The well-known Fruit loops brand can be used to launch product line extensions throughout each of the demographic markets shown. A third demographic segment is defined through psychographic analysis, and these are the highly brand-loyal Kellogg's consumers who will consume nothing but products from this manufacturer. MARKETING MIX STRATEGY

The goal of the marketing mix strategy is to synchronize every aspect of product, price, promotion and distribution or place to ensure the product line extension is successful. Beginning with the product, the focus on making Fruit loops product line extensions in the form breakfast bars flavored with the distinctive taste of the cereal is key. Second, a product line extension of Fruit loops Cookies and other confectionary products would also appeal to the most brand-loyal custoemrs the company has. The product line extensions need to concentrate on being alluring and interesting enough to attract new customers, while also retaining the quality, taste and unique texture of the existing Fruit loops so that brand loyal customers will stay with the product and adopt its extensions as well.

The pricing aspects of the Fruit Loops Breakfast bar needs to be at market parity and comparable to competitive brands. Pricing of the new breakfast bar needs to focus first on market parity and competitive advantage, connoting a price-quality relationship in the process.

For promotion, Kellogg's has continued to excel in the area of sales, channel and distribution-based promotions through the use of co-op and funding programs. For the first year of the launch of the Fruit Loops Breakfast bar the focus needs to be on gaining shelf space and top-of-mind awareness against its dominant competitors. The use of in-store promotions, coupons, free trials and a continual focus on driving up awareness and eventual adoption through the selling process is critically important if the product is going to succeed. All of these factors need to be orchestrated throughout the product introduction process.

Finally the distribution if the proposed product line extension will be through existing Kellogg's distribution channels, first being forecast by sales directors, managers and then by mass merchandisers including Wal-Mart and others. The coordination of demand of these forecasts to production are critical for the success of this product.

BUDGET

To successfully launch this new product it will require approximately $10M AUS, including support for social networking and social media efforts to reach the prime demographic of 18- to 45-year-olds who are the primary customers for the new Fruit Loops Ready-to-Eat Breakfast bar.

Table 2: Proposed Launch Budget

Costs

Website and Facebook Application Development for Fruit Loops Ready-to-Eat Cereal Bar

$600,000

Series of advertisements in target market publications

$400,000

Production of a series of testimonial videos for YouTube and regional TV spot

$6,000,000

Sponsorship Strategy for Healthy Events Promoting Fruit Loops Ready-to-Eat Cereal Bar

$100,000

Event Marketing Strategies and Investments including channel programs

2,000,000

Fruit Loops Ready-to-Eat Cereal Bar Launch Events Globally

$900,000

Totals:

$10,000,000

IMPLEMENTATION / ACTION PLAN / SCHEDULE

It is anticipated that the entire product introduction process will take six months to execute. With the focus being on getting a high level of awareness accomplished there is heavy emphasis on online and social networking strategies in addition to event...

Expected time to produce is 6 months due to content fine-tuning.
Timeframe: Initiate 6 months prior to product launch.

Series of advertisements in target market publications -- Couponing to incent people to take a test drive and informative advertisements on breakfast bar's benefits are shown.

Timeframe: Initiate 2 months prior to product launch.

Production of 60 second commercial for YouTube and regional TV.

Timeframe: Initiate 6 months prior to product launch.

Sponsorship Strategy for Health-Related and Charity Events

Timeframe: Initiate 2 months prior to product launch and continuing through the product lifecycle

Event Marketing Strategies

Timeframe: Initiate 6 months prior to product launch and continuing through the product lifecycle

Fruit Loops Ready-to-Eat Cereal Bar Launch Events Globally

Timeframe: Initiate 2 months prior to product launch

EVALUATION and CONTROL PROCEDURES

A series of key performance indicators (KPIs) will be created to evaluate the product introduction, concentrating on the level of distribution acceptance and the adoption rate with the primary markets. These metrics include trail rate, success rate of marketing programs and the costs and Return on Investment associated with each.

CONCLUSIONS and RECOMMENDATIONS

The launch of the Fruit Loops Ready-to-Eat Breakfast Cereal will concentrate on the needs of those customers in the 18- to 45-year-old age segment who have hectic schedules and often do not have time to eat. The focus on healthy yet tasty attributes and positioning of thee Fruit loops Ready-to-Eat cereal bar will also be concentrated on as well. Finally the focus of the launch as being coordinated across all areas of Kellogg's will be concentrated on to enable the greatest level of success possible.