Here's how Nescafe and Kellogg's achieved their marketing success in Japan and India

Japan, by its geography had been a tea loving nation, marketing coffee was going to be tricky for Nestle.

After World War 2, Nestlé wanted to promote their coffee products but fell flat despite spending an enormous amount of marketing dollars.

The Japanese society did not approve of coffee as a preferred hot beverage and the company got frustrated.

In 1975, Nestlé took the help of Clotaire Rapaille, a psychoanalyst from France. He conducted various experiments with a group of volunteers and during one such experiment he asked a group to talk him through their childhood memories.

There was none, since coffee was a beverage that was meant for adults.

Rapaille suggested Nestle to launch coffee flavoured candies to children, which will create memories and imprint the flavour of coffee.

Soon after Nestlé flooded the market with coffee-flavored candies. Not only the candies got popular among kids, but with curious adults too. Nestle re-entered the Japanes marketing after a decade, so the kids who grew up ate Nestle’s candy now became coffee loving adults.

Clotaire Rapaille stated that an emotional bond should be built with the brand because emotions drive consumer behavior and loyalty, fostering a deeper connection and resonance with the brand's identity and values.

Today, Nestle has the largest market as Japan today imports about $22 billion, about 500,000 tons of instant coffee every year, more than any other country. Barely 5 decades prior, it was a market that hardly sold a cup!

The Japan Instant Coffee Market Size is valued at USD 31.72 Billion in 2022. Japan stands as the fifth-largest consumer of coffee and coffee-related items in the world.

The rising emphasis on special, genuine flavors and diverse functional characteristics of coffee has contributed to the premiumization of the Japanese instant coffee industry. Companies like Nestle and AGF are progressively employing flavors that cater to regional taste preferences.

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Similar case is Kelloggs cereal in the Indian market. They entered the Indian Market in 1994 investing 65 million dollars to launch corn- flakes, basmati rice flakes and wheat flakes. However, by April 1995, the company was able to capture just 0.1% of its target market and had only approximately 90,000 customers.

Usual Indian breakfast would rice and curry, tapping into a market that serves traditional cultural flavours is going to be difficult. Once Kellogg’s launched it, the west ate cereal with cold milk, but Indians prefer to eat with warm milk which made the cereal soggy.

After repeated market strategies failed, cereal made from local flavours thandai- badam and rose flavored corn flakes to cater to the Indian palettes.

Linkedin article “But despite certain failures, Kellogg's made improvements like they introduced Frosties, which was a sugar-coated cereal in chocos in the year 1997 and 1998. This instantly became favorites. The global brands also introduced local flavors like thandai- badam and rose flavored corn flakes to cater to the Indian palettes. It later brought famous Indian chefs on board, like Ranveer Brar to whip up special recipes. And as far as the pricing issue was concerned, the company introduced affordable single-serve packs priced at Rs.10 in tier 1 and tier 2 towns. This resulted in the expansion of 15 to 30% sales between 2010-2016. It further became the market leader with gaining 70% of the market share in India.”

This approach involves customizing products or marketing strategies to suit the specific preferences, cultural norms, and consumption habits of a particular market or target audience.

By understanding and addressing the unique needs and tastes of Indian consumers, Kellogg's aimed to overcome the challenges posed by traditional breakfast preferences and create a stronger appeal for their cereal products in the Indian market.

According to an article from Toppan, “The brand also?localised?its branding and advertising approach to make it more acceptable. Kellogg’s took the decision to localise its flavourings, and chose brand names to appeal to the Indian public such as ‘shakti’ (‘power’) when selling products fortified with iron….. Although the brand presently enjoys a colossal 70% market share, it now has to defend from rivals the market it has created. Logistically Kellogg’s is well invested in this territory. All raw materials, including packaging, are sourced in India, and the main plant is located close to the largest market; all of which minimises costs.

Using a network of agents, the brand has established a distribution network including storage facilities. Overheads are minimised by giving distributors large responsibility for sales. In 2010 the market growth was at 20% but following a change in leadership, it is thought to be closer to 30%.”

Another article from Mint on how Kellogs doubling household income and being a prominent player in the global food industry, “Kellogg's ready-to-eat cereals make their way into around 25 million Indian households annually….With a?75%?market share in India, Kellogg's leads the breakfast cereal category, which is evenly divided between children and adults/families. Cornflakes and the Muesli-granola segment each represent half of this market”

Another research article states that Asian people prefer hot breakfast meals that has taste and spicy added to it. “The Indian market for muesli, granola, and hot cereal products is rapidly growing. Hot cereals include oats, oat bran, wheat bran, and porridge. Indian consumers prefer hot breakfasts. Hence, the hot cereal category is growing much faster than ready-to-eat cereals. Among hot cereals, oats have gained high acceptance and popularity due to consumers' awareness of the health benefits of whole grains. India is a large market with growing middle-income ground double-income households. It holds great potential for the breakfast cereal market, which must provide healthy, convenient, and tasteful options…… Breakfast cereal manufacturers have continuously put up efforts and are constantly striving to create products that appeal to Indian preferences and palates. Indians love to have a little spicy food. Hence, they require their breakfast to be tasty and spicy.”

Targeting the right social group and demographics is crucial for business success. By understanding the unique needs, preferences, lifestyle and behaviors of specific societal and demographic segments, businesses can tailor their products, services, and marketing strategies to effectively reach and resonate with their target audience.

This targeted approach enables businesses to allocate resources more efficiently, maximize their marketing impact, and build stronger connections with consumers. That is how Nestle’s two products became successful in Japan and India.

Businesses target their audience through various means, including market research, segmentation, and positioning strategies. Market research helps identify key demographic and psychographic characteristics of target consumers, while segmentation allows businesses to divide the market into distinct segments based on common traits or behaviors.

By truly understanding, adapting, and innovating, businesses can build strong connections with consumers and thrive in today's ever-changing marketplace.