Hot breakfast cereals refer to cereal grains that had to be soaked or boiled to be softened and edible. Pre-prepared cereal that is edible on its own or in milk is also known as Ready-to-eat cereal. Within Singapore itself, breakfast cereal are generally seen as a nutritious form breakfast that appeals more to the younger generation and children who are seemingly more receptive to these western breakfast.(Breakfast Cereal- Singapore,1)Datamonitor states that by definition the breakfast cereal market consists of hot breakfast and ready-to-eat (RTE) cereals.
In Singapore alone, the breakfast cereal market in 2008 is generated a retail value of $38 million a 4% increase from 2007. Unlike other countries, where Kellogg has the majority of the market share, in Singapore, Nestle comes in first with 29%, followed by Kraft foods then Quaker Oats co. at 18.8%.(Breakfast Cereal- Singapore,1)As seen from the table below.
The statistics board of Singapore reveals that the average household expenditure in 2003 is estimated at S$4867, in which 21.3% are spent on food. In 2005, estimated that there are 1,047,216 households in Singapore of which 151,390 households belong to singles or those not living with family nucleus. While 840,911 households within are within one family nuclei. (Statistics Singapore 2006)Breakfast Cereal Market Segmentation and its variablesMarket segmentation can be broken down into several variables; Geographical which consists of regional, city size, density and climate breakdown. The demographical variables include age and life-cycle stage, gender and income. Psychographic segmentation will divide consumers into different groups based on socioeconomic status, lifestyle or personality characteristics. Lastly behavioral segmentation, which groups consumers on their basis of knowledge of the product, their attitude towards it, usage patterns and responses. (Kotler et al.2006, 217-223).
Kraft foods produce Post Cereals that targets the Finer Foods, Healthy, Convenience, Mainstream and Traditional Segments. The consumers at the finer food segments are luxury seeking and value quality but also seek out variety, they make up of 22% of households in Singapore (Statistics Singapore 2003). Therefore, Kraft Foods uses Post Selects with six different flavor RTE cereals to target the segment (Kraft Post Selects n.d.). While Post LiveActive, which is whole grain, based and fortified with prebiotic fiber helps promotes healthy digestive system (Kraft LiveActive n.d.). This product attribute appeals and targets the healthy segment, which is 22% of total no of households. For the mainstream segment which are mostly families with young children and buying is often influence by their children’s preference, Kraft Foods has Post Kids Cereals.
Lastly, for the traditional segment whom is strongly affected by brand name, Kraft Foods has Post Honey Bunches of Oats and Post Kids Cereals that carry the Post Brand (Kraft Foods n.d.)(Statistics Singapore 2003)Kellogg’s produces various ranges of cereals to target all six segments. A finer Food segment has… It targets the Healthy Segment with Kellogg’s Special K, All Bran, Raisin Bran and Muselix. While for the convenience, Kellogg’s has individually packed cereal like Kellogg’s Cornflakes. For the mainstream, they have Kellogg’s® Froot Loops® Cereal. The tradition segment will be drawn by the original breakfast cereal, which the Kellogg’s Cornflakes that has been in the market for more than a century (Kellogg Company n.d.) is targeted using all the RTE cereal with Kellogg’s brand name. Lastly, for the price sensitive, Kellogg’s targets using Econ Packs for its RTE cereal to give the consumers their value for money.
Positioning of productsThe market segment of Healthy Consumers in the breakfast cereal market is an ever-increasing market, due to the growing trend of Singaporeans becoming increasing health-conscious, which in turn affects their food choice. Over the past few years, there has been a newfound emphasis on healthier eating. With a change in lifestyle, people are becoming more aware of the negative effects of unhealthy eating habits. Consumers are showing increased preference for fat-free and healthy food products. Food items containing trans-fat are losing market share as they are linked to cardiovascular diseases. (Kellogg Company SWOT Analysis, 92)In this part of the report, I will discuss about how Nestle, Kraft Foods and Kellogg’s positioned their similar cereal products to target this budding segment.
Nestle Fitnesse and Finesse & Fruit are positioned as against Kellogg’s Special K Cereal, however, Nestle Cereals are certified Halal so it has an added class of users whom are Muslims. It emphasizes on it low fat content of 0.5g per serving and also its other product attributes like high in calcium, Folic Acid and Iron and that it is made out of whole grains. It positions itself as a part of a healthy lifestyle, therefore as a nutritious add-on for the healthy consumer. (Nestle Singapore n.d.)An Image of Fitnesse Cereal Box( Fitnesse & Fruit Cereal Cover 2008)Post LiveActive Cereal from Kraft Food targets the healthy consumers by positioning as a nutritious and healthy cereal like Nestle Fitnesse consist of whole grains with fruits and nuts. However, it emphasize on it being nutritious yet it is able to help promote healthy digestive system with its whole grains and most importantly it has an additional component in its cereal which is prebiotic fiber (Inulin) that helps the proliferation of good bacteria within the body (Kraft LiveActive n.d.).
Kellogg’s special K is also targeted at the healthy segment; with its emphasis on being 99% fat free, high in protein, which on the cereal box states it, will help in building and repairing all body cells and how it content of rice and wheat flakes will keep the consumer fuller longer. It has is positioned away from its competitors by having rice and wheat flakes instead of whole grains for its range of nutritious cereal that targets the same healthy segment. (Kellogg’s NA Company. n.d )An image of Kellogg’s Special K Cereal (Special K Cereal Cover 2008)
Breakfast Cereals Industry Profile: Asia-Pacific Industry Profile.2007.4 :7-8. Business Source Premier, http://search.ebscohost.com.dbgw.lis.curtin.edu.au/login.aspx?direct=true&db=buh&AN=27967436&site=ehost-live (accessed September 08, 2008).
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