kellogg's report

1. INCREASE IN SALES OF KELLOGG’S CRUNCHY NUT
- Submitted By
GANAPATHI KOLUSU (18BSP2329)
UTKARSH JAISWAL (18BSP2777)
PRANAY DESAI (18BSP3571)
ANUJ AGRAWAL (18BSP2230)
ASHISH KUMAR (18BSP2250)

2. KELLOGG'S CRUNCHY & NUT
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TEJAS NARANG (18BSP2768)
CONTENTS PAGE NO.
Company history ---------------------------------------------------------------------------- 02
Situational Analysis -------------------------------------------------------------------------- 03
Customer Analysis -------------------------------------------------------------------------- 03
Competitors Analysis ------------------------------------------------------------------------ 03
S.W.O.T Analysis ---------------------------------------------------------------------------- 04
Marketing mix --------------------------------------------------------------------------------- 05
STP Analysis ----------------------------------------------------------------------------------- 08
Competitive Advantage ----------------------------------------------------------------------- 09
PESTEL Analysis ------------------------------------------------------------------------------ 09
Recommendations ----------------------------------------------------------------------------- 11
References -------------------------------------------------------------------------------------- 12

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Company History:
Will Keith Kellogg once have estimated that 42 cereal companies were launched in the
breakfast-food boom during the early years of the 20th century. His own venture, founded as the Battle
Creek Toasted Corn Flake Company, was among the last, but it outlasted most of its early competitors
and has dominated the ready-to-eat cereal industry. The Kellogg Company, as it was ultimately named,
followed a straight and profitable path, avoiding takeovers and diversification, relying heavily on
advertising and promotion, and posting profits nearly every year of its existence.
Kellogg's Corn Flakes:
By the time Kellogg launched his cereal company in 1906, he had already been in the cereal
business for more than ten years as an employee of the Adventist Battle Creek Sanitarium run by his
brother, Dr. John Harvey Kellogg. Dr. Kellogg, a strict vegetarian and the sanitarium's internationally
celebrated director, also invented and marketed various health foods. One of the foods sold by Dr.
Kellogg's Sanitas Food Company was called Granose, a wheat flake the Kellogg brothers had stumbled
upon while trying to develop a more digestible form of bread. The wheat flake was produced one night
in 1894 following a long series of unsuccessfulexperiments.
The company continued adding new cereals, aiming some at adolescent baby boomers and
others, like Special K and Product 19, at their parents. Kellogg's Corn Flakes still led the cereal market
and got more advertising support than any other cereal on grocers' shelves. Kellogg poured nearly $10
million into Corn Flakes advertising in both 1964 and 1965, putting more than two-thirds of those
dollars into television.
In 1969 Kellogg finally made a significant move away from the ready-to-eat breakfast-food
business, acquiring Salada Foods, a tea company. The following year Kellogg bought Fearn
International, which sold soups, sauces, and desserts to restaurants. Kellogg added Mrs. Smith's Pie
Company in 1976 and Pure Packed Foods, a maker of nondairy frozen foods for institutional customers,
in 1977. Kellogg also bought several small foreign food companies.
 Kellogg's Crunchy n nut:
Crunchy Nut (previously known as Crunchy Nut Corn Flakes in the UK, and Honey & Nut Corn
Flakes in the US during the 1980s) is a breakfast cereal made by Kellogg's, made with flakes of corn, a
small amount of honey, three types of sugar, and chopped peanuts. The product was created by
Kellogg's employees at their Trafford Park factory in Manchester and were first introduced to the UK
and Ireland around 1980. In 2011, Crunchy Nut was introduced to the US.

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 Situational Analysis:
Market Summary:
 The value of the UK cereals market is around £1.1 billion per year. Kellogg has a 42% market share
of the value of the UK’s breakfast cereal market. Reported earnings for full year 2009 were $1.2
billion, or $3.16 per diluted share, an increase of 6 percent from full-year 2008 of $1.1 billion. The
company has developed a range of products for the segments within this market, targeted at all age
groups over three years old. As a market leader, it maintains a distinct premium position within the
market. This means that it has confidence of its consumers and a large market share.
 Kellogg’s has turned around the performance of its Crunchy Nut brand following a catalogue of
growth initiatives which have boosted value sales by 10% to £88m in the last year.
 The popular brand has returned to growth following a major brand overhaul last year and in the last
12 weeks alone the brand has enjoyed a 24% leap in sales.
 Customer Analysis:
 According to customer’s reviews, the price of crunchy nut is high compared to the competitors yet
has a great taste. But the shelf life of the product is very low.
 Compared to ordinary cereals,this is more indulgent and preferred by most customers.
 Competitor Analysis:

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 Kellogg’s is the market leader and enjoys a strong position.
 Advanced knowledge and independence of choice.
 General Mills is one of Kellogg's's top rivals. General Mills was founded in 1866, and its
headquarters is in Minneapolis, Minnesota. Like Kellogg's, General Mills also works within the
Packaged Foods & Meats field. General Mills has 7,000 more employees than Kellogg's.
 The total revenue earned by general mills is $28.1B whereas kellogg’s has a total revenue of $10.1B.
 S.W.O.T analysis:
STRENTHS
 Worldwide presence
 Strong brand/Awareness
 Market Leader
 ‘Fighting Hunger’ marketing initiative.
 Economics of scale
 Brand presence and acceptability
 Customer loyalty
WEAKNESS
 Lack of customization.
 Questionable marketing campaigns.
OPPORTUNITY
 Market penetration
 Changing lifestyle
 Targeting Restaurants & hotels
THREATS
 Intense competition
 Take away outlets
 Restrictions from regulating bodies.
 Marketing mix of Kellogg’s:
Product:
 Kellogg’s crunchy nut bites nut n caramel – Available in packages of 360gm, 400gm and
625gm.
 Kellogg’s crunchy nut granola– Available in packages of 150gm with price of ₹290, 380gm
and 460gm .
 Kellogg’s crunchy nut peanut crisp bar – Available in size of 35 gm with a price of ₹75.

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Place:
Since Kellogg’s crunchy nut is a fast confusing food, it should be easily available to the customer.
So the product will be placed in a way that will be easily accessible. It will be placed in supermarkets in
ready to eat section. It will be also placed in local departmental stores.
Price:
The price of the product is high i.e. ₹1300 whereas its competitors are selling at a lower price. For
eg. General mills crunchy cornflakes at a price of ₹1149 which is lesser than Kellogg’s. But still most of
the customers are preferring Kellogg’s crunchy nut due to brand loyalty and Kellogg’s being the market
leader in the field.
Promotions:
Kellogg’s is trying to capture most of the market by providing various attractive offers. For
various seasonal festivals, they are capturing the customer’s attention by providing family trips on the
purchase of it’s products. They are focusing on children by providing offers which strike their attention
like giving away free football playing cards etc.

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 STP in the Marketing strategyof Kellogg’s Crunchy nut–
 Mission- “ Nourishing families so they can flourish and thrive ”
 Vision- “ Enrich and delight the world through foods and brands that matter ”
 Tagline- “ Let’s make today great ”
Targeting:
Kellogg’s being the market leader in cereals and convenience meals has targeted the following
segments –
1. Tasty starter: cornflakes and Kellogg’s crunchy nut
2. Simply whole: Fruit ‘n’Fibre, Alpen and Kellogg’s Just right.
3. Shape management: Kellogg’s special K and Fitness.
4. Mum Approved: Rice Krispies and shreddies
5. Kid Preferred:Frosties, Coco pops and Weetos.
6. Inner Health: All-bran, own label Bran cornflakes.
Segmentation:
 Demographic – Targeted to adults, children in the age group of 10-15 years.
 Psychographic – Maintained a proper image of very healthy and nutritious food maker in the
market thus incorporates health conscious people.
 Behavioral – the firm targets people frequently buying the product and thus provides additional
discounts and offers on the products.

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Positioning:
 Kellogg’s crunchy nut is positioned as a Fat free and nutritious cereal accompanied with
great taste of fruit and nut to enjoy the breakfast meals.
 Competitive advantage in the Marketing strategyof Kellogg’s –
Manufacturing Facility: Kellogg’s has manufacturing facilities in more than 20 countries which are
helping it to make its products available in more than 180 countries globally.
Strong product portfolio: Being world’s largest cereal maker and 2nd largest maker of cookies &
snacks is helping the company to distribute more than 160 countries globally.
Kellogg’s spends more than its 8% of its revenue brand building exercise which is helping the company
in emerging as a powerful brand in some of the developing markets in the world.
 PESTELanalysis:
Kellogg Company PESTEL analysis is a strategic tool to analyze the macro environment of the
organization. PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal
factors that impact the macro environment of Kellogg Company. Changes in the macro-environment
factors can have a direct impact on not only the Kellogg Company but also can impact other players in
the Processed & Packaged Goods. The macro-environment factors can impact the Porter Five Forces at
shape strategy and competitive landscape. They can impact individual firm’s competitive advantage or
overall profitability levels of the Consumer Goods industry.
1. Political Factors:
Political factors play a significant role in determining the factors that can impact Kellogg
Company's long term profitability in a certain country or market. Kellogg Company is operating in
Processed & Packaged Goods in more than dozen countries and expose itself to different types of
political environment and political system risks. The achieve success in such a dynamic Processed &
Packaged Goods industry across various countries is to diversify the systematic risks of political
environment.
Kellogg Company can closely analyze the following factors before entering or investing in a
certain market-
 Political stability and importance of Processed & Packaged Goods sector in the country's
economy.
 Risk of military invasion
 Level of corruption - especially levels of regulation in Consumer Goods sector.
 Bureaucracy and interference in Processed & Packaged Goods industry by government.
 Legal framework for contract enforcement
 Intellectual property protection

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 Trade regulations & tariffs related to Consumer Goods
 Favored trading partners
2. Economic Factors:
The Macro environment factors such as – inflation rate, savings rate, interest rate, foreign
exchange rate and economic cycle determine the aggregate demand and aggregate investment in an
economy. While micro environment factors such as competition norms impact the competitive
advantage of the firm. Economic factors that Kellogg Company should consider while conducting
PESTEL analysis are -
 Type of economic system in countries of operation – what type of economic system there is and
how stable it is.
 Government intervention in the free market and related Consumer Goods
 Exchange rates & stability of host country currency.
 Efficiency of financial markets – Does Kellogg Company needs to raise capital in local market?
 Infrastructure quality in Processed & Packaged Goods industry
 Comparative advantages of host country and Consumer Goods sector in the particular country.
 Skill level of workforce in Processed & Packaged Goods industry.
 Business cycle stage (e.g. prosperity, recession, recovery)
 Economic growth rate
 Discretionary income
 Unemployment rate
 Inflation rate
 Interest rates
3. Social Factors:
Society’s culture and way of doing things impact the culture of an organization in an
environment. Shared beliefs and attitudes of the population play a great role in how marketers at
Kellogg Company will understand the customers of a given market and how they design the marketing
message for Processed & Packaged Goods industry consumers. Social factors that leadership of Kellogg
Company should analyze for PESTEL analysis are -
 Demographics and skill level of the population
 Class structure, hierarchy and power structure in the society.
 Education level as well as education standard in the Kellogg Company ’s industry
 Culture (gender roles, social conventions etc.)
 Entrepreneurial spirit and broader nature of the society. Some societies encourage
entrepreneurship while some don’t.
 Attitudes (health, environmental consciousness, etc.)
 Leisure interests
4. Technological Factors:
Technology is fast disrupting various industries across the board. Transportation industry is a
good case to illustrate this point. Over the last 5 years the industry has been transforming really fast, not
even giving chance to the established players to cope with the changes. A firm should not only do
technological analysis of the industry but also the speed at which technology disrupts that industry. Slow

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speed will give more time while fast speed of technological disruption may give a firm little time to cope
and be profitable. Technology analysis involves understanding the following impacts -
 Recent technological developments by Kellogg Company competitors
 Technology's impact on product offering
 Impact on cost structure in Processed & Packaged Goods industry
 Impact on value chain structure in Consumer Goods sector
 Rate of technological diffusion
5. Environmental Factors:
Different markets have different norms or environmental standards which can impact the
profitability of an organization in those markets. Even within a country often states can have different
environmental laws and liability laws. For example, in United States – Texas and Florida have different
liability clauses in case of mishaps or environmental disaster.
Some of the environmental factors that a firm should consider beforehand are -
 Weather
 Climate change
 Laws regulating environment pollution
 Air and water pollution regulations in Processed & Packaged Goods industry
 Recycling
 Waste management in Consumer Goods sector
 Attitudes toward “green” or ecological products
 Endangered species
 Attitudes toward and support for renewable energy
6. Legal Factors :
Some of the legal factors that Kellogg Company leadership should consider while entering a new market
are -
 Anti-trust law in Processed & Packaged Goods industry and overall in the country.
 Discrimination law
 Copyright, patents / Intellectual property law
 Consumer protection and e-commerce
 Employment law
 Health and safety law
 Data Protection
 Recommendations:
 The company can focus more to create awareness about the offers to the customers by various
promotional techniques like advertisements through media, advertisement hoardings etc.

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 Product extension in the developing countries through sales in the local markets, superstores and
departmental stores.
 The sales can be increased by reducing the prices of the product and providing more and more offers
on the product.
 Providing the crunchy nut as a freebie to the customer in the stores may lead to customer awareness
about the product.
 The improvement in the product i.e. improved receipe , flavor and taste with least or no sugar may
help in increasing focus of the health conscious segment on the product.
References:
 www.kelloggs.com
 www.encyclopedia.com
 www.kelloggsnutrition.com