kellog's case india
TRANSCRIPT
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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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