Marketing Final Paper: Analysis of Kellogg’s Strengths in Business
The strengths of a company represent the positive aspects of a business that puts them above their competitors. They are internal factors that the business can control, which involves strategies that help them progress as a business. For Kellogg’s, this includes their strong consumer base. According to expendedramblings.com, Kellogg’s accounted for 20% of Walmart’s total sales in 2019 (Smith…, 2019). This is a huge revenue, considering how many products Walmart carries and distributes. Another strength the company has are their effective marketing campaigns. The most recent campaign that the company has produced is the “Believe in the Brand” campaign. This campaign essentially sponsors athletes and influencers for them to promote them and talk about their products in a positive aspect so more consumers buy their products (Joseph…, 2019). Majority of these sponsors occur on social media and sponsors mostly influencers who are in the Olympics or even motor racing. The brand also tries to promote sustainability. On their website they state how their very first cereal box was made out of 100% recycled material, showing that from the beginning the environment has been a priority for them (Environmental…, 2019). Kellogg’s cereal boxes are almost all made out of 100% recycled material and work with local farmers to support their brand. Kellogg’s is also trying to use less water, cut their greenhouse gas emissions, and cut their energy consumption. Lastly, they implement global marketing and manufacturing. Kellogg’s brand is now located in 180 different countries (Ladd, 2019). The brand started in a tiny town and has expanded into a huge global market all around the globe.
The weaknesses are also an internal factor that also can be controlled, but they set the company back and keep them from reaching their full potential. The first factor that is a weakness for Kellogg’s is that they are known mostly for breakfast cereals. This is not a great contributor for the company, considering that breakfast cereals are usually unhealthy, high in sugar, and highly processed. Next, although the company has reached over 180 different companies in the world, the majority of their products are bought and sold in the United States. According to Statista.com, 60% of Kellogg’s sales in 2018 were in the United States (Net sales…, 2019). The rest of the total sales were made by the smaller 180 countries that Kellogg’s is located in. Finally, their research and development centers are limited within certain regions. This is most likely the main contributor why most sales are within the states. The brand is limited to which countries they are able to develop and grow into, limiting the brands profits.
Opportunities are the external factors that companies can use to grow and profit on to move into a more successful business. Kellogg’s largest opportunity they can attempt to do is grow into emerging markets. These emerging markets could be ones such as online purchasing and distributing of products using methods such as shipt or amazon, so the customers would not have to leave their homes to purchase items that they need or want. According to Statista, $17.5 billion are contributed to online food sales in 2018 (Duncan, 2019). Another method Kellogg’s could use to grow is to expand their product development. Kellogg’s could do this by expanding into the vegan, gluten free, or sugar free markets. Markets such as these may be taking customers away from the brand because they are attempting to sustain a healthier more sustainable lifestyle. Lastly, people of all ages eat PopTarts. This gives Kellogg’s a huge opportunity because they are able to create a delicious snack for all ages and demographics of people from elementary students, on-the-go parents, and busy college students getting from class to class.
The threats of a company represent the external factors that are detrimental to the growth of a company. Kellogg’s threats begin with their intense competition in the snack foods area. One of their biggest competitors is General Mills because they are another huge company that sells ready-to-eat cereals and breakfast foods. Next, people’s perceptions about these overly processed foods are changing dramatically. More and more people are attempting to switch to a healthier lifestyle that excludes highly processed foods such as cereals, granola bars, and ready-to-go snacks. The sales of processed foods have been decreasing for years, due to healthier living. Lastly, a large threat of the company is the government regulation. These government regulations limit the amount and certain food additives that could be added to their foods to increase their desirability and sales (Kellogg…, 2019). Unfortunately, these additives could also be detrimental to an individual’s health and well-being.
Kellogg faces many direct and indirect competitors including both well known and local brands. Kellogg’s biggest competitor is General Mills, primarily in their large array of cereals. However, the main direct competitors for Kellogg’s Pop-Tarts are local and generic brands that make similar products, the most well known being Great Value sold in Walmart stores. These brands are often cheaper than the Kellogg brand, but have a lower quality of ingredients and have fewer flavor options. Some indirect competitors to Pop-Tarts are other on-the-go breakfast options. The most well known would be any of the Belvita breakfast options. These products are more expensive than Pop-Tarts but are considered to be a healthier option. However, this is not a concern given that Pop-Tart’s main target market would not be as concerned with healthy options, but are more concerned with flavor.
Kellogg’s Pop-Tart’s main target demographics include a wide range of individuals. Mainly, Pop-Tarts are focused towards anyone with a busy life that requires a quick and easy meal. Typically this includes kids/teens (age 8-19), the parents of kids and teens, and especially college students (18-25). However, Pop-Tarts do not limit who would most likely be interested in the product by providing a wide range of flavors and being available in a wide range of locations (gas stations, vending machines, etc.).
Throughout their rich and proud history, Kellogg’s have made significant strides towards a more diverse inclusion of women, people of color, lesbians, gays, bisexual, transgender individuals, people with disabilities, veterans, and other demographic groups. Their goal is to reflect the diversity of consumers throughout their company. Incorporated in 1906 by W.K Kellogg, Kellogg’s initially started the business with breakfast cereals i.e. ready to eat cereals but over the period of time it ventured out to the products beyond breakfast. Today its product portfolio includes convenience foods such as snacks, biscuits, waffles, pastries, cookies, and crackers.
“Kellogg’s” brand name is famous globally but the company has its brand portfolio consisting of brands such as Murray, Austin, Famous Amos, Cheez-it and Keebler. Kellogg’s uses a mix of demographic, geographic and psychographic segmentation to market its 1600 products in around 180 countries around the world. . A box of frosted flakes is around $2.40 and a family size about $2.80 depending on location. Therefore, Kellogg’s doesn’t have a specific income branch and keeps a lower price for their products so any family income will be able to buy from Kellogg’s. Coming onto Kelloggs demographics their products are seen as gender neutral as there are no specifications of who can purchase these products or who they are meant for. When it comes down to targeting a certain age group for their products each one has its own specified age. For example, Kellogg’s Frosties are targeted to children whereas it’s crunchy and nut cornflakes are targeted to the adults. Both the goods products which are marketed to the two different sets of people and both have same needs and traits as well as wants. Kellogg’s has also targeted some of its goods to older people by giving impression of very healthy food just before starting the day so that they feel energetic and healthy. Overall whether its young age to senior citizens Kellogg’s has a product no matter what age someone is. Kellogg’s has maintained a proper image of very healthy as well as nutritious food makers in the market and thus its entire target market even incorporates all the people that are very health conscious. Also, consumers want a better way to help maintain their health and weight and Kellogg’s nutritional products help them get there. To make sure that this image is properly maintained in market, Kellogg’s also has started demonstrating its ingredients as well as nutritional values upon their goods they are packaging. Now based on certain lifestyles Kellogg’s is for those who are generally busy and have to get out of the door early in the morning. So a good reason Kellogg’s is targeted at kids and you adults is because of their usual busy morning schedule of school or rushing to work. Differentiating targeting strategy is used by Kellogg to make its products available across different channels. The world’s largest cereal company uses product/ benefit-based positioning strategies to highlight the benefits of their products to the customers. Customers of Kellogg’s consists of B2C and B2B. Mainly people from urban or metro regions are the major customer segments which are targeted by Kellogg’s. Also even though Kellogg’s is a name brand they aren’t out of reach even for low income households.
Some other important considerations include the legal regulations put forth by the Food and Drug Administration (FDA). The FDA provides standards for food products from the source of ingredients to the production process and distribution. The FDA requires that all food products be marked with an expiration date in order to protect consumers from purchasing spoiled products that may cause them to become ill. It is also important to consider how the economic state would affect the level of consumption of Pop-Tarts. A low economic state may cause consumers to opt for cheaper generic brands, however, the quality of Pop-Tarts may also deter consumers from purchasing other products as well.
Technology may also be able to play an important role in the distribution and production of Pop-Tarts. The increased use of the internet allows consumers to purchase products from the comfort of their home and have them delivered. Services like Shipt and Amazon’s Subscription options allow consumers to have products whenever they need them. Technology could also help to improve the production process by not only making it faster, but also making it more environmentally friendly.
Overall, the environment surrounding Kellogg’s Pop-Tarts is ideal for introducing a new product. With many competitors, direct and indirect, Pop-Tarts are still able to hold the majority of the market. Kellogg’s continues to abide by FDA regulations in their processes and therefore is not at risk for any fines or legal action. Now is the perfect time to introduce the Banana Pudding flavor, especially with the holidays approaching.
What is a product? A product is the item offered for sale. These products can be either a service or an item. In our project our product is a Banana Pudding flavored pop tart. With dozens of different flavors of pop tarts, seasonal, and limited edition ones we think we have found the best in the “Banana Pudding“ flavor. A pop tart is a toaster pastry that has a sugary filling sealed inside with two thin layers of rectangular pastry crust.
Our Banana Pudding pop tart will consist of a pudding type filling and will also have a Banana Pudding frosting on top of the thin crust. Our pop tart is going to be 5 inches in length and 3 inches from side to side.
Pop-Tarts come in packages of 8, 12, and 16 count per box. Our pop tarts will stay the same price as the other flavors, based on this pricing scale, 8 ct. Box for $1.99, 12 ct. Box for $2.99, 16 ct. Box for $3.68. Pop tarts are a very convenient and a relatively cheap food that can be eaten at any time of the day. They are easy to take on the go and don’t require any time to prepare. Pop-Tarts are a very good food for all different ages. Our pop tarts will be sold in pairs inside a foil like packaging that does not require any refrigeration.
There are many different ways that you can promote a product. The best ways for us to promote the pop tart will be via Television Commercials, many ads are placed in magazines, newspapers, the internet uses the distribution through schools, billboards, and Coupons to offer customers a way to save money. The main way that we will use our promotion is by television commercials that will attract the attention of many young kids. In the TV ad we will be having a family demonstrating the morning routine by the parents feeding their kids pop tarts before heading off to school and work. The reason for us wanting to push our attention towards kids, is because it is a very easy breakfast food for parents to give their kids when on the go.
Magazines can be a cheap and easy way to promote our product. Putting the picture of what our pop tart will look like and where we will be selling them will attract the attention of many individuals. Magazines are a good way to promote your product because magazines can be in doctors offices, grocery stores, and convenience stores. Newspapers are just like magazines, they will be an easy way for us to get our product out to the world. With many individuals being on their phones and on the internet we could easily get our product out.
Selling pop tarts in schools is an easy and cheap way for us to have a successful product. Kids are always looking for a quick and easy breakfast or a snack and that’s what you are getting when you buy a pop tart. With selling the pop tarts in any school there really is no work that has to go into selling the product, so it will also be a very cost efficient way to sell our product.
Wouldn’t you love to save money on food? Well here you go. Coupons, the thing in this world that pretty much love and use almost everyday. We will be posting coupons for the Banana Pudding pop tart on the internet and also will be putting them around the stores so that it catches the eyes of the customers walking around the store. The coupons that we will be offering around the store is 25 cents off every box of the Banana Pudding pop tart that you buy.
Point of Difference
The primary point of difference for the Kellogg’s Banana Pudding Pop-Tart will be the strong lack of banana-flavored breakfast products, specifically banana pudding products. It has been proven that people do not think that banana-flavored products actually taste like banana and that they desire a product with a more real banana flavor (Insert our one citation we used in the presentation here please). Adding a banana pudding element to our Pop-Tart will allow for customers to enjoy a product that tastes more like real bananas, but also taste more enjoyable than a regular banana product because it has the banana pudding element. By using banana pudding as our flavor and not just banana we will entice more people to sample our product because it sounds better than “Banana Pop-Tart.” Our product will also serve as an on-the-go type of breakfast, allowing for customers to take their Pop-Tart with them as they leave and not having to eat it in their home before they leave for the day. By implementing the Banana Pudding Pop-Tart we will be adding a product that people have desired a better taste for, and they will taste better than the other banana products because of the banana pudding element.
Another major point of difference for the Banana Pudding Pop-Tart is the fact that Kellogg’s has never had a product very similar to this one. The only other banana-flavored products Kellogg’s has made are Banana Cream Frosted Flakes and a Chocolate Banana Split Pop-Tart. The Chocolate Banana Split Pop-Tart has many different elements to it as a banana split would and appears as more of a treat than an on-the-go breakfast. The Banana Cream Frosted Flakes did taste like actual banana cream, but it also does not give people the ability to take their breakfast with them as they go like many people enjoy doing. Implementing the Banana Pudding Pop-Tart will allow for those Banana Cream Frosted Flakes lovers to have an again improved flavor, and take their breakfast with them on-the-go. Once the Banana Cream Pop-Tart begins to be sold it will be Kellogg’s first product of its kind and banana lovers across the globe will want to get their hands on it.
Positioning
Pop-Tarts are seen by customers as a food that can be eaten at any time of the day, but they are more so seen as a breakfast food. Since bananas go well with breakfast, Kellogg’s customer base will see this product as an on-the-go breakfast that is a healthier replacement to many other Pop-Tart that are already being sold in the market. If the customers compared it with another Pop-Tart they would probably choose Brown Sugar Cinnamon as it is also a classic breakfast Pop-Tart. As well as being a healthier option, banana lovers will see this product as one they have been waiting a long time for because there are not a lot of accurate banana flavored products being sold. Parents could also see this Pop-Tart as a way to get their child to enjoy somewhat healthier breakfast foods. Many children prefer the chocolatey fudge flavors or even the chocolate banana split. By implementing a banana pudding flavor children could still think they are eating a “treat” as it is pudding flavored, but in reality, it’s more similar to the Brown Sugar Cinnamon Pop-Tart in the way that it tastes great, but is not as unhealthy as other Pop-Tarts. Overall, the Banana Pudding Pop-Tart will be seen as a healthier replacement to other Pop-Tarts and one that can be eaten at any time of the day, but will probably go best near breakfast-time. All ages would see this as a potential new food to try, but since Pop-Tarts are liked more amongst the younger generations the appeal could be higher to them as well.