Kellog's Business Case Essay

9476 words - 38 pages

1. How much were the traditional marketing strategies pursued responsible for Kellogg's downfall?2. What is the underlying cause of the loss of market share for Kellogg? Has the company responded in appropriate ways? Justify your answer.1.What business is Kellogg's in?The Kellogg's Company, headquartered in Battle Creek Michigan, is the world's largest producer of cereals with annual sales over nine billion. Their cereal line is flag shipped by their venerable Corn Flakes, but also includes such famous brands as Rice Krispies, Frosted Flakes, and Special K among others. Additional food lines include Keebler, Pop Tarts, Eggo, and Nutri-Grain.The Company also markets cookies, crackers and other convenience foods, under brands such as Kellogg's, Keebler, Cheez-It, Murray and Famous Amos, to supermarkets in the United States through a direct store door delivery system, although other distribution methods are also used.In addition, the Company markets convenience foods under trademarks and trade names that include Keebler, Cheez-It, E. L. Fudge, Murray, Famous Amos, Austin, Ready Crust, Chips Deluxe, Club, Fudge Shoppe, Hi-Ho, Hydrox, Sunshine, Munch'Ems, Sandies, Soft Batch, Toasteds, Town House, Vienna Fingers, Wheatables and Zesta. One of its subsidiaries is also the exclusive licensee of the Carr's brand name in the United States.William Kellogg, who founded the company in the USA, believed that diet played a key role in a healthy lifestyle and that breakfast was the most important meal of the day. Around 1898 he conducted experiments that led to the development of Corn Flakes. Kellogg Company, incorporated in 1922, and its subsidiaries are engaged in the manufacture and marketing of ready-to-eat cereal and convenience foods such as cookies, crackers, toaster pastries, cereal bars, frozen waffles, meat alternatives, pie crusts and ice cream cones. . The company prospered, and in 1924 Kellogg's established the Kellogg Company of Great Britain. By the 1950s the US Company had begun to develop cereals appealing to younger tastes. Frosted Flakes hit the USA in 1952. In 1954 they arrived in the UK, as Frosties. These products were, as of December 28, 2002, manufactured by the Company in 19 countries and marketed in more than 180 countries. The Company's cereal products are generally marketed under the Kellogg's name and are sold principally to the grocery trade through direct sales forces for resale to consumers. The Company's largest customer, Wal-Mart Stores, Inc. and its subsidiaries, accounted for approximately 12% of consolidated net sales during the fiscal year ended December 28, 2002, comprised principally of sales within the United States.2.What value does the business provide to the customer?Kellogg's revolutionized breakfast in the USA. The Kellogg brothers were part of the first health movement in America that warned about the dangers of fatty, protein rich foods. Instead, they advocated a diet based primarily on vegetables, grains and...

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