Elements of a Marketing Strategy of Nestls Breakfast Cereal Division - Essay Example

?Marketing Report for Nestle’s Breakfast Cereal Division Introduction In the studies conducted by Clancy (1995), he d that the common myth in the field of marketing is that it is the child or children within a household who normally influence the kind of product and even the brand that is going to be bought for household use. Therefore, based on this myth, marketers normally target this influential audience by devising colorful advertisements that air during prime time shows that are popular among the young generation. Sheth (2011) also shared in this common assumption as she stated that parents normally make their purchase decision based on the preference of their children as they will always try to appease them and therefore, it is a strategic approach to design adverts that are targeted towards the influential audience within the household,. This myth or common assumption in the field of marketing has largely contributed to low focus on the market segment of the over 50s in terms of personalized products, services, and marketing campaigns. By overlooking this particular market segment, it means that most companies are unable to diversify, increase their market share, and overall revenues because they are not tapping the opportunity presented by this market segment. This present paper is a briefing paper prepared from the standpoint of the Marketing Director of Nestle breakfast cereal division for the United Kingdom. This briefing paper will outline the key elements of a marketing strategy that is designed to target the market segment of the over 50s. The outline will entail the market opportunities, product strategy, and the next steps that should be undertaken before drawing up a formal marketing plan. Market opportunities To begin with, the report presented by Shaw (2008) on behalf RIAS insurance company, noted that statistics from the Office for National Statistics reveal that the population for the over 50s is bound to increase in the coming in years and in particular they are bound to reach 27.2 million by the year 2031. According to the writings by Morgan and Levy (2002), this statistics reflect a market segment that will record increased demand over time and therefore, companies focusing on this particular segment will be able to record a continued growth in terms of revenue from the sales arising from this expanding market segment. Therefore, based on the estimated population growth for the over 50s, the Nestle breakfast cereal division for the UK will record continued increase in demand and subsequent revenue arising from the breakfast cereal that is specially prepared for the over 50s population. Another factor that demonstrates the true potential of the market segment for the over 50s is the fact that both Shaw’s (2008) report and the report by Kellogg’s indicated that the over 50’s are wealthier and have high disposable income or high spending power as compared to the other generations. Under the RIAS’ report, Shaw (2008) noted that the over 50s have substantial financial assets. In particular, their personal wealth has risen by 45.6% over the past 5 years to surpass the ?5 trillion mark, secondly, they account for 75% of UK’s total wealth and on average the persons above the age of 65 years has a life savings of ?11,660.85. The report by Kellogg’s noted that persons above the age of 65 years are wealthier and they make up 20% of cereal consumers. The findings from these two reports further validate the true potential of the over 50s market segment since it was noted that they have a high spending power which means that demand for Nestle’s breakfast cereals, which are specifically prepared for this market segment will experience high demand. According to Morgan and Levy (2002), a viable market segment that can generate high revenues for a business is usually made up of consumers with high spending power and therefore, by strategically focusing on creating breakfast cereals for the over 50s market segment, Nestle is bound to record increased revenue. In terms of food consumption, Bernstein and Luggen (2011) stated that persons above the age of 50 years are particularly conscious with their health and therefore, they have a high preference for healthy diets. This means that they will consume different kinds of foods only if they have been proven to be healthy and promote good diet. Consequently, because of the great emphasis on a healthy diet, the over 50s consumers will only consume cereals that promote healthy diet and Bernstein and Luggen (2011) stated that basically such cereals should have low fat content, low calories and more nutrients. Moreover, the over 50s consumers would prefer to eat cereals in order to ensure that they do not become a burden to their family members with special needs such as special breakfast and by continuing eating cereals with the rest of the family during breakfasts will give them the general feeling of belonging and attachment to the entire family. For example, a person above the age of 50 years would feel isolated if he or she has to wait for a special breakfast to be prepared while the rest of the family are eating cereals for breakfast, which is easy to prepare and it only takes a few minutes (Hough, 2008). Summarily, it is correct to state that there is a great market potential in the market segment for the over 50s in terms of breakfast cereals this is because they are many in number, and secondly, they have high spending power that can allow them to easily purchase breakfast cereals. Thirdly, they will be ready and willing to purchase breakfast cereals that are nutritious and promote healthy diet. Product strategy Nestle and its associated brands are widely known globally since the Nestle food and beverage company is the largest food company in the world in regards to revenue generated. However, its breakfast cereal division has largely focused on producing products that are appeasing to children (Morgan and Levy, 2002). Relying on the marketing assumption or myth that was written in the introduction part it can be stated that the company adopted this product policy (concentrating on kids cereals) in order to ensure that every household serves breakfast cereals courtesy of the desires of the children. This product policy contributed to the neglect of the consumer segment that is made up of persons above the age of 50 years. However, as it has been noted above, the over 50s present a potential market for the Nestle breakfast cereals division and they can be the new source for the company’s sustained profitability as they are increasing in number and they have a higher spending power than the other consumer segments within the breakfast cereal division. The only viable product strategy that can be implemented in order to explore this consumer market segment is by creating a new product line that contains breakfast cereals that are specially prepared to suite the taste and health needs of persons above the age of 50 years. In order to demonstrate the special attention that is deserved for this consumer market segment, the Nestle Company should create a sub-division within the breakfast cereals division that will also consist of a research and development team. This team will be mandated to research on perfect ingredients or recipes that can be used to prepare delicious and nutritious breakfast cereals for consumers above the age of 50 years. Secondly, this division should have its own marketing department that will rely on the findings, or the reports that have been prepared by the research and development team. The reports will show the nature of the targeted consumer segment and appropriate marketing messages that can be used to lure them into becoming loyal customers of the new breakfast cereals specially prepared for the over 50s consumers. Generally, according to Chernoff (2006), the new breakfast cereals should focus on promoting healthy diets and in order to gain a competitive advantage, the new breakfast cereals should be delicious or tasty but with still low sugar content. This is because most healthy diets that are designed for the older consumers are usually tasteless because of limited sugar content (Hough, 2008). Therefore, by creating a health breakfast cereals for the elderly consumers, which are equally tasty, Nestle would have a competitive advantage in this potential market segment. Next steps Before drawing up a formal marketing plan the most important thing that should be done is to find out whether consumers above the age of 50 years will vouch into the idea of consuming Nestle brand of breakfast cereals since the company is largely known for producing a wide variety of kids’ cereals. Alternatively, it should be noted whether this new consumer segment would like to associate themselves with an anonymous company that has shown deep interest in serving them and solely catering for producing their breakfast cereals that factors in their dietary needs and health status. Secondly, it would be important to get input from geriatric doctors on the dietary needs and health status of consumers above the age of 50 years. Based on the information provided it would be possible to devise marketing messages that are in tandem with the opinion of geriatric doctors, who largely influence the decision of the older people in regards to what they will eat. References  Bernstein, M. and Luggen, A. 2011. Nutrition for the Older Adult. Burlington, MA: Jones & Bartlett Publishers Chernoff, R. 2006. Geriatric Nutrition: The Health Professional's Handbook. Burlington, MA: Jones & Bartlett Publishers Clancy, K. 1995. Marketing Myths That Are Killing Business: The Cure for Death Wish Marketing. New York, U.S: McGraw Hill Professional Hough, F. 2008. Older. Richer? Wiser? Millennium Consultancy Firm Kellogg’s Do you think I’m sexy? Falling in love with the over 65’s. Kellogg’s Report Morgan, C. and Levy, D. 2002. Marketing to the Mindset of Boomers and Their Elders. Attitudebase Publications Shaw, O. 2008. Older, Richer Wiser? RIAS Insurance Sheth, J. 2011. A Normative Theory of Marketing Practice. US: Marketing Classics Press Read More