1

HOW CAN KELLOGG DO BETTER IN

INDIA?
WHAT WERE THE MISTAKES MADE?

Submitted by
Divya Ogoti
FT163020
Section B

TABLE OF CONTENTS
Introduction.......................................................................................................................... 3
Kelloggs In INDIA................................................................................................................ 3
Market Response................................................................................................................. 3
5 Mistakes of Kelloggs India............................................................................................. 3
Things that Kelloggs India did rightly.............................................................................4
Recommendations............................................................................................................... 6
REFERENCES......................................................................................................................... 7

INTRODUCTION
Kelloggs had a humble beginning in year 1906. This Battle Creek, Michigan
multinational food based company has grown by leaps and bounds over the years.
Kelloggs has manufacturing unit in 35 countries and has a market presence in 180
countries across the globe. Its name has become synonym with breakfast. Kelloggs
mission is to convey the importance of breakfast to customers and offer them a
gamut of varieties which are healthy as well as sumptuous. Kelloggs seems to have
been successful so far in achieving their mission.

KELLOGGS IN INDIA
In 1994, after India opened her gates for international trade, Kelloggs invested
$65millions in introducing Indians to the world of cereal breakfast.Indian market
looked very lucrative and Kellogs felt it was a right step to do something about its
stagnant growth in USA and UK.It was also facing heavy competition from General
Mills (Cheerios brand).Therefore Kelloggs strategically decided to geographically
diversify and choose India as its new market. However the things were not as rosy
as they looked and Kelloggs had to pay a hefty price for their unpreparedness.

MARKET RESPONSE
The initial response looked promising but then the sales figures tapered. Initially
people bought corn flakes out of curiosity to try something new. This can be
attributed to variety and novelty seeking behavior of customers.In april,1995 the
sales declined by 25% with respect to previous month.Inspite of having a quality
product, technical and managerial expertise and support from the parent company,
the sales numbers looked very disappointing. High profile launch, strong media
activities failed to make an impact in Indian market.

5 MISTAKES OF KELLOGGS INDIA

1. Poorly done homework: They failed to grasp the gravity of fact that Indians
were very new to the concept of cereal breakfast. Indians have gamut of traditional
varieties to choose from for their breakfast. Also, Idli, parathas, dosas etc.are
stomach filling wherein eating cornflakes left consumers still hungry. As a result of
Kelloggs ignorance of cultural aspect, the company had failed to register
substantial growth.
2. Market Research was in adequately done. It failed to show very conspicuous
facts about Indian cooking style .For example Kelloggs was banking heavily on the
crispiness of its flake. They were not aware about the fact that the Indians
preferred boiled hot milk and pouring hot milk over cornflakes made them soggy.

When they were encouraged to use cold milk, Indians preferred to add sugar and
then there was dissatisfaction about the undissolved sugar crystals. Indian platter is
accustomed to piquant spices and bowl of corn flakes and milk was too bland to
satiate their taste buds. And also typical middle class Indian family did not have
breakfast on a regular basis. The Kelloggs was focusing too much on changing the
breakfast habits rather on fulfilled experience of eating cornflakes.
3. Price sensitivity of Indian customers was not considered while deciding the
market mix of the product. It was priced at a very premium price and was heavy on
pockets of Indian middle class. At an average cost of Rs 21 per 100 gm, Kellogg
products were clearly priced a way above the product of its main competitor,
Mohun's Cornflakes which was priced at Rs 16.50 for 100 gm.
4. Advertisement follies: Unlike in US, Kelloggs India touted cornflakes as a
healthy choice rather fun filled experience. Initial advertisement were focused on
conveying the health benefits of its products. The usual element of fun was missing
from in its advertisements. Negative advertising about Indian breakfast backfired as
it hurt the sentiments of mothers and homemakers. These advertisements tried to
convey the message that Indian breakfast was not nutritious enough to be deemed
as healthy.
5. Targeting failure: Kelloggs only targeted consumers in metros and middle level
stores. Thereby it failed to capitalize on the other larger section of potential buyers.
All these factors culminated into failure of Kelloggs as a brand.Kellogs learned its
lesson a hard way .Ahead of it was the task to reinvent the brand in India.

THINGS THAT KELLOGGS INDIA DID RIGHTLY

Repositioning:
Kelloggs began re writing the story by introducing many varieties of corn flakes. In
1997, they launched Frosties (sweet, sugar-coated flakes) and where pleasantly
surprised with its success. Kelloggs reinvented their brand image in India by doing
the following:

They moved their focus from touting it as a nutritious choice to fun filled
ones. The product was sold in different sizes so as to appeal to various
consumer segments. The price was also reduced in accordance with the price
sensitivity of an Indian buyer.

Kelloggs was perceived as a western brand, therefore to localize the brands

the products were named accordingly, for example Iron Shakti.

Kelloggs also increased the distribution network so as to reach more

customers.

In addition to all the above ,it also improved the packaging of the product.

Advertising

Elaboration Likely hood Model would better explain the advertising tactics
employed by Kelloggs to bring about attitudinal changes regarding cereal
breakfast. Using celebrities in advertisements helps in creating impact and
memorability on the viewers. Herby, Kelloggs roped in celebrities who were
health conscious to endorse their products. Peripheral cues were used to
promote their product.
o Example: In one of the ads we see Shakshi Tiwari, a popular TV
actress, donning a role of mother, preparing breakfast which is healthy
as well as tasty.Shaksi is known for playing role of a responsible and
loving mother and daughter in law and this image helped in
emotionally connecting with viewers.This ad tried to reinforce the new
position of product i.e. it is healthy as well as tasty at the same time.
o

Karishma Kapoor a celebrated actress was roped in for series of ads

wherein she played a role of mom who has found a healthy breakfast
option in Kelloggs varies cereal breakfast varieties. She is also seen to
tout about how easily and quickly one can make a bowl of corn flakes.
In one of the ads she is seen promoting a Rs.10 pack as a healthy
snacks option. These series of advertisement successfully conveyed
functional and economical benefit of the product.

Then came the Special K series of ads. Here Kelloggs tried to employ
the concept of altering the self. Sometime Consumers wish to
change or improve themselves. And who does not want to be
slim.Deepika Padkone, an actress who looks fit as a fiddle was seen
endorsing Special K cereals as a substitute for regular meal to achieve
weight loss. This ads effectively used concept of actual and selfimage for promoting new positioning of the product.

The latest series of ads Kelloggs Waale Guptaji ka Nashta, we are

introduced to a typical Indian family.The ad depicts how Kelloggs
products have become integral part of their life. In the extension of the
ad we see the mother sharing with the viewers the recipes of various
dishes that can be prepared using flakes as one of the major
ingredients. This ad aims to convey the message to variety and

novelty seeking consumers that Kelloggs breakfast cereals is not

about monotony but it is about variety. Use of innovativeness
explains the advertising strategy of Kelloggs. Use of innovativeness is
about using an already adopted product in a new or novel way.
Kelloggs is also very clear that is not here to replace traditional
breakfast items but to develop taste for grain based items.
Other Initiatives:
Kelloggs launched The Kellogg Breakfast Week-an initiative to spread a word about
the importance of having a healthy breakfast. The initiative aimed to prevent
anemia and conducted a series of workshops activities in major metros. The
company roped in the Indian Dietetic Association to launch a nation-wide publicservice initiative to raise awareness about iron deficiency problems. This initiative
was aimed to appeal cognition of an individual. They employed central route for
persuasion to convey the message arguments.
Brand building initiatives: It portrayed itself as a socially responsible firm by
recycling and reusing materials, involving in social responsibility activities.
All these efforts paid off as Kelloggs India established itself as market leader in
arena of cereal breakfast category. Presently, Kelloggs is estimated to hold about
60-65 percent of Indias Rs.400 crore worth of breakfast cereal market.

RECOMMENDATIONS

Kelloggs promotes themselves as a healthy option for people who want to

loose weight. Instead of building their message on the importance of
image, the ads could also show the perils of obesity and unhealthy weight.
It could also talk about the adverse effects of consuming junk food.Using
Fear appeal to promote the above message is not a bad idea.

Affect loaded advertisements can be designed so as to appeal to emotions

of consumers. Indians connect very well with emotions and these ads cold be
really fruitful.

Kelloggs could also target the growing population of young IT employees

who are usually are short of time. Kelloggs breakfast are very easy to make
and are nutritious at the same time. These attributes would definitely appeal
to the target.

To catch the attention of young kids, ads and packages could be designed
based on famous cartoon characters like Choota bheem. Free goodies would

also catch their attention. Further , Kelloggs could target school children.
Teachers and parents could play an instrumental role in teaching their kids
about the importance of healthy breakfast. By sponsoring school event,
conducting competitions in schools this message can be well promoted.

Product Placement: Kelloggs should use movies, cartoons and also TV

serials for product placement. This would grab the attention of viewers and
also reach larger population.

Customization: Kelloggs should continue to customize its products. It

should be on a look out for local flavors and tastes.

Additionally to above recommendations, Kelloggs needs to continue with ads

based on Elaboration likely hood model. It can have both central and
peripheral route employed for promoting its products.

Central route of persuasion would help in establishing need and purpose of

using the product .It may be a long route but it is a stronger and an effective
way to build brand loyalty. The ads could be so designed to show the
importance of healthy breakfast and the nutritious values that Kelloggs
cereal have. Kelloggs also proclaims to be an effective way of losing weight.
By providing physical evidence in terms of reports, empirical studies it can
establish credibility.

As India has a huge population, central route would not suffice. Peripheral
route would help in communicating the message to larger population. Ads
showing famous sports person endorsing the product would be an effective
way of communicating about the products.

REFERENCES
1. http://www.ibef.org/download/Kellogg_India.pdf
2. http://www.translatemedia.com/translation-blog/how-kelloggs-failed-and-thenwon-in-india/
3. http://www.authorstream.com/Presentation/aSGuest132938-1396883kelloggs-india-case-study/
4. https://vaibhavgnnugupta.files.wordpress.com/2012/01/marketing_sem1_grou
p11_kellogs_final1.pdf
5. http://www.researchersworld.com/vol3/issue3/vol3_issue3_3/Paper_09.pdf
6. http://www.managementparadise.com/knt.nallasamygounder/documents/498
3/case-study-of-kellogg039s-failure-in-india/