The Uk Market For Breakfast Cereals

U.S. market consumed 2.82 billion pounds of cereal, grossing nearly $8 billion in sales for breakfast

5) Capital Requirements: in order to enter the industry, there were huge capital expenses to be sustained by firms, such as a minimum of $ 100 million for capital investments, and at least 125 employees to run a plant that could produce both packaging and cereals themselves. In this framework, advertising expenses may be added too, since they’re a great part of the expenditures a RTE Cereal firm has to face, and they also represent a great Barrier To Entry, being an amount close to 1/5 of the sales generated by the company.

IntroductionMy name is Kevin Chen and I am a senior consultant of the Boston Consulting firm. Per the request of the A/S Dansk Minox, a food products manufacturer, I am preparing this analysis to identify the existing problems within the business of A/S Dansk Minox and provide possible recommendations. As a consultant, I will present the analysis without bias and for the best benefits of A/S Dansk Minox. In the following analysis, I am going to answer the following question: Should A/S Dansk Minox bring the new product, complete meal, to the market?Company backgroundThis case is set in Denmark in 1967 when the "boom" in consumer food products was just beginning more working mothers, more disposable income, more choices in convenience food

The ready-to-eat (RTE) breakfast cereal industry has been very successful for decades, achieving high returns and growth. By 1994, the US market alone has grown to $8 billion in sales, and 2.82 billion pounds in volume and In 2007, the market value for the industry was $11.2 billion. Despite its high profitability, the industry has grown more concentrated over the years with very few and mostly unsuccessful entry attempts. The breakfast cereal was first invented in 1863 by Dr. James Caleb Jackson who made the granola. The granola was a hard wheat that had to soak overnight before it could be eaten. Later the popular Corn Flakes was invented.

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

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

Weakness- A major foreseeable weakness OMG Active Cereal may encounter is that the cereal could be perceived by the public as just another “nutritious cereal”. There are many kinds of nutritious conscious cereals in today’s market produced by several different companies. Each year, a few more of these cereals are created and placed on each and every grocer’s shelves. A weakness for our newly released cereal could be that breakfast-eating consumers will group OMG Active Cereal along with the average nourishing cereals before eating or becoming cognizant of our cereal’s fantastic features other than especially served for the teenagers.

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.

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).

General Mills competes in a dynamic environment. Some of their competitors are Kellogg’s in the cereal segment. Cereal was a product that used to be the number one election for breakfast in American. As time and new knowledge evolved, consciousness about products with less sugar or gluten free arose making the cereal industry tumble. Products like protein bars, Greek yogurts, and even fast food are the new options to start the date, gaining market share over the cereal industry.

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.

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.

Answer: Based on the case study, Kellogg’s main competitors in the ready-to-eat cereals market are General Mills and Kraft Foods and PepsiCo. In the convenience foods market, the main competitors are Frito-Lay unit of PepsiCo which is the largest maker of salty snacks while the Nabisco unit of Kraft Foods which is the largest maker of cookies and crackers. Except from these competitors, Kellogg also has been facing competition with the new entrants or the improved store brand products which intent to get some shares of these two markets. Also, Kellogg’s brand