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Running head: Principles of marketing

PRINCIPLES OF MARKETING

Principles of marketing

Table of Contents

Introduction ................................................................................................................................ 3

Company Overview................................................................................................................ 3

Market Approaches of Kellogg .............................................................................................. 4

Digital and Social Media Marketing Strategy of Kellogg...................................................... 4

SWOT Analysis...................................................................................................................... 5

Environmental forces and trends ............................................................................................ 6

Conclusion ................................................................................................................................. 7

Reference List ............................................................................................................................ 8

Principles of marketing

Introduction

Marketing strategy is the most significant aspects in the context of developing a

business process by enhancing consumer awareness regarding different products and price

level of an organization. The assignment highlights marketing plan of food manufacturing

and packaging company Kellogg. It highlights various marketing approach such as product

development strategy as well as market penetration strategy and social and digital marketing

strategy was implemented by the company. Based on that SWOT analysis of Kellogg has

been done through that strength and weakness of the company can be evaluated and by

modifying that weakness into opportunity market threat from other competitors can be

mitigated.

Company Overview

American multinational food manufacturing and packaging company Kellogg is

largest and leading producer of cereal food as well as other convenience foods such as

cookies, pastries, snacks with sales volume more than 12 billion dollars in the financial year

2010. It expands their opportunity to market in more than 180 countries and manufacturing

Kellogg’s own product in more than 18 countries (Overview of Kellogs., 2019). In financial

2017 Kellogg’s revenue was 12.923 Billion US Dollar with an operating income of 1.946

Billion US Dollar and 1.296 Billion US Dollar. The estimated value of total assets of

Kellogg’s in 2017 was 16.350 Billion US Dollar and total equity was 2.212 Billion US dollar.

As per company profit and revenue status it can be said that Kellogg’s revenue has fallen by

0.7% in the financial year 2017 from the previous year as revenue in 2016 was high with a

value of 13.014 Billion US Dollar (Kellogg’s, 2019). However, the net income of Kellogg in

2017 was 1.269 Million Dollar that significantly more than the year 2016 as net income in

2016 was 694 million US Dollar (Kellogg’s, 2019).

Principles of marketing

From the above financial information regarding Kellogg’s market and sales revenue,

it can be said that Kellogg is leading cereal food manufacturing and packaging company with

having a large number of market share in the packaged food industry. Thus, Kellogg has been

chosen as a specific company for this assignment for having a strong marketing strategy.

Market Approaches of Kellogg

Kellogg has strong marketing strategies that made them a market giant in cereal food

manufacturing and packaging industry. Various approaches for promotional strategies such as

Brand advertising through social media has helped them to get a competitive advantage in the

international market with increasing sales in the last 3 years by 4%. Another approach that

can be seen in the case of Kellogg’s marketing strategy is strategic acquisition with other

market leaders. For example, Kellogg has acquired Procter and Gamble’s Potato chips brand

Pringles in the fiscal year 2012 by 2.7 Billion US Dollar cash deal that made Kellogg world’s

second largest processed snack food company after PepsiCo (NEWSROOM, 2019). Thus, it

can be said that a strong strategic acquisition market strategy has increased market share and

valuation of the company in international cereal market.

Digital and Social Media Marketing Strategy of Kellogg

In an era of digitalization, every organization is adopting digital and social media

marketing strategy in order to gain sustainable growth in the intensely competitive market.

Implementation of digital media in advertising and promotional strategies of the product can

increase the sales volume of the product by attracting customers from a different area

(Zarietnow, 2017, 4:16).

The digital marketing strategy of Kellogg includes marketing and promoting Cereal

through different social media platforms such as Facebook and LinkedIn. In the case of

digital marketing strategy, Kellogg is one step ahead of its competitors such as Nestle as well

Principles of marketing

as Heinz and Quaker Oats Company (influenced by Bohari, Hin, & Fuad, 2017). In order to

promote Kellogg’s Special K cereal for women and its benefits in human health, Company

has launched an app that will provide health benefit tips to consumer and user of the product.

Kellogg has launched this app with the help of Virtual Earth Technology (Kotler, 2008,

6:14). The main promotional vision of Kellogg was to raise awareness among women in

order to keep their body in proper shape and stay fit. As opined by Phadermrod, Crowder &

Wills (2019) taking strategy regarding the way of using digital communication channels.

Social Media marketing strategy of Kellogg includes the company’s promotion of

cereal products through Facebook as well as Twitter and YouTube. Kellogg has launched two

campaigns on YouTube in the financial year 2018 that has increased ad recall of company by

29% and consumer purchase power has lifted by 15% through YouTube campaign of

Kellogg. Based on that overall sales volume of Kellogg's has increased by 4% in the last three

years (Kellogg's went from zero to 60 on digital thanks to 2 campaigns, 2019).

SWOT Analysis

Strengths

Weaknesses

● Strategic Acquisition

● Strong Brand Advertisement

● Large Market Share

● Lack of Skill Employees

● Lack of innovation in the product

range

● Negative word to mouth message

through product promotion.

Opportunities

Threats

● Emerging market

● A large number of targeted

customers having a demand for

cereal

● Local companies

● An increasing number of new entry

● Lack of following Corporate policy

on a daily basis

Principles of marketing

Table 1: SWOT analysis

(Source: influenced by Gürel, & Tat, 2017, p.39)

Figure 1: SWOT analysis

(Source: influenced by Gürel, & Tat, 2017, p.39)

Taking strategy regarding the way of promoting different products through social

media such as Facebook, the company could be able to enhance the rate of earning a profit.

However, the lack of skilled and experienced employees are reasons for decreasing net

production of the company due to which it impacts negatively on sales volume in the current

year. With the aid of a strong management team and providing the best quality training,

employees could be trained perfectly. Based on that, Kellogg’s could be able to achieve a

leading position in the competitive market. However, the company could consider increasing

a large number of new entry as a major threat.

Environmental forces and trends

Environmental factors and trends such as green marketing initiative and high rate of

minerals and nutrients as well as usage of organic resources have forced Kellogg’s to take

strong action. Based on the view of Reganold & Wachter (2016), Government policy based

Strengths

•Strategic Acquisition

•Strong Brand Advertisement

•Large Market Share

Weaknesses

•Lack of Skill Employees

•Lack of innovation in product range

•Negative word to mouth message through product promotion.

Opportunitie

•Emerging market

•Large number of targeted customers having demand of cereal

Threats

•Local companies

•Increasing number of new entry

•Lack of following Corporate policy on daily basis

Principles of marketing

on avoiding plastics bags has changed the overall business process of the company due to

taking action regarding the way of improving packaging system.

Conclusion

Thus, it can be concluded that taking strategy regarding the use of social media is the

most significant aspects in the context of communicating with national and international

customers. Use of digital media aids in reviewing feedback of consumers on a daily basis

which helps in improving the quality of products and very price level.

Principles of marketing

Reference List

Bohari, A. M., Hin, C. W., & Fuad, N. (2017). The competitiveness of the halal food industry

in Malaysia: A SWOT-ICT analysis. Geografia-Malaysian Journal of Society and

Space, 9(1). 23-39. Retrieved on 25 February 2019 Retrieved from

http://ejournal.ukm.my/gmjss/article/viewFile/17805/5529

Gürel, E., & Tat, M. (2017). SWOT ANALYSIS: A THEORETICAL REVIEW. Journal of

International Social Research, 10(51), 34-69. Retrieved on 26 February 2019

Retrieved from

https://www.researchgate.net/profile/Emet_Guerel/publication/319367788_SWOT_A

NALYSIS_A_THEORETICAL_REVIEW/links/5a09f172a6fdcc2736de9e82/SWOT-

ANALYSIS-A-THEORETICAL-REVIEW.pdf

Kellogg’s. (2019), Kellogg’s. Retrieved on 25 February 2019. Retrieved from

https://www.kelloggs.com/en_US/home.html

Kellogg's to introduce 'traffic light' labels on most UK cereal packaging. (2019).

independent.co.uk. Retrieved on 27 February 2019. Retrieved from:

https://www.independent.co.uk/news/health/kelloggs-cereal-traffic-light-colour-code-

system-coco-pops-crunchy-nut-corn-flakes-a8657241.html

Kellogg's went from zero to 60 on digital thanks to 2 campaigns. (2019).

MARKETINGDIVE. Retrieved on 25 February. Retrieved from

https://www.marketingdive.com/news/kelloggs-went-from-zero-to-60-on-digital-

thanks-to-2-campaigns/522817/

Kotler.P.,(2008), Marketing Strategy, [6:14], Retrieved on 2nd March 2019. Retrieved from:

https://www.youtube.com/watch?v=bilOOPuAvTY&feature=youtu.be

NEWSROOM (2019). Kellogg’s. Retrieved on 28 February 2019. Retrieved from

http://newsroom.kelloggcompany.com/

Principles of marketing

Overview of Kellogs. (2019). Kellogg’s. Retrieved on 25 February 2019. Retrieved from

https://investor.kelloggs.com/CustomPage/Index?KeyGenPage=1073753430

Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis

based SWOT analysis. International Journal of Information Management, 44(3), 194-

203. Retrieved on 23 February 2019 Retrieved from

https://eprints.soton.ac.uk/394441/2/elsarticle-template.pdf

Reganold, J. P., & Wachter, J. M. (2016). Organic agriculture in the twenty-first

century. Nature plants, 2(2), 15-23. Retrieved on 24 February 2019. Retrieved from

http://www.agroecologia.net/wp-content/uploads/2016/02/Reganold-2016-Organic-

farming-in-XXI-Nature-Plants.pdf

Zarietnow. T., (2017), McDonald's: Analyzing the Marketing Environment. [4:16], Retrieved

on 2nd March 2019. Retrieved from: https://www.youtube.com/watch?v=RvOv5whZ-

a0#action=share

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