Peer Critique for each Group Member- Growing and Sustaining Brand Equity-

April Klukas

American Intercontinental University

Product Launch of Raska Foods

July 23, 2016

Abstract

This paper outlines the steps involved in the launch of a new product. It will review the product’s industry and provide a competitive analysis. It will also review the product’s brand vision/strategy and will discuss brand positioning as well as the different aspects of promotion.

Product Launch of Raska Foods

Introduction

Once a company has created a new product the last step is to introduce that product to the public. That ultimate step can come only after thorough market research has occurred. From analysis of the chosen industry/category to the various stages of brand essence/equity and positioning, a company must pay close attention to the wants and needs of their target customers. The final stage before a product launch is to consider all the different aspects of promotion available, to ensure the company sets out on the best foot possible. All of these actions must fall into place in order to ensure a successful product launch.

Industry/Category Analysis

The cereal industry is an $11 billion dollar business in the United States, $33 billion worldwide. There are about 35 U.S. companies in breakfast cereal manufacturing, with the major companies being Kellogg, General Mills, Post Foods, Quaker, and Ralcorp. The cereal made by these companies is the packaged ready-to-serve kind or the type that must be cooked prior to serving. Globally, the most cereal is consumed in North America, the United Kingdom, and Australia. But the strongest growth for the industry is expected to come from markets such as China, India, Russia, and Turkey (First Research, 2015). It is difficult for small companies to make a dent in the revenue of the top four companies. Due to their (the big four companies) size they have purchasing, distribution, and marketing advantages which the smaller companies just do not have. The best way for a smaller company to compete is to focus on using healthier ingredients in their manufacturing process and focus on letting the consumer know that they are the healthier alternative. Without providing a solid reason to choose a different brand, consumers are conditioned to stay with the brands they are familiar with.

Competitive Analysis (Positioning Map)

Raska Foods wants to differentiate itself from its competitors by being both good for you (healthy) and enjoyable to eat (tasty). Most other cereals are either one or the other. For example, both Kellogg’s and Post Foods make a cereal called Bran Flakes. But they might as well have named them Blah Flakes because they are not very tasty, but they are very healthy. Then there is General Mill’s Cocoa Puffs or Quaker’s Cap’n Crunch, eating these cereals for breakfast is the equivalent of eating a cup full of sugar. They taste good, but they are not very good for you. Raska Foods REAL GOOD cereal will be made with whole grains and natural sweeteners. It will taste good and be good for you. The product positioning map shown below is where Raska Foods plans to position REAL GOOD cereal. REAL GOOD will be placed in the upper-right Tastes Good/High Nutrition quadrant.

Tastes Bad

Tastes Good

High Nutrition

Low Nutrition

Brand Strategic Plan (Vision/objectives/strategies/tactics)

A company’s brand is more than just their name. It is everything the consumer knows about them all rolled together – name, messaging, logos, vision, customer experience, etc. In order for a brand to be a successful it has to differentiate itself from its competitors. Kellogg’s vision is ‘to be the food company of choice’ and their mission statement reads ‘Kellogg is a global company committed to building long-term Growth in volume and profit and to enhance its worldwide leadership position by  providing nutritious food products of superior value’ (Onyongho, 2011). Raska Foods vision statement will be ‘Tasty and Healthy is not an either/or proposition’. Its mission statement will be clear and more concise. It will read ‘The goal of Raska Foods is to deliver the nutritious, delicious food its customers want and deserve’. It will try to accomplish that goal by ensuring the highest quality products are used in its cereal manufacturing. By holding quarterly or bi-annual customer panels (alternating the number of panels held each year to quarterly in even years and bi-annually in odd years), it will attempt to determine future consumer wants and needs. In this way, Raska Foods hopes to remain in-touch with the ever-changing palate of the public, able to adjust its product(s) to meet what customers are actually wanting.

Target Customer Segmentation Analysis

The target customer segmentation for Raska Foods is men and women, aged 18-44, with or without children. “Nearly all US adults (94%) indicate they eat either hot or cold cereal…and 42% of US adults indicate they are eating more cereal this year, compared to last year. US adults are eating more cold cereal (36%), than hot cereal (24%), including healthier varieties such as high-fiber cereal (18%), granola (14%) and weight-management cereal (13%) (Prepared Foods, 2015). This customer segmentation group was chosen because they are the ones making the buying decisions in their households. Not all households have children in them. And in the ones that do, the children may eat more cereal than the adults. However, it is the adults who purchase the product; therefore they are Raska Foods target segment. A Canadian report on American Eating Trends reported that pre-sweetened cereal is eaten primarily by families, particularly those with children under the age of 12, family cereal is preferred by single active seniors; blacks; and adult men on doctor or self-prescribed diets, and that natural/bran cereal is the preferred cereal of affluent seniors; women; and adults on diets (Government of Canada, 2012).

Customer Insight

Gordon, Vernick, & Sukys (2005) wrote there were six steps to follow to set about product development and marketing. They were: 1) Finding and identifying your insight, 2) Concept development and screening, 3) Product development and quantification, 4) Advertising development and screening, 5) Packaging development and screening, and 6) Introductory marketing/promotion materials. A study conducted by Mintel, award-winning provider of market research, determined that the main reasons consumers ate cereal was because they consider it quick, healthy and inexpensive (Palenius, 2013). Even when research showed that cereal is not that healthy, consumer attitudes toward cereal are that it is a healthy food (as opposed to donuts one assumes). In further research studies by Mintel, it was shown that consumers tend to prefer the types of cereal they grew up on. Whether the pre-sweetened or plain variety, the brands consumers ate as children was still their preferred brand as adults. “The kind of consumer insight needed when developing a new product or brand is all about what target consumers are saying and thinking, and what truly matters to them. With that kind of insight in hand, we can create a product that fully delivers the benefit highlighted by the insight - and then 'hit a homerun' executionally with advertising, packaging, and marketing that highlights the benefit and sells it in a believable way” (Gordon, Vernick, & Sukys, 2005). Consumer feedback on when and how they eat their cereal is the driving force behind the many types of convenience packaging that have been created for cereal consumption today. From square-shaped little pre-packaged bowls to new single-serve pouches, the idea of having a convenient receptacle to transport their cereal was born from consumer insights. Ready-to-eat as is, these types of easily transportable packages are the result of consumers telling panels that they often took their cereal with them, carrying it around in small plastic bags. Eating their cereal ‘dry’ or as a snack food brought the consumers a sense of nostalgia as that is how many of them ate it as children. The idea mentioned above of preferred brands leads us into the next section of this paper, brand essence.

Brand Essence/Equity Elements

On page four of this paper it was stated that “a company’s brand is more than just their name”. That is a concept that marketers must understand and embrace. The marketer must create a strategy that sparks interest in the product. That interest has to be fanned into a purchase by the consumer and that purchase must be perceived in a positive light. This entire activity is the consumer experience and if that experience is coded in their memories as a satisfactory transaction and shared, that is the beginning of brand equity (Hanna, S., & Rowley, J., 2012). It is the totality of the experience that equates to brand essence. From the look and feel of the packaging to the placement on the shelf, and how the consumer feels once buying and consuming the product will determine the success or failure of any new brand. Successfully hit the sweet spot with consumers however, and you are in the money. It is not enough to merely think of a new brand, put it in a colorful box, and present it to consumers. To create brand essence/equity a company has to create a relationship with their consumers from the beginning. They have to give their consumers a reason to choose their (new) product over that of their competitors (old) product. Once they have captured their (the consumers) attention (hearts and minds) they have to continually work at growing and feeding that relationship throughout the products life cycle.

Brand Positioning

"Positioning" may be simply defined in terms of how a brand is positioned in the mind of the consumer with respect to the values with which it is differentially associated or which it "owns" (Ries and Trout, 1982; Marsden, 2000) As stated in the Competitive Analysis (Positioning Map) section above, “Raska Foods wants to differentiate itself from its competitors by being both good for you (healthy) and enjoyable to eat (tasty). Adopting this position and pricing themselves in the median range, is how Raska Foods REAL GOOD brand cereal intends to occupy a distinct place in the minds of their customers. One way Raska Foods plans to differentiate themselves from other brands is by showing the consumers the many ways they can enjoy REAL GOOD cereal on the box itself. It will provide recipes that use the product as an ingredient or a topping. It will also show graphics of people enjoying the cereal as a snack-that-travels. Raska Food’s desire is for their consumers to no longer have to choose between healthy or great taste. They want to be the first company that can deliver both those requirements in the same product. Raska Foods wants the position as the top producer of tasty and nutritious cereal (and eventually other products). In other words, when consumers think ‘healthy and tasty’ they will think of Raska Foods; the same way that the name Hershey’s conjures up images of delicious chocolate.

Brand Concept

“Brand concept can be viewed as a firm's effort to structure for consumers the relationship between the brand's products and features on one hand and the potential need satisfaction or goal attainment on the other” (Even, J. L., & Olsen, L. E., 2012). Consumers have a lot of choices when it comes to breakfast cereal. Those choices can usually be divided into two camps, pre-sweetened (Frosted Flakes) or unsweetened (Corn Flakes). There are a few cereals that try and bridge that divide by mixing both sweetened and unsweetened components together (Honey Bunches of Oats) in the same box. Since brand concept is all about marrying consumer needs with products features, Raska Foods will try and brand REAL GOOD cereal as the product that will fill the consumer need of a great tasting cereal that is also good for you. The fact that REAL GOOD cereal can also serve other purposes i.e. eaten as a snack food or used as a bakery topping, will be a bonus that may keep consumers coming back. Consumers may not yet know they need a multi-purpose food product, but through inventive and engaging advertisements, they will come to see the value of buying one product that can serve multiple uses. That ‘need satisfaction’ is one of Raska Foods main strategies and what they are building their brand concept upon.

Strategic Brand Promotional Mix: Traditional promotions with rationale

Promotion is one of the four P’s in the marketing mix. The other three are price, place, and product. “The four P's must each support one another and be crafted into a meaningful whole from the customers point of view. Emerging technologies may cause adjustments in the four P's, but each must still be considered in light of customer preferences” (Motley, 2002). The traditional methods of promotion are television, radio, print mediums (newspapers/magazines), and direct mail. Television is the most expensive of the traditional promotional methods, but its outreach is the broadest. Radio has the ability to reach a large swath of the population, but its efficacy is conditional upon the market chosen to advertise in. To make the greatest impact using radio, Raska Foods would need to select one or two formats (i.e. Top 40, Country, or Adult Contemporary) that are most popular with its target demographic and then select the most popular stations in the most populated locations. The same strategy would need to be employed when selecting the various print mediums available. Newspaper advertisements are not as popular as they used to be, but still reach a lot of people. However, “we know that statistically under 35s are less likely to read a printed newspaper instead they get their news digitally” (Stop and Stare, 2015). The better choice if Raska Foods decides to advertise in newspapers is to target the online versions most newspapers now have. Millennials, those individuals born between 1977 and 2000, and whom comprise 25% of the U.S. Population (Millennial Marketing, 2016) are tied to their electronic devices, so any method to have your companies advertising pop-up on their devices is the one that should be selected (further discussed in the following section – New Media Promotions). Or they can contract with direct mail companies such as RedPlum. Magazines are a great medium to showcase a new product, but not one that has any promotional-type deal included in the ad (buy-one-get-one [BOGO] or coupons). The timeliness of magazines is not conducive for that type of advertising. For example, you are sitting at your hairdressers, or in your doctor’s or dentist’s waiting area, and are thumbing through a magazine; if you came across a coupon for a cool new product you might be interested. But, when you noticed that the coupon had expired some time ago, that may make you upset. A successful company would never intend to anger its consumers or potential consumers. That being said, magazines are a good source for introducing a new product, because a product can be presented both graphically and descriptively. Magazines (and other print media) provide the ability to describe products features in much greater detail than in other forms of media promotion.

Strategic Brand Promotional Mix: New Media Promotions with Rationale