Kellogg's (also Kellogg, Kellogg Company, and Kellogg's of Battle Creek) is an American multinational food manufacturing company headquartered in Battle Creek, Michigan, United States. Kellogg's produces cereal and convenience foods, including cookies, crackers, toaster pastries, cereal bars, fruit-flavoured snacks, frozen waffles, and vegetarian foods. The company's brands include Loops, Corn, Frosted Flakes, Rice Krispies, Special K,Cocoa Krispies, Keebler , Pringles, Pop-Tarts, Kashi, Cheez-It, Eggo, Nutri-Grain, Morningstar Farms, and many more. Kellogg's stated purpose is "Nourishing families so they can flourish and thrive."[3] Kellogg's products are manufactured in 18 countries and marketed in over 180 countries.[4] Kellogg's largest factory is at Trafford Park in Manchester, United Kingdom, which is also the location of its European headquarters.[5] Kellogg's holds a Royal Warrant from Queen Elizabeth II and the Prince of Wales.

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CASE STUDY ON SUCCUESSFUL GLORY AND CHARM OF
KELLOOGG’S CON FLAKES IN INDIA WITH SPECIFIC REFERENCE TO
INDIAN BREAKFAST CEREAL MARKET
Varun Kesavan, Research Scholar, Palakkad, Email Id –
varunkesavan@yahoo.com
INTRODUCTION
Kellogg's (also Kellogg, Kellogg Company, and Kellogg's of Battle Creek) is an
American multinational food manufacturing company headquartered in Battle Creek,
Michigan, United States. Kellogg's produces cereal and convenience foods, including
cookies, crackers, toaster pastries, cereal bars, fruit-flavoured snacks, frozen
waffles, and vegetarian foods. The company's brands include Loops, Corn, Frosted
Flakes, Rice Krispies, Special K,Cocoa Krispies, Keebler , Pringles, Pop-
Tarts, Kashi, Cheez-It, Eggo, Nutri-Grain, Morningstar Farms, and many more.
Kellogg's stated purpose is "Nourishing families so they can flourish and thrive."[3]
Kellogg's products are manufactured in 18 countries and marketed in over 180
countries.[4] Kellogg's largest factory is at Trafford Park in Manchester, United
Kingdom, which is also the location of its European headquarters.[5] Kellogg's holds
a Royal Warrant from Queen Elizabeth II and the Prince of Wales.
History
The accidental legacy of corn flakes goes back to the late 19th century, when a team
of Seventh-day Adventists began to develop new food to adhere to the diet
recommended by the church. Members of the group experimented with a number of
different grains, including wheat, oats, rice, barley, and corn. In 1894, Dr. John

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Harvey Kellogg, the superintendent of The Battle Creek Sanitarium in Michigan and
an Adventist, used these recipes as part of a strict vegetarian regimen for his
patients, which also included no alcohol, tobacco, or caffeine. The diet he imposed
consisted entirely of bland foods. A follower of Sylvester Graham, the inventor
of graham crackers and graham bread, Kellogg believed that spicy or sweet foods
would increase passions.[2]
This idea for corn flakes began by accident when Kellogg and his younger
brother, Will Keith Kellogg, left some cooked wheat to sit while they attended to
some pressing matters at the sanitarium. When they returned, they found that the
wheat had gone stale, but being on a strict budget, they decided to continue to
process it by forcing it through rollers, hoping to obtain long sheets of the dough. To
their surprise, what they found instead were flakes, which they toasted and served to
their patients. This event occurred on August 8, 1894, and a patent for "Flaked
Cereals and Process of Preparing Same" was filed on May 31, 1895, and issued on
April 14, 1896.
Kellogg's was founded as the Battle Creek Toasted Corn Flake Company on
February 19, 1906, by Will Keith Kellogg as an outgrowth of his work with his
brother John Harvey Kellogg at the Battle Creek Sanitarium following practices
based on the Seventh-day Adventist Church. The company produced and marketed
the hugely successful Kellogg's Toasted Corn Flakes and was renamed the Kellogg
Company in 1922.
In 1930, the Kellogg Company announced that most of its factories would shift
towards 30 hour work weeks, from the usual 40. W.K. Kellogg stated that he did this
so that an additional shift of workers would be employed in an effort to support
people through the depression era. This practice remained until World War II, and

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continued briefly after the war, although some departments and factories remained
locked into 30 hour work weeks until 1980.[6]
From 1969 to 1977, Kellogg's acquired various small businesses including Salad
Foods, Fearn International, Mrs. Smith's Pies, Eggo, and Pure Packed
Foods;[7]however, it was later criticized for not diversifying further like General
Mills and Quaker were. After under spending its competition in marketing and
product development, Kellogg's U.S. market share hit a low 36.7% in 1983. A
prominent Wall Street analyst called it "a fine company that's past its prime" and the
cereal market was being regarded as "mature". Such comments invigorated Kellogg
chairman William E. LaMothe to improve, which primarily involved approaching the
demographic of 80 million baby boomers rather than marketing children-oriented
cereals. In emphasizing cereal's convenience and nutritional value, Kellogg's helped
persuade U.S. consumers age 25 to 49 to eat 26% more cereal than people that age
ate five years prior. The U.S. ready-to-eat cereal market, worth $3.7 billion at retail in
1983, totalled $5.4 billion by 1988, and had expanded three times as fast as the
average grocery category. Kellogg's also introduced new products including Crispix,
Raisin Squares, and Nutri-Grain Biscuits and reached out internationally with Just
Right aimed at Australians and Genmai Flakes for Japan. During this time, the
company maintained success over its top competitors: General Mills, which largely
marketed children's cereals, and Post, which had difficulty in the adult cereal
market.[8]
In March 2001, Kellogg's made its largest acquisition, the Keebler Company. Over
the years, it has also gone on to acquire Morningstar Farms and Kashi divisions or
subsidiaries. Kellogg's also owns the Bear Naked, Natural Touch, Cheez-It, Murray,

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Austin cookies and crackers, Famous Amos, Gardenburger (acquired 2007), and
Plantation brands. Presently, Kellogg's is a member of the World Cocoa Foundation.
In 2012, Kellogg's became the world's second-largest snack food company
(after Pepsico) by acquiring the Pringles potato crisps brand from Procter &
Gamble for $2.7 billion in a cash deal.[9]
Cereal Success
Corn flakes and other new products turned Kellogg's into the world's leading cereal
manufacturer. Just as he did during his days at the sanitarium, Kellogg worked long
hours, often walking through his factories to watch operations. He had a sharp eye
for detail and always looked for ways to save money. He demanded hard work from
his employees, and some found him distant, even mean. Yet Kellogg paid better-
than-average wages for the time and would sometimes help relatives of workers
struck by illness or other misfortunes.
In 1932, W. K. Kellogg gave most of his California ranch to the University of
California. Today the ranch is part of the California State Polytechnic University and
features a large library devoted to Arabian horses, which Kellogg once raised.
By the 1920s, the man who feared he would always be poor was one of the
wealthiest business owners in the United States. He owned homes in Michigan and
Florida and he raised horses on a ranch in California. Although he spent more time
away from Battle Creek, he remained active in his company and the community.
In 1930, Kellogg used some of his fortune to start the W. K. Kellogg Foundation. A
personal tragedy led to the founding of what remains one of the largest charitable
organizations in the United States. Kellogg could not find good medical care for one
of his grandsons, who were badly injured in a fall. His foundation, Kellogg said,
would help families pay for the care of their injured and sick children. Soon after its
founding, the Kellogg Foundation enlarged its focus, contributing to a wide range of
charitable causes.

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Products of Kellogg’s Brand
NEW PRODUCTS

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INTRODUCTIONOF KELLOOGG’S CORN FLAKES IN INDIA
In 1994, three years after the barriers to international trade had opened in India;
Kellogg’s decided to invest more than US $30 million into launching its number one
brand, Corn Flakes.
When Kellogg Company entered India, the per capita consumption of breakfast
cereals was a low 2 gm per annum against 5 kg per annum globally. The Indian
ready-to-eat-cereal market, clearly, posed several challenges. The Indian sub-
continent found the whole concept of eating breakfast cereal a new one. Indeed, the
most common way to start the day in India was with a traditional regional breakfast.
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.
THE INITIAL FAILURE
With so much of global exposure, success and the well renowned value that the
company enjoyed in the world market, the question that stuck in the mind is what is
that that led to the initial failure in Indian market with its foray. India is a country that
has a history that comprises of traditional practices, that also includes the regular
and long followed eating habits. Kellogg’s believed that it is going to introduce the
new breakfast product, heavily on the quality of its crispy flakes. But pouring hot milk
on the flakes made them soggy. With this it was also failed in understanding the very
needs and taste of Indian consumer, perhaps the HOMEWORK done was not good
enough. Kellogg's failure was the fact that the taste of its products did not suit Indian
breakfast habits. Kellogg sources were however quick to assert that the company

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was not trying to change these habits; the idea was only to launch its products on the
health platform and make consumers see the benefit of this healthier alternative.
Another reason for the low demand was deemed to be the premium pricing adopted
by the company. The prices of its products were way too much than the nearest
competitors like the Mohan's Cornflakes.
THE FACTORS LEADING TO FAILURE OF KELLOOGG’S CORN
FLAKES IN INDIA
1. Cultural factors and eating habits – population not used to processed foods
Kellogg pitched itself as an alternative to the regularly consumed breakfast. The
Indian breakfast is heavy and there is a feeling of fullness at the end of an Indian
breakfast. What with oily Parantas, Puris and Dosas, the feeling of fullness is real
and not imagined. Kellogg’s Corn flake breakfast does not give that feeling of
fullness and that went against the grain of having a full breakfast. In short after
having a corn flake based breakfast the Indian consumers were still hungry. Also
Indians have spicy and hot food for breakfast. To ask them to eat the sweet tasting
and cold corn flake breakfast was too much of a sweet breakfast for the Indians to
digest.

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2. Easy availability of low-priced traditional breakfast
Indian breakfast is known for its variety. There can be 30 types of Dosas (there is a
restaurant in Hyderabad that offers 99 types of Dosas!) or Idlis, Parantas or other
types of native Indian breakfast items. Indians are used to a variety and one item
that is eaten will not be on offer for the next two or three weeks. Asking Indians to
have the same type of corn flake based breakfast was too much of a cultural change
for the Indians to accept.
3. Low awareness about processed foods
Low awareness about processed foods and Calorie requirements about various diet
plans to be followed from health prospective. Also Kellogg in its advertising
campaigns hinted that the Indian breakfast was not nutritious and that Indian
breakfast was not very good for health. This deeply hurt the sentiments of the home
maker. The home makers said to themselves “We have eaten and served the Indian
breakfast for decades and centuries. My family is doing fine”. Once the home
maker’s ego was hurt they psychologically turned themselves against the concept of
corn flake based breakfast.

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4. Price sensitive customers
Indian customers are very price sensitive. With Kellogg price a third more than its
nearest competitor it created an image of being a high class product and also
pushed it out of reach of just liberated Indian middle class. Considering all these
challenges, Kellogg India required to come up with a real brand equity and a
framework to convince Indian consumer to get out of from the long following
breakfast eating pattern and face to an entirely new range of products offered by the
company.

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THE SUCCESS AND REVISED STRATEGY OF KELLOOGG’S CORN
FLAKES AFTER ITS INITIAL FAILURE
Kellogg’s reduced the price of their products and began to offer a wider range of
product sizes to appeal to different customers. Individual packs were especially
popular. Messaging was also changed, to reposition the cereals as a fun choice
rather than just a nutritious one.
This approach may have been successful than the brand’s previous attempt to imply
that the traditional Indian breakfast was not nutritious – marketing messaging which
may have made the Indian housewife rather indignant. The products were no longer
positioned as premium products, in order to make them a regular rather than a one-
off buy.
The brand also localised its branding and advertising approach to make it more
acceptable. Gone was the familiar cockerel and advertising campaigns using local
faces such as a yoga instructor and Kathakali dancer attributing their vigour to a
Kellogg’s diet? Accompaniments such as curd and pistachio, which suited the local
palate, were suggested.

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Kellogg’s took the decision to localise its flavourings, and chose brand names to
appeal to the Indian public such as ‘shakti’ (‘power’) when selling products fortified
with iron. These days, cornflakes are offered with mango and banana puree to suit
local tastes.
Although the brand presently enjoys a colossal 70% market share, it now has to
defend from rivals the market it has created. Logistically Kellogg’s is well invested in
this territory. All raw materials, including packaging, are sourced in India, and the
main plant is located close to the largest market; all of which minimises costs.
Using a network of agents, the brand has established a distribution network including
storage facilities. Overheads are minimised by giving distributors large responsibility
for sales. In 2010 the market growth was at 20% but following a change in leadership
it is thought to be closer to 30%.
Kellogg’s remains significantly pricier than local rivals such as Bagrry’s, whose
website and logo are breathtakingly similar to Kellogg’s. Larger multinationals
including Dr Oetker and PepsiCo are also muscling in on the market. Kellogg’s India
is defending its market share by expanding its distribution network by 50%.
It’s arguable that only a massive brand like Kellogg’s was capable of cracking the
Indian market, given the amount of market creation and habit changing that was
required.

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What’s generally agreed is that Kellogg’s was too confident when it entered the
market and didn’t do enough research on local tastes and habits before plunging in.
Whilst the company has now turned its performance around, it has done so by trying
new things but above all by localising its offering and message to suit the market.
RECENT STUDY WHICH CONDUCTED BY KELLOOGG’S CORN
FLAKES STATES
In a bid to increase penetration of its cereals in the urban markets further, Kellogg’s
India is pushing its new campaign with brand ambassador Saina Nehwal and looking
to strengthen its position in the breakfast segment.
A study on Indian’s breakfast habits sponsored by Kellogg’s states that for 72 per
cent of Indians the breakfast is nutritionally inadequate. With its new campaign,
“Bade Sapno Ki Sahi Shuruat” #Feedingdreams the company is hoping to connect
fulfilling dreams with having grain-based breakfast and giving the right start to the
day.
According to industry estimates, the breakfast cereals category is over ₹ 800 crore
markets and is believed to be at an inflection point.

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QUESTIONS
1. What are the various challenges present for KELLOOG’S CORN FLAKES?
2. Which kind of technology can be adopted for KELLOOG’S CORN FLAKES in
near future?

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REFERENCES
1. http://www.translatemedia.com/translation-blog/how-kelloggs-failed-and-
then-won-in-india/
2. https://vaibhavgnnugupta.files.wordpress.com/2012/01/marketing_sem1_gr
oup11_kellogs_final1.pdf
3. http://www.kelloggs.com/en_US/product-search.pt-null.pc-true.html
4. http://www.thehindubusinessline.com/companies/kelloggs-launches-new-
campaign-to-push-breakfast-cereals/article7608421.ece
5. https://en.wikipedia.org/wiki/Kellogg%27s
6. https://en.wikipedia.org/wiki/Corn_flakes
7. http://www.referenceforbusiness.com/businesses/G-L/Kellogg-W-K.html

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