PROPOSAL

Team Lima: Travis Butler, Ina Evans, Greg Moldovan, and Keith Phillips
Team Lima 1

Problem
Our parents are retiring in 4 years We want to look after their future. Resources House Cars $500k in CDs $100k/year

Team Lima

Supply Chain
Planned order Warehouse to Production Quantity of raw goods Production order Process the raw goods into ingredients Production order Combine/cook ingredients Distribution
Team Lima 3

Sales History & Data

Founded 1906 Battle Creek, Michigan
30,900 Employees

Made in 18 Countries Sold in 180 Countries

Diversified Products

Team Lima

Sales History & Data

Team Lima

Sales History & Data

Leader in Global Cereal $485M Profit 2nd Qtr Sales 2012

Team Lima

Sales History & Data

Kelloggs v. General Mills

Team Lima

Target Markets
Breakfast Cereal Healthy Snacks

Frozen Foods
Toaster Pastries

Snacks
Cookies & Crackers

Team Lima

Domestic Market

North American & International Sales by category in Comparison to Total Sales (2011)
Team Lima 9

Domestic Market Sales

North American Markets vs. International Markets

(2011)
Team Lima

10

Breaking into New Markets

Keebler Cookies Pringles Chips Cheez-It

Team Lima

11

Target Demographics
Children
Families Mothers Single Men Students

Athletes

Kelloggs ultimately has no specific preference for a customer; the goal is to get their product in all households around the world.
Team Lima

12

Media for Domestic Market Segment

Advertising and packaging are key aspects of the marketing mix Television is the primary advertising outlet
Kellogg also purchases time and space in a broad range of media

Press Posters Radio

Cinema Direct mail Internet

Team Lima 13

Mission Statement
Mission Staying Focused. Going Further.

Vision To enrich and delight through foods and brands that matter Purpose Nourish families so they can flourish and thrive

Team Lima

14

Corporate Culture
Emphasizes the importance of diversity in the work place Philanthropy is an important part of the Kellogg legacy Focus of charitable contributions
helping children reach their full potential

increasing opportunities for women and minorities

building stronger communities
Team Lima 15

Charities
Kellogg's Corporate Citizenship Fund (KCCF)
More than $420,000 was donated by KCCF to match employee contributions in 2004

Kellogg Care$ program

provide monetary donations to nonprofit organizations where Kellogg employees and retirees volunteer

World of Children Awards

Each year the award and $100,000 goes to someone who has made a significant lifetime contribution to children's futures by greatly improving their opportunities to learn and grow.

Team Lima

16

DFW Impact
Expanding distribution center in Lewisville
200 300 local employees

Employs a small number of merchandiser and territory managers Merchandisers - part time employees
Average salary of $11.17 per hour

Territory managers - full time employees

Average salary of $44,564 each year.
Team Lima 17

Investment
Price of $55.26 per share as of November 23rd

$500,000 will purchase 9,048 shares of Kellogg.

Each quarter we can expect to make $3,981.12 from cash dividends $15,924.48 can be earned in the first year off dividends alone. If dividend value remains constant, our parents would have earned $79,622.40 in five years.
Team Lima 18

Dividend
Kellogg has a strong history of paying dividends quarterly to all investors and the dividend value has steadily increased.

In the last five years the amount paid in dividends per share has increased
Team Lima 19

Certificate of Deposit
5 year CD of $500,000 at 3.00% compounded daily.

CD maturity value = $552,583.92.

Income of $52,583.92 after five years.

Team Lima

20

Evaluation
Kellogg will earn $27,038.48 more than a CD would pay in the same amount of time Projected inflation rate for the next 10 years is 1.38%

Benefit of security gained from the insured CD is negated by low rates.

Team Lima

21

Recommendation

We recommend that our parents invest their entire $500,000 in the Kellogg Company

Team Lima

22