Cheerios Swot Analysis free essay sample

The cheerios brand from the organization Nestle has been around for years and is a well known cereal / brand still with a significant share in the breakfast cereal market of 3%. The brand cheerios has been around since 1945 and comes from the strong brand Nestle which is a Swiss multinational nutritional company formed in 1905. A Mintel report by Clifford (2012) clearly shows that cheerios has a 3% market share of breakfast cereals. Whilst this does not seem particularly high, the branded cereal which holds the largest share is only at 8%. From the report a fair observation can be made that cold cereals, which includes Cheerios, form 87% of the total market and so therefore a strong proportion of the market. Clifford, E. (2012). Mintel Report. Breakfast Cereals UK August 2012. Breakfast Cereals. 1 (1), p3. The ‘Health’ benefits from eating Cheerios cereal is well marketed and branded. With more and more people looking towards healthy eating and watching the contents of their food intake, companies are now branding products to show the health benefits. Equally, existing companies and brands are having to create new strategies and change their products to contain healthy benefits to promote, attract or keep their customer basis. The Mintel report by Clifford (2012) states that ‘25-34s appear to be attracted to healthy cereals, being the most inclined to use high-fibre cereals, muesli, diet cereals, granola and added health cereals. ’ According to a report by Strutton (2012) this has a direct affect on the brands marketing as Cheerios has now targeted children through their parents, which states that Cheerios is ‘playing the kiddie card’ in terms of marketing. This is a strong move in the current market and moving with the trends. This is also helped with such Government campaigns such as Change4 Life which is there to actively encourage consumers to have a healthy start to their day by eating breakfast. As a food brand which uses raw natural ingredients the price of which are subject to huge price changes due to the economic market and recession. A Mintel report by Srutton (2012) uses data from the Office of National Statistics which states the following, ‘food prices will continue to experience inflationary pressures in 2011 with the hardest-hit commodities likely to be wheat and sugar, two key ingredients in a number of breakfast foods. ’ This in tern means that companies such as Cheerios are unable to lower their prices to attract more customers who by being hit by the recession are more conscious of prices. This evidence is then supported by a Mintel report by Ihekweazu (2011) who stated that the price of basic breakfast foods such as cereal was increased in 2008 as a combination of poor harvest in wheat as well as extreme climates. Therefore this shows the nock on effect of the raw material used to produce the product. This is a marketing opportunity for the company Nestle to promote Cheerios as a product eaten at home and not on the go, therefore saving money. More and more customers now have the established habit of eating breakfast at home every day. It has become part of our daily routine, this is something which has now become more pronounced with the recession as eating at home is a cost-effective option rather than eating on the go. A future marketing plan should focus on the product being sold as a family cereal in the morning as there is a growing segment that would relate to this. A report conducted by Ihekweazu (2011) looks into the eating habits of people within the UK. Stating that the sales of breakfast cereals has therefore been mainly driven by consumers demand for a cost effective and convenient breakfast options driven by a desire for a healthy start to the day. It was also found that ‘two thirds of consumers eat breakfast at home every day, rising to 78% of over-55s and 85% of those that are retired. ’ REFERENCE: Ihekweazu, V. (2011). Mintel Report. Breakfast Easting Habits UK. Vl1. More women being employed who are more conscious of eating breakfast in the morning, passing this down to the children. In a Mintel report by Ihekweazu (2011) it is found that the number of women in employment has increased and is set to increase by 1. 5% within the next five years, this is quite an important social change within the external environment. This is due to the fact that women are more inclined to east breakfast at home, this therefore has a huge impact on the children within the family as it means theoretically it will be easier for parents to ensure their child is having breakfast. It also means that they have more control over what they are eating. This should theoretically make it easier for parents to ensure that their children have breakfast at home before they head out to school, however, it appears not to be the case as a study carried out by the University of Exeter in 2009 found that a quarter of 14-15s do not eat breakfast, with the problem more pronounced in teenage girls. Breakfast still appears to be one of the few meals that families can share together at the start of the day; however, women are less likely to agree that it is the most important family meal of the day (see The Consumer – Attitudes towards Eating Breakfast). Working mothers have increased calls on their time, especially in the morning when they are likely to be facing time pressures. This underlines the importance of quick and convenient breakfast options that parents can prepare for children, or older children can prepare for themselves.