Dr ritu

New products from market research

Kelloggs

Introduction to Kelloggs

The worlds leading producer of breakfast cereals

Manufactures in 18 countries Products sold in more than 180 countries Supportive of health and nutrition for over 100 years Focuses on consumer needs Aims for sustainable growth by expanding its product portfolio

A market-orientated business

Market research is critical to making these decisions

Market research

Finds out what consumers think and want today and in the future

Helps businesses to make informed choices Aids forward planning

Adds value

Ensures new products will meet consumer needs Improves competitive advantage

Types of market research

Primary Gathered first hand for specific project, e.g. through interviews, focus groups, questionnaires Time-consuming and expensive but focused Secondary Existing data from published sources, e.g., market research reports, government statistics Cheaper and quicker to collect but less specific and open to competitors Qualitative Conveys opinions, feelings, attitudes Quantitative Provides hard numerical data for statistical analysis

New product development

Breakfast cereals is an established market

Little room to increase overall sales Kelloggs continues to strengthen its product portfolio

Product/brand extension is lower risk by trading on existing brand

New product development and launch is costly and high risk

Introduces new consumers to the brand Extends the life of the brand

Kelloggs market research process

Crunchy Nut Cornflakes is one of Kelloggs most important brands

Launched 1980; total sales value 68 million

To extend the brand, Kelloggs undertook market research

A four-stage process
1. 2. 3. 4.

Discovery Selecting the best idea Crafting the best idea into a product Using research to forecast sales

Order in which information is gathered is as important as the type of information

Discovery

Secondary market research provided data

Focus groups tested the prototypes

On market and innovation trends New products, flavours, foods from around the world

Reported opinions on texture, flavour etc Several ideas appealed

Kelloggs created new cereal prototypes based on these

Selection the idea

Most liked ideas from Discovery stage put on picture boards Boards shown to representative group of consumers

Rated ideas against a scale to identify which liked best and which least Gave indication of sales potential

Statistical data showed a Crunch Nut Bites idea was most appealing

Crafting the product

Qualitative data on the eating experience

Helped to explore texture and taste of recipe

Four alternative recipes produced

Crunchy Nut Bites prototype refined

Further focus groups tested new prototypes Quantitative data enabled Kelloggs to select the preferred option New pack design also tested with consumers

Forecasting sales

Final test in-home usage

How consumers interact with the product for the first time Questionnaire to evaluate opinions Measures how appealing the product is and how likely consumers will be to buy

Data used to construct sales forecast for years 1 & 2 in market

Allows budgets to be set Supply chain and production organised

Brand extension

Market research techniques used throughout the Kelloggs process Brand extension Crunchy Nut Clusters

Launched 2003; now with two varieties Enables the brand to reach a wider group of consumers Now worth 21 million in annual sales value