Kellogg's uses various stages of market research to develop new products. Stage 1 involves secondary research from external sources and focus groups to get initial consumer feedback. Stage 2 takes the ideas from focus groups and tests them quantitatively in surveys to identify the best ideas. Stage 3 crafts the top ideas into real products based on additional qualitative and quantitative consumer testing. Stage 4 uses "In Home Usage Tests" to forecast sales for new products like Crunchy Nut Bites by collecting consumer feedback over a week-long trial period. This thorough, multi-stage research process allows Kellogg's to efficiently develop and launch new products that meet consumer needs.

1. Unit 10 P2
Lewis Appleton 1 Miss Johnston
Kellogg’s
Kellogg’sisaleadingproducerof cereal products,the productsare soldin180 countries.The
productsproducedbyKellogg’sare intendedtobe consumedaspart of a healthybalanceddiet.
Kellogg’suse variousformsof marketresearchtofindoutthe needsof theirconsumers.Since the
launchof CrunchyNutCornflakesin1980 it hasbecome the mainsellingproduct.Kellogg’shasa
salesvalue of £68 millioninCrunchyNutCornflakes.The productwasalsoexpandedintoCrunchy
NutClusterswhichisnowworth£21 millioninannual sales.
Market researchused
There are twodifferenttypesof market research;productorientedisseeninmostorganisations
whichinvolvesfocusingonthe product.Kellogg’sare marketorientatedwhichmeanstheybuildthe
businessaroundthe consumersneedsratherthanthe product.Thisallowsthemtoidentifythe
needsof consumerswhich give themmore advantagesastheycanplanahead.Therefore the
businesshasthe competitive advantagewhichmeansiscancompete more efficientthatrivals. As
the cerealsmarketiswell establishedthere isn’tmuchthatcan be done toimprove the salesso
therefore Kellogg’shasimprovisedbyexpandingintootherareas.Thiscantake a large amountof
time andmoneyas well asriskand alsothe advertisingcoststoraise awareness.Of the many
productsthat organisationslaunchonlyasmall percentage reachasignificantplace inthe market.
Therefore itisimportanttocarry out the marketresearch.
Stage 1: Discovery
The researchhere usedissecondary, the data isfromexternal websitesthatkeepdataon
organisationssuchas Data monitorandMintel, andthe data can be costlyespeciallyif itappliesto
multiple competitorsinamarket.Thisprovidesinformationontrends.Focusgroupswere used
internallyforqualitativeresearch;byusingthisconsumerscouldbe made aware of differentfood
ideasinthe formof prototypes.Thiswaythe attitudesandfeelingsfromthe consumerscanbe used
to helpthe organisationknowif the productwould be successfulora waste of time andmoney.
Stage 2: Selectingthe bestidea
Kellogg’sputthe ideasfromthe focusgroupsonboards.The boardswere thenshowntoconsumers
ina quantitative survey. The waythiswasdone byaskingthe consumerstorate the productas a
number,thiswayKellogg’scouldgetalarge amountof simple data.The data concludedthatthe
CrunchyNut Bitesestablishedthe proportionthatlikeditenoughtobuyit,and, itidentifiedthe
ideasthathad the bestand leastresponse.
Stage 3: Craftingthe ideaintoa complete new product
Afterstage 2 the bestsellingproductwaschosenitneededtobe createdintoareal product.Using
the feedbackthe productwasadjustedsothat all possible consumers’ needsweremetandthenit
was furtherrefinedwithmore qualitativeandquantitative surveydata.Theyproducedmultiple
recipessothat consumerswouldgainthe besttaste.Several packagingdesignswere alsoproduced.

2. Unit 10 P2
Lewis Appleton 2 Miss Johnston
Both of these were testedwithconsumersandthe twomostfavourable were made intothe
product.
Stage 4: Forecastingsalesforthe newCrunchyNutBites
The product had the “In Home Usage Test”whichKellogg’suse fortheirdevelopingproducts,what
thismeansisthat the consumersare givena weektotestthe product whichallowsKellogg’stosee
howconsumersinteractwithit.Afterthe weekthe consumersfill outaquestionnaire which
determineshowsuccessfulthe productmaybe.Therefore Kellogg’scouldcalculate asalesforecast
for the first2 years.Thismeant theycouldsetbudgetsandorganise the supplychain.The
productioncouldnowstart forthe product.
Why they were appropriate
Stage 1 was appropriate forgettingthe original basisof consumerfeedbackwhichwouldgive them
justthe basic formof data on the potential products,thiswaytheycouldtrytoimprove the other
productsbut alsofocuson the most favourable product.If the improvementsonthe otherproducts
didn’tworkthentheycouldbe droppedandfocuscan be drawnto the bestproducts.The data from
external databaseswasuseful becauseitgivesthemanideaonhow theirpreviousproductswere
successful.The focusgroupswere usefulbecause theycouldgetagood amountof feedbackonthe
potential productswhile atthe same time gettingthe attitudesof consumers. Stage 2was important
because itmeantthat the bad ideaswere eliminatedwhichmeantthe goodideascouldbe focused
on instead.Stage 2 alsoallowedthemtofindouthow manypeople likedeachproducthow muchby
usingquantitative datasurveys.Stage 3wasimportantbecause itallowedthemtofindthe correct
packagingand productshape that wouldbe bestsuitedtothe consumersneeds.Stage 4was
importantbecause itallowedthemtogetthe nextfew years’saleswhichallowedthemtoplanand
adjustbudgetsandpredictedsalesfigures.
Qualitative data
Data records – data researchon trendswithinthe marketforcereal retrievedfromMintel and Data
monitor.
Focusgroups – usedto showconsumersnew foodideasasprototypes,capturedattitudesand
feelings.
Survey – eatingexperience askedforonprototypes.
In Home Usage Test– feedbackfromseveral daysof testingthe product.
Quantitative data
Survey – boardsfrom focusgroupswere showntolarge customergroupsand askedfor ratings.

3. Unit 10 P2
Lewis Appleton 3 Miss Johnston
Effectiveness
The differenttypesof datahelpedeachother,firstof all the Datarecordsgave themthe basison
howto start tryingto work theirwayintothe marketwiththe new productideas,theythenused
focusgroupsto showa small number of consumerswhichwouldgivethemasmall detailedsample
of data whichtheycouldthenadjustandask ina quantitative questionnairesurveyforratingson
the products,thiswouldbe on a large scale.Thisthenmeanttheycan eliminatethe lowerrated
productsand make prototypesof the betterratedproductsto show the customersandask feedback
on a qualitative scale.Finallytheyusedthe InHome Usage Testwhichallowedthemtogetthe last
feedbackoveralargerscale in more detail.Afterall of thisthe productcouldnow be produced.