Situation analysis 1003MKT PDF

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Situation analysis 1003MKT...

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Situation Analysis for

Nature Valley Granola Bars

Author: -SID: --1003MKT – Introduction to Marketing Tutor: Mike Thomes Trimester 1, Year 2019

Word Count: (should be 2000+/- 10%)

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Table of Contents

Table of Contents.......................................................................................................................4 Introduction and Company Background....................................................................................5 Introduction.............................................................................................................................5 Company Background............................................................................................................5 Situation Analysis.......................................................................................................................6 Market Analysis......................................................................................................................6 Macro Environment Analysis.................................................................................................6 Political Analysis.................................................................................................................6 Economic Analysis..............................................................................................................6 Social Analysis....................................................................................................................7 Technological Analysis........................................................................................................7 Legal Analysis.....................................................................................................................7 Environmental Analysis ………………………………………………………………………………………………… …….7 Micro Environment Analysis..................................................................................................7 Company Analysis...............................................................................................................7 Competitor Analysis............................................................................................................8 Competitive market Summary.............................................................................................8 Consumer Analysis..............................................................................................................9 SWOT Analysis...................................................................................................................9 Objectives.................................................................................................................................10 Marketing Objectives............................................................................................................10 Reference List ………………………………………………………………………………………………… ……………………..11

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Introduction and Company Background Introduction Within the competitive market of snack bars, Nature Valley Granola Bars are becoming increasingly commoditised. Revenue in the snack bar category expanded to US$1,502 million in 2019 and expected to increase annually by 3.1% (CAGR 2019-2023 [Statista]). As a result of an increase in competition and lack of brand differentiation. Most snack bars on the market contain similar ingredients and provide comparable nutritional value. However, many snack bar brands on the market are willing to attract more consumers through heavy discounting, thus, becoming a major challenge for Nature Valley. New entrants to the markets also provide benefits for an even wider audience providing amino acids, protein for the needs of athletes. As a result, Nature Valley has lost its lead positioning and market share has eroded at the hands of other snack bar competitors such as Kellogg’s’ and Carmans. This plan seeks to address the main issues with Nature Valley in order to deliver the brand a point of difference that will provide consumers a reason to choose Nature Valley.

Company Background Who is General Mills? General Mills is one of the major breakfast cereal companies worldwide, with recognised brands such as Cocoa Puffs, Cheerios and Trix located in many supermarkets globally. The company promotes its products in over 90 countries worldwide. Not only does General Mills market cereal, the company distributes and produces more than a hundred brands on six continents, including some of the most renowned brands in other food lines including Yoplait yogurt, Bisquick and Nature Valley Granola Bars. History of General Mills General Mills was established in 1928, specialising in cereals and flour based products. Through the years the company grew as a food processor establishment. Over these periods, the company began to expand their brand varieties, including their very own Nature Valley Granola Bars, the brand introduced its first crunchy Place footer here

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granola bar in 1975, General Mills became the first leading food company that sells granola bars. The brand launched in Australia in 2006 offering a wide range of products such as Protein bars, nut butter biscuits and crunchy granola bars. Their bars provided consumers a quick and easy alternative over a meal in order to function though a busy, on-the-go lifestyle. The brand is renowned for its association with the great outdoors, forming partnerships with other organisations including the National Parks Conservation Association, in the hopes to support, restore and preserve national parks for generations in the future. Its aim is to motivate kids and families to enjoy the outdoors and promote healthy choices.

Situation Analysis

Market Analysis

Snack bars have become a profitable market worldwide, gaining attraction through the rise of health-conscious consumers. The trend as resulted in an increase in nutritious snacks up to $453.5 million in the Australian marketplace in 2013. In the past few years, the healthy snack food category has performed reasonably well. Industry revenue is estimated to grow at an annualised 5.7% over the 5-year period through 2014 to 2019, to be worth $2.1 billion. The industry revenue has also significantly increased as a result of the rising participation in gyms, fitness centres and health conscious individuals. Concerns of obesity and time-constrained lifestyles from consumers have also led to a high demand for healthy snack bars and conveniency during the past few years.

With the rising popularity of snack bars over the years, ranging from Kellogg’s, Freedom Foods and Carman’s alongside new entrants have left the category overcrowded. The increase in competition together with companies willing to discount their products heavily has proved to be a major problem for snack bar brands like Nature Valley. These constant promotions provide challenges for Nature Valley as consumers are looking for ways to cut costs, thus, many consumers are

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waiting for products to be on special in supermarkets in order for them to purchase instead of being “brand loyal”. Alongside new competitors, nut bar companies have released a new collection of bars adding extra nutritional benefits to attract a wider demographic. The nut bars created have added amino blends, vitamins and protein to attract more athletes and fitness-oriented individuals.

Macro Environment Analysis sustain POLITICAL ANALYSIS -

The department of health implementing preventative health measures in Australia

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Collaboration with Australian Government -

As the obesity levels in Australia rise, the implementation of new health policies will encourage consumers do lean towards whole foods that are not processed and high in sugars. This policy may decrease the number of consumers purchasing Nature Valley products as they contain processed ingredients and high sugar content. As a result of Australia possessing high obesity levels, the government is urging consumers with be more health conscious, food industries such as Nature Valley and General Mills have settled on decreasing the sodium, sugar, saturated fats content in their bars to assist in improving the Australian dietary requirements.

ECONOMIC ANALYSIS Place footer here

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Increased consumer spending forecast

Consumer spending in Australia has increased to 261,905 million AUD in 2018, this trend indicates a resilient economy, giving manufactures a sense of certainty that there will be buyers in the marketplace.

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Rising revenue snack food industry

The market is expected to increase annually by 3.1% (CAGR 2019-2023), means there will be a rise in consumers.

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Increase of health- conscious consumers

The increasing trend means consumers are leaning towards healthier snack options with less sugar. Due to the high sugar content level of Nature Valley bars, the market share has experienced a decline over the past 5 years as a result of an increasing number of health conscious consumers.

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Healthier changes

in

SOCIAL ANALYSIS

Lifestyle -

More and more consumers have joined the health trend, with a growing participation rate at the gym and interests in fitness. The trend affects Nature Valley bars as consumers are looking for nutbars that offer more nutritional benefits such protein and high fibre.

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Food intolerances and allergies

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Busy Jobs lifestyles

Food allergies affect 1 in 10 infants in and approximately 2 in 100 adults in Australia. The country has one of the highest allergy rates in the world. Food intolerances is becoming even more common. A survey shows up to 25% of the population believe they have an intolerance to certain foods. These factors can impact Nature Valley as a result of their limited selection of bars that are allergy free, which in turn, limit their number of consumers who possess certain allergies and intolerances.

and

TECHNOLOGICAL ANALYSIS -

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Consumers living in the busy world nowadays lack the time to cook meals which leads to the purchase of Nature Valley nut bars, as they are quick and convenient on-the-go snack. This positively affects the company as the demand for “on-the-go” snacks rise.

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Companies have been increasingly involved in mobile apps in order to evolve with oncoming trends and making their products even more assessable to consumers. Mobile apps allow consumers to scan product barcodes to show information on ingredients, dietary needs and allergens.

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An increasing number of consumers are using online purchasing to purchase their groceries. This trend can allow for more consumers as it is convenient and easily assessable. This can be an opportunity for Nature Valley to expand their marketing options and give consumers another way to purchase their products.

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General Mills was targeted by three consumer groups (OCA, BP, MAA) for claiming their bars as “100% Natural Whole Grain Oats”, as their bars contained artificial, processed ingredients containing

Mobile apps

Online shopping

LEGAL ANALYSIS -

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Legal lawsuit on Nature Valley Place footer here

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Misleading descriptions

ENVIRONMENTAL ANALYSIS -

Climate Spain

glyphosate (Pesticide). The claim was deemed deceptive which damaged their reputation.

product

change

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False advertising of their products claiming the be “100% N Natural” while their bars contained a high level of fructose corn syrup and maltodextrin. The company was forced to remove their false claim on their products as it misleads consumers and unethical.

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As Nature Valley products in Australia import their ingredients from Spain, a change of climate in Spain may affect Nature Valley’s products as it can lead to a reduced access to food, availability. Extreme weather changes in Spain over the years have affected the nutritional quality of foods. This directly affects Nature Valley as it can affect where they import their product ingredients, may result to finding another source of importing goods.

in

(www.choice.com.au, Snack Bars compared)

Micro Environment Analysis Company Analysis Positives Table Positive aspects of Nature Valley Worldwide brand reputation

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Nature Valley have been refining their brand and food products for many years and has become one world’s leading snack bar brands recognised globally. The sturdiness of its products in international environment since 1975 gives Nature Valley a strong and flexible reputation. Their most renowned product are the granola bars.

Environment ally friendly

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Nature Valley pride themselves in being one with nature and exploring the great outdoors. Establishing and implementing a national park foundation to order to preserve and support national parks. General Mills has also shipped their ship their products by sea in order to minimise its environmental footprint, further portrays their brand for showing concern in consumers and benefits the environment positively. This in turn helps build their reputation as a strong brand.

Good product distribution

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Nature Valley bars are distributed globally which covers a wide market place. This places Nature Valley as a top competitor for the snack food category.

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Negatives Table Negative Aspects of Nature Valley Nature  Valley bars contain a high sugar content level

In comparison to other bars on the market, Nature Valley bars have a very h level of sugar content in their bars alongside a lack of fibre. The lack of nutritio benefits discourage consumers to purchase their products, thus, making Nat Valley not a main preference for consumers.

False advertisem ent

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Nature Valley’s deceptive marketing claiming their products to be “100% Natu (Contain processed and artificial ingredients), has damaged their reputation a decreased their sales as a result of this.

Dependent  on the US market

Although General Mills distributes their products globally, up to 70% of th products are in the US. The lack of distribution of their products in Australia lim the choices consumers can have on the product, therefore, limiting their sales.

Nature Valley has a strong international reputation and brand acknowledgement, and they take a strong commitment to their environmental friendly status, including the campaigns to support national parks, finding creative ways to help maintain the environment through shipping their products by sea to reduce environmental footprint. However, the consumer marketplace in Australia is trending towards health consciousness and high participation levels in fitness, Nature Valley has consequently being taken over by other snack food competitors. While Nature Valley bar products is currently dropping in market share compared to its competitors, it is achievable that their reputation, distribution of products and health benefits of their products can be improved through introducing “new and improved” bars, paying more attention to health conscious consumers and finding innovative ways to market their products to a wider group of consumers.

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Competitor Analysis The Australian snack bar industry consists of 3 main competitors: Kellogg’s, Nature Valley and Carman’s Fine Foods, however Freedom Foods are also quickly increasing their position on snack bar sales in Australia. The brand has a strong reputation selling healthy and quality products that benefit their consumers and dietary needs, thus, becoming a very strong entrant. These competitors sell similar snack bars, cereals that target the similar consumer market looking for convenient, on-the-go, affordable snack bars. Other snack bar competitors of Nature Valley would be Barley+ Seven Seed Bars from Freedom Foods because they target health conscious consumers looking for high nutritional benefits and allergy and intolerance free. POS and POD analysis Competit ors

Points of Similarity (POS)

Kellogg’s

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Kellogg’s has snack bars and a cereal  range, their products target health consumers looking for convenient snack options.

Kellogg’s are seen as a well established Australian brand and having a wider range of reputable products on the market.

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Kellogg’s products are distributed in the  same grocery stores and convenient stores.

Kellogg’s brand has a strong commitment to nutrition.

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Carman’s sells snack bars also and  target a similar market.

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Carman’s chocolate bars contain a high sugar content similar to Nature Valley.

Carman’s Fine Foods market their snack bar ranges successfully in partnership with Australian influencers on social media to develop a great reputation.

Carman’s Fine Foods

Freedom Foods

Points of Difference (POD)

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Carman’s has niche, hands on, more personal approach to their business.

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Freedom Foods products include a  variety of snack bar options.

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Their products affordable.

Freedom Foods markets their products at a higher quality and low price which allows for more younger consumers to afford.

are

cheap

and 

Freedom Foods products focus on creating quality foods that are free from allergens and intolerances that genuinely offer high nutritional benefits .

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Competitive market Summary Competitor

Target Market

Product

Price

Promotional

Distribution

Strength/ Weakness

Kellogg’s

Urban and metro regions. Health conscious individuals

Granola bars with fruit

$4.00 per box

Utilises product/ benefit based positioning strategies in order to place emphasis on the nutritional benefits of their products to consumers.

Coles, Woolworths, Convenient stores Vending machines

STRENGTHS Strong worldwide presence. Influential awareness of brand and loyal customers. Strong commitment to nutrition. Marketing campaigns are effective. Focuses on sustainability.

Carman’s Fine Foods

children, after/ school snack

Nut bar with fruit, chocolate and protein

$5.60 per box

Word of mouth. Through social media platforms such as blogs, radio ads, Facebook, online interviews and appearances on tv shows.

Coles, Woolworths Convenient stores

STRENGTHS Good reputation – assists in word of mouth marketing and maintaining loyal customers. Main Weakness/s Limited opportunities to expand as a result of their hands on approach.

Barley+ Seven Seed Bars

Health conscious consumers, millennials

A bar with 7 seeds, extremely high In fibre

$5.50 per box

Social Media to promote their products

Coles, Woolworths

Main Strength Contains a variety of seeds which is extremely high in fibre. Very attractive to consumers looking for healthy snacks Main Weakness/s While the produ...