External Environmental Analysis on Kellogg’s Cereal Essay

The ready-to-eat (RTE) sector has increased sales and therefore have given the Breakfast cereals market an advantage to have a higher market share of 4.2% in 2013. The emphasis is more to the value and the convenience of cereals rather than the quality. However people are starting to be more heath conscious and are going to the higher nutritional brands which tend to be the well-known ones such as Kellogg 's, Weetabix and Nestle.

The cereal industry is very adamant on using a differentiation strategy to make one’s brand stand out in the minds of certain people. The companies break down the public into different target markets; and then make products that will be attractive to their target markets. Companies make different brands for young kids, teenagers, adults, and people who are health conscience. Currently, there are 387 different brands of cereal sold in the United States and each family is estimated to purchase 17 different brands per year. (O’Connor, Amy) Companies continue to brainstorm for new product ideas to attract the various market segmentations.

Special K is a successful brand, with a good level of innovation and communication. It has reached many consumers; especially women aged 20 to 40 yearsold, focusing on key elements such as beauty, shape, and weight loss. People are ready to pay more for Special K cereals, positioned as high quality products, with higher prices as competitors’. As the

Kellogg’s is one of the major food manufacturing companies in the world and its main products are breakfast cereals and snacks. The story of the firm started in 1898 when the brothers W.K. Kellogg and J.H. Kellogg discovered a new process to make cereals (Corn Flakes). Nowadays, Kellogg’s is a multinational company with a presence in 180 different countries producing a wide range of cereals and snacks that consist of crackers, toaster pastries, cereal bars, biscuits, fruit-flavoured snacks, frozen waffles and vegetarian foods. The vision of the company is defined by the following sentence: “To enrich and delight the world through foods and brands that matter”. Furthermore, Kellogg’s states that their purpose is “Nourishing families so they can flourish and thrive”.

The value chain, Appendix B, in the RTE cereal industry consists of branded manufactures and private labels that receive their raw materials from suppliers and then distribute their product to food stores, drug stores, and mass merchandisers where the end consumer can eventually purchase the cereal product. Private labels rely on wholesalers and third-party distributors to get their product on the store shelves where the end consumer can purchase these items.

As mentioned above we will have to incorporate Canadian traditional and comfort foods in to our menu. We will have to conduct market testing in order to determine which American comfort foods the new Canadian market will purchase and which should be eliminated from our Canadian menu. We are at an advantage already; it has been reported that 88 percent of Canadians have recently eaten seafood. Fish and seafood is also one of the largest food sectors that are exported by Canada. We will be able to use the abundance of that food to our financial advantage. We will be able to see slightly lower raw products cost, since seafood is known to fluctuate wildly throughout the year, as well as being reassured that Canadians will want to eat the food that we are selling in our restaurant. The fact that one of canada’s most valued exports includes: lobster, snow queen crab, farmed Atlantic salmon and shrimp, is a happy bonus to our bottom line. We should be able to buy directly from local fisheries. That will not only give us a more positive image with our new Canadian market, but we will be able to advertise that we use fresh locally sourced

Kellogg’s is highly a profile company which is hugely known not only in the UK but in the world at large. It is one of the largest breakfast companies in the word, not only that but it is also financially it is a stably and well organised company. Kellogg’s profits have been stable if not increasing for the better from what it was 5 years ago.

| Social: * Because of women are busy with their career now, we need to produce new type of cereal for those have no time to eat breakfast at table but they can eat in the car. The new product will have milk package on the top and cereal on the bottom cup, they need to use straw to push down so the milk will fill in the bottom cereal, then people can enjoy their breakfast in the car. * Meanwhile, we will put promotion in the cereal package for teenage to purchase. For instant, if you buy a box cereal, you will find one pin, this pin allow you download songs, and Hockey ticket coupon for the upcoming events, also scratch to win an Ipad or IPhone when you buy any Kellogg’s cereal.

Quaker Oats emerged from a turn of the century merger of three milling companies over 130 years ago. It grew to become one of the top companies in the world by providing reliable quality to its first customers. Quaker Oats has been able to build a reputation of offering healthy, wholesome breakfast foods by targeting female supermarket customers. Although advertising has gone from a “warm, healthy breakfast” to delivering messages about “vitamins and minerals essential to a female metabolism” (Standaert, 2003), the target market is the same. Quaker is also hoping to reach nutrition professionals and health-food retailers. According to Indra Nooyi, Chief Executive Officer of Pepsico (parent company of Quaker Oats), they “…do not market to kids under 12…” since they “…do not have a nutritious product…” they feel comfortable marketing to young kids (Farey-Jones, 2010).

Kellogg’s is a company that produces and sells cereals, fruit flavored snacks, breakfast biscuits, beverage, crackers, toasters pastries,

giant multinational breakfast foods company United Cereal, portrays the background of a launch decision for a new cereal product, the ‘Healthy Berry Crunch’.

Kellogg’s Special K with strawberries is the only competitor in the market currently offering healthy cereal to the consumers.

Kellogg is a company that has been around for over 100 years. William Kellogg and his brother Dr, John Harvey, started the company in 1868. In 1898 they were able to create the first flake created from toasted maize and in 1902 they were able to create a cereal with a longer shelf life. The company started out really small, they only accepted orders through mail and they sold primarily to people they were affiliated with. They eventually came up with the idea to brand themselves and they posted ads in newspapers and on billboards; this was the time that people started to recognize them as competition; in 1900 more than forty cereal companies were in competition with the Kellogg brand.

Eating habits is changing. Kellogg’s main target customers are younger generation. However, the majority of them, today, do not have enough time to sit down and enjoy their breakfast. The increasingly busy lifestyles makes them often sacrificed breakfast to going to work (Superbrands case studies: Kellogg 's Corn Flakes, 2002).

Japanese are poly-chronic in nature which means that they do many things at one time. Even they can easily get distracted and sometimes they also change their plans very easily. Here Canadians are totally different so Jell-O would have to present itself in such a way that they do not get attracted towards other brands.