Kellogg's entered India soon after liberalization in India, post 1991 reforms. I t set up a wholly-owned subsidiary and invested in a greenfield manufacturing plant for cereals. Source.
But the sales of its rice-based and wheat-based flakes did not rise. Reason? a) The price points were high to begin with, which did not position it in the snacks mid-meal category b) The flakes did not gel with the Indian consumption pattern, thereby leading to misplaced positioning, confusing the consumer, and declining sales. c) The Product was very different (sweetless), whereas Indians preferred slightly sweet content
Gradually, the consumption patterns evolved, and Kellogg's customized its product portfolio to reposition itself. In 1996, it launched Chocos and Frost ies pre- sweetened flakes.
There was another mistake that Kellogg's did. It did not know its target segment well. So, it finally narrowed down its target segment to Children. Even when it offered to children, there was no "excitement" flavor added to it, nothing exciting about the product. So not many bought the concept. But, when it introduced Chocos biscuits, it instantly connected with the younger consumers, earning a higher brand name. This was subsequently leveraged to reintroduce its core product - Wheat-based flakes, in different flavors.
Currently, Kelloggs has introduced many products to cater to its target segment - children in 3-12 age-group, ensuring higher recall and brand name for itself.
Finally, to answer your queries comprehensively, here is a useful link on brand Failures, one of which is "Kellogg's in India" Brand Failures
This explicates the need to enter India, reasons for its failures, the apprehensions and the risks involved. Refer to page 153. A great read.
Hope this helps!
Read more: http://www.marketingprofs.com/ea/qst_question.asp?qstID=10493#ixzz1dlKOGrFJ
Please join StudyMode to read the full document