KELLOGG'S MARKETING RESEARCH

Kellogg's Marketing Research

Kellogg's Marketing Research

Question 1

Kellogg's as an Organization

Kellogg enjoys a very strong brand portfolio particularly in breakfast cereals but also in snack bars and biscuits. Its Kashi brand in the US market has been built into one of its biggest brands. The scope of Kellogg's manufacturing and distribution networks means that the company has the scale to quickly roll out new brands and brand extensions (Aaker, 2006, pp. 15-19).

Product and Sales Orientation

With 2010 sales of $12,397 million, Kellogg is the world's leading producer of cereal and of the leading producers of convenience foods. Kellogg should consider expanding this brand outside of the US including into Western Europe. There is a clear opportunity, for instance, in hot cereals in the UK market. Also, the success of Nutri-Grain breakfast cereals in the Australian market suggests there is potential for this variant to be introduced into other markets to capitalise on the strength of the Nutri-Grain brand.

In 2010, Kellogg took advantage of the significant media deflation. Rather than cutting back on advertising spending, the company invested over $1 billion in advertising resulting in more consumer impressions and a greater impact from each dollar spent (Lee, 2004, pp205-218). A leading market position provides Kellogg with significant bargaining power as well as stabilizes the company's financial growth. Further, the company's strong brand strength supports the innovation process, in launching new products and enhancing the revenue stream. Kellogg has leveraged its high brand recognition to increase customer loyalty and compete effectively with regional players in various markets (Lee, 2004, pp.227-236).

The Relationship Marketing Ladder for Coco Pops Choc 'N' Roll Cereal

Kellogg commenced its K LEAN programme in 2009. However, following a series of recalls and supply interruptions in 2010/2011, the company's CEO of less than a year John Bryant said the company had "cut deeper than it should have". Kellogg announced US$70 million in additional capital expenditure in the latter part of 2011, adding back some of the jobs cut and focusing on employee training and its relationships with suppliers. Kellogg hopes that this investment will ensure better quality control and a more reliable supply chain (Lee, 2002, 440-454).

Instead, Kellogg opted for acquisition in foreign markets with the United Bakers Group in Russia and Navigable in China. In Russia, where the biscuits market will expand by US$84 million over the forecast period, Kellogg has a 7% market share (Lee, 1994, 270-275).

Types of Needs, Wants and Demands for Kellogg's customers

Emerging health consciousness would drive the demand of the company's products

Kellogg's ready-to-eat cereal brands are well positioned to meet the demands developing from the growing health and wellness trends. The company's largest brand Special K, a low-fat cereal, continues to grow globally at nearly double-digit rates and triple-digit in India. And, although only recently launched in South Korea, Special K is already a top cereal brand in the country (Labroo, 2006, 374-385). Furthermore, as the cereal category continues to be on trend with demographic shifts around the world, Kellogg's strong portfolio of adult ...