Marketing MGT Project

MARKETING MANAGEMENT
MBA 506
Prepared By: Jakia Jalal ID #1035057 Omair Khan Panni ID # 0310121 Azmina Panjwani
ID # 1035012
Prepared for: MD MUNIR HOSSAIN
Submission date: 9th April 2010
Table of Contents
Table of Contents....................................................................................................... 2 1.0 INTRODUCTION:....................................................................................................2 2.0 MARKET SEGMENTATION:.....................................................................................3 3.0 BUYING BEHAVIOUR:............................................................................................4 7.0 BRANDING STRATEGY:..........................................................................................6 7.1 Line Extension:..................................................................................................6 7.2 Brand Extension:...............................................................................................7 9.0 STAGES OF PRODUCT LIFE CYCLE: ......................................................................7 10.0 CONCLUSION:.....................................................................................................9
1.0 INTRODUCTION:
Consumers around the world enjoy Kellogg Company products, one of which Kelloggs Corn Flakes has been part of a wholesome, delicious morning for more than a century. Our company began with only 44 employees in Battle Creek, Michigan, in 1906. Today we employ nearly 32,000 people, manufacture in 19 countries and sell our products in more than 180 countries around the world. For more than 100 years, innovation and our commitment to being the best in the categories in which we compete have guided our company. From being the first company to offer premiums in our cereal boxes to being the first to fortify our cereals, Kellogg has historically been a leader in industry, innovation and marketing. Its founder, W.K. Kellogg, had a strong commitment to nutrition, health and quality. His vision continues to drive improvement in our products and processes, with the goal of providing great-tasting, nutritious products that meet the most rigorous quality standards
2.0 MARKET SEGMENTATION:
3.0 BUYING BEHAVIOUR:

There are basically four types of buying behavior; Complex buying behavior, dissonance-reducing buying behavior, habitual buying behavior and variety seeking buying behavior. For Kelloggs Corn Flakes, they follow variety seeking buying behavior because here customers switch not from dissatisfaction but for seeking different taste. They produce different taste of corn flakes so if the consumer switches it stays within the companys racket.
4.0 POSITIONING STRATEGY:
Positioning by Product Attributes or Benefits: In the marketing strategy point of view, the product is positioned by attributes or benefits; which are meaningful to customers and helps develop a positioning strategy. Corn flakes are breakfast cereals made by combining milled corn with sugar. Milled corn products are believed to enable easier utilization of vitamins and nutrients as compared to theirnon-milled counterparts. The major ingredients include milled corn, sugar, iron, high fructose corn syrup and vitamins (A, B, C, D, and E). It is rich in niacin, riboflavin, vitamin A, vitamin B, vitamin B12 (for vegetarians vitamin B12 is available mostly in these foods), necessary for a fit and sound health.
5.0 PRODUCT DIFFERENTIATION:

Product can be differentiated based on its form, features, performance, conformance, durability, reliability, repairability, style and design. Kelloggs is differentiated on reliability. Kelloggs is a name that always raises a smile. It has been around for generations and has built up an impressive portfolio of brands that can be found in many a kitchen across the globe. It markets in over 180 countries, and its annual 2009 sales towered up to an impressive $13billion.
6.0 BRAND-NAME DECISION:
A brand for a company is like a reputation for a person. Manufactures and service companies who brand their products must choose which brand names to use. There are four strategies are available for brand name decision: 1. Individual Name 2. Blanket Family Name 3. Separate Family Name 4. Corporate Name Combined With Individual Product Names Corporate Name Combined With Individual Product Names, this policy is followed by Kellogg s. The company name legitimizes, and the individualizes, the new product.
7.0 BRANDING STRATEGY:

Branding is a major issue in product strategy. Well-known brands command a price premium. Japanese companies such as Sony and Toyota have built a huge brand loyal market. At the same time developing a branded product requires a great deal of long term investment, especially for advertising, promotion and packaging. KELLOGGS is currently using LINE EXTENSION and BRAND EXTENSION strategy for their products.
7.1 Line Extension:

Existing brand name extended to new size or flavors in the existing product category.
7.2 Brand Extension:

Brand names extended to new product categories. The company uses the line extension strategy for its corn flakes because of its different sizes and flavors, for example different flavors like chocolate, strawberry, vanilla, mango, honey, banana ; and brand extension strategy for its new product categories such as Keebler, Pop-Tarts, Eggo, Cheez-It, All-Bran, Mini-Wheats, Nutri-Grain, Rice Krispies, Special K, Chips Deluxe, etc.
8.0 PRICING STRATEGY:

Under the pricing strategy we will see whether the company is doing market skimming or market penetration. Market penetration is when the company set the price at the lowest level and wants to earn profit in the long run, they want to maximize the market share and they believe that the market is price sensitive.The companies which unveil new technology favor setting high prices to skim the market. Now which pricing strategies the company follows? From the above definition it's hard to say actually which strategy they are following; neither the company is introducing new technology or setting the lower price for long term profit. But for sure we can say that the company is not following market penetration strategy. Again also they are not following fully market skimming for its entire product but for some of its products which we did not presented for lack of reliable data.
9.0 STAGES OF PRODUCT LIFE CYCLE:

1. Launch - Many products do well when they are first brought out and Kelloggs corn flakes was no exception. From launch (the first stage on the diagram) it was immediately successful, gaining almost 50% share of the growing cereal market in just two years. 2. Growth Kelloggs corn flakes sales steadily increased as the product was promoted and became well known. It maintained growth in sales until 2002 through expanding the original product with new developments of flavour and format. This is good for the business, as it does not have to spend money on new machines or equipment for production. The market position of cereal also subtly changed from a missed breakfast product to an all-day healthy snack.
3. Maturity - Successful products attract other competitor businesses to start selling similar products. This indicates the third stage of the life cycle - maturity. This is the time of maximum profitability, when profits can be used to continue to build the brand. However, competitor brands from both Kellogg's itself (e.g. All Bran bars) and other manufacturers (e.g. Alpen bars) offered the same benefits and this slowed down sales and chipped away at market position. Kellogg's continued to support the development of the brand but some products (such as Minis and Twists), struggled in a crowded market. Although Elevenses continued to succeed, this was not enough to offset the overall sales decline.
Not all products follow these stages precisely and time periods for each stage will vary widely. Growth, for example, may take place over a few months or, as in the case of Nutri-Grain, over several years.
4. Saturation- This is the fourth stage of the life cycle and the point when the market is full. Most people have the product and there are other, better or cheaper competitor products. This is called market saturation and is when sales start to fall. By mid-2004 cereals found its sales declining whilst the market continued to grow at a rate of 15%. 5. Decline - Clearly, at this point, Kellogg's had to make a key business decision. Sales were falling, the product was in decline and losing its position. Should Kellogg's let the product die, i.e. withdraw it from the market, or should it try to extend its life.
10.0 CONCLUSION:
With 2010 sales of nearly $12 billion, Kellogg Company is the worlds leading producer of cereal and a leading producer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles and veggie foods. The Companys brands include Kelloggs, Keebler, Pop-Tarts, Eggo, Cheez-It, All-Bran, Mini-Wheats, Nutri-Grain, Rice Krispies, Special K, Chips Deluxe, Famous Amos, Sandies, Austin, Club, Murray, Kashi, Bear Naked, Morningstar Farm, Gardenburger and Stretch Island.

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MARKETING MANAGEMENT

Prepared for: MD MUNIR HOSSAIN

Submission date: 9th April 2010

2.0 MARKET SEGMENTATION:

3.0 BUYING BEHAVIOUR:

4.0 POSITIONING STRATEGY:

5.0 PRODUCT DIFFERENTIATION:

6.0 BRAND-NAME DECISION:

7.0 BRANDING STRATEGY:

7.1 Line Extension:

7.2 Brand Extension:

8.0 PRICING STRATEGY:

9.0 STAGES OF PRODUCT LIFE CYCLE:

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