Kellogg's Company When the Kellogg Term Paper

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In the "question marks" category were introduced the products of the "Specialty channel," as they appeared in 2004 and tried to conquer a relatively new market for the company, that of the non-traditional products. Therefore, this attempt has not been proved to be a real success because, just as in the case of the natural, organic and frozen products, the market of the specialties had been reached by other companies and, even though the investments were quite high, because the offer of products was diverse, the growth has proved to be quite low.

The QSPM Matrix

Having all these in mind, the main two directions I could identify for the Kellogg Company to follow are represented by a potential enlargement of its company in Europe -where for example, the sugar free chocolate chips cannot be found- or by a diversification of the products line in the North America, the most productive area from its point-of-view. A good advice in this perspective for the Kellogg Company would be to start manufacturing ice-cream based on flakes- just as Nestle and General Mills did with the Nesquik ice cream.

Enlargement

Diversification in Europe in U.S.

Key Factors Weight AS TAS

Opportunities

1. One European currency-Euro.10 4.40 2.20

2. Rising health consciousness in selecting foods.15 4.60 3.45

3. The products are in their greatest part, organic

4. Many parts of the food area which can be conquered.15 3.45 4.60

5. NAFTA.OS?

Threats

1. Food revenues increasing only 1% annually.10 3.30 4.40

2. Unstable economies in Europe.10 4.40 1.10

3. The emergence of substitute products, under the brand

05?

Name of its competitors

5. Low value of the dollar.15 1.30 4.60

Strengths

1. Profits rose.10 4.40 4.40

2. A tradition of more than 100 years.10 2-20 2 20

3. Situated on the 100th position in the Top.10 2.20 4.40 of the Most Developed American Companies

4. Strong brand name.05 4.20 3.15

5. The value of the sales in 2005 were more than $10 billion

05?

Weaknesses

1. The brand is less developed than its main competitors.05 2.20 2.20

2. The unsuccessful attempt in the past to broaden its

Portfolio with a range of snacks and convenience foods

Sum Total Attractiveness Score 1.0-3.85 4.10

AS = Attractiveness Score; TAS = Total Attractiveness Score

Attractiveness Score: 1 = not acceptable; 2 = possibly acceptable; 3 = probably acceptable; 4 = most acceptable.

The QSPM successfully shows that the best solution for the Kellogg Company would be the diversification of its products line in the U.S. rather than an enlargement of the company in Europe.

Recommendations

As it might be obvious, the main recommendations I could make are also those proposed for the QSPM Analysis:

the diversification of its products line for the U.S., since the occurrence of Keebler promoted Kellogg on the 37th place on the advertiser's list; and an enlargement of the company in Europe, as this represents an important point in the competence field, since General Mills and Nesquik are the main providers of cereals in Europe,.

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In other words the commercializing of all the Kellogg's products throughout Europe would drastically change the force report in this competition.

In, my opinion, a re-orientation of the foods' line would also be welcomed. What it might be easily noticed nowadays is the fact that "people have oriented towards healthier food and, implicitly, towards low-fat food." Similarly, I consider that Kellogg should do the same and improve its fat-free products line. If it was to be taken only the example of sweets, it would be easily to notice that most of the fat persons and women, in generally, prefer those who have written on their labels the magic words "fat-free."

One the other hand, I do not think that the leaders of the company are aware of the fact that the publicity made for the products Kellogg manufactures is enough. For example, few of the peoples of the 180 countries in which its products are commercialized are aware of the strong brand which lies behind the image of the item they consume. Therefore, a broader publicity line will surely improve the sales. In addition, the continuation of the collaboration with the big customers, such as Wall mart, would surely prove to be prolific on the long-term, since "all the customers are attracted by lower prices." Moreover, this maneuver would keep the loyal customers and would also attract new ones. As a consequence, the relationship with the hypermarkets should be maintained, no matter the discounts they practice and, even more than that, an attempt to eliminate the competitors' products from their shelves should be made and this only through practicing lower prices than those of the competitors.

All of these should be kept in mind because, as the surveys shows, the sales have decreased since the last year. And I consider this fact is in direct relationship with the good behavior of its competitors on the market. For example, in 2004 General Mills has launched an entire whole grain breakfast cereal line, and this occurred after the appearance of triple-pack breakfast cereals in the supermarkets, during the same year. In addition, Kraft Foods revenues on the third quarter of 2006 increased with 2.3% to $8.2 billion.

Even though, this does not mean that Kellogg's cause is lost: it just has to improve its methods in order to become the best. What it should also be done is the attempt to awaken in the people's conscience the long tradition of the brand, since "people usually trust into all that is old is associated to all that is good, in people's imagination."

All in all, it seems that the Kellogg Company has great chances to become even more famous than it is; all that is needed is a more developed marketing plan and a stronger attempt to adapt to the market needs. If we were to look back into the history, we would notice that Kellogg has face all the.....

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