MARKETING MANAGEMENT

MARKETING MANAGEMENTAn Individual Journal

TABLE OF CONTENTSEXECUTIVE SUMMARY2A REVIEW OF THEORETICAL ISSUES31. Product Life Cycle32. Ansoffs Matrix: A View Upon Product and Market5GROUP REFLECTION8INDIVIDUAL REFLECTION11PEER ASSESSMENT14CONCLUSION17REFERENCES18

EXECUTIVE SUMMARYThis is a Journal about an individuals perspective toward the Group Assignment in Marketing Management course based on the case study of Kelloggs in extending its Product Life Cycle for Nutri-Grain. Like other life form, the product itself has particular point of age and sometime, when it is not taken care, the chance to be faded from the market is high. This Journal will help to state out each stage of the Product Life Cycle and which strategy that Kelloggs used to extend the growth of that product. Ansoffs Matrix or Product-Market Expansion Grid will be used to cover for the strategy of Kelloggs. From the matrix, we can easily see how Kelloggs had a smart combination between the market and product. The Journal also shows the Groups explanation the reason why Kelloggs chose to innovate and develop its product but not Diversify another products brand. Moreover, I will give my own point of view toward the comprehensive strategic management formulation when I had chance to learn about another matrix of Product-Market Expansion Grid (Ansoffs Matrix). The implementation for this matrix from the assessment of growth opportunities will be mentioned as well. Last but not least, my unique experience in leading the Group to the Final Marketing Presentation will be shared as well.

A REVIEW OF THEORETICAL ISSUES1. Product Life CycleBased on the case study of Kelloggs when it planned the strategy to help continuing the growth of the Nutri-Grain when it showed the decline of sale in 2004. This case study reveal one of the most important theory: Product Life Cycle.

Regarding to Lancaster and Massingham in 2011, like the other life form, when the product penetrate into the market, they all have finite life. Beside that, in a book in 2012, Kotler and Keller make a very significant statement when saying a product has life cycle in order to emphasize four things: Products have limited life. Product sales pass through distinct stages, each of that stage will have to face with different threats as well as chances and problems to the sellers. Profits will be increased or decreased at different stages of product life cycle. Products will this point is most important need different marketing, production, financial, purchasing and even human resource strategies in each stage of life cycle. Therefore, at some point of the time, the product will see its end and will fade from the market. In addition, like humans have to pass through the stages of infant, teenagers, adults, etc.; the same situation also happens with product. The stages can be defined into four parts (Lancaster & Massingham, 2011) with the different characteristics:

Introduction: the product is new and just introduced to the market. Growth: the product satisfies the customers need and has a good market reaction with an acceleration in sale. Maturity/Saturation: the product meets most of the potential buyers as well as the increase in competition make the sales growth becoming slow down. Decline: the forces and factors that take part in the onset of maturity erode the revenue. A sine wave shape will go through these four stages:

Figure 1. A GRAPH OF PRODUCT LIFE CYCLESource: Kotler and Keller (2012)Except the case that Kelloggs will abandon the product and let it die on the market, the question that Kelloggs and other firms have to answer here is: when the product reaches the maturity stage, there is an requirement of forming the strategy if the company decides to keep extending the life of the products. As a result, it is seemed that Kelloggs used the strategy based on the Ansoffs Matrix about Product and Market.

2. Ansoffs Matrix: A View Upon Product and MarketAnsoffs Matrix or Product-Market Expansion Grid is used to analyze the strategic growth opportunities of the company regarding to the current and new markets and products. This Matrix is built by Igor Ansoff (1957) which are inclusive of four strategies basing on the products & markets: Market Penetration: with the current products and the current markets, the company tries to encourage the customers to buy more, attract the customers from the competitors or persuade the potential buyers (Kotler, Marketing Management: Millenium Edition, 2002). Market Development: the company will use its current product to develop a new market. Product Development: the company after researching the market, it can consider to put a new product into the current market. Or: Diversification: the company will make a risky decision when putting a brand new product to find or develop a new market.

Figure 2. KELLOGG'S PRODUCT-MARKET EXPANSION GRIDSource: The Times 100 (2013)From the case study, it stated that Kelloggs has decided to use the Product Development instead of Diversification in order to change the product to adapt with the markets needs. This is considered as a smart move of Kelloggs because the Nutri-Grain has been analyzed that it still has core features and modeled to make it be totally different with the other competitors. Therefore, the main tactic point at that moment was that focusing in renewing the brand image of Nutri-Grain instead of accepting a higher risk and higher cost to diversify a new product. Moreover, another important concept that also helped Kelloggs to communicate the re-launch the Nutri-Grain is Marketing Mix. In order to make marketing communication become strategic, there is a requirement of planning and implementation to make it be consistent with overall corporate and marketing strategies (Lancaster & Massingham, 2011). The marketing mix includes of some elements: Product: for many customers, products represents the symbols of lifestyle, trend and personality as well (Lancaster & Massingham, 2011). Price: this is an important factor. The price is not only the marketing mix that brings the revenue and profits but it also has a direct link toward the customers demand. Moreover, it is also an easy marketing mix to change and a main quality cue for customer (higher price means higher quality) (Ferrell & Hartline, 2011). Place/Distribution: the Place mix is an essential factor helps to make the product get the right place in the right time with the cost that is as lowest as possible (Ferrell & Hartline, 2011). Promotion: help the customers be aware with the existence of the products.The right strategy of Product Development with the combination of Marketing Mix helped Kelloggs to gain the a substantial growth later of almost three times of the market and still maintaining after the re-launch campaign (The Times 100, Extending the Product Life Cycle: A Kellogg's Case Study, 2013).

GROUP REFLECTION

When carrying out the research of this case study as well as its question in our Group Meeting, our group had the big wonder toward the two questions: 1) Is Kelloggs strategy considered as a product orientated? 2) Is the Product Development best strategy? Can it be with Diversification instead?The product orientation is an concept that the company tend to put the emphasis in designing and creating the best products and quality with the thought that customers would buy the best engineered products (Lancaster & Massingham, 2011). In the case of Kelloggs, thanks to the mention of the Ansoffs Matrix, we can get the conclusion as below:1) Good Combination between Market and Product Development: Kelloggs, as we mentioned above, analyzed that the Nutri-Grain has already possessed a base range of customers and that was the most beneficial and competitive advantage. Therefore, Kelloggs decided to make a clear analysis about their product. They did not make a total change toward their whole product brand in order to adapt completely with the market. In fact, they made a re-launch campaign with a new brand image to create a new awareness toward the customers. The reaction of the market in this case, is an factor to help them reveal the trend. Therefore, they make an innovation of the existing product with two main points: Soft is favored than gritty and Customers would like to have easy-to-eat indulgent style food (biscuit and cake, etc.). This can be seen as a combination between a Market Orientation and Product Orientation. They still keep the value of the Product but still tend to adapt with the Market properly. 2) Product Diversification is not a good choice: The Product Diversification in anyway, is not the smart choice for Kelloggs. Beside the higher costs, higher risk of failure, the analysis about the market as we stated above help them to decide for the Product Development. Moreover, there are also two major reasons that we think the Product Development is the best way: a. Economies of Scale: as the products quantity increases, there will be a decrease in long-run average total cost (Mankiw, 2012). With the existing customers and potential buyers, the new Nutri-Grain would be consumed right after it is sold out. Therefore, Kelloggs can shorten the time to decide if carrying the mass production or not. So, it would be better for Kelloggs to innovate their products instead of developing a whole new product line with the doubt of failure. b. Marketing Plan and Advertising Cost: with the existing products brand, Kelloggs does not have to push more for the Marketing Plan to communicate and create awareness for the customers. Moreover, the mass production of quantity, the costs for Advertising Costs will be spread for those large number of products as well (Economies of Scale). For conclusion, we can see that with the right positioning in their product within the market and the successful of using marketing mix, it is not a surprise when Kelloggs again has a stable growth for their Nutri-Grain products.

INDIVIDUAL REFLECTIONWith the understanding on the case study of Kelloggs, in my individual point of view, the Product Life Cycle would be an my utmost interest especially when the decline stage happens even with the product of Kelloggs. The second largest snack-food company with typical breakfast cereal and corn flakes, Kelloggs products appear almost everywhere. However, when we all think that a breakfast product from Kelloggs should have a stable growth since everyone needs breakfast, it shows a fact that declining stage also happens. Taking a deeper place in my memory, I now gain the knowledge why FMCG (Fast-Moving Consumer Goods) companies such as Unilever, P&G have to make a change or innovation in their products every year with big promotion and marketing campaign although we all think that their goods should be in every household because they are all necessary. Especially, a lot of them have the high connection with the customers or create a big impact on social activities such as Nestle carrying out the campaign of voting new Kit Kat Chunky flavor in UK (Webb, 2012) or the launch of worlds first Toilet Academy by Unilever in Vietnam to promote for the Domestos cleaning substance (Unilever Guardian Professional, 2012). Moreover, the case study of Kelloggs also reveals another strategic management matrix Ansoffs Matrix. Strategic Management is a set of management level decisions as well as actions that determine the performance of a corporation in the long-term (Wheelen & Hunger, 2012). However, in my point of view regarding to the strategic management, only the Ansoffs Matrix alone cannot make the decision whether the company should focus in taking major part of Product or Market. In the long-term, the comprehensive strategy formulation should be referred as:

Figure 3. A comprehensive strategic management analytical framework Source: David (2012)Moreover, regarding to Kotler and Keller in 2012, before carrying the Ansoffs Matrix, there is a needs in assessing growth opportunities which is the the gap between the desired and projected sales figure.

Figure 4. the strategic-planning gapSource: Kotler & Keller (2012)From the graph above, Kotler and Keller show that there are three options in identifying the opportunities, they are inclusive of intensive opportunities (the opportunities that grow within the current businesses), integrative opportunities (the chances to develop or attain businesses related to the current businesses), and diversification opportunities (identify the chances and put the attractive businesses).

PEER ASSESSMENT The Group promoted me as their leader in the very first day, although I had enough experience when controlling another groups before during my Bachelor time, I still felt an excitement of leading a new group this time especially when I did not have chance to choose my most favor members; all team will be chosen randomly and they are from different countries with unique cultures. During the Marketing Management break time on class, I tried to find my teams members include of six people. Thanks to that effort, at last I could gather all of them and felt a little bit peace of mind. After that time, I emailed immediately to all of team members to introduce myself and asked one member to book a room for the first group meeting. I tried to be as active as I could to stay connecting with my team, to push for the ability of each team member, gave out short deadline and tried to achieve gradually until we finish the whole Group assignment. Actually, that was my very first thought and I hoped this Group would be very positive and potential. At last, the first Group Meetings come, and my first impression is that most of my team members came late (instead of one girl and I was really appreciated with her attitude) and even they did not read the case study carefully before coming to the meeting. Disappointment was my feeling but I still felt fine. I spent some time to give a brief summary for my team members to understand clearly about the case. After reading through all of the questions, I tried to plan the whole Table of Content so that we would know what each question talked about.

After going through all the questions, I at last felt that we made something. So, I gave out the decision that each week we should have one Group meeting to go through all of these questions, one by one. Hence, in the end, the presentation would be all easy for us. Therefore, the next Group Meeting was planned. However, although I planned and sent emails to all of group members, the next Group Meeting was just only inclusive of four members instead of six. At that moment, my fear about upcoming meetings would lead to the risk that the number of people attending will be none. Hence, I had to change the way of working instead of creating a small forum so that everyone in the team can contribute and speak their own voice; now, I had to push the tasks to all of them.

Moreover, in order to enhance the performance of each team member, I tried to communicate with them through emails, mobile phone text message, and the most efficient way I used is Google Drive which I created a folder to share with other members so that they could upload their working process and I, as a result, could track the work.

When I applied the electronic method of using cloud service like Google Drive, it gave me a new experience in managing the performance of the whole group. Everyday, I just clicked on the folder to track the process; so, whenever a team member did not meet the deadline of their work, I could easily drop the email or control from the distance. As a result, I could have all of their work in the prompt time and it helped me to manage my schedule as well in editing the whole PowerPoint slide. At last, after two nights of staying up to edit the slides, we can all come to the Presentation in the most ready status. In my point of view of Organizational Behaviour, it looks like that I used the Forcing Style in resolving the problems within the team which tried to achieve the own goals without concern to the others (Hellriegel & Slocum, 2011). This style, at first, sounds quite negative when it indicates the spirit of Like it or not, what I say goes. However, when in a team which is full of reactive and passive members, the appearance of a Forcing leader would be quite necessary. Lets imagine if I did not assign all the tasks to the team, who else would do since what all the people doing is just waiting.

CONCLUSIONThe Group Assignment gave me a chance to discover deeply into two new aspects: Product Life Cycle and Ansoffs Matrix. It proved that with the right analysis of a companys existing product, suitable strategy and the combination of the marketing mix, that company can help to avoid the declining stage of product and continue the growth trend. Moreover, a mix of other strategy formulations would also be needed to ensure a better proportion of success for the product.

REFERENCESAnsoff, I. (1957, September - October 5). Strategies for Diversification. Harvard Business Review, 35(5), 113-124.David, F. R. (2012). Strategic Management: Concepts and Cases (13th Edition). New Jersey: Pearson Prentice Hall.Ferrell, O. C., & Hartline, M. D. (2011). Marketing Strategy (5th ed.). Mason: South-Western Cengage Learning.Hellriegel, D., & Slocum, J. W. (2011). Organizational Behaviour (13th ed.). Mason: South-Western Cengage Learning.Kotler, P. (2002). Marketing Management: Millenium Edition. New Jersey: Prentice-Hall Inc.Kotler, P., & Keller, K. L. (2012). Marketing Management (14th ed.). New Jersey: Pearson Education Inc.Lancaster, G., & Massingham, L. (2011). Essentials of Marketing Management. London and New York: Routledge.Mankiw, N. G. (2012). Principles of Microeconomics. Mason: South-Western Cengage Learning.Onkvisit, S., & Shaw, J. (2004). International Marketing: Analysis and Strategy (4th ed.). London: Routledge.The Times 100. (2013). Extending the Product Life Cycle: A Kellogg's Case Study. Retrieved September 23, 2013, from Business Case Studies LLP: http://businesscasestudies.co.uk/kelloggs/extending-the-product-life-cycle/introduction.html#axzz2kIuwRb3kThe Times 100. (2013). Marketing Theory: Marketing Mix. Retrieved September 23, 2013, from Business Case Studies LLP: http://businesscasestudies.co.uk/business-theory/marketing/marketing-mix-price-place-promotion-product.html#axzz2kIuwRb3kUnilever Guardian Professional. (2012, November 22). Unilever to launch world's first Toilet Academy in Vietnam. Retrieved September 23, 2013, from Guardian News and Media Limited: http://www.theguardian.com/sustainable-business/unilever-to-launch-vietnam-toilet-academyWebb, S. (2012, January 25). UK: Consumers to vote on Nestle's new Kit Kat Chunky flavour. Retrieved September 23, 2013, from Just-Food: http://www.just-food.com/news/consumers-to-vote-on-nestles-new-kit-kat-chunky-flavour_id118049.aspxWheelen, T. L., & Hunger, J. D. (2012). Strategic Management and Business Policy: Toward Global Sustainability (13th ed.). New Jersey: Prentice Hall.Zenger, T. (2013, June). What is the Theory of Your Firm? Harvard Business Review, pp. 72-78.

MARKETING MANAGEMENT: An Individual JournalPage 19