kelloge

Topics: Marketing, Qualitative research, Product management Pages: 5 (2050 words) Published: December 18, 2013
The Kellogg Company is the world's leading producer of cereals. Its products are manufactured in 18 countries and sold in more than 180 countries. For more than 100 years, Kellogg's has been a leader in health and nutrition through providing consumers with a wide variety of food products. These are designed to be part of a balanced diet and meet the different tastes of consumers. Kellogg's focuses on sustainable growth. This involves constantly looking for ways to meet consumer needs by growing the cereal business and expanding its product portfolio. Market research is a specific area of marketing that informs businesses like Kellogg's about the things consumers need, how best to design products to answer those needs and how to advertise those products to consumers. Market research goes beyond finding out what consumers are thinking today. It can identify what consumers might want in the future. In this way market research helps a business to make more informed choices. This reduces the risks for any new product development (NPD). It also increases the likelihood that products will be well received by consumers when they are launched. Kellogg's launched Crunchy Nut Cornflakes in the UK in 1980. Since then, it has become one of the most important brands for Kellogg's with a sales value of £68 million (according to IRI sales data). In 2003 the Crunchy Nut brand created a brand extension. This involved using the Crunchy Nut name to launch a new product called Crunchy Nut Clusters. This variant has two varieties, Milk Chocolate Curls and Honey and Nut. Both of them have enabled the brand to reach a wider group of consumers. This brand extension is now worth £21 million in annual value sales (according to IRI sales data). This case study focuses on the importance of market research during the development and launch of Crunchy Nut Bites, a more recent extension to the Crunchy Nut brand. The objective of this innovation was to provide a new flavour and texture for consumers, helping Kellogg's extend its share of the breakfast cereals market. Why carry out market research? Many organisations are described as product orientated. This means they develop a product and then look for a market to sell to. Kellogg's is market orientated. This means that the whole organisation focuses on the needs of its consumers. It is therefore essential that it identifies and anticipates changing consumer needs before the development of new products Market research adds value to businesses like Kellogg's by identifying consumers' needs. It helps Kellogg's to plan ahead, for example, looking at what products or extensions it should develop and for whom. It focuses the business on the needs of its consumers. An organisation that does this can improve its competitive advantage. In an established market, such as breakfast cereals, there is little room to increase the overall sales in the market. Kellogg's is therefore always looking for ways to strengthen its own portfolio. Designing new products is a good way of doing this. However, this can take a long time and may involve considerable costs. In addition to the resources required during development, suppliers must produce an advertising campaign to raise awareness of the product among consumers and encourage retailers to stock the product. Launching a new product can be a risky business. Of the hundreds of products launched every year in consumer goods markets, very few reach significant market share. In order to reduce risks, market research is, therefore, essential. A product extension is a less risky way of increasing market share by providing consumer products with new features under an existing brand. New product extensions give more choice to consumers and help them to feel more favourably about the existing brands. Types of research Primary research To develop a new Crunchy Nut brand extension, Kellogg's commissioned primary research. This is research gathered firsthand to answer questions that...
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