Kellogg's failure and success

How Kellogg’s Overcame Failure to be Successful

 The world’s leading manufacturer of snacks and cereals Kellogg’s arrived at India’s doorstep in the year 1994. During that time, the Indian consumers were not ready to consume cereals on a daily basis, unlike their Western brothers. Though milk was a daily part of their breakfast, cereals were still alien to the majority of the user base. Initially, Kellogg’s was regarded as a failure in the domestic market. Magnum media promotions, advertising, and attractive marketing strategies could inspire consumers to try the products as a novelty. But certainly not repeated purchasing.

Many analysts believe that there was a lack of cultural insights on the part of this international brand; the price bracket was also much higher than the regular groceries. This was one of the reasons why the consumers were not including Kellogg’s product on a daily basis. The Indians were habituated to have their milk hot and with added sugar. But the cereals were to be eaten with cold milk, and consequently, the sugar could not be dissolved when the milk is cold. The Indian consumers would rather have the cereals with hot milk so that the flakes are soggy and then add sugar to it. But Kellogg’s propagated having the cereals with cold milk. The Indian palette was surely not happy with the resulted taste.

Kellogg’s later changed the marketing strategy. It launched Frosties, which came with added sugar, and with milk, the taste would be automatically sweet, without any more sugar by the consumers. The Indian or the desi breakfast menu comprises of paratha, vada, idli, poha, dosa, etc. In comparison to the diverse and tasty list of breakfast options, cereals became very bland and insubstantial. Indian breakfast is hot, diverse and spicy. Cereals with cold milk will not give that taste and happiness. Another blunder that Kellogg’s made during its early launch was that it tried to influence the people saying that the age-old Indian breakfast is not healthy enough and lacks nutritional value. Indians were not happy hearing such allegations against their favourite breakfast options.

Kellogg’s success can be attributed to the launch of Frosties in 1997. It contained added sugar, and also came in various packaged sizes and range of prices for various consumers. The price brackets were reduced and this appealed the price-sensitive consumers across the nation. Individual packs were a preferred choice of the masses. And the product was promoted as a fun and tasty choice, and not just about nutritional value. Preparing a bowl of cereal is easier and less time consuming than the desi menu like paratha and dosa etc. Cereals can be consumed on the go, fast; all you need is a bowl of milk. The brand also localised the product by showing familiar faces in the advertisements and campaigns. Not just milk, the company gave the option of adding curd, yoghurt, pistachio, fruits in the bowl of cereal.

Kellogg’s also localised its flavours and selected brand names related to the Indian dialects. For example, the pack containing a lot of iron is denoted by the word “Shakti”, it also added banana and mango juice in cereal to suit the Indian taste buds. The brand has successfully gained entry in all the shops and malls, with the help of top-notch business models and a strong network of agents and distributors. In 2010, the market growth of Kellogg’s was close to 20%.

Since 2013, this 14.6 billion-dollar company is on a plan to make India the fastest growing market in the Asia Pacific. In the same year, Kellogg’s decided to open its first Indian R&D unit In Mumbai and started working hard for increasing the profit into three-fold. By the closing of the decade, the position of Kellogg’s is still running strong in India. Kellogg’s has launched “Knor” range of products including instant soups. Serving the hunger pangs of the evenings, 7.00 PM to be precise was the tagline of the brand and it attained huge success. Though the brand suffered failure initially, later it gained momentum and started dominating the cereal and snack segment of the FMCG.

From the growth chart of the brand, there are several things to learn:

  • The culture and habits of the land are a must-know: You must be aware of the place of the business, the people, their culture and lifestyle. Without knowing these, business expansion can be a herculean task. Kellogg’s initially failed to understand the Indian mentality, but then it understood it and initiated effective strategies.
  • Keep in mind the price brackets: Still, now India is a developing nation and the per capita income is much lesser than the western world. The price brackets must be set according to the consumer’s choice and convenience for gaining popularity and profit margin.
  • Explore various avenues: Kellogg’s started with cereals, but later expanded to various other products, product ranges, sizes, cereals, soups, etc. The brand targeted the taste of the children as well, and launched Kellogg’s Chocos, they are well aware that the children love chocolates and not the bland healthy cereals.

 Not all can pull themselves up, like Kellogg’s, say for example Nokia. Mistakes and failures are great teachers, but wouldn’t be great if you can avoid them on time?

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