Kelloggs Ppt 6f3y1v

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

Kelloggƍs Marketing Strategy and Marketing Plans

(rganizational Strategies ' '

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

˜lobal Strategy Management continues global strategy ' Offers brandbrand-differentiated pricing ' Invests in new product research ' Brand 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

elloggƍs SWOT Analysis

Strengths '

Control 42% of global market share for PrePresweeter cereal, which is more than triple the market share of any of their competitors.

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They have the strongest brand recognition and advertising recollection of all the cereal manufacturers

þeaknesses '

wave Ô aggressively evel pe maÔ Ôew cereal lines in the past four years.

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O w er Ô of their U.S. marke e in the past few years,

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Follower in Pricing Strategy

( ortunities '

Interntion ex nsion is the biggest area for growth for Kelloggƞs.

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Kellogg can continue to w vef vef,, while still remaining in their core business area, which will increase their profitability.

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If they can eve p a better pÔ e and guarantee lower prices, they can reduce costs while increasing their market share.

°hreats '

General Mills, Post, and Quaker Oats are using pe mpe Ô Ô p p fe Ô to erode Kelloggƞs share of the market.

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D Ô m Ô ee brands have been successful in reducing brands in the more commodity like cereals.

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Market Analysis '

Market size: sales of nearly $9.7 billion in the ReadyReady-ToTo-Eat Market in 2001

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Product segments: the bestbest-selling kidsƞ cereal brands-brands--GM GM Lucky Charms, GM Count Chocula, Post Marshmallow Alphabits, Q Marshmallow Safari, Rice Krispy.

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Market share: competition is heating up in this market as flat sales and lowlow-priced clones have eroded the market shares of Kellogg and General Mills

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Market Forecasts: the kidsƞmarket 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 kidƞs food market was driven, to the largest extent, by gains in cereals.

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Marketing/promotion: Seven breakfast cereal marketers allocated almost $775 million to purchases of space and time mass media in 2001.

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Industry structure:

Three food giants-giants--Kellogg, Kellogg, General Mills, and Philip Morris-Morris--responsible responsible for 70% of kidƞs foods in 2001.

Major °rends in Cereal Industry '

New products are dominated by line extension and product promotion

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Increasing popularity of private labeled cereals due to high cost of branded products

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wigher demand for health food markets & products

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wealth claims is becoming more prevalent; Kelloggƞs American weart Association

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Com etitive Force Analysis Intensity of Rivals

XFour Large companies are dominant in the market XOligopoly XCompetition is very intense XInflated prices XGrowth Rate has remained Constant

Com etitive Force Analysis Treat of a O bstit tion XPrivate Labels Xwas made substitution very significant XCaused other 3 competitors to lower their prices XLow switching cost (1/3 of 1,000 shoppers switched to private label) XPrice competition (1990ƞs started a price war between rivals) XMade the buyer more powerful

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

Com etitive Force Analysis Hi Barriers to Entry

! eting - eed need o to compee compete st s cue b ds h h ve bee es blshed houh l e dves d pomoo l effos (.v., coupo)

Hh C p l coss - fo dffee ypes of equpme d pl s

Com etitive Force Analysis Power of O lier '

Supplier does not have much power because of private labels.

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Similar products have allowed buyers to acquire products from private labels at a Cheaper Price.

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Now industry is very Sensitive to the buyer.

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Cocoa Kris ies Buying Criteria '

Key equity drivers: chocolate taste, Coco the monkey, snap, crackle and pop

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Package: fun, colorful, capture childrenƞs attention

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Product: very sweet, colorful and contain nutritious elements

Kelloggƍs Customer Analysis Wo Are te Buyers? ' Parents, Older Adults H w OfeÔ D Te P e? ' Kids cereal are purchased roughly 18 times a year ' 10th fastestfastest-moving product in the supermarket Wee D e WÔ B ? ' Grocery Stores responsible for 99% of cereal sales W Ae e IÔf eÔe? ' Kids W Ô me e ? ' Kids under 18 W e e T e !e? ' Kids 88-11 years old

Percent of °otal Annual S ending on Presweeter Cereal (by Age ˜rou







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Cocoa Kris ies (bjective '

Strengthen kid consumer base

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Secure Kellogg Ơcocoaơ bit subsegment volume share with competitive focus on GMƞs Cocoa Puffs and Postƞs Cocoa Pebbles

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Create a product that enhances the Ơultimate multimultisensory food experienceơ by adding additional attributes that satisfy expended consumer needs

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Attract different target groups

C(C( Kris ies Promotion '

Spent roughly $15 million for ad campaign: TV, print

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Adds include Coco the Monkey

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r: Kellogg Agency (Leo Burnet)

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Quantity and price discounts

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Packaging: fun, colorful, capture children attention

Cereal Pricing for Retail Stores

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Kelloggƍs

Distribution Players ±



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!ajor players:

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Kroger Farmer Jack Target

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Convenience stores Gas stations

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Kelloggƍs

Distribution Channels











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Critique of the Plan '

wave we heard of it?

Promotioal issues

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Ca we get it?

Distributio istributio

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Ca we afford it?

Pricig

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Are we buyig it?

Target maret record

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Is it legitimate?

Corporate re oibilitie respoibilitie

Promotional Issues '

Mass Advertising

TV, Cocoa the Money, and Sna Crace and Po .

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Direct Promotions

C ns Cou ns

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Trade Pr m ti ns

InIn-st re dis ays am es

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Pers na eing

Key-acc nt re s

KeyArea re s

Merchandisers

istribution '

Penetration -

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Sae Canne -

Brand rand eq ity e

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Logitic

Finied good areo e / rai / tr c / center or inde endent areo e

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Reationi -

Chain tore Inde endent oeaer whoeaer

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Confict or armony?

°he °arget Fatet Gr wÔg F

Ô the AmeraÔ Det: Det:

Carbonated Soft drinks Pre--Sweet Cereal Pre Bagels Toaster Pastries Pizza

Cor orate Res onsibilities Legal Issues - ae

afe I a C e ' Ev eal - Ea Aa Issues ' Cv Res sbles - A e saas '

- ae le ea - ubl Publ ga su '

Eal Issues -

u al Nu al eua

- ! e a eque

ericaƍs °o 10 RR-°-E Cereals 1. Frosted Flakes 2. Cheerios 3. Frosted MiniMini-Wheat 4. Corn Flakes 5. Rice Krispies/Cocoa Krispies

6. woney Nut Cheerios 7. Raisin Bran 8. Fruit Loops 9. Special K 10. Corn Pops

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Sources ' ' ' ' ' ' ' ' ' '

Kellogg - Mike Culverson / Cusoer ervie Farer Jakƞs - Ron Van Ese / Cereal buer Media Week - Ma98 / oeing oeing e Under M oseơ Business Week - Wednesda, Ma 29, 2002 ƠKellogg Co.ơ WWW.indusreek.o - ƠFood Indusr Fousơ Field Visis - Kroger, Farer Jakƞs, Targe, RieRie-Aid. Florida un eninel - Feb. 7, 1998 / Robin Fields / ƠGe Ta One Mo e PD Group - Mar, 2001/ Ơe el Annual Repor on Eaing Paerns in Aeria Kellogg - .Kellogg's.o p://aul.sba.udaon.edu.senk.kellase.

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