Question1. Market Definition from a customer defined market for Special K The product I choose is the cereals Special K from the very well-known brand Kellogg’s. As it is an international brand, I chose to be more specific, and only to focus on this product in France. As we all know, Special K is famous brand for its low fat and nutritional cereals, as a consequence those two factors will be our primary benefits. See figure 1. 1 In this case, our primary benefit is the fact that Special K is low fat cereals.
Our fifth level of competition is the budget competition. As we are from a customer perspective, and as our product is cereals, we figured that the customer’s money depend on the Food and Entertainment. As we see, “Food and Entertainment” is very wide, and can be developed in several domains such as breakfast food, hot beverage and even cinema. We are now going to establish the main type of food for breakfast: we have bread, cereals and oat flakes, furthermore as a consequence, those brand product figure to be competing against Special K.
We notice then, different types of cereals, such as kids’ cereals, low fat cereals and very nutritive cereals, as Special K is known to be low fat cereals, we know that there are different brands for low fat cereals, such as Kellogg’s, Nestle or Jordan’s. To finish, our first level is product variant, here for our product the variant is to be low fat and nutritional. As we can see every time we go down a level, our product and its competitors become more and more precise! See Figure 1. 2 Now our primary benefit is the fact that Special K is nutritional cereals.
As we can see the competitors are not the same, as we are more on the healthy aspect. As our generic competition level is functional nutrition, Special K competes against pharmaceutics nutrition or even tasty food. We again developed this last level into functional breakfast food, functional snack and functional beverage. As we all know, Special K is a nutritional cereal, and in this level, it competes with nutritional bread and nutritional oat flakes as bread and oat flakes are other types of breakfast food. Figure 1. 1 Market Definition for cereals from a customer perspective Primary Benefit: Low fat cereals
Figure 1. 1 Market Definition for cereals from a customer perspective Primary Benefit: Low fat cereals Figure 1. 2 The market definition for cereals from a customer perspective Primary Benefit : Nutritional cereals Figure 1. 2 The market definition for cereals from a customer perspective Primary Benefit : Nutritional cereals Question 2. Which of the PEST contexts impacts most the marketing strategy of Special K? As we know, there are four different contexts. First, there is the Political/ Regulatory/ Legal Context which involve a wide range of forces that may constrain channels distribution.
Second of all, the Economic context, this can affect the marketing strategy in its communication or promotion. The Social and Cultural aspect can be very powerful in influencing marketing strategies and tactics. At last the fourth context is Technological/Physical which affect the price. To relate these factors to Kellogg’s Special K, we notice that cereal is a raw material, so its price can be very instable due to economic factors. In addition, the fact to be slim and good looking, and very healthy is a social in our occidental culture.
If we look for example in Africa, where the culture is not occidental at all, Special K is not implement because they know that the population is not obsess with their physical appearance as it is not root in their culture and way of living. To conclude, if the price of cereal changes, it is going to have an impact on Special K as it is their first resource. Last but not least, if the culture in occidental countries changes and the physical appearance is not as important as today, then people are not going to put that much effort in eating low fat and healthy.