Kellogg’s
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Founded by Will Keith Kellogg in Battle Creek, Michigan, in 1906
Has manufacturing plants in 18 countries
Sells in more than 180 countries
Offers more than 50 different products worldwide
Total revenue $ 12.4 billion in 2010
World’s leading producer of cereal and convenience foods
First coming in India
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Launched in September 1994
High profile launch
Excited media activity
Invested more than $30 million in India
Completely untapped market potential
Introduction of new trend with nutritional value in breakfast
A Failed Launch
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25% decline in countrywide sales since March 1995
Consumers reportedly rejected the taste
Expensive product
Wrong evaluation of projection in market demand
Less than 5% buyers were regular customers
Reason of failure
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Ignorance of cultural aspects
Lack of understanding of Indian consumer behavior and habits
Premium pricing policy
Low/scattered availability
Flawed positioning
The Re-Launch
• Launch two of its highly successful brands –
– Chocos (September 1996)
– Frosties (April 1997)
• Also launched Mazaa Series in August 1998
The Second Coming
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Refocused on ‘Fun-&-taste’ Positioning.
Reduction in Price - brought down price per kg by 20%.
Different Sku’s – 500 gm family pack, Rs.10 pack of each variant.
Gave away free gifts with packs of chocos.
eg. Glowing stickers with Rs. 10 pack of chocos.
1996
1997
Chocos
Frosties
Chocolate
flavoured
scoops
Sugar
frosting on
individual
flakes
Fun n Health, Sweet, Kids
Centric Products
1998
2000
2008
MAZZA
Iron Shakti
K plus
Mango
A crunchy,
Elaichi
almond
shaped corn
breakfast
Coconut
cereals in
three flavors
namely
Rose
Mazza was positioned as a tasty ,
nutritional breakfast cereals for families.
Offered a
new
dimension
to health
with iron
fortified
cornflakes
Low-fat
breakfast
option,
targeted
especially to
women
Specifically targeted women,
and their wish to loose weight
Again focussed on the healthily
eating but targeting mainly kids
The Marketing Mix
Product
Price
• Indianised Taste
• Launched much sweeter
‘Chocos’ and ‘Frosties’ brands &
Mazaa Series with 3 flavours;
Mango, Elaichi, Coconut Kesar
• Launched Special K to target
Women
• Price per kg by 20%
• 60 gms sku, apart from 500 gms sku
• Glossy cardboard packaging was
replaced by pouches which helped in
reducing the price
The Marketing Mix
Place
Promotion
• Unlike Metropolitan approach
of 1995, used nationalized
approach
• Increased its stores by 33%
from 30,000 in 1995 to 40,000
in 1998
• Positioned itself as ‘Fun and Taste’
Cereals
• Majorly targeted kids with help of
mascots
• Launched Chocos Biscuit to improve
brand awareness and brand
recognition for Kellogg’s
Current Market Scenario
• Kellogg’s has more than 65% percent of market share of Rs. 600+ crore
morning cereals market, where the current market will more than double
in next 4 years
CHI-SQUARE TEST
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Hypothesis:
H0: Consumer wants all the benefits equally by consumption of cereal food.
H1: Consumer do not want all the benefits equally by consumption of cereal food .
This means all benefits are not equally asked for . In particular health and fitness is the most
preferred one.
SUGGESTIONS FROM NON- USERS
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If portrayed as
more filling
breakfast and
Indianised, Kellogg
can substantially
increase its
consumer base in
India.
SUGGESTIONS FROM USERS
Users clearly pointed
out that taste is the
most important driver
to purchase cereals
after nutritional value
ADVERTS: SOLE DRIVER FOR THE AWARENESS
OF A BRAND
INSIGHTS FROM RETAILERS
• The retailers stocked many brand.
• If the retailer had no stocks of Kellogg’s & Chocos he suggested some
other brand
SWOT
Strength
Weakness
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Kellogg’s flexibility and adaptability towards
consumer needs
Customization of products
History of changing food habits globally
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Opportunity
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Introduction of new trend with nutritional
value in breakfast
Changing work-life demanding processed
foods
Less competition
Scope for entering untapped markets
If even they liked taste, the product was too
expensive initially
failed to make a lasting impression
Product not adopted to the Indian taste or
Indian traditional food habit
Wrong evaluation of projection in market
demand.
Threats
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Cultural factors and eating habits
Population not used to processed foods
Easy availability of traditional breakfast
Blinded by the population figures of India
Low awareness about processed foods and
calorie requirements
Price sensitive customers
Lessons and Conclusion
• The Habit Barrier
• The Price Barrier
• Advertising plays an important role
Thank You