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Kellogg Case Study

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Kellogg Case Study
Kellogg 's - Indian Experience
A Mukund

"Our only rivals are traditional Indian foods like idlis and vadas." - Denis Avronsart, Managing Director, Kellogg India.

The case analyzes the causes that led to the failure of the Kellogg breakfast cereal brand in the Indian market. The case examines the measures the company adopted on the marketing front to rectify its mistakes and at the efficacy of these measures.

A Failed Launch

In April 1995, Kellogg India Ltd. (Kellogg), received unsettling reports of a gradual drop in sales from its distributors in Mumbai. There was a 25 percent decline in countrywide sales since March 1995, the month Kellogg products had been made available nationally.

Kellogg was the wholly-owned Indian subsidiary of the Kellogg Company based in Battle Creek, Michigan. Kellogg Company was the world 's leading producer of cereals and convenience foods, including cookies, crackers, cereal bars, frozen waffles, meat alternatives, pie crusts, and ice cream cones. Founded in 1906, Kellogg Company had manufacturing facilities in 19 countries and marketed its products in more than 160 countries. The company 's turnover in 1999-00 was $7 bn. Kellogg Company had set up its 30" ' manufacturing facility in India, with a total investment of $30 mn. The Indian market held great significance for the Kellogg Company because its US sales were stagnating and only regular price increases had helped boost the revenues in the 1990s.

Launched in September 1994, Kellogg 's initial offerings in India included cornflakes, wheat flakes and Basmati rice flakes. Despite offering good quality products and being supported by the technical, managerial and financial resources of its parent, Kellogg 's products failed in the Indian market. Even a high-profile launch backed by hectic media activity failed to make an impact in the marketplace. Meanwhile, negative media coverage regarding the products increased, as more and


References: 1. Chhaya, "A second helping", Business Today, April. 7,1997. 2. "Kellogg Breakfast Week in Calcutta", Business Standard, April, 17, 1997. 3. "Narayan Sanjay & Bhandari Bhupesh", Business World, October, 22,1997. 4. Chhaya, "Can Kellogg India sustain the crackle?", Business Today, October, 22,1998. 5. Dubey Chandan, "Instant snack - Kellogg India launches Krispies Treat", Financial Express, May, 17, 2000. 6. Kulkarni Jatar Nita, "Kellogg 's ' India dream", Business Today, June, 22, 2000. Website: 1. www.kelloggs.com
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