Kellogg: Political, Economic, Technological and Social Factors

Executive summary

Marketing strategies include access to distribution channels, the ability to achieve economic scale, technological processes, and access to resources. Monitoring the market trends is also essential as it will help the company in sourcing new opportunities and threats. Finding the distribution channels for Kellogg via the giving retailers negotiating power as a way of capturing more margin. Internal environment refers to the analysis of the internal forces which a company has control of. In this case, SWOT analysis is used as a strategy of analyzing the internal environment.

SWOT is an acronym for Strengths, Weakness, Opportunities, and Threats to the external environment. The trends and new channels to be developed can offer the company opportunity to have a competitive advantage. Some of the existing distribution channels can be scanned to know their essence for clients. Intuitively, the use of porter's five market forces is a sure way of entering the market for Kellogg cereal. PESTL analysis shall be used to analyze the macro market. PESTEL is an acronym which stands for Political, Economic, Social, and Legal factors.

Growth shall be studied via demographic info and sales info since they are the key drivers of growth in the market. Drawing a product diffusion curve can also be a good tool as such to study the adoption of similar cereals in the market. Eventually, the maturity and decline lifer stages shall be reached via pressure due to competition in the market, limited brand loyalty, the emergence of similar products, inadequate or lack of market drivers, and saturation in the market.

Marketing Environment

Pedagogically, climate changes have affected the way food has been produced globally, especially in the UK. These effects have been due to industrialization which has taken over all the whole world. The effects have led to food shortages and foods which are contaminated. Cases of food poisoning have been often from the GMO (Genetic Modifying Organizations) to cereal boards which produce cereals locally. Kellogg’s New cereal has 3 in one punch for healthy living. The UK is one nation which has enjoyed stability in peace over the last 50 years. The economy in the country has been strong ever since and it is one of the leading traders among the EU nations. The UK has a population of over 500 million and the country is in dire need of cereals both for breakfast as well as other meals. There is a need of finding the key success factors in the marketing of the new Kellogg's cereal in the UK. These include the factors which are necessary for Kellogg to achieve the set objectives.

Basically, the marketing environment consists of a set of factors which act to control the performance of an organization or a company within its target market. There are two main environments in the market environment which consist of the microenvironment and macro environment. The microenvironment is the internal environment of the company and can be controlled while the macro environment refers to the external environment which the company can not control. In this case, the macro environment of Kellogg cereal includes the government forces, technological impacts, legal impacts, economic impacts, and social impacts.

On the other hand, the Kellogg cereal internal market includes the: the company itself and all the departments. Market analysis of Kellogg cereal will, however, be based on the macro elements such as the size of the market, suppliers, customer relations management (CRM), the main competitors, and the economical stability of the UK at large.

The Micro-Environment

Internal environment refers to the analysis of the internal forces which a company has control of. In this case, SWOT analysis is used as a strategy of analyzing the internal environment. SWOT is an acronym for Strengths, Weakness, Opportunities, and Threats to the external environment.

Strengths

Kellogg cereals have the following strengths: Variety of choices, the brand offers a variety of choices for different market segmentation.

Opportunities: Entering the high GDD market

Weakness: low client turnout due to competition,

Threats: saturation of the current market. Due to many cereals in the market

The macro-Environment

PESTL analysis shall be used to analyze the macro market. PESTEL is an acronym which stands for Political, Economic, Social, and Legal factors.

Political Factors

Political factors are mainly on the degree in which government has an influence on the economy concerning the market. This involves the taxation rates and duty. This also includes the stability of the political system in any given nation. The stability basically attracts investors who invest their money in a country without fear of chaos. Intuitively people will fear investing in nations which have polarized security Rao It has to do with the rate of corruption, tax policy, labor laws, environmental laws, trade restrictions, and tax policy. In addition, a government may have an intense impact on the education system of a given nation, health regulations, and infrastructure.

The government of Albania has separation of powers as the main principle which organizes the government. The country is also a member of the United Nations (UN), NATO, OSCE, Council of Europe (CoE), and UNESCO. These organizations are critical in trade and business since they form unions which allow easy transaction as well as ease of movement of goods from one member state to the other. Consequently, the formation of FTA and AEOs is easy and there are benefits when one invests in Albania.

Economic Factors

The economy of the UK has been stable for the last 50 years despite the recent Brexit issues. However, the country reportedly has ways of making stabilized AEOs and WTO with other willing nations. The country is highly industrialized and a leading sports country with the famous English premier league. However, as at the start of 2018, the country had economic tantrums which were caused by uncontrollable weather conditions. With improvement in the weather, the economy has picked up well. The financial crisis is one of the worst experienced in the UK since the 1920s and it took the UK up to 2013 to reach the size in which it was economy-wise.

The GDP has however been slower than before. It took the country until the second quarter of the financial year 2015/2016 for the GDP to return to its normal place as the pre-recession level. It has however risen to more than 3% higher than the pre-crisis peak. The country has a low unemployment rate of 4.1%. UK has maintained a low unemployment rate historically which has played a crucial role in boosting the economy of the UK. The initial success in low unemployment rates was due to part-timers as well as self-employed but apparently, it has grown to include all full-time employment levels. However, following the depreciation of the Sterling pond, wages have started to fall due to the Brexit vote which has directly swept consumer prices as well as the nominal wage which has remained down ever since.

UK has the highest GDP globally and second after Germany. Has a large population which allows small markets to gain margin profits. The economy is also diversified with large public and private sectors. Basically, the market is free and the rate of foreign investors. However, the flip side of the economy is that it has developed slowly to recover from 2008/2009 from the economic recession. There has also been a lot of money spent in providing free public services as well as financial aid to all including migrants.

Technological Factors in the UK

The recent technology has a profound impact on transactions of business as well as industries. The UK is a techno nation and has taken great steps in phase with the current technology. Apparently digital has taken over every aspect of life in the UK from the production of goods to selling. Supply and purchase have also been included as an online business and therefore any company willing to join the market has to be prepared to make use of digital. However, digital improvement is for the good of the company as it can increase the size of production as well as the supply chain.

Fact because the UK is a More Economically Developed Country (MEDC), it needs to have good technology but the reverse is true for this. Some of the technological factors including technology include: innovation skills quality, Expertise in science and IT, there are effective laws on the basis of intellectual property, and the existence of internal competition which stimulate growth. However, the flip side of technology is that there is slow growth in technological development when compared to other nations such as the US.

Social Factors

The social standards of the UK are very high and have led to better all-round status. These up to standards favor the growth of all businesses and entrepreneurship. The advantages of the social status of the UK are that there are many free public services provided by the national health service, the country is densely populated with a population of 64 million inhabitants which can provide a good market for goods, there are high living standards and open to migration which give birth to the cosmopolitan environment having close to 1 out of 8 residents is born abroad which brings large and cheap manpower. The limitations of the social factors are that it has led to a high dependency ratio since there are free services from the government. There are also social unrest in regard to migration and ethnic groups. This has led to a multicultural rise. There have been ever-increasing costs of further education.

Marketing Strategy

This section shall introduce the marketing strategy intended to market Kellogg cereal in the UK environment. The strategies to be employed include the marketing mix strategy (4Ps), porter 5 forces, segmentation and targeting, and positioning the porter five strategies to be analyzed to include: Buyer power, Supplier power, barriers to entry, rivalry among firms in existence, and threat of substitute products. Consequently, the cost structure of Kellogg's firm is important in identifying success factors. This shall employ the porter’s value to decide where value shall be added and for cutting down the cost. The market size is also essential via the use of government data, customer surveys, trade associations, and financial data from the key players. This shall be done via analyzing the size of the UK market as well as the import and export of cereals to know the weight of competition in the market. Intuitively, the market growth of the UK can be useful in predicting the success of Kellogg cereal.

Marketing Objectives

The current study shall be guided by the following marketing objectives

• To investigate the factors leading to high profit margins within the UK market environment.
• To examine the key success factors in the establishment of Kellogg cereal within the competitive market.
• To investigate the barriers to entry in the UK market
• To investigate on supply power and buyer power in the UK market
• To study the channel power structure in determining brand equity
• To evaluate the industry cost structure.

Market segmentation

Based on the competitive nature of cereal companies, Kellogg’s breakfast cereal segmentation shall be based on the following factors:

1. Kids cereals
2. Teen market segmentation for cereals
3. Adult market segmentation

Kids Cereals

Cereals are not just about taste but the appearance or the appeal on many individuals. The market has offered numerous shapes and appearances of cereals. This segmentation offers cereals which have a high concentration of sugar like marshmallow treats with different prizes and two sides in. basically most of these factors match with kids. Basically, this segment does not put more concerns on taste but the color of the box or the prize thought.

Teen Market Segmentation

As little children grow up, they realize the need of healthy eating habits. They are not concerned on the sugar but rather the package of the price. The price now does not matter but health is the first choice. The teen market segment seems not to be concentrated on sugar but on fruit with less artificial sugars as well as the coloring and on the favor as well.

Adult Segmentation

This segmentation is more focused on health matters in the current environment. So much emphasis on health has led to the manufacturing of cereals which focus on health. Basically, cereals for adults have high protein, high fiber, low calories as well as natural. The artificial flavors, as well as the marshmallow, are not that important in this segment but the taste is important. In this case all adults are aware that the box of cereal does not matter a lot.

Market Mix

The marketing mix to be applied in the marketing of Kellogg breakfast cereal is the 4P strategy. The 4P strategy call Place, Price, Promotion, and Product.

Product

Kellogg cereal is involved in the selling of breakfast cereals. The cereals come in different variations depending on the targeted market. Kellogg's cereal offer cereals to kids, teens, and adults. Each of the segments has different variations due to the choices of the chosen segment. The products also have different flavors and take ranging from creamy, sugary, and marshmallow. Most clients want products which are healthy due to the current climate changes and the increase in heart-related diseases. In that case, Kellogg has embarked in manufacturing breakfast cereals which are also less sugary to reduce the levels of blood pressure and diabetes in the society. The brand shall be Kellogg cereals.

Place

Kellogg cereals shall occupy the big UK market which has a stable economy and from the dense population, the Brand shall sustain its loyalty via the use of CRB. From the fact that the UK has the most stable GDP in the world, Kellogg cereals seem to have chosen the place to be. The chosen place has to march with the price and in this case, the current product has chosen the UK since it is one of the places with a vast population and high GDP.

Price

The pricing technique for Kellogg cereals. The price is based on the segmentation of the cereals. Basically, the price rise across the curve for kids, teens, and adults. The price is based on health factors and packaging factors. Teen cereals are usually packed in packs similar to tetra packs for preservation. However, sugar is one way of preservation which shall be highly utilized and so the cereals with high sugar content shall be priced high. However, the price shall be slightly higher than the competitors in the market since quality has to be ensured and hence raising the price.

Promotion

The promotion of the product shall be done on digital platforms basing the fact that digital promotion can reach many clients at a very short time. Having PR on the internet basically using the social media platforms such as Facebook, Twitter, YouTube, and WhatsApp the product aims to break even the current UK market. Televisions shall also be employed as a strategy for promotion since they are watched by all segmentation groups aligned in this market analysis. Promotions can also be launched via benchmarking which shall as well be a way of learning more from other companies. Having or attending meetings scheduled overseas or locally can highly promote the product.

Monitoring and evaluation

Once the brand is in the market, it will be essential to monitor the faring of Kellogg cereal in the market. Monitoring of the product shall be based on regular surveys of the visual materials used in marketing such as YouTube, and Facebook to compare the number of likes and views. Having a personnel power view of the number of likes can be used as an evaluation model. Consequently, consumer and supply can as well be used as a model of monitoring and evaluation. Obtaining user feedback on an often basis and updating the style guide as well as the brand guidelines. This shall be used as proof of whether the guidelines are clear on the users. Also, electronic communication reviews are a way of gaining client loyalty ensuring friendliness and compliance to the design and official guidelines. Having mystery shopping in the key sites, sitting in and presentations, as well as other spot checks, can be used as a way of promoting while evaluating the faring of the brand.

Intuitively assessing other forms of information from blogs, tweets, and Instagram pictures can as well give a clue on the perception such as reviews based on communications and analysis of media coverage.

Conclusively, Basically, the marketing environment consists of a set of factors which act to control the performance of an organization or a company within its target market. There are two main environments in the market environment which consist of the microenvironment and macro environment. The microenvironment is the internal environment of the company and can be controlled while the macro environment refers to the external environment which the company cannot control. In this case, the macro environment of Kellogg cereal includes the government forces, technological impacts, legal impacts, economic impacts, and social impacts.

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