A new report from WPP’s Brandz survey, which questions 70,000
consumers across seven major world markets, including the UK, France,
Germany and the US, names Kellogg’s Corn Flakes as the fourth strongest
superbrand among European consumers. The survey was based on people’s
attitudes and loyalty toward a brand, and ranked above Kellogg were the
likes of Gillette, McDonald’s and Pampers.
Yet Kellogg the company, despite its Superbrand status, is in serious
trouble. Earlier this month the US-based business announced it was axing
500 head office staff and a further 240 contract staff. The cutbacks
come after Kellogg already shed some 1200 staff between 1995 and 1996.
In the UK this week it announced it was slashing the price of several of
its leading cereal brands.
Kellogg has been overtaken by changes in the market largely beyond its
control. People in the UK and in other countries do not eat the same
amount of breakfast cereal they once did. But most tellingly, own-label
cereal brands, with aggressive pricing, have eroded Kellogg’s share of a
declining market. Even with price cuts, Kellogg cereal brands remain
significantly more expensive than the own-label competitors which have
done so much to damage them. The decline in Kellogg’s fortunes shows
that even Superbrands cannot escape the inevitable consequences of
change in the way people live and consume. The company insists that it
will not follow Heinz, which in August 1995 abandoned a 100-year-old
tradition by starting production of own-label beans for retailers.
’Beanz Meanz Heinz’ could no longer be quite so proudly declared.
Kellogg, in a similar vein, has always insisted ’We don’t make cereal
for anyone else’. Ultimately if the market further declines and
own-label brands continue to increase their share, the cereal giant may
have to reassess its position. Kellogg’s problems illustrate that even
though consumers may recognise a Superbrand, that doesn’t guarantee
they’ll buy it.