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  1. 2. Kellogg Company Mission Statement <ul><li>“ Kellogg is a Global Company Committed to Building Long-Term Growth In Volume and Profit and to Enhancing its Worldwide Leadership Position by Providing Nutritious Food Products of Superior Value” </li></ul><ul><li>W. K. Kellogg </li></ul>
  2. 3. Idea generation Idea screening Concept develop-ment Marketing strategy Business analysis Product development Market testing Commerc- ialization Send the idea back for product development Modify the product or marketing programmer Drop Lay future plans Yes No No No No No No No No No No Yes Yes New Product Development Process
  3. 4. Budgeting for New Product Development 13984000 5721000 Total 10000000 5000000 1:2 2 National Launch 2000000 500000 1:2 4 Test Marketing 1600000 200000 1:2 8 Product Development 320000 20000 1:2 16 Concept Testing 64000 1000 1:4 64 Idea Screening Total Cost $ Cost per Product Idea $ Pass Ratio Number of Ideas Stage
  4. 5. Idea Generation <ul><li>Kellogg's recognized the opportunity to stretch the brand by investments that would: </li></ul><ul><li>Revitalize it. </li></ul><ul><li>Extend and further develop its growth phase. </li></ul><ul><li>Help to delay the onset of the maturity phase. </li></ul><ul><li>International expansion is the biggest area for growth for Kellogg’s. </li></ul><ul><li>If they can develop a better pricing strategy and guarantee lower prices, they can reduce costs while increasing their market share. </li></ul><ul><li>Kellogg’s wanted to launched Special K Red Berries in the UK. </li></ul>
  5. 6. Continue….. <ul><li>In considering Special K, the company concentrated on changing the product through new variants. </li></ul><ul><li>Although Special K was already a well established brand, its full potential had never been reached. It was viewed as a stand-alone product, and Kellogg’s had not created any variants or brand extensions to develop the core product. </li></ul><ul><li>Kellogg’s already knew that women who are keen to watch their weight and shape seek a range of solutions throughout the day - not just at breakfast. </li></ul><ul><li>Develop Special K as a healthy snack. </li></ul>
  6. 7. Idea Screening <ul><li>Sorting the proposed ideas into three groups: </li></ul><ul><li>Promising Idea </li></ul><ul><li>Marginal Idea </li></ul><ul><li>Rejects </li></ul>
  7. 8. Product Success Requirements aRating Scale: 00-0.30 Poor, 0.31-0.60 Fair, 0.61-0.80 Good, Minimum Acceptance rate: 0.61 0.69a 1.00 Total 0.05 0.50 0.10 Lack of Strong Competition 0.14 0.70 0.20 High Marketing Dollar support 0.18 0.60 0.30 High performance to Cost Ratio 0.32 0.80 0.40 Unique or Superior product Product Ratings Product Score Relative Weight Particulars
  8. 9. Probability of Success Overall Probability of Success Probability Of technical Completion = X Probability of Commercialization given technical X Probability of economic Success given
  9. 10. Concept Development And Testing <ul><li>A product idea can be turned into several concepts: </li></ul><ul><li>Who will use this Product? </li></ul><ul><li>Product can be aimed at children, teenagers, Young or Middle-aged adults or Older adults </li></ul>
  10. 11. Benefits of the Product <ul><li>What primary benefit should this product provide? </li></ul><ul><li>Taste </li></ul><ul><li>Nutrition </li></ul><ul><li>Refreshment </li></ul><ul><li>Energy etc. </li></ul>
  11. 12. Consumption <ul><li>When will people will consume the product? </li></ul><ul><li>Breakfast </li></ul><ul><li>Mid-morning </li></ul><ul><li>Lunch </li></ul><ul><li>Mid-afternoon </li></ul><ul><li>Dinner </li></ul><ul><li>Late Evening etc </li></ul>
  12. 13. Formation of Concepts <ul><li>Concept 1: An instant breakfast catering all segments (age) who wants a nutrition breakfast without preparation. </li></ul><ul><li>Concept 2: A tasty Snack for children to have twice in a day i.e., in morning and evening. </li></ul><ul><li>Concept 3: A healthy and lite supplement for older adults to consume in the late evening before they go to bed. </li></ul>
  13. 14. Product Positioning Map Bread & Toast, Butter & Eggs Tea Cold Milk Idli Dosa Upma Instant Breakfast Expensive Inexpensive Slow Quick
  14. 15. Concept Testing <ul><li>Today firms can use: </li></ul><ul><li>Rapid Prototyping </li></ul><ul><li>Virtual Reality </li></ul>
  15. 16. Marketing Strategy <ul><li>The plan consist of three parts: </li></ul><ul><li>1 st part describes: </li></ul><ul><li>Target Market Size </li></ul><ul><li>Structure </li></ul><ul><li>Behaviour </li></ul><ul><li>The Sales </li></ul><ul><li>Market Share </li></ul><ul><li>Profit Goals in the first few years etc. </li></ul>
  16. 17. <ul><li>Thank You </li></ul><ul><li>“ Dhanyawad” </li></ul>