8/6/2019 Kellogg in India

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Kellogg in India

Marketing Audit

1. Marketing Environment. For India - the whole concept of eating breakfast cereal a new one. The mostcommon way to start the day in India was with a bowl of hot vegetables, hot milk. 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.India is a complex culture, emerging economy. Consumer class numbers are around 100 million

people at the most, and buying habits and tastes vary greatly between the Indian regions. India has 17

official languages and six major religions spread throughout 25 states.

2. Marketing strategy. The company concentrated on establishing its brand name in the market,promoting its quality crispy flakes which were a worldwide success accepted throughout the western

countries. Rapidly launched its products. Quite expensive cereals. The companys attempts to

Indianize its range - disastrous. If it cant sell cereal, its going to try and sell biscuits.

3. Marketing Organisation.4. Marketing Systems.5. Marketing Productivity. Launched Corn Flakes in India - a Western product attempting to appeal to

Indian tastes. Even if they liked the taste, the product was too expensive. Introduced Chocos, Cheez-It,

Wheat Flakes, Frosties, Rice Flakes, Honey Crunch unsuccessful. Special K for obese women.

Three segments: kids, all-family, adult space. Using packaging as an effective marketing tool, for brand

communication. Adopting brand names that appeal to the Indian consumer such as Shakti, meaning

power.

6. Marketing Functions. Indians preferred their milk hot. When the Kelloggs crispy flakes are mixed withhot milk, they turned out to be soggy - rejected by the consumers. Kelloggs had to modify their

products to suit hot milk.

Marketing mix: Product, Price, Place and Promotion. Failed on Product and Price: did not take into

account peoples tastes. It assumed that if the product sold heavily in US, it should appeal equally to

the Indian masses. Also, Kelloggs did not find many buyers because of the high price. Its

advertisements and promotions focused initially on the health aspects of the product

Porters Five Forces:

1. Threat of substitute products. Hot foods for breakfast. Paranthas, idli, dosa. - high2. Threat of established rivals. Various brands available. Pepsico`sQuacker oat, Mohan Meakins - high3. Threat of new entrants. ITC, Nestle, Heintz. - high4. The bargaining power of suppliers. Located its manufacturing plant at Taloja, near which is the

largest market for breakfast cereals in the country thereby optimising transportation cost. Set up a

distribution network with storage hubs in all the key states of the country. - low

5. The bargaining power of customers. Price sensitivity, Brand identification, Switching to rival brands high

= not attractive market