Summary

Introduction 2. History 3. Industry Analysis 4. Pestle Analysis 5. Mission 6. Challenges 7. SWOT 8. KFS 9. Kelloggs International 10.Competitive Strategies 11.Product Life Cycle 12.Conclusion
1.

INTRODUCTION

The society lifestyle has evolved with time.

The traditional UK breakfast consisting of beacon and eggs has slowly been replaced by a less time consuming meal.
Alongside a growing issue for health.

There was created the healthy rapid breakfast cereal as a response the market demand.
While the breakfast meal change, it has socially become more than just breakfast. It is nowadays a all day meal or snack. Cereals are often consumed after school at 3-4pm. The market needed cereal bar as a quick on-the-go meal (i.e. workers in the office at 10am)

ABOUT THE COMPANY

Kellogg Company headquarters

HISTORY
February 19th 1906 - John Harvey Kellogg and Will Keith Kellogg also known as W.K Kellogg founded the Battle Creek Toasted Corn Flake Company in Battle Creek, Michigan 1914 The production of the Kelloggs Corn Flakes expanded world wide 1922 The Battle Creek Toasted Corn Flake Company changed there name to The Kellogg Company 1938 The company continued to expand and build plants in England and Australia 1951 W.K. Kellogg died. The Kellogg Company continued to expand and build plants in Latin America and Asia 1964 Kelloggs Pop Tarts are introduced 1976 Acquisition of Mrs. Smiths Pie Company 1999 Acquisition of Worthington Foods 2000 Acquisition of Kashi 2001 Kellogg acquires Keebler, its largest acquisition 2006 With almost 11 Billion, Kelloggs is the worlds leading producer of cereal and other convenience foods

Mission

Key factors for success (KFS) Health Versatility Convenience Brand Awareness Something for everyone Innovation Low barriers to entry Value for money

Critical factors for success (CFS)

Location Availability Marketing Research & development/Innovation Affordable

Quality

PESTLE
Political
The government has the food acts and there is also ACFM (Members of the Association of Cereal Food Manufacturers) which deal specifically on cereal issues

Economic
The success is due to high usage but still threaten by the traditional breakfast. There are still opportunities to grow.

Socio-cultural
Initial target was school student but grew the to whole family members. The eating habit has evolved

Technological
The major player are seeking to diversify more and the production process is highly computerised

Legal
EU legislation regarding health, ingredients, labeling and storage. This legislation includes the Food Labeling Regulations and there is ACFM also and CEEREAL.

Environment
The players are proactive in CSR and do sponsor a lot of event relating to diet

ANSOFF MATRIX

Kellogg is a Global Company Committed to Building LongTerm Growth In Volume and Profit and to Enhancing its Worldwide Leadership Position by Providing Nutritious Food Products of Superior Value
W. K. Kellogg

Organizational Strategies

Leadership in product innovation Strengthening the companys 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 Invests in new product research

Brand-building marketing activities

Cost structure reduction

Product Market Strategies

Product development

Constant innovation. Introduction of new product to present customers.

Market development

Maintain global position

Diversification

Introduction of new products to fit new customers needs

Key Factor for Success(KFS)

The Introduction Stage:

Market Size and Growth is small Research & development costs have been incurred in getting product to the stage High Marketing costs Hardly to make good profits during this stage Products are carefully monitored to ensure the growth

Growth:

Identified by rapid growth in sales and profits Huge market share Less costly for business to expand their market Enjoying the overall growth

Maturity:

Competition of market share exist The most profits made during this stage in the whole entire market An organization is recommended in order to get a bigger market share E.g : Kelloggs expenditure research and development to product modification and improvement

Declined:

Market is declining Decreasing the amount of profits Market share is divided between competitors End the product if it is not profitable

Brand Names

Kelloggs Keebler Nutri-grain Pop-Tarts Eggo Cheez-It Special K

Rice Krispies Morningstar Farms Kashi Murray Austin Famous Amos

Product Lines

Cereal Crackers Cookies

Snacks Frozen Foods Water

Market Analysis

Market Analysis

Market size: sales of nearly $9.7 billion in the Ready-To-Eat Market in 2001 Product segments: the best-selling kids cereal brands--GM Lucky Charms, GM Count Chocula, Post Marshmallow Alphabits, Q Marshmallow Safari, Rice Krispy. Market share: competition is heating up in this market as flat sales and lowpriced clones have eroded the market shares of Kellogg and General Mills 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 kids food market was driven, to the largest extent, by gains in cereals. Marketing/promotion: Seven breakfast cereal marketers allocated almost $775 million to purchases of space and time mass media in 2001. Industry structure: Three food giants--Kellogg, General Mills, and Philip Morris--responsible for 70% of kids foods in 2001.

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; Kelloggs - American Heart Association

Percent of Total Annual Spending on Presweeter Cereal

(by Age Group)

75+ 65-74
Age Groups

8.2 8.8 10.3 22.3 29.4 16.3

Percentage

55-64 45-54 35-44 25-34

Kelloggs

Distribution Channels
Kelloggs Kelloggs Kelloggs

Computer system Wholesaler

Kroger, Target, distrib. centers

Retailer

Retailers Distrib. In stores

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Sources

Kellogg - Mike Culverson / Customer Service Farmer Jacks - Ron Van Este / Cereal buyer Media Week - May98 / Something New Under My Nose Business Week - Wednesday, May 29, 2002 Kellogg Co. WWW.industryweek.com - Food Industry Focus Field Visits - Kroger, Farmer Jacks, Target, Rite-Aid. Florida Sun Sentinel - Feb. 7, 1998 / Robin Fields / Get That One Mommy The NPD Group - March, 2001/ The Twelfth Annual Report on Eating Patterns in America Kellogg - www.Kellogg's.com http://faculty.sba.udayton.edu.schenk.kellcase.htm