Operations Management Of Kellogg Company Marketing Essay

The Kellogg Company was established in 1906 as Battle Creek Toasted Corn Flake Company and produced the first batch of Kelloggs Corn Flakes. Today Kelloggs is one of the universe ‘s prima cereal makers and have fabricating units in 18 states and sold in 180 states. The broad assortment of nutrient merchandises offered by the company makes it the leader of wellness and nutrition market. The merchandises are designed in such a manner that it provides a balanced diet and meets the different gustatory sensations of the consumers ( Kellogg ‘s, 2012 ) .

Operations direction has a major function in all procedures get downing from the client order to the bringing of the merchandise or services accomplishing the client satisfaction. The procedure of client satisfaction involves the designation of the demands, design the merchandise or service, procurance of inputs, transmutation of inputs into end product and bringing of the merchandise. The operation direction focuses on the design of merchandises, procurance of inputs and transmutation procedure, and the designation of demands and bringing of the merchandises are the duty of the selling squad ( Khanna, 2007 ) .

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The selling squad of Kellogg ‘s carries out extended market research and identifies the possible consumer demands. This helps the company to spread out the merchandise portfolio and fulfill the consumers. The consumer demands identified by the selling squad are so analyzed by the operations direction squad and they design the merchandise in such a manner that best suits the consumer demands. The market research besides helps to place the hereafter needs of the consumer, which helps the operations direction squad to plan the new merchandise ( Stokes and Lomax, 2008 ) .

The markets like breakfast cereals are good established and increasing the gross is hard undertaking. The operations direction squad of the company helps to accomplish it through planing the new merchandises. However, planing the new merchandises is clip devouring and extremely expensive. Hence the operations direction squad focuses more on the extensions of the bing merchandises, which is less hazardous and less expensive compared to new merchandise development. The trade name extensions of the bing merchandises aid to pull the consumer by supplying new characteristics to the bing merchandise ( Stokes and Lomax, 2008 ) .

After developing the paradigm of merchandise extensions and the packaging designs, Kellogg ‘s selling squad conducts another study to mensurate the satisfaction degree of the consumers. This study helps the fiscal section to put the budgets. Theoperations direction squad uses the informations collected from this study to make up one’s mind the operations scheme and form the supply concatenation. Based on the operations scheme developed and the supply concatenation, operation direction squad besides schedules the production. Thus operation direction squad of Kellogg ‘s dramas an of import function in the new merchandise development and heightening the gross of Kellogg ‘s ( Stokes and Lomax, 2008 ) .

1 ) Customers and Operation Objectives of Kellogg ‘s

The successful concern administrations are by and large market oriented and supply first-class client service. Customer is defined as the individual who purchase and utilize the merchandises or services of the administration and is besides called as client or purchaser. The ability of the administration to give the clients what they want is known as client service. Supplying the best client service in order to run into the organizational aims is known as client focal point ( Fulton-Calkins, Rankin and Shumack, 2010 ) .

The clients are loosely classified into two groups and are external clients and internal clients. The external clients include other people, administrations and authorities entities who purchase or use the merchandises or services. Internal clients are the employees or sections of the administration who avail the services or merchandises of other employees of the administration. An illustration for internal clients is the employees of the administration who use the service of publishing section of the administration ( Fulton-Calkins, Rankin and Shumack, 2010 ) .

The external clients if non satisfied with the merchandise or service will choose for another concern and consequences in a reduced gross revenues and net income for the administration. Hence effectual external client service has to be in topographic point to accomplish client satisfaction, client trueness and client keeping. Effective internal client service can be obtained through developing a strong relationship among the directors, employees, associates and equals. Good internal client service can ensue in employee satisfaction, employee trueness and employee keeping and hence an effectual external client service ( Fulton-Calkins, Rankin and Shumack, 2010 ) .

1.1 ) Customers of Kellogg ‘s

The consumers of Kellogg ‘s include all age group people above three old ages and the company developed about 39 different trade names of cereals and many cereal bars. The aged chiefly focal point on the Calorie of the diet and the kids are chiefly interested in the gustatory sensation of the nutrient. Kellogg ‘s flexibleness of their merchandise run into these demands. They provide different spirits, which attracts the childs, promotes different formulas of their cereals and the merchandises like Special K attracts the people who are wellness witting. Kellogg ‘s is the 1 of the market leaders and are confident about their consumer as they deliver high quality merchandises. In order to develop the concern objectives the decision-takers of Kellogg ‘s created a public consciousness and took portion in certain arguments about wellness and life style. These helped them to better understand the concerns of the consumers ( Kellogg ‘s, 2012 ) .

1.2 ) Aims of Kellogg ‘s

The concern to go successful, the administration must put specific aims and purposes and proper schemes must be in topographic point. The administrations chiefly uses a combination of many schemes like timely bringing of the merchandises or services, flexibleness in the merchandise designs to run into the altering demands of the clients, quality of operations and lowest possible monetary values compared to the rivals ( Panneerselvam, 2012 ) .

The chief aim of Kellogg ‘s is to present superior quality merchandises which will present tasty and balanced nutrition. The packaging of the Kellogg ‘s merchandise stress the importance of balanced diet and a healthy breakfast. The aims of Kellogg ‘s are based on certain values like unity, answerability, passion, humbleness, simpleness and success. The people in the company are accountable and concentrate on happening solutions faster. They actively participate in treatments and determination devising where of all time they are concerned. This helps in work outing the issues at the earliest and presenting the merchandises in clip. Kellogg ‘s believe in supplying positive, vitalising and delighting environment for the employees. This will assist the employees deliver an first-class client service ( Kellogg ‘s, 2012 ) .

Other aims of Kellogg Company are growing of the concern and enlargement of its market.They besides aims at sustainable growing and uses the reclaimable stuffs for bundle. Though the premier aim is growing and net income, company besides have corporate societal duties. They promote the importance of breakfast and physical activities ( Kellogg ‘s, 2012 ) .

1.3 ) Visions of Kellogg ‘s

The company support uninterrupted acquisition and growing of the employees along with the growing of the company. They train their employees through coaching and feedback for better service. They respect the employees and do them experience valued. The company believe in simplifying the procedure continuously, which will do the apprehension easier. The internal relationship in the company will be strong and there is no boundaries between different units. The employees of the administration work as squad without internal barriers. There exists a strong relationship between the different degrees of the squads. The issues are discussed straight and openly ( Kellogg ‘s, 2012 ) .

The company values the rivals and ne’er underestimates the rivals. They ever learn from errors and the successes and gathers the honest feedback. The most of import of all the aims is to fulfill the clients and function them high quality merchandises and services. The assortment of merchandises and flexibleness of their services pull many consumers. The company ever strives to advance and protect the repute ( Kellogg ‘s, 2012 ) .

Kellogg Company is secondary concern sector, which obtains the wheat, maize, chocolate, rice and sugar from providers. These are so processed into broad assortment of cereals and bites. To obtain a relentless merchandise quality, Kellogg Company keeps thorough quality cheques throughout the procedure. The quality cheque begins at the choice of high quality natural stuffs from providers and carries out throughout the procedure by utilizing assorted procedure control techniques. The quality of the packaging and the nutrient packaged are besides checked to guarantee the freshness of the nutrient ( Kellogg ‘s, 2012 ) .

1.4 ) Supply Chain Management of Kellogg ‘s

The concatenation of all procedures and administrations that helps the administration in presenting the merchandise is known as supply concatenation and the design, executing and control of supply concatenation is known as supply concatenation direction ( Sinha and Kotzab, 2012 ) .

To accomplish the aims, the company has to see many things during the supply concatenation management.The fabricating units should be located near to the providers of natural stuffs and the distribution channels so that the transit charges will be less and the distribution of the merchandises will be faster. Another of import factor is the procedure of hive awaying the packaged merchandises until these are sold. The conveyance and storage of the merchandises are of import during the supply concatenation as it occurs between all phases of supply concatenation. Kellogg ‘s avails the services of transit and storage companies which are experts in presenting the merchandises integral at decreased cost ( Hill and Jones, 2009 ) .

With advanced engineerings like computerised stocking and stock lists Kellogg ‘s proctor the handiness of the merchandises in shelves and that the orders are delivered in clip. The coaction with the third concern sectors and just-in-time system helps to cut down the where-housing ( Kellogg ‘s, 2012 ) . The company aims to accomplish these operational aims in order to obtain stable growing and net income.

2 ) Role of Process in Achievement of Customer Satisfaction

Operationss scheme is defined as developing the wide programs for viing with the larger administration and involves the design of procedure and substructures to back up the procedure. The procedure design involves the choice of proper engineering, sizing the procedure, certification of the procedure and reexamining the procedure ( Chase et al. , 2006 ) .

In order to vie good in the market, the company should put a clear and elaborate operations scheme in topographic point. The most common methodological analysis to develop the operations scheme is Hill methodological analysis and involves five stairss. These are specifying the corporate aims, develop selling scheme to achieve the aims, appraisal of competition, method to present the merchandise and design the substructure to back up the procedure ( Greasley, 2007 ) .

2.1 ) Procedure at Kellogg ‘s

The procedure of fabricating the cereals at Kellogg ‘s adhere to strict quality criterions. There exists rigorous quality control procedure right from the natural stuffs, through each phase of the fabrication till the concluding merchandise is manufactured. They guarantee the packaging will maintain the cereals fresh till it reaches the consumers. They develop newer engineerings to guarantee the quality like Waxtite negligees to maintain the cereals fresh for longer periods. Kellogg ‘s utilizations big scale equipments and mechanization in the fabrication of each merchandise. This is really utile and helps to cut down the cost of big scale fabrication of the merchandises. But the chief disadvantage of this procedure is the wastage during the fabrication for single order. Kellogg ‘s overcome this by maintaining merchandises in stock. This besides helps to cut down the clip required to present the merchandises ( Boyer and Verma, 2009 ) .

2.2 ) Factors Affecting Customer Satisfaction and Gross saless

Kellogg Company is one of the universe ‘s largest manufacturer of cereals and conveniencefoods. The gross revenues of the company was about $ 12.4 billion in 2010 with the distribution in 180 states. The most popular trade names of the company are Keebler, Pop-Tarts, Eggo and Rice Krispies. But Kellogg Company faces the most tough clip late. The lifting monetary values for several inputs like wheat, maize and the energies is the first challenge that the company faces. The rise in the monetary value of the energies leads to the increased transit and distribution charges. Another challenge that the company face is the strong competition from General Mills and Kraft in U.S. market. Due to the lag in U.S. economic system, the consumers attempts to cut down the disbursals, which significantly affected the gross revenues of Kellogg ‘s ( REUTERS, 2013 ) .

The company has increased the monetary value of the merchandises due to the addition in the monetary value of inputs, which significantly affected the monetary value sensitive market. However the publicity of healthy breakfast and balanced diet helps the company to keep the gross revenues, particularly that of Particular K. This helps the company to retrieve the gross revenues, which was hurt from several old ages due to the extended discounting and two major merchandise backdowns. Kellogg ‘s besides taken stairss to better the supply concatenation to get the better of these like intense quality cheques for the natural stuffs ( AutomatedTrader, 2013 ) .

The company supports invention and trains and educates the employees. They appreciates and regards advanced thoughts, which encourages and motivates the employees to develop advanced thoughts. The company carries out extended market research to analyze the altering demands of the consumers and the operation squads are involved in new merchandise development and trade name extensions. Since new merchandise developments are extremely expensive and clip consuming, the squad chiefly focuses on merchandise extensions where they provide new characteristics to the bing merchandise. This helps to supply better service at lower cost and is less hazardous. After developing the paradigm of the new merchandise or merchandise extension, the selling squad conducts a study. These informations help the fiscal squad to put the budgets and the operations squad to form the supply concatenation, which helps to cut down the monetary value farther ( Hill and Jones, 2009 ) .

The flexibleness of the merchandises and the gustatory sensation of the Kellogg ‘s merchandises attract many clients and aid to vie in the market. The trade name trueness and the super-market shelf infinite of Kellogg ‘s helped to impede the potency for new market entries and hence to cut down the competition for many old ages. But subsequently due to replacing of cereals with other nutrients like gems and entries of powerful discount houses like Walmart significantly challenged Kellogg ‘s market. Hence Kellogg ‘s faced a trouble in capturing market and had to cut off their monetary values. But it rarely helped to recover the market. Later Kellogg ‘s regained their market portion through merchandise extensions. The merchandises like Particular K are sold extensively despite of its high monetary value. The company achieved this through the consciousness plans and engagement in many arguments about the balanced nutrition. These helped to pull the wellness witting consumers and helped to vie in the market. This shows that Kellogg ‘s attempts to larn from their failures ( Hill and Jones, 2009 ) .

2.3 ) Supply Chain Management and Price

Kellogg ‘s plans the supply concatenation to cut down the cost of production. Kellogg Company collaborates with certain transit administrations like TDG, which helps to cut down the transit charges. They locate their fabrication units near to their providers and distributers in order to cut down the transit charges and clip of bringing. They maintain a good relationship between the administrations and their distributers and pull off the stock through the usage of information engineerings. This helps to keep a good communicating and assist them in a timely bringing of their merchandises. Hence the merchandises of Kellogg ‘s are easy available in the market, which helps keep the market portion changeless ( Kellogg ‘s, 2012 ) .

The market research showed that while taking cereals the consumers gives much importance for gustatory sensation. They prefer for a healthy and tasty cereal. This made them develop new tastier merchandises of All-Bran like Bran Flakes Yoghurty. To avoid confusion, they clearly mention the description of the merchandise in bundle ( Stokes and Lomax, 2008 ) . The extended research and invention in Kellogg ‘s helps them to keep the gross revenues in malice of the rise in monetary value of the inputs. The new merchandise development, merchandise extensions and usage of newer engineerings besides contribute to this.

Decision and Recommendations

Kellogg Company is one of the leaders in the cereals market. They have broad scope of high quality and tasty merchandises, which help them to keep the market invariable. This besides makes the company confident about their clients. The selling squad of the company carries out extended market research and the information generated is analysed by the operations direction squad in order to plan and develop the merchandises to run into these client demands. The intentional merchandise ‘s paradigm is manufactured and another study is done on the paradigm acquire the feedback. Based on the feedback, the company set the budget of the company and designs the supply concatenation and the production.

The chief aim of the company is to develop merchandise of utmost quality and gustatory sensation. The other operational aims include timely bringing of the merchandises, preparation and educating the employees to present high quality, keeping the corporate duty, simplifying the procedure and keep good relationships and communications. To keep the quality, extended quality control procedure is in topographic point which checks the quality of the natural stuffs, in procedure merchandises, concluding merchandises and besides the packaged merchandises are checked for the freshness. They create awareness about balanced diet and healthy breakfast, which helps them get the wellness witting consumers. The simplification of the procedure like mechanization in fabricating units and computerised stocking and stock lists helps in faster production and distribution. The computerised stocking helps them to supervise the handiness of the merchandises in the third sectors.

The company besides supports and compliments the invention. They congratulate the employees for the advanced thoughts and supports their growing. They value the employees and supply them positive and vitalizing environment, which helps them to present first-class quality products.The company besides maintain good internal relationship, wherein everyone concerned with the issue is allowed to take part in the treatments and determination devising. This helps them to be accountable and work out the issues at the earliest.The supply concatenation is managed efficaciously so that the quality is consistent and helps to cut down the cost of production. The good relationships with transit companies helps them to cut down the cost of conveyance.

However the monetary value of the Kellogg ‘s still impact the price-sensitive consumers. This will significantly impact U. S. market due to the lag of U. S. economic system. This can be overcome with extended research and development of new merchandises at a lower cost. Acquiring of the rivals which possess a good market portion can besides assist them to increase the client. Geting the rivals can assist them get the market already possessed by the rivals.

The mechanization in the big graduated table fabricating units assist them cut down the cost while fabricating for multiple orders. But this can take to wastage while fabricating for single orders. This can be avoided through a control in the mechanization procedure while taking up the single orders. As a future prospective, they can besides be after for engineerings cut downing energy ingestion during the procedure, cut downing the cost of production.


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