Professional Documents
Culture Documents
Project:
Rice Krispies
By:
Group Seekers
Name Reg#
Iltaf Hussain MB083002
Rafiullah khattak MB083032
Zeeshan Ahmed MB083023
Muzzamil Munawar MB083030
Zain-ul-Hassan MB083037
To:
Aarif Vaseer
Date: 28-01-2010.
Product.
Dedication
With the name of “Allah”, the most beneficent and merciful who gave us strength and
knowledge to complete this research. This report is a combine effort of Seekers group. We would
like to dedicate this study to our parents without their prayers and kindness we might not
complete this project. This time we would like to express our gratitude to our teacher Mr.Aarif
Vaseer, who gave us this opportunity to do this report. He gave us helpful comments in every
Acknowledgment
1st of all we are thankful to Almighty ALLAH who has given us the abilities to do hard
work to perform well. We be indebted a special debt of gratitude to our generous parents. We
also would like to thank our friends they help us a lot in finding the data and how to work. An
in Pakistan market. Although it was a big challenge for us to launch a product in Pakistani
market because it’s very hard when it comes practical and it was also due to the competitors
pressure in the market but we never go back and face the challenges in very short times. We are
thankful to the teacher also for teaching us with such zeal and vigor to enable us to present our
Introduction
Rice Krispies (known as Rice Bubbles in Australia and New Zealand) is a breakfast cereal that
was created by Clayton Rindlis bacher for the Kellogg Company, and later marketed by
Kellogg's in 1927 and released to the public in 1928. Rice Krispies are made of crisped rice (rice
grains that are cooked, dried and toasted), and expand forming very thin and hollowed out walls
that are crunchy and crispy. When the cereal is subjected to a change in heat, the walls tend to
collapse, creating the famous "Snap, crackle and pop" sounds.
Rice Krispies cereal is widely known and popular with a long advertising history, with the
cartoon characters Snap, Crackle, and Pop touting the brand. In 1963, The Rolling Stones
recorded a short song for a Rice Krispies television advertisement. Rice Krispies are also an
important ingredient in Rice Krispies treats made by combining the cereal with melted
marshmallows.
It is a healthier product and widely used in Australia and New Zealand. It contain high amount of
nutrition’s that’s why people prefer its purchasing than other cereals. It attracts the children’s
towards itself because they are providing more packages, taste, flavors etc. it is also used by the
older peoples and all other people because they knew that using these types of product is very
beneficial to health due to high containing of nutrition’s.
Customer’s analysis:
For our product the following will be the customer’s analysis.
The customers will be kids under 18 and also old people. For that purpose we are launching our
product name as Rice Krispies. It’s a breakfast cereal mostly used by children’s and old peoples
in their breakfast because they love to eat these types of product and specially kids mostly used
this product they demand in new packages new taste and new flavors in the product. And these
types of product are very much beneficial for the kids because their bones are getting stronger by
eating and taking breakfast daily with good things of eating.
The kids under 18 and old people will use this product because it is very healthy to their health.
And there are also other people who are using this product to get nutritious because calories are
required to health they take in breakfast and prepare their self for whole day work. Without
taking breakfast you cannot do work perfectly, not accurately.
Their unmet needs are to find good things for their health which contains some nutrition’s and
calories they loose whole day to fulfill those requirements. Everybody wants that he/she should
eat healthy product which give benefits to their health nor to give harm to health.
Competitor’s analysis:
Competitors are always playing good role and sometimes it is a major threat for no success of product in
future market.
Existing Competitors
1. Nestle cereals
2. Fauji cereals
Year Total Assets Net Worth Turn Over Net Profit / Loss
2001-02 119 35 99 17
2002-03 151 46 106 27
2003-04 165 45 111 23
2004-05 78 52 117 30
2005-06 98 47 123 31
2006-07 135 51 142 35
Fauji Products
The Nestle has 70 to 80 percent market shares and they are exporter to major countries of the world like
UAE, Afghanistan, Bangladesh, and New Zealand.
And they have also won the international food award of 2005. Now they are ISO, 9001-2008 certified.
Strengths
Global food producer, located in over 100 countries. Consistently one of the world's largest
producers of food products, with sales in the USA in 2008 of $10 billion; sales and earnings
in 2008 were better than expected, even in a downturned economy. Global sales in 2008
topped $101 billion.
Repeatedly ranked as the world's largest bottled water company and have set up facilities to
operate water resources in a responsible manner.
In 2008, Nestlé was named one of "America's Most Admired Food Companies" in Fortune
magazine for the twelfth consecutive year.
Nestlé provides quality brands and products and line extensions that are well-known, top-
selling brands including:
Lean Cuisine, Yoplait, Maggi, Dryer's/Edy's, Haagen-Dazs, Stouffer's, Boost, Dibs, Hot
Pockets.
Chocolate and Candy: Kit Kat, Toll House, Butterfinger, Baby Ruth, Crunch Bar, the Willy
Wonka Candy line.
Pet Products: Purina, Alpo, Cat Chow, Fancy Feast, Friskies, Tidy Cat.
Drinks: Carnation, Perrier, Nesquik, S. Pellegrino, Nescafe, CoffeeMate, Taster's Choice,
Juicy Juice.
General Mills: subsidiary which makes Betty Crocker, Bisquick, Hamburger Helper,
Pillsbury, Old El Paso, cereals, fruit snacks, frozen pizza, canned soups, frozen vegetables,
ready-made frozen meals.
Gerber: baby formula, prepared baby foods, baby cereals, water, juice, yogurt, foods for
infants, toddlers and preschoolers.
Professional brands sold to restaurants, colleges, hotels, and food professionals including
Jenny Craig meals, Impact liquid meals for trauma patients, liquid meals for diabetics, and
OptiFast weight loss products.
Weaknesses
Their LC-1 division was not as successful as they thought it would be in France. In the late
1980s, Dannon entered the market with a health-based yogurt, and become the top selling
brand of yogurt; Nestlé's 1994 launch was behind the product life cycle curve in an already
mature market and could not compete against a strong, established brand.
Growth in their organic food sales division was flat in 2008, even though the industry grew
8.9%.
Since 2004 the breakfast cereal industry has been under fire from the FDA and the American
Medical Association, both of which say that false claims of "heart healthy" and "lower
cholesterol" need to be removed from packaging and advertising. They have also been forced
to reduce the amount of sugar in their products, as parent's advocates groups claimed they
were contributing to the diabetes epidemic among American children.
General Mills is an experienced, established brand and are the market leader in the USA,
however, they have been lacking in innovation, have not cashed in on the booming health
food craze and have been behind in creating new, niche products, especially in their yogurt
division, where Yoplait is the only brand making a profit.
In 2008, although their products did not carry the recalled pistachios, several of their ice
cream brands, Dryer's, Edy's and Haagen-Dazs, were still plagued with bad PR and loss of
sales.
Opportunities
In today's health conscious societies, they can introduce more health-based products, and
because they are a market leader, they would likely be more successful.
Provide allergen free food items, such as gluten free and peanut free.
They launched a new premium line of higher cacao content chocolates dubbed Nestlé
Treasures Gold, in order to cash in on the "recession economy" in which consumers cut back
on luxury goods, but regularly indulge in candy and chocolate. Americans want luxury
chocolates, and high-end chocolate is immune to the recession (so far), because it is an
inexpensive indulgence.
Opened Nestlé Café's in major cities to feature Nestlé products.
Threats
Any contamination of the food supply, especially e-coli. Their Toll House brand cookie
dough was recalled in March of 2009 because of e-coli. Outbreaks were linked to 28 states
and the product had to be recalled globally. Nestlé has yet to find out how this happened, and
is still investigating.
They were affected by the pet food recall in 2007, in which 95 different brands of dog and cat
food was recalled due to contamination with rat poison. Also in 2007, FDA learned that
certain pet foods were sickening and killing cats and dogs. FDA found contaminants in
vegetable proteins imported into the United States from China and used as ingredients in pet
food.
The Nestlé global vision is to be the leading health, wellness, and Nutrition Company in the world. Nestlé
Pakistan subscribes fully to this vision. In particular, we envision to:
Lead a dynamic motivated and professional workforce – proud of its heritage and bullish about the future.
Meet the nutritional needs of consumers of all age groups – from infancy to old age, from nutrition to
pleasure, through an innovative portfolio of branded food and beverage products of the highest quality.
Deliver shareholder value through profitable long-term growth, while continuing to play a significant and
responsible role in the social, economic and environmental sectors of the country.
We have profitable and diversified high quality food and beverage product portfolio, delivering 60:40+
advantage to consumers, available across all sales channels.
Our brands are the preferred choice in their categories. Consumer insight drives all aspects of our
marketing and communication efforts.
Our communications to the consumer are relevant, cutting-edge, and adhere to the highest standards of
responsible communication.
Our company is seen as the No. 1 career destination for talented, motivated and ambitious professionals.
Our result-oriented organisational structure ensures effective communication and empowered self-
management.
Our milk collection and agri services will continue to play the primary role in development of the dairy
sector in rural Pakistan.
Our proactive innovation and renovation culture is the key to our success in the marketplace.
Fully integrated systems (Nestlé Pakistan, suppliers, customers) ensure efficient business processes.
Fauji Porridge have been prevalent in the domestic market for over 4 decades and are now the
market leaders in this segment of the category due to genuine consumer preference alone. in a
market segment dogged by a multitude of unbranded or cheaper brands offered by backyard
manufactures, Fauji Porridge drives the category growth with a market share of over 65%.
The best Wheat and Barley is selected during Fauji's uniquely scientific and hygienic
process to ensure less cooking/ preparation time for consumers. It makes for a delicious ,
nourishing and energizing meal that can be consumed at any time of the day. Add some milk ,
cream and sugar for an irresistible taste. Soups can also be made more savory by adding Fauji
Porridge to them. It is the best nutritive meal for children, the convalescent and is a solid food for
babies over the age of four months.
Market Analysis:
Product segments: the best-selling kids’ cereal brands and also for old people.
Market share: competition is heating up in this market as flat sales and low-price.
Market Forecasts: the kids’market has been growing at a rate of more than 15% a year, for the
5 to 7 years and shows no sign of slowing through the end of the decade. Growth in the overall
kid’s food market was driven, to the largest extent, by gains in cereals.
Marketing/promotion: We will advertise our product through banner, panaflex also we will
make broachers and especially we will focus on kid’s variety. We will ensure kids variety and
provide them lots of fun and different packages.
Environmental Analysis
MAJU Islamabad. Page 11
Rice krispies
Environmental threats: Nestle and Fauji cereals are major threats to our product because they are
already present in the market and providing low price and good quality products. They attract the
customers by giving those best packages, better taste and more.
Opportunities: There are vast varieties of opportunities. Those are that our competitors are providing
product but in their products there are less number of nutrition’s by this we will make customers by
providing them high nutrition’s because everybody wants that they get healthy products for their health .
Trends exist: We first launch our product in the market and then we will increase our sale day by day
according to market conditions. For the first time we will provide sample to make ensure our customers
about our products.
Political factors
The main political factors in this industry are employment laws, Food and Drug Administration laws, and
freedom of business practices in the Pakistan, trade regulations in the Pakistan and other countries and the
global code of ethics. Employment laws affect the company in that they differ in different countries, and
the company must adapt its wages and hours to fit these regulations. The company can add value by
manufacturing its products in areas where the cost is the least for labor. The manufactured product must
also meet FDA regulations, which is a political factor in that all the products must meet certain quality
levels, levels that change due to which country the food is being sold in, such as regulations that are
different in different countries. Trade and tariff laws also affect Kellogg's because it operates
internationally, and must meet international market regulations keep in mind the logistic costs involved in
the movement of the cereals and other goods between borders.
Economical Factors
Exchange rates and inflation Exchange rates largely affect Rice krisphies because of its products which
are sold in other countries, and the better the exchange rate, the more profit is earned. Inflation rates affect
Rice krispies the most, because it is basically a low-cost product, and consumers buy it as such. Inflation
means consumers buy less of the products, because they have less money to spend.
Sociological factors
Rice krispies must study lifestyle trends such as the demand for sugary products versus organic ones,
quality products versus cheap ones, and which promotional techniques will be most effective to the niche
which they are targeting. To add value to their company this is one of the most important factors because
it determines on who buys their product, and how often.
Technological factors
Rice krispie is affected by many technological factors in the logistics of how it moves its products, keeps
tracks of its accounts, and even manufactures its cereals. New technology and shipping companies such
We should develop strategies to improve access to existing technologies to reduce our cost and to
offer a reasonable price to our customers.
Ensuring the development of new technologies in areas where the market is failing.
We should adopt cost-effective new technologies in order to minimize our cost and to remain
Rice krispie remaining at cutting edge by offer a minimum cost.
Internal Analysis
Level of investment:
Cost price:
Product unit:
20,000
Sale price:
Incomes :
400,000.
Our cost is 150 per 9 oz (255 g). And we will sale in the market for Rs.200.
Strategies:
For promotion of our products we will first import the product from new Zealand and also from
Australia. Then we will launch the product in Pakistani market for that purpose we will use
different channels to make availability of product.
Performance:
Point of differentiations:
Our product is different from our competitor’s products because our product contains more
nutrition’s and calories that are very much useful for the children’s and also for the old people.
Our products contain lots of packages and flavors, taste.
Strength:
Our products contain more nutrition’s that is very much useful for the kids as well as older
people health. This is our main strength due to which we will survive in the market in future. We
are also ensuring quality product. We will be known for our quality product.
Weaknesses:
Our core weaknesses are that we are new in the market and our product is not
available and also we are facing some problems about distribution of products. No such
advertisement exists.
Culture varies market because some people dislike these type of product and they donot want to
use that type of products. Especially in village there is no known how of these products that’s
why they are not using it. If somebody tell them.
Today’s busy consumers want a broad selection of foods that are tasty, nutritious and compatible
with an on-the-go lifestyle. Kellogg fulfills these needs through an assortment of breakfast bars,
healthy snacks and other non-meal options from a variety of our brands, including Nutri-Grain,
Special K, Kashi and Pop-Tarts.
Our cookie and cracker business offers a growing assortment of great-tasting products for
snacking and entertaining from a host of well-known brands, including Club, Townhouse,
Cheez-It, Sandies, Famous Amos and Fudge Shoppe.
Our natural, organic and frozen food lines Offer an extensive selection Of quick, delicious and
health-conscious meal solutions For any time of day. Eggo leads the frozen breakfast category
By offering hot breakfast solutions that are ready in minutes,m While Morningstar Farms leads
the meat-alternative category, Offering a variety of great-tasting veggie foods. Our Kashi Line of
natural frozen entrees and crispy crust pizzas. is one of our fastest growing businesses.
Strategy development
We will launch our product in all over Pakistan. For this purpose our investment level will be
Profit =400,000
We have limited time and we have to launch it in 3 weeks. For this purpose we will sell 20,000 units with
the cost of 30, 00,000 and our profit will be 400,000 after that we will invest again some portioning of our
profit into the business for further expansion. First we will launch this product throughout in Pakistan and
after taking the responses from different customers we will enlarge or expand operations in different
countries.
We have targeted the kids under eighteen and older people and we are providing quality products
to our customers and it contain high amount of nutrition calories as compared to our competitors.
Value proposition
We are making unsubstantiated and misleading claims in advertising on Rice Krispies boxes. The Rice
Krispie Claims made by the company included "now helps support your child's immunity" and "has been
improved to include antioxidants and nutrients that your family needs to help them stay healthy. It attracts
our customers. It is our core offering to our customers as compared to competitors. Our product Rice
Krispies is guaranteed this means if a customer is not satisfied with a product, that they are able to obtain
a full refund.
Main purpose of introducing our Rice krispies shops is to take attention of people to our newly introduced
Rice krispies.
Forces analyze a company by addressing which suppliers, buyers, barriers and substitutes in its given
industry.
Suppliers
Kellogg is a major corporation which sells brand name Rice krispies cereals, snacks and a few other
products. This means is must have a great deal of raw materials with which to make its products. To make
its Rice krispies, the main product which the Kellogg’s brand name is known for, it has suppliers for raw
ingredients such as grain, Rice, sugar (glucose and fructose), salt, malt (corn flour, malted barley) ,
sucrose, and dairy products. It also has suppliers who provide the packaging such as cardboard boxes and
plastic bags, and suppliers such as David Michael who provide flavorings and colorings to the cereal
making process. They also must have labor supplies, processing and packaging equipment, and things that
provide sanitation, refrigeration and waste removal.
Buyers
Buyers are key component to the industry of cereals and Rice krispies, which Kellogg’s competes in.
Kellogg mostly sells in bulk to wholesalers and retailer stores such as super markets. Then individual
packages from those stores are bought by individual customers from a wide segment of people who are
brand loyal to one or two certain types of cereals based on demographic and psychographic segmentation
aspects. Kellogg must be constantly aware of what the individual customer is likely to buy more of, or
how to update its products to meet new trends, such as the demand for healthier, whole-grain cereals
within the same brand that the customer is loyal too.
Since Rice krispies is in the food industry, there are dozens of other substitutes with which it competes.
Other cereal companies such as Nestle cereals and Fauji cereals, and since the switching price for the
customer is so low -just walk over to a different section of the shelf- it is very constant competition. A
customer may also just choose not to buy cereal, or they may have regularly changing preferences as to
which cereal or snack food they buy.
New Entrants
The barriers specific to the Rice Krispie product are ones of low product cost due to cereals being sold in
bulk, the high number of different products, the product mix and economies of scope, and the maturity of
the cereal industry in its product age and brand loyalty of its consumers .
Industry Competitors
In market there are many competitors. We will face lot of road blocks in our launching the
product in the market. We will remove that road blocks and overcome the market and become
market leader because we are providing more healthy and quality product to our customers.
Inbound logistics are a critical part in supply chains that involve manufacturing and getting all the
required parts and raw materials in the right order, the right quantity, the right quality and the right time to
the manufacturing and assembly plants. In the process of finding the most cost-effective ways to organize
these very complex logistics activities, inventory levels are being reduced and technological advances are
put to use to provide a way to see the location of all parts moving to the plant at any given time .
Transportation and warehousing are a big part of most inbound logistics chains, but Kellogg’s service
portfolio goes beyond this. Quality control is assured to guarantee that Kellogg's is manufacturing
products with safe, healthy, and flavorful. Many of Kellogg’s standards are even stricter than those
required by the government. Kellogg's Quality Assurance workers often visits suppliers’ plants to assure
that proper sanitation procedures are being followed and that the raw materials they supply meet
Kellogg’s specifications.
Operations and manufacturing is the next critical step along the value chain. Sub-assembly is the
assembly of a component from individual parts before onward distribution. Sub-assembly services can be
found in the electronics, automotive and fast moving consumer goods industries. These provide a cost
Forward End
After-market logistics and service is one of the most important steps for Kellogg’s. Normally, one
would not think a cereal company would need such a thing, but the truth is that is what makes Kellogg’s a
household favorite among families. Kellogg’s customer service is remarkable. All of Kellogg’s products
are “guaranteed,” this means if a customer is not satisfied with a product, that they are able to obtain a full
refund.
When Kellogg started manufacturing his original rice krispies, he had a goal: to provide his customers
with a high-quality, nutritious product that was enjoyable to eat. Today, Kellogg's Company still follows
this basic idea – “every Kellogg employee has a responsibility for maintaining the high quality of Kellogg
products.” It is plain to see that Kellogg’s strives for simplicity. They stop processes, procedures and
activities that will slow the company down or will not add value. This is important to the company as well
as its customers. It assures that results will be greater in the long run and operations will run smoothly.
Supply chain
Indirect distribution
Direct distribution
We are launching a new product that’s why we will adopt all the distribution channels as shown
in the figure. Because at the initial stages of product life cycles if the product is difficult to
available to its customers they switch off to the substitutes.
References:
http://www.ricekrispies.com/recipes/peanut-butter-treats.aspx#/recipes/peanut-butter-treats