Introduction

Kellogg's is the world's biggest producer of breakfast cereals. Its famous brands include Corn Flakes and Rice Krispies.

Growing a brand

To stay ahead in a market, businesses like Kellogg's have to make decisions about their brands. They have to decide whether or not to grow a brand, or to let it decline. Kellogg's decided that it was not making enough of its Special K brand. It decided to expand it through using the brand name to promote other, similar, products.

Marketing mix

Kellogg's looked at the marketing mix for Special K to see how it could be changed. The marketing mix is the mixture of the right:

• product to make

• price to charge

• place to sell and

• promotion to make people buy.

For Special K, Kellogg's found out from market research that:

• the product would suit new fashions for healthy foods

• it is able to maintain a good premium in the market because it is a strong brand

• it could be sold in all the places Kellogg's products are sold

• a special campaign could increase sales.

Product Life Cycle

Kellogg's also looked at where Special K was on the product life cycle. The product life cycle is the stages a product goes through. These are just like a living thing - the product is born, grows, matures, gets old and dies. When it is born ('introduced') it grows slowly but as more people buy, sales grow. When it matures, other products have come out to compete with it. A business then needs to decide if the product is to be allowed to die.

Special K

Kellogg's saw that Special K was a strong, mature brand that it could base other products on. It saw that Special K's strength could be used to launch a whole range of brand variants.

First, in France, Special K Red Berries was launched. This was a success so it was launched in Britain in 1999. Special K bars came out in 2001, with extra promotion. By 2003 Kellogg's had also launched Special K Peach and Apricot in both boxes and bars. The success of the new brands means that they are now sold all over the world.

At every stage Kellogg's tested the new brands with market research. It also watched closely to make sure that the new brands were not eating into the sales of Special K. The new brands have grown - creating a new market - while Special K sales have not dipped at all.