Situational analysis
Kellogg’s Company operates within the food industry, dealing with the production of a variety of convenience and cereal food products. Over the past few years, the global food industry has become very competitive. The competition has resulted from an increment in the number of small and medium enterprises and supercenters dealing with the production of food products (Leibtag & Hausman, 2005, p. 3). In addition, consumer demand for food products has become very complex. One of the sectors which have experienced intense challenges relates to firms dealing with the production of convenience foods. In order for Kellogg’s Company to attain a competitive advantage, it is necessary for the management team to attain high efficiency in marketing its Fruit Loop products which are increasingly appealing to the consumers.
Goals and objectives
Financial objectives
- By marketing the fruit loops within the domestic and foreign market, the firm intends to increase its profit with a margin of 35% within a period of one year. This is expected to continue into the future.
- It is the objective of the firm’s management team that effective marketing of fruit loops will culminate into an increment of the firm’s market share with a margin of 25%. This is expected to be achieved within a period of one year.
Non-financial objective
- To conduct a continuous product innovation so as to improve the quality of its Fruit Loops, culminating in an increment in the level of customer satisfaction. Through product innovation, the firm will be able to strengthen its consumer base. In addition, product innovation will enable the firm to attain a high competitive edge in competing with other brands which have been introduced by its competitors.
- To attain effective market awareness. According to Shimp (2008, p.164), effective market communication has the effect of increasing a firm’s sales volume.
- To conduct marketing of Fruit Loops in a socially responsible manner. This is in line with the firms’ social corporate responsibility in relation to responsible marketing (Corporate responsibility report, 2008, p.29).
Segmentation and target market
The firm’s management team has realized that market targeting can play a significant role in an effort to attain its profit maximization objective. According to Morton (2008, para. 3), market segmentation enables a firm to be efficient in its marketing process. Weinstein (2004, p.23) asserts that a firm benefits from market targeting since it enables a firm to focus on a subset of the entire market. In marketing the Fruit Loops brand, the firm will specifically target individual consumers. This is due to the fact that they are the major consumers of food products.
Demographic and behavioural segmentation
In order to attain efficiency in marketing the Fruit Loops, the firm will segment its market by incorporating demographic methods of market segmentation. According to Tutor2U (2010, para. 1), demographic segmentation enables a firm to attain high efficiency in marketing consumer products. This is due to the fact that various variables affect consumers purchasing patterns. In segmenting the market for Fruit Loops using the demographic method of segmentation, Kellogg’s Company will use age and income level as market variables.
The income variable will be integrated by considering the diversity of income amongst consumers of different income groups. As a result, a large number of individual consumers will be able to purchase the product. Segmentation using the age variable will be attained by considering the energy requirements of individual consumers of different age groups. According to McDaniel, Hair and Lamb (2008, p.206), consumers demand different products as their age changes. However, there are some products that are consumed despite age, such as food products. The income variable will be utilized as a behavioural variable by considering the behaviours exhibited by the consumers in their purchasing patterns. This results from the realization of the fact that consumers are price sensitive in making their consumption decisions (Dabbah, 2006, para. 6). As a result, the firm will be able to set the price of the Fruit Loops.
Psychological segmentation
On the other hand, the psychological method of market segmentation will be undertaken by considering the benefit sought by the consumers. This was considered by realizing the fact that individual consumers seek different benefits in their purchasing patterns. Over the past few years, consumers are becoming more health-conscious in their consumption patterns. In order to attain the health benefits sought by the consumers, Kellogg’s Company management team will ensure that the Fruit Loops high quality is ensured in the production of the Fruit Loops.
Positioning strategy
According to Weinstein (2004, p. 35), effective positioning plays a significant role in the survival of the firm. Weinstein asserts that firms have to position their products in the market optimally. This will act as a defence mechanism for the product against its competitors. In marketing its Fruit Loops, Kellogg’s Company will incorporate product quality as its key positioning element. This will be attained through continuous value addition.