Case Analysis

Submitted to: Ms. Aditi Prasad

Submited by: Aditya gaur

Course: MAMM 1st yr

KEY ELEMENTS:

Kellogg’s Indian Experience- the brand Kellogg was the wholly-owned Indian subsidiary

of the Kellogg Company based in Battle Creek

Kellogg Company was the world's leading producer of cereals and convenience foods, including cookies, crackers, cereal bars, frozen waffles, meat alternatives, piecrusts, and ice cream cones.

The Indian market held great significance for the Kellogg Company because its US sales were stagnating and only regular price increases had helped boost the revenues in the 1990s.

Marketing -Even a high-profile launch backed by hectic media activity failed to make an impact in the marketplace.

Mistakes - Kellogg banked heavily on the quality of its crispy flakes.

-The company's promotions focussed only

on the health aspect of the product. Hence

Kellogg had moved away from its

successful ‘fun-and-taste' positioning

adopted in the US.

OBJECTIVES:

Its aim - the broad statement of where it wanted to be - was therefore to reinforce the idea of a balanced, healthy lifestyle. Objectives were set in three main areas:

Encouraging and promoting physical activity for health Using packaging to promote the measure of balanced lifestyle Using food labelling to help consumers make choices. Learning from the

case • Market study is must before you enter any market

• Don’t underestimate local competitors• Remember that square pegs don’t fit into round holes• Cultural difference must be addressed• Over confidence leads to failure• For succeeding in country like India company has to Indianise it

TARGET AUDIENCE:

The company proposes is to offer consumers around the world a healthy, nutritious, convenient and easy-to-prepare alternative in the breakfast eating habit for both children and adults.

INTRODUCTION TO THE CASE :

The case, ‘Kellogg’s Indian Experience’ analyzes the causes that led to the failure of the Kellogg breakfast cereal brand in the Indian market. It couldn’t understand the fact, that for Indians breakfast is more than meal. The traditional Indian food was like a part of culture and giving direct competition to that was never advisable.

The case examines the measures the company adopted on the marketing front to rectify its mistakes and at the efficacy of these measures.

Kellogg Company was the world's leading producer of cereals and convenience foods, including cookies, crackers, cereal bars, frozen waffles, meat alternatives, piecrusts, and ice cream cone.

SWOT ANALYSIS:

Strength

Reputed brand Internationally

First of its kind

53% market share in Mumbai

Aimed at elite class in the society.

Weakness

Its products did not suit Indian breakfast habits. Premium pricing policy. Banked heavily on crispy flakes. In order to maintain quality Kellogg focused on Premium and middle-

level retail stores.

Opportunities

In order to forge ahead, Kellogg decided to launch two of its highly successful brands-Chocos (September,1996) and Frosties (April,1997) in India which were very successful and sales picked up significantly.

Kellogg was able to reduce prices by reducing its cost of production. Kellogg saw distribution as an important area to look into to improve its

market penetration.

Threat

More reasonable alternatives like Mohun’s cornflakes and Champions Typical Indian cultural breakfast options like paranthas, idlis. Etc

CASE ANALYSIS:

Despite offering good quality products and being supported by the technical, managerial and financial resources of its parent Kellog products failed in the Indian market. Kellogg knew it will be difficult to get Indian customers to accept its products hence it relied heavily on the quality of its crispy flakes. Indians liked to boil their milk and consume it warm or lukewarm, they also like to add sugar to their milk. The rice and wheat versions did not do well because sugar could not easily dissolve in cold milk which made it not sweet enough for the Indians. Some consumers called the rice flakes, rice corn flakes.

In a nutshell we have seen that the main reasons for Kellogg failure in India was the westernisation of its products and high prices.

The Indianisation of its products helped Kellogg in penetrating the market.

The reduction in prices also helped Kellogg improve its standing in the market.

Recommandations

In order to avoid the pitfalls by Kellogg in India,I would advocate any company trying to establish its full presence in another Country needs to take this points into consideration-

Market study is must before you enter any market Don’t underestimate local competitors Remember that square pegs don’t fit into round holes Cultural difference must be addressed Over confidence leads to failure For succeeding in country like India company has to Indianise it.

ConclusionIn 1995, Kellogg had a 53percent share of the Rs150 million breakfast cereal market, which had been growing at 4 to 5 percent per annum. In 2000,Kellogg share had increased to 65 percent and the market share was Rs600 million, and Kellogg’s share had increased to 65 percent. Analyst claim Kellogg’s entry was responsible for this GROWTH. The Company’s improved prospects was clearly traced to shift in positioning, increased consumer promotions and an enhanced media budget. Effort to develop products specifically for the Indian market helped Kellogg penetrate the Indian market. However, Kellogg was still viewed as a premium brand and its consumption was restricted to the high class in the Indian market. The company had to realise it will be very difficult to change the eating habit of the Indians. In 2000,Kellogg unfolded many new brands including Crispix Banana,Crispix Chocos,Froot loops,Cocoa Frosties,Honey crunch,All Bran and All Rasin. Kellogg also introduced Krispies Treat,an instant snack targeted at children priced at theRs3 andRs5,this product was placed to compete against the products in the impulse snacks category.

Some Analyst believe the introduction of new cereals and the launch of biscuits and snacks could be attributed to the fact that the company had been forced to look at alternate product categories to make-up for the below expectation of the breakfast cereals brand.