Case Study: General Mills

General Mills:

• proven cereal marketing expertise;

General Mills has a comprehensive marketing programme for each of its core brands, from traditional television and print advertisements to in-store promotions, coupons and free gifts.

In 2002, the company teamed up with US publisher Simon & Schuster to include books or audio CDs with the purchase of its Oatmeal Crisp Raisin and Basic 4 cereals. Other promotions have included free Hasbro computer games included in boxes, promotion of new millennium pennies and golden dollars in 2000

• technical excellence in products and production processes;

The company’s cereals are sold under the Nestlé brand, although many originated from General Mills. Brand names manufactured (primarily by General Mills)under

The company began in the field of dairy-based products and later diversified to food and beverages in the 1930s.

Nestlé’s businesses are classified into six divisions based on product groups, which include Beverages;

Milk Products, Nutrition and Ice Cream; Prepared Dishes and Cooking Aids; Chocolate, Confectionery and Biscuits; Pet Care; and Pharmaceutical Products. Nestlé’s global brands include Nescafé, Taster’s Choice, Nestlé Pure Life, Perrier, Nestea, Nesquik, Milo, Carnation, Nido, Nestlé, Milkmaid, Sveltesse, Yoco, Mövenpick, Lactogen, Beba, Nestogen, Cerelac,Nestum, PowerBar, Pria, Nutren, Maggi, Buitoni, Toll

House, Crunch, Kit-Kat, Polo, Chef, Purina, Alcon, and L’Oréal (equity stake). • strong worldwide organization;

Nestlé is headquartered in Vevey, Switzerland and the company has 500 factories in 83 countries. It has about 406 subsidiaries located across the world. The company employs 247,000 people around the world, of which 131,000 employees work in factories, while the remaining employees work in administration and sales.

• deep marketing and distribution

Research and Development:

As the production arm in the joint venture, General Mills has been increasing its research and development budget in this area steadily since 2003 to reach $191 million in 2007 to the sum of more than six percent of its total sales

.

The company extended its R&D function to include the manufacturing process and not only the products. On the other hand, Kellogg who invented the category spent $179 million in 2007 which represents about one percent of total sales in the same year. Kellogg is continuing to support its W. K. Kellogg Institute for Food and Nutrition Research centre to develop and enhance new products.

Production:

General Mills has more than tripled the number of production facilities of the market leader and key competitor, Kellogg.

However, taking the North American facilities, which General Mills allocated 50 percent of its production locations, out of the equation,can narrow this gap between the two companies’ production presence across the globe.

General Mills have improved its production efficiency by standardizing raw materials and leveraging technology in