MARKETING CASE STUDY

Marketing Case Study



Marketing Case Study - Kellogg's Special K

Introduction

Kellogg Company was founded in 1906 and incorporated in 1922. It is a publilcy traded company on the NYSE. Kellogg's headquarters are in Michigan. Kellogg's main products are convenience foods and ready-to-eat cereals . The company manufactures these products in 18 countries and sells them in more than 180 countries. Typically, Kellogg company sells their products to grocery stores, for sale to consumers. Wal-Mart Stores Inc. is their largest customer and accounted for 19 percent of sales in 2007. Kellogg owns a number of trademarks pertaining to their cereals, including Kellogg's Corn Flakes, Fruit Loops, Corn Pops and Rice Krispies. Non-cereal trademarks include Keebler, Famous Amos, Cheez-It, Sunshine and Wheatables, among many others. The company offers licenses to third parties to use these trademarks on various goods. Kellogg Co. had 2008 sales of nearly $13 billion.

Discussion

Brothers Will Keith Kellogg and Dr. John Harvey Kellogg started the company that eventually became Kellogg's in 1870's. Dr. John Harvey Kellogg and his brother William Keith Kellogg were in the business of making cereals locally. Ella Kellogg helped her husband, Dr. John Harvey Kellogg, develop products that enabled them both to launch a successful cereal company that became Kellogg's Cereals. They worked long hours, often into the night. In 1894, they came up with a method of rolling out mashed wheat, cooking it, and then flaking the dough. The patients liked this toasted cereal, and most people gave Dr. Kellogg the credit for it, but he said that Ella played the key role. The Kellogg brothers and Ella continued working on new recipes, and they found a way to make the first flaked corn cereal in 1898. The next year, William K. Kellogg became general manager of the Sanitas Nut Food Company, which marketed cereal products to former Battle Creek Sanitarium patients. The Kelloggs sold their cereal by mail order. (Aaker, 2009)

Although cereal was rarely eaten for breakfast at that time, Will Kellogg believed their corn flake cereal would appeal to many Americans. In 1906, he founded the Battle Creek Toasted Corn Flake Company, which was later renamed the W. K. Kellogg Company. Will Kellogg promoted the cereal vigorously in a national ad campaign that emphasized the virtues of this new breakfast food: healthful, tasty, and convenient for people of all ages. Within just a year, he sold 175,000 cases of corn flakes. Next, the company began selling wheat flakes, followed by other products.

Meanwhile, C. W. Post, a former sanitarium patient who had enjoyed the cereals the Kelloggs served there, had also formed a cereal company. The cereal industry proliferated in Battle Creek, which became known as Cereal City. Within 10 years, 40 different companies were making cereal products. During the early 1900s, Kellogg's was the most successful. It eventually grew into a global company. (Bolton, 2004)

The premise, which is as relevant today as it was then, was that “you are what you ...