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Case study on kellogg


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the kellogg case study with solution

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Case study on kellogg

  1. 1. CASE STUDY ON KELLOGG’S Q1. Describe the purpose of Market Research? A. Market research is a specific area of marketing that informs businesses like Kellogg’s about the things consumers need, how best to design products to answer those needs and how to advertise those products to consumers. Market research goes beyond finding out what consumers are thinking today. It can identify what consumers might want in the future. In this way market research helps a business to make more informed choices. This reduces the risks for any new product development. It also increases the likelihood that products will be well received by consumers when they are launched. Many organizations are Market Oriented. This means that the whole organisation focuses on the needs of its consumers. It is therefore essential that it identifies and anticipates changing consumer needs before the development of new products. Market research adds value to businesses like Kellogg’s by identifying consumers’ needs. It helps Kellogg’s to plan ahead, for example, looking at what products or extensions it should develop and for whom. It focuses the business on the needs of its consumers. An organisation that does this can improve its competitive advantage. Gain a more detailed understanding of consumers’ needs – marketing research can help firms to discover consumers’ opinions on a huge range of issues, e.g., views on products’ prices, packaging, recent advertising campaigns Reduce the risk of product/business failure – there is no guarantee that any new idea will be a commercial success, but accurate and up-to-date information on the market can help a business make informed decisions, hopefully leading to products
  2. 2. that consumers want in sufficient numbers to achieve commercial success. Forecast future trends – marketing research can not only provide information regarding the current state of the market but it can also be used to anticipate future customer needs. Firms can then make the necessary adjustments to their product portfolios and levels of output in order to remain successful. Ad Tracking - periodic or continuous in-market research to monitor a brand's performance using measures such as brand awareness, brand preference, and product usage. (Young, 2005) Advertising Research - used to predict copy testing or track the efficacy of advertisements for any medium, measured by the ad's ability to get attention, communicate the message, build the brand's image, and motivate the consumer to purchase the product or service. (Young, 2005) Brand equity research - how favorably do consumers view the brand? Brand name testing - what do consumers feel about the names of the products? Commercial eye tracking research - examine advertisements, package designs, websites, etc by analyzing visual behavior of the consumer Concept testing - to test the acceptance of a concept by target consumers Coolhunting - to make observations and predictions in changes of new or existing cultural trends in areas such as fashion, music, films, television, youth culture and lifestyle
  3. 3. Buyer decision processes research - to determine what motivates people to buy and what decision-making process they use Q2. Explain the differences between the Primary research and Secondary research. A. Primary research consists of the collection of original primary data. It is often undertaken after the researcher has gained some insight into the issue by reviewing secondary research or by analyzing previously collected primary data. It can be accomplished through various methods, including questionnaires and telephone interviews in market research, or experiments and direct observations amongst others. B. Primary marketing research is collected for the first time. It is original and collected for a specific purpose, or to solve a specific problem. It is expensive, and time consuming, but is more focused than secondary research. There are many ways to conduct primary research. We consider some of them: Advantages: Addresses specific research issues as the researcher controls the search design to fit their needs Great control; not only does primary research enable the marketer to focus on specific subjects, it also enables the researcher to have a higher control over how the information is collected. Taking this into account, the researcher can decide on such requirements as size of project, time frame and goal. Disadvantages:
  4. 4. Compared to secondary research, primary data may be very expensive in preparing and carrying out the research. Costs can be incurred in producing the paper for questionnaires or the equipment for an experiment of some sort. In order to be done properly, primary data collection requires the development and execution of a research plan. It takes longer to undertake primary research than to acquire secondary data. By the time the research is complete it may be out of date. Low response rate has to be expected. Secondary research involves the summary of existing research rather than primary research. In most cases this means finding information from third-party sources such as marketing research reports, company websites, magazine articles, and other sources. But in actuality any information previously gathered, whether from sources external to the marketer or from internal sources, such as accessing material from previous market research carried out by the marketer’s organization, old sales reports, accounting records and many others, falls under the heading of secondary research. Advantages: Ease of Access. The use of secondary data has allowed researchers access to valuable information for little or no cost to acquire. Therefore, this information is much less expensive then if the researchers had to carry out the research themselves. In many cases, the originators of secondary research include details of how the information was collected. This may include
  5. 5. information detailing the procedures used in data collection and difficulties encountered in conducting the primary research. Disadvantages: Quality of Research;the researcher needs to take sufficient steps to critically evaluate the validity and reliability of the information provided. Incomplete Information;In many cases, researchers find information that appears valuable and promising. The researcher may not get the full version of the research to gain the full value of the study. Not Timely;When using secondary research, one must exercise caution when using dated information from the past. With companies competing in fast changing industries, an out-of-date research reports many have little or no relevance to the current market situation. Q3. Analyse why an organisation like Kellogg’s would use both qualitative and quantitative data. A. Primary market data may involve qualitative research or quantitative research. Both types of data are valuable in understanding what consumers want or need. Qualitative data is concerned more about opinions, feelings and attitudes. Quantitative data is in numerical form and is usually gathered from a large sample of respondents. Qualitative research establishes a conversation with consumers. It prompts consumer reaction to, for example, a new product idea and helps researchers understand what they think of it, how it makes them feel, why they find it interesting or not. Quantitative research may use questionnaires administered to large numbers of respondents. This allows statistical analysis, such as the calculation of a mean score or percentages. It aims to give a
  6. 6. representative picture of what consumers think of a new product idea or a new (real)food. As this research focuses on development of Crunchy Nut Bites, a more recent extension to the Crunchy nuts brand.It was important for Kellogg’s to conduct both Qualitative and Quantitative research because by conducting qualitative research it was able to know the demands of the consumer in terms of potential flavours and textures. The results of the qualitative research allowed the Kellogg’s to discard some ideas. Other ideas were appealing to consumers but needed refining and further development. Quantitative research was also important. As Kellogg’s came out with a number of products to produce, these products were shown to a number of large group of representative consumers in a quantitative survey. They were asked to rate those ideas against a number of scales, so Kellogg’s could identify which product ideas consumers liked best or disliked. Q4. Evaluate why market research can reduce the risks of a new product launch. A. Market research is a specific area of marketing that informs businesses about the things consumers need, how best to design products to answer those needs and how to advertise those products to consumers. Market research goes beyond finding out what consumers are thinking today. It can identify what consumers might want in the future. In this way market research helps a business to make more informed choices. This reduces the risks for any new product development. Market research enables the business to explore different types of products that consumers may like. Screen those ideas by collecting quantitative information from the consumers about their preferences. Testing the product in the market and conducting the research on the success of the product and finally launching the product in the market. A complete research of the market before launching a product reduces the risks of failure of the new product. Market research not only tells
  7. 7. todays needs of the consumers but also forecasts what will be the situation in the future. Product development is the lifeblood of any business, yet it is one of the most complex, costly, and risky endeavors your company will face. With competition fierce and consumer understanding illusive, product failure rates are notoriously high. So, the question becomes; is there a way to increase the odds for product success and/or reduce the risk of an unsuccessful launch. The answer is yes, by utilizing marketing research. At the heart of any product success is a true understanding of consumer wants and needs, and how your new product could fill those needs in a meaningful way. How can you achieve this understanding? Follow these four steps. such as qualitative research, category assessment, and segmentation to understand the competitive landscape, why consumers buy certain products, how they use those products, and what unmet needs they may have. You then apply that insight in step two, concept development. Here you use brainstorming, concept testing, and volumetric forecasting to generate new product ideas, identify areas for improvement, and determine which products are most promising. Building on that knowledge, you move to step three, product development. In this step marketing research tools such as product testing, packaging research, pricing research, and claim substantiation help you understand how your product performs in real-world conditions, how it compares to competing products, and what competitive claims you can make. After product launch, you move to step four, product management. Here you use tools such
  8. 8. as customer satisfaction research, tracking research, and promotion assessment to determine key metrics related to product awareness, competitor comparisons, consumer usage, and optimum marketing approaches. While there’s no sure-fire way to ensure product success, marketing research is crucial in providing the consumer understanding and market awareness necessary to make the best strategic decisions during new product development. Without that understanding, product failure isn’t just a risk, it’s almost a guarantee