“ANALYSIS OF MARKETING STRATEGIES OF NESTLE

MAGGI”
OBJECTIVES OF THE PROJECT:

 To Understand the Marketing and Promotional Strategies

adopted by Nestle Maggi.

 To understand the brand performance of Maggi product.

 To understand Brand Imagery, Brand Quality perceived by

customers, Brand Credibility, consideration, superiority.

 Brand extension of Maggi in terms of product diversity

INDUSTRY PROFILE

Fast Moving Consumer Goods (FMCG) goods are popularly named

as consumer packaged goods. Items in this category include all
consumables (other than groceries/pulses) people buy at regular
intervals. The most common in the list are toilet, soaps, detergents,
shampoos, toothpaste, shaving products, shoe polish, packaged
foodstuff, and household accessories and extends to certain electronic
goods. These items are meant for daily of frequent consumption and
have a high return.

The Fast-Moving Consumer Goods (FMCG) sector is the fourth

largest sector in India. The FMCG sector has grown from US$ 31.6
billion in 2011 to US$ 52.8 billion in 2017-18. The sector is further
expected to grow at a Compound Annual Growth Rate (CAGR) of
27.9% to reach US$ 103.7 billion by 2020. The sector witnessed
growth of 16.5% in value terms between June–September 2018;
supported by moderate inflation, increase in private consumption and
rural income. It is forecasted to grow at 12-13% between September–
December 2018. FMCG's urban segment is expected to have a steady
revenue growth at 8% in FY19 and the rural segment is forecasted to
contribute 15-16% of total income in FY19. Accounting for a
revenue share of around 4%, rural segment is a large contributor to
the overall revenue generated by the FMCG sector in India. Urban
segment accounted for a revenue share of 55% in the overall
revenues recorded by FMCG sector in India. Revenues of FMCG
sector reached Rs 3.4 trillion (US$ 52.8 billion) in FY18 and are
estimated to reach US$ 103.7 billion in 2020. Growing awareness,
easier access, and changing lifestyles are the key growth drivers for
the consumer market. The focus on agriculture, MSMEs, education,
healthcare, infrastructure and employment under the Union Budget
2018-19 is expected to directly impact the FMCG sector. These
initiatives are expected to increase the disposable income in the
hands of the common people, especially in the rural area, which will
be beneficial for the sector.

Leading players of consumer products have a strong distribution

network in rural India; they also stand to gain from the contribution
of technological advances like internet and e-commerce to better
logistics. Godrej is focusing on rural market for household
insecticides segment. At present, Godrej accounts for 25% of the
household insecticides sales from rural areas. Rural FMCG market
size is expected to touch US$ 220 billion by 2025.

Low penetration levels in rural market offers room for growth.

Disposable income in rural India has increased due to the direct cash
transfer scheme. E-commerce segment is forecasted to contribute
11% of the overall FMCG sales by 2030.Rising incomes and
growing youth population have been key growth drivers of the
sector. Brand consciousness has also aided demand. India's
contribution to global consumption is expected to more than double
to 5.8% by 2020. The online FMCG market is forecasted to reach
US$ 45 billion in 2020 and the number of online users in India is
likely to cross 850 million by 2025.

1. INTRODUCTION OF NESTLE COMPANY

Nestle is the world's leading nutrition, health and Wellness Company.

Their mission of "Good Food, Good Life" is to provide consumers with
the best tasting, most nutritious choices in a wide range of food and
beverage categories and eating occasions, from morning to night.
They believe that leadership is about behaviour, and they recognise that
trust is earned over a long period of time by consistently delivering on
their promises. Nestlé believes that it is only possible to create long-
term sustainable value for their shareholders if their behaviour,
strategies and operations also create value for the communities where
they operate, for their business partners and of course, for their
consumers. They call this 'creating shared value'.

The Nestlé Corporate Business Principles are at the basis of their

company’s culture, developed over 140 years, which reflects the ideas
of fairness, honesty and long-term thinking.

Nestlé can trace its origins back to 1866, when the first European
condensed milk factory was opened in Cham, Switzerland, by the
Anglo-Swiss Condensed Milk Company. One year later, Henri Nestlé,
a trained pharmacist, launched one of the world’s first prepared infant
cereals ‘Farine lactée’ in Vevey, Switzerland.

The two companies merged in 1905 to become the Nestlé we know

today, with headquarters still based in the Swiss town of Vevey. They
employ around 328 000 people and have factories or operations in
almost every country in the world. Nestlé sales for 2011 were almost
CHF 83.7 bn.

"Good Food, Good Life" is the promise they commit to everyday,

everywhere – to enhance lives, throughout life, with good food and
beverages.

Ever since Henri Nestlé invented Farine Lactée to alleviate infant

mortality, Nestlé has been dedicated to enhancing lives. They strive to
help consumers care for themselves and their families by offering
tastier and healthier choices. Their dedication to great tasting, healthier
and trusted products is tied to their respect for the environment and the
people they work with.

1. INTRODUCTION TO MAGGI NOODLES

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 RDA1 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.
COMPETITORS OF MAGGI

Maggi has certainly been the leading brand in the noodle industry for
decades .But there areother brands as well which have given close
competition to Maggi in the past and in the present as well.

MAGGI VS TOP RAMEN

Top Ramen is the second largest Noodles brand in India trying hard
for the past 18 years to beatMaggi Noodles. Top Ramen is a global
brand from Nissin. Launched in 1991, Top Ramen hasbeen trying all
possible marketing tools to dethrone Maggi.First occasion was when
the brand was launched, the brand quickly went into limelight with
itsfamous positioning as Smoodles. But after the initial trying, people
again went back to Magginoodles.The next occasion was when Maggi
changed the taste. That was an occasion where, as a brandloyalist , people
dumped Maggi .For a while people consumed Top Ramen. When
Maggireversed the taste, many people again switched back.Top
Ramen at that point of time was one of the heavy advertisers in
the media. And since thetaste was also comparable, many Maggi
users may have switched to this brand. But it could notretain all the
customers . One factor is the price. Top Ramen was always perceived
as apremium brand compared to the affordable Maggi. The high price
may have prompted manyMaggi users to switch back.Another factor
 was the promotion. Top Ramen could not sustain the share of mind
it generatedduring the formative years. Maggi was able to bring in lot
of noise because it had become anumbrella brand and was advertising
for various other products.Top Ramen had an interesting distribution
strategy. For the past 10 years, the brand has beendistributed by
Marico. It is a case of marketing alliance where Top Ramen was
utilizing thedistribution strength of Marico. In 2008, the alliance was
mutually called-off. Now Nissin isbuilding its own distribution
network.It is puzzling to see that a global brand with lot of support
from its parent could not put up a bigfight with Maggi .The
major issue faced by Top Ramen was the differentiation. Top
Ramencould not offer any serious differentiation to Maggi either in
terms of the product or brand.Since there was no serious
differentiation, Maggi was able to gain back the lost ground because it
was the pioneer brand who built the category. Top Ramen also lost
out when Maggi repositioned itself in the health platform.

Maggi vs Yippee noodles

 Yippee Magic Masala is product of Indian based company name

Imperial Tobacco Company ITC ) while most famous Maggi is
product of switzerland based company Nestle.
 Maggi small packet comes in market with a price tag of Rs. 5 and
Yippee comes with a tag of Rs. 12.
 If we talked about packing, Yippee packed in most decorative way in
red while Maggi also comes in yellow packing looking decorative as
well.
 Yippee Magic Masala raw noodles comes in sticky circular shape
while maggi comes in sticky rectangular shape.
 Yippee noodles contain dehydrated vegetables including small Ring
beans, Carrot flakes and Cabbage but maggi haven’t.
 Small chopped vegetables can be seen in Yippee noodles with naked
eyes that also increases their taste.
 Both Maggi and Yippee have masala packet inside.
 Both noodles having alike ingredients while some ingredients changes
in Yippee noodles.
 Yippee magic masala came in a market with a slogan of “Long Non-
Sticky Noodles”, Yippee doesn’t stick or merged including when it
cooled this is their best part while Maggie sticks when it cooled,
weird its taste.
 When Yippee cooked their color is fade red while maggi have fade
yellow in color.
 Yippee is longer while it cooked but Maggi breaks down mostly
decreases its size.
 At last, Yippee can be seen as better competitor to Maggi. Yippee
invades its growth in market rapidly when Maggi was banned in India
but Maggi tops market with a 70% share of market in India.