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Kelloggs
Kellogg's initially failed in India with the launch of Corn Flakes in 1994 due to lack of cultural understanding and product localization. However, they learned from their mistakes by conducting extensive market research, Indianizing their products through new flavors and packaging, improving distribution, and educating consumers. Kellogg's is now the market leader in the cereal category in India with constant innovation and adaptation to the local market. They plan to further localize their oats range by launching new Indian flavors to drive growth. However, experts note that localized variants may not be the main growth driver for the category long-term.
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Kelloggs
- 3. India anopportunity 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
- 4. Cereal basedbreakfast ??? 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
- 5. Promising earlysales 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.
- 6. Strength Opportunities • Addressing Consumer Needs • Trend setter • Product range • Changing Lifestyle • Product Innovation • Untapped new • Adaptability & market Flexibility
- 7. „Multinational corporationsmust 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
- 8. 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
- 9. The initial failuredid not deter the breakfast food giant. But a Re Look at Product Mix Re positioning Adaptations Revised Communication Strategies Promotional Strategies
- 10. Introduced newvariants 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.
- 11. New positioningFun & 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
- 12. 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
- 14. 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
- 15. The newcampaign „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‟
- 16. Karisma Kapurto 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
- 17. „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 Kellogg's All Bran TVC is based on a very real insight that women relate with instantly- when your digestive system is not working smoothly you might feel irritable. It was this simple thought that we brought to life in the commercial. A mundane request from the husband seems like a huge task for her and results in irritation which is depicted as a silent scream.
- 18. 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
- 19. Entry toIndian 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
- 20. Maintain thecontinuous 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
- 21. 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
- 22. Kellogg India totake 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 PepsiCo Expert Say "The breakfast cereal category works more for consumers with global palettes... so whether localized variants will be a growth driver for this category will depend on how consumption patterns evolve.”
Editor's Notes
- #9 Mistook India for one, single, homogenous market, when in reality it is an amalgam of several regional markets with local preferences and tastes.* Overestimated the amount of premium customers were willing to pay for quality and the foreign tag.
- #21 Distribution Network so that itact as barrier to any new entrant.
- #22 Distribution Network so that itact as barrier to any new entrant.