Honey Clusters of Oats Business Plan for a brand management course at Columbia College Chicago.

1. HONEY
CLUSTERS
of
OATS
Business Plan

2. Honey Clusters of Oats is part of
Special Mills growing cereal category.
The category overall is a global corporate priority with
a commitment to become the leading manufacturer by
the year 2020
Focused on aggressive growth across all existing brands
as well as entering new segments categories
HONEY
CLUSTERSof
OATS
Through an acquisition, Special Mills
entered the Johnsonia cereal category
10 years ago.

3. VISION
• Special Mills: To be The
World’s Breakfast Leader
in the next 20 years
• HCO: To be the
‘healthy cereal’
option to generate
sales and boost
popularity

4. SWOT
STRENGTHS
• “Better for You” certification
• Budget increased by 50%
• Expected to deliver a 20% increase
in volume in 2011
WEAKNESSES
• 2.0 share in a total cereal
category that is flat.
• One base flavor (regular) and
three sizes: 8, 16 and 32 oz.
• Premium priced brand
• Retailers generally only carry
one, or possibly two, of the
brand’s sku’s.
OPPORTUNITIES
• The traditional trade outlets
and convenience stores together
account for 40% of overall
cereal category sales.
• HCO’s share loss is a result of
Johnsonia’s increased usage of
more natural, whole grain
breads, crackers and cereal
bars, which are perceived to be
“healthier,” easier/quicker to eat,
and more portable for snacking.
THREATS
• The category is flat
• 85% of HCO’s share decline
fromlightly-sweetened cereals
• Outspent in marketing
communication by a 2:1 margin.

5. • “Better for You” certification
from the Johnsonia Heart
Association and just approved
low fat and naturally cholesterol
free product claims of which the
category competition does not
have.
• HCO’s marketing budget has
been increased by 50% so that
the brand can leverage their
important “new” news with a
powerful IMC campaign.
• Expected to deliver a 20%
increase in volume in 2011
Strengths

6. Weaknesses
• Experienced a sharp decline
over the past few years and find
itself now at a 2.0 share in a
total cereal category that is flat
• HCO comes in one base flavor
(regular)
three sizes: 8, 16 and 32 oz.
• It is a premium priced brand at
$3.00, $5.00 and $8.00
• Retailers generally only carry
one, or possibly two, of the
brand’s sku’s.

7. Opportunities
• The traditional trade outlets and
convenience stores together
account for 40% of overall
cereal category sales. HCO is
currently not sold in these stores.
• HCO’s share loss is a result of
Johnsonia’s increased usage of
more natural, whole grain
breads, crackers and cereal
bars, which are perceived to be
“healthier,” easier/quicker to
eat, and more portable for
snacking.

8. Threats
• The category is flat
• 85% of HCO’s share decline has come
at the hands of other lightly-sweetened
cereals
• Oatmeal Crisp, Accapella, Mueslix,
Vanilla Nut Flakes, Mini-Wheats,
and Honey Nut Cheerios
• These brands are currently being
purchased by many HCO brand
users and have been very active in
the category with line
extensions/new flavors, temporary
price adjustments/alignments, and
heavy advertising/marketing
communication activities
• On average, HCO has been outspent in
marketing communication by a 2:1
margin.
• Minimal shelf space

9. CORE STRENGTH
“Better for You”
certification from the
Johnsonia Heart
Association and it’s just
approved “low fat” and
“naturally cholesterol
free” product claims--both of
which the category competition does
not have yet
HONEY
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of
OATS

10. HCO
Users
• Heavy: 3-4x/wk (breakfast), 3-4 different brands at
any given time in pantry--one each of adult, all-
family, and kids cereal, regularly snack with
cereal (1-2xweek), don’t bake or top with it, always
exploring the category and trying new brands,
1x/mo uses cereal for meal replacement for
themselves (not family), want variety
• Medium: 1-2x/wk (breakfast), think of HCO as an
indulgent “treat” for weekend breakfasts, like to
switch among “better for you”/more healthy
cereals during the week, also enjoy more
natural breakfast options like fruit, yogurt,
multi-grain breads & crackers, seek variety at
breakfast during the week
• Light: <1x/wk (breakfast), only 1-2 brands in home
at one time, like to switch based on family
request, primarily served on weekends vs.
weekdays, prefer brands the whole family likes,
starting to experiment with cereal in different
ways (e.g. as snack, to top salads, baking, etc.)

11. HONEY
CLUSTERS
of
OATS #HH Avg.
Purchas
ed/Yr./H
H
Total
(MM
Lbs.)
Heavy 250M 35 8.75
Medium 550M 16 8.80
Light 400M 6 2.40

12. Current Competitive Position
HONEY
CLUSTERS
of
OATS
To moms who want to give their
families a healthy start to the
day, HCO is the brand of ready-to-
eat cereal that delivers the
perfect balance of great taste
and nutrition in every bite because
it’s a lightly sweetened oat
cereal low in fat and naturally
cholesterol free

13. TYPE-A
DEMOGRAPHICS
Country: Johnsonia
# of People: 160 million
# of Households: 60 million
- Highly educated
- Live in couples with
children, ages 6 to 12
Account
for 80%
of the
country’s
wealth
HONEY
CLUSTERS
of
OATS

14. TYPE-A
PSYCHOGRAPHICS
• Enjoy working out and
overall healthy
lifestyle
• They eat 3 meals a day
• Breakfast is very
important to them
• They prefer to work
from home
• Care about the culture
of Johnsonia
• 70% of our priority
consumer have a health
club membership
• They prepare their meals
beforehand
HONEY
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of
OATS

15. Priority Consumers • Moms
HONEY
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of
OATS • responsible for BREAKFAST AT LEAST 4
TIMES A WEEK
• She’d like to cook a hot breakfast, and
occasionally does, but often doesn’t
have the time--except on weekends and
holidays.
• WANTS NUTRITIOUS OPTIONS THAT ARE KID
FRIENDLY (She eats cereal occasionally herself and
many times opts for what the kids are
easting, although she really prefers to eat
“her own,” “more adult” cereal)

16. How Moms Talk About Cereal
• “Bad For You”
• Heavily sugared/sweetened
and high in fat, cholesterol,
carbs and calories
• “Sweetened, Not Bad For
You”
• Lightly sweetened cereals
with some perceived health
benefits
• “Good For You”
• All natural, whole grain
cereals with clear health
benefits and that are not
artificially sweetened

17. RESEARCH

18. Survey Monkey
HONEY
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OATS
health
questions.

19. HONEY
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OATS
Survey Monkey
consumption
questions.

20. Buyer
Comments
• “It’s my guilt free treat that’s not bad for me”
• “I have great memories of HCO from my childhood. I
grew up with it in my native country.”
• “Gives me the energy I need to start my day and it
gives my kids the nutrition I want them to have”
• “I enjoy snacking on it between breakfast and
lunch and sometimes in the afternoon”
• “Perfect balance of sweet”
• “It’s my guilt-free treat that’s not bad for me”
HONEY
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of
OATS

21. NON-Buyer
Comments
• “I can’t tell if it’s a kids cereal or something my
whole family would like.”
• “When I think of Oats I think of cardboard or soggy
hot cereal. They just seem neutral to me. Not
great tasting and it’s overly good for me.”
• “The front of the package makes it look like
there’s a lot of honey and other stuff in HCO. I’m
not exactly sure what the ingredients are.”
• “I’ve never heard of this brand before. Is it new?”
• “Seems like HCO is a much sweeter cereal than the
ones I usually buy for myself. Will it be bad for
me?”
HONEY
CLUSTERS
of
OATS

22. There needs to be
more distinct
differences in
packaging
Consumer Insight
Johnsonians are
looking for more
cereal uses
Johnsonians are
shopping in
convenience stores
Johnsonians like to have prepared meals
HONEY
CLUSTERS
of
OATS

23. One-Year Plan
•20% trade in convenience stores
•Increase share of HCO by 14% to
achieve 50% of corporate share
•Increase Oaties share by 15% to
achieve 30% of the unsweetened
segment
•20% increase in volume
•Regain 33% of the market
HONEY
CLUSTERS
of
OATS

24. HONEY
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of
OATS
needs to…
•Push the BFY
certification
•“Lunchable” style
packaging with
yogurt and other
healthy snacks
•Get in convenience
stores

25. Yogurt cups.
Yogurt & oats combo
packs

26. recipes on
the side of
the box for
baking!
HONEY
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of
OATS

27. Snack Packs
HONEY
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of
OATS

28. Honey Clusters of Oats is
more than just a cereal.
It’s an experience for you
and your family
Make every meal,
your most important meal
of the day!
HONEY
CLUSTERS
of
OATS