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Kellogg's in India
Kellogg's in India
- A Case Study
• Launched in 1994 in India with initial offerings of wheat flakes & basmati
rice flakes
• Kellogg India’s main products in India includes now Corn flakes, Chocos,
Special K and the single-serve KPak, in addition to muesli and the recently
launched oats
•Kellogg claims it has now tailored the product to suit the Indian palate,
• The breakfast cereal market is estimated at close to Rs 400 crore in India with
• It has tried to segregate the category into corn flakes as an all-family breakfast
option :
• Similar to most other packaged foods, Kellogg’s too is betting heavily on small
packs at Rs 10 to gain volumes, generate trials and increase category penetration.
INITIAL FAILURE OF KELLOGGS IN THE INDIAN
MARKET
• 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.
• Indians liked to boil their milk and consume it warm or lukewarm, they
also like to add sugar to their milk.
• The rice and wheat versions did not do well because sugar could not easily
dissolve in cold milk which made it not sweet enough for the Indians.
MAIN REASONS FOR ITS FAILURE
• Insufficient Market Research
• The second mistake it made in the Indian market was its positioning front.Its
advertisements and promotions focused initially on the health aspects of the
product which was a fundamental departure from the successful ‘fun and taste’
positioning adopted in the United States.
• In most third world countries pricing is believed to play a dominant role.
• At an average cost of Rs21 per 100gm,Kellogg products were clearly priced way
above the product of its main competitor, Mohun Cornflakes(Rs16.50 for 100gm).
• This gave Kellogg a premium image and unattainable for the average Indian
consumer.
Contd.
• Due to the premium pricing problem faced by Kellogg's, it tried a dollar to a
rupee pricing for its products, still it could not attract the mass consumer.
• Even those consumers at the higher end of the market failed to perceive any
extra benefits in Kellogg’s products.
• A Business Today report said that like other Multinational Companies,
Kellogg had fallen into a price trap by assuming that there was substantial
“latent niche market” in India for premium products.
• Kellogg's was able to reduce prices by reducing its cost of production. For example
Mazza was not positioned in the premium segment.
Contd.
• Kellogg's saw advertising as a vital tool in promoting its brand .
• Kellogg’s increase the retail packs of different sizes to cater the needs of