KELLoGG'S MARKETING

Marketing Environment for Breakfast Cereals

[Name of the Writer]

[Name of the Institution]

Marketing Environment for Breakfast Cereals

Introduction

The breakfast cereal market is a very dynamic one with a variety of products being available and which aim to target different market segment. This is why the purpose of this report is to explain how marketers segment the breakfast cereals using a combination of demographic, geographic, psychographic and behavioural variables. Finally, it will assess three chosen brands within the breakfast cereal industry to show how each of them are positioned in the market by using a perceptual map. Finally, the marketing mix of each brands accordingly are stated.

Industry overview

Since the Second World War, the consumption of cereals has increased in every household. The breakfast cereal manufacturing industry comprises of companies that produce ready-to-eat cereals made with corn flakes, wheat or puffed rice and cereals that must be cooked prior to eating like farina or infant cereals. This industry is a highly concentrated one since the top companies account for 80% of industry revenue (Research and Markets; Breakfast Cereal Manufacturing Report on the $9 Billion Industry 2009, 99). General Mills, Kellogg and Weetabix are the leading producers of the breakfast cereals industry as they devote huge resources to marketing, aim at satisfying kids, family and adult cereals and developing new products.

Marketing Environment for Breakfast Cereals in India

The Cereal Production industry in India is in the mature stage of its life cycle, characterized by a saturated domestic market and a range of well-established products and manufacturers. High barriers to entry have restricted the number of industry participants to a few, large producers, which fiercely compete for market share (Dawar & Tony, 1999: 119). In the five years to 2012, Indian state regulatory expects the number of firms to drop from 41 to 33, representing an average annual decline of 4.2%. Because of a saturated domestic market, it is imperative for manufacturers to continually introduce new products in the marketplace, to differentiate themselves from their competitors.

Marketing Environment for Breakfast Cereals in UK

The Breakfast Cereals Manufacturing industry in UK is in the mature stage of its life cycle stage and is characterized by a saturated domestic market and a range of well-established products and manufacturers. While barriers to entry remain relatively low, few new players enter due to fierce competition for market share by the industry's larger producers (Arnold & John, 1998: 10). Due to a saturated domestic market, it is imperative that manufacturers constantly introduce new products into the marketplace to differentiate themselves from their competitors. Industry value added is expected to increase at an annualized rate of 2.6% between 2006 and 2016. The industry is outperforming the economy by increasing capital investment in technology and equipment and effectively reducing the need for additional labor.

Micro and Macro Analysis

Capital Intensity

The level of capital intensity is high. Cereal production requires substantial capital investment, which leads to high capital and labor intensity. The ongoing investment needs of plants do not require significant capital investment as ...