With over 12 billion dollars of total revenue Kellogg's was a leader in the world of serials in America. It was started by Dr John Harvey Kellogg and his brother William Kieth Kellogg in 1898 when they were experimenting with wheat. Kellogg's entered the Indian market in 1994 after Manmohan Singh introduced the economic liberalisation policy which allowed brands and companies outside of India to do business in India.
Kellogg entered the Indian market in order to capture the Indian audience but it failed initially due to the various marketing failures and business failures leading to the failure of not capturing of the Indian audience.
Kelloggs initially enter the Indian market with two visions,
1 )India's population was growing at a high speed and they had a much bigger population here to capture
2)Since a lot of companies had entered the Indian market from different parts of the globe more people were getting employment ,which in turn meant they had more money to spend .
In the early years in India,Kellogg's faced a huge failure .Where they were expecting a 40% gain they had to face an 18% loss in 1995 and the lost almost 80% of their customers. This happened because there was a huge difference in the way that cereal was consumed in India when compared to the other nations in the world in which Kellogg's was consumed.
While watching this downfall that they had in India ,they tried to launch new campaign ,which emphasized that their cereal was really healthy compared to the Indian breakfast. But this marketing campaign backfired immediately on Kellogg's. It created a huge down for them in India and people were expecting to leave them to leave the Indian market and never return again. They weren't the first company to introduce corn flakes in India, Mohan Meakin,a local company was already selling cornflakes in India with a very less price compared to Kellogg's. After experiencing these huge down falls,Kellogg's decided to study the Indian market and the notice three things.
1) People in India and like the rest of the word use hot milk instead of cold milk. This result in the corn flakes beeing soft and spungy rather than crispy like how the people wanted.
2) Most people in India were concerned about saving their money. They had to pay 64Rs for 500 gram pack of Kellogg's corn flakes were as they only had to pay 37Rs for the same amount of corn flakes from Mohan Brand.
3) They identified that the Indians were attached to their culture with all their heart.
Even the Indian residing in foreign countries, Indians still prefer Indian food. And it's natural of anyone to hate a company that criticizes the food of the place that they live in and are connected to.
But after studying all these issues they made a powerful marketing strategy that helped them capture around 70% of the market share in the cereal business. They changed the whole product according to the preferences and taste of the Indian customers. They even lowered their price as they felt that Indians consider their products to be expensive .They made sure that that's the prices were very low that everyone could afford them.After doing this, they introduce a new marketing strategy that is "EDUCATING AND NOT SELLING". The customers won't buy a product when they are forced into buying it, but instead if you educate them about the product, then there are more chances of them wanting to buy that product. They used this strategy. They also used taglines like "AUR JAAGO JAISE BHI, LO KELLOGS HI AUR KHUSHIYON BHARI HAR SUBHA". With all these campaigns and taglines, they captured the minds of the Indian audience.
While keeping in my the mistakes they've had, they decided to implements two more strategies.1) Product Extension: After analysing the Indian audience, they found out that Indians prefers fruits a lot. They extended their product line by introducing corn flakes flavoured with strawberry, chikku,mango and bananas. In 1996,inorder to capture kids market,they introduced Chocos and Frosties. And immediately after launching, they became the favourite snack of most children.Since most kids in India had an iron deficiency, they marketed chocos as an iron rich product. They put the thought that chocos being a very healthy snack in the minds of every Indian mother.
2) Local Manufacturing: They set up a manufacturing plant in Taloja,Mumbai,which was the biggest market of cereals in India. They also sourced their raw materials locally so that they don't have to pay import duty. They were also able to produce the products other very cheaper price. They made it into all the key states of the nation and made a very strong distribution network of 200 distributors. And they gave them the freedom so their product rotation happens frequently in the market.
And with all these strategies Kellogg's retained their position as a leading brand in the cereal market.
August 12, 2023
Tags :
casestudy
,
Kellogg's Case study
Subscribe by Email
Follow Updates Articles from This Blog via Email
No Comments