Kellogg’s – The Indian Experience

Objectives
How to overcome the competition?
Understanding the reasons of failure in
north India?
Acceptance of consumer?
Indian food habits ?
 Kellogg’s International
W.K. Kellogg is the founder of Kellogg’s started in
1906, at Battle Creek Michigan

Kellogg Company is the world’s leading producer

of cereal and a leading producer of convenience
foods

Kellogg products are manufactured in 19 countries

and marketed in more than 180 countries around
the world.
 Kellogg’s India
When Kellogg Company entered India, the per
capita consumption of breakfast cereals was a low
10 gm p.a. against 5 kg p.a. globally.
Existing for past 15 years entered in the year 1994
Kellogg India is a 100 per cent subsidiary of
Kellogg’s Company, USA, and is the largest player in
the Indian breakfast cereal market.
Investment over US$ 30 million.
 Market Analysis

Market size: sales of nearly 70%

Product segments: the best-selling kids’ cereal brands--
Quaker Lucky Charms, Count Chocula, Post Marshmallow
Alphabits, Quaker Marshmallow Safari, Rice Crispy,
Kellogg’s Cornflakes & Chocoo
Market share: competition is heating up in this market
as flat sales and low-priced clones have eroded the market
shares of Kellogg and General Mills.
Industry structure: Three food giants--Kellogg,
Quaker, Mohun’s--responsible for 70% of kid’s
foods in 2008-09.
Market Forecasts: the kids' market has been
growing at a rate of more than 15% a year, for
the 5 to 7 years and shows no sign of slowing
through the end of the decade. Growth in the
overall kid’s food market was driven, to the
largest extent, by gains in cereals
 Industry Analysis
3 players in the Indian Market:
– Kellogg’s
– Quaker
– Champion Oats & Gold Crunch from the Hindustan
Vegetable Oils Corporation
The breakfast cereals market has grown well from 1996 and is
growing steadily
Kellogg’s has been the growth-driver

Year Market Share of Kellogg's

1995 27%
1998 More than 43%
2001 More than 58%
2005 More than 69%
2009 More than 80%
 Segmentation
Segmentation for Kellogg's, the segment of people
who can buy Kellogg's products are from middle
income groups to high income groups

Targeting
Target audience for Kellogg's is mothers and children
as it is quiet convenient to serve healthy and
affordable and children as the product comes with a
variety of flavors and its crispy nature and different
flavors are all quiet appealing.
 Positioning
Positioning the product has been positioned as
a healthy breakfast as it has to supplement the
usual bread and butter which is both less
nutritious and butter leads to accumulation of
fat . The product is also positioned as not a niche
segment product as can be afforded by the
general public easily for their daily
requirements
 Promotion Strategy
1994
– Heavily Advertised
– All Ads were Brand driven
– Promotion strategy was focused at encouraging the
consumer to try the product

1996 - 2002
– Kellogg’s India shifted its Positioning from
nutrition to fun-filled
• Rs.25 crore media-spend
• Constant free sampling exercises
• An on-going process of developing price volume
packages
 Promotion Strategy
Today 2009

– Attempts to Indianize the Ad campaigns

– Punch line: “Jago jaise bhi, lo Kellogg’s hi”

– “Cock” Identity symbolizes the morning

association the world over
Successful Strategy of Kellogg’s
for Logistics
 Operations, Systems & Logistics
Manufacturing Plant at Taloja in Maharashtra

Kellogg’s Cereal brand is available in 1,00,000 outlets across

the country

Kellogg’s gives a margin of

Distributors: 5%
Retailers: 12%
 Kellogg’s
Distribution Channels
Kellogg’s Kellogg’s Kellogg’s

Division
Division Jacob Circle
Jacob Circle
Distributor centers
Vile Parle

Big Bazaar Retailers

D-Mart
Retailers
 PRICING WARFARE
Price Barrier: when Kellogg’s entered Rs. 40 cr market in
1994.Kellogg’s price was double the price of it’s sole
domestic rival Mohan Meakin’s MOHUN
450 gm pack of Kellogg’s cost Rs. 63
500 gm pack of Mohun’s cost Rs. 48

Customer’s Value Perception: Family of 4 guzzling 30 g

of Kellogg's cornflakes a day will end up finishing a 500 gm
pack costing Rs 120 in 4 days flat. The average household
would spend about Rs. 900 a month on cornflakes
 PRODUCT LIFE STAGE
To Increase Consumption:
Beyond Breakfast, Twice daily meal plan and afternoon
snacks

First Mover Advantage:

Special K, reaching out to women as a first weight
management cereal in the country

New Market:
Kellogg’s packs, offer Chocó variant as a nutritious
substitute for chips and other junk foods
 PRODUCT LIFE CYCLE

Introduction Growth Maturity Decline

Time
 Positioning of Kellogg’s
1994: Kellogg’s positioned itself on the health platform,
highlighting the nutritional values of brand

1996: Positioning shifted from nutrition to fun-filled

Healthy Breakfast for Children (Iron Shakti)

2001: Healthy Breakfast for Working people (Iron & Protein)

2004: Healthy Meal for whole family including Women (Iron,

Protein & Calcium)
Cereal Industry Volume Sales
for Cereal

Volume Sales

Kellogg
12.2 Quaker
36.8 Mohun's
19.3
Champion oats
31.7

In million
 Positioning Map

High on Taste

Cocoa

Fruit Loops Cheerios

Low High
Nutritional Corn Flakes Raisin Nutritional
Valve Bran Valve

Special K

Low on Taste
 Reasons for Failure in
Since 1994

WRONG MARKETING
MIX
 WRONG PRICING

Prestige Price Policy.

Unable to trap the rural market.

Overlooked the competitors pricing policy

and followed its own pricing policy.
 WRONG PRODUCT
Product did not suite the Indian taste.
Product became soggy.
Product was not stomach filling.

More emphasis on Health Aspect.

Products not available in small retail packs.
Tried to change the Indian habits forcefully.
 WRONG PLACE
Focus only on premium and middle level stores
Disguised Demand.

WRONG PROMOTION
Concentrated mainly on T.V. Advertisements and
copied International
promotions.
ROOSTER, a Kellogg mascot , missing in Indian
advertisements.
No Long Term Base –Lines.
RIGHT MARKETING
MIX
 RIGHT PRICING
Used Glossy cardboard packaging to bring
down the price substantially.

Adopted Sachet Revolution

E.g.. Mazaa Series.
 RIGHT PRODUCT
Launch of Chocos and Frosties.
Decided to Indianise its flavors.
E.g. Elaichi, Kesar, Rose.
Addition of Iron Fortification in cereals.
E.g. Iron rich Cereals for children.
E.g. Special K-Kellogg’s for women.
 RIGHT PROMOTION
Started Indianised Campaigns

Launched “The Kellogg breakfast week”

Tied up with Indian Dietetic Association (IDA)

Targeted schools for promotion

Product at discounted rates.

Launched chocos biscuits

 RIGHT PLACE

Increased outlets from 30,000 to 40,000.

Targeted metropolitan cities.

 Recommendations
• Kellogg’s is associated with Breakfast
– Hence the company should take advantage of it &
extend the Leverage of Mother brand (Breakfast
attribute) to new brand extension

• The Brand “Kellogg’s” could be extended into

related product Categories

• Different shapes of the Cereal like Animals, Stars,

Flowers, Hearts, Toys (guns, cars etc.)
 Recommendations
Free toys with Kellogg's for kids
Brand Ambassador
Introduce flavors according to target Audience
Understand Indian food Habits. Give them
anything which us ‘Sweet, Salty or Spicy’ but
never give anything which is fade.
Remember that square pegs don’t fit into round
holes
Don’t try and make consumers strangers to their
culture
Presented by

Nitesh Bang 47
Mithil Jain 61
Nikhil Khanvilkar 65
Bharat Kothari 66
Mayur Nahar 72
Divya Wadhwani 90