Brandalyzer

Kellogg’s in India

Posted on: February 7, 2010

Kellogg’s cereals were consumed around the globe with around 40% of the US ready-to-eat market. Kellogg’s had over 20 plants in 18 countries worldwide, with yearly sales reaching above US $6 billion. However, Kellogg’s was under pressure with competition from General Mills and other close rivals. The cereal industry had been stagnant for over a decade and Kellogg’s looked beyond its traditional markets in Europe and United States.

Kellogg’s decided that India is a suitable target for its cereal products. Kellogg’s thought that even if they can manage a two percent market share in India, they will have 18 million consumers, a market larger than the US itself. However, we Indians were not too used to this style of breakfast. So apart from marketing the product, Kellogg’s had an extra challenge to market this style of breakfast to Indians.

Initially, the sales figures were decent which indicated that the Indians are responding well. However, it soon became apparent that many people had bought Corn Flakes as a one-off, novelty purchase. Another big issue is its price, the product is too expensive for the Indian middle-class. Meanwhile, Kellogg’s didn’t reduce the price and decided to launch other products in India. Indian cereal buyers were introduced to Chocos, Rice Flakes, Wheat Flakes, All Bran, Honey Flakes and few other line extensions where none of them have managed to really succeed in a big scale.

Acknowledging its poor performance in India, Kellogg’s decided to sell biscuits as a strategy to establish its brand equity. Kellogg’s biscuits are produced only in India and there are six flavors – Chocos, Glucose, Chocolate Cream, Badam, Pista and Cashew.

Kellogg’s tried to bring in new breakfast habits to Indians, but the price of the product still restricts consumption to the urban consumers and affluent house-holds. Meanwhile Kellogg’s is trying hard to establish the company’s brand equity in the market. So it is to be seen if Kellogg’s experiments(like moving into snack food ) to strengthen its brand equity will be fruitful or not.

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9 Responses to "Kellogg’s in India"

Sai ,
Kellogs did its best to change the snacks and breakfast habits in India, upto some extent the they were successful ,one factor I which could have gone against them might have been taste :-) :-) . I did try cornflakes and chocos for a while , they might do good to health but given the taste of idly sambar or a good aloo paratha … Icorn flakes seemed too routine and tasteless. Indian snacks and breakfast have a great variety thats some kellogs needs to think about. at least food lovers like me would want varietey

i think after 2 yrs , kellogs has introduced some flavours and ppl are getting accustomed to the taste .Their museli seems to be good. But the sad part is that they have different qualty of the same products in different countries. Kellogs in Uk and Hongkong is far superior than what they sell in India. May be the costings .

Yes, I agree with you Subbu.

I guess people will get bored quickly with Cornflakes. I guess we can compare this case with Maggi, which is both easy to prepare and also much tastier and gives scope for exerimentation. Maggi is Indian style and goes with our tastes well.

Cornflakes, though easy to prepare, can cause boredom after 2-3 weeks because of the lack of scope for variety and experimentation.

Ofcourse, Maggi is much cheaper and caters to a large segment than against Cornflakes which is pretty much for the middle-class in the Urban.

Yeah , the very fact that one can attach flavors to maggi makes maggi more closer to all age groups at the home ,Maggi actually scores here. But looking from a health perspective , does either of them cornflakes/maggi give all the nutrients required for a break fast .

Subramanyam,
The information you are providing here is outdated. Kellogg is now a $13 billion company, with rapid growth in India. Indian breakfast cereal market is 400 crores and Kellogg dictates 70% market share. The cereal market didnt exist before Kelloggs enetered 15 years ago. Now I see the kids asking for Chocos, working professionals seeking corn flakes. It takes a generation to change the mindset, Kellogg’s in now for young adults, people over 30 may not like it, but the money making, busy, modern youth is what Kellogg is aiming for and surprisingly it is seeing success.

you seem to be from Kellogs only . This morning only i returned 4 packs of Kellogs K special to ur offfice with bad smell in it. The qualty was pathetic. The guy who came to replace my packs was a bit nervous. Being a XX billion or XX % share does nt matter. In india brands like Uncle Chips , who had market share of more than 70 % was sold to Fritolays who in turn was struggling for market share in 1998. Fritolay now has market share of app.60 % and just a casual approach towards the consumer and the launch of Bingo by ITC made them loose app. 12 % share in the first year . fritolay really worked very hard and regained its position .So no brand shud be living in the past glory of it s history. Business is not just being on top . It s more difficult maintaing urself on top. No multinational has still been able to even come near to HaldiRams in the Namkeen segment , because they are so focussed on their product qualty and
proper regular placement .

Mango in Kelloggs would be somethng

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