This study seeks to investigate the marketing strategy of Kenlee’s & Company Cereal Limited (KCCL). This successful cereal producer prides itself on having a quality product and a policy of putting customer satisfaction first. The importance of the marketing mix, market research, competitors, substitutes and customer satisfaction all impact on the strategy adopted by KCCL. The impact of branding and the various choices available to the marketing department will be discussed and the Ethical responsibility KCCL owes to its customers will be highlighted.
Description of the Business
Kenlee Cereal & Company Limited (KCCL) was founded in 1987 as a privately owned family business. The company is involved in the production and marketing of cereals. In1997 it took on a partner to provide more capital. It is also a limited liability business. This medium sized company employs 50 persons. It is financed by loans, personal savings and investments through its partnership with its local business partner Erica’s Country Styled Honey Roasted Peanuts.
KCCL is located off the Sir Solomon Hochoy Highway close to the Presal fly-over. It plans to become the leading exporter of cereals in the Caribbean and thereafter the international market.
Organization of the Marketing Department
Organization of the Marketing Department
Marketing Manager: –
The Marketing Manager is responsible for the cereal marketing and also the profit and loss of his department. Advertising Manager:- The Advertising
Manager oversees the whole process of advertising for KCCL. The process begins from market research and finally leading to the actual sales. Advertising at KCCL is based on the image the company seeks to portray.
In this case, the company is concerned about producing a cheap, quality, nutritious and tasty product. Sales Manager:- Sales Managers are responsible for sales. Their role involves organizing, motivating and leading sales teams. They are responsible for the combined performance of the team. At KCCL, Sales Managers are responsible for:
•Recruiting and training sales staff
•Supervising, motivating and monitoring team performance
•Allocating areas to sales executives
•Setting budgets/targets
•Liaising with customers which includes actual selling (Wholesalers, Retailers)
•Keeping abreast of what competitors are doing
Market Research
Customers differ on many dimensions- taste, needs, and expectations. Managers therefore need to ensure that their product satisfies these tastes. Market research is therefore very important to reveal customer needs. Before this can be done the potential customers had to be identified. This is done by either:
•Targeting the whole population
•Segmentation (geographical, behavioral or demographics)
•Niche marketing
KCCL has chosen to target the whole population.
At the company’s recent launch of its new product. KCCL chose to segment themarket using demographics to identify its customers. Characteristics such as age,income, occupation or education can be used to divide the population. In theintroduction of its new Granola Bar, age was used to identify the target population.The age groups were:
•3-14years
•15-35years
•36 and older
The marketing manager identified the needs of these groups with respect to their nutritional needs. The (3-14years) group indicated that these persons needed proper nutrition in order to promote healthy growth and development. The (15-35 years), included students and persons “on the go”.The (36years and over), were persons who did not need to eat as much. This group’s mainconcern was focused on the maintenance of their health. The study of these segments identified a market for a nutritious meal-Kenlee’s Crunchy Bar was the result.
Price
Price is an important aspect of the marketing mix which must be considered. The price a product is sold at is dependent on the following:-
•The pricing objective the firm sets for itself
•The demand for the product
•Cost incurred in production, marketing and distribution
The product characteristics
Pricing is very competitive as there are four other similar companies with whom KCCL has to compete with. KCCl’s prices are based on cost plus mark up. KCCL has chosen a Market leadership objective. The aim is to increase their share of the market.
Competitors
The market is very competitive. There are four major companies that sell the same products. See pie chart which shows the percentage of the market held by these cerealmanufacturers.
Substitutes
Substitutes are a threat to any company. This occurs if there is in existence products thatcan replace it. There needs to be qualities that the product exhibits that identifies it fromothers, if possible.
Sales Forecast
The following table shows a sales forecast for KCCLs products. This was based onhistorical records of sales for the past five years.
ProductUnits/Mth (000)Retail Price ($ per unit)
Cereal1000$2.00
K Flakes200$2.50
Wheat Thins1500$15.25
Coco Flakes100$13.50
Branding and Packaging
The Cereals produced are branded under the name KCCL and it is a well known brand.The product carries a distinctive red and white logo of the company. Branding is veryimportant because it allows consumers to identify the product of a particular manufacturer. Branding issues include:
•Brand name selection
•Brand name extension
•Brand sponsor
KCCL’s launch of its new product, Kenlee’s Crunchy Bar was under its present brandname. This name has been established in the minds of consumers as a quality cereal. Ithas therefore chosen a line extension strategy since its product has similar features to its present products. KCCL packages its products using attractive foil packaging. The packaging carries thecompany’s colors for immediate identification. The colors used for the logo are the colorsof the nation flag of Trinidad and Tobago.Information given on the packaging includes:
•Nutritional information
•Ingredient
•Expiry date
KCCL ’s Price Strategy
Their strategy is to to have market-share leadership to ensure its continued survival andexistence. It has chosen to sell its products at the lowest possible price in order to capturea large share of the market.
Place
The method by which the product gets to the consumers is called channels of distribution.KCCL has a fleet of vehicles to transport its products. It also subcontracts delivery invery far geographical areas. Many small retailers buy directly from the centrally locatedoffice. Delivery is made twice weekly by boat to Tobago. Promotion Mix
Kenlee Cereal & Company Limited (KCCL) advertises it products by the use of print,radio and television. In-store displays are sponcered by local businesses. The selling of KCCL’s products are carried out through, sales meetings, sales presentations and incentive programs. KCCL products are promoted by the use of coupons and product samples. It also promotes its products through contests.
Government Regulations
The Bureau of Standards sets the standards in Trinidad and Tobago in terms of qualityand workmanship of products. Some standards include: •Products must be labelled
•All ingredients identified
•The value added tax (VAT) must be included in labelling of the price
•Information must also be written in English
Technology
KCCL uses high mechanization which reduces costs. All machinery used by KCCL isvery efficient and this increases productivity of the company. Record keeping iscomputerized.
Consumer Complaints
KCCL has two consumer complaint offices; one is located at its head quarters and the other in Tobago. KCCL addresses all complaints and has a three day response policy.
Ethical Issues
•Ingredients stated on the labeling and advertising of products is accurate and not misleading
•Correct declaration of sales for taxation.
•Proper disposal of waste
•Money laundering to hide illegal business transactions
KCCL has maintained its motto of having good legal and ethical business standards
Conclusion
Key to success of Kenlee’s & Company Cereal Limited are:
1.Quality products.
2.Good customer service.
3.Good distribution channel.
4.High ethical and business standards.
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