Kellogg’s Stakeholder Engagement Assignment

Kellogg’s Stakeholder Engagement
Introduction
Kellogg is a reputable name among the world’s best producers of cereals and other nutritious
food products. Over the past 100 years, Kellogg has been able to maintain its position in food
and health market owing to its commitment to ethical practices in the business and values
oriented culture. The business values and beliefs determine the path of decision making and
shape up the overall behavior of a company. Kellogg name these values as K-values. More
specifically, K-values define the way Kellogg interacts with its stakeholders. Owing to the large
business, being spread in about 180 countries, Kellogg has to maintain its relationship with a
diverse range of stakeholders.
This report briefly answers some of the important questions related to the strategies of Kellogg to
engage with its stakeholders.
1. Identify key internal and external stakeholders for Kellogg.
Stakeholders are those individuals or groups which have direct or indirect interest in the
decisions or products made by a company. According to stakeholder salience concept,
stakeholders are being categorized in eight classes, on the basis of power legitimacy and
urgency. These include: dormant, discretionary, demanding, dominant, dangerous, dependent
and definitive stakeholders (Mitchell et al, 1997, pp 853-854). However, they can be broadly
classified as internal and external stakeholders.
Internal stakeholders are those who exist within the company and have keen interest in
company’s decisions and actions. Kellogg’s internal stakeholders include all of their employees

working around the globe in any branch, and the shareholders of Kellogg. Both of the internal
stakeholders hold a vital position for Kellogg.
External stakeholders are outside elements for a company. For Kellogg, external stakeholders
include: suppliers, customers, community, charity organizations, health organizations and
government of a country. Kellogg realizes the importance of the external stakeholders and their
impact of the sales and operations of the company.
2. Explain why stakeholder engagement is important element to the success of Kellogg.
In today’s business world stakeholder engagement plays a vital role in elevating or declining a
business. The way a company engages with its stakeholders defines the responsible practices and
ethical leadership criteria for a company. Kellogg’s stake holders are categorized in different
groups. Each group has its own needs and demands towards the company. Kellogg gives utmost
importance to all groups of stakeholders, unlike some companies which gives special status to
shareholders on the expense of needs of other stakeholder groups. In the matter of stakeholder
engagement, the aim of Kellogg is to maintain a two way relationship with its stakeholders.
Kellogg considers it important to meet the needs of each stakeholder group hence the company’s
CSR covers strategies to engage individually with each stakeholder group.
For example, Kellogg invests heavily in its employees and as a reward it wins immense
cooperation and participation from the employees. Kellogg tries to make a team of diverse
employees which helps the company to get unique ideas for new products and marketing. The
company conducts employee’s survey which results in making better reforms and bringing
positivity and enthusiasm in employees. The CSR (Corporate Social Responsibility) of Kellogg
focuses largely on improving the lives of people living in the community. The community

service is important to Kellogg as it attracts more and more consumers towards the brand. The
communities where company operates are targeted with multiple schemes initiated by Kellogg.
These initiatives are positively creating good will for the company among masses and consumers
are getting aware of ethical practices of the company.
Moreover, a strong engagement with each stakeholder group may help Kellogg to anticipate any
possible conflict to be arising between any two groups. Thereof the conflict can be handled
timely and tactfully. For instance, there was a recent conflict between government’s food
requirement about sugar content and consumer preference about the taste. Kellogg managed the
conflict by making changes in the formula of Honey Loops so that the government requirements
are met. However there was an impact on consumer perception about Kellogg.
3. Personal approaches that Kellogg uses to engage with external stakeholders.
Identify strengths and weaknesses of approaches identified.
Breakfast Club Approach
Kellogg initiated the Breakfast Club scheme in order to highlight the importance of eating a
healthy breakfast for children (Defeyter et al, 2010). There are numerous researches which
deduce the benefits of starting a school day with healthy and balanced breakfast. However, there
is a vast majority who do not eat healthy breakfast and there are also those who do not even have
any breakfast before starting their day.
The breakfast club is a multiplatform scheme which has been devised to support the ‘Help give a
child a breakfast’ campaign initiated by Kellogg in October 2011 (Defeyter, 2010). Kellogg has
been successful in setting up over 500 breakfast clubs in United Kingdom. The schools which are
interested in starting a breakfast club under this campaign receives a grant from Kellogg to

startup. Kellogg also provide training to the school staff to help run the breakfast club according
to the standards.
Strengths of the approach
 The campaign has built a positive habit of having healthy breakfast among children.
 The moods of children have been improves through the course of day.
 Improved learning and physical activities by children
 The satisfaction of teachers and parents have been achieved by the campaign (De
 Children and their parents are tend to prefer Kellogg products outside Breakfast Clubs as
well.
Better community life has been achieved.
Weaknesses of the approach
 The breakfast club staff misses the class preparation time which in turn impacts the class.
 Monitoring and control of school food standards is a tough job for Kellogg.
Advertising Campaign Approach
Kellogg invest heavily in advertising campaigns as through this medium they can engage with a
wide variety of stakeholder through single platform. Kellogg aims to engage consumers and
communities with the help of television advertisements. On the basis of a news report, major
marketing spending for Kellogg’s product marketing is being spent on television commercials.
According to the report, 95.4% marketing budget of Kellogg’s Special K, 100% of Kellogg’s
Crunchy Nut, 97.5% of Kellogg’s Cereal Range, 52.7% of Kellogg’s Rice Krispies and 94.8% of

Kellogg’s Krave marketing budget is used in their advertisement campaigns through television
commercials (North, 2015).
Strengths of the approach
 The main strength of the approach is that is targets huge masses.
 Audio visual appeal plays great role in attracting people of all ages.
 The emotional element is also intact within this approach.
 Repetition of TVCs helps in intruding the subconscious of audience.
 Children are very keen to buy the products relating to their favorite commercials.
Weaknesses of the approach
 Higher costs are attached with this approach of marketing (Schwartz et al, 2010)
 Consumers can easily be misled by manipulation by other parties
 Costs of products are elevated due to increased spending in marketing
 Television commercial may raise the expectations of consumers above ground facts
4. Evaluate the extent to which Kellogg’s initiatives to engage with stakeholders
support its vision to influence a sustainable future for both the business and society.
The Corporate Social Responsibility (CSR) of Kellogg aims at creating a better future for its all
stakeholders including employees, consumers, communities and the overall environment of the
region in which the company is operating. The CSR of the company stands on four pillars for its
strategies (Masaryk University, 2014). These four pillars comprise of:
 Market place

 Environment
 Community
 Workplace
The market place ambition focuses on selling high quality, healthy, safe and nutritious products
to its consumers while engaging the consumer in ethical marketing and selling practices. The
advertisement campaign by Kellogg is evidence of their ethical marketing. All of the
advertisement campaigns by Kellogg are founded on the K-values defined by the company
which include: accountability, respect, simplicity and integrity.
Environment ambition focuses on the sustainable environment in each and every process
conducted by the company. According to its vision, the company is committed to improve its
own efficiency in the whole manufacturing process (Holdorf, 2017). The annual report (2018)
clearly states that company aims at reducing usage of water, usage of energy, quantity of waste
produced during manufacturing process and greenhouse gas emissions by 15% in the next two
years that is till 2020 (Kellogg company, 2018). In order to fulfill this vision focuses greatly on
ethical supply chain. The company engages its supplier to achieve its environment sustainability
targets. The company has a very strict Supplier Code of Conduct which all the suppliers are
compelled to obey. This Code of Conduct majorly focuses on the product standards,
manufacturing processes, environmental and safety issues. Kellogg also aims at initiating water
reuse projects in 25% plants. According to previous records, the sustainability efforts by the
company led them to achieve 1.8% reduced water usage, 2.1% reduced energy usage and 11.4%
reduction per metric ton in greenhouse gas emission (Kellogg Company, 2018). This was a
commendable achievement by the company’s sustainability program.

Community ambition of Kellogg can be studied in two sections. One is for the social and health
wellbeing of consumer community while the other focuses on supplier community that is farmers
and basic level labors, including their financial and physical needs. For example, the Kellogg’s
Breakfast for Better Days campaign engages three of the main stakeholders to achieve the
Kellogg’s aim of “Nourishing families, so that they can flourish and thrive”
(kelloggcompany.com). The stakeholders engaged in this campaign includes consumers,
suppliers which are obliged to ensure highest nutritional contents in the products of the company,
and the communities in which company is operating. The Breakfast Club initiative comes under
this campaign which aims at communicating the importance of having healthy and balanced
breakfast for every child. Food poverty is another focus of community ambition by Kellogg.
Food bank initiative by Kellogg has helped to cope with food poverty around the globe. The
company aims at lowest possible wastage during its processes. However, some of the amount of
grains is crumpled during warehousing, transport and packaging. This crumpled amount is not in
the state of being sold at outlets. Instead of wasting this product, the company donates the whole
amount of grains and processed food in the food banks established around the world.
Coming together on the second section of community ambition of wellbeing of farmers and labor
community, Kellogg realizes the needs of the basic labor involved in the supply chain of the
company. Kellogg aims at elevating the financial state of the farmers to help achieve sustainable
agriculture. Kellogg objective is to help farmers grow efficiently to achieve more yield. More
yield leads to more income and better future for their generations. Sustainable agriculture helps
in providing security to farmer’s families.
Workplace ambition engages all the employees of Kellogg around the world. Kellogg ensures
ethical practices starting from the hiring process. The company realizes that an inclusive

workforce can help the company to achieve its mission statement. Hence they invest in their
employees according to best ethical practices. Kellogg believes in diversity of workforce for high
performance and better creative ideas. Kellogg conducts employee’s survey in order to find out
the needs and opinions of employees.
Conclusion
Kellogg has a stakeholder-centered business strategy. All the decisions and actions of the
company revolves around the interests of it stakeholders of all categories. The key aim of
Kellogg is to develop two-way relationship with its stakeholder which is helping the company in
gaining the trust of stakeholders. This two-way communication is beneficial for internal and
external stakeholders as well as the company. Kellogg proves itself as a responsible business by
initiating massive engagement strategies. Though the company has to invest higher cost in such
strategies however, they yield huge benefits to the consumers, suppliers, communities,
employees and Kellogg itself.

References
Defeyter, M. A., Graham, P. L., Walton, J., & Apicella, T. (2010). NEWS AND VIEWS:
breakfast clubs: availability for British schoolchildren and the nutritional, social and
academic benefits. Nutrition Bulletin, 35(3), 245-253.
Holdorf, D. (2017). Incorporating Climate Change and Sustainability into Kellogg’s
Decisionmaking (No. 1958-2017-2594).
Kelloggcompany.com (n.d). Our vision and purpose. [online]. Available at:
https://www.kelloggcompany.com/en_US/our-vision-purpose.html (accessed 6 April
2019)
Kellogg Company (2018). 2018 Annual Report. SEC form 10-K and Supplemental Information.
[online]. Available at:
http://www.annualreports.com/HostedData/AnnualReports/PDF/NYSE_K_2018.pdf
(accessed 6 April 2019)
Masaryk University. (2014). Kellogg’s Case Study. [online]. Available at: https://is.muni.cz/
el/1433/jaro2014/PV216/48855710/Kelloggs_Case_study.pdf (accessed 6 April 2019)
Mitchell, R.K., Agle, B.R. & Wood, D.J. (1997) Toward a theory of stakeholder identification
and salience: defining the principle of who and what really counts, The Academy of
Management Review, 22(4), pp. 853-886.
North, A (2015). Kellogg’s triples ad space spend. Breakfast report 2015. The Grocer. [Online].
Available at: https://www.thegrocer.co.uk/breakfast-report-2015/cock-a-doodle-do-
kelloggs-triples-ad-space-spend/523318.article (accessed 6 April 2019)

Schwartz, M. B., Ross, C., Harris, J. L., Jernigan, D. H., Siegel, M., Ostroff, J., & Brownell, K.
D. (2010). Breakfast cereal industry pledges to self-regulate advertising to youth: will
they improve the marketing landscape?. Journal of public health policy, 31(1), 59-73.