M.O.P.

VAISHNAV COLLEGE FOR WOMEN (Autonomous)

CHENNAI
2016 – 2017

DEPARTMENT OF COMMERCE
(MARKETING MANAGEMNET)

Under the guidance of Dr. NISHA.U,M.Com, PGDMM, Ph.D. (UGC

– NET)

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 An Advertising Campaign Report on
“MAGGI”
Submitted in partial fulfilment of the requirement
For the award of the degree

BACHELOR OF COMMERCE IN MARKETING MANAGEMNET

M.O.P.VAISHNAV COLLEGE FOR WOMEN (Autonomous)

By,

HEENA JAIN– 1413116

ASHMITHA JAIN – 1413104
DARSHANA – 1413108
HARSHEEKA CHALLANI– 1413114
HIRAL SAMANI– 1413118
SHREYA JAIN– 1413169
SURBHI CHAUDHURY – 1413171

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 DECLARATION

We the students of II year B. Com MM declare that this project given to

us by, Dr.Nisha.U of the Department of Commerce is genuinely done by
us.

We also declare that the information presented in this project have been
collected by us with the help of our faculty member.

NAME REGISTER SIGNATURE

NO.
HEENA JAIN 1413116

ASHMITHA 1413104

DARSHANA 1413108

HARSHEEKA 1413114
CHALLANI
HIRAL 1413118
SAMANI
SHREYA JAIN 1413169

SURBHI 1413171
CHAUDHURY

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 (Chapter 1)
INTRODUCTION

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NESTLE – INDIA:
Nestlé S.A. is among the largest consumer packaged goods companies in the world,
founded and headquartered in Vevey, Switzerland. Nestlé originated in a1905 merger
of the Anglo-Swiss Milk Company, which was established in 1866 by brothers
George Page and Charles Page, and the Farine Lactée Henri Nestlé Company, which
was founded in 1866 by Henri Nestlé, whose name meant "Little Nest". The company
grew significantly during the First World War and following the Second World War,
eventually expanding its offerings beyond its early condensed milk and infant formula
products. Today, the company operates in 86 countries around the world and employs
nearly 283,000 people.

HISTORY OF NESTLE:

The company dates to 1867, when two separate Swiss enterprises were founded that
would later form the core of Nestlé. In the succeeding decades the two competing
enterprises aggressively expanded their businesses throughout Europe and the United
States.
In August of 1867 Charles A. and George Page, two American brothers from Lee
County, IL, established the Anglo-Swiss Condensed Milk Company in Cham. Their
first British operation was opened at Chippenham, Wiltshire in 1873.

In September 1867, in Vevey, Henri Nestlé developed a milk-based baby food and
soon began marketing it. Henri Nestlé retired in 1875, but the company, under new
ownership, retained his name as Farine Lactée Henri Nestlé.

In 1877 Anglo-Swiss added milk-based baby foods to its products, and in the
following year the Nestlé company added condensed milk, so that the firms became
direct and fierce rivals.

In 1905 the companies merged to become the Nestlé and Anglo-Swiss Condensed
Milk Company, retaining that name until 1947, when the name Nestlé Alimentana SA
was taken as a result of the acquisition of Fabrique de Produits Maggi SA (founded
1884) and its holding company, Alimentana SA of Kempttal, Switzerland. Maggi was
a major manufacturer of soup mixes and related foodstuffs. The company‘s current name was
adopted in 1977. By the early 1900s, the company was operating factories in the

5
United States, United Kingdom, Germany and Spain. World War I created new
demand for dairy products in the form of government contracts; by the end of the war,
Nestlé's production had more than doubled.

After the war, government contracts dried up and consumers switched back to freshm
ilk. However, Nestlé's management responded quickly, streamlining operations and
reducing debt. The 1920s saw Nestlé's first expansion into new products, with
chocolate the company's second most important activity.

Nestlé felt the effects of World War II immediately. Profits dropped from US$20
million in 1938 to US$6 million in 1939. Factories were established in developing
countries, particularly Latin America. Ironically, the war helped with the introduction
of the company's newest product, Nescafé, which was a staple drink of the US
military. Nestlé's production and sales rose in the wartime economy.

The end of World War II was the beginning of a dynamic phase for Nestlé. Growth
accelerated and companies were acquired. In 1947 came the merger with Maggi
seasonings and soups. Crosse & Blackwell followed in 1950, as did Findus (1963),
Libby's (1971) and Stouffer's (1973). Diversification came with a shareholding in
L'Oréal in 1974. In 1977, Nestlé made its second venture outside the food industry by
acquiring Alcon Laboratories Inc.

In 1984, Nestlé's improved bottom line allowed the company to launch a new round
of acquisitions, notably American food giant Carnation and the British confectionery
company Rowntree Mackintosh in 1988, which brought the Willy Wonka Brand
toNestlé.

The first half of the 1990s proved to be favourable for Nestlé: trade barriers crumbled
andworld markets developed into more or less integrated trading areas. Since 1996
therehave been acquisitions including San Pellegrino (1997), Spillers Petfoods (1998),
andRalston Purina (2002). There were two major acquisitions in North America, both
in2002: in June, Nestlé merged its U.S. ice cream business into Dreyer's, and in
August aUS$2.6 billion acquisition was announced of Chef America, the creator of
Hot Pockets. In the same time frame, Nestlé came close to purchasing the iconic
American companyHershey's, though the deal fell through. Another recent purchase
includes the JennyCraig weight loss program for US $ 600 million.

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In December 2005 Nestlé bought the Greek company Delta Ice Cream for €240 million. In
January 2006 it took full ownership of Dreyer's, thus becoming the world's biggest ice
cream maker with a 17.5% market share.

In November 2006, Nestlé purchased the Medical Nutrition division of Novartis

Pharmaceutical for $2.5B, also acquiring in 2007 the milk flavouring product known
as Ovaltine. In April 2007 Nestlé bought baby food manufacturer Gerber for $5.5
billion.

In December 2007 Nestlé entered in a strategic partnership with a Belgian chocolate

maker Pierre Marceline. Nestlé agreed to sell its controlling stake in Alcon to
Novartis on4 January 2010. The sale forms part of a broader US $39.3 billion offer by
Novartis to fully acquire the world‘s largest eye-care company.

PRODUCTS OF NESTLE:
Nestlé has 6,000 brands, with a wide range of products across a number of markets
including coffee (Nescafé), bottled water, other beverages (including Aero (chocolate)
&Skinny Cow ), chocolate, ice cream, infant foods, performance and healthcare
nutrition, seasonings, frozen and refrigerated foods, confectionery and pet food.

EARNINGS OF NESTLE:
In 2009, consolidated sales were CHF 107.6 billion and net profit was CHF 10.43
billion.Research and development investment was CHF 2.02 billion.

 Sales by activity breakdown: 27% from drinks, 26% from dairy and
foodproducts, 18% from ready-prepared dishes and ready-cooked dishes, 12%
fromchocolate, 11% from pet products, 6% from pharmaceutical products and
2%from baby milks.

 Sales by geographic area breakdown: 32% from Europe, 31% from Americas
(26% from US), 16% from Asia, 21% from rest of the world.

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JOINT VENTURES:
Nestlé holds 26.4% of the shares of L‘Oreal, the world's largest company in cosmetics and beauty.
The Laboratories Inneov is a joint venture in nutritional cosmetics between Nestlé and
L’Oréal, andGal derma a joint venture in dermatology with L’Oréal. Others include Cereal
Partners Worldwide with General Mills, Beverage Partners Worldwide with Coca-
Cola, and Dairy Partners Americas with Fonterra.

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 Indian FMCG sector with a market size of US$14.8 billion is the fourth largest
sector in the economy. The FMCG market is set to double from USD 14.7 billion
in2008-09 to USD 30 billion in 2012. FMCG sector will witness more than 60 per
cent growth in rural and semi-urban India by 2010. Indian consumer goods market is
expected to reach $400 billion by 2010.Hair care, household care, male grooming,
female hygiene, and the chocolates and confectionery categories are estimated to be
the fastest growing segments. At present, urban India accounts for 66% of total
FMCG consumption, with rural India accounting for the remaining 34%. However,
rural India accounts for more than 40% consumption in major FMCG categories such
as personal care, fabric care, and hot beverages. In urban areas, home and personal
care category, including skin care, household care and feminine hygiene, will keep
growing at relatively attractive rates. Within the foods segment, it is estimated that
processed foods, bakery, and dairy are long-term growth categories in both rural and
urban areas. The growing incline of rural and semi-urban folks for FMCG products
will be mainly responsible for the growth in this sector, as manufacturers will have to
deepen their concentration for higher sales volumes.

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Major Players in this sector include Hindustan Unilever Ltd., ITC (Indian Tobacco
Company), and Nestlé India, GCMMF (AMUL), Dabur India, Asian Paints (India),
Cadbury India, Britannia Industries, Procter & Gamble Hygiene and Health Care,
Marico Industries, Norma, Coca-Cola, Pepsi and others. As per the analysis by
ASSOCHAM, Companies Hindustan Unilever Ltd, Dabur India originates half of
their sales from rural India. While Colgate Palmolive India and Marico constitutes
nearly 37% respectively, however Nestle India Ltd and GSK Consumer drive 25 per
cent of sales from rural India. A rapid urbanization, increase in demands, presence of
large number of young population, a large number of opportunities is available in the
FMCG sector. The Finance Minister has proposed to introduce an integrated Goods
and Service Tax by April 2010.This is an exceptionally good move because the
growth of consumption, production, and employment is directly proportionate to
reduction in indirect taxes which constitute no less than 35% of the total cost of
consumer products - the highest in Asia. The bottom line is that Indian market is
changing rapidly and is showing unprecedented consumer business opportunity.

HISTORY OF MAGGI–INDIA:
Nestlé India Ltd. (NIL), the Indian subsidiary of the global FMCG major, Nestlé SA,
introduced the Maggi brand in India in 1982, with its launch of Maggi 2 Minute
Noodles, an instant noodles product.

With the launch of Maggi noodles, NIL created an entirely new food category –
instant noodles - in the Indian packaged food market. Because of its first-mover
advantage, NIL successfully managed to retain its leadership in the instant noodles
category even until the early 2000s.

NIL offered a variety of culinary products such as instant noodles, soups, sauces and
ketchups, cooking aids (seasonings), etc., under the Maggi brand (Refer to Exhibit II
for Maggi's product portfolio as of mid-2006). Of these, instant noodles had been
NIL's main product category in the culinary segment since the launch of Maggi 2
Minute Noodles (Maggi noodles) in 1982. Over the years, Maggi noodles became a
popular snack food product in India.

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During the 1990s, the sales of Maggi noodles declined, and this was attributed partly
to the growing popularity of Top Ramen, another instant noodles product. In order to
improve sales and attract more consumers, NIL changed the formulation of Maggi
noodles in 1997. However, this proved to be a mistake, as consumers did not like the
taste of the new noodles. In March 1999, NIL reintroduced the old formulation of the
noodles, after which the sales revived.
Over the years, NIL also introduced several other products like soups and cooking
aids under the Maggi brand.

However, these products were not as successful as the instant noodles.In the
early2000s, Maggi was the leader in the branded instant noodles segment, and the
companyfaced little serious competition in this segment. In the early 2000s, NIL
started introducing new 'healthy' products in accordance with the Nestlé Group's
global strategy to transform itself into a health and wellness company. In March 1999,
NIL reintroduced the old formulation of the noodles, after which the sales revived.
Over the years, NIL also introduced several other products like soups and cooking
aids under the Maggi brand.

However, these products were not as successful as the instant noodles. In the early
2000s, Maggi was the leader in the branded instant noodles segment, and the
company faced little serious competition in this segment.

In July 2001, Maggi replaced Nescafé (NIL's coffee products brand) as the company
‘score brand. Nescafé had been NIL's core brand since 1998.

Commenting on the shift, Carlo Donati (Donati), chairman and managing director,
NIL,said, "The focused approach on Nescafé, which was the company's flagship
brand over the last few years, has yielded rich dividends and we plan to replicate the
same in case of Maggi as well."

In the early 2000s, the Nestlé Group had been taking measures to transform itself into
a ‘health and wellness' company. The company had also set up new research and
development facilities with a view to improving the attributes of the existing Nestlé
products to make them healthier, and to develop new health and wellness products

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.Since the early 2000s, the Nestlé Group had been introducing 'health and wellness
products all over the world. In India, NIL introduced new 'healthier' weaning and milk
products in 2004.

In March 2005, the Maggi brand too took to the health route with the launch
of Vegetable Atta Noodles. NIL made use of the group's extensive research and
development facilities in developing this new 'healthy' product.

MAGGI– INDIA:
Nestle India Limited is the market leader in Indian Noodle Market with its Maggi Brand
OfNoodles which was pioneer brand launched in 1983 in the packaged food market
of India. It took the challenge and established Maggi in Indian market considered to
be conservative and typical about food consumption. It appropriate realization of
targetsegment, effective positioning and effective promotion and sales made Maggi
toNoodles in India as Xerox it to photocopier. NIL had introduced sauces, ketchups
andsoups under Maggi brand to reap benefit of brand popularity and image and
contributeto financial gains by 1990.Maggi also became successful in sauces,
ketchups andsoups Market in India. Though NIL tried to extend to other ready to
eat products likepickles, cooking aids and paste, it was unsuccessful so dumped those
products. MaggiBrand of products sustained recession in 2000 and 2001 in India by
introducingeconomy packets.

To fulfil novelty needs of customers and revitalize Maggi Noodles Brand NIL
madedifferent attempts by introducing new formulation to new taste but customers
resistedchange and Maggi had to reintroduce Maggi Noodles in same taste. Maggi
Noodle hadtill 2005 five product line on noodles with four variant in Maggi 2 Minutes
Noodle. In 2006 in compliance with NIL target to be ―health and Wellness Company Maggi
repositioned it as health and taste food products. NIL has also introduced with taste
and product line in Sauces and Soup Market under Maggi to catch new segment,
revitalize brand, compete with other producers and fulfil expectation of customers.

In 2005 Maggi brand worth was 3.7 billion from 1.7 billion market worth in 1.7
billion in2003. Maggi Noodle is Market leader with around 80% market share in

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 Noodles/Pasta and Maggi Sauce is market leader with almost 37% of market share in
2005 in 1.8billion market of India. Knorr has taken over Maggi in Soup market
recently.

In 2005 Maggi was the highest spender in the Promotion and Sales in the Indian
Marketing the Noodles Category. Maggi is competing with Heinz Sauces and
Ketchup, Knorr Soups, Kiss in Sauces and Ketchup, Top Ramen, Sunfeast Pasta Wai
Wai and 2 PM in corresponding categories of products and variants.

PRODUCT IN THE MARKETING MIX OF MAGGI

Maggi has introduced numerous products in the market according to the needs and
tastes of its consumers. The brand has been known for its noodles, wuze, bouillon
cubes, instant soups, stocks, sauces, ketchups and seasonings. The products that have
surpassed the expectations of the people and have become a hit in the minds of the
consumer’s are-
 Maggi 2 Minute Noodles- The flagship product in the Maggi umbrella brand, this
product is available in five flavours that are Tricky Tomato, Chicken, Masala,
Romantic Capsica and Thrillian Curry.
 Maggi Vegetable Multigrainz Noodles is a product that has Fiber, Calcium, protein
and added vegetables.
 Maggi Vegetable Atta Noodles is made from wheat flour that has fiber content and
added vegetables.
 Maggi Cuppa Mania is available in an easy cup format with two variants Chilly Chow
Yo and Masala Yo
 Maggi Oats Noodles is an innovative, healthy and delicious dish that is made from
Wholegrain Oats.
 Maggi Sauces
 Maggi Pichkoo
 Maggi Pazzta
 Maggi Healthy Soups
 Maggi Magic Cubes
 Maggi Coconut Milk Powder

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 Maggi Masala -ae- Magic
 Maggi Bhuna Masala
 Maggi Pasta and Pizza Sauce

PLACE IN THE MARKETING MIX OF MAGGI

Maggi has followed the distribution channel of Nestle to Distributor to Retailer to
Consumer, as a chain system is helpful in proper distribution of the product.

PRICE IN THE MARKETING MIX OF MAGGI

Maggi has a penetration pricing strategy because it knows it has to penetrate the
market the world over. There are many indirect competitors to Maggi as well. Maggi
has a very clear-cut policy regarding its prices. From its initial years it has kept low
pricing policy because, its consumers mostly belong to the average middle class
group. To make the product affordable they had to tone down their prices but the
volumes the product generates has helped the company in maintaining a healthy
profit. Therefore, the prices have always been kept normal without any dramatic
changes. In order to keep with the changing economic times Maggi has reduced the
quantity, instead of the prices. Along with this, to cater to the middle and low income
class customers, Maggi offers different sizes of packets at various prices so that the
customer can buy as per budget.

PROMOTIONS IN THE MARKETING MIX OF MAGGI

When the parent company Nestle decided to launch Maggi in India, its promotional
activities included creating awareness amongst the females and kids. Toys and
utensils were offered as gifts along with packets of Noodles. This turned out to be a
huge booster for the brand and made it an instant household name. Maggi advertised
on kid’s channels and between main programs in the television. Its tagline “2 minute
noodles” is known to be the smartest tagline in the advertising industry and is still
very famous amongst the consumers. Till date, no one has been able to cook a Maggi
in 2 minutes J but still, people love the product for the quick way they can get an
excellent snack. Maggi has also announced many offers and schemes over the years to
attract its consumers like Fun books, free Maggi products, scratch and win coupons,
discounts and money back offer.
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In an exciting commercial for Maggi Oats Noodles, a consumer can see the famous
Bollywood actors commending the product to the viewers. The convincing
advertisement has proved to be a hit with the audiences taking the company to new
heights. In all its campaigns, since the year 1982, the product has been advertised as
“2 minute noodles”. The famous actor Amitabh Bachchan is also seen in the
promotional activities of Maggi.
You can see Maggi advertising heavily when it brings a new product in the market.
But time to time, it also advertises for product recall. For example, the Maggi masala
for readymade food is advertised time to time to keep the product in the minds of the
consumer. On the other hand, the 2 minute noodles are advertised heavily when there
is a new variant such as Oats noodles or Aata noodles.

THE TRAGIC BAN OF MAGGI IN INDIA:

In May 2015, Food Safety Regulators from Barabanki, a district of Uttar Pradesh,
India reported that samples of Maggi 2 Minute Noodles had unexpectedly high levels
ofmonosodium glutamate, as well as up to 17 times the permissible limit of lead. On
June 3, 2015, the New Delhi Government banned the sale of Maggi in New Delhi
stores for 15 days due to these findings. On June 4, the Gujarat FDA banned the
noodles for 30 days after 27 out of 39 samples were detected with objectionable levels
of metallic lead, among other things. Assam had banned sale, distribution, and storage
of Maggi's "extra delicious chicken noodles" variety for 30 days since 4 June 2015
after tests carried out at the state public health laboratory concluded that the particular
variety contained added monosodium glutamate and an excessively high amount of
lead.Some of India's biggest retailers like Future Group, which includes Big
Bazaar, Easyday, and Nilgiris imposed a nationwide ban on Maggi. In addition,
multiple state authorities in India found an unacceptable amount of lead, leading to
bans in more than 5 other states.

On June 4, 2015 the government of Tamil Nadu banned Maggi foods due to an
unacceptable amount of lead and other components.

On June 5, the Andhra Pradesh Government also banned Maggi foods.

During a press meet on June 26, 2015, the Minister for Health and Family Welfare
of Karnataka, U. T. Khader, stated that Maggi foods would not be banned.

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On June 5, 2015, the Food Safety and Standards Authority of India (FSSAI) ordered a
recall of all nine approved variants of Maggi instant noodles and oats masala noodles,
suggesting that they were unsafe and hazardous for human consumption. On the same
day, the Food Standards Agency of the United Kingdom launched an investigation
into the level of lead in Maggi noodles. On June 6, 2015, the Central Government of
India banned nationwide sales of Maggi noodles for an indefinite period. Nepal
indefinitely banned Maggi over concerns about the lead levels in the product. Maggi
noodles have been withdrawn in five African nations: Kenya, Uganda, Tanzania,
Rwanda and South Sudan by a super-market chain after a complaint by the Consumer
Federation of Kenya.

Testing controversies:

 Monosodium glutamate (MSG): Testing found some MSG in Maggi noodles. The
packet stated "No added MSG"; however, MSG naturally occurs in hydrolyzed
peanut protein, onion powder and wheat flour. Maggi offered to remove the words
"No added MSG" from the package to overcome the objection.
 Lead: Maggi noodles include flavouring packets named "Tastemaker" which is
intended to dissolve in water during cooking. Maggi insisted that testing should
be done on the product as it is eaten; however, the FSSAI insisted that the powder
itself should be tested. On June 5, the FSSAI said that the prescribed standards of
2.5 parts per million would have to apply to all components of the product. Out of
the 13 samples tested by Delhi authorities, 10 of them had lead content exceeding
this limit. The packets that initiated the investigation from Uttar Pradesh had 17.2
ppm of lead.[31] Nestlé also questioned the reliability of the labs used. Results
from testing outside of India (Singapore, USA) reported that Maggi noodles were
safe. In the later Bombay High Court judgment, the court agreed that the test
results by earlier labs were unreliable. The court mandated testing to be done at
three specific laboratories (Punjab, Hyderabad and Jaipur) where Maggi was
found safe. The lead may have been naturally occurring in plants and soil or from
Indian spices, although within acceptable limits.

The Bombay High Court allowed the export of Maggi while the ban in India
remained.

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FIRs against Bollywood Maggi Brand Ambassadors Amitabh Bachchan, Madhuri
Dixit, & Preity Zinta were lodged by Sudhir Kumar Ojha, a lawyer, at Muzaffarpur
district court, asking the authorities to arrest them if required. He complained that he
fell sick after eating Maggi which he had purchased from a shop at Lenin Chowk on
30 May.

Maggi has always insisted that their noodles are safe. Maggi recalled stock worth
nearly Rs 320 crore from the shelves and paid 20 crores to a cement factory to burn
the product. In addition, Corporate Affairs Ministry imposed an Rs 640 crore fine on
Nestle India for the presence of MSG and lead beyond the permissible limit.

In August, tests performed by the US health regulator FDA showed no dangerous lead
levels in the products. On 13 August 2015, the nationwide ban was struck down by
the Bombay high court. The court stated that proper procedure was not followed in
issuing the ban and called into question the test results, as the samples were not tested
at authorized laboratories accredited to the National Accreditation Board for Testing
and Calibration Laboratories (NABL).

Maggi came back to the shelves in India in November 2015. Nestle has also been
running a campaign to win back trust of members of the Indian community. Also the
Maggi anthem by Vir Das and Alien Chutney took the nation by storm. Nestle in
India resumed production of Maggi in all five plants, that is Nanjangud (Karnataka),
Moga (Punjab) Bicholim (Goa) and Tahliwal and Pantnagar in Himachal Pradesh, on
30 November 2015.

FSSAI Sting Operation

The India Today Television team conducted a sting operation in which they
approached FSSAI officials pretending to have a food product with high lead levels in
October 2015. One of them agreed to pass the samples without conducting any tests.
He told the team that "When you make money by selling your product, just pay me Rs
20,000 on a yearly basis". He revealed that milk samples from one of India's best
known companies had been dismissed by deliberately adulterating it, because
company did not agree to bribe the inspectors.

16
Food and Consumer Affairs Minister Ram Vilas Paswan reacting to the operation said
that "Standard products are being labelled as sub-standard and faulty products are
being passed by such corrupt officials. This is a big crime and I demand strongest
possible action against all those found guilty," and promised to take serious action,
although FSSAI is not administered by his ministry. Commenting on the reports,
Union Health Ministry stated that FSSAI has clarified that the officials who have
figured in the sting operation are not working in FSSAI but are employees of the UP
state government.

CRITISIMS:
Nestlé has faced criticism of its advertising not adhering to marketing regulations in
developed countries, and making misleading claims in developing countries. Also, in
October 2008 Nestlé mistakenly aired a commercial meant for Bangladeshi television
on British TV. The advert made false claims that the noodles would "help to build
strong muscles, bone, and hair". The British Advertising Standards Authority said that
the advert did not abide by the new EU consumer protection legislation, by which
advertisers have to provide proof of health claims.

NESTLE SETS GROUND FOR MAGGI'S RELAUNCH;

INCREASES SPENDING ON TELEVISION COMMERCIALS

Four months after running into perhaps its worst credibility crisis, the world's largest
food company Nestle started increasing spending on television commercials, setting
the ground for the relaunch of its Maggi instant noodle brand in the country. Nestle
India's percentage growth of ad volume, or second ages of advertising on television,
was 96% in September Vis a Vis August, according to advertising data estimates
source from various media agencies.

And now, with Maggi clearing the review tests mandated by the Bombay High Court
that had lifted a nationwide ban on the instant noodles brand in August and several
states lifting their bans, Nestle is expected to advertise aggressively to regain Maggi's
lost ground in retail shelves and consumers' shopping carts. Media sources have

17
confirmed that the Swiss major will soon launch a new set of TV commercials for
Maggi created by McCann World Group.

Nestlé’s advertising volume has been mostly decreasing month-on-month since May
when the Maggi controversy erupted with allegations of excess lead content that led
to food regulator Food Safety and Standards Authority of India (FSSAI) banning
Maggi in early June.

Nestle kicked off its relaunch campaign for Maggi on Monday with a print
advertisement that said: "Your Maggi is safe, has always been." The ad goes on to
explain that around 3,500 samples of the noodle brand were put to rigorous test in
India and in places such as the USA, Canada, UK, Australia, New Zealand and
Singapore.

Chandrasekhar Radhakrishnan, head of communications and ecommerce for Nestle

South Asia region, said the firm's consumer engagement services operate 24x7 across
all communication channels, including digital and social media. "It is this team which
will engage, answer queries and deliver relevant content and information across
channels to consumers during the relaunch," he said.

Last month, Nestle released a corporate campaign to coincide with its 100 years in
India, which conspicuously avoided mention of its biggest brand Maggi noodles while
features its other brands such as Nescafe and KitKat. Brand consultant Harish Bijoor
said, "Besides Nestle preparing for a comeback of Maggi noodles, it also has existing
contracts with broadcasters which it would be fulfilling.
Whether Nestle advertises KitKat or Nescafe, has an umbrella impact on Maggi and
subliminally connotes Nestlé’s message about its food being completely safe."
Marketing insights company Airloyal, which did an instant social media survey on
Maggi on Monday, said nearly 65% respondents said they had reacted to the Maggi
controversy on social media.
"About 60% of them said they would take to social media yet again to talk about
Maggi now that the brand has cleared all tests," said Raja Hussain, founder & CEO of
Airloyal. But 30% respondents said they would not buy Maggi after its relaunch.

18
 (Chapter 2)
REVIEW OF
LITERATURE

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REVIEW OF LITERATURE:

Maggi is an international brand of seasonings, instant soups, and noodles that

originated in Switzerland. It was acquired by Nestle in 1947. The company originally
started in Switzerland in 1885. In 1947, following several changes in ownership and
corporate structure, Maggi ‘s holding company merged with the Nestlé company to
form Nestlé-Alimentana S.A., currently known in its francophone homebase as Nestlé
S.A.Maggi instant noodles are popular in India and Malaysia. Nestle has 39% market
share in Malaysia, where "Maggi" is synonymous with instant noodles, and had 90%
market share before the nationwide ban by the FSSAI and now have 53% in India. In
Malaysia, fried noodles made from Maggi noodles are called Maggi goreng.

In May 2015, Food Safety Regulators from Barabanki, a district of Uttar Pradesh,
India reported that samples of Maggi - 2 Minute Noodles had unexpectedly high
levels of monosodium glutamate, as well as up to 17 times the permissible limit of
lead .

On June 3, 2015, the New Delhi Government banned the sale of Maggi in New Delhi
stores for 15 days due to these findings, THE TIMES OF INDIA.

On June 4, the Gujarat FDA banned the noodles for 30 days after 27 out of 39
samples were detected with objectionable levels of metallic lead, among other things,
THE TIMES OF INDIA.

Assam had banned sale, distribution, and storage of Maggi's "extra delicious chicken
noodles" variety for 30 days since 4 June 2015 after tests carried out at the state
public health laboratory concluded that the particular variety contained
added monosodium glutamate and an excessively high amount of lead, INDIA
TIMES .

Some of India's biggest retailers like Future Group, which includes Big
Bazaar, Easyday, and Nilgiris imposed a nationwide ban on Maggi, FIRST POST.

In addition, multiple state authorities in India found an unacceptable amount of lead,

leading to bans in more than 5 other states, HINDUSTAN TIMES.

20
On June 4, 2015 the government of Tamil Nadu banned Maggi foods due to an
unacceptable amount of lead and other components, THE TIMES OF INDIA.

On June 5, the Andhra Pradesh Government also banned Maggi foods, DECCAN
CHRONICLE

During a press meet on June 26, 2015, the Minister for Health and Family Welfare
of Karnataka, U. T. Khader, stated that Maggi foods would not be banned, NEWS
KARNATAKA.

On June 5, 2015, the Food Safety and Standards Authority of India (FSSAI) ordered a
recall of all nine approved variants of Maggi instant noodles and oats masala noodles,
suggesting that they were unsafe and hazardous for human consumption, FSSAI,
INDIA.

On the same day, the Food Standards Agency of the United Kingdom launched an
investigation into the level of lead in Maggi noodles, THE ECONOMICS TIMES.

On June 6, 2015, the Central Government of India banned nationwide sales of Maggi
noodles for an indefinite period, PATRIKA.COM.

Nepal indefinitely banned Maggi over concerns about the lead levels in the product,
HINDUSTAN TIMES.

Maggi noodles have been withdrawn in five African nations: Kenya, Uganda,
Tanzania, Rwanda and South Sudan by a super-market chain after a complaint by the
Consumer Federation of Kenya, BBC NEWS.

Testing controversies:

 Monosodium glutamate (MSG): Testing found some MSG in Maggi noodles. The
packet stated "No added MSG"; however, MSG naturally occurs in hydrolyzed
peanut protein, onion powder and wheat flour. Maggi offered to remove the words
"No added MSG" from the package to overcome the objection, NDTV FOOD
TIMES.
 Lead: Maggi noodles include flavouring packets named "Tastemaker" which is
intended to dissolve in water during cooking. Maggi insisted that testing should
be done on the product as it is eaten; however, the FSSAI insisted that the powder
itself should be tested. On June 5, the FSSAI said that the prescribed standards of

21
 2.5 parts per million would have to apply to all components of the product. Out of
the 13 samples tested by Delhi authorities, 10 of them had lead content exceeding
this limit. The packets that initiated the investigation from Uttar Pradesh had 17.2
ppm of lead. Nestlé also questioned the reliability of the labs used. Results from
testing outside of India (Singapore, USA) reported that Maggi noodles were safe.
In the later Bombay High Court judgment, the court agreed that the test results by
earlier labs were unreliable. The court mandated testing to be done at three
specific laboratories (Punjab, Hyderabad and Jaipur) where Maggi was found
safe, INDIAN EXPRESS.
 The lead may have been naturally occurring in plants and soil or from Indian
spices, although within acceptable limits, "Study: Indian Spices, Powders Linked
with Lead Poisoning - TIME"

The Bombay High Court allowed the export of Maggi while the ban in India
remained, ECONOMIC TIMES.

FIRs against Bollywood Maggi Brand Ambassadors Amitabh Bachchan, Madhuri

Dixit, & Preity Zinta were lodged by Sudhir Kumar Ojha, a lawyer, at Muzaffarpur
district court, asking the authorities to arrest them if required. He complained that he
fell sick after eating Maggi which he had purchased from a shop at Lenin Chowk on
30 May, THE HINDU.

Maggi has always insisted that their noodles are safe, NESTLE.IN.

Maggi recalled stock worth nearly Rs 320 crore from the shelves and paid 20 crores
to a cement factory to burn the product. In addition, Corporate Affairs Ministry
imposed an Rs 640 crore fine on Nestle India for the presence of MSG and lead
beyond the permissible limit, RUCHIKA SHAH, DNA INDIA.

In August, tests performed by the US health regulator FDA showed no dangerous lead
levels in the products. On 13 August 2015, the nationwide ban was struck down by
the Bombay high court, 14TH AUGUST.

The court stated that proper procedure was not followed in issuing the ban and called
into question the test results, as the samples were not tested at authorized laboratories
accredited to the National Accreditation Board for Testing and Calibration
Laboratories (NABL), TIMES OF INDIA.

22
Maggi came back to the shelves in India in November 2015. Nestle has also been
running a campaign to win back trust of members of the Indian community. Also the
Maggi anthem by Vir Das and Alien Chutney took the nation by storm, INDIA
TODAY.

Nestle in India resumed production of Maggi in all five plants, that is Nanjangud
(Karnataka), Moga (Punjab) Bicholim (Goa) and Tahliwal and Pantnagar in Himachal
Pradesh, on 30 November 2015, THE HINDU.

23
 (Chapter 3)
RESEARCH
METHODOLOGY

24
OBJECTIVE OF THE STUDY

1. To analyse the sales of Maggi, before and after the lead controversy
2. To do an in depth analysis of consumption of Maggi
3. To determine consumer’s loyalty before and after the issue
4. To find the impact of special packing after the issue
5. To study the re-branding strategies of Maggi
6. To find the impact of celebrity endorsement on Maggi

SCOPE OF THE STUDY

The scope of the study includes the students’ ability to analyse the reasons for the
sale of Maggi before and after the lead issue and try to substantially analyse the
similarities between the earlier situations with the current. We have analysed the
sales, consumption, loyalty and impact of the lead issue on Maggi of the Chennai.

SAMPLING

SAMPLING PLAN

Sampling is that part of statistical practice concerned with the selection of a subset of
individual observations within a population of individuals intended to yield some
knowledge about the population of concern, especially for the purposes of making
predictions based on statistical inference.

POPULATION AND SAMPLING UNIT

A population is the total of all the individuals who have certain characteristics and are
of interest to a researcher. A population can be defined as any set of persons/subjects
having a common observable characteristic. The characteristics of a population are
called a parameter. The population for the study includes all the in Chennai who know
or heard about Maggi brand. Samples are necessary to research because it is
impossible to survey each and every member of a population.

25
SAMPLE SIZE

The number of sampling units selected from the population considered for statistical
analysis is called the size of sample. The sample size taken is 100 in the age group 14-
41, residing in Chennai. The sample includes students both school and college going,
working professionals.

SAMPLING PROCEDURE

The sampling procedure that was used was simple random sampling. This comes
under probability sampling. Any one meeting the criteria set for research was taken
as a sample and responses were recorded online.

SIMPLE RANDOM SAMPLING:

The sampling technique that is used in this project is simple random sampling.
Random sampling is the purest form of probability sampling. Each member of the
population has an equal and known chance of being selected. Each individual is
chosen randomly and entirely by chance, such that each individual has the same
probability of being chosen at any stage during the sampling process, and each subset
of k individuals has the same probability of being chosen for the sample as any other
subset of k individuals. This process and technique is known as simple random
sampling, and should not be confused with systematic random sampling. A simple
random sample is an unbiased surveying technique.

DATA COLLECTION AND TOOLS

Data collection is the term used to describe a process of preparing and collecting data.
Systematic gathering of data for a particular purpose from various sources, that has
been systematically observed, recorded, organized.

26
 CLASSIFICATION OF DATA COLLECTION

DATA
COLLECTION

PRIMARY SECONDARY
DATA DATA
COLLECTION COLLECTION

Diagram No. 1

PRIMARY DATA:

(I) Observation method

(ii) Interview method,

(iii) Through questionnaires,

(iv) Through schedules, and

(v) Other methods which include:

(a) warranty cards; (b) distributor audits; (c) pantry audits; (d) consumer panels; (e)
using mechanical devices; (f) through projective techniques; (g) depth interviews, and
(h) content analysis.

For this study, Primary source of data is used. The questioner method is used to
collect data. Primary data is collected from sample of Chennai based of the age group
of 14- 41years, who know/heard about Maggibrand.

27
WEB BASED QUESTIONNAIRES:

A new and inevitably growing methodology is the use of Internet based research.
This would mean receiving an e-mail on which you would click on an address that
would take you to a secure web-site to fill in a questionnaire. This type of research is
often quicker and less detailed. Some disadvantages of this method include the
exclusion of people who do not have a computer or are unable to access a computer.
Also the validity of such surveys is in question as people might be in a hurry to
complete it and so might not give accurate responses.

For this research e have use web based questioner which has 32 questions. People
who were aware about the brand Maggi were asked to fill the questionnaires.

SECONDARY DATA

Secondary data has been used to do the industry analysis and literature review for this
report. The various sources used in this were:

a) Various publications of the central, state are local governments;

b) Various publications of foreign governments or of international bodies and their

subsidiary organizations;

c) Technical and trade journals;

d) Books, magazines and newspapers;

e) Reports and publications of various associations connected with business and

industry

f) Reports prepared by research scholars, universities, economists, etc. in this field;

and

g) Public records and statistics, historical documents, and other sources of

published information.

28
TOOLS FOR DATA ANALYSIS

The analysis was done using spread sheet and software MS Excel

 Frequency
 Pie
 Bar
 General Graph

RESEARCH DESIGN

The sample chosen consisted of 100 respondents. The respondents represented

different age groups, educational levels and genders. The data were collected through
field survey with the help of pre-structured questionnaire. The respondents were
assured that the data collected was only for the research (academic) purpose. The
informants faced no apparent difficulty in responding.

TYPES OF RESEARCH

A research design is purely and simply the framework or plan for a study that guides
the collection and analyses of data. It‘s a blueprint that is followed in completing the
study.

There are three basic types of research designs.

 Exploratory research design

 Descriptive research design

Exploratory research is research conducted for a problem that has not been clearly
defined. It often occurs before we know enough to make conceptual distinctions or to
posit an explanatory relationship. Exploratory research helps determine the best
research design, data-collection method and selection of subjects.

29
This study focuses on the company’s requirements to understand the impact of lead
issue among the people in Chennai, which forms the customer base for Magi in
Chennai and to study the effectiveness of itslead issue.

LIMITATIONS OF THE STUDY

 The study limits itself to residents of Chennai with the sample size 100.
 The respondents are from age group 14 to 41years of age, hence and inference
for the other age group cannot be drawn.
 The respondents include audience that have knowledge/heard about Maggi
brand.
 The response to the questionnaire might not be 100% accurate, as it depends
on the mind-set of the respondents.
 Time given is limited, for an in-depth survey.

30
 Chapter 4
Analysis
&Interpretation

31
 1) Which brand of noodles do you use?

Maggi 45
Yippee 25
Top Ramen 20
Others 10

10

20 Maggi
45 Yippie
Top Raman
Others

25

Fig 4.1

INTERPRETATION:
From the above figure, Majority of the sample size prefer Maggi while
the rest of the sample size prefers other brands of noodles. Little less than
half prefer Maggi noodles while quarter of the population size prefers
yippee noodles.

32
 2) Which product of Maggi do you prefer?

Noodles 40
Sauce 5
Soup 10
Pasta 25

25

Noodles

40 Sauce
Soup
Pasta

10

Fig 4.2

INTERPRETATION:
From the above data, almost half of the sample size prefer Maggi noodles
while there are people who do not prefer to take Maggi sauce in isolation.
One fourth of the sample from the population prefers Maggi pasta while
the remaining prefers Maggi soup. Maggi sauce seems to be the least
popular product while Maggi noodles seems to be the most popular
product. Even after the crisis people seem to be loyal towards Maggi
noodles.

33
 3) According to you which age group prefers Maggi most?

4_12 18
13-26 43
27-40 32
41 & Above 7

50
45
40 43
35
30 32
25
20
15 18
10
5 7
0
4_12 13-26 27-40 41 & Above

Fig 4.3

INTERPRETATION:
When the analysis is done for age group, the utmost sample size
preferring Maggi lie between the age group 13-26 while the least sample
size preferring Maggi lie between the age group 41 and above.

34
 4) Do you perceive Maggi as a health product?

Yes 35
No 65

35

65
YES
NO

Fig 4.4

INTERPRETATION:
The above data interprets that the majority of the sample size perceive the
Maggi noodles to be an unhealthy product while there are only a few
people who perceive the Maggi noodles to be healthy product.

35
 5) What comes first in your mind when you hear the word Maggi?

2 min noodles 47
Safe & healthy 10
Fast foods 28
others 15

50
47
45
40
35
30 28

25
20 15
15 10

10
5
0
2 min noodles Safe & healthy Fast foods Others

Fig 4.5

INTERPRETATION:
From the above graph, almost half of the sample size perceives
Maggi noodles as a two minute noodles where little more than
quarter of sample size perceives Maggi as fast food. Only one
tenth of the sample size perceive it to be a safe and healthy
product while the remaining do not perceive it to a two minute
Maggi noodles nor a fast food nor a safe and healthy product.

36
 6) How do you rate Maggi brand in terms of the following
parameters?

Expertise 37
Trustworthiness 44
Liability 12
None of these 7

None of these 7

liability 12

Trustworthiness 44

Expertise 37

0 10 20 30 40 50

Fig 4.6

INTERPRETATION:
The above data interprets that majority of the sample size have the trust
factor in the Maggi brand. Majority of the sample size trust Maggi brand
where little less than majority believe in the expertise of the brand.
Though people have the trust factor, they do not perceive it as a healthy
product.

37
 7) Which advertisements of the Maggi product do you like the most?

Noodles: Me aur Meri 30

Maggi
Sauces: Its different 25
Soups: Tasty bhi healthy 25
bhi
Pasta: Licious pazzta 20

Noodles: Me aur Meri

20 Maggi
30
Sauces: Its different

Soups: Tasty bhi healthy

25 bhi
25 Pasta: Licious pazzta

Fig 4.7

INTERPRETATION:
The above figure reveals that the consumption pattern is in much balance
with the liking of advertisement in case of noodles whereas in case of
sauces even if people like the advertisement only one fifth of the people
who like the advertisement consume the product. For soups the pattern of
consumption and liking of advertisement is the same as that for sauces.
For pasta it is different. In case of pasta, people consuming the product
are more than people liking the advertisement of the product.

38
 8) How often do you eat Maggi?

Once a week 29
Twice a week 47
Once a month 16
Every day 8

50
45
40
35
30
25
47
20
15 29
10
16
5 8
0
Once a week Twice a week Once a month Every day

Fig 4.8

INTERPRETATION:
The above graph interprets that utmost people consume Maggi noodles
twice a week whereas very few people consume it every day.

39
9) Do you prefer Maggi as :

Snack 48
meal 52

48 Snack
52
meal

Fig 4.9

INTERPRETATION:
The figure itself depicts that though people perceive Maggi noodles to
be a fast food and unhealthy, more than half of the sample size prefers
Maggi noodles as a meal. Little less than half of sample size prefer
Maggi as a snack.

40
 10) Rate the following attributes of Maggi out of 5?

Taste 80
Price 10
Quantity 15
Hygiene 5

Hygiene 5

Quantity 15

Price 10

Taste 80

0 20 40 60 80 100

Fig 4.10

INTERPRETATION:
The above data shows that clear majority of sample size choose Maggi
only on the basis of its taste. Very few people choose Maggi on the basis
of hygiene. Only one tenth of the sample out of the population
prefersMaggi on the basis of its price. When it comes to Maggi noodles,
hygiene, quantity and price are not the factors for choosing the Maggi
noodles. Taste is major factor for choosing Maggi noodles.

41
 11) Who did the controversy of Maggi affect the most?

Students 39
Hostelites 43
Office goers 10
Others 18

Students
Hostelites
Office goers
Others

Fig 4.11

INTERPRETATION:
The above figure shows that, the majority of the sample size who were
affected by the controversy were the hostelites. Little less than the
majority who were affected by the controversy were the students. Only
one tenth of the sample size were office goers who were affected by the
controversy.

42
 12) Has the controversy changed your consumption frequency of
Maggi?

Yes 58
No 42

consumtion frequency

yes
no

Fig 4.12

INTERPRETATION:
From the above data we can interpret that more majority of the sample
size think that the consumption frequency has changed after the
controversy Maggi faced. Little less than half of the sample size think
that it has not changed.

43
 13) Do you think the advertising strategies to rebrand the product have
increased the sales of Maggi?

Yes 73
No 27

27

Yes
No

73

Fig 4.13

INTERPRETATION:
The above figure depicts that almost here fourth of the sample size
believe that advertising strategies to rebrand the product have increased
the sales of Maggi whereas the rest of the sample do not believe that
advertising strategies to rebrand the product have increased the sales of
Maggi.

44
 14) After the ban, what helped Maggi regain its brand value?

Taste 40
Loyal customers 13
Rebranding strategies 41
Less efficient 6
competitors

50

40

30

20

10

0
Taste
Loyal
customers Rebranding
strategies Less efficient
competitors

Fig 4.14

INTERPRETATION:
From the collected data, 41% of the population felt that the rebranding
strategies helped Maggi regain its brand value whereas 40% of the
samples from the population felt that the taste of Maggi noodles helped it
regain its brand value. Around 6% of the respondents felt that the
existence of less efficient competitors helped Maggi regain its brand
value while 13% of the sample size felt that loyal customers helped to
regain Maggi’s brand value.

45
 15) Do you think the controversy Maggi was involved in
affected its sales?

Yes 20
No 18
Maybe 24
Don’t know 38

20

38
Yes
No
Maybe
18 Don’t know

24

Fig 4.15

INTERPRETATION:
From the survey conducted, 38% of the sample size do not know if the
controversy affected its sales while 20% of the sample size were sure that
the controversy affected the sales, 18% of the sample size were sure that
the controversy did not affect the sales and 24% of the sample size were
not sure and were confused if the controversy affected the sales or not .

46
 16) The controversy made Maggi a secondary option compared
to other noodles?

Yes 11
No 79
Maybe 10

80

70

60

50

40

30

20

10

0
yes no maybe

Fig 4.16

INTERPRETATION:
From the above diagram, we can interpret that almost four fifth of the
respondents said Maggi did not become their second choice compared to
other brand noodles. 10% respondents were no sure if Maggi became
their second choice whereas 11% of the respondents were sure that Maggi
became their second choice.

47
 17) The controversy made the sales of other noodles affect in a
great manner…Increasing rapidly

Yes 58
No 42

42
Yes
No
58

Fig 4.17

INTERPRETATION:
From the above data, it is clear that more than half of the sample size
agree to the fact that the controversy Maggi faced helped other brands
increase their sales rapidly whereas less than half the sample size
disagreed to the fact.

48
18) The sales of Maggi could ever be the same as before, after
the controversy it was held in?

yes 78
No 22

Sales

Yes

No

Fig 4.18

INTERPRETATION:
From the survey conducted, majority of the sample size agree that
the sales can be the same as before the controversy whereas the
remaining disagree to the fact.

49
 19) The quality of Maggi after controversy was affected?

Yes 76
No 24

24

Yes
76
No

Fig 4.19

INTERPRETATION:
From the above data, the majority of the respondents felt the change in
the quality after controversy whereas the remaining did not feel the
change in the quality after the controversy.

50
 20) When Maggi was banned, you felt?

Happy 5
Sad 57
Did not affect 17
Offended 21

57
60

50

40

30
21
17
20

10 5

0
happy sad did not affect offended

Fig 4.20

INTERPRETATION:
From the above figure, more than half of the respondents felt sad when
Maggi was banned whereas very few respondents felt happy when it was
banned. Little more than one fifth of the respondents felt offended when
it was banned while one fifth of respondents were not affected.

51
 21) How much are you aware of rebranding strategies Maggi
took to retain its customers?

10-30% 20
30-50% 45
50-80% 17
80-100% 18

45
45
40
35
30
25 20
17 18
20
15
10
5
0
10-30% 30-50% 50-80% 80-100%

Fig 4.21

INTERPRETATION:
From the above graph, little less than half of the sample size were only
aware of 30-50% of the rebranding strategies Maggi took to retain its
customers whereas little less than one fifth of the sample size were aware
of 50-80% of the rebranding strategies Maggi took to retain its customers.

52
 22) Does brand endorsement really affect your purchasing
decision?

Yes 66
No 44

44
yes
no
66

Fig 4.22

INTERPRETATION:
From the above diagram, clear majority of the sample size agree that the
brand endorsement really affected their purchasing decision while the
remaining respondents disagreed with the fact.

53
 23) Do you recall any celebrity endorse for Maggi?

Yes 74
No 26

80
70
60
50
40 74

30
20 26
10
0
yes no

Fig 4.23

INTERPRETATION:
From the above diagram, we can depict that the majority of the sample
size recall celebrity endorser for Maggi whereas the remaining sample
size do not recall any celebrity endorser.

54
 24) Did Celebrity Endorsement assure you about the quality of
the product?

Yes 79
No 21

21

79

yes no

Fig 4.24

INTERPRETATION:
From the survey conducted, 79% of the sample size believes that
celebrity endorsements assures quality of the product whereas the
remaining respondents do not believe that celebrity endorsements assures
quality of the product.

55
 25) Will you purchase Maggi even if you don’t like a particular
celebrity endorsing it?

Yes 43
No 10
Maybe 47

50
45 47
40 43
35
30
25
20
15
10 10
5
0
yes no maybe

Fig 4.25

INTERPRETATION:
From the collected data, 47% of the respondents are confused and not
sure if they would purchase Maggi even if they don’t like a particular
celebrity endorsing it and 43% of the respondents are sure that they
would purchase Maggi even if they don’t like a particular celebrity
endorsing it and 10% respondents would not purchase Maggi.

56
 26) Do you think that celebrity endorser uses the product
(Maggi) that they endorse?

Yes 81
No 19

19

yes
no

81

Fig 4.26

INTERPRETATION:
From the survey conducted, clear majority of the sample size believe that
the celebrity endorser endorsing the product uses the product also and the
remaining do not believe the fact.

57
 27) What kind of celebrity endorsement would you like to see in
a Maggi advertisement?

Sports 42
Actors 45
Others 13

45
40
35
30
25
20 42 45
15
10
13
5
0
sports actors others

Fig 4.27

INTERPRETATION:
From the above data we can interpret that there is not much difference
between number of respondents wanting sports endorsers and number of
respondents wanting actors endorsing Maggi product. 42% of the
respondents want sports endorsers whereas 45% of the endorsers want
actors endorsing Maggi product. The remaining 13% respondents do not
want sports starts nor actors endorsing Maggi and want any other
celebrity endorser.

58
 28) What rebranding strategies should Maggi adopt?

Increase the product line 12

Focus on offers 58
Differentiate from 41
competitors
Others 5

60 58

50 41

40
30
20 12
5
10
0

Fig 4.28

INTERPRETATION:
From the survey conducted, the respondents gave their suggestions
about the rebranding strategies Maggi should adopt. More than half
of the sample size said that Maggi should focus on giving offers
and coupons whereas little less than half of the sample size said
Maggi should differentiate from its competitors and almost one
eight of the respondents said that they should increase their product
line and very few did not agree with any of the above.

59
CHAPTER 5
FINDINGS AND
SUGGESTIONS

60
People prefer Maggi over other brands. It is in the top list of the people.
Maggi Noodles is the most preferred product of Maggi brand. Other products
of Maggi are less referred when compared to Maggi noodles.
When people hear the word Maggi, Maggi noodles is the product that pops out
first. Most people even think Maggi has only one product and that is Maggi
Noodles. The other products of Maggi are unrecognised
The age group that prefers Maggi are between 13-26 years, i.e., the youth.
Maggi is perceived as an unhealthy product. Though there was negative
campaigning the market share of consumption of Maggi was relatively high.
The tagline “2 min noodles” has a very high recall value.
Maggi has created a special place in consumer’s heart which is why they trust
the brand blindly.
The most liked advertisement and the most consumed product is Maggi
noodles. But there is an imbalance between the consumption pattern and the
liking of advertisement for the other products like sauce, soups and pasta. The
consumption pattern is in much balance with the liking of advertisement in
case of noodles whereas in case of sauces even if people like the
advertisement only few people who like the advertisement consume the
product. In case of pasta, people consuming the product are more than people
liking the advertisement of the product.
As said earlier, though it is presumed to be an unhealthy product it is
consumed twice a week by the consumers.
Maggi is taken as any time meal by the consumers – breakfast, lunch or
dinner.
Unlike any other product, price is not the major factor for the purchasing
decision but taste becomes the major factor attracting the consumers.
The ban or the consequence Maggi faced sure did affect the consumption
pattern and also hostelites who preferred Maggi on a regular basis.
People do believe that Maggi sure did a great job by again increasing the sales
after comeback from the downfall through its rebranding strategies.
From the survey, it is concluded that both the taste and the rebranding
strategies helped Maggi regain its value after the downfall.

61
People are confused whether the ban has really affected its sales and this
makes way for Maggi to easily regain its customers.
Brand loyalty is still there as Maggi even after controversy did not become the
secondary option for the consumer.
People felt sad when Maggi was banned and this depicts the loyalty of
customers towards the brand.
People were not aware of what was going around. People were aware of only
50% of the rebranding strategies adopted by Maggi to regain its market share.
Brand endorsements sure do affect the purchasing decisions of the customers.
People do recall brand endorsers, endorsing Maggi.
Consumers are confused if they would purchase Maggi even if they don’t like
the celebrity endorser endorsing Maggi.
It is believed that the endorsers endorsing the product also use the product for
personal consumption.
The consumers feel that Maggi needs to use more rebranding strategies like
differentiating from its competitors, focus on coupons and offers.
Maggi needs to take steps which makes the consumer believe that it is a
healthy product and expand its consumer base from just youth to others as
well.
Maggi needs to utilise positive social proof.
Maggi should use words which the consumers love to hear and attract them.
Maggi should balance all its products and all the product must have balanced
market share.

62
(Chapter 6)
CONCLUSION

63
Nestle will have to work hard to build up the faith among the people, it may take a
long time might be several years to up-bring its brand again. Most of the youth have
now starting consuming the competitor‘s products like Yippee Noodles and others. If
they get addicted to those brands, then the Brand Loyalty towards Maggi may be lost.
But after analysing all the Reports studied from the newspaper, Online Magazines,
TV reports, and the survey held on Maggi, it can be concluded that the controversy of
Maggi did not affect the loyal customers of Maggi Noodles. The Maggi controversy
had shattered many hearts at the beginning, as Maggi was not merely a product or a
brand in India but a slice of life for consumers. Indian consumer, who is not unused to
suspect food standards, feels a deep sense of betrayal by one of the most trusted food
brand in India. More than 50% of the youth consume Maggi Noodles after it has been
Re-Launched with approval from FSSAI as the addiction continues because of greater
impact on the youth. The Bombay High Court has given the verdict in favour of
Nestle and withdrawn the ban after the testing has been conducted various different
laboratories. Almost two third of the population are inclined towards junk food
although knowing its ill effects on health. This helps us to conclude there can be more
Business Houses selling junk food and giving increased scope for Health Care
Services there by promoting our GDP levels.

The Maggi controversy has exposed the pathetic condition of India’s processed and
packaged food industry. The Bombay High Court set aside the countrywide ban on
Nestlé’s Maggi instant noodles, saying the national food regulator had acted in an
“arbitrary” manner and not followed the “Principles of Natural Justice” while banning
the product. "It has been brought to our attention that the Supreme Court website has
posted that the Food Safety and Standards Authority has filed a case against Nestle
India Ltd and Others. We have not been served a notice about this and are not yet
aware of its content. However, we would like to reiterate that Nestle India is confident
of the quality and safety of MAGGI Noodles and so we will defend ourselves
vigorously," a Nestle India spokesperson said. In June, the FSSAI had banned Maggi
noodle products saying it was "unsafe and hazardous" for consumption after finding
lead levels beyond permissible limits. The company had withdrawn the instant noodle
brand from the market. Nestle India said on May 21, “We do not add MSG to our
Maggi noodles sold in India and this is stated on the concerned product. However, we
use hydrolysed groundnut protein, onion powder and wheat flour to make Maggi

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noodles sold in India, which all contain glutamate. We believe that the authorities‟
tests may have detected glutamate, which occurs naturally in many foods.” FSSAI-
approved testing methods for MSG only test for glutamic acid, which is a component
of several foods, including hydrolysed vegetable proteins. “Tests in India are not as
sensitive as those in developed countries, where individual sources of every
component can be identified,” Dr Annapure said. The court, however, ordered Nestle
India to conduct fresh safety tests on five samples of each variant of the noodles at
three independent laboratories in Punjab, Hyderabad and Jaipur which were
accredited with National Accreditation Board for Testing and Calibration
Laboratories (NABL) before re-launching it. It was said that if the lead content is
within the permissible limit of 2.5 ppm, only then company will be allowed to sell the
product in the market. On November 9, the Indian arm of Swiss company re -
launched Maggi noodles in India, five months after they were banned for allegedly
containing lead beyond permissible levels. In between, RamDev also introduced
Patanjali Atta Noodles. The taste was nice but still in the end, people will continue to
eat Maggi because nothing can beat the taste of Maggi and nothing can satisfy the
hunger of Maggi. Yes, Somehow very few people got effected by this incident
otherwise people are still in love with Maggi Noodles and after its Re – Launch
people eagerly awaited to buy it after the 5 months Ban lifted from it. To gain the
market share as it was before the controversy, the company should go for damage
repairing activities-

 Company should organize campaigning in different part of the country.

 Company should use the recent court’s verdict in their advertisement to build
confidence in the mind of consumers.

 Company should focus on rural market through free sampling and

improvement in distribution channel.

In a state of affairs where there has been a failure or error on the company’s part, then
acceptance is the best way out. During the time of a crisis of such an extent, it is vital
for a brand to communicate. Connecting for stakeholders in order to share a message
that helps ease them emotionally is the key to good reputation management. The lapse

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may or may not be intentional but humility at such a moment is the slightest that the
consumers expect. The best way ahead to ensure that no such incidence would ever be
repeated is acknowledging the lapse, taking corrective, timely and stringent actions
and making a pledge of the same. The solution to revitalizing the brand image is
winning back the trust of consumers and investors. Consumer performance leads to
the business performance of the company. Nestle indeed recognized this, as evidenced
by the emphasis on rebuilding trust and consumer confidence. It’s not enough to say
that it’s the same formulation for Maggi globally. Nestle needs to re-formulate Maggi
as per Indian standards and regulations, and replace them in stores. The cost could be
substantial, but it was not an impossible task for Nestle. And it does that, it built the
brand up slowly by investing in corporate social responsibility activities, signing up a
credible endorser and effective public relations. Nestle brought Maggi back into the
shelves after coping with the controversy and emerged out as global example of
reviving the brand image.

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 (Chapter 7)
BIBILIOGRAPHY

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https://en.wikipedia.org/wiki/Maggi

https://www.nestle.in/Brands/MAGGI2-MINUTENoodles

www.business-standard.com › Markets › Features

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 (Chapter8)
ANNEXURES

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Article 1
Explained the controversy surrounding Maggi Noodles

Has Maggi broken food laws? Is it harmful for you? Indian Express explains the
controversy over India’s favourite instant noodles.

Written by PrithaChatterjee | Updated: June 5, 2015 2:03 pm

Diagram No. 2

What is the controversy around Maggi? What have tests shown?

A officer of the UP Food Safety and Drug Administration based in Barabanki ordered
tests on a dozen samples of Nestlé’s Maggi instant noodles at the state laboratory in
Gorakhpur, and repeat tests at the Central Food Laboratory in Kolkata, a referral lab.
The Gorakhpur lab tested for monosodium glutamate (MSG) to check Nestlé’s claim
that Maggi had none. Both tests found MSG; in addition, the Kolkata lab found “very
high quantities” of lead — 17.2 parts per million — according to UP authorities.

70
Based on the findings, UP FDA filed a complaint in a Barabanki court. On Monday,
Food Minister Ram Vilas Paswan directed the statutory regulator, Food Safety and
Standards Authority of India (FSSAI), to conduct nationwide tests on Maggi.
Consumer Affairs Additional Secretary G Gurucharan said all parameters, not just
lead and MSG, would be tested.

What rules govern “instant noodles” (such as Maggi) under FSSAI?

According to Food Safety and Standards Rules, 2011, MSG, a “flavour enhancer”,
should not be added to food for infants below 12 months. MSG is not permitted in
over 50 items, including “Pastas and noodles (only dried products)”, but is allowed in
the seasoning used for noodles and pastas.
Under Food Safety and Standards (Contaminants, Toxins and Residues) Regulations,
2011, permissible levels of lead range from 0.2 parts per million in infant milk
substitute and infant foods to 10 ppm in categories like baking powder, tea,
dehydrated onions, dried herbs and spices flavourings. For instant noodles included in
the “foods not specified category”, the permitted level of lead is 2.5 ppm.
Instant noodles like Maggi are identified under food category code 6.4.3, which
includes “pre-cooked pastas and noodles and like products” that are “pre-gelatinised,
heated and dried prior to sale”. These categories of food are governed by Codex
international standard 249, standards of food safety recognised by WHO. The masala
used in these noodles is identified in code 12.2, which includes herbs, spices, masalas,
seasonings, and condiments (e.g., seasoning for instant noodles), where the use is
“intended to enhance the aroma and taste of food”, according to FSSAI regulations.

Why do noodles have MSG and lead?

MSG stimulates the nervous system and makes food appear tastier. It is widely used
in “Indian Chinese” food. The US FDA says MSG is “generally recognized as safe”,
the same as salt, pepper, vinegar and baking powder. Glutamate is present in many
natural foods including tomato, mushroom, fungi and cheese. In “extreme cases”,
MSG may cause some reactions in the body; “however, researchers have found no
definitive evidence of a link between MSG and these symptoms,” according to a
Mayo Clinic note on allergies.

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The time and frequency of exposure has a bearing too. “Even if a product is satisfying
MSG limits, and one is consuming it in large quantities or very frequently, it may be
harmful,” said DrUdayAnnapure of Institute of Chemical Technology, Mumbai.
The lead, according to scientists, may come from the raw materials — water or
flavouring material — or packaging, or the curling agent. “Lead is not an essential
component of noodles. Raw materials are not periodically evaluated in India; before
FSSAI introduced new regulations in 2011, we were following the PFA Act of the
1950s. Regular checks of raw materials will help generate a database of possible toxic
components for every ingredient, we will know where these are coming from. Such
tests should be conducted at least every five years,” DrAnnapure said.

What does Nestle say?

Nestle India said on May 21, “We do not add MSG to our Maggi noodles sold in India
and this is stated on the concerned product. However, we use hydrolysed groundnut
protein, onion powder and wheat flour to make Maggi noodles sold in India, which all
contain glutamate. We believe that the authorities’ tests may have detected glutamate,
which occurs naturally in many foods.”
FSSAI-approved testing methods for MSG only test for glutamic acid, which is a
component of several foods, including hydrolysed vegetable proteins. “Tests in India
are not as sensitive as those in developed countries, where individual sources of every
component can be identified,” DrAnnapure said.
Nestle India has also said it “regularly monitors” for lead, including testing by
accredited laboratories. On June 1, the company said it had submitted samples from
almost 600 product batches to an “external laboratory” for an “independent analysis”,
but did not identify the lab. It also said it had conducted in-house tests on 1,000
samples at its accredited laboratory. “These samples represent around 125 million
packets. All the results of these internal and external tests show that lead levels are
well within the limits specified by food regulations and that Maggi noodles are safe to
eat. We are sharing these results with the authorities,” Nestle said.

Are brand ambassadors culpable too?

Consumer Affairs official Gurucharan said on Monday said brand ambassadors and
retailers who sold Maggi “with knowledge” about their side effects would be “liable

72
for action” if FSSAI identified irregularities. “They would be liable for action if the
advertisements are found to be misleading. It becomes a misleading advertisement if
it is found that the product does not have the attributes that the
manufacturerprofessed. And if the brand ambassador has promoted that product and
said specifically that the product has those attributes, they are also certainly liable for
action,” Gurucharan said. Courts in Muzaffarpur and Barabanki on Tuesday ordered
FIRs against Madhuri Dixit, Amitabh Bachchan and PreityZinta for endorsing Maggi.

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Article 2
Consumer Court Orders Fresh Tests On Maggi Noodles
The apex consumer court on Thursday for the first time ordered tests on 13 samples of
Maggi noodles from nine batches to determine lead and Monosodium Glutamate
(MSG)content. The decision was taken by a bench of the National Consumer Disputes
Redressal Commission (NCDRC) here.

The NCDRC said the Maggi samples should be sent to the Central Food
Technological Research Institute (CFTRI) in Mysore in Karnataka after verifying the
seal and samples in the court's presence.
"The 13 out of 25 total samples are sent to CFTRI in Mysore for analysis to determine
the quantity of lead and 'Monosodium glutamate (MSG) stock glutamate' in the
aforesaid samples," the bench said.

"All the samples will be packed in a box by a special magistrate, duly signed and
sealed by him. The box will be sent to the laboratory by a special messenger and the
recipient will have to compare both seal and signature on the box and the forwarding
letter to ensure there is no tampering during transit."

Further, the analysis shall cover both the noodles and the taste-maker in the Maggi
packets. When the consumer court verified the Maggi samples on Thursday, they
found four packets damaged. The remaining packets in the same batch were not
qualified to be sent for tests.

Earlier, the bench approved sending nine samples of nine batches but later increased
the number to 13 as the quantity was found insufficient for tests. Nestle India used to
produce nine variants of Maggi noodles but only two variants - Masala and
Vegetable) Atta noodles - will be sent to Mysore.

Justice V.K. Jain and Justice B.C. Gupta were hearing a class action suit against
Nestle India, regarding the alleged high levels of lead content in the company's Maggi
noodles. The government counsel had requested the NCDRC to allow them to procure

74
more samples from the Food Safety and Standards Authority of India (FSSAI) but the
plea was not accepted.

"The request to procure more samples from FSSAI has been rejected in view of the
Bombay High Court where a similar exercise has been conducted. But a local
commissioner will visit the godown in Lucknow and record the batch and expiry date
of the Maggi cartons stored," said the bench.

The commission said it would hear the application again on November 23 regarding
the latest tests on Maggi samples. On June 5, the FSSAI ordered Nestle India to
withdraw and recall all nine Maggi variants, halt production and stop exports, saying
samples were found to be unsafe and hazardous for human consumption.

Diagram No. 3

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Article 3
Ban on Maggi: High Court lifts ban, orders fresh tests within 6 weeks

Written by Aamir Khan | Mumbai | Updated: August 14, 2015 9:51 am

Diagram No. 4

The Bombay High Court on Thursday set aside the countrywide ban on nine variants
of Nestlé’s Maggi instant noodles, saying the national food regulator had acted in an
“arbitrary” manner and not followed the “principles of natural justice” while banning
the product.
The court, however, ordered Nestle India to conduct fresh safety tests on the product
before relaunching it.
The Indian unit of Nestle had challenged a June 5 order of the Food Safety and
Standards Authority of India (FSSAI) and a similar order by the Maharashtra Food
and Drug Authority (FDA) directing it to withdraw all variants of the noodles, citing
the presence of excessive lead.

76
While setting aside the ban, Justices V M Kanade and B P Colabawalla clarified that
Nestle India has to send five samples of the noodles in its possession for fresh tests
before bringing it back to the market.

Diagram No. 5

The court said it was still concerned about “public health and public interest”. “Even
though it is two-minute noodles, it took us a lot of time,” the court said, minutes after
setting aside the ban.
The tests will be carried out within six weeks at three centres accredited and
recognised by the National Accreditation Board for Testing and Calibration
Laboratories (NABL): Vimta Labs, Hyderabad; Punjab Biotechnology Incubator,
Mohali; and CEG Test House and Research Centre Pvt Ltd, Jaipur.
Reacting to the order, Nestle welcomed the decision and said it would undertake fresh
tests of Maggi noodles.
Referring to the ban, the high court observed: “(The) principles of natural justice have
not been followed before passing the impugned order and on that ground alone
impugned orders are liable to be set aside, particularly when the petitioner (Nestle
India), one day prior to the impugned order, had given a press release that it had
recalled the product till the authorities were satisfied about the safety of the product.”
The court also said that the food labs engaged by the FSSAI, which found excessive
lead in Maggi noodles, were not “authorised” under the FSS Act and Regulations.
Therefore, the results could not be relied upon, it said.
Besides, the mandatory procedure of giving a notice under the provision of sampling
and analysis was not followed, the court said.

77
During the arguments, FSSAI had alleged that Nestle India could not claim any relief
as it had suppressed facts and attempted to destroy evidence. The High Court,
however, negated this line.
Another question was whether FSSAI could impose a ban on Maggi noodles on the
grounds that the lead found in tests was in excess of what the company had
represented on its product approval application —- it was below the maximum
permissible limit. The answer to this was also negative, the court said.
As to the question of whether the FSSAI had “unfettered” discretion to decide on
standards to be maintained by companies such as Nestle India which manufactures
proprietary food or non-standardised food, the court’s response was again ‘no’.
The court also observed that lab reports obtained by the company from its labs and
other accredited labs could not be considered.
Soon after the High Court passed its order, the FSSAI and the FDA sought a stay. The
court, however, observed that Nestle India had already said that it was not going to
either manufacture or sell Maggi noodles and refused to oblige the two agencies. The
court also allowed the company to seek approval for its tenth variant, Maggi Oats
Masala Noodles.
The company had earlier argued that the CEO of FSSAI, while passing the order, had
acted in an “emergent, drastic and arbitrary” fashion while raising doubts over his
jurisdiction.
Nestle also argued that the food regulator had not served any notice before ordering a
ban. Nestle claimed it has been operating in India for 30 years and had a global
footprint.
The government has also filed a class action suit against Nestle India seeking, Rs 640
crore in damages for alleged unfair trade practices, false labelling and misleading
advertisements.
“Nestle India respects the decision made on August 13 by the Honourable Bombay
High Court to revoke the ban order passed by the Food Safety and Standards
Authority of India (FSSAI) and FDA, Maharashtra, on Maggi noodles and will
comply with the order to undertake fresh tests,” the company said.

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Article 4
Maggi tops noodles charts again, in just over 4 months

RatnaBhushan, ET Bureau Mar 23, 2016, 04.19AM IST

NEW DELHI:
Nestle India Chairman Suresh Narayanan has said that Maggi instant noodles,
banned for a few months last year, had returned to leadership position in the
country, with close to half the share of the market estimated at a little over Rs 2,000
crore.
The share of the instant snack was over 48% in February, according to data by
market researcher Nielsen, still significantly lower than the 77% it commanded at
the same time last year.
Narayanan said Maggi is now available in over 2 million outlets and variants such
as oats and atta noodles would be back on the shelves over the next couple of
weeks.

"Some of the big hitters will be coming back to the market. We are rejigging the
Maggi portfolio under noodles, pasta and sauces," he said. Before the controversy,
Maggi was sold at about 3 million outlets in the country.

Nestle relaunched the three-decade-old instant snack brand in November, after it

was taken off the shelves in June following the ban by the nation's food regulator.
"Maggi used to contribute close to 30% of our portfolio before the controversy.

At the moment, it's slightly less than a fourth of the turnover because the full
traction hasn't happened. But it's quickly catching up," Narayanan said. Nestle
India's domestic sales declined to Rs 7,794 crore in 2015 from Rs 9,485 crore in
2014, according to data on its website.

Consumer goods companies have shown softness across categories for the past five-
six quarters, with most of them growing in single digits. "The market is not super

79
buoyant and is showing signs of strain. Even in our categories, the fact is that
consumption expenditures are getting fragmented.

There is a bit of a loss of momentum but with the recent Budget announcements,
we should be bouncing back into the realm of what a 7.5-8% GDP growth economy
should exhibit in a couple of quarters," he said.

In other categories, Narayanan said Nestle had started revving up in chocolates,

beverages and dairy and that a fairly robust set of launches and relaunches were
under way in coffee under the Nescafe umbrella, under Nestea in beverages, in the
chilled dairy portfolio and a few global products from the Switzerland-based
wellness and health-related portfolio, which were being customised for the Indian
market.

Diagram No. 6

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CASE STUDY 1

Maggi seems to be just that perfect quick-snack between meals and is so easy to make
that kids sometime make it alone. At the end of May 2015, India’s Food safety
administration (FDA) ordered Nestle India to recall its popular Maggi noodles after
tests showed that the product contained high levels of lead and MSG.

Objective– This case study shows how Nestle reacted and managed the situation
using multiple digital channels.

Implementation details–

The Company used various social media channels to take care of its image while the
media was putting questions on its image.

 Initially Company rejected the accusation that the noodles were unsafe and said
on their website and social media accounts that there had been no order to recall
any products. A statement on their website said “The quality and safety of our
products are the top priorities for our Company. We have in place strict food
safety and quality controls at out Maggi factories… We do not add MSG to
Maggi Noodles, and glutamate, if present, may come from naturally occurring
sources. We are surprised with the content supposedly found in the sample as we
monitor the lead content regularly as a part of the regulatory requirements.”
 Nestle continued to keep its customers up to date on the investigation into the
safety of Maggi noodles in India. Nestle stated on the official Maggi noodles
Facebook page, Twitter and website, that extensive testing revealed no excess
lead in Maggi noodles.
 Nestle used its Twitter and Facebook accounts to answer customers questions
about the levels of MSG and lead found in their noodles. The company continued
to re-assure customers that the noodles are safe and that they are a transparent
company working closely with authorities in India to resolve the issue.
 Nestle launches a FAQ page on the official website.

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 Diagram No. 7

 Nestle recalled all Maggi noodles from India.After re-assuring customers that its
noodles are safe, the brand did a U-turn and decided to recall Maggi noodles from
the shelves. CEO Paul Bulcke said “We are working with authorities to clarify the
situation and in the meantime Nestle will be withdrawing Maggi noodles from
shelves.”
 Nestle decided to destroy more than $50million worth of Maggi Noodles in India
after they were deemed unsafe by regulators.

Results Achieved-

 When Maggi was deemed unsafe in India, all eyes were on Nestle to see how they
would respond and manage the situation. Nestle defended its product on all social
media channels and rejected all claims that its noodles were unsafe. They used the
best use of social media to connect the masses. Initially the websites which were
used for promotion of the product was now being used for maintaining its image.
 Maggi India twitter account makes an impressive effort to respond to every tweet
from customers on this issue with a pre-prepared statement explaining that lead
occurs naturally in soil and water. Nestle also explained the science behind the
reason for the ban in simple terms so customers could understand.
 The scare was a huge blow to the company, which has been selling its Maggi
products for over three decades in India with 80% of the country’s instant noodle

82
 market. However, through smart use of social media during the crisis, the brand
limited further damage by reassuring and informing customers to encourage them
to continue buying the noodles in the future.

Nestle India is preparing a blueprint for a possible re-launch of the Maggi instant
noodles brand.

Industry experts and analysts feel the issue of the recall and ban of Maggi noodles in
India is likely to be resolved in the next three to six months.

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CASE STUDY 2:

NESTLÉ’S MAGGI IS ON THE SHELVES -A CASE STUDY

ABSTRACT "What Xerox is to photocopier and Colgate to toothpaste, Maggi is to

noodles in India." The Economic Times, a prominent newspaper in India, in 2003.
Nestlé India Ltd. (NIL), the Indian subsidiary of the global FMCG major, Nestlé SA,
introduced the Maggi brand in India in 1982, with its launch of Maggi 2 Minute
Noodles, an instant noodles product. With the launch of Maggi noodles, NIL created
an entirely new food category - instant noodles -in the Indian packaged food market. ,
NIL successfully managed to retain its leadership in the instant noodles category
because of its firstmover advantage until the early 2000s.Over the years, NIL
extended the Maggi brand to a variety of culinary products like soups, sauces and
ketchups, and cooking aids among others. However, these product extensions were
not as successful as the instant noodles. In 2005, NIL started offering a range of new
'healthy' products under the Maggi brand, in a bid to attract health-conscious
consumers. This case study is aimed to analyze the business strategy used byt the
company to reenter the market and also looks at the various phases in the product life
cycle of Maggi noodles in India. It also talks about the various challenges faced by the
company, after it is off the shelves. It further discusses the measures taken by NIL to
reposition Maggi as a 'health product'.

Objectives:

1. To study about the company and the product

2. To analyze the challenges faced by the company to maintain consumer loyalty

towards their brand

3. To study the brand repositioning decisions used by the company

4. To analyze the digital channel strategy used by the company.

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The original company came into existence in 1875 in Switzerland, when Julius Maggi
took over his father's mill. He quickly became a pioneer of industrial food production,
aiming to improve the nutritional intake of worker families. Maggi was the first to
bring protein-rich legume meal to the market. In India and Malaysia, Maggi instant
noodles were very popular; Nestle has 39% of the market in Malaysia, where "Maggi"
is synonymous with instant noodles and had a 90% share in India. Nestlé unleashed
Maggi in India in 1982.Nestlé’s iconic brand.-Flagship culinary brand in India as well
as globally .Maggi launched in India at a time when the instant noodles market was
not a popular one. Nestle launched Maggi in India with the tagline: ‘Fast to cook and
good to eat’ i.e. they focused on Convenience and Health

The Indian consumer was on a lookout for a product that would provide quality food
and was also convenient at the same time. Maggi recognized this need and thought of
a ‘fast relief from hunger’ product. In a fast growing India, where women were no
more just home makers but professionals helping their spouses to run their
households, cooking food was an important issue. Therefore, initially Maggi 2-minute
noodles targeting the women. But the sales was not picking up despite heavy Media
Advertising. Indian consumers were rather conservative in their food habits,
preferring to eat traditional Indian dishes rather than canned or packaged food. They
realized that the Indian consumer was still orthodox and believed in traditional home
made Indian food, they conducted market surveys. They found that it was the children
who enjoyed the taste of Maggi more than women. They shifted their focus on
children and their mothers.

With the launch of Maggi noodles, Nestle India Ltd. created an entirely new food
category: instant noodles. NIL had the first-mover advantage which helped it retain
leadership in the instant noodles category for a long time. Maggi positioned itself as
‘the 2-minute noodles.’ Consumers still associate Maggi with ‘Easy to cook and good
to eat. The biggest problem faced by Maggi in India was the Indian psyche:
Traditional Indian food was still a psychological barriers in India. The idea of instant
food or fast food was not acceptable as much as it is today. The strategies they
followed to sustain in the market is ‘taste bhi health bhi’: reinforcing their focus on
health and getting in a new angle to 2-mintue Maggi: taste. The following strategies
worked well for the company like

85
1. First-mover advantage: the introduction of instant noodles as a food segment

2. Continuous persuasion through adds/campaigns to their TG (children and their

mothers)

3. Consumer connect and loyalty

4. Newer and more relevant contacts (taglines/ads) with the consumer

5. Customized products to suit the consumer changing demands

According to a report published by the World Instant Noodles Association, India

stands fourth in the global instant noodles consumption listing at 5.5 billion servings
per year.

On June 5, the Food Safety and Standards Authority of India (FSSAI) had ordered a
pan-India ban on the Nestle India's Maggie Noodle on the ground that these were
"unsafe and hazardous" for humans due to the presence of lead, allegedly beyond
permissible limits. The report says that samples of Maggi 2 Minute Noodles had
unexpectedly high levels of monosodium glutamate, as well as up to 17 times the
permissible limit of lead. Some of India's biggest retailers like Future Group which
includes Big Bazaar, Easy day and Nilgiris have imposed a nationwide ban on Maggi.
Thereafter multiple state authorities in India found an unacceptable amount of lead
and it has been banned in more than 5 other states in India. Monosodium glutamate
(MSG) as well as tertiary-butyl hydroquinone (TBHQ) - a chemical preservative
derived from the petroleum industry - may be present in instant noodles for their taste
enhancing and preserving properties. Though dietary intake of these elements is
allowed within a limit, regular intake of these can cause severe health issues," said Dr.
Sunil Sharma, general physician and head of emergency, Madan Mohan Malviya
Hospital, New Delhi. Women who International Journal of World Research, ate
instant noodles twice a week or more had a higher risk of metabolic syndrome than
those who ate less, or not at all, regardless of whether their diet style fell into the
traditional or fast-food category, “as published in The Washington Post. The study
concluded that excessive instant noodle consumption can not only trigger obesity but
also metabolic ailments like diabetes, high blood pressure, hypertension, heart
problems and so on. When Maggi noodles, one of Nestlé’s top products was deemed
unsafe in India, all eyes were on Nestlé to see how they would respond and manage

86
the situation. Initially Nestlé defended its product and rejected all claims that its
noodles were unsafe, and they did this on all digital channels. The scare was a huge
blow to the company, which has been selling its Maggi products for over three
decades in India with 80% of the country’s instant noodle market. However, through
smart use of social media during the crisis, the brand limited further damage by
reassuring and informing customers to encourage them to continue buying the noodles
in the future. Nestlé took to social media, Face book and multiple Twitter accounts
(main Nestlé account, Nestlé India, Maggi India) to reassure customers that its
product was safe. Nestlé responded directly to all comments on social media. As well
as this Nestlé created a section on their main website to keep customers updated. As
the pressure grew on the global company, in a press conference Nestlé’s CEO said
that all Maggi noodles in India would be withdrawn from shelves in order to comply
with regulators. Again Nestlé used digital channels to explain to customers why this
decision had been made and to answer all their questions. Nestlé also explained the
science behind the reason for the ban in simple terms so customers could understand.
The ban imposed by the Food Safety and Standards Authority of India (FSSAI) was
revoked after it cleared all tests ordered by the BombayHigh Court at three accredited
laboratories.

The return of Maggi Noodles on the auspicious eve of Deepawali and on the day of
Dhanteras is a moment of celebration for all of us," Nestle India chairman and
managing director Suresh Narayanan said, announcing the re-launch, after it was
taken off the shelves on June 5. Nestle India termed the five-month ban as "one of the
biggest crises" it has faced in the 32-year history of the brand in the country. "The
crisis we went through is a big one for Nestle India. But we were always confident
about the quality and safety of Maggi noodles. It is an important brand for the
company," Narayanan told a round-table with journalists to announce the re-launch.
The re-launched pack would be exactly the same as it was pre-crisis, and would have
the same product formula, Narayanan said, adding: The packaging, however, will not
have the line "no-added MSG (monosodium glutamate)" which, too, had become a
contentious issue.

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PAPER CUTTINGS:

Diagram No. 8

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Diagram No. 9

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Diagram No. 10

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 QUESTIONNAIRE

1) Age:

2) Gender:

o Male

o Female

3) Occupation:

4) Which brand of noodles do you use?

o Maggi

o Yippee

o Top Ramen

o Others

5) Which product of Maggi do you prefer?

o Noodles

o Sauces

o Soups

o Pasta

6) According to you which age group prefers Maggi most?

o 4-12

o 13-36

o 27-40

o 41 & above

7) Do you perceive Maggi as a health product?

o Yes

o No

8) What comes first in your mind when you hear the word Maggi?

o 2 minutes noodles

o Safe and healthy

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 o Fast food

o Others_________________

9) How do you rate Maggi brand in terms of the following parameters?

o Expertise (competent, innovative, market leader)

o Trustworthiness (dependable and keep customers interest in mind)

o Liability (fun, interesting)

o None of these

10) Which advertisements of the Maggi product do you like the most?

o Noodles: Me Aur Meri Maggi

o Sauces: It’s different

o Soups: tasty bhi healthy bhi

o Pasta: Licious pazzta

11) How often do you eat Maggi?

o Once a week

o Twice a week

o Once a month

o Everyday

12) Do you prefer Maggi as

o Snack

o Meal

13) Rate the following attributes of Maggi out of 5?

o Taste –

o Price-

o Quantity-

o Hygiene-

14) Who did the controversy of Maggi affect the most?

o Students

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 o Hostelites

o Office goers

o Others

15) Has the controversy changed your consumption frequency of Maggi?

o Yes, why?

o No

16) Do you think the advertising strategies to rebrand the product have increased
the sales of Maggi?

o Yes

o No

17) After the ban, what helped Maggi regain its brand value?

o Taste

o Loyal customers

o Rebranding strategies

o Less efficient competitors

18) Do you think the controversy, Maggi was involved in affected its sales?

o Yes

o No

o Maybe

o Don’t know

19) The controversy made Maggi a secondary option compared to other noodles?

o Yes

o No

20) The controversy made the sales of other noodles affect in a great
manner…Increasing rapidly

o Yes

o No

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 21) The sales of Maggi could ever be the same as before, after the controversy
it was held in?

o Yes

o No

22) The cost of Maggi after controversy would it be higher than that of the same
before the controversy and whether the quality of it is affected thereon.

o Yes

o No

23) When Maggi was banned, you felt?

o Happy

o Sad

o Did not affect

o Offended

24) How much are you aware of rebranding strategies, Maggi took to retain its
customers?

o 10-30%

o 30-50%

o 50-80%

o 80-100%

25) Does brand endorsement really affect your purchasing decision?

o Yes

o No

26) Do you recall any celebrity endorse for Maggi?

o Yes, mention the name….

o No

27) Did Celebrity Endorsement assure you about the quality of the product?

o Yes

o No

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28) Will you purchase Maggi even if you don’t like a particular celebrity endorsing it?

o Yes

o No

o Maybe

29) Do you think that celebrity endorser uses the product (Maggi) that they endorse?

o Yes

o No

30) What kind of celebrity endorsement would you like to see in a Maggi
advertisement?

o Sports

o Actors

o Others

31) What rebranding strategies should Maggi adopt?

o Increase the product line

o Focus on offers

o Differentiate from competitors

o Others.

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