b) The Case Situation (Read the case situation and answer the questions) Kelloggs is the worlds leading producer of cereal and a leading producer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, frozen waffles, meat alternatives, pie crusts, and cones, with 2007 annual sales of $11.776 billion and a market share of more than 30 percent. David Mackay, chairman and CEO of Kelloggs, takes pride in being a part of the Kellogg Company because of the consistency of the decisions that are made within the company to promote the long-term growth of their business as well as serve the needs of their people and communities. With such a large share of the market, one would think that Kelloggs is untouchable. However, Kelloggs faced a slump in the market. Its cereal sales were declining and it had to face the challenge of getting out of its slump. Kelloggs therefore turned to marketing research to identify the problem and develop several solutions to increase (5) (10) cereal sales. To identify the problem, Kelloggs used several tasks to help them in the process. The researchers spoke to decision makers within the company, interviewed industry experts, conducted analysis of available data, and performed some qualitative research. Several important issues came out of this preliminary research. Current products were being targeted to kids. Bagels and muffins were winning for favored breakfast foods. High prices were turning consumers to generic brands. Some other information also came to light during the research. Adults want quick foods that require very little or no preparation.

The Marketing Research Decision

1. What is the management decision problem facing Kelloggs?

2. Define an appropriate marketing research problem that Kelloggs needs to address.

3. Discuss the role of the type of marketing research problem you have identified in enabling David Mackay to increase the sales of Kelloggs.

The Marketing Management Decision

1. David Mackay is wondering what changes Kelloggs should make to increase market share. What marketing strategies should be formulated?

2. Discuss how the marketing management decision action that you recommend to David Mackay is influenced by the research that you suggested earlier and by the findings of that research.