Fall

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K ELLOGG S N UTRI G RAIN

M IA P RICE , D EVON K REIDER , J ACOB J ESSAR , R OBERT W IGGINS , M ICHAEL I NCOLLINGO S OUTH A FRICAN A DVANCEMENT

I NTRODUCTION
KelloggsCompanyislookingtoexpandinternationallytoacountrywheretheyarealready located,SouthAfrica.BybringingthecompanysproductofNutrigraintoSouthAfrica, theyhopetoestablishanadaptedproductthatwillpleasethetargetedSouthAfrican Consumers. MissionStatement Todrivesustainablegrowththroughthepowerofourpeopleandbrandstobetterserve theneedsofourconsumers,customersandcommunities. Themissionstatementandvisionstatementsarealargepartofhowacompanyisviewed byconsumers.Itgivesinsighttohowacompanywantstobeviewedbyitssurroundinga community.Kelloggsmissionstatementis,Todrivesustainablegrowththroughthe powerofourpeopleandbrandsbybetterservingtheneedsofourconsumers,customers andcommunities.Thismissionstatementisgoodforthedomesticmarketwithinthe UnitedStates,buttomakeitmoreappropriateforSouthAfricathereneedstobeafew changes.TheneedsofthecustomersarenotsomethingthattheyneedtofocusoninSouth Africa.Togetapositiveimagetheyshouldfocusmoreonhelpingthecommunitiesand creatingamorestableenvironmentandeconomyforthepeoplelivinginSouthAfrica. Visionstatement Tobethefoodcompanyofchoice.

KELLOGGSNUTRIGRAIN 3 Byfollowingthevisionstatement,Tobethefoodcompanyofchoice,Kelloggsisopening upanopportunitytokeepthatfocusinSouthAfrica.Byhelpingtodevelopcommunitiesin SouthAfricathebrandimagewillbecomewellknow.Whenaproducthasapositiveeffect ontheconsumeritwillleavealastingimpression.Thelastingimpressionwillhelpthe NutriGrainbrandbeknowntothepeopleofeventhesmallestcommunities. OncethecommunitieshaveasolidfoundationeconomicallyNutrigraincanbeginto implementtheirproductsatamarketfairprice.Thiswillallowthecommunitiestogrow withthebrand.Thiswillalsohelptocreatetrustbetweenthebrandandthepeople aroundit.BystayingtruetothemissionandvisionstatementsNurtigrainwillkeepour goodreputation. Themissionandvisionstatementscomefromtheleadersandhelptoreflectwherethe peopleatthetopofthecompanyseethebrandheading,alongwiththecommunities surroundingthebrand.Thetrustthatwillbuildbetweenthecommunityandthebrand willbealastingone.

P RODUCT O VERVIEW
NutriGraincerealbarsareaconvenientoptionforbreakfastorasasnack.Whilethebars provideagoodsourceofmanynutrientsandevenwholegrains,theydohavesome

nutritionallimitations.NutriGrainbarscanbepartofahealthydiet,buttheyshouldnotbe relieduponasamajordietarysourceoffruitorwholegrains. CalorieDistribution EachNutriGrainbarisasingleservingandcontains120calories,accordingtoNutri Grain'swebsite.Thecaloriesineachbarcomefrom3gfat,24gcarbohydrateand2g protein.Ofthe3gfat,0.5gcomesfromsaturatedfat,while12gofthecarbohydrate contentcomesfromsugar.FortypercentofthecaloriesinaNutriGrainbarcomefrom sugar,while25percentcomefromfat. WholeGrains ThefrontofeachboxofNutriGrainbarstoutstheproduct'swholegraincontent.Eachbar contains8gofwholegrains,whichisabout17percentoftherecommended48gperday, accordingtotheWholeGrainsCouncil.ThewholegraincontentinNutriGrainbars consistsofwholegrainoatsandwheat.Thegraincontentisnot100percentwholegrain, astheproductalsocontainsrefinedwheatflour.TheinclusionofwholegrainsinNutri Grainbarscontributestoitsdietaryfibercontentof3gperbar,or10percentofthedaily value. VitaminsandMinerals NutriGrainbarsarefortifiedwithvitaminsandminerals,makingthemagoodsourceof manyessentialnutrients.Eachbarcontains25percentofthedailyvalueofniacin, riboflavinandvitaminB6,20percentofcalcium,15percentofvitaminAandthiamine,and

KELLOGGSNUTRIGRAIN 5 10percentoffolicacid,ironandzinc.Eachbaralsocontains110mgsodium,or5percent ofthedailyvalue. Superfoods NutriGrainalsooffersaSuperfoodFusionlineofcerealbars.Theflavors,suchas StrawberryAcaiandCherryPomegranate,appeartoprovideadditionalnutritionalbenefit aboveandbeyondthatofthetraditionalflavors,buttheyactuallydonot.Fruitslike pomegranatesandacaidocontainbeneficialphytonutrientsthatmaypromotehealthand evenpreventdisease;however,theseflavorsofNutriGrainbarscontainverysmall amountsofthesesuperfoods.Itisbesttoconsumewholefruitsinordertoobtainadequate amountsofbeneficialphytonutrients. Antioxidants TheSuperfoodsFusionflavorsalsotouttheirantioxidantcontent,thoughthisisnotdueto theirsuperfoodscontent.Thebarsactuallycontainadditionalvitaminfortificationof ascorbicacidandalphatocopherolacetate,whichareformsofvitaminCandE, respectively.Eachofthesebarscontains20percentofthedailyvalueofvitaminCandE, bothofwhichareabsentfromthestandardNutriGrainbars.Thesevitaminshave antioxidantpropertiesthatmayhelptoreducetheeffectsofoxidativestresswithinthe body.

PEST A NALYSIS
ThePESTanalysisofSouthAfricaisinitiallyhardtorecoverduetothelackofinformation providedpublically.However,withextensiveresearchanddeterminationwehavebeen abletofindwaystodecodetheirnation. PoliticalAnalysis ForthepoliticalsituationinSouthAfrica,theyfaceadversitycontinuously.Asfortheir ecologicalandeconomicalstatus,theyrankasthehighestnationwithbiodiversityinthe world.Theirsoilisaffectedbymanyfactorsintheirunderlyingbedrock.Theirvarietyand landformsandvegetationszoneshavethusresultedinaremarkablyhighdiversityof species(plantsandanimalsalike)inSouthAfrica.Thisresultsinarichnaturalheritage, whichincludesamixoftropicalMediterraneanandtemperateclimates.Theyarethusable tomaintaintobeoneofthesixcountriesintheworldwithanentireplantkingdomwithin itsnationalconfines. AsforSouthAfricaslegislation,theyfaceafewboundarieswiththeirmixed/hybridlegal system.Itiscomposedofinterweavinganumberofdistinctlegaltraditionssuchas:civil

KELLOGGSNUTRIGRAIN 7 lawoftheDutch,commonlawoftheBritish,andanindigenouslawsystemfromAfrican Natives.Withthesetraditionshavingacomplexinterrelationship,theproceduralaspectsof thelegalsystemstillprominentlyprevailtobecorrelatedwiththeRomanDutchlegal system.Duetothis,theircourtsystemisorganizedhierarchically,andconsistsof MagistratesCourts,HighCourts,aSupremeCourtofAppeal,andaConstitutionalCourt. TheConstitutionalCourthadthehighestauthorityinallmatters. EconomicAnalysis SouthAfricantradepolicyiscomposedduetotheircompositionandaggregategrowthof trade.Intheapartheidperiod,tradeprotectionseriouslyimpededbothexportsand imports,andtheeconomydependedonfavorableglobalcommoditypricetrendstoavoid runningintoanexternalconstraint.SouthAfricadevelopedacomparativeadvantagein capitalintensiveprimaryandmanufacturedcommoditiespartlybecauseofitsnatural resourceendowments.Highandopaquetariffsseriouslyimpededexportgrowth,and whenglobalcommoditymarketswereweak,andadecliningingoldexports,theseriously containedaggregategrowthanddulledresponsetoexportstotheweakerrandinthelate 1980s.Duetothis,tradeliberalizationinthe1990snotonlyincreasedimportsbutby reducingbothinputcostsandrelativeprofitabilityofdomesticsales,alsoboostedexports. Thegrowthinnoncommoditymanufacturedsectoralexportsasaresultofliberalization wasactuallyfasterthansectoralimports.Thissuggeststhatadditionaltradeliberalization couldwellbeapartofthestrategytoenhanceexportdiversification.

SouthAfricasDepartmentofTradeandIndustryhaslaunchedaCompetitivenessFundthat providesfinancialsupporttoqualifyingentrepreneurs,allocatinggrantsthatcoverupto 50%oftheirrunningcosts.TheyalsohavetheBEE,BlackEconomicEmpowerment,which makessurecompaniesareprovidingsharestotheiremployees. SouthAfricahasamixedeconomywithhighrateofpovertyandlowGDPpercapita.ByUN classificationSouthAfricaisamiddleincomecountrywithanabundantsupplyof resources,welldevelopedfinancial,legal,communications,energy,andtransportsectors,a stockexchangethatranksamongthetoptwentyintheworld,andamoderninfrastructure supportinganefficientdistributionofgoodstomajorurbancentersthroughouttheentire region.Theyareranked25thintheworldintermsofGDPasof2008. Advanceddevelopmentissignificantlylocalizedaroundfourmajorareas:CapeTown,Port Elizabeth,Durban,andPretoria/Johannesburg.Beyondthesefoureconomiccenters, developmentismarginalandpovertyisstillprevalentdespitegovernmentefforts.Atthe startof2000,thenPresidentThaboMbeki,vowedtopromoteeconomicgrowthand foreigninvestmentbyrelaxingtheirrestrictivelaborlaws,steppingupthepaceof privatizationandcuttingunneededgovernmentspending.Resultswereseenassoonof 2004,whenSouthAfricasawasignificantincreaseineconomicgrowth. Theirmonetarynote,theZAR,isthemostactivelytradedemergingmarketcurrencyinthe world.ThenotewasthebestperformingcurrentagainsttheUSDollarforthreeyears, 20022005.Thesemarketstheytradewith,besidesotherAfricancountries,include:

KELLOGGSNUTRIGRAIN 9 Germany,theUnitedStates,China,Japan,UnitedKingdomandalsoSpain.Theirchief exportsincludecorn,diamonds,fruits,gold,metalsandminerals,sugarandwool. Machineryandtransportationequipmentmakeupmorethanonethirdofthevalueof SouthAfricasimports.Otherimportsincludechemicals,manufacturedgood,and petroleum. Oneoftheirbiggesthurdles,whichaffectSouthAfricalocally,isenvironmentaldamage, whichwascausebythemisuseofthelandandglobalclimatechange.SouthAfricais unusuallyvulnerabletoclimatechangeandhasseenavastdisappearanceofsurface waters. SouthAfricamaintainsformaltraderelationswithvariouscountriesbymeansoftreaties, tradeagreements,andmembershipininternationaltradeinstitutions.Thecenterpieceof SouthAfrica'sforeigneconomicpolicyistheSouthernAfricanDevelopmentCommunity (SADC),comprisingAngola,Botswana,theDemocraticRepublicofCongo(DRC),Lesotho, Malawi,Mauritius,Mozambique,Namibia,Seychelles,SouthAfrica,Tanzania,Zambia,and Zimbabwe.Thegovernment'skeypolicyobjectiveistostrengthentradeandinvestment linkagesbetweenSouthAfricaandtheotherSADCcountries. TheUnitedStatesisanotherofSouthAfrica'slargesttradingpartners.SouthAfricaisa beneficiaryoftheU.S.GeneralizedSystemofPreferences(GSP),whichgrantsdutyfree treatmentformorethan4,650products.SouthAfrica'sexportstotheUnitedStates increasedfromR5.2billionin1993toR14.8billionin1998.SouthAfricaalsohas

importanttradingrelationswithJapan,SouthKorea,andcountriesinSouthAmerica. SocialAnalysis Withagrowingpopulationof49,052,489andelevenofficiallanguages,SouthAfricahas becomeandintenselydivertivenation.Theyhavealargemassmediasectorthat commonlyusestheEnglishlanguage. TheSouthAfricanblackmajoritystillhasasubstantialnumberofruralinhabitantswho leadlargelyimpoverishedlives.Itisamongthesepeople,however,thatculturaltraditions survivemoststrongly;asblackshavebecomeincreasinglyurbanizedandWesternized, aspectsoftraditionalculturehavedeclined.UrbanblacksusuallyspeakEnglishor Afrikaansinadditiontotheirnativetongue.Therearesmallerbutstillsignificantgroupsof speakersofKhoisanlanguageswhoarenotincludedintheelevenofficiallanguages,but areoneoftheeightotherofficiallyrecognizedlanguages.Therearesmallgroupsof speakersofendangeredlanguages,mostofwhicharefromtheKhoiSanfamily,that receivenoofficialstatus;however,somegroupswithinSouthAfricaareattemptingto promotetheiruseandrevival. Researchersinvestigatingtheimpactofthecurrenteconomiccrisisonlocalconsumer behaviorhavefoundthat60%ofSouthAfricansareworriedaboutthefutureandtheirfear isfuellingaconsiderablechangeintheirbuyinghabits.

KELLOGGSNUTRIGRAIN 1 TechnologicalAnalysis

ThereisanintenseincreaseofecommercetechnologiesthroughoutSouthAfrica.Through asurveyof150SouthAfricanbuilding,itwasrevealedthedominanceofcommunication aspects,butnotthetransactionprovesofecommerce.Theintegratedimplementationof ecommercesolutionsandsecurityenablingapplicationsisincrediblylimited.

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T ARGET M ARKETAND I NDUSTRY

Thecerealbarindustryisonethatiscommittedtounderwhattheconsumerneedand providingavarietyofproductsthatworkfordifferentlifestages.Thetargetmarketof cerealbarsisspannedthroughoutthegenerations.IE:differentagegroupspreferdifferent tastesversusoneanother.Theworldwidetrendtowardhealthiersnacks,practicallybars thatdelivermultiplewholesomebenefits,issomethingtheindustrywillcontinuetosee rise.AsSouthAfricanconsumerlifestylesmoveeverfaster,thiscountry,aselsewhere,is experiencingandexplosionofcerealbars.AccordingtoDanaBarithwaite,thefood researcheratBMIFoodpack,themarketismaturinginSouthAfricaandgrowingwell, healthbarsarethebiggestsectorwithalmosthalfthemarket.SouthAfricahasavery differentdemographicascomparedtotheUS,andsophisticatedflavorswouldonlyappeal tosmallpartofitspopulation,sothroughtheintegrationoftheircurrentstaples, stimulatingtheirmarketwithaspecializedbarwouldeasethediscomfort.

SWOT A NALYSIS
Strengths SouthAfricaisdevelopingcountrywithmaturingtastesandanewandhighlyreceptive population.Beingenabledthroughanewlyopengovernmentwithcontinuestorelaxits strictlaws;theyareacceptinginternationalproductswithgreatsuccess. Weaknesses

Kelloggsneedstoperfectthetotaldevelopmentofthisnewproduct,alsosincetheyarenot thefirstcompanytobegintoinfiltratethecerealbarmarketwithinSouthAfricatheywill facemarketprevalencetopreexistingproducts. Opportunities Withthecornmealandchoiceoflocalfruits,thetastesblendthenewandtheoldSouth Africatogetherintoawhollyopportunisticproduct. Threats Inevitableriskoffailure,foreigncountry,andalsoaforgeinconsumer.

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M ARKET C HARACTERISTICS
Overview SouthAfricahasapopulationof49,109,107peopleandisgrowingatarateof0.051%. PopulationgrowthsarelowerinSouthAfricaduetoanexcessofmortalityduetoAIDS. SouthAfricahasabirthrateof19.61births/1,000populationandadeathrateof16.99 deaths/1,000population. 61%oftheentirecountryisanurbanpopulationandthereisa1.4%ofannualrateof changetowardurbanization. 18.1%ifadultshaveHIV/AIDS.5.7millionpeoplearelivingwithAIDSinSouthAfricaand therewere350,000HIV/AIDSrelateddeathsasof2007. ThedegreeofriskfordiseasesinSouthAfricaisintermediate.Bacterialdiarrhea,Hepatitis AandtyphoidfevermakeupmostofthefoodandwaterborndiseasesinSouthAfrica. SchistosomiasisislistedasthemainwatercontactdiseaseinSouthAfrica. 79%ofthepopulationisSouthAfricaisblackAfrican,9.6%iswhite,8.9%islistedas colored,and2.5%isIndian/Asian.

Thereare11officiallanguageslistedinSouthAfricaincludingIsizulu,IsiXhosa,Afrikaaner, Sepedi,English,Setswana,Sesotho,Xitsonga,isiNdebele,TshivendaandsiSwati. 86.4%ofthepopulationareconsideredliterate,meaningthat86.4%of15yearoldsand oldercanreadandwrite.87%ofmalesand85.7%offemalesareliterate. 13yearsold,formalesandfemales,istheschoollifeexpectancyofmostchildreninSouth Africa.Thisstatisticdependsonlocationandsocioeconomicfactors. TargetMarket Ourtargetmarketconsistsofmaleandfemaleteenagersfromtheagesof1218yearsold. Thetargetmarketwillbelongtoallsocioeconomicbackgrounds,ruralandurban,and belongtoallmajorracesinSouthAfricaincluding,blacks,whites,Indians,andEuropean AfricanMalays. WearetargetingthisagegroupbecausestudieshaveshownthattheyouthofSouthAfrica isatthemostriskformalnutritionandthathighschoolagedchildreninSouthAfricadono eatasufficientbreakfastonadailybasis. Astudyofbreakfasthabitsin1618yearoldSouthAfricanstudentsshowedthat21%of ruralblacksdidnoteatasolidbreakfast,19%ofurbanblacksdidnoteatasolidbreakfast, 13%ofIndiansdidnoteatasolidbreakfast,13%ofEuropeanAfricanMalaysdidnoteata solidbreakfast,and14%ofwhitesdidnoteatasolidbreakfast.

KELLOGGSNUTRIGRAIN 1 PacketcerealfoodssuchasCornFlakesandRiceKrispiesareconsumedfrequentlyby

Indianandwhitestudentsbutareeatenlessfrequentlybyblackstudentsdomainlytothe costofmanufacturing. Porridgeand/orbreadwithsomethingtodrinkisconsumedmostfrequentlybyless privilegedgroupsbutisalsoconsumed,insimilaramounts,bywhiteandIndianstudents.

I NTEGRATED S TRATEGY
TargetSegment OurtargetsegmentforNutriGrainbarsinSouthAfricawillbeyoungadultsfrom1218 yearsold.Wewillbetargetingbothmaleandfemaleyouths.Wewouldliketoreacha targetaudienceofallofthedifferenttypesofsocioeconomicclassesinSouthAfricawith ourproducttailoredslightlytomeettheneedsoflowereconomicclasses.Wewillfocuson ruralblacks,urbanblacks,Indians,EuropeanAfricanMalay,andwhites.Thetarget segmentisfocusedonteenagersfromtheageof1218yearsoldbecausestudieshave shownthatteenagersinSouthAfricaarenoteatingasufficientdiet,includingbreakfast. Outoftheseteenagersalargenumberofthemareatriskofdevelopingchronic malnutritionatanearlyage. BrandPositioning WewouldlikeNutriGrainbarsinSouthAfricatoembodyboththevaluesofKelloggsand thevaluesofSouthAfrica.SinceKelloggsstrivestosupplyqualityandhealthyproducts

thatenhanceconsumerlifestylesaroundtheworld.NutriGrainbarsinSouthAfricawill thenstrivetobringbreakfastbacktointocommunitiesandprovidefamilieswitha nutritiousproduct,whichtheycanrespectandenjoy.Theproductwillenterintoa competitivemarketwiththehopestobringinresultsbyencompassingacombinationof wellknownKelloggvaluesandfavoriteSouthAfricantastes.Wewillworktoward sustainabilityinthecommunitiesthroughoutSouthAfricabyprovidingalowcost,healthy breakfastandsnackavenue. BusinessObjectives NutriGrainbarsinSouthAfricawillstrivetoupholdthebusinessobjectivesofKelloggs. ThecompanywillfocusonachievinggrowthasanewproductintheSouthAfricanmarket andonsurvivinginthebreakfastfoodmarket,particularlyinthecerealbarmarket.Nutri Grainwillstresstheimportanceofethicalandsocialresponsibilityinitsbrandpositioning andfollowKelloggsobjectivetobesociallyaware.Kelloggsmissionstatementstatesthat itisimportanttodrivesustainablegrowththroughthepowerofourpeopleandbrandsby betterservingtheneedsofourcustomer,consumers,andcommunities.Kelloggsiswell knownforbeingsociallyresponsible.Thecompanybelievesthatsocialresponsibilityis keytosustainabilityandincludesenvironmentalstewardship,communityinvolvementand nutritionleadership. MarketingObjectives ThemainobjectivewehaveforNutriGraininSouthAfricaistoinitiateandgrowproduct earnings.OurobjectiveistobuildarelationshipwiththeSouthAfricancommunitythrough

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healthylivingandthereliabilityofourproduct.WewillstrivetogrowNutriGrainintoa brandthatisasstrongasallthecurrentKelloggsproductsinSouthAfrica.Wewill increasethenumberofSouthAfricanteenagerswhoeatbreakfastandmiddaysnacks throughtheinexpensiveandhealthychoiceofNutriGrainbars.Wewillincreasesales throughstorepromotionsandbypartneringwithSouthAfricansoccerteamstosupport NutriGrainoverothercompetitors.Byaffiliatingourselveswithsoccerteamsandwell knownSouthAfricansportswewillbeabletoincreaseawarenessofourproductinSouth Africancommunities. ProductOffering KelloggsNutriGrainbarswillencompassthetastesofSouthAfrica.Thecrustofthecereal barswillbemadewithcornmeal.MieliePapisastiffcornmealmixthatisthestaplefood ofmostSouthAfricandiet.CornmealisaddedtomanySouthAfricandishes.Bymaking thecrustoftheNutriGrainbarswithcornmealKelloggswillappealtothepalatesofits SouthAfricancustomers.ThefruitfillingoftheNutriGrainbarswillcomeinthree differentflavorsthatarenativetoSouthAfrica.Bananas,mangos,andpineapplesarethree ofthemostfrequentlyeatenfruitsinSouthAfrica.ByfillingtheNutriGrainbarswith thesefruitswewillbetargetingthespecifictastesofouraudience. Pricing(CompetitiveandValuePosition) Thecerealbarandbreakfastbarmarketisaverycompetitivemarketwithmany companiessellingclosesubstitutestoNutriGrain.ThebiggestcompetitorforNutriGrain willbeWheatbixmanufacturedbyBokomoandpricedat3.24foraboxof48barsand

1.74foraboxof24bars.StorebrandssimilartoWheatbixandcheapercompetitorbrands suchasAsdasellfor2.15.Wewillneedtobepricedcompetitivelyamongstorebrands andwellknownnamebrandssuchasBokomo.PricingNutriGrainbarsclosertostore brandswillgiveusanadvantageoverthewellrespectedbrandofWheatbix. ThereisaneedtoadjustpricingtotheSouthAfricanmarket.Peoplearenotaswelloffin thismarketandwewillhavetosellourproductatadiscountascomparedtothedomestic market.Anestimatefrom2000put50%ofSouthAfricanpopulationbelowthepoverty line.Thereisalsoanunemploymentrateof24%asofa2009estimatefromtheCIAworld factbook.FurthermoreGDPpercapitais$10,300estimatedasof2009,whichisverylow whencomparedtoothernations.Alsotheinflationrateisworrisome,at7.1%bya2009 estimatebytheCIA.Currentlytheexchangerateis6.92SouthAfricanRandsto1dollar. SouthAfricaishoweveranemergingmarketone,whichisseeingrapidgrowthand industrialization.Becomingpartofthisemergingmarketshowsgreatprospectsforthe future. Ourpricingobjectivewillbetomaximizeourprofit.Thelowestpricewewouldbeableto goisoneinwhichourmarginalrevenuefromabar,equalsitsmarginalcost.Atthislevel wecanfindaperfectlycompetitiveequilibriumquantityandprice.Itisnothowevera perfectlycompetitiveindustry.Thismarketisoneinmonopolisticcompetition,onein whichtherearemanycompaniessellinggoodsthatareclosesubstitutes,withfreeentry andexitintothemarket.Inthebeginningwemayneedtopriceatthislevelfor promotionalreasonstogetourproductout.Tomaximizeprofitwecanpricesomewhere

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abovethislevel.Theprofitmaximizingpointwillbeifwedrawalineuptoademandcurve derivedfromextensivemarketresearch.Thiswillbecontingentonwhatthemarketwill take,andhowourcompetitorsplaythepricinggame.Inthelongrunweuselongrun marginalcost,andthemarginalrevenuecurve,uptothepointwherelongrunaveragecost istangenttoourdemandcurve.Atthesepointswewillfindourprofitmaximizingpoints andwillbeenabledtoachieveourgoalofmaximizingprofit.Pricinglessthenthiswould notmakesenseforourbottomline,andexcessprofitswillcausemorefirmstoenter. DistributionTactics PickandPayStores,Shoprite,andMassmartarethreeoftheleadingsupermarketsand fooddistributorsinSouthAfrica.Wewillwanttodistributethroughthesestoresbecause theyarewellknowninSouthAfricaandwellrespectedbymanypeopleincludingour targetmarket.Thereareatotalof775PicknPayStoresacrossSouthAfricathatarea combinationofFamilyStoreandSupermarkets.ShopriteisoneofSouthAfricasmost trustedbrandsandthehighestpercentagesofshoppersinSouthAfricachooseShoprite overotherstores.Shopriteofferscustomersthelowestpricesforfoodandhousehold amenitiesandhas309storesthroughoutSouthAfrica.Massmartisthethirdlargest distributorofconsumergoodsinAfricaandaleadingretailerofwholesalerfoods. UseofRetailers Ofthe31,000retailstoresinSouthArica,1,000ofthemgenerate60%ofthecountrys business.Woolworthsisapopularretailchainthathasaseriesoffoodstoresthroughout thecountry.Directmarketingwouldbeineffectiveforacerealbarattemptingtoinfiltratea

newforgeinmarket.Theuseofcatalogsandonlinedistributorsmaybeusedafterthe productseesameasurableamountofsuccess,however.Changecouldalsobeverycostly, soitwillbeimportanttohaveastrongdistributionsystemfromthestart. Middlemen FactoriesinSouthAfricawouldbetheplacewheretheproductwillbecreated.Shippingof SouthAfricanNativeingredientsbacktotheUnitedStatesandthenshippingthefinished producttoSouthAdrivawouldbeovercostlyandineffective.Nutrigrainfactorieswillbe setupinSouthAfrica,employedandmanagedbytheirnativeworkers,andoverseenby U.S.representatives.Agentmiddlemenwouldgiveustherighttoestablishpolicy guidelinesandpricesthatrequireagentstoprovidesalesrecordsandcustomer information.ThisallowsKelloggsmorecontrol,asopposedtousingMerchantMiddlemen. ForeignMiddlemen Withourtargetmarket,theuseofforeignmiddlemenwouldletusemploypeoplewho knowthecountryanditsnativepeoplebest.Useofforeignmiddlemenwouldshorten channelsandallowustohaveaconstantcontactwiththemarket,andthirdparty distributors.Thesemiddlemenwillsetourproductupwiththirdpartydistributorswho arenativetothecountryandareabletogettheproductwhereitneedstogo,whenit needstogetthere.Foreignmiddlemenhaveknowledgeofthegeographyandcultureof SouthAfricathatdomesticmiddlemenmayneverunderstand.Therearealsodrastic changesinwealththroughoutSouthAfrica.Inruralareas,wewillhavetodistributeto large,wellknownretailstores,andinlessruralareas,itwillnotbeasimportantbutwe

KELLOGGSNUTRIGRAIN 2 willstillneedtomaketheproductavailablewhenpossible,throughsmallernativechain stores. BrandCommunication

Byusingacombinationofpushandpullcommunicationwewillbeabletomeettheneeds ofSouthAfricancommunitiesthroughourcosteffectiveandhealthyproduct.NutriGrain willcommunicatehealthylivingandeatingtoruralandurbanfamiliesofallsocioeconomic backgrounds.SouthAfricaisagrowingandprosperingnationwithmanybackgroundsand peoples.NotonegroupismorelucrativetoNutriGrainorKelloggsthananothergroup. Wewillcommunicatehealthylivingandeatingto1218yearoldmalesandfemalesby promotingourproductthroughtraditionalSouthAfricansportssuchaswellknownsoccer teamsandsportingevents.OurbrandwillcommunicatethatKelloggsisinterestedinthe futureofSouthAfricabypromotingaproductthatembodieshistoricalSouthAfricantastes. AdvertisingChannels SABC1isthemostwatchedstationinSouthAfrica,whichoffersnew,entertainment,and sports.Wecouldshowcaseourproductthroughtheuseofcommercialsduringthetarget marketsmostwatchedtimeslots.Kudaclub,anonlineTVservicebyMNet,isanotherplace wherewecouldplacecommercials.WiththeonlineTVBroadcast,wecouldalsoutilize popupadvertising,andwebsiteadbanners. SportingEvents,likeduringaBafanaBafanagame,amenssoccerteam,wecouldplace bannersatthestadiums.AnothercosteffectiveuseofadvertisingcouldbeseenatBanyana

Banyanagames,whichisawomenssoccerteamthatisnotintenselyfollowed.Rugby however,isamoreprobableformofsportsadvertisingsinceitisthemostfollowedevent inSouthAfrica. SalesPromotions Throughsports,thecompanycouldsendcustompackagestosportsteams,andalso showcaseparticularteamsontheirpackaging.Alsotheycouldplacethisnewproductnext tootherexistingcerealbarsinthedistributors,thereforepiggybackingontheirdominance forunderstandingthroughthecommunity. SalesForce Thesalesforcewillworkverycloselywiththedistributorsbecauseourmaindistributors willbelargescalegrocerystoresandthesmallcommunitylevelstorethatthelargerstore distributeto.ThesalesforcewillbeinchargeofpromotingNutriGrainthroughsports teamsandactiveliving.TheywillworkwithsmallcommunitystorestobringtheKelloggs brandclosertotheconsumerandembedafeelingofKelloggscommitmenttohealthier familyliving. Byutilizingthirdpartysalesteams,whicharenativetoSouthAfrica,wewillbeableto haveateamthatisfamiliarwithworkingwithSouthAfricans.Thisallowstheproductto createabetterbrandimagineasaSouthAfricansnackasopposedtoanAmerican attemptingtoimitateSouthAfricanFlavors.Wewillworkalongsideofthesalesforceto handleproblemsthatmayarisewithretailersandactualcustomers.Allcustomerfeedback,

KELLOGGSNUTRIGRAIN 2 comments,questionsandconcernswillbehandledseriouslybyateamofAmerican professionalsthatcanmakeanychangesnecessarytotheproductorproductimage.

I MPLEMENTATIONAND T IMING
There is no real set time to enter the market just wait until the area can sustain our product otherwise it will become a high priced low demand product even when the country is able to sustain it.

W ORKS C ITED

"AboutShopriteFoodRetailingtoConsumersofAllLevels."WelcometoShopriteLower PricesYouCanTrustAlways.Web.30Nov.2010. <http://www.shoprite.co.za/pages/127416071/About.asp>. Agbola,By."EstimationofFoodDemandPatternsinSouthAfricaBasedonaSurveyof Households|AfricaSouthernAfricafromAllBusiness.com."SmallBusinessAdvice andResourcesfromAllBusiness.com.Web.30Nov.2010. <http://www.allbusiness.com/finance/9780181.html>. "CIATheWorldFactbook."WelcometotheCIAWebSiteCentralIntelligenceAgency. Web.30Nov.2010.<https://www.cia.gov/library/publications/theworld factbook/geos/sf.html#top>. ExchangeRate.comCurrencyRates.Web.30Nov.2010.<http://www.exchangerate.com/>. KelloggCompany.Web.30Nov.2010.<http://www.kelloggcompany.com>. Massmart.Web.30Nov.2010.<http://www.massmart.co.za/default.asp>. "NutrigrainBarNutritionInformation|LIVESTRONG.COM."LIVESTRONG.COMHealth, Fitness,Lifestyle|LIVESTRONG.COM.Web.30Nov.2010. <http://www.livestrong.com/article/262344nutrigrainbarnutrition information/#ixzz16o8fjhg6>. "SouthAfricanFood."ExploreSouthAfricaSouthAfricanTravelandAccommodation.Web. 30Nov.2010.<http://www.exploresouthafrica.net/culture/food.htm>. "SouthAfricanFood."ExploreSouthAfricaSouthAfricanTravelandAccommodation.Web. 30Nov.2010.<http://www.exploresouthafrica.net/culture/food.htm>.

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"SouthAfricaFreshFruitsExporter."China,Africa,Asia,EuropeTradeandSourcing.Web. 30Nov.2010.<http://www.exportforum.com/africa/southafricafruits/>. "WelcometoPickNPay|FindRecipes,LifestyleTips,Events,&ShopOnlinePickNPay." PicknPay.co.za.Web.30Nov.2010. <http://www.picknpay.co.za/picknpay/content/en/home>.