KELLOGGS – BRINGING THE BEST TO U• Kelloggs was founded as the Battle Creek Toasted Corn Flake Company on 1906• found by William Keith Kellogg• Worlds leading producer of breakfast cereals and convenience foods, such as cereal bars• Kellogg’s products and their characters crackle, pop are famous all over the world• Number one in market share with just under 34% of the $9 Billion cereal market• Kellogg recently announced a shortfall in earnings due to lower sales and continued competitive pressures in the ready-to-eat cold cereal market•
THE NUTRIGRAIN PROBLEM•The Market grew by 15% in 2003•There was a steady growth in thecompetitor’s market share•The sales of the Nutrigrain declined in thesame period•The tastes and behavior of the marketchanged•The manufacturers knew the product wasapproaching the decline period•The objective of the manufacturer shiftedfrom introducing another product toincreasing the life cycle of the existingproduct•Decided to rebrand and re launch thesame product to increase it’s maturitylifecycle and hence product lifecycle
PRODUCT LIFE CYCLEEvery product has its own life cycleShows the various stages of how salesof a product changes over timeFive stages of PLC:Launch – Product launch and its initialperformance in the market Growth – Period in which salessteadily increase Maturity – Stage in which othercompetitors emerge. Time of maxprofitability Saturation – Market is full of similarproducts. Sales start to fall Decline – Stage in which decisionsabout the death or resurgence of theproduct is taken.
Strengths of KelloggsStrong position in themarket for convenienceand health foodsWell established brandname and brand valueFocus on promotinghealthy livingStrong commitment tocorporate socialresponsibility
Causes for FailureProblems started at maturitystageCannibalisation – Competitionfrom products of Kellogg’s itselfand other manufacturers likeAlpen barsLack of product differentiationLesser focus on advertisingand promotional strategiesLack of measures to curbcompetition
Relaunching strategyIdentification of the problemPossible solutions for extending thePLC:Promoting Nutrigrain as an “all daysnack” rather than as a “breakfast food”.Improving the Integrated MarketingCommunication through enhancedadvertising and promotionsIntroducing new flavours to cater to allcategories of peopleTie ups with corporate, fitness centresand schools to increase promotionsUtilize the media, press to launch newadvertising strategies