Final Report 3.0

8/8/2019 Final Report 3.0

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PROJECT REPORT

Marketing Management - 1

IMT S eptember, 2008

Institute of Management Technology

Ghaziabad

By:

Rachita Pandey 08FT-032

Rajesh Kumar 08FT-035

Sameer Jain 08FT-041

Saurav Anand 08FT-045

Shailendra Sharma 08FT -047

Sulabh Gupta 08FT-052


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Table of Contents

Contents

Executive Summary ................................ ................................ ................................ ........................... 4

Situational Analysis ................................ ................................ ................................ ............................ 5

Economic and Legal Conditions ................................ ................................ ................................ ...... 5

Market Share Global Processed Food Trade ................................ ................................ ............ 5

Policies and Regulations ................................ ................................ ................................ ............. 6

Fiscal Policy & Taxation ................................ ................................ ................................ .............. 7

Food Laws ................................ ................................ ................................ ................................ .. 7

Financing and credit availability ................................ ................................ ................................ . 8

New Opportunities: In India ................................ ................................ ................................ ....... 8

Population Growth: ................................ ................................ ................................ ....................... 9

Population Age mix ................................ ................................ ................................ .................. 10

India Population Pyramid for 2005 ................................ ................................ ........................... 10

India Population Pyramid for 2010 ................................ ................................ ........................... 10

Literacy and Education ................................ ................................ ................................ ................. 11

Economic environment ................................ ................................ ................................ ............ 11

Socio culture environment ................................ ................................ ................................ ........... 14

Consumption ................................ ................................ ................................ ............................... 15

Gist of the demographic analysis ................................ ................................ .............................. 16

Conclusions drawn from Demographic Analysis ................................ ................................ ....... 16

Survey Analysis ................................ ................................ ................................ ................................ 16

Findings ................................ ................................ ................................ ................................ ....... 17

Product Advantages ................................ ................................ ................................ ..................... 18

Kellogg in India ................................ ................................ ................................ ............................ 19

Company Profile ................................ ................................ ................................ .......................... 19

Business Statistics ................................ ................................ ................................ ........................ 19

Company Strategy................................ ................................ ................................ ........................ 19

Problems faced by Kellogg ................................ ................................ ................................ ........... 20

Efficient supply chain network ................................ ................................ ................................ ..... 21

Kellogg India: At a glance ................................ ................................ ................................ ............. 21

SWOT ANALYSIS ................................ ................................ ................................ ........................... 22


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Strengths ................................ ................................ ................................ ................................ . 22

Weaknesses ................................ ................................ ................................ ............................. 23

Opportunities................................ ................................ ................................ ........................... 23

Threats ................................ ................................ ................................ ................................ .... 23

STP (Market Segmentation, Targeting and Positioning) ................................ ................................ .... 25

Segmentation ................................ ................................ ................................ .............................. 25

Targeting ................................ ................................ ................................ ................................ ..... 25

Positioning ................................ ................................ ................................ ................................ ... 26

The Marketing Mix ................................ ................................ ................................ .......................... 27

Product ................................ ................................ ................................ ................................ ........ 27

Co nstituents ................................ ................................ ................................ ........................... 27

Price ................................ ................................ ................................ ................................ ............ 28

Schemes for retailers ................................ ................................ ................................ ............... 29

Place ................................ ................................ ................................ ................................ ............ 29

Promotion ................................ ................................ ................................ ................................ ... 30

SALES PROMOTION ................................ ................................ ................................ .................. 30

Smaller SKUs ................................ ................................ ................................ ............................ 30

Schemes for Retailers ................................ ................................ ................................ ............... 30

Partnership Scheme ................................ ................................ ................................ ................. 30

Aggressive Pricing ................................ ................................ ................................ .................... 31

ADVERTISING ................................ ................................ ................................ ........................... 31

CHANNELS ................................ ................................ ................................ ............................... 33

Market Survey ................................ ................................ ................................ ................................ . 34

Findings ................................ ................................ ................................ ................................ ....... 39

References................................ ................................ ................................ ................................ ....... 40


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Ex ecutive SummaryThis paper presents a business pr o po sitio n to tap the huge p o tential in healthy andready t o eat breakfast segment in India. It further studies h ow Kello ggs can use thepr o po sitio n to capture a much larger chunk o f the Indian market share.

Indians are traditi o nally kn ow n to take either heavy o r unhealthy breakfast, thatdo ubles up as the aftern oo n meal o r skip m o rning meal due t o vario us reas o ns. Theneed f o r quick healthy f oo d remains largely insatiated. As a strategic line extensi o n to Kello ggs range o f breakfast pr o ducts, Good Morning -- soya based flavoured flakes suitably addresses this need. The plan is t o run a campaign that w ill be two pr o nged. On o ne hand it w ill po pularise the idea o f Impo rtance o f healthy breakfastby its S ay Good Morning to Yourself campaign . On the o ther hand it w illpr o pagate the g oo dness o f so ya and w hat better and tastier w ay o f having it thanGood Morning s o ya flakes .

Kello gg is right n ow facing challenge fr o m the l o cal player M o han Meakin Ltd .How ever, even a bigger challenge is t o gain the acceptance o f a greater Indian

po pulati o n.


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bas is , it is fo as t t a t ap ita packaged foo d spend ing will sh ow an increase of 6. % to US$ . 6 by .

In d ia presen ts a h ug e un tapped o pp o rt un ity for the foo d pr ocess ing sec to r enhanced with low pene tra tion leve ls and a libera l regu la tory reg i e . Increased ec ono ic gr owth , ev olving foo d-c onsump tion pa tterns , a h igher s tandard of living due to r is ing d isp osab le inc omes and a trend towards nuc lear dua l-inc ome f am ilies a ll presen t cons iderab le p oten tia l. overnmen t s tud ies sh ow tha t an average Ind ian spends ma jor ity of h is inc ome on foo d consump tion . ec ogn izing an opp o r tun ity togr ow, mu ltina tiona l food compan ies have en tered th is indus try to mee t consumer demand for conven ience and va lue-added pr oduc ts . U.S. brands such as

cDona ld's , Pizz a u t and Ken tucky r ied Ch icken (K C) have a lready bec ome h ouseh old names in Ind ia wh ile m o re are se t to en ter . With s ocio-ec onom ic pr ogress ,consumer tas tes are increas ing ly inc lined towards conven ience ; hea lth and o rgan ic foo ds off er ing va lue for money

P lici s an d R ul at i n s

Since libera liza tion severa l policy measures have been taken with regard toregu la tion & con tr ol, fisca l p olicy , exp o r t & imp o r t la ws , t axa tion , exchange & in teres tra te con tr ol, exp o r t pr om otion and incen tives to h igh pr ior ity indus tr ies . oo d pr ocess ing and agr o indus tr ies have been acc o rded h igh pr ior ity with a number of imp o r tan t re lieves and incen tives .

At presen t, no in d u str ia l lice n se is requ ired for a lm os t a ll of the foo d & a g r o pr o cess ing in d u str ies excep t for s ome items like: beer , potab le a lcohol & wines ,cane sugar , hydr ogena ted an ima l f a ts & oils e tc . and items reserved for exc lus ive manu f ac ture in the sma ll sca le sec tor .

Total In c ease in o ve all mark e t forpro cesse ! food indu str y in India

Increase inper capitapackaged

food spending- 56 " 5%

Increase inpackaged

food sales -67 " 5%

Increase inpro cesse d

food output44 " 2%


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Fi cal Policy & a x ation

ide ranging fiscal p o licy changes have been intr o duced pr o gressively. ExciseImport duty rates have been reduced substantially . Many pr o cessed f oo d itemsare t o tally exempt fr o m excise duty. Custom duty rates have been substantiallyreduced o n plant & equipments, as w ell as o n ra w materials and intermediates,especially f o r exp o rt Pr o ducti o n. Corporate taxes have been reduced and there is ashift tow ards market related interest rates.

Food aw

ifferent la w s g o vern the f oo d pr o cessi ng sect o r in India. The prevailing la w s andstandards ad o pted by the G o vernment t o verify the quality o f f oo d and drugs is o neo f the best in the wo rld. Multiple la w s/regulati o ns prescribe varied standardsregarding f oo d additives, c o ntaminants, f oo d c o lo urs, preservatives and labelling.C urrently there are m o re than t w enty Indian la s relating t o f oo d, w hich are

administered by a number o f different Ministries and epartments. F oo d pr o cess o rshave t o co mply w ith these rules.

Amo ng the m o re imp o rtant f oo d l a w s are :

y Pre ention of Food Adulteration Act PFA o f 1 54 and the PFA Rules o f 1 55 : Co vers specificati o ns related t o f oo d c o lo r, preservatives, pesticideresidues, packaging and labeling, and regulati o n o f sales.

y The S tandards of Weights and Measures Act , 1 7 , and the Standards o f eights and Measures Packaged Co mm o dities Rule, 1 77 : esigned t o

establish fair trade practices w ith respect t o packaged c o mmo dities.y The Fruit Products Order , 1 55 : Specificati o ns and quality c o ntr o l requirements

regarding the pr o ducti o n and marketing o f pr o cessed fruits and vegetables,

sw

eetened aeratedw

ater, vinegar, and synthetic syrups.y Meat Food Products Order , 1 2 : Administers the permissible quantity o f heavymetals, preservatives, and insecticide residues f o r meat pr o ducts.

y Milk and Milk Products Order , 1 2 : Regulates the pr o ductio n, distributi o n, andsupply o f milk pr o ducts; establishes sanitary requirements f o r dairies, machinery,and premises; and sets quality c o ntr o l standards f o r milk and milk pr o ducts

y The Food S afety and S tandards Act , 200 : In August 200 , G o vernment o f India has passed a ne w legislati o n F oo d Safety and Standards Act. The Actpr o po ses establishment o f a ne w auth o rity; the F oo d Safety and Standards

Auth o rity, re o rgani ati o n o f scientific supp o rt pertaining t o the f oo d chain thr o ughthe establishment o f an independent risk assessment b o dy and a ne w Foo d La w ,merging eight separate Acts.

How ever, in spite o f these challenges, India presents a significant untappedo ppo rtunity f o r the FPI sector enhanced by lo penetration levels and a liberalregulat o ry regime. The r o le o f f oo d pr o cessing has bec o me m o re critical since f oo dpr o ducti o n is targeted t o do uble in the next 10 years.


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Finan ci ng an d cr di t ava il a bili ty

Inadequa te and h igh cos t of cred it has been one of the ma jor reas ons for the subdued agr i-sec to r gr owth . Acc o rd ing to indus try es tima tes , rura l cred it pene tra tion in Ind ia is jus t percen t of the a ll Ind ia average of percen t.

Due to inadequa te forma l cred it de livery mechan ism f armers have to re ly on in forma ls ources such as money lenders and traders who charge h igher in teres t ra tes .

ac to rs such as lops ided re gu lat o ry p o lic ies and non- a va ilab ility of tim e ly a n d ade q u ate cred it have led to the h igh ly f ra g m e n ted n at u re of the indus try. ack of ec onom ies of sca le and uncer ta in ty in ra w-ma ter ia l ava ilab ility has resu lted in h igher inven to ry hold ings and low capac ity u tiliza tion . Due to the un o rgan ized indus try s truc ture , m os t of the un its in the PI are s tand a lone with ou t s ign ifican tback ward o r for ward linkages . All these f ac tors are resp ons ib le for the s ign ifican t cons tra in ts on banks with regard to cred it assessmen t eva lua tions increas ing the cos t of bo rr owing .

New Oppo r t u n it ie s: In In di a

overnmen t es tab lish ing S pec ia l Econom ic Zones with the purp ose of pr omoting exp o r ts and a ttrac ting DI.

ura l cred it pene tra tion es tima ted to be %

loba l marke t share to be increased to % f r om presen t share of . %

0

5

# 0

$ 5

20

25

30

35

40

45

India Rural India

Credit Penetration in India

credit p ene tration inIndia


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No du ty on imp o r ts of inpu ts and they en joy s imp lified fisca l and for e ign exchange pr ocedures and a llow % DI.

In tr oduc ing of an in tegra ted foo d la w, wh ich is expec ted to he lp mee t the requ iremen ts of in terna tiona l trade and make the Ind ian foo d indus try compe titive in the g loba l marke t.

arness the va lue-crea ting poten tia l of agr o pr ocess ing , super ior marke t mechan ism and inf ras truc ture .

Pop ul at ion Gr o w t h:

Ind ia is a coun try of s tr iking con tras ts and en o rm ous e thn ic , lingu is tic , and cu ltura ld ivers ity. It has a popu la tion of .6 m illion (as per census of Ind ia , ) wh ich acc oun ts for 6. % of t he wor lds tota l p opu la tion . Diff eren t s ta tes in Ind ia d iff er vas tly in res ources , cu lture , foo d hab its , living s tandards , and languages . Ab ou tpercen t of the coun trys pe op le live in its , villages ; the res t in towns and

c ities . here are cities with a popu la tion ab ove one m illion pe op le .

Ind ias ec on om ic scenes has goo d consump tion gr owth poten tia l, and inc ome leve ls ,increas ing urban iza tion , a chang ing age pr ofile (mo re young pe op le ), increas ing consumer ism , a s ign ifican t r ise in the number of s ing le men and women pr of ess iona ls , and the ava ilab ility of cheap cred it will push Ind ia on to a ne w gr owth tra jec tory.

hese segmen ts of the p opu la tion are a ware of qua lity d iff erences , ins is t o n wor ld s tandards , and are willing to pay a prem ium for qua lity.

esu lts of the arke t In forma tion S urvey of o useh olds , conduc ted by the Na tiona lCo unc il of App lied Econom ic esearch , sh ow tha t the share of househ olds in the upper m idd le /h igh inc ome gr oup (a nnu a l h ou seh o ld in c o m e > s. 9 , on purchas ing power par ity bas is ) is g iven be low:

Sixty-five m illion pe op le are expec ted to en ter the -34 year age gr oup f r om to. By , 40 percen t of Ind ians are expec ted to be urban d we llers . Ind ias

0%

10%20%

30%

40%

50%

60%

1989 -90 2001 -02 2009 -10

Sh are of h ouse h olds in t h e uppermiddle/ h igh income group


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s u sta in ed ec ono mi c g r o w th , wh ich has been re la tive ly s tr ong over the pas t twodecades , is 6% per annua lly.

Pop ul at ion Age m ix

Ind ian var ies in its age m ix; the med ian age of the p opu la tion is es tima ted to cr oss 30 years by the year 025 . As per the census of Ind ia 2001 , 15 .35 % of t he popu la tion is 6 years of age of less . Among the pe op le wh o are 12 years o r ab ove , 34 % are less than 25 years of age . Another 24 % of t h is popu la tion be longs to the age bracke t of 25 to 34 years . P e op le who are ab ove the age of 54 years cons titu te on ly ab ou t 14 %of the popu la tion .

In di a Pop ul at ion P yr am id fo r 2005

Age and sex d is tr ibu tion for the year 2005:

In di a Pop ul at ion P yr am id fo r 2010

P red ic ted age and sex d is tr ibu tion for the year 2010:


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Since the da ta ab ove sh ows tha t the marke t poten tia l for the you th segmen t is very large as th is segmen t cons titu tes a s ign ifican t segmen t of the coun trys popu la tion .

h is sh ows tha t there is a poten tia l marke t fo r break f as t cerea ls wh ich is curren tly un tapped in Ind ia .

Lit e r a cy an d Educ at ion As per census 2001 , Ind ia has a literacy ra te of 6 5 .38 %. h is literacy ra te is d iff eren tfor ma les and f ema le , fo r ma les it is 5 .85 % and for f ema les it is jus t 54 .16%.

iteracy ra tes a ls o vary acr oss rura l and urban areas , with the literacy ra te in urban areas a t 80 .3% and in rura l areas a t 59.4 %. hese con tras ts in literacy leve ls are s ign ifican t and have imp o r tan t imp lica tions on demand of o ur pr oduc t.

us t o ver ha lf (55 percen t) of de f ac to wo men age 15-4 9 are litera te , compared with 8 Percen t of de f ac to men in the same age gr oup . iteracy has increased

subs tan tia lly over time , with recen t coh o r ts be ing mo re litera te than older coho r ts .

Na tiona lly, 35 percen t of wo men and 18 percen t of men are n ot regu lar ly exp osed tone wspapers /maga zines , te lev is ion , rad io, o r cinema .

he educa tion var iab le is a ls o h igh ly s ign ifican t and has a pos itive e ff ec t o n the tota ldemand of the break f as t cerea ls . E duca ted pe op le are mo re concern ab ou t the nu tr ition va lue , the ir ca lor ie requ iremen ts and the imp o r tance of hav ing break f as tda ily. And with increase in the educa tion leve l the ir kn owledge ab ou t d iff eren t brands and d iff eren t pr oduc ts are increas ing wh ich will resu lt in to the ir a wareness ab ou td iff eren t break f as t op tions presen t in the marke t.

Econom ic e

nv ir onme

nt o r ty-three percen t of wo men age 15-4 9 are emp loyed , compared with 87 percen t of

men in the same age gr oup . ens emp loymen t var ies little by urban-rura l res idence ;h owever , urban women are much less like ly than rura l women to be emp loyed . he ma jor ity of emp loyed women are agr icu ltura l workers (5 9 percen t); whereas , nos ing le occupa tion acc oun ts for the ma jor ity of emp loyed men . Si m ilar pr opo r tions of emp loyed women and men (7 percen t, each ) are in pr of ess iona l, techn ica l,

India

65 % 38%

&

al e

75 % 85%

Femal e54 % 16%

' ( untry

65 % 38%

) rban

80 % 3%

Rural

59 % 4%


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adm in is tra tive , and manager ia l occupa tions . wo-th irds of emp loyed women earn cash , compared with 91 percen t of emp loyed men .

he d istr ib u tion of in c o m e in Ind ia sh ows tha t 77 .7% of urban h ouseh olds in Ind ia have a m on th ly inc ome up to s . 3000 . he urban househ olds with a m on th ly inc ome of s . 3001 and 6000 are es tima ted to be ab ou t 16.2%. A mon th ly house h old inc ome of s . 6 001 to 10000 cons titu tes 4 % and on ly ab ou t 2 .1% of urban h ouseh olds have a m on th ly inc ome of o ver s . 10000 . Inc ome d is tr ibu tion of h ouseh olds in Ind ia has been chang ing s ign ifican tly over time .

ouseh olds be long ing to the lower inc ome segmen t have been s tead ily dec lin ing over the years , and the m idd le inc ome h ouseh olds have been sh owing an increase .

hese are the resu lts of the ec onom ic gr owth . he NCAE has c lass ified Ind ian consumers in to five ca teg o r ies .

Ric 0

Tho se who ha ve mon ey and own a wid e rang e of produ cts1

nnual In com e > Rs 2 215000

3 on sumingClass

4

ave mon ey and ar e willing to pa y1

nnual In com e be tw ee n Rs 2 45000 - Rs 2 215000

Climb e rs

4 ave des ire and willingn ess to bu y but ha ve limit ed cash at hand1

nnual In com e Rs 2 22000 - Rs 2 45000

5

spirant s

6 ew entrant s into th e con sumption system du e to in crease in th e ir in com e7

nnual In com e be tw ee n Rs 8 16000 - Rs 8 22000

Dest itute

6 ot a ctive parti cipant in mark e t e 9 chang e for a wid e rang e of good s1

nnual In com e < Rs2

16000

0

10

20

30

40

50

60

70

80

90

Rich Con sumingclass

Climbers @ spirant s A es titut e

1995 -1996

2006 -2007


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umber o f ho useh o lds in India in milli o ns in different inc o me gr o ups

As per the C EAR estimates the first three inc o me categ o ries sh ow significantgr ow th fr o m the year 1 5 -1 . The number o f ho useh o lds classified as the rich is

estimated to

gr ow

by 5% fr o

m the year 1 5 -1 to

200 -2007, the co

nsumingclass by 132%, and the climbers by 51%. The percentage o f aspirants o n the o ther hand is expected t o decline by 54% and the destitute by ab o ut 50%.

The inc o me levels o f rural h o useh o lds sh ow difference in pattern, alth o ugh the trendis s o me w hat similar. The rich class in urban areas is estimated t o increase by 400%fr o m 1 5-1 t o 200 -2007, w hereas the rural areas indicate a gr ow th o f 200%.The climbers are estimated t o gr ow by 145% in urban areas and by 11 % in ruralareas.

This trend suggests that the urban areas are likely t o w itness a relatively higher gr ow th o f pe o ple w ith mo ney, w ho actively participate in the market exchange. Theo verall trend pr o vides a str o ng indicati o n o f better ec o no mic levels o f po pulati o n thatis c o nducive t o the dem ands f o r go ds and services.

As per the C AER m o ney spend by an Indian o n different pr o duct categ o ries.

Acco

rding to

the atio

nalCo

uncil f o

r Applied Eco

no

mic ResearchC AER data, theco nsuming class, w ith an annual inc o me o f E R 701 o r ab o ve, is gr ow i ng and is

expected t o co nstitute o ver 80 percent o f the p o pulati o n by 200 -10. The increase ininco me levels o f the Indian p o pulati o n and the emergence o f the c o nsuming classthat has higher penchant t o spend, o ffers great gr ow th o ppo rtunities f o r co mpanie sacr o ss vari o us segments. The rupee spending by an Indian o n f oo d and groceryitem constitutes 57% o f their t o tal rupee spending.

The FPI c o ntinues t o attract invest o rs. F I inflow s in the FPI fr o m August 1 1 t o June 2007 st oo d at S 1,282.0 mn, 2.43 percent o f to tal inflow in value terms.


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The gr ow th in the pr o cessed f oo d industry als o affects the demand o f the breakfastcereals market in India.

Socio culture environment

India is a land o f diversities w ith different languages, cultures as w ell as religi o usbeliefs. There is a c o mplex mingling o f cultures and subcultures. There are s o meelements o f the culture that are c o mm o n but many elements that determine theco nsumer behavi o ur o f pe o ple vary in nature. A survey c o nducted by ResearchInternati o nal in 2002 indicates that there is a progression from traditionalism to

esternization as one mo e from lo er socioeconomic classes to higher socioeconomic class .

The middle class o f India has n o t been satisfact o rily measured. It is veryheter o gene o us and its si e depends o n the definiti o ns o f several parameters.Estimates range fr o m 25 millio n to 200 millio n but it is generally accepted that it isgr ow ing. Breakfast cereal manufacturers are likely t o find the greatest o ppo rtunitiesin the markets serving the middle and upper income groups o f India.

ith urbani ati o n, rising inc o mes, m o re wo rking wo men, the arrival o f so me f oo dmultinati o nals, and a pr o liferatio n o f fast f oo d o utlets, the acceptance o f packaged

Traditionlism Westernization


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and ready-t o -eat f oo d pr o ducts is increasing, especially am o ng the urban middleclass.

These pr o ducts, n o netheless, are usually tail o red t o Indian tastes. Many Indians arequite w illing to try ne w f oo ds, but usually return t o traditi o nal fare.

C on um p tion

The cultural fact o rs and eating habits influence the demand o f the breakfast cerealsin India. C ultural fact o rs w hich already exist in rural and urban areas still make thepe o ple t o eat a breakfast w hich is h o memade. Indian p o pulati o n is n o t used t o pr o cessed f oo ds. Pe o ple in India still prefer t o have s o mething w ith ho t milk rather than c o ld milk.

But n ow increasing literacy and exp o sure t o devel o ped nati o ns via f o reign media ando verseas wo rk experience/travel has br o ught ab o ut a change in the mindset andpreferences o f urban Indians. Increase in the p o pulati o n o f wo rking wo men anddo minance o f nuclear d o uble inc o me families, especially in urban areas, are o ther trends shaping the changing lifestyles. Lack o f time due t o a busy lifestyle andchanging c o nsumpti o n patterns has led t o an increase in the demand f o r pr o cessed,ready-t o -coo k and ready-t o -eat f oo d, leading t o increased brand -c o nsci o usness.

This translates t o a c o nsuming class o f 5 mn rural h o useh o lds by 2010 m o re thanhalf o f India's o verall estimated middle class by this time. C learly, c o nsumpti o ngr ow th in rural India w ill ge t a str o ng b oo st, thus o pening up the vast and relativelyunexpl o red strata o f India t o co mpanies. ith these pr o mising trends and India'sready availability o f raw materials, India has several c o mpetitive advantages in thebreakfast cereals sect o r.


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Gis t of t h e d e mog r ap hic ana lysis

Con clusi on s dr a w n f r om D e mog r ap hic Ana lysis

is ing d isp osab le inc ome leve ls: Willing to spend on goo d and hea lthy foo dis ing educa tion leve l: ea lth consc iousnessChang ing age pr ofile: o re pe op le in lower age gr oup resu lts in h igh un tapped p oten tia l marke tIncreas ing urban iza tion and exp osure to W es tern cu lture: penness to non trad itiona l food items

r owing number of wo rking women: ess time to prepare break f as t ecen t trend toward a hea lth ier lif es tyle: A n iche marke t for d ie t, hea lthy , low-

ca lor ie , and non-f a t food pr oduc ts

Sur ve y Ana lysis Be fore launch ing any ne w break f as t cerea l it is imp o r tan t to s tudy consumer needs and wha t bene fits consumer expec ts f r om the ir break f as t. N eed less to say break f as tcons titu te mos t imp o r tan t par t of human da ily d ie t. A survey is conduc ted to s tudy the ir lif e s tyles , ea ting hab its and buy ing hab its .

he survey was conduc ted us ing a sa m p le of 4 in wh ich there were f a ir ly equa lpar ticipan ts f r om each age gr oup i.e . 1 to 18 , 18 to 23 , 24 to 30 and ab ove 30 (Q . ).

he survey a ls o t akes care of gender ra tio to cons ider var ious p oin ts of vie w. 40 % of

G end e r

B al e - 69 C 9%

Femal e - 30 D 1%

E arital Statu s

B arri ed - 50 C 8%F nmarri ed - 48 D 5%G th e rs - 0 C 7%

H onthl y In com e (%I

P ess than R s Q 10000 - 19 Q 6Rs R 10000 to 2 0000 - 2 8 R 6Rs R 20000 to 30000 - 2 7Rs Q 30000 to 40000 - 16 Q 2

S or e than R s Q 40000 - 8 Q 7

H arital Statu s (%I

S arri ed - 50 Q 8T nmarri e d - 48 R 5U th e rs - 0 R 7

V

ge (Ye ar sI

W e low 2 5 - 32. 825 to 35 - 2 7 35 to 45 - 2 3.845 to 55 - 11 .9

S or e than 55 - 4.5

X du cation ( %Y

Secondar y - 1.3` igh er Edu cation - 2. 7a nd er G raduat e - 3.4G raduat e - 40 .9

b ost G raduat e - 51 .7

c ccupation ( %Y

` om e mak er - 50 .8Service - 48 .5Self Emplo yed - 0.7Retir ed - 2 5.2Stud ent s - 22. 7


17/40

participants w ere female (Q . 2 . Initially the pr o duct wo uld be launched inMetr o po litan and later o n in cities (Q . . The survey w ill depict the habits and lifestyle o f the pe o ple living in such areas.

The investigati o n sh ow s 50% o f pe o ple are n o t taking their breakfast daily (Q . 5 andreas o n o f skipping the breakfast is n o thi ng but lack o f time (Q . 6 . They have o nly 15minutes f o r their breakfast (Q . . As far as eating habit is c o ncerned a healthy andnutritio nal breakfast is m o re p o pular. 83% o f pe o ple accepted this fact (Q . 10 . Thismeans there is a seri o us need o f a qui ck breakfast w hich can als o meet their dailyneed o f nutritio n.

The ab o ve t wo needs are easily fulfilled by all breakfast cereal available in market.Then w hat c o uld be the fact o rs that hamper the sale o f breakfast cereal. 0% o f pe o ple eat breakfast o nce o r tw ice in a w eek (Q .12 and maj o r fact o rs c o ntributing t o co nsume them daily are taste and c o st (Q . 6, Q . 1 . As o f now o nly 20% pe o ple liketo have cereals in their breakfast (Q . 11 but if ab o ve t wo fact o rs are taken care w ecan certainly turn the events in o ur fav o r. Mo st o f the pe o ple are ready t o spend Rs.25 /- f o r their breakfast per day (Q . 8 . S o its required t o have a cereal in marketw hich is healthy, tasty and als o falls i nto budget o f target cust o mer. One m o re p o intw hich needs t o be taken care is that the breakfast cereal is taken w ith ho t milk s o crispness sh o uld be maintained in o rder t o pr o vide taste (Q . 16 . sually pe o ple buybreakfast cereal due t o its health and nu triti o nal value o n the o ther hand o nly 14%but cereals because o f its taste (Q . 13 . There is fairly equal distributi o n o f number o f servings o ne packet sh o uld serve s o vario us SK s sh o uld be made available (Q . 17 . The t wo po int clearly specifies w hat add iti o nal sh o uld be present in o ur pr o ductto have best o f results. M o re o r less pe o ple buy their gr o ceries fr o m super market o r retailers s o the breakfast is als o bo ught fr o m these places o nly (Q . 15

A large number o f pe o ple believe that vegetarian f oo d is en o ugh t o acc o mplish all thenutrients w hich are present in egg o r meat (Q . 18 . S o ya is o ne o f the perfectco nstituent t o reali e the pr o tein diet o ne sh o uld have in their daily diet.

In any nuclear family it s the responsibility of home maker i .e . ife or mother to

take care of nutritional re uirement of their husband and children . It is onething that they ne er e er ould not like to compromise . But ery fe optionsa ailable in market to cater this need .

Findingy Out o f the t o tal number o f pe o ple surveyed ie. 40 cl o se t o 50% have breakfast

daily.

y Mo st o f the pe o ple skip breakfast due t o lack o f time.

y C lo se t o 70% resp o ndents are n o t w illing to spend m o re than Rs25 o n a breakfast.

y 80% o f the resp o ndents spend 5 -15 min o n preparing and eating the b reakfast daily.

y 80% resp o ndents primary expectati o n fr o m the breakfast is nutriti o n.

y Mo st preferred breakfast is sand w ich, fruits, eggs o r meat.

y 3 % o f the resp o ndents never have breakfast cereal.


18/40

y The m o st liked fact o r in the cereals available in the mark et is nutriti o n and the m o stunliked fact o r is c o st.

y 4% resp o ndents purchase cereals fr o m super market.

y Mo st resp o ndents prefer h o t milk o ver c o ld al o ng w ith cereals.

y 80% o f the resp o ndents wo uld buy breakfast cereals if they pr o vide all nutrients ineggs o r meat.

Product Advantage

The survey clearly specifies the fact o rs w hich hampers the sale o f cereals and irregular breakfast habits. They are taste, c o st and lack o f time in the m o rning. e have very w elltaken care o f taste and c o st o f o ur pr o duct. A s far as lack o f time is c o ncerned campaign

wo uld made pe o ple a w are h ow quick this breakfast can be. A ne w feature that wo uld beintr o duced fr o m this pr o duct that crispness o f So yaflakes w hen taken w ith ho t milk. Thenutritio nal need is w ell taken care w it h specified pr o ducts w ith specific targets. Our distributi o n net wo rk sh o uld be str o ng en o ugh t o reach all the retailers and super marketsbecause m o st o f co nsumers buy cereals fr o m such places. ow adays pe o ple are gettinga w are ab o ut essentiality and nutri ti o nal capabilities o f vegetarian f oo d and it is a o penS o ya is o ne the vegetarian f oo d reach in pr o tein c o ntent.


19/40

Kellogg in India

C om p any ProfileKello gg Co mpany Kell o gg is an American multinati o nal pr o ducer o f breakfast f oo ds,snack f oo ds, c oo kies, and crackers. The c o mpany als o manufactures and marketsready-t o -eat cereals and c o nvenience f oo ds such as t o aster pastries, cereal bars, fruitsnacks, fr oz en w affles and veggie f oo ds. Kell o gg manufactures and sells its pr o ducts in18 and 180 c o untries respectively.

B u ine Stati ticW ith pr o jected annual sales o f o ver S billio n, Kello gg Co mpany, SA, is the wo rldsleading pr o ducer o f cereal and c o nvenience f oo ds. F o unded and head quartered inBattle C reek, Michigan, Kell o gg.

Co mpany manufactures pr o ducts in 1 c o untries and markets pr o ducts in m o re than 1 0co untries ar o und the wo rld. Kello gg India is a 100 per cent subsidiary o f Kello ggsCo mpany, SA, and is the largest player in the Indian breakfast cereal market. Kell o ggIndia has o ver 100 empl o yees and has invested o ver S 30 milli o n.

C om p any Strategy

Kellogs

Manufactureproducts in

more than 19countries

Marketsproducts in

more than 160countries

Kellogg's Indialargest producer

of breakfastcereals

Kellogg's India -more than 100employees and

has investedover US$30

million

Sameness at the table, whether it s the breakfast table or the table of ideas, doesn t create interest or capture the prolonged attention of consumers .


20/40

Ke llogg be lieves in Divers ity, and hence has a number of pr oduc ts in the marke t. Ke llogg has re ta ined the same , s imp le s tra tegy in recen t years . h is s tra tegy inc ludes three areas of focus for the company .

Pr obl e m s fa ce d b y K e ll oggWhen Ke llogg Co mpany en tered Ind ia , the per cap ita consump tion of break f as t cerea ls was a low 2 gm per annum aga ins t 5 kg per annum g loba lly. he Ind ian ready- to -ea t-cerea l marke t, clear ly, posed severa l cha llenges .

Ke llogg Ind ia has been s tead ily overc om ing these and has con tr ibu ted to the rap id gr owth of the break f as t cerea l marke t in the coun try. ver time Ke llogg Ind ia has widened its pr oduc t po r tfolio and expanded its range to inc lude r os ties , ch ocola te-flav oured sc oo ps and tas te var ian ts of Co rn lakes . Ke llogg Ind ia a ls o adap ted its pr oduc ts to address the loca l need gaps .

o r examp le it enhanced its focus on ir on and ca lc ium for tifica tion with pr oduc ts like Ir on S hak ti (mean ing ir on power ) and Ca lcium Shak ti.

O verall Strat erg y

d

ur sue Selec t edG rowth

O pportuniti es

Expand th e Snacks

bu siness

G row th e Ce real

Busin ess

Challeng esEasy availabilit y of

low-pri ce dtraditionalbr eakfa st

Cultural fa ctor s and eating habit s

e ow awar eness about pro cesse dfood s and calori e

req uir em ent s

f rice se nsiti ve custom e rs

The Produ ct wa s very diff e rent

(sw ee tl essg


21/40

E fficient u pp ly c ain networPrice sensitive cust o mers necessitated a c o nstant f o cus o n c o st reducti o n and supplychain efficiency enhancement in India. Kell o gg India has taken several initiatives in thisarea :

1. Lo calised the entire ra w and packing material requirement, saving imp o rt duty.2. In additi o n it has ad o pted single s o urcing strategy achieving scale efficiencies3. Lo cated its manufacturing plant at Tal o ja, near Mumbai in the state o f

Maharashtra, w hich is the largest market f o r breakfast cereals in the c o untrythereby o ptimising transp o rtatio n c o st

4. Set up a distributi o n net wo rk w ith st o rage hubs in all the key states o f the c o untry18 clearing and f o r w arding agents serving o ver 200 distribut o rs pr o viding a

goo d reach.

Kellogg India At a glance1. Largest player in the breakfast cereals market.2. 100 empl o yees, Investments o f o ver S 30 milli o n3. Fact o rs f o r success :

a. Inn o vative marketing and brand-building.b. Efficient supply chain net wo rk.c. C ust o mising pr o ducts f o r India.d. Str o ng supp o rt fr o m parent.

4. F o r Kello gg, India is : A so urce f o r managerial talent and an imp o rtant marketFuture plans, India : To co ntinue its investment drive t o gr ow the Indian breakfastcereal market


22/40

SWOT AN ALYSIS

Ke llogg is one of the wor ld's lead ing pr oducers of cerea l and conven ience foo ds , with $11 .8 b illion sa les in Y2007 . It off ers coo kies , crackers , to as ter pas tr ies , cerea l bars ,f r oz en wa ffles and mea t a lterna tives . he companys pr oduc ts are manu f ac tured in 18 coun tr ies and marke ted in mo re than 180 coun tr ies ar ound the wor ld . Ke llogg is the one of the mos t rec ogn izab le and trad itiona l brand in ready- to -ea t cerea l pr oduc t ca teg o ry.

igh brand rec ogn ition and wor ldwide large sca le opera tion pr ovide the company with an edge over its compe titors . ow ever , fluc tua tions in comm od ity pr ices and in tens if ying compe tition cou ld h inder the Ke llogg's revenue and marg in gr owth .

St r e ngt hs

a . igh brand rec ogn ition: Ke lloggs sugges t h igh qua lity, nu tr itiona l va lue ,va lue for money e tc Ke llogg off ers its pr oduc ts under a large po r tfolio of we llrec ogn ized brands So me top brands have even bec ome syn onym ous with the

ca teg o ry. Ke llogg en joys the bes t vis ib ility am ongs t its peers in the marke t.b . St r ong supp o r t f r om paren t company: Ke llogg Ind ia rece ives techn ology inpu ts (in cus tom is ing pr oduc ts to su it the Ind ian nu tr itiona l pr ofile , deve lop ing pack ing ma ter ia l for Ind ia , manu f ac tur ing pr ocess e tc .) f r om its paren t. With in the larger managemen t and s tra teg ic f rame wo rk, Ke llogg Ind ia has the flex ib ility to adap t its opera tiona l s tra tegy su ited to the loca l env ir onmen t.

Commodit y costfluctuation s

Int ense comp e tition

Emerging h ealthcon sc iou sness amongIndian sRising food se rvice sec tor

Custom ercon centration

h norgani sed Re tailMark e t

i igh brandrecognitionStrong support frompar ent

Str enght Weakn ess

ThreatO pportunit y


23/40

W ea ne e

a. C ust o mer c o ncentrati o n : uring FY2007, Kell o gg's t o p five cust o mersacc o unted f o r appr o ximately 32% o f its co ns o lidated net sales andappr o ximately 40% o f the S net sales. Particularly, Kell o gg largely dependso n big retail chains t o sell its pr o duct. Overdependence o n large retailcust o mers c o uld negatively impact the c o mpany's pr o fitability and v o lumegr ow th.

b. n o rganised Retail Mark et : In India, the retail market and specially the f oo dpr o cessing industry is by and large un o rganised. Maj o rity o f Indians buy their daily needs fr o m petty sh o pkeepers.

Opp ortunitie

a. Emerging health c o nsci o usness : Over the past fe w years, there has be en a

new

f o

und emphasiso

n healthier eating.Co

nsumers are show

ing increasedpreference f o r fat -free and healthy f oo d pr o ducts. F oo d items c o ntaining transfat are l o sing market share as they are linked t o cardi o vascular diseases.Rising health a w areness am o ng c o nsumers is leading t o a higher demand f o r low carb o hydrate and l ow cal o rie f oo ds wo rldw ide.

Also , rising c o nsumer inc o me had given them m o re buying p ow er and theycan aff o rd healthy f oo d even it c o sts slightly m o re. 'Light' and fat -freeversi o ns o f snacks and desserts have experienced str o ng gr ow th. It isestimated that ab o ut 40% o f co nsumers in the India are c o nsci o us o f apr o duct's cal o rie and carb o hydrate c o ntent. Kell o gg's ready -t o -eat cerealbrands are w ell po sitio ned t o meet the demands deve l o ping fr o m the gr ow inghealth and w ellness trends

As the literacy rate and inc o me o f the family is increasing in India, pe o ple arebec o ming m o re and m o re c o nsci o us ab o ut their health and nutriti o n. S o pe o ple are ready t o s w itch to healthier breakfast o pti o n. 78 % o f the men arebet w een 15 t o 4 age gr o up and 8 % o f them are literate w ith 87% o f themempl o yed. This makes the breakfast cereal business m o re attractive.

b. Rising f oo dservice sect o r : The t o tal f oo d market turn o ver in India has beenestimated at S 1 7.7 billi o n. It is the largest pr o ducer o f fruits, vegetables,milk, livest o ck in the wo rld and its agriculture and f oo d pr o duct exp o rts havebeen valued at S 10 billi o n. It is calculat ed that Indians spend ab o ut 50per cent o f their h o useh o ld expenditure o n f oo d items. And w ith mo redisp o sable inc o me in the hands o f Indian middle class, they buying p ow er isincreased tremend o usly.

reat

a. Co mmo dity co st fluctuati o ns : Kello gg depends o n c o mm o dities, such aso ats, grain, c o rn, w heat/fl o ur, egg/dairy pr o ducts, spices, sucr o ses w eeteners, fruit and nuts, packaging materials and glass b o ttles, w hich areused in its pr o ducts, and are subject t o price fluctuati o ns.


24/40

In January 2007, the S President pr o po sed t o increase the mandat o ryalternative fuel use fr o m 7.5 billi o n gall o ns in 200 t o 35 billio n gall o ns by2017. This trend t o use m o re alternative fuels increased the price o f a bushelo f co rn fr o m 1.8 in 2005 t o .7 in June 2008.

b. Intense c o mpetiti o n : Kello gg faces intense c o mpetiti o n acr o ss its pr o ductlines and als o in bo th d o mestic and internati o nal markets. S o me o f itsco mpetit o rs like Pepsi Co have substantial financial, marketing and o ther principal fact o rs o f co mpetiti o n include ne w pr o duct intr o ductio ns, pr o ductquality, taste, nutriti o nal value, price, and pr o mo tio n. The c o mpany's pr o ductshave t o co mpete w ith branded pr o ducts and private label pr o ducts, w hich aretypically distributed at l ow er prices.

Pepsi Co 's Quaker Oats, is perceived t o o ffer healthier and m o re nutriti o uscereals than Kell o gg. In India Kell o gg is facing huge c o mpetiti o n fr o m Mo hanMeakins. Pr o ducts o f Mo han Meakins are much cheaper than Kell o ggspr o ducts and are m o re readily available in the l o cal marke t. Middle classIndian wo uld prefer cheaper pr o ducts even if they are little less healthy. If Kello gg is n o t successful in intr o ducing ne w pr o ducts than its categ o ry shareand gr ow th can als o be adversely impacted.


25/40

S P (Mar et Segmentation, argeting andPo itioning)

SegmentationThere are three "levels" o f segmentati o n. Levels here refer t o the trade o ff bet w eenthe difficulty o f implementing a segmentati o n scheme and the benefits that result.

Since w e are launching o ur pr o duct o nly the metr o s initiall y, w e are taking int o co nsiderati o n o nly the urban p o pulati o n in the middle and upper inc o me gr o ups.

I. The first level o f segmentati o n inv o lves personal characteristics e.g.,dem o graphics. This is a fairly easy meth o d o f segmentati o n to empl o ybecause w e have a g oo d idea o f w ho is in each segment and w e can easilytarget these segments. India has a huge p o pulati o n o f 48 Millio n men inservice and 25 milli o n students. Indian females are 4 milli o n in number o uto f w hich ar o und 135 milli o n live in urban area s.

II. The sec o nd level is benefit desired that is, segmenting o n w hat s o me o new ants rather than w ho he o r she is. Indias 45 milli o n urban females in theage gr o up 25-50. They generally skip their breakfast w hile readying their kidsand husbands t o sch oo l and wo rk respectively. W e w ill pr o vide them ahealthy and handy breakfast.

III. The third level is segmentati o n based o n behaviour . Many y o ung and singleIndians are tired o f coo king the same o ld traditio nal breakfast again andagain. W e are pr o viding them w ith t asty, healthy and easy t o make breakfastin different flav o urs.

Targeting As w e have discussed earlier, o ur target w ill be Kids, single wo rking men and wo men

and h o use w ives o f metr o s. W e have t wo pr o ducts f o r this target market G ood morning Sunny Boy and Lady .

Our pr o mo tio n w ill target the h o use w ives o f metr o s w ho find it difficult to havebreakfast in the m o rning due t o time c o nstraint. India has 45 milli o n urban females inthe age gr o up 25-50. They generally skip their breakfast w hile readying their kid sand husbands t o sch oo l and wo rk respectively. G ood morning Lady w ill pr o vide thema healthy and handy breakfast.

Also , many o f the h o use w ives are w ary o f the children nutriti o nal intake. India has ahuge p o pulati o n o f 0 Millio n urban children bet w een t he age gr o up 5-15. G ood

morning Sunny Boy pr o vides them a quick and tasty breakfast.There are 28 milli o n urban male in age gr o up 20 -2 . 30% o f them are staying a w ayfr o m h o me and are single. They either skip their breakfast o r have s o mething w hichis n o t really healthy. W e are pr o viding them w ith tasty, healthy and easy t o makebreakfast in different flav o urs.


26/40

Po itioningEffective P o sitio ning is based o n:

Kello ggs G ood Morning Soya Products w ill po sitio n itself as a value f o r mo ney, o nethat is tasty, reliable, trust wo rthy and fun t o eat. Its appeal w ill be Healthy -tasty, funto eat.

W e w ill have three fundamental p o sitio ning themes

i. Benefit P o sitio ning : So ya Flakes pr o vides a great nutriti o nal value. S o ybeansare c o nsidered by s o me t o be a "c o mplete pr o tein" s o urce in that they pr o videall the essential amin o acids f o r human nutriti o n. A research states that : "25 grams of soy protein a day, as part of a diet lo in saturated fat andcholesterol, may reduce the risk of heart disease

Apart fr o m that o ne m o re benefit is that it is easy t o prepare and is less time

co nsuming.

ii. ser P o sitio ning : W e have p o sitio ned the user int o three gr o ups vi z . Kids,rban wo men, and single y o ung men.

iii. Co mpetitive P o sitio ning : Our s o ya pr o duct w ill be a ne w , n o n-c o nventi o nal,healthy and value f o r mo ney breakfast o ptio n.

S p q sta r ces f q ra r t

val u eC

v w

sistew

tv ver time

x s t y sim le

isti w ctive

EffectiveP v siti v w i w g


27/40

Th e Ma rk e t ing M ix

Pr oduc t

Good

orn i ng is De f atted S o ya lakes (to asted ) ob ta ined f r om So ya bean seeds by the pr ocess of crack ing , dehu lling , flak ing , ex trac ting , de-s olven tizing , to ge t a flakes with wh ite to cream ish colour .

on st itu e n ts So ya S ugar

Chocola te Syrup S a lt

Ir on Niac inam ide Vitam in CVitam in B6 Vitam in B1 Vitam in A Vitam in B12

olic Acid Vitam in D

Good orn i ng S unn y o y is the same comp os ition as ab ove . ow ever , it will be ava ilab le in following shapes

1 . S phere shapes-ch ocola te .2 . St ar shapes-ch ocola te .3 . ixture of both with S unn y o y shapes a ls o in it.

he shapes are dec ided keep ing ch ildren in m ind .

Good orn i ng La dy is s oya flakes for tified with Ca lcium , Ir on and Iod ine to f u lfil the needs of Ind ian woman . ther cons tituen ts are same as tha t of goo d mo rn ing .

here will be packag ing of the following two types:

1 . lakes-ch ocola te 2 . lakes-s tra wberry


28/40

The SKU s f o r all the three brands w ill be o f f o llow ing si z es :

1. 35 g all varieties except o ne w ith sunny b o y shapes2. 70 g all varieties3. 200 g all varieties

4. 500 g all varieties5. 1 kg all varieties

After so me time m o re flav o urs w ill be launched giving the c o nsumer m o re o ptio ns. Thethrust w ill be o n Indian flav o urs :

a. Mang o b. Co co nut Kesar c. R o se.

Price

C urrently, 55 % of the price of a packet of K ellogg s cereal is allocated tomarketing and profits , w hile 45 per cent is paid f o r all the ingredients, packaging,labo ur and capital c o sts ass o ciated w ith manufacturing and distributing the pr o duct.

Kello ggs uses this pricing strategy in all o f its markets, sh ow ing that the pricingstrategy is standardised.

How ever, l oo king at the c o ntinu o us l o ss o f market share t o Mo han Meakins, theco mpany has t o set the price level at par w ith that o f Mo huns.

Fo llow ing pricing is suggested based o n the existing prices o f Kello ggs, Mo huns and IndianCo nsumers expectati o n. It is als o taken int o acc o unt that the actual c o st o f pr o ductio n w illbe 0 - 5 % o f the price o f a packet o f G ood Morning .

Pack Si z es Sunny B o y Lady M o huns1. 35 g except the mixture Rs. 10 12 --2. 70 g all varieties Rs. 18 20 --


29/40

3. 200 g all varieties Rs. 28 31 304. 500 g all varieties Rs. 0 05. 1 kg all varieties Rs. 8 108 127

The Prices are decided t o target the cust o mers o f Mo han Meakins as w ell as the market thathas n o t been captured because o f price barrier. The strategy is t o f o cus o n economies of scale rather than larger profit margins .

K ellogg s gi es its istributors a margin of 5% and 12% to its retailers . Whereas, the competitors gi e a margin of 10 -15% to its distributors .

To incentivise the retailers, disc o unts o n v o lumes w ill be given t o make thempartners in the economies of scale strategy

Sc eme for retailer1. 10% margin f o r retailers in metr o s w here there is str o ng h o ld o f Mo han Meakins. On

sale o f every 15 kg o f S unny boy o r Lady the retailer w ill be given a kg o f any o neo ne o f them free.2. Markets w ill be divided in sect o rs. Retailer o r a gr o up o f retailers sh ow ing the highest

sale in any sect o r minimum 1000 kgs w ithin six m o nths w ill be given a h o lidaypackage wo rth Rs. 5,000.

3. Attractive credit schemes w ill be extended t o the retailers and distribut o rs.

Place

1. Initially the G ood Morning brand w ill be intr o duced in all the f o ur metr o s.

2. After having a g oo d loo k at the resp o nses o f co nsumers later it w ill be intr o duced ino ther parts o f India.

3. T o day KELLOGGs C ho co s cereal brand is available in 50,000 o utlets acr o ss theco untry. G ood Morning w ill make use o f this extensive net wo rk and even strengthen itw ith the PART ERSHIP schemes.

4. K ellogg should ha e manufacturing plants near all the metros It has just haveo ne plant in Tal o ja in Maharashtra and transp o rting o f breakfast cere als is n o t easy .

5. Thr o ugh Partnership Schemes, the distribut o rs and retailers w ill be enc o uraged t o keep the st o cks, reducing invent o ries w ith Kello ggs.


30/40

Promotion

SA E S P OMO T IONSmaller SKU Pack si z es o f 35 g and 75 g are designed t o target the f o l low ing types o f co nsumers :

Testers : w ho w ant t o test the pr o duct bef o re start buying; if they getsatisfied, larger pack si z es w ill be bo ught in repeat o rders.

Seld o m-ers : w ho do no t have breakfast regularly, and s o buy as andw hen required, but d o no t keep st o ck.Low -Budget-ers : w ho have l ow er budgets f o r breakfast and cann o t haveG ood Morning daily as breakfast.

Sc eme for etailer 10% margin f o r retailers in metr o s w here there is str o ng h o ld o f Mo han Meakins. On sale o f every 15 kg o f sunny b o y o r Lady the retailer w ill be given a kg o f respective variety free.Markets w ill be divided in sect o rs. Retailer o r a gr o up o f retailers sh ow ing the highest sale inany sect o r minimum 1000 kgs w ithin six m o nths w ill be given a h o liday package wo rth Rs.5,000.

Partner i p Sc emeealers and distribut o rs, w ho sh ow sales figures m o re than a set thresh o ld, w ill be made

PART ERS o f the G ood Morning campaign. A Partner w ill have f o llow ing benefits

C redit peri o d 50 % m o re than o ther retailers and distribut o rs.Annual Festival f o r all the Partners w ith their families w here the t o p threepartners w ill be rec o gnised and re w arded.Advertisement aids fr o m c o mpany t o increase sales in the Partners areas


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Aggre ive PricingThe prices o f Sunny Boy and Lady

have been set l ow er than M o han meakins. This w ill help in making inr o ads in theco mpetit o rs market share. M o reo ver, the traditi o nal price barrier that Kell o ggs hasbeen facing w ill also be breached.

ADVER T ISIN

Theme G oo d Mo rning ; It is clear fr o m the dem o graphic analysis and the sample survey thatIndians prefer traditi o nal breakfasts like parantha, pudi, idli, d o sa, sab z i -r o ti w hich areusually o ily, lacking in pr o per nutrients as w ell as very heavy. M o reo ver, there is als o asubstancial number that skip breakfast because o f price, time o r the eff o rt o f makingbreakfast o r lack o f goo d o ptio ns.

Theref o re, this campaign is f o cussed o n creating a areness am o ng the Indiansab o ut importance of a good breakfast .Basic theme :

Happy families fr o m vari o us w alks o f life w ill be sh ow n.Slo gan Say G oo d Mo rning t o yo urself o r Khud k o Goo d m o rning B o la?By having a healthy breakfast y o u can say g oo d m o rning t o yo urself.

Phase 1 : Teasers KHUD K O GOO D MORNING BOLA ? spread acr o ss all media

Phase 2 : Advertisements sh ow ing lead act o rs being asked w hether they said G oo d Mo rningto themselves t o day. And then, getting explained that they can say g oo d m o rning t o themselves by having a g oo d healthy breakfast.

Phase 3 : Lead act o rs having unhealt hy breakfast being pitied that they still cann o t say G oo dMo rning t o themselves.

Phase 4 : Intr o ducti o n o f G ood Morning as the w ay o f saying g oo d m o rning t o yo urself.

Theme SU NNY BOY : This brand is targeted at children in age bracket 5 -12 yrs. The masc o to f the brand w ill be sunny b o y cart oo n character and brand ambassad o r w ill be arsheelSafari.

The central idea w ill be to sh ow a b o y w ho has the masc o t friend. Thebo y is faced w ith expectati o ns and challenges and even then is al w ayssmiling and al w ays champi o n.Target m o thers : w ho w ant their kids t o be healthy & w inning al w aysTarget kids : w ho w ill start liking and ass o ciating w ith the brandambassad o r.


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MASC OT-S Y BOY Brand Ambassad o r

Theme Lady : This campaign w ill highlight the vari o us r o les that an Indian wo man plays, andhow she cares ab o ut the w ho le family. ow it is high time that she starts thinking ab o ut her health and starts saying GOO MOR I G t o herself.

Brand ambassad o r w ill be Preity inta, because she pers o nifies health -co nsci o us, a w are and resp o nsible Indian wo man.She w ill be sh ow n in vari o us r o les : wo rking wo men, student, y o ungmo ther and then saying I ensure that I say G oo d Mo rning t o myself everyday

Brand Ambassad o r- Lady

I IA W OMA

MA Y FAC ES MA Y ROLES

Yo u deserve G ood Morning Lady


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CHANN ELS - with ten ta tive spend ing percen tages

TELEVISION

65 %

N EWSPAPERS

20%

O ARDING S

10 %FM RADIO

5 %


34/40

Mar et Survey

1 W hat is y o ur age?

2W

hat is yo

ur gender?

3 W hat is y o ur o ccupati o n?

4 Yo u are living in a?

2

11

25

105

1015

202530

1-18 18 -23 24 -30 30+

28

11

0

5

10

15

20

25

30

Male Female

13

1

25

005

1015202530


35/40

5 How many times d o yo u have breakfast in a w eek?

W hy do n't yo u have breakfast daily?

7 W ho buys breakfast f o r yo u?

21

17

1 00

5

10

15

20

25

1311

9

19

0

5

10

15

20

ever 1 -3 ays 4 -6 ays aily

13

1

25

00

5

10

15

20

25

30

I o not haveenough time

I o not havegoo options

Breakfast isnot very

importantt

I o not haveenough time


36/40

8 W ho much are y o u w illing to spend o n yo ur breakfast per day per pers o n?

How much time d o yo u spend/ w illing to spend o n preparing and eating y o ur breakfast per day?

10 W hat is y o ur primary expectati o n fr o m a breakfast?

0

10

17

12

0

5

10

15

20

y ife y t er

yself t ers

6

24

8

10

5

10

15

20

25

30

upt Rs10 upt Rs25 upt Rs50 ab veRs50

5

17

14

3

0

24

6

8

10

12

14

16

18

upt 5 in

upt 10 in

upt 15 in

ab ve15 in


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11 W hich o f the f o llow ing is y o ur preferred ch o ice f o r breakfast?

12 H ow many times in a w eek d o yo u have c o rnflakes, muesli, o ats o r o ther breakfast cereals?

13 W hat d o u like in the breakfast cereals available in the market?

7

31

1 0

0

5101520253035

96

15

9

02468

101214

16

14

21

31

0

5

10

15

20

25

Never 1 -3 days 4 -6 days Dai ly


38/40

14 W hat d o u dislike in the breakfast cereals available in the market?

15W

here do

yo

u usually buy break fast cereal fr o

m?

1 Yo u eat y o ur breakfast cereal w ith?

29

813

005

101520253035

1215

8

002468

101214

16

25

85

2

0

5

10

15

20

25

30


39/40

17 Ideally h ow many servings sh o uld a packet o f Breakfast C ereal have?

18 W o uld yo u buy a 100% vegetarian Breakfast C ereal that has all nutrients present in an eggo r meat?

Findingy Out o f the t o tal number o f pe o ple surveyed ie. 3 cl o se t o 50% have breakfast

daily.y Mo st o f the pe o ple skip breakfast due t o lack o f time.

29

8

0 00

5

10

15

20

25

30

35

Hot milk Cold milk Cream Other

9

15

5

10

02468

1012

1416

1-2 5 -6 11 -12 19 -20

32

7

0

5

10

15

20

25

30

35

Yes o


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y C lo se t o 70% resp o ndents are n o t w illing to spend m o re than Rs25 o n a breakfast.y 80% o f the resp o ndents spend 5 -15 min o n preparing and eating the breakfast daily.y 80% resp o ndents primary expectati o n fr o m the breakfast is nutriti o n.y Mo st preferred breakfast is sand w ich, fruits, eggs o r meat.y 3 % o f the resp o ndents never have breakfast cereal.y The m o st liked fact o r in the cereals ava ilable in the market is nutriti o n and the m o st

unliked fact o r is c o st.y 4% resp o ndents purchase cereals fr o m super market.y Mo st resp o ndents prefer h o t milk o ver c o ld al o ng w ith cereals.y 80% o f the resp o ndents wo uld buy breakfast cereals if they pr o vide all nutrients in

eggs o r meat.

R eference

Documents

Final Report 3.0