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An Indian Experience


Synopsis In 1994, three years after the barriers to international trade had opened in India, Kellogg’s decided to invest US $65 million into launching its number one brand, Corn Flakes. However, the Indian sub-continent found the whole concept of eating breakfast cereal a new one. While this meant that Kellogg’s had few direct competitors it also meant that the company had to promote not only its product, but also the very idea of eating breakfast cereal in the first place.


Synopsis Furthermore, the company’s attempts to ‘Indianite’ its range have been disastrous. Its Mazza-branded series of fusion cereals, with flavours such as mango, coconut and rose, failed to make a lasting impression. “the research founded that their only rivals are traditional Indian foods like idlis & vada’s.” - this statement was given by “Denis Avronsord” (M.D of Kellogg's India.)

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Kellogg`s India `S Kal In 1994

Industry analysis:

Industry analysis Kellogg's entered in India in 1994. Our only rivals are traditional Indian foods like idlis and vadas. products offered in India : corn flakes, wheat flakes, basmati rice flakes With 2008 sales of nearly $13 billion, Kellogg Company is the world’s leading producer of cereal and a leading producer of convenience foods, products include cookies, crackers, toaster pastries, cereal bars, frozen waffles, and meat alternatives.

Key points:

Key points 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 .

Swot analysis:

Swot analysis

Swot analysis:

Swot analysis STRENGTHS: Kellogg’s flexibility and adaptability towards consumer needs Customization of products History of changing food habits globally WEAKNESSES: If even they liked taste, the product was too expensive initially Initially product was not adopted to the Indian taste or Indian traditional food habit Wrong evaluation of projection in market demand.

Swot analysis:

Swot analysis OPPORTUNITIES: Introduction of new trend with nutritional value in breakfast Changing work-life demanding processed foods Less competition Scope for entering untapped markets THREATS: Cultural factors and eating habits – population not used to processed foods Blinded by the population figures of India Low awareness about processed foods and calorie requirements Price sensitive customers


MARKETING MIX New Product Concept Less variety Not Indianized Premium pricing Product segmentation More variety Indianized Penetration pricing 1995 1997 PRODUCT PRICE


MARKETING MIX Localized Ad campaign Nationalized Better advertising strategy 1995 1997 PLACE PROMOTION



Communication strategy:

Communication strategy Give away free gifts with packs of chocos. eg. Glowing stickers with Rs.10 pack of chocos.

Advertising strategy:

Advertising strategy ‘ Jaago Jaise Bhi, lo Kellogg’s hi’ Yoga instructor to kathakali dancer attributing their morning energy and fitness to Kellogg's Introduction of new cereals (Chocos, frosties etc.) forced to look at alternate product categories to make up for bad performance of breakfast cereals.

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Kelloggs Breakfast Week

Positioning :

Positioning A healthy, nutritious, convenient & easy - to - prepare alternative to traditional breakfast eating habits. Developing a taste for grain based foods in the morning. Different Sku’s – 500 gm family pack, Rs.10 pack of each variant. Worked on Better Positioning – Iron Shakti. Now positioned as ‘Fun-&-Taste-&-Health’.

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New positioning – level of iron & vitamin intake.

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Kelloggs Special K Diet – Women health.

Target market:

Target market Chocos launched in India in September 1996. Targeted at Kids with mascot monkey “Jose” Chocos were wheat scoops coated with chocolate.

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Launched 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.

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Market objectives and strategies Markets strategy are divided into six key segments to the Kellogg market, as shown: Tasty Start - the cereals that most people will eat to begin their day. Kellogg's brands include Kellogg's Corn Flakes and variations, such as Kellogg's Crunchy Nut. Simply Wholesome . These are 'good for you' brands, such as Kellogg's Fruit 'n' Fiber

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Shape Management . Brands that can enable customers to manage their weight or shape, such as Kellogg's Special K. Mum Approved . Those that mothers see as being good for their children, such as Kellogg's wheat flaks. Kid Preferred . The brands that children themselves prefer, such as Kellogg's Frosties, Kellogg's Chocó's and Honey Loops. Inner Health . These are the brands that help people with digestion, such as Kellogg's All-Bran and Kellogg's Heart to Heart Oats.

Results 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. Results for failure

Porter Five Force Model :

Porter Five Force Model


1995 – 53% market share of Rs. 150 million breakfast cereal market. 2000 – 65% market share of Rs. 600 million market. Improved prospects Shift in Positioning Increased consumer promotions Enhanced media budget Continued to have image of Premium brand. recommendation


In a nutshell we have seen that the main reasons for Kellogg's failure in India was the westernisation of its products and high prices. The indianisation of its products helped Kellogg's in penetrating the market. The reduction in prices also helped Kelloggs improve its standing in the market. conclusion

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