KELLOGG’S HEALTHY BREAKBAR MARKETING PLAN

1.Executive Summary:

Kellogg's is a global company committed to building long-term growth in volume and profit to enhance its worldwide leadership position by providing nutritious food products of superior value. We strive to fulfil our company objectives with every decision taken.

These objectives are:
Maintain a leadership position in all our endeavours

Offer customers the quality and brand-value characteristic of Kellogg’s.

Take advantages of the growing markets segments in the industry.

Represent the company in those segments where it is not.

This marketing plan will, in order to achieve these company objectives, introduce a new product to Kellogg’s extensive product mix. The Kellogg’s BreakBar will be the beginning of a plannedassault on the Australian muesli bar industry. We attempt mainly to gain recognition in this previously untapped market segment.

2.Situational Analysis:

SWOT Analysis:

Strengths:
Kellogg’s has been in the market for a long time.
The most successful and profitable company in the breakfast cereal market.
We are a well known name in the market
We have built up brand value.
The financial capability for a big marketing campaign.
We can offer more competitive prices where competition is fierce.
We have well established distribution channels.

Weaknesses:
Day Dawn is undergoing change; this may result in inertia from managers and employees.
Day Dawn is not entirely ready for production at the quality that Kellogg’s is expected to offer.
Kellogg’s does have already established products in the healthy snacks market.

Opportunities:
The cereal market is dividing and segments expanding.
People are becoming more health concerned.
Increasing demand for healthy products.
The acquisition of Day Dawn gives the company control over the generic-brand market.
Also a window to enter the nutritious snack food industry.

Threats:
A number of big competitors are already in the nutritious snack market.
They have well set up products satisfying a range of needs and wants.
The slow down of the economy is affecting all Australian businesses.

3.Marketing Objectives:

The company will focus on these marketing objectives in developing this marketing plan.

Enter the healthy snack food industry, a market where Kellogg’s hasn’t previously been represented.
Gain market share to competitors in this segment to maintain Kellogg’s a leader.
We aim at 30% of the market in the first year.

4.Target Markets:

The health snack food market comprises a vast range of consumers. To enter the market we will be targeting one of the more specific types, the health conscious women market:

Target Market Characteristics:
Females.
15 to 35 in age.
Location: Urban and suburban areas.
Image concerned or health conscious.
Middle and upper-class.
Benefits sought: Image, quality, fitness.

Reasons for targeting these customers:
Market Research shows that this segment is potentially very profitable as more people switch to healthy lifestyles and fitness. The health conscious women market is a growing segment where the company can effectively capitalise, and will be effective as an entry point to the snack foods market.

5.Marketing Strategies:

To enter the health snacks food market Kellogg’s will be concentrating on the healthy breakfast/snack muesli bar industry. We plan to use the newly acquired Day Dawn as a vehicle into this market where Kellogg’s hasn’t been involved in the past. Also the company will implement a very aggressive advertising campaign in order attract customers to the product and gain the planned amount of market share.

Marketing Mix:

Health conscious women market:

Product:
Kellogg’s Healthy BreakBar

Core product characteristics:
The customer buys the following benefits:
Food.
Healthiness and a healthy lifestyle.
Sense of self worth.
Image.
Sense of sophistication.

Actual product characteristics:
Kellogg’s Healthy BreakBar will provide these benefits to the consumer; it is a healthy muesli bar with fruits (i.e. with low fat and high fibre.). It is easy to carry for busy medium- to high-class women and with the Kellogg’s brand name it makes the consumer stand out and distinguishable.

Positioning: Because the target market is female, we are aiming at increasing the consumer’s sense of self worth when consuming the product, and intangible characteristic. To do this we will use smart advertising that will enhance the brand’s already established value. Healthy BreakBars will be positioned as an upper-marker quality product.

Packaging: Healthy BreakBars will be packaged in two ways to appeal to different uses of the product:
Boxes of 6 units: for the breakfast consumers.
Singles: for people “on the go”

The package will include all the specifications required by law, such as ingredients and nutritive information. The package will also contain important promotional information in order to attract customers’ attention. This includes “Low Fat” signs and descriptions of a healthy lifestyle.

Price:

For this product a market skimming strategy is to be applied: that is to set our price the same as competitors offering similar products or higher. Healthy BreakBar is positioned as an upper-market product so high quality will have to be paid for.

Competing product’s price: Unit: $0.55 | Pack of 6 units: $3.20

Healthy BreakBar Price Analysis

Unit
Recommended retail price: $0.65
less Retail discount (20%): $0.13
Price to retailers: $0.52
less Wholesale discount (20%): $0.10
Manufacturer Selling Price: $0.42

Pack of 6 units $
Recommended retail price: $3.35
less Retail discount (20%): $0.67
Price to retailers: $2.68
less Wholesale discount (20%): $0.54
Manufacturer Selling Price: $2.14

Promotion:

The new product will need to be ‘pushed’ into the market with aggressive advertising on a number of media. The target consumer’s awareness of the product will be enhanced by strong images and concepts relating the product to health, fitness and a sense of status.

The media used will be:
TV: During lifestyle programs and during prime time. To launch the product appearances of advertisements during the popular show “Big Brother”.
Magazines: Lifestyle, focusing on women magazines in particular. Examples include: Cosmopolitan, Cleo and Woman’s Day.

During the introduction phase of the product sales promotion activities will try to get the customer to buy Kellogg’s. These activities include Samples offers in supermarkets and competitions.

Place:

Healthy BreakBar will use the already established distribution network that Kellogg’s uses for all its products. This comprises of a Producer>Wholesaler>Retailer>Customer chain, retailers are nearly all medium to large supermarket chains in Australia.
The main ones being:
Coles Supermarkets
Woolworths
Franklins

There are however over 50 other smaller chains that will be used to distribute the product

Also a new distribution strategy is to be used along with the one explained above. In association with Smith’s Chips, Kellogg’s will introduce the Healthy BreakBar into the snacks vending machines seen everywhere in commercialised areas. Such a procedure will make the product more available to the people ‘on the run’.

6.Implementation, Monitoring and Controlling:

Implementation Action Plan:
In order to achieve the marketing objectives the following Action plan has been developed:

To begin, Day Dawn must be accommodated for production of the new goods.
After the production capabilities are up and running Kellogg’s will need to stock up for the forecast immediate demand. Total stock will be 150,000 units to hit the shelves
Implement promotional campaigns. Including TV and magazine advertising.
Stock wholesalers and retailers.
Launch the product officially.

If the product succeeds we will be looking at:
Expanding into other products or market segments within the healthy snacks market.
Introducing more differentiated products in these target markets
Focusing more on profits rather than market share as we have done now

However if the product does not meet expected results the marketing plan will need to be adjusted, especially the marketing mix and the way we plan on reaching the target markets. Other things that may need adjustment are the target markets themselves. They might just prove too competitive.

Monitoring and Controlling:

To monitor this new plan Kellogg’s will use both Sales and Market Share analyses; in view of the fact that the marketing objectives are to increase the businesses share of the market.
Sales analyses will examine level of sales from different outlets, especially the just implemented Smiths snacks vending machine approach. This way weak points in the company’s selling channels can be assessed.
Market share analysis will closely measure gain or loss of market share though time, and thus if the primary marketing objectives are being met.
Using these tools allows Kellogg’s to clearly decide whether the plan is achieving objectives or if it will need adjustments to do so.