Kellog's Case India

7/29/2019 Kellog's Case India

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BYSushil kumar singh

MBA 4th sem


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Synopsis In 1994, three years after the barriers to

international trade had opened in India, Kelloggsdecided to invest US $65 million into launching its

number one brand, Corn Flakes.

However, the Indian sub-continent found the wholeconcept of eating breakfast cereal a new one.

While this meant that Kelloggs had few direct

competitors it also meant that the company had to

promote not only its product, but also the very idea

of eating breakfast cereal in the first place.


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Synopsis Furthermore, the companys attempts to Indianite its

range have been disastrous. Its Mazza-branded seriesof fusion cereals, with flavours such as mango, coconut

and rose, failed to make a lasting impression.

the research founded that their only rivals are

traditional Indian foods like idlis & vadas. - this

statement was given by Denis Avronsord (M.D of

Kellogg's India.)


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Kellogg`s India `S Kal In

1994


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Industry analysis Kellogg's entered in India in 1994.

Our only rivals are traditional Indian foods like idlis and

vadas.

products offered in India : corn flakes, wheat flakes,

basmati rice flakes

With 2008 sales of nearly $13 billion, Kellogg Company is

the worlds leading producer of cereal and a leading

producer of convenience foods, products include cookies,

crackers, toaster pastries, cereal bars, frozen waffles, and

meat alternatives.


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Key points Products offered in India Corn Flakes, Wheat

flakes, Basmati rice flakes. April 1995, 25% decline in sales in comparison

to last month.

Despite offering good quality products and beingsupported by the technical, managerial and

financial resources of its parent, Kellogg's

products failed in the Indian market.

High-profile launch backed by hectic media

activity failed to make an impact in the

marketplace.


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Swot analysis


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Swot analysisSTRENGTHS:

Kelloggs flexibility and adaptability towardsconsumer needs

Customization of products

History of changing food habits globally

WEAKNESSES:

If even they liked taste, the product was tooexpensive initially

Initially product was not adopted to the Indiantaste or Indian traditional food habit

Wrong evaluation of projection in market

demand.


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Swot analysisOPPORTUNITIES:

Introduction of new trend with nutritional value in

breakfast

Changing work-life demanding processed foods

Less competition

Scope for entering untapped marketsTHREATS:

Cultural factors and eating habitspopulation

not used to processed foods

Blinded by the population figures of India

Low awareness about processed foods and

calorie requirements

Price sensitive customers


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MARKETING MIX

New ProductConcept

Less variety

Not Indianized

Premium pricing

Productsegmentation

More variety

Indianized

Penetration pricing

1995 1997

PRODUCT

PRICE


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MARKETING MIX Localized

Ad campaign

Nationalized

Better

advertising

strategy

1995 1997

PLACE

PROMOTION


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WHY TO GO FOR KELLOGGS?

=


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Communication strategyGive away free gifts with packs of chocos.eg. Glowing stickers with Rs.10 pack of

chocos.


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Advertising strategy Jaago Jaise Bhi, lo Kelloggs hi

Yoga instructor to kathakali

dancer attributing their morning

energy and fitness to Kellogg's

Introduction of new cereals

(Chocos, frosties etc.) forced tolook at alternate product

categories to make up for bad

performance of breakfast cereals.


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Kelloggs Breakfast Week


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Positioning

A healthy, nutritious, convenient & easy - to -prepare alternative to traditional breakfast eating

habits.

Developing a taste for grain based foods in the

morning.

Different Skus 500 gm family pack, Rs.10

pack of each variant.

Worked on Better PositioningIron Shakti.

Now positioned as Fun-&-Taste-&-Health.


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New positioninglevel of iron & vitamin

intake.


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Kelloggs Special K DietWomen

health.


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Target marketChocos launched in India in September 1996.

Targeted at Kids with mascot monkey Jose

Chocos were wheat scoops coated with

chocolate.

h d i i di


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Launched Frosties in India

April 1997.

Frosties had sugar frosting onindividual flakes.

The success of these variants

took even Kellogg by surprise

and sales picked up significantly.

It was even reported that Indianconsumers were consuming the

products as snacks.


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Market objectives andstrategiesMarkets strategy are divided into six key segments to

the Kellogg market, as shown:

Tasty Start - the cereals that most people will eat to

begin their day. Kellogg's brands include Kellogg's

Corn Flakes and variations, such as Kellogg's CrunchyNut.

Simply Wholesome. These are 'good for you' brands,

such as Kellogg'sFruit 'n' Fiber


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Shape Management. Brands that can enable

customers to manage their weight or shape, such as

Kellogg's Special K.

Mum Approved. Those that mothers see as being

good for their children, such as Kellogg's wheat flaks.

Kid Preferred. The brands that children themselves

prefer, such as Kellogg'sFrosties, Kellogg's Choc's

and Honey Loops.

Inner Health. These are the brands that help people

with digestion, such as Kellogg'sAll-Bran and

Kellogg's Heart to Heart Oats.


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Over confidence and ignorance of culturalaspects.

Lack of understanding of Indian consumer

behavior and habits. Premium pricing policy.

Banked heavily on crispy flakes.

Results for failure


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Porter Five ForceModel


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199553% market share of Rs.

150 million breakfast cerealmarket. 200065% market share

of Rs. 600 million market.

Improved prospects

- Shift in Positioning

- Increased consumer promotions

- Enhanced media budget

Continued to have image of

Premium brand.

recommendation


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In a nutshell we have seen that the main

reasons for Kellogg's failure in India was thewesternisation of its products and high prices.

The indianisation of its products helpedKellogg's in penetrating the market.

The reduction in prices also helped Kelloggsimprove its standing in the market.

conclusion


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Kellog's Case India

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