Business GCSE / National 5: How to market a new cereal

Steph McGovern:Hello, I'm Steph McGovern, and I'm here to help you get to grips with business studies.

Steph McGovern:Now I've been reporting on finance and the economy for years, and I've spent a lot of time meeting people in factories like this one, finding out how they work and how things are going for them.

Steph McGovern:It totally fascinates me and I hope the things we're going to look at will interest you too. So without further ado, let's get down to business.

Steph McGovern:Now here we're looking at one of the hardest things for businesses to get right, launching a brand new product. Now companies often have to do it to stay fresh and relevant, but it doesn't always work and the stakes are always high, whether it's cars, clothes or, in this case, a new take on Coco Pops.

Narrator:July 2010, and behind the imposing walls of Kellogg's Manchester HQ…

Seminar Presenter:Morning everyone, do you want to move a little bit closer, please?

Narrator:Some of the finest minds in the cereal world have gathered to hear about the future shape of breakfast.

Seminar Presenter:Yeah, just squeeze up a little bit more and then we'll make a start.

Narrator:Careers, reputations, and the future of Coco the Monkey himself hang in the balance.

Seminar Presenter:We've got the biggest ever launch program for a Coco Pops cereal.

Narrator:In six weeks, Kellogg's is launching Choc 'N' Roll, its new wheel-shaped cereal. The prize? A slice of the money-spinning, UK children's breakfast market worth over half a billion pounds annually.

Greg Peterson:This new formula for Choc 'N' Roll, we've been working on this for two years. Sometimes you don't get it right the first time, and you learn from your mistake and you come back and try again.

Narrator:It's taken a lot of legwork to get this far.

Jenny Powell:We tested a whole range of different shapes. We've tested links and chains and squares and triangles. You name it, we've tested it. And what we actually found was that this wheel really, really captured kids' imaginations.

Greg Peterson:We're going to be advertising to Mum, both in TV and in press, and we're going to be spending roughly £3 million to do this. And that's a lot of money.

Seminar Speaker:What we're working towards is the 16th August. This is the critical date for Kellogg's and Choc 'N' Roll. And what we need to ensure is that we've got it in full distribution to maximise the TV that goes live that week.

Narrator:The supermarkets are primed and ready, nothing has been left to chance. Even the exact shelf space has been reserved.

Seminar SpeakerIt's going to be next to Coco Pops Original. On the middle shelf, on a minimum of two facings. So it gives us maximum opportunity to get in front of Mum.

Narrator:It is one of 100 new cereals that will be launched this year.

Child:Mummy, Mummy!

Mother:Is that what you want?

Child:Yeah.

Sir Ken Morrison:Space is always at a premium and the people have to justify new lines, so it's always a constant battle to get that little bit of room.

Bill Jordan:They're doing you a favour, they're giving you a space and you've got to promote hard and advertise and get people in there to pick the stuff off the shelves.

Caption:Bill JordanCo-founder, Jordans

Narrator:But if brands don't deliver at the check-out, then the end is swift and brutal.

Greg Peterson:Once you get on the shelf, if the product doesn't sell well it's going to come off the shelf.

Justin King:You see more new products launched in the UK than any other market in the world. And a higher proportion of them fail. So it's a high stakes game.

Caption:Justin KingChief Executive, Sainsbury's

Steph McGovern:So it's 2010, the potential for profits is huge and Kellogg's are confident they're on to a winner. But just look at all the different elements involved.

Narrator:And back in Manchester, Kellogg's is pushing on with its big launch. At head office, its top sales team is being briefed.

Seminar Presenter:As you know in 2010, one of our business priorities was to make new brands massive.

Narrator:In London, the national press has been summoned.

Greg Peterson:Good morning, everyone and welcome to what is quite a rare press briefing for Kellogg's.

Narrator:And all over the country supermarkets are taking delivery of the company's new cereal.

Greg Peterson:It's called Choc 'N' Roll. It's high in fibre. It's a source of wholegrain. It's got less sugar, it's low in salt, low in saturated fat.

Narrator:Two years spent in development, £3 million ear-marked for advertising, and Kellogg's has done it again.

TV Advert:New Choc 'N' Roll, with wholegrain and fibre.

Greg Peterson:We've been here in the UK for 80-something years, and we want to be here for at least 80-something more years. And so making sure we're doing the right thing for consumers, making sure we're doing the right thing for the nation, has stood us in good place for the last 80, and those priorities still stay there for the next 80.

Steph McGovern:So there was that big push, the advert, shelves bursting and yet if you check the Kellogg's website you won't find any reference to Choc 'N' Roll. Even a big company like theirs doesn't get it right every time, and if the public don't go for it, well your dreams of creating the next big thing can just end up going "pop".