Like Coco the monkey we sing the praises of the chocolatey cereal

Kellogg Company Mission Statement Kellogg is a Global Company Committed to Building Long-Term LongGrowth In Volume and Profit and to Enhancing its Worldwide Leadership Position by Providing Nutritious Food Products of Superior Value
W. K. Kellogg

Kellogg s Marketing Strategy and Marketing Plans

Organizational Strategies 

Leadership in product innovation Strengthening the company s seven largest cereal markets Accelerating the growth of convenience foods business Developing a more focused organization Continuing to reduce costs

Global Strategy Management continues global strategy  Offers brand-differentiated pricing brand Invests in new product research  Brand-building marketing activities Brand Cost structure reduction  .

Market development Maintain global position Diversification Introduction of new products to fit new customers needs . Introduction of new product to present customers.Product Market Strategies Product development Constant innovation.

Kellogg s SWOT Analysis .

which is more than triple the market share of any of their competitors.Strengths  Control 42% of global market share for PrePresweeter cereal. They have the strongest brand recognition and advertising recollection of all the cereal manufacturers  .

market share in the past few years.S. Slow erosion of their U. Follower in Pricing Strategy   .Weaknesses  Have not aggressively developed many new cereal lines in the past four years.

Kellogg can continue to slowly diversify. If they can develop a better pricing strategy and guarantee lower prices.   . while still remaining in their core business area. diversify. they can reduce costs while increasing their market share.Opportunities  International expansion is the biggest area for growth for Kellogg s. which will increase their profitability.

 .Threats  General Mills. and Quaker Oats are using price competition and product proliferation to erode Kellogg s share of the market. Discount imitation cereals brands have been successful in reducing premium brands in the more commodity like cereals. Post.

Market Analysis .

by gains in cereals. . for the 5 to 7 years and shows no sign of slowing through the end of the decade. Post Marshmallow Alphabits.  Market share: competition is heating up in this market as flat sales and low-priced clones have eroded the market shares of lowKellogg and General Mills  Market Forecasts: the kids market has been growing at a rate of more than 15% a year. GM Count Chocula. Rice Krispy. Growth in the overall kid s food market was driven. Q Marshmallow Safari.7 billion in the Ready-To-Eat Ready-ToMarket in 2001  Product segments: the best-selling kids cereal brands--GM bestbrands--GM Lucky Charms.Market Analysis  Market size: sales of nearly $9. to the largest extent.

8 16.Cereal Industry Volume Sales for Presweet Cereal Volume Sales 4.4 4.5 1.7 In million Kellogg USA GM & Ralston Post & Nabisco Quaker Store Brands Malt O Meal Co .7 (As of 2/01) 7.4 11.

.Market Analysis (continued)  Marketing/promotion: Seven breakfast cereal marketers allocated almost $775 million to purchases of space and time mass media in 2001. and Philip Morris--responsible for 70% of kid s foods in Morris--responsible 2001. Mills.  Industry structure: Three food giants--Kellogg. General giants--Kellogg.

Kellogg s American Heart Association    .Major Trends in Cereal Industry  New products are dominated by line extension and product promotion Increasing popularity of private labeled cereals due to high cost of branded products Higher demand for health food markets & products Health claims is becoming more prevalent.

Competitive Analysis .

Competitive Force Analysis Intensity of Rivals Four Large companies are dominant in the market Oligopoly Competition is very intense Inflated prices Growth Rate has remained Constant .

000 shoppers switched to private label) Price competition (1990 s started a price war between rivals) Made the buyer more powerful .Competitive Force Analysis Threat of a Substitution Private Labels Has made substitution very significant Caused other 3 competitors to lower their prices Low switching cost (1/3 of 1.

Strategic Group Map of Competitors in the Presweeter Cereal Industry High Kellogg General Food General Mills Quaker Oats Low Private Label Brand Cereals PRODUCT LINE/MANUFACTURING MIX .

Private Label Quaker Oats General Foods General Mills Cap¶n Crunch KELLOGG Honey Nut Cheerios Lucky Charm Cocoa Krispies Other Cereals Cheerios Honey Nut Cheerios Honey Nut Shredded Cap¶n Crunch Snack Bars Bagged ValuePriced Cereal Fruit Cereal Bars Cranberry Almond Crunch Rice Cakes Oatmeal Cereal Bars .

Product development . limited shelf space. need to create retail demand. all increase costs for manufacturers .easy for established manufacturers to duplicate products.high slotting & promotional fees.Competitive Force Analysis High Barriers to Entry Main barriers to entry in the breakfast cereal market are four major cost factors. new products take more money & time to develop Distribution .

.need to compete against current brands that have been established through large advertising and promotional efforts (t.for different types of equipment and plants .Competitive Force Analysis High Barriers to Entry Marketing .v. coupon) High Capital costs .

Competitive Force Analysis Power of Supplier  Supplier does not have much power because of private labels.   . Now industry is very Sensitive to the buyer. Similar products have allowed buyers to acquire products from private labels at a Cheaper Price.

Customer Analysis .

capture children s attention Product: very sweet. colorful and contain nutritious elements   . snap. crackle and pop Package: fun.Cocoa Krispies Buying Criteria  Key equity drivers: chocolate taste. colorful. Coco the monkey.

Older Adults How Often Do They Purchase?  Kids cereal are purchased roughly 18 times a year  10th fastest-moving product in the supermarket fastestWhere Do they Want to Buy?  Grocery Stores responsible for 99% of cereal sales Who Are the Influencers?  Kids Who consumes the goods?  Kids under 18 Who are Kellogg s Target Market?  Kids 8-11 years old 8- .Kellogg s Customer Analysis Who Are the Buyers?  Parents.

3 Percentage 55-64 45-54 35-44 25-34 .3 29.2 8.8 10.3 22.Percent of Total Annual Spending on Presweeter Cereal (by Age Group) 75+ 65-74 Age Groups 8.4 16.

Cocoa Krispies Objective  Strengthen kid consumer base Secure Kellogg cocoa bit subsegment volume share with competitive focus on GM s Cocoa Puffs and Post s Cocoa Pebbles Create a product that enhances the ultimate multimultisensory food experience by adding additional attributes that satisfy expended consumer needs Attract different target groups    .

colorful. print Adds include Coco the Monkey Advertiser: Kellogg Agency (Leo Burnet) Quantity and price discounts Packaging: fun. capture children attention     .COCOA Krispies Promotion  Spent roughly $15 million for ad campaign: TV.

21/ounce (Post) Cocoa Krispies (Kellogg¶s) $0.17/ounce Private Labels $0.27/ounce $0.Cereal Pricing for Retail Stores Farmer Jack Kroger Target Cocoa Pebbles (General Mills) $0.28/ounce $0.25/ounce $0.23/ounce $0.25/ounce $0.23/ounce $0.22/ounce $0.13/ounce n/a .15/ounce Cocoa Puffs $0.

Kellogg s Distribution Players Retail/Distribution: Grocery stores are responsible for the overwhelming 99%--of cereal sales  Major players: Kroger Farmer Jack Target  Minor players: players: Convenience stores Gas stations .

Kellogg s Distribution Channels Kellogg¶s Kellogg¶s Kellogg¶s Computer system Wholesaler Kroger. In stores . centers Retailer Retailers Distrib. distrib. Target.

Cocoa Krispies: PRODUCT LIFE CYCLE Introduction Growth Maturity Decline Time .

Critique of the Plan      Have we heard of it? Can we get it? Can we afford it? Are we buying it? Is it legitimate? Promotional issues Distribution Pricing Target market record Corporate responsibilities .

Cocoa the Monkey. Merchandisers . Area reps. Samples In-  KeyKey-account reps. and Snap.Promotional Issues  Mass Advertising Direct Promotions Trade Promotions Personal Selling TV. Coupons   In-store displays. Crackle and Pop.

Independent wholesalers Brand equity helps Finished goods warehouse / rail / truck / centers or independent warehouses Conflict or harmony?   -  Relationships - .Distribution  Penetration Sales Channel Logistics Chain stores.

The Target Fastest Growing Foods in the American Diet: Diet: Carbonated Soft drinks PrePre-Sweet Cereal Bagels Toaster Pastries Pizza .

Corporate Responsibilities Legal Issues . Choice  Environmental .More than required .Safety.Stakeholder orientation . Information.Public program support  Ethical Issues - Nutritional education .Ad content standards  .Earth Spirit Award Issues  Civic Responsibilities .

Fruit Loops 9. Special K 10. Cheerios 3. Rice Krispies/Cocoa Krispies 6. Frosted Mini-Wheat Mini4. Raisin Bran 8. Frosted Flakes 2.America s Top 10 R-T-E RCereals 1. Honey Nut Cheerios 7. Corn Flakes 5. Corn Pops .

Positioning Map Taste Cocoa Krisp Fruit Loops Corn Flakes Cheerios Raisin Bran Nutrition Special K .


The boys are back in town! .

2001/ The Twelfth Annual Report on Eating Patterns in America Kellogg .Kellogg' .udayton.sba. 2002 Kellogg Co.htm .March. 1998 / Robin Fields / Get That One Mommy The NPD Group .www.schenk. Farmer Jack s.Sources           Kellogg . Rite-Aid.Food Industry Focus Field Visits http://faculty.Ron Van Este / Cereal buyer Media Week .Kroger. WWW. RiteFlorida Sun Sentinel .industryweek. Target.kellcase.May 98 / Something New Under My Nose Business Week . May 29.Mike Culverson / Customer Service Farmer Jack s .

The End .

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