SIMSREE

PRESPECTIVE MANAGEMENT (60 Marks Exam)

SEM I – 2022 TIME – 3 hours

Case Study – The 2015 Maggi Crisis

Maggi was introduced in India by a Global FMCG company called Nestlé in 1982 and over
this time, until 2015 the brand captured 60% of the noodle market in India. Maggi was in
every nook of the country, this was because of how affordable, portable and instant these
noodles are. However, as all good things come to an end. Maggi faced a temporary ban in
2015. Food Safety and Standards Authority of India (FSSAI) is not very well known for
surprise food inspections; however, April 2015 was different. FSSAI conducted a surprise
Inspection for testing any possible food adulteration issue on Maggi’s manufacturing unit in
the Barabanki district of Uttar Pradesh. The tested samples were sent to FSSAI labs and
reports of higher than permissible levels of lead and the presence of Monosodium
Glutamate (MSG) was released, these substances are banned to use for consumable
products. Naturally, Nestlé India Limited (NIL) appealed against the report and said MSG
was a result of natural processes (it’s also mentioned on their website) and requested re-
inspection of the products in the unit. Following this appeal, samples were sent to a
government-authorized lab in Kolkata which only supported the findings of state FSSAI
laboratory.

These reports led to several states banning sale and use of Maggi, obviously because of the
health concerns. And unfortunately, on 9th June, 2015, FSSAI put a nationwide ban on sale
on Maggi noodles for 5 months. Owing to this nationwide ban Nestlé recalled all the Maggi
products from all the outlets and emotionally promised that they’ll be back in market as
soon as the lab reports were clear. Almost 38,000 tonnes of Maggi was destroyed by
Nestlé which worth Rs.320 crore. The then brand Ambassadors of Maggi – Amitabh
Bachchan, Preity Zinta, and Madhuri Dixit were slammed for endorsing the brand and
criminal cases were filed against them. Other brands were trying aggressively to capture the
Market. Competitors like Top Ramen, Yippie, Patanjali Noodles started marketing their
noodles healthy and 60% of the Market was now open for them to capture. Things went
sour when the Government filed a case against Nestlé and charged Rs.640 crore for
damages . Nestlé posted its first loss in 17 years after the Maggi was banned. But worse,
the consumers were now losing their trust in Maggi.

Surprisingly even when the Maggi was banned, it really wasn’t ready to give up on its
consumers. The brand had an active social media page through which it stayed connected
to its audience by the way of various social media posts and advertisements. Even on their
Facebook page, they kept posting that their (consumers’) favorite food will be safe to
consume very soon. There was a loyal set of customers that believed in Maggi and would
occasionally post on their social media about how much they wanted their favorite noodles
to return. Responding to them Maggi ran a campaign showcasing how they were missing
their customers as well. They also created helpline numbers and FAQ pages for
customers’ related queries. In August 2015, the ban was lifted by the Bombay High court
on the condition that it will be relaunched only after the reports are cleared by the FSSAI.
And, in November 2015, when Nestlé got a nod from the food regulatory authority of India
(FSSAI), it launched its WELCOME BACK campaign – an emotional campaign that won the
heart of its consumers. They even launched 15 new variations of Maggi. They teamed up
with e-commerce giants and started selling welcome kits which contained 12 Maggi packs.
The response was great, the then e-commerce company Snapdeal sold 60,000 Maggi kits in
just 5 minutes after the launch.

All in all, this teaches us all that what matters in end is the emotional connection you have
with your customers. Unfortunately for Maggi’s competitors, they really did not achieve a lot
during the ban. Maggi captured over 60% again in the next two years to come.
Answer the below questions based on the Case Study Of 2015 Maggi Crisis
(Compulsory - 20 marks )

1) What was the Crisis that Nestle faced for its Maggi brand in 2015?

2) What was impact of the Ban on Maggi?

3) What was the Response Module adopted by the company?

4) What effective communication strategy did the company incorporate during its Crisis?

5) What are the learnings from the Maggi Case study?

Answer any four Questions (10 marks each)

1) What is the difference between Quality Control v/s Quality Assurance? What is the Lean
Manufacturing Framework?

2) Explain the Triple bottom line Approach in Business Sustainability. What is corporate
social responsibility (CSR)?

3) State and explain difference between Managership and Management. Discuss the
different Leadership Styles.

4) Explain Kurt Lewin’s 3-Step Change Process. Explain the phases of Organisation
Development.

5) State Abraham Maslow’s Theory of Need and Equity Theory.

6) What are the key forces affecting Organisations? What is the Key Difference Between
Effective and Ineffective Mangers?