Marketing Marketing Mix Katherine Mulhall 20041462
This assignment has been prepared with the highest standards of academic integrity
Katherine Mulhall
BBS2
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Table of Contents TABLE OF CONTENTS.....................................................................................2 TABLES AND FIGURES............................................ FIGURES...................................................................... ....................................... ............... 3 COMPANY COMPANY HISTORY/BACKGROUND........................ HISTORY/BACKGROUND.............................................. .................................... .................... ...... 4 ELLOGG-BROTHER..........................................................................................4 JOHN HARVEY K ELLOGG ELLOGG$% ORN#LAKE%............................................................& THE A!"ENTAL REAT!ON O# K ELLOGG OR'ORATE !MAGE..............................................................................................................&
MARKET SEGMENTATION SEGMENTATION & TARGETING..................... ARGETING...................................................... ...................................... .....6 6 MARKET %EGMENTAT!ON.......................................................................................................( TARGET MARKET!NG............................................................................................................) MARKET POSITIONING...................................................................................8 TRATEG!E%.....................................................................................................* 'O%!T!ON!NG % TRATEG!E%
PRODUCT......................................................................................................9 NE+ 'RO",T "EVELO'MENT .............. ...................... ............... .............. ............... ............... .............. ........................................... .................................... New Product- ‘Special K’..........................................................................................10 'RO",T L!#E YLE........................................................................................................ Introductory Stage...................................................................................................11 Growth Stage...........................................................................................................11 Maturity Stage..........................................................................................................12 ecline Stage...........................................................................................................1! PRICING......................................................................................................14 !NTERNAL / E0TERNAL #ATOR%.........................................................................................4 Internal "actor# $%ecting Pricing eci#ion#.............................................................1& '(ternal "actor# $%ecting Pricing eci#ion#.............................................................1) PLACE DISTRIBUTION!.................. DISTRIBUTION!........................................ ............................................ .........................................1" ...................1" TRATEGY....................................................................................................) "!%TR!B,T!ON % TRATEGY ONL!NE MARKET!NG..........................................................................................................* *hat +u#ine## +ene,t# can the Internet proide...................................................1/ Kellogg’# nline Mareting.......................................................................................1/
PROMOTIONS..............................................................................................2# A"VERT!%!NG...................................................................................................................12 In#titutional $derti#ing...........................................................................................20 Product $derti#ing..................................................................................................20 CONCLUSIONS & RECOMMENDATIONS........................ RECOMMENDATIONS.............................................. ................................... ............. 22 ONL,%!ON% ............................... ................................................................. .................................................................. ...................................... ............. ........... .... 11 REOMMEN"AT!ON% ..........................................................................................................13 REFERENCES...............................................................................................24
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Tables and Figur #!G,RE -+!LL!AM K E!TH K ELLOGG............................................................................................4 #!G,RE 1-J OHN HARVEY K ELLOGG.............................................................................................4 #!G,RE 3-%NA' RAKLE / 'O'..............................................................................................) #!G,RE 4-K ELLOGG5% %'E!AL K.............................................................................................2 #!G,RE &-%'E!AL K BL!%%.....................................................................................................2 #!G,RE (-N,TR!-G RA!N.........................................................................................................3 #!G,RE )-%'E!AL K LOGO.................................................................................................... #!G,RE *-"RO' A JEAN %!6E.................................................................................................. #!G,RE -R,NHY N,T.......................................................................................................1 #!G,RE 2-K ELLOGG5% LOGO.................................................................................................1&
Y TABLE -THE %EGMENTAT!ON 'ROE%%.......................................................................................( TABLE 1-N,TR!-GRA!N %ALE% #!G,RE%.....................................................................................3
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Company History/Bacground Kellogg#s began on $ebruary 1%th 1%06& 'illiam Keith Kellogg was born (pril )th* 1+60* in Battle ,ree-* Michigan and he died in .ctober 6th* 1%/1&'illiam Kellogg was the person responsible for it all and was the person who signed the papers that officially incorporated the Battle ,ree- Toasted ,orn $la-es ,ompany which is now commonly -nown as Kellogg#s& 'ill Kellogg started his business entures by selling brooms* before helping his brother* ohn arey Kellogg* run the Battle ,ree- Sanitarium& 3ow he is responsible for the '&K Kellogg ,o& (lthough 'illiam Keith Kellogg is the official founder of the cereal* it was his brother ohn who had first attempted to deelop the first brea-fast cereal& ohn Kellogg failed to inent the cereal as the taste was not appealing and then that is when 'illiam stepped in and too- oer and with the addition of a simple ingredient* sugar* it became a huge success& The popularity of his new ,orn $la-es# cereal was discoered by accident in 1+)6* which Figure 1!"illiam #eit$ #ellogg encouraged 'illiam Kellogg to set up the Kellogg company* now the most successful cereal manufacturer in the world# 5Kelloggs 7&
John Harvey Kellogg-Brother ohn arey Kellogg 5$ebruary 26* 1+/2 8 9ecember 14* 1%4"7& Kellogg was a dynamo of human energy* a personification of the wor- ethic* who needed only 4 to / hours of sleep a night* went cycling or :ogging eery morning* dictated 2/ to /0 letters a day* adopted and reared 42 children* wrote nearly /0 boo-s* edited a ma:or maga;ine* performed more than 22*000 operations* gae irtually all of his money to charitable organi;ations* loed human serice* generally accomplished the wor- of ten actie people* and lied in good health to age %1 5ohn * 1%%%7& 'hilst 9r& ohn arey Kellogg wor-ed at the hospital and health spa in Michigan* his brother 'illiam wor-ed alongside him as the business manager& The hospital stressed healthy liing and -ept its patients on a diet that eliminated caffeine* meat* alcohol* and tobacco&
Figure 2!%o$n Har&ey #ellogg
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The Accidental Creation of Kellogg’s Cornflakes The two brothers inented many foods that were made from grains* including a coffee substitute and a type of granola* which they forced through rollers and rolled into long sheets of dough& .ne day* after coo-ing some wheat* the men were called away& 'hen they eentually returned* the wheat had become stale& They decided to force the tempered grain through the rollers regardless of its condition& Surprisingly* the grain did not come out in long sheets of dough as it preiously had done& ceeded ?% billion 5(nswers&com7& But Kellogg#s did not stop there& The company introduced a wide range of products such as@
(ll8Bran Bran $la-es ,oco !ops ,runchy 3ut Aleenses $ibre !lus $rosties $ruit n $ibre 'heats
$ruit 'inders ot .a- Krumbly Krae 3ature#s !leasure 3utri8rain .ptiita !op Tarts Cice Krispies Special K
Corporate Image Kellogg#s portrays their corporate image with arious adertising for each indiidual product& (dertising wasn#t their only campaigns to polish their corporate image* Kellogg#s also contributes bac- to the society and ery generously& The '&K& $oundation was founded in 1%"0 by 'illiam Kellogg&
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'aret (egmentation ) Targeting Segmentation and targeting are two -ey elements of mar-eting planning& Segmentation inoles diiding the mar-et of potential customers into homogenous groups& These groups may be distinguished in terms of their behaiour* attitudes* demographic characteristics* age* gender* wor- status* social class etc& Target mar-eting follows on from the initial segmentation decision&
Market egmentation 'hy segmentD Mar-et segmentation is the strategy of last resort 5Kotler* 20017 (n organisation would rather attract a large mar-et than a specific part of that mar-et and then target to that mar-et as a whole but based on the fact that most mar-ets consists of buyers who hae different needs and who cannot all be sered with the same product offering this is why organisations segment their mar-et& %7e8i9:
the
;arket
"e<8ri=e >h? =u:<4 >hat the: =u:4 >here the: =u:4 an@ h?> the: =u:
Buil@ 7r?Ale ?9 in@ii@ual
"eter;ine the attra8tiene<< ?9 ea8h
"eter;ine Ar;5< a=ilit: t?
Table 1!T$e (egmentation *rocess
Behaioural segmentation is based on buyers# behaioural patterns& These patterns can include the occasion when the buyer uses the product* timing of use etc& $or instance* most consumers of Kellogg#s ate the product at brea-fast* but the company mounted an adertising campaign to encourage consumers to use the product at other times of
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the day as a snac-& Kellogg#s hoped this would open up a new segment for them 5Cogan* 200)7
Target Marketing Targeting means selecting particular customers or customer groups at which to aim the firm#s mar-eting mi>& es for different segments& Targeting is the decision about which segment5s7 a business decides to prioritise for its sales and mar-eting efforts 59ibb* Sim-in* !ride* E $errell* 1%%)7 Kellogg#s targets its products at different segments depending on the product& $or e>ample Special K is targeted at women as Kellogg#s was aware of the increasing demand for health products for women& (nother e>ample would be Kellogg#s Rice Krispies: They target this product at children as a fun cereal that snap crac-le E pops# and they also associated the cereal with characters to catch the -ids# interest&
Figure +!(nap, Cracle ) *op
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'aret *ositioning Mar-eting positioning has been defined as the place a product occupies in a gien mar-et* as perceied by the releant group of customers# 5Blythe* 20017 !roduct positioning is strongly related to perception and image& Mar-eters hope that the buyer will perceie their product to be uniFue and that they will hae a distinctie image of the product and its benefits& !roduct positioning inoles establishing a uniFue position for the product in the mind of the consumer 5Cogan* 200)7 Buyers are being constantly bombarded with adertising and promotions which are all attempts to position products in the buyers# minds& Mar-eters try to find a distinct position and must compete for attention with other e>isting competitors& The product#s positioning will be based on the alue offered to the consumer& This alue can be e>pressed in a number of ways including@
!roduct benefits $eatures Style Galue for money =niFueness Sophistication
!ositioning trategies There are a number of product positioning strategies* and which one the mar-eter select will depend on the nature of the buyer#s needs& The positioning strategies are@
!roduct features8 emphasised by some mar-eters to differentiate their products& Benefit positioning8 inoles the mar-eter concentrating on the benefits of the product& =sage occasion8 depending on how the consumer uses a product& Type of user8 eay users* medium users* and light users& ,ompetitie users8 differentiate their product offering to other competing organisations&
The type of user- heay users can be encouraged to continue using the product* while medium and light users can be encourages to increase their use&&&& Kellogg#s aim brands such as Special K at female users* while $rosties and ,oco !ops are aimed at children 5Cogan* 200)7
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*roduct ( product is anything that can be offered to a mar-et for attention* acFuisition* use or consumption that might satisfy a want or a need# 5Kotler* (rmstrong* Saunders* E 'ong* 200/7 Kellogg#s cereals and snac- bars are non8durable productsH they are consumed Fuic-ly on one or a few occasions& Kellogg#s products would be classified as conenience#& They are low priced* freFuently purchased and can be found in most locations such as conenient stores and supermar-ets&
"e# !rod$ct %evelopment 3ew product deelopment is the deelopment of original products* product improements* product modifications and new brands through the firm#s own CE9 efforts 5Kotler* (rmstrong* Saunders* E 'ong* 200/7 isting products can be e>pensie& tremely ris-y as most new products fail but it also important for organisations to hae product8lines and also product mi>es to continue a steady profit flow and to preent their indiidual product to sin- beneath the depths of the current mar-et& Iife blood of corporate success is bringing new products to the mar-etplace# 5Kotler* (rmstrong* Saunders* E 'ong* 200/7 Kelloggs is a global organisation& isting products hae been ery sustainable and most of their products are now -nown as cash8cows# so they are able to generate the money from these cash8cows and pump it bac- into inestment to help aid the deelopment of new products so prices would not be e>tremely high as the inestment from e>isting products coers the cost of resources and manufacturing&
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-e. *roduct! (pecial # Kellogg#s -ept up with current tastes and attitudes of is consumers& (s the desire for a healthier lifestyle became more demanding* Kellogg#s seen this growth and acted on it when they e>tended their product mi> by launching Special K# in .ctober 1%%%&
Figure 4!#elloggs (pecial #
Special K is the delicious crunchy multi8grain fla-es made with rice and wheat that is less than "J fat and it is also a great source of 6 essential B itamins* itamin ,* 9* and iron& This proed to be a huge success especially with the women& The Special K challenge encouraged women around the world to 9rop a ean Si;e#& Kellogg has sustained healthy success* generating nearly ?1" million in 200% sales which is phenomenal& Most of the products in the Special K line build on the famous Special K diet# and proide ersatile weight management solutions that are mar-eted toward a largely female consumer segment& Kellogg#s then launched Special K !each E (pricot in $ebruary 200" to widen their flaours and sustain interest in the product& ( line e>tension inoles the deelopment of indiidual offerings that appeal to different mar-et segments* but that remain closely related to the e>isting product line 5Boone E Kurt;* 1%%/7 Kelloggs already -new that women who are -een to watch their weight and shape see- a range of solutions throughout the day 8 not :ust at brea-fast& Figure !(pecial # Bliss They e>amined the accomplishment of Special K cereal and e>panded its product line by producing similar low fat* healthy snac- bars and nibbles for women to en:oy on the go& Kellogg#s was aware that people would not eat a bowl of cereal at their des- during the day so this new product was perfect for them mid8day snac-s& They brought out a wide range of Special K Snac-s such as Special K Bar 5original* apple E pear* chocolate* bliss7* Special K Mini Brea-s&
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!rod$ct &ife Cycle !roducts are li-e people* they go through stages of life& ( person#s life cycle progresses progress from infancy to childhood to adulthood to retirement to death whereas successful products progress through four basic stages@ introduction* growth* maturity and decline* this is -nown as a product life cycle&
3ntroductory (tage The firm#s ob:ectie in the early stages of the product life cycle is to stimulate demand for the new mar-et entry 5Boone E Kurt;* 1%%/7 $inancial losses are common in the introductory stage due to high e>pensie to deelop the product and heay promotion costs and e>tensie research e>penditure& (dertising is an e>tremely e>pensie component of mar-eting a new product as you hae to let your potential customers aware of this new product on the mar-et& ( negatie profit is usually the outcome as sales are low and e>pensie is high& pensie and roc-y stage there are ways to assist your product through the unpleasant stageH <&
<<& <<<&
Iaunch a basic product8 start from the bottom and wor- your way up* test the waters first to ma-e sure that there is an interest in it& !roduct comple>ity8 ma-es sure the product is easy to understand and use& Selectie distribution8 don#t distribute eerywhere* begin in one place and see the reaction& =se heay sales promotions8 such as /0J off ne>t buy or buy one get one free# are great promotions to -ic- start your sales& (dertising8 Build up consumer awareness* let people -now about the product&
Some Kellogg#s products* li-e Kellogg#s cornfla-es* hae retained their mar-et position for a long time& Many products do well when they are first brought out and Nutri-Grain was no e>ception&
ro.t$ (tage 9uring the growth stage* the pace of consumer acceptance and sales Fuic-ens 5arrell* 20027 The growth stage of a product life cycle is crucial as this is when competitors notice the increase in sales and will deelop competitie products and aggressiely pursue distribution channels& Ma:ority of firms in a particular industry enter the mar-et at the growth stage as they notice success and substantial profit which attract rials&
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Nutri-Grain’s sales steadily increased as the product was promoted and became well -nown& panding the original product with new flaours and format& This was a good idea for the business as it does not hae to spend money on new machinery or eFuipment for production& The mar-et position of Nutri-Grain also subtly changed from a missed brea-fast# product to an all8day# healthy snac- 5The Times 100* 1%%/7
'aturity (tage Sales continue to grow during the early part of the maturity stage* but eentually they reach their potential pea- as the bac-log of potential customers dwindles& (t this stage a large number of competitors hae entered the mar-et and the firm#s profits begin to decline as the competition intensifies& (s competition intensifies* competitors tend to cut prices in an attempt to attract new buyers& (lthough a price reduction may be the easiest method of inducing additional purchases* it is also one of the simplest moes for competitors to duplicate 5Boone E Kurt;* 1%%/7 ilbert arrell indicates that wea-er competitors are li-ely to lower prices* while stronger rials may sacrifice mar-et share to maintain a satisfactory profit leel 5arrell* 20027 (lso a lot of companies drop out of the mar-et as their profit margins are suffering too much& Kellogg#s Nutri-Grain bars were faced with a competitor* (lpen bars* which offered the same benefits as the Nutri-Grain bar& This slowed down sales and chipped away at Nutri-Grain’s mar-et position& Kellogg#s was one of the strong companies who fought for their product to succeed and oercome this stage& Kellogg#s continued to support the deelopment of the brand but some products such as Mini’s and Twists struggles in the crowded mar-et& Aleenses continued to succeed* this was not enough to offset the oerall sales decline& 3ot all products follow these stages precisely and time periods for each stage will ary widely& rowth* for e>ample* may ta-e place oer a few months or* as in the case of Nutri-Grain* oer seeral years 5The Times 100* 1%%/7
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S$%' () N*+,-G,$- R$0 *222 )222 he>:
(222
Mini<
&222 T('
Eleen
4222
T>i
3222 1222 222 2 ) * 1222 122 1221 1223 1224
Table 2!-utri!rain (a les Figures
5ecline (tage tremely low at this stage as they had to reduce the price of the product to -eep consumers purchasing it& The product life cycle implies that companies should hae products in all stages at all times& $irms with only mature and declining products can e>pect dwindling profitability& et product deelopment and the introductory stage are li-ely to absorb much of the profit generated from growing and mature products& By mid 2004 Nutri-Grain found its sales declining whilst the mar-et continued to grow at a rate of 1/J& ,learly* at this point* Kellogg#s had to ma-e a -ey decision& Sales were fallingH the product was in decline and losing its position& Should Kellogg#s let the product die or should they e>tend its lifeD Kellogg#s decided to e>tend the life of Nutri-Grain rather than withdraw it from the mar-et& This meant deeloping and e>tension strategy for the product&
Figure 6!-utri!rain
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*ricing !rice is the amount of money charged for a product or serice* or the sum of the alues that consumers e>change for the benefits of haing or using the product or serice 5Kotler* (rmstrong* Saunders* E 'ong* 200/7 !rice is the only mar-eting mi> element that generates income& The other ariables include ma-ing the product* telling consumers about it* and ma-ing it aailable to them* all these other elements generate costs&
Internal ' ()ternal *actors !ricing decisions affect profit* olume* share of the mar-et and social stance& ternal factors& .scar 'ilde once wrote that a cynic is a man who -nows the price of eerything and the alue of nothing But the concepts of price and alue are hard to separate 5ill E .Sullian* 1%%%7
3nternal Factors ffecting *ricing 5ecisions (ccording to Kotler internal factors affecting pricing include the company#s mar-eting ob:ecties* mar-eting8mi> strategy* costs and organisation 5Kotler* (rmstrong* Saunders* E 'ong* 20017 Mareting +ectie# Before setting a price* the company must decide on its strategy for the product& 'hether or not the organisation has set its target mar-et and positioning carefully will determine if its mar-eting mi> strategy* including price* will be straightforward or not& $or e>ample Kellogg#s Special K targeted towards women and carefully positioned themseles in the healthy foods section* this allowed them to price Special K a little higher than their e>isting products such as Rice Krispies or Cornflakes. ,ompany ob:ecties are general aspirations toward which all actiities in the firm* not only pricing* are directed# 53agle E olden* 1%%/7 To be effectie and efficient* the company#s pricing decisions must fit into the mar-eting strategy* and be in line with decisions on other mar-eting8mi> elements& Ceflections on appropriate prices should occur at the time the product* communication* and distribution are conceied* because the different instruments of the mi> hae a synergic# influence on the mar-et 5Blois* 20007 The company may see- additional ob:ecties* the clearer a firm is about its ob:ecties* the easier it is to set prices& A>amples of common ob:ecties are survival, current profit a!iisation, arket-s"are a!iisation and pro#uct-$uality lea#ers"ip.# 5Kotler* (rmstrong* Saunders* E 'ong* 20017 17 Surial8 ,ompanies set surial as their fundamental ob:ectie if they are troubled by too much capacity* heay competition or changing consumer wants 5Kotler* (rmstrong* Saunders* E 'ong* 20017& Kellogg#s deals with surial by producing 14 ! a g e
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new product mi>es to meet consumers eer8changing wants such as %ll-&ran. !eople became aware of their health and how much fibre they consumed and this is why Kellogg#s launched %ll-&ran to meet their consumer wants and needs& ed costs* they can stay in business& isting competitors& 27 ,urrent profit ma>imisation8 Many companies use current profit ma>imisation as their pricing goal& They estimate what demand and costs will be at different prices and choose the price that will produce the ma>imum current profit* cash flow or return on inestment 5Kotler* (rmstrong* Saunders* E 'ong* 20017& Kellogg#s Cornflakes is so well -nown that they do not hae to promote it which means costs are low& (lso it has such a high demand because of its familiarity that Kellogg#s can -eep the price of Cornflakes relatiely low and still generate profit off the freFuent sales& "7 Mar-et8share leadership8 .ther companies want to obtain mar-et8share leadership& They beliee that the company with the largest mar-et share will en:oy the lowest costs and highest long8run profit 5Kotler* (rmstrong* Saunders* E 'ong* 20017& Kellogg#s posses most of the mar-et8share as they are the ones that inented cereal so yes their costs are low and profit is high& 47 !roduct8Fuality leadership8 ( company might decide that it wants to achiee product8Fuality leadership& This normally calls for charging a high price to coer such Fuality and the high cost of CE9 5Kotler* (rmstrong* Saunders* E 'ong* 20017
3o#t# ,osts can determine the price that a company can charge for its product& ( company will want to charge a price that will coer its costs for producing* distributing* and selling the product but also that will retriee a fair rate of return for the effort that was put into producing it& (ccording to (rmstrong many companies wor- to become the Llow8cost producers in their industries& ,ompanies with lower costs can set lower prices that result in greater sales and profits 5(rmstrong E Kotler* 20007& (s < hae mentioned& Kellogg#s Cornflakes is -nown as their Lcash8cow as it e>tremely well recognised so Kellogg#s does not hae to pump much inestment into the product so costs are low& 'ith haing low costs means that Kellogg#s can set low prices but still generate a substantial amount of profit&
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78ternal Factors ffecting *ricing 5ecisions (s well as factors internal to the firm* there are factors that are e>ternal to the firm that must be ta-en into account when prices are set& A>ternal factors that affect pricing decisions include the nature of the mar-et and demand* competition* and other enironmental elements 5(rmstrong E Kotler* 20007 4he Maret and e5and 'hereas costs set the lower limit of prices* the mar-et and demand set the upper limit& Both consumer and industrial buyer balance the price of a product or serice against the benefits of owning it& Thus* before setting prices* the mar-eter must understand the relationship between price and demand for its product 5Kotler* (rmstrong* Saunders* E 'ong* 20017& The seller#s pricing freedom aries with different types of mar-et& Aconomists recognise four different types of mar-et* each presenting a different pricing challengeH pure competition* monopolistic competition* oligopolistic competition* and pure monopoly& < beliee that Kellogg#s falls under oligopolistic competition which defines as a mar-et in which there a few sellers that are highly sensitie to each other#s pricing and mar-eting strategies 5Kotler* (rmstrong* Saunders* E 'ong* 20017&
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*lace 95istribution: !roducts need to be aailable in adeFuate Fuantities* in conenient locations and at times when customers want to buy them& !roducers need to consider not only the needs of their ultimate customer but also the reFuirement of channel intermediaries* those organisations that facilitate the distribution of products to customers 5obber* 20047
%istri+$tion trategy Astablishing a supply chain that is efficient and meets customers# need is ital to mar-eting success& This supply chain is termed a channel of distribution* is the means by which products are moed from producer to the ultimate customer& aining distribution outlets does not come easily& ,hoosing an effectie channel of distribution is an important aspect of the strategy& Supermar-ets is a type of distribution and effectiely shortens the distribution channel between producer and consumer by eliminating the wholesaler* for e>ample* Kellogg#s distributes to Tesco* 9unnes Stores* SuperGalue etc& The most basic Fuestion to as- when deciding distribution strategy is whether to sell directly to the ultimate customer or to use channel intermediaries such as retailers andNor wholesalers& The company has to decide if they want to use a direct distribution channel* where a company use their own employees and physical assets to sere the mar-et* which is economically feasible for small mar-ets* or if the company wants to use indirect distribution channels which are* as < hae already mentioned* wholesalers* retailers* distributors and dealers* franchises and agents& Many manufactures want to connect with customers in as many ways as possible& Multiple channel systems ma-e use of more than one channel to access mar-ets for the same product 5arrell* 20027& $or e>ample* Kellogg#s distributes its products through company8owned stores* wholesalers that resell to supermar-ets and conenience stores* and franchised outlets& clusie distribution but intensie distribution& Kellogg#s has achieed saturation coerage of the mar-et and uses eery aailable outlets ranging from local corner shops to huge supermar-ets to college ending machines for their Special K and Nutri-Grain bars& Kellogg#s does not sell directly to its customers or use their website as a distribution channel as who would want to buy a bo> of cereal onlineD (lthough selling online has become a ma:or source of distribution in this modern age it does not fit well for Kellogg#s as their products are those that people would not purchase indiidually from the website but Kellogg#s has intermediaries such as Tesco that hae an online website that allows customers purchase their wide range of products online and it is then deliered to their door and Kellogg#s products are included in their range& This is more suitable as customers would purchase a bo> of cereal as part of their wee-ly shopping& Kellogg#s has a fantastic distribution strategy and its products are distributed nationwide& 1) ! a g e
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,nline Marketing More recently the
"$at business benefits can t$e 3nternet pro&ide; (ccording to 9ae ,haffey* the isting products into e>isting mar-ets& This can be achieed by using the power of the isting mar-et& 27 Mar-et deelopment& ere the
#elloggs plained* it does use the
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company itself and also about :ob opportunities within Kellogg#s& (ny recent eents or charity eents are also adertised such as their new fundraiser for schools called Kids4$un#& (nother popular aspect of the website that has been a success* especially with the women* is their Special K drop a :ean si;e# challenge where it allows women to record their weight and what they eat and watch their progress oer the wee-s& This is a huge encouragement for women to get fit and healthy whilst also promoting Special K.
Figure ?!5rop a %ean (i@e
Figure =!(pecial # >ogo
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*romotions $ew goods or serices* no matter how well deeloped* priced* or distributed* can surie in the mar-etplace without effectie promotion& (ccording to ,harles '& Iamb* r& !romotion is communication by mar-eters that informs* persuades* and reminds potential buyers of a product in order to influence their opinion or elicit a response 5Iamb* air* E Mc9aniel* 20007
Advertising (dertising can be defined as any paid form of non8personal promotion transmitted through a mass medium& The -ey difference between adertising and other forms of promotion is that it is impersonal and communicates with large numbers of people through paid media channels 5Brassington E !ettitt* 1%%)7 There are different types of adertising&
3nstitutional d&ertising tremely impressie corporate image&
*roduct d&ertising =nli-e institutional adertising* product adertising promotes the benefits of a specific good or serice& The product#s stage in the life cycle often determines which -ind of product adertising is used@ pioneering adertising* competitie adertising* and comparatie adertising& Kellogg#s uses product adertising freFuently as they hae so many products which are at different stage of their life cycle& < will gie an e>ample of a different product for each type of product adertising to gie you an idea of how Kellogg#s adertises its different products&
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Pioneering $derti#ing !ioneering adertising is used in the early stages of the life cycle when it is necessary to e>plain :ust what the product will do and the benefits it can offer 5Brassington E !ettitt* 1%%)7& !ioneering adertising also see-s to create interest& Kellogg#s uses pioneering adertising when launching new products to creatie interest to its consumers and let them -now how good it is& 'hen Kellogg#s launched Crunc"y Nut they had to adertise it so as people would ta-e an interest in it because after all it is :ust another cereal and how would people -now or want to -now how good it tastedD Kellogg#s had to persuade consumers to try Crunc"y Nut and they done this by adertising it as something that people couldn#t get enough of& The common teleision adertisement that eeryone is aware of consists of people being in loe with Crunc"y Nut and not being able to resist eating it anywhere* anytime& $or e>ample* one adertisement showed a man getting into his car after being at the supermar-et and :ust pouring the mil- directly into the Crunc"y Nut cereal bo>& The adertisement shows that he could not wait to eat the delicious cereal and they use the slogan Lobiously another Kellogg#s ,runchy 3ut* this indicates that this man is not alone when it comes to be addicted to the cereal&
3o5petitie $derti#ing $irms use competitie adertising when a product enters the growth stage of the product life cycle and other companies begin to enter the mar-etplace&
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Conclusions ) ecommendations Concl$sions .erall* Kellogg#s is such a massie successful organisation that has done e>tremely well oer the past decade& The company has grown from an accidental creation to the main brand in the cereal industry& (lthough they still produce the first product that was inented* cornfla-es* they also produce oer )0 different products& This shows me how much they hae grown as an organisation throughout the years& (s a result of 'illiam Keith Kellogg* people in ceptional mar-eting mi> which is important&
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ecommendations (lthough Kellogg#s has been* and still is* a huge success due to their effectie mar-eting mi> strategy* < feel there are some recommendations that would benefit the company in so many ways&
Targeting8 $rom researching Kellogg#s < hae learnt a lot about their products and who they are aimed at& $or e>ample* Rice Krispies, 'rosties, and Coco (ops are targeted at children because of their delicious sugary taste and eye8catching pac-aging* Special K is targeted at women who are health conscious and want to lose weight& 'ith Special K’s low fat and nutritious goodness it really attracts women who want to be healthier& 'hat about menD Kellogg#s has aimed its products at most of the mar-et but hasn#t yet succeeded in reeling in the male population& Some men might hae a bowl of Corn 'lakes but there is nothing specifically aimed at them or is uniFue to men in general& This is something < feel Kellogg#s can focus on and improe een if it is :ust something simple li-e a sports bar&
3ew !roduct 9eelopment8 Kellogg#s has accomplished launching new and great products and now they hae such a wide range of products aailable& (dice < would gie Kellogg#s would be to accomplish something completely new* to branch away from the brea-fast and cereal industry and maybe bring out something from another food section such as minerals* confectionary* etc&
9istribution8 Kellogg#s uses multiple channel distribution systems as they distribute to supermar-ets* local conenience stores* franchised outlets etc& The one type of distribution Kellogg#s does not use is online distribution& < can understand that a business to consumer 5B2,7 distribution would not be ideal as not many customers would buy cereal online from Kellogg#s website& oweer* < do thin- that Kellogg#s should consider using business to business 5B2B7 type of distribution as it would be great for Kellogg#s to handle and -eep trac- of their transactions and it will also reduce costs as it would cut out the wholesaler&
!romotion8 < mentioned institutional adertising and how this type of adertising promotes the corporation as a whole not :ust one indiidual product& Kellogg#s does not seem to do this as they adertise their products separately but < thin- institutional adertising could be beneficial for Kellogg#s as it helps maintain customers# interest and loyalty&
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eferences %nswers.co& 5n&d&7& Cetrieed $ebuary 1/* 2011* from http@NNwww&answers&comNtopicNwill8 -eith8-elloggPi>;;1$dgSCmS
(rmstrong* &* E Kotler* !& 520007& Marketin): %n *ntro#uction, +t" #ition. 3ew ersey@ !rentice8all ford =niersity !ress @ !earson Aducation Iimited& Boone* I& A&* E Kurt;* 9& I& 51%%/7& Conteporary Marketin) (lus. .rlando@ The 9ryden !ress& Boone* I& A&* E Kurt;* 9& I& 51%%/7& Conteporary Marketin) (lus, 0t" #ition. .rlando@ The 9ryden !ress& Brassington* $&* E !ettitt* S& 51%%)7& (rinciples of Marketin). Iondon@ !itman !ublishing& ,haffey* 9&* Mayer* C&* ohnston* K&* E ,hadwic-* $& A& 520007& *nternet Marketin). Asse>@ !earson Aducation Iimited& ,haston* <& 520017& -Marketin) Strate)y. Ber-shire@ Mcraw8ill !ublishing ,ompany& 9ibb* S&* Sim-in* I&* !ride* '& M&* E $errell* .& ,& 51%%)7& Marketin) Concepts 1 Strate)ies, 2r# #ition. Boston@ oughton Miflflin ,ompany& arrell* & 9& 520027& Marketin) Connectin) wit" Custoers, /n# #ition. 3ew ersey@ !earson Aducation* @ (ddison 'esley Iongman Iimited& obber* 9& 520047& (rinciples an# (ractice of Marketin), 3t" #ition. Ber-shire@ Mcraw8 ill
Kotler* !& 520017& Kello)) on Marketin). 3ew or-@ ohn 'iley E Sons& Kotler* !&* (rmstrong* &* Saunders* &* E 'ong* G& 520017& (rinciples of Marketin), 2r# #ition. Asse>@ !earson Aducation Iimited& Kotler* !&* (rmstrong* &* Saunders* &* E 'ong* G& 5200/7& (rinciples of Marketin), 3t" #ition. 3ew ersey@ !rentice all&
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Iamb* & ,&* air* & &* E Mc9aniel* ,& 520007& Marketin), +t" #ition. .hio@ South8'estern ,ollege !ublishing& 3agle* T& T&* E olden* C& K& 51%%/7& Tactics of (ricin): % Gui#e to (rofitale 6ecision Makin). Anglewood ,liffs* 3@ !rentice all& Cogan* 9& 5200)7& Marketin)- %n *ntro#uction for Stu#ents in *relan#, 2r# #ition. 9ublin@ ill E Macmillan Itd& T"e Ties 788& 51%%/7& Cetrieed http@NNwww&thetimes100&co&u-N
March
21st*
2011*
from thetimes100&co&u-@
Figure 10!#elloggs >ogo
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