Kellogg’s: The Breakfast Story (Habit Marketing)

Kellogg’s acquisition of P&G's Pringles business; makes Kellogg world's second-largest savory snacks player. The acquisition nearly triples the size of Kellogg Company's international snacks business and adds a complementary product to the company's high-quality snacks brands

      

While experimenting with different food production techniques at the Battle Creek Sanatorium in Michigan, William and his brother, Dr. Kellogg, decided to run boiled wheat dough through rollers which enabled them to produce thin sheets of wheat. After a sudden interruption in their laboratory activities left cooked wheat exposed to the air for more than a day, the Kellogg brothers decided to run the wheat through the rollers despite the fact it was no longer fresh. To their amazement, instead of a single, large sheet of wheat, the rollers discharged a single flake for each wheat berry – Kellogg’s was born.

In the early nineties the cereal industry became stagnant in US and Europe and Kellogg’s looked beyond its traditional markets in Europe and United States. Hence, Kellogg’s came to India with lots of hope. Kellogg’s decided that India is a suitable target for its cereal products. Kellogg’s thought that even if they can manage a two percent market share in India, they will have a market larger than the US itself.

When launched, the sales figures were decent which indicated that the Indians are responding pretty well. However, it soon became apparent that many people had bought Corn Flakes as a one-off, novelty purchase. So Kellogg’s realized that their problem is not marketing the product to Indians their problem is marketing the style of breakfast to Indians. Pursuing Idly-dosa-paranthas obsessed Indians to take cereal for breakfast is a classic case of ‘habit marketing’.

To change the Indian mind-set, they decided to sell biscuits as a strategy to establish its brand equity. Kellogg’s biscuits are produced only in India and there are multiple flavors like Chocos, Glucose, Chocolate Cream, Badam, Pista and Cashew. 

Kellogg’s tried to modify breakfast habits of Indians, but the pricing of the product restricts consumption to the urban consumers and affluent house-holds. Kellogg’s had targeted middle class mothers for its cornflakes category by introducing iron shakti. Again the strategy is a bit similar, targeting middle aged women, but only those belonging to SEC A and B. They promoted the concept of having breakfast together through advertisements and tried to influence kids who are mainly initiators for buying decision of this type of products.

Kellogg’s has also positioned itself as a health centric brand through introduction of Indi’s first diet cereal, Kellogg’s K Special. Kellogg’s has offerings for daily weight management, digestive regularity and heart health.

Apart from repositioning the brand, they have been trying to enhance their market share through product line extension. To capture fortune at the bottom of the pyramid and to attract economic buyers Kellogg’s has introduced 10 rupees packets. More importantly, they didn’t want customers to take a quick decision. Customers were gradually and softly exposed to the new products, promotions and were given enough time to enjoy the experience.

Kellogg’s now holds 70 percent share of 400 crore breakfast market in India.