Breakfast Cereal Marketing Essay

MARKETING essay

1.0 Introduction

The breakfast cereal market is a very dynamic one with a variety of products being available and which aim to target different market segment. This is why the purpose of this report is to explain how marketers segment the breakfast cereals using a combination of demographic, geographic, psychographic and behavioural variables. Finally, it will assess three chosen brands within the breakfast cereal industry to show how each of them are positioned in the market by using a perceptual map. Finally, the marketing mix of each brands accordingly are stated.

2.0 Industry Overview

Since the Second World War, the consumption of cereals has increased in every household. The breakfast cereal manufacturing industry comprises of companies that produce ready-to-eat cereals made with corn flakes, wheat or puffed rice and cereals that must be cooked prior to eating like farina or infant cereals. This industry is a highly concentrated one since the top companies account for 80% of industry revenue (Research and Markets; Breakfast Cereal Manufacturing Report on the $9 Billion Industry 2009, 99). General Mills, Kellogg and Weetabix are the leading producers of the breakfast cereals industry as they devote huge resources to marketing, aim at satisfying kids, family and adult cereals and developing new products.

With 2008 sales of nearly $13 billion, Kellogg Company owes its overwhelming success to the large variety of cereals and convenience foods having product ranging from corn flakes, wheat cereals, frozen wafers, snack food and meat alternatives. The company's great brands include Kellogg's®, All-Bran®, Special K® and much more (Kellogg Company 2009).

In the protected brand of Special K®, we can find cereals, bars, waffles, crackers and protein water aim to feed people with healthy food that would inspire them to lose weight by taking the “weight reduction challenge”. In the product line of Special K cereals, different flavours like red berries, original, chocolatey delight, protein plus etc are available in order to respond to each consumer's needs in the fierce competitive market of cereals.

3.0 Market Segmentation Variables and Positioning

Two main criteria's must be taken into account when analysing the target market for breakfast cereals; these are Segmentation and Positioning.

3.1 Market Segmentation

Market segmentation is a strategy that involves dividing a larger market into distinct groups of buyers with “different needs, characteristics or behaviour” (Kotler at al. 2009, 228). These subgroups of consumers may be divided into:

  • Demographic segmentation, which divides the market into group based on age, gender, income or occupation.
  • Geographic segmentation, which subdivides markets into segments based on geographical units such as nations, regions, states.
  • Psychographic segmentation, which divides the market into groups based on social class, lifestyle or personality characteristics.
  • Behavioural segmentation, which attempts to divide the market on the basic of consumer's behaviour in relation to particular product, benefits that customers want from the product, their usage level and extent of their loyalty. (Rix 2007, 118-122)
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3.2 Market Positioning

Baines, Fill and Page (2008), Ries and Trout (1972) suggest that “Positioning is not what you do to a product; it is what you do to the mind of a prospect”. Positioning is important since it is a way by which products and services can be differentiated from one another and so give consumers a reason to buy. It encompasses two elementary elements; the first element is the physical attributes and capability that a brand offers and the second element is concerned about how customers perceived the brand in relation to other competing brands in the marketplace (Baines, Fill and Page 2008, 251).

However, it is not just the physical nature of the product nor the communication of the product that is important for positioning but it is the ability to deliver against the promises made. Various positioning strategies may be used to properly position a product; product attributes, according to usage occasions, according to user classes, against competitors and away from competitors and positioning for different product classes.

4.0 Segmentation Variables of Special K Cereals

Special K cereal is a strategy to move beyond the breakfast bowl and the company Kellogg has launched this branded product with the aim to enter into new emerging and profitable market segment. The Special K Among all the different flavours available in the popular cereal Special K, “Special K Protein Plus” will be segmented by the segmentation variables.

4.1 Demographic segmentation

Demographics considerations go beyond overall cereal demand, as obese women population will affect demand for individual cereals brands and attributes such as cereals with high protein but low carbohydrates. The changing role taken by women from household work to working professionals has encouraged marketers in Kellogg Company to create the Special K Protein Plus, which is designed for working women on diet. Today, educated women are most informed and their decision-making in day-to-day purchase range from food requirements to health requirements (All India Management Association 2009).

Special K Protein Plus is a high protein cereal with low carbohydrates and healthy fibre intake compared with the other flavours of cereals including chocolatey delight and red berries. As the Special K Chocolatey Delight contains chocolate chunks to add a bit of flavour and mainly those women who are “chocolate lover at heart” who will buy this savour. Indeed, the speciality of Protein Plus has a slight cinnamon taste that is not too sweet so as there is no need to add any sugar to it when eating it with milk.

It is especially targeted for those working out a lot and eating a very strict, high protein and low carbohydrates diet. Moreover, the vegetarians also are targeted since they have difficulties in finding ‘abundance' of protein and they find it in the cereal Special K Protein Plus (Special K Homepage 2009).

Marketers target women in the age group of 25-45 years, as they are more financially independent to spend on Special K Protein Plus to stay on track with their weight-management goals; single and young married women with no children (All India Management Association 2009). Therefore, the primary target variant is modern working women who pay great attribute to their personal need like looking good, nutrition and figure conscious.

4.2 Geographic segmentation

Some countries are still conservative as they stick to their traditional breakfast like Italy for example. People in this country eat coffee and bread for breakfast. Therefore, marketers need to pay particular attention when targeting potentially profitable market of Special K since people in some countries might be reluctant to purchase cereals.

Special K was first launched in US in 1995 and has progressively launched across the globe. Presently, it is being sold in more than 40 markets internationally. The brand Special K Protein Plus was launched in India in 2007 with the aim to give an open challenge and promising achievable results by creating functional credibility in this country of cultural adaptation. Furthermore, marketers have segmented the densely urban areas as there is greater purchasing power due to educated and highly independent women and because there is easy access to the number of distribution channels like hypermarkets (All India Management Association 2009).

The brand Special K is using the internet to widen its market of Special K cereals by having a worldwide website to satisfy its buyers in terms of product information and offering support to those taking the “two-week challenge” (PROTECTED BRANDS: The protected heritage brand: Special K 2009, 17).

4.3 Psychographic segmentation

People living in this geodemographic group have different psychographic profile such as socioeconomic status, attitudes/lifestyle or personality characteristics (Kotler et al. 2009, 231).
The socioeconomic status of an individual plays an important role in Kellogg marketing in Special K Protein Plus as this product line followed a premium pricing and the target market for this cereal is medium income women who work and can afford to spend money.

The relevance of taking the two-week challenge requires money to spend on this special diet meal, consequently it targets those women who are esthetical conscious (All India Management Association 2009). However, people do not value the price ticket of the product, but the result about how it actually works as “slimming aid” (PROTECTED BRANDS: The protected heritage brand: Special K 2009, 17).

In addition, the Special K logo creates an effect of emotional response from viewer due to the running ads on television, which is exploiting new media to communicate its weight management programme. Whenever people see these ads, particularly women who are the targeted market, they will take some small sense of ownership to this product if they are actual customers and are taking the weight reduction challenge.

4.4 Behavioural segmentation

The consumption of Special Protein Plus brings indeed much benefit since this cereal is made up of very high protein and low carbohydrate and this product helps women to work longer and better without hungry lethargic feeling. As a result, this product has embedded itself more deeply into the way people live their lives due to its overall brand image.

Moreover, the importance of promotional offers and the advertising slogan in the market of Special K is valued since it can turn irregular customers into regular ones. When seeing all the advertising with pretty and slim women, customers being actually on diet are more willing to buy the product and consequently it will turn them into heavy users. In addition, the usage of dietary cereals is regularly given that women on diet will have to eat the cereals everyday morning to maintain their weight keeping them as loyal customers.

5.0 Market Positioning in the Cereal Industry

The two competitors brands are: Nature Path and Benefit Nutrition and one product from each competitor's brand is positioned along with Kellogg's Special K, within one target market: Dietary cereal with high nutrition value for women.

5.1 Marketing Mix

1. Special K Protein Plus

Product- It is a cereal focusing on Protein Plus that lets you cut back the carbohydrates without cutting out the crispy and crunchy taste. (Special K Homepage 2009)

Price- It is being sold $4.04 per pack (Amazon.com Homepage 2009).

Promotion- The cereal is promoted via radio, television and has mostly used pretty women in their advertisement. Its positioning strategy is on product attribute (healthy body looks good) and positioning against competitors. Moreover, it uses the discount programme coupon for its customers.

Place- The product is distributed in hypermarkets and supermarkets and can also be found on the internet in Amazon.com or ShopFoodEx.com

2. Optimum Slim Cereal

Product- The product features are extra fibre and low fat

Price- It is being sold $4.80 per pack (Amazon.com Homepage 2009)

Promotion- It promotes overall health female and is advertised on television in which its aim is to “add up to a smarter way of living.”

Place- The product is distributed in hypermarkets and supermarkets and also on the internet like Amazon or ShopFoodEx.com

3. Benefit Nutrition Protein Plus

Product- This cereal is made up of “soy protein and multigrain cereal”, a clunchy cluster of corn flakes, crisp rice and whole grain oats (Benefit Nutrition Homepage 2009)

Price- It is being sold $5 per pack (Amazon.com Homepage 2009)

Promotion- Coupons are given to consumers to reduce the price. Its positioning strategy is on product attribute.

Place- The cereal can be found at many supermarkets and natural food stores.

According to Lucy Danziger, Health Expert for Women's health, a highly nutritious cereal weight-loss diet comprises of at least 5 grams of fibre per serving and high protein.

Kellogg's Special K Protein Plus Cereal Nature's Path Optimum Slim Cereal Benefit Nutrition Protein Plus Cereal

Price: $4.04 (Low) $ 4.80 (Medium) $ 5 (High)
Nutrition Value: 14 * (High)
Refer to Appendix A 11* (Medium)
Refer to Appendix B 10 * (Low)
Refer to Appendix C
*Nutrition Value= Protein + Fibre
The Price and the Nutritional Value data will be used to plot the three products on the perceptual map.

5.3 Positioning Results

1. Special K Protein Plus

This cereal which is made for adult market especially women, has already a brand name in the market. It is placed in the Upper Left Quadrant; place to the left on the horizontal line to show its low price as compared to the two products of competitors and further up on the vertical line to explain the high in nutrition value (Protein + Fibre). Therefore, customers perceived the product in the market as being low price with high nutrition value as compared to the other two competitors.

2. Optimum Slim Cereal

This product, which targets overall health female and weight-management, is placed in the Upper Right Quadrant. Situated to the left on the horizontal line to illustrate its medium price and slightly up to show its medium nutritional value as compared to the other competitor's brand.

3. Benefit Nutrition Protein Plus

B.N Protein Plus, which is a “delicious and crunchy” Protein Plus cereal, is located in the Lower Right Quadrant. It is placed to the right on the horizontal line to demonstrate its high price and partly down on the vertical line to explain its low nutrition value.

6.0 Conclusion

After analysing the segmentation variables and positioning of Special K Protein Plus cereal together with two competitor's brand, it is obvious that this cereal has a high brand recall among the adult market. In the positioning task, the important thing in the real world is to know what dimensions of your product are most important to the consumer; of paramount importance is what your consumer thinks and not what you think your ‘precious' cereal belongs.

Once the positioning is done, marketers might need to re-think of their strategies in order to strengthen the position of Special K Protein Plus cereal. Either they can change the marketing strategy to conform to what the market thinks it is or by fulfilling the expectations created through out an advertising campaign. As a result, a good segmentation and positioning of the product will help to increase the market share of Kellogg Company.

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7.0 Reference List

All India Management Association. 2009. Kellogg's K SRATEGY:TAPPING New Market Segment. http://ssrn.com/abstract=1444672 (accessed August 20, 2009)

Amazon.com Homepage. 2009. http://www.amazon.com (accessed September 05, 2009)

Baines, P., C. Fill, and K. Page. 2008. Principles of Marketing. USA: Oxford University Press

Benefit nutrition Homepage. 2009. http://www.benefitnutrition.com (accessed September 03, 2009)

Kellogg Company. 2009. http://www2.kelloggs.com/General.aspx?ID=466 (accessed August 18, 2009)

Kotler, P., S. Adam, S. Denize, and G. Armstrong. 2009. Principles of Marketing. Australia: Pearson Pty Ltd
PROTECTED BRANDS: The protected heritage brand: Special K. 2009. Marketing Week, March 05. Proquest. http://proquest.umi.com.dbgw.lis.curtin.edu.au/pqdweb?did=1656292321&sid=2&Fm t=3&clientId=22212&RQT=309&VName=PQD (accessed August 24, 2009)

Research and Markets;Breakfast Cereal Manufacturing Report on the $9 Billion Industry. 2009. Food Weekly News, July 23. Proquest. http://proquest.umi.com.dbgw.lis.curtin.edu.au/pqdweb?did=1787731571&sid=3&Fm t=3&clientId=22212&RQT=309&VName=PQD (accessed August 24, 2009)
Rix, P. 2007. Marketing:a practical approach. Australia: McGraw-Hill Pty Ltd.
Special K Homepage. 2009. http://www.specialk.com/cereals/protein-plus/ (accessed August 18, 2009)

Appendix A: http://www.nutritiondata.com/facts/breakfast-cereals/9136/2 (accessed September 05, 2009)
Appendix B: http://www.nutritiondata.com/facts/breakfast-cereals/7840/2 (accessed September 05, 2009)
Appendix C: http://www.nutritiondata.com/facts/breakfast-cereals/9160/2 (accessed September 05, 2009)

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