Topics: Marketing, Breakfast, Strategic management Pages: 11 (3792 words) Published: January 22, 2013
U.S based Kellogg’s is a world leader and the most successful cereal manufacturer in the world. Kellogg’s entered India in 1994 and it took them a good 15 years for stability in the Indian markets facing initial problems and trying to change the Indian consumer’s mentality about the morning breakfast About the assignment: (Refer Appendix 1)

Growth strategy by Kellogg’s in India:
Kellogg’s were successful to create a need for the product which was never a necessity for an Indian household. We will now discuss how the company managed to establish themselves with a dominant market share in the Indian market. 1.) Ansoff Matrix

Ansoff Matrix was introduced to address the corporate strategy of the future. It delivers the perspective of growth options on the horizontal level and introduces the possibility of diversification. (Kotler, Berger & Bickhoff, 2010)

Market Development:
Market Development is capturing new markets with your existing products or services. (Lester, 2009) In a new market or to a new consumer, it will be a quiet a task to have them to believe in your product on launching (Meldrum, M & McDonald, M., 2007) especially, when a country is so fond of their traditional recipes. With the help of extensive market research Kellogg’s found out that there was no breakfast cereal trend in the Indian market. Hence they launched their flagship product ‘Cornflakes’. This was always going to be tricky as Indians love their hot breakfast. Kellogg’s had a challenge to turn the mindsets of the Indian consumers who traditionally were used to having hot breakfast in the morning. Ready-to-eat breakfast or food was nonexistent. Kellogg’s via their advertising campaign did also educate the Indian consumers about the calorie and nutritional contents, etc. Company also struggled with their introductory pricings as their competitor ‘Mohan Meakin’ sold at a reasonable price. Although, Kellogg’s had a safe and attractive packaging but was considered as high. We assume that the market for Kellogg’s in the U.S and U.K was saturated and hence they decided to enter India. (Haig, 2003) (Refer to Appendix 1)

Product Development:
Companies develop new products or upgraded products for an existing market. It also includes thinking on how the new products can satisfy customer needs and outperform the rivals. Following the corn flakes the company launched chocolate covered flakes, named as Chocos and to go with it flavours such as coconut and mango. The product which saw the company sales rise up by 17% was the ‘Iron Shakti’ which contained iron and was designed to address the iron deficiency in the Indian kids as most of the population ass had no proper breakfast apart from milk, tea & biscuits, etc. Iron Shakti was their first major success which helped them capitalise eventually. Kellogg’s tried its hand in producing biscuits which apparently didn’t work due to a very tough competition it faced from Parle-G and Britannia biscuits. Kellogg’s other product ‘Cheez-It’, launched in 2002 and was withdrawn in 2003 didn’t garner any attention either. (Refer to Appendix 2)

(Excerpts from the case study, page 5)

Market Penetration:
It’s well known growth strategy where the company concentrates on selling existing products into existing markets. (O'Shaughnessy, 1995) Kellogg’s with their intelligent research team did find out that the cereals were actually consumed by the entire family and also for health/diet conscious women so they launched a different...
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