CBSE Business Studies CLASS 12 MARKETING PROJECT CEREALS

Index Introduction Objective Breakfast Cereal Competitors Product Packaging Price Place Promotion

Introduction Marketing Mix is a very significant concept of the business progression. The products and services of the business organizations get a very effective strategic position in the market with the assistance of the application of marketing mix. Through correct diligence of the marketing mix, a company can have a well explicated marketing strategy and tactics through which the marketing aims of the company can be accomplished at the necessitated level. The marketing mix is not an individual term but it is the assemblage of the various elements of the marketing. It primarily piles up the 4Ps of marketing such as product, price, place and promotion. These four Ps have equal implication for the marketing of the products in different organizations. The actual meaning of those four is creating the right product, selling it at the right price and in the right place, with the use of the most effective promotion possible. When being in the process of bringing some particular product to the market, the organization is supposed to make choices concerning the product that will eventually influence the effectiveness of a chosen strategy. The four P’s are a sort of parameters that are under marketer’s control. “The goal is to make decisions that center the four P’s on the customers in the target market in order to create perceived value and generate a positive response”

1.Objective of the Study: The overall goal of this project is to investigate the breakfast cereal industry, with the leading brands in the market and work within form a suitable marketing mix to achieve increased efficiency and profit. The specific objectives of this work are: - Examine the impact of marketing mix on the decisions taken by a company - Examine the working of the breakfast cereal industry - Evaluate the various competitors and their unique selling proposition

Breakfast Cereal Breakfast cereal is a food made from processed grains that is often eaten as the first meal of the day. It is eaten hot or cold, usually mixed with milk and sometimes yogurt or fruit. Some companies promote their products for the health benefits from eating oat-based and high-fiber cereals. In America, cereals are often fortified with vitamins. A significant proportion of cold cereals are made with high sugar content. The history of modern-day breakfast really begins with a pain in American stomachs. The mid-19th century breakfast consisted mainly of fatty meat, was largely devoid of any fibre and created all sorts of gastrointestinal disorders. It may be hard to believe, with its endless flavor varieties and sugary additions, but cereal is one of the first widely marketed “health foods.” It was developed as an answer to a growing dyspepsia epidemic in America. During the Civil War, many suffered from this chronic digestion problem that resulted from the unhealthy, high-protein diets of the time. It was clear that eating habits had to change; doctors recognized a need for teaching Americans how to eat and live healthier. Institutions that emphasized exercise and a healthy diet, known as sanitariums, began popping up around the country.

! The first ever breakfast cereal was Granola, invented in the USA in 1863 by James Caleb Jackson, a convinced vegetarian, who was the operator of the Jackson Sanitorium in the state of New York. However, the cereal never caught on commercially, because the heavy bran nuggets needed soaking overnight before they were tender enough to eat. But then Doctor John Harvey Kellogg arrived on the scene. A religious man, and a respected superintendent at the Battle Creek Sanatorium, he developed a biscuit made from oats, wheat and corn meal, and a number of other cereals in the 1880s.
 
 Together with his brother, Will Keith Kellogg, John developed several grain-based cereals. It was, however, largely by accident that they invented the first modern, ready-to-eat cereal, the “Corn Flake,” and established the manufacturing model for modern cereal production.

Why have we selected this product?

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The role of breakfast cereals in a balanced diet has been recognized for many years. Dietary guidelines note that the high nutrient density of breakfast cereals (especially those that are whole grain or high in cereal fiber) makes them an important source of key nutrients. Cereal has firmly rooted itself in food culture; a bowl of cereal is a treat. One of the most beloved parts of the cereal experience is the ice-cold milk that is left behind once the cereal is gone. This milk, flavored by sweetened cereal, has its own unique taste. The flavor is so special and recognizable that Christina Tosi, chef and owner of Momofuku Milk Bar in New York City, has developed a cereal milk soft serve as one of her most popular signature dishes. Everybody seems to have a favorite cereal. No matter which variety you enjoy, it holds a special place in our collective experience. In many ways, the cereal flake is the perfect consumer product. It's easy to produce, easy to sell, and surprisingly lucrative. To this day, cereal comes with an eye-popping profit margin of 50 percent. TRENDS •

In 2013, consumer awareness regarding the benefits of healthier food options and an increase in on-the-go consumption were the main factors impacting demand for breakfast cereals. This was manifested by an increase in demand for health and wellness (HW) breakfast cereals and options that favour on-the-go consumption.

COMPETITIVE LANDSCAPE •

There were no major changes in 2013 in the breakfast cereals competitive landscape.

PROSPECTS •

Breakfast cereals in the United Arab Emirates is predicted a constant value CAGR of 4% over the forecast period. A CAGR of 3-4% is anticipated across the different categories, with the exception of muesli, which is forecast a CAGR of just 2%.

Competitors Kellogg’s

Corn flakes are a popular breakfast cereal originally manufactured by Kellogg's through the treatment of maize. Kellogg’s® Corn Flakes® cereal is the Original & Best® cereal. Every bite of these crispy, golden flakes is just as delicious as the first. USP 1. One of the oldest cereal brand 2. Corn flakes as diet food According to Kellogg’s any individual consuming their cornflakes for two continuous weeks can witness significant weight loss

Weetabix

Weetabix is the classic cereal for breakfast tables, made the same way, the same size and on the same site for over 80 years. Today it is one of the most popular breakfast cereal with more people choosing to fuel their day with Weetabix than any other cereal

USP

Weetabix Food Company's USP is its wholegrain product portfolio as all the brands of the Weetabix Food Company are founded on wholegrain goodness. Weetabix Organic provides one with the same Fuel as original Weetabix, and all of the agricultural ingredients in Weetabix Organic are, as one would expect, organically grown according to the standards set by the Soil Association, using natural methods with no artificial chemical fertilisers, herbicides or pesticides. Weetabix Original is a low fat, low sugar, low salt, and high fibre food. Nestle

Nestlé has launched its first gluten-free breakfast cereal to meet rising consumer demand. The new Gluten Free Corn Flakes, fortified with B-vitamins and iron, are available in two flavors including Traditional and Honey. USP Gluten is a naturally occurring protein found in grains, such as wheat. Nestlé Gluten Free Corn Flakes are aimed at consumers who are gluten sensitive and interested in reducing the amount of gluten in their diets, as well as those who suffer from Coeliac Disease, an autoimmune disease. GENERAL MILLS

Cheerios is an American brand of breakfast cereals manufactured by General Mills. Successful marketing led General Mills to become highly successful and sell approximately 1.8 million cases of the cereal in its first year alone. It is a healthy start to the day or a perfect, crunchy snack for the entire family. USP Made with 100 percent natural whole grain oats – Three grams of soluble fiber daily from whole grain oat foods, like Cheerios cereal, in a diet low in saturated fat and cholesterol, may reduce the risk of heart disease. Bokomo cereals

Over the last few decades Bokomo Foods developed into a key player across numerous categories in the South African food industry. The brands from the Bokomo stable have been household favourites for decades and are the preferred choice in various segments such as cereals, baking aids, desserts, biscuits and dried fruit. Weet-Bix Lite salt & sugar free is high in fibre with added vitamins and minerals.  USP
 It has no added salt and sugar, is low in fat and contains no colourants, flavourants or preservatives. It is also approved as part of the South African Heart and Stroke Foundation eating plan.

PRODUCT In marketing, a product is anything that can be offered to a market that might satisfy a want or need. From the customer’s point of view, a product is a bundle of utilities, which is purchased because of its capability to provide satisfaction of certain need.

Breakfast cereal is a consumer product, which is purchased by the ultimate users or consumers to satisfy personal needs or desires. It can be further categorized as a convenience product, on the basis of shopping efforts involved. Our Product Almost every one of us must have heard the saying that breakfast is the most important meal of the day. Still, not many have taken it seriously and made breakfast a part of their daily diet. Just like adults, skipping breakfast has also become a practice among school going children and has led to many problems, like, headache, sleepiness, stomach pain, muscle fatigue, Indecisiveness, anger, anxiety, irritability, unhappiness, nervousness, lethargy, hostility. Hence, our product, Munchiez caters to the needs of different age groups according to the specific needs of that group. We at Munchiez believe in the power of eating a healthy breakfast, meeting nutritional requirements. Hence, we have created a wide range of breakfast cereals specifically to serve the community a better breakfast. Your mother was right: Breakfast really is the most important meal of the day. Not only does it give you energy to start a new day, but breakfast is linked to many health benefits, including weight control and improved performance.  Studies show that eating a healthy breakfast (as opposed to the kind containing doughnuts) can help give you: •

A more nutritionally complete diet, higher in nutrients, vitamins and minerals

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Improved concentration and performance in the classroom or the boardroom

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More strength and endurance to engage in physical activity

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Lower cholesterol levels

Features We have built up some key core brand characteristics, emphasizing quality and nutritional benefits that will apply to any of our product.

Unique Selling Proposition MUNCHIES is the great breakfast friend for both mom and kids. While kids love its fabulous taste, and have fun with the way MUNCHIES turns milk super-duper yummy ,Moms can feel relieved that they’ve given their child a nourishing breakfast to take on an action packed and fun filled day in school. That’s because MUNCHIES is now made with Whole Grain, which gives 12 essential vitamins and minerals, and fibre.

The most unique and compelling part of the MUNCHIES proposition is that we give a free packet of munchies to a child in need for every pack that you purchase.

Permissions and Licensing In a consolidated industry such as this, companies often face a substantial amount of scrutiny from the legal environment. Often times this stems from the demands of consumers. It is necessary to establish a business presence in order to provide or sell goods or services in the UAE. Regardless of the type of business to be set up, it is necessary to obtain a license. The basic requirement for all business activity in the UAE is one of three categories of license, commercial, professional or Industrial. These licenses are issued by the Department of Economic Development of each Emirate. Since the breakfast cereal industry is a food processing industry, we require an industrial license. An Industrial allows the holder to import raw materials, manufacture specified products and export the finished products to any country. Also, every company set up in Dubai or elsewhere in the UAE is required to have no less than fifty-one percent (51%) shareholding of UAE nationals.

Label Social Message/Responsibility We work with local growers and millers to support sustainable agriculture practices to bring our best to you. We make almost all our cereal boxes from 100 percent recycled cardboard. These cereal boxes can be in turn recycled by our customers, so they can give back too. We try to send the minimum possible waste to the landfills and reduce our carbon footprint to almost zero. At Munchiez, we carefully watch our water consumption. That’s because we want to make sure that we’re making a more positive impact on the environment with every drop we save.

Tagline Why are taglines used? Taglines tell the customers the key benefits of the business product to the customers. By reading a tagline, the customers get an idea about what is expected from the particular product. A tagline works as a salesperson explaining the benefits of the product.Using a tagline in an effective way, results in differentiating the brand from the rest of the products in the market. It represents the vision and the mission of the business in front of the customers. The knowledge of the vision and mission is what makes a customer more inclined towards the offering of the business. A Crunch with Every Munch.

Every bite of Munchiez is just as delicious as the first. We ensure that our products are made using the best technology so that our customers will enjoy every bit of their breakfast.

Logo

Product Range The Fruit One: Fruity Munchiez Fruity Munchiez is a gluten-free, sweetened rice cereal with a rainbow of fruity flavors that make mornings rock! Fruity Munchiez have been a family favorite for over 40 Years! Each serving of this Post Fruity Munchiez Cereal is bursting with flavor and important Vitamin D. Vitamin D promotes healthy bones and teeth by helping a growing child's body absorb calcium. Parents can also feel good knowing this morning treat provides the nutrition you want in the fun great-

tasting product your kids will enjoy. Each serving of this Fruity

Munchiez Cereal is just 110 calories and is packed with real fruit flavor. This cereal also contains 11 other essential vitamins and minerals in each serving and is gluten free. The honey one: Honey Nut Munchiez This 26.6 oz Honey Nut Munchiez Cereal has the irresistible taste of golden making it a family favorite. In addition, each little "o" contains soluble

honey,

fiber from whole

grain oats. As part of a heart-healthy eating plan, eating Honey Nut whole grain cereal each day may help lower your cholesterol. In fact, 3 grams of soluble fiber daily from whole grain oats (as provided by this cereal) with a diet low in saturated fat and cholesterol can reduce the risk of heart disease. Made with whole grains and low in fat, Munchiez also provides 12 essential vitamins and minerals. That's something that everyone can smile about. Tried and tested over three decades, this Honey Nut cereal is a tasty and nutritious day to start your day. MUNCHIEZ RASIN BRAN: Start your morning out right with Munchiez Raisin Bran Cereal. This high-fiber cereal is only 190 calories per serving and combines delicious raisins with crisp, toasted bran flakes for a tasty and nutritious breakfast. The 23.5-oz box of

Munchiez Rasin Bran Cereal contains

no saturated fat. Make morning amazing with Munchiez Raisin Bran cereal! Munchiez Raisin Bran cereal has a delicious balance of crispy wheat-bran flakes and plump, juicy raisins. In fact, it has two scoops of raisins in every box! Plus it's an excellent source of fiber, with 7 g in each serving. And each bowl is a

small but smart step toward a healthier future—a heart-healthy breakfast* choice that's also delectably sweet.

Packaging

Packaging is very important to ensure the freshness of the breakfast cereal. Muchiez has Bag-in-box packaging wherein the product is initially weighed into bags. The bag is required to preserve the integrity and freshness of the product and acts as a barrier to moisture. As a result of high-speed packing, the bag will inevitably contain some air. This has the added advantage of physically protecting the product from factory to kitchen shelf. The bag is then inserted at high speed into the carton. The carton provides rigidity and protects the product. Bag-in-box packaging allows continuous high-speed packing of products with differing bulk densities and shapes. This allows the consumer to benefit from a wide variety of distinctive and innovative products. Modern weighing systems are very accurate giving consumers the guarantee that all packs are at or extremely close to the declared weight. An automated machine packages the cereal at a rate of about 40 boxes per minute. The box is assembled from a flat sheet of cardboard, which has been previously printed with the desired pattern for the outside of the box. The bottom and sides of the box are sealed with a strong glue. The bag is formed from moisture-proof plastic and inserted into the box. The cereal fills the bag and the bag is tightly sealed by heat. The top of the box is sealed with a weak glue which allows the consumer to open it easily. The completed boxes of cereal are packed into cartons which usually hold 12, 24, or 36 boxes and shipped to the retailer. Some cereals, such as shredded wheat, are fairly resistant to damage from moisture. They may be placed directly into cardboard boxes or in cardboard boxes lined with plastic. Most

cereals must be packaged in airtight, waterproof plastic bags within cardboard boxes to protect them from spoiling.

PRICE Pricing of Our Product

Price is the amount of money paid by a buyer in consideration of the purchase of a product or a service. It is the single most important factor affecting the revenue and profits of a firm. Per Unit Pricing (in AED) Cost of Market Research

0.50

(PRODUCT DEVELOPMENT)



Cost of Advertising (PROMOTION)

2.00

Cost of Distribution (PLACE)

0.75

Cost of Cereal (BASIC COST)

1.25

Cost of Box (PACKAGING)

0.50

TOTAL PRODUCTION COST (total of all costs listed above)

5.00

ProPit to Manufacturer (Total production cost x 30%)

1.50

COST TO WHOLESALER (Total production costs + proPit to manufacturer = wholesale price)

6.50

ProPit to Wholesalers (Cost to wholesaler x10%)

0.65

COST TO RETAILERS (Cost to wholesalers + proPit to wholesalers = Price to Retailers)

7.15

ProPit to Retailers (Cost to Retailers x 20%)

1.43

COST TO CONSUMERS (cost to retailer + proPit to retailers = Retail Price)

8.58

Selling Price of Competitors (in AED, 375 grams)

1 box Kellogg’s

12.75

1 box Weetabix

13.50

1 box Cheerios

11.75

1 box Bokomo

10.25

1 box nestle

14.50

1 box munchies

8.50

Factors determining the price 1. PRODUCT COST: Product cost includes the cost of producing Munchiez, and also the cost incurred from distributing and selling the product. The product cost sets the minimum level or floor price of the Munchiez at which it should be sold. But the main aim is earning profit therefore there should be a profit margin at which the Munchiez is to be sold. The cost incurred from purchasing raw materials can be classified as a variable cost as these costs vary in direct proportion. Semi-variable costs are those costs which vary with the level of activity for example if production increases the costs on hiring workmen increases. 2. UTILITY AND DEMAND: The utility provided by Munchiez and demand made by the buyers sets the upper limit of price. The buyer may only be ready to pay up to

the point where the utility from the product is at least equal to the sacrifice made it terms of the price paid. The price of the product is also affected by the elasticity of demand of the product. If the price elasticity of demand is INELASTIC, the firm is in a better position to fix higher price. 3. EXTENT OF COMPETITION IN THE MARKET: Competitors’ prices and their anticipated reactions must be considered before fixing the price of a product. Competitive products must be examined carefully before fixing the price. 4. Government Regulation: If the price of the commodity and services is to be fixed as per the regulation of the government, it should also be borne in mind. 5. Marketing method used: Price is also influenced by the marketing method used by the company, e.g., commission which is to be paid to the middlemen for sale of the goods is also added to the price. Similarly, if the customers are to be provided “after sale service” facility, then those expenses are also added to the price.

6. Make the Price Relatable: At the end of the day, the sales process comes down to convincing a customer that your product is worth the price you’re asking. Sometimes all you have to do is put the price in terms the customer will understand.

PLACE The potential to reduce costs, improve efficiency, expand markets and increase customer satisfaction often make business partnerships too productive to pass up. It has become increasingly difficult for businesses to sell one product in one place, necessitating more global cooperation to increase success rates.

Channel of Distribution In business, a “channel” is the pathway through which goods flow from producers to consumers. It is important to consider every point on the path in order to create a full picture of how goods are actually made and sold. A poorly designed or executed distribution channel strategy can create conflict, inefficiency and disruption up and down the line.

Two Level ChannelManufacturer- Wholesaler- Retailer- Consumer Breakfast cereal is a consumer product which is standardised, less- bulky and frequently purchased. It can be better distributed by long network of channels. Also, the unit value of an individual cereal box Is low, so a two level channel is preferred.

The wholesaler and retailer function as a link between us, the manufacturers and our customers. Why? Intermediaries (the wholesaler and retailers)- provide several benefits to both manufacturers and consumers: improved efficiency, a better assortment of products, routinization of transactions, and easier searching for goods as well as customers. Exchange relationships can be standardized in terms of lot size, frequency of delivery and payment, and communications. The use of intermediaries also aids the search processes of both buyers and sellers. We are constantly searching to determine their customers' needs, while customers are searching for certain products and services. A degree of uncertainty in both search processes can be reduced by using channels of distribution. Warehousing Warehousing and inventory control systems help a business monitor and track the amount of raw materials, finished goods and work in process the company has on hand at all times. Businesses rely on the information in the inventory control system to make decisions on stock purchases, production schedules and warehousing needs. Accurate inventory systems help small businesses keep costs low and efficiently deliver products to meet customer demand. How we keep costs low? Storing raw materials and finished goods incurs a cost to a business. The inventory control and warehousing system can help manage the cost by controlling the amount of materials the business must keep on hand. We, at Muchiez use a lean system, having a minimum amount of stock on hand to keep the cost of inventory and warehousing low. We only purchase materials when there is a customer demand. Lean inventories help us minimize the cost of raw materials, warehousing and material handling. However, we have a central warehouse which contains more inventory than the others to help reduce delays in shipments from vendors or unforeseen increases in customer demand can result in late deliveries or lost business for a company that uses a lean inventory system. Inventory Control We follow a computerized stock-holding system to ensure shelves are always full and orders are delivered on time. The computerized stockholding shows immediately when shelves are empty. It then automatically sends orders to the manufacturing base to replenish stocks, minimizing waste and increasing profits. This also enables the company to offer competitive prices, which makes for happy and loyal customers.

Transportation

Our raw materials of wheat, corn, cocoa, rice and sugar are obtained from primary suppliers around the world. These materials help make our different breakfast cereals and snacks to sell to customers.

Promotion Promotion plays a very important role in the sale of our cereal. We follow different types of promotion techniques to help boost the sale of our products. Advertising We advertise using a whole range of media: in the press, on posters, radio and cinema, direct mail and, most recently, on the Internet. 
 
 Direct mail/messaging: through this form of advertisement we look into building direct relationship with the customers, we can contact them through the information cards they fill out after a first purchase, this is an efficient form of advertisement as it promotes the firm and can take inputs from the customers thus improvising on products.
 
 Magazines: this form of advertisement may be comparatively expensive but its a desirable in order to advertise to large target group in an attractive and desirable way
 
 Newspaper: almost everyone reads the newspaper so, what better method to advertise than to reach a huge mass of people inexpensively 


Television ads: They are more expensive than most of major forms of advertising. However, with the increasing number of television networks and stations, businesses might find good deals for placing commercials or other forms of advertisements. Television ads usually are priced with similar considerations to radio ads, that is, the number of ads, the length of ads and when they are put on the air. Promotion Schemes for the Consumer

Discount: During the end of the year or to mark special occasions, we offer discounts to our customers to encourage them to buy our cereal. Product Combination: Offering the another product as a gift along with the purchase of breakfast cereal is a way by which we promote our product. For example, offering bowls or spoon

Quality Control Every step in the manufacturing of breakfast cereal, Munchiez is carefully monitored for quality. We ensure the highest level of hygiene in every step of the process. Since cereal is a food intended for human consumption, sanitation is essential. The machines used are made from stainless steel, which can be thoroughly cleaned and sterilized with hot steam. Grain is inspected for any foreign matter when it arrives at the factory, when it is cooked, and when it is shaped. To ensure proper cooking and shaping, the temperature and moisture content of the cereal is constantly monitored. The content of vitamins and minerals is measured to ensure accurate nutrition information. Filled packages are weighed to ensure that the contents of each box is consistent. In order to label boxes with an accurate shelf life, the quality of stored cereal is tested over time. In order to be able to monitor freshness over a reasonable period of time, the cereals are subjected to higher than normal temperatures and humidity in order to speed up the spoiling process.

Conclusion Getting the right product or service to the customer, at the right price, in the right place and at the right time is fundamental to business success. Understanding and balancing the marketing mix enables an organization to uniquely position its brand to drive sales of its products and services. To remain as a market leader a business needs to continually look at new ways of engaging and exciting customers in its products and services.

Bibliography wikipedia.com https://www.kelloggs.com/

https://www.thrillist.com/

www.investopedia.com/terms/m/marketing.asp

https://www.mindtools.com

https://www.stealingshare.com/pages/breakfast-cereal/

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