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TOPIC
Kelloggs Indian Experience

Introduction of Kelloggs
Kellogg's was founded as the Battle Creek Toasted Corn

Flake Company on February 19, 1906.

The company produced and marketed the hugely
successful Kellogg's Toasted Corn Flakes and was
renamed the Kellogg Company in 1922.
Kellogg Company was the worlds leading producer of
cereals and convenience foods inlcuding cookies,
crackers, cereal bars, and ice cream cones.
Kellogg Company had set up its 30 th manufacturing
facility in India, with a total investment of $30 million.
In 2012, Kellogg's became the world's second-largest
snack food company (after Pepsico) by acquiring the
Pringles potato crisps brand from Procter & Gamble for
$2.7 billion in a cash deal.

First Kelloggs Package

A FAILED LAUNCH
Kelloggs initial offerings in India included

cornflakes, wheat flakes and Basmati rice flakes

launched in september 1994.
According to analysis, out of every 100 packets
sold, only two were being bought byregular
customers; with the rest 98 being first-time buyers.
Converting these experimenters into regular buyers
had become a major problem for the company.
Meanwhile, negative media coverage regarding the
products increased, as more and more consumers
were reportedly rejecting the taste.
By September, 1995, sales had virtually sagnated.

THE MISTAKES
Kellogg realized that it was going to be tough to get

the Indian consumers to accept its products.

Kellogg banked heavily on the quality of its crispy
flakes. But pouring hot milk on the flakes made them
soggy.
Indians always boiled their milk unlike in the west and
it consumed it warm.
When Kellogg flakes put in hot milk, it was not sweet
enough because the sugar did not dissolve easily in
cold milk.
A major reason for Kelloggs failure was the fact that
the taste of its products did not suit Indian breakfast
habits.

Indian people did have breakfast, consumed milk,

biscuits, bread, butter, jam, and local food like

idlis, parathas etc.
The Companys advertisements and promotions
initially focused only on the health aspects of the
product.
Kellogg had moved away from its successful funand-taste positioning adopted in the US.
Another reason for the low demand was deemed
to be the premium pricing adopted by the
company.
Kellogg products were clearly priced way above
the product of its main competitor.
Kellogg had also decided to focus only on the
premium and middle-level retail stores.

SETTING THINGS RIGHT

Kellogg decided to launch two of its hoghly

successful brands Chocos in September 1996

and Frosties in April 1997 in India.
The success of Chocos and Frosties also led to
Kelloggs decision to focus on totally Indianising
its flavors in the future.
Tge decision to reduce prices seemed to be a step
in the right direction.
Kelloggs advertising had not been impressive in
the initial years. Apart from JAGO JAISE BHI, LO
KELLOGGS HI the brand had no long term
business lines.

In April 1997, Kellogg launched THE KELLOGG

BREAKFAST WEEK a community- oriented

initiative to generate awareness about the
importance of breakfast.
Kellogg also Increased its focus on promotions

that sought to include people to try their product

and targeted schools across the country.
The company also offered free pencil-boxes,

water bottels, and lunch boxes with every pack

Kelloggs also began working towards a better

postioning plank for its products.

THE RESULTS
In 1995, Kellogg had a 53% share of the Rs. 150

million breakfast cereal market.

Kellogg also launched Krispies Treat an instant
sanck targeted at children.
Priced on the lower side at Rs 3 and Rs 5, the
productwas positioned to compete against the
products in the impulse snacks category.
By 2000, the market size was Rs 600 million and
Kelloggs share had increased to 65%.

THANK YOU