18BEC0226 J.

GOVINDA LAHARI

LEAN STARTUP MANAGEMENT

DIGITAL ASSIGNMENT-2
MGT1022
TE2

FMCG PRODUCT: MAGGI

FACULTY COORDINATOR:
Prof. BHANU SHREE

SUBMITTED BY:
J. GOVINDA LAHARI (18BEC0226)
18BEC0226 J. GOVINDA LAHARI

MAGGI PRODUCT & PLACE: This originates from Switzerland where in 1886
Julius Maggi created a recipe of flavors to bring added taste to the meals. It was during
this time, he was known for his nutrition-oriented approach and asked by the
government to create something that is really quick and healthy at the same time. This
is because more and more women are working outside the home and may not fulfill the
nutritious requirements in that short span of time. With all these the results where instant
soups. This iconic brand is on a mission of to improve the goodness of home cooking
and renewing global product portfolio by adding ingredients that are familiar to users.

PRICE: This particular product has a price margin that allows to full one stomach to
many. It says one meal at 10/-. After a huge market from customers, they decided to
increase the price to 11/-. They thought this small change for individual customer would
bring loads of profit, but to their shock their market got down. The reason they observed
was, for every purchase of a packet the customer has to carry an extra 1/- coin, instead
they have chosen another instant noodles with same price. After realizing all this, they
came up with great marketing skills. This time the brand Maggi came back with a cost
of 10/- but with the quantity reduced from 100gm to 95gm. Did customers notice this
change? NOPE, so within a span of few years Nestle managed to reduce Maggi noodle’s
quantity to less than 3/4th of its original size. Which is 70gm for 10/-.

PROMOTION: As mentioned before, Maggi mainly focussed on the working

women. So at the starting stages of launching the product in India, Maggie was with a
tag line of “Fast to cook-Good to eat”. Because of Indian psyche this was not much
marketed. Very importantly Maggi invests very little on print media, cause this mainly
focuses on women and children. It was late 2003 when Maggi introduced ads into
various magazines. After all these also, there was no much growth in market. So they
came up with attracting strategy of distributing Maggi for free in schools and offices to
promote trail. Along with this they popped up with return gifts for empty packs, Maggi
fun books with stickers, animal facts and all the funky stuff they can.
After all the strategies they can do from their side, now they had a look from the
customers’ side. One of the strategies that was implemented in this regard is the way
they display their products in the store. Larger packs at the top with decreasing pack
sizes as going down. This is because that for a retail outlet, larger packs generate more
revenue and these top shelves are convenient view for customers. In order to capture
the loyalty of consumers and ward of any duplicacy, Julius Maggi had his signature
registered and created the brand logo with the red and yellow colour, something which
is still considered as a legacy. He also created around eighteen variants of his name like
Magi, Magique etc.
18BEC0226 J. GOVINDA LAHARI

PRODUCT LIFE CYCLE:

A product life cycle is the amount of time a product goes from being introduced into
the market until it's taken off the shelves. There are four stages in a product's life cycle—
introduction, growth, maturity, and decline. The concept of product life cycle helps
inform business decision-making, from pricing and promotion to expansion or cost-
cutting. The stage of a product's life cycle impacts the way in which it is marketed to
consumers. A new product needs to be explained, while a mature product needs to be
differentiated from its competitors.

• Introduction: This phase generally includes a substantial investment in

advertising and a marketing campaign focused on making consumers aware of
the product and its benefits.
• Growth: If the product is successful, it then moves to the growth stage. This is
characterized by growing demand, an increase in production, and expansion in
its availability.
• Maturity: This is the most profitable stage, while the costs of producing and
marketing decline.
• Decline: A product takes on increased competition as other companies emulate
its success-sometimes with enhancements or lower prices. The product may
lose market share and begin its decline.

Maturity Stage in PLC of Maggi:

Around 1985, the demand for Maggi had increased tremendously in India recovering
their developmental costs and increasing the sales rate. Maggi remained the monopoly
in the Indian Market till 1990, after which Top Ramen entered the market reducing the
market share of Maggi a little. 10 years back Maggi had 50% of the market, In order to
increase its sales again, Maggi introduced a new flavour in 1997 which wasn’t well
accepted by the consumer, thus in 1999, Nestle re-launched its old flavour of Maggi,
getting back on track in terms of sales.
18BEC0226 J. GOVINDA LAHARI

Over the years, Nestle has also introduced many products under the Maggi brand, like
the ketchups, soup, oats, pasta, more noodle flavours etc. During it’s maturity stage,
Maggi’s sales were at peak, production costs were low and profits were high. In 2003,
Hindustan Unilever Limited (HUL) was all set to take on Nestle’s Maggi by launching
a new category of liquid snacks under it’s food brand Knorr Annapurna. Priced
aggressively at 5Rs, the new product called Knorr Annapurna Soupy Snacks was made
available in 4 varieties. Like Maggi, it had a similar target market and positioned it in a
similar manner. Also, Maggi faced tough competition from Top Ramen. That led to
decline in sales, signifying that Maggi had entered the maturity stage. Maggi reaching
the peak and seeing the sales rate declining launched a series of new products. While
keeping price aggressive at 10 Rs and made the distribution channel more intensive to
encourage their product over the competitor.

OPINION AND SUGGESTIONS:

Maggi has done their best to give at most-healthier and marketing product. But with all
the new products that resemble the mission line of Maggi, their market got affected. At
some point of time, we made a conclusion that it has reached its decline stage of PLC
because of its ban. Taking this into consideration, we can improve its consumption by
few following steps.
➢ Air live: Inviting an official media channel to the production unit and giving air
live of the important sectors of manufacturing, so that customers can get out of
the negative impact they had on the products’ quality and ingredients.
➢ Crate of Maggi at shop entrance: This in my personal experience worked a lot.
Any product packed in smaller sachets and displayed in a bulk, will surely grab
customers attention.
➢ Delivery vans with safety branding: grant the food delivery trucks with Maggi
noodles branding. Use them for delivery across each city. Seeing it move around
the city with the safety message clearly communicated will help spread the
message at the ground level.
➢ Media: Being conservative is good, but not quite in a crisis involving its most
iconic product. Reaching out proactively through media should have been the
first boxes to tick in the To Do list. Avoiding media is a strict NO.

J. GOVINDA LAHARI
18BEC0226