ESTABLISHING A BUSINESS:

MARKETING

KENLEE’S & COMPANY

CEREAL LTD.

STUDENT NAME : Kenlee Hadai

REGISTRATION NO :
SUBJECT : Principles of Business
SCHOOL : Palo Seco Government
CENTRE NO. :
DATE SUBMITTED:
 CONTENTS

Introduction…………………………………………………….Pg.

Description of Business………………………………………...Pg.

Organization of the Marketing Department…………………….Pg.

Market Research………………………………………………..Pg.

Branding and Packaging………………………………………..Pg.

KCCL’s Price Strategy………………………………………….Pg

Place…………………………………………………………….Pg.

Promotion Mix………………………………………………….Pg.

Government Regulations………………………………………..Pg.

Technology……………………………………………………...Pg.

Consumer Complaints…………………………………………..Pg.

Ethics……………………………………………………………Pg.

Conclusion………………………………………………………Pg.
 INTRODUCTION

This study seeks to investigate the marketing strategy of Kenlee’s & Company Cereal
Limited (KCCL). This successful cereal producer prides itself on having a quality product
and a policy of putting customer satisfaction first.

The importance of the marketing mix, market research, competitors, substitutes and
customer satisfaction all impact on the strategy adopted by KCCL.

The impact of branding and the various choices available to the marketing department
will be discussed and the Ethical responsibility KCCL owes to its customers will be
highlighted.
 Description of the Business

Kenlee Cereal & Company Limited (KCCL) was founded in 1987 as a privately owned
family business. The company is involved in the production and marketing of cereals. In
1997 it took on a partner to provide more capital. It is also a limited liability business.
This medium sized company employs 50 persons. It is financed by loans, personal
savings and investments through its partnership with its local business partner Erica’s
Country Styled Honey Roasted Peanuts.

KCCL is located off the Sir Solomon Hochoy Highway close to the Presal fly-over. It
plans to become the leading exporter of cereals in the Caribbean and thereafter the
international market.
 Organization of the Marketing Department

Marketing Manager: - The Marketing Manager is responsible for the cereal marketing
and also the profit and loss of his department.

Advertising Manager:- The Advertising Manager oversees the whole process of

advertising for KCCL. The process begins from market research and finally leading to the
actual sales.Advertising at KCCL is based on the image the company seeks to portray. In
this case, the company is concerned about producing a cheap, quality, nutritious and
tasty product.

Sales Manager:- Sales Managers are responsible for sales. Their role involves
organizing, motivating and leading sales teams. They are responsible for the combined
performance of the team. At KCCL, Sales Managers are responsible for:

• Recruiting and training sales staff

• Supervising, motivating and monitoring team performance
• Allocating areas to sales executives
 • Setting budgets/targets
• Liaising with customers which includes actual selling (Wholesalers, Retailers)
• Keeping abreast of what competitors are doing

Market Research

Customers differ on many dimensions- taste, needs, and expectations. Managers

therefore need to ensure that their product satisfies these tastes. Market research is
therefore very important to reveal customer needs. Before this can be done the potential
customers had to be identified. This is done by either:

♦ Targeting the whole population

♦ Segmentation (geographical, behavioral or demographics)
♦ Niche marketing

KCCL has chosen to target the whole population.

At the company’s recent launch of its new product. KCCL chose to segment the
market using demographics to identify its customers. Characteristics such as age,
income, occupation or education can be used to divide the population. In the
introduction of its new Granola Bar, age was used to identify the target population.
The age groups were:

♦ 3-14years
♦ 15-35years
♦ 36 and older

The marketing manager identified the needs of these groups with respect to their
nutritional needs. The (3-14years) group indicated that these persons needed proper
nutrition in order to promote healthy growth and development.
The (15-35 years), included students and persons “on the go”.

The (36years and over), were persons who did not need to eat as much. This group’s main
concern was focused on the maintenance of their health.

The study of these segments identified a market for a nutritious meal-Kenlee’s Crunchy
Bar was the result.

Price

Price is an important aspect of the marketing mix which must be considered. The price a
product is sold at is dependent on the following:-

♦ The pricing objective the firm sets for itself

♦ The demand for the product
♦ Cost incurred in production, marketing and distribution
♦ The product characteristics

Pricing is very competitive as there are four other similar companies with whom KCCL
has to compete with. KCCl’s prices are based on cost plus mark up. KCCL has chosen a
Market leadership objective. The aim is to increase their share of the market.
Competitors

The market is very competitive. There are four major companies that sell the same
products. See pie chart which shows the percentage of the market held by these cereal
manufacturers.

Substitutes

Substitutes

Substitutes are a threat to any company. This occurs if there is in existence products that
can replace it. There needs to be qualities that the product exhibits that identifies it from
others, if possible.
Sales Forecast

The following table shows a sales forecast for KCCLs products. This was based on
historical records of sales for the past five years

Product Units/Mth (000) Retail Price($per unit)

Cereal 1000 $2.00
K Flakes 200 $2.50
Wheat Thins 1500 $15.25

Coco Flakes 100 $13.50

Branding and Packaging

The Cereals produced are branded under the name KCCL and it is a well known brand.
The product carries a distinctive red and white logo of the company. Branding is very
important because it allows consumers to identify the product of a particular
manufacturer. Branding issues include:
♦ Brand name selection
♦ Brand name extension
♦ Brand sponsor

KCCL’s launch of its new product, Kenlee’s Crunchy Bar was under its present brand
name. This name has been established in the minds of consumers as a quality cereal. It
has therefore chosen a line extension strategy since its product has similar features to its
present products.
KCCL packages its products using attractive foil packaging. The packaging carries the
company’s colors for immediate identification. The colors used for the logo are the colors
of the nation flag of Trinidad and Tobago.

Information given on the packaging includes:

♦ Nutritional information
♦ Ingredient
♦ Expiry date

KCCL’s Price Strategy

Their strategy is to to have market-share leadership to ensure its continued survival and
existence. It has chosen to sell its products at the lowest possible price in order to capture
a large share of the market.

Place

The method by which the product gets to the consumers is called channels of distribution.
KCCL has a fleet of vehicles to transport its products. It also subcontracts delivery in
very far geographical areas. Many small retailers buy directly from the centrally located
office. Delivery is made twice weekly by boat to Tobago.
 Promotion Mix

Kenlee Cereal & Company Limited (KCCL) advertises it products by the use of print,
radio and television. In-store displays are sponcered by local businesses. The selling of
KCCL’s products are carried out through, sales meetings, sales presentations and
incentive programs. KCCL products are promoted by the use of coupons and product
samples. It also promotes its products through contests.

Government Regulations

The Bureau of Standards sets the standards in Trinidad and Tobago in terms of quality
and workmanship of products. Some standards include:

♦ Products must be labelled

♦ All ingredients identified
♦ The value added tax (VAT) must be included in labelling of the price
♦ Information must also be written in English

Technology

KCCL uses high mechanization which reduces costs. All machinery used by KCCL is
very efficient and this increases productivity of the company. Record keeping is
computerized.

Consumer Complaints

KCCL has two consumer complaint offices; one is located at its head quarters and the
other in Tobago. KCCL addresses all complaints and has a three day response policy.
 Ethical Issues

♦ Ingredients stated on the labeling and advertising of products is accurate and not
misleading
♦ Correct declaration of sales for taxation.
♦ Proper disposal of waste
♦ Money laundering to hide illegal business transactions

KCCL has maintained its motto of having good legal and ethical business standards

Conclusion

Key to success of Kenlee’s & Company Cereal Limited are:

1. Quality products.
2. Good customer service.
3. Good distribution channel.
4. High ethical and business standards.
APPENDIX
BIBLIOGRAPHY
QUESTIONAIRE