1. Detailed competition study

This and the next steps are belonging to the justification why the product has to be developed.

To learn more about my competitors, the colleagues from the marketing are collecting as many information as possible by: collecting competitive literature and advertising, asking salespeople about competitor trend in new products, asking suppliers about competitor's capacities and equipment (do they have the resources for a quick launch of me-too-products).

 

The competitor study has given the following information:

Despite of all the many products in the market, there are mainly four big competitors: Kellogg, Cereal Partners, Weetabix and Quaker. The following table shows their share of the total market:

 

	1991	1991	1993	1993	1995 (est)	1995 (est)	% Change
	000 t	%	000 t	%	000 t	%	1991-95
Kellogg	172.0	46.6	178.9	43.3	188.2	42.5	+9.4
Weetabix	57.2	14.8	58.1	14.1	61.4	13.9	+7.3
Cereal Partners	23.1	6.0	30.7	7.4	36.5	8.2	+58.0
Quaker	24.9	6.4	25.1	6.1	28.2	6.4	+13.3
Other brands	23.5	6.1	28.3	6.9	31.3	7.0	+33.2
Own label	85.2	22.1	92.0	22.3	97.4	22.0	+14.3
Total	386.0	100.0	413.0	100.0	443.0	100.0	+14.8

Picture -1 Source : MINTEL

 

Kellogg is market leader with a declining share of 42,5% in 1995 and an average growth of 9,4 %.

 

 

Weetabix is second with a share of 13,9% and an average growth of 7,3%.

While the other three companies are owned by multinationals, Weetabix is an independent British Company. It received a turnover of £203 million in 1993. The main business of Weetabix is the breakfast cereal market. The second well-known label is called 'Alpen'- a muesli mix. With this label they could be able to come up with a similar hearty vegetable mix. The company is successful in the hot cereal market, too. This segment could be (maybe) an additional market for our vegetable muesli mix !

 

Because of the company is not driven by multinationals, there are not so much resources of capital to boost production. In addition, the slightly conservative management is not willed to come up with such new products, when they are not proved in the market.

A tremendous average growth have the Cereal Partners brands with 58% and a share of 8,2%.

In the 1990s Nestlé and General Mills made a joint-venture. The company called 'Cereal Partners' was formed. The company General Mills has a huge variety of breakfast cereal brands (and is second in the US cereal market), such as Nestlé, too. Together they want to win shares in the competition against the market leader Kellogg's. The new company acts under the well known name from Nestlé. The customer knows Nestlé as a producer of high quality brands, too which is very important in this premium price market.

 

Their products are traditional cereal products like Shredded Wheat (100 years old), Shreddies, Frosted Shreddies as well as modern breakfast cereal products imported from the US like: Crisp Rice, Lucky Charms, Golden Grahams. The newer brands are Multi cheerios.

 

Especially Nestlé is a strong competitor with a similar image of quality. They have the resources to come up with a me-too product. Moreover they are willing to risk something for new slices of market share. Cereal partners have a good advertising and distribution system (like Kellogg!). Kellogg has a more bigger market share and to be the first (with hearty cereals) means for Nestlé: gain shares from Kellogg.

 

The fourth, Quaker has a big average increase, too and a share of 6,4%.

Quaker is an US owned company and in business for more than a century. It's businesses are pet foods, snacks, pasta and breakfast cereals. Quaker is the leader in the hot-cereal market with a share of more than 50%.

Some of its brands are: Quaker Oats, Sugar Puffs, Puffed wheat, Harvest Crunch, Oat Krunchies. 'Feast of Flakes' and 'Wholegrain Feast' are the newer products of Quaker Oats as a response to the growing Health care efforts of the consumers.

They could be able to come up with a me-too product, too.

 

The own label brands have a relatively big share. That's because of their low price compared to the market leaders.

 

The other brands have a relatively high growth, maybe because of innovative products. With them they want to enter the market. Like e.g. Jordans, they mainly work in the health-food segment or in own label production.

Even one of this companies would try to launch a me-too product. They have the possibility to set their price under our price.Þ We must ensure that the consumer wants to buy our products in spite of the price Þ Marketing, brand's image.

 

2. 'Detailed' Market Study

· cold ready to eat cereals (e.g. cornflakes, muesli)

· hot oat products (e.g. porridge)