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
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)
30 companies = combined annual revenues $12 Billion
5 companies = 80% of Sales ( Monopoly?)
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
Branding Strategies: From Creation to ExtinctionOutlineI. Introduction II. Choosing the Brand NameA. Take a Stand. Narrow the FocusC. Beware of Brand Inflation. Expand the Business III. Advertising the Brand NameA. Logo Sizes. Attention Getting 1. Research 2. Mention the Product 3. Show the Product 4. Show the Name and Logo 5. Call Attention to the Logo 6. Headline Company Names 7. Use Theme Line ...
Consumption amt. varied greatly depending on culture
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
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”
strong penetration in most national markets
but: differences in product profiles & marketing strategies
Increasing Price & Profit Pressure
Market growth = interest in health
Cereal: add fruits
2003: Kelloggs-> Special K. (freeze dried strawberries)
UC: tested numerous products. -> plan to launch Bluberry
Plan to launch Eu. Productvmarket strategy = help cut the PD & marketing costs by 10~15% over 3 yrs EU. Tastes are converging.