Download - Final Kellog's Ppt
Presentation
on
Kellogg’s Indian Experience
Presented to- Presented by- Col. N.R.Vaid Vishal
FOSTIIMA Business School
OVERVIEW
• FOUNDED :1906
• Country : U.S.
• Had manufacturing facilities in 19 countries
• Marketed its product in more than 160 countries.
• Turnover in 1990-00 was $7billion.
• Launched in 1994 in India with initial offerings of wheat
flakes & basmati rice flakes
• Had set up its 30th manufacturing facility in India, with
total investment of $30 million
A Failed Launch
• In April 1995, KELLOGS received unsettling
reports of gradual drops in sales from its
distributors
• 25% decline in countrywide sales.
KELLOGS product failed in Indian market even after -:
• Offerings good quality products, supported by
technical, managerial & financial resources
• High profile launch backed by hectic media
activity
Reasons for failure
• Positioning – positioned it as health product
• Over confidence and ignorance of cultural
aspects
• Non understanding of Indian consumer
behavior and habits
• Premium Pricing policy
• Banked heavily on crispy flakes
Setting Things Right
KELLOGS
CO’s hoped to repeat the global success of these brands in the
Indian markets
Both products had sugar frosting on individual flakes
CHOCOS & FROSTIES were totally spread in Indian flavors
“NOW IT WAS REPORTED THAT INDIAN CONSUMERS
WERE CONSUMING THE PRODUCT AS SNACKS”
CHOCOS (1996)
FROSTIES(1997)
KELLOGS MAZZAA crunchy, almond shaped corn breakfast cereals, in august 1998
Mango Elaichi Coconut
kesar
Rose
Focus on customers
Mazza was positioned as a tasty , nutritional breakfast cereals for families.
Kelloggs was careful not to repeat its earlier mistakes. It did not position MAZZA in the premium segment
MAJOR STEPS TAKEN TO ACHIEVE SUCCESS
Prices reduction
Kellogg’s increase the retail packs of different sizes to cater the
needs of different consumers group
Kellogg’s repositioned the product as tasty nutritious food
products were not positioned in premium categories
Indianising the products
Free samples in schools and to housewives
RESULTS
• In 1995, kelloggs had a share of the Rs 150 mn breakfast cereals market, which had been growing at 4-5%p.a.
• The market size was Rs 600mn in 2000, & kelloggs share had increased to 65%.
• The co’s improved prospects were clearly attributed to the shift in :
1. POSITIONING 2. PROMOTIONS 3. ENHANCED MEDIA BUDGET
• In 2000, it launched many new brands including
Crispix banana, Crispix chocos, Froot loops, Cocoa
frosties, Honey crunch.
• ‘Krispies Treat’ an instant snacks targeted at children.
Priced on the lower side at Rs 3 & Rs 5, the product
was positioned to compete against the products in the
‘impulse snacks’ category.
KELLOGGS SOURCES however revealed that
the co’s was in India with long-term plans &
was not focusing on profits in the initial
stages. In Mexico the co’s had to wait for
two decades & In France nine years, before
it could significantly influence local palates.
Learning from the case
• Market study is must before you enter any market
• Don’t underestimate local competitors
• Remember that square pegs don’t fit into round holes
• Cultural difference must be addressed
• Over confidence leads to failure
• For succeeding in country like India company has to
Indianise its strategy