Kellogg’s Brand Extension and Marketing Strategy Analysis

Introduction

Marketing is a procedure of communicating product and services to wide range of audience. The present study will state about the brand extension of Kellogg’s that emphasis on including granola bars and chocolaty in its product range. It is a American company, producing food items and snacks, its headquartered at Chicago. The aim of the report is to evaluate the target market for the new brand extension. The market size of Kellogg`s is $25.44 Billion all over the world in 2024 and rank at a 75^th position as a valuable company globally (Kellogg’s, 2024). In 2023, the market share of the business was $ 13.1 Billion U.S. dollars. Its sales increase from 2.5% from previous year.

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Secondary Research

The market for Kollog`s brand is estimated to reach $ 13.1 billion in 2023. Kellogg`s brand to grab the attention of the targeted audience launched advertising campaign namely Tongue-in-check. It aids in promote its products of granola bar as well as chocolaty. In addition, the company uses sponsorship by organizing event to promote its new products. It promote it product via company`s official website.

Growth strategy

Kellogg`s make use of product diversification strategy of Ansoff matrix. It means company expand its product range by including chocolaty and granola bar, it assist the company rto reach to new customers and help in increase market share effectively (Van Kranenburg, Hagedoorn and Pennings, 2023). This strategy leads to aids in increase company sales and profitability.

Target market

Kellogg is a nutritious, delicious product for the snack time. To promote the product, Kellogg`s focus on the target audience that include children, health conscious people and families as well as youth (Pinto et al, 2021). Company attracts the health conscious people as the product has high nutition and provides energy as a result satisfies their needs. To target the audience for Kellogg product company will focus on the demographic factors including age, income and gender. The company focus on the Gen X, Millennial and Generation Alpha as well as include males and female with high , middle and lower level income group people.

PESTLE analysis

Pestle analysis refers to the factors that remain outside the business but impacts company operations directly and indirectly.

• Political factors: Kellogg is a multinational company it impacts by the rules, regulations and policies of each country. For example, the increase in the price due to government policies leads to increase the cost of raw material which leads to increase the cost of production as a result the company profitability hampers.
• Economical factor: It includes factors such as rate of interest, inflation, unemployment rate, economy growth and so more. Increasing inflation, recession in economy becomes the reason for increasing cost of production (Kellogg`s PESTLE Analysis, 2024). Also, it leads to decline the purchasing power of customer as a result demand and sales declines which reduce company sales and profitability.
• Social factor: It consist factor sic as taste and preference, customer lifestyle as well as demographic aspect. The factor impacts company ability of brand extension. To prevent the complexity it is essential for meet culinary taste, demand and preference of the customers (D'Ascenzo et al, 2022).
• Technological factor: Kellogg`s make use of emerging technologies like machine learning and artificial intelligence, this assist to enhance its supply chain. This leads to assist the business to maintain the stock of products in appropriate manner. On the other hand, due to the risk od cyber threats, it has to face some issue regarding brand extension of new product.
• Legal factor: Company has to follow the laws related to the food standard as well as safety, the non-compliance of the laws leads to negatively impacts the company brand extension. It make difficult to retain customer and brand image.
• Environmental factor: In recent time, environmental concerns increase rapidly. Adoption of sustainable practices such as eco-friendly packaging, use of renewable sources of energy, recycling policy aids in overcome the issues arise at the time of the brand extension.

Thus, the factors need to be considered for the brand extension of Kellogg.

Competitive Analysis

The evaluation aids the Kellogg`s brand to identify its competitors within a strategy to make its product diversification strategy successful. The main competitor of the Kellogg is Nestle, the competitive analysis is as under:

Particular	Kellogg`s	Nestle
Product Portfolio	Offers granola bars and chocolaty	It offers dairy product, coffee item and so more
Marketing Strategy	It use campaigns and sponsorship to market product (Czinkota et al, 2021)	Collaborative strategy with chefs for product promotion, use digital marketing strategies too.
Growth Strategy	Product diversification	Product-mix startegy

The Result

It is identified the Kellogg has a opportunity to expand its product range to grab the attention of wide range of customers as well as increase the profitability of the business. The market share of $ 13.1 Billion dollar as well as market size of $ 25.44 billion dollar explains that company has a prospect for develop and grow its product range more with the help of product diversification strategy. This leads to serve the needs of the health conscious customers, as granola bars and chocolaty are nutritious and full of energy. It is evaluated that Kellogg have a effective marketing strategies as a result its Tongue-in-check ad-campaign aids in promote and communicate the new products to target market audience mainly children, their parents and health-centered people. With the help of external environment, it is analyzed that current customer trend is that they prefer health conscious products as a result Kellogg`s new product range is effective for satisfy customer need and company profitability. Also, for the new products company will use eco-friendly packaging with attractive colours to grab customer attention.

Conclusion

As expressed, marketing is important to promote the product. The present study based on marketing strategy for the Kellogg`s as expand its product range by including chocolaty and granola bars with the help of product diversification strategy. The report stated the market share and size as well as outline that company with the help of sponsorship and Tongue-in-check ad-campaign promote its new products. It highlight target customer of product including children and their parents. The pestle analysis included several factors and explains social, legal and environmental factors. It evaluated competitiveness within the industry with its competitor Nestle.

References

Books and Journals

Czinkota, M.R., Kotabe, M., Vrontis, D., Shams, S.R., Czinkota, M.R., Kotabe, M., Vrontis, D. and Shams, S.R., 2021. Designing effective promotion and advertising strategies. Marketing Management: Past, Present and Future, pp.553-606.

D'Ascenzo, S., Scerrati, E., Villani, C., Galatolo, R., Lugli, L. and Nicoletti, R., 2022. Does social distancing affect the processing of brand logos?. Brain and Behavior, 12(3), p.e2501.

Pinto, A., Pauzé, E., Roy-Gagnon, M.H., Dubois, L. and Potvin Kent, M., 2021. The targeting of preschoolers, children, adolescents and adults by the Canadian food and beverage industry on television: a cross-sectional study. Applied Physiology, Nutrition, and Metabolism, 46(6), pp.651-660.

Van Kranenburg, H., Hagedoorn, J. and Pennings, J., 2023. Measurement of international and product diversification in the publishing industry. In Diversity and Diversification (pp. 87-104). Routledge.

Online

Kellogg`s PESTLE Analysis. 2024.Online. Available through: < https://www.swotandpestle.com/kellogg-company/>

Kellogg’s.2024. Our Values. Online. Available through: <https://www.kelloggs.com/en-in/who-we-are/our-values.html>.