International Strategy of Kellogg’s
Comparison Between UK and Taiwan
KAI JIAO
ALBINA ROGERS
NAI-HSIN CHWU
WANG-JEN CHEN
ZHU LIU
Kellogg’s Profile
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Founded in 1906 in US
An American multinational producer of
breakfast foods
Marketed in 180 countries around the world
‘Ready to eat’ cereal dominates the market
In 2006, sales revenue reached 10.6 billion
dollars
In 2007, they extend business to East Asia
Investing heavily in its advertising
Countries' Profile
UK
60,943,912
(July 2008 est.)
white 92.1%, black
2%,
other 5.6% (2001
census)
Taiwan
Population
Ethnic
group
Christian 71.6%,
Muslim 2.7%, Hindu
1%, other 1.6%,
Religions
unspecified or none
23.1% (2001 census)
Sources: CIA Worldfact https://www.cia.gov/library/publications/the-world-factbook/index.html
22,920,946
(July 2008 est.)
Taiwanese (including
Hakka) 84%, mainland
Chinese 14%,
indigenous 2%
mixture of Buddhist and
Taoist 93%, Christian
4.5%, other 2.5%
Countries' Profile
UK
constitutional
monarchy
Taiwan
Government
multiparty democracy
Developed, service
industry plays
important role
Economy
Developed, import &
export is important
$35,300 (2007 est.)
GDP
-per capita
$29,800 (2007 est.)
cereals, oilseed,
potatoes, vegetables;
Agriculture
cattle, sheep, poultry;
fish
rice, corn, vegetables,
fruit, tea; pigs, poultry,
beef, milk; fish
Sources: CIA Worldfact https://www.cia.gov/library/publications/the-world-factbook/index.html
Situation Analysis – Internal
Some Non Financial Highlights (Kellogg’s Group Worldwide)
Business sector: food processing
 Main products: Cereals, Cookies, Crackers, toaster Pastries
 Employees: 26,000 worldwide
 Manufactured: 17 countries Marketing: 180 countries
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Some Financial Highlights (Kellogg’s Group Worldwide)
Sources: Kellogg Annual Report 2007 http://annualreport2007.kelloggcompany.com/
Situation Analysis – Internal
Firm’s Competencies (Kellogg’s as a whole)
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Corporate Level: Senior management vision is to be
the market leader
Strategic: to serve the need of the consumers and
customers through the power of their employees and
brands
Long experience in global coordination and supply
chain management
Skilled staff, lots of training and promotional
opportunities
Situation Analysis – External
PEST Analysis
UK
Taiwan
Political/Legal
Stable Political Environment
with Strict Law
Private enterprise
encouraged
Stable Political Environment
with Less Strict Law
Foreign investment is
welcomed
Socio-Cultural
Environment
Western Life-style
Have a tradition of eating
cereals as breakfast
Eastern Life-style
No such tradition, thus need
to be persuaded by mass
marketing campaign
Economic
Economy is growing, but
facing a downturn
Economy is growing, with a
good future outlook
Technological
Good infrastructure and well
established channels of
distributions
Good infrastructure and well
established channels of
distributions
Sources: CIA Worldfact https://www.cia.gov/library/publications/the-world-factbook/index.html
Situation Analysis – External
Industrial Analysis- Porter’s Five Forces Analysis
UK
Taiwan
Power of Buyers
High
Medium
Power of Suppliers
Low
Low
Threat of New
Entrants
Low
Market is already very
competitive
High
New market
Threat of Substitute
Products
Relatively low
Relatively high
Intensity of Rivalry
High
Medium
Sources: CIA Worldfact https://www.cia.gov/library/publications/the-world-factbook/index.html
Situation Analysis
SWOT Analysis (Kellogg’s as a whole)
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Strengths: healthy finance, strong global based brand, product range
diversity, innovation of new product and explore new market
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Weakness: limitation on the growth of product margins and pollutions
in the production lines
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Opportunities: further improvements on the channel distributions and
further expansion on the product ranges
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Threats: rising costs of product materials and increase intensity of
market competition
SEGMENTATION and TARGETING
(UK)
(Taiwan)
Product
Ready to eat Cereals
Ready to eat
Cereals
Demographic
(Age, sex, income
group)
Adults, Children,
Elderly, Men, Women
Middle-High income
Pre-school Children,
Teenagers,
Middle-high income
Behavioral
Nutritional, healthy,
breakfast
Light snack
Convenient, healthy
breakfast
Office workers
POSITIONING
Taiwan
UK
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Healthy, convenient
breakfast food for the
whole family
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Healthy and
nutritional western
style breakfast for
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Low calorie breakfast
food or snack
adults
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Snack food
Healthy and nutritious
breakfast food for
children
POSITIONING (Taiwan)
High Price
Q
K
G
C
Low Quality
High Quality
V
Low Price
Source from: http://www.vaughns-1-pagers.com/food/breakfast-cereals.htm
G - General Mills
K - Kellogg's
C - Cereal
V - Vita
Q - Quaker
POSITIONING (UK)
High Price
K
N
A
High Quality
Low Quality
DC
w
K - Kellogg’s
N – Nestle
A – Alpen
DC – Dorset cereals
W – Weetabix
Low Price
Source from: http://academic.mintel.com/sinatra/oxygen_academic/search_results/show&/display/id=227674
Branding Strategies
UK
Branding
strategy
Corporate Branding
Taiwan
Corporate Branding
Source: Kellogg's UK http://www.kellogg.co.uk/ Kellogg's Taiwan http://www.kellogg.com.tw
Price Strategy
Taiwan
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Price reflects quality
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Charge more for
brand value
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UK
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value
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Charge more for
brand value
Price competitive
Payment: cash
Price reflects different
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Price competitive
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Payment: credit cards
Product Strategies
Product development
• Constant innovation. Introduction of new
product to present customers.
Market development
• Maintain global position
Diversification
• Introduction of new products to fit new
customers needs
• Discretionary modification
Sources: Kellogg Annual Report 2007 http://annualreport2007.kelloggcompany.com
UK
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Over 40 different types
http://www.kelloggs.co.uk/products/
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Covers most types of consumers
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Large packaging
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More focus on healthy diet
in recent years
Source: Kellogg's UK http://www.kellogg.co.uk
Taiwan
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A new market for the company
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Only 5 types of product currently
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More focus on children and office workers
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Source: Kellogg's Taiwan http://www.kellogg.com.tw
Products Differences
between UK & Taiwan
UK
long
Enter time
Over 40
Types of
product
Target
customers
All ages, but more
on healthy care
Special K
Special
product
Taiwan
short
Only 5
Children and office
people
Black-Sesame
Channel of Distribution
UK
Type of
Distribution
Intensive
coverage
Taiwan
Intensive
coverage
Source: Kellogg's UK http://www.kellogg.co.uk/ Kellogg's Taiwan http://www.kellogg.com.tw
Marketing Communication
TAIWAN Kellogg’s
UK Kellogg’s
Promoting Campaigns
Promotion Campaigns
•Drop
•Sponsor
a dress size promotion
•Swimming coupons for children
TV Advertising
•Focus
on the health benefits of
cereals for breakfast
Online Special Offer
•Free
baseball cap
baseball association
•Cartoon
character ‘Donny’
•Free spa products with bulk
order
TV Advertising
•Colourful,
fun and memorable to
children
Online Game
•Obtain
free cereal
Source: Kellogg's UK http://www.kellogg.co.uk/ Kellogg's Taiwan http://www.kellogg.com.tw
Marketing Communication
UK Kellogg’s
Sponsorship
TAIWAN Kellogg’s
Package
•Kellogg's
sponsors the
•Carton character
Amateur Swimming Association Product Flavour
Product Diversification
•Dried
fruit bags
•Grain-black
sesame
Source: Kellogg's UK http://www.kellogg.co.uk/ Kellogg's Taiwan http://www.kellogg.com.tw
UK and Taiwan Promotion
Campaign: Weight Loss
Please watch the following TV commercial
UK: http://www.youtube.com/watch?v=evXhcJPDRvE
Taiwan: http://www.kellogg.com.tw/
UK Promotion Campaign: Swimming
coupons for children
Sources: Kellogg’s UK http://www.kelloggs.co.uk/whatson/swimming/
UK Online Promotion
•
Collect 5 Coupons to receive free Baseball Cap
Taiwan Online Game
•
Obtain free cereal
Source: Kellogg's UK http://www.kellogg.co.uk/ Kellogg's Taiwan http://www.kellogg.com.tw
Conclusion
According to Hofstede, UK and TW are culturally Diametric
PDI Power Distance Index
IDV Individualism
MAS Masculinity
UAI Uncertainty Avoidance Index
LTO Long-Term Orientation
Kellogg's has adopted different approaches to market its
products
 Differences: Marketing Strategies and Marketing Mix
 Similarities: Channel of Distribution
 Recommendation: Marketing Strategies are successful but
need further improvement
Source: http://www.geert-hofstede.com/hofstede_dimensions.php?culture1=94&culture2=89
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ATTENTION
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