Kellogg’s Case study: Extending the Product Life Cycle

Q.1) Using current products familiar to you, draw and label a product life cycle diagram,

showing which stage each product is at.

0

1

2

3

4

5

6

7

8

INTRODUCTION GROWTH MATURITY DECLINE

PLC

Introduction

Growth

Maturity

Decline

PLC of Current Products:

Phase I- Introduction Stage: Smart TVs.

Phase II- Growth Stage: Smart Phones.

Phase III- Maturity/ Saturation Stage: DVD Players/ Basic Mobile Phones.

Phase IV- Decline Stage: Black & White TVs/ Type Writers.

Q.2) Suggest appropriate aims & objectives for small, medium, & large business.

Aim for a small business can "Survival", to survive in the market and look for profits.

OBJECTIVE- IS TO MAKE 15% RETURN ON INVESTMENT.

Aim for a medium sized business would be to maximize their profits and growth to expand

their current business operations and increase market share.

OBJECTIVE- IS TO ACHIEVE SALES OF €10 MILLION IN THE FIRST YEAR.

Aims for Large business would be external growth, i.e. taking over their competitors in the

market. Secondly it would be adding value and quality to their products, and finally providing

service to the community in some way, like giving funds to charities and opening up its

branches in development area where development.

OBJECTIVE- IS TO GROW BY 20% EVERY YEAR FOR THE NEXT 3 YEARS.

Q.3) Explain the difference between market oriented routes and product oriented routes in

Ansoff’s matrix.

The Ansoff Matrix is a strategic planning tool that provides a framework to help executives,

senior managers and marketers devise strategies for future growth

Difference between market oriented routes and product oriented routes

1. Basic focus

2. Approach to customer

3. Promotional mix

4. Pricing policy

5. Segmentation/ Target market.

Q.4) Consider the decision taken by Kellogg to opt for product development. Suggest a way

in which it could have diversified instead. Justify your answer.

Kellogg had a strong position in the market for both healthy foods & convenience foods.

Nutri-Grain fitted well with its main aims and objectives and therefore was the product and

brand worth rescuing.

With the help of Ansoff’s matrix, the best alternative for the given situation was Market

Penetration. Market Penetration involves re-launching the product or increase brand

awareness Kellogg opted for this strategy & successfully implemented strategy.

The strength of Kellogg is the distribution / channel management. If Kellogg has to diversify

itself the most likely option for growth is to make an acquisition of a product line like quality

oats manufacturer.