The following package has been prepared by __________ ad agency. The contents held within are as listed here: executive summary, situational analysis, objectives of our communications plan, budgeting, overall strategy, creative execution, media execution, and an evaluation. With this information Kellogg’s can effectively raise awareness and trial of their new product Krave in the Canadian market.
Brock Stuart
Janice Annett
Maya Cieszynska
Shree Govindarajan
Sid Tetz
Ph: 1 (780) 679 – 2989 10023 – Jasper Avenue Fax: 1 (780) 679 – 9999

EXECUTIVE SUMMARY -------------------------------------------------------------------------------------------------------------------------- 3
SITUATIONAL ANALYSIS ------------------------------------------------------------------------------------------------------------------------- 4
CEREAL INDUSTRY ----------------------------------------------------------------------------------------------------------------------------- 4
KELLOGG COMPANY -------------------------------------------------------------------------------------------------------------------------- 4
INDUSTRY ANALYSIS CEREAL -------------------------------------------------------------------------------------------------------------- 5
SIZE --------------------------------------------------------------------------------------------------------------------------------------------- 5
TRENDS --------------------------------------------------------------------------------------------------------------------------------------- 6
COMPETITOR ANALYSIS ------------------------------------------------------------------------------------------------------------------ 6
MARKET ANALYSIS ----------------------------------------------------------------------------------------------------------------------------- 8
YOUNG ADULTS ----------------------------------------------------------------------------------------------------------------------------- 8
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With the changing advertising atmosphere and much more sophisticated consumers entering the market, the way companies reach consumers has changed. Our agency provides a service that will allow your company to reach your target consumers using a unique blend of traditional and new marketing media vehicles and promotions. By using a combination of traditional and new mediums with a congruent strategy, we can develop and establish your brand within the Canadian market.
The initial portion of this package will take into consideration the situational factors that have affected the structure of this campaign. By understanding Kellogg’s and its environment, we were able to transition our focus to the objectives and what exactly needed to be achieved with our recommended communications strategy. These two components, situational factors and objectives, were taken into consideration with the development of all remaining portions of our recommended strategy.
With our understanding of Kellogg’s the brand, the operating environment, and the young adult consumer, our creative department has developed a truly unique and exciting communications strategy that will be effective. This strategy has five major sections: print, TV, mail, social media, and street team promotions. Print, TV, and Mail are what our agency considers to be the traditional marketing mediums.
The fact that they are traditional does not make them ineffective or less useful; however, they can be enhanced with the use of new or developing marketing mediums such as social media and a promotional street team. Many other agencies will tell you that these other new mediums are simply required to develop a presence. We feel that this is entirely false and we aim to educate, develop, and provide services to our clients on how to best utilize a combination new and old mediums for success without waste. We encourage you to take this into consideration when evaluating our recommended communications strategy for the launch of your new product and look forward to potentially running this campaign for Kellogg’s.
[Type the company name] | Executive Summary 3

The world's first breakfast cereal, Granula , created in 1863, wasn't tasty or easy to eat (Mr.
Breakfast, 2010). Its inventor, Dr. James Caleb Jackson, created this dense bran nugget meal that was further developed by John Kellogg (Mr. Breakfast, 2010). A dispute between the two men caused the name to change to the word we are familiar with today, Granola (Mr. Breakfast, 2010).
A health movement in Battle Creek, Michigan, in the 1860's is what interested John's brother Will
Keith and Charles William Post into the cereal business we know today (Bruce & Crawford, 1995). It was the need to develop bran-rich vegetarian food for the Kellogg Sanitarium Health Institute, that led John to experiment with easy to chew breakfast foods (Bruce & Crawford, 1995). His brother Will Keith soon developed cereal flakes and broke away from John's experiments to develop the Kellogg's cereal company. As a patient at Kellogg's Sanitarium Health Institute, Charles took note of the Kellogg's brothers developments in the field of healthy foods (Bruce & Crawford, 1995). Charles thought this would be an excellent business venture and soon created postum and Post Cereals. (Bruce & Crawford,
1995). Around 1902, there were 30 different breakfast cereal companies in Battle Creek and it was during this time that the cereal industry started to grow in other parts of the world making the business what it is today (Bruce & Crawford, 1995).
Headquartered in Battle Creek, Michigan, the Kellogg Company is the world's leading producer of cereal and convenience foods (Datamonitor, 2010). This American-based producer of breakfast foods, snack foods, cookies, and crackers also manufactures ready-to-eat cereals and foods such as toaster pastries, cereal bars, etc (Datamonitor, 2010).
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In 1906, Will Keith Kellogg entered into the cereal business by distinguishing his brand of cereal as the original corn flake (Kellogg Company, 2007). After experiencing much success in the United
States, Kellogg opened its first foreign cereal manufacturing facility in Canada in 1914 (Kellogg
Company, 2007). During the time of the Great Depression, W. K. Kellogg doubled his advertising spending, instead of cutting back like his other competitors at the time (Kellogg Company, 2007). This in turn increased cereal sales which allowed W. K. Kellogg to create the W. K. Kellogg Foundation and invest money into developing the nutritional quality of his products (Kellogg Company, 2007). The improved nutritional quality of his products allowed them to be provided to soldiers in package K-rations during World War II (Kellogg Company, 2007).
After the war, the legendary W. K. Kellogg passed, meanwhile Kellogg's the company surged ahead with the introduction of five new cereals throughout the 1960's (Kellogg Company, 2007). The most difficult decade for the Kellogg's brand was during the 1990's because of private-label brands and international competition (Kellogg Company, 2007). But, with the purchase of Keebler Foods Company in 2001, Kellogg's was able to expand its convenience food business worldwide (Kellogg Company,
2007). Today, Kellogg's employs over 30, 900 people and markets its over 1500 products in more than
180 countries (Datamonitor, 2010). Having celebrated its centenary in 2006, Kellogg's remains to be a leading producer in the industry of cereal and convenience foods with revenue of $12, 575 million in
2009 (Datamonitor, 2010).
S IZE
The Canadian breakfast cereal market has grown considerably from $918.3 million dollars in
2001 to a projected $1.1 billion dollars in 2006 (Datamonitor, 2002). The market grew by 10% in 2001 alone (Datamonitor, 2002). The market in Canada is divided into ready-to-eat cereals that only require milk (90.2% market share) and hot cereals that require heating (9.8% market share) (Datamonitor, 2002).
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To sell cereal products in Canada, there are four main market distributors (Datamonitor, 2002). Standard grocery stores distribute 66.0% of the market in terms of volume while traditional grocers (17.5 %), other
(10.7%), and discount grocers (5.8%) account for the other distribution centres (Datamonitor, 2002).
Most of the market for breakfast cereals in Canada involves ready-to-eat cereal, because as in the
United States, hot cereals represent a seasonal sector where most of its sales come from winter months rather than months that experience warmer weather (Datamonitor, 2002). Despite this, the market is continually growing due to an increase in healthy conscious consumers and the introduction of new products (Datamonitor, 2002). Nonetheless, the barriers to entry into this industry are very high because to gain high brand recognition, each company continually increases their advertising expenditure
(Datamonitor, 2002). Due to high levels of regulation from Canada's Food and Drugs Act and the high level of investment required to start a cereal production businesses, it is very difficult to enter into this industry (Datamonitor, 2002).
In order to be successful in the cereal industry, it is important to establish contracts with suppliers for key raw materials like flour, corn, wheat, etc (IBS World, 2010). Being able to adapt and respond to industry changes is another key success factor (IBS World, 2010). This involves passing unexpected costs down the supply chain and creating differentiation between products to increase sales revenues (IBS
World, 2010). As this industry is becoming more globalized, the major players are putting more investments into foreign countries (IBS World, 2010).
The leading manufacturer of cereal in Canada is Kellogg's with over 43% of market share in 2010
(GMID, 2010). Their dominance in Canada has remained steady over the last few years (Datamonitor,
2002). General Mills which produces such brands as Cheerio's and Wheaties is the next largest company in Canada with a market share around 18% (GMID, 2010). Quaker Oats (hot cereal brand - acquired by
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PepsiCo in 2001) holds a 14% market share for 2010 while Post cereals (Honey-Comb, Golden Crisp,
Alpha-Bits; merged with Ralcorp Holdings Inc., in 2008) accounts for market share around 10% (GMID,
2010). Other private label brands take up less than 15% of the market share in Canada (GMID, 2010).
As the sixth largest food company in the world, General Mills' marketing position is heavily driven by its diverse product categories (Datamonitor, 2010). A strong financial position and many global expansions has helped General Mills to launch innovative products in many promising markets
(Datamonitor, 2010). Consequently, General Mills relies heavily on the US market to drive its revenues
(IBS World, 2010). Also, safety issues have shed a negative light on General Mills manufacturing facilities which has weakened its brand image (Datamonitor, 2010). Similarly, low oatmeal sales weakened Quaker Oats revenue position as gains were made in ready-to-go cereal sector (IBS World,
2010). Despite this, Quaker Oats has great growth potential due to is position within the PepsiCo brand.
As a leading manufacturer and distributor of beverages and foods, the PepsiCo merger has helped to increase Quakers' revenues coming into the year 2010 (IBS World, 2010). Likewise, the merger of Post
Cereals with Ralcorp Holdings Inc., has helped to sustain Posts' value offer (Ralcorp Holdings Inc.,
2009). This has given Ralcorp the ability to strength its corporate social responsibility initiatives and achieve its commitment to environmental sustainability (Ralcorp Holdings Inc., 2009). All of these companies experience threats from intensified competition and rising inflation rates that could put extensive pressure on operating costs (Datamonitor, 2010).
To maintain a dominate force in the cereal industry, Kellogg invested nearly $1.10 billion into advertising in 2009 (Datamonitor, 2010). This is approximately 9% of Kellogg ' s net sales, which is significantly higher than its competition in the packaged foods industry (Datamonitor, 2010). Kellogg's has been known to increase advertising in deflationary periods and as a result of its 2009 spending
Kellogg's had a greater impact per dollar and received more consumer impressions (Datamonitor, 2010).
Oppositely, PepsiCo decreased advertising expenses in 2009 (from $1.8 billion to $1.7 billion) in order to control costs instead of generate revenue (PepsiCo, 2009). General Mills boosted its spending on
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advertising in 2009 as well to $730 million (Geiger, 2010). Ralcorp Holdings Inc., spent $185.4 million dollars on advertising in 2009 (Ralcorp Holdings Inc., 2009).
Young adults, those aged 18-24, make up 11.1% of the Canadian population (Appendix A).
Almost all young adults own a computer (98%) and 84% use the internet to research information about products (Microsoft Advertising, 2009). This makes young adults sceptical multi-taskers who are very tech-savvy (Microsoft Advertising, 2009). About one in four young adults in Canada actively seek new education and employment opportunities which makes them very mobile (Clark, 2007). Despite this, on average younger adults are making fewer transitions into adulthood with women making them earlier than men (Clark, 2007). Therefore, young adults are not moving out of the home and finding their own permanent residences very quickly (Clark, 2007). This effects the purchasing behaviour of young adults based upon their level of disposable income. As a result, family members and parents have a greater influence in the type of food young adults consume because they are spending a longer time living at home (Clark, 2007).
When Kellogg's launched Krave cereal to the UK in January 2010, they tried to diversify their product offerings to attract a younger demographic (Reynolds, 2010). As many young adults skip breakfast (Schmidt, Garden-Robinson, North, & Nicklas, 1998), there is great potential for cereal consumption to increase in this segment.
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