Team Lima 1

PROPOSAL

Team Lima: Travis Butler, Ina Evans, Greg Moldovan, and Keith Phillips

Team Lima 2

•Our parents are retiring in 4 years•We want to look after their future.•Resources •House• Cars• $500k in CDs• $100k/year

Problem

Team Lima 3

•Planned order•Warehouse to Production•Quantity of raw goods •Production order• Process the raw goods into ingredients•Production order• Combine/cook ingredients•Distribution

Supply Chain

Team Lima 4

Sales History & Data

• Founded 1906

• Battle Creek, Michigan

• 30,900 Employees

• Made in 18 Countries

• Sold in 180 Countries

• Diversified Products

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Sales History & Data

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Sales History & Data

• $485M – Profit 2nd Qtr 2012

• Leader in Global Cereal Sales

Team Lima 7

Sales History & Data

Kellogg’s v. General Mills

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•Breakfast Cereal

•Frozen Foods

•Toaster Pastries

Target Markets

•Healthy Snacks

•Snacks

•Cookies & Crackers

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Domestic Market

North American & International Sales by category in Comparison to Total Sales (2011)

10Team Lima

Domestic Market Sales

North American Markets vs. International Markets (2011)

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•Keebler Cookie’s

•Pringles Chips

•Cheez-It

Breaking into New Markets

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•Children

•Families

•Mothers

Team Lima

Target Demographics

• Single Men

• Students

• Athletes

Kellogg’s ultimately has no specific preference for a customer; the goal is to get their product in all households

around the world.

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• Advertising and packaging are key aspects of the marketing mix

• Television is the primary advertising outlet

• Kellogg also purchases time and space in a broad range of media

• Press• Posters• Radio

• Cinema• Direct mail • Internet

Media for Domestic Market Segment

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•Mission – Staying Focused. Going Further.

•Vision – To enrich and delight through foods and brands that matter

• Purpose – Nourish families so they can flourish and thrive

Mission Statement

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• Emphasizes the importance of diversity in the work place

• Philanthropy is an important part of the Kellogg legacy

• Focus of charitable contributions

• helping children reach their full potential

• increasing opportunities for women and minorities

• building stronger communities

Corporate Culture

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• Kellogg's Corporate Citizenship Fund (KCCF)• More than $420,000 was donated by KCCF to match employee contributions in

2004

• Kellogg Care$ program• provide monetary donations to nonprofit organizations where Kellogg employees

and retirees volunteer

• World of Children Awards• Each year the award and $100,000 goes to someone who has made a significant

lifetime contribution to children's futures by greatly improving their opportunities to learn and grow.

Charities

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DFW Impact

• Expanding distribution center in Lewisville• 200 – 300 local employees

• Employs a small number of merchandiser and territory managers

• Merchandisers - part time employees• Average salary of $11.17 per hour

•Territory managers - full time employees • Average salary of $44,564 each year.

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• Price of $55.26 per share as of November 23rd

• $500,000 will purchase 9,048 shares of Kellogg.

• Each quarter we can expect to make $3,981.12 from cash dividends

• $15,924.48 can be earned in the first year off dividends alone.

• If dividend value remains constant, our parents would have earned $79,622.40 in five years.

Investment

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Kellogg has a strong history of paying dividends quarterly to all investors and the dividend value has steadily increased.

Dividend

In the last five years the amount paid in dividends per share has increased

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Certificate of Deposit •5 year CD of $500,000 at 3.00% compounded daily.

• CD maturity value = $552,583.92.

• Income of $52,583.92 after five years.

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Evaluation

• Kellogg will earn $27,038.48 more than a CD would pay in the same amount of time

•Projected inflation rate for the next 10 years is 1.38%

• Benefit of security gained from the insured CD is negated by low rates.

Team Lima 22

We recommend that our parents invest their entire $500,000 in the

Kellogg Company

Recommendation