Consumer taste trends are moving to healthy and natural foods. Nutrition and energy bars are a still-growing industry segment that is particularly appealing to Millennials. Yet, many of the older, established CPG firms struggle to attract and retain sales from that market segment. What should a company do? While it can certainly develop new products, market adoption of the new products can take valuable time and development itself takes resources and money away from a company’s established products.
A fast way to enter a new market with a new product is through acquisition. Kellogg recently took just this approach and acquired the very trendy RXBAR nutrition bar brand for a cool $600 million. The four-year old company currently has built its sales up to about $120 million and has added a children’s bar line, also.
RXBAR is known for a “no B.S.” innovative spirit. The brand highlights its commitment to whole food, protein bars that contain simple ingredients. The bars are gluten-free, soy-free, and dairy-free, tapping into a growing food product segment. RXBAR has a distinctive package that clearly states ingredients on the front of each package. For example: “3 Egg Whites, 5 Almonds, 4 Cashews, 2 Dates, No B.S.”
Group Activities and Discussion Questions:
- Discuss the four primary marketing strategies: market penetration, market development, product development, and diversification.
- Show RXBAR Web site: https://www.rxbar.com/
- Video about the company story: https://youtu.be/aMFwfKThixA
- Which strategy did RXBAR use?
- Which strategy is Kellogg using?
- Divide students into teams. Have each team select one of the four different strategies and explain why that strategy could be used to market RXBAR.
- Have each team determine the marketing mix (4Ps) to support their strategy choice.
- Debrief the exercise.
Source: Buss, D. (2017, Oct. 9). Kellogg looks to “no B.S.” RXBAR for growth and inspiration. Brandchannel.com