Kelloggs

Consumer Behavior

Group 4

Richa AgrawalRipsy SrivastavaSakshi JalotaSaurav ChaudhurySudeshna BanerjeeVikrant MahajanVikas Kumar

How can Kellogg’s do better in India ?What were the mistakes made?

The India Story

Consumer Behavior

The Firm

Established in 1906, by Will Keith Kellogg

Top Most Cereal companies in the world

Had global footprints by 1990’s, present in over 180 countries now

Revenue stream of more than 13 billion USD

One of the first companies to print nutritional labeling

Mission Statement:

"quality products for a healthier world"

Consumer Behavior

India Entry- 1990’s India an opportunity land

Newly opened economy for the West

Attractive huge population base, over 950 million inhabitants

New, unexplored, untapped market

Invested 65 million INR initially

Launched iconic brand Corn Flakes as the first offering in 1994

Had a 53% market share on the 150 million INR Indian market

Cereal breakfast segment was growing at 4-5% annually

Consumer Behavior

The Initial Jitters Cereal based breakfast ???

a new concept for Indians

Major investment in Consumer Education or Learning

Traditional, deep rooted breakfast habits

Indians are used to hot/lukewarm servings

Corn Flakes in hot/warm milk tend to be soggy

OR

Consumer Behavior

The Early Set Back Promising early sales turned out to

be one-off novelty purchases

Product was too expensive (33% more pricy)

Unwillingness to bow down on price pressures

More product launches despite low pick up.

Lack of market research before launch

Too Bad Indianization of products- Mazza Mango elaichi, Coconut, Rose etc.

Consumer Behavior

SWOT AnalysisStrength

• Addressing Consumer Needs

• Product range• Product

Innovation• Adaptability &

Flexibility

Weakness

• Pricing Strategy• New breakfast

concept• Consumer

Learning• Optimistic

Demand Forecasting

Opportunities

• Trend setter• Changing

Lifestyle • Untapped new

market

Threats

• Cultural Issues• Blinded by huge

population• Price Sensitivity• Low awareness

and health Consciousness

Consumer Behavior

Experts Comments

‘Multinational corporations must not start with the assumption that India is a barren field,’ C K Prahalad

‘It was just clumsy cultural homework,’ Titoo Ahluwalia, Chairman ORG MARG

‘You cannot change the taste buds that were developed more than a thousand years ago,’ Wahid Berenjian, MD, US Pizza

‘The society is much stronger than any company or product’ Wahid Berenjian, MD, US Pizza

Consumer Behavior

Our Understanding High Prices

Probably overestimated the amount of premium that customers were willing to pay for quality and the foreign tag.

Lack of Optimized or Indianized flavors

Mistook India for one, single, homogenous market

Underestimated the efforts they would have to put in to create a strong distribution and retail chain.

Kellogg’s was blinded by numbers, it saw the huge population of India but purchasing power parity is not the same.

Corn Flakes seems like a long haul product. Involves new habit creation and consumer learning

Consumer Behavior

Company’ Strategy

The initial failure did not deter the breakfast food giant. But a Re Look at

Product Mix

Re positioning

Adaptations

Revised Communication Strategies

Promotional Strategies

Consumer Behavior

Product Mix

Introduced new variants from its vast product line of the West, to make up for the bad performance of the star brand – Corn Flakes

Entered aligned food category to make up for the loss in the Corn Flakes segment

Introduced energy bars, biscuits etc.

Launched special products for strategic segmentation of the consumers owing to the better understanding of the Indian Consumer E.g. Chocos for kids, K special for women, All Bran for mid

aged women etc.

Consumer Behavior

Re-positioning New positioning Fun & Taste & Health

Indianized product names – e.g. Iron-Shakti Generating familiarity with the masses Touching upon general passion for scholastic excellence in

India

Launched different SKU’s catering the varied Indian Consumers

Family pack Smaller pack One time use pack @ Rs.10/-

Identified the nutritional need and launched products accordingly

Extra Iron Shakti Special K diet for weight management Chocos for kids in different shapes and styles, reassuring the

fun element All Bran Wheat Flakes for a fiber rich diet

Consumer Behavior

Advertising Strategy Catchy Phrases

“jaago jaise bhi, lo Kelloggs hi” “Andar se khush , to bahar se khush” “Shuruaat sahi to din sahi”

Attributing to the daily energy of the whole family

Focused initially on communicating the nutritional value

Currently educating consumer about varied recipes

Popular health conscious celebrity brand ambassador Lara Dutta, Karisma Kapoor, Sakshi Tanwar

Currently emphasizing more on convenience and fun

Consumer Behavior

Promotional Events

Consumer Behavior

Promotional Strategy Mass Advertisements – Nice array of TVC’s aired

on prime time.

Direct Promotions – Consumer awareness campaigns Reaching out to schools etc.

Discounts / Offers – Continuously used tool, introduced new range variants of product this way

Exploiting the growing involvement of kids in purchasing behavior.

Attractive Packaging

Creation of mascots for variants, popular among Kids in the west

Consumer Behavior

The New Campaign - 1 The new campaign ‘Shuruaat Sahi Toh Din

Sahi’

Sakshi Tanwar to endorse, stereotyping the present day homemaker

It brings forth the emotional payoff that a mother and wife may experience after having provided her family with a Kellogg’s Corn Flake breakfast.

The move comes along with the new positioning, which empowers every homemaker to customize Kellogg’s Corn Flakes to suit her family’s preferences and set them up for a great day.

An attempt to bring an element of ‘Fun’

Consumer Behavior

The New Campaign - 2 Karisma Kapur to endorse

Kellogg’s Chocos Rs 10 pack as the evening snack option

Positions as a preferred option among mothers as a kid snack

Highlights nourishment, taste and SMALL PACK

It aims to drive differentiation, both functionally and economically

An attempt to address a market research finding that Indians prefer it as Snacks

Consumer Behavior

The New Campaign - 3

‘Happy Inside, Happy Outside’

for women to play their many roles with ease, they need to feel good from the inside.

targets Indian women between 35 to 40 years

prone to digestive irregularity due to considerable impact of hormones, poor eating behavior, insufficient exercise, hectic lifestyle

The Kellogg's All Bran TVC is based on a very real insight that women relate with instantly-

when your digestive system is not working smoothly you might feel irritable. It was this simple thought that we brought to life in the commercial. A mundane request from the husband seems like a huge task for her and results in irritation which is depicted as a silent scream.

Consumer Behavior

Results Brand Image: Quality, Variety, Distribution

Customer based brand equity changed from ‘costly’ to ‘Quality’

Brand Identification: high; logo is well recalled by consumers

High TOMA

First mover advantage.

Strongest brand recognition and advertising recollection of all the cereal manufacturers

Kellogg’s is the undisputed market leader in the particular segment

Consumer Behavior

Our Learnings Entry to Indian market was probably before time

Early fall out did not deter the focus of Kellogg’s team, fought back in the Indian market

Improved the earlier mistakes by understanding Indian Consumer and growing needs

Constantly used mass communication tools to enhance consumer learning

Brand name synonymous with the category itself

Need for convenience food rising and so is the revenue

Consumer Behavior

Recommendation

Maintain the continuous product innovation

Enhance its distribution network

Enormously growing category (20% CAGR) Segment growth is owed partly to the efforts of Kellogg’s

Increased Health Consciousness and Awareness Approach fitness centers and clinics for promotional activity

E.g. Talwalkar’s, Fitness One, VLCC etc.

2nd generation of consumers evolving Should approach schools and educational Institutions for

promotion Should develop affinity to this consumer class

Consumer Behavior

Recommendation

To attract ‘KIDS’ - the biggest influencer’s - Popularize various brand mascots in shopping malls and cinema commercials

(max. attention) Provide brand mascot merchandize for kids as freebies during festive season Conduct promotional activity with mascots in theme parks and adventure parks

This will engage consumers and also associate “fun” with the brand

To attract Women / Home Makers Encourage experimentation with the product Associate with some cookery shows, chefs for special episodes

E.g. Master Chef India, Sanjeev Kapoor

This will also satisfy the variety seeking nature of the consumers

Roll out some nutritious finger food snack item for Kids.

Do market research to know the pulse of the consumer for product innovation

Consumer Behavior

Kellogg India to take a second shot at localizing its India portfolio

Moving On

Set to launch pudina, tomato and garam masala for its oats range to take on Quaker oats from PepsiCo

Expert Say "The breakfast cereal category works more for consumers with global palettes... so whether localized variants will be a growth driver for this category will depend on how consumption patterns evolve.”

Consumer Behavior

Thank You