LOVELY PROFESSIONAL UNIVERSITY

ACADEMIC TASK NO. 2

Mittal School of Business (MSOB)
Faculty of Marketing
Name of the faculty member: Pawandeep Kaur
Max. Marks: 30 Marks
Course Code: MKT201
Course Title: Principles of Marketing
Date of Submission: 10.12.2021
INDEX

Sr. No. Particulars Page No.

1. Introduction - objective 2-3

2. Innovation – SWOT 4-8

3. Competitors – Growth 8-10

& Diversification

4. Problems - 10-12
Repositioning

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 Report on Kellogg’s Case Study

About Kellogg’s

The Kellogg Company (Kellogg's), is an American multinational food

manufacturing company headquartered in Battle Creek, Michigan, United States.
Kellogg's produces cereal and convenience foods, including crackers and toaster
pastries and markets their products by several well known brands including Corn
Flakes, Frosted Flakes, Pringles, Eggo, and Cheez-It. Kellogg's products are
manufactured and marketed in over 180 countries. Kellogg's largest factory is at
Trafford Park in Trafford, Greater Manchester, United Kingdom, which is also the
location of its UK headquarters.
Mission and Vision and Tagline
Mission: Nourishing families so they can flourish and thrive.
Vision: A good and just world where people are not just fed but fulfilled. Our
Purpose: Creating better days and a place at the table for everyone through our
trusted food brands. We are a company of promise and possibilities. Each day
represents a fresh opportunity to share Our Vision, live Our Purpose.
Tagline: "Let's Make Today Great" – that reflects the reasons consumers
worldwide choose Kellogg's brands for the best start to their days.

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 Objectives of Kellogg’s

 Specific: All objectives set by Kellogg Company are specific and clear. This
helps employees, as well as managers, manage and maintain focus on the
targets and the end results that need to be achieved. At the same time,
specific objectives help managers determine skill development and training
needs within their departments as well.
 Measurable: Objectives at Kellogg Company are also measurable. This
means that all objectives can be tracked for progress. This is important for
Kellogg Company as it helps in meeting deadlines. The element of
measurability is added in objectives by adding quantifiable criteria for
determining progress and objective achievement.
 Attainable: The goal should be attainable that even in stretching the abilities
of the employees and challenging them, it should remain possible to achieve.
The objectives at Kellogg Company are attainable in that they push the
employees out of their comfort zones but remain possible to achieve.
 Realistic: Objectives at Kellogg Company are also attainable in that they are
realistic. This means that Kellogg Company sets objectives keeping in view
the organizational resources and constraints to be able to achieve objectives
effectively and within time.
 Timely: Objectives at Kellogg Company are also time-bound in that they
have a specified start and finish date. The timeliness of the objective helps
Kellogg Company maintain a sense of urgency in employees, and keep them
motivated towards achieving the objective.

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 Innovations

The first area of innovation taps into consumer desire for simple enjoyment and
includes products such as Pringles Scorchin', Homestyle Rice Krispies Treats,
Eggo Stuffed Pancake Bites and the return of Smorz cereal.

The second area of innovation, well-being, responds to a significant rise in overall

interest in health and wellness. Kellogg’s were addressing this through zero- or
low-sugar variants of our foods across the globe and a range of keto-friendly and
plant-based protein foods. Products include Kashi cereal and Special K snack bars
that were developed for the ketogenic diet, as well as Kellogg’s portfolio of ready-
to-eat cereals that are high in fiber.

Then there’s another area that even merits its own mention, our Morningstar Farms
range of plant-based foods we are extremely well placed for consumers’ move
toward plant-based eating because we have an overall portfolio that is 86% pure
plant-based. This includes a meat alternative, plant-based protein range in
Morningstar Farms and its recently launched subline, Incogmeato.

In 2021, Kellogg launched innovation across the whole of this range, from Veggie
Meatballs and Bites to our new Incogmeato Chik'n Nuggets and Bites. This gave
great firsthand feedback on how to optimize our innovation and create value for
our consumers, our customers and us. Changes to Kellogg’s product development
capabilities provide a competitive advantage to keep pace with consumer trends
and innovate more quickly. The pandemic accelerated the use and effectiveness of
these new capabilities.

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 S.W.O.T Analysis

Strength

1. Worldwide presence: Kellogg’s products are manufactured in 18 countries

and marketed in over 180 countries. Kellogg’s became the world’s second-
largest snack food company (after Pepsi Co.) by acquiring
the Pringles potato crisps brand from Procter & Gamble for $2.7 billion in a
cash deal in 2012.
2. Strategic Acquisition: Kelloggs has acquired various companies over the
years which helped it in optimizing the use of its resources. Kellogg’s made
its largest acquisition, theKeebler Company in the year 2001. Over the years,
it has also gone on to acquire Morningstar Farms and Kashi divisions or
subsidiaries. Kellogg’s also owns the Bear Naked, Natural Touch, Cheez-It,
Murray, Austin cookies and crackers, Famous Amos, Garden
burger (acquired 2007), and Plantation brands.
3. High Awareness: Kelloggs is successful in creating awareness in developed
economies. It is world’s largest cereal maker by sales, which spends more
than $1 billion annually on brand advertising and marketing and is an
official sponsor of the U.S. Olympic and Paralympic Teams.
4. Marketing Initiatives: It has positioned itself as a brand meant for fighting
hunger specifically as an alternative to the breakfast i.e. breakfast cereal
brand which has helped the company to acquire the share of wallet of the
customers. “Fighting Hunger” initiative with Walmart, Master brand TV
campaign and many others are some of the major marketing initiatives that
helped Kellogg in establish itself as a global brand.

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 Weakness

1. Slow Innovation: Innovation is something “new” and refreshing that’s

never been seen before. Although the market is overloaded with so many
local, national and international brand. But despite this extent of
competition, Kellogs is not able to seize the development market.
2. Disputed Campaigns: Some of the campaigns were questioned by the press
which was prompted by an increase in consumer awareness of the mismatch
between the marketing messages and the products themselves which resulted
in negative word of mouth.
3. Debt: The company currently possess a net worth of 13.77 billion dollars. Its
shares have been decreased by 6.75$ in the last 3 months and until they pay
down the debt, it will weigh heavily on their own business. Kellogg’s most
recent financial statement shows total debt at $8.45 billion, with $6.93
billion.
4. Controversial Marketing Tactics: Some of the promotion of Kellogg and
was criticized by the press and bloggers, this results in creating a negative
brand image among the customers.

Opportunities

1. Market Penetration: Penetrating further in the current market & targeting

other developing markets will help the company in increasing its sales.
2. Changing lifestyle: With the growth of the urban population, their hectic &
changing lifestyle people are looking for some easy meals to put down their
hunger & save their time which is the driving force the growth of the cereal
industry.

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3. Targeting Restaurants & hotels: Many companies from FMCG & food
industry are tying-up with Restaurant & hotel chains to expand their
business. There’s great opportunity lying ahead for Kelloggs if they can
generate their business from this growing segment.
4. Re-imagining Cereals: Kelloggs have been working together with
renowned chefs to produce cereals with new ingredients and new flavours.
Kellogg Company has launched new products or variants in “ethnic”
flavours like Chef Ranveer Brar has cooked special recipes for India’s
thandai-flavoured corn flakes.
5. New Product: Though Kellogs has many products for children and women,
it is still lacking behind in cereals for men, it can think of bringing a new
product in the market for men. They can innovate protein-based cereals for
men which can be consumed with water or could be taken in raw form.

Threats

1. Intense competition: Inter Industry & intra industry rivalry is one of the
major factors that are affecting the industry as a whole. Readymade foods,
Local food joints, restaurants in close proximity are some of the reason that
restricts the growth of cereal industry.
2. Government regulations: Government policies relating to the contents &
ingredients used in the cereals is creating a big hurdle in their growth.
3. Changing lifestyle: With the increase in the urban population office going
people use to have less time so now they are shifting to “Take away outlets”
to save their time.
4. Health Concern: Tribals in southern Scandinavia claimed that it contains
some toxins such as Special K which would result in young children being at

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 risk for liver and kidney damage. The cereal doesn’t have enough fibre,
fresh fruits or vegetables, and a way to keep you motivated and accountable.
5. Controversies: When consumers understand an advert to be controversial,

they expand bad emotions towards the brand and its merchandise, and those
unfavourable emotional states affect the corporation‘s popularity Fake
imitations of food products or shopkeepers keeping products beyond expiry
can be a threat for Kellogg’s because it’s highly affecting its image.
Kellogg’s ran an advertising campaign for Special K cereal that made it
seem like it was a super porridge.

Competitors

Company Sales(billion) Profit(billion) Asset(Billion) Market

value(billion)
Kraft Food $18.3 $1.6 $23.3 $29.8
Group.
General $17.4 $1.8 $22.8 $29.9
Mills
Kellogg’s $14.2 $1 $15.2 $22.5
CongAgra $13.8 $0.7 $12.5 $14.4
Foods
Mondelez $35 $1.6 $75.5 $50.5
International

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General Mills and Kellogg’s were the two companies which competed and
dominated the U.S cereal category. General Mills was ranked 47 in the forbes list
of world’s most innovative company. In May 2013, the company revenue was
$17.43 billion. Pepsi Co. oats was a dominant player in the hot cereal category.
Cereal producers started focusing on snacks business, as the trend in the
R.T.E(ready –to-eat) food was changing. While the cereals category was
witnessing a drop in sales of 3.3%, Kellogg’s saw growing demand internationally
Children and older adults were expected to account for over 80% of total growth in
the US population. Both these groups had the highest rates of per‐capita cereal
consumption. The traditional breakfast consumption habits were changing and
Americans preferred having breakfast on the go. In addition to this consumers
showed preference for foods that added nutritional value. Snacking culture had
changed breakfast into ‘snack fast’, as consumers’ preferred packaged foods that
were easy to carry while travelling
Convenience foods and on the go foods captured the market in recent years.
Protein and high fiber foods like Yoghurt, frozen egg sandwiches were the latest
trend and it had become a challenge for the breakfast cereal manufacturers to keep
up with these changing preferences. Companies involved in breakfast cereal
diversified into snacks business as there was decline in sales in 2012
Manufacturers faced great difficulty in maintaining the quality of the products.
Growth and Diversification
As Kellogg’s strategy for entering and growing in the Indian market has involved a
number of different stages, a critical discussion must explore each stage of
Kellogg’s approach in turn.
The first stage of Kellogg’s entry in India was in 1994 when the company entered
the market with three variants of cornflakes, expensively packaged and focused on
the crispiness of the product. This, therefore, indicates that in terms of the
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marketing mix, Kellogg’s began by assuming that product was the most important
factor in comparison with other less significant aspects such as pricing.
In the late 1990s, the company had improved its growth strategy by changing the
packaging and product to appeal more to consumer tastes. By introducing ethnic
flavors such as coconut and mango, Kellogg’s have embarked on a process of
product development.
Kellogg’s retained its position in the RTE market in the US, adopting the
acquisition route. In 2001, Kellogg’s acquired Keebler Foods Company, a
leading producer of cookies and crackers, which was the largest acquisition in its
history. In the year 2000 acquisition transformed the company’s revenues from
$1.80 billion to $2.34 billion in the second quarter of 2001. The company’s core
business of cereals represented 53% of its worldwide sales. 32% of sales were
from snacks and the remaining 15% was with other grain‐based foods.
Kellogg’s acquired Kashi Company, a health foods leader for products such as
Kellogg's Special K Red Berries cereal. The company focused on day‐to‐day
implementation of product development and promotion initiatives.
Kellogg’s snacks introduced its new Special K Pastry Crisps and Nutri‐Grain
Fruit Crunch bars. Kashi Heart to Heart Chia, Raisin Bran Omega‐3 and Special
K Multigrain were some of the products introduced by Kellogg’s. Kellogg’s new
cereal Scooby Doo for children was a good source of fiber (3 grams) with 27
grams of whole grains, and Cinnamon Jacks, which contained 12 grams of
whole grains.
Problems faced by Kellogg’s
Kellogg’s struggled with its traditional cereals offering to compete with newer
products like yogurt, smoothies and breakfast sandwiches. The adverse
fluctuation of international currency rates caused a drop in Kellogg’s sales
growth from 7% to 5% in 2013. Increased competition in the nutritional value
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foods category and consumer boredom had led to a fall in sales of its cereals and
snacks foods, at the end of 2013.
 Political instability: From the crises of wars in Iraq and Syria and the
migrant challenge in Europe affecting the socio-economic balance, to
foreign exchange and volatility around US. These kinds of challenges
have huge impacts on Kellogg Company’s sourcing and play into the
sustainability field at a very high level.
 Food security: The most vulnerable populations out there are the ones
who will be most affected by this challenge. Hirst described how
“these are our current consumers and hopefully in the developing
markets, this is where our future business will be. So we have a vested
interest in making sure the communities in which we operate have
access to food and nourishment on a regular basis. And business can
do that – we can step in and we find commercial ways to take people
from subsistence farming into the commercial cash crops.
 Urbanisation: Hirst detailed how “the estimates at the moment are
that the world’s population will be nine billion by 2050 and 70 percent
of that population are going to be in urban areas. So not only are there
going to be more mouths to feed, but there will be no more land or
water appearing – we’re going to have to do more with less.” For
Kellogg Company, “that means we have to have a strong sustainability
agenda, particularly around productivity and finding ways to improve
food security for the people who are actually left on the land, so they
want to be farmers and want to produce food for those who are moving
to the cities.”

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 Repositioning Strategy
The company had plans to increase its presence across the globe through
organic growth, acquisition and joint ventures or through cross selling
opportunities which had been created by the acquisition of Pringles.
The company efforts to move special K away from dieting, which was
effective more towards wellness, are helping Kellogg’s gain the attraction
again. Kellogg’s also is reinvigorating special K by reinforcing the berries by
adding more of the ingredient, which resulted in 7.3% profit sale of red
berries.
Kellogg’s repositioned its brand in the RTE and snack business while
retaining its focus on the core markets of cereals, as well as strengthening its
presence in the emerging markets. Kellogg's reduced the price of their
products and began to offer a wider range of product sizes to appeal to
different customers. Individual packs were especially popular.
Messaging was also changed, to reposition the cereals as a fun choice rather
than just a nutritious one.
It aims to lead in plant-based nutrition and win with “food forward”
consumers. Its visibility into the future also includes accelerating the Latin
America business, doubling the Asian business, tripling the Arabian business,
and transforming the African business.

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