Kellogg's Indian Experience

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Case Details:

Case Code : MKTG017
Case Length : 6 Pages
Period : 1995 -2001
Pub Date : 2001
Teaching Note : Available
Organization : Kellogg India Ltd
Industry : Cereals and Convenience foods
Countries : India

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

The Mistakes

Kellogg realized that it was going to be tough to get the Indian consumers to accept its products. Kellogg banked heavily on the quality of its crispy flakes. But pouring hot milk on the flakes made them soggy. Indians always boiled their milk unlike in the West and consumed it warm or lukewarm. They also liked to add sugar to their milk or lukewarm...

Setting Things Right

Disappointed with the poor performance, Kellogg decided to launch two of its highly successful brands - Chocos (September 1996) and Frosties (April 1997) in India. The company hoped to repeat the global success of these brands in the Indian market.

Chocos were wheat scoops coated with chocolate, while Frosties had sugar frosting on individual flakes. The success of these variants took even Kellogg by surprise and sales picked up significantly. (It was even reported that Indian consumers were consuming the products as snacks.)

This was followed by the launch of Chocos Breakfast Cereal Biscuits. The success of Chocos and Frosties also led to Kellogg's decision to focus on totally indianising its flavors in the future. This resulted in the launch of the Mazza series in August 1998 - a crunchy, almond-shaped corn breakfast cereal in three local flavors -'Mango Elaichi,''Coconut Kesar'and 'Rose.'...

The Results

In 1995, Kellogg had a 53% share of the Rs 150 million breakfast cereal market, which had been growing at 4-5% per annum till then.

By 2000, the market size was Rs 600 million, and Kellogg's share had increased to 65%. Analysts claimed that Kellogg' entry was responsible for this growth.

The company's improved prospects were clearly attributed to the shift in positioning, increased consumer promotions and an enhanced media budget...