Reference no: EM131706547

Background

Kellogg's is an American multinational food manufacturing company that sells cereal, cookies, crackers, waffles and other snack varieties. Kellogg's first began in 1898 when the W.K Kellogg and his brother Dr. John Harvey Kellogg failed their attempts to create granola bars. The brothers accidently flaked wheat berry during their experiments. WK. Kellogg kept experimenting until he flaked corn thus creating the infamous Kellogg's corn flakes.

With Kellogg's new creation of flake corn, W.K Kellogg launched a company name as Battle Creek Toasted Corn Flakes. He realized that for his product to expand, he would need advertising and promotion. The company spent a third of its working capital on an ad in Ladies Home Journal. From this early ad, Kellogg's corn flakes sales skyrocketed. In 1907, outputs had reach 2,900 cases day with a net profit for about a dollar a case.

However, in June of 1907, a fire destroyed the main production building of corn flakes. After the fire, W.K Kellogg bought out his brother's share of the company. Battle Creek Toasted Corn Flakes had been renamed to Kellogg's Toasted corn flakes. In 1922, Kellogg's Toasted corn flakes lost the trademark of toasted corn flakes as it no longer accurately described the company, thus becoming Kellogg's.
Kellogg's has been strategic of their marketing strategies. Kellogg's used television advertising in 1950 to attract the postwar baby boomers.

To appeal to the younger audience, Kellogg's introduced sugar into their breakfast cereal. This was when Tony the Tiger was introduced. With the introduction of Tony the Tiger, sales and profits doubled over the decade. Fast-forward to 21st century, with sales such as these, it would be no surprise to see Kellogg's doing so well today because of its foundations.

Unfortunately, Kellogg's shares have started to decline. In 2014, Kellogg's has reported as 31% third-quarter drop on their breakfast foods. This is a significant decrease for a company who had made such an impact on the world with their breakfast foods. For this project, we are going to focus on the marketing issues primarily for Kellogg's Cereal. We are going to examine the causes of their recent decline in sales.