Kellogg's Indian Experience
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Case Details:
Case Code : MKTG017
Case Length : 6 Pages
Period : 1995 -2001
Pub Date : 2001
Teaching Note : Available
Organization : Kellogg India Ltd
Industry : Cereals and Convenience foods
Countries : India
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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"Our only rivals are traditional Indian foods like idlis and vadas."
- Denis Avronsart, Managing Director, Kellogg India.
A Failed Launch
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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% decline in countrywide sales since March1995, 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, piecrusts, and ice cream cones.
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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 billion. Kellogg Company had set up its 30th manufacturing facility in India, with a total investment of $ 30 million.
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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... |
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