Market Analysis: Kelloggs Issues - Essay Example

? Market Research: Case Study on Kellogg’s Section Market Research & Qualitative and Quantitative Techniques A business such as Kellogg’s that need to achieve higher or superior performance in the current business climate must be able to develop and continuously sustain its competitive advantage. This is why market research is an important aspect of any market-oriented business. traditionally, competitive advantage in the market leaned towards characteristics that were quite structural in nature like gaining market power to control the market, amassing huge large economies of scale, or having a production line that was very massive and produced goods in huge quantities to cut on costs and meet market demand that was very high due to few number of industries (Baker & Sinkula, 1999, pp.411-427). This focus has rapidly shifted in the current global market environment. This is because of the ever-growing sensitivity of consumers who demand satisfaction of their needs and wants by the brands in the market. Thus, the focus is now on capabilities, which are able to deliver very superior value to customers in a consistent manner and should be able to sustain such an operation in the future to remain competitively in business (Day, 1994, pp.37-52). this is why it is important for a market oriented firm to constantly conduct a market research to keep its culture and meet the value based needs of its customers (Piercy, et al., 2002, pp.261-273). A business could be defined as market-oriented when it has a culture that is wholly and systematically focused on the creation of value that is superior in serving the needs of its customers. This ensures that it performs satisfactorily (Celuch, et al., 2002, pp.545-554). To ensure that the value creation is achieved, marketers have to collect and essentially coordinate any form of applicable information on their customers or clients, industrial competitors in the market, and other players or influences that have an impact on its market within and without the industry. This is the role that marketing research plays in market-oriented firms. Market research for a market oriented firm should be able to encompass three components that are very vital to the meeting of a business’s goals (Day, 1994, pp.37-52). These components include the customer orientation, cross-functional orientation, and competitor focus. These three components are very much long-term in their nature and are based on both vision of the firm and the profit-making aspect. Market research does eventually give the firm a focus that is unified and geared towards realizing superior performance in the market through satisfying the needs of consumers. Overall, market research forms the basis of short-term and long-term marketing strategies that are adopted by the firm as it is the case for Kellogg’s in its pursuit to serve the customers better (Roberts, 2002, pp.23-29). The differences between qualitative and quantitative research comes from the type of data being collected, how it is collected, and analysed. Qualitative data has a lot to do with human emotions or psychology about a given product. This is because it addresses the feelings of people about a given product, their opinions and attitudes as far as the expected and realized performance of a product is (Mason, 1994, pp.56-67). Kellogg’s need this information so that it can be able to position its brand in the market and stay focused on satisfying these emotional aspects of its consumers. Ignoring qualitative data could render quantitative data useless due to inability to explain itself. Qualitative data has over the years been applied in explaining the findings of the quantitative data analysis since figures cannot make meaning on their own (Boaduo, 2005, pp.88-101). Given the subjectivity nature of qualitative research, Kellogg’s will be able to know what most of its customers need and find ways of satisfying these psychological processes in the market. On the other hand, quantitative research has more to do with statistical data analysis because questionnaires have to be filled and responses analysed statistically to reach findings. Quantitative research has been considered to be very objective and could be used by Kellogg’s to forecast future trends in the consumer market. Objectivity in market research is very essential since it eliminates the human aspect of biasness and gives the facts as they have been collected thus making the findings to be more scientific, valid, and reliable. This is important in a competitive market place such as the one Kellogg’s operates in so that it can gain a competitive edge over its competitors. Proper use of qualitative and quantitative data hand in hand should continue to be applied by Kellogg’s so that it can meet its marketing needs (Boaduo, 2005, pp.88-101; Mason, 1994, pp.56-67). Section 2 – Analyses of the 4 Stages It is important that a company identifies the opportunity it needs to serve in the market before launching any new product. This has the benefit of ensuring that the product does not lack a market to sell. Once an opportunity has been identified in the market, it is possible for a firm like Kellogg’s to capitalise on it and align this with its goals. The discovery stage of Kellogg’s was very much informed because it had realized the opportunity in the market, which was to provide the consumer market in the breakfast segment with a new form of flavour as well as adding a new texture for its consumers in this market segment. The discovery of this opportunity is the one that spun Kellogg’s into researching the new ideas in its food products that could help serve this need in the market. Many companies provide free information on consumer markets and thus it was important that Kellogg’s went for the reports published by Mintel and Datamonitor in the identification of trends of innovation within the cereal market (Roberts, 2002, pp.23-29). This approach must have saved it a lot of costs because conducting this kind of research is a bit hectic, time consuming, and costly to the organization, especially when it is not going to sell the research report. Using secondary data from around the world was a good move because it meant that the food ideas to be finally incorporated into the cereals would be global ones. Use of focus groups to provide necessary data was also quite in order because it targeted the main would be consumers of the products. The tastes and preferences of these focus groups are normally given immediately and a firm like Kellogg’s could get instant feedback on its prototype so that it could continue or change the ingredients. The selection of the best idea by Kellogg’s was as a result of what had been found in the first stage of discovery. Putting together all the information and bringing it on board for constructive criticism and discussion by stakeholders was a good move done by Kellogg’s. However, qualitative information alone is not enough and that is why Kellogg’s had to go for quantitative data that was collected from consumers. Use of representative samples was fine because it is not possible to get views from all the consumers through questionnaires. Finding the new Crunchy Nut Bites to be the best idea was a milestone for Kellogg’s. However, it was important that the number of people who would prefer the new product be established against those that could not prefer it so that the viability of launching the new product could be established. It is sometimes challenging to craft the new idea into a finished product that could be approved in the market. This is what Kellogg’s had to do in order to make the idea real. Refining the new idea through further research and design is quite important, just like what Kellogg’s did. Doing a further quantitative research at this point was also quite in order. Coming up with a very catchy design of the packaging materials always brings problems to many product launch processes. This is because it is part of the marketing strategies of a firm like Kellogg’s and if the package is not got in the eyes of the consumers, then the product is also not appealing to them. Most consumers buy what they see. The fourth stage of sales forecasting was critical for the product to get into the market. This is because if one does not know what the current and future demands of the product would be, it becomes very tricky to produce the product since possibilities of low sales and making losses are normally high for a new product. Giving free samples to customers might be one of the methods that could be used to introduce the new product in the market. A further market research on the samples is very important because consumers are able to tell about their experiences in using the product. This data could also be used in the determination of sales forecasts that could be subsequently used by the production department to produce the required amounts of the new product. Use of market research consistently in the product launching process was very well informed. Failure to do so could mean that Kellogg’s would end up doing things that were more appealing to them and forgetting the most important aspect which is core to the product launch success, the consumer. This is why a pull approach is important as opposed to a push approach to launching new products (Van-Kleef, et al., 2005, pp.181-201). Suggestions to improve the marketing research for Kellogg’s: The marketing research team needed to have clearly defined its goals and come up with quite specific objectives that are able to be measured. These could be in relation to the market, competitors, product, technology, consumer, or the manufacturing process; and, There is need for the Kellogg’s company to analyse and research more on its supply chain for this new product so that it can establish the best ways of meeting consumer needs while ensuring that it develops mutual relationships with its suppliers. This has the benefit of satisfying consumers, reducing costs, and increasing the quality levels of the new product (Baker, 2010). Section 3 – Findings from Marketing Research 5 changes on Kellogg’s Customer needs, wants, expectation or trends i. Consumers needed potential new flavours that were to be developed into the new product ii. They also needed to have a mini crispy lattice product that was to be part of the new product as opposed to what Kellogg’s had initially thought; iii. They expected to get a nutty triangle from the new product that was expected to be produced; iv. The product was also to be changed to in terms of how it looked as compared to the others that were in the market; v. The consumers expected the brands to keep up with the new demands in the market by giving them quality cereals that could be both nutritious and tasty. 5 changes on Kellogg’s Product attributes or characteristics i. The product needed to be changed by adding more vitamins D to help meet the needs of the consumers who complained of lack of vitamins D and raised this as a health concern. This led to the fortification of the brands with vitamins D; ii. The other characteristic demanded of the product was reduction of the salt content which Kellogg’s did by over 50%; iii. The consumers also needed the product to be changed so it can have less sugar than the other products thus leading to a sugar content reduction; iv. The product was to be changed to be very appealing compared to those in the market so that the consumers could be attracted; and v. There was need to change and put ingredients that could serve a wider collection of customers, which included vegans. 5 changes in the Marketing/Advertising at Kellogg’s, since inception i. The change from advertising Kellogg’s products to children to non-children oriented advertisements; ii. The packaging of these new products was done differently from the others in the market as per the findings from the market research; iii. Names that were more catchy or appealing to customers were used; iv. A well-funded advertisement that targeted only mums was launched representing a change from the general public approach to specific user focused advertisement; and, v. There was change from advertising without mentioning the nutrition value of the cereals to advertising by alleging the nutrition value that could be derived from the added nutrients. 5 new Kellogg’s brands introduced after market research, and why i. Crunchy Nut brand which came up as part of a brand extension; ii. Crunchy Nut Clusters launched because of the need to have milk chocolate curls and the one that includes honey and nut only; iii. Caramel Flavoured Coco Pops: this was initiated due to the need to have caramel flavour in the Choco pops; iv. Coco Pops Moon & Stars: this was introduced due to the need to appeal to the foreign markets; v. Coco Pops Choc-N-Roll: the reason for this product’s launch was the need to have rice krispies of multigrain range and included in chocolate. 3 marketing research techniques used in this Case i. Focus groups: here, a moderator had to use some questions after tasting the samples so that a required response is given based on what the consumer felt about the product; ii. Personal interviews: these involved collecting primary data by asking consumers some questions that were pertinent to the launch of the new products; and, iii. Field trials were also used where consumers were given samples of the new products to test in their homes for some period of time and fill questionnaires as per their experiences. List of References Roberts Edward, B. (2002) Innovation: Driving Product, Process and Market Change, Jossey-Bass/Wiley, 23-29 Celuch, K. G., Kasouf, C. J., & Peruvemba, V., (2002), “The Effects of Perceived Market and Learning Orientation on Assessed Organizational Capabilities”, Industrial Marketing Management, Vol. 31: 545-554 Day, G.S., (1994), “The Capabilities of Market-Driven Organizations”, Journal of Marketing, Vol. 58: 37-52 Baker, W.E. & Sinkula, J.M., (1999), “The Synergistic Effect of Market Orientation and Learning Orientation on Organizational Performance”, Journal of Academy of Marketing Science, Vol. 27, and No.4: 411-427 Piercy, N.F., Haris, L.C., & Lane, N., (2002), “Market Orientation and Retail Operative’s Expectations”, Journal of Business Research, Vol. 55: 261-273 Baker Rosie (2010), Kellogg launches "healthy" Coco Pops. Retrieved on 29th November 2011, from: http://www.marketingweek.co.uk/sectors/food-and-drink/kellogg-launches-healthy-coco-pops/3016625.article Van-Kleef E, Van Trijp HCM, & Luning P (2005). “Consumer research in the early stages of new product development: A critical review of methods and techniques”, Food Qual. Preference, 16(3): 181-201 Boaduo NAP (2005). Methodological Choice and Application in a Research Study: A Framework for Practitioners. In the African Symposium, 5(3): 88-101. Mason K (1994). “Linking qualitative and quantitative data analysis”. In A. Bryman and R.G. Burgess (eds.) Analysing qualitative data. London: Routledge, 56-67 Read More