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Kellogg Investment Proposal for Secure Retirement

Team Lima proposes investing $500k in Kellogg for secure retirement. Analyzing sales history, market targets, and corporate culture, invest in Kellogg for stable returns exceeding CD rates.

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Kellogg Investment Proposal for Secure Retirement

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

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

  3. Supply Chain • Planned order • Warehouse to Production • Quantity of raw goods • Production order • Process the raw goods into ingredients • Production order • Combine/cook ingredients • Distribution Team Lima

  4. Sales History & Data • Founded 1906 • Battle Creek, Michigan • 30,900 Employees • Made in 18 Countries • Sold in 180 Countries • Diversified Products Team Lima

  5. Sales History & Data Team Lima

  6. Sales History & Data • $485M – Profit 2nd Qtr 2012 • Leader in Global Cereal Sales Team Lima

  7. Sales History & Data Kellogg’sv.General Mills Team Lima

  8. Target Markets • Breakfast Cereal • Frozen Foods • Toaster Pastries • Healthy Snacks • Snacks • Cookies & Crackers Team Lima

  9. Domestic Market North American & International Sales by category in Comparison to Total Sales (2011) Team Lima

  10. Domestic Market Sales North American Markets vs. International Markets (2011) Team Lima

  11. Breaking into New Markets • Keebler Cookie’s • Pringles Chips • Cheez-It Team Lima

  12. Target Demographics • Children • Families • Mothers • 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. Team Lima

  13. Media for Domestic Market Segment • 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 Team Lima

  14. Mission Statement • 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 Team Lima

  15. Corporate Culture • 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 Team Lima

  16. Charities • 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. Team Lima

  17. 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. Team Lima

  18. Investment • 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. Team Lima

  19. Dividend Kellogg has a strong history of paying dividends quarterly to all investors and the dividend value has steadily increased. In the last five years the amount paid in dividends per share has increased Team Lima

  20. 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. Team Lima

  21. 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. Recommendation • We recommend that our parents invest their entire $500,000 in the Kellogg Company Team Lima

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