Porter Five Forces Analysis On

Indi
a
Porter Five Force
Model
 Company Facts
Established in 1906 founded by Will Keith Kellogg
Products manufactured in 18 countries and marketed in
more than 180 countries around the world.
World's leading producer of cereal and a leading producer
of convenience foods, including cookies, crackers, Toaster
pastries, cereal bars, fruit-flavored snacks, frozen waffles,
and vegetarian foods.
Post liberalization, company entered India in 1994.
 Kellogg`s
India `S Kal
In 1994
Established Products
 Indian Experience
Our only rivals are traditional Indian foods like idlis and vadas."
- Denis Avronsart, Managing Director, Kellogg India.

Products offered in India Corn Flakes, Wheat flakes, Basmati rice

flakes.

April 1995, 25% decline in sales in comparison to last month.

Despite offering good quality products and being supported by the

technical, managerial and financial resources of its parent,
Kellogg's products failed in the Indian market.

High-profile launch backed by hectic media activity failed to make

an impact in the marketplace.
 Reasons for Failure
Over confidence and ignorance of cultural
aspects.
Lack of understanding of Indian consumer
behavior and habits.
Premium pricing policy.
Banked heavily on crispy flakes.
 Intensity of Competitive
Rivalry
Chocos launched in India in September 1996.

Targeted at Kids with mascot monkey Jose

Chocos were wheat scoops coated with chocolate.

Lauched Frosties in India April
1997.

Frosties had sugar frosting on

individual flakes

The success of these variants

took even Kellogg by surprise
and sales picked up significantly.

It was even reported that Indian

consumers were consuming the
products as snacks.
Followed by the launch of Chocos Breakfast Cereal
Biscuits.

The success of Chocos and Frosties also led to Kellogg's

decision to focus on totally indianising its flavors in the
future.

Honey loop being aggressively promoted in electronic

and print media
Sustained brand-building
through advertising and
investment behind key brands.
Introducing a limited edition
Kelloggs Chocos Spider Man 2
web designed cereal

Conducting school contact

programmes and having active
interface with opinion leaders
CFTRI, the government,
independent agencies etc.

Adopting brand names that

appeal to the Indian consumer
such as Shakti, meaning power

Using packaging as an
effective marketing tool, for
brand communication and on-
shelf differentiation
Total Indian Cereal Marke

Market of Rs.500
Crore

Various brands
available
 Threat Of The Substitute
Products/Brands
Pepsico`s Quacker oat
Mohan Meakins
Bagrry`s
Heinz Complan
Amway
Private labels by Retail chain
 The Threat Of The
Entry Of New
Competitors
Marico will tap cereals market with Saffola Oats very
shortly

Nestle India planning to launch Cornflakes in October

e Bargaining Power Of Custom
ensitivity

identification

ing to rival brands

ation available
The Bargaining Power Of
Suppliers
Localised the entire raw and packing material requirement

Located its manufacturing plant at Taloja, near which is

the largest market for breakfast cereals in the country
thereby optimising transportation cost

Set up a distribution network with storage hubs in all the

key states of the country (18 clearing and forwarding
agents) serving over 200 distributors providing a good reach

Optimising overheads by giving distributors larger

responsibility for sales bringing down the strength of its
internal sales force

Deploying Oracle 11i based ERP to enhance supply chain

transparency leading to lesser inventories and better
service levels.
Kellogg`s India `s Aaj in 20

Rs.400 crores comprises of

cornflakes market

Overall Market is growing at

20% annually

Holding 70% of market in a

500 crore Indian cereal
market
Questions
Please!!!
 Thank
You !!!
Presented by

Group Number One

Manika Kaushik
Nitin Bansal
Astha Mishra
Ashish Khullar
Divyanshu Mishra