Kellogg’s Cornflake Company

CASE STUDY ANALYSISBY: FLORIND METALLA

Who and What is Kellogg's?• Began by the Kellogg brothers in 1906

– who originally ran a sanatorium in Michigan, USA– experimented with different ways to cook

cereals without losing the goodness

• World’s leading breakfast cereal manufacturer – Since 1938 it has opened manufacturing plants

in:• UK, Canada, Australia, Latin America and Asia• manufactures in 19 countries and sells in more than

160 countries• Wide range of cereal products:

– Kellogg’s Corn Flakes, Rice Krispies, Special K, Fruit n’ Fibre, as well as the Nutri-Grain cereal bars.

SWOT Analysis• Strengths– Corporate Social Responsibility– Environmentally aware– Computerised warehousing– The general public remains highly aware of

All-Brand– The only large very high fibre brand in the

marketplace

SWOT Analysis• Weaknesses– Awareness of the brand is declining– The fibre products have limited scale, making

it hard to make advertising investment economic

– The position that a fibre cereal keeps you regular is less motivating to consumers than in the past. Consumers now more interested in products that promote “inner health”

SWOT Analysis• Opportunities– People are looking to eat more healthy – The rapid growth of non-cereal products that

meet inner health needs– In the UK, the number of people over the age

of 55 continues to increase– Baby-boomer market– Internet Advertizing

SWOT Analysis• Threats– The sales of private labels fibre cereals are

growing– There is a consumer trend towards tastier

cereal– General Mills– Kraft

• Generates triple the revenues that General Mills and Kellogg produce

• Leading segment is snacks which accounts for about $10 billion in revenue

Corporate Strategy• Grow Cereal• Expand Snacks• Sustainable Growth• Manage for Cash• Realistic Targets

Business Strategy• to grow the cereal business – there are

now 40 different cereals• to expand the snack business – by

diversifying into convenience foods• to engage in specific growth opportunities

Marketing Mix• Product: they manufactures the right products

based on research into consumer needs

• Price: their focus on cost effective systems ensures its prices are competitive

• Place: they manage the distribution channels to place its products in stores

• Promotion: they work with retailers to improve promotion of its products

Recommendations • Recruit more Baby-Boomers because

their market is growing and they are the most health conscious and wealthiest generation

• Increase their advertising towards Generation Z to establish customer loyalty

• Expand their snack catalogue so it is marketable to all age groups with all kinds of concerns and preferences