Extending the product life cycle A Kellogg's case study
Page 5: Implementing the extension strategy for Nutri-Grain
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 benefits:
the healthy grains were soft rather than gritty
the eating experience is closer to the more indulgent foods that people could be eating (cakes and biscuits, for example)
The unique selling point, hence the focus of the brand, needed to be the 'soft bake'.
Researchers also found that a key part of the market was a group termed 'realistic snackers'. These are people who want to snack on healthy foods, but still crave a great tasting snack. The re-launched Nutri-Grain product needed to help this key group fulfil both of these desires.
Kellogg's decided to re-focus investment on the core products of Soft Bake Bars and Elevenses as these had maintained their growth (accounting for 61% of Soft Bake Bar sales). Three existing Soft Bake Bar products were improved, three new ranges introduced and poorly performing ranges (such as Minis) were withdrawn. New packaging was introduced to unify the brand image. An improved pricing structure for stores and supermarkets was developed.
The marketing mix
Using this information, the re-launch focused on the four parts of the marketing mix:
Product improvements to the recipe and a wider range of flavours, repositioning the brand as 'healthy and tasty', not a substitute for a missed breakfast
Promotion a new and clearer brand image to cover all the products in the range along with advertising and point-of-sale materials
Place better offers and materials to stores that sold the product
Price new price levels were agreed that did not rely on promotional pricing. This improved revenue for both Kellogg's and the stores
As a result Soft Bake Bar year-on-year sales went from a decline to substantial growth, with Elevenses sales increasing by almost 50%.
The Nutri-Grain brand achieved a retail sales growth rate of almost three times that of the market and most importantly, growth was maintained after the initial re-launch.