Name

: MOHSIN AKHTAR

Program Leader

: Steve Storey

Submission Date

: 16th May, 2011.

Module Code

: MKT 306

Module Title

: Marketing Strategy

Word count

: 2943

1 2 3 3.2 3.2.1 3.2.2 3.2.3 3.3.4 4 4.1 4.2 4.3 4.4 4.5 4.6 5 5.1 5.2 5.3 5.4 6 6 6.2 6.2.1 6.2.2 6.2.3 6.2.4 6.2.5 6.3 7 8

Summary Introduction SWOT Analysis Explanation Strengths Weaknesses Opportunities Threats Pestle Analysis Political Economic Social Technological legal Environmental Competitive Advantage Introduction Stage Growth stage Maturity Stage Decline Stage Recommendation Segmentation, Target and Positioning Marketing Objective and Goals Specific Measureable Attainable Realistic Time-Bond Marketing Strategy and Programs Conclusion References

2 2 3 3 3 3 3 3 4 4 4 4 4 4 4 5 5 5 5 5 6 6 6 7 7 7 7 8 8 9 10

1. Summary
This assignment highlights the significance of Kelloggss company which has been very famousfor its food stuff products especially served in the breakfast. The corn flakes if one of a lucrative breakfast food stuff throughout the world which is being appreciated according to its taste and nutritious values provided the marketing of the product. For this purpose, in this report the SWOT and PESTLE analyses and competitive edge have been described for evaluation of the product. Moreover, the recommendation have been presented to improve the operations include STP, SMART and marketing strategies.

2. Introduction
This report is a detailed and explicit description of exploring and assessing the contemporary marketing strategies, tools and techniques being employed by a renowned company Kelloggs in promoting their famous breakfast foodstuff brand by the name of Corn Flakes. Also, the recommendations are being imparted in this report to promote and ameliorate the brand in order to enhance the profitability, sales and the marketing share. The Kelloggs corn flakes is one of the most lucrative brand throughout the world as compared to the other corn flakes being labeled under various companies because of its distinct marketing strategies revealing the quality of corn flakes in an explicit manner. The backside of the packet is utilized for advertising whereas the front part for the label and branding. Some of the prominent advertising tactics include the stories of famous event of sports persons, the various recipes in which corn flakes can be used, the details of nutritious values and the protective packing are the attraction for the consumers. These salient marketing strategies have transformed the Kelloggs corn flakes the most suitable breakfast stuff selected by most of the families around the globe but the problem to manage and improve the marketing strategies is been an issue for Kelloggs also in the management of steps in product life cycle like introduction, growth, maturity and decline.

Fig. 1 Different packing of Kelloggs Corn flakes with an attraction towards the consumers with an exquisite marketing exposure

3. SWOT Analysis
3.1 Significance The significance of SWOT analysis has been an integral part in many companies, research papers and articles. It is being suggested by Houben et al. (1999) that the identification of internal strengths and weaknesses in association with external opportunities and threats within an organization or product is carried out on the basis of SWOT analysis. The SWOT analysis of a company is an essential source for data and information at the top level. The SWOT analysis of Kelloggs evaluates its business structure and various operations, information of products with historical background and provides the synopsis of analysis of its major marketing strategies and revenue generation. Kelloggs company is the producer of breakfast foods, cookies and crackers. Its products are prepared in 18 countries and distributed in 180 countries. Therefore, in projecting the SWOT analysis of Kelloggs, the root causes of various problems can be revealed. 3.2 Explanation 3.2.1Strengths The company has a control of 42% of market share globally for the cereals, which is greater than the triple the market share of any other companies being their competitors. They have firm brand recognition and advertising collections as compared to their competitors. Others major strengths include asset leverage, effective communication, real estate, distinct products, cost advantage and online growth. 3.2.2 Weaknesses The company is been abortive in developing new cereal lines effectively in the past few years. Also there is slight erosion being observed in the market share. The company is also found a follower of pricing strategy.Other weaknesses are not innovative with weak management team. 3.2.3 Opportunities The company has an option to expand internationally which the biggest area is for the growth of Kelloggs. In the core business area, the company can diversify their strategies which will increase the profitability. They have a chance to develop their pricing strategy in a better way and that is how they can reduce the prices of their products while increasing the market share. Others opportunities might include products and services expansion, takeovers and financial markets. 3.2.4 Threats The post, general mills and quaker oats are facing price competition and proliferation of the of the product to erode the market share of Kelloggs. The discount imitation cereal brands have

been successful in decreasing the premium brands in the more commodities for instance the cereals. The other risk oriented threats could be cheaper technology, the substitution of the product and imports at lower costs.

4. PESTLE Analysis
The long term growth prospects seem to be attractive for any company but the real picture is different and Political, economic, social, technological, legal and environmental issues are requisite to discuss in order to retain stability of the region where the product is being launched. It is claimed by Healy (1994) that political, economic, social and technological aspects such as inflation, low productivity, high debt and political instability threaten the stability of the region. 4.1 Political The government promulgates the food acts and there is also ACFM (Members of the Association of Cereal Food Manufacturers) which deals specifically the cereal issues. 4.2 Economic The success rate of Kellogs corn flakes is very high but it is still threatened by the traditional and conventional breakfast. But the opportunities to grow are also there. 4.3 Social The initial target of corn flakes was students of the school which has gradually transformed to the whole family. 4.4 Technological The company is seeking to diversify the technology and the production processes have been highly computerized. 4.5 Legal The legislation is enforced regarding health, ingredients, labeling and storage. This legislation incorporates the food labeling regulations and the existence of ACFM is also present. 4.6 Environmental The company is proactive in corporate social responsibility and does sponsor a number of events relating to diet.

5. Competitive Edge
The product corn flakes by Kelloggs have a competitive edge over the other corn flakes because of its life cycle. For this purpose, in Kelloggs there are four major steps in life cycle which make this product a competitive edge over the others. In this company, the operations are of the highest importance, following the strategy paradigm based upon competitive service. According to Roth and Velde (1991) that a competitive service strategy paradigm attributes the strategic role of operation as a competitive edge. 5.1 Introduction Stage At this stage, the risk factor is high because of the growth of the product. The marketing cost is high and the chances of profit at this stage are rare. This risk is undertaken by the Kelloggs after research and development and ensures a competitive edge as compared to the other companies. 5.2 Growth Stage The growth of the product is directly interlinked with an increase in sales and profit. According to Morgan et al. (2009) that profit growth is one of the primary drivers of an organization.Therefore, Kelloggs have an edge in terms of market share and the product is not costly to expand their market and hence the company is having an overall growth. 5.3 Maturity This stage is all about existence of competition of market share. A huge profit is made during this stage of the product. The product modification is kept under consideration by Kelloggs strategy of expenditure research and development. 5.4 Declined It is supposed to be significant in Kelloggs to keep an overview of the market of the product whether it is declining, stable or growing. The product is also considered to be ended if it is not making the profit based on the data being obtained from the market share with counter strategies to decrease the profit margin also.

Fig. 2 Sales of Kelloggs Corn Flakes (The wall Street Journal 2007)

6. Recommendations
6.1In Segmentation, Targeting, Positioning (STP)
It is necessary before to start the marketing of a product, the STP should be clearly defined. The concept of segmentation is of the highest importance. According to Hunt and Arnett (2004) that market segmentation is the widely accepted concepts in marketing. The main goal of segmentation is to find the attractive markets around the globe. In this regard, it is recommended to scrutinize all the factors like population of the specific region, characteristics and ages of the people, also the economic growth, industrial analysis and financial analysis. The accumulated outcome of these factors will have a beneficial effect in the sales of corn flakes. Whereas, the positioning is used to measure the position of a product, firm, service or idea. According to Gruca and Klemz (2003) that identifying the positioning strategy for new products is difficult and critical decision. In this case, there should be a competitive analysis in product level, category level, and corporate level also the industrial level. By following the comparison policy, the Kelloggs would be able to determine the position of its own product in a better way with respect to the other companies. Finally, the targeting is very essential tool in marketing. It does focus on the need of the marketer. The marketer selects the segments and targets them. The Kelloggs can produce corn flakes at a low cost by adopting the targeting marketing as it transforms the pricing, promotion, distribution of the product in an easier and cost effective way.

6.2 In Marketing Objectives and Goals (SMART)

The marketing goalsshould be based on perceiving the strengths and weaknesses of a company and the business environment in which an organizationdoes function in. These should also be inter-linked to overall business strategy of a company.

Fig. 3 SMART Objectives (Learn Marketing 2010)

In analysis of Kelloggs, the SMART objectives are fulfilled with a precise manner but the following recommendations can be made. 6.2.1 Specific The objectives must be clarified and explicit because the notions have no existence in setting goals. When the objectives are defined, they navigatethe employees accurately what is expected, when and how much. As the objectives are specific, the company can easily appraise theprogress of the employees with respect to the completion of the objectives. 6.2.2 Measurable The measurement of the objectives is an integral part in order to make a product or service lucrative. If the objectives are not measurable, the company would not be able to conceive whether employees are making development toward their positive completion of the set objectives. Moreover, there should be set milestones to measure the progress of the employees. 6.2.3Attainable: The objectives that need to be attained should be convincing and achievable by average employees. The articulate goals should be acquired by the employees are difficult to achieve and even accessible, but they are not impossible. It means that the goals are neither out of access nor below quality performance. The goals that are set above expectation or below standard converted meaningless. 6.2.4 Relevant
The relevancy in goals should be considered as an integral part and tool in the achieving the goals with accuracy reflecting the vision and mission of an organization. For this purpose, it will be appropriate to recommend that apply 80/20 rule and this relationship comes from Italian economist Vilfredo Pareto's 80/20 rule. Briefly, elaborating this rule which describes that 80 percent of the wealth in most of the countries is being retained by only 20 percent of the population and this principle has been applicable to myriad of the fields since its discovery. The relevant goals state only 20% of doings that have a forceful impact on efficiency and transform an organization closer to its mission and vision. It has been Milgram et al. (1999) that whatever activities for instance reducing the costs, abridgementof a project time line, select major

employees for promotion or selection of the clients you want your sales staff to visit but commence your analysis with the Paretos rule.

6.2.5 Time-bound In my recommendations, the goals must have starting and end points with fixed durations. The assurance to the deadlines assists the employees to converge their efforts on execution and completion of the goals on time or even before the fixed date. The goals having no deadlines for completion tend to be affected by continual crises that inconsistently exist in an organization. SMART goals are made for smart organizations. In my experience of working on Kelloggs managers do not neglect to work and co-ordinate with their workers to establish goals together. But, there is always been a need of recommendations and suggestions and in case of ambiguous, unrealistic and unrelated goals to the organizations vision, create demotivation amongs the workers and a direct effect on marketing can be observed. Therefore, by the initiation of SMART goals with your employees, Kelloggs can improve its marketing of foodstuff especially corn flakes in comparison with other competitors in the market ensuring the progress of organization.

6.3 In Marketing Strategies and Programs (4 Ps)

The major decision making in marketing is based on four factors which are being listed below: y y y y Product Price Place Promotion

The marketing mix variables including product are the goods, ideas or services that fulfill the needs the Price is linked withthe decision making and counter strategies that establish pricing goals and policies quoting the product prices. The placeis related to the suitable and well-timed availability of the products and finally in the promotion, there are some activities that are being utilized activities to intimatethe customers about the organization and its products.

Fig. 4 Marketing Mix (4Ps) (Brand Champion by Rex Whisman 2011)

Kelloggs has always been interested inmanaging value growth of its famous foodstuff namely Kelloggs Cornflakes and the prominent marketing and programs are clearly reflected in its marketing strategies. The following suggestion can be recommended to Kelloggs to improve its marketing strategies and programs. y y The brand Kelloggs corn flakes should be elastic with respect to cost. For pricing, price can be increased to gain value growth. The pricing has a significant bearing on the competitive position of a product. The marketing manager should use pricing as a tool for attaining the targeted sales volume. The pricing should be used for capturing the marketing. The price, distribution and sizing should coincide to achieve the required value growth because the growth of marketing values is very important because thecustomer requires will be more varied in nature and flexible so the company will grow more internationally; the environment of the information will be more fast, global and clear, the number of stakeholders will be increased on the markets. The Kelloggs should carry on the production which they are doing very in a competitive manner as compared to other companies. The company should be innovative in developing ideas helping to develop new products or improvement in the existed product. The new technology and new minds should be adopted to overcome the deficiencies in marketing strategies. Even though the company has shown a tremendous growth over the last few years but the creative people should be considered in hiring. Interpersonal presentation There must be coordinationin all the elements so that the potential consumer is not being sent mixed messages that can cause confusion.

y y

y y

7. Conclusion
From the above discussion, it can be concluded that marketing is a core tool which ensures the sales of the products or services on the basis of its features sometimes in an exaggerated manner. The marketing of breakfast food stuff especially corn flakes is been in a continuous phase of one of the most used food in breakfast. The Asian market in this regard has been in focus because of its increased number of population. Therefore, the volume of sales is very high and marketing in those regions has been quite success oriented. The factors like product, price, place and promotion are the integral parts in marketing strategies which help to increase the profit of any company in which these are implemented properly.

10

8. References
Houben, G., Lenie, K., Vanhoof, K. (1999). A knowledge-based SWOT analysis system as an instrument for strategic planning in small and medium sized enterprises, Decision Support Systems. 26(2), pp. 125-135. Healey, N.M. (1994). The transition economic of central and eastern Europe: A political, economic, social and technological analysis, The Columbia Journal of World Business. 29(1), pp. 62-70. Milgram, L., Spector, A., Treger, M. (1999). Applying the 80/20 Rule. Brand Champions (2011). Four Ps of Marketing [online] http://www.brandchampionsblog.com/my_weblog/2009/09/four-ps-of-marketing-are-oldschool.html Last Accessed 29th April 2011. Morgan, N.A., Slotegraaf, R.J., Vorthies, D.W. (2009). Linking marketing capabilities with profit growth, International Journal of Research in Marketing. 26(4), pp. 284-293. Roth, A.D., Velde, M.V.D. (1991). Operations as marketing: A competitive service strategy. Journal of Operations Management. 10(3), pp. 303-328. The Wall Street Journal (2007). Products and Profits: Kelloggs Corn Flakes [online] http://online.wsj.com/public/resources/documents/info-pp-070430-kellogg.html Last Accessed 28th April 2011. Hunt, S.D., Arnett, D.B. (2004). Market Segmentation Strategy, Competitive advantage and Public Policy: Grounding Segmentation Strategy in Resource-Advantage Theory, Australasian Marketing Journal (AMJ), 12(1), pp. 7-25. Gruca, T.S., Klemz, B.R. (2003). Optimal new product positioning: A genetic algorithm approach. European Journal of Operational Research. 146(3), pp. 621-633. Learn Marketing (2010). SMART Objectives [online] http://www.learnmarketing.net/ Last Accessed 29th April 2011.

11

12