Kellogg Case Analysis

1718 words - 7 pages

The Kellogg Company was incorporated in 1906. Their mission statement is that Kellogg is a worldwide organization committed to building long-term growth in volume and value and to enhancing its international leadership role by providing healthy food products of greater value. Kellogg is one of the world's leading manufacturer of cereal and a leading global manufacturer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, meat alternatives, pie-crusts and cones. Their products are manufactured in 17 countries and marketed in over 180 countries around the world. Some of the company's brands include Keebler, Pop-Tarts, Eggo, Cheez-It, Nutri-Grain, Morningstar Farms, Carr's, Plantation, Ready Crust, and Kashi. The core markets include US, UK/Ireland, Canada, Mexico and Australia/New-Zealand. These markets represent 80% of Kellogg's global cereal business (www.kelloggs.com).The cereal industry without question uses the tactics of differentiation. The companies provide a variety of name brands aimed at different market segments. There are brands for kids, teenagers, adults (parents), and the health conscious. Sometimes, by creating market segmentation it reduces the chance of entry. This strategy of pursuing a comprehensive product line to deter entry is known as product proliferation. Within the cereal industry competition is based on the production of alternative kinds of cereal to meet or create new consumer desires. Currently there are over 75 brand names on the shelves today. Companies continuously look for latest brands to attract varying market segments. One example that Kellogg's is trying to stimulate its market share in introducing Cocoa Frosted Flakes with an anticipated $30 million ad push. Likewise, Post has expanded their brand name cereals by introducing Cranberry Almond Crunch. The cereal industry has also tried to differentiate by pushing its value as a finger snack. While cereal accounts for a minuscule segment of snacks, its consumption as a finger food has grown over the last 10 years, according to NPD Group, a company that tracks eating habits. And the snack market holds potential: Americans consumed an average of 200 snacks annually, compared to 300 or so breakfasts, the research firm reported" (Price cuts make mass wake up to cereal; competition among major suppliers should allow retailers to milk sales Drug Store News, Bnet.com, July 22, 1996).Kellogg positions itself as a company manufacturing high quality and nutritious food while emphasizing on convenience. Kellogg's products are positioned to highlight nutrition and quality of the goods whilst emphasizing on convenience. Thus, it is seen that Kellogg utilizes hybrid-positioning strategy where it positions on the product features as effectively as the use. However, Kellogg has very recently changed strategy, where it re-positions itself as a snack food provider. Its marketing strategy of moving into new markets was found on its over-dependence on...

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