Kellogg 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 about the things consumers need, how best to design products to answer those needs and how to advertise those products to consumers. Kellogg launched Crunchy Nut Cornflakes in the I-J in 1980. Since then, it has become one of the most important brands for Kellogg with a sales value of EYE million (according to IR 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 This brand extension is now worth EYE million in annual value sales (according to IR sales data). Kellogg is market orientated. This means that the whole organization 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 by identifying consumers’ needs.
It helps Kellogg 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 organization that does this can improve its competitive advantage. Kellogg used market research throughout the whole development process for a new product for the Crunchy Nut range, from the initial idea to the planning of production and livery. During the earlier stages of research, consumer responses helped Kellogg”s to explore lots of different ideas in an open way.
It then crafted some ideas in more detail and screened those ideas with consumers to select the one which seemed to have the highest appeal. The idea became real by testing several recipes, refining the food prototype selected and developing the design for packaging. Once the food and packaging elements for the new product had been developed, the whole product was tested with consumers to ensure it met their needs. The data also provided a sales recast to predict the first two years of sales of Crunchy Nut Bites. Crunchy Nut Bites has extended the Crunchy Nut family of products.
In doing so it has brought new consumers to the brand and increased its consumption. Kellogg launched Crunchy Nut Bites in September 2008. Sales data shows it was one of the best performing brands to launch in the breakfast cereal category with a sales value of E. 9 million in its first full year of sales (IR sales data). This illustrates that the detailed market research undertaken during the planning stages was valuable. It helped to ensure hat the product extension hit the spot with consumers straight away.
Research undertaken by Kellogg as part of the 2005 Family Health Study emphasized that a balanced diet as well as regular exercise were essential for good all round health and wellbeing. Kellogg is demonstrating good corporate responsibility by promoting and communicating this message whenever it can and by investing money in the appropriate activities. This was the broad aim. To achieve this aim, Kellogg set out measurable objectives. It developed a business strategy that engaged Kellogg in a series of activities and relationships with other organizations.
