The Ready-to-Eat Breakfast Cereal Industry in 1994

Why have private labels been able to enter this industry successfully? How do the cost structures of private label and branded cereal manufacturers differ?

The private labels have been able to enter the ready-to-eat cereal industry successfully for the following reasons:

High prices set by major manufacturers (incumbents)

Retailers' willingness to promote better because of better margins

Coupon promotions by major manufacturers eroding brand loyalty

Failed brand extensions by major manufacturers

Increased technological competence raising product quality

Proliferation of mass merchandisers that did not need slotting fees

High prices set by branded cereal manufacturers (incumbents)

The incumbents engaged in increasing the prices and then spending more on advertisements and promotions to steal consumers from their competitors, eventually leading to a zero-sum game. The consumers resented the tactics of......

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Title: The Ready-To-Eat Breakfast Cereal Industry In 1994
Approximate Word Count: 428
Approximate Pages: 2 (250 words per double-spaced page)

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