The purpose of this report is that to let the readers know the challenges and competition in Cereal and Snacks of UK and rest of the world. This report is sculptured on Kellogg’s the market leader of cereal and breakfast industry of UK. This report consists of detail company analysis using SWOT* analysis, PESTEL** analysis and using Marketing 4 p’s*** and Porter Five Forces to highlight the industry. The objective of the report is to outline the marketing plan of Kellogg’s and then critically evaluate the plan making the recommendations. Further then this report is going to highlight effects of technology on Kellogg’s operations and how Kellogg’s is benefiting from new media i.e Internet. The end of the report some focus is upon the Kellogg’s Sustainability plan and recommendations for further improvements.
* SWOT – Strengths, Weakness, Opportunity and Threats
** PESTEL Political, Economical, Social, Technological, Environmental and Legal
*** 7p’s- Product, Price, Promotion and Place
Contents
Marketing…………………………………………………………………………………..
2) About Kellogg’s and market analysis……………………………………………
3) Kellogg’s Marketing Plan …………………………………………………………….
4) SWOT ANALYIS…………………………………………………………………………….
5) PESTEL Analysis……………………………………………………………………………
6) Kellogg’s 4 P’s……………………………………………………………………………….
7) Kellogg’s Product life Cycle…………………………………………………………….
8) Impact of technology on Future Marketing Plans…………………………..
9) Sustainability and Kellogg’s…………………………………………………………….
10) References……………………………………………………………………………………
Marketing
Marketing is the management process of Identifying, anticipating and satisfying customer needs and requirements profitably. Chartered Institute of Marketing
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So the main functions of marketing is to ‘Identify’ and ‘Anticipate’ what are the needs and wants of the customer and analysing what the competitors are providing at the moment and what further new and better product and service the Organisation can provide. The Main aim here is to know and understand the customer so well that product or service fits accordingly to customer requirements and sells itself. Secondly the important aim of marketing is to satisfy the customer. So the companies provide the combination of products and services to satisfy the needs and wants of the customers.
Kotler describes marketing as ‘the process by which companies create value for customers and build strong relationships in order to capture value from customers in return.’ To do this successfully, firms need to embrace a culture of market orientation and put the customer at the forefront of everything they do. Communication of the marketing strategy and plan across the organisation plays a vital part in making this happen.
Philips Kotler
There is misconception among the people that marketing is all about advertising and selling i.e. ”Telling and selling”, although they are important but they are only the tip the marketing iceberg. Selling and telling occurs after the product is complete and ready to launch to market, in contrast marketing starts long before the company has a product. Marketing is all about assessing the needs of consumers, measure their extend intensity and estimate whether there is a profit opportunity exist. Marketing is of such importance that is continues from the product development to market withdrawal, and its main function during this period is to acquire new customers and keep the current customers locked in by improving product appeal and performance and giving customer a good after sales service with constant product updates. According to the Marketing guru Peter Drucker,” The Aim of marketing is to make selling unnecessary this is done by understanding the customers so well that the product and service sells itself.
Marketing is a five step process;
Understanding the Marketplace and Customer needs and wants
Design Customer-Driven Strategy
Construct a Marketing Programme that delivers superior value.
Build Profitable relationship and customer delight
Capture Value from customer in return.
Kotler one of the famous Marketing author describes marketing as a Process by which companies create value to the customers and build a strong relation in order to capture value from customers in return in the form of Current and future sales, market share and profits. Companies should provide good quality service and superior products to customers to satisfy them and in return win customer loyalty and future sales. To create value for the customer the company should have a ”Customer-driven marketing strategy and the customer driven strategy looks upon two basic questions,” What customers will we serve and how can we serve these customers best”. The company must first decide who it will serve, for this company divides the market into segments and selects the segment it will go for. After selecting the target customer then company decides how they are going to differentiate and position itself in the marketplace. One important role of marketing is that to lock the customer with continuous good quality service and to provide innovative products at regular intervals and once the customer is locked in, and then most important step is to build a profitable customer relationship.
Kellogg’s
About Kellogg’s: Kellogg’s is a prominent player in the world of Breakfast and produces more than three out of 10 packets eaten in UK. Kellogg’s has 42% of UK market share, this makes Kellogg’s a market leader and in 2009 it was Britain’s biggest grocery selling brand with sales of £550 million and global sales of nearly 12 billion. Kellogg’s products are manufactured in 18 countries and marketed in more than 180 countries and it employs around 32000 employees. The Company Products including cookies, crackers, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles and veggie foods. Kellogg’s markets its products under a variety of brands include Rice Krispies, Special K and Nutri-Grain.
Vision and Mission
Kellogg Company’s Vision and Mission statements define our focus upon sustainable growth, our broadened definition of social responsibility and the true strength of our company – our people and our brands.
Our Vision encompasses the full spectrum of our stakeholders including shareowners, employees, customers, consumers and communities. Our Mission articulates where we are as a company today and where we wish to be in the future.
Our Vision and Mission do not stand alone. They are integrated with our focused strategy and operating principles as well as the foundations of our business: our K Values, people and commitment to social responsibility.
http://www.kelloggcompany.com
Kellogg’s Marketing Plan and Strategies
The cereal giant Kellogg’s being the Market leader in the world of breakfast has plans to further increase its market share with the help of new innovative products and new marketing campaigns. Kellogg’s chief marketing officer Mark Baynes said in an marketing Magazine ” We are aiming to create a team inspired, equipped and enabled to drive stronger returns in this increasingly complex consumer landscape. As per Mark Baynes the company marketing plan is to drive stronger returns in the complex business environment as last year Kellogg’s reported six per cent drop in the earnings in the third quarter, which is because of increasing competition in the cereal industry, General mills, Nestle being the biggest competitor of Kellogg’s followed by Quaker Oats.
So the main Marketing and Business plan of Kellogg’s is to
Leadership in product innovation
Strengthening the company’s seven largest market segments
Continuing to reduce the Cost and increasing the effectiveness and efficiency of the business processes
Investing in new product research and brand building activities
Thinking ethically and environmentally.
SWOT ANALYSIS
The SWOT analysis is an analysis of the company’s current position in the light of its strengths, weakness, opportunity and threats.
Kellogg’s Strengths:
Kellogg’s biggest strength comes from its 42% market share and being market leader
Brand is fully recognised by the customers and the retailers.
Providing Quality innovative products with the support of proper marketing campaigns and sound distribution channels.
High product demand gives Kellogg’s main shelf space in the shops and Retailer like ASDA, TESCO etc.
Kellogg’s have products targeting children’s, teenagers, adult and even the elders. This gives Kellogg’s reputation of proving products for everyone.
Social Responsibility: Kellogg’s welcomes social responsibility and notes the environment, advocating healthy lifestyles, and promoting diversity as its main responsibilities.
Kellogg’s Weakness:
Slow erosion in Global market share as competitors like Nestle and Wheatabix are providing new and economic valued products.
Kellogg’s has many demographically different customers which mean many different focuses. This may cause a conflict when it comes to public opinion
Kellogg’s Opportunities:
Kellogg’s can slowly diversify and still remain into their core business. This could further increase their profitability and market growth.
There can further increase their market share and growth by using better pricing strategy.
Major opportunity for Kellogg’s is to provide health and more organic products as customers are looking for healthier life-style.
Kellogg’s Threats:
Retailers like ASDA, Tesco are so powerful that they have created their own brand of cereals and corn flakes. Providing cheaper and better quality alternative products.
The world economy is suffering, so customers prefer economical n cheap products. Kellogg’s charging premium prices can hinder in its growth.
Competition in the market is increasing day by day as many companies like Quarters , Nestle wheata bix and other brands are coming with new and healthy breakfast products, this increases pressure on kellogg’s to provide even better products with reasonable price.
PEST ANALYSIS
Political:
Social — health Conscious………fast paced Life style…… obesity
Kellogg’s 4 P’s:
The main objective of marketing plan is to create a strategy and goals that ultimately satisfy customer needs. The main part of marketing plan consists of its marketing mix, to satisfy customers the company is to provide quality products with suitable distribution channels i.e Place with competitive and reasonable Price with appropriate Promotion.
Products:
Product is anything that is offered to the market for the attention, acquisition, use and consumption that satisfy the wants and needs of the customer. Kellogg’s being the market leader in product innovation by launching new cereals and snacks
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