Kelloggs Marketing Analysis Assignment Help

Introduction:

Nutri-Grain is a brand of Kellogg’s Company in Northern Hemisphere. Especially in New Zealand and Australia, Nutri-Grain is a popular breakfast cereal that is made from wheat, corn and oats. The original Nutri-Grain breakfast in “block and hole” shape was marketed in Australia in 1976 and 1981 (Kellogg’s, 2016). The previous wheat breakfast cereal were made up of sugar and flakes. There were four types of cereal available at start including rye, barley, wheat and corn. The bars of Nutri-Grain became popular during 1990s in Australia while Nutri-Grain breakfast drinks were recently added into line of cereals in 2013 (Kellogg’s, 2016).  

 

 

SITUATION ANALYSIS

The situation analysis of Kellogg’s Nutri-Grain is given below.

Levels of Competition

The top competitors of Kellogg’s Nutri-Grain cereal are shown in the figure below:

Product Form

Product form of competition is about the competitive products with similar product features and same competing market (Lehmann & Winer, 2008). At this level, the competitors offer similar goods and compete for the same turf (IBISWorld, 2016). Under this level of competition, Nutri-Grain has following competitors:

• Weeties
• General Mill Holdings
• Milo Energy Cereal
• Uncle Toby’s Oats
• Golden Vale
• Sanitarium

 Product Category

Product category competition expands to include the competitive products with similar features regardless of any market segment (Lehmann & Winer, 2008). Under this level of competition, Nutri-Grain has following competitors:

• Australian Health & Nutrition Association
• Nestle
• The Uncle Tobys Company Pty Ltd
• Freedom Foods

Generic

Generic form of competition is the one that includes all competing products but are unrelated to given product (Lehmann & Winer, 2008). These products fulfill equivalent wants and needs. Under this level of competition, Nutri-Grain has following competitors:

• Quaker Oats Company
• Unigrain Australia
• Monster Health Food Co.
• Dorset Cereals
• McCain Foods
• Prestige Food manufacturing
• Jewel Fine Food
• Vesco Foods

 Budget

Budget competition is the outermost level of competition that involves the products that compete for same consumer dollar. Under this level of competition, Nutri-Grain has following competitors:

• Many competitors selling different kinds of cereals at different price points ranging from as low as AUD3.19.

Category Analysis

The category analysis of Kellogg’s Nutri-Grain is given below:

Category Size and Growth

The Breakfast and Cereal Industry of Australia is facing stagnancy as Australians are now choosing healthier cereals and snacking option that has reduced the value share of two major cereal industry players i.e. Nestle and Kellogg’s. According to Euromonitor International reports, in 2010 Kellogg’s (Australia) had a cereal market share of 40% which dropped down at 27% in 2014. Similarly the value share of Nestle also dropped from 27% in 2013 to 25% in 2014 (Euromonitor, 2016). However, a 39% increase in sales of hot cereals was recognized whereas muesli’s sales grew by 27% in the past six years.

Based on data trend of 2007-2012, the Australian Bureau of Statistics indicates that Australian Cereals and Bakery sector will continue to increase in value at CAGR of 1.3% between 2012 till 2017 (Euromonitor, 2016). This rising number of consumption is due to Australians focus on healthier life style with much focus on low fat, low calorie and low cholesterol products.

Channel Analysis

Kellogg’s possesses a well-equipped and leading storage system for ensuring that products reach the customers in best quality. Kellogg’s annual report (2015) presented that one of the greatest opportunities for growth in the country is to expand geographically along with acquisition of new high-potential channels of distribution. Sydney’s new café launch by Kellogg’s is an example of such step. Kellogg’s follow intensive distribution system for ensuring that all of its products including Nutri-Grain are widely distributed and is in reach of everyone. Kellogg’s has been achieving saturation coverage through contracting with local distributors and retailers like Tesco, Walmart, Dunnes and ASDA for distributing its products especially Special K and Nutri-Grain Bars (Kellogg’s, 2015).  

Stage of the Product Life Cycle

The product life cycle is based on four mains stages i.e. introduction, growth, maturity and decline (Stark, 2015). Nutri Grain’s prime purpose was to allow the eaters to have quick breakfast in short time. Convenience and healthy ingredients underpinned the product (Kellogg’s, 2015). During introduction stage, Nutri Grain became successful after being recognized as the most popular breakfast cereal. During market growth stage, the sales grow at faster rate while industry profits reach higher rates. Advertisement plays major role in growth stage while competitors keep on entering the market. At this point customers tend to see the product everywhere and gain more knowledge about the product. In Australia and New Zealand, Nutri-Grain became a popular breakfast cereal made from corn, wheat and oats. In 2002, Nutri-Grain’s sales increased as the product was promoted as a popular healthy breakfast alternative. The sales improved due to development of flavors. The market position of the Nutri-Grain also re-established at all-day healthy snack. In the maturity phase, the profits are at maximum and brand name is built. Kellogg’s All Bran Bars and other manufacturer’s Alpen Bars started facing slower sales and ate away some of Nutri-Grains market position. Right now, Nutri-Grain cereal is at decline stage where the products lose its value to customers and a resolution related to redesigning, reformulating or repackaging of product is required. In 2005, Kellogg’s extended the life of Nutri-Grain by repackaging and reformatting the product at $3 million marketing strategy (MARSD, 2017). However, currently Kellogg’s is operating in an oligopoly market with being at mature life cycle stage.

 PEST Analysis

PEST analysis is undertaken to review the political, economic, social and technological (PEST) factors affecting the products and firms operating within an economy (Fullen & Podmoroff, 2006). A PEST analysis correlates the external factors with success of a particular company or industry with a subsequent business (Fullen & Podmoroff, 2006). The PEST analysis of Nutri-Grain is given below:

Political

Kellogg’s needs to adhere to exportation and importation of the boards under Australian New Zealand Food Standards Code for regulating a proper cereal manufacturing.

Economic

Cereal industry grows with high usage of cereal along with affordable prices.

Social

Ready to eat cereals have emerged out to be effective in servicing the busiest lifestyles of many customers. Cereals are also becoming popular as companies are advertising the health benefits that are associated with eating breakfast.