Kellogg Company is one of the world’s largest producers of cereal, convenience foods, and meat alternatives. Its corporate headquarters are located in Battle Creek, Michigan, and the 2008 revenues were almost $13 billion. The company is over 100 years old, founded in 1906, and became a household word in breakfasts across America during the post WWI era with the “Toasted Corn Flakes” cereal. The company also owns such famous brands as Keebler, Morningstar Farms, Famous Amos, Eggo’s, Gardenburger, and the Plantation brands. It employees over 30,000 people, and is now a global company, exporting its products to almost every area of the world (“Kellogg Company”).
Because of the massive amount of individual products, and Kellogg’s commitment to freshness, their manufacturing plants and bakeries are decentralized across the United States. With the number of brands under the umbrella, this is understandable, and the central management and organizational structure still remains in Battle Creek, Michigan. In addition, there are a number of Regional and State Sales and Marketing offices. As of March 2009, there were 26 plants and bakeries located across the United States, most centered in the Midwest and eastern coasts, with only 3 on the western side of the Rocky Mountains. There are also plants in 19 countries that help service the marketing and distribution efforts in more than 160 countries worldwide.
Kellogg is large enough, and powerful enough in the industry, that it has used a specific planning system called the KPS. The KPS is a large-scale, multiperiod program that guides production and distribution decisions based on market flow, purchasing patterns, new demographic information, and just-in-time inventory algorithms. This program allows these 26 plants and bakeries to understand and product in the most efficient manner for the company’s sales. This system, as well as the commitment to delivering the freshest product possible, utilizes multiple plants to product relevant products, and keeps plants for allowing a single line to remain idle (Brown, et.al., 2001).
Of course, it would be expected that Kellogg, with its massive market share and longevity in the market, would have products that succeeded and failed, or grew outdated over time. The company innovates new products based on demography and lifestyle, tweaks others, looks at the way customers dine (microwave, etc.), and makes changes based on research criteria. Formulas are typically not adapted to different markets (e.g. more sugar in Fruit Loops for x country, etc.), but product placement and action is. However, in 2003, Kellogg’s as a company decided to move from a global “branding” to a local branding with global implications:
The idea of a global Kellogg’s brand with identical product offerings and marketing campaigns did not fulfill the expectations the management. In addition, market research revealed that there are of course different needs related to Kellogg’s in the various countries. Based on this information, Kellogg’s swung back to a slightly more localized approach – with success (Schurek, 2006).
Kellogg has also taken a new approach to market studies based on trends in consumer behavior, nutritional advice, and the general trend towards eating healthier. This has been in response to groups like the Center for Science in the Public Interest and the Campaign for Commercial Free Childhood criticizing Kellogg and other cereal and food manufacturers of marketing “junk” food to young children. Within the last few
