Because a healthy breakfast starts here!
The College of Business
California State University, Monterey Bay
The problem that is driving our market planning project is: there is not enough healthy
breakfast for children that they actually want to eat and that tastes good. The obesity rate in the
United States is higher than in any other country in the world(Boyd,2013). The foods that are
healthy are also very expensive and unappetizing(Static Brain, 2013).
Making a low sugar cereal for children
Make a nutrition bar that is appealing for children
Make a better tasting wheat Eggo’s
Low sugar Pop-Tarts
Breakfast on the go bars
The one Solution
The solution our team agreed to work on was to produce a new brand of cereal that will
be healthy for the children. We chose this solution because many cereals that target children
contain a high content of sugar. Cereals are mainly targeted at children especially minority
children that like that can only afford the low priced cereal.In general, companies are targeting
Hispanics by advertising twice the amount on TV; we are focused on producing something
healthy that will benefit both the seller and the buyer. Most cereal products contain more sugar
that raise blood levels faster than sugar itself. Also, we want to help out parents to promote a
healthier breakfast with low sugar and high fiber contents.
Our main target market is children between the ages of seven to fifteen as they tend to eat
more cereal than any other ages. Children are fascinated by the cereal boxes that contains
colorful pictures and superheroes. We will use these characteristics and manufacture a product
that will be appealing to the children eyes. The majority of advertisement made by many cereal
companies focuses on children and Hispanic races. We will equally advertise the product so that
all children find this cereal a source of satisfaction. We are planning on marketing the product
primarily to children but also want to make it appeal to health-conscious parents with children.
Our product will be appealing to them as nutritious and beneficial, thus making parents
buy our product for their children and themselves. With the appropriate advertising and
promoting, children will reach on top of the shelf begging parents to purchase a brand of cereal
that appeals and satisfies their craving for a good and tasteful breakfast cereal. We also would
expect this product to see strong sales from mothers who are worried about their child’s health.
Our product will be distributed, produced, and advertised by the company Kellogg’s. We
plan to heavily reduce our costs by relying on the already in place massive infrastructure
Kellogg’s has. We hope by subsidizing some of the previously mentioned costs our product will
be able to employ a higher quality of ingredients while remaining competitively priced.
According to Butlery, K. (2011),"The United States stands as the second most obese
country in the world while Mexico obtains the first place." Our biggest goal is to encourage
children to keep eating a healthy and nutritious breakfast each morning. In order for this to
happen, we'll work with Kellogg's to distribute Fiber Fox Cereal to different target areas in the
United States. Reducing obesity in all genders, ages, and races will become a key factor for
gaining market share. Knocking off unhealthy cereal like the Honey Smacks from store shelves
will become a priority as it is the number one unhealthy cereal in the United States explained by
Breyer (2013), "Kellogg's sells the Honey Smacks which is the healthiest cereal containing
55.6% sugar by weight."
Kellogg's biggest competitor is General Mills; these two cereal giants compete to gain
market share. General Mills focuses less on fiber quantity in contrast to Kellogg's that has a
significant higher amount in its cereal the Mini-Wheats.
When considering on purchasing a cereal, the consumer must revise the nutritional facts
on the back of the box. Kellogg's Frosted Mini Wheats concentrates high on sugar as well on
serving size. Honey Nut Cheerios has a lower serving and sugar count. To better explain this,
Kellogg's Mini Wheats holds 20% sugar by weight in contrast to Honey Nut Cheerios, which
contains 32% sugar by weight. The Honey Nut Cheerios is 10% higher on sugar as opposed to
the Mini-Wheats. The price for range relating to these two brands varies. Frosted Mini-Wheats
smallest box offers a 18oz cereal box which typically runs the consumer at an average of $3.68.
General Mills markets its Honey Nut Cheerios at a range of $2.98 for a 12oz cereal box. Table
1.1 shows some differences regarding to dietary facts from these two cereal monarchs.
Kellogg's Frosted Mini Wheat's
Calories from Fat
Honey Nut Cheerios
Calories From Fat
We want Consumers to purchase our cereal having knowledge regarding dietary facts.
Informing customers on the benefits will increase sales, brand loyalty, and at the same time
promote health and wellness. A consumer who is well informed is a valuable customer for any
Obesity is a significant concern in the United States. The economical areas that have
higher rates are urban and suburban regions; economically, the poorer states tend to have more
obese residents. According to Bernal (2012), "The leaner your wallet, the fatter you are."
Mississippi became the most obese state of the U.S. according to the article, "Why we're so fat:
What's behind the latest obesity rates" (Bernal, P. R, 2012). Therefore, we will focus highly in
this state by selling and promoting our product at an affordable price.
One of the contributing factors leading to obesity in the state of Mississippi is security
concerns. Mississippi lacks safe areas where low income populations can exercise. As a result,
people lose motivation toward exercising. We are hoping for consumers specifically parents to be
able to consume a product that will be affordable, healthy, and satisfying. Thus, sharing new
living styles for children and passing this eating style to future generations while rejuvenating
America and getting rid of the poor health image it reflects to its people and to the world.
Our target age consists of children of age's six to 12. Both genders must be taken into
account because they're our target market. We also need to focus on parents purchasing our
cereal because they are the key to a families purchasing behavior. By persuading parents and
children to purchase our product, families will not only enjoy the health benefits, but will pass
their purchasing behaviors to future generations giving us a place to stay in the market.
In order for our product to fully satisfy the need in the market, we had to conduct
research regarding to child obesity in the United States. Our target market of boys and girls from
ages six to 12 ranked at an average of 18% as shown in Figure 1.2. This becomes a serious
concern because it indicates that there's an issue related to the eating habits of children in the US.
United States, 2009-2010
Y-Axis represents the countries child obesity percentage as a whole
X-Axis represents Gender in the US
Poor eating habits lead to an unhealthy life. It all comes to how a person in raised
disregarding eating disorders.
Income plays a heavy role on people's purchasing behaviors. In this country, people of
white skin have bigger opportunities than any other skin color. We believe life-style has become
one of the reasons why people choose to consume the products they currently do. America's lifestyle changed over the years, people chose different paths of eating habits; the taste for certain
food has changed, thus, must adapt to the peoples style and develop a cereal brand that will be
desired by children and adults; as a result changing America into a much healthier place with
different eating habits and longer life span.
Finally, education is relatively important to our products success in the market-place. We
will imprint the back of our products with a small quiz hoping it will contain useful information
regarding health benefits and other school related material. We expect to educate children while
they eat by integrating interactive information that will not only enrich their lives with
knowledge, but will add a taste to the things they read as they eat.
Business to Business
Ideally, a healthy good tasting cereal will appeal to companies where their market share is
in the advancement of serving healthier cereal. These companies are also concerned about the
lifestyles and beneficial factors consumers are looking for in products. Also, Fiber Fox will focus
on companies that want to make a change in the type of cereal they are producing. This will be
Business to Business because we will also be selling products to Kellogg’s.
Business to Consumers
The first group Fiber Fox will be targeting young children. These young consumers
would be the most attracted the design the box has and how colorful it will be and by the taste.
Another target group would be the parents of young children that are concern about what
their children consume. These consumers will be the parents, because they would notice how
much healthier this product is than the other products. This group will be most interested in the
low sugar concentration Fiber Fox has and how nutritious the cereal is.
The last group Fiber Fox will target will be anybody that wants to have a healthy
breakfast. This would be individuals that have healthy problems and cannot have high sugar
content product to individuals who just want to start living a healthy diet. This group would be
highly motivated to continue eating a healthy breakfast. No more tasteless cereals or protein
shakes just to have a healthy breakfast.
Currently, cereal products in the market are being sold with high contents of sugar. Cereal
products have been lacking fiber and have increased fructose in their products. Both Kellogg's
with Mini Wheat’s and General Mills with Cheerios are the biggest competitors with advertising
that they have the best products. When in reality Mini Wheat’s has high fiber but it also has high
calories and in contrast Cheerios has low calories but low fiber(Calorie Count, 2012). Therefore
customers are looking for a healthier cereal that’s has a higher content of fiber, lower content of
sugar, and sodium. Consumers that are frequently looking for a healthier better tasting product
will buy our product.
Our research indicates that the gap in the marketplace is that there aren’t cereals that have
high fiber, low sugar, and low sodium targeted for children. As you can see in Figure 1.3 children
favor cereals that are high in sugar like Frosted Flakes and Lucky Charms.
(Alex Arellano, Jose Mendoza,Maurice Hinrich,Thomas DImitriou, survey, October 2013)
In the early assessments of the market we found out that Fiber Fox was a potential cereal
for the market place. We believe that this is a niche market that we can take advantage off. First,
healthier eating habits are the biggest trend now a day. Customers are concerned about the health
of their children. Today there is a high demand for healthier foods.
This trend will prove to be a success for Fiber Fox. Consumers now a day want to start
living a healthier life not only for them, but for their kids. Fiber Fox will satisfy both of these
needs. Consumers will like this cereal, because it will be tasteful and it will also have high doses
Lastly the awareness of child obesity is another trend that will be lucrative for Fantastic
Fiber, because people want an alternative to the cereals their children are eating. Since breakfast
is the most important meal of the day. Eating a healthy cereal for breakfast will contribute to this
cause of reducing child obesity, thus causing more consumers to buy this product.
The market growth potential for the Fox Fiber Cereal product lines would be fairly
significant. By looking at the information regarding market trends and the indicators of the
market it is clear that Fox Fiber Cereal could both penetrate and even expand the market for
healthy children's cereals. We also became aware of the fact that many consumers are either not
concerned or not well-informed about dietary needs and requirements. We would like to follow
the market trend towards healthier eating and increasing fiber through whole-grains. The biggest
challenge will to find a way in our product advertising or packaging to make consumers aware of
the importance of fiber in their child's diet and how fantastic fiber is a good way to fulfill those
dietary needs. It will be Fox Fiber Cereal's task to compete against existing competition in the
general cereal market as well as within the healthy cereal sub-market. Fox Fiber Cereal will
attempt to first become the market leader within the health cereal market before trying to expand
it. Fox Fiber Cereal must be marketed so its value is known to justify its difference in price
compared to brands like Cheerios while remaining cheaper or retaining higher-value than brands
such as "EnviroKidz".
All costs would be reduced because our products would be manufactured and distributed
within the current infrastructure in place by Kellog’s.
Product lines will include frozen and dry-good convienence breakfast items to keep
current with people's busy life styles.
Product lines will use reduced manufacturing costs to provide customers with a higher
value by using health conscious and higher quality ingredients.
Products to be distributed nationally, if desired, using Kellog's distribution channels.
Product will be cheaper than most competitors, ie gluten-free and other high-end health
Must enter a market with existing competitors.
Supplies for premium health food could have a more irregular pricing than more
standard ingredients due to less preservatives and processing causing issues.
Increased interest in weight loss, whole grains, and healthy living will create a demand
for healthy cereal alternatives to the standard low-fiber, high sugar offerings flooding the
Chance to fill a spot in the Ready to eat or RTE market since many people now skip
breakfast for “deskfast”.
Can fill market gap that Kellog is not currently focusing but use their infrastructure to do
Publics increased interest in following an athletic lifestyle and eating natural foods will
make many qualities about Fox Fiber, such as dried fruit and nuts, more appealing.
Will also appeal to adults who buy products for their children. The current on-the-go
lifestyle where people feel increasingly pressed for time will make convenient food more
Decline in the the sales of cereal is hurting the entire market, even Kellog’s and General
Material sources directly affected by environmental issues and catastrophes.
Market may be too fractured into "niches". Gluten-free, whole-grain sprouted breads,
sweet potato pancakes, etc.
Shares majority of the breakfast market with Kellog's, so a very large
competitor(Financial Releases, 2013).
Has an entry into every channel of the breakfast market that our products would occupy.
Carries some healthy cereal like Cheerio’s but nothing marketed specifically to children.
Even carries brand Cascadian Farm which has healthy, whole-grain and organic food
Company focuses on whole-grain and organic food with low-sugar healthy formulations.
Has product offerings in the breakfast cereal, snack bar and, toaster pastry market.
Has entire product line called “EnviroKidz” that promotes healthy cereal to children with
colorful pictures of wild animals(Nature's Path, 2013).
Appeals to parents of children because it is healthy and the box explains how this product
helps give back to the environment.
Products are priced to be sold in standard grocery stores, not just Whole Foods, so it can
be marketed to a broader audience.
Fiber Fox Cereal targets the problem of obesity by offering a much healthier cereal for
children. According to the article “Nutrition and Marketing Ratings of Children’s Cereals”,
which presents the results of research work conducted at Yale University, usual children’s
cereals include 85% more sugar, 65% less fiber and 60% more sodium than equivalent
cereals targeting adults. Consequently our company aims for reducing these disadvantageous
elements by including a decent mix of whole grains and bran. By including a high percentage
of those in the cereal fiber, the risk of Type 2 Diabetes, as well as obesity and cardiovascular
disease issues will decrease. The high amount of insoluble fiber reduces appetite and ensures
children to get through school without getting hungry.
In order to make our product more attractive to children, the actual cereal will be offered
in appealing shapes, like letters or animals. By grabbing attention to shapes, Fox Fiber Cereal
can completely abandon artificial food dyes. Replacing the amount of sugar with fruit
elements will make our cereals still satisfy children’s desire for sweet food while still being
While offering a healthy breakfast for kids, their parents, relatives or friends can easily
enjoy the advantages of our product as well. Due to the mixture of fiber, there is no need for
adults to purchase another brand based cereal breakfast the children are refusing to eat. This
is convenient as parents can enjoy their breakfast together with their kids while being a role
model – a brilliant start to the day.
Keys to Success
As a major aspect Fox Fiber Cereal’s success, awareness concerning the high amount of
unhealthy ingredients in cereals – especially children’s cereals- has to stay up or increase.
Looking at the apparent obesity problem in the U.S. our product will definitely go in hand
with what health awareness programs initiated by the government or health institutions
would recommend. As determined by researchers at Yale University, the average preschooler
sees 642 cereal commercials per year. An increase in awareness on TV and in school would
sufficiently affect the obesity level in America as well as our products success.
Providing a high value product for a relatively reasonable price is crucial in order to keep
the sales as high as needed to achieve the goals set. Especially ingredients like whole grain
and bran are more expensive than substitute ingredients with a lower nutrient level. As stated
by “The American Journal of Nutrition”, a lower socioeconomic status leads to the
consumption of unhealthy food. Being unable to offer our product to the majority of people
in the U.S. would make it hard to achieve the sales level our company aims for. A good
supply chain with a resulting high level of transparency, reliability and good contract
bindings will avoid losing customers due to a changing cost basis.
Another crucial aspect is successfully marketing our product to children, especially in
regard to competition with a high percentage of sugar. Health awareness, especially among
parents, as well as adequate marketing that targets children should minimize problem. This
can be achieved by a decent marketing strategy of our distributor Kellogg’s as well as good
connections with various grocery store chains to put our product on eye –level.
Fiber Fox marketing strategy will utilize a careful selection of the target market as well as
a clear communication of the product values. Our target market will be younger parents as well
as health conscious adults. We will attempt to appeal to these markets by advertising the
competitive price of our products, nutritional value, and great quality and variety of tastes. We
will appeal to our target market by plainly stating on the packaging some of the nutritional values
such as high fiber and whole grains. We will also attempt to keep our products cheaper than
many of our competitors in the “health food” breakfast products such as Natures Path. This is
going to help increase our sales by making our product have the ability to be sold in a wider
range of retail locations. We will accomplish this by pricing it at about $4.25. We will also use
nuts and dried fruits within our products to not only provide a great taste but also ensure it
remains healthy and low in highly processed foods and sugars.
To promote healthy eating and physical well-being by making great tasting breakfast
foods that will also make your body feel great.
We hope to achieve a strong entry into the market by pricing our product competitively.
This will hopefully increase our sales while still providing a comfortable enough profit
remaining. Fiber Fox products will most likely not be able to compete in the general cereal
market since many “standard” cereals have very high sugar and artificial flavoring as well as a
lower price. For these reasons Fiber Fox will focus all of their efforts to the healthy breakfast
foods market. Our main competitors would be companies such as Nature’s Path and Van’s and
we hope to take some of their market share from them when we enter the market. Our marketing
objectives will also involve careful collection of customer feedback. We hope to use this as a
way to ensure that we remove any hindrances to the success that Fiber Fox Products may have.
We also hope to increase the popularity and accessibility of healthy eating. We will do this by
making our products have an accessible price as well as many retail locations. We hope to
aggressively enter the market in order to make the great value of our products enjoyable to as
many as possible which will have the side effect of increasing the healthy eating habits of our
Marketing is approximately 20 to 25 percent of the sales value of most breakfast cereals
and most cereals bring in a gross profit margin of 40 to 45 percent(Lawrence 2006). This is a
standard to hold ourselves to but we will attempt to. Assuming that we sell each box of cereal for
$4.25 this means that marketing should cost $.85 to $1.06, or if averaged $.96, a box. To meet
industry standards we still must bring in profits of $1.70 to $1.91, or if averaged $1.81, a box.
The most likely competitor to us, Natures Path, sold 3,878,437 units of cereal(“Breakfast food
statistics”, 2013). With our assumed profit of $1.81 a box of cereal that would generate
$16,483,357 in sales for Fiber Fox as well as a profit of $7,019,970. We are going to set our
financial goals to be 60% of what Nature’s Path does so we are hoping to generate $9,890,014 in
sales and a profit of $4,211,982. To accomplish this goal we would have to sell approximately
2,327,062 boxes of cereal. We are not assuming that we are going to take 60% of the “healthy
breakfast food” market, just that our sales goal would be to reach 60% of what Natures Path can
Our target market is going to be anyone who has an interest in health food with
advertising on television and print showing the health benefits in a positive light such as
someone eating cereal and then going running, or a grandson and grandfather eating breakfast
and going fishing. Our marketing will appeal to peoples newfound interest in healthy eating and
their desire to eat healthier. Our cereal boxes will be marketed more towards young adults and
we will even have one marketed to children specifically. Our marketing will be fairly plain and
simple showing the cereal with a collage of people doing physical activities such as cycling and
hiking. Our cereal will be marketed towards parents who want to get a healthy cereal that their
kids will actually want to eat. Our cereal is also meant to appeal to people who want to avoid
preservatives and overly processed foods. Fiber Fox cereals will appeal to anyone who is
interested in all natural foods, healthy eating, and their physique. We will make our products
appealing to children by using fun and colorful boxes and graphics. We will still make the fact
that the product is healthy for children known to parents by stating it on the front of the box in a
Fiber Fox cereals will be positioned in the “healthy cereal” category. Fiber Fox will be
packaged in a standard cardboard for with the name and logo of the cereal. It will also promote
that it is healthier and better tasting than our competitor. Fiber Fox will be positioned in the more
for less category this means that we will be offer better quality product than our competition, but
for a lesser price. Our main competitor is Natures Path which their products attribute a wide
variety of healthy cereals. We will be offering a similar type of product as our competitor with a
different twist to our product. For example like adding fruits and not adding any of the starch
Fiber Fox first and most important target market will be for children from the ages of 5 to
12 years old. This group will most likely be attracted the fun colorful box. This is the first thing
that will appeal to them the most, and then it would be the great taste. Most importantly parents
will see that Fiber Fox cereal is a healthier for their children and will buy it for them. After Fiber
Fox expands its target market to the rest of the population it will become a known brand. These
are the people that want to eat a healthier cereal in the mornings. This group will be adults ages
18 and up. The pricing, distribution and marketing communication will make it easier for Fiber
Fox cereal to reach the whole target market.
Fiber Fox will use a cereal for kids this will make customers perceive Fiber Fox as a high
priced cereal. They will think this because most of our competitor’s healthy cereal is expensive.
Based on this Fiber Fox will use “competition pricing” which means we will charge a price
similar to our competitors. The basic cereal box of Natures Path is $4.70 (Static Brain, 2013).
For a box of Fiber Fox cereal it will cost $4.25 we are able to offer a lower price, because we are
offering a better tasting product for a lower price. Furthermore Fiber Fox cereal will be using
Kellogg’s as the main distributor reducing out cost of distribution.
Because we will emphasize in the quality of Fiber Fox we will try to build a solid
relationship with suppliers. This will help us get the consumers what they want a better tasting
cereal. This will also help Fiber Fox reduce the cost of the creating the cereal.
Fiber Fox will also use Kellogg’s as the main distributor and promoter of the cereal. The
relationship we will have with Kellogg’s will reduce the cost we will have in distribution because
Kellogg’s will take a percentage of the sales. This will be an exclusive distribution system
because Kellogg’s will be the only ones that distribute our products.
Figure 1.4 Marketing distribution System:
materials used in
materials used in
Fiber Fox CerealFiber Fox CerealGet the product
Get the product
factory to various
factory to various
Sells the final
Sells the final
product to the end
product to the end
Fiber Fox will be using most of the marketing communication mix we will use
advertising and direct marketing. The way we will advertise our product is by making tv ads.
This will help us gain the attention of the public, these commercials will promote the healthiness
of our product and how better tasting they are.
Fiber Fox will also direct market to its public. This will help us build loyal customers. By
targeting individual consumers we will obtain both an immediate response and a cultivate lasting
customer relationships (Kotler and Armstrong, 2012). Another factor that will help Fiber Fox
will be that we will use Kellogg’s and it will be easier to penetrate the market since Kellogg’s is
a known cereal brand. The price will also be a big factor because it will be lower than the
The primary research for Fiber Fox consisted of a survey. The purpose of the survey was
to see what types of cereals children are and how many time a week did they eat it. It also helps
us find out if they would eat a healthier cereal and if the name would be attract their attention.
The survey also helped us determine how much would they pay for the cereal.
All secondary research was made online articles, company websites, static blogs, and
online website in general. These helped us find out what the competition was charging and what
they were basing their prices on. It also helped us find out what their target markets were and
how they would target them. It also helped us find out what people think about healthier eating
More research can be conducted if Fiber Fox accomplishes its marketing objectives. This
can be done to find out if we can expand into other markets. We can make a second research
survey to see if the taste is we have perceived it. We can ask our customers if they think the taste
is good. After this we can set new objectives to add to our line of cereals we will be having.
In order to compute the break-even point, the amount of units that have to be sold in order to
cover the marketing costs of our company, the marketing expenses have to be split into fixed and
variable costs. As most companies summarize the marketing expenses as part of the fixed costs,
the main amount will be taken as fixed costs. However, especially considering occasional
adjustment of the design of the cereal box, Fiber Fox Cereal will include 30 percent of the
overall marketing costs as variable costs and the rest as fixed costs.
As stated in the financial objectives section Fiber Fox aims for roughly 60% of Nature's Path. In
order to compute the expenses Kellogg's finacial data , found on Yahoo Finance, will be used by
breaking down the expenses to the volume of Nature's path and then furthermore to the 60
percent this company is aiming for. Consequently, the expenses of our company equal 0.126% of
Kellogg's expenses. 14 percent of those costs will be fixed costs while six percent are variable
costs. Consequently, just for the break-even analysis, the overall per unit marketing costs, the
variable cost, mentioned in the financial objectives section will be $0.29 per unit. In line with
Kellogg's financial data our fixed costs will be $677,000 for the first year. As shown in the figure
below, Fiber Fox Cereal breaks even at approximately 170,960 units sold.
In order to predict the company’s performance in the next few years, Kellogg’s financial data
will be used and multiplied by 0.126% that our company represents. As Kellogg’s data reflects
the fluctuation of different quarters adequately via their revenue levels, the quarterly data of
Kellogg is an ideal reference point. Consequently, we will aim for the sales levels shown in the
table below. The conversion percentages for the quarters are respectively 23.98%, 25.99%,
25.02% and 25.01%. Over the years we expect a ten percent grow rate of the sales level
mentioned in the financial objectives section.
Year 1 4th
For the expenses forecast we use the same concept as in the sales forecast section. Consequently
Table 1.3 shows the expenses forecast. The growth rate of expenses are assumed equal to the
sales growth rate.
To control and monitor current production and performance, every store must keep track
of its inventory list regarding sales, questions asked by the consumer relating to the product, in
store feedback relating to the product, and service attained by sales personnel. Having all of that
information will define the supply and demand giving us detailed information for production and
performance. As data demonstrates our performance, we will be able to accommodate the price,
box labeling, marketing mix, and customer service for the consumer giving us a positive
reputation in the cereal industry.
Chart 1.1 demonstrates the steps required for a successful launch in the cereal industry.
We have laid out the possible dates to be met before the product is placed on shelves in different
stores. We start developing the plan on December 2013, and we hope to launch the product by
the beginning of October 2014.
Our personnel departments are crucial for our internal structure for maintaining order and
success. Chart 1.2 demonstrates how our departments will be laid out accordingly.
A company without an organized internal structure will have a higher fail rate in contrast
to those organizations with an orderly functioning system. We have set up nine different
department Personnel which will help our business contain an organized system allowing us to
be efficient in every aspect required to launch a successful product. Our operations department
will focus mostly on machinery and transportation maintenance giving us an update on
productivity. We will be forced to be sustainable and responsible on our environment. We cherish
our planet, and have a strong commitment on reducing waste and contamination to our
ecosystem therefore an environmental department will be integrated. To measure our progress,
we have a financial department where our accountants and financial analyst observe our numbers
relating to performance and sales. If our advertising fails, our marketing department will take the
lead on addressing the issues. When we purchase the raw materials, we must have a fixed budget
to purchase the goods at a profitable price, and our purchasing department will do the
negotiations with our suppliers. Our shipping and receiving department will help us store our
goods at different locations in the country giving us easy access to reach to consumer via
terrestrial transportation. Our Human resources and payroll departments will maintain an ethical
workplace for our professional staff who essentially becomes our “partners” in helping us
become a bigger company.
Contingency Planning resources
One of the difficulties that we foresee in this business is the amount of competition.
General Mills is one of the leading cereal brands that sells highly consumed cereal. Creating
customer relationships and loyalty will become a struggle as we fight our way to brand
recognition. We must be accurate with our advertising budget and the type of message being
delivered to the consumer. Selling our cereal at a reasonable price will be a challenge due to a
high demand on other cereal brands such as the Honey Nut Cheerios.
Assuming that supply is high and demand is low; we will reduce our supply and start
working on our weakness. In the event that our product doesn't sell as expected, we will start
focusing more on the advertising, boxing, and general taste of our cereal perfecting it and
accommodating it to customer demands by distributing surveys for more in-depth feedback.
Integrating a new cereal to the market can become an issue because we run the risk of not
selling the units expected. To address that issue, we must start distributing low amounts of units
assuming that sales will increase over time with perfected marketing strategies. Another risk that
we can potentially run into are natural disasters striking farms that cultivate the resources needed
for our product development. To cover up this issue, we must have contracts with different
suppliers around the globe. By purchasing a portion from each, we will maintain supplier
relationships giving us aid in such catastrophic events.
Finally, in the event that our cereal over succeeds in the market, we will integrate a
research and development team that will focus on creating new healthy breakfast that can be
affordable and on the go. Having that said, we will take into consideration expanding into foreign
countries to maximize our revenue. Having market control of different countries will be
beneficial for all company personnel.
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