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8/9/2019 Kellogs Private
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8/9/2019 Kellogs Private
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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 offeringsof wheat flakes & basmati rice flakes
Had set up its 30th manufacturing facility in
India, with total investment of $30 million
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A Failed Launch
In April 1995, KELLOGS received unsettlingreports 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
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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
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Setting Things Right
KELLOGS
CHOCOS (1996) FROSTIES(1997)
COs 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 inIndian flavors
NOW IT WAS REPORTED THAT INDIAN
CONSUMERS
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A crunchy, almond shaped
corn breakfast cereals, in
august 1998
Mazza was positioned as a tasty ,
nutritional breakfast cereals for
families.
Focus on
customers
KELLOGS MAZZA
Kelloggs was careful not to repeat its earlier mistakes. It did not position
MAZZA in the premium segment
Mango
ElaichiCoconut
kesar
Rose
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MAJOR STEPS TAKEN TO ACHIEVE SUCCESS
Prices reduction
Kelloggs increase the retail packs of different
sizes to cater the needs of different consumers
group
Kelloggs repositioned the product as tasty
nutritious food
products were not positioned in premium
categories
Indianising the products
Free samples in schools and to housewives
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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 cos improved prospects were clearly
attributed to the shift
in
1.POSITIONING
2. PROMOTIONS
3. ENHANCED MEDIA BUDGET
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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
theimpulse snacks category
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KELLOGGS SOURCES however revealed that the
cos was in India with long-term plans & wasnot focusing on profits in the initial stages. In
Mexico the cos had to wait for two decades &
In France nine years, before it could
significantly influence local palates.
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Learning from the case
Market study is must before you enter any
market
Dont underestimate local competitors
Remember that square pegs dont fit into
round holesCultural difference must be addressed
Over confidence leads to failure
For succeeding in country like India company
has to Indianise its
strategy
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Bagged
Value-
KELLOGG
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Bagged Value-
Priced Cereal
CapnCrunch
Snack Bars
Rice Cakes
Oatmeal
Cereal Bars
FruitCereal Bars
Capn Crunch
Quaker Oats
General Foods
Honey Nut
ShreddedCranberry
Almond Crunch
Honey Nut
Cheerios
Private Label