Kelloggs leading producer of cereal products and convenience foods, such as cookies, crackers and frozen waffles. Its brands include Corn Flakes, Nutri-Grain and Rice Krispies. Its products are manufactured in 19 countries worldwide and sold in more than 180 countries with annual sales of more than 4.5 billion. In an uncertain world where the organizations strategy is to focus on products and brands that are either the market leader or in a strong second position the company believes that this focus upon core and successful products enables it to provide consistent and reliable returns and rewards for its stakeholders. When a company like Kelloggs is investigating a change in its marketing it can consider four elements. These are known as the marketing mix or 4Ps: Product - This element relates to how the company offers meets the changing needs and wants of customers. The growth in healthier lifestyles creates opportunities for Kelloggs to increase the number of products for this segment. Price - The amount a company charges for its product is important in determining sales. Super brands like Kelloggs can charge a premium because of the strength of the brand and product quality. Place - Where customers can purchase the product is also an important factor in determining sales. If a brand like Special K is not stocked in supermarkets where most purchases are made, sales will be lost. Promotion - Communicating the availability of a product is essential for sales to be made. Kelloggs uses above the line promotion like TV advertising as well as below the line promotion like on-pack promotions and sampling. . Although Special K was already a well-established brand, its full potential had never been reached. It was viewed as a stand-alone product. Managers can decide when to make key changes to a core product by analyzing its position within the product life cycle. A products life cycle may last only a few months (e.g. with a fad or craze) or, as with Special K, for many years. Kelloggs was convinced that such investment would help to maintain the brands strength in a rapidly changing marketplace.

Explain the important product-related decision that was not taken into consideration by the company and Give TWO ways to develop company products by using Product Differentiation.