Kellogg's

Kellogg’s is the world leading producer of breakfast cereals and
convenience foods. With total revenues in 2018 of around $13

billion dollars, it’s one of the biggest multinational food
manufacturing company.The company was founded by Kellogg
brothers in 1889 and its headquarters is Battle Creek, Michigan,
United States.
Kellogg’s has achieved this position not only throught great
brands and great brand value, but throught strong committment to
corporate social responsability, that is how a business shows it
cares not just about proucts, but its people and communities. In
fact, Kellogg company belongs to the international food and
beverage alliance, the organization born to increase company’s
committment to public health (helf).
Kellogg’s market is divided into 6 segments:
1. For first, Kellogg’s Corn Flakes has been on breakfast tables
for over 100 years and represents the «Tasty Start» cereals
that people eat to start their day;
Other semgments include:
2. «Simply Wholesome» products, such as Kashi Muesli;
3. «Shape Management» products, such as Special K;
4. «Inner Health» lines, such as All-Bran
5. «Kid Preferred» brands, such as Frosties
6. «Mum Approved» brands, such as Raisin Wheats.
Each brand has to hold its own in a competitive market. For this,
brand managers monitor the success of their brands in term of
market share, growth and performance against the competition and
key decisions have to be made about the future of any brand that is
not succeeding.
Through the analysis of the product life cycle, Kellogg recognised
there was a problem with the brand Nutri-Grain. The product life
cycle shows how sales of a product change over time. It’s usually
composed by 5 stages (launch, growth, maturity, saturation and
decline), even if perhaps the most important stage of a product life
cycle happens before this graph starts, namely the Research and
Development (R&D) stage.
In the case of Nutri Grain, it was originally designed as to meet
the need of busy people who had missed breakfast. So, it aimed
(eimd) to provide a healthy cereal breakfast in a portable and
convenient format.
1)From launch, it was immediatly successfull (saksessfull),
gaining almost 50% share of the growing cereal market in just two
years.
2) Nutri Grain’s sales steadily increased as the product was
promoted and became well known, even if the market position of
Nutri Grain also changed from a “missed breakfast” product to
“all-day” healthy (helfi) snack.
3) Maturity is the time of maximum profitability, when profits can
be used to continue to build the brand. However, Kellogg’s
succeess attracted (acracted) other competitors and this slowed
down sales and chipped away at Nutri Grain’s market position.
4) Saturation is the point when the market is full, when there are
other, better or cheaper competitors. This is called market
saturation and is when sales start to fall. By mid-2004 Nutri-Grain
found its sales declining whilst (wailst) the market continued to
grow at a rate of 15%.
5) Decline, is the moment when the brand has to make a business
decision. In fact, at this point Kellogg Company had to decide if
whitdraw Nutri Grain from the market or if had to try to extend its
life.
Kellogg decided to extend the life of the product rather than
withdraw it from the market: this meant developing an extension
strategy for the product. In order to make this decision, Kellogg
used Ansoff’s matrix, that is a tool (tol) that helps analyse which
strategy is appropriate.
“In fact, Kellogg had to decide wheter the problem with Nutri-
Grain was the market, the product or both. The market had grown
by over 15% and competitors’ market share had increased whilst
Nutri- Grain sales had declined.” INUTILE
The choice of extension strategy indicated by Ansoff’s Matrix was
either product development or diversification, but diversification
carries much higher costs and risks. For this reason, the company
decided that it needed to focus on changing the product to meet
the changing market needs.
In fact, Kellogg’s recognized that the brand message was not
enough in the face of competition and Nutri-Grain’s products
received a small proportion of advertising.
Having recognised the problems, Kellogg then devoloped
solutions to re-brand and re-launch the product in 2005, focused
on some elements:
1) Fondamental to relaunch was the renewal of the brand
image;
2) Nutri-grain had to satisfy people who want to snack on
healthy foods but still want a great tasting snack.
3) A new packaging was fondamental to unify the brand image.
Using this information, the re-launch focused on the four parts of
the marketing mix (a series of variable factors such as the four Ps
used by an organisation to meet its customers’ needs), based on
the «4P»:
1. Product, repositioning the brand as “healthy and tasty”, not a
substitute for a missed breakfast;
2. Promotion, with a new and clearer brand image;
3. Place;
4. Price, with new price levels.
As a result of this solutions, sales went from a decline to
substantial (sabstanscial) growth. In fact, in this case Kellogg was
able to use a number of business tools in order to successfully
relaunch the Nutri-Grain brand.
Using these business tools, the company had met all its aims to:
 re-position the brand through the use of marketing mix;
 return the brand to grow;
 improve the frequency of purchase;
 introduce new customers to the brand.

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Kellogg’s is the world leading producer of breakfast cereals and

convenience foods. With total revenues in 2018 of around $13

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