Kellogs Private

8/9/2019 Kellogs Private

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OVERVIEW

FOUNDED :1906

Country : U.S.

Had manufacturing facilities in 19 countries

Marketed its product in more than 160

countries

Turnover in 1990-00 was $7billion.

Launched in 1994 in India with initial offeringsof wheat flakes & basmati rice flakes

Had set up its 30th manufacturing facility in

India, with total investment of $30 million


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A Failed Launch

In April 1995, KELLOGS received unsettlingreports of gradual drops in sales from its

distributors

25% decline in countrywide sales.

KELLOGS product failed in Indian market even

after -:

Offerings good quality products, supported by

technical, managerial & financial resources

High profile launch backed by hectic media

activity


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Reasons for failure

Positioning positioned it as health product

Over confidence and ignorance of cultural aspects

Non understanding of Indian consumer behavior and habits

Premium Pricing policy

Banked heavily on crispy flakes


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Setting Things Right

KELLOGS

CHOCOS (1996) FROSTIES(1997)

COs hoped to repeat the global success of these brands in the Indian markets

Both products had sugar frosting on individual

flakes

CHOCOS & FROSTIES were totally spread inIndian flavors

NOW IT WAS REPORTED THAT INDIAN

CONSUMERS


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A crunchy, almond shaped

corn breakfast cereals, in

august 1998

Mazza was positioned as a tasty ,

nutritional breakfast cereals for

families.

Focus on

customers

KELLOGS MAZZA

Kelloggs was careful not to repeat its earlier mistakes. It did not position

MAZZA in the premium segment

Mango

ElaichiCoconut

kesar

Rose


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MAJOR STEPS TAKEN TO ACHIEVE SUCCESS

Prices reduction

Kelloggs increase the retail packs of different

sizes to cater the needs of different consumers

group

Kelloggs repositioned the product as tasty

nutritious food

products were not positioned in premium

categories

Indianising the products

Free samples in schools and to housewives


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RESULTS

In 1995, kelloggs had a share of the Rs 150 mn

breakfast

cereals market, which had been growing at 4-

5%p.a

The market size was Rs 600mn in 2000, &

kelloggs share had

increased to 65%

The cos improved prospects were clearly

attributed to the shift

in

1.POSITIONING

2. PROMOTIONS

3. ENHANCED MEDIA BUDGET


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In 2000, it launched many new brands

including Crispix

banana, Crispix chocos, Froot loops, Cocoa

frosties,

Honey crunch

Krispies Treat an instant snacks targeted at

children.

Priced on the lower side at Rs 3 & Rs 5, the

product was

positioned to compete against the products in

theimpulse snacks category


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KELLOGGS SOURCES however revealed that the

cos was in India with long-term plans & wasnot focusing on profits in the initial stages. In

Mexico the cos had to wait for two decades &

In France nine years, before it could

significantly influence local palates.


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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 holesCultural difference must be addressed

Over confidence leads to failure

For succeeding in country like India company

has to Indianise its

strategy


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Bagged

Value-

KELLOGG


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Bagged Value-

Priced Cereal

CapnCrunch

Snack Bars

Rice Cakes

Oatmeal

Cereal Bars

FruitCereal Bars

Capn Crunch

Quaker Oats

General Foods

Honey Nut

ShreddedCranberry

Almond Crunch

Honey Nut

Cheerios

Private Label

Documents

Kellogs Private