Kellogg’s • Founded by Will Keith Kellogg in Battle Creek, Michigan, in 1906 • Has manufacturing plants in 18 countries • Sells in more than 180 countries • Offers more than 50 different products worldwide • Total revenue $ 12.4 billion in 2010 • World’s leading producer of cereal and convenience foods
First coming in India • Launched in September 1994 • High profile launch • Excited media activity • Invested more than $30 million in India • Completely untapped market potential • Introduction of new trend with nutritional value in breakfast
A Failed Launch • 25% decline in countrywide sales since March 1995 • Consumers reportedly rejected the taste • Expensive product • Wrong evaluation of projection in market demand • Less than 5% buyers were regular customers
Reason of failure • Ignorance of cultural aspects • Lack of understanding of Indian consumer behavior and habits • Premium pricing policy • Low/scattered availability • Flawed positioning
The Re-Launch • Launch two of its highly successful brands – • Chocos(September 1996) • Frosties(April 1997) • Also launched Mazaa Series in August 1998
The Second Coming • Refocused on ‘Fun-&-taste’ Positioning. • Reduction in Price - brought down price per kg by 20%. • Different Sku’s – 500 gm family pack, Rs.10 pack of each variant. • Gave away free gifts with packs of chocos.eg. Glowing stickers with Rs. 10 pack of chocos.
1998 2000 2008 1996 1997 Frosties Chocos Rose Mango Elaichi Offered a new dimension to health with iron fortified cornflakes Low-fat breakfast option, targeted especially to women A crunchy, almond shaped corn breakfast cereals in three flavors namely Coconut Chocolate flavouredscoops Sugar frosting on individual flakes Iron Shakti K plus MAZZA Specifically targeted women, and their wish to loose weight Again focussed on the healthily eating but targeting mainly kids Mazza was positioned as a tasty , nutritional breakfast cereals for families. Fun n Health, Sweet, Kids Centric Products
The Marketing Mix • Indianised Taste • Launched much sweeter ‘Chocos’ and ‘Frosties’ brands & Mazaa Series with 3 flavours; Mango, Elaichi, Coconut Kesar • Launched Special K to target Women • Product • Price • Price per kg by 20% • 60 gmssku, apart from 500 gmssku • Glossy cardboard packaging was replaced by pouches which helped in reducing the price
The Marketing Mix • Unlike Metropolitan approach of 1995, used nationalized approach • Increased its stores by 33% from 30,000 in 1995 to 40,000 in 1998 • Place • Promotion • Positioned itself as ‘Fun and Taste’ Cereals • Majorly targeted kids with help of mascots • Launched Chocos Biscuit to improve brand awareness and brand recognition for Kellogg’s
Current Market Scenario • Kellogg’s has more than 65% percent of market share of Rs. 600+ crore morning cereals market, where the current market will more than double in next 4 years
CHI-SQUARE TEST • Hypothesis: • H0: Consumer wants all the benefits equally by consumption of cereal food. • H1: Consumer do not want all the benefits equally by consumption of cereal food . • This means all benefits are not equally asked for .In particular health and fitness is the most preferred one.
SUGGESTIONS FROM NON- USERS • If portrayed as more filling breakfast and Indianised, Kellogg can substantially increase its consumer base in India.
SUGGESTIONS FROM USERS Users clearly pointed out that taste is the most important driver to purchase cereals after nutritional value
INSIGHTS FROM RETAILERS • The retailers stocked many brand. • If the retailer had no stocks of Kellogg’s & Chocos he suggested some other brand
Lessons and Conclusion • The Habit Barrier • The Price Barrier • Advertising plays an important role