“Expanding a brand into a new market isnt just about translating the tagline. The bestExpandingto succeedinto a newlocal tastes way a brand is to study market isnt just about translating closely”. the tagline. The best way to succeed is to study local tastes closely
"Our only rivals are traditional Indian foods like idlis and vadas." - Denis Avronsart, Managing Director, Kellogg India.
Strong ConfidenceKellogg is a past master at the art, having fought and won against croissant-and-coffee in France, biscuits in Italy and noodles in Korea."
CHALLENGES FACED BY KELLOGG INDIA• Cultural factors and eating habits – population not used to processed foods• Easy availability of low-priced traditional breakfast• Low awareness about processed foods and calorie requirements• Price sensitive customers• Kellogg India has been steadily overcoming these and has contributed to the rapid growth of the breakfast cereal market in the country.
Cont..• Indians always boiled their milk unlike in the West and consumed it warm or lukewarm. They also liked to add sugar to their milk• Negative media coverage regarding the products increased and taste was not good.• The rice and wheat versions did not do well.• In fact, some consumers even referred to the rice flakes as rice corn flakes.
SEGMENTING• Launched in September 1994, Kelloggs initial offerings in India included cornflakes, wheat flakes and Basmati rice flakes• They first lunched their products in Mumbai
TARGETING• To caters the mass market but they only caters to the A-Class towns or the more affluent consumers.• Disappointed with the poor performance, Kellogg decided to launch two of its highly successful brands - Chocos (September 1996) and Frosties (April 1997) in India. • This resulted in the launch of the Mazza series in August 1998 - a crunchy, almond-shaped corn breakfast cereal in three local flavors - ‘Mango Elaichi, ‘Coconut Kesar and ‘Rose.
POSITIONING • The companys advertisements and promotions initially focused only on the health aspects of the product.• In doing this, Kellogg had moved away from its successful ‘fun-and-taste positioning adopted in the US.• Analysts commented that this positioning had given the brand a ‘health product image, instead of the fun/health plank that the product stood on in other markets.
PRODUCT MIX KelloggBISCUITS KELLOGGS SPECIAL K CORN FLAKES OATS ALLBRAN CHOCOS CINNAMON PECAN ALMOND & HONEY HEART TO HEART WHEAT GLUCOSE RED BERRIES REAL STRAWARRY RICECHOCOLATE CREAM ORIGINAL ORGINAL BADAM VANILLA ALMOND MANGO PISTA CRANBERRIES CASHEW FRUITS BLUEBERRY
Promotion• Kellogg also increased its focus on promotions that sought to induce people to try their product and targeted schools across the country for this. By mid-1995, the company had covered 60 schools in the metros.• In March 1996, the company offered specially designed 50 gm packs free to shoppers at select retail stores in Delhi.• This was followed by a house-to-house sampling exercise offering one-serving sachets to housewives in the city.• The company also offered free pencil-boxes, water bottles, and lunch boxes with every pack.• Plastic dispensers offering the product at discounted rates were also put up in petrol pumps, super markets, airports etc.
SUMMARY• 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
CONCLUSION• Kellogg’s failure in India was a cultural failure.• Kellogg’s business model was a recipe of disaster for Indian plates.• Company’s initial strategy of causing FOOD HABBIT changes did them a lot of damage.• Though business now showing some positive growth but it is steal far behind its global standards.• Kellogg’s has still not found any answer for its biggest competitor HOME COOKED FOOD.• Globalization may be an increasing trend, but regional identities, customs and tastes are distinct as ever.• “Think GLOBALY Act LOCALY”