TASK 1 – OVERVIEW OF BREAKFAST CEREAL MARKET
TASK 2 – KELLOGG’S BRAND
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MARKET SIZE AND PRODUCT CATEGORIES
This market is an oligopoly with a Kellogg’s Co, Weetabix and Cereal Partners having two-third of market. An oligopoly market structure is one in which there are a few large producers who are present in the industry and account for most of the output in the industry and have concentrated market shares. Weetabix and Kellogg’s dominate the leading five brands. The breakfast cereal market is worth £1.28 billion and has shown strong growth over the last five years, increasing in size by 17%. The market is divided into two main sectors: the ready-to-eat sector (corn flakes, wheat biscuits, puffed wheat, bran and muesli) and the hot cereals sector (porridge). Figure 1 shows shape of the cereal market in sub sectors
Figure 1: Value share of sub-sections of the RTE breakfast cereal market, 2007
CONSUMER CHARACTERISTIC AND SEGEMENTATION
It is important for companies to segment their market as it will mean that they are able to focus their marketing strategy upon the consumers most likely to purchase their product. Main approached for consumer segmentation are demographic (age, family life cycle, gender, ethnicity and house composition) socio-economic (occupation and income) and psychographic (lifestyle, attitudes, benefits sough and loyalty).
Breakfast cereal industry has a wide range of shaped cereals which are aimed to children and their influence on their parents’ choice of products cannot be underestimated. We also have breakfast snacks aimed at consumers aged 40and over
who are seeking better-tasting health products, luxury range is more suitable for snack treats and is aimed at professional women. Cereal bars are aimed at any gender but females may have more interest in the product because they come across as more health-conscious than males. CONSUMER BEHAVIOUR
Consumer buying behaviour is defined as the buying behaviour of final consumers, individuals and households who purchase goods and services for personal consumption (Kotler, Brown, Adam and Armstrong, 1999). There are different types of buying situations - routine buy, modified buy and completely novel.
Very useful in offering an understanding of consumer motivation is Maslow’s hierarchy of needs theory. It is readily adaptable to marketing strategy, primarily because the goods one consumes often serve to satisfy each level of need.
As shown on Figure 2 (KeyNote, 2009) overall women (88.8%) are more likely than men (83.6%. Teenagers between 15-19 years old (88.9%) and people age 25-34 (88.5%) are slightly more likely to have cereal than the other age group. Overall 37.9% of adults consume breakfast cereal once a day (Figure 3). Households with children are more frequent consumers than those without children. Hot cereals are more likely consumed by women (55.0%) than men (43.5%). They are also more popular amongst people over 65 (56.5%) and the higher social grade (Figure 4).
|All adults |86.3 | |Sex | | |Men |83.6 | |Women |88.8 |
Figure 2: Consumption of Ready-to-Eat Breakfast Cereals in the Past 12 Months (% of adults), Year Ending March 2008
| |More Than Once a Day |Once a Day |2 or 3 Times a Week|Once a Week |2 or 3 Times a Month|Once a Month or Less | | | | | | | | | |All adults |6.4 |37.9 |22.3 |6.8 |6.5 |4.8 | |Sex...