Brand Failures

Culture failures 157
and visible on the retail shelves with a wide range of products,’ explains
a company dealer in Mumbia.
As per the trade, Kellogg India has disclosed to the dealers its intention
of launching more than one new product onto the market every month
for the next six months.
These rapid-fire launches were supported with extensive ‘below-the-line’
activity, such as consumer offers on half of Kellogg’s cereal boxes. Although
most of the biscuit ranges have so far been a success with children, due in part
to their low price, Kellogg’s is still struggling in the cereal category.
Although the company tried to be more sensitive to the requirements of
the market, through subtle taste alterations, the high price of the cereals
remains a deterrent. According to a study conducted by research firm
PROMAR International, titled ‘The Sub-Continent in Transition: A strategic
assessment of food, beverage, and agribusiness opportunities in India in
2010,’ the price factor will restrict Kellogg’s from further market growth.
‘While Kellogg’s has ushered in a shift in Indian breakfast habits and adapted
its line of cereal flavours to meet the Indian palate, the price of the product
still restricts consumption to urban centres and affluent households,’ the
study reports.
Kellogg’s tough ride in India has not been unique. Here are some further
examples of brands which have managed to misjudge the market:
Mercedes-Benz. In 1995 the German car giant opened a plant in India to
produce its E-class Sedan. The car, which was targeted at the growing ranks
of India’s wealthy middle class, failed to inspire. By 1997, the plant was
using only 10 per cent of its 20,000 car capacity. ‘Indians turned up their
noses at the Sedan – a model older than those sold in Europe,’ reported
Business Week at the time. ‘Now Mercedes has to reassess its mistakes and
start exporting excess cars to Africa and elsewhere.’
Lufthansa. Germany’s Lufthansa airline joined forces with Indian company,
the Modi Group, to launch a new domestic private airline, Modi-
Luft, in 1993. However, three years later ModiLuft had gone bust and
Lufthansa filed a lawsuit against one of the Modi brothers, claiming he
had used funds obtained from the German company in other ventures.
In return, the Modi Group accused Lufthansa of charging too much and
of producing defective planes.