Marketing Mix of Kellogg's - what went wrong?
In the first-ever mPower blog, we understood how the marketing mix would help you start your own chewing gum company. It's not always as straightforward as we made it sound back then and even the world's largest breakfast cereal company got it wrong the first time it tried to enter the Indian market.
Kellogg's had a strong market presence in the US and European markets before making its entry in India. With a massive population of 900 people, India was the golden bird everybody wanted a piece of, and Kellogg's was no different. They invested over $65 billion and forayed into the subcontinent with the high media frenzy.
Let's look at where they lost the marketing mix game.
Kellogg's launched its iconic cornflakes in India but failed to consider an average Indian consumer's behaviour and eating preferences. While cornflakes worked like a charm in western countries, Indians have a very different taste palette. We usually boil our milk and consume it with sugar. When you mix cornflakes with hot milk, it becomes soggy, and when combined with cold milk, Kellogg's wasn't sweet enough as the sugar did not dissolve.
Kellogg's launched its cornflakes at a premium price tag. ₹63 for a 450gm box was not a convenient price range for most consumers, especially when a rival brand offered the same for around ₹30. Moreover, only one package was available, which showed a lack of segmentation by Kellogg's, of their consumers and their needs. (Small shampoo sachets are a hit as they leverage the lower purchasing power of the consumers).
Kellogg's wanted to leverage the population advantage in India and looked to change consumer behaviour. However, placing its products in high-end stores in only urban setups deviated from its ideology of bringing quality ready to eat cereal to an average Indian's table.
Kellogg's positioned cornflakes as a healthy product hinted that the existing Indian breakfast wasn't a healthy option. They wanted to replace the Indian breakfast with cornflakes, which didn't fare well with us. It wasn't as filling as a full Indian breakfast such as Aloo Paratha topped with butter or Masala Dosa.
To give you a quick comparison, Nestle introduced Maggi, and with their spot-on understanding of the Indian consumer, they aced the marketing mix.
However, Kellogg's was also quick to realize its mistakes and made amends like localized flavors and a tagline "Iron Shakti", which resonated more with Indians. As a result, Kellogg's managed to change India's consumer behaviour and currently dominates the breakfast cereal market in India with a 56% market share.