Company 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 offerings of wheat flakes & basmati
rice flakes
• Had set up its 30th manufacturing facility in India, with total investment of
$30 million
 HISTORY OF KELLOGG’S IN INDIA
 In the 1990’s there was the desire by Kellogg’s to expand.

 Stagnating sales in the U.S strengthened this need.

 Set up its 30th manufacturing facility in India with a total investment of

$30million.

 Launched in September,1994, Kellogg’s initial offerings in India included

cornflakes,wheat flakes and Basmati rice flakes.
 FAILURE OF KELLOGGS IN THE INDIAN
MARKET
 Despite offering good quality products and being supported by the technical,managerial and
financial resources of its parent, Kellog’s products failed in the Indian market.

 Lack of understanding
 Market Research
 Premium product : unattainable for the average Indian consumer.
 Marketed wrongly as a Health Product
 Taste not suited to Indian breakfast habits
 REMEDIAL MEASURES
 In order to forge ahead,Kellogg decided to launch two of its highly
successful brands-Chocos(September,1996) and Frosties (April,1997) in
India.

 These brands were very successful and sales picked up significantly.

 The success of Chocos and Frosties led to the total indianisation of the
Company’s flavours.

 In future, it resulted in the launch of Kellogs biscuits in August,1998 in

three local flavors Mango Elaichi,Coconut Kesar and Rose after one year
extensive research to study consumer patterns in India.
Continue……
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 Kelloggs saw advertising as a vital tool in promoting its brand by indianising its
campaign instead of simply copying its international promotions.

 The rooster that was associated with the Kellogg brand worldwide was missing from
its advertisements in India.

 One of the adverts depicted a cross section of individuals from a yoga instructor to a
kathakali dancer attributing their morning energy and fitness to Kellogg.

 Kellogg saw distribution as an important area to look into to improve its market
penetration.In 1995,Kellogg had 30000 outlets which was increased to 40000 outlets
by 1998.
RESULTS
 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
Kellogg’s share had increased to 65 percent.
 Analyst claim Kellogg’s entry was responsible for this growth.
 The Company’s 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 the Rs3 and Rs.5
 Prices reduction

 Kellogg’s increase the retail packs of different sizes to cater the needs of

different consumers group

 Kellogg’s repositioned the product as tasty nutritious food

 products were not positioned in premium categories

 Indianising the products

 Free samples in schools and to housewives