STRATEGIC MANAGEMENT TASK #1

KELLOGG’S CASE STUDY

It all began in Battle Creek Sanatorium, Michigan USA, in the 1870’s. Originally set up by the Will Keith Kellogg and Dr. John Harvey Kellogg brothers, the company was founded on a belief that “you are what you eat”. It took the brothers six years to come up with the “correct formula” and create a once wholesome and pleasant to eat breakfast food. They finally had the start up product they had desired for such a long time, the product that within time became the worlds most popular breakfast, the product we today all know as Kellogg’s Corn Flakes. It has been more than a decade since the product was introduced for the first time, however, it still remains the most highly rated, favored and preferred breakfast in the world.

The Kellogg Company was originally founded in 1906, in Battle Creek, Michigan. It began as a small business entity, employing 44 people, producing one single product. Today the company possesses production plants in 19 countries, markets its products in more than 180 countries, and employs approximately 32 000 people across the globe. Kellogg’s is currently the worlds leading producer of cereal and a leading producer of convenience foods. W.K. Kellogg’s original vision of health and nutrition for everyone continues to drive the company at the very top level.

        

Brands are all around us. We encounter them at work, at the shopping center, outdoors, even at home. A brand refers to a name, term, sign, symbol, design, major feature or a combination of them that aims to identify and differentiate the goods or services of a particular company or organization. It is important to note that the term branding does not limit itself to simply putting a label on a product. A brand serves to provide information and communicate a series of values to consumers.  It distinguishes a company and its products in terms of attributes and qualities from its competitors.  A strong brand identity can position a company above its competitors all by itself. That is why branding is often referred to as the foundation of marketing, an essential and inseparable part of the business strategy. Kellogg’s completely understand the importance of branding. They are aware that if managed properly a brand could be a company’s most valuable asset, creating loyalty and strong recognition among consumers, resulting in repeated purchasing on a regular basis. They are aware that the brand distinguishes the product from the competitor’s products, adding value to it, meaning that the decision of a consumer to buy is not purely determined by the price. Kellogg's have built a strong brand throughout the years, by primarily emphasizing on the quality and nutritional benefits of their products.  In addition, they have been adding elements of individual brand personality. In result, each product possesses unique individual characteristics. Last but not least, Kellogg’s has been strengthening their position through demonstrating great Corporate Responsibility. All together, that is what makes Kellogg’s a premium brand. A brand is considered premium when people believe it is worth the price. It is normally built upon both tangible and intangible attributes, like sensuality, rarity, confidence, authenticity, and of course, quality. Due to their complexity, managing a premium brand is a great challenge. For premium brands the brand image and identity is literally everything. Bad strategic decisions could harm or ruin the reputation of the brand. Kellogg’s have directed and harmonized all strategies towards and with their brand image, which has proved to be a winning approach.

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Living a healthy life recently became an extremely popular trend in modern society. The numbers of people seeking that type of lifestyle were dramatically increasing. The growing demand attracted Kellogg’s attention. They decided to promote the message “Get the Balance Right”, which was aiming to show consumers the benefits a balanced diet and exercise had. In support of their aim, Kellogg’s assigned several objectives, primarily focused on physical activities. The objectives were SMART – specific, measurable, achievable, relevant, and time-related. Kellogg’s had to develop a strategy and an action plan, designed to meet those aims and objectives.

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