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On April 7th, 1860, Will Keith (W.K.) Kellogg was born. Born into a fairly poor family, he

never received an education beyond sixth grade. However that did not stop the huge impact

Kelloggs cereal later had on the breakfast industry.

It was in 1894 that Will and his brother, Dr. John Harvey Kellogg, accidentally created flaked

cereal whilst experimenting with shredded wheat cereal. It took until 1906 for Will toconvince his brother to set up a commercial cereal business. They initially called it 'The

Battle Creek Toasted Corn Flake Company', this was soon cut down to 'The Toasted Corn

Flake Company' and later simply 'Kellogg's'.

In 1906 Kelloggs cereal hit the market, at a time when American eating habits were

changing from more heavy fat laden foods to lighter more grain based Breakfasts. W.K.,

along with his brother, discovered that a better flake was produced by using only the corn grit

or the sweetheart of the corn. This is what inspired his first campaign of the same name.

To distinguish his product from the 42 other cereal companies in Battle Creek, Michigan,

W.K. placed his signature on each box and claimed they were the original, this still

continues to this day.

One of the reasons the company succeeded was because it believed the entire populace might

be interested in cereal foods, not just those on special diets. Also, it never settled and allowed

other companies to overtake them, it was constantly evolving to meet the needs of its

customers and this still continues to happen all these years later.

Kelloggs cereals were consumed around the globe with around 40% of the US ready-to-eat

market. Kelloggs had over 20 plants in 18 countries worldwide, with yearly sales reaching

above US $6 billion. However, Kelloggs was under pressure with competition from General

Mills and other close rivals. The cereal industry had been stagnant for over a decade and

Kelloggs looked beyond its traditional markets in Europe and United States.

Kelloggs decided that India is a suitable target for its cereal products. Kelloggs thought that

even if they can manage a two percent market share in India, they will have 18 million

consumers, a market larger than the US itself. However, we Indians were not too used to this

style of breakfast. So apart from marketing the product, Kelloggs had an extra challenge to

market this style of breakfast to Indians.

Initially, the sales figures were decent which indicated that the Indians are responding well.

However, it soon became apparent that many people had bought Corn Flakes as a one-off,

novelty purchase. Another big issue is its price, the product is too expensive for the Indian

middle-class. Meanwhile, Kelloggs didnt reduce the price and decided to launch otherproducts in India. Indian cereal buyers were introduced to Chocos, Rice Flakes, Wheat

Flakes, All Bran, Honey Flakes and few other line extensions where none of them have

managed to really succeed in a big scale.

Acknowledging its poor performance in India, Kelloggs decided to sell biscuits as a strategy

to establish its brand equity. Kelloggs biscuits are produced only in India and there are six

flavors Chocos, Glucose, Chocolate Cream, Badam, Pista and Cashew.

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Kelloggs tried to bring in new breakfast habits to Indians, but the price of the product still

restricts consumption to the urban consumers and affluent house-holds. Meanwhile Kelloggs

is trying hard to establish the companys brand equity in the market. So it is to be seen if

Kelloggs experiments(like moving into snack food ) to strengthen its brand equity will be

fruitful or not.

Lessons from Kelloggs

y Do your homework. Why did Kelloggs cereals have a tough ride inIndia? It was justclumsy cultural homework, says Titoo Ahluwalia, chairman of market research company

ORG MARG in Bombay.

y Dont underestimate local competitors. Although Indian brands were worried they wouldstruggle against a new wave of foreign competition following the market opening of 1991,

they were wrong. Multinational corporations must not start with the assumption thatIndia is

a barren field, said C K Prahalad, business professor at theUniversity of Michigan, in a

Business Week article. The trick is not to be too big.

y Remember that square pegs dont fit into round holes. When Kelloggs first launched CornFlakes in India it was essentially launching a Western product attempting to appeal to

Indian tastes. Globalization may be an increasing trend, but regional identities, customs and

tastes are as distinct as ever. It may be easy for brand managers of global brands to view the

world as homogenous, where consumer demands are all the same, but the reality is rather

different. There is a bigger opportunity in localizing your offerings and the smarter

companies are realizing this, says Ramanujan Sridhar, chief executive officer at Indian

marketing and advertising consultancy firm Brand Comm.

y Dont try and make consumers strangers to their culture. The rules are very clear, saysWahid Berenjian, the managing director for US Pizza (which has successfully launched a

range of pizzas with Indian toppings) in an article for the Hindu newspaper, Business Line.

You can alienate me a bit from my culture, but you cannot make me a stranger to my

culture. The society is much stronger than any company or product. Brands who want to

succeed in India and other culturally distinct markets need to remember this.