Kellogg's Marketing Mix - Essay Example

Kelloggs Marketing Mix Introduction Marketing is defined as the communication of a product, brand, or service’s value to consumerswith the main purpose of selling or promoting that brand, product, or service to them (O’Kane, 2011: p37). The marketing mix is a set of actions or a strategy used to promote a company’s product or brand in the market and is made up of the 4Ps. This mix is important because it aids a business in determination of a product’s suitability for a specific target consumer group. Other marketing tools include market research that involves the gathering, evaluation, and interpretation of information concerning a product to be offered in a specific market, market segmentation that involves division of a target market into various consumer subsets, and the product life cycle that refers to the stages through of a service or product’s life span in relation to sales and promotion (Kerin et al, 2013: p51). Kellogg’s Background Kellogg’s is a multinational food manufacturer founded and headquartered in the United States (Kellogg Company, 2011: p38). The company was founded in 1906 by Will Kellogg and produces convenience foods and cereals, such as toaster pastries, crackers, cookies, fruit-flavored snacks, cereal bars, vegetarian foods, and frozen waffles. The UK breakfast cereals market has experienced a growth of 15.6% in the last ten years, while breakfast cereals have become an integral part of the diet in the UK with some 52.1% of the adult population eating cereals for breakfast (Euromonitor PLC, 2013: p44). For Kellogg’s, however, their earnings or revenue has been falling over the past three years, slipping by 0.8% between 2012 and 2013 to $3.69, while its profits also fell from $352 million to $295 million in the same period (Prior, 2014: p1). Currently, the value of the cereals market in the UK stands at £1.1 billion, of which Kellogg’s has a market share of 42%, making it a market leader (Lanschützer, 2013: p1). Kellogg’s major competitors in the UK cereals market are Weetamix Company, Weight Watchers, Nestle S.A., and General Mills. Finally, Kellogg’s has several advantages in the cereals market, including strong brand awareness, economies of scale, being a market leader, customer loyalty, product differentiation, and brand acceptability and presence (adbrands.net, 2013: p1). Critical analysis of Kelloggs 4Ps When organizations such as Kellogg’s are assessing a change to its marketing strategy, one of the most helpful strategies is to consider the marketing mix’s 4Ps and its four elements of product, price, place, and promotion. The product element is related to how the organization’s offers meet the customer’s changing wants and needs. For Kellogg’s, increased awareness of healthier lifestyle in the UK has given them the opportunity to increase product varieties in the healthy lifestyle sector, such as Kellogg’s Fiber Plus and Special K products (Hoovers.com, 2014: p1). With regards to the price element, the amount that an organization charges for a product is critical in the determination of sales. Kellogg’s charges premium prices for its products due to the quality of their product and their brand’s strength. In relation to the place element, the location where consumers can purchase the company’s products is essential to determining the amount of sales (Bickhoff et al, 2014: p51). For example, the Special K brand from Kellogg’s is stocked in all major supermarkets where most consumers can access it. Moreover, Kellogg’s has partnered with transport companies to ensure their products are distributed to retailers across the UK. Finally, with regards to the element of promotion, communicating to consumers about the availability of a product is critical to any company. Kellogg’s, in this case, has made wide use of TV advertising, online ads, and sampling. In addition, the company has a rewards website and coupons to increase sales (Green, 2014: p32). Importance of Implementing and Balancing the Marketing Mix The 4Ps are critical to the launching of an old or new product in a new market. Implementing the product mix for Kellogg’s means that the company must meet the requirements of the company, in which case the products must do what they claim to do with regards to their health benefits (McKay, 2011: p55). Appearance would also be important to the marketing mix for Kellogg’s, which is one of the reasons the company is able to charge premium prices. Implementing the pricing mix would also be important in the overall marketing strategy for Kellogg’s, which depends on the organization’s strategy to penetrate the UK market with a higher price, while also creating a high end target niche market. The pricing for the products need to be relevant to the target market and, for Kellogg’s, the pricing decision should be aimed at attracting a specific market, in this case by charging a higher price (Baker, 2014: p44). Implementing the place mix is not as important as it was before because it is now possible to buy from stores, as well as online. However, it still important to consider that almost 20% of all costs related to a product is spent on ensuring that the product reaches the consumer (keynote.co.uk, 2013: p1). Whereas the actual figures for the amount spent on getting the product to consumers varies significantly for Kellogg’s depending on whether the products are purchased online or at the store, the distribution aspect is still essential for the marketing mix. Kellogg’s distributes its products via independent business owners across the UK. Finally, the promotion mix for Kellogg’s is very important in order for the company’s products to penetrate the mass market with Kellogg’s using TV and online ads (Blythe, 2012: p29). This element is critical to communicating with the consumer, which is one of the main aspects of any marketing strategy. Competitive Advantage The marketing mix provides a competitive advantage for Kellogg’s, for which the new products act as the product element, while getting the price right has to do with examining the perceptions of the consumer and the pricing of rival products and the costs of product manufacture (Kerin & O’Regan, 2011: p48). By identifying these aspects, Kellogg’s can price their products competitively to ensure that they gain c competitive advantage. On the other hand, Kellogg’s could use the promotional mix to gain competitive advantage by engaging their target consumers using promotional activities like sampling. In addition, the place element of the marketing mix could also give a competitive advantage to Kellogg’s if they choose to use the most efficient distribution channels, including leading supermarkets and retail chains. As a result, marketing plays an essential role in determining the appearance of the product as per the market’s requirements. In addition, marketing also determines the product’s function because the product is required to address the consumer’s needs as already identified through the marketing research strategy (Bowman & Gatignon, 2010: p61). How the product range is used is an essential function of the 4Ps marketing mix, in which case the product range could be broadened to match competition or cater towards seasonal fluctuations, such as the school months. Conclusion In order to create the right marketing mix, Kellogg’s should meet several conditions. To begin with, their products have to possess the correct features, including the improvement of the healthy function of its products, as well as the packaging’s attractiveness. In addition, they should also ensure that their pricing is right because the consumers will have to buy large quantities of their products in order for Kellogg’s to achieve a healthy profit. This will be important given the declining profits over the past few years. Moreover, Kellogg’s must ensure that their products are in the right place when required by the consumer, including on the online platform. Ensuring that their products arrive at the required place at the right time will be critical to Kellogg’s sales. Finally, promotional activities should also be conducted online, where they can make younger target groups aware of their products’ availability and existence. Through successful promotion, Kellogg’s can spread their costs over larger amounts of output. References adbrands.net. (2013). The Kellogg Company (UK). Retrieved February 23, 2015, from AdBrands: http://www.adbrands.net/uk/kelloggs_uk.htm Baker, M. J. (2014). Marketing strategy and management. New York, NY: Palgrave Bickhoff, N., Hollensen, S., & Opresnik, M. O. (2014). The Quintessence of Marketing: What You Really Need to Know to Manage Your Marketing Activities. Dordrecht: Springer. Blythe, J. (2012). Key concepts in marketing. Los Angeles, Calif: SAGE. Bowman, D., & Gatignon, H. (2010). Market response and marketing mix models: Trends and research opportunities. Boston: Now. Euromonitor PLC. (2013). Breakfast cereals in the UK. London: Euromonitor. Green, S. (2014). Kelloggs. Minneapolis, MN: Bellwether Media hoovers.com. (2014). KELLOGG COMPANY: Company Profile. Retrieved February 23, 2015, from Hoovers: http://www.hoovers.com/company-information/cs/company-profile.Kellogg_Company.b530620d866a5afc.html Kellogg Company. (2011). The history of Kelloggs: How it became the greatest name in cereal. Battle Creek, Mich.: Public Affairs Dept., Kellogg Co. Kerin, R. A., Hartley, S. W., & Rudelius, W. (2013). Marketing. Boston: McGraw-Hill/Irwin. Kerin, R. A., & ORegan, R. (20011). Marketing mix decisions: New perspectives and practices. Chicago, Ill: American Marketing Association. keynote.co.uk. (2013, July 11). Going with the Gain: the Success of the Breakfast Cereals Market. Retrieved February 23, 2015, from Key Note Media Centre: http://www.keynote.co.uk/media-centre/in-the-news/display/going-with-the-gain%3A-the-success-of-the-breakfast-cereals-market/?articleId=617 Lanschützer, H. (2013, August). Breakfast Cereals - UK - August 2013. Retrieved February 23, 2015, from Mintel: http://store.mintel.com/breakfast-cereals-uk-august-2013?cookie_test=true MacKay, C. (2011). Effective Marketing in Easy Steps: Packed with Tips to Become an Excellent Marketer. Southam: In Easy Steps Limited. OKane, B. (2011). Marketing Basics. Cork: Oak Tree Press. Prior, A. (2014, July 31). Kelloggs profit, sales decline. Retrieved February 23, 2015, from Market Watch: http://www.marketwatch.com/story/kelloggs-profit-sales-decline-2014-07-31 Read More