“ 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”
W. K. Kellogg
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
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
In considering Special K, the company concentrated on changing the product through new variants.
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.
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.
Market size: Sales of nearly $9.7 billion in the Ready-To-Eat Market in 2001
Product segments: The best-selling kids’ cereal brands--GM Lucky Charms, GM Count Chocula, Post Marshmallow Alphabits, Q Marshmallow Safari, Rice Krispy.
Market share: Competition is heating up in this market as flat sales and low-priced clones have eroded the market shares of Kellogg and General Mills
Market Forecasts: The kid’s & Women market was been growing at a rate of more than 15% a year, for the 5 to 7 years and shows no sign of slowing through the end of the decade. Growth in the overall kid’s food market was driven, to the largest extent, by gains in cereals.
Marketing/promotion: Seven breakfast cereal marketers allocated almost $775 million to purchases of space and time mass media in 2001.
Industry structure: Three food giants--Kellogg, General Mills, and Philip Morris--responsible for 70% of kid’s foods in 2001.
High Low PRICE/ QUALITY /IMAGE PRODUCT LINE/MANUFACTURING MIX Strategic Group Map of Competitors in the Presweeter Cereal Industry Brand Cereals Kellogg General Mills General Food Quaker Oats Private Label