Business Analysis: Kellogg's Analysis Of Breakfast Cereals

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Kellogg’s Overview:
Kellogg’s was founded as a Battle Creek Toasted Corn Flake company in the year 1906. It was founded by the brothers named Keith Kellogg and John Harvey Kellogg in Battle Creek, Michigan. The company was renamed as Kellogg’s company in 1922. It started off as a corn flakes company and later expanded to offer a variety of products including cereals, cereal bars, convenience foods, cookies, toaster pastries, frozen waffles, etc. The company positions its products on the lines of health and taste and its purpose is “Nourishing families so they can flourish and thrive”.
Kellogg’s is one of the leaders in terms of breakfast cereals and its cereals are the most consumed breakfast cereals. In the 1980s, almost 40% of the ready to
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Kellogg’s was also getting a stiff competition by one of its competitors named General Mills whose Cheerios brand was a rival to Kellogg’s cereals. In order to find new markets for its cereals, Kellogg’s entered into India, a country with over 950 million population of which almost 25% was middle class. India provided Kellogg’s with an opportunity to capture a huge pie of this market and Kellogg’s invested a whopping 65 million dollars to launch its best corn flakes brand in India. Kellogg’s realized that even if it managed to capture 2% of the Indian market, its customer base in India would become more than what it had in …show more content…
Typically, an Indian consumer had vegetables and chapatti for breakfast. Kellogg’s, in order to sell its products in India, had to promote not just its products but also the concept or idea of having cereals for breakfast. The response to their corn flakes was not very exemplary and their positioning and strategy to project Kellogg’s as a healthy and nutritional brand met with a disappointment and the product had to be taken back. Kellogg’s then did some market research and analyzed the reasons behind their disappointing start. What Kellogg’s observed was that Indians are very traditional in almost every aspect of their lives, be it festivals, dressing styles or even eating habits. Kellogg’s while introducing its corn flakes in India focused on functional aspect of the corn flakes such as its crispiness, but where company went wrong was that it failed to understand that habits and behaviors of people in India are very different. Compared to US residents who consumed these corn flakes with cold milk, Indian consumers were used to eating their cereals in hot milk which made the flakes soggy and they were not left crispy at all. Also, Indian consumers prefer more spicy food and to expect them to switch to eat cereals that should be sweet and served in cold milk was asking too much from them. On top of this, there were various complaints that

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