KELLOGG-SUSTAINABLE MARKETING

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Requirement

Kellog-Sustainable Marketing Assignment

Solution

Introduction

Triple Bottom Line-Mission and Purpose

The mission of TBL is to incorporate the three vital performances dimensions namely social, financial and environmental. The mission is to encompass the three Ps namely, planet, people, and profits in any organization. TBL aims to inculcate fair and beneficial business practices towards the employees and workers, minimize the environmental impact and finally to attain high economic value in the organization (the cost of all the inputs and expense of capital tied up are deducted in this factor). Therefore the purpose of the approach is to produce a framework which will be beneficial in preparation of the sustainability report by evaluating the personal and organizational needs (people), concept of reduce, reuse and recycle (planet) and high focus on the customer service along with adopting various strategy for developing market segments (profits). (Elkington, J., 2004).  
Kellogg

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Company info and background

Kellogg is an American MNC having its headquarters at Battle Creek, Michigan, United States and deals with the food manufacturing. It is highly popular in the production of the convenience foods and cereals like crackers, cookies, cereal bars, waffles, pastries, etc. The stated purpose of the organization is "Nourishing families so they can flourish and thrive.” The products are manufactured in around 18 countries and are marketed in approximately 180 countries. 
Kellogg was founded on 19, February 1906 as the Battle Creek Toasted Corn Flake Company by Will Keith Kellogg. Kellogg’s Toasted Corn Flakes were a huge success and in 1922, the company renamed itself to Kellogg Company. Then the company went on to acquiring various businesses like Pure Packed Foods, Salada Foods, Fearn International, Eggo, Mrs. Smith's Pies, etc. After facing tough competition, it introduced new products like Nutri-Gain Biscuits, Crispix, etc. which were a huge success. In 2012, the company became the second largest snack food company after Pepsico.  

Vision and mission in sustainability 

The Vision and Mission statements of the Kellogg Company define their prime focus on the sustainable development and their definition of social responsibility along with emphasizing on the strengths of the company namely their brand and their employees. 
The Vision of the organization: “To enrich and delight the world through foods and brands that matter" has encompassed the whole spectrum of the stakeholders like communities, employees, shareholders, consumers, etc. reflecting upon the maintaining all the values and meaning on which the organization was founded. The Mission statement “Nourishing families so they can flourish and thrive” it is focusing on the aim of the company. Additionally, the vision and the purpose of the organization are integrated into the corporate responsibility strategy (Bansal, P., 2005).. The prime purpose is to nourish as many people as possible and help the customers to thrive and flourish defining the existence of the company and delivering on their mission (Kellogg Company, 2015).

Why did Kellogg choose to do sustainability

Kellogg realized that a company with a strong social, environmental and governance systems and practices are bound to outperform their competitors regarding financial concerns. The organization realized that all the retailers are seen to drive the sustainability through their supply chains, this was the organization had been expected to meet all the social and environmental goals. Overtime, with the ever-changing values of consumers, Kellogg comprehended the alignment of the CSR values and their communication with consumers. In 2008, the company outlined its CR strategy, and a comprehensive materiality was employed for defining the vital concerns of stakeholders and the company. Since then Kellogg has been trying to shape its work by focusing on these pillars: Marketplace, Workplace, Environment and Community (Dobson, A., 2007). This has helped it in driving the change and leveraging their own strengths revolving around these pillars.

Kellogg's Challenges from demand of the Sustainability Agenda

How do TBL issues affect the business challenges
Owing to the accumulation of the anecdotal evidence in order to attain long-term profitability, the TBL along with its sustainability concepts are seen to compel the business world. The TBL issues are seen generally are listed below:

  • a.    Reduce – Reuse – Recycle

  • b.    Improvement of the environmental footprints of the products

  • c.    Reduction in the energy, Packaging Waste, and Water Conservation

  • d.    New products in order to reduce the environmental problems 

  • e.    Enhance the Organisational operational impact on the Community 

In consideration to these TBL issues, Kellogg has been looking out for methods for reducing the carbon footprint, maximize the energy efficiency and cost effectiveness. The organization has amended their objectives and is trying to incorporate the corporate social responsibility and strategies in all their operational activities (Elg, M., Ellström, P., Klofsten, M., & Tillmar, M., 2015). The following figures depict how the TBL has affected the Kellogg's challenges. 

Challenges faced

The prime challenges being faced by the Kellogg includes recognizing that their operational activities have a wider impact on the communities where all the operations are been taking place, working in partnership with other companies, groups, etc. so as to seek benefits and finally taking into account the social, economic and environmental impacts of their operational activities across the globe (Lele, S. M., 1991). Therefore the organization has been facing challenges to come up with a strategy which has a compatibility between the well-being of the consumers and ‘one planet economy.' Hence, Kellogg's needs to work towards the reduction of the carbon footprints, reduced environmental cost, high nutrition of the products, etc. (Bansal, P., 2002). General Mills has better marketing strategy than Kellogg. The company has hosted a contest to search any pet having bunny ears to highlight its Trix cereal artificial ingredient removal for showcasing limited time on the boxes. This has send a clear message to their consumers that the products are being updated with time. Further the cereal will be seen to be missing its green and blue color to represent the switch from artificial to natural. Furthermore, it has being attracting the millennials using consumer re-engagement either through digital component or other activities with consumer-first approach. Kellogg’s must learn from these activities and make marketing management shifts. 

What is the consumers’ perception of sustainability issues within this sector?

Various researches have proved that the global consumers are highly interested in the concept of the sustainability. A consumer survey performed by the Neilsen Company found that about 66 percent of the socially conscious consumers, from a list of 18 critical issues, were found to place the issues of environmental sustainability as one of the vital factor. Furthermore, the consumers were seen to be interested in the usage of pesticide, packaging waste and water shortages due to the food manufacturing industry as the greatest concerns. According to the consumers, the recyclable packaging and energy efficient products are the strongest positive effects and should be placed at the highest order of priority. Additionally, the consumers of the food manufacturing industry are most likely organic products as compared to the locally made products. (Socially Conscious Consumer Trends - Sustainability - Agriculture and Agri-Food Canada, AAFC, 2013).

Is the mainstreaming of sustainability a viable option at the moment? In oversea or in Singapore?

It is widely known that the environmental issues are highly substantial. Although strict environmental regulations are sometimes seen to inhibit the growth resulting from the trade-off between healthy growth and safe environment. This leads to constrained business. Therefore the organization needs to develop forms that are socially sustainable and environmental also. Therefore, sustainability in an organization with three objectives namely, social wellbeing, environmental protection, and economic developments, can be highly beneficial for the organizations (Hopwood, B., Mellor, M., & O'Brien, G., 2005). This will help in creating the opportunities regarding the needs of the green consumers, investment in eco-efficiency, environmentally safer processes, and equipment, engaging in the social wellbeing, etc. Therefore, sustainability must be a viable option in the overseas so as to earn the good will of the world.
Strategies

Determine the marketing strategies & tactics 

Kellogg has come up with one of the most noticeable marketing tools with their newsletter incorporating information about all their products and latest news in TV, print media, etc. With the help of this newsletters, the organization has been able to update their customers regarding the offers, latest improvements, etc. in the Kellogg company. Furthermore, the company always comes up with promotional offers like the special offer, coupons, promotions, nutrition tips, good tasting recipes; product sneak peeks so as to maintain the competition advantage. The company with the help of its promotional adverts has established a strong position in the market shares. A huge focus on the health of the customers as well as sustainability has also been a strong tool for the organization. (Welford, R., 2013)

Kellogg’s Sustainable business network

Encourage: 

  • a.    Conservation and protection of the natural resources.

  • b.    Reduction of the environmental footprints of the products.

  • c.    Increasing the recycled content of the packaging.

  • d.    Sustainable agriculture practices aligning with the business requirements.

  • e.    Ensuring quality, nutritional content, traceability, and continuity of supply. (Redclift, M., 2002). 

Engage:

  • a.    Focusing the on various key elements of the business namely, stakeholders, customers, consumers, transport, sourcing, and manufacturing.

  • b.    Focusing on CSR activities and initiatives that will benefit the stakeholders.

  • c.    Seeking on a vital method that makes a profit for securing high returns for the shareholders.

  • d.    Engaging the customers and consumers through lucrative advertising campaigns. 

  • e.    Incorporating farmer development programs for engaging their suppliers

Enable:

  • a.    Contribution to the communities where the company is operating.

  • b.     Concentrating on supporting dedicated and talented workforce so as to reflect their objectives.

  • c.    Upholding the labor and employees standards for increasing sustainability objectives. 

Exemplify:

  • 1.    Kellogg is involved in the driving systematic change and has been a contributor to the palm oil industry even when it is a minor palm oil user.

  • 2.    Kellogg’s MorningStar Farms® has been supporting an initiative since 2012 to go Meatless on Mondays so as to decreases the carbon footprint and saving of natural resources along with lowering the fat intakes. 

  • 3.    Promotes sustainable agriculture for driving sustainability improvements like GHG emissions reductions, energy use, etc. in their supply chain's agricultural stage. 

Evaluating what Kellogg deal with TBL issues

The following figures depict how the Kellogg has worked in order to deal with the TBL issues:
Various Kellogg’s facilities have been undertaking energy along with along with green house reduction activities in 2011. Some of the most significant ones have been mentioned below:

 Figure 2: Energy and greenhouse gas reduction

The company worked towards their goal of reduction in water use by approximately 15 to 20 percent from 2005 to 2015. The organization changed their cleaning practices being performed in the manufacturing plants. Since 2005, the baseline year of the company, the water use for the food produced was seen to be lowered to 13 percent. And company has been helping to drive their water use for long-term.

 Figure 3: Reduction in water usage

The Kellogg facilities have been focusing on the reduction of materials beinf destined in the landfill. The organization has increased their landfill by 13 percent in the 2010-2011 session per metric ton of food produced. 

 
Figure 4: Reduction in waste
The organization uses energy in form of natural gas and electricity either for toasting a piece of bread or baking cake. Further energy is required for heating waters in order to clean the dishes and pans. Various cereals are toasted and products are baked-utilizing higher amount of energy. 
One of the most significant environmental impacts, the GHG emissions resulting in the fossil fuels leads to contribution of the climate change. The suppliers of the company also use energy in the equipment, ingredients and packaging material.    

 Figure 5: CARBON FOOTPRINT ESTIMATE

The company has been working towards reduction of global energy and greenhouse gas emissions by 2005 to 2015. The organization has changed their plant cleaning processes and has enhanced their food quality and safety systems along with production volumes and changes in it. GHG emissions and energy use has been dropped from 11 percent and 8 percent respectively.

Figure 6: OUR ENERGY AND GREENHOUSE GAS PERFORMANCE

How well Kellogg address its challenges

Kellogg has been highly conscious regarding its vision of sustainability and put forward various steps forward so as to address the associated challenges. In order to reduce the carbon footprint, maximize the commitment towards energy efficiency and cost-effectiveness, slash their road usage, etc. it formed a partnership with its container shipping company, Peel Ports (Kellogg's - More than just growth, sustainability | Peel Ports., 2016). The company has proved out to be one of the most environmentally-friendly logistics solutions. This partnership resulted in the reduction in need of over spilling facilities, improvement in the carbon footprint, and eradication of the inefficient journeys. Similarly, various other initiatives like Kellogg’s food bank, sustainable agriculture, have resulted in eradication of the challenges and strong corporate responsibility strategies. 

Supply Chain

The supply chain of Kellogg's is highly ethical and has a supplier code of conduct to which all the suppliers are seen to abide by. The suppliers of Kellogg's, with the help of this code of conduct, comply with the values of ethical business standards and fair labor practices focusing majorly on health and safety issues. Therefore, Kellogg's has come up with various farmer development programs so as to engage their supplies for reducing the cases of poverty along with the promotion of economic development. These programs are seen to support to the vision and purpose of the organization. For instance, the Mexican rural regions are supported by the Mexico's Kellogg so as to encourage people towards the production of amaranth (previously seen as a stable by the people of Aztecs and Incas). (Brown, L. D., 1991).

Communicate- DEFRA

Kellogg's not only believed in selling nutritious and healthy food but also engages in promoting healthy practices and sponsors breakfast clubs in many schools. Kellogg Company has been seen to inculcate the following ethics in their communication with their customers:

  • a.    ACCOUNTABILITY: The promises and commitments being made the company to their customers and other stakeholders are always kept.

  • b.     PASSION: the organization always tries to delight its customers and consumers with high quality of services and products.

  • c.    SIMPLICITY: The organization attempts continuously to simplify and improve its processes, procedures, and activities. 

Therefore, Kellogg’s have been marketing their products and foods in a truthful manner with no is misleading. Every claim made in their advertisement, as well as marketing materials, are substantiated as per the requirements of the law. Furthermore, the organization complies with all the regulations and laws.   

Implementation
Redefine value. What are the values of the strategies?

The value must be an incorporation of the competitive advantage with the corporate social responsibility so as to maintain the competitiveness of the organization along with maintaining the health of the society and natural resources. The connection between the economic progress and societal progress must be recognized and then capitalized by the organization so as to attain the global growth. The strategies implemented in any organization are seen to strengthen the organization which in turn helps in crating values for the customers. This is highly useful and beneficial in understanding the needs as well as requirements of the customers. The well-planned strategies help the organization to shape the vision and purposes while maintaining the previous values of the organization. (Welford, R., 1995). 

Conclusion

Compare pros and cons based on research. Justify with research.
Pros
With the increased focus on the sustainable development, the organizations are able to focus on natural resources, human resources, environment and other factors leading to increased profit along with a good will all over all the globe. This helps in attaining competitive advantage along with maintaining the environmental conditions. This will help in creating the opportunities regarding the needs of the green consumers, investment in eco-efficiency, environmentally safer processes, and equipment, engaging in the social wellbeing, etc. (Welford, R., 1995). 
Cons
The sustainable development poses a higher responsibility to all the organization to have an outlook towards the natural and human resources along with the profit generation at the same time. This results in higher costs for the organizations. Furthermore, higher attention to the sustainability is seen to counterbalance the decision-making process along with economic benefits irrespective of the social and environmental costs.  This higher responsibility due to sustainable development results in difficulty in management.

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References

  • 1.    Elkington, J. (2004). Enter the triple bottom line. The triple bottom line: Does it all add up, 11(12), 1-16.

  • 2.    Grunert, K. G. (2011). Sustainability in the food sector: A consumer behaviour perspective. International Journal on Food System Dynamics,2(3), 207-218.

  • 3.    Hopwood, B., Mellor, M., & O'Brien, G. (2005). Sustainable development: mapping different approaches. Sustainable development, 13(1), 38-52.

  • 4.    Kellogg Company, (2015). Kellogg Company. UK. Retrieved from https://www.kelloggs.com/en_US/what-we-believe.html

  • 5.    Kellogg's - More than just growth, sustainability | Peel Ports. (2016). Peelports.com. Retrieved 28 September 2016, from https://www.peelports.com/case-studies/kelloggs-more-than-just-growth-sustainability

  • 6.    Socially Conscious Consumer Trends - Sustainability - Agriculture and Agri-Food Canada (AAFC). (2013). Agr.gc.ca. Retrieved 28 September 2016, from http://www.agr.gc.ca/eng/industry-markets-and-trade/statistics-and-market-information/agriculture-and-food-market-information-by-region/socially-conscious-consumer-trends-sustainability/?id=1410083148827#d

  • 7.    Welford, R. (1995). Environmental strategy and sustainable development: The corporate challenge for the twenty-first century. Routledge.

  • 8.    Lele, S. M. (1991). Sustainable development: a critical review. World development, 19(6), 607-621.

  • 9.    Dobson, A. (2007). Environmental citizenship: towards sustainable development. Sustainable development, 15(5), 276-285.

  • 10.    Brown, L. D. (1991). Bridging organizations and sustainable development.Human Relations, 44(8), 807-831.

  • 11.    Bansal, P. (2005). Evolving sustainably: A longitudinal study of corporate sustainable development. Strategic management journal, 26(3), 197-218.

  • 12.    Elg, M., Ellström, P., Klofsten, M., & Tillmar, M. (2015). Sustainable Development in Organizations. Sustainable Development in Organizations. Studies on Innovative Practices. Edward Elgar Publishing Limited, Northampton, Massachusetts.

  • 13.    Bansal, P. (2002). The corporate challenges of sustainable development.The Academy of Management Executive, 16(2), 122-131.

  • 14.    Welford, R. (2013). Hijacking environmentalism: Corporate responses to sustainable development. Routledge.

  • 15.    Redclift, M. (2002). Sustainable development: Exploring the contradictions. Routledge.

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