the breakfast cereal industry xandra hompe, dani gredoña, stephanie lau, and shannon tierney 1
TRANSCRIPT
![Page 1: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/1.jpg)
1
THE BREAKFAST CEREAL INDUSTRY
Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney
![Page 2: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/2.jpg)
2
Agenda
Industry Choice Industry Structure Advertising: Overview Advertising Mediums Advertising Strategies Analysis & Recommendations
![Page 3: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/3.jpg)
3
Why Breakfast Cereals?
Products we know and love Product differentiation extremely important
Pricing not as important High Ad-to-Sales Ratio Spend more than any other packaged food
category in marketing products to children $229 million in 2006
Demonstrates many different advertising strategies
![Page 4: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/4.jpg)
4 Industry Structure
![Page 5: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/5.jpg)
5
Industry: An Overview
Revenue Annual Growth 07-12 Annual Growth 12-17 Profit
$13.3bn 4.9% 0.9% $1.8bn
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 6: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/6.jpg)
6
Products
Hot Cereals12%
Ready-to-eat Cereal
53%Cereal Bars35%
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 7: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/7.jpg)
7
Supply Chain
Raw Materials
Storage Facilities Processors Distributors Retailers
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 8: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/8.jpg)
8
Sales by Market Segments
Food & Service Providers
Exports
Grocery Wholesalers
Supermarkets & Convenience Stores
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 9: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/9.jpg)
9
Cost Structure
Profit13.3%
Wages7.4%
Purchase72.2%
Depreciation3.1%
Utilities1.1%
Rent1.1%
Other1.8%
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 10: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/10.jpg)
10
Key External Drivers
Per capita disposable
income
Demand from grocery
wholesaling
Healthy eating index
Price of coarse grains
World price of wheat
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 11: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/11.jpg)
11
Operating Conditions
Life Cycle Stage: MATURE Revenue Volatility: MEDIUM Concentration Level: HIGH Regulation Level: HEAVY Technology Change: HIGH Barriers to Entry: HIGH
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 12: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/12.jpg)
12
International Trade
Domestic demand accounts for 95.9% of revenue Exports LOW and DECREASING Imports LOW and INCREASING
International facilities supply foreign markets directly
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 13: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/13.jpg)
13
Industry Trends
Increase in per capita disposable income Acquisitions/consolidation Healthy private-label brand cereals Convenient products
Breakfast bars Stable profit margins
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 14: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/14.jpg)
14
Industry Concentration
Kellogg- 33.3%
General Mills- 17.9%
PepsiCo- 8.0%
Ralcorp Holdings- 6.7%
Other- 34.1%
HHI = 1,539.19 Four-Firm Concentration Ratio= 65.9
HIGHLY CONCENTRATED|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 15: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/15.jpg)
15
Competition
Kellogg’s General Mills
PepsiCo Ralcorp Holdings
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 16: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/16.jpg)
16
Kellogg’s Company
Largest cereal manufacturer
2011 Expected Revenue $8.9 billion
Innovation is key 2000 - Acquired Kashi
brand 2011- Gluten-free cereals
like Rice Krispies
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 17: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/17.jpg)
17
General Mills
2nd largest producer of breakfast cereals
2011 Expected Revenue $10 billion
New products in 2011 Chocolate Cheerios Wheaties Fuel
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 18: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/18.jpg)
18
PepsiCo
Leading global manufacturer, distributor, and marketer of food and beverages
2011 Expected Revenue $1.9 billion
2001- Merger with Quaker Oats Company
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 19: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/19.jpg)
19
Ralcorp Holdings
2011 Expected Revenue $4.7 billion
Private label brands
2008 - Acquired Post Cereals
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 20: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/20.jpg)
20
Government Regulation
Public health Nutrition Labeling and Education Act Food Ingredient Safety Program
Product labeling FFDC Act, FPL Act
Environmental regulation EPA- food processing
Advertising to Children Children’s food marketing calls for change Concerns of rising childhood obesity
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 21: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/21.jpg)
21 Advertising: Overview
![Page 22: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/22.jpg)
22
Advertising Spending
Spend half of budgets on child and family brands
General Mills and Kellogg’s dominate cereal advertising
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 23: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/23.jpg)
23
Advertising-to-Sales Ratio
Numerous introductions of new products Grain Mills Product Industry (bulk is cereal): 1.2x higher than average value
for food sector Substantial product differentiation
Kellogg Co Kraft Foods, Inc. PepsiCo Inc. Ralcorp Holdings, Inc.
0
1
2
3
4
5
6
7
8
9
10
8.62
4.41
2.86 2.83
Ad-Sales Ratios
Companies
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 24: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/24.jpg)
24
Number of Ads- Four Industry Leaders
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 25: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/25.jpg)
25
Number of Ads by Brand
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 26: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/26.jpg)
26
Advertising Effects on Target Markets
Primary target market: Children: Age 5-12 Children see 2x as many TV ads for cereal than adults
Compared to non-advertised products: Advertised child-targeted cereals were purchased 13x more
frequently Family-targeted brand purchases were 10x higher Adult-targeted cereals were purchased 4x more
Source: Castetbon, Katia, Jennifer Harris, and Marlene Schwartz. "Purchases of ready-to-eat cereals vary across US household sociodemographic categories according to nutritional value and advertising targets." Public Health Nutrition. (2011): 1-10. Print.
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 27: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/27.jpg)
27
Brand Equity
Blind vs. Branded Test Choice increase from 47% to 59% when Kellogg’s
brand identified Sub brands within brand drive overall brand value
Kellogg’s Top 3 Brand Values General Mills
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
Source: Harris, Schwartz, Kelly Brownell, and Vishnudas Sarda. ”Evaluating the nutrition quality and marketing of children’s cereals." Cereal FACTS. (2009): 1-102. Online.
![Page 28: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/28.jpg)
28
Advertising & Brand Loyalty
Studies show brand loyalty is a strong feature in consumer product markets
However, advertising overcomes brand loyalty in this industry Encourages “switching” behavior at the household
level Persuades households to try new brands
Advertising may effective option for new entrants
Source: Shum, Matthew. "Does advertising overcome brand loyalty? Evidence from the breakfast cereals market." Journal of Economics & Management Strategy. 13.2 (2004): 241-72. Print.
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 29: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/29.jpg)
29 Advertising Mediums
![Page 30: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/30.jpg)
30
Advertising Mediums
Television Internet
Child-targeted websites Banner advertising Social media marketing
In-Store Product packaging Shelf space allocation Displays and promotions
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 31: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/31.jpg)
31
Television
TV ad expenditures by cereal producers are second only to expenditures by automobile manufacturers
“There is a clear pattern of evidence showing that Saturday morning television advertising has an important influence on children’s asking for cereal and toy products.”-The Journal of Communication, Charles Atkin & Gary Heald
Source: Nevo, A. (2001). Measuring market power in the ready-to-eat cereal industry. Econometrica, 69(2), pp. 307-342. Atkin, C. and G. Heald. “The Content of Children’s Toys and Food Commercials.” Journal of Communication 27(1), Winter 1977, pp. 107-114.
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 32: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/32.jpg)
32
Number of Ads According to Daypart
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 33: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/33.jpg)
33
Number of Ads According to Channel
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 34: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/34.jpg)
34
Number of Ads According to Day of Week
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 35: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/35.jpg)
35
Number of Ads according to Program Type
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 36: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/36.jpg)
36
General Mills Advertising Distribution According to Program Type
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 37: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/37.jpg)
37
Kelloggs’ Advertising Distribution According to Program Type
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 38: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/38.jpg)
38
Ralcorp Holdings’ Advertising Distribution According to Program Type
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 39: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/39.jpg)
39
Pepsi’s Advertising Distribution According to Program Type
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 40: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/40.jpg)
40
Internet Advertising
6% of youth advertising budgets
Forms of digital media Child-targeted websites Banner advertising Social media marketing
Highly entertaining and interactive content
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
Source: Harris, Schwartz, Kelly Brownell, and Vishnudas Sarda. ”Evaluating the nutrition quality and marketing of children’s cereals." Cereal FACTS. (2009): 1-102. Online.
![Page 41: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/41.jpg)
41
In-Store Marketing
Child and family cereals ½ shelf space in cereal aisle; prime middle shelf; in-store displays and promotions
Cereal box Child engagement messages
Average box: 1.4 Health messages
Average box: 2.0
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 42: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/42.jpg)
42
Share of Shelf Space Data
Source: Harris, Schwartz, Kelly Brownell, and Vishnudas Sarda. ”Evaluating the nutrition quality and marketing of children’s cereals." Cereal FACTS. (2009): 1-102. Online.
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 43: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/43.jpg)
43 Advertising Strategies
![Page 44: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/44.jpg)
44
Primary Advertising Methods
Persuasive Advertising Informative Advertising Memory Jamming Celebrity Endorsement Humor Emotional Appeal Product Placement
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 45: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/45.jpg)
45
Persuasive Advertising
Dangerous to those who don’t understand persuasive intent Children limited in ability to detect until age 8 or 10
Ex: Frosted Flakes “They’re grrreat!” Effective for experience goods
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 46: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/46.jpg)
46
Informative Advertising
Direct: Nutritional benefits Ex: Cheerios
Indirect: Match products to buyers
Ex: Lucky charms commercial Signal efficiency effect
Ex: General Mills
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 47: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/47.jpg)
47
Memory Jamming
Average preschooler sees 642 ads/year on TV
Memorable slogans Lucky Charms: They’re magically delicious!
Paired with creative cartoons- easily recall figures and mascots
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 48: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/48.jpg)
48
Celebrity Endorsement
Can strengthen brand’s equity, make claims of ad appear more credible Wheaties: The Breakfast of Champions
Can pose great risks to the company too Kellogg’s: Michael Phelps Wheaties: Tiger Woods
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 49: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/49.jpg)
49
Humor Appeals
Connection through humor is often delivered by cereal mascot Mascot can be depicted in humorous situations
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 50: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/50.jpg)
50
Emotional Appeals
Consumers’ emotional connection to the ad can be strengthened by cereal mascot
Kellogg’s Rice Krispies, Life: Family bonding Mini-Wheats: claims help child do well in school
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 51: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/51.jpg)
51
Product Placement
Further integrating products into TV programs Children’s programs, movies, soap operas
Days of Our Lives: Cheerios Dickie Roberts: Former Child Star
http://www.youtube.com/watch?v=oGtig5DiTxc&feature=player_embedded&noredirect=1
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 52: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/52.jpg)
52
Differences in Strategies Across Companies
Child and family brands on TV; significant child-targeted presence on internet Speak directly to parents on boxes: 3.2 health
messages/box
Target specific consumers Supermarket, in-store displays + promotions Most promotions on boxes
General Mills
Kellogg’s
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 53: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/53.jpg)
53 Analysis & Recommendations
![Page 54: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/54.jpg)
54
Investor Recommendations
Positive outlook on breakfast cereal industry Large innovation capability and opportunities Increasing competition: Private-label brands Cost-cutting and consolidation Recession-proof products Stable industry
Companies have variety of products with different pricing options
Huge potential for growth in emerging markets Cultural acceptance barrier
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 55: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/55.jpg)
55
Advertising Recommendations
Advertise more based on nutritional facts Especially for children – appealing to parents
Increase use of the memory-jamming technique
Advertise more to teens and young working adults
|Industry Structure| |Advertising: Overview| |Analysis & Recommendations||Advertising Strategies||Advertising Mediums|
![Page 56: THE BREAKFAST CEREAL INDUSTRY Xandra Hompe, Dani Gredoña, Stephanie Lau, and Shannon Tierney 1](https://reader036.vdocuments.net/reader036/viewer/2022062516/56649dac5503460f94a9c718/html5/thumbnails/56.jpg)
56 Questions?