Analysis of Case  

Kellogg’s Indian Experience

Kellogg India Limited is a wholly owned subsidiary of the Kellogg Company based in Michigan, USA.  Kellogg, lured by the prospect of several million breakfast eaters ventured into India in the mid 1990s. Kellogg’s products were introduced to the Indian market in September 1994 with offerings such as cornflakes, wheat flakes and Basmati rice flakes. Kellogg failed to make any impact and gather a foothold in India during the initial period. Although the Indian market provided tremendous opportunities, it was not free of challenges. Kellogg’s brand power which was backed by technical, managerial and financial resources of its parent was severely tested in India.

The entry strategy of Kellogg proved to be unsuccessful in the Indian market. Some of the main reasons for the poor performance of the brand were the following.

1. Insufficient market research. The company assumed people to have similar tastes in food ignoring the fact that food is one item that is heavily influenced by the culture. Traditionally, Indians like hot, savory or spicy, freshly cooked breakfast. This has been the practice for generations. What Kellogg was trying to introduce as a breakfast option was completely conflicting to this age old practice. The concept of a cold breakfast was alien to majority of breakfast eaters. Lack of research led to the over estimation of the demand potential. Kellogg failed in the initial years because it was not sensitive to the cultural factors that influence consumer behavior in India. The quirky consumption patterns in India are heavily influenced by the local culture, a culture that could sometime differ by every 100 kilometers. Sufficient market research would have helped Kellogg identify these issues earlier on and work on an entry strategy that would work in India.

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2. Product features: Kellogg relied heavily on the quality of its crispy flakes, as a unique selling point. But the consumers were not completely educated about the usage of the product. Indians typically consume hot or warm milk and the crispy flakes primarily made for cold milk didn’t hold up to hot or warm milk and ended up as an unappetizing mush. When the consumers tried to eat the cereals with cold milk, the taste did not appeal to them as the flakes were too bland. Adding sugar did not help as it would not dissolve well in cold milk. ...

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