Marketing Mix Strategy for Nutri Mix Breakfast Cereal

Introduction and Market Overview

Healthy Co. Pty Ltd. is a food processing organisation located in Queensland, Australia. Nutri Mix, a breakfast cereal developed by the company, is focused on nutrition and healthy life choices. Initial research examined six local macro-environment factors that could potentially impact the product. Factors favouring the launch on the Australian market include an ageing population as a proportion of total population — prompting the government to focus on nutrition as a means of slowing healthcare expenditure (IGR, 2004) — a stable and developed local market, the country's technological advancement enabling sophisticated marketing and logistics techniques, and growing concern about 21st-century nutrition trends, particularly an alarming rise in child obesity. Between 1985 and 1995, child obesity in Australia grew by almost 50% in both genders (Parliament of Australia, 2006).

Target Market Segmentation

Demographic segmentation refers to the process of dividing the market into groups based on variables such as age, gender, income, occupation, education, religion, race, nationality, and family size.

Age is an important demographic variable for Nutri Mix, as the product will target segments more likely to consume healthy food products. The rationale for using age as a segmentation variable is that consumer needs and wants change as people grow older, and marketers must design products, packaging, and promotions to meet those evolving needs. The healthy breakfast cereal will focus primarily on children aged 3 to 12 and senior adults aged 65 and above. The children's segment is selected because of parents' heightened concern about child obesity in Australia, while the senior segment is chosen in response to the government's concern about rising healthcare costs generated by an ageing population and a shrinking tax base caused by declining birth rates.

Gender is another relevant variable for Nutri Mix market segmentation. This variable is widely used in consumer marketing, particularly in clothing, cosmetics, and toiletries. However, given that one of the primary age segments targeted by the breakfast cereal is children, the product's specifications, packaging, and promotional activity should address the female segment, as women typically hold the purchasing decision in household grocery buying.

Behavioural segmentation consists of dividing customers into groups based on the way they respond to, use, or possess knowledge about a product. Occasions can be used to group consumers into different segments; for instance, Kellogg's, one of the largest breakfast cereal producers worldwide, has historically encouraged consumers to eat its products upon waking. Another behavioural variable is product benefits. In this case, the benefits relate to the health and well-being of the consumer. Nutri Mix is recommended for people with weight concerns as well as those who already maintain healthy eating habits.

Psychographic segmentation refers to dividing the market into groups based on social class, lifestyle, or personality type. Nutri Mix is designed for Australia's middle class and for individuals with a healthy lifestyle — those who engage in outdoor activities, expend considerable energy, or are actively seeking to improve their health. Personality-type segmentation may prove useful at a later stage for designing targeted promotional campaigns, but in the initial phase it will not be treated as a primary segmentation variable.

Geographic segmentation consists of dividing customers into groups based on region or rural/urban location. Nutri Mix will be launched in Queensland, Australia's third-largest state by population, with approximately 4.35 million inhabitants (Queensland Government, 2009).

Marketing Objectives

The marketing objectives for Nutri Mix centre on product awareness, target market reach, and market share. The company aims to increase product awareness through intensive, targeted promotional campaigns over a six-month period. Promotional campaigns will specifically address female adults fitting the mother profile, senior consumers, and nutrition consultants. Awareness will be built via multiple channels, using both above-the-line and below-the-line sales promotions.

The company also aims to achieve a 5% share of the breakfast cereal segment within the first six months of launch. This segment is dominated by Kellogg's, one of the largest breakfast cereal marketers in the world. However, many products in this category fall short nutritionally. A study conducted by CHOICE on 152 breakfast cereals concluded that "most breakfast cereals contain far too much sugar, salt, or both to be healthy choices for everyday eating, while cereals aimed at kids can be among the worst for nutrition" (CHOICE, 2009).

Product Strategy

The product strategy addresses the characteristics of the final product — the extent to which it meets customer requirements, along with quality, brand name, functionality, styling, safety, packaging, warranty, and after-sales support.

The CHOICE study identified four nutritional dimensions that Healthy Co. Pty Ltd. should address in Nutri Mix: dietary fibre, saturated fat, sugars, and salt. Nutri Mix will feature high fibre content, low saturated fat even when the recipe contains nuts, relatively low sugar, and low salt. The sugar and salt content will be carefully controlled, as these represent the primary concern in children's nutrition. Sugar contributes to tooth decay and weight gain, while excessive salt intake has been linked to high blood pressure, heart disease, and stroke.

Nutri Mix will be developed as a range of healthy products, including: (a) simple muesli cereals, dried fruit muesli cereals, and nut muesli cereals (such as Brookfarm Natural Macadamia Muesli); (b) simple muesli bars, dried fruit muesli bars, and nut muesli bars (such as the Carman's range of breakfast cereal bars); (c) wheat biscuits (such as Weet-Bix and Weet-Bix for Kids); (d) puffed rice cereals (such as Abundant Earth Organic Puffed Rice); (e) puffed corn cereals (such as Abundant Earth Organic Puffed Corn); and (f) instant oatmeals in various flavours.

Packaging will be designed to appeal to children and mothers on one hand, and to senior consumers on the other. The company will also consider environmental implications, designing packaging that is easily recyclable while still properly preserving the product contents. This environmentally friendly approach is almost a mandatory requirement in a country where 62% of adults — approximately 8.9 million people — report concern about environmental problems (Australian Bureau of Statistics, 2004). Puffed rice and corn cereals, aimed primarily at children, will feature packaging displaying a licensed character or movie theme, with cartoon artwork (e.g., a tiger mascot) and/or an activity or promotion directed at children (e.g., collectible stickers). All bars will be packaged in vivid colours associated with energy, while the colour palette will coordinate with the broader product range. The remaining product lines will adopt packaging consistent in style with the children's and cereal bar products, but in softer tones. The primary packaging material will be paper, considered an optimal solution from an environmental standpoint for both the outer package and the printed nutritional information.

All packaging will display nutritional content in compliance with current food regulations, and packages will include food-related claims endorsed by relevant food authorities and bodies such as national heart associations. Product differentiation will be considered a strategic competitive advantage for Healthy Co. Pty Ltd., given that the Australian market, while mature in general breakfast cereals, remains underdeveloped in the healthy products niche.

Conclusion

Nutri Mix is a breakfast cereal product range focused on healthy eating habits, primarily for children and senior consumers. Product awareness is a critical goal, as Nutri Mix is the company's market-entry product in Australia. Targeting a specific market niche gives Healthy Co. Pty Ltd. the ability to compete more effectively within the mature broader breakfast cereal market, while setting a 5% market share target within the first six months provides a clear viability benchmark.

The product range will be divided into sub-categories — some directed primarily at children, others at the general market — while promotional activity will be tailored to relevant sub-segments depending on product content. The pricing strategy will be a skimming approach, enabling the company to recover its sunk costs partially or fully. Distribution will be handled via at least one distributor and one large retailer initially, with the potential to extend to smaller specialty shops at a later stage. The promotional programme will focus on advertising, sales promotions, and public relations activity in the launch phase.

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