Question

Case: Kellogg’s Cereals

In the U.S. cereals are taken at breakfast time. Cereal manufacturing is an industry of great magnitude. Cereals are manufactured in various shapes, flavours and colours and the advertisement is directed at children. The leading manufacturers are Kellogg’s, General Mills, General Foods, Quaker Oats, and Champion. Kellogg’s share was constantly being eaten away by other manufacturers who were introducing new cereals. Kellogg’s therefore thought of introducing a new cereal, which they had not done for a long time. The cereals were not only consumed by children, but a substantial portion formed the adult market as well. Kellogg’s developed a new plan to come out with a cereal which would be tasty, nutritious, free of sugar and made of grain. The cereal consisting of the above attributes was named “Nutrigrain”. These were available in four types. Nutrigrain Corn, Wheat, Barley and Rye. These were introduced together, and no test marketing was done to avoid competition. These Products were advertised heavily and targeted at adults. To promote the product further, discount coupons were freely distributed, which gave a cut of about 30 per cent in the retail price of the product. Coupons were also inserted in the Nutrigrain boxes’ so that customer would return to take advantage of these coupons, and make repeat purchases. A lot of information and advantages of consuming Nutrigrain was boldly printed on the packages for the information of the consumers. Proper display in the shelves of stores was also taken care of. Their efforts brought results, and the stores were loaded with orders and most adults started eating these cereals, because of promotion, curiosity, etc. After one year, the sales declined because there were very few repeat purchases. This started the extensive thinking as to where they had gone wrong. Consequently, they withdraw two of their brands—Barley and Rye. These were replaced by raisin and wheat varieties. They also found out later, that there was a shortage of time for the adults, which prevented them from having cereals. If they could get out of bed 10 minutes early and devote these ten minutes to breakfast, they would probably enjoy the cereals. They also found out that though people were clamouring for sugarless cereals, yet they loved to satisfy their palates with sugar coated cereals.

(A) What is the consumer behaviour of Indian customers targeted for this case? Why the initial year of the product was successful?
(B) Suggest how company can plan promotions in accordance with consumer behaviour? How it can find out what is going on in the head of customers?​

Answer 1

Answer:

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