Akshay Garg

DM 20204

How can the corn flakes companies expand the category in India

Introduction
Cornflakes were developed at the end of 19th century by physician John Harvey Kellogg and his brother Will
Keith Kellogg so as to provide a healthy vegetarian supplement to his patients for recovery. This discovery
aspirated and later marketed by Will Keith Kellogg in 1906, by establishing a company Battle Creek Toasted
Corn Flakes, now known as Kellogg Company.
(Cornflakes, n.d.)

Kellogg’s Company
Kellogg is an American multinational food manufacturing company, headquartered in Battle Creek, Michigan,
United States. The company produces cereals, cookies, crackers and toaster pastries, under the brand Corn
Flakes, Frosted Flakes, Keebler, Pringles, Eggo, and Cheez-it.
Kellogg has a mission statement “ Nourishing families so they can flourish and thrive”.
Kellogg’s product is marketed in around 180 countries and its largest manufacturing plant in Trafford Park in
Trafford, Greater Manchester, United Kingdom. Kellogg’s holds a Royal Warrant from Queen Elizabeth II
and the Prince of Wales.
(Kellogg's, n.d.)
Kellogg’s was able to introduce their breakfast cereals in many of the continues that were not even aware of
it. With the right strategy and marketing technique, they were able to pursue the customer to accept cornflakes
into their daily meal.

Kellogg’s journey in India

During 1994, when India becomes globalized, Kellogg introduced its cereals in Indian Market. They were the
only company that was wholly-owned by Kellogg’s based in Battle Creek. The expansion of India was much
needed for the company, as the growth in America has stagnated and also because of the huge population of
India.
When Kellogg’s entered India, the consumption of breakfast cereals was as low as 2 gm per annum against
the global consumption of 5 kg per annum. There were many challenges for ready-to-eat-cereals, which are:-

Cultural Factors and Eating Habits

Indian consumption was new to cereals, as traditional food such as parathas, chhole bahture, sandwich, bread
butter jam, idli, dosa, poha etc. dominated the market. People in India, rarely eat breakfast, as compared to the
American people.

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Easy availability of low-priced traditional breakfast

A normal Indian family spend around ₹15 - ₹ 25 per person. Moreover, the food was rich in taste and spices.
Even though it was of high calories and fats, but that was not in consideration.

Low awareness about processed foods and calorie requirements

In India, there is a low level of concern over health and calories intake. Indian is more focus on overfilling
their belly and satisfying taste buds.
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Price sensitive customers

Indian middle man is most concern about saving and spend less on the luxury, leisure and comfort over foods.
They require a perfect balance between perceived priced and perceived value.
(Akhtar, 2012)

Competitors
Kellogg have large set of competitor present in India. Breakfast brand like MTR, Quaker and even fruit juices
like Tropicana, Real claim to be ‘complete morning meals.
(Sharma, 2015)

Mistakes Performed
Kellogg’s failed to successfully launch there product in India, even though having a quality product and
support of technical, managerial, and financial support from its parent company. Even though they performed
a rigorous advertisement in India, but the negative word of mouth of being tasteless spreaded like wildfire.
Also, the logistic channel was not well defined out as there were complain of non-availability of their product
in a different region. According to the analytics data, out of 100 packs sold, only 2 were regular customer
whereas rest was a new customer. This created the problem of sustainability for the company, which was a
major concern.

Major Faults and mistakes committed by Kellogg’s India

Product USP:
Kellogg’s always relied heavily on the crispness of there cereals. In India, people generally prefer to boil their
milk, which makes the cereals soggy.

Product Taste:
Indian middle-class family rarely have breakfast, unlike Westerners, and those who consume, prefer local
eateries, because of taste, therefore the rice flavour of cereals didn’t suit the taste of the Indian consumers.

Wrong Positioning:
Kellogg’s focused more on the health benefits more and its easiness to prepare. Unlike in the US, ‘fun and
taste’ is completely forgotten out, which was a hedonic attribute.

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Premium Pricing:
Kellogg marketed its product at a premium price, in price-sensitively market. They marked their product at
₹21 for 100 gm which was high from its local competitor which provide cornflakes at ₹16.5 for 100 gm. They
also failed to create high perceived value to its high-end users.

Limited supply chain network:

Kellogg’s initially launched its product in Mumbai, where they gain a sale from distributors, whereas when
they started marketing nationwide, the sales dropped. This was due to the fact, the distributor sells their product
at another part of countries as well as the nation at the initial launch, which gave them the wrong idea of the
market. Also, Kellogg usually focused on the high end and middle-end retailer store, so as to maintain
standardization and uniform service quality. Therefore, they missed the major point in the decision and
therefore left the large part of the community.
(Akhtar, 2012)

Consumer Behaviour Viewpoint

Kellogg positioned its product as a utilitarian attribute that is much healthier breakfast option and were nearly
limited to the breakfast. They tried to urge the Indian customer to leave there normal diet and to adopt
cornflakes as their diets. This caused consumer to develop cognitive dissonance with the product and a reason
for not adopting the product.
(Akhtar, 2012)

Overcome of the difficulties

Introducing Taster Product
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Kellogg’s introduced taster products such as Chocos and Frosties, unorder to add taste component to their
cornflakes, which was very much preferred by kids.

Fig:1 Introduction of Chocos (Kellogg’s)

In this, Kellogg used the comforting and familiarity by using of dogs so as to target the young children
(SEE HOW ANIMALS MAY INFLUENCE ADVERTISING, 2017)

Involving Customers
Kellogg organized many different shows, such that with Kellogg Real Chief challenges.

Different Use of the Items

Kellogg are requiring to not only focus on the breakfast menu, but also on the evening snacks, and mid-day
eating. There advertisement on after-school snacks was popular as children were free to eat snacks, and parents
were happy with the health benefits.

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Figure 1: Item is being used as snacks and chips

Focus Advertisement on Breakfast

In order to increase the consumption of breakfast, Kellogg introduced many of the advertisement focusing
mainly on having the breakfast. As in earlier research it was found that people seedily consume breakfast, so
in order to increase the consumption and change of attitude, they continued playing ads in loop.

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In the advertisement, they used the halo effect of player

Saina Nehwal,, so as increase the consumption of
breakfast for being fit. The customer is also more likely to
believe and endorse the product, associating with the
sports star. It also enhances the visibility and credibility
of brands. 'Bade Sapno ki Sahi Shuruat' which was not
very successful, but was more aim for having proper
breakfast in morning.

Introduction of Range of advertisement

After there huge flop in India market, Kellogg change the style of showing their advertisement from more of
the health benefit by using mother-son and father-daughter relationship. This type of advertisement introduced
the familiarity and protectiveness as well as the social message of love and care.

Recommendation
Research on Indian taste Preference
Kellogg’s should do more of the market research so as to introduce more of the taster version of the cornflakes
in India. Different types of products are required to produce for different aged group people in India which
can pull them to consume towards Kellogg and leave their traditional diet.

Reach Small and Middle Town

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Kellogg is requiring to invest more in the distribution channel so as to have a greater reach in small town and
villages. They are requiring to focus more on their mission statement of reducing hunger, thus creating a halo
effect.

Involving Customer
Kellogg is required to customer more, so as to increase the familiarity between the people. The creation of
Maggie Hot stop, and the Cadbury advertisement of making your sweets form Cadbury chocolates was very
much supported by the people.

Instructing People
In order to target the people on their USP of crunchiness, people are required to be educated. By providing
advertisement of how to make the meal will be beneficial, as people will right make according to the
instruction.

Ikea Effect
Kellogg need to encourage people more, so that they can make their own recipe according to their taste. When
a consumer makes things by himself, he feels satisfied and liking of the product increase because of self-
justification. This effect is famously known as Ikea Effect.

Conclusion
Kellogg’s approached India with the global perceptive and didn’t understand its consumer, and tried to change
the behaviour. Kellogg’s should have first understood Indian consumer by doing a proper market research and
by proper implementation of sales and distribution with proof. Since they have a strong backhoed from their
parent company, they were able to recover and with this, they gained experience and a shelf space in the
household kitchen.

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References
Akhtar, Z. (2012). How can Kellogg's do better in India? What were the mistakes it made? Retrieved from Slide Share:
https://www.slideshare.net/ZeeshanAkhtar12/fmcg-case-study-kelloggs-performance-in-indian-market-
analysis-and-proposal

Cornflakes. (n.d.). Retrieved from Wikipedia: https://de.wikipedia.org/wiki/Cornflakes

Kellogg's. (n.d.). Retrieved from Wikipedia: https://en.wikipedia.org/wiki/Kellogg%27s

SEE HOW ANIMALS MAY INFLUENCE ADVERTISING. (2017, May 5). Retrieved from Miler Label Company, Inc.:
https://www.mileslabel.com/see-animals-may-influence-advertising/

Sharma, A. (2015, August 10). "Only 3 per cent of metro dwellers consider breakfast essential": Kellogg India.
Retrieved from afaqs!: https://www.afaqs.com/news/story/45204_Only-3-per-cent-of-metro-dwellers-
consider-breakfast-essential-Kellogg-India

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