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CBSE Business Studies CLASS 12 MARKETING PROJECT CEREALS
Marketing Mix is a very significant concept of the business progression. The
products and services of the business organizations get a very effective
strategic position in the market with the assistance of the application of
marketing mix. Through correct diligence of the marketing mix, a company
can have a well explicated marketing strategy and tactics through which the
marketing aims of the company can be accomplished at the necessitated
level. The marketing mix is not an individual term but it is the assemblage of
the various elements of the marketing.
It primarily piles up the 4Ps of marketing such as product, price, place and
promotion. These four Ps have equal implication for the marketing of the
products in different organizations. The actual meaning of those four is
creating the right product, selling it at the right price and in the right place,
with the use of the most effective promotion possible. When being in the
process of bringing some particular product to the market, the organization is
supposed to make choices concerning the product that will eventually
influence the effectiveness of a chosen strategy. The four P’s are a sort of
parameters that are under marketer’s control. “The goal is to make decisions
that center the four P’s on the customers in the target market in order to
create perceived value and generate a positive response”
1.Objective of the Study:
The overall goal of this project is to investigate the breakfast cereal
industry, with the leading brands in the market and work within
form a suitable marketing mix to achieve increased efficiency and
The specific objectives of this work are:
- Examine the impact of marketing mix on the decisions taken
by a company
- Examine the working of the breakfast cereal industry
- Evaluate the various competitors and their unique selling
Breakfast cereal is a food made from processed grains that is often eaten as the first meal
of the day. It is eaten hot or cold, usually mixed with milk and sometimes yogurt or fruit.
Some companies promote their products for the health benefits from eating oat-based and
high-fiber cereals. In America, cereals are often fortified with vitamins. A significant
proportion of cold cereals are made with high sugar content.
The history of modern-day breakfast really begins with a pain in American stomachs. The
mid-19th century breakfast consisted mainly of fatty meat, was largely devoid of any fibre
and created all sorts of gastrointestinal disorders.
It may be hard to believe, with its endless flavor varieties and sugary additions, but cereal is
one of the first widely marketed “health foods.” It was developed as an answer to a
growing dyspepsia epidemic in America. During the Civil War, many suffered from this
chronic digestion problem that resulted from the unhealthy, high-protein diets of the time. It
was clear that eating habits had to change; doctors recognized a need for teaching
Americans how to eat and live healthier. Institutions that emphasized exercise and a healthy
diet, known as sanitariums, began popping up around the country.
The first ever breakfast cereal was Granola, invented in the USA in 1863 by James Caleb
Jackson, a convinced vegetarian, who was the operator of the Jackson Sanitorium in the
state of New York. However, the cereal never caught on commercially, because the heavy
bran nuggets needed soaking overnight before they were tender enough to eat.
But then Doctor John Harvey Kellogg arrived on the scene. A religious man, and a
respected superintendent at the Battle Creek Sanatorium, he developed a biscuit made
from oats, wheat and corn meal, and a number of other cereals in the 1880s.
Together with his brother, Will Keith Kellogg, John developed several grain-based cereals.
It was, however, largely by accident that they invented the first modern, ready-to-eat cereal,
the “Corn Flake,” and established the manufacturing model for modern cereal production.
Why have we selected this product?
The role of breakfast cereals in a balanced diet has been recognized for many years. Dietary
guidelines note that the high nutrient density of breakfast cereals (especially those that are
whole grain or high in cereal fiber) makes them an important source of key nutrients.
Cereal has firmly rooted itself in food culture; a bowl of cereal is a treat. One of the most
beloved parts of the cereal experience is the ice-cold milk that is left behind once the cereal
is gone. This milk, flavored by sweetened cereal, has its own unique taste. The flavor is so
special and recognizable that Christina Tosi, chef and owner of Momofuku Milk Bar in New
York City, has developed a cereal milk soft serve as one of her most popular signature
Everybody seems to have a favorite cereal. No matter which variety you enjoy, it holds a
special place in our collective experience.
In many ways, the cereal flake is the perfect consumer product. It's easy to produce, easy to
sell, and surprisingly lucrative. To this day, cereal comes with an eye-popping profit margin
of 50 percent.
• In 2013, consumer awareness regarding the benefits of healthier food options and an
increase in on-the-go consumption were the main factors impacting demand for
breakfast cereals. This was manifested by an increase in demand for health and wellness
(HW) breakfast cereals and options that favour on-the-go consumption.
• There were no major changes in 2013 in the breakfast cereals competitive landscape.
• Breakfast cereals in the United Arab Emirates is predicted a constant value CAGR of 4%
over the forecast period. A CAGR of 3-4% is anticipated across the different categories,
with the exception of muesli, which is forecast a CAGR of just 2%.
Corn flakes are a popular breakfast cereal originally manufactured by Kellogg's through the
treatment of maize. Kellogg’s® Corn Flakes® cereal is the Original & Best® cereal. Every
bite of these crispy, golden flakes is just as delicious as the first.
1. One of the oldest cereal brand
2. Corn flakes as diet food
According to Kellogg’s any individual consuming their cornflakes for two continuous
weeks can witness significant weight loss
Weetabix is the classic cereal for breakfast tables, made the same way, the same size and
on the same site for over 80 years. Today it is one of the most popular breakfast cereal with
more people choosing to fuel their day with Weetabix than any other cereal
Weetabix Food Company's USP is its wholegrain product portfolio as all the brands of the
Weetabix Food Company are founded on wholegrain goodness. Weetabix Organic
provides one with the same Fuel as original Weetabix, and all of the agricultural ingredients
in Weetabix Organic are, as one would expect, organically grown according to the
standards set by the Soil Association, using natural methods with no artificial chemical
fertilisers, herbicides or pesticides. Weetabix Original is a low fat, low sugar, low salt, and
high fibre food.
Nestlé has launched its first gluten-free breakfast cereal to meet rising consumer demand.
The new Gluten Free Corn Flakes, fortified with B-vitamins and iron, are available in two
flavors including Traditional and Honey.
Gluten is a naturally occurring protein found in grains, such as wheat. Nestlé Gluten Free
Corn Flakes are aimed at consumers who are gluten sensitive and interested in reducing the
amount of gluten in their diets, as well as those who suffer from Coeliac Disease, an
Cheerios is an American brand of breakfast cereals manufactured by General Mills.
Successful marketing led General Mills to become highly successful and sell approximately
1.8 million cases of the cereal in its first year alone.
It is a healthy start to the day or a perfect, crunchy snack for the entire family.
Made with 100 percent natural whole grain oats – Three grams of soluble fiber daily from
whole grain oat foods, like Cheerios cereal, in a diet low in saturated fat and cholesterol,
may reduce the risk of heart disease.
Over the last few decades Bokomo Foods developed into a key player across numerous
categories in the South African food industry. The brands from the Bokomo stable have
been household favourites for decades and are the preferred choice in various segments
such as cereals, baking aids, desserts, biscuits and dried fruit.
Weet-Bix Lite salt & sugar free is high in fibre with added vitamins and minerals.
It has no added salt and sugar, is low in fat and contains no colourants, flavourants or
preservatives. It is also approved as part of the South African Heart and Stroke Foundation
In marketing, a product is anything that can be offered to a market that might satisfy a want
or need. From the customer’s point of view, a product is a bundle of utilities, which is
purchased because of its capability to provide satisfaction of certain need.
Breakfast cereal is a consumer product, which is purchased by the ultimate users or
consumers to satisfy personal needs or desires. It can be further categorized as a
convenience product, on the basis of shopping efforts involved.
Almost every one of us must have heard the saying that breakfast is the most important
meal of the day. Still, not many have taken it seriously and made breakfast a part of their
daily diet. Just like adults, skipping breakfast has also become a practice among school
going children and has led to many problems, like, headache, sleepiness, stomach pain,
muscle fatigue, Indecisiveness, anger, anxiety, irritability, unhappiness, nervousness,
Hence, our product, Munchiez caters to the needs of different age groups according to
the specific needs of that group. We at Munchiez believe in the power of eating a healthy
breakfast, meeting nutritional requirements. Hence, we have created a wide range of
breakfast cereals specifically to serve the community a better breakfast. Your mother was
right: Breakfast really is the most important meal of the day. Not only does it give you
energy to start a new day, but breakfast is linked to many health benefits, including weight
control and improved performance.
Studies show that eating a healthy breakfast (as opposed to the kind containing doughnuts)
can help give you:
• A more nutritionally complete diet, higher in nutrients, vitamins
• Improved concentration and performance in the classroom or the
• More strength and endurance to engage in physical activity
• Lower cholesterol levels
We have built up some key core brand characteristics, emphasizing quality and nutritional benefits
that will apply to any of our product.
Unique Selling Proposition
MUNCHIES is the great breakfast friend for both mom and kids. While kids love its fabulous
taste, and have fun with the way MUNCHIES turns milk super-duper yummy ,Moms can feel
relieved that they’ve given their child a nourishing breakfast to take on an action packed and fun
filled day in school.
That’s because MUNCHIES is now made with Whole Grain, which gives 12 essential vitamins
and minerals, and fibre.
The most unique and compelling part of the MUNCHIES proposition is that we give a free
packet of munchies to a child in need for every pack that you purchase.
Permissions and Licensing
In a consolidated industry such as this, companies often face a substantial amount of
scrutiny from the legal environment. Often times this stems from the demands of
It is necessary to establish a business presence in order to provide or sell goods or services
in the UAE. Regardless of the type of business to be set up, it is necessary to obtain a
The basic requirement for all business activity in the UAE is one of three categories of
license, commercial, professional or Industrial. These licenses are issued by the Department
of Economic Development of each Emirate.
Since the breakfast cereal industry is a food processing industry, we require an industrial
license. An Industrial allows the holder to import raw materials, manufacture specified
products and export the finished products to any country.
Also, every company set up in Dubai or elsewhere in the UAE is required to have no less
than fifty-one percent (51%) shareholding of UAE nationals.
We work with local growers and millers to support sustainable agriculture practices to bring
our best to you.
We make almost all our cereal boxes from 100 percent recycled cardboard. These cereal
boxes can be in turn recycled by our customers, so they can give back too.
We try to send the minimum possible waste to the landfills and reduce our carbon footprint
to almost zero.
At Munchiez, we carefully watch our water consumption. That’s because we want to make
sure that we’re making a more positive impact on the environment with every drop we save.
Why are taglines used?
Taglines tell the customers the key benefits of the business product to the customers. By
reading a tagline, the customers get an idea about what is expected from the particular
product. A tagline works as a salesperson explaining the benefits of the product.Using a
tagline in an effective way, results in differentiating the brand from the rest of the products
in the market. It represents the vision and the mission of the business in front of the
customers. The knowledge of the vision and mission is what makes a customer more
inclined towards the offering of the business.
A Crunch with Every Munch.
Every bite of Munchiez is just as delicious as the first. We ensure that our products are made
using the best technology so that our customers will enjoy every bit of their breakfast.
The Fruit One: Fruity Munchiez
Fruity Munchiez is a gluten-free, sweetened rice cereal with a rainbow of fruity flavors that
make mornings rock! Fruity Munchiez have been a family favorite for over 40 Years! Each
serving of this Post Fruity Munchiez Cereal is bursting with flavor and important Vitamin D.
Vitamin D promotes healthy bones and teeth by helping a growing child's body absorb
calcium. Parents can also feel good knowing this morning treat provides the nutrition you
want in the fun great- tasting product your kids will enjoy. Each serving of this Fruity
Munchiez Cereal is just 110 calories and is packed with real fruit flavor. This cereal also
contains 11 other essential vitamins and minerals in each serving and is gluten free.
The honey one: Honey Nut Munchiez
This 26.6 oz Honey Nut Munchiez Cereal has the irresistible taste of golden honey,
making it a family favorite. In addition, each little "o" contains soluble fiber from whole
grain oats. As part of a heart-healthy eating plan, eating Honey Nut whole grain cereal
each day may help lower your cholesterol. In fact, 3 grams of soluble fiber daily from whole
grain oats (as provided by this cereal) with a diet low in saturated fat and cholesterol can
reduce the risk of heart disease. Made with whole grains and low in fat, Munchiez also
provides 12 essential vitamins and minerals. That's something that everyone can smile
about. Tried and tested over three decades, this Honey Nut cereal is a tasty and nutritious
day to start your day.
MUNCHIEZ RASIN BRAN:
Start your morning out right with Munchiez Raisin Bran Cereal. This high-fiber cereal is only
190 calories per serving and combines delicious raisins with crisp, toasted bran flakes for a
tasty and nutritious breakfast. The 23.5-oz box of Munchiez Rasin Bran Cereal contains
no saturated fat. Make morning amazing
with Munchiez Raisin Bran cereal! Munchiez Raisin Bran cereal has a delicious balance of
crispy wheat-bran flakes and plump, juicy raisins. In fact, it has two scoops of raisins in
every box! Plus it's an excellent source of fiber, with 7 g in each serving. And each bowl is a
small but smart step toward a healthier future—a heart-healthy breakfast* choice that's also
Packaging is very important to ensure the freshness of the breakfast cereal. Muchiez has
Bag-in-box packaging wherein the product is initially weighed into bags. The bag is
required to preserve the integrity and freshness of the product and acts as a barrier to
moisture. As a result of high-speed packing, the bag will inevitably contain some air. This
has the added advantage of physically protecting the product from factory to kitchen shelf.
The bag is then inserted at high speed into the carton. The carton provides rigidity and
protects the product. Bag-in-box packaging allows continuous high-speed packing of
products with differing bulk densities and shapes. This allows the consumer to benefit from
a wide variety of distinctive and innovative products.
Modern weighing systems are very accurate giving consumers the guarantee that all packs
are at or extremely close to the declared weight.
An automated machine packages the cereal at a rate of about 40 boxes per minute. The
box is assembled from a flat sheet of cardboard, which has been previously printed with the
desired pattern for the outside of the box. The bottom and sides of the box are sealed with
a strong glue. The bag is formed from moisture-proof plastic and inserted into the box. The
cereal fills the bag and the bag is tightly sealed by heat. The top of the box is sealed with a
weak glue which allows the consumer to open it easily. The completed boxes of cereal are
packed into cartons which usually hold 12, 24, or 36 boxes and shipped to the retailer.
Some cereals, such as shredded wheat, are fairly resistant to damage from moisture. They
may be placed directly into cardboard boxes or in cardboard boxes lined with plastic. Most
cereals must be packaged in airtight, waterproof plastic bags within cardboard boxes to
protect them from spoiling.
Pricing of Our Product
Price is the amount of money paid by a buyer in consideration of the purchase of a product
or a service. It is the single most important factor affecting the revenue and profits of a firm.
Per Unit Pricing (in AED)
Cost of Market Research
Cost of Advertising
Cost of Distribution
Cost of Cereal
Cost of Box
TOTAL PRODUCTION COST
(total of all costs listed above)
ProPit to Manufacturer
(Total production cost x 30%)
COST TO WHOLESALER
(Total production costs + proPit to manufacturer =
ProPit to Wholesalers
(Cost to wholesaler x10%)
COST TO RETAILERS
(Cost to wholesalers + proPit to wholesalers = Price to
Selling Price of Competitors (in AED, 375 grams)
Factors determining the price
1. PRODUCT COST: Product cost includes the cost of producing Munchiez, and also
the cost incurred from distributing and selling the product. The product cost sets the
minimum level or floor price of the Munchiez at which it should be sold. But the
main aim is earning profit therefore there should be a profit margin at which the
Munchiez is to be sold. The cost incurred from purchasing raw materials can be
classified as a variable cost as these costs vary in direct proportion. Semi-variable
costs are those costs which vary with the level of activity for example if production
increases the costs on hiring workmen increases.
2. UTILITY AND DEMAND: The utility provided by Munchiez and demand made by
the buyers sets the upper limit of price. The buyer may only be ready to pay up to
ProPit to Retailers
(Cost to Retailers x 20%)
COST TO CONSUMERS
(cost to retailer + proPit to retailers = Retail Price)
1 box Kellogg’s 12.75
1 box Weetabix 13.50
1 box Cheerios 11.75
1 box Bokomo 10.25
1 box nestle 14.50
1 box munchies 8.50
the point where the utility from the product is at least equal to the sacrifice made it
terms of the price paid. The price of the product is also affected by the elasticity of
demand of the product. If the price elasticity of demand is INELASTIC, the firm is in
a better position to fix higher price.
3. EXTENT OF COMPETITION IN THE MARKET: Competitors’ prices and their
anticipated reactions must be considered before fixing the price of a product.
Competitive products must be examined carefully before fixing the price.
4. Government Regulation: If the price of the commodity and services is to be fixed
as per the regulation of the government, it should also be borne in mind.
5. Marketing method used: Price is also influenced by the marketing method used
by the company, e.g., commission which is to be paid to the middlemen for sale of
the goods is also added to the price. Similarly, if the customers are to be provided
“after sale service” facility, then those expenses are also added to the price.
6. Make the Price Relatable: At the end of the day, the sales process comes down
to convincing a customer that your product is worth the price you’re asking.
Sometimes all you have to do is put the price in terms the customer will understand.
The potential to reduce costs, improve efficiency, expand markets and increase customer
satisfaction often make business partnerships too productive to pass up. It has become
increasingly difficult for businesses to sell one product in one place, necessitating more
global cooperation to increase success rates.
Channel of Distribution
In business, a “channel” is the pathway through which goods flow from producers to
consumers. It is important to consider every point on the path in order to create a full
picture of how goods are actually made and sold.
A poorly designed or executed distribution channel strategy can create conflict, inefficiency
and disruption up and down the line.
Two Level Channel-
Manufacturer- Wholesaler- Retailer- Consumer
Breakfast cereal is a consumer product which is standardised, less- bulky and frequently
purchased. It can be better distributed by long network of channels. Also, the unit value of
an individual cereal box Is low, so a two level channel is preferred.
The wholesaler and retailer function as a link between us, the manufacturers and our
Intermediaries (the wholesaler and retailers)- provide several benefits to both manufacturers
and consumers: improved efficiency, a better assortment of products, routinization of
transactions, and easier searching for goods as well as customers.
Exchange relationships can be standardized in terms of lot size, frequency of delivery and
payment, and communications. The use of intermediaries also aids the search processes of
both buyers and sellers. We are constantly searching to determine their customers' needs,
while customers are searching for certain products and services. A degree of uncertainty in
both search processes can be reduced by using channels of distribution.
Warehousing and inventory control systems help a business monitor and track the amount
of raw materials, finished goods and work in process the company has on hand at all times.
Businesses rely on the information in the inventory control system to make decisions on
stock purchases, production schedules and warehousing needs. Accurate inventory systems
help small businesses keep costs low and efficiently deliver products to meet customer
How we keep costs low?
Storing raw materials and finished goods incurs a cost to a business. The inventory control
and warehousing system can help manage the cost by controlling the amount of materials
the business must keep on hand.
We, at Muchiez use a lean system, having a minimum amount of stock on hand to keep the
cost of inventory and warehousing low. We only purchase materials when there is a
customer demand. Lean inventories help us minimize the cost of raw materials,
warehousing and material handling. However, we have a central warehouse which contains
more inventory than the others to help reduce delays in shipments from vendors or
unforeseen increases in customer demand can result in late deliveries or lost business for a
company that uses a lean inventory system.
We follow a computerized stock-holding system to ensure shelves are always full and orders
are delivered on time. The computerized stockholding shows immediately when shelves are
empty. It then automatically sends orders to the manufacturing base to replenish stocks,
minimizing waste and increasing profits. This also enables the company to offer competitive
prices, which makes for happy and loyal customers.
Our raw materials of wheat, corn, cocoa, rice and sugar are obtained from primary suppliers
around the world. These materials help make our different breakfast cereals and snacks to
sell to customers.
Promotion plays a very important role in the sale of our cereal. We follow different types of
promotion techniques to help boost the sale of our products.
We advertise using a whole range of media: in the press, on posters, radio and cinema,
direct mail and, most recently, on the Internet.
Direct mail/messaging: through this form of advertisement we look into building direct
relationship with the customers, we can contact them through the information cards they fill
out after a first purchase, this is an efficient form of advertisement as it promotes the firm
and can take inputs from the customers thus improvising on products.
Magazines: this form of advertisement may be comparatively expensive but its a desirable
in order to advertise to large target group in an attractive and desirable way
Newspaper: almost everyone reads the newspaper so, what better method to advertise
than to reach a huge mass of people inexpensively
Television ads: They are more expensive than most of major forms of advertising. However,
with the increasing number of television networks and stations, businesses might find good
deals for placing commercials or other forms of advertisements. Television ads usually are
priced with similar considerations to radio ads, that is, the number of ads, the length of ads
and when they are put on the air.
Promotion Schemes for the Consumer
Discount: During the end of the year or to mark special occasions, we offer discounts to our
customers to encourage them to buy our cereal.
Product Combination: Offering the another product as a gift along with the purchase of
breakfast cereal is a way by which we promote our product. For example, offering bowls or
Every step in the manufacturing of breakfast cereal, Munchiez is carefully monitored for
quality. We ensure the highest level of hygiene in every step of the process. Since cereal is a
food intended for human consumption, sanitation is essential. The machines used are made
from stainless steel, which can be thoroughly cleaned and sterilized with hot steam. Grain is
inspected for any foreign matter when it arrives at the factory, when it is cooked, and when
it is shaped.
To ensure proper cooking and shaping, the temperature and moisture content of the cereal
is constantly monitored. The content of vitamins and minerals is measured to ensure
accurate nutrition information. Filled packages are weighed to ensure that the contents of
each box is consistent.
In order to label boxes with an accurate shelf life, the quality of stored cereal is tested over
time. In order to be able to monitor freshness over a reasonable period of time, the cereals
are subjected to higher than normal temperatures and humidity in order to speed up the
Getting the right product or service to the customer, at the right price, in the right place
and at the right time is fundamental to business success. Understanding and balancing the
marketing mix enables an organization to uniquely position its brand to drive sales of its
products and services. To remain as a market leader a business needs to continually look at
new ways of engaging and exciting customers in its products and services.