...Main Cereal Company is a relatively new company that was established in 2007. It is an Australian owned and operated company. The head office and factory are located in Sydney, New South Wales and it is manufactured and distributed from this location. Main Cereal Company offers organic cereals, which consists of Australian grown whole grains, fruits and nuts. Main Cereal Company has developed a new breakfast cereal range called Bran Flakes. The range offers ‘Bran Flakes Original’ (only flakes), ‘Bran Flakes Mixed Fruits’ and ‘Bran Flakes and Nut’. The purpose of this paper is to provide an analysis of the six forces that operate and within the macroenvironment, the six influences are: demographic, economic, natural, technological, cultural, and political (Kotler, Brown, Burton, Deans and Armstrong, 2010). All six forces play a significant role in marketing Main Cereal Company’s new range. Demographic As explained by Kotler, et al. (2010) demographic environment is “the study of human populations in terms of size, density, location, age, sex, race, occupation and other statistics” (p.137). Statistics indicate Australia has lower fertility rates and people are living for longer. This has increased Australia’s median age, evidently resulting in Australian have an ageing population (Australian Bureau of Statistics, 2011). In the year 2007 Australian’s population for people over the age of 60 was sitting at 18%, however by the year 2050 they predict over a quarter of Australian’s...
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...Introduction Farming Organic Grain Growers Association is a food processing organization situated in Balranald Australia and gluten free preservative free ‘Healthy Muesli’ breakfast cereal is the item for consumption introduced by the organization for this marketplace and it is determined on nourishment and consumers vigorous life choices. This analysis will show in today’s competitive market environment it is necessary to have a deep understanding about the market structure and environment before launching any new product or even to retain the existing product line in today’s highly vigorous market place. In analysing the market this will explain the significance to understanding the 6 major forces of the macro-environment factors as these factors can create a major impact on the company’s performance and they can also help increase the competition in the market as well. In today’s rapidly growing business environment and with other factors like technology, the socio-economic issues and demographics impacts are continuously compelling the business world to adapt them and Farming Organic Grain Growers Association will need to adapt in order to cope with all the changes that are taking place in their macro environment. Demographics The preliminary investigation was determined on six confined macro environment factors that could potentially influence the sales of the product. The factors in support of the promotion of the manufactured goods gluten free preservative free ‘Healthy...
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...In-store promotions & signage Before entering the aisle, there was a giant category sign identifying the cereal aisle and marked with an aisle number. When we first entered the aisle, we saw the natural and organic sign placed on top of healthier cereals area. Keeping walking towards the aisle, we found a lot of product price tags, including cutback tags on sale items, comparison tags showing the price difference between the generic brand and the promoting brand, store football game promotion tags under the qualified products. Additionally in the middle of the aisle, there was a game panel exhibiting the grand prizes that customers can win via purchasing the specific products. The most effective signs in this aisle are the on sale promotion price tags and the Viking’s football game promotion price tags. Within twenty minutes of our observational research, we saw three people buying five boxes of cereal because of the promotional deal. First of all, the red and yellow design attracted customers’ attention, especially like what Paco said, “We’re going to have to see a lot more black, white and red and a lot less of any other hue.” (P141). In this case, the sign used a huge portion of red and black colors with the yellow background. It was obviously easier for people, especially for the older people to read. Moreover, on the tag, it said “when you buy 5, LIMIT 5, all other purchases $2.49.” This price tag used a really good anchoring strategy. Customers perceived this irrelevant...
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...Harvard Business School 9-795-191 Rev. February 14, 1997 The Ready-to-Eat Breakfast Cereal Industry in 1994 (A) All is not well in the land of Tony the Tiger.1 In early 1994, the ready-to-eat (RTE) breakfast cereal industry had reached a critical turning point in its evolution. In an industry historically characterized by stability and above average profitability, slowing demand growth and a surge in private label sales threatened to undermine the dominant positions of the Big Three: Kellogg, General Mills, and Philip Morris. The 1993 year-end statistics showed that industry sales growth had slowed to under 2%, while private labels had topped 5% market share by sales and 9% by volume for the first time. Price increases by the Big Three had widened the gap between branded and private label products. The competitors had traditionally avoided destructive head-to-head competition, but this mutual restraint appeared to be crumbling. Each of the firms faced major decisions going forward about whether to break with the industry’s lock-step moves and how to deal with the threat of private labels. History of the RTE Breakfast Cereal Industry2 The ready-to-eat breakfast cereal industry got its start in 1894, when Dr. John Kellogg and his brother W.K. Kellogg invented wheat cereal flakes in an attempt to make whole grains appealing to the vegetarian clients of the Seventh-Day Adventist sanitarium Dr. Kellogg ran in Battle Creek, Michigan. 3 W.K. went on to invent the corn flake...
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...Equity Research Report , October, 31, 2009 Bobby Kelley , Kellogg Company K: Bobby's Company Report - (K-NYSE) HOLD OUTLOOK Kellogg Company, the leader in ready-to-eat cereals, has successfully executed the Volume to Value and Manage for Cash strategies. In 2006, management adopted additional programs, namely, Sustainable Growth and People Passion and Pride . By focusing on brand building and profitability, Kellogg is reporting consistent sales and earnings growth, reducing debt, and repurchasing shares. However, recent commodity inflation and increased investment in advertising expenditures have pressured the gross and operating margins. Current Recommendation Hold Current Price (10/30/09) Twelve-Month Target Price $51.54 $55.13 SUMMARY DATA 52-Week High 52-Week Low One-Year Return (%) Beta Average Daily Volume (sh) Shares Outstanding (mil) Market Capitalization ($mil) Short Interest Ratio (days) Institutional Ownership (%) Insider Ownership (%) Annual Cash Dividend Dividend Yield (%) 5-Yr. Historical Growth Rates Sales (%) Earnings Per Share (%) Dividend (%) P/E using TTM EPS P/E using 2009 Estimate P/E using 2010 Estimate $53.39 $35.64 17.54 0.51 3,909,678 383 $19,731 3.25 82 2 $1.50 2.91 7.4 8.0 7.0 16.5 16.5 13.8 Risk Level Type of Stock Industry Low Large-Growth Food-Misc./Diversified BOBBY'S ESTIMATES Revenue (in millions of $) Q1 (Mar) 2007 2008 2009 2010 2,963 A 3,258 A 3,169 A 3,366 E Q2 (Jun) 3,015 A 3,343 A 3,229 A Q3 (Sep)...
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.............. 3 1.1.2 Current Pricing...................................................................... 3 1.1.3 Current Distribution.............................................................. 4 1.1.4 Current Promotion................................................................. 4 1.2 Environmental Scanning.................................................................... 5 1.2.1 Political/Legal Environment...................................................5 1.2.2 Economic Environment...........................................................5 1.2.3 Social/Cultural Environment...................................................5 1.2.4 Technological Environment....................................................6 1.2.5 Natural Environment...............................................................6 1.2.6 Competitive Environment.......................................................7 1.2.7 Demographic Environment.....................................................7 1.3 SWOT Analysis----------------------------------------------------------------8 2.0 Segmentation Theory........................................................................... 9 2.1 What is segmentation?................................................................9 2.2 Why is segmentation...
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...Biofuels and the underlying causes of high food prices Alessandro Flammini October 2008 The development of this report was coordinated by Maria Michela Morese and Jonathan Reeves (Global Bioenergy Partnership Secretariat). The views expressed in this report reflect those of the author and do not necessarily reflect the views of the Global Bioenergy Partnership or those of the Food and Agriculture Organization of the United Nations. For info: alessandro.flammini@fao.org ACRONYMS ADB Asian Development Bank DDG Dried distillers grains DEFRA Department for Environment Food and Rural Affairs EU European Union FAO Food and Agriculture Organization of the United Nations GHG Greenhouse Gas OECD Organization for Economic Co-operation and Development PRC People’s Republic of China UAE United Arab Emirates US United States of America USDA Department of Agriculture of the United States WFP World Food Programme of the United Nations WTO World Trade Organization Table of contents EXECUTIVE SUMMARY ..................................................................................i BACKGROUND.....................................................................................1 THE CAUSES.......................................................................................4 THE CLIMATE ISSUE ......................................................................... 4 INTERNATIONAL STOCK LEVELS......................................................... 5 INCREASED GLOBAL FOOD...
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...Failed Research Leading to Failed Positioning – Kellogg’s Launch in India Kellogg’s in the 90’s started facing immense pressure from competitors and their main markets of the U.S and Europe had become sluggish. It is during this time that they decided to launch in India. Our “Marketing Management” textbook outlines the following six major forces to be researched at a macro level when considering the opportunities and threats, especially when venturing into a new territory: Demographic, economic, social-cultural, natural, technological and political-legal (Kotler, Keller, Koshy, Jha, 2009). If the above has been researched and evaluated carefully, you can then position your product well with the other 3’P’s: Place, Promotion and Price. Yet, Kellogg’s with their over-confidence just gambled on the economics and here too they failed miserably. While considering economics in 1994, they considered the overall population. Mr. Bhagirat B. Merchant, at that time director of the Bombay Stock Exchange, agreed on this when he stated, “Even if Kellogg’s has only a two percent market share, at 18 million consumers they will have a larger market than in the US itself” (Cashberry, 2006). Yet, Kellogg’s forgot to take into consideration, before investing USD 65 million, was the “consumer class” was not more than 100 million and were dispersed geographically with very different cultures, customs, and tastes. Over-confidence came from the fact that they were a huge company...
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...according to statistics. These diseases cause many complications and are responsible for a reduced quality of life. These startling statistics reveal that Americans, especially children, are not getting the proper nutrients their body needs. America has taken technological innovations in food production to the next level and has an abundant food supply. So why are so many Americans sick with food related diseases? Taking a closer look at America’s diet holds the answer. A typical American diet consists of 70 percent processed foods. This includes packaged foods, fast foods, and foods that could not be prepared with simple ingredients in a home kitchen. Processed foods can broadly be defined at food that is changed from its natural, raw state. Joseph Hyder, a dietician at the Mayo Clinic, defines food processing as: Methods used to transform raw ingredients into different forms of food. Food processing often produces foods that have extended shelf lives and contain...
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...General Mills (NYSE: GIS) is not just a cereal maker, it is one of the largest packaged food producers in the world. Starting as a successful flour mill near the Mississippi River, it has grown to own some of the most recognizable brands, including Cheerios, Wheaties, Progresso Soup, Hamburger Helper, and Fruit Roll-Ups. Some of its #1 and #2 market-leading brands are Better Crocker, Gold Medal, Green Giant, Pillsbury, and Yoplait. General Mills operates in more than 130 countries worldwide and divides its business into three core segments: U.S. Retail (70% of revenue through major retailers), international (18% of revenue and supported by a joint venture with Swiss food giant Nestle SA), and bakeries and foodservices (12% of revenue). Currently, it’s growing its reach from grocery stores into new channels like super centers, drug and discount stores, and convenience stores. It is also expanding quickly into growing markets such as China, Russia, and Latin America. The goal of General Mills is to be among the most socially responsible food companies in the world in addressing the interrelationship of economic, environmental and social value. In 2012, they have reported continued progress in advancing their goals specifically in the health, environment, and sourcing areas. They have improved the health profile of their products again due to the increase of healthy and organic food choices, and have decreased natural resource consumption in global supply chain operations...
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...THE BATTLE FOR THE BREAKFAST CEREAL MARKET, by Richard Lynch 1. INTRODUCTION Corporate strategy is certainly a topic that is exciting and challenging. It makes fundamental decisions about the future directions of organisations. And it has the potential to have a real impact on people's lives. But it isn't the easiest subject to study. There are several reasons for this: *It's a young academic subject when compared to more traditional topics like economics and organisational behaviour. This means that there is a lot that we still don't understand. *It's a complex subject that involves many different aspects of organisations, all of which may be important. This makes it difficult to record and analyse. *And it's a subject that lacks a widely agreed body of accepted knowledge. Different strategists have different opinions on what is important and how strategy should be developed. All these factors make it quite tough. Certainly, some strategists argue that there is a place for strategic analytical frameworks like Professor Michael Porter's Five Forces. But the same strategists also point out the most successful strategies need to be more experimental and creative. For example, they argue that the successful strategy of Dell Personal Computers - selling directly to customers, cutting out the distributor - owed much more to innovation than to traditional strategic analysis. In more general terms and arguably to oversimplify strategy theory, strategic processes need to be both prescriptive...
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...CASE 21 PepsiCo’s Diversification Strategy in 2014 John E. Gamble Texas A&M University–Corpus Christi P epsiCo was the world’s largest snack and beverage company, with 2013 net revenues of approximately $66.4 billion. The company’s portfolio of businesses in 2014 included Frito-Lay salty snacks, Quaker Chewy granola bars, Pepsi soft-drink products, Tropicana orange juice, Lipton Brisk tea, Gatorade, Propel, SoBe, Quaker Oatmeal, Cap’n Crunch, Aquafina, Rice-A-Roni, Aunt Jemima pancake mix, and many other regularly consumed products. The company viewed the lineup as highly complementary since most of its products could be consumed together. For example, Tropicana orange juice might be consumed during breakfast with Quaker Oatmeal, and Doritos and a Mountain Dew might be part of someone’s lunch. In 2014, PepsiCo’s business lineup included 22 $1 billion global brands. The company’s top managers were focused on sustaining the impressive performance through strategies keyed to product innovation, close relationships with distribution allies, international expansion, and strategic acquisitions. Newly introduced products such as Mountain Dew KickStart, Tostitos Cantina tortilla chips, Quaker Real Medleys, Starbucks Refreshers, and Gatorade Energy Chews accounted for 15 to 20 percent of all new growth in recent years. New product innovations that addressed consumer health and wellness concerns were important contributors to the company’s growth, with...
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...RAND Journal of Economics Vol. 31, No. 3, Autumn 2000 pp. 395–421 Mergers with differentiated products: the case of the ready-to-eat cereal industry Aviv Nevo* Traditional merger analysis is difficult to implement when evaluating mergers in industries with differentiated products. I discuss an alternative, which consists of demand estimation and the use of a model of postmerger conduct to simulate the competitive effects of a merger. I estimate a brand-level demand system for ready-to-eat cereal using supermarket scanner data and use the estimates to (1) recover marginal costs, (2) simulate postmerger price equilibria, and (3) compute welfare effects, under a variety of assumptions. The methodology is applied to five mergers, two of which occurred and for which I compare predicted to actual outcomes. 1. Introduction Traditional analysis of horizontal mergers is based primarily on industryconcentration measures. The market is defined and pre- and postmerger market shares of the relevant firms are used to compute pre- and postmerger concentration measures, which give rise to presumptions of illegality. Using this approach to evaluate mergers in industries with differentiated, or closely related but not identical, products is problematic. In many cases the product offerings make it difficult to define the relevant product (or geographic) market. Even if the relevant market can easily be defined, the computed concentration index provides a reasonable standard by which to judge...
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...Status and Challenges: Food security situation in Bangladesh has improved, especially on the availability side, and further improvements on access and utilisation, to be sustainable and large-scale, needs renewed efforts from the government, civil society (including media) and the development partners. Records say in 70s’, 70% people were under the food consumption poverty line. Today this is down to under half of the population. Today, though people are not dying, they are going hungry and becoming stunted with reduced mental and physical capacity. They are suffering. The hungry population of over 60 million people is larger than most other global cases- the third largest poor population in any country after China and India5. Nearly half of Bangladesh’s children are underweight, making it one of the most severe cases of malnutrition in the world. While Bangladesh has definitely got more food than it had thirty years back, yet almost half of Bangladesh is still far from being food secure. The World Bank and GoB-UN in their respective reports on MDGs, put the target of 34% children being underweight as non-attainable at present rates of progress. Much will need to be done to achieve the 2015 MDG target...
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...The Taiwanese Market for Organic Food & Drink © Organic Trade Association 2006 This report is the intellectual property of OTA and for the use of US companies only. No part of this report may be reproduced or used in other commercial publications without written consent from the OTA. For information regarding permission, write to: Organic Trade Association PO Box 547, Greenfield MA 01302 www.ota.com Table of Contents I. Introduction 3 II. Market Overview & Summary 5 III. Industry Analysis 6 Industry Development Organic Farmland 6 7 IV. Market Analysis 8 Market Forecasts Market Drivers Market Restraints Product Categories 8 10 12 14 V. Sales Analysis 16 Distribution Structure Sales Channels 16 17 VI. Competitive Profiles 20 Producer Analysis Importer Analysis 20 22 VII. Pricing Analysis 24 IX. Business Recommendations 26 X. References 28 XI. List of Key Companies 29 © Organic Trade Association 2006 Organic Monitor (www.organicmonitor.com) 1 2 Organic Monitor (www.organicmonitor.com) © Organic Trade Association 2006 I. Introduction This report analyzes the Taiwanese market for organic food & drink. The report has been prepared by a combination of primary and secondary research. About 90 percent of the data was derived from primary research, which was in the form of trade interviews with leading producers, wholesalers, importers and retailers of organic products. Interviews...
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