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Kellogg company

Global marketing final project

andrea manyari torres

on 4 July 2013

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Transcript of Kellogg company

Product category insights
What the consumer is looking for?
Product strategies
The brand founder was Will Keith Kellogg’s, so the brand adopted his last name.

Kellogg’s have a few competitors, but the strongest is “General Mills” with it’s product called Cheerios.

Price: $3.28

Company strategies
In 2012, they continued to execute a strategy based on their fundamental strengths, including their expanding family of mega brands, strong global opportunities, a powerful pipeline of product innovations, and people across the globe that can put all of these assets to work.
The company
Marketing intermediaries
Associated British Foods plc
ConAgra Foods, Inc.
General Mills, Inc.
Nestle S.A.
Hain Celestial Group, Inc.
The Mondelez International, Inc.
Post Holdings, Inc.
PepsiCo, Inc.
Founded in 1906 as the Battle Creek Toasted Corn Flakes Company by Will Keith Kellogg.
The company changed its name to Kellogg Company in 1922 after it began making cereals other than cornflakes.
Motivated by a passion for people, quality and innovation, W. Kellogg created the
first-ever breakfast cereal
and then shaped an entire industry. The ready-to-eat cereal innovation would change the way people eat breakfast worldwide.
Is a multinational producer of breakfast foods, snack foods, cookies and crackers. The company manufactures and markets ready-to-eat cereals and convenience foods such as toaster pastries, cereal bars, fruit snacks, frozen waffles and veggie foods.
Kellogg co. is involved in the manufacture and distribution of a variety of packaged food focused mainly on breakfast cereals. Kellogg sells its products in over 180 countries and manufactures in 18 countries.
Board of directors
Corporate officers
Principal raw materials:
Agricultural commodities, including corn, wheat, soy bean oil, sugar and cocoa.
Packaging material:
Carton board, corrugated, and plastic.

Continuous efforts are made to maintain and improve the quality and supply of such commodities for purposes of short-term and long-term requirements.

Has long-term contracts
Purchase these items on the
open market,
depending on their view of possible price fluctuations, supply levels, and their relative negotiating power.

Raw materials and packaging needed for internationally
based operations are available in adequate supply and
are sometimes
from countries other than those where used in manufacturing.

Kellogg trust in their capacity of purchase an adequate supply of commodities no matter if the cost of the commodities increase over time
Vision: To enrich and delight the world through foods and brands that matter.
Purpose: Nourishing families so they can flourish and thrive.
About Kellog co.
The values of the company guide the way they work with their business partners, within our communities and with each other.

integrity, accountability, passion, humility, simplicity
and a focus on success, they have created a vibrant company culture where ideas can blossom, people can thrive and success can flourish.
Price strategies
Place (International markets)
Segmentation and targeting
Kellogg operates through seven business segments, which are classified based on product category or geographic location.
Product category:
US morning foods and Kashi
US snacks
US specialty
North America other
Geographic location:
Latin America
Asia Pacific
Product category
The North America
other segment represents the US frozen and Canada businesses
The US morning foods and Kashi
segment consists of cereal, toaster pastries, and health and wellness business marketed under the Kellogg’s brand name. Also includes Kashi-branded cereal, cereal bars, crackers, cookies and Stretch Island fruit snacks sold in the US.
The US snacks
segment represents the company’s snacks business in the US, which includes products such as cookies, crackers, cereal bars, savory snacks and fruit-flavored snacks
The US specialty
segment mainly represents the food service and Girl Scouts business.The food service business is mostly non-commercial and services schools, hospitals and prisons.
Geographic location
The remaining three reportable segments are based on geographic location and include
, which consists principally of European countries
Latin America
, which is comprised of Central and South America and Mexico
Asia Pacific
, which includes South Africa, Australia and other Asian and Pacific markets.
In 2013, they are executing their strategy across four tracks.
Remain a global Cereal leader
Kellogg has a leading share in most regions and a very strong geographic footprint on which to build.

This means great opportunities to drive incremental growth in
developed markets
, and particularly strong opportunities in
emerging markets
, where cereal is quickly becoming recognized as a fast, convenient, affordable and enjoyable food source.
Become a global snack player
As of 2012, Pringles became Kellogg's number one brand by value sales. This allowed the company to bolster its international presence in the snacking business. It's a significant move for a company that was predominantly a breakfast cereals player.
This means an exceptional platform on which to drive growth, and on which to build a global snacks business that already accounts for more than $6 billion a year.
Focus on frozen
This business is focused on the growing and on-trend Frozen Breakfast, Frozen Veggie, and Natural/ Organic Frozen Meals segments of the broader category.
The frozen food business in North america generates $1 billion in revenues.
Pringles, which is the fourth-largest individual brand globally, has
premium positioning and strong
brand awareness across key regions
The businesses have also been growing very quickly driven by the introduction of value-added, innovative new products, such as new Thick and Fluffy Eggo waffles and Special K Flatbread Sandwiches
Increase focus on emerging markets
The business in fastgrowing economies reached approx. $2 billion in 2012— up 140% since 2001.
Whether through
organic growth, acquisitions and joint ventures, or cross selling opportunities
created by the acquisition of Pringles, the company now has exceptional opportunities to expand across regions with highly favorable demographics, from central and Eastern Europe, to Latin america, and to the Middle East and Asia.
Kellogg's largest customer,
Wal-Mart Stores, Inc.
and its affiliates, accounted for approximately 20% of consolidated net sales during 2012, comprised principally of sales within the United States. No other customer accounted for greater than 10% of net sales in that year.
There has been significant worldwide consolidation in the grocery industry and this trend is likely to continue.
The company sells its cereal products to
grocery trade
through direct sales force for resale to consumers.
They use
broker and distributor arrangements
for certain products in its markets.
Kellogg also markets convenience foods to supermarkets in the US mostly through a
direct store-door delivery system.
Kellogg's face competition across their product lines, including ready-to-eat cereals and convenience foods, from other companies which have varying abilities to withstand changes in market conditions.
Most of them have
substantial financial, marketing and other resources
, and competition with them in our various markets and product lines could cause us to
reduce prices, increase capital, marketing
or other expenditures, or
lose category share
, any of which could have a material adverse effect on the business and the financial results.
Principal methods and factors of competition include new product introductions, product quality, taste, convenience, nutritional value, price, advertising and promotion.

Food and brands that matter
Kellogg employs cross-category brand leveraging,
taking a successful brand and expanding it into other categories
in order to drive overall brand growth.
Snacking has become a priority for Kellogg. It has expanded its Special K range into the sweet and savoury snacks category.
Healthy eating vs. tasting eating
Balancing attractive taste with consumers' interest in healthier eating
Emerging health consciousness would drive
the demand of the company's products
Changing lifestyle: more importance to the nutrition facts
Majority of new products launched in the recent times were aimed at these health-conscious consumers
Kellogg's ready-to-eat cereal brands are well positioned to meet the demands developing from growing health and wellness trends..
The company is reformulating its products to meet the newer consumer needs of health and wellness. Kellogg improved several of its products globally by
reducing sugar and sodium and removing trans fats.
The company generates majority of its revenues from the US, its largest geographic market. In FY2012, Kellogg generated $8,875 million revenues from the US, which accounted for 62.5% of the company’s total revenues during the year.
In the US, the company has four cereal plants and warehouses. Kellogg also has manufacturing locations in Australia, Belgium, Brazil, Canada, Colombia, Ecuador, Germany, Great Britain, India, Japan, Mexico, Poland, Russia, South Africa, South Korea, Spain,Thailand and Venezuela. Some of these locations also have warehousing facilities.
Political environment
Economic environment
Cultural environment
Technological environment
Innovation on the cereal market: different package, small bar (snack), resalable package (or close package)
Recycling package
Innovation in communication and advertising level
Scientific progress on the health- diet food
Increase the cost of R&D

Kellogg increasingly rely on information technology systems to process, transmit, and store electronic information.
Important for their
production and distribution
facilities and
inventory management
to increase efficiencies and limit costs. Also for the
between the personnel, customers, and suppliers.
Increase of obesity rate so the cereal market can develop the sector of light and healthy food.
Lack of time to take a breakfast
The increase in the Third Age population group (due to better living conditions and better health care) will decrease the sales of Kellogg children product and down growth for “adult” products.
Importance of the health, safety.
People want to be inform on what they are eating.

Deterioration of general economic activity and the contraction of the food market
Faced with financial difficulties and difficulties of access, people don't have money to buy expensive food because of the decrease of salary.
Hard competition between the breakfast and snack brands

During periods of economic uncertainty, consumers tend to purchase more private label or other economy brands
Reforms for the problem of obesity (wide problem)
Political concern about having more healthy food for their people.

- Need to comply with new or revised tax, environmental, food quality and safety and other laws or regulations.

Over the past few years, there has been a new found emphasis on healthier eating. With a changing lifestyle, people are becoming more aware of the negative effects of unhealthy eating habits.
Kellogg’s have been know by the quality and the variety of it’s products, that’s why a lot of people when think about breakfast, they think about Kellogg’s cereals
This product have a long line extensions. The famous ones are:

Froot Loops (targeting children)

Special K (targeting women who wants to loose weigh and beauty)

All Bran (targeting old people concerned about improving their health)

Price: $3.18

Price: $3.78

Price: $2.24

1. Launched in 1997.
Gained 50% of cereal bar market share in 2 years.

2. Enjoyed steady growth till 2002- from “breakfast cereal” to “all day snack”.

3. Competitors launched a similar product-slowed sales (2003-04)

4. Mid 2004, sales declined by 15%

New brands?
Kellogg's To Go™ Milk Chocolate Breakfast Shake Mix

Kellogg's® Eggo Drizzlers™ with Strawberry Topping

Kellogg's™ Special K™ Breakfast Shake French Vanilla

All the packaging of the Kellogg’s products are according to the target sector.
For example:
Froot Loops:
this product has been inspired by the children. So according to that, the package have to be colorful, entertaining and something fun to see.
Special K:
this product has been inspired by the women that always want to look good, healthy and specially… to look thinner. So obviously in the package we have a gorgeous lady with an enviable and toned body.

In all the package they put the nutrition labels where you can find all their components.
If you have a question you can go to their web site : www.kelloggs.com

There you will find the “Kellogg’s Community” where you can make questions to other people about the products and it’s benefits, etc. Also you can answer the questions that they made.

If you still have a question you can call to : 1-800-962-1413 and they will be pleased to help you with your doubst.

Or write to: Kellogg's Consumer AffairsP.O. Box CAMBBattle Creek, MI 49016

Price index
The key of Kellogg’s success is based on the positioning. Kellogg's products are positioned to
highlight the quality of the goods and to build on the emotional attachments.

Consumers who have grown up with Kellogg's breakfast cereals will have strong associations of childhood and home.

W.K. Kellogg dedicated our company to making "quality products for a healthier world."

General Mill’s positioning should be a combination of physical, functional and emotional benefits.
One functional benefit is simpler ingredient lists and nutritional information.
From an emotional perspective, the brand should evoke a sense of well-being.

The DSD improves sales performance because there is much greater control over retail shelf space. Also used by Coca cola, Pepsi co, Kraft food.
The power of breakfast
Great breakfasts lead to great days. Kellogg is passionate about helping everyone start each morning off right.
Leading producer of cereal
Leading producer of frozen foods.
Second-largest producer of cookies and crackers
Second-largest savory snacks company

Promotional support
Full transcript