Marketing Plan For Kellogg’s Green Tea Biscuits

Situation Analysis

The Kellogg Company, also known as Kellogg’s, is a multinational food- manufacturing company from America having its headquarters situated in Michigan, United States. Kellogg’s is involved in the production of convenience and cereal foods such as crackers, cookies and toaster pastries and markets its products through a number of well- known brands like Keebler, Corn Flakes and Cheez- it. The mission of Kellogg’s is to nourish families so that they can thrive and flourish. The manufacturing of the products of Kellogg’s take place in 18 countries and are marketed in more than 180 countries of the world (Kellogg’s, 2018).

Kellogg’s is entering into a new business of producing green tea biscuits for its customers in order to provide them a healthier experience. Green tea has small amounts of minerals that contribute towards the health of the individual. Furthermore, it improves physical performance and increases fat burning. The risk of various diseases such as Alzheimer’s, Parkinson’s and Cancer is also minimized to a great extent (Khan & Mukhtar, 2016).   

The compounds contained in the green tea perform the function of improving the brain functions and makes an individual smarter (Arendt, Rahamat, Xu & Jeong, 2018). On the other hand, every individual eats biscuits which make them obese and unhealthy. The company wants to launch a green tea biscuits which will support the health of the customers. This marketing plan is addressed to the board members, executive committee and the investors of the company to be taken into consideration for the reaching the target market.  

Situation Analysis

Porter’s five forces model is selected for the purpose of conducting the situation analysis for the new business launch of Kellogg’s.

Threats of New Entrants- Further innovation will be brought by processed and packed goods by the new entrants which, in turn, will pressurize the Kellogg Company for lowering their prices. All these challenges will require to be managed by Kellogg’s along with safeguarding its competitive edge in the market (Hess & Slavin, 2017).

Bargaining Power of Suppliers- there are a number of suppliers in the processed and packaged goods industry. The dominant position of the suppliers has the capability of reducing the profit margins of Kellogg’s. In other words, there is high supplier bargaining power that impacts the profitability of the entire industry.

Bargaining Power of Buyers- the customers have become very demanding over a period of time. They want to obtain the best quality product at the minimum possible price. The bargaining power of the customers is very high due to which the Kellogg’s will have to increase the offers and discounts on the product.

 Threats of Substitute Products or Services-  There is high threat of the substitute products in the industry which can meet the customer needs in different ways. This will also affect the profitability of the industry. Kellogg’s needs to focus on increasing the switching costs of the customers in order to tackle the threat of substitute products.

Rivalry among the Existing Competitors- the processed and packaged goods industry is very competitive, which is the operating area of Kellogg Company. The intense competition between the existing players in the industry will result in driving down the prices and decreasing the overall profitability of the industry (Labonté, Noorhosseini, Bernstein, Ahmed & L’Abbé, 2016).   

Threats of New Entrants

Target customers or target market can be defined as the market segment to which the specific product of the company is aimed at. The customers of the green tea biscuits are the customers that are conscious regarding their health. It will target the customers who have the habit of eating biscuits from time to time which, in turn, is making them obese and unhealthy. With the help of such biscuits, the customers will be able to carry on their habit of eating biscuits in the morning and evening breakfast and will be able to stay fit and healthy without gaining any excessive weight.  Therefore, the main aim of this business of the company is to identify the health conscious customers who will become their target market (DiPietro,  Remar & Parsa, 2016).       

Competition

Since Kellogg’s is an international brand, its competitors are also the brands that operate in the global market. The major competitors of Kellogg’s are General mills, Quaker Oats Company, Nestle and Conagra foods. All these brands are also coming up with the innovative strategies from time to time in order to attract the target customers. However, these companies have still not been able to launch such an innovative idea in the market related to the use of green tea in their products.

General Mills- General Mills was established in the year 1856 and have its headquarters situated in Minnesota, United States. The company is regarded as one of the top competitors of Kellogg’s as it is a global producer of branded consumer goods. Various range of nutritious products are offered by the company which may pose a threat for the success of the green Tea biscuits in the market.  

Quaker Oats Company- the main target of the Quaker Oats Company is also those consumers who want to consume healthy food. The company has a strong brand image in the marketplace and is regarded as the trust brand of the United States. The innovative healthy products of the company make it one of the biggest competitors of Kellogg’s.

Nestle- The headquarters of Nestle are situated in Vaud, Switzerland and it was established in the year 1866. Nestle is often regarded as the largest food company in the world and also has a diverse product range. With the passage of time, the company has also entered into the healthy food range market and therefore has become a big competitor of Kellogg’s.

Conagra Foods-  Conagra foods was established in the year 1919 and have its headquarters situated in Chicago, Illinois. The company is engaged in the production and sales of customized branded food products. The main segments of the company can be classified as consumer foods and commercial foods. Due to the reason of their great availability and productivity, Conagra Foods is regarded as one of the competitors of Kellogg’s.

Strengths, weaknesses, opportunities and threats (SWOT)

Strengths-

First Mover Advantage- Kellogg’s will be the first company to lunch Green Tea Biscuits in the marketplace which will provide them the first mover advantage. The company will be always known for taking this initiative even when other companies will steal this idea with the passage of time.

Bargaining Power of Suppliers

Brand Values- Kellogg’s stands for a variety of values such as balanced nutrition, taste and is portrayed by low fat and high carb which makes its products an ideal breakfast for the health conscious customers.  These values will be reflected in the Green Tea Biscuits of the company which will have a great taste and will be known for its health benefits.

Weaknesses-

R & D Centres- R&D centres of the company are located in specific regions only which will create difficulties in introducing the Green Tea Biscuits in different markets of the world. This is due to the fact that the companies are required to add the tastes of the specific regions in order to make it popular in the market (Pharis, Colby, Wagner & Mallya, 2018).  

Known Majorly for Breakfast Cereal- Kellogg’s is majorly known for the popular cornflakes produced by it. This is due to the fact that such product is tried and tested by the target audience over a period of time. However, this may prove to be a weakness of the company and the target audience may not like the new product introduced in the market.  

Opportunities-

Changing Preferences- with the passage of time, the customers are increasingly becoming health conscious which, in turn, increases the market for the Green Tea Biscuits by Kellogg’s. Moreover, those who prefer biscuits whenever they feel hungry will also be able to maintain their health along with giving preference to their choices (Phongnarisorn, Orfila, Holmes & Marshall, 2018).

Targeting the age group 20- 40- The group of people between the age 20- 40 years are increasingly becoming health conscious and want to stay fit by consuming healthy food in their day to day life. The company should target this particular set of people as they appears to be the biggest opportunity for increasing their sales.

Threats-

Competition- Competition is increasing with a rapid pace in the healthy food industry as well. The major competitors of Kellogg’s are Quaker Oats Company, Nestle, General Mills, Conagra Foods, etc. All these companies are coming up with innovative products and strategies from time to time and are increasing their share in the healthy food market as well (Hayakawa, 2017).

Government Regulations- the policies of the government are becoming stricter especially in respect of the ingredients and contents used in the products by big companies like Kellogg’s. Such regulations can create hurdle in the growth of the company through this innovation.

Macro Environmental Analysis

Political- USA have a stable political environment due to which Kellogg’s is able to effectively make the use of advanced technology and infrastructure. The political stability further allows the company to carry on their operations in a smooth manner (Juergensen & Demaree, 2015).

Economic- the unemployment rates in USA has reduced and labor has also become expensive which may require Kellogg’s to outsource its activities for the purpose of operating in a cost effective manner. USA is also facing the challenge of hanging global economic landscape.  The purchasing power of the people in USA is also increasing which will further contribute towards the benefit of the company (Van Doorn & Verhoef, 2015).

Bargaining Power of Buyers

Social- with the passage of time, the people in USA have started becoming health conscious due to the fact that the fast food culture have contributed towards illness and obesity in the country. This will act in the benefit of The Kellogg Company (Kroese, Marchiori & de Ridder, 2015).   

Technological- USA is considered as the global leader in terms of technology and science. Such technological innovation will assist Kellogg’s in the cost effective production of the Green Tea Biscuits (Rocha, Bolin, Cardoso & Otton, 2016).

Legal- There are own legal scheme and government structure of every state in USA. The regulatory environment of the state governs the businesses. The Intellectual Property Rights of the Kellogg’s will be protected by the legal system of USA (Carreno & Dolle, 2017).    

Environmental- Kellogg’s is also impacted by environmental standards of USA.  The weather conditions of USA are toughest in the world which leads to disasters and cause financial damages to the businesses (Grech, Hebden, Roy & Allman? Farinelli, 2017).       

Market Segmentation

The Kellogg Company has segmented the market for the health conscious consumers that come under the age group of 20- 40 years. This group of customers has different needs and wants as they want to stay fit while carrying on their busy daily routine. Specifically, women will be the main target of the product.  Moreover, it also covers the older segment which covers the older people by providing them the healthy Green Tea biscuits that will make them feel healthy and energetic. The image of Kellogg’s is that of the company which provides nutritious and healthy products of food to the customers. Therefore, such segments are targeted by Kellogg’s with the help of its special segmentation procedure (Gineikiene, Kiudyte & Degutis, 2017).

Product

Though a number of healthy products are offered by Kellogg’s to the target customers, the Green Tea Biscuits will be the most innovative product in the marketplace. The most important ingredient of this product will be green tea which will help the customers in overcoming a number of health concerns for the customers. Till now there is no such product in the market, therefore, the company will get the first mover advantage and is expected to obtain a big market share as well. The product focuses on the fitness of the customers and is a great breakfast option (Niculescu, Leonhardt, Payne & Barney, 2018).   

Price

Proper market research will required to be done for the purpose of fixing the price of the Green Tea Biscuits. The research will look into various factors such as the demand for the product and the capability of the target customers. However, the actual selling price will take into account the production costs of the company along with profit and advertisement costs. After this, all the aspects of the market research are analyzed and then the selling prices are determined. The price of the Green Tea biscuit will be a bit higher than the prices of the normal biscuits as these will be the only product of this type in the market (Namkung & Jang, 2017).  

Threats of Substitute Products or Services

Distribution

Since Kellogg’s is a global company, it serves different parts of the world. Along with this it has manufacturing plants in a number of countries such as UK, Australia, Canada, Latin America, Asia, etc. The company also owns a distribution channel that handles the entire network in an efficient manner. For the purpose of reaching the customers at proper place and time, the company maintains open warehouses in order to maintain the required stock (Siawsolit, Seepun, Choi, Do & Kao, 2017).

Promotion

Kellogg’s is said to have an excellent marketing strategy and usually take the help of media for the promotion of its products. The promotional campaigns for Green Tea Biscuits will be telecast on television during the prime time slot. Print media such as magazines and newspapers will also be used for showing the ads (Appendix 1). Initially, the company will offer the free samples of the biscuits for creating awareness of the product among the target customers (Davari & Strutton, 2014).

Projections

The projections for the company provide that there is a great future of the product among the target audience. This is due to the fact that the customers are increasing the use of green tea in their day to day life in order to stay healthy. However, along with increasing the consumption of green tea they also increase the unhealthy practices such as eating unhealthy biscuits during tea time and in the morning breakfast. Therefore, the product is expected to perform extremely well in the market for a longer period of time.

Projected Costs

Following is the budget for executing the entire marketing plan: (Appendix 1)

Conclusion

This marketing plan for the new business of Kellogg’s addresses all the important aspects for entering into the market. The benefits of green tea will be offered by Kellogg Company in the form of biscuits which, in turn, will be advantageous for the health conscious customers. Situation analysis has been conducted by using the Porter’s five forces model along with making the use of SWOT analysis for analyzing the internal and external environment of Kellogg Company. Furthermore, the use of PESTLE Analysis model has been made for analyzing the macro environment of the company. Various aspects such as product, prices, distribution and promotion have also been discussed in this plan. At the end of this plan, the budget projections have been provided for carrying on the entire marketing plan.

References

Arendt, S., Rahamat, S., Xu, Y., & Jeong, E. (2018). Are Health-Conscious Consumers Using Menu Labels? A Pilot Study at One Midwestern University. Journal of the Academy of Nutrition and Dietetics, 118(10), A144.

Carreno, I., & Dolle, T. (2017). The Relationship between Public Health and IP Rights: Chile Prosecutes Kellogg’s, Nestlé and Masterfoods for Using Cartoons Aimed at Attracting Children. European Journal of Risk Regulation, 8(1), 170-177.

Davari, A., & Strutton, D. (2014). Marketing mix strategies for closing the gap between green consumers’ pro-environmental beliefs and behaviors. Journal of Strategic Marketing, 22(7), 563-586.

DiPietro, R. B., Remar, D., & Parsa, H. G. (2016). Health consciousness, menu information, and consumers’ purchase intentions: An empirical investigation. Journal of foodservice business research, 19(5), 497-513.

Gineikiene, J., Kiudyte, J., & Degutis, M. (2017). Functional, organic or conventional? Food choices of health conscious and skeptical consumers. Baltic Journal of Management, 12(2), 139-152.

Grech, A., Hebden, L., Roy, R., & Allman?Farinelli, M. (2017). Are products sold in university vending machines nutritionally poor? A food environment audit. Nutrition & Dietetics, 74(2), 185-190.

Hayakawa, H. (2017). Health-conscious consumer behavior. Eurasian Economic Review, 7(1), 1-31.

Hess, J. M., & Slavin, J. L. (2017). Healthy Snacks: Using Nutrient Profiling to Evaluate the Nutrient?Density of Common Snacks in the United States. Journal of food science, 82(9), 2213-2220.

Juergensen, J., & Demaree, H. A. (2015). Approach-motivated positive affect and emotion regulation alter global–local focus and food choice. Motivation and Emotion, 39(4), 580-588.

Kellogg’s. (2018). Giving Our Best — Together. Retrieved October 18, 2018 

Khan, N., & Mukhtar, H. (2016). Green Tea and Cancer Prevention. In Inflammation, Oxidative Stress, and Cancer(pp. 352-363). CRC Press.

Kroese, F. M., Marchiori, D. R., & de Ridder, D. T. (2015). Nudging healthy food choices: a field experiment at the train station. Journal of Public Health, 38(2), e133-e137.

Labonté, M. E., Noorhosseini, S., Bernstein, J., Ahmed, M., & L’Abbé, M. (2016). Are Foods of Higher Nutritional Quality More Expensive Than Their Less Healthy Counterparts? An Analysis of Canadian Packaged Foods. The FASEB Journal, 30(1), 131-7.

Namkung, Y., & Jang, S. (2017). Are consumers willing to pay more for green practices at restaurants?. Journal of Hospitality & Tourism Research, 41(3), 329-356.

Niculescu, M., Leonhardt, J. M., Payne, C. R., & Barney, C. (2018). Dietary Restraint and Consumer Consumption Intentions for Low?Calorie Snacks. Journal of Consumer Affairs, 52(2), 466-479.

Pharis, M. L., Colby, L., Wagner, A., & Mallya, G. (2018). Sales of healthy snacks and beverages following the implementation of healthy vending standards in City of Philadelphia vending machines. Public health nutrition, 21(2), 339-345.

Phongnarisorn, B., Orfila, C., Holmes, M., & Marshall, L. J. (2018). Enrichment of Biscuits with Matcha Green Tea Powder: Its Impact on Consumer Acceptability and Acute Metabolic Response. Foods, 7(2), 17.

Rocha, A., Bolin, A. P., Cardoso, C. A. L., & Otton, R. (2016). Green tea extract activates AMPK and ameliorates white adipose tissue metabolic dysfunction induced by obesity. European journal of nutrition, 55(7), 2231-2244.

Siawsolit, C., Seepun, S., Choi, J., Do, A., & Kao, Y. (2017). Personalized Assistant for Health-Conscious Grocery Shoppers. In International Conference on Persuasive Technology (pp. 95-106). Springer, Cham.

Van Doorn, J., & Verhoef, P. C. (2015). Drivers of and barriers to organic purchase behavior. Journal of Retailing, 91(3), 436-450.

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