Marketers in the cereal industry are starting to realise that it's not just what's in the package is important, but what's on the package too. It is becoming more and more apparent that the function of packaging goes well beyond its traditionally defined role as simply a container for the product.
The cereal industry in general has b een facing a declining demand over the past few years. Consumer's breakfast preferences have changed due in part to busy working couple households where breakfast has been reduced to grabbing a pop tart or muffin on the way out the door to eat during the drive to work.
However, despite this overall downtrend, certain segments of the cereal industry have been doing very well to record huge market share gains. WShat distinguishes these great performing cereals? The packaging, of cource!Cereals sold in a bag have gone from virtually nothing to account for 8% of all cereal packages sold since 1995.
While Kellogg Co. experienced layoffs, declining earnings and a plummeting stock price, Quaker Oats Co. have been enjoying increasing cereal volumes, increasing market share, and a stock price near its all-time high. Quaker's secret? For the past few years, they have been rolling out a line of bagged cerals that are priced a dollar or two lessthan their rivals. Not only do the bags cut packaging costs, but also convery the impression of a "value" cereal. The packaging also tries to indicate to buyers that the contents are very similar to higher priced, boxed brands by using ripped-off names like "Rice Crisps". Major players in the bagged cereal market like Quaker and Malt-O-Meal need the increased volume as their margins are considerably lower than those of boxed cereals.
With the increasing role of technology in marketing, there is no doubt that technological...