Strategic Marketing Essay For Kellogg's In India.

Learning Outcomes:

After completing the module you should be able to:

1. Evaluate an organisation's current and future external environment.
2. Critically analyse an organisations current and future internal environment.
3. Analyse relevant information to recommend and inform strategic decision making.
4. Develop a strategic marketing plan to realise organisational objectives.
5. Manage resources to deliver the strategic marketing plan.
6. Monitor, measure and adapt the marketing plan for continuous improvement.
7. Perform effectively within the professional environment. Work within a team, demonstrating interpersonal skills such as effective listening, negotiating, persuading and presentation. Be flexible and adaptable to changes within the professional environment.

Kellogg’s company which is also popularly known has Kellogg’s, Kellogg and Kellogg’s of Battle Creek is a 112 years old American Multinational food manufacturing company headquartered in Battle Creek, Michigan, United States. The company was founded by W.K Kellogg’s as a part of experiment he was doing while preparing Granola, he accidently flaked wheat berry, and kept on continuing with the experiment until he flaked corn, eventually leading to the birth of Kellogg’s corn flakes(Faulkner, 2016). The company which is currently under the leadership of the veteran John Bryant is delivering great quality breakfast in more than 180 countries, and the company, until today, irrespective of its size and expansion, flakes the corn in the similar way as W.K Kellogg’s did way back in 1906.Some of the widely popular product offering of Kellogg’s include; Cereals, cookies, crackers, toaster pastries, cereal bars, fruit flavoured snacks, frozen waffles, vegetarian food and fruit loops(Grayson, Waiker & Smith, 2017). Eggo, garden burger, pringles and sunshine biscuits are some of the prominent brands of Kellogg’s. One of the strongest contributing factor of success for Kellogg’s has been, its ability to customize the product according to the market. The company which employees over 50,000 people earned revenue about   13 Billion USD in the year 2016, since the inception the company is moving on an upward trajectory in terms of sales figures. Kellogg’s is undoubtedly the world’s largest cereal company which is developing healthy breakfast lifestyle amongst people all over the globe (Begum, 2015)

Strategic market planning can be understood as an on-going process through which company creates marketing strategies and marketing plans and implements the same in the target market. The strategic marketing process considers the current position of the company in the market and based on the research identifies the promotional activities to penetrate the market and then evaluates and monitors the activity (Veselinova, Miceski & Gogoya, 2016). The five steps which are crucial for the strategic marketing are: Identifying the mission, analysing the situation, setting objectives, developing a marketing strategy and planning for evaluation (Ching, 2016) The purpose of the report here is to create a strategic marketing plan for Kellogg’s in the Indian market; The Company is keen to offer a new product, customized to the taste of Indians, keeping its brand image intact along with delivering customizable breakfast choice in India. India, is 2^nd largest country, next only to China in terms of population, changing the habit of traditional Parantha, Samosa, Idli  & Dosa people is hard, Kellogg’s is on a mission to offer Indians alternate product with more nutritional value(Vomberg, Homburg & Bornemann, 2015)

Introduction to Kellogg's Company

PESTLE analysis was developed by Michael Porter and is one of the most fundamental frameworks used in conducting marketing analysis. Companies all over the world use the tool to better understand the market force or the environment in a bid to launch the company in the market or while launching the product. The PESTLE analysis can be seen as a bird’s eye view of the market environment from different angles which one uses to keep a track of while projecting or contemplating an idea. PESTLE mnemonic comprises of 6 forces which provides comprehensiveness to the marketing environment (Robertson & Hamilton, 2015)

As the name implies, political factors determine the extent to which the government may act as an influencer in an industry or the economy. A government might change the taxation policy which might hurt the company, imposing stringent rules and regulation which can again hurt the sentiments of the company. Tax policies, trade tariffs, economic environment are some of the examples of how the political forces can influence the organization’s strategic goals in the country (Makos, 2015)

India is one of the fastest growing Asian economy and surprisingly surpassing many developed countries in terms of GDP. India has good, friendly relations with almost all the countries, and is not involved in any kind of controversy with the western countries. The company has opened its doors to a lot of MNC for the purpose of investment and is considerably improving its policies to improve the market forces in India. Political situation in India is extremely cordial and the stability in the government makes India a very favourable location to conduct business. A plus point for Kellogg’s is that India and US have great friendly relations and hence the company will face almost zero resistance in launching a new product for the Indian consumers.

Economic factors can be seen as the determinants of the economy’s performance which directly impacts the company; hence it is one of the most important factors to take into consideration while evaluating the country’s potential for new idea or new product development. Inflation affect’s the company severely, for example if the inflation rises, the companies have to adapt to the changing inflation and make a change in their pricing strategy. Purchasing power parity is another economic measure which affects the company, other factor include the changing interest rates, foreign exchange rates, trade policies and economic growth patterns. Thus, economic factors make the company evaluate its every step before making a progress in the forward direction (Aithal, 2016)

Product Offerings of Kellogg's

India is the fastest growing economy which even surpassed China; the company had a GDP of 2.26 lakh crore in the year 2016 and is expected to grow by 7.1% in the following years. The country has made significant progress in the last few decades and has positioned itself strongly on the world map. India has opened up many SEZ (Socio economic Zones) which offer free trade and many tax emptions, it is for sure a positive sign for Kellogg’s. The inflation in India is well under control and Indians have shown a considerable improvement in its purchasing power parity. Hence, a new product introduced in the market, will definitely attracts footfall in the malls, if the product has value offering for the population.

India is one of the most diverse countries in the entire world; the company has so many religions, ethnicities, social and cultural norms that for a marketer it becomes really tough to come up with a comprehensive strategy to tap the entire Indian population. Factors like cultural trends, demographics understanding and population analytics play a key role in analysing the social forces (Newton, 2014)

Kellogg’s was launched in India with a lot of fanfare and has for certain made a place in the traditional Indian homes. A country with a population of 1.32 billion, is for tough to penetrate the market all at one go, but Kellogg’s with its brand image and reputation can certainly do wonders. India is very quick in accepting the western trends and the young nation can definitely be a suitable market for Kellogg’s to launch a new product.

These are another set of factors which have to be identified in order to analyse the market forces. Technological factors pertain to innovation in technology, new trends in technology which can affect the industry or the organization favourably or unfavourably (Greenspan, 2015)

India is really strong with technology and is really fast at adoption of new technology trends, Kellogg’s introduced food automation in India which was accepted and became the industry standard across the entire country. Kellogg’s spend too much on R&D and can further bring technological advancement in the country, thus technological factors puts Kellogg’s in a position of strength.

Legal factors can affect the organization considerably at any point in time, companies have to be really smart with the compliance of the legal requirements of the nation and they have to ensure that the organization is not breaching legality of any country, in case of breach, the company may be imposed with heavy penalty or can be asked to exit the country. Consumer laws, safety laws, labour laws and employment laws are some of the legal regulation the organization has to comply with (Irani & Sharif, 2018)

Success Factors of Kellogg's

India has some flexibility for MNC’s operating in India, but still all the food companies have to comply with the rules and regulation of Food Corporation of India, beside following employment protection and work place safety standards.  Overall, India offers flexibility but still follows a zero tolerance policy in legal breach.

All the countries across the world are paying close attention to the degrading environment and are consistently coming up with measures to reduce the environmental pollution. Certain nations have started imposing heavy fines on the organization which are found to be destroying the environment or polluting it in some way or the other. Incentives are being provided to the companies who want to bring environmental friendly practice in the country. Another reason why environment is an important factor, because it affects other industries like tourism and hospitality adversely, thus companies has to ensure that they work in accordance with environmental sustainability (Ho, 2014).

Kellogg’s decided to enter India because the country holds a good supply of the raw materials, which was available readily in India. Moreover the company is planning environmental friendly packaging and labelling to preserve the environment. Company is also doing a proper waste management, reducing the energy wastage and keeping a close tab on the CO2 emission. Thus, Kellogg’s is being a really good company for India, which is helping in preserving the environment.

Understanding and analysing all the forces of PESTLE model it can be said that India is a great market for the food industry. The growing awareness, rising young population, growth in the internet penetration puts India on the same pedestal as developed countries. The country’s policies are flexible which aids the MNC giant, at the same time the breakfast eating habits of Indian need a radical shift, they have to move from traditional oily food to better healthy nutritional food. Thus, PESTLE analysis holds a very favourable position for Kellogg’s to launch a new product, satiating the needs of the Indian consumers.

Internal competencies of the firm can be analysed under the value chain model for Kellogg’s.

Figure 1 Showing Value chain analysis model

(Source: Johnson, 2016)

Kellogg’s is highly flexible and uses different services and features to ensure a high satisfaction level. The company understands the market and then customizes the product for the consumers:

Quality control

Information system: High level

Strong logistic and distribution channels

Kellogg’s has set a wish model for all its employees “Kellogg’s business leader model”, the model helps to improve the competencies of all the employees associated with Kellogg’s. The Kellogg’s business model helps the company to achieve a sustainable competitive advantage over other companies.

• Kellogg’s provide standing training to its employees to breed more innovation and efficiency in business processes.
• Innovation is one of the most important factors which the company wants to breed amongst its employees.

Strategic Market Planning

• Innovation is the most important component of the cereal industry
• Innovation to keep the iron in the cereal food
• Innovation on the image of health cereal
• Innovation in developing museli as product

Kellogg’s aims to achieve economies of scale in its procurement process, thus the purchasing division negotiate with suppliers to get group rates and reduce the cost and save tie in delivery.

Best suppliers are selected by Kellogg’s on the basis of quality of products, timely delivery & cost efficiency. The inbound logistics at Kellogg’s is completely automated.

Kellogg’s opens up an office in every country to better manage the business operations

Kellogg’s uses multi-layer channel system to deliver the product to the end consumers

Different distribution channels allow the customer to shop according to their comfort zone

• Good brand penetration of Kellogg’s products amongst Indians.
• Kellogg’s get into sponsorship activity to increase brand awareness.
• Kellogg’s has pulled up a good show in managing its product portfolio across retail malls, shops and hypermarkets across the world

Kellogg’s offer excellent customer service and takes the feedback of its esteemed customers seriously to better understand the taste and preference of its customers.

• Employee empowerment
• Openness in communication
• Kellogg’s business leader model

All the above points show how Kellogg’s is using its value chain model to leverage its competencies in the competing environment.

SMART framework is used to set up objectives which can be tracked, monitored, are timely specific and relevant to the organization. Organization these days have been using the SMART objectives to ensure the fulfilment of the set objectives (Bjerke & Renger, 2017)

S.No	Mnemonic	Parameter	Objective
1	S	Specific	· Create a new breakfast product for the Indian Market (Tier 1 cities to begin with) · Conduct all over India campaign encompassing the breakfast habits of the people. · Development of campaign focussing on the nutritional value the new breakfast will provide to the consumers.
2	M	Measurable	The objectives can be measured by tracking the progress on social media, website traffic, conversation in and around the new product and the increase in the brand awareness.
3	A	Action oriented	The entire campaign will have either a number to call for more details, participate in a contest or a way to engage with the community members.
4	R	Realistic and relevant	All the objectives set are highly relevant and are in sync with the previous marketing campaign of Kellogg’s when it first launched in India.
5	T	Time based	The objectives have to be achieved in time duration of 6 months.

Product: Bundle breakfast Product- Museli cereal cookies with Fresh Pressurized fruit Juice and Fruit loops cereal burger

India is a land where people have varied eating habits, but mostly people prefer the traditional low quality, oil rich home food in breakfast. The breakfast which Indians consume these days is high in calories, low in nutritional content and thus a very big source of cholesterol problems (Lokesh, 2017) Hence, in order to change the breakfast habits of the people, Kellogg’s decided to alter the taste of Indians by giving them a taste, which they never had with rich nutritional value (Hennessy & Krishnan, 2017). As mentioned earlier in the report, the initial target market for Kellogg’s new product launch has to be Tier 1 cities; this is where maximum professionals, newly wed couples and more heath conscious families reside. Based on the above discussion, the STP for the new product is:

Segmentation is dividing the entire population depending on the demographic, geographic, psychographic and behavioural parts. Segmentation is a process to serve the common needs of the customers who are segmented in accordance with the above mentioned criteria. Kellogg’s has adopted segmentation based on the geographic and behavioural characteristics of the Indians. The company wants the children, male and female of the house to love the product. For the purpose, the company is segmenting the population from middle class to upper income levels. The rationale for picking behavioural segmentation is based on the adoption of healthy, high nutritional value products among the segmented audience (Jones & Campbell, 2017)

Geographical	Region-Initially in Tier 1 cities for the first 6 months City- Tier 1 cities, retail stores, super market, grocery stores, malls Rural- No consumption as of now
Demographics	Age-Popularity of the brand amongst kids, mothers and health enthusiasts. Income-Middle to high income class Gender- Both Male and female seeking higher nutritional value for their families
Psychographic	Lifestyle- easily consumable Personality-Health conscious people
Behavioural	Occasion- Day to day breakfast needs Benefits- Healthy and tasty

PESTLE Analysis

In order to enter any segment the company has to look at the potential success each market segment can derive, this process is called as targeting. Kellogg’s has decided to go forward with differentiated targeting strategy for Indian market. Differentiated targeted strategy is a marketing strategy which the company adopts to target two or more than two segment market groups (Aktas, 2015)

Kellogg’s is targeting individuals who are done with eating the traditional breakfast which is oil rich, and are now moving for adoption of healthy breakfast habits. The fresh pressurized juice and muesli rich breakfast and the fruit loop cereal burger is a great offering to such health conscious individuals. The breakfast will cater the need of all age groups, and to all the genders (Dutta, 2017). Kellogg’s wants to leverage the opportunity of healthy eating habits in India by targeting especially the kids and their mothers. Mothers in India till date make the eating decisions of the family, thus targeting them implies the entire family is being targeted (Viterouli, 2014)

The target market as described above is mostly females and people who are health conscious and looking for alternative breakfast to replace their traditional breakfast. In order to do so, the company wants to create campaigns empowering the women of the society and make them the head of the family, a person who cares for the need of the family and gives them the ultimate breakfast catering to their nutritional requirement (Lacobucci, 2014). The company is already established in the Indian cereal market as a healthy and tasty cereal provider, the company has to just tweak it brand image to healthy, tasty and for all ages breakfast on the go. Breakfast on the go is the positioning statement of the world’s leading cereal manufacturer in India.

Marketing mix is another fundamental tool in the marketing ecosystem; it is defined as the set of marketing tools which are used by the firm in order to fulfil the marketing objectives in the identified target market. 7P’s of marketing are used as marketing mix to fulfil the objectives of the company with the identified target market (Kotler, 2017)

Product	Kellogg’s is the leading manufacturer of cereals and cereals based food products. The completely continuously innovates its product to better suit the need of its consumers and always delivers product with high nutritional value. Some of its popular product offering include: Cereals- Chocos, Cinnabon, Nut feast Crackers Cereal bars Frozen waffles Cookies Toaster pastries Fruit flavoured snacks. These are the food items which made Kellogg’s popular in India. After having a further understanding of the market, the company is coming up with two more new product offering for its consumers: · Muesli cookies · Fresh Pressurized fruit juice · Fruit loops cereal burger
Price	Kellogg’s in a way adopts value based pricing that is one of the strongest reasons why company’s product is perceived as expensive. Especially for the new product, Kellogg’s wants to take into consideration the selling costs, after estimating all the production cost, material cost, distribution cost, packaging, human resources and marketing cost. Based on the aggregation of all the costs, Kellogg’s wants to calculate the selling price of the product, and initially to get more hands on the product the company will get into with penetration pricing and after a period of 3 months will increase the price to normal.
Place	Kellogg’s is a  well renewed cereal brand all over the world, it has plants in 18 countries and sells and market product in 180 countries and the numbers are further increasing. The company has its own distribution channel to monitor the penetration of the product and to better understand the supply chain ecosystem. Kellogg’s is planning to open up warehouses to ensure that the products reach the consumers at the earliest. Kellogg’s is in talks with Tata, Reliance, Aditya Birla, Big Bazaar, Hypermarket and other such stores to strike a collaborative deal for maximum sale of its new product. Thus, the product of Kellogg’s will be found in even the smallest of the grocery shops to lavish malls.
Promotion	Kellogg’s marketing strategy is highly targeted for its audience. In order to woo the female audience of its product, the company is aiming to take the prime slots for showing advertisement, this is the time when families sit and watch something on TV together. Hence the mother being the decision maker will able to make a better connect with the ads. In the similar way, the company is targeting kids by making animated cartoons in its ads and delivering the ads on cartoon network and other such channels where the kids prefer to watch shows. Thus, the kid will act as an influencer and the mother as decision maker in buying the product. In order to drive sales among the healthy eating individuals, the company will be using online channels for the sales promotion. The company will show its ads on the health website, lifestyle and entertainment sites to target the profiled audience. Kellogg’s also wants to sign in P. V Sindhu (Indian Badminton player) and Virat Kohli (Indian Cricket Team Captain) as brand ambassadors to promote the product and healthy breakfast lifestyle amongst the Indian audience.
Physical evidence	The company spends a lot of time and thought in the designing and packaging of its products. The company has created two cartoon’s one for each product to target the kids and women. For healthy men the company is coming up with limited edition packaging showcasing Virat Kohli on the Box. People would really love the tangy colour the company is using in the packaging of its food item, it will surely make them want to pick the product off the rack, once they pick the product on its attraction, the company is sure to leverage on the high quality consumers experience after eating the product.
People	Kellogg’s has appointed a President for especially the Indian market , who has to handpick a team of Indians for enhanced understanding of the market and collect their views on the new product development. A customer success team is formed especially for the Indian market which will deal with big retail stores and identify and negotiate the challenges they might face in selling the product. These managers will also ensure that the feedback is collected from the consumers and convey to the India head for further improvement.
Process	Kellogg’s has a customer complaint team handling the complaints of the consumers or to address the feedback of the consumers. The company follows a process which utilizes the economies of scale to ensure business sustainability. Kellogg’s follow six sigma operational efficiency in its operation process.

The above created STP of Kellogg’s new product launch will change the breakfast habits of Indians and push them to adopt healthy eating lifestyle. With the women of the house acting as the decision maker and the children acting as the influencers, the product when marketed well will easily be adopted by families and health conscious individuals. At the same time, the company is going with a penetration pricing strategy for the first time instead of value pricing; India being a price sensitive market, the pricing will further help in wider adoption of the product In the Tier 1 market. After analysing the success of the products and the buyer behaviour, the product will be made available in the Tier 2 market as well.

Political Forces in India

Kellogg’s being one of the leading cereal manufacturers of the world does not want to leave any stone unturned in marketing the new product. India with a population of 1.32 billion, and having 940 females for every 1000 males is one of the biggest markets of breakfast for the company. Hence, the company wants to spend lavishly to achieve the desired numbers. P V SIndhu and Virat Kohli are the new youth models and biggest influencers in the Indian sub-continent, leveraging their brand value will give great mileage to the promotional campaign of Kellogg’s. Based on the points discussed above, a promotional plan is devised citing the budget for Kellogg’s new product launch:

Campaign type	Elements of Campaign	Time Schedule	Budget
Online	· Increasing the new product awareness. · Drive conversation in and around the product. · Increase the engagement with the target audience. · Launch of promotional deals and free trials of the product through online channels. · Creating content and pushing it both organically and inorganically to the audience. · Active social listening on the social media platform · Using influencer marketing to tap the followers of the celebrity. · Facebook, Instagram, Snapchat & Twitter to be used as social platforms for mass penetration of the campaign. · Google ad words to be used for high customer profiling and targeting of the campaign. · Big data to be used for sending out the e-mail campaign to the audience. · Organizing contest for the target audience and offer them a gift hamper on winning the contest	12 months ( 6 months development phase and 6 months for the sustainability of the product in the market)	20 Crore
Offline channels	· Prime time slots for airing the commercial of Kellogg’s. · Showing the advertisement on Kids channel to get their interest in the product. · Creating contest on Kellogg’s trivia to increase brand awareness.	6 Months ( 3 months before the launch and 3 months after the product launch)	35 Crore
Road Shows	Road show to be organized in all the tier 1 cities of India. The vehicle will have two brand mascot of the product and the vehicle will be parked in places with huge footfall and near the malls. Music, comedy and information of the product will be the highlight of the road shows	4 months ( 2 months before the launch and 2 months after the launch of product)	2 Crore
Partnering with Retail stores and malls for In –store promotion and Beta testing of the product	Retail stores with the maximum footfall will be targeted to understand the views of the consumers on the new product launch. Identify and assess their breakfast need and bridge the gap in the current situation. Feedback garnered from people involved in beta testing will help in 2 ways; One being positive word of mouth about the product and second being reliable feedback from the actual consumers	2 months ( 1 months before the launch and 1 month after launch)	Collaboration and Partnership (Tata, Aditya Birla, Hyper market and Reliance fresh Stores)

The promotional plan for Kellogg’s is a consolidated effort of both the online and offline activity. Certain metrics which will be used to monitor the performance of the campaign and evaluate the marketing plan are:

Online Channels	· Number of impression delivered on the social media platforms and affiliate websites (CPM is the metric to be used, and as per Kellogg’s, the company has to deliver 3 million expression in one month) · Click through rate- How many people took action on the advert or the promotional material and engaged with the company. · Social Listening- Effectively monitoring wherever the word Kellogg’s is being mentioned on the social media, and address the same then and there · Time spent viewing the ad on social media or other channel- A lot of people accidently clicks on the ad with no intention of viewing the ad, such audience has to be removed while understanding the behaviour of audience with the promotional material. If the people leave the ad in less than 30-40 seconds, they have to be removed from the impression audience. · Remarketing of the promotional campaigns to the people who show some activity with the content of Kellogg’s content. · Monitor and track the consumer behaviour once he interacts with the company’s content, what he does further after watching or interacting with the content, this behaviour will help in further targeting the relevant promotional deals to him.
Offline channels	· Viewership audience- Using TRAI and the TRP rating assess the number of people who have seen the advertisement, people who turned their channels and people who watched the full advertisement. · Newspaper circulation-The ad in the newspaper will appear on weekends, so that the paper attracts maximum circulation, monitor the number of circulation and plot the areas with maximum circulation to push more organic and inorganic content to them
Road Shows	Consumers contact details and their views are recorded and documented. Footfall around the vehicle People showing interest in the Beta testing of the product. People asking for more information about the product. All these documented information will help in getting data on the targeted audience which can be further used to create exclusive deals for them

 

Conclusion

Kellogg’s is one of the leading American Multinational companies which are known all over the world for delivering tasty and nutritional breakfast. Kellogg’s has been pivotal in changing the breakfast eating habits of people all around the world. Kellogg’s wants to launch new products in the Indian market, because of its traditional high calorific value eating habits and also looking at the immense market size of the country. India thus is an apt market for a new product launch. Muesli cereal cookies, fruit loops cereal burger and pressurized fresh juice will bring a disruption in the traditional breakfast eating Indians. In order to do so, the company is targeting mothers and kids who act as decision makers and influencers respectively. Another set of audience which the company aims to target is the young individuals who are aware of the benefits of eating healthy and wants to adopt a healthy lifestyle, such audience will be targeted through the online channels of promotion. The company for the first time is coming up with the cost based market strategy followed by penetration pricing to target the price sensitive Indian consumer market; this strategy will certainly help Kellogg’s in achieving a mass distribution of its products. A lot of campaigns are to be created both for the online and offline audience on healthy eating, benefits of muesli and fruit loops, fresh juices and so on; all the campaigns will be part of the promotional strategy of Kellogg’s. In the end the report can be concluded by saying, India needs a change in its breakfast habits, Kellogg’s can certainly change the outlook of the Indians towards the most important meal of the day- Breakfast!!

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