Extending the product life cycle
A Kellogg's case study

Page 1: Introduction

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Businesses need to set themselves clear aims and objectives if they are going to succeed. The Kellogg Company is the world's leading producer of breakfast cereals and convenience foods, such as cereal bars, and aims to maintain that position.  In 2006, Kellogg's had total worldwide sales of almost $11 billion (£5.5 billion).  In 2007, it was Britain's biggest selling grocery...
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Page 2: The product life cycle

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Each product has its own life cycle. It will be 'born', it will 'develop', it will 'grow old' and, eventually, it will 'die'. Some products, like Kellogg's Corn Flakes, have retained their market position for a long time. Others may have their success undermined by falling market share or by competitors. The product life cycle shows how sales of a product change over time. The five typical...
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Page 3: Strategic use of the product life cycle

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When a company recognises that a product has gone into decline or is not performing as well as it should, it has to decide what to do. The decision needs to be made within the context of the overall aims of the business. Strategically, Kellogg's had a strong position in the market for both healthy foods and convenience foods. Nutri-Grain fitted well with its main aims and objectives and...
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Page 4: Extending the Nutri-Grain cycle - identifying the problem

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Kellogg's had to decide whether the problem with Nutri-Grain was the market, the product or both. The market had grown by over 15% and competitors' market share had increased whilst Nutri-Grain sales in 2003 had declined. The market in terms of customer tastes had also changed more people missed breakfast and therefore there was an increased need for such a snack product. Extension...
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Page 5: Implementing the extension strategy for Nutri-Grain

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Having recognised the problems, Kellogg's then developed solutions to re-brand and re-launch the product in 2005. Fundamental to the re-launch was the renewal of the brand image.  Kellogg's looked at the core features that made the brand different and modelled the new brand image on these. Nutri-Grain is unique as it is the only product of this kind that is baked. This provided two...
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Page 6: Conclusion

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Successful businesses use all the tools at their disposal to stay at the top of their chosen market. Kellogg's was able to use a number of business tools in order to successfully re-launch the Nutri-Grain brand. These tools included the product life cycle, Ansoff”s matrix and the marketing mix. Such tools are useful when used properly. Kellogg's was able to see that although...
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    This case study shows how Kellogg recognised that the Nutri-Grain brand was losing market share. It used business tools to re-launch the brand and return it to growth in its market.

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