Executive summary

Nestlé India is a subsidiary of Nestlé S.A. of Switzerland. With six factories

and a large number of co-packers, Nestlé India is a vibrant Company that
provides consumers in India with products of global standards and is
committed to long-term sustainable growth and shareholder satisfaction. The
company is known for its brands in the Milk Products & Nutrition, Prepared
Dishes & Cooking Aids, and Chocolates & Confectionery segments.

Nestlé leads the value sales of noodles in India with a market share of 79.3%.
A testament to Nestlé's domination of the sales of plain noodles is the fact that
for its instant noodles brand Maggi, among all its global offices, India accounts
for the highest level of volume sales for the company.

This marketing plan analyses the current marketing mix of Maggi Noodles,
studies the popularity of the two new health variants Vegetable Atta and Dal
Atta Noodles and makes suggestions with regard to introducing a new brand
“Cup O Maggi” in the cup noodles segment. Various tools like surveys and
secondary sources of information have been utilized for the purpose of this
analysis.
Contents
 INTRODUCTION

Ever since its launch in India in 1983, this brand has become synonymous with noodles. The bright
red and yellow colours of the packet with the brilliant blue “2-minute Noodles” printed on it has
found a place on every kitchen. Over the years, Maggi has grown as a brand and positioned itself as a
“Fast to cook! Good to Eat! “food product.

The history of this brand traces back to the 19th century when industrial revolution in Switzerland
created factory jobs for women, who were therefore left with very little time to prepare meals. Due to
this growing problem Swiss Public Welfare Society asked a miller named Julius Maggi to create a
vegetable food product that would be quick to prepare and easy to digest. Julius, the son of an Italian
immigrant came up with a formula to bring added taste to meals in 1863. Soon after he was
commissioned by the Swiss Public Welfare Society, he came up with two instant pea soups & a bean
soup- the first launch of Maggi brand of instant foods in 1882-83.Towards the end of the century,
Maggi company was producing not just powdered soups, but bouillon cubes, sauces and other
flavourings. However in India (the largest consumer of Maggi noodles in the world!) it was launched
in 1980 by Nestle group of companies. Maggie had merged with Nestle family in 1947.

When launched it had to face a stiff competition from the ready to eat snack segments like biscuits,
wafers etc. Also it had other competitor the so called home made snacks which are till today
considered healthy and hygienic. Hence to capture the market it was positioned as a hygienic home
made snack, a smart move. But still this didn’t work, as it was targeted towards the wrong target
group, the working women. After conducting an extensive research, the firm found that the children
were the biggest consumers of Maggi noodles. Quickly a strategy was developed to capture the kids
segment with various tools of sales promotion like pencils, fun books, Maggi clubs which worked
wonders for it. No doubt the ads of Maggi have shown a hungry kid saying “Mummy bhookh lagi
hai” to which his mom replies “Bas do minute!” and soon he is happily eating Maggie noodles.

Further the MAGGI 2-MINUTE Noodles has been renovated to provide 20% of the RDA 1 of
Calcium and Protein for the core target group building on the nutrition proposition “Taste bhi health
bhi”. The company could have easily positioned the product as a meal, but did not, as a study had
shown that Indian mentality did not accept anything other than rice or roti as meal. They made it a
easy to cook snack that could be prepared in just two minutes. The formula clicked well and Maggi
became a brand name.

1 Recommended Dietary Allowances for children of 7–9 years as per “Nutritive Value of Indian Foods”, published by Indian Council of
Medical Research, Reprinted ‘04.
 COMPANY PROFILE

Nestlé’s relationship with India dates back to 1912, when it began trading as The Nestlé Anglo-
Swiss Condensed Milk Company (Export) Limited, importing and selling finished products in the
Indian market.

After India’s independence in 1947, the economic policies of the Indian Government emphazised
the need for local production. Nestlé responded to India’s aspirations by forming a company in India
and set up its first factory in 1961 at Moga, Punjab, where the Government wanted Nestlé to
develop the milk economy. Progress in Moga required the introduction of Nestlé’s Agricultural
Services to educate, advise and help the farmer in a variety of aspects. From increasing the milk
yield of their cows through improved dairy farming methods, to irrigation, scientific crop
management practices and helping with the procurement of bank loans. Nestlé set up milk
collection centres that would not only ensure prompt collection and pay fair prices, but also instil
amongst the community, a confidence in the dairy business. Progress involved the creation of
prosperity on an on-going and sustainable basis that has resulted in not just the transformation of
Moga into a prosperous and vibrant milk district today, but a thriving hub of industrial activity, as
well. For more on Nestlé Agricultural Services.

Nestlé has been a partner in India's growth for over nine decades now and has built a very special
relationship of trust and commitment with the people of India. The Company's activities in India
have facilitated direct and indirect employment and provides livelihood to about one million people
including farmers, suppliers of packaging materials, services and other goods.

The Company continuously focuses its efforts to better understand the changing lifestyles of India
and anticipate consumer needs in order to provide Taste, Nutrition, Health and Wellness through its
product offerings. The culture of innovation and renovation within the Company and access to the
Nestlé Group's proprietary technology/Brands expertise and the extensive centralized Research
and Development facilities gives it a distinct advantage in these efforts. It helps the Company to
create value that can be sustained over the long term by offering consumers a wide variety of high
quality, safe food products at affordable prices.

Nestlé India manufactures products of truly international quality under internationally famous brand
names such as NESCAFÉ, MAGGI, MILKYBAR, MILO, KIT KAT, BAR-ONE, MILKMAID and
NESTEA and in recent years the Company has also introduced products of daily consumption and
use such as NESTLÉ Milk, NESTLÉ SLIM Milk, NESTLÉ Fresh 'n' Natural Dahi and NESTLÉ Jeera
Raita.

Nestlé India is a responsible organization and facilitates initiatives that help to improve the quality of
life in the communities where it operates.
 IMPORTANCE AND SCOPE
MARKET NEEDS
The urban Indian is used to having his dinner late from around 8:30 pm to as late as 11 pm. Hence a
convenient snack between lunch and dinner is an often exercised option. In rural areas, smaller
priced packs stimulates demand.
Maggi is a fun and convenience brand which sits strongly in its position as a "good to eat, fast to
cook" anytime snack and is popular across different age groups. Opportunities in practically all
consumption categories arise in terms of "reach" and "medium of consumption". Hence the onus is
on the company to make it easily available and affordable and in different sizes, catering to
different categories of users like the new Maggi chota pack conveniently priced at Rs 5 for 50gms.
The Indian palate is not too adventurous in terms of trying out new flavours.In fact today, Maggi
have settled at standard flavours such as curry, masala, tomato and chicken and not much
experimentation is necessarily required in the noodles market. People prefer to have it easily
available and affordable.

MARKET TRENDS

􀂃The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015.

􀂃Penetration level is only 30% for Maggi Noodles in urban areas as well as per capita
consumption for the Instant noodles and pasta segment is low indicating the untapped market
potential.

Urban Rural
Population 2005-06 (mn household) 53 135
Population 2009-10 (mn household) 69 153
% Distribution (2005-06) 28 72
Markets (Towns) 3,758 62,700
Universe of Outlets (mn) 1 3.3
Urban profile
Source:Statistical Outline of India (2005-2006)

􀂃Burgeoning Indian population, particularly the middle class segments and the rural segments,
presents an opportunity to makers of branded products to convert consumers to branded
products.

􀂃Growth is also likely to come from consumer 'upgrading' in the matured product categories.

􀂃At 4% constant value CAGR into the forecast period, value growth for packaged food is
predicted to remain healthy. Growth will continue to be fuelled by convenience products
such as noodles and ready meals with 200 million people expected to shift to processed and
packaged food by 2010

􀂃Manufacturers are introducing low-priced goods in smaller pack sizes. As a result, the
rural marketing efforts have pushed the demand for sachets in many consumer goods
markets. Priced at Rs0.50-1.00, sachets have proved to be extremely popular in smaller towns
and villages, where households cannot afford to buy larger packs due to financial
MARKET GROWTH

General growth of the Indian Noodles sector FY 2005-2006

􀂃FICCI states that the culinary products and snack category, under which Maggi noodles is
classified, has had a robust growth of 8%.

􀂃Growing by a more than robust 21% in current value and 16% in volume, growth in noodles
will be among the fastest in the various packaged food products in India. (Refer Appendix
A: Indian Instant Noodle Market Growth Graphs)

noodles accounting for more than 66% of the total value sales.

Growth of Maggi Noodles FY 2005-2006

􀂃For the FY 2005-2006, the growth of Maggi noodles was an impressive 15%, with sales at
Rs 6.75 billion and profit at Rs 2 billion.
SWOT ANALYSIS
RESEARCH OBJECTIVES
HYPOTHESIS
QUESTIONNAIRE
RESEARCH METHODOLOGY
DATA ANALYSIS
FINDINGS
SUGGESSTIONS
LIMITATIONS
BIBLOGRAPHY
ANNEXURE