THE KELLOGS CONNECTION

BYSWATHIPRIYA VENKATESANSHAIK NAZIASAGAYA VINOLIA SEBASTINGEORGECYRIL VINOTHLEO JUDE S

KELLOGGS – BRINGING THE BEST TO U

• Kellogg's was founded as the Battle Creek Toasted Corn Flake Company on 1906

• found by William Keith Kellogg• World's leading producer of breakfast

cereals and convenience foods, such as cereal bars

• Kellogg’s products and their characters crackle, pop are famous all over the world

• Number one in market share with just under 34% of the $9 Billion cereal market

• Kellogg recently announced a shortfall in earnings due to lower sales and continued competitive pressures in the ready-to-eat cold cereal market

THE NUTRIGRAIN PROBLEM

•The Market grew by 15% in 2003•There was a steady growth in the competitor’s market share•The sales of the Nutrigrain declined in the same period•The tastes and behavior of the market changed•The manufacturers knew the product was approaching the decline period•The objective of the manufacturer shifted from introducing another product to increasing the life cycle of the existing product•Decided to rebrand and re launch the same product to increase it’s maturity lifecycle and hence product lifecycle

PRODUCT LIFE CYCLE

Every product has its own life cycleShows the various stages of how sales of a product changes over timeFive stages of PLC:Launch – Product launch and its initial performance in the market Growth – Period in which sales steadily increase Maturity – Stage in which other competitors emerge. Time of max profitability Saturation – Market is full of similar products. Sales start to fall Decline – Stage in which decisions about the death or resurgence of the product is taken.

Strengths of Kellogg's

Strong position in the market for convenience and health foodsWell established brand name and brand valueFocus on promoting healthy livingStrong commitment to corporate social responsibility

Causes for Failure

Problems started at maturity stageCannibalisation – Competition from products of Kellogg’s itself and other manufacturers like Alpen barsLack of product differentiation Lesser focus on advertising and promotional strategiesLack of measures to curb competition

Relaunching strategy

Identification of the problemPossible solutions for extending the PLC:Promoting Nutrigrain as an “all day snack” rather than as a “breakfast food”.Improving the Integrated Marketing Communication through enhanced advertising and promotionsIntroducing new flavours to cater to all categories of peopleTie ups with corporate, fitness centres and schools to increase promotionsUtilize the media, press to launch new advertising strategies