Kellogg's Failure 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.

External Environmental Analysis We chose Kellogg’s cereal category because Kellogg’s has over 100 years history and we have14 kinds of breakfast cereal products. Our products sell to 180 countries across the world. Our mission is still to provide you and your family with better breakfasts that lead to better days, and now you eat flake corn is the same way W.K. did back in 1898. It just tastes better that way. Kellogg’s cereal provides a variety of nutrition’s cereals that deliver the benefits of grains, and provide important nutrients like iron, B vitamins, zinc and fibre.

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.

The threat of customers finding substitute products from other manufacturers in the food industry is high. In the ready-to-eat breakfast cereals segment, General Mills’ primary business focus, there are a variety of similar products being

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

The Kellogg is continuing to innovate a century later, offering cereals that are affordable, convenient to prepare and eat, and tasty. It will also reduce ingredients such as sugar that consumers want less of while increasing fiber, whole grains, vitamins and other nutrients(Kelloggcompany, 2011).

In the RTE cereal industry, there were three large manufacturers, General Mills, Kellogg and Philip Morris that had a strong presence in the market. They were extremely profitable with pricing power and dominated the whole market with great market share; all this made it unattractive

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.

Mission: Kellogg is a worldwide business dedicated to construct Long-Term expansion in their bottom-line and to ornament its universal Leadership Position by supplying healthful Food Products of better-quality worth.

| 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.

As a starting point for this assignment, I used the Oxfam report “Walking the Talk, Food and beverage companies slowly start turning policy into practice in Oxfam’s Behind the Brands campaign” (Smith, 2015). After reading the report, I selected Kellogg’s as the large multinational company for which I will answer the questions for one simple reason. According to the Behind the Brands Scorecard, they started from the 9th place in February 2013 and were in the 4th in April 2016 (Oxfam, n.d.), which means that they have identified and corrected some of their practises..

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).

Sales of private label cereal grew 50% from 1991-1994 in the Ready-to-Eat breakfast cereal industry. Some of the factors that contributed to the entry of private label cereal manufacturers and their subsequent growth include - lower costs related to manufacturing, packaging, marketing, R&D compared to the Big 3 cereal companies, product quality approaching that of branded products, higher margins for grocers, lower priced products. Some observers blamed higher prices and elaborate expenditure on coupon printing, distribution, redemption and reimbursement of grocer's handling fee for market share gains made by private label cereal products. The policy of "price up and spend back" seemed to hurt the Big 3 firms.

While all the research tools discussed will benefit Kellogg Company as the new nutritional cereal bar is launched, some will produce more meaningful results than others. Being a food product, Kellogg management will surely gain the most insight into consumer attitudes and the target market through in-store promotions and field trials. This research method allows consumers to taste, touch and view the new product in the market setting,

Obstacles that Pepsi faced when trying to prospecting India include: Terrorism in the Punjab Pradesh, a brand new political party, the Janata Dal, a high degree of government intervention, and a decline of the currency, the Rupee.