Case

Analysis

Submitted to: Ms. Aditi Prasad

Submited by: Aditya gaur
Course: MAMM 1st yr
KEY ELEMENTS:
Kelloggs 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
Dont underestimate local competitors
Remember that square pegs dont 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, Kelloggs Indian Experience analyzes the causes that led to the
failure of the Kellogg breakfast cereal brand in the Indian market. It
couldnt 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 Mohuns 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
Dont underestimate local competitors
Remember that square pegs dont 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.

Conclusion
In 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
Kelloggs share had increased to 65 percent. Analyst claim Kelloggs entry was
responsible for this GROWTH. The Companys 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.