Special K. Product Life Cycle

Only available on StudyMode
  • Download(s) : 707
  • Published : May 5, 2012
Open Document
Text Preview
Special K added special k bars to the product range in 1999, to target the lucrative female market. The company has gradually introduced a range of flavors and varieties such as Special K bars apple & Pear, chocolate, and Red berry. The parent company for special K is Kellogg’s and it’s a worldwide company for producing cereals. In 2010 sales reached nearly $12 billion, Kellogg Company is the world’s leading producer of cereal and a leading producer of convenience foods, including cookies, cereal bars, and fruit-flavored snacks, with leading brand such as Pop-Tarts® and Nutri-Grain®. My assessment of Kellogg’s Special K is that they are doing well at managing the product line, particularly in the area of advertisement, which has lead to the brand become a household name in the category of healthy snack bars. Despite this still improvement that could be made.

Product Life Cycle (PLC):

The life expectancy of a product is thought to be finite; the product life cycle diagram is used to describe the change in sales during various stages of the product life. The first stage is Introduction where the product is launched into the market and the sales will most likely start low. The second stage is Growth this means the product is becoming successful and sales will start to grow rapidly as it becomes established. Moreover, the third stage is Maturity; this occurs when the product is at its peak and has displaced the previous market leader for example replacement of CD’s with MP3. The final stage is Decline this is when the product sales begin to fall, this is usually due to lack of successful innovation or creation of new varieties to keep consumer interest or expand the target market.

Source: Mintel
The graph of percentage market share below shows Special K bars has maintained a steady hold of the market share at 10-11 % over the past 3 years, this lack of change in sales suggests that Special K bars is in the Maturity stage. They hold a position of number 2 in the market leader board in healthy snack bars after Go ahead! ‘United Biscuits’.

Future trends:

Throughout the international economics crisis for the last couple years, special K cereal bars maintain the market share. In addition the parent company Kellogg’s also as remain constant 3 years with regard to the net sales, although there was a slight decline in 2010, the 2011 year-to-date result from the October 1st shows an increase in net sales from $9,537 to $10,183 shows that the market is growing stronger. In fact Kellogg’s believe that they can “ build long-term momentum in 2012, internal net sales are expected to rise 4-5 % above the long-term annual target” (Kellogg’s Q3 REPORT, 2011). Its look positive that the market will regain in strength and profit will continue to rise. Association with a parent company that has strong sales and seen as successful in the market place can affect the Special K cereal bars positively; in addition perhaps more money from the parent company can be invested into the brand to help more and more product to be developed. Over the last ten years the life style of people has changed and convenience food has become more readily available and the cost of sweets and chocolate has become cheaper, this added to the fact that our jobs are less active and people are now facing obesity. This led people to become more interested in healthy eating and health snacks; the likelihood is that this interest will only increase. Overall my assessment that the company will increase sales and revenue with good management and putting in place my recommendations

Source: Kellogg's annual report, 2010

Using the BCG growth share matrix it will appear that Special K cereal bars is a Cash Cow, according to the Market share graph show the last 3 years the brand has remained steady with out any significant...
tracking img