Kellogg’s Marketing Essay

IntroductionU.S based Kelloggs is a manhood leader and the most supremacyful cereal manufacturer in the world. Kelloggs entered India in 1994 and it took them a good 15 years for stability in the Indian commercializes facing initial problems and trying to change the Indian consumers mentality or so the morning eat http//www.kelloggs.co.uk/ association/history/howitallbegan.aspx most the assignment (Refer Appendix 1)Growth dodging by Kelloggs in IndiaKelloggs were successful to create a need for the convergence which was neer a extremity for an Indian household. We will now discuss how the company managed to establish themselves with a dominant merchandise sh be in the Indian marketplace.1.) Ansoff MatrixAnsoff Matrix was introduced to address the corporate system of the future. It delivers the perspective of push throughgrowth options on the horizontal level and introduces the possibility of diversification. (Kotler, Berger & Bickhoff, 2010)http//www.ansoffmatrix.com/ merchandise DevelopmentMarket Development is capturing red-hot markets with your vivacious returns or services. (Lester, 2009) In a innovative market or to a new consumer, it will be a quiet a task to withdraw them to believe in your product on opening (Meldrum, M & McDonald, M., 2007) e particularly, when a country is so companionable of their traditional recipes. With the help of extensive market research Kelloggs imbed 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 guileful as Indians love their hot breakfast. Kelloggs 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. Kelloggs via their advertizing campaign did as well as gear up the Indian consumers astir(predicate) the calorie and nutritional topics, etc. Company also struggled with their introductory prices as their competitor Mohan Meakin sold at a conjectural price. Although, Kelloggs had a safe and winsome in look but was considered as game. We assume that the market for Kelloggs in the U.S and U.K was saturated and hence they contumacious to enter India. (Haig, 2003)Product DevelopmentCompanies 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. http//www.ansoffmatrix.com/product-development.htmlhttp//business cuttingstudies.co.uk/portakabin/achieving-growth-through-product-development/ansoffs-matrix.html Following the corn flakes the company launched chocolate cover flakes, named as Chocos and to go with it flavours such as coconut and mango. The product which byword the company sales rise up by 17% was the press out 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(ip) success which helped them capitalise eventually. Kelloggs tried its hand in producing biscuits which appargonntly didnt work payable to a very tough competition it confront from Parle-G and Britannia biscuits. Kelloggs otherwise product Cheez-It, launched in 2002 and was withdrawn in 2003 didnt garner any attention either. (Refer to Appendix 2)(Excerpts from the case study, rascal 5)http//www.thehindubusinessline.in/2003/03/18/stories/2003031801420600.htmMarket PenetrationIts well known growth outline where the company concentrates on selling existing products into existing markets. (OShaughnessy, 1995) Kelloggs with their intelligent research team did find out that the cereals were actually consumed by the good family and also for health/diet conscious women so they launched a distinguishable variant of the cornflake known as Special K under fish management. With this pro duct (Special K), Kelloggs challenged the consumers to lose 2.5 kgs in just two weeks. To countenance the household adults to consume, they produced adverts with adults featuring in it. (Excerpts from the case study 6 & 7)Market sixth sense increases or helps maintain the market share of the current products with advertising, sales promotions and personal selling. The Special K and the Iron Shakti just did that for Kelloggs they kept educating their consumers via adverts, campaigns and attractive and informative packaging which later paid off with good market share on these products. http//tutor2u.net/business/strategy/ansoff_matrix.htmProduct/Market variegationA process which defines the activities of firms to enter new product market combinations. It is of elementary interest to the researchers. (Klier, 2008) To improve the market capitalisation of the company, Kelloggs introduced Cheese-It a sunbaked cheese insect bite crackers in the pungencys category. It was launched in 3 flavours to font the Indian tastes. And along with the snacks, the company introduced biscuits, as Kelloggs Choco Biscuits. The move to launch snacks and biscuits backfired and resulted in withdrawal of the products in a very short duration. The Indian biscuits industry has been dominated by Parle-G and Britannia for a very long time now.It was an up heel task for the Kelloggs but they were confident as people started to recognise Kelloggs as a good fictitious character brand. With the launching of the snacks and the biscuits Kelloggs wanted to mountain chain out to the masses and delimitate them as a contrivance food market. Kelloggs made a major announcement that they are ready to acquire savoury snack realiser Pringles from Proctor & Gamble. This deal marks the entry of Kelloggs into salty snacks, an important add-on to their portfolio with convenience foods and the successful breakfast cereals.(Excerpts from case study, page 7) http//www.business-standard.com/india/ne ws/with-pringles-buy-kelloggs-haslarger-canvas-in-india/464942/ http//www.just-food.com/news/kelloggs-exits-biscuits-business_id68045.aspx2.) Kelloggs India in regards with the 4Ps of trade correspond to Borden, 1964, the selling sashay included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging display, servicing, physical handling, fact finding & analysis. All the above factors were later sort into 4 categories now known as 4Ps of Marketing.http//www.netmba.com/marketing/mix/http//www.google.co.uk/imgres?q=4+p%27s+of+marketing&hl=en&biw=1366&bih=643&gbv=2&tbm=isch&tbnid=MyJEUI-Mui5D0M&imgrefurl=http//candidkatie.com/2009/10/13/the-4-ps-of-marketing-part-1/&docid=W7aCYZrJmVXbSM&imgurl=http//candidkatie.com/wp-content/uploads/2009/10/4-ps-300218.jpg&w=300&h=218&ei=Rf-9T4X_EsXk8QP4lfUp&zoom=1&iact=hc&vpx=571&vpy=178&dur=224&hovh=152&hovw=209&tx=73&ty=46&sig=116673603394737623265&page=2&tbnh=139&tbnw=191&start=20&ndsp=2 5&ved=1t429,r21,s20,i162ProductAs a tangible product, it was important for the product to be appealing for its content and its price too. Kelloggs launched their flagship product to start with, Cornflakes which was a success in the western market. Cornflakes which initially failed, were later back in the market with some modifications thus called as indianization. The flakes were a bit cryptic and were sweetened to suit the Indian palette. The increase in the awareness of the products via advertising resulted into the expansion in the market and health eudaemonia of the products was the main argue for the fast driving sales. The Iron Shakti gave the Kelloggs taste of success with 17% rise in the sales, was designed to cater the iron deficiency in the growing kids. In order to redefine themselves as a convenience company and to pace their growth Kelloggs introduced Cheez-It and Kelloggs biscuits unfortunately it did non share a liking amongst the Indian consumers and was later s crapped from production. Kelloggs then only decided to concentrate on cereals and its development. (Excerpts from the case study, page 5 & 6)PricePricing is an important marketing mix tool for two(prenominal) creating and capturing customer cheer. (Kotler & Armstrong, 2010). Initially, Kelloggs only focused on the quality of the product, features and benefit to the Indian consumers. India is a country with majority of population as optic class the Indian public has been always price smooth. Kelloggs launched KPak, a very reasonably priced product at only INR 10 in 2007, a variant of the Chocos, an ideal option to chips and other junk foods. In 2010, Kelloggs rolled our retail packs of contrastive sizes & prices to cater the need of pastiche of consumers. After the launch with effective advertising, the company saw rise in the sales but that was just the curiosity of the Indian consumer to buy a new product. Baring in mind that the competitor Mohan Meakin reasonably priced th eir cereals and the side (initial failure of Cornflakes), Kelloggs priced their future products reasonablyPlaceThe products were only operable in the metro cities when it was initially launched in 1994. Then as a premium product it was only placed in the supermarkets and due its pricing clientele expected was the higher middle class or elite. Eventually, when the product became popular and after the launch of KPak which was priced at INR 10, Kelloggs tried to reach out to the Tier 1 & Tier 2 towns in the country.(Excerpts from case study, page 8)PromotionKelloggs were quiet effective on the promotional front. They always had attractive adverts on the telly usually featuring kids and the adverts featuring at the autochthonic time soaps. As mentioned earlier, Kelloggs had a Bollywood celebrity to endorse their products for adults. A celebrity is like an eye-kandy who attains the attention of the consumers which helps in creating awareness about the brand. In regards with personal s elling, newspapers adverts were granted and special pass adverts were posted in weekend newspapers or in the kids section of the newspapers to attract the attention of the kids.Kelloggs did a special promotion whilst sponsoring Spiderman 2 movie they rolled out specially packed limited edition spider web cereals and gave away applicable toys. The promotion was only available for 2 weeks and extensive advertising was done. along with the pack, the buyer can also avail 20% discounts on the approaching Spiderman 2 DVD. http//www.thehindubusinessline.in/2004/07/14/stories/200407 cxl1260900.htm http//www.4psbusinessandmarketing.com/24022011/storyd.asp?sid=4411&pageno=1 http//searchandhra.com/cinema/karishma-kapoor-brand-ambassador-for-kelloggs-chocosPorters Generic StrategiesMichael Porter has identify the four strategies to achieve a competitive advantage1.) Cost leading2.) Differentiation3.) Focus Strategy i) Differentiationii) Cost.The Differentiation strategy is more(prenominal ) relevant for the Kelloggs, in accordance with case study. A Differentiation strategy calls for the development of a product or services that are both unique and are valued by the customers. A Differentiation strategy is also the one in which a product offering is different from that of one or more competitors. (Aaker, 2001) http//tutor2u.net/business/presentations/strategy/genericstrategies/default.html Kelloggs started in India with their flagship product Cornflakes with 3 variants. Unlike their competitor, Kelloggs cornflakes were premium priced with an attractive packaging.With cornflakes initially failing due to sogginess after adding milk and less sweet flakes, Kelloggs was quick to do amendments to suit to the local taste buds. Kelloggs with their effective advertising campaign and communication via packaging spread awareness about the product and its benefits. Kelloggs always believed in advertising and promotions, as its the most important medium to reach the target market and airing brand awareness in India and endorsing the product with a celebrity is adding value to its which the Kelloggs rival never did. http//www.4psbusinessandmarketing.com/24022011/storyd.asp?sid=4411&pageno=1Major Challenges go about by KelloggsEven if Kelloggs was a world leader in breakfast cereals with reports of profits in the western countries they did struggle for a spell on their arrival in India. Kelloggs were smart enough to bear proper strategies to tackle the issues they had. I have analysed their issues with some theories below1.) overdress AnalysisThe use of rig out Analysis allows organizations to maximize their strengths, minimize their weakness, contribute advantage of their opportunities and overcome their weaknesses. (Fine, 2009)StrengthKelloggs main strength was the product. Although they misinterpret the market at first in regards with the product and price, they were quick to make changes and jump back. They had the advantage of first foreign cereal company to aid in the raw market India. Over the years, the best thing that Kelloggs did was they carried extensive market research. They read the market accurately and offered quality products on a regular basis at a reasonable price. The other major factor was they were selling variety of healthy products whilst creating awareness about the products amongst the consumers. (Refer to Appendix 3)P.E.S.T.L.E(Refer to Appendix 4)With the help of the Porters 5 forces we can evaluate the 5 major challenges faced by Kelloggs in India.http//www.google.co.uk/imgres?q=porter%27s+5+forces+definition&um=1&hl=en&sa=N&biw=1366&bih=643&tbm=isch&tbnid=WmX3SuQUrNjk4M&imgrefurl=http//www.businessmate.org/Article.php%3FArtikelId%3D9&docid=w0bo10yR_EOaQM&imgurl=http//www.businessmate.org/userupload/Michael_Porter_Five_Forces.png&w=450&h=400&ei=xE6_T9W2E82W0QWy-_nRCg&zoom=1&iact=hc&vpx=275&vpy=269&dur=44&hovh=212&hovw=238&tx=126&ty=173&sig=116673603394737623265&page=1&tbnh=140&tbnw=156&start=0&ndsp=1 8&ved=1t429,r7,s0,i86 With evaluation of the opportunities and threats through the SWOT analysis, The porters five forces model will give us an overview of the challenges Kellogg would face. The five major forces lead to assessment of the overall competitive dynamics of an Industry. ( Colley 2007 )1. Threat of new entrantsThere are a lot of Domestic Companies from India like Hindustan colorful Ltd, Dabur India Ltd which may diversify and enter the Cornflakes Market which will threaten Kelloggs position as they have an expertise in the food touch business . Also, with the Supermarket trend starting in India, there is a likely entry of their own brands which are more reasonably priced on the market .This will make it necessary for Kellogg to come up with products with traditional Indian flavours to be able to gain competitive advantage over the domesticated competitors like adding saffron or cinnamon flavour to their products.2. Threat of transmute products or servicesKellogg is a product in which many variations are not possible. The Indian breakfast items list from a wide ply of foods with different tastes and flavours. The introduction of ready to eat breakfast items from Manufacturers like Haldirams and Gits contract a huge threat to Kellogg . The Company is recommended to diversify their product portfolio.3. negotiate office of BuyersThe bargaining of power of an Indian consumer is very high due to a wide range of available products in the market. In case of slight fluctuations on the price, the customers may opt for other products in the market which are more reasonably priced as the buyer is price sensitive .This makes it ideal for Kellogg to price their product in accordance to the competition.4. Bargaining power of SuppliersThe company imports most of the raw materials required for manufacturing. If it purchases these materials via domestic suppliers, it would prove to be cost efficient, save time and also save the exercise trading taxes.5. In tensity of rivalry among competitorsWith introduction of wheat flakes, extra muesli as its high fibre breakfast cereals, Kellogg is also in process of creating alternatives with different flavours in order to compete with its Rivals such as ITC , PepsiCo and Nestle . In 2006 the largest snack company in the country , Frito Lay , a division of PepsiCo India Holdings , had also , had also entered the breakfast cereal market .ConclusionThe assignment has given me an opportunity to understand the marketing implications of a product launched in a foreign nation with a diverse culture and also the challenges faced in order to have an established competitive advantage on foreign soil. It gives an insight of how marketing can help reach out new markets and also create new markets for products which were never a necessity .Also the use of various marketing concepts like Porters five forces and Ansoff matrix have helped in a critical evaluation of current marketing line and various forces th at affect the performance of Kellogg .BibliographyBooksPhilip Kotler, Roland Berger & Nils Bickhoff, The Quintessence of strategic marketing, 2010, page 210 David Aaker, strategic Market Management, 6th edition, page 159 Andrew Lester, Growth Management Two hats are better than one, 2009, page 52 John OShaughnessy, Competitive Marketing A Strategic Approach, 4th edition, 2008, page 175 Daniel O. Klier, Managing Diversified Portfolios, 2008, page 76 Philip Kotler, Gary Armstrong, Principles of Marketing, 2011 Lawrence G Fine, The SWOT Analysis, 2009Websiteshttp//www.kelloggs.co.uk/company/history/howitallbegan.aspx http//www.businessweek.com/innovate/content/may2006/id20060508_952455.htm http//www.ibef.org/download/Kellogg_India.pdfhttp//www.ansoffmatrix.com/product-development.htmlhttp//businesscasestudies.co.uk/portakabin/achieving-growth-through-product-development/ansoffs-matrix.html http//www.thehindubusinessline.in/2003/03/18/stories/2003031801420600.htm http//tutor2u.net/busin ess/strategy/ansoff_matrix.htmhttp//www.business-standard.com/india/news/with-pringles-buy-kelloggs-haslarger-canvas-in-india/464942/ http//www.just-food.com/news/kelloggs-exits-biscuits-business_id68045.aspx http//www.netmba.com/marketing/mix/http//www.4psbusinessandmarketing.com/24022011/storyd.asp?sid=4411&pageno=1 http//searchandhra.com/cinema/karishma-kapoor-brand-ambassador-for-kelloggs-chocos http//tutor2u.net/business/presentations/strategy/genericstrategies/default.html http//www.4psbusinessandmarketing.com/24022011/storyd.asp?sid=4411&pageno=1 http//www.kelloggcompany.com/corporateresponsibility.aspx