Consumer Behaviour- Corn Flakes Case

4591 Words Dec 26th, 2013 19 Pages
HOW CAN CORNFLAKES COMPANIES EXPAND THE CATEGORY?
The Indian breakfast cereal market is a small market when compared to countries like the USA but it is growing rapidly. This segment was valued at $139 million in 2012 and has witnessed a doubling of market growth over the past six years. It is comprised of cold cereals like cornflakes and muesli which represent 60% of the market and hot cereals like oats which represent 40% of the market. The market leader in this segment is Kellogg, which is far ahead of its competitors.
The room for growth of the cereal industry had reduced and thus the cereal industry had been stagnant for over a decade in its core countries like the US and the UK. Thus, in the beginning of the 90s Kellogg’s had to
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This was one of the areas where Kellogg fell short.
The products offered by Kellogg were too expensive as compared to its other local competitors, which cost around one third of what Kellogg cost. Kellogg was positioned as a premium product and hence was not affordable for the masses.
Kellogg has always positioned itself as an alternative to the usual or regular breakfast consumed by customers. They continued with this same positioning in India as well. While this message worked globally, it did not succeed in India. The food eaten by people in India for breakfast consists of items like dosas, puris and parathas, all of which are very heavy. These dishes are very filling and make people feel that they have had a complete breakfast. However, a breakfast consisting of only Kellogg’s Corn Flakes did not give consumers that feeling of fullness and satisfaction. They did not feel that they had had a full breakfast, and still felt hungry.
Indian consumers are used to having a lot of variety for breakfast. There are several varieties of almost every breakfast dish ranging from dosas to idlis to chutneys. Once an item has been eaten on a particular day it is usually consumed only after several days. Hence it is a part of Indian culture to eat a variety of dishes over several days and not repeat them often. Hence when corn flakes was introduced and it was positioned as an everyday meal, it was too much of a
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