GSM Situation Analysis PDF

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Global Sustainability Marketing with Ergem Senyuva Tohumcu ...

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•Situation Analysis (How does the industry changing with respect to sustainability and how is your company adapting?) target markets, players, competition, - Caitlin Industry is becoming very aware of what ingredients are being used in products and how these ingredients are grown - no GMOs, pesticides, etc Company - Caldwallader C. Washburn began General Mills, the parent company of Cheerios, in 1856 when he wanted to produce the world’s finest flour. Since the beginning of the company, General Mills has had the mission to “nourish everyone by making lives healthier, easier, and richer.” Initially, General Mills had only one type of cheerios. However, in 1979, General Mills released what would become one of their most popular brands: Honey Nut Cheerios. Currently, General Mills has expanded their product line of Cheerios to include 17 different flavors, ranging from Chocolate to Blueberry to Multi-grain. Cheerios is one of the most popular brands of cereal today, and they have exceeded a $1 billion in sales and over 250 million boxes sold for just Cheerios and Honey Nut Cheerios (https://www.kiplinger.com/slideshow/investing/T052-S001america-s-most-popular-breakfast-cereals-stocks/index.html). Competitor - The cereal industry has many different players, and while Cheerios is an established brand name, its competitors are too. Cheerios’ main competitors include Frosted Flakes, Honey Bunches of Oats, and Kashi Honey Toasted Oats. Frosted Flakes is a main competitor of Cheerios due to their high sales of $412 million compared to Honey Nut Cheerios’ $453 million in the first half of 2018 (Hyslop). Frosted Flakes targets children due to their high sugar content, and do not market themselves as having high health benefits like Cheerios does, instead focusing on taste. Another competitor of Cheerios is Honey Bunches of Oats (HBO). HBO and Cheerios has a very similar target market of health-conscious families. In comparison to Honey Nut Cheerios’ sales of $453 million, HBO made $373 million in sales (Hyslop). As well, HBO and Cheerios are priced similarly. Each product can be purchased for $3-4 depending on the store. The last main competitor of Cheerios is Kashi’s Honey Toasted Oats. Kashi is a main competitor of Cheerios due to their products’ heart health benefits. As well, the perception of Kashi’s healthiness is competition for Cheerios. However, Kashi does not sell as much as Cheerios does. Kashi has a very similar target market as Cheerios, as they target an older health-conscious group. These three brands are Cheerios’ main competitors and Cheerios will need to continue to grow in order to remain in the top cereal brands in the country. https://www.bakeryandsnacks.com/Article/2018/08/30/A-new-look-at-cereal-snacking-The-topbrands-and-producers-for-the-first-half-of-2018

Customers - Cheerios’ main customers include women ages 18-54.

There are about 141 million homemakers and principal in the US and of those 133,341,000 are women. This comprises the general universe of people Honey Nut Cheerios chooses to operate in. This leaves around 65 million men in this category as well. Listed below is the analysis of what the current target market for Honey Nut Cheerios looks like. Honey Nut Cheerios (HNC) chooses to target women of all ages 18-54 collectively because they are all at least 15% more likely to buy HNC than men in the same category. However, Women 18-34 are 47% more likely to purchase HNC than men ages 18-34. Additionally, however, women in the 25-54 age group top out the charts for purchasing HNC as being 19% more likely to buy then men in the same age category. HNC also targets people who have middle to upper middle class income levels. MRI data shows that 28% of HNC users have an income level of $75,000-$149,000 per year. On average households with children of any age are 27% more likely to purchase HNC than households without children. Among that, households with children between the ages of 12- 17 are 37% more likely than average to purchase HNC. Children are a large part of who HNC

advertises too, although ultimately, the head of the household will purchase the product, so HNC chooses to target both groups, but spends more time and money advertising to the older people. Blacks are the race that is most likely to buy our product, followed with whites. Blacks are 9% more likely than Whites to buy HNC. The typical HNC consumer has graduated high school and a large portion of them have attended some college. When thinking of psychographic characteristics of HNC’s consumer, one may think of a middle aged woman who concerns herself with stereotypical female ideas and characteristics. She is concerned about her health and her family’s well-being, as well as big life changes such as getting married, or having children. In the US, women generally make food decisions for her family. There are exceptions, however, when target market is concerned, HNC chooses to focus on women who are making the decisions of what their family will eat. These women buy HNC at grocery stores and markets and also at department stores such as Wal-Mart and Target. HNC targets children because they often have a large influence on what the parents buy.

Collaborator: The downstream suppliers of Cheerios include the companies that Cheerios partners with to get their product to the store and the stores to which they sell their products. Cheerios mainly sells their products at “grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, commercial and noncommercial foodservice distributors and operators, restaurants, and convenience stores.” Walmart “accounted for 21 percent of our consolidated net sales and 30 percent of our net sales in the U.S,” making it Cheerio’s largest client. https://csimarket.com/stocks/GIS-BusinessDescription.html. One main distributor for General Mills is Sysco, which helps General Mills distribute their goods to each of their clients. Context: The breakfast cereal industry is taking action in becoming more sustainable by reducing their environmental impact and becoming more conscious of the social welfare of their workers. Manufacturers of cereal look at the lifecycle of the product in regards to sustainability, looking at the production of grains and impacts of farming, all the way to the distribution of the product. http://www.ceereal.eu/priorities-actions/sustainability The main challenges in regards to cereal and sustainability are climate change, water use, ingredient usage and workers welfare. In regards to Cheerios, there is room for improvement in their sustainability goals. General Mills’ as a parent company, should “have stronger policies regarding other raw materials such as palm oil, establish guidelines and controls to guarantee the reduction of GHG emissions on agriculture, evaluate changes in the portfolio of products to decrease the dairy consumption, and raise the environment concern in retailers and consumers.” https://digital.hbs.edu/platformrctom/submission/the-environmental-impact-behind-a-cereal-box-how-general-mills-isaddressing-climate-change/...