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IMIntroduction:

Nestle India Limited(NIL) is the market leader in Indian Noodle Market with
it’s Maggi Brand of Noodles 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. Its appropriate realization of target segment, effective
positioning and effective promotion and sales made Maggi to Noodles in
India as Xerox is to photocopier. NIL had introduced sauces, ketchups and
soups under Maggi brand to reap benefit of brand popularity and image,
and contribute to financial gains by 1990.Maggi also became successful in
sauces, ketchups and soups Market in India. Though NIL tried to extend to
other ready to eat products like pickles, cooking aids and paste, it was
unsuccessful, so dumped those
Over the years maggi has launched several products under its brand name
Competitors:
Maggi is competing with:
• Heinz Sauces and Ketchup
• Knoor Soups
•
Kissan Sauces and Ketchup
• Top Ramen
•
Sunfeast Pasta Wai Wai in corresponding categories of products and
variants
NIL promotions positioned the noodles as a convenient product for mothers
as it takes only 2 minutes to cook and it’s very easy to cook as well. All that
it takes it to boil water and add Maggi noodles and masala in it which is
provided in the packet itself. And it is positioned as fun for the children as
they eat it with fork and sause and those noodles are very enjoyable while
eating. Hence the tagline “fast to cook, good to eat” best suits the
promotional strategies. They promoted the product further distributing free
samples which helped mothers to try cooking once and realizing how
convenient it is in cooking. And whether their children like it or not. And
they actually found it amazing. NIL promotions gave gifts on return of the
packets which by default attracted the people towards it. Hence it led to
effective tagline communication for Maggi.
NIL had to give the protection for this product as they saw the success of
this product in the market. Hence they opted to go for the copyrights. The
word ‘noodles’ was registered in the year 1984 by NIL. Hence Maggi
became the trademark for the noodles category products from the year
1984. After this copyright the growth of Maggi product got an amazing
bounce and in 1997 the growth of the product topped the market. It fell a bit
in 1999 and gained boomed in 2004.
SWOT Analysis
Strengths
•
Market leader in the noodles category. Anytime anyone prefers Maggi as noodles.
•
It has a huge brand loyalty.
•
It has developed the huge distribution channel network over thousands of
distributors, retailers etc. hence Maggi is available in every shop right from
the supermarket till food malls.
•
Innovative products for Indian taste buds such as Maggi, Maggi masala,
chicken Maggi, tomato flavor which helped them grabbing more market as
customer needs variety and they loved those flavors as well.
•
The advertising strategy for Maggi was a super hit as their tagline itself was very
effective and grabbed the consumer’s mind.
Weakness
The weakness of the product was it was earlier heavily dependent on
only one flavor which consumers get bored after a time and stops buying
the product which hits the market sales of the product. It contains Maida, so
there are some health related issues for this product such as constipation
and it does not give sufficient required proteins and vitamins to children.
Opportunities
The greatest opportunity for the product Maggi is their
•
Unexploited rural markets as so far they have mainly targeted cities and
developed areas.
•
Number of youths working nowadays are increasing rapidly, so they can
open new branches and employ these people and increase production and
their by sales and profits by targeting rural markets.
•
Increased affinity of Indians towards chinese cuisine creates new opportunity for
Maggi to improve its taste further and capture large market share.
Threat
•
Presence of regional competitor’s e.g Top Raman, Ching’s noodles.
•
Price war strategies adopted by other brands like Top Raman.
STDP Analysis
Segmentation
It is based on lifestyle and habits of urban families depending on their
consumption per week, type of flavor sold etc.
Targeting
Kids, Office goers are their main targets as it is very easy to cook and less time
consuming office goers prefer it. And kids love its taste.
New
Entrants
Industrial
Rivalry
Substit
utes
Suppliers
Distributors
Buyers, consumer
mindset
Positioning
With statements such as 2 min noodles, easy to cook and good to
eat, they crate their own position in the market, and their tagline is the most
effective way to get the positioning done.
Differentiation
Different taste for different flavors and attractive packaging has helped them to
differentiate their product from others
C Project Report (Maggi Noodles)
New
Entrants
Industrial
Rivalry
Substit
utes
Suppliers
Distributors
Buyers, consumer
mindset
Positioning
 With statements such as 2 min noodles, easy to cook and good to
eat, they crate their own position in the market, and their tagline is the most
effective way to get the positioning done.
Differentiation
Different taste for different flavors and attractive packaging has helped them to
differentiate their product from others.
Michael Porters Five Forces Model
Market Penetration Strategies:
Maggi started with promotional campaigns in the school to see the reaction of
children after eating Maggi.
•
Started their advertising straight focusing on kids.
•
Introduced new products like atta noodles dal atta noodles cuppa mania.
•
Products are made available in different packages like 50,100,200,400 Gms.
•
Keep on conducting market research to understand changes in market.
Though Maggi has been successful every time, there were times when it faced
challenges. Some of these are:
•
Sales saw decline in 1990: The Company saw a decline in the sales in
1990. When the company tried to find out what the reason was, they came
to know that there was some thing wrong with the formula that spoiled the
taste. So the formula was changed from fried base to oiled dried base
•
Competition increased in noodle segment: When Maggi was enjoying being
the only noodle offering by any company Top ramen entered the market as
a competition. This was a big challenge for Maggi. Though Top Ramen
couldn’t do well in India
•
New product launched in market but failed- Nestle decided to expand its
offerings by offering Dal atta noodles & Sambhar flavor noodles. But these
products were not welcomed by the people the very special taste of Maggi
was still ruling the consumer
•
Maggi launched some new products: Ketchups, Soups, Taste makers etc. but they
were not successful
Current Scenario:
Maggi right now is a leading brand in India as well as world. It has
successfully established itself as a noodle brand that can be made in 2
minutes and can be cooked very easily. The simple process of making and
different taste makes it most loved noodle brand.
Reasonable competitive price gives it another advantage; packs of every
size and pack are available in the market. Nestle has priced it in such a
way that it has always been affordable to the consumer
The company has a creative interaction blogs for customers where people
can discuss about various topics if any problem is discussed about the
product the company gets to know it. Direct and continuous contact with
customers is maintained at .www.maggi- club.in
Maggi normally focuses mainly on health benefits; it not only wants itself to be
tasty but
nutritious as well. This is the reason why it always keeps on adding nutritional
value to it.

Maggi turns 25; Nestle comes up with new campaign

Nestle India is out with a new marketing drive to mark the 25th anniversary
this year of its instant Noodles brand, Maggi Called Me & Meri Maggi, the
campaign is celebrating the consumer’s bond with Maggi. The company is
doing“360 degree activation” across television, print and the internet,
beside on-ground activities. Nestle has also launched an interactive
website for the consumers,ww w .meandmeri.in
The packaging has been tweaked to accommodate the pictures of
consumers whose entries the Company chooses. “If a consumer has a
story to tell about Maggi will put him or her on the Packaging, TV or print,”
Suggestions: Promotional Strategies
•
Maggi should Focus on creating distinctive image of its own based on
twin benefits of being easily & instantly ready to be made
•
It should conduct promotional campaigns at schools in small towns with
population not more than 1000
•
It should strengthen the distribution channel of the rural areas within
100km of all the metros.
•
It should launch new advertisement campaign (TV, radio, print media
commercials) with a brand ambassador or mascot
So we can see that Maggi has a story of it’s own to tell. A story with
success & failures. A story where Nestle gave the country something to
eat, that it had not eaten before and now the country loves it so much that it
has become one of the most well established brands as well as a part of
many household. We can conclude that Maggi as a brand has a long way
to go
2 Minute Fast-food Wonder- Nestle Maggi
Background of Maggi:
Nestle India Ltd. (NIL) is the Indian subsidiary of the global FMCG major,
Nestle SA. Maggi Brand was introduced to the Indian consumers by NIL
with the launch of Maggi 2 Minute Noodles, an instant food product, in1982.
With the launch of Maggi noodles, NIL created an entirely new food
category - instant noodles - in the Indian packaged food market
1. The Brand, its Positioning and Equity
Nestle wanted to explore the potential for such an instant food among the
Indian market. It took several years and lot of money for Nestle to establish
its Noodles brand in India. Now it enjoys around 50% market share in this
segment which is valued at around 250 crores.
Maggi has faced lot of hurdles in its journey in India. The basic problem the brand
faced is the
Indian Psyche. Indian Palate is not too adventurous in terms of trying new
tastes. So a new product with a new taste that too from a different culture
had a great deal of difficulty in appealing to Indian market. Initially Nestle
tried to position the Noodles in the platform of convenience targeting the
working women. But it found that the sales are not picking up despite heavy
promotion. Research then showed that Kids were the largest consumers of
the brand. Realizing this, Nestle repositioned the brand towards the kids
using sales promotions and smart advertising. Now Maggi is the number
one brand in the noodles.
Maggi was positioned as ‘2-minute noodles’ with a punch line that said
‘Fast to Cook Good to Eat’. This gave the implied understanding to the
consumer that it was a ‘between meals’ snack. The company could have
easily positioned the product as a meal, either lunch or dinner. But, it chose
not to do so, because the Indian consumer mindset did not accept anything
other than rice or roti as a meal. Hence trying to substitute it with noodles
would have been futile. The firm did not position it as a ‘ready-to-eat’ meal
either, as the housewife prefers to ‘make’ a meal for her kids rather than
buy it for them. And if she can make it in two minutes with very little effort,
then obviously it’s a hit with her. The kids also loved the taste, thus the ‘2-
minute’ funda coupled with the ‘yummy taste’ worked. NIL’s promotions
positioned the noodles as “convenience product”, for mothers and as a
“fun” product for children.
The tag lines such as “Fast to Cook Good to Eat”, “2-minute noodles” and “Taste
Bhi, Health
Bhi” are the strong brand elements of Maggi which have helped in building brand
equity.
2. Brand Extensions:
Riding on the success of noodles, Nestle India, tried to make extensions of
the Maggi brand to a number of products like, sauces, ketchups, pickles,
soups, tastemakers and macaroni in the mid- 1990s. Maggi has both good
and bad experiences of brand extension. Extended products such
as Maggi Sauces and Maggi Soups were successful in the market. With the
launch of Maggi soups, NIL had become a pioneer in the organized
packaged soup market in India. Maggi sauces are another success story as
Maggi has a market share of 45% in the 180 crores ketchup market in
India, whereas the macaroni and pickles didn’t pick up as expected. Maggi
Macaroni was directly positioned against Maggi Noodles in the market
cannibalizing the parent brand and eating its market share. Therefore, NIL
eventually
withdrew Maggi Macaroni form the market. The preference for pickles
varied from region to region in the country, and the consumers were
generally not loyal to branded pickles. Therefore Maggi pickles had been
performing badly in the market so, NIL also discontinued Maggi Pickles.
The soups and sauces did somewhat fine, gathering considerable
sales volumes and have a satisfactory presence even today.
NIL had failed to extend the Maggi brand systematically. NIL had even
been unable to sustain the popularity and sales of its flagship product,
Maggi Noodles, let alone achieve successful product extensions. The
brand was positioned as a "Different" sauce with the baseline “Its different".
3. The Competitors:
At that time when Maggi Noodles were first launched in India, there was no
direct competition. The first competition came from the ready-to-eat snack
segment which included snacks like samosas, biscuits or maybe
peanuts, that were usually ‘the bought out’ type. The second
competition came from the homemade snacks like pakoras or
sandwiches. So there were no specific buy and make snack. Moreover both
competitors had certain drawbacks in comparison. Snacks like samosas
are usually bought out, and outside food is generally considered unhygienic
and unhealthy. The other competitor, ‘home made’ snacks overcame both
these problems but had the disadvantage of extended preparation time at
home. Maggi was positioned as the only hygienic home made snack.
Maggi Noodles, which built itself on the taste-and-convenience platform through
the 80s and
early 90s, started facing the heat from Indo Nissin’s Top Ramen brand during 90s.
Top
Ramen managed to get a 25% market share by the mid-1990s. Maggi
Noodles also faced competition from its own product i.e. Maggi Macaroni.
Another player in the instant noodles segment was Wai Wai brand of
noodles owned by Chaudhary Group, a Nepalese conglomerate. Maggi
Noodles also faced competition form ITC’s Sunfeast Pasta Treat, a ready-
to-eat pasta product which was cooked in more or less the same way as
Maggi Noodles.
To add to NIL’s problems, the organized soups market saw the entry of a new
player, Knorr
Soup in 1996. Soon Knorr Soups started giving stiff competition to Maggi Soups
and grabbed a
major share of the organized packaged soup market within a short space of time.
In the sauces and ketchups segment, NIL started facing competition form
Kissan sauces launched by Hindustan Lever Ltd. (HLL) in mid-1990s.
During 2004, Heinz India Pvt. Ltd. introduced Heinz Ketchup with premium
pricing which impacted Maggi’s Sauces as its market share came down
form 41.9% to 39.7%.
4. The Competitive Strategy:
To beat the competition 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 with much
fanfare after
which the sales revived. The company spent Rs. 200 million on an advertising
campaign to
communicate to consumers that it had relaunched the “old Maggi”. In the 2005,
NIL started
introducing new “healthy” products in accordance with the Nestle Group’s global
strategy
to transform itself into a health and wellness company. NIL also adopted the same
strategy
for the Maggi brand with the launch of the Maggi Vegetable Atta Noodles and Dal
Atta
Noodles in 2005.To counter the competition form Top Ramen, NIL reduced the
price of Maggi
noodles and introduced new economy packs.
The brand has been innovating constantly to keep share. Maggi adapted to
local tastes and withstood competition over the years and has continuously
sensitized itself to the evolving Indian consumer. NIL resorted to two-
pronged strategy. It came up with different line extensions and tastes such
as:
•
Maggi Noodles was available in four variants:
–
Maggi noodles masala
–
Maggi noodles tomato
–
Maggi noodles curry
–
Maggi noodles chicken
•
NIL repositioned soups as ‘Maggi Healthy soup’ with the tag line ‘Taste bhi,
health bhi’.
•
To fight the competition in sauces and ketchup segment NIL came up with the
following
differentiations:
–
Maggi sauces

Tomato Chatpat

Tomato Pudina

Masala chilli

Chilli Garlic
–
Maggi ketchup

Tomato sauce

Tomato ketchup

Hot and sweet sauce
5. Marketing Strategy:
The advertising of Maggi has always been children-centric in keeping with
the target audience – whether it is a hungry kid coming back from school or
play or a child opening his lunch box expecting Maggi. The jingle used for
the Maggi instant noodles campaign was pretty catchy which went down
well with the target audience, children. The ads of Maggi became so
popular that the tagline “Bas 2-Minute” immediately reminded Indian
consumers of Maggi noodles even several years after the ads were taken
off the TV. This had created a strong brand recall value.
Other places where the company targets children are shops and stores
where Maggi is sold. Children are often taken out by moms when they go
for shopping, hence the Maggi packs are usually placed in low counters,
shelves or hung in twine baskets within their eye level. The reason for this
is, children often influence purchases by pestering their parents to buy
things on seeing them. Incidentally the company also came up with smaller
packs of Maggi at Rs 5/- to initiate trial purchase and boost sales. It
increased the sales volume since the value for money is main concern of
Indian consumers.
During 2001-02 FMCG sector faced recession, in order to fight this slump
NIL introduced smaller packs at lower price points. During recession,
people prefer to buy smaller packs which helped in building brand loyalty
and penetration. Distribution network was improved so as to increase
accessibility of customers. This move proved successful as the smaller
packs of Maggi noodles sold extremely well. This strategy was also used in
its other products like coffee and confectionery. NIL began to offer Nescafe
sachets and chocolate products in smaller packs. Maggi soups were also
available in different sizes. Maggi soups available in sachets were
introduced in the market in order to counter the competition from Knorr
Soups.
NIL improve the sales of the small packs through vending machines placed
at busy locations such as offices and railway stations. It worked as a
fabulous marketing strategy and NIL was the only company that did not
lose significantly during the recession which was mainly due to the pricing
strategy that the company adopted.
6. Strengthening of the brand - Creating Brand Awareness and Maintaining Brand
Image:
To maintain the image of the brand Maggi, NIL had adopted the 360
degree marketing strategy. They promoted the product as a health product.
Initially NIL aggressively promoted Maggi noodles through several
schemes like distributing free samples, giving gifts on there return of empty
packs, etc. the company has spent a huge amount of money in
communicating the product’s benefit to the target consumers. They have
spent the huge
amount on various small events for the kids and on advertisement of the Maggi
like electronic
and print advertising.
NIL has use the celebrity endorsement strategy to endorse Maggi noodles
in order to strengthen the brand’s image. Celebrity was endorsed in the
advertisement because India is a country where people are star-struck by
film stars, cricketers, politicians, and even criminals and brand
communication messages delivered by celebrities and famous personalities
generate a higher appeal, attention and recall than those executed by non-
celebrities. In 2004-NIL roped in
Preity Zinta to endorse Maggi noodles and it was focused on promoting small
packs
of Maggi noodles so as to strike a chord with the consumers. NIL did not resort to
any
price cutting, rather it signed on Ranvir and Vijay, popular T.V. personalities
in India to grab sauces market. NIL spent heavily on the advertising
campaign for Vegetable Atta Noodles compare to other noodles or pasta
brands in India which is shown in the pie chart below.
SWOT Analysis:
Strengths:
•
NIL was first to introduce instant noodles and packaged soup in the Indian
market hence the Maggi had the first mover advantage and had opportunity
to capture the untapped market.
•
Maggi had the strong parent brand and brand recall value.
•
Capable of keeping the Maggi brand fresh in the minds of Indian consumers
•
The taste of the Maggi was like by most of the Indian consumers
•
Has a strong distribution channel
•
Maggi was able to capture the market share of 80% in the instant noodles market
•
The company had strong research and development facilities
•
NIL was able to offer ready-to-eat healthy food products such as fortified
noodles, healthy soups with low fat, low cholesterol, real vegetables and
without preservatives, artificial color or MSG
Weakness:
•
Maggi had unsystematic brand extension
•
NIL did brand extension by introducing Maggi Macaroni without taking into
concern its
threat of cannibalizing its own noodles segment.
•
Products were launched without doing proper market analysis like introduction of
sweet
noodles which was later withdrawn form the market.
•
Maggi focused mostly on the noodles and sauces segments in creating the
brand awareness to its consumers due to which other product categories
were not able to succeed in the market.
Opportunities:
•
Growing population leading to growth in the consumer market
•
Market for branded food products was growing at a healthy rate
•
changing lifestyles and eating habits of Indian consumers
•
increasing purchasing power of the growing middle income group
Threats:
•
Entry of new competitors in the market
•
Inflation in the Indian as well as international market
•
Competitors introducing new brands with local taste capturing the local market.
7. Possible Alternatives:
•
As NIL has marketed coffee products brand under differ brand name of
Nescafe. Different product category should be marketed under different
brand names such as culinary products should be under one brand name,
similarly noodles segment should be under on brand name. This strategy
will help to create and position the new products as a strong brand. Also
this will not hamper the image of the parent brand.
•
NIL has worked hard to create brand awareness only in the noodles
category by providing free test samples, free gifts and organizing the
funfare for the kids. This strategy can also be applied in other product
segments so as to attract the customers.
•
Use strategies to create awareness on health products
•
Maggi Noodles was positioned as the ‘in between meal’ snacks. Likewise, NIL
should
position its new products as the other food types so that consumers are attracted.
•
In case of culinary products, advertisements should focus on women, as
women are the one who make the purchase decisions in the culinary
market. The opportunity of posting the recipes and other gift offers are to
be introduced in order to attract Indian women.
•
More healthy food products should be introduce with proper market research
which
would best suit the Indian palate like the Maggi Dal Atta noodles was introduced.
•
Existing products should be fortified or contain nutrients so that the Indian
consumers with conservative food habits who give importance to the
perceived health benefits of traditional food are also attracted to switch
their food habits.
•
The celebrity endorsement strategy must be integrated with target market
characteristics, and the other elements of the marketing mix such as
product design, branding, packaging, and pricing. The message execution
that will be mouthed by the celebrity must likewise be made clear and
single-minded. This can be done cleverly by aligning the spirit of the brand
to the product, or by using a celebrity because it ensures that people will
notice you, and hopefully remember what the brand is saying.
•
The noodles segment has not been extended much. NIL should
concentrate mostly on the noodles segment in terms of brand extension
rather that extending the brand under different category.
8. Best Course of Action:
•
Giving new brand names to the different product category so that the consumers
are not
confused with the brand name and this might not dilute the brand image.
•
Advertising has its own small role in ensuring the brand message reaches
the target audience, in the desired medium. The general belief among
advertisers is that brand communication messages delivered by celebrities
and famous personalities generate a higher appeal, attention and recall
than those executed by non-celebrities. The quick message-reach and
impact are all too essential in today's highly competitive environment. The
celebrity appeal can successfully carrying out their jobs by giving the
bottom lines of all the brands what they want - profit, market share and
even recall.
•
Economic packs of the products are to be introduced in the market.
9. Recommendations and Suggestions:
•
The company should carefully identify the target consumers before creating the
brand
awareness.
•
The brand and its product should be advertised continuously and its benefits must
be
educated carefully to the target consumers.
•
The celebrity endorsement strategy must be integrated with target market
characteristics. The most important thing to remember is that putting a
celebrity in an ad is not an idea in itself. Unfortunately, this is how most
celebrities are being used in Indian advertising, where they just become a
prop. Ideally, there should be an idea that makes the celebrity relevant to
the product and the consumer. A celebrity's presence in the ad should be
contextual.
•
NIL must continuously invest in market researches for the product development
and to
increase the market share.
•
Proper strategies must be developed and formulated before introducing new
products into
the market.
•
The brand image should be maintained and should not be diluted with other brand
extensions.
•
The products that are in the maturity stages such as noodles, sauces and ketchups
need
continuous innovation to sustain in the market and capture more market share.

•
Frequent gift offers, sponsorships, discount offers are to be provided to the
consumers to
compete with the competitors.