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The Kellog's India Story

Published in: Business
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  1. 1.  India an opportunity land Newly opened economy for the West Attractive huge population base, over 950 million inhabitants New, unexplored, untapped market Invested 65 million INR initially Launched iconic brand Corn Flakes as the first offering in 1994 Had a 53% market share on the 150 million INR Indian market Cereal breakfast segment was growing at 4-5% annually
  2. 2.  Cereal based breakfast ??? a new concept for Indians Major investment in Consumer Education or Learning Traditional, deep rooted breakfast habits Indians are used to hot/lukewarm servings Corn Flakes in hot/warm milk tend to be soggy OR
  3. 3.  Promising early sales turned out to be one-off novelty purchases Product was too expensive (33% more pricy) Unwillingness to bow down on price pressures More product launches despite low pick up. Lack of market research before launch Too Bad Indianization of products- Mazza  Mango elaichi, Coconut, Rose etc.
  4. 4. Strength Opportunities• Addressing Consumer Needs • Trend setter• Product range • Changing Lifestyle• Product Innovation • Untapped new• Adaptability & market Flexibility
  5. 5.  „Multinational corporations must not start with the assumption that India is a barren field,‟ C K Prahalad „It was just clumsy cultural homework,‟ Titoo Ahluwalia, Chairman ORG MARG „You cannot change the taste buds that were developed more than a thousand years ago,‟ Wahid Berenjian, MD, US Pizza „The society is much stronger than any company or product‟ Wahid Berenjian, MD, US Pizza
  6. 6.  High Prices  Probably overestimated the amount of premium that customers were willing to pay for quality and the foreign tag. Lack of Optimized or Indianized flavors Mistook India for one, single, homogenous market Underestimated the efforts they would have to put in to create a strong distribution and retail chain. Kellogg‟s was blinded by numbers, it saw the huge population of India but purchasing power parity is not the same. Corn Flakes seems like a long haul product. Involves new habit creation and consumer learning
  7. 7. The initial failure did not deter the breakfastfood giant. But a Re Look at Product Mix Re positioning Adaptations Revised Communication Strategies Promotional Strategies
  8. 8.  Introduced new variants from its vast product line of the West, to make up for the bad performance of the star brand – Corn Flakes Entered aligned food category to make up for the loss in the Corn Flakes segment  Introduced energy bars, biscuits etc. Launched special products for strategic segmentation of the consumers owing to the better understanding of the Indian Consumer  E.g. Chocos for kids, K special for women, All Bran for mid aged women etc.
  9. 9.  New positioning Fun & Taste & Health Indianized product names – e.g. Iron-Shakti  Generating familiarity with the masses  Touching upon general passion for scholastic excellence in India Launched different SKU‟s catering the varied Indian Consumers  Family pack  Smaller pack  One time use pack @ Rs.10/- Identified the nutritional need and launched products accordingly  Extra Iron Shakti  Special K diet for weight management  Chocos for kids in different shapes and styles, reassuring the fun element  All Bran Wheat Flakes for a fiber rich diet
  10. 10.  Catchy Phrases  “jaago jaise bhi, lo Kelloggs hi”  “Andar se khush , to bahar se khush”  “Shuruaat sahi to din sahi” Attributing to the daily energy of the whole family Focused initially on communicating the nutritional value Currently educating consumer about varied recipes Popular health conscious celebrity brand ambassador  Lara Dutta, Karisma Kapoor, Sakshi Tanwar Currently emphasizing more on convenience and fun
  11. 11.  Mass Advertisements – Nice array of TVC‟s aired on prime time.  Direct Promotions –  Consumer awareness campaigns  Reaching out to schools etc.  Discounts / Offers – Continuously used tool, introduced new range variants of product this way Exploiting the growing involvement of kids in purchasing behavior. Attractive Packaging Creation of mascots for variants, popular among Kids in the west
  12. 12.  The new campaign „Shuruaat Sahi Toh Din Sahi‟ Sakshi Tanwar to endorse, stereotyping the present day homemaker It brings forth the emotional payoff that a mother and wife may experience after having provided her family with a Kellogg‟s Corn Flake breakfast. The move comes along with the new positioning, which empowers every homemaker to customize Kellogg‟s Corn Flakes to suit her family‟s preferences and set them up for a great day. An attempt to bring an element of „Fun‟
  13. 13.  Karisma Kapur to endorse Kellogg‟s Chocos Rs 10 pack as the evening snack option Positions as a preferred option among mothers as a kid snack Highlights nourishment, taste and SMALL PACK It aims to drive differentiation, both functionally and economically An attempt to address a market research finding that Indians prefer it as Snacks
  14. 14.  „Happy Inside, Happy Outside‟ for women to play their many roles with ease, they need to feel good from the inside. targets Indian women between 35 to 40 years prone to digestive irregularity due to considerable impact of hormones, poor eating behavior, insufficient exercise, hectic lifestyle The Kelloggs All Bran TVC is based on a very real insight that women relate with instantly- when your digestive system is not working smoothly youmight feel irritable. It was this simple thought that we brought to life inthe commercial. A mundane request from the husband seems like ahuge task for her and results in irritation which is depicted as a silentscream.
  15. 15.  Brand Image: Quality, Variety, Distribution Customer based brand equity changed from „costly‟ to „Quality‟ Brand Identification: high; logo is well recalled by consumers High TOMA First mover advantage. Strongest brand recognition and advertising recollection of all the cereal manufacturers Kellogg‟s is the undisputed market leader in the particular segment
  16. 16.  Entry to Indian market was probably before time Early fall out did not deter the focus of Kellogg‟s team, fought back in the Indian market Improved the earlier mistakes by understanding Indian Consumer and growing needs Constantly used mass communication tools to enhance consumer learning Brand name synonymous with the category itself Need for convenience food rising and so is the revenue
  17. 17.  Maintain the continuous product innovation Enhance its distribution network Enormously growing category (20% CAGR)  Segment growth is owed partly to the efforts of Kellogg‟s Increased Health Consciousness and Awareness  Approach fitness centers and clinics for promotional activity E.g. Talwalkar‟s, Fitness One, VLCC etc. 2nd generation of consumers evolving  Should approach schools and educational Institutions for promotion  Should develop affinity to this consumer class
  18. 18.  To attract „KIDS‟ - the biggest influencer‟s -  Popularize various brand mascots in shopping malls and cinema commercials (max. attention)  Provide brand mascot merchandize for kids as freebies during festive season  Conduct promotional activity with mascots in theme parks and adventure parks This will engage consumers and also associate “fun” with the brand To attract Women / Home Makers  Encourage experimentation with the product  Associate with some cookery shows, chefs for special episodes E.g. Master Chef India, Sanjeev Kapoor This will also satisfy the variety seeking nature of the consumers Roll out some nutritious finger food snack item for Kids. Do market research to know the pulse of the consumer for product innovation
  19. 19. Kellogg India to take a second shot at localizing its India portfolio Set to launch pudina, tomato and garam masala for its oats range to take on Quaker oats from PepsiCoExpert Say "The breakfast cereal category works more for consumers with global palettes... so whetherlocalized variants will be a growth driver for this category will depend on how consumption patterns evolve.”