GSBS6010-MA2-WANG

Newcastle Graduate School of Business
ASSIGNMENT COVER SHEET
Student detail:
Family Name: Wang
Given Name: Shiyi (Angie)
Student Number: 3105989
Course Details:
Course Name: FOUNDATIONS OF MARKETING THEORY
Course Code: GSBS6010
Lecturer's Name: Mr. Christiaan McComb, Ms Penny Crittall
Assignment Details: Assignment 2 (MA2)-- Critical Evaluation of Nutri-Grain’s Marketing Strategy
Due date: 8th
Nov, 2009 midnight
Date Submitted: 8th
Nov, 2009
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Student Signature: Wang Shi Yi (Angie) Date: 8th
Nov, 2009

Wang Shi Yi (Angie), Student No. 3105989, Total page: 17
Wang Shi Yi (Angie), Student No. 3105989, Total page: 17 1
Critical Evaluation of Marketing Strategy
Assignment 2
Critical Evaluation of Nutri-Grain’s Marketing Strategy
.
Lecturers name: Mr. Christiaan McComb, Ms Penny Crittall
Name: Wang Shi Yi
Student number: 3105989
Course Code: GSBS6010
Course name: FOUNDATIONS OF MARKETING THEORY
Assignment Number/Name: MA2/ Critical Evaluation of Nutri-Grain’s Marketing Strategy

Table of Content
1 Executive Summary__________________________________________3
2 Introduction & Background___________________________________3-4
3 Current Market Situation____________________________________4-7
4 SWOT Analysis___________________________________________ 7-10
5 Objectives and Issue_________________________________________10
6 Critical Evaluation of Marketing Situation_____________________10-13
7 Market Research___________________________________________ 13
8 Action Program and Budget___________________________________13
9 Control_________________________________________________13-14
10 Market Plan Tool___________________________________________14
11 Growth Opportunity_____________________________________14-15
12 Recommendatons_______________________________________15-16
13 Conclusion________________________________________________16
14 Reference ________________________________________________17

1 Executive summary
The aim of this paper is to evaluate the marketing strategy of an important brand
“Nutri-Grain”, which is the one of main 39 brands of the world's largest breakfast
cereal producer - Kellogg Company. Nutri-Grain’s success achieved by constantly
engaged in managing and developing a range of products and made the
reasonable product positioning to target the right people in the market segment.
According the Nutri-Grain’s market situation analysis and SWOT analysis
assessment, a market plan is designed; At last, Recommendations for Kellogg’s
Nutri-Grain to strengthen the international market development, and use more
effective methods to collect the marketing information, improving the customer
relationship management are strongly suggested.
2 Introduction & Background
2.1 The History of Kellogg
Kellogg is the best known an American owned organization and leading
supplier in the breakfast, cereal and convenience food business with 39
brands and a 42% share of the UK market. The history of company goes
back to 1900 when it was founded as the Sanitas Food Company by the
brothers W.K. Kellogg and Dr. John H. Kellogg (Kellogg Co, 2009, P.3). In
1906, W.K. Kellogg eventually bought out his brother and established the
Kellogg Toasted Corn Flakes Company. In 1922, the company began making
cereals other than corn flakes, and its named was changed to Kellogg
Company. After 1969, Kellogg Company began to diversify and launch
various brands to meet the changing the market and customers’ demand
(Kellogg Co, 2009, P.3). Kellogg's has a true global market, which products
are manufactured in 19 countries and marketed in more than 180 countries
around the world; Kellogg’s manufacturing operation located in different
European countries and sales regions cover North America, Europe, Latin
America, Asia, and Australia.

2.2 Nutri-Grain
Nutri-Grain was designed as a brand of healthy breakfast cereal and
breakfast bar by Kellogg Company to take the advantage of market
situation. With the development of global economy, more and more people
prefer to eat smart, and live with a healthy life style, especially in the US,
Australia and countries of Western Europe countries. In addition, many
people missed breakfast due to fast and highly stressful modern lifestyle. In
order to better meet the need of customers in the modern lifestyle, Nutri-
Grain come to Market which was originally targeted at the busy people who
had missed breakfast ,from the first launch of 1997,Nutri-Grain was
successful immediately, gaining almost 50% share of the growing cereal bar
market in 2 years (The time 100,1995-2009,P.2). Until 2002, Nutri-Grain
sales’ steadily increased, and become well known. In the competitive
market environment, many competitors offered the same benefit with
Nutri-Grain, and then in 2005, Kellogg Company rebranded and relaunched
the brand of Nutri-grain and changed from a ‘missed breakfast’ product to
an ‘all-day’ healthy snack to extend its life cycle. In recently years, Kellogg
Company constantly relaunched and developed news product to add Nutri-
Grain product line to reach more customers.
3 Current Market Situation
Today Nutri-Grain as the market leader with 38% share of the total cereal
bar market, which is a very popular and well-know brand in this world.
The Kellogg’s Nutri-Grain brand is currently worth over £47million and the
introduction of two new Nutri-Grain variants was seen in 2007(Metropolis
International Group Ltd, 2009, P.1).In the competitive market, Kellogg
company constantly repositioning and launch new products to reach more
customers and gain more market share, so it is very important that Kellogg
company make the right product positioning and market segment carefully.

3.1 Marketing Description
The design of Nutri-Grain was originally targeted at the busy people who
had missed breakfast, so Nutri-Grain was positioned as the “the best
solution to missed breakfast”. Later Kellogg Company ultimately clearly
defined the market segment target at 18-34 working adults .With the great
growth in sales and hot market competition, the Kellogg Company evolved
product positioning from a “missed breakfast” product to an “all-day
healthy snack” in order to reach more customers, then “the sport bar”
successfully differentiate this brand with another competitors. In the
competitive market, many new variations were added to Nutri-grain
product range to attract more customers. A special Nutri-Grain Elevenses
Carrot Cake Bakes with more relax idea was launched recently, which was
targeted an audience of 30 to 50-year old women who love to enjoy a
moment have a comforting snack with a cup of tea in the day.
3.2 Product review
Nutri-Grain bar have a soft baked crust made with wheat and the whole-
grain oats and filled with a variety of tasty fruit fillings such as apple, orange,
blue cherry, strawberry and cherry etc, and they are available to buy in
single bar and multi-pack formats.New ingredients such as “yoghurt”;new
formats such as Nutri-Grain-Twists, Minis, Chewy Bars, Yoghurt Bars; New
occasions such as Children’s lunchboxes, Elevenses. In addition, the original
Nutri-Grain which called as soft bake bars now and Elevenses including
Nutri-Grain Oat-baked bars and the new nutria-Grain soft oaties was
announced by Kellogg in Nov of 2007 (Stephen Bogan, n.d, P.1).The original
brand positioning from missed breakfast has been evolved to have a
emphasize on taste backed by healthy ingredients, later the idea of sport
bar successfully differentiate this brand with another competitors. The
products of Nutri-Grain’s mainly common feature are summarized as
follows:
 the brand of Nutri-Grain is designed as the signal of high-quality,
nutritious and healthy products and it has more vitamins and minerals.
 it is convenient to take and eat. Building distribution in “impulse”, then
Nutri-Grain is available where people were missing breakfast and it is
convenient for you to take with where you go.

 various healthy and tasty products with different size package are more
flexible to customers’ choice.
3.3 Competition situation
Now days four companies –General Mills, Kellogg, Philip Morris and Quaker
Oats dominate the cereals market in this world, the market competition is
very intense. The price competition and product proliferation are used by
another 3 companies to erode Kellogg’s share of the market (The time
100,2009,P.2).Moreover, the competitor brands from both Kellogg’s itself,
it is like All Bran Bars also play a competitor role and made Nutri-Grain’s
sales growth slow down due to its offer the same product and benefit. (The
time 100, 1995-2009, P.2) The list as below is the detailed description of
Nutri-Grain’s competitors in the industry and brand.
 General Mills: As the nation’s second largest cereals marker behind the
Kellogg Company and head of Post cereals, it is more target on children
market segment; the strategies of market segmentation and product
differentiation, pricing were effectively used. (Kellogg School of
Management,2009 ,P.1)
 Post cereals: A division of the Kraft foods unit of the Philip Morris
Company Philip Morris, taking third ready to eat cereal market share
and target at entire family market segment. New product development,
brand promotion and pricing strategy strengthened the competition of
this company in the global market.
 Quaker Oats: Founded in Chicago in 1901, family is the targeted market
segment. Company use price competition and product proliferation
strategy to take more global market share in the cereal food industry.
 All Bran from Kellogg: The brands from Kellogg itself, and it is provided
the similar products and benefit with Nutri-Grain.
3.4 Distribution situation
In the Kellogg Company, the distribution channel of Kellogg’s Nutri-Grain
uses the multichannel distribution systems to gain more market segment.

The products sell directly to consumer through one or two intermediaries
like wholesales, supermarkets, street stores, on line stores, grocery and
hotels to distribute the products. The distribution “impulse” was quickly
built by Kellogg by using their skills honed in grocery distribution, and Nutri-
Grain bars were launched greatly in the impulse sector in May 1997.
3.5 The Macro environmental Forces
Kellogg Company operates the brand of Nutri-Grain in the macro
environmental forces including political, social, economical and
technological.
 Political Environment: The employment laws as the political factor can
affect the company in that they differ in different countries. The labor is
the least cost which will be reflected at the product’s price.
 The Economical Environment: The economic growth, sales growth can
be affected by the economic. The people would like to buy the more
products when the economy grows and people become richer.
 Sociological Environment: The Kellogg company must be learn about
social lifestyle trends such as people prefer to eat healthy food in high
quality and have a healthy lifestyle, then company’s market strategy will
be most effective to their targeted customers.
 Technological Environment: The technology make the Information and
communication easier, and this allows Kellogg's to plan for the future
development accordingly.
4 SWOT Analysis
(Strengths, Weaknesses, Opportunities, and Threat Analysis)
There are several powerful strengths of Kellogg company’s Nutri-Grain can
be focus on , the brand’s the weakness is lack of enough international
market exposure, also this brand show too much attention on “healthy
food” ,which will put off some “mainstream” consumer. In the intense
competitive market, there are many market development opportunities

and spaces, but at the same time this brand will also face the threat of
ever-higher market competition and pressure.
4.1 Strengths
The brand of Nutri-Grain can be focused on 3 strengths.
 Strongest Brand Recognition
Nutri-Grain Is a unique, strong, and well recognized brand and its products
are always nutritious and healthy with high-quality.
 Leading Market Control
Nutri-Grain as the market leader with 38% share of the total cereal bar
market which has the biggest strengths to compete with another
companies.
 Right Market Segment and Brand Positioning
Kellogg’s Nutri-Grain correctly evaluated the targeted consumers with busy
working adult who desire to increase energy, concerned about nutrition
and health, as well as emphasize on taste backed by healthy ingredient.
Company positioned the brand feature with healthy, tasty, and convenient
by using a sport topic to make most sense. The right market segment and
brand positioning provide the completive advantage to Nutri-Grain.
4.2 Weakness
 Over Strong Brand Awareness
Nutri-Grain was used to signal health, but over strong healthy brand
awareness will put off the “mainstream” consumer and attract a very
health conscious one, who would not appreciate the food.
 Higher package cost

Foil wrap packaging is more expensive and increasing the cost.
 Lack of enough International Market Exposure
Company generally lack much exposure to high growth international
market ,so company should more focus on the international market
development and increase the Nutri-Grain’ international market
share.( Dow Jones & Company. Inc, 2009,P.1)
SWOT analysis
STRENGHTS
1,Strongest Brand Recognition
2, Leading Market Control
3, Right Market Segment and Brand
Positioning
WEAKNESSES
1, Over strong Brand Awareness.
2, Higher package cost.
3, the development of international
market
OPPORTUNITIES
1,increasing Health awareness
2,the development of international market
THREATS
1,the Threat of Competitors
2, The Discount imitation products
4.3 Opportunity
 Increasing Health Awareness
With the development of society and economy, more and more people are
aware of the importance of diet and would like to have more healthy
lifestyle. This is a good opportunity for Kellogg’s Nutri-Grain brand to
continue develop a healthy, tasty products in high quality.

 The Development of International Market
The international market also presents an opportunity to Kellogg’s Nutri-
Grain, and Kellogg can continually take advantage of it and develop and add
more products to Nutri-Grain product line according the demand of
international market.
4.4 Threat
 the Threat of Competitors
General Mills, Kellogg, Philip Morris and Quaker Oats dominate as the
industry giant in cereals market of this world, which their market
competition is very intense. Kellogg’s must deal with the threats of mainly
competitors as well other smaller, private cereal and snack
companies. General Mills, Post, and Quaker Oats are using price
competition and product proliferation to erode Kellogg’s share of the
market.
 The Discount from the imitation products
The Discount imitation products affect the sales of Nutri-Grain’s products
because of lower price.
5 Objective and Issue
The Kellogg company aim to strengthen Nutri-Grain brand positioning and
create the consumer’s brand loyalty; constantly develop new products in
Nutri-Grain product line to grow market share and increase market
competition; more focus on expositing the international market
development and increase the Nutri-Grain’ international market share.
6 Critical Evaluation of Marketing Situation
Given the above situation analysis, the success and big achievement of
Nutri-Grain attribute to Kellogg Company constantly develop and improve

product to “re-position” and “relaunch” to satisfy the expectation of
Consumer. In addition, Nutri-Grain’s success should thanks for Kellogg’s
company correct product positioning and market segment. The Marketing
Strategy of Kellogg’s Nutri-Grain was adjusted from based on a positioning
of “missed breakfast to “all day healthy, convenience and tasty food” to
reach various market segments. Nutri-Grain consumer mainly target at the
group of busy working adult with nutrition and health concerned.
Furthermore, Kellogg’s Nutri-Grain achieves by selling quality products and
pays more attention their customers. Company use the four P’s of
marketing mix to meet the demand of target segment.
6.1 Marketing Differentiation and Positioning:
When the market segment has been defined and decided to enter by a
company, and the company must be decide how its market offering will be
differentiated for each segment and what position it wants to occupy in
those segments (Armstrong & Kotler, 2009, P.49).The Kellogg company
positioned the Nutri-Grain as the “missed breakfast” and target the market
segment at”18-34 busy working adults” at the beginning time. Then with
the development of market and competition, Kellogg company
repositioning the brand as “all day healthy, convenience and tasty food”,
later decided to use sports as the platform from which to leverage the
healthy aspect and differentiate with another brand.
6.2 Product Strategy
Marketing mix is referred to the set of controllable tactical marketing tools-
product, price, place, and promotion-that firm blend to produce the
response it want in the target market (Armstrong & Kotler, 2009, P.51).
Product Strategy is defined the combination of the goods and services of
the company offers to the target market (Armstrong & Kotler, 2009, P.51).
Kellogg company believes that nothing adds value more effectively than
marketing a good quality product. As well known, Kellogg’s is always
guarantee the quality products since 1906.Nutri-Grain as the strong brand
of Kellogg company produce the nutritious and healthy product in high

quality. Maintaining and strengthening the brand of Nutri-Gran is an
integral part of market strategy. In the Future, the Kellogg Company should
continue focus on the brand positioning as “healthy, convenient and tasty
food”, strengthening brand development and product improvement such
as the improvement to recipe and a wider range of flavor, and constantly
engaged in product innovation, introduction and diversification.
6.3 Pricing Strategy:
Price is the amount of money customers must pay to obtain the product.
the Products of Nutri-Grain ‘s can get from 2 dollars to 5 dollars anywhere,
some snacks can be sold for only 1 or 2 dollars at the discount time.
General Mills, Post, and Quaker Oats are using price competition to erode
Kellogg’s share of the market, in addition, some imitation products with
lower price also give Nutri-grain’s a market challenge. Kellogg’s Nutri-Grain
should use the Value-added pricing with a higher price, attaching “health”
value-added feature to differentiate the competitors, which is better to cut
price to match competitors.
6.4 Distribution:
Kellogg’s Nutri-Grain use the channel strategy is the multichannel
distribution systems to reach more customers. The products of Nutri-Grain
are sold directly to consumer through one or two intermediaries such as
supermarkets, grocery stores, on line stores, gas stations, convenience
stores and vending machines. In order to expand the international market
especially Asia market, such as China. Company can build and strengthen
the worldwide distribution network, and company can control the entire
distribution chain, and it is a good way to save cost and lower risk in a new
market.
6.5 Marketing communication Strategy
Marketing Communication and promotion is very important to the band of
Nutri-Grain’s success. From advertisement on television and radio to giving
away prizes inside their cereal boxes, Kellogg’s strives to promote their

product so that the average person would rarely go a day without seeing
the Kellogg’s logo; A successful form of promotion has been through the
packaging of Kellogg’s Nutri-Grain; Kellogg’s entices their younger
consumers by their most popular characters on the food boxes, also Nutri-
Grain can use trade promotion such as in store displays, samples, personal
selling and direct promotions such as Coupons to channels
partners ;Choosing appropriate media to strengthen the brand and the
main points of product differentiation ;The TV had been used, and the
budget would have achieved 3.5% share of the snacking market
expenditure; Press was the main medium used to build brand, and Nutri-
Grain dominate the medium due to the 50% of the snaking expenditure
thanks for the press (Stephen Bogan, n.d, P.3); Sport Sponsorship is very
effective for Nutri-Grain to establish credibility, as well as Company can
continue run full color, large space and tactical ads in sport sections of
newspapers, sports magazines, match programs etc. Company can book
ads in the page carrying the relevant editorial If there was a particular sport
we were involved (Stephen Bogan, n.d, P.3).
7 Market Research
After the research, the mainly brand feature is specific identified which
benefit the targeted market segment. From the success of Nutri-Grain,
company can continue to develop and expand “healthy and tasty” product
positioning to gain more market share.
8 Action Program and Budget
The marketing plan must design the specific action programs and building a
supporting budget to achieve the business objectives. The forecast sales
volume in unit and the average price will be showed at the budget on the
revenue side, and the cost of production, distribution is showed on the
expense side.
9 Controls
The market plan’s progress is monitored by the controls which are outlined
by the last section of the marketing plan. The evaluation of the marketing

strategies’ results is involved and corrective action should be taken to
ensure the attained objectives. .
10 Market Plan Tool
The strategic planning and development of a marketing plan is a necessary
and important process for success. Here there are some resources are
provided in order to assist the Kellogg’s nutria-Grain to make good
marketing plan.
 CIM’s Marketing Planning Tool: This tool has been developed by CIM to
help company set the objective and create the plan (the Chartered
Institute of Marketing,2008,P.1)
 Planwrite for marketing software: A expert guidance, a complete word
processor, financial spreadsheets, color chart are included in this
software (Software, Inc,1995-2009,P.1)
 PlanMagic Marketing Plan Software: It is the first and only business
planner with this much automation, which offers a complete line of
products for starting and existing business and companies (PlanMagic
Corporation,1995-2009,P.1)
11 Growth Opportunity
11.1 health awareness’s incensement
Nutri-Brain’s “healthy and tasty” product positioning exactly match the
increasing health awareness of the people. With the improvement of
people’s living standard, more and more people prefer to eat healthy snack,
so Company can take advantage of this market opportunity to differentiate
and prominency this brand with another competitors’ ,then continue to
develop this brand in the competitive market. Using sports as the platform
from which to leverage the healthy aspect of the brand make most sense,
and it own sport bar’s establishment turn Nutri-Grain into a dynamic and
emerging player in a entirely new category (Stephen Bogan,n.d,P.3).This

brand will have healthy future if Nutri-Grain sports bar positioning will be
continued to develop and expand.
11.2 International market
The international market is huge, which is the biggest development area
for Kellogg’s Nutri-Grain and also presents this brand a growth opportunity.
Nutri-Grain should strengthen the focus on the international market
especially the Asia Market.
11.3 Pricing strategy in the up-market
Kellogg can make use of the advantage of “healthy” brand, as well as the
sport brand focus to develop some new products such as healthy food to
add Nutri-Grain product line to develop its up-market, then using the
Value-added pricing with a higher price to gain the customers in the up-
market.
12 Recommendations
According the Market situation analysis Kellogg’s Nutri-Grain, a number of
recommendations are suggested.
12.1 Strengthening the development of international market
The international market is huge and there is also has a big market
development potential and growth opportunity to Kellogg’s Nutri-
Grain .Nutri-Grain should strengthen the development of the international
market, which can be promoted through TV, radio, Press, and use the sport
s as platform to positioning the brand with a heath topic to increase brand
reorganization and reputation.
12.2 Improving Customers’ Relationship Management
Making strongly commitment to customer satisfaction making many
company successful (Article base, 2005-2008); collecting and processing
more customers satisfaction surveys including using the questionnaire and
customers product preferences.

The customer relationship scheme is various including regular newsletters,
regular phone calls, sales promotions, new product test; as well the
additional information can be sourced through these contacts. A great ability
to develop products to customer needs can be done by this scheme, and
then a good relationship with customers can be maintained and improved.
12.3 Developing the Marketing Research
Collecting the marketing information by making good use of the methods-
marketing research to o better understand the consumer environment and
monitor competitors’ actions to better respond marketing challenge and
opportunity.
13 Conclusions
The Kellogg’s Nutri-Grain has been discussed and evaluated by this
Marketing plan in relevance to applicable marketing theory. Also, the
reports has certified the importance of company make the reasonable
product positioning and define the right market segment to the
development and success of a brand.

14 References
Armstrong & kotler. (2009) Marketing, 9th edn, Pearson education, Australia.
The Time 100 (1995-2009) Extending the product life cycle, Retrieved Oct 20, 2009, from
http://www.thetimes100.co.uk/case-study--extending-product-life-cycle--6-301-2.php
Software, Inc (1995-2009), Plan writing for Marketing, Retrieved Nov 6, 2009, from
http://www.marketing-plan-brs.com/marketing_plan_reviews.asp
The Chartered Institute of Marketing (2008) Welcome. Write your own Marketing Plan,
Retrieved Nov 6, 2009, from
http://www.cim.co.uk/marketingplanningtool
PlanMagic Corporation (1995-2009) PlanMagic Product, Retrieved Nov 5, 2009, from
http://planmagic.com/products.htm
Kellogg Co. (2009) Kellogg-our history, Retrieved Oct 28, 2009,from
http://www.kelloggcompany.com/company.aspx?id=32
Articlebase.com (2005-2008) Commitment to Customers Satisfaction, Retrieved Oct 3, 2009, from
http://www.articlesbase.com/career-management-articles
Metropolis International Group Ltd (2009), Nutri-Grain adds Soft Oaties to product range , Retrieved Oct 23, 2009, from
http://www.talkingretail.com/products/7335-nutri-grain-adds-soft- oaties-to- product
Stephen Bogan, (n.d), Kellogg’s Nutri-Grain, Retried Oct 26, 2009, from
www.iapiadvertisingeffectiveness.ie/cases
Dow Jones & Company. Inc (2009), Retried Oct 28, 2009, from
http://online.barrons.com/home-page?refresh=on
Kellogg School of Management (2009) General Mills Breakfast CerealsIceland, 1991 Retrieved Oct22,from
http://www.kellogg.northwestern.edu/faculty/sterntha/htm/module2/12.html

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