Kellogg's (also Kellogg, Kellogg Company and Kellogg's of Battle Creek) is an American multinational food manufacturing company headquartered

in Battle Creek, Michigan, United States. It was founded in the year 1906 by Will Keith Kellogg Kellogg's produces cereal and convenience foods, including cookies, crackers, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles, and vegetarian foods.

Baby boomers will turn into adult population in 1980s who would be more health conscious and would give more weightage to nutrition than the taste of the cereal Based on these insights the market size was estimated to be $3 billion It was also expected that compared to older generations, fitness and exercise are more culturally ingrained in the minds and daily routines of baby boomers Due to the stable growth of the US economy it was expected that many baby boomers would be successfully employed and would have a stable financial footing which would aid them to afford products which are nutrition rich and also be product conscious

 Brand Value Market Leader Strong brand recall

Strengths

Poor product development Erosion of market share Price follower though a market leader Strong product proliferation and pricing strategies by competition Discount imitation cereal brands Substitutes for breakfast

Weaknesses

International Expansion Diversification potential Huge baby boomer population

Opportunities

Threats

Ansoffs Matrix
New

Product Development
Using the base of existing products to grow others.

Product Diversification
Seeking to create and develop new product lines or product ranges.

Honey Loops Nutri-Grain

Heart to Heart Oats Pretzel Crackers Rice Crispies French Toast Waffles
High Risk Market Development Finding/creating new markets by targeting new parts of the market.

Medium Risk

Markets

New

Nutri-Grain the only sugar-less cereal made from whole grain introduced by Kelloggs

Nutri-grain was an instant hit initially but the sales of the product started declining later

Rye

Barley

 In order to make Nutri-Grain a sustainable product test marketing was required The In Home Usage Test was not performed on Nutri-Grain

Test marketing would have enabled Kelloggs to understand how are consumers interacting with the product for the first time

 Lack of sweetness and the failure of the Rye and Barley versions could be gauged upon before product introduction Understand the consumer eating experience

 Understand preferred product attributes and the attitude of consumers towards the product.

Fast-tracking the test marketing exercise and then launching the product with necessary revisions
Sleep as the major issue could be tackled at the promotional campaign stage

Test marketing results help in forecasting sales

Kelloggs accounts for about 40% of U.S. sales Estimated adult cereal market :$3billion Rival: General Mills ; new cereals chipping away market share Consumers Taste buds rule over their health Kelloggs enjoys Separate Shelf space Consumer Habit: Reading package for information Lack of emphasis for breakfast

STEPS: Blue Ocean Strategy

Specific target audience Primary Research Promotions

Encouraging consumers : a healthy lifestyle Use resources to sponsor activities and focused community programs Sponsoring marathons Use the cereal packs to communicate Emphasize importance of breakfast via all media channels Invest in suppliers and distribution channels

Related Diversification: Horizontal Integration

Cereal

Fruit Beverages

Waffles

Pastries

Flavored Pancakes

Bars Snacks & Crackers

- Focus on fitness freaks, gym hitters, athletes etc. - Positioning the cereal as the ultimate macho breakfast

Give freebies like Frisby, Gym Gloves etc Conduct contests/quiz and give prizes like free gym passes/memberships

Alliance with gymnasiums and fitness institutes Sponsor for fitness challenges

- Promote as healthy supplements (chakna) along with alcohol

Focus on pregnant women

Focus on elderly

- Weight Loss

- Meal Replacement

- Innovation

- Snap up Competitors

- Be - More Flexible

Differential Pricing

Temporary Discount Pricing

2 different pricing strategies: Discount vs. Full price Quantity discounts, special sales, cash-paid incentives Respond to price reductions by competition

Matching competitive Pricing

TV Commercials

Cereal Booths near Railway Station Business District Hospitals

Ready To Go cup of cereals

Newsprint/ Magazines

Packaging Communication

Nutritional Info

Stories

Recipes

The concept of having cereals for breakfast was new in India

Indians are not used to having their breakfast cold and sweet. They always had something warm.

 Price of Kelloggs corn flakes was perceived to be too high Cheaper alternatives were easily available Also, its nearest competitor had a price one third that of Kelloggs

 Corn flakes didnt give the feeling of fullness i.e. even after eating cornflakes, Indian consumers were still hungry. Indians are used to having variety. There are many varieties of dosas, parathas, etc. Asking Indians to have the same type of cornflake based breakfast was too much of a cultural change for the Indians to accept.

 Price reduction Kelloggs increase the retail packs of different sizes to cater the needs of different consumers group Products not positioned in premium categories Projection of products as fun-filled' brands rather emphasizing only on the nutrition value.

 Come with a new product that is more filling. It should also be positioned as something that is convenient for breakfast. Since the Indian consumer wants variety, along with corn flakes they should come up with products like rice flakes, oat meals, wheat flakes, etc.

Pros : Post liberalization of Indian economy, establishing itself Increase in market share Penetration in Tier I and Tier II cities. Leverage its foreign brand status as well as first mover advantage.

Cons : Product acceptance soggy cornflakes Overestimated the amount of premium customers were willing to pay for quality and the foreign tag. Local culture and food habits were ignored. It was positioned as a healthy breakfast option than the traditional Indian breakfast.

Mohans cornflakes Murginns Shantis AIMs Aristo Savour

Increase their promotional spends. Increasing visibility on the retail shelves. Increase in distribution channels corporate canteens, schools, etc. Bringing new variants. Penetrative pricing