Description
This is document describes about Kelloggs in Indian market.
Kellogg’s
Kellogg's has utilized integrated business units and compensation incentive systems to increase the accountability of the cash expenditure and improve the functionality of the organization. Products sales have been increasing in the US as well as in other countries. The pricing and availability of the product determines the profitability of a product. Streamlining many of the operations in recent times has helped the Kellogg increase the profit margin. More resources could therefore be spent on the marketing and advertisement of products. In addition, Kellogg's also increased the number and frequency of promotional offers. More toys and DVD's in cereal boxes, tie-ins with movies and charitable donations to local schools and charities.
Kellogs India: When Kellogg Company entered India, the per capita consumption of breakfast cereals was a low 2 gm per annum against 5 kg per annum globally. The Indian ready-to-eat-cereal market, clearly, posed several challenges: • Cultural factors and eating habits – population not used to processed foods • Easy availability of low-priced traditional breakfast • Low awareness about processed foods and calorie requirements • Price sensitive customers Kellogg India steadily overcame these and contributed to the rapid growth of the breakfast cereal market in the country. Factors for success Innovative marketing and brand-building Kellogg India took various initiatives to overcome the low awareness of breakfast cereals: • Sustained brand-building through advertising and investment behind key brands. • Introducing a limited edition Kellogg?s Chocos Spider Man 2 “web designed cereal” which was part of the global association between Kellogg Company and the movie Spider Man 2 • Conducting school contact programmes and having active interface with opinion leaders – CFTRI, the government, independent agencies etc. • Adopting brand names that appeal to the Indian consumer such as „Shakti?, meaning power • Using packaging as an effective marketing tool, for brand communication and on-shelf differentiation Efficient supply chain network Price sensitive customers necessitated a constant focus on cost reduction and supply chain efficiency enhancement in India. Kellogg India took several initiatives in this area: • Localised the entire raw and packing material requirement, saving import duty. In addition it adopted single sourcing strategy achieving scale efficiencies • Located its manufacturing plant at Taloja, near Mumbai in the state of Maharashtra, which is the largest market for breakfast cereals in the country thereby optimising transportation cost • Set up a distribution network with storage hubs in all the key states of the country serving over 200 distributors providing a good reach • Optimising overheads by giving distributors larger responsibility for sales, thus bringing down the strength of its internal sales force • Deploying Oracle 11i based ERP to enhance supply chain transparency leading to lesser inventories and better service levels. Other locally developed systems help monitor stocks and movement on a daily basis. Customising products for India Kellogg India also adapted its products to address the local need gaps. For example it enhanced its focus on iron and calcium fortification with products like Iron Shakti (meaning iron power) and Calcium Shakti.
However, all these strategies have not necessarily worked very well.
KELLOGG'S India withdrew its Cheez-It brand of extruded snacks from the market. Launched in 2002, Cheez-It, a range of baked cheese snack crackers, marked Kelloggs entry into the snacks market. Through its launch in India the American multinational wanted to reposition itself as a convenience food company from making just cereals. Pegged at Rs 10 for a 25-gm packet, Cheez-It came in three flavours - Cheese, Party Mix Onion Garlic and Party Mix Tangy Tomato. The products were being outsourced unlike its cereals, which are manufactured at its company-owned plant in Taloja. Targeting the `On-the-go snacker', Cheez-It was primarily pitted against the `Cheeselings' offerings from Britannia and Parle. Kellogg's had even appointed Leo Burnett to devise a campaign (Mind Mein Ghus Gayee Cheese) to target teenagers with its snack brand. Positioning the brand as `America's No:1' brand of cheese crackers, Cheez-It was devoid of the Kellogg's brand name and was expected to serve as a standalone brand on Kellogg's portfolio.
Taking the fitness mantra of the 21st century to India, Kellogg’s India was planning to make it easier with its new brand of cornflakes, Special K. Focusing on getting its strategy right for the ready-to-eat cereal market, the $11-million American multinational believed it had a product to enter a new category and set of consumers - women aiming for weight management. Special K had been formulated specifically for the Indian market while continuing with its international positioning of being a weight management product. The fact that it is starting off with a challenge to consumers to lose 2.5 kg within two weeks and claims to be 98 per cent fat-free with its whole wheat composition are all modifications for the Indian market. With no other breakfast cereal brand offering the same benefit of weight management, Kellogg’s believed it has got the first-mover advantage. While its mother brand of Kellogg’s cornflakes and its variants were meant for everyone, subbrands such as Chocos and All Bran wheat flakes have been addressing children and adults. With Special K, Kellogg was going to target the urban women. Research showed that that there were nearly 12 crore obese urban women. In fact, Kellogg’s has test-marketed the product in Bangalore to gauge its acceptability and the results were extremely positive, says the company. Eighty per cent of the consumers observed weight reduction and also felt Special K helped keep them fit. It easily fitted into one’s daily routine without any substantial time and money commitment. It was priced Rs 45 for a 140 gm pack and Rs 90 for a 290 gm pack. Kellogg’s also introduced Basmati flakes. Its honey and mango variants under cornflakes were made for this market. Kellogg’s stayed away from the overcrowded categories and wanted to offer differentiated products. However, worldwide its strength was in breakfast cereals and not in snacks. According to analysts, “Kellogg’s had hoped to create a new category of branded snacks which would have brought in the immediate volumes it
was looking for. Since its cereals and snacks could never ride on the same distribution chain, Kellogg’s had even taken the pains to set up a fresh distribution network.” Kellogg’s once again betted on its core category to make an impact. Realising the market is price-sensitive, it launched a new sub-brand under KPak in lower SKUs of Rs 10. This increased their distribution reach by 100 per cent in the previous year. In the present year they are looking at adding 60-70 per cent more reach.
Kellogg’s Uk:
With the advent of the 21 century, people all over the world started becoming more health conscious. There was a definite demand for the figures of the composition of foodstuffs to be displayed on the pack and Kellogg?s realised this. In the area of food labelling, Kellogg introduced the Kellogg's GDAs to its packaging, showing the recommended Guideline Daily Amounts. These GDAs allow consumers to understand what amount of the recommended daily levels of nutrients is in a serving of Kellogg's food. Working with a group of other major manufacturers, Kellogg introduced a new format in May 2006, with GDAs clearly identified on brand products and packages. These GDAs have been adopted by other manufacturers and retailers such as TESCO, one of the biggest supermarket/hypermarket chains in the UK. For many years Kellogg?s had been working to encourage people to take part in more physical activity. The company used this to its advantage by taking cognizance of people?s new found awareness about their health and started working with the Amateur Swimming Association (ASA) in the UK. More than twelve million people in the UK swim regularly. Swimming is inclusive as it is something that whole families can do together and it is also a life-long skill. The ASA tries to ensure that 'everyone has the opportunity to enjoy swimming as part of a healthy lifestyle' With the ASA, it set some longer term objectives. As a lead body for swimming, the ASA has been a good organisation for Kellogg to work with, as its objectives match closely those of the company. Kellogg became the main sponsor of swimming in Britain. This ensured that Kellogg's sponsorship reached all swimming associations so that swimmers receive the best possible support. Kellogg sponsors the ASA Awards Scheme with more than 1.8 million awards presented to swimmers each year. This relationship with the ASA has helped Kellogg add to its existing image of a healthy brand and thus reinforces its brand position. Working with the ASA helped Kellogg set up links with a number of other bodies and partners. For example, Sustrans is the UK's leading sustainable transport organisation. Sustrans looks at the different ways that individuals can meet their transport needs in a way that reduces environmental impact. It is the co-ordinator of the National Cycle Network. This provides more than 10,000 miles of walking and cycle routes on traffic-free paths throughout the UK. To meet its business objective of encouraging and supporting physical activity Kellogg is developing a promotion for a free cyclometer which will be advertised on television in 2007. Walking is one of the easiest ways for people to look after themselves and improve their health. To encourage people to walk more often, Kellogg has supplied a free pedometer through an offer on AllBran so that individuals can measure their daily steps. During 2006 more than 675,000 pedometers were claimed by consumers. From a research sample of 970 consumers, around 70% said they used the pedometer to help them walk further. Kellogg's Corn Flakes Great Walk 2005 raised more than £1 million pounds for charity on its way from John O'Groats, through Ireland and on to Land's End. In 2004, 630,000 people took part in the Special K 10,000 Step Challenge. It was a huge success for the company in terms of its positioning and image since the demand for a healthier lifestyle was growing as was Kellogg?s image as a healthy food
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doc_530956692.docx
This is document describes about Kelloggs in Indian market.
Kellogg’s
Kellogg's has utilized integrated business units and compensation incentive systems to increase the accountability of the cash expenditure and improve the functionality of the organization. Products sales have been increasing in the US as well as in other countries. The pricing and availability of the product determines the profitability of a product. Streamlining many of the operations in recent times has helped the Kellogg increase the profit margin. More resources could therefore be spent on the marketing and advertisement of products. In addition, Kellogg's also increased the number and frequency of promotional offers. More toys and DVD's in cereal boxes, tie-ins with movies and charitable donations to local schools and charities.
Kellogs India: When Kellogg Company entered India, the per capita consumption of breakfast cereals was a low 2 gm per annum against 5 kg per annum globally. The Indian ready-to-eat-cereal market, clearly, posed several challenges: • Cultural factors and eating habits – population not used to processed foods • Easy availability of low-priced traditional breakfast • Low awareness about processed foods and calorie requirements • Price sensitive customers Kellogg India steadily overcame these and contributed to the rapid growth of the breakfast cereal market in the country. Factors for success Innovative marketing and brand-building Kellogg India took various initiatives to overcome the low awareness of breakfast cereals: • Sustained brand-building through advertising and investment behind key brands. • Introducing a limited edition Kellogg?s Chocos Spider Man 2 “web designed cereal” which was part of the global association between Kellogg Company and the movie Spider Man 2 • Conducting school contact programmes and having active interface with opinion leaders – CFTRI, the government, independent agencies etc. • Adopting brand names that appeal to the Indian consumer such as „Shakti?, meaning power • Using packaging as an effective marketing tool, for brand communication and on-shelf differentiation Efficient supply chain network Price sensitive customers necessitated a constant focus on cost reduction and supply chain efficiency enhancement in India. Kellogg India took several initiatives in this area: • Localised the entire raw and packing material requirement, saving import duty. In addition it adopted single sourcing strategy achieving scale efficiencies • Located its manufacturing plant at Taloja, near Mumbai in the state of Maharashtra, which is the largest market for breakfast cereals in the country thereby optimising transportation cost • Set up a distribution network with storage hubs in all the key states of the country serving over 200 distributors providing a good reach • Optimising overheads by giving distributors larger responsibility for sales, thus bringing down the strength of its internal sales force • Deploying Oracle 11i based ERP to enhance supply chain transparency leading to lesser inventories and better service levels. Other locally developed systems help monitor stocks and movement on a daily basis. Customising products for India Kellogg India also adapted its products to address the local need gaps. For example it enhanced its focus on iron and calcium fortification with products like Iron Shakti (meaning iron power) and Calcium Shakti.
However, all these strategies have not necessarily worked very well.
KELLOGG'S India withdrew its Cheez-It brand of extruded snacks from the market. Launched in 2002, Cheez-It, a range of baked cheese snack crackers, marked Kelloggs entry into the snacks market. Through its launch in India the American multinational wanted to reposition itself as a convenience food company from making just cereals. Pegged at Rs 10 for a 25-gm packet, Cheez-It came in three flavours - Cheese, Party Mix Onion Garlic and Party Mix Tangy Tomato. The products were being outsourced unlike its cereals, which are manufactured at its company-owned plant in Taloja. Targeting the `On-the-go snacker', Cheez-It was primarily pitted against the `Cheeselings' offerings from Britannia and Parle. Kellogg's had even appointed Leo Burnett to devise a campaign (Mind Mein Ghus Gayee Cheese) to target teenagers with its snack brand. Positioning the brand as `America's No:1' brand of cheese crackers, Cheez-It was devoid of the Kellogg's brand name and was expected to serve as a standalone brand on Kellogg's portfolio.
Taking the fitness mantra of the 21st century to India, Kellogg’s India was planning to make it easier with its new brand of cornflakes, Special K. Focusing on getting its strategy right for the ready-to-eat cereal market, the $11-million American multinational believed it had a product to enter a new category and set of consumers - women aiming for weight management. Special K had been formulated specifically for the Indian market while continuing with its international positioning of being a weight management product. The fact that it is starting off with a challenge to consumers to lose 2.5 kg within two weeks and claims to be 98 per cent fat-free with its whole wheat composition are all modifications for the Indian market. With no other breakfast cereal brand offering the same benefit of weight management, Kellogg’s believed it has got the first-mover advantage. While its mother brand of Kellogg’s cornflakes and its variants were meant for everyone, subbrands such as Chocos and All Bran wheat flakes have been addressing children and adults. With Special K, Kellogg was going to target the urban women. Research showed that that there were nearly 12 crore obese urban women. In fact, Kellogg’s has test-marketed the product in Bangalore to gauge its acceptability and the results were extremely positive, says the company. Eighty per cent of the consumers observed weight reduction and also felt Special K helped keep them fit. It easily fitted into one’s daily routine without any substantial time and money commitment. It was priced Rs 45 for a 140 gm pack and Rs 90 for a 290 gm pack. Kellogg’s also introduced Basmati flakes. Its honey and mango variants under cornflakes were made for this market. Kellogg’s stayed away from the overcrowded categories and wanted to offer differentiated products. However, worldwide its strength was in breakfast cereals and not in snacks. According to analysts, “Kellogg’s had hoped to create a new category of branded snacks which would have brought in the immediate volumes it
was looking for. Since its cereals and snacks could never ride on the same distribution chain, Kellogg’s had even taken the pains to set up a fresh distribution network.” Kellogg’s once again betted on its core category to make an impact. Realising the market is price-sensitive, it launched a new sub-brand under KPak in lower SKUs of Rs 10. This increased their distribution reach by 100 per cent in the previous year. In the present year they are looking at adding 60-70 per cent more reach.
Kellogg’s Uk:
With the advent of the 21 century, people all over the world started becoming more health conscious. There was a definite demand for the figures of the composition of foodstuffs to be displayed on the pack and Kellogg?s realised this. In the area of food labelling, Kellogg introduced the Kellogg's GDAs to its packaging, showing the recommended Guideline Daily Amounts. These GDAs allow consumers to understand what amount of the recommended daily levels of nutrients is in a serving of Kellogg's food. Working with a group of other major manufacturers, Kellogg introduced a new format in May 2006, with GDAs clearly identified on brand products and packages. These GDAs have been adopted by other manufacturers and retailers such as TESCO, one of the biggest supermarket/hypermarket chains in the UK. For many years Kellogg?s had been working to encourage people to take part in more physical activity. The company used this to its advantage by taking cognizance of people?s new found awareness about their health and started working with the Amateur Swimming Association (ASA) in the UK. More than twelve million people in the UK swim regularly. Swimming is inclusive as it is something that whole families can do together and it is also a life-long skill. The ASA tries to ensure that 'everyone has the opportunity to enjoy swimming as part of a healthy lifestyle' With the ASA, it set some longer term objectives. As a lead body for swimming, the ASA has been a good organisation for Kellogg to work with, as its objectives match closely those of the company. Kellogg became the main sponsor of swimming in Britain. This ensured that Kellogg's sponsorship reached all swimming associations so that swimmers receive the best possible support. Kellogg sponsors the ASA Awards Scheme with more than 1.8 million awards presented to swimmers each year. This relationship with the ASA has helped Kellogg add to its existing image of a healthy brand and thus reinforces its brand position. Working with the ASA helped Kellogg set up links with a number of other bodies and partners. For example, Sustrans is the UK's leading sustainable transport organisation. Sustrans looks at the different ways that individuals can meet their transport needs in a way that reduces environmental impact. It is the co-ordinator of the National Cycle Network. This provides more than 10,000 miles of walking and cycle routes on traffic-free paths throughout the UK. To meet its business objective of encouraging and supporting physical activity Kellogg is developing a promotion for a free cyclometer which will be advertised on television in 2007. Walking is one of the easiest ways for people to look after themselves and improve their health. To encourage people to walk more often, Kellogg has supplied a free pedometer through an offer on AllBran so that individuals can measure their daily steps. During 2006 more than 675,000 pedometers were claimed by consumers. From a research sample of 970 consumers, around 70% said they used the pedometer to help them walk further. Kellogg's Corn Flakes Great Walk 2005 raised more than £1 million pounds for charity on its way from John O'Groats, through Ireland and on to Land's End. In 2004, 630,000 people took part in the Special K 10,000 Step Challenge. It was a huge success for the company in terms of its positioning and image since the demand for a healthier lifestyle was growing as was Kellogg?s image as a healthy food
st
doc_530956692.docx