Few Major Brands of Kellogg Company - Essay Example

Few Major Brands of Kellogg Company Introduction This report is based on the analytical study of few major brands of Kellogg Company such as Kellogg Special K, Cornflakes, Rice Krispies, Nutri-Grain and Crunchy Nut. Kellogg Company is a multinational organisation which specializes in breakfast foods cookies and crackers. It was established in the year of 1906 by Mr. Will Keith Kellogg and it is headquartered in Michigan, USA. This company is operating in various parts of Americas, Europe, Asia, Middle East and Africa. The company’s revenue in the year of 2013 was $14,792 million with an increase of 4.2% over the year of 2012 (MarketLine, 2014). Background The case study is based on the analysis of marketing mix for Kellogg Company. Marketing mix is an essential business tool used by organisations to determine a product or brand offer. It is normally associated with price, product, placement and promotion of any organisation. These elements help marketers to create the market strategies and positioning of the company. The first element, product, helps a company to understand that how their offering meets the changing needs of customers. Price charged by any company is an important element to assess the sales of the products and place denotes the availability of the product. The last element, promotion, is very important to understand various ways of positioning of the product (Borden, 1964). Marketing mix of Kellogg Company will help them to plan their marketing strategies and resource allocation (Vignali, 2001). Critical analysis Product: The products of Kellogg’s can be classified as convenience products. Convenience products are those which are purchased by consumers without much consideration. Most of them are low priced, easily available and frequently parched products (Vignali, 2001). Developing new product is extremely risky and expensive procedure for any business. To develop a new product, company needs to assess the rapidly changing market and they need to predict the changing needs of customers (Annacchino, 2003). The Kellogg Company is very successful in developing any new product since its inception. Their first established product in the market was cornflakes and it helped them to attain the highest market share in the cereal market. Consumers generally purchase their product easily as the company holds a reputation in providing good quality products. Their existing products are very popular and generate a huge profit for the company. This financial gain helps them to invest in the development of new products and sell them in low price as the cost is covered by the profit from the existing products. They always consider the changing customer preferences and taste. Their primary market research has shown that the desire for healthy and low fat food is growing among the women buyers. So they have expanded the product line for special K cereal with nibbles and snack bar. These new products are perfect as a mid day snack for the health conscious customers (Business Case Studies, 2014). Price: Price is an essential element of marketing mix. It helps organisation to generate income. There are various internal and external factors that affect the pricing decision of any company. The internal factors involve company’s marketing objective and cost. Before setting any price for the product, the company needs to introduce new marketing strategies for it. The organisation needs to set its target market before deciding the price of the product (Lee and Staelin, 1997). Kellogg Company uses different pricing strategies for different kind of products. The targeted customers for Kellogg Special K were mostly women who are very health conscious. Therefore, they have decided to use premium pricing strategy for it in comparison to normal corn flakes. Products like Cornflakes and Rice Krispies is already very well known in the market and have a number of competitors. These products generate more profit with low investment and they do not need to set a high price for that product. So, they have used competitive pricing strategy to be the leader in this segment (Lee and Staelin, 1997). The nature of market and its competition considered as the external factor for pricing decision. A slightest change in their price structure can boost their market demand (Business Case Studies, 2014). Place: Product needs to be available in sufficient quantity in desired location. Therefore, establishing an efficient supply chain is very necessary (Bueß, 2004). Kellogg is using the intensive distribution procedure. They have used almost every available outlet in the market such as huge supermarkets, local shops and college vending machines for their special K snacks Bar and Nutri-Grain. They still have not used the direct selling method and company owned website as their product distribution procedure. Customers generally prefer to buy these kinds of products along with all other grocery items. All of the supermarket chains and retailers provide the facility of online shopping. So, Kellogg prefers to use the website of these intermediate supermarket chains such as Kroger, Sainsbury’s and Tesco to sale their products (Business Case Studies, 2014). Promotion: Effective promotion is very necessary for product placement in the market. Any well developed and meticulously priced product can fail due to lack of promotion. Institutional advertisement procedure promotes the organisation as a whole (Munger, and Grewal, 2001). Institutional advertising is not a right choice for Kellogg as they have a wide range of products. They have different target market for each kind of products and they generally follow integrated marketing communication for their products. Kellogg generally use the social media advertising for their Nutri- Grain Bar and children snacks. They use the product advertisement very frequently as they have a large number of products in different stage of life cycle. Kellogg prefers to use pioneer advertising when they are launching any new product. Kellogg’s Crunchy Nuts has no difference from the other cereals so they need to use the pioneer advertisement to create a demand for this product in the market. They use newspaper, magazine and television to advertise Crunchy Nuts. Kellogg Special K healthy Bar already has a few competitors in the market. So, they need to do some innovative promotion for this product to attract their consumers. Therefore they have decided to attract women towards Special K by introducing it as a low fat snacks bar that can replace their day meals and can help them to stay fit. This promotion has given them an added advantage over competitors such as Go-Ahead Bar (Business Case Studies, 2014). Conclusion and key recommendation Overall, Kellogg is a highly successful organisation and generating profit in all the product segments. The main reason of their huge success is that they are continuously launching new products with nutritional value and they are utilizing different promotional methods for every product. There are few issues that need to be solved by the company such as they need to introduce a totally new range of products apart from breakfast snacks and they need to create their own online distribution channel. Recommendation for new product: Kellogg needs to introduce a totally new range of products apart from the breakfast cereal and nutrition bars. They can introduce a new food section such as confectionary and minerals, which will eliminate the risk of product saturation. Recommendation for distribution: It has been already discussed that the online distribution channel is not feasible for their business. Kellogg is already using third party online distribution channel for their products. Their own website for online product selling will be helpful for their business to business customers. This procedure will help them to properly handle all the business to business transaction. Recommendation for promotion: They need to follow some institutional promotional activity as it will help them to maintain their customer loyalty and interest. Reference List Annacchino, M. A., 2003. New Product Development: From Initial Idea to Product Management. London: Butterworth-Heinemann. Borden, N. H., 1964. The concept of the marketing mix. Journal of advertising research, 4(2), pp. 2-7. Bueß, J., 2004. Product Placement: The Analysis of a Marketing Communication Instrument. Germany: Diplom.de. Business Case Studies, 2014. Kellogg’s and the marketing mix. [online] Available at: [Accessed 26 December 2014]. Lee, E. and Staelin, R., 1997. Vertical strategic interaction: Implications for channel pricing strategy. Marketing Science, 16(3), pp. 185-207. MarketLine, 2014. Company Profile: Kellogg Company. [pdf] MarketLine. Available at: [Accessed 26 December 2014]. Munger, J. L. and Grewal, D., 2001. The effects of alternative price promotional methods on consumers’ product evaluations and purchase intentions. Journal of Product & Brand Management, 10(3), pp. 185-197. Vignali, C., 2001. Kellogg’s–internationalisation versus globalisation of the marketing mix. British Food Journal, 103(2), pp. 112-130. Read More