Unit 10 D1

K E L L O G G ’S

MARKET RESEARCH METHODS USED

Kellogg’s used market orientated research which means that their business is built around the needs of the customers rather than being product orientated which would mean it would be built around the products. Kellogg’s uses both primary and secondary data, rather than going straight into carrying out research, Kellogg’s first of all uses secondary data; this allows them to base their primary research from something so they have an idea of what they are doing. The majority of Kellogg’s data was qualitative, the only quantitative data they carry out is at the end, this is to give them a general idea about what the customers feel about the product, it doesn’t waste the persons time and it allows the company to make changes to make sure the customers are satisfied. They use data records which allow them to have an insight to sales in the cereal market which allows them to know if their product will fit in. They also use focus groups which allowed people to test multiple versions of the product in terms of taste, packaging, texture, shape and any other traits. This allowed a very small but very precise feedback to decide which would be the product they focus on mainly. What Kellogg’s do on all their products at the end is have an “In Home Usage Test” which lets a small sample of people test the product for several days and give feedback on the experience.

W H Y

All of the research that Kellogg’s did was important, the fact that they are market orientated meant that they were trying to get their customers to the product, such as focus groups rather than trying to get the product to the customers, which, in this method would have heavy advertising and free samples as well as other similar distribution methods. The data records were essential for Kellogg’s to know if the demand for new cereal products was there, if the sales of cereals were low then Kellogg’s may have felt it would be unnecessary to create a new product whereas if they were too high and if Kellogg’s didn’t have the largest sales then they may have felt that the demand is too great elsewhere, although this works in the opposite way; they could create the product to get their demand back up or to boost the market for cereal products. The focus groups were important to find out which products would be most popular, this way they could eliminate any of the versions which did not have a good enough feedback which in turn eliminates the need for extra expenditure and unnecessary wasting of time which could be focused on the more popular products which have the potential to gain high sales. The survey was important being the only quantitative feedback as it allowed Kellogg’s to gain a large amount of feedback, although being general it meant that customers did not have to waste their time as the feedback would take no more than a few minutes, this gave incentive for customers as they felt they would not be wasting their time. This allowed Kellogg to have a large amount of data to base changes from; this meant that anything customers did not like about the product could be changed. Finally the In Home Usage Test was important because it allowed Kellogg’s to see how consistency of the products popularity was, this way the small sample tests the product over time so it eliminates any effects such as “the customer being hungry therefore finding the product tasty” which may have happened if

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Unit 10 D1

the product was only consumed once. It gave Kellogg’s a detailed sample to base any further changes off as the customer described in full what they thought about the product.

THE BENEFITS OF RESEARCH USED

The benefits of using data records are that the statistics are highly detailed and give specific information to a business or market, because Kellogg’s are cereal based it meant that they could get information on the cereal market which directly applies to them as they are the leading provider in the market, this allowed them to see certain trends for both their products and competitors.

The benefits of using focus groups are that they specifically focus on what they are being asked, they aren’t like people answering questionnaires as they dedicate themselves to the focus, these are very useful because the feedback is highly detailed and it allows Kellogg’s to gain vast amounts of qualitative data, as well as this they can make changes in front of the group and gain live feedback on what could be improved, this is helpful as it allows key changes to be made.

The In Home Usage Test is a very beneficial method of research, it allows a more longitudinal sample for Kellogg’s to gather data from and therefore it will neglect any changes in data due to events such as “haven’t eaten all the day so therefore the product tastes good” and “I’ve eaten all day so I don’t like the taste of this product” which in turn gives more correct and detailed feedback. The product is taken for a week which is how it rules out these individual differences. As well as this the test is carried out on many people so not only is the data highly qualitative but there’s a large amount of feedback that recommendations can be made from.

THE DRAWBACKS OF RESEARCH USED

The drawback of using data records is that it costs a large amount of money, to get detailed information that is, any information that is at a low cost or free may have very basic information unless it is legally required such as public figures from a PLC. Data monitor has large amounts of data that is extremely precise but it costs a large amount of money so unless the business has large amounts of money and is willing to take the risk it is not suitable for all businesses. For the report “Consumer and Innovation Trends in Cereal Products” it costs £2,150 just for a single use license. If the businesses go ahead and it doesn’t end up creating a good product they will have to accept the loss. For a multiple user licence is costs over £5,350.

The drawbacks of focus groups are that the people involved may have to dedicate a large amount of time and therefore if they start to get bored they may give incorrect feedback on purpose. As well as this the feedback is different from each person and as the sample is small it’s difficult to try and please each person’s point of view, therefore the group has to try and agree on a viewpoint or the person receiving the feedback will have to take all viewpoints into account, even if they are incorrect.

There are multiple drawbacks to the In Home Usage Test, first of all the test is actually repetitive and could be seen as a strain from the user, they may become acquired to the taste and not feel as if they want to eat it because the taste has become boring, second of all it isn’t actually realistic, it isn’t often that people eat 2 cereals a day consistently, and

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Unit 10 D1

usually the person wouldn’t consider their thoughts about the product like they have to in this test. Thirdly if the person does not want to eat the product then they may give incorrect feedback which would affect the results and conclusions. Finally this can cost Kellogg’s a small sum of money since they have to distribute free products to the people doing the test and as they have to have a large sample for the information to be highly valid this can add up.

RECOMMENDATIONS ON HOW TO IMPROVE RESEARCH

One of the things that Kellogg’s could have done was to first of all send out questionnaires asking which kind of products the customers wanted, rather than starting off with spending large sums of money they should have done the questionnaires first because, although they have seen a potential gap in the market, they cannot be sure that the product they are trying to design is what the customers want. Another issue that Kellogg’s have is that the product they were looking to design was not suitable for people with nut allergies, another thing Kellogg’s could have thought of was designing a product that these people would also be able to enjoy. The first research that they did was qualitative, this wasn’t what they should have done, what they should have done first of all was gain a generalised large base of information because although basic feedback there is a large amount of it and therefore it is reliable and cost effective when compared to focus groups it is a more appropriate option. The In Home Usage Test was a good idea however the regularity of eating cereal would get repetitive and boring to the customer as well as being unrealistic, what they should have done is created various flavours of the cereal just to make sure that the testing consumer does not get bored of repetitive tastes, they could have changed the taste in two ways, either by having various flavours in the one pack or each pack having a different flavour. The fact that consumers give feedback at the end of the testing means the repetition could create more effect, they could also have forgot about the first few days. What Kellogg’s should have done as well is asked them with a more qualitative method such as an interview, the several days being a more longitudinal study means that the consumer may forget a few things and therefore in an interview they could be prompted into remembering as well as Kellogg’s receiving more qualitative data.

THE PRODUCTS SUCCESS AS A RESULT OF RESEARCH

The market research methods that Kellogg’s have used has appeared to be successful at creating their new product, it was necessary for them to use the data records to highly the gap in the market which they have used effectively to create a product that is in the interest of the consumers. The qualitative data methods used allow them to get the more precise information such as colours on their packaging whereas the quantitative samples were essential in getting feedback on the customers thought of taste. The use of focus groups specifically was important highlighting the focus on the product itself and the packaging, while it did cost money it was worth it for the qualitative data that was received. As concluded the results were that Kellogg’s received many more new customers into their market and as a result the sales data showed that the first year’s performance of the product made Kellogg’s almost £7 Million. Therefore it is clear that the product was successful when considering the research carried out.

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