Marketing Report: Strategic Analysis of Uncle Tobys Breakfast Cereals

This report provides a comprehensive marketing analysis of Uncle Tobys breakfast cereals, focusing on the Australian market. It begins with an executive summary and table of contents, followed by an in-depth examination of the product's lifecycle, a BCG matrix analysis to assess its market position, and a two-dimensional consumer perception map comparing it to competitors. The report then delves into the macro-environmental factors influencing Uncle Tobys, including demographic, economic, social, technological, and political aspects. A thorough competitive analysis using Porter's Five Forces framework assesses the threats and opportunities within the breakfast cereal industry. The analysis includes strengths, weaknesses, opportunities, and threats (SWOT) for Uncle Tobys. The report concludes with a summary of key findings and strategic recommendations for the brand.

Running head: MARKETING
Strategic Marketing and Matrix
Name of the Student:
Name of the University:
Author Note:

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Executive Summary:
The objective of the report is to provide an overview of the current market situation of one of the
products of Uncle Tobys. The product chosen here is breakfast cereals. Uncle Tobys refers to an
Australian brand known for its breakfast cereals and other food products for breakfast including
snacks and oats. The brand has a reputable history and is known to be a subsidiary of Nestle,
Australia. The key manufacturing unit of the company is located in Wahgunyah located in the
North East Victoria. The report commences with the analysis of the brand by focusing on the
lifecycle of the product, BCG matrix analysis and two dimensional analysis of consumer
perception map along with critical reflections. The report also projects an analysis of macro
environmental forces and an analysis of competitive environment.

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Table of Contents
1. Analysis of the Product/ Brand:...................................................................................................3
(i) Product Life Cycle Analysis...................................................................................................3
(ii) BCG Matrix Analysis.............................................................................................................5
(iii) Two-Dimensional Consumer Perception Map Analysis:......................................................7
2. Analysis of the Macro Environmental Forces.............................................................................8
1. Demographic Factors:..............................................................................................................8
2. Economic Factors.....................................................................................................................9
3. Social and Cultural Factors:.....................................................................................................9
4. Technological Factors:...........................................................................................................10
5. Political and the Factors:........................................................................................................10
3. Analysis of Competitive Environment:.....................................................................................10
Porter’s Five Forces Analysis....................................................................................................10
References:....................................................................................................................................15

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1. Analysis of the Product/ Brand:
The product under analysis is the breakfast cereal range of Uncle Tobys
(uncletobys.com.au, 2019). These cereals are available in wide variety of ranges.
(i) Product Life Cycle Analysis
The product life cycle (PLC) refers to the time period during which a product is
developed, introduced to the market and gradually removed from it (Wang, Wangn & Zhao
2015). There are four key stages of the cycle that include introduction, growth, maturity and the
decline (Doha, Das & Pagell, 2013).
The breakfast cereals gained popularity immediately after its launch which implied a rise
in the cereal market in a matter of two years. This has been marked as ‘introduction’ or the
launch phase and also represents the expensive stage of product cycle. As size of market has
been small so product sales had been comparatively low. However, the cost associated with
consumer testing, research and development and marketing has been higher. Besides, there has
been newer product development marked by entire range of breakfast cereals varying in taste and
flavor. This is marked by the ‘growth’ stage. Nonetheless, the competitors weaken the market
positioning of cereals which is identified as the ‘maturity’ stage. Influx of the newer players
along with the aspect of undercutting by the competitors has been marked by the ‘saturation’
phase in the life cycle of the product. The last stage known as the ‘decline’ stage is marked by
rapid growth in sales and brand positioning of the product.

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Figure 1: Diagrammatic Representation of Product Life Cycle
Source: (Wang, Wangn & Zhao, 2015)
At this juncture, Uncle Tobys breakfast cereals needed to make key decisions whether to
discard the product or to continue extending its life by using newer strategies and business tools.

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Stage Introduction Growth Maturity Decline
Product Put forward the
basic product
Ensure product
warranty,
extensions and
service
Diversification
of the models
and brands
Phasing out the
weaker items
Price Initiate changes
in cost
Determine price
for market
penetration
Determine a
price that match
the competitors
Reduce the price
Diversification Ensure selective
distribution
Ensure intensive
distribution
Building intense
diversification
Phasing out non
profitable
customers and
outlets.
Advertising Ensure product
awareness
amongst the
dealers and the
early adopters.
Building interest
and awareness
within mass
market
Focus on the
benefits and the
differences of the
brand
Ensure the return
of the hardcore
loyal customers
Sales Promotion Ensure heavier
sales promotion
for enticing
trials.
Keeping control
and taking
advantage of the
higher consumer
demand
Ensure brand
switching
through
increased
promotion
Reducing to the
minimum level
Figure 2: Tabular Representation of the PLC strategies to be incorporated
Source: (Sharma, 2013)
(ii) BCG Matrix Analysis
This a matrix put forward by the Boston Consulting Group for the evaluation of strategic
positioning of business brand portfolio and their potential (Mohajan, 2017). The framework
helps in classifying portfolio in four different categories based on the attractiveness of the
industry and the competitive positioning. The four components of the matrix includes Question
mark, Stars, Cash Cow and Dogs.

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Figure 2: Diagrammatic Representation of BCG Matrix
Source: (Zakharova et al., 2015)
Question Mark: It represents those segments that operate in higher growth industry
having lower market share. Kellogg’s one of the competitors of Uncle Tobys breakfast cereals
falls in this category. In Australia, Kellogg’s had a market share of close to 40 percent for
breakfast cereals that reduced to about 27 percent.
Stars: They represent the segments that have lower industrial growth rate and a higher
market share. In Australia, Uncle Tobys breakfast cereal is incorporated in this category in
comparison to Kellogg’s. Thus, Uncle Tobys which is a subsidiary of Nestle holds 21 percent of
the share value in the breakfast cereals during 2017.

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Cash Cows: These segments are represented by lower sales growth rate and a higher
market share. Products that represent market leaders within the specific industry fall where the
industry does experience futuristic growth fall in this category. In Australia, Uncle Tobys
breakfast cereal falls in this category and acts as revenue churners for company and has lower
investment for sustaining profitability and leadership within market. Kellogg’s should adopt
market diversification and product development strategy in order to generate increasing level of
revenue.
Dogs: This segment represent the products that are perceived having a higher growth
potential but somehow failed in creating the magic due to the slower rate of market growth. In
Australia, the Kellogg’s company falls into this particular category of matrix.
(iii) Two-Dimensional Consumer Perception Map Analysis:
The two-dimensional mapping represented a diagrammatic technique put to use by the
marketers for visually displaying perceptions or the potential of the customers (Vidal et al.,
2016). It is to be noted here that the positioning of the brand is usually influenced by the
consumer perception. The figure below represents the positioning of the Uncle Tobys brand of
cereal breakfast in comparison to the competitors, Kellogg's and Sanitarium

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Higher Nutritional value
Great Taste
Poor Taste
Lower Nutritional value
Sanitarium
Kellogg’s
Uncle Tobys
Figure 3: Diagrammatic Representation of Consumer Perpetual Map
Source: (Ares et al., 2013)
2. Analysis of the Macro Environmental Forces
The macro environmental forces that affect the marketing practice and competitive
environment of Uncle Tobys products include (De Castro, Khavul & Bruton, 2014):
1. Demographic Factors:
Age acts as one of the most prominent demographic variables for the chosen Uncle Tobys
product which is the breakfast cereal. The product target specific segments that look forward

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towards the consumption of the healthier food products. Cereal being one of the healthier options
for breakfast focuses more on the children between 3 to 12years of age and the senior adults who
are over 65 years of age. Nowadays, increasing number of people is becoming health conscious
and so the people in the middle aged brackets who are mostly the office goers opt for the
product. The demographic aspect is vital as the company uses mix of geographic, demographic
and psychographic segmentation for marketing its products across Australia and gain
competitive advantage. Besides, Uncle Tobys makes use of the product/benefit based on the
positioning strategies for highlighting benefits of the products to customers.
2. Economic Factors
The cereal industry of Australia experiences growth due to the higher usage of the
cereals at the affordable prices. This will aid the marketing practices of Uncle Toby and help it in
gaining a competitive advantage. However, it has been found that cereals as breakfast menu
requires some complimentary requirements likes fresh fruits, milk, sugar and honey. Therefore,
the demand for the cereal depends on the price of the additional goods.
3. Social and Cultural Factors:
In recent times, ready-to-eat cereal has become an effective means of sufficing the
breakfast needs of the consumers having a busy lifestyle. The cereals are also gaining popularity
through the portrayal of health benefits to the customers. However, some of the macro
environmental factors that affect the marketing practices of Uncle Tobys product are its varying
range of taste preference across the various regions within Australia. People might have
preference for other breakfast options like the traditional ones.

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4. Technological Factors:
Technology has been increasingly used for harvesting wheat that helps in the production
of the cereals. Uncle Tobys being a breakfast cereal manufacturer has been no different.
Nowadays, it has been found that the cereals emerge out of the advanced and computerized
industry that seeks newer advancements for reducing the carbon footprints. This would provide
an edge in the marketing practice undertaken by the company thereby helping it in gaining
competitive advantage over its competitors.
5. Political and the Factors:
As a part of the political factor, it is necessary for Uncle Tobys to adhere to the
exportation and the importation of boards under the Australian New Zealand Food Standards
code for undertaking an appropriate cereal manufacturing. Besides, the company is also
constrained by the food and the packaging laws of various nations put across by the governing
bodies. This would not only aid marketing practices of the company but will also help it in
earning a competitive advantage.
3. Analysis of Competitive Environment:
Porter’s Five Forces Analysis

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Figure 3: Diagrammatic Representation of Porter’s Five Forces
Source: (E. Dobbs, 2014)
Porter’s Five Force represents a strategic framework that focuses on how Uncle Tobys
would be able to build a competitive advantage in the processed and the packaged goods industry
(Takata, 2016). Managers at the company can use this framework for not only developing
strategic position but also in exploring profitable opportunities in the entire consumer goods
sector. The fives forces that needs to be taken into account are as follows:
1. Threat of New Entrants:
According to Lüttgens & Diener (2016), newer entrants in the Processed & Packaged
Goods results in innovation, newer ways of getting things done and put pressure on the Uncle
Tobys to lower its price, reduce cost and put across newer value propositions to customers .
Uncle Tobys can manage all the challenges and build the effective barriers for safeguarding the
competitive edge