Table of contents

Executive Summary – Page 2

Introduction – Page 3

Product & Branding Strategy – Page 4

Pricing Strategy – Page 6

Distribution Strategy – Page 9

Promotional Strategy – Page 11

Recommendations – Page 13

Conclusion – Page 15

Bibliography – Page 16

1

Executive Summary

This report analysed the product and branding strategies; pricing strategies; distribution

strategies and promotion strategies in order to make recommendations on how to further

develop the product and improve sales of Weet-Bix. Weet-Bix has been classified as a

convenience product and has chosen to brand itself as, “An Aussie Icon.” Weet-Bix has

achieved this through several methods such as associating itself with Australian sport,

sponsorship of the Australian Cricket and Rugby teams and also promoting it long-standing

in the market. These factors are all considered when setting the price of the product. Weet-

Bix used cost-based pricing and value-based pricing strategies. Their product employs an

indirect distribution strategy involving their product being distributed to an intermediary

company before it reaches the consumer. Weet-Bix uses many promotional strategies such as

advertising (television and print); product placement and; sales promotions.

Recommendations include new packaging. A new sports sponsor more specifically we have

recommended the Olympics, and a promotional Olympics strategy to go accompany it. We

have also recommended researching what consumers like to add to their Weet-Bix and

featuring some recipes on the new Weet-Bix packaging.

2

Introduction

Weet-Bix was first introduced to the market in 1920 as a “budget-friendly health biscuit,”

(weetbix.com.au). Weet-Bix has chosen to brand itself as an ‘Aussie Icon’, and also as a healthy

breakfast option for those who lead an active lifestyle. This strategy has proven successful, as Weet-

Bix has been the most popular breakfast cereal in the market for 30 years (weetbix.com.au). Weet-Bix

uses cost-based pricing to support its branding as, “budget-friendly,” (weetbix.com.au) and also uses

some value-based pricing to take advantage of its successful branding. Weet-Bix level of market

exposure is intensive with Weet-Bix sold in nearly every supermarket in Australia, as well as

convenience store and even some petrol stations. The promotional strategy exercised by Weet-bix is a

marketing mix of advertising, sponsorship, product placement and special sales promotions all

targeted towards their loyal consumers.

We recommend that the company can further develop the product by introducing new

packaging to re-modernise Weet-Bix, sponsor some different sports or possibly apply more

current promotions, even possibly exploiting the Olympics.

3

Product and Branding Strategy

Product Classification:

As Weet-Bix is a shopping item that is frequently purchased at a low price. There is low customer

involvement or effort and therefore it can be classified as a convenience product

Product Lifecycle Stage

Weet-Bix was first introduced to the market in 1920 as a “budget-friendly health biscuit,”

(weetbix.com.au) and is currently in the market maturity stage of product lifestyle. Weet-Bix has been

the most popular breakfast cereal for 30 years (sanitarium.com.au/about-us). This means that sales

have levelled off as Weet-bix has been accepted by most potential buyers in the market. Weet-Bix

main focus now is defending its position in the market against competitors such as Nutrgrain.

Branding:

Weet-Bix has chosen to brand itself as an ‘Aussie Icon’, and also as a healthy breakfast option for

those who lead an active lifestyle. It has achieved through promoting its long standing in the market

and by associating itself strongly with Australian sport through sponsoring the Australian Cricket and

Rugby teams. Weet-Bix also by provides several different sporting events such the Weet-Bix kids

TRYatholon (weetbix.com.au) and Brett Lee’s cricket bootcamp (weetbix.com.au). This could be

improved by sponsoring more sports such as football, as it is a very popular sport in Australia. To

improve the branding of Weet-Bix as a healthy breakfast option Weet-Bix could focus less on

associating itself with sports and sponsor a television show such as The Biggest Loser, which is very

popular in Australia and also influences people who use the show as an example for what they should

eat. This would help promote the branding of Weet-Bix to consumers who aren’t as interested in sport

but still want to be healthy.

4

Packaging:

The packaging of Weet-Bix has been changed since it was first created but has remained relatively

unchanged for many years since. The brand could benefit from a change in packaging, however the

main colours used should remain the same so consumers can still recognise the product. Sports stars

who commonly appear in television advertisements for Weet-Bix could be featured on the packaging,

or something similar to make the packaging more interesting. The aim should be to make the product

stand out on the shelf and catch the attention of consumers.

As Weet-Bix is a fairly plain product, suggestions of what could be added to Weet-Bix to make it

more interesting could be added to the back of the packaging. For example if some consumers find

Weet-Bix too plain and are thinking of trying a different breakfast cereal, a suggestion of adding

banana and honey to their Weet-Bix may be the change they were looking for. This would help ensure

that consumers continue to buy Weet-Bix.

Weet-Bix original packaging

Source: weetbix.com.au

Current Weet-Bix packaging

Source: weetbix.com.au

5

Pricing Strategy

Approach to price setting

The price a company charges to the product is either too low to produce a profit or too high to

produce any demand.

Figure 1

Souse: major considerations in setting price (Marketing 8th Australiasian Edition – Kotler)

Figure 1 shows the main factors affecting the price setting for the product. The company should

consider these factors to determine the best price. In order to set up a good price, the company should

select many different factors, the cost-based pricing, value-based pricing, competition-based pricing,

performance-based pricing and relationship pricing. Weet-Bix uses Cost-based pricing and value-

based pricing strategies.

Cost-based pricing: the company sets up the price by the cost of product. Weet-Bix set up the

different product by different price, such as the original one is cheaper compare to the organic one.

The price setting are basic consider to the cost of product itself.

Value-based pricing: the price is determined based on the product’s perceived value. Weet-Bix makes

a cup of breakfast cereal in order to convenience the customer which is more expensive than a box of

breakfast cereal. The consumer is willing to pay more money for the convenience service. In this case,

Weet-Bix uses the value-base pricing strategy, which can charge more because of the value added by

the convenience service.

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Pricing strategies

Product and service mix strategies and price adjustment strategies: the strategy for the price is always

changed when product and service is mix. Generally, we are look at five product mix and service mix

pricing situation, product/ service-line pricing, optional product/service pricing, Captive

product/service pricing, By-product pricing and Product/service-bundle pricing. As weet-bix, the

companies usually develop product lines rather than the single product. Such as it provide the many

different type of breakfast cereal, the Multi Grain one or Organic one etc.

Demand based strategies: The price elasticity of demand usually has three different points, Elastic,

Inelastic and Consumers are less sensitive to price increases for necessities. As weet-bix, the price is

elastic. Cereal is kind of fast-moving consumer good, is lower price and health product. However

there are many substitute products. So that the price cannot too high and too low, the price are always

go with the value of the products.

Price adjustment strategies

Discount pricing and allowances: In order to reward customers for certain responses, the most

companies adjust their basic price, such as cash discounts, quantity discounts, functional discounts,

seasonal discounts and allowances. As Weet-Bix, is usually using quantity discounts to reward

customer’s concerns. For example, the Sanatarium Weet-Bix original 375g is $2.89 and the 750g is

$4.50. The discount provides an incentive to the customer to buy more quantity from the retailer.

Segmented pricing: The companies are always adjusting prices by differences customers, services,

products and locations. As Weet-bix, there is more expensive selling price in the convenience shop

compare to the supermarket; this price was adjusted by Location. The cost of offering each location is

the same, but the different locations are priced differently. The different versions of the product are

also priced differently. Such as the company priced Weet-Bix organic with 750g for $5.36, which is

$0.83 more expensive than the original one.

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Psychological pricing: Price is really indicates something about the product. When the customer can

adjust the quality for the product, they judge the quality by fewer prices. But when the customer

cannot adjust the quality for the product, they are willing to look at the price to adjust the quality. For

instant, if the people lack the information for the breakfast cereal, and there are two different products

for the cereal, which is 750kg for $4.50 and another is 750kg for $5.00, some people are willing to

pay $5.00 because this price indicates the quality.

Promotional pricing: The companies sometime to lower their products price or cash rebates to draw

more customers. The Weet-bix company launched its ‘Search for your share of £1m’ Sales

promotion, it offering the chance to win cash prizes from £10 up to £100,000 with an on- packs of

Weet-bix in September last year (Utalk Marketing, 2010).

Value pricing: The Weet-bix company provides the 97% wholegrain product to customers which can

provide energy to help sustain through the morning. Weet-bix is the most popular breakfast cereal in

Australia. Many of us are not eating enough grains and risk missing out on the nutrients. Some

breakfast cereals offer wholegrain, protein, vitamins and up to 30% sugar. Higher sugars are easier

have diabetes, so that people choose breakfast are more likely choose the lower sugar product.

Compare to other product Weet-bix provide the low sugar but high nutrition for the breakfast. To

protect its competitive advantage, Weet-bix provides many different designed products. Such as ‘one

Square Meal’ was designed by a meal solution for breakfast, lunch- whenever, wherever (Sanitarium,

2011).

Geographical pricing and International pricing (not relevant)

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Distribution strategy

An indirect distribution approach is utilised by Weet-Bix, whereby once manufactured they use such

retailer companies as Coles and Woolworths to be the intermediary selling stage for their product.

Once distributed to these grocery stores the consumers can then purchase the product from their local

intermediary companies. Weet-Bix is distributed over multiple grocery and convenience stores all

around Australia giving them a large degree of distribution. This large number of intermediary

companies is beneficial as “intermediaries may provide market access that would otherwise be very

expensive or impossible for the firm to secure” (Capon, 2007). This corporate channel of distribution

employed by Weet-bix makes the shopping experience for consumers simpler and makes the

purchasing of their product more efficient. This method delivers the Weet-bix product to the

consumers in a setting that they feel comfortable purchasing in. Cereal is not a specialty item and is

not an individually sought out item so consumers will purchase it along with other grocery products.

Customers that shop at retail grocery stores want to compare and contrast the product and having

Weet-Bix there gives them the opportunity to choose one brand over others and this is where the

marketing strategies from Weet-bix will play a large role. The promotional, packaging and pricing

strategies that Weet-Bix have chosen to use will influence the consumers on the first level to choose

their product or at the least become interested in the product. However, once the manufactured good is

sold to the retailer a lot of the risk and burden of selling the product now falls onto the retail company,

so Weet-Bix share the responsibility of sales with their intermediary establishments.

Degree of market exposure: There are three level of market exposure, exclusive, selective and

intensive. The number of intermediaries classifies them. Weet-bix is at an intensive level, which

outlets as many as possible. Weet-bix is available where and when customers want them, for example,

the products are outlet in supermarket, petrol satiation and convenience shop. Since Weet-Bix has a

selected target market of families and those with active kids, the product must be easily accessible.

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Therefore the intensive exposure of distribution correlates well with the markets consumer needs.

Although Weet-Bix is distributed intensely around Australia they chose the two main retail outlets

Coles and Woolworths as their intermediaries. Coles and Woolworths both have strong retail brand

names and therefore if a customer wants to purchase a cereal brand they will most likely visit one of

these two chain retailers. Overall Weet-Bix is the dominant force in distribution in the cereal market

as it is difficult to find a grocery or convenience store without the product.

Physical distribution: The Company employs the supply chain method of delivering and distributing

their product. This requires a large amount of organisation between the Weet-bix manufacturers, the

retailers and the transportation officers. Since Weet-Bix has chosen to sell their product first to large

retail stores, the task of transporting the product usually falls upon the retailer. Most often the stores

that purchase the product will have their own delivery system and the manufacturer simply puts their

order together for them to collect making it very simple.

Weet-Bix is a well-established company and since it is now in its maturity stage with an intensive

exposure level and a strong distribution strategy their only concern is to keep their product popular so

that stores will continually purchase their brand. This is where promotion strategy comes into play.

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Promotion strategy

The message Weet-Bix pushes centres upon the idea of a healthy option of cereal for kids that will

benefit them with their active lifestyle. The message draws from themes such as active lifestyles,

healthy choices, sport and family. The cheap price of Weet-Bix put together with its high quality

status transmits the idea of value for money, which is perfect for families and those on a tight budget.

Weet-Bix has a strong promotional blend in place. They use multi-media advertising, sponsorship,

product placement and sales promotions to constantly remind consumers to purchase Weet-bix over

other cereal brands. Since Weet-Bix is in its ‘Maturity’ stage it needs to continuously stay relevant

and continue to advertise strongly in order to prompt consumers to resume buying their brand of

cereal. Since it is in its maturity stage a large amount of advertising is not necessary, just enough to

remind consumers about the Weet-bix brand so that it can maintain its position as a market leader.

Advertising: Weet-Bix uses various platforms of media to advertise its product. These advertisements

include television ads, newspaper print ads, in-store displays and posters (Woolworths and Coles). All

advertisements focus on the Weet-bix message of healthy active kids, through always pushing their

slogans of “Aussie kids are Weet-Bix kids” and “How many do you do?”. However, their advertising

has been lacking recently with no television commercials being aired or released in the past year and a

low number of print advertisements.

Print Advertisement (2010) In-Store Display and Banner (2011)

Print Advertisement- http://www.thenewspaperworks.com.au/images/StandardImage/100616_11343038_weetbix-world-cup-article.jpg

In-Store Banner and Display - http://1.bp.blogspot.com/E_lAtomEhAM/TkOrnMJ716I/AAAAAAAAAEg/cGPcSL6Ylok/s1600/IMG_0079.JPG

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Sponsorship: Weet-Bix is the proud sponsor of many sporting teams and sporting activities including

My Cricket Australia, Kids Tryathalon, Hyundai A-League of Soccer, the Socceroos and television

reality show The Biggest Loser. Famous sporting individuals such as Brett Lee, Tim Cahill and Torah

Bright and Stephanie Gilmour also sponsor Weet-Bix. These sponsors of Weet-Bix have not changed

for a long time and Brett Lee is still the face of Weet-Bix. Since all sponsorship of Weet-Bix is

revolved around sport it creates congruence in the consumers mind that Weet-bix and sport go hand in

hand. Their sponsorships have associated the Weet-bix cereal with the idea of healthy active

Australian lifestyles.

Product Placement: Just recently the Weet-Bix brand has joined into the product placement

promotional strategy. The brand is one of the first brands to sign up for a revolutionary style of

product placement of where a product is now digitally inserted into a program after the show is

produced. Weet-Bix signed up with channel 10 to utilise this product placement where there is to be

“a digitised Weet-Bix box set to appear in an episode of The Biggest Loser” (Kennedy, 2012). This is

a clever strategy by Weet-Bix as the product placement of their brand in a show that is based upon

eating healthy and losing weight effortlessly advertises and promotes the healthy option of Weet-Bix

without the viewers even being aware of it.

Sales Promotion: There are a few promotions occurring involving Weet-bix at the moment. One of the

promotions is an incentive promotion where kids receive a ten-dollar discount to their ‘tryathlon’

registration if they purchase two boxes of Weet-bix cereal. The second promotion that has just

recently finished was the opportunity to win a cricket experience with famous cricketer Brett Lee.

This promotion involved entrants writing a short message about their memorable cricket moment and

the winner was to receive tickets to the match day of cricket where they would spend the day with

Brett Lee himself. Both of these promotions gave Weet-Bix a strong marketing edge over the other

brands, as it was both a strong incentive to purchase Weet-Bix as it enticed kids who are interested in

sport and the promotion stayed true to Weet-Bix’s theme of active and healthy. It was a very directed

and focused promotion to a small target audience but was overall very effective.

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Recommendations

Weet-Bix already has strong marketing strategies in motion. Their large affiliation with sport has

helped them maintain a strong advantage over other cereal brands. There are a few issues in their

strategies that could be altered or fixed up. As stated earlier both Weet-Bix’s branding and

sponsorships have not changed for a long time. To stay relevant with the ever-changing market we

suggest a re-modernisation of Weet-Bix while keeping along with its core theme and message. All

consumers may not always like change but it is always effective at getting attention and bringing

excitement to a product. The packaging itself needs to be modernised with a bolder image on the box,

the colour scheme should stay the same so that consumers can easily recognise the brand but the word

“Weet-Bix” and the image on the box of Weet-bix should be more attention grabbing. Perhaps an

image of a child playing cricket, but instead of a cricket ball it could be replaced with Weet-Bix. This

would be more of an exciting image for kids to see on the box than the current image of two Weet-bix

in a bowl and it would stay relevant to the theme of “Healthy living” and their sponsored sport of

cricket. The logo of Weet-Bix could be changed slightly with simply using a different font.

The packaging and promotion of Weet-Bix could be used together. Weet-Bix could ask its consumers

what they like to add to their Weet-Bix or recipes they have created with Weet-Bix. This could be

done via Facebook, an online survey or even a promotional competition where the best recipe wins.

These ‘Weet-Bix recipes’ could then be added to the package on the back. There could even be a new

recipe on each new dispatch. This would involve the consumer and make them feel more apart of the

Weet-Bix product. Along with new promotions Weet-Bix should consider getting new sports

sponsors. Their main sponsor Brett Lee is getting old and is not as popular as he used to be. With new

popular cricketers rising each year Weet-Bix should contemplate choosing a new face for their

product. There is also the possibility of going in a new direction with not only a new face of Weet-Bix

but sponsoring a different or another sport along with cricket. For example soccer players such as Tim

Cahill and the Hyundai A League is already sponsored by Weet-Bix but is not promoted as highly as

cricket. Weet-Bix could become the absolute dominant sporting choice of cereal if it sponsored not

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only cricket and soccer but also other sports such as netball, Afl or hockey. The company should also

exploit upcoming sporting events such as the World cup of soccer or the 2012 Olympics.

There are numerous promotional strategies that the Olympics could be utilised in. The box that Weet-

Bix comes in could have a cut-out collectible Olympian card where each card has statistics and a

photo of an Australian athlete competing in the Olympics. Australian pride is at its highest when the

Olympic games are happening and everyone wants to support their Country’s athletes. So, Weet-Bix

should appeal to this by promoting the Olympics in not only their sales promotions but packaging and

also advertisements. They could bring in a special slogan to further emphasize that Weet-Bix is an all-

Australian cereal company and their patronage towards the Australian Olympic team. It could be

something as simple as “Proud to be Australian”, and this simple reminder of patriotism will influence

other loyal Australians to purchase Weet-Bix.

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Conclusion

To conclude Weet-bix has a strong marketing strategy in action but could improve in certain areas.

Their pricing strategy has and currently still is working quite well and continues to offer good value

for money. Their packaging and branding are sufficient enough but could be improved and maybe

enhanced. Their distribution is very strong and they have penetrated the cereal market on great level

with intense exposure. As long as their product is in demand their distribution will continue to be

strong. The promotional strategy is where Weet-Bix has been strong in the past but has recently been

lacking. Since Weet-Bix is in its Maturity stage it needs to constantly stay relevant and promote its

product. If Weet-Bix becomes stronger in the promotional strategy it will stay the leader of the cereal

market.

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Reference list

-Capon, N. 2007. Capon’s Marketing Framework. Wessex Inc, New York

-Kennedy, J. 2012. Digital Weet-Bix box in The Biggest Loser. February 29th 2012

http://www.bandt.com.au/news/media/digital-weet-bix-inserted-in-the-biggest-loser, viewed on May

18th 2012.

-Kotler et. Al, 2008. Marketing 8th Australasian Edition, Pearson Publishing, Sydney

-“One Square Meal” (2011), Sanitarium, viewed on May 2012

http://www.sanitarium.com.au/products/on-the-go/one-square-meal

-Weetabix’Search for your share of £1m’ sales promotion, 2010, Utalk marketing.com, viewed on

May 16th http://www.utalkmarketing.com/Pages/Article.aspx?

ArticleID=18093&Title=Weetabix_‘Search_for_your_share_of_£1m’_sales_promotion

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