MBA 705 Milestone Four Guidelines and Rubric
Overview: For the capstone assessment, you will create a business implementation plan and audiovisual presentation for the product, service, or idea you have
been developing throughout your MBA coursework.
In Milestone Four, you will submit a financial analysis and funding plan, which includes your analysis of the projected costs, revenue streams, and net present
value for the concept from launch until two years after the breakeven point. Be sure to include a budget, an assessment of assets and liabilities, your anticipated
sources of funding, and the associated costs of attaining that capital as part of your analysis. Support your analysis with relevant primary and secondary data in
an appendix, specifying any relevant assumptions and limitations. You should include, among other support, sales forecasts, cash flow statements, income
projections, and any other relevant calculations or financial reports.
Critical Elements:
Analyze the projected costs, revenue streams, and net present value for the concept from launch until two years after the breakeven point.
Include the following as part of your analysis:
o Budget
o Assessment of assets and liabilities
o Anticipated sources of funding
o Associated costs of attaining that capital
Include relevant proforma financial reports:
o Sales forecasts
o Cash flow statements
o Income projections
o All other relevant reports specific to your concept or idea
Guidelines for Submission: Your draft must contain all of the elements listed above. It should be 5 to 8 pages in length (excluding the title page, references, and
appendices) using 12-point Times New Roman font, with one-inch margins. You may include summary pictures, charts, graphs, or other explanatory diagrams as
needed to successfully explain the concept and implementation, but should use appendices for detailed supporting documentation. Your paper should follow
APA guidelines. You must include at least 5 scholarly sources. Cite your sources within the text of your paper and on the reference page.
Critical Elements
Main Elements
Critical Thinking
Financial Analysis
Proficient (100%)
Includes most of the main elements
Provides logical conclusions and defends with
examples
Provides an analysis of projected costs,
revenue streams, and net present value for
the concept from launch until two years after
the breakeven point
Not Proficient (0%)
Does not include any of the main elements
Does not provide logical conclusions
Does not provides an analysis of projected
costs, revenue streams, and net present value
for the concept from launch until two years
after the breakeven point
Value
20
20
15
Analysis Parts
Financial Reports
Articulation of Response
Provides a budget, an assessment of assets
and liabilities, anticipated sources of funding,
and the associated costs of attaining that
capital as part of the analysis
Provides proforma financial reports including
sales forecasts, cash flow statements, income
projections, and other relevant reports
specific to concept or idea
Submission does not have critical errors
related to citations, grammar, spelling,
syntax, or organization that prevent
understanding of ideas
Does not provide a budget, an assessment of
assets and liabilities, anticipated sources of
funding, and the associated costs of attaining
that capital as part of the analysis
Does not provide proforma financial reports
15
Submission has critical errors related to
citations, grammar, spelling, syntax, or
organization that prevent understanding of
ideas
Total
15
15
100%
Running head: MILESTONE 1-2 - JUSTIFICATION
1-2 Milestone One: Justification
Jonathan Brannan
Southern New Hampshire University
Course MBA-705
December 23, 2018
Dr. Isabel Wan
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Running head: MILESTONE 1-2 - JUSTIFICATION
2
Rationale
Over the years, Kellogg`s Company, a breakfast cereal manufacturing entity has enjoyed
tremendous growth. The establishment has always responded well to changing market trends and
has always emerged successful. The products the company produces have over the years been
the choice of many peoples’ healthy breakfast stop (Avey, 2012). Such products are what made
the company register greater strides in growth to be one of the leading cereal companies in the
20th century. However, changing consumer lifestyles has shifted the company’s business
strategy. The most evident result of these emerging trends is the drop in the company`s yearly
sales by 4% in the U.S market. Due to this, the company needed to adopt a new product that sets
to address the emerging consumer trends to remain in operation and boost its annual sales.
Another reason as to why Yo-Bran needs to be adopted is the issue of competition that
has grown rife in the breakfast cereal industry in recent years. Kellogg`s needs to effectively
compete with other key industry players and emerging brands for consumers. To effectively
compete, the firm needs to adopt products that have not been produced by other firms but are in
demand by consumers. The biggest strategy of winning in the business driven competition is by
producing goods that satisfy the consumer and not products that are fit for the market. In
producing goods that fit the market, in most instances, the company produces goods that every
other company is producing to match their production. But in producing goods that satisfy the
consumer, the company invests in products that are in line with the current consumer demands,
and this is where Yo-Bran comes in. Yo-Bran is set to quench the demand of consumers who are
now avoiding sugary cereals. The ultimate goal is to overturn the sales that plunged in past years
and register significant improvement.
Running head: MILESTONE 1-2 - JUSTIFICATION
3
Many breakfast cereals in the market today are genetically modified. The U.S is the
leading player in this industry (Hallman et al. 2013). The reception of genetically modified foods
has had a lot of misconceptions and poor public perceptions. The quest of Kellogg`s Company to
penetrate such markets where opinions are rife would prove difficult. For the company to
increase its market share and increase its annual sales globally, it has to expand its market base.
The expansion involves venturing into territories where the company has not operated before. It
will be a huge task to penetrate a market where misconceptions of genetically modified foods are
high. Hence, for the firm to realize expansion, it has to adopt healthier products like Yo-Bran
that would readily be adopted in those areas and help the company to grow.
Opportunity
According to Jack Linshi of Time.com, the breakfast cereal industry is faced with the
challenge of producing a taste and healthy alternative that appeal to consumers (Linshi, 2015).
This gap leaves an opportunity for Kellogg’s to take advantage of. A gap presents a business
opportunity, and the existence of such a gap means there is a ready market for the products
developed specifically for that spotted chance. Yo-Bran introduces a completely different taste
and healthy alternative that is in line with consumer specifications and demands. The
introduction of the product to the market will be a major response to consumer demands which
include a better tasting product and a healthier alternative to other breakfast foods. The
development of Yo-Bran came about to fill the needs of Kellogg’s consumers.
The current focus of the breakfast food industry is now on products that promote healthy
living and wellbeing of the consumer. The products that have been proven to cause various
medical conditions are being avoided. For instance, sugary cereals that have a negative impact on
teeth and cause other general health problems are being avoided. It is for this reason that the
Running head: MILESTONE 1-2 - JUSTIFICATION
4
development of Yo-Bran presents an alternative to such consumers to help them live healthier
lives. Kellogg’s has taken their consumers’ health and wellbeing in to consideration with YoBran. More and more people are getting concerned about products that have long-term side
effects, and Yo-Bran will alleviate these concerns.
Market Analysis
The ultimate winner in the innovation of a new product is the company that produces a
product with the global market as the major objective (Cooper, 2013). Product performance is
greatly dependent on the vibrant marketing strategy accentuated by the company. The primary
target market for Kellogg’s Yo-Bran is breakfast consumers who are shifting to healthy eating.
The product geared towards tapping a market of consumers avoiding sugary foods to foster good
health. Furthermore, the taste of cereal products has been in question before which triggered the
development of Yo-Bran. The identified gap regarding taste is the market Yo-Bran sets to fill.
The intention is to present a product with a unique, and a favorable taste unmatched by any other
current product in the market. The unique and healthy taste along with consistent demand from
consumers will help prove Yo-Bran successful.
Consequently, Kellogg`s in recent years adopted a rigorous marketing strategy that is set
to draw more young adults into embracing breakfast (Bonigalia). Initial studies show that young
adults in the age bracket 25-35 with income ranging between $35000-70000 an untapped market.
The studies further show that males of the age 16-24 do not readily take breakfast. Statistically,
the population consists of huge numbers of the males in the stated age bracket. By sensitization
through the marketing strategy that the company has adopted, the said persons will provide a
wide market for Yo-Bran products. The figures alluded to are generally from the U.S, a market
environment the firm has in the past dominated, and hence holds a significant advantage over.
Running head: MILESTONE 1-2 - JUSTIFICATION
5
Yo-Bran is projected to appeal to them because of the health factors it portends, the taste that is
significant with age stated, and the ease with which preparation achieved. Further, the company
will continue taking advantage of the African-American and the middle age who have been the
loyal customers for Kellogg`s products.
Moreover, the product introduced to international markets where the company enjoys
significant support. The markets include Canada, Australia, and the United Kingdom. The
strategy is in line with the thought that a new product should be developed for the world and
marketed to the globe (Cooper, 2013). The market territories mentioned provides an expansive
platform for the product to thrive in and register tremendous growth. Quality and innovation
incorporated in the product is the primary strength of the product that capitalization in, and
rigorous marketing will play a key role in its market acceptance and take off positively.
Competitive Analysis
Investigations carried out by market analysis establishment NPD group show projections
breakfast consumption could rise by a 5% margin come 2019 (Chamlee, 2016). The facts present
an opportune moment for the breakfast cereal industry. The competition that is set to arise due to
these facts will be immense, but Kellogg`s will sustain itself through the marketing initiatives it
has so far adopted. Also, the quality of Yo-Bran is unmatched by current products with similar
features in the market. Clients are very concerned about the quality of the products they associate
with, and hence, the projections show a great reception of Kellogg’s Yo-Bran. The quality of the
product and marketing strategy, along with Kellogg’s brand name, are the driving force the
company intends to leverage on to ensure the product beats all kinds of competition from other
market key players.
Running head: MILESTONE 1-2 - JUSTIFICATION
6
Yo-Bran was developed with the health of consumers in mind, which means that the
product holds a significant advantage over the rest of the competition. The concept of healthy
living that has played a crucial role in the design of the product as a factor will receive much
attention from consumers. During the marketing campaigns, the factor of health intentionally
highlighted, so that the targeted market can get a glimpse of the leverage the product has over the
rest. The intention is to raise awareness of the benefits of the product to the consumer to gain a
significant market share. The competitors will have a rough time matching the benefits offered
by Yo-Bran. Since the endeavors by other companies to match this product won’t be
spontaneous, the company will leverage that window to push the sales of the goods. Eventually,
the product will be part of the healthier living culture we live in today.
Company: Kellogg’s
According to Kellogg’s their Vision states that “To enrich and delight the world through
foods and brands that matter (Kellogg Company).” The fact that Yo-Bran is a product that is
devoted to the wellbeing of the consumer regarding health, it is in line with the statement of the
vision of enriching and delighting. It is an enrichment because of the health of the consumer
taken into account. Also, it is a delight to the consumer by them realizing that the product they
associated with will not have a negative impact on their health. So, Yo-Bran is a product that
matters a lot to consumers since the ultimate goal is to provide a product that has the taste the
consumer wants and concerned about their health.
On the other hand, the mission statement of Kellogg Company states that “Kellogg is a
global company committed to building long-term growth in volume and profit and to enhancing
its worldwide leadership position by providing nutritious food products of superior value.” First,
the product that is in question is nutritious and of high quality combining yogurt, cereal with
Running head: MILESTONE 1-2 - JUSTIFICATION
7
fresh fruit, and granola. The nutritious and quality part is in line with some part of the mission
statement. Second, the part of the mission talks about the company`s long-term growth in volume
and profit. Yo-Bran will to a great extent help the company diversify in its products leading to
more sales, growth, an increase in the company`s net profits. Finally, in stamping the firm`s
leadership position, the new product is a milestone in setting a pace for healthy eating hence
taking command in global product leadership.
Lastly, the priority of the company is to create a platform where ideas can grow and
register success. Yo-Bran presents a new idea and a new specter of a product that if adopted
present the company with an opportunity to steer its success to greater heights. The company,
therefore, need to give the idea an opportunity to grow and help the company register significant
success in line with its priorities.
Innovation
The products that have been in the market show some shortcoming. The created gap
between the manufacturer and the consumers. Majorly, the concern of the consumers has been
the amount of sugar-laden cereals. Second, is the fact that the sugary cereals cause health
challenges for the clients. Finally, is the taste of the cereals which breakfast consumers feel
should taste a particular way. Innovations are set to breach such gaps and provide solutions to
existing problems. Yo-Bran developers took into considerations all these factors and produced a
product that addresses the challenges alluded. It is an innovation that addresses the challenge of
taste, health concerns, and significantly reduces sugar in its composition. It is an innovation that
that by far will set the pace in the industry of cereals adopted for breakfast.
Running head: MILESTONE 1-2 - JUSTIFICATION
8
References
Avey, T. (2012, November 29). What’s for Breakfast? Discover the History of Cereal. Retrieved
on December 17, 2018, from http://www.pbs.org/food/the-history-kitchen/history-ofcereal/
Bonigala, M. (n.d.). Kellogg’s Adopts New Target Market. Retrieved on December 17, 2018,
from https://www.spellbrand.com/kelloggs-adopts-new-target-market
Chamlee, V. (2016, May 17). Americans Are Increasingly Obsessed With Breakfast. Retrieved
on December 17, 2018 from https://www.eater.com/2016/5/17/11691604/us-breakfastconsumption-rise
Cooper, R. G. (2013). New products: What separates the winners from the losers and what drives
success. PDMA handbook of new product development, 3-34.
Cooper, R. G. (2013). New products: What separates the winners from the losers and what drives
success. PDMA handbook of new product development, 3-34.
Hallman, W. K., Cuite, C. L., & Morin, X. (2013). Public perceptions of labeling genetically
modified foods.
Kellogg’s. (n.d.). Business Summary. Retrieved on December 17, 2018, from
http://investor.kelloggs.com/business-summary#overview
Linshi, J. (2015, February 12). Skipping Breakfast and Decline in Kellogg’s Cereal Market.
Retrieved on December 17, 2018, from http://time.com/3705987/skipping-breakfastcereal-kellogg/
Running head: MILESTONE 3-1 – COMPANY AND KEY PERSONNEL
3-1 Milestone Three: Company and Key Personnel
Jonathan Brannan
Southern New Hampshire University
Course MBA-705
January 13, 2019
Dr. Isabel Wan
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Running head: MILESTONE 3-1 – COMPANY AND KEY PERSONNEL
Introduction
When launching a product, a company ought to ensure that all necessary resources are
in place, in order to ensure successful designing, production, marketing and launching of the
product. Personnel such as; market research experts, product designers, quality managers, a
project manager, marketing personnel, and sales personnel, will be key in ensuring successful
launch of Yo-Bran. These employees will play a key role of ensuring that: a thorough market
research is conducted, the design of the product is appealing, production is carried out
effectively and products are thoroughly tests, and that effective customer service is ensured.
Leveraging human resource skills ensures that corporate culture is aligned to building a
competitive advantage because employees offer innovative skills. Corporate culture has the
potential to boost or bury a new product idea before or after it’s launched, hence the need to
invest in the organizational culture in order to ensure that employees supports the company’s
long term goals and innovation.
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Running head: MILESTONE 3-1 – COMPANY AND KEY PERSONNEL
Organization’s Core Competencies
Each company has its key competences, which could be corporate culture, product
design, corporate responsibility, pricing, or customer service. However, even the most
successful competencies can fail if not built on a strong corporate culture which encourages
team work, innovation, and ensures employee satisfaction and motivation. Core
competencies such as technology, experience, ability, and knowledge ensure innovation, low
operating costs, and good customer services. These competencies help distinguish an
organization and its products from rivals, thus resulting to high competitive advantage.
Therefore, employees, who have the potential to achieve these competencies, can help the
organization effectively create and implement the product. Companies have the potential of
utilizing their personnel as one of the key competencies and as a means of developing
strategic responsiveness (Belassi, 2013). Kellogg's can build on its human resource
competences by expanding the existing human capital capacity and through employee
training and recruitments. These efforts would make it possible to establish a culture which
recognizes customer needs and meets them accordingly.
Skilled personnel fits within the company’s long term goals, especially the core
competencies needed for the product launch. Human resources offer a high level of
innovation; hence diverse teams have capability to ensure the product’s success. Employee
competencies go beyond simply performing daily job description tasks(Ivana Nacinovic,
2009). Rather, these competencies ensure that employees understand market trends,
understand the company’s vision and mission, and buy into the company’s long terms goals
of assuming market leadership in the cereals industry in the US market and across the globe.
The company’s personnel also offers competences of tech skills as well as the ability to
communicate effective, network, and partner with industry leaders. Therefore, the personnel
will offer a platform on which the company and the new product can build its success.
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Running head: MILESTONE 3-1 – COMPANY AND KEY PERSONNEL
Human resources are a key competence because employees are responsible of
ensuring the company’s readiness to design, manufacture, market, and successfully launch
the product. Fast growth of the product would also require an ability to keep up in order to
ensure that supply matches demand, hence the need for employees to ensure scalability of
resources to accommodate changes. A successful product launch and increased demand will
automatically result to an increase in customer attention, hence the need to ensure a
motivated and satisfied customer service team is in place to address these needs. This team
would also ensure that customer inquiries and needs are addressed in time.
Corporate Culture
Kellogg's corporate culture has the capacity to affect the quality and quantity of the
new product launch. Therefore, for successful launch of the product, the company should
focus on being customer centric, should be technology driven, and should also be competitor
focused.
Customer focus. According to research, companies that adopt a customer centered
corporate culture are able to achieve more success in products development and launch. By
focusing on the customer needs, the company would be able to incorporate consumer
feedback in the product design and development process (Walid Belassi, 2007). This would
ultimately ensure customer loyalty as well as product recognition.
Involving all employees. For successful launching of the product, internal
stakeholders should be on board with the new product and should be kept engaged. All
employees, including those who are not directly involved in the product launch, should be
onboard. Therefore, before and after the launch, employees should be encouraged to embrace
the product for personal use and share about it on their social media platforms. Before selling
the product to the target customers, the company should first ensure that employees buy into
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Running head: MILESTONE 3-1 – COMPANY AND KEY PERSONNEL
it. An ongoing workshop about the product should be established to ensure that employees
are educated about the product.
Technology. Kellogg's should focus on establishing a corporate culture centered on
innovation and creativity. Before and during the product launch, innovation and creativity
should be encouraged by creating a safe space where employees can freely express their
thoughts. This will ensure that efficiency, affordable marketing, and low cost production are
embraced. Customer needs and preferences are fast changing thus leading to changes in
customer demand. Therefore, the company’s culture should be able to utilize these
technologies in keeping up with the changing trends (Belassi, 2013). Through use of
technology, they should be able to master latest innovations in order to create cutting edgeproducts. This should be the case, especially during the initial stages of product development
which require a lot of creativity. The company should also be able to encourage risk taking,
and the ability to come up with original ideas. This will help the team ensure that; rather than
only following competitors’ approaches of producing, marketing, and distributing of cereal
products, the company gets to support innovation which will help create a creative system for
the product. This technology will help ensure quality of products, will encourage low
operation costs, and will also save time.
Diversity. Kellogg's should also embrace a culture of inclusion through which
employees of different genders, race, and age groups are engaged in the product launch. This
can help with innovation and creativity, and ensure diversity which is good for the company’s
image, especially when dealing with customers and suppliers.
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Running head: MILESTONE 3-1 – COMPANY AND KEY PERSONNEL
Key Roles, Responsibilities, and Qualifications
Project manager. This role will entail coordinating all aspects of the product and resources
involved, including human resources. This position requires thorough understanding of the
market and the product.
Senior management. The senior management, including the CEO and senior executives will
play an important role of coordinating the team and in reinforcing innovation in order to
position the organization towards achieving success.
Product marketing launch manager. This is a central and critical role which will be at the
center of the product launch process. This manager will be responsible of developing and
executing a thorough market plan for the new product
Sales Personnel. The product manager will work closely with the marketing personnel
including sales team which will be on the ground ensuring that the cereal is thoroughly
marketed in various markets.
Product support/customer service team. This team will be responsible of ensuring that:
after the product has been released, customer needs including possible complains are
addressed accordingly.
Contingency Plans
In the event the team composition needs to be modified, the company will explore
various options including employing individuals on permanent, contract, or temporary basis.
As unexpected or additional tasks in research, marketing, or administration come up, the
company will employ employees on contract basis to carry out temporary tasks, consultants
will be utilized in drafting various strategies, while long term vacancies will be filled by new
permanent basis hires.
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Running head: MILESTONE 3-1 – COMPANY AND KEY PERSONNEL
A new product launch process will create additional work demand; hence hiring
seasonal staff on temporary basis to meet this need will be the most effective approach. These
employees will work for a temporary period of one year or less, thus ensuring that extra work
is completed without incurring too much hiring cost. Unlike hiring on a permanent basis,
seasonal employees are usually already skilled and previously vetted for the position; hence
this contingency plan will help save the company time as well as money. This plan will also
offer flexibility, making it possible to only hire specifically needed skills at a particular time.
The company can also recruit part-time employees who will be paid an hourly wage rather
than a monthly or annual pay. This approach will help save overheads as it minimizes
employee down time (Marshall, 2014).
Kellogg's can also opt for contractors who will bring in a team of workers to perform
specific tasks, especially in manufacturing of the cereals. Unlike under a temporary or
permanent employment arrangement, the company will not pay the workers directly, but
rather, will pay the contractor who will in return pay the workers. Contractors tend to be
experts who specialize in a specific skill, hence are likely to offer more expertise, thus
ensuring success of the product.
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Running head: MILESTONE 3-1 – COMPANY AND KEY PERSONNEL
References
Ali Gursoy, B. G. (2016). Effect of Innovative Culture on Intrapreneurship. International
Journal of Business and Social Science , 11.
Belassi, W. (2013). The Impact of Organizational Culture on the Success of New Product
Development Projects: A Theoretical Framework of the Missing Link . The Journal of
International Management Studies, Volume 8 Number 2, 10.
Ivana Nacinovic, L. G. (2009). Corporate Culture and Innovation: Implications for Reward
Systems . Ivana Nacinovic, Lovorka Galetic, and Nevenka Cavlek .
Marshall, M. I. (2014). Planning for the Unexpected: Human Resource Risk and Contingency
Planning. ResearchGate.
Walid Belassi, A. Z. (2007). New product development projects: The effects of
organizational culture. Project Management Journal.
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Running head: MILESTONE 2-1 – IMPLEMENTATION PLAN
2-1 Milestone Two: Implementation Plan
Jonathan Brannan
Southern New Hampshire University
Course MBA-705
January 5, 2019
Dr. Isabel Wan
1
Running head: MILESTONE 2-1 – IMPLEMENTATION PLAN
Physical and Technological Resources
Capital resources. In order to fund production, marketing, and distribution of the
new product, Kellogg`s Company will need an infusion of capital through exploring various
capital contribution options. The new product will be funded through ploughing back of
profits.
Operational resources. In order to successfully implement the new product,
Kellogg`s will need various resources such as a manufacturing facility for Yo-Bran. The
company will also need to make room for more resources of additional staff, who will focus
on the new product. The additional staff members will be recruited to ensure that there is
sufficient staff team to deal with the additional needs of production, marketing, and
manufacturing of the new product, as well as in running other operations-related tasks. A
proper working space and sufficient information systems such as computers and new
telephone lines will also be necessary.
Experts. For successful implementation, the new product’s design and production
will be carried out through a support team of experts. These individuals will provide expertise
and train employees on how to successfully develop and launch the cereal product.
Technologies. Some of the relevant technologies that will help cut cost and ensure
efficiency in operations include; robotics and ERP. These can be used in enhancing
communication in the production process. An active website will also be needed for smooth
advertising of the product. Manufacturing of Yo-Bran will require precision in preserving the
ingredients and in ensuring quality of products. Keeping a digital data system will help
deliver real-time updates and overview of the process, thus ensuring accuracy and
minimizing downtime which could be caused by stock out. The production process will also
rely on formulaic production methodologies and detailed product recipes, thus ensuring that
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Running head: MILESTONE 2-1 – IMPLEMENTATION PLAN
that burden is alleviated from equipment operators, since the process will be less manual.
These tools will ensure lean manufacturing and timely delivery of products to the market.
Kellogg`s also has to comply with the food and beverage industry regulatory requirements.
Therefore, emerging technologies such as Internet of Things (IoT) will be useful in ensuring
that; when producing the product, the company is able to deploy improved track and trace
methods in the post-production monitoring process. This way, any products that need
improvement can be traced back to where the defects originated, thus making it possible to
prevent repeat incidences of poor quality products. In stocking and restocking the product,
the company will utilize a flow-through sorting system which will make the restocking
process simpler. Robotic palletize and de-palletize technologies will be incorporated in order
to ensure that modularity, flexibility, and scalability are ensured (Papageorgiou, 2018).
Implementation Schedule
1. Market Research. This will be a three month process, during which a lot of money will be
allocated to research and development. This task will be carried out by an outsourced team of
market researchers.
2. Building the product. Based on the market needs identified during the research process,
product design and the building process will begin, lasting for a period of two months. This
process will include establishing the product mix.
3. Creating a buzz around the product. This task will take place one month before the launch.
During this period, simple PR and press releases will be done. The marketing team will be
responsible of this activity. A buzz will alert the target audience of the newly to be introduced
cereal. The product will also be introduced through various media platforms. A buzz will help
gain customers of the product before the actual product in actually launched to the market.
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Running head: MILESTONE 2-1 – IMPLEMENTATION PLAN
4. Product launch. After manufacturing and creating a buzz, the product launch process will
take place in a period of one week. Top managers and the marketing team will work closely
in launching the product. Outsourced team of online marketers and tech savvy people will
help with online marketing and optimization of online marketing campaigns.
5. Monitoring and development. After the launch, product monitoring will begin
immediately. During this process, product quality, price, and demand as well as sales will be
monitored closely in order to provide room for improvements. The quality will be monitored
through customer feedback, and if need be, the necessary changes will be made.
Table 1:
Task
Duration
Party
Responsible
Market Research
3 months
Contracted
Company
Building product
2 months
(Product Design/
Manufacturing
team
Mix)
Creating Buzz
1 months
Marketing
Team
Product Launch
1 week
Operations
manager/ Top
managers
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Running head: MILESTONE 2-1 – IMPLEMENTATION PLAN
Monitoring and
Continuous
development
Manufacturing,
Marketing, &
Finance Team.
Project Review Processes
The project review processes will include operation, functional reviews as well as
performance reviews (UAS, 2013). The project’s success is dependent on success of the
product, which can be measured through sales increase, profitability, customer engagement,
and customer loyalty. Success of the product’s implementation process shall be measured
through the following factors;
1. Business Analytics. Success of the product in the market will be closely tracked using
business analytics through various metrics of sales per day, new customers, repeat sales, and
customer base growth. These metrics will help establish value of the launched product
overtime, thus providing feedback on the areas that need improvement. The analysis will also
measure customer engagement with the product on the company’s website. The biggest
challenge will be maintaining the buzz and social media engagement before and after the
launch, hence the focus on the ability to keep customers talking about the cereal and its health
benefits will be a critical measure of the product’s success.
2. Testimonials. Online testimonials as well as reviews and feedback from customers will
also be a key approach to reviewing success of the product. Due to the freedom that social
media and other online platforms provide, objective criticism of the product will be available
online, thus making it possible to make improvements.
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Running head: MILESTONE 2-1 – IMPLEMENTATION PLAN
3. Customer surveys. After sales, customers will be offered an option to rate the cereal in
terms of quality, fair pricing, and their satisfaction with the product in general. This will offer
a more reliable form of feedback from actual customers.
4. Proven results in terms profitability and increase in sales. The ability to increase sales
overtime and break even within the expected one year will be an indication that the product
has performed well. Other factors such as a loyal and growing customer base will also be an
indicator that the product is a success in the market.
5. Customer demographic trends. Often, a product may become more popular among
unexpected demographics. The main geographic location for the Yo-Bran target market
segment will be in the United States as there is a national shift to eating healthier. The age of
the demographic will be 25-35, with a medium income of $35,000 - $70,000.Consumption of
the product by this demographic as well as others will be closely monitored to establish
demand trends.
Intrapreneurship Factor
Trademark. Protecting rights to the product is essential for long term profitability, as
well as the ability to build competitive advantage. Defining origin of the product can help
prevent third parties from legally developing an identical product, especially in terms of the
design. Yo-Bran cereal is however not easy to trademark because cereals are a commonly
available product (Papageorgiou, 2018). Therefore, restricting others from selling a similar
product mix may be impossible (Musick, 2009). However, the company will be able to make
the product’s brand stand out by using a name or phrase that is eligible for trademark, and
focus on using it when marketing the product and other Kellogg’s products. In addition, other
measures will be taken to ensure that the product mix ideas are all kept confidential through a
non-compete and non-disclosure document signed by the employees who are directly
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Running head: MILESTONE 2-1 – IMPLEMENTATION PLAN
involved in the production process. This will ensure that employees do not use the knowledge
of the product and communicate this to the competition or start a competition business. This
agreement will be legally drafted by a lawyer who will help ensure that all ideas developed
by employees in relation to the product will solely belong to the company, hence will only be
for the benefit of the company. This will ensure that; in case of a falling out, former partners
or employees do not act against the company.
Leveraging on human capital. In order to ensure success, intrapreneurship and
entrepreneurial factors such as the ability to find and manage the right people, will be
considered. By leveraging on employees, vendors, and other human resources, pulling
together of resources will be ensured, and the product will be a success.
Organizational culture. The implementation process will take into account various
factors of organizational culture (Ali Gursoy, 2016). Availability of a creative and innovative
team will be significant in ensuring product success. A good team will also encourage risk
taking, rather than only following competitors on how they navigate production, marketing,
and distribution of cereal products. This ability to support innovation will help create a
creative system for the product, including the ability to utilize technology in production,
marketing, and distribution, thus saving time and cost.
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Running head: MILESTONE 2-1 – IMPLEMENTATION PLAN
References
Ali Gursoy, B. G. (2016). Effect of Innovative Culture on Intrapreneurship. International
Journal of Business and Social Science , 11.
Bamdad, F. (2015). New Technologies in the Processing of Functional and Nutraceutical
Cereals and Extruded Products. Nutraceutical and Functional Food Processing
Technology.
Musick, E. M. (2009). PROTECTION OF INTANGIBLE ASSETS. Procopio, 2.
Papageorgiou, M. (2018). Introduction to cereal processing and by-products. Sustainable
Recovery and Reutilization of Cereal.
UAS. (2013). The Project Quality Review Process (PQRP). University of Oxford , 8.
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Running Head: COMPREHENSIVE BUSINESS PLAN
9-1 Final Project Submission: Comprehensive Business Plan
MBA 560
Jonathan Brannan
Southern New Hampshire University
6/4/2017
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Running Head: COMPREHENSIVE BUSINESS PLAN
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Executive Summary
Kellogg Company has always been renowned for its popular brands and its ability to keep up
with the ever-changing trends in the breakfast food industry. With breakfast foods moving to a
healthier and quick eating trend, it’s important for Kellogg’s to make sure they develop a product
to stay ahead of this trend. The new Kellogg’s breakfast food, Yo-Bran, will help ensure
Kellogg’s maintains its profitability and its market share within the industry, as well as giving
their consumers what they want. Yo-Bran beats the competition by providing healthy ingredients
in the product with nonfat Greek yogurt combined with fresh fruit and granola. Yo-Bran will
give consumers a healthy and quick alternative breakfast food for those people living on-the-go
lives looking for something quick and healthy to eat in the morning. Yo-Bran also isn’t just a
breakfast food but can also be a healthy snack food alternative throughout the day. The rest of
the Yo-Bran product concept and proposal is outlined in the following business plan.
Context: Defining Features
“America's leading cereal maker, Kellogg's, reported a 4% decline in its annual U.S. cereal
sales Thursday, slashing its long-term growth forecast roughly in half. What's to blame for the
soggy outlook? Kellogg's and other cereal makers face two big problems: Breakfast-skippers and
changing tastes” (Linshi, 2015, p. 2). Kellog’s industry share over the years and has continuously
reduced, resulting in the strengthening of competitors like General Mills. The biggest problems
in the breakfast cereal industry have been brought about by their overdependence on genetically
modified food materials, high sugar concentrations, and preference of fast foods for breakfast for
convenience purposes.
Commodity pricing pressures have forced many companies within the breakfast cereal
industry to raise their prices (Rooney, 2012). As if the competition with other cereal brands
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3
wasn’t enough already for Kellogg’s, private label-cereals began to take shape and started to
become an attractive alternative to price-conscious consumers (Rooney). As mentioned before,
more people have been looking for healthier alternatives to the high sugar cereals. “Kellogg Co.,
maker of such iconic brands as Special K, Mini Wheats and Corn Flakes, is no stranger to these
challenges, itself having to raise prices amid rising commodity costs and recently reporting a net
sales decrease of 1.3% in the first quarter. Revenues are expected to increase only 2% to 3% in
2012 versus an average of 6% annually over the past decade. Most recently, consumers have
taken to social media to voice their anger at Kellogg’s natural-cereal brand Kashi’s use of
GMOs” (Rooney, p. 2).
With that said, Kellogg’s most defining feature is their advertising, as well as their
sponsorships. Despite all the competition and rising prices, Kellogg’s still remains one of the
largest cereal makers by sales (Rooney, 2012). Amazingly enough, Kellogg’s spends “more than
$1 billion annually on brand advertising and marketing and is an official sponsor of the U.S.
Olympic and Paralympic Teams, is fighting back with product innovation, an expected purchase
of Pringles that should expand its global footprint in the snacks category and now, a major brand
overhaul” (Rooney, p. 3). Kellogg’s marketing efforts are one of the best in the industry. They
spend more than any of their competition, but it has proved to be worthwhile.
Another defining feature Kellogg’s has is their brand itself. In 2012 Kellogg’s went
through a corporate rebrand, with the project being dubbed “Project Signature.” (Rooney, 2012).
With this rebrand came a new logo which identified Kellogg’s core purpose, an incorporation of
the “masterbrand” into all Kellogg’s marketing campaigns, consolidating 42 company websites
into one, and the new tagline “Let’s Make Today Great” (Rooney). This rebrand was driven by
an acknowledgement but Kellogg’s leaders that consumers want to be more engaged with the
Running Head: COMPREHENSIVE BUSINESS PLAN
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brands they care about. This is evidence that Kellogg’s is learning and wanting to keep pace with
today’s consumers.
Context: Fit
“A strong focus on innovation is advantageous to the company while catering to the
growing needs of its customer base. Kellogg’s R&D and innovation activities are carried out at
its research center, W. K. Kellogg Institute for Food and Nutrition Research, in Battle Creek,
Michigan, the US. The company considers a global approach to R&D and innovation, expansion
and adjustment in its portfolio to meet consumer needs around the world. Innovation is one of
the major driving forces of the growth of the company. For instance , In April 2016, the
company's Pop-Tarts brand introduced Pop-Tarts, mashed-up with soda pop flavors. The
company spent US$193 million on its R&D activities in FY2015. Strong focus on R&D helps
the company in improving its competitiveness in the market” (MarketLine)
Breakfast is widely considered the most important meal of the day and research seems to
agree (Spector). “Study after study shows that breakfast boosts brainpower and helps to control
cravings later in the day” (Spector, p. 1). With that said, Yo-Bran fits in with Kellogg’s shift to a
healthier style of breakfast. Since Yo-Bran is of the breakfast variety it fits the mold of the
current Kellogg’s brand portfolio. The nonfat Greek yogurt provides an extra boost of protein in
the morning to go along with a healthy serving of fruit (Spector, 2014). Yo-Bran also fits in with
Kellogg’s new tagline, “Let’s Make Today Great,” since you’ll be starting your day off with a
healthy breakfast to give you the energy you need to make your day great.
When it comes to Kellogg’s current business plan, Yo-Bran certainly fits the model.
“Breakfast remains a growing meal occasion that generates more than $400 billion in sales
globally each year. It also comprises about 45 percent of our global sales. We know that tastes
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and preferences for breakfast have been changing, which we view as an opportunity for our
business. During the past year, we have focused on our four largest cereal markets, namely the
U.S., Canada, U.K. and Australia. We have made strides in delivering foods our customers want,
improving the relevance of the cereal category, and reinventing the in-store experience”
(Kellogg’s, pg. 3). Kellogg’s core business model is to grow the breakfast cereal market and be
able to dominate it at the same time. With a new and healthy product to introduce to their
breakfast cereal portfolio, it will allow Kellogg’s to increase their market share in the breakfast
cereal industry by providing consumers what they want, which is a healthy product.
Kellogg’s business plan also involves becoming a global snack powerhouse (Kellogg’s).
“The snack foods market has been another important focus of our strategy for very good reasons.
Snacks generate $230 billion in total worldwide sales annually and represent almost 50 percent
of our global sales” (Kellogg’s, pg. 3). The good news is that Yo-Bran can be consumed as a
healthy snack alternative, as well as being a breakfast cereal. Through research conducted by
Kellogg’s, it has been proven that 30 percent of all cereal in the United States is eaten as a snack
(Kellogg’s). Yo-Bran’s nonfat Greek yogurt base with crunchy granola and a healthy serving of
fruit will Kellogg’s in their quest in becoming a global snacking powerhouse. Of course, this will
all depend upon the effectiveness of Kellogg’s ability to market the product.
Context: Effectiveness
In order to be more effective in the industry and to maintain their share in the breakfast
cereal market, a rebrand was necessary to help truly understand the strengths and weaknesses of
Kellogg’s. With that said, there were two major outcomes that came out of this rebrand for
Kellogg’s, which allowed them to focus their strategy to remain effective. One outcome was to
drive absolute clarity and alignment around the purpose of the Kellogg’s brand and what it stood
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for, and the other outcome was to create a fresh identity for the Kellogg’s brand (Rooney, 2012).
Even though Kellogg’s remained one of the leaders in sales within the breakfast cereal industry,
before the rebrand they felt their brand effectiveness was lacking and they weren’t connecting
with their target audience like they wanted. After the rebrand, Kellogg’s began to spend more on
digital platforms and tech to give the consumer a better brand experience (Rooney). With more
people accessing information from mobile devices and online, it was imperative that Kellogg’s
made a shift in their marketing efforts to reach more people and to be more effective as an
overall brand.
With a rebrand, it becomes easier to add and implement new products to fit a new brand
strategy. With that said, when rebrands occur, many companies often add new products to their
portfolios. Sponsorships, like the Olympics, have been a fantastic way for Kellogg’s to launch
new products and to get across their message to their consumers. Yo-Bran would be a perfect
product to add to Kellogg’s shift into a healthier product market and fits within their new brand
effectiveness strategy. As stated by Mark Baynes, “a better breakfast leads to a better day”
(Rooney, 2012, p. 8). At the end of the day, Kellogg’s rebrand has made their brand as a whole
become more effective in the market.
Need: Target Market: Basic Demographics
Kellogg’s has recently adopted a new target market with their advertising campaign
targeting young men (Bonigala). The age of the demographic will be 25-35 with a medium
income of $35,000 - $70,000. The main geographic location for the Yo-Bran target market
segment will be in the United States as there is a national shift to eat healthier. Initial targets will
be in the Mid-Atlantic States. “Sometimes identifying and marketing to a previously untapped
niche can mean incredible success. Kellogg’s is likely hoping that this will be the case with their
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new advertising campaign targeting young men, an audience that has been virtually ignored by
high fibre cereal and breakfast food manufacturers up until now. The new campaign, called
‘Wake Up to Breakfast’, encourages young men to make healthy choices for breakfast and to
make this meal a part of every morning” (Bonigala, p. 1). “Studies have shown that men between
the ages of 16 and 24 generally stop eating breakfast. Kellogg’s hopes to entice them back to a
favourite childhood brand with cereals that are branded to appeal to a slightly older palate and
lifestyle” (Bonigala, p. 3). Yo-Bran will be a perfect product for this demographic as it is both
healthy, with the nonfat Greek Yogurt, and tasty with the granola crunch and fresh fruit. It’s also
easy to make as all you need to do is pour it into a bowl. With today’s fast pace lifestyle, this
product will be perfect to grab, eat, and go.
With that said, “A Kellogg's consumer is generally higher income, African American,
and lower middle age. Kellogg's consumers are more likely to purchase Kellogg's during larger
pantry stocking trips. Brands such as Quaker Chewy, Dannon Danimals, and Yoplait Go-Gurt
also tend to be purchased in the same trip” (InfoScout).
Need: Target Market: Other
“By segmenting the market based on psychographic characteristics you are able to be
more niche in your advertising buys; maximizing exposure to key segments. As a result, your
money is spent more wisely and you should see an increase in your ad spend efficiency or a
greater return on investment. You also can appeal more specifically to motivations in your
messaging, which improve your conversion rate. Psychographic characteristics also play a key
role in developing your target market personas” (LocalDirective, p. 3).
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Kellogg’s continues to market in their core markets which include Canada, Australia,
United States, and the U.K. (Kellogg’s). They also continue to target younger aged consumers
and mothers of the middle class.
Need: Want or Need
Specifically, younger consumers have been shifting from breakfast cereals to more
healthy, nourishing, and quick to make alternatives (Tuttle, 2016). “The latest indication this is
so came in the form of a Mintel survey in which 40% of millennials described cereal as too
difficult to eat, what with the need to add milk and the maddening requirement of two hands for
consumption” (Tuttle, p. 3). “In recent years, the big cereal companies have launched multiple
missives to stop the decline of cereal. They've played up the nostalgia angle, periodically
bringing back Boo Berry and other monster cereals that were part of many Gen X childhoods.
They've marketed cereal as the perfect option for dinner and late night snacking, rather than have
it limited to the breakfast hours” (Tuttle, p. 6).
With that said, the decline in cereal sales has been a big problem for not only Kellogg’s
but for their competitors as well. Consumers are looking for healthy and quick to make product
alternatives to breakfast cereal. That’s why innovation is necessary and finding creative ways to
fill the needs of their consumers. Yo-Bran is the perfect product to add to Kellogg’s product
portfolio because it is both healthy and quick to make. Yo-Bran will help contrast the declining
cereal sales and help fulfill the needs of Kellogg’s consumers.
Need: Why
Kellogg’s is working on tapping in to a new target audience including young men. As
mentioned before, younger consumers are shifting their breakfast eating habits to healthier foods
(Tuttle, 2016). Yo-Bran is both a healthy alternative to cereal, as well as a quick to make meal
Running Head: COMPREHENSIVE BUSINESS PLAN
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for people on the go. The nonfat Greek yogurt base, mixed with fresh fruit and granola chunks
make it a healthy alternative to normal breakfast cereals. For serving purposes, all that a
consumer needs to do is pour it into a bowl to to-go container and enjoy. These two
characteristics help defend the strategy behind its target market of younger males.
Strengths and Weaknesses: Assess
Strength – Strong Product and Brand Portfolio: One of Kellogg’s biggest strengths is its
current product and brand portfolio. More often than not, when Kellogg’s is mentioned people
know what it is and the types of products they sell. Yo-Bran will benefit from this since
Kellogg’s is trusted among many breakfast food eaters and many consumers are brand loyal.
People are more willing to give a new product a try if they trust the brand that makes it.
Kellogg’s Company is the largest producer of breakfast cereals and convenience foods in the
world (Kellogg Company, 2006). Kellogg’s has a variety of products within its portfolio which
include cereals, cookies, crackers, savory snacks, frozen foods, toaster pastries, cereal bars, fruitflavored snacks and veggie foods (Kellogg Company). “The company markets its products under
the brands of Kellogg's, Pop-Tarts, Eggo, Nutri-Grain, Rice Krispies, Morningstar Farms,
Famous Amos, Special K, All-Bran, Crunchy Nut, Frosted Mini-Wheats, Garden Burger, and
Town House. It also produces cookies, crackers, crisps and convenience foods and markets under
the brands of Keebler, Cheez-It, Murray, Austin and Famous Amos” (Kellogg Company, pg. 1).
“Kellogg’s brands are highly reputed and enjoy massive attention from consumers even in
emerging markets. Strong product range coupled with well-known brands enables the company
to attract broad customer pool” (MarketLine, 2016, p. 1). Kellogg’s is headquartered in Battle
Creek, Michigan but operates all over the world including Africa, Europe and Asia.
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Weakness – Reliance on Few Customers: Even though Kellogg’s is an industry giant with a
large consumer base, it relies too much on a limited customer base, which supplies their
products, for most of their revenue (MarketLine, 2016). If shoppers of a particular store don’t
purchase new products, this could hurt Yo-Bran’s chances of becoming a popular trend since
Kellogg’s focuses on a limited customer base. With a limited amount of customers selling
Kellogg’s products, Yo-Bran’s chances of being seen and tried are limited.
“In FY2015, Wal-Mart Stores Inc and its affiliates alone accounted for approximately 21% of
the company’s consolidated sales. As of January 2016, Wal-Mart Stores, Inc. and its affiliates
accounted for approximately 18% of the company’s consolidated receivables balance and 27% of
its US receivables balance” (MarketLine, 2016, p. 6). With that said, in FY2015 34 percent of
Kellogg’s net sales came from its top five customers and 47 percent of their US net sales
(MarketLine). With Kellogg’s depending highly on customers like Wal-Mart, it could affect their
overall business and operations if they aren’t able to find suitable alternatives for their products.
This also allows its customers to increase bargaining power, which may affect Kellogg’s
business operations (MarketLine).
Strength – Knowledge: In 2012 Kellogg’s went through a corporate rebrand, with the project
being dubbed “Project Signature.” (Rooney, 2012). With this rebrand came a new logo which
identified Kellogg’s core purpose, an incorporation of the “masterbrand” into all Kellogg’s
marketing campaigns, consolidating 42 company websites into one, and the new tagline “Let’s
Make Today Great” (Rooney). This rebrand was driven by an acknowledgement but Kellogg’s
leaders that consumers want to be more engaged with the brands they care about. This is
evidence that Kellogg’s is learning and wanting to keep pace with today’s consumers.
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That said, with a rebrand comes a knowledge base of the current product portfolio, the
industry, as well as knowledge and insights into product innovation. The people of Kellogg’s
understand the breakfast cereal industry and the trends that come with it. The current trend in the
industry is healthy eating. This continuing knowledge will help Kellogg’s with product
innovation to help keep them relevant in the industry and making sure they are supplying their
consumers what they want. Since Yo-Bran is similar to a yogurt parfait, knowledge on how to
produce the product shouldn’t be out of the capabilities of the people at Kellogg’s.
Strengths & Weaknesses: Opportunities: Consumer Trends
According to a report done by market research firm NPD Group, breakfast consumption
will grow by five percent through 2019 (Chamlee, 2016). Also according to the NPD Group,
breakfast snack consumption, including yogurt, fruit, and granola bars, has increased 17 percent
over the past six years (Chamlee). One of the major consumer trends attached to this recent
growth is fast food and fast food restaurants.
Morning visits to fast food restaurants have increased five percent over the past year, meaning
more people are looking for quick fixes for their breakfast consumption (Chamlee, 2016). “For
consumers, convenience and affordability are key — breakfast foods showing the most growth
include breakfast sandwiches (hello, McGriddles) and portable foods, like yogurt and cereal bars.
The average annual number of breakfasts consumed per person in 2015 was 361 (up 11 per
person from 2010), meaning the average person is eating breakfast almost every day” (Chamlee,
p. 3). Thanks to the speed and convenience of fast food restaurants, major breakfast brands, like
Kellogg’s, must innovate to keep up with the fast food trend. Yo-Bran is a perfect example of a
fast and convenient breakfast food, which is also a healthier alternative to fast food breakfast.
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With that said, a report done by NPD Group shows that 70 percent of breakfast consumption still
takes place in the home (Chamlee).
Another emerging consumer breakfast trend affecting the marketplace is all-day breakfast.
Many fast food chain restaurants are now offering all-day breakfast menus and products (Huen,
2016). The reason for this is that breakfast items are often more affordable for both consumers
and food operators to produce. The breakfast all-day trend also attracts those consumers getting a
later start to their day (National Pasteurized Eggs, Inc., 2016). Yo-Bran is the perfect all-day
breakfast product as it’s great for an early morning breakfast cereal alternative, or makes for a
great mid-day snack. Yogurt can be enjoyed anytime throughout the day.
The main breakfast target market affected by these trends that Yo-Bran must be able to
capitalize on is the both men and women in their early 20’s who work or are in school. These
people are on the go consumers and are looking for a quick and healthy breakfast product to
consume on their way to work or school. In order to compete with fast food restaurants, Yo-Bran
will have to use its competitive advantage it has in healthy eating. These trends will continue to
play a major role of this target audience.
Strengths and Weaknesses: Opportunities: Ethics
For the seventh time since 2007, Kellogg’s Company has been named to Ethisphere
Institute’s World’s Most Ethical Companies list (PR Newswire, 2015). Kellogg’s not only
promotes ethical business standards and practices within their business, but they also exceed
legal compliance minimums and shape future industry standards by introducing best practices
(PR Newswire). With that said, those best practices implemented by Kellogg’s have reinforced
the right behaviors to safe guard the business and its consumers, employees and investors.
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In 2013, Kellogg Company modified its Global Code of Ethics and began to embed the code
into the company culture. “Building on our legacy of integrity, we wanted to ensure our Global
Code of Ethics incorporated all of our 'K Values,' which include integrity, respect,
accountability, passion, humility, simplicity and driving results," said Jim Sholl, vice president of
internal audit and compliance. "In addition to recognizing our corporate ethics and governance,
we're especially proud that this year's Ethisphere honor reaffirms our commitment to social and
environmental stewardship and our philanthropic efforts” (PR Newswire, 2015, p. 4).
Then, in 2014, Kellogg Company announced its new global sustainability goals in responsible
sourcing and the conservation of natural resources (PR Newswire, 2015). Kellogg’s also
continued its battle against hunger by pledging to donate one billion servings of food through
Breakfast for Better Days. As a food company it makes sense for Kellogg’s to focus on global
hunger relief, food insecurity and the importance of breakfast for children.
Even though Kellogg Company is one of the most ethical companies in the world, new
product develop can uncover ethical violations that could be harmful to the community and the
company. Transportation of Yo-Bran to its suppliers could impact the community in a negative
way. Transporting Yo-Bran in trucks could lead to increased traffic in local communities and
also increased noise pollution. Of course, increased truck traffic can lead to an increase in air
pollution within the community. Although this might not directly affect Yo-Bran’s branding, it
might affect Kellogg’s overall branding of being a helpful community leader.
Strengths and Weaknesses: Affect
Even though Kellogg’s is one of the most well-known companies in the world when it comes
to breakfast food, that doesn’t mean they don’t have their problems. One of the main weaknesses
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that affects the company in a major way is the amount of product recalls they have every year
(MarketLine, 2016). Product recalls affect Kellogg’s in a negative way and really hurt the brand
image and may decrease customer confidence in the brand. “In September 2016, the company
recalled its whole wheat waffles due to presence of Listeria monocytogenes. It recalled
approximately 10,000 cases of these products. Listeria monocytogenes causes fatal infections in
young children, frail and elderly people and for people with poor immune systems. It also leads
to severe headache, fever, stiffness, nausea, abdominal pain and diarrhea problems. Additionally,
it also causes miscarriages and stillbirths in pregnant women. The company offered full amount
of refund for those customers who purchased these products” (MarketLine, SWOT Analysis
Overview, p. 6). These recalls could really have a negative impact on Yo-Bran especially if
confidence is low among the customer base. This will affect the manufacturing department.
Community impact can also have a huge effect on Kellogg’s and the marketplace.
Transportation of the Yo-Bran product could negatively affect the community due to traffic
concerns and air and noise pollution. Although there might not be any solution to this, we might
be able to limit the amount of trucks coming and going from our suppliers by increasing the
amount of product we ship in a truck. This would affect our logistics department.
Core Competencies
One of Kellogg’s main core competencies is diversity and inclusion. Diversity refers to the
wide variety of human characteristics within the business, while inclusion has to do with the
environment Kellogg’s creates so everyone can bring their whole selves to work every day and
contribute fully to the organization (MarketLine, 2016). “At Kellogg, we are firmly committed to
diversity and inclusion. We aim to have a workforce that, at all levels, reflects the vast diversity
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of our consumer base, and we want every employee to feel they can be real and authentic. We
know that both diversity and inclusion are business imperatives: Diversity helps us better
understand what our increasingly diverse consumers want and love, and inclusion helps to
bolster employee productivity” (MarketLine, Company View, p. 4).
Another core competency that Kellogg’s has is research and development. Kellogg’s puts a
strong focus on its research and development activities. This helps Kellogg’s stay ahead of the
changes within the industry and provides it with ‘first mover’ advantage by launching products
ahead of its competition (MarketLine, 2016). “The company’s R&D initiatives are aimed at new
product development, improvement of existing products and identifying and developing new
benefits and developing new food forms. It always intends to achieve the growth through various
product improvements and renovations” (MarketLine, SWOT Analysis Overview, p. 1).
Kellogg’s is known for its cutting-edge technologies that help it develop new products based on
the changing industry trends. “Kellogg’s R&D and innovation activities are carried out at its
research center, W. K. Kellogg Institute for Food and Nutrition Research, in Battle Creek,
Michigan, the US. The company considers a global approach to R&D and innovation, expansion
and adjustment in its portfolio to meet consumer needs around the world. In FY2016, the
company invested US$182 million on its R&D activities” (MarketLine, SWOT Analysis
Overview, p. 1).
Lastly, Kellogg’s most valuable core competency is their wide geographic presence.
Kellogg’s diverse geographic operations help lessen risk associated with the dependence on a
particular market. Having a wide geographic presence helps Kellogg’s increase its revenues
while decreasing business risks. Kellogg Company is one of the world’s leading producers of
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Running Head: COMPREHENSIVE BUSINESS PLAN
ready to eat breakfast cereals and holds a strong market share within the industry (MarketLine,
2016).
Pricing: Costs
The total cost of a quart of Yo-Bran will be $6.99. This number is based on the fixed and
variable costs that go into making the product. The main ingredients in Yo-Bran include nonfat
Greek yogurt, granola clusters, and fresh fruit. Variable costs are “periodic costs that varies in
step with the output or the sales revenue of a company. Variable costs include raw material,
energy usage, labor, distribution costs, etc” (Business Dictionary). On the other hand, fixed costs
are “periodic costs that remain more or less unchanged irrespective of the output level or sales
revenue, such as depreciation, insurance, interest, rent, salaries, and wages” (Business
Dictionary).
When it comes to Yo-Bran, variable costs, including labor and distribution costs will be
around $3.00 per unit produced. On the other hand, fixed costs will be around $2.00 per product
produced. In total, production will cost around $5.00, which leaves us with a $1.99 profit on each
unit of Yo-Bran produced.
Fixed Costs
Variable Costs
$2.00
$3.00
Pricing: Pay
Since Yo-Bran is a unique product, not many of Kellogg’s direct competitors offer a
Greek yogurt based cereal with granola clusters and fresh fruit. However, Yo-Bran can be
compared to yogurt parfaits. When it comes to quick and ready to eat yogurt parfaits,
McDonald’s takes the cake. Based on McDonald’s breakfast menu, their parfait cost $1.00
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17
(Secret Menus). With that said, a quart of Yo-Bran will cost $6.99. I believe consumers will be
able and willing to pay $6.99 for Yo-Bran over a McDonald’s parfait. If you get a parfait for
breakfast every day from McDonald’s a consumer will be spending over $7.00. A quart of YoBran that will last a consumer longer than a week only costs $6.99. The consumer will also be
saving on the time it takes to drive to McDonald’s and wait in line to order their parfait. Yo-Bran
will allow the consumer to prepare and enjoy their breakfast in the comfort in their own home.
Pricing: Preferences
Younger consumers are endorsing healthy eating habits with a willingness to pay a
premium (Nielson, 2015). According to Nielson, 33 percent of millennials, Yo-Bran’s target
market, say it’s very important to eat healthy and 29 percent of them say they are willing to pay
a premium for healthy food (Nielson). With many consumers preferring a healthier product for
breakfast, it aligns perfectly with Yo-Bran’s purpose to make breakfast healthy. It’s important
that consumers understand the health benefits of Yo-Bran compared to normal breakfast cereal,
which will be important in the marketing and product strategy when Yo-Bran is unveiled.
Pricing: Strategy
The pricing strategy that will be employed with Yo-Bran will be penetration pricing,
which is when “the price charged for products and services is set artificially low in order to gain
market share. Once this is achieved, the price is increased” (Marketing Teacher, p. 2).
Penetration pricing is used for new products in the industry as a way to gain market
share. This is a perfect way to start marketing the Yo-Bran product with a low price and
gradually increase it over time. This discounted price will help grab large numbers of consumers
to try the product and hopefully recommend it to their friends and family. The total price for a
quart of Yo-Bran is $6.99.
Running Head: COMPREHENSIVE BUSINESS PLAN
18
Refinement: Evaluate the Success
Qualitative goals are subjective and are measured by observations rather than statistics
(Worthy, 2016). Examples of qualitative goals include reputation, taste, feel, smell, image, and
leadership (Business Dictionary, 2017). These goals are predictably much harder to measure but
are equally as important as quantitative goals. “Knowledge of these aspects is gained through
observation combined with interpretative understanding of the underlying thing or phenomenon”
(Business Dictionary, 2017).
Qualitatively, Kellogg Company must evaluate their brand image as well as the taste of
Yo-Bran. It’s very important for Kellogg’s to retain its brand image through innovation. One of
Kellogg’s most important characteristics over the years has been their positive and popular brand
image among the industry and community. Kellogg’s many brands are positively reputed and
attract attention from consumers not only in the North American market, but also in emerging
markets. Kellogg’s various products coupled with its well-known brands enables the company to
attract a broad customer pool (MarketLine, 2016). This positive image has been built through
producing exceptional products, excellent marketing campaigns, and helping out the community.
To measure their brand image goal, surveys will be sent to customers asking them questions
regarding their satisfaction with the brand. It will also include a section for ideas and comments
to help improve the brand where it is lacking.
Of course, one of the most important qualitative goals regarding Yo-Bran is the taste. If the
product lacks in taste, consumers will be less likely to buy it which will hurt the overall goal of
increasing market share and revenue. In order to measure how people perceive the taste of YoBran, a taste test will be necessary. The taste test will involve a small sample of Yo-Bran and a
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Running Head: COMPREHENSIVE BUSINESS PLAN
questionnaire to be filled out after the test. The questionnaire will include questions about the
product and what the consumer liked and disliked about the taste. From this survey Kellogg’s
will be able to gather valuable data about Yo-Bran.
Figure 1.
Yo-Bran Taste Test
1. What do you dislike about the product you just tasted?
2. What do you like about the product you just tasted?
3. Please indicate how much you like or dislike the product you just tasted using the
following scale:
Like Very Much
Like Moderately
Like A Little
Neither Like Nor Dislike
Dislike A Little
Dislike Moderately
Dislike Very Much
7
6
5
4
3
2
1
Running Head: COMPREHENSIVE BUSINESS PLAN
20
On the other hand, quantitative goals are much easier to measure. These goals can be
measured and verified and involve objective quality of a thing or phenomenon (Business
Dictionary, 2017). Quantitative goals will be easier for Kellogg’s to monitor since they have a
numerical identifier. With that said, one way Kellogg’s could quantitatively measure the success
of Yo-Bran is through sales and overall revenue brought in by Yo-Bran.
In order to evaluate the success of Yo-Bran, Kellogg’s must evaluate the sales of Yo-Bran
compared to the company’s overall sales. By doing this, Kellogg’s will be able to see how YoBran has affected Kellogg Company’s revenue. This will allow senior leadership and executives
to see the positive or negative impact Yo-Bran is having on their company. Due to the amount of
products Kellogg’s has, they will use 5 percent of their advertising budget to advertise Yo-Bran.
To make best use of this advertising budget, Kellogg’s will use more of a digital marketing
strategy with Yo-Bran in order to strategically target their demographic of healthy eaters in
school or in the workforce.
As outlined in Milestone One, the total cost to make Yo-Bran is $5.00. Kellogg’s will start
selling Yo-Bran at a price of $6.99. This price will have to be monitored to see if consumers are
choosing alternatives that give them more value for $6.99. If so, the price of Yo-Bran will have
to be reduced and in turn profits will fall. However, if price remains steady and profits continue
to climb, Yo-Bran will continue to be sold in stores.
Tracking these goals with be very important. The qualitative goals will be tracked by
Kellogg’s Customer Service and Quality Control teams. These teams will gather customer
feedback from both the customer satisfaction survey and the taste test on a monthly basis. The
Quality Control team will be tasked with handling the taste test and making sure the feedback is
reported to the Marketing Department and Senior Leadership. On the other hand, the customer
Running Head: COMPREHENSIVE BUSINESS PLAN
21
satisfaction survey will be handled by the Customer Service team. Feedback will be collected
and presented to the Marketing Department. The quantitative goals will be measured and data
will be collected on an ongoing basis and will be reported on a monthly basis by the Marketing
Department. The data will be presented to Senior Leadership and Executives. Product
revaluation will happen on a yearly basis.
Refinement: Feedback Loops
In order for Kellogg’s to determine their consumers overall satisfaction with not only their
brand but with Yo-Bran, a customer satisfaction survey will be introduced. These surveys will be
online and will be provided with a coupon for filling out the survey. The survey will be provided
at a URL on the bottom of the consumer’s receipt of purchase from the store. After filling out the
survey the consumer will be awarded a coupon for 15 percent off of any Kellogg’s brand
product. This survey will help determine the consumers overall perception of not only the
Kellogg’s brand but of Yo-Bran as well. The results of the surveys will be presented to the
Marketing Department on a monthly basis unless otherwise notified. A sample of Kellogg’s
customer satisfaction survey is included in Figure 2 below.
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Running Head: COMPREHENSIVE BUSINESS PLAN
Figure 2.
Kellogg’s Customer Satisfaction Survey:
1. How satisfied were you with Yo-Bran?
Very Satisfied
Moderately Satisfied
A Little Satisfied
Neither Satisfied Nor Not Satisfied
Not Very Satisfied
5
4
3
2
1
2. How satisfied are you with the Kellogg’s brand?
Very Satisfied
Moderately Satisfied
A Little Satisfied
Neither Satisfied Nor Not Satisfied
Not Very Satisfied
5
4
3
2
1
3. Would you purchase Yo-Bran again?
Yes
No
4. If you wouldn’t purchase Yo-Bran again, what would you do to make it better?
5. Please provide us with your overall feedback about Kellogg’s and Yo-Bran.
Running Head: COMPREHENSIVE BUSINESS PLAN
23
This survey will help Kellogg’s determine how people are reacting to their brand and to the
Yo-Bran product. These questions are aimed to find out why consumers are or are not buying the
Yo-Bran product and also to see how people feel about the Kellogg’s brand. It’s important to
offer some sort of incentive for filling out the survey, otherwise people wouldn’t fill it out. The
15 percent off coupon will entice more people to fill out the survey which will help Kellogg’s
understand their consumers.
Refinement: Other Factors
When introducing a new product to the market place there are all sorts of obstacles to
overcome in order for the product to succeed. With that said, many people believe that 80
percent of new products fail; however, the actual product failure rate is around 40 percent
(Castellion, 2013). Many people who have ideas for new products think it’s the best idea yet.
This might be true, but what happens when something goes wrong. For example, one factor that
could hinder Yo-Bran’s ability to succeed would be if the product begins to make people sick.
This could lead to a recall of the product and could possibly lead to the mistrust of the Kellogg’s
brand and could lead to revenue and market share loss. Many people choose to buy Kellogg’s
products because of the trust they have in the brand. That loss of trust could really hurt
Kellogg’s.
Another factor that could help Yo-Bran is that Kellogg’s is a world leader in the breakfast
cereal industry. When you think of breakfast products many people think directly of Kellogg’s.
This will really help Yo-Bran when they go to introduce the new product to the public. More
people are willing to try a new product from a brand they trust then one they don’t. This factor
will help Yo-Bran get off the ground running faster than many other new products in the market.
Running Head: COMPREHENSIVE BUSINESS PLAN
24
Conclusion:
Kellogg’s Yo-Bran is the perfect new product to keep up with the healthy and quick breakfast
food trend. With that said, introducing a new product is no easy task and there must be a plan
and goals set in place in order to track success. Kellogg’s brand name gives them an advantage in
that many people prefer to try new products made by brands they trust. Having a taste test and
customer satisfaction survey in place will help Kellogg’s track the success or failure of Yo-Bran
in the future. Yo-Bran will benefit from Kellogg’s large brand portfolio and Kellogg’s brand
name as a whole. Kellogg’s is also an industry leader in keeping up with consumer trends and
Yo-Bran is the perfect prdocut for the latest consumer trends of all-day breakfast and fast food
breakfast. Yo-Bran is also a healthy alternative to many breakfast cereals. One ethical concern
with Yo-Bran involves the community impact when transporting the product. This could cause
traffic and air pollution from the trucks. Yo-Bran has the ability to be a leader in the healthy
breakfast cereal market if it’s able to lean on Kellogg’s brand name.
Running Head: COMPREHENSIVE BUSINESS PLAN
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