United Cereal: Breakfast Cereal Pioneer:
2010: 100 BDay
Originially: packaged cracked wheat, rolled wheats, malt flakes Diversified: snack foods, diary products, drinks, beverages, frozen foods, and baked goods. Business= 9 Billion (cereal =1/3 x 9 = 3 billion.
UC’s Corporate Values, Policies, Practices.:
Commitment, Diligence, Loyalty
The UC Way – processes & Practices
Listen to the Customers
Spot the Trend, Make the Market
Honoring the past, while embracing the future
KSF:
R&D- more products & patents than any other competitor
“Brand Management” System allowing brand managers leadership of cross functional teams reduced lateral communication, strong vertical communication
The Breakfast Cereal Market
Cereal Industry- $21billion (2009)
U.S:
30 companies = combined annual revenues $12 Billion
5 companies = 80% of Sales ( Monopoly?)
Types: Hot
Ready to eat = 90% of sales in US & EU
Competitive. Much Advertising
Advertising = >10% revenues.
Company Size = advantages in purchasing, distribution, marketing. New
product intro= expensice.
Brand extension- cheaper.
UC’s European Operations
Entered European market in 1952 ( by aqusition)
Became 20%of its sales ( 2009)
EU. Industry & Competitive Strategy
2010 = $7Billion market
Consumption amt. varied greatly depending on culture
The Business plan on Segmentation of Cereal Market within Singapore
Introduction Hot breakfast cereals refer to cereal grains that had to be soaked or boiled to be softened and edible. Pre-prepared cereal that is edible on its own or in milk is also known as Ready-to-eat cereal. Within Singapore itself, breakfast cereal are generally seen as a nutritious form breakfast that appeals more to the younger generation and children who are seemingly more receptive to ...
Distribution channels also varied greatly
Supermarkets, hypermarkets – 80% of sales in Germany. 37% in France. 17%- Italy. Competitors:
1st. Kelloggs = 26%.
Used vol. to decrease costs
Establish & maintain shelf space
2nd= UC = 20%share
3rd = JV (Nestle + GM) = Cereal Partners = 17%.
Brand ex: Cheerios, Shredded Wheat
Leverage Nestle’s tech expertise & European relations to compete. 4th = Weetabix = 7%
relied on strong branding & promotions
hold niche market positions
targeted price promotions
Rest= 30%
UC’s EU Strategy & Organization
Due to major differences, UC established national subsidiaries in EU. lead by Country Manager ( CM)
made & adapted product, advertising & marketing decisions
had to conform to “UC WAY”
** Results:
strong penetration in most national markets
but: differences in product profiles & marketing strategies
Increasing Price & Profit Pressure
Increasing competitions
Market growth = interest in health
Cereal: add fruits
French Opportunity
2003: Kelloggs-> Special K. (freeze dried strawberries)
UC: tested numerous products. -> plan to launch Bluberry
European Debate:
Plan to launch Eu. Productvmarket strategy = help cut the PD & marketing costs by 10~15% over 3 yrs EU. Tastes are converging.
