The report focused on the breakfast cereal industry and its macro-environmental factor influencing the industry. It highlighted the industry attractiveness for the company to study market outlook for investing in the breakfast cereal market. The report addressed the consumer behavior and marketing theories to assess the suitability of product and industry feasibility. Urbanization has increased dependence on ready to eat items. Through using effective advertisement and product quality breakfast cereal is increasing market penetration .The mobility of packaged food shows consumer shift to the industry with ease in feasibility set up in Australia.
Table of Contents
Market segmentation and product promotion.
Macro environmental analysis.
Threat and opportunity analysis.
Porter’s five force model
Consumer behavior impact on breakfast cereal industry.
Critical assessment of consumer behavior.
The breakfast cereal industry includes the sale of cereals. It is segmented by hot cereals and ready to eat breakfast cereal. The market includes consumption by urban households. The report address key factors for market segment identification and understanding consumer behavior towards breakfast cereal industry. Distribution channels and product integration with industry is depicted for growth forecast and profitability matrix for industry setup. The report highlights the study of the breakfast cereal market to assess the market structure, current trend and investment outlook.
The Australian breakfast market has annual revenue of AUD 1000 million, depicting the annual growth rate of 4 percent during 2015 to 2018 (IBIS World 2020).The cereal products that are popular are Muesli, breakfast cereals. Australia ranks among the top 16 countries in global revenue with average consumption price consumption growth of 2 percent every year (Statista 2020).The report depicts the market segmentation and industry outlook of the breakfast cereal industry.
Market segmentation and product promotion
Breakfast cereal the market is advertised to appeal for increasing its reach to the target audience. The cereal market is segmented on the basis of flavor, nutritional aspects. The product is advertised and distributed through distribution channels. Young adults focus on exercise regime intakes protein substitutes like an egg that are influenced by information availability and the external influence of the peer group. The industry trend shows purchasing snacks and cereals through suburbs have increased to 65percent (KPMG 2020).Marketing of products from cereal through effective packaging. Below is the segmentation and key factors determined for behavior
PESTLE is a marketing tool used to analyze the key factors (Political, Economic, Sociological, Technological, Legal and Environment) that influence an industry. The external factors of the breakfast cereal industry will help to determine the firm’s business and strategic operation with respect to the macro environment. These factor relate to specification and industry analysis for marketing and pivot of company through screening and analysis (Moore 2019).
The government support with technology advancement in the cereal industry shows brands to look for sustainable development. The breakfast cereal industry is focusing on nutritional and health aspect in line with prevalent norms which makes Australia an attractive location. ERP and product innovation tool for supply cycle innovation and factoring is included in systematic reform cycle to encourage new technology and existing industry standards improvement (DAWE2019).
Threat and opportunity analysis is used for assessing the industry position in the marketplace by measuring and evaluating current factors determinant to the organization to establish competitive advantage.
Opportunities- Focus on health and quick preparation and ready-to-use options are seeing surge in growth. These options require the development of the company’s product line to gain new products.
Threats- Change in consumer preference and availability of substitute products possess threats to the breakfast cereal industry from expansion. The surge in the convenience food industry possess a threat to in house development.
Developing of cereal as an important part of breakfast through focusing on hot cereals and ready to eat market are key measures for development.Focus on nutritional product high fiber, strong growth for specific need for mobility of ready to eat cereal is the platform for diversification and opportunity ahead.Distribution channels and product integration with industry is untapped for growthand profitability.
Porter‘s five force model provides insight on the external and internal competitive environment of an entity .The profitability of the business are affected by these forces-
This model explores the external and internal environment affecting a business. The model focuses on evaluating conditions specific to potential industry forces (Belton 2017) Competitive rivalry is strong as global player dominance is broken by supermarkets who have developed their own cereal product. The preference of buyer tapped by key availability of product decline substitute product purchase .The bargaining of suppliers is strong because of the large consumer’s availability and product differentiation. The industry is in the growth stage and new entrants are using product differentiation and product line extension for increasing shelf place in suburbs and convenience stores as a distribution mechanism (Benton 2017). Large pool of suppliers and product differentiation is necessary for existential growth and industry forecast
Below is the pictorial description of Porter’s five force model.
Figure -1 –Porters five force model. (Walder 2017)
Breakfast cereal companies have used nutrition as a key driver to enhance sales. The segment targeted by manufacturers are kids, aging citizens, and young adults. The fast tracked growth accounts for revenue generation to focus on key qualities primarily design of attraction (Kim, 2015).
In the breakfast cereal industry, it is not necessary for a marketer to consider consumer behavior. Consumer behavior is vital for identifying product opportunities and ensuring sales of the product. The demographic and behavior patterns increase focus on product usability. The need for the product as “nutrient” can be delivered by traditional products providing composite nutrient value.The industry is in the growth stage and new entrants are using product differentiation and product line extension for increasing shelf place in suburbs and convenience stores as a distribution mechanism. The digital business environment as a new practice will help in the understanding of consumer behavior through social media analysis and informational data analytics for marketing products (MENAFN 2019). Young adults focus on exercise regime intakes protein substitutes like an egg that are influenced by information availability and the external influence of the peer group (Ipsos 2016). Creating ideas and modifying product appeal based on consumer perspective will yield improved results.
From the above discussion and analysis, it can be concluded that the breakfast cereal industry is growing at a fast pace. The assessment of a company seeking investment will have a favorable outlook as the current industry and the market situation is showing growth prospects. In Australia ease of doing business is increasing investment for new companies set up. Pestle Analysis and Porter's five forces model shows industry and supply chain integration with major players influencing consumer buying decisions with new entrants in a favorable position to market its product. Buying behavior is described as key matrix for development of product and assessing. Buying behavior trend isdiscussed for identifying product opportunities and revenue stream of existing product. The existent patterns increase focus on product durability and quality. The need for the product as healthy alternative in composite value is explained.
The breakfast cereal industry is growing with an increase in accessibility and change in buying behavior. The external factors of the breakfast cereal industry will help to determine the firm’s business and strategic operation with respect to the macro environment. Urbanization has increased dependence on ready to eat items. Breakfast cereals with ready to eat cereal as a front runners are tough competition in the breakfast segment. The mobility of packaged food shows consumer shift to the industry, which will benefit the company set up and investment in ready to eat market. The consumption pattern is discussed to set up products for children and young teens as category entrant in the cereal industry. These operating trend creates industry attractiveness .
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MENAFN.2019.Breakfast cereal market is estimated to translate to revenue of US $43Billion by 2019. [Online].Available at https://menafn.com/1100121683/Breakfast-Cereals-Market-is-Estimated-to-Translate-to-a-Revenue-of-US-43-Bn-by-2019 .Accessed on [May 7, 2020]
Moore, F.M., McConnell. A., Cassetari, T. Petcoz, P. 2019. Breakfast choice is affected with nutrients, food groups and discretionary intakes in Australian Adults both breakfast and the rest of the day. Nutrients Open Journal, 12(1), 243-272
Statista.2020. Breakfast cereal Australia. [Online].Available at https://www.statista.com/outlook/40090100/107/breakfast-cereals/australia#market-pricePerUnit. Accessed on [May 6, 2020]
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