Company Facts<br />Established in 1906 founded by Will Keith Kellogg<br />Products manufactured in 18 countries and marketed in more than 180 countries around the world.<br />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.<br />Post liberalization, company entered India in 1994.<br />
Indian Experience<br />Our only rivals are traditional Indian foods like idlis and vadas."<br />- Denis Avronsart, Managing Director, Kellogg India.<br />Products offered in India Corn Flakes, Wheat flakes, Basmati rice flakes.<br />April 1995, 25% decline in sales in comparison to last month.<br />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. <br />High-profile launch backed by hectic media activity failed to make an impact in the marketplace. <br />
Reasons for Failure<br />Over confidence and ignorance of cultural aspects.<br />Lack of understanding of Indian consumer behavior and habits. <br />Premium pricing policy.<br />Banked heavily on crispy flakes.<br />
Intensity of Competitive Rivalry<br /><ul><li>Chocos launched in India in September 1996.
Chocos were wheat scoops coated with chocolate.</li></li></ul><li><ul><li>LauchedFrosties 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.</li></li></ul><li><ul><li>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</li></li></ul><li><ul><li>Sustained brand-building through advertising and investment behind key brands.</li></ul>• Introducing a limited edition Kellogg’s Chocos Spider Man 2 “web designed cereal” <br />• Conducting school contact programmes and having active interface with opinion leaders – CFTRI, the government, independent agencies etc.<br />• Adopting brand names that appeal to the Indian consumer such as ‘Shakti’, meaning power<br />• Using packaging as an effective marketing tool, for brand communication and on-shelf differentiation<br />• Image building through recycling and reusing, improving access to health and human services in local communities<br />
Total Indian Cereal Market<br /><ul><li>Market of Rs.500 Crore
Various brands available </li></li></ul><li>Threat Of The Substitute Products/Brands<br /><ul><li>Pepsico`sQuacker oat
Private labels by Retail chain</li></li></ul><li>The Threat Of The Entry Of New Competitors<br />Marico will tap cereals market with Saffola Oats very shortly<br />Nestle India planning to launch Cornflakes in October<br />
The Bargaining Power Of Customers<br /><ul><li>Price sensitivity
Information available</li></li></ul><li>The Bargaining Power Of Suppliers<br /><ul><li>Localised the entire raw and packing material requirement</li></ul>• Located its manufacturing plant at Taloja, near which is the largest market for breakfast cereals in the country thereby optimising transportation cost<br />• 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<br />• Optimising overheads by giving distributors larger responsibility for sales bringing down the strength of its internal sales force<br />• Deploying Oracle 11i based ERP to enhance supply chain transparency leading to lesser inventories and better service levels. <br />
Kellogg`s India `s Aaj in 2010<br /><ul><li>Rs.400 crores comprises of cornflakes market