marketing

Marketing plan of K cereal bars

2008 Marketing Plan of K cereal bars

Executive Summary

Every year , a number of start-ups emerge in every industry and existing players in the industry expands their services by introducing several new products . The underlying reasons behind this fact are the industry still becomes attractive market that continues encouraging the increasing number of new companies . The reasons include the continuous development of information technology (IT ) that creates a new way of doing business such as e-commerce and simplified supply chain , rapid economy growth of

a country , and the increasing consumer spending on particular products

In to reach the desired results , any companies should take into account several considerations or fundamental procedures of successful business by making and implementing marketing plan . While a market is a particular group of who needs services , a marketing plan composes of several components as described below

Concerning the creation of marketing plan , this will discuss marketing plan for Kellogg K cereal bars . The marketing plan composes of trend overview of cereal market , target market , marketing program financial data analysis , implementation plan , and evaluation and control

Market Review

Trend overview

Breakfast is undoubtedly becoming important food for human being since it provide enough energy to perform any activities . Due to the importance of having a breakfast , many organizations and governments campaign to have breakfast every day by providing facts stressing the nutrition of several breakfast alternatives

In a special 1998 research on the impact of breakfast on children Koyama (2007 , children reveal that those who have breakfast have advantages compared to those skip breakfast as following

Have better performance at school

Obtain superior test scores

decrease absenteeism and tardiness

(Koyama , 2007

Due to the significant impact of having breakfast , nutritionist develops many kind of menu that is suitable for breakfast one of them is cereal According to Koyama (2007 , children who eat cereal more frequently will be less likely to be overweight since cereal composes few fat and cholesterol that those who are not cereal eaters . This interesting finding encourages many people in the world especially in western like the U .S . to have cereal as the main menu for breakfast . Figure 1 shows the projection of worldwide cereal consumption in which it demonstrates the near-linear increase of cereal consumption until 2026 (Koyama 2007

Figure 1 Various Projection Results for World Cereal Consumption

Source : Koyama , 2007

Market segment

Segmentation divides the market into smaller segments with similar characteristics , allowing us to treat each segment differently by giving them different products , prices and other marketing tools . This activity is important in a heterogeneous consumer market (Perner , n .d

The market segment for K-cereal is those who have great concerns over healthy foods . In general , Kellogg 's (R ) Special K (R ) bars have basic benefits that other cereal have such as low in calories and fat than other mode of breakfast choices . Due to the health ingredients of cereal , the market segmentation for such products are for people whom

Concerns over rich in nutrients

Aware of the importance to give their children a diet by taking leading source of whole grain

Understand the importance of having nutritional breakfast since according to a survey , 16 ,000 adults who skip breakfast are likely to experience overweight . Figure 2 shows the calorie-per-serving comparison of most breakfast options

Figure 2 Calorie per Serving

Source : General Mills , 2008

Target market

The cereal market is a growing industry according to figure 1 above . Due to the attractive market , K-cereal bars will have particular target market to put the products standing out the crowd . The potential target markets for K-cereal bars are

Primary Target Market

Adults : The features and packaging of K-cereal bars is suitable to be a snack or the substitution of chocolate bars that many adults still consume . This adult target market represents about 58 .8 million younger adults within the ages of 18-35 (Coffee Crunch , LLC , 2007 Figure 3 . Percentages of U .S . Overweight Children and Teens

Source : National Conference of State Legislatures (NCSL , 2008

Children : these target market is becoming primary target since many researches have reveal the growing number of overweight children that need to take suitable low-fat diet . According to National Conference of State Legislatures (NCSL (2008 , the growth rate for overweight children is about triple within the last 20 years . Most of them are in the age of 12-17 . Figure 3 shows the proportion of children that experience overweight

Students : the students at high school and college also become the target market for K-cereal bars due to the packaging and various taste offering that are suitable for teenagers . This market represents about 52 .3 of students who take cereal in the U .S . alone (Coffee Crunch , LLC , 2007

Secondary Target Market

People who become coffee and cereal consumers : this target market cannot be disregard since in the U .S . alone there are about 75 (seventy-five percent ) people take breakfasts in which 50 (fifty-percent ) of them take cereal as their breakfast menu

Competitive review

Product

In addition , the key features of K cereal bars are in general similar to those of cereal in which the consumers will take less fat at breakfast and it helps consumers to lowering the daily calorie intake . The objective of the development Kellogg K cereal bars is driven by the target market characteristics as described above

Figure 4 Product Range of Kellogg K Cereal products

Source : Coffee Crunch , LLC , 2007

Business review

The breakfast cereal industry exhibits a continual growth during the economic stability . Unlike coffee industry that is more recession proof cereal industry shows declining sales during the recession . This is because when recession occurs , cereal consumers will likely to eat product substitutes and decrease their spending on breakfast cereals Figure 5 shows the sensitivity of cereal products during the inflation

Another strategy to sell cereal in large volume is by using channel alternative such as coffee shop and cafy . This strategy is in line with the explanation regarding the secondary target market where the combination of coffee and cereal during breakfast and leisure time would be a good option . Therefore , K-cereal bars may perform joint marketing scheme with coffee chains including Coffee Bean or the famous Starbucks since it may help cereal industry to take advantages of declining spending on cereal Figures are estimates according to market research

Figure 5 Product Range of Kellogg K Cereal products

Source : Coffee Crunch , LLC , 2007

Another strategy to sustain the cereal industry growth is by use endorsement from nutritionists or doctors . This endorsement-like strategy is suitable due to the three conditions as following

Nutrition : Currently , doctors suggest adults to take more cereal in to provide enough supply for vitamins , fiber , and minerals . This nutrition suggestion especially works for particular type of consumers like working husbands that are approaching middle age who likely to have great concern on best nutrition at breakfast . In addition , unmarried working males also consumers that likely to take doctors suggestion regarding cereal consumption (Coffee Crunch , LLC , 2007

Time Pressure : This issue is significantly important especially in today 's working condition where workers often face high job pressure to meet causes workers to skip the breakfast . In to supply suitable nutrition during the tight work schedule , it is better to take ready to eat meals . Americans are known to have great proportion of people skipping breakfast due to time constraints . At least , one of four Americans skips breakfast and this number continuously increases by more than 11 percent within the next five years (Coffee Crunch , 2007

SWOT analysis

The first analysis that takes into account the internal and external environment is SWOT analysis . As the name implies , SWOT analysis composes of strengths (S ) and weakness (W ) as internal factors while the external factors composes of opportunities (O ) and Threats (T

Amidst new emerging business analyses , some companies still employ SWOT analysis since it provides information that is useful to match the companies ' resources and capabilities to existing business environment in which the company competes

Strengths

Strengths are the one component of internal analysis . The component describes any resources and capabilities that support a company to achieve its competitive advantage such as patents , excellent reputation low cost structure and many more

Concerning the strengths of Kellogg K cereal bars , we find that their multi taste offering become one key strengths that K cereal bars provide . This is because cereal is only cereal that other competitors may copy it easily . However , by introducing the multi taste products each with careful plan calories content put the K cereal bars as the strong products in cereal industry . For example , Strawberry K bars contain only 90 calories for each bar as shown in the figure 6

Figure 6 Strawberry K Bars

Source : Coffee Crunch , LLC , 2007 Weaknesses

The second internal factor is Weaknesses . This is simply in contrast to the strength in which the absence of specific strength might be considered as the weaknesses of the company . It includes a lack of patent protection , high-cost structure and many more

However , any internal factor could be the strength or the weakness for a company . Consider many human resources . When a company could not employ and appoint them in the appropriate manner , they could the weakness for the company since it causes high-cost structure and ineffective business environment and vice versa

Concerning the weaknesses of Kellogg K Cereal Bars , we find that the current situation where Kellogg becomes the number two in US cereal market behind the market leader , General Mills , would put in the weak position if competitors , General Mills , also develop the same products (Decision News Media SAS , 2008

Opportunities

The first external factor in SWOT analysis is Opportunities . These elements provide specific opportunities that may help a company to gain more profit and achieve sustainable growth . They include unfulfilled customer need , new technologies , elimination of trade barriers and so on

The opportunities for Kellogg K Cereal Bars lies on the opportunity to sell them in coffee chain like Starbucks and The Coffee Bean in to become snacks while taking coffee at cafy . This opportunity based on a data where about 37 .5 million coffee consumers always take breakfast in the morning according to data in 1999 (Coffee Crunch , LLC 2007 .Figure 7 U .S . Market Value for Ready-To-Eat Cereal and Coffee

Source : Coffee Crunch , LLC , 2007

The condition suggests Kellogg to promote Kellogg K-cereal bars as the supplementary food for coffee drinker in the morning become a good daily intake during breakfast

Threats

In addition , Threats describe any changes in the external factors that may put any company in unsafe position in the market . They include a change in consumer tastes , new substitute products , new regulations and many more . The threats for Kellogg K Cereal Bars come from specialized cereal food producers and well-known food producers like General Mills Kraft Foods , and Nestly where any products produced by the three competitors will quickly taken by the market for good branding awareness of these competitors

Goals and objectives

In business terminology , goals are defined as statements that are formulated and lack of specificity while objectives are likely to appear in exact form ( Strategic Planning . Goals statement composes of five elements task , what , who , timeframe , and Table 1 Goals and Objectives of Kellogg K Cereal Bars

Task (We ) commit to

What Produce health cereal bars that provide good diet

Who For consumers

Time Frame To meet the challenge of tight working days and daily intake Source : Lukaszewski (1990

Sales objectives

To achieve sales of K cereal bars 229 ,301 ,800 million in 2008 representing a 169 .77 increase from previously 85 million sales in 2006 (Promo Magazine , 2006

To maintain annual revenue growth revenue at more than 70

Marketing objectives

Since there are many existing cereal products , therefore , K cereal bars must have distinctive offering as following

To provide unforgettable benefits in having breakfast by offering many tastes of K cereal bars

To develop suitable community of K cereal bars consumers by promoting with nutritionist , fitness coach , life coach , and friendship supports

To develop attractive website that provides information regarding K cereal bars products its benefits and offering

To develop and provide attractive customers retention program in to improve customer satisfaction and to drive them becoming loyal customers

Strategies

In Competitive Strategy : Techniques for Analyzing Industries and Competitors , Michael Porter explain about three generic strategies that a company should consider when it plans to enter a new market . The three strategies that suitable for K cereal products are as following

Broad cost leadership to reach a larger portion of market segment

Broad differentiation to acquire a smaller portion of target market than the broad leadership

Focused strategy on key benefits of cereal nutrition with various flavor to target broad market

Points of difference

It is widely known that the key success of Kellogg K cereal bars is the multi flavor offering , low prices strategy , vast selection , and multi channel distribution . In addition , Kellogg K cereal bars also target three key target markets that in high demand for health foods : working adults , students , and children

Positioning

According to Recklies (2006 , positioning is a process that deals with conveying product value to buyers , which results in driving all type of outbound communications . Therefore , the best positioning strategy is visibly position how the product will solve specific customer problems Concerning K cereal bars products , the suitable positioning is the right option for breakfast that features rich in nutrients

Product

In addition , the suitable segmentation also drives Kellogg to develop Kellogg 's (R ) Special K (R , which produced with special features as follow : lowering calorie diet , lightly toasted , high in flavor , and lightly sweetened rice cereal . In addition , Kellogg 's (R ) Special K (R also have healthy ingredients composing of excellent source of 11 vitamins and minerals , which offered in a wide range of delicious flavors including Special K2Otm Protein Water , Special K (R ) Proteintm Meal Bars , Special Ktm Snack Bites , and Special K (R ) Proteintm Snack Bars (Kellogg NA Co , 2008 . Figure 4 shows the product range of Kellogg K cereal that composes of bars , snacks , and waffles

Pricing

The pricing for K cereal bars is priced at 1 .29 for each Special K Protein Meal Bars that contain 10 grams of protein or 5 .98 for a box of six meal bars . Meanwhile , for other flavor cereal bars like Strawberry flavors , Double Chocolate , and Chocolate Peanut Butter , they sold at 89 cents each or 3 .99 for a box of six (Promo Magazine , 2006

Distribution

The opportunities for Kellogg K Cereal Bars lies on the opportunity to sell them in coffee chain like Starbucks and The Coffee Bean in to become snacks while taking coffee at cafy . This opportunity based on a data where about 37 .5 million coffee consumers always take breakfast in the morning according to data in 1999 (Coffee Crunch , LLC 2007

Communication /promotion

To develop suitable community of K cereal bars users by promoting with nutritionist , fitness coach , life coach , and friendship supports like displayed in their official website ( HYPERLINK "http /www2 .kelloggs .com " http /www2 .kelloggs .com )Figure 8 Promotion of Kellogg K Cereal

Source : HYPERLINK "http /www2 .kelloggs .com http /www2 .kelloggs .com

Action plan and implementation

No Communication

Activities Budgets

(USD ) Time Schedule Measure for Evaluation /Control

1 Customer Gathering 400 ,000 Monthly in cooperation with nutritionist or supermarket The number of Audiences at the Customer Gathering (minimum 1 ,000 people gathering

Post-seminar Sales Record /Achievement

2 Press Release 300 ,000 monthly News Distributed into Media

3 Website Updates 1 ,000 ,000 Any time Web sites updated once a changes /new activities occur

4 Year end Sale 40 off regular price ) Sales increased by 40 at minimum biweekly Hard selling during year-end sales to reach target

Financial Analysis

Summary

Concerning the creation of marketing plan , this has elaborated marketing plan for Kellogg K cereal bars . The marketing plan composes of trend overview of cereal market , target market , marketing program implementation plan , and evaluation and control , and financial data analysis

Concerning the target market selection for K-cereal is those who have great concerns over healthy foods (rich in nutrients , those who aware of the importance to give their children a diet by taking leading source of whole grain , and those who understand the importance of having nutritional breakfast

Concerning the financial objectives , in financial year 2008 /2009 , K cereal bars plan to reach 229 ,301 ,800 million in 2008 , representing a 169 .77 increase from previously 85 million sales in 2006 and maintain annual revenue growth revenue at more than 70

Reference

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Business Wire (1999 . New Kellogg 's Special K Plus Cereal Offers Strength in Numbers for Superior Nutrition . Retrieved April 27 , 2008 from http /findarticles .com /p /articles /mi_m0EIN /is_1999_August_4 /ai_

Decision News Media SAS (2008 . Kellogg admitted second position on US cereal market behind General Mills . Retrieved April 25 , 2008 from http /www .foodnavigator .com /news /ng .asp ?id 40208-kellogg-admitted-secon d

General Mills (2008 . Cereal Kids . Retrieved April 26 , 2008 from http /www .generalmills .com /corporate /health_wellness /cereal_kids2 .aspx

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Koyama , Osamu (2007 . Projecting the World Food Supply and Demand Using a Long-Term Dynamic Simulator . Retrieved April 26 , 2008 from http /www .agnet .org /library /eb /492

National Conference of State Legislatures (NCSL (2008 . Percentage of Overweight U .S . Children and Teens . Retrieved April 26 , 2008 from http /www .ncsl .org /programs /health /overweightct .htm

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Pricing Objectives . Retrieved April 27 , 2008 from http /www .fact-index .com /p /pr /pricing_objectives .html

Promo Magazine (2006 . Special K to Launch Water , Protein Bars Retrieved April 27 , 2008 from

Quick MBA (2006 . SWOT Analysis . Retrieved April 26 , 2008 from http /www .quickmba .com /strategy /swot

Recklies Management Project GmbH . Marketing (2006 . Segmentation Target Marketing / Positioning . Retrieved April 26 , 2008 from http /www .themanager .org /Knowledgebase /Marketing /Segmentation .htm

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