Slide 2: By Poonam Chavda
Simon Chee H Wong Summary : Summary Introduction
Product Life Cycle
Conclusion Introduction : Introduction The society lifestyle has evolved with time.
The traditional UK breakfast consisting of beacon and eggs has slowly been replaced by a less time consuming meal.
Alongside a growing issue for health.
There was created the healthy rapid breakfast cereal as a response the market demand.
While the breakfast meal change, it has socially become more than just breakfast.
It is nowadays a all day meal or snack. Cereals are often consumed after school at 3-4pm. The market needed cereal bar as a quick on-the-go meal (i.e. workers in the office at 10am) History : History The Kellogg Company is the world’s leading producer of cereal and one of the leaders in the production of convenience foods. The Kellogg's company was born in 1894
The company was officially launched in 1902. At this time the company's only product was Corn Flakes History : History Kellogg's was the first company to include nutrition messages, recipes, and product information on cereal boxes
Kellogg’s products are made in seventeen countries and are sold in more than 180 countries Industry Analysis : Industry Analysis Porter’s five forces
KFS Porter’s Five Forces: : Porter’s Five Forces: Competitive Rivalry – The buyers has control over the business and the entry is less likely and substitute is more probable.
Buying Power – Market is segmented by three major players and switching cost if very low
Supplier Power – Suppliers have no control over the raw material and government controls the prices.
Threat of Substitute – It is high has there are three major players with a lot of different brands and sometimes the channels are providing with they own as well
The Threat of Entry – It is very low as the cost to enter the indusrty is quite high as the market is already saturated PESTILE : PESTILE Political – The government has the food acts and there is also ACFM (Members of the Association of Cereal Food Manufacturers) which deal specifically on cereal issues
Economic – The success is due to high usage but still threaten by the traditional breakfast. There are still opportunities to grow.
Socio-cultural – Initial target was school student but grew the to whole family members. The eating habit has evolved.
Technological Factors – The major player are seeking to diversify more and the production process is highly computerised.
International – The majors are on every market in every countries.
Legal - EU legislation regarding health, ingredients, labeling and storage. This legislation includes the Food Labeling Regulations and there is ACFM also and CEEREAL.
Environment – The players are proactive in CSR and do sponsor a lot of event relating to diet. Opportunities : Opportunities With the classification of oats as a “superfood”, the manufacturers are looking forward the make enormous profit.
The benefits of cereal is increasing and big countries like India and China are westernising. Threats : Threats Market has three majors but if eating habit are to change in India or China, they might see business opportunities in making cereals
The threat of substitute is quite high as the distribution channels has seen the potential in the cereal and at a discounted price
The demand for bio-fuel had turned the manufacturers to devote their entire production to that particular industry which is pretty profitable.
Breakfast Cereals with high level of sugar and salt under attack: Organization “Which” report “Cereal re-offenders” July 2006
ADVERTISING BAN - In February 2007, broadcasting regulator Ofcom announced its plans to ban junk food advertisements during television programmers watched by under-16s Forecast : Forecast Forecasting that the market will grow in volume and value terms to 2011, value growth is expected to outpace that of volume
Manufacturers will continue to focus new product development (NPD) on premium-priced products, such as organic and indulgence products
Competitor Forecasts - breakfast cereals market is dominated by three large players — Kellogg, Weetabix and Cereal Partners — small niche players have emerged and flourished Mission : Mission Challenges : Challenges Strengths : Strengths Weaknesses : Weaknesses Oppurtunities : Oppurtunities Threats : Threats Key Factor for Success(KFS) : Key Factor for Success(KFS) Healthy image: Cereal and breakfasts are seen as an important meal of the day, it is perceived as healthy in comparison to other daily snacks such as crisps and chocolates. Kellogg’s has a range of breakfasts called ‘Special K’ which specialises in ‘shape management’ and the body conscious customers/markets.
Convenience: Kellogg’s have a range of breakfast bars which are ‘portable snacks’ to have on-the-go which make it convenient for those on the morning rush, something that they can have whenever they want, were ever they are.
Versatility: can be used to replace meals, as a snack between meals and for kids as lunch box filler.
Healthy options: There has been demand in the food industry for making products healthier weather its controlled calories or fat in-take to making products natural in color and no added additives. Kellogg’s are making cereals healthier for the future generation as health is a growing concern by reducing salt and adding fruits into the cereals and bars. Key Factor for Success(KFS) : Key Factor for Success(KFS) Brand awareness: Kellogg’s has been a long established company and have a high level of brand awareness and customer loyalty. Brands in the kelloggs range such as Nutri-Grain, Special K, Alpen and Frosties are part of the companies Brands.
Something for everyone: they have a wide range of products that vary from children to adults, those that are health conscious to those that want to indulge, those that are concerned with the ‘fair-trade’, organic produce and those who share what they consume with others.
Innovation: Not only do Kellogg’s produce all the favorite cereals from when they started they continue to make more and more different cereals by playing with flavor, taste and the new emerging markets.
Low barriers to entry: low technological requirements have made it easy for niche markets to enter the industry.
Value for money: the average household can afford to buy Kellogg’s as they usually promote offers with new products and regular price reductions in order to keep there loyal customers by their side.
Quality: since they began Kellogg’s have always offered the same quality in the products they also make a promise to the customers that if they are not satisfied with there product they can get their money back. This ensures the same great taste in every product. Slide 21: Key factors for success (KFS) Critical factors for success (CFS) Key Factor for Success(KFS) : Key Factor for Success(KFS) Kellogg’s International : Kellogg’s International Kellogg’s International : Kellogg’s International Kellogg is a publicly traded company headquartered in Battle Creek, Michigan.
Kellogg products are manufactured in 19 countries and
marketed in 180 countries around the world.
Kellogg Company operates through four operating segments:
Kellogg North America, Europe, Latin America and Asia Pacific Competitive Strategies : Competitive Strategies Product Life Cycle : Product Life Cycle Product Life Cycle : Product Life Cycle The Introduction Stage:
Market Size and Growth is small
Research & development costs have been incurred in getting product to the stage
High Marketing costs
Hardly to make good profits during this stage
Products are carefully monitored to ensure the growth Product Life Cycle : Product Life Cycle Growth:
Identified by rapid growth in sales and profits
Huge market share
Less costly for business to expand their market
Enjoying the overall growth Product Life Cycle : Product Life Cycle Maturity:
Competition of market share exist
The most profits made during this stage in the whole entire market
An organization is recommended in order to get a bigger market share
E.g : Kellogg’s expenditure research and development to product modification and improvement Product Life Cycle : Product Life Cycle Declined:
Market is declining
Decreasing the amount of profits
Market share is divided between competitors
End the product if it is not profitable Conclusion : Conclusion