Communications Plan of Kelloggs Company - Essay Example

? Communications Plan of Kellogg’s Company Step Situational Analysis of Kellogg’s Company Kellogg’s Companyis a multinational company which deals with manufacture and sale of foodstuffs and snack such as cookies, biscuits, cereal snacks and waffles. The company is generally affected by political, social and environmental factors. Politically, Kellogg’s Company is affected by U.S and foreign, federal, state and local laws about different operations. Thus, different regulations enacted by the U.S government normally affect the company greatly. Enactment of new tariffs or changes by the same also affects the company performance and its general financial position. Changes in the existing taxes also affect Kellogg's operations since; there will be an increase in the expenses of the company (Boehlje, Krause & United States, 2001, 13). This poses a challenge for the Company because it has to find ways of increasing its revenues in order to cover up the expenses. In addition, political unrests and terrorist attacks in the Unites States also affect the flow of work in the company. For instance, terrorist attacks will normally lead to massive losses due to fall in the demand of foodstuffs. However, it is not all times that the political environment will create challenges for the company. At times it also creates opportunities for the company. For instance, when the government creates trading opportunities in the economy, or creates new investments in the country. The country is able to increase its revenue by taking advantage of such investments (Boyce, 2002, 32). The economic environment of the company also has a great impact on the company’s operations. Economic downturns affect the consumer demand of the products being offered by the company (Kellogg’s, 2008, 9). This is because; consumers will only be attracted to buy products which are lowly or averagely priced, but not highly priced. Therefore, economic problems such as inflation or increase in prices also affects the company’s financial statements due increase in the expenses. For instance, increase in the prices of raw materials, fuel and labor costs, increases the production costs of the company. Kellogg’s company mostly uses agricultural products such as wheat, corn and sugar. Therefore, any slight price increases in the agricultural market pose a challenge to its operations. In addition, shortages in labor, and the general inflationary pressures in the economy increase the labor costs of the company. Social/cultural effects mainly involve effects arising from the reaction of the customers. Kellogg’s Company produces products which directly affect customers since; the products involve direct consumption by the public (Kellogg's, 2008, 8). Therefore, the company has the duty to produce high quality products which will not have adverse effects on the customers’ health. Therefore, the company has to check on the safety and quality of its products. The ingredients used in the food products also have to vary depending on the culture of the target group. This is due to the fact that; different cultures consume different foods and despise different foods too (Peterson, 2004, 15). Competition is also a factor that greatly affects the operations of Kellogg’s Company because; the company operates in a highly competitive industry, the food industry (Kellogg's, 2008, 7). There are many other businesses that are engaged in the supply of fast foods and ready-to-eat cereals. Most of these businesses also have strong financial positions and thus they are highly competitive. Therefore, Kellogg’s also has to improve its operations in order to match up the challenge posed by its competitors (West, 2001, 41). Technology is also a factor that affects the company immensely. This is because; technological failures would disrupt its operations since; the company greatly relies on information technology to store and transfer data. For instance, its inventory management system is electronic and thus, it highly depends on the information technology systems (Kellogg's, 2008, 10). The current communication strategies of the Company also greatly depend on its technology system. It is for this reason that the communication system is considered as effective though, it still has a number of loopholes such as insecurity, and lack of confidentiality. The company also enjoys a number of strengths such as production of unique products, cost advantage, and strong brand equity. Its weaknesses include lack of innovativeness and a weak management team. Stage 2: Two strategic directions One of the strategic directions that Kellogg's Company should take is to join a new market in a different part of U.K. This is because; the company will be able to get new customers for its unique products. This will be a way of expanding its market share and improving its operations. Going into a new market will also help the company to improve the quality of its products since; it will want to convince the new customers about the quality of its products. The target market in this overseas area will be the individuals who are major consumers of fast foods and snacks (Patten, & Patten, 2008, 34). The company could also ensure that it ensures maximum promotion of its products in the new markets. This is because; this is the only way that the market will get to know about the products. In the new market, the consumers will have a different buying behaviour than in the normal market where all consumers are aware of Kellogg’s products. The new customers may have different tastes and preferences and thus, the company will have to determine their choices before supplying all its products to the market. Depending on the tastes of the new market, the company could also decide to bring new and unique products that are just suitable and specific for that particular market. Another strategic direction that Kellogg’s Company can choose to take is building up the market share of its products in the already existing markets. Kellogg’s can increase the number of customers consuming its products by launching new products and services in order to ensure that it keeps its customers and attracts new ones from its competitors. For instance, it could introduce new ways of providing services to the customers. The company could also introduce house to house delivery services for all orders. This would attract customers of the companies that do not offer delivery services. The company should choose to improve its delivery services because; this way it will certainly increase its sales within a short period. Market share can also be increased by improving the advertising and promotion methods (Espejo, 2010, 36). The company could decide to use promotional methods that reach a large number of individuals such that it attracts many customers. Step Three: Quantitative and Qualitative objectives A qualitative objective that the company should focus on is improvement of the quality of its products and services. This is because; the company deals with food stuffs, whose value is mainly determined by quality. If the food stuffs are of a high quality, then the company will be sure to increase its sales. On the other hand, if the foodstuffs are of a poor quality, then the company will have a fall in sales since, customers will move to other companies where they can obtain the same commodities but with better qualities. On the other hand, one of the quantitative objectives could be an increase in sales by 20% within the next one year. This objective is specific and thus, it will help the company to be aware of exactly what it wants to achieve within the next one year. The objective is also measurable and thus, the company will not just be targeting a random increase. Instead, it will be in a position to measure the specific increase in the sales. The objective is also achievable, and thus, the company will not be frustrating its employees in order to attain goals which are very high and difficult to achieve. Therefore, the company should identify the particular steps that it can follow in order to attain this goal. In addition, the goal is also realistic and thus it will not act as discouraging factor to the employees of the company. The goal is also time bound. This can be seen from the fact that; the company has defined the specific time within which it would like to achieve its goals. A second quantitative goal that can be pursued by the company is to ensure a 10% increase in its customer base within the next six months. This is also a smart goal since; it is specific, measurable, attainable, realistic, and time bound. Step Four: Budget With a budget of ?500,000, the company should first ensure that it allocates ?250,000 to the labor costs for the sales and marketing personnel. This is because; it will have to hire a large number of sales personnel in order to cover a wide area in the market. On the other hand, ?150,000 should be assigned to the mass media advertisements. For instance, the company might use TVs, radios, newspapers and magazines to promote its products. The company could also decide to use sales promotion in the campaign and thus it will have to allocate a certain amount too. Therefore, it could allocate ?50,000 to personnel involved in then sales promotions. The remaining ?50,000 should be allocated to miscellaneous costs such as transport costs, and coverage of losses which might be incurred during the campaign. Step Five: Communication Tools The company should use social networking sites to communicate to its unreached customers and the reached customers too. Examples of social networking sites could be opening of facebook page and creation of an account in twitter (Reece, 2010, 43). This way, the company will be able to invite many people to like its page and thus, many individuals will be able to know about its products. The company could also post pictures showing its products and describing them to the customers. This communication method will be the cheapest since; the company will only need to employ one or two administrators to run the online programs. This type of communication will have no specific date since it can be used all the time, even after the campaign is over. The company should use advertisements in the TV programs in the first week of the campaign. The theme of the advertisement could be: ‘Always and Ever Yummy’. This type of communication channel might be slightly expensive since the company will have to enter into contracts with media companies. In the second week of the campaign, the company could use newspapers and magazines with a theme like; ‘One is Never Enough’. This will definitely attract new customers and persuade the existing ones to increase their purchases from the company. The company can also use personal selling which will involve free delivery of the products in order to bring the products closer to the customers since; this will be a way of convincing them to purchase more. Personal selling will be used in the last days of the campaign in order to convince the customers who have not yet been convinced by the other promotion methods. A fifth communication tool that Kellogg’s company can use is sales promotion such as; ‘buy two get one for free’ offers, gift offers, contests and prizes. These will attract customers from the competitors who are not offering the same offers. These will also capture individuals who do not watch TVs or read newspapers and magazines. This method could be used in the third week of the campaign as a way of increasing awareness. The communication tool might be slightly expensive because; it will force the company to increase its production thus causing a direct increase in the production costs. Step Six: Campaign Schedule First Two Months: In the first month, the company should implement all communication tools except personal selling. Media advertisements and newspapers should be used first in order to catch the attention of the public. On the other hand, the social network sites should also be started at the beginning of campaign in order to create time for people to join. Next Two Months In the next two months, the company will still continue to use TV and newspaper advertisements. However, the communication tool that will be intensively used at this stage is the social network site. This is because; at this stage many people will have joined the sites and thus, the company will be reaching many people if it uses online marketing. Final Two Months In the last two months, the company should majorly focus on using sales promotions and personal selling. This is because; its major aim at this stage will be to reach the unreached individuals at a personal level. However, at this stage the company will also use the other methods though it will minimize on the newspaper and TV advertisements since; they will have become monotonous. Step Seven: Evaluation of the Impact The impact of the campaign will depend on the overall increase in the sales of Kellogg’s Company. If the sales increase by more than fifty percent, then it will imply that the campaign was successful. However, if the sales and customer base stagnate even after the campaign, then it will imply that the campaign had not been effective. Effectiveness of the campaign will also be evaluated by checking at the costs incurred in the campaign (Espejo, 2010, 50). If the costs will be higher than the benefits derived from the campaign, then the campaign will be judged as ineffective. However, if the benefits are more, then the campaign will be viewed as effective. References Boehlje, M., Krause, K. R., & United States 1981. Economic and federal tax factors affecting the choice of a legal farm business organization. Washington, D.C: U.S. Dept. of Agriculture, Economics and Statistics Service. Boyce, J. K. 2002. The political economy of the environment. Cheltenham, U.K: E. Elgar Pub. Espejo, R. 2010. Advertising. Detroit: Greenhaven Press. Kellogg's 2008. Retrieved April 20, 2013, from http://www.annualreport2008.kelloggcompany.com/downloads/KELLOGGS-10-K.pdf Patten, D., & Patten, D. 2008. How to market your business: A practical guide to advertising, PR, selling, and direct and online marketing. London: Kogan Page Ltd. Peterson, B. 2004. Cultural intelligence: A guide to working with people from other cultures. Yarmouth, Me: Intercultural Press. Reece, M. 2010. Real-time marketing for business growth: How to use social media, measure marketing, and create a culture of execution. Upper Saddle River, N.J: FT Press. West, C. 2001. Competitive intelligence. Houndmills, Basingstoke: Palgrave. Read More