EXECUTIVE SUMMARY

Maggi is a Nestl brand of instant soups, stocks, bouillon cubes, ketchups, sauces, seasonings and instant noodles. The original company came into existence in 1872 in Switzerland, when Julius Maggi took over his father's mill. It quickly became a pioneer of industrial food production, aiming at improving the nutritional intake of worker families. It was the first to bring protein-rich legume meal to the market, which was followed by ready-made soup based on legume meal in 1886. In 1897, Julius Maggi founded the company Maggi GmbH in the German town of Singen where it is still established today. This project is related to analyzing the consumer perception of Maggi food products in the age group of five-twenty years in Bangalore city. The theory used in this study is Belch and Belch theory of behaviourism. This study explains the customers process and activities engage in when searching for selecting, purchasing, using, evaluating, and disposing of Maggi food products so as to satisfy their needs and desires. Perception is the act of discerning, realizing, and becoming aware of through the senses. The customers perception is what counts, not what we think it is. The study helps in examining the process and activities while selecting Maggi food products. The study is necessary to understand customer preferences, customer needs towards Maggi food products in the age group of five-twenty years in Bangalore city . The data collected is analysed and used to draw conclusions while taking support of a sound theoretical base. To compare the conclusions to the theories mentioned and make comments in relation to the theories. The data to be collected on convenience sampling method and the research sample comprises of a hundred consumers selected at convenience in Bangalore city. Finding perception has become a backbone of business activities. Customer can be reached by studying perceptions, expectations & satisfaction level. The project is titled as Study on consumer perception of Maggi food products in the age group of five-twenty years in Bangalore city.

Finding perception has become a backbone of business activities. Customer can be reached by studying perceptions, expectations & satisfaction level.

The project is titled as Study on consumer perception of Maggi food products in the age group of five-twenty years in Bangalore city. Objectives of study are to study consumer perception of Maggi food products To analyse the needs of consumers of Maggi food products To know the impact of consumer perception on purchase of Maggi food products Descriptive research, also known as statistical research, describes data and characteristics about the population or phenomenon being studied. Descriptive research deals with everything that can be counted and studied. Convenience sampling is a non-probability sampling method. The research limitation were -the research investigation is confined to 10 retail units in Bangalore city, limited sample size of 100 for customers due to time and resource constraints and the study focuses on only MTR retailers. A structured servqual questionnaire will be used for data collection and for the analysis The statistical tool used is Chi-Square test.The data collected is analysed using tables and graphs. Conclusions and inferences are drawn upon analysing the collected data using the statistical tool of Chi-Square test.

Only Bangalore city is considered .This research is restricted to age group of five-twenty years in Bangalore city. The sampling is 100 respondents which is not very large.The study does not measure the actual quantity of the product.

Industry Profile

The Indian food market, according to the 'India Food Report 2008' by Research and Markets is estimated at over US$ 182 billion, and accounts for about two thirds of the total Indian retail market. Further, according to consultancy firm McKinsey & Co., the retail food sector in India is likely to grow from around US$ 70 billion in 2008 to US$ 150 billion by 2025, accounting for a large chunk of the world food industry, which would grow to US$ 400 billion from US$ 175 billion by 2025.

The growth of the food industry in India stems from the consistently increasing agricultural output. With the second largest arable and area in the world, India is one of the key food producing countries in the world, second only to China.

In fact, the year 2008 has been a record year for Indias food grain sector with increased production, acreage under cultivation and record procurements.

Further, according to an Economic Times analysis, one out of every five listed companies in India confirmed higher profits during the first half of fiscal 200809, with farm inputs and farm machinery companies achieving the biggest profits.

According to Mr Subodh Kant Sahai, the Union Minister of State for MFPI, the food processing industry in India was seeing growth even as the world was facing economic recession. According to the minister, the industry is presently growing at 14 per cent against 67 per cent growth in 200304. Foreign direct investments (FDI) totaling US$ 143.80 million was put into the food processing industry in 200708 against US$ 5.70 million in the previous fiscal

Advantage India
 India is the largest producer of milk in the world, and is likely to become the second largest dairy products producer in the coming years.

 It is the second largest producer of fruits and vegetables.  It is home to the largest number of livestock in the world.  It is the third largest producer food grains.  It has the third largest output of fish.  With above 9500 spices from medicinal and aromatic plants, India is truly a treasure trove of spices, accounting for 25-30 per cent of the worlds production. India is the largest producer consumer and exporter of spices, with major spices produced being black pepper, cardamom (small & large), ginger, garlic, turmeric, chilly etc.

Food Processing
The food processing industry provides crucial connections between industry and agriculture. To aid the growth of the food processing industry, the government has implemented schemes including the setting up food parks, packaging centres, integrated cold chain facilities, valueadded centres, and modern abattoirs.

Vision 2015 undertaken by the Ministry of Food Processing Industries entails:

   

Three-fold growth in the size of the processed food sector. Increasing level of processing of perishables from 6 per cent to 20 per cent. Value addition to be raised from 20 per cent to 35 per cent. Share in global food trade to go up from 1.5 per cent to 3 per cent.

Despite India having a huge agricultural production base, its share in exports of processed food in global trade is only 1.5 per cent; whereas the size of the global processed-food market is estimated at US$ 3.2 trillion and nearly 80 per cent of agricultural products in the developed countries get processed and packaged. Consequently, there is a tremendous potential for export-led growth and investment in this sector.

Snacks and Confectionary 4

The Indian market holds enormous growth potential for snack food, which is estimated to be a market worth US$ 3 billion. The market is clearly and equally divided into the organized and unorganized sector. The organized sector of the snack food market is growing at 15-20 per cent a year while the growth rate of the US$ 1.56 billion unorganized sector is 7-8 per cent.

BMI has predicted a 22 per cent growth in value terms in India's confectionery market till 2012.

Dairy and Probiotic

According to Dairy India 2007 estimates, the current size of the Indian dairy sector is US$ 62.67 billion and has been growing at a rate of 5 per cent a year. Both production and consumption of milk and its derivatives are traditionally high in the country. The dairy exports in 200708 rose to US$ 210.5 million against US$ 113.57 million in the corresponding period, in the last fiscal, whereas the domestic dairy sector is slated to cross US$ 108 billion in revenues by 2011.

Probiotic dairy products, which contain live organisms, build immunity and help in digestion, is an emerging category in the Indian food market. Along with domestic dairy majors like, Amul and Mother Dairy, global players like Nestle have made significant investments to capitalize the potential of the segment. The latest entrant is YakultDanone with its investment worth US$ 28.3 million and an additional US$ 20.8 million on the cards for the next 23 years.

According to the latest report on Indian Functional Foods and Beverage markets' by Frost & Sullivan, the market of nutraceuticals and probiotics earned revenues of over US$ 185 million in 2007 and is projected to touch an estimated US$ 1,161 million in 2012. Although the segment in its nascent stage currently, it is poised for an upswing. A healthy domestic economy and awareness of health products are expected to give a boost to the segment.

Beverages

According to industry experts, the market for carbonated drinks in India is worth US$ 1.5 billion while the juice and juice-based drinks market accounts for US$ 0.25 billion. Growing at a rate of 25 per cent, the fruit-drinks category is one of the fastest growing in the beverages market. Sports and energy drinks, which currently have a low penetration in the Indian market, have sufficient potential to grow. They are considered a socially- acceptable alternative to alcoholic beverages. Beverages major Coca-Cola India is readying an extensive roll-out of products for this year. It will roll off in February, 2009 a fortified low-priced powder drink Vitingo (an orange-flavoured beverage powder with micronutrients), followed by a phased launch of global energy drink Burn in the next quarter and its third lime-based drink, besides the existing Sprite and Limca brands either under Coca-Colas juice franchise brand Minute Maid or aerated drink Fanta also later in the year. According to industry officials, the market for packaged nimbu pani in India, almost entirely unorganized till now, promises higher growth potential than most packaged drinks. The market for alcoholic beverages has been growing consistently. 'The Future of Wine', a report on the state of the wine industry over 50 years, prepared by Berry Bros & Rudd, one of the oldest, independent wine merchants in Britain, suggests that the market for wine in India was growing at over 25 per cent per year.

Approaching the milestone of one million cases a year, the Indian wine market has also recorded an impressive growth rate. An impressive 59.84 per cent growth of wine production (21.1 million liters in FY 2007-08 from 132 million liters in FY 2006-07) in Maharashtra bears testimony to the fact. Global wine majors have already set up shop in India to tap the vast potential. Out of the total consumption of grape wine in India, around 80 per cent wine consumption is from the major cities.

Marine Food

India with its considerably long coastal lines enjoys a natural advantage in the marine food sector. According to the estimates by Marine Products Export Development Authority (MPEDA), Indian seafood exports rose to US$ 1.55 billion during 200708. Frozen shrimp accounted for 52 per cent of total marine exports at US$ 980 million followed by frozen fish at US$ 326 million.

Poultry and Processed Meat

The country's poultry market is expected to grow at 1215 per cent per annum. At the same time, fuelled by a booming retail sector, the market for processed meat is also growing at an estimated 1520 per cent per annum. Favourable conditions such as rising incomes and a young and urban population have fuelled increasing domestic demand. The rapidly growing sector offered investment opportunities for foreign players in activities such as breeding, animal health, feed, equipment, processing and retail distribution.

Retail Landscape: Food Chains and Restaurants

The food and grocery market in India is the sixth largest in the world. Food and grocery retail contributes to 70 per cent of the total retail sales.

According to industry estimates, the segment is growing at a rate of 104 per cent and is expected to grow to US$ 482 billion by 2020. According to a BMI forecast, India is likely to see a huge 443 per cent increase in mass grocery retail (MGR) sales during the 20072012 period. The sector has recently attracted UK retail giant Tesco, which plans a partnership with the Tata Group.

Ninety nine per cent of this segment is unorganized, and therefore, there is immense scope for growth for the organized sector. The organized food retail sector is largely dominated by restaurants, fast food outlets, coffee joints and the like.  With the increasing competition in large cities, dining chains and restaurants like Pizza Hut, Dominos, Nirulas and KFC are now bullish on setting up their stores in smaller cities and tier-II and III markets.  Global fast food chain, Domino's Pizza is present in 45 Indian cities with 207outlets and is eyeing penetration into Tier-II and Tier-III cities with a plan to add another 300 outlets by the end of 2011. The chain holds 42 per cent share of the approximately US$ 113 million organized pizza market.

 Another fast food chain, McDonald's, has 160 franchised restaurants all over India. With an aim to clock 3035 per cent growth per annum, it is looking to open 60 more outlets in the next three years.  In the coffee retail segment, Cafe Coffee Day, the largest coffee bar chain in India, plans to grow from the present level of 590 cafes to 900 by the end of 2009.  Popular Italian brand for ice creams, desserts and other food items, "Italicks", has entered the Indian market. The traditional Italian food items brand has launched its first outlet in Pune and will soon be present across India.  UK-based Wimpy International Ltd said it has clocked a 50 per cent increase in its sales within a month.  Dodsal Corporation operates 62 Pizza Hut and KFC outlets spread across 11 cities in India.  With out-of-home-consumption of coffee growing at 1213 per cent, the Indian conglomerate, The Tata Group, is planning to step in to the business, by setting up a caf chain across the country.  Hyderabad-based Heritage Foods India Private Limited (HFIPL) is planning to set up about 75 Fresh@Stores, its grocery retail chain, in Hyderabad, Chennai and Bangalore.

The food retail market is going to receive a further boost with the proposed mega food parks. These, with complete backward and forward linkages with common processing facilities, are expected to create an integrated value chain from the farm gate to the consumer.

Major investments
Private investment has been one of the key drivers for growth of the Indian food industry. The 'India Food Report 2008', reveals that the total amount of investments in the food processing sector in the pipeline for the next three years is about US$ 23 billion.

 The government has received around 40 expressions of interest (EoI) for the setting up of 10 mega food parks (MFPs) with an investment of US$ 514.37 million.  In August 2008, the first chocolate academy in India was opened by Swiss confectioner Barry Callebaut, making its fifth foray into the Asia market.  South Korean confectionery giant, Lotte Group, also has plans to set up a subsidiary in India.

 Belgian brewing giant, InBev, has announced increased expansion in India, with a focus on the beer market. Through its recent acquisition of US brewing giant Anheuser-Busch (A-B), the company now also owns A-B's Indian subsidiary, Crown Beers India. Consequently, A-B's popular Budweiser brand is likely to soon hit affluent Indian markets.  Italian confectionery company, Ferrero SpA, has announced plans to invest US$ 35 million for setting up a mint manufacturing plant in Maharashtra. Conglomerate Reliance Industries Ltd has invested US$ 1.25 billion in a dairy project. In August 2008, Reliance Industries was reported to be mulling a partnership with UK-based supply chain solutions provider, Wincanton, for its efforts focussed on Indias mass grocery retail (MGR) sector.  According to Business Monitors Q108 India Food & Drink Report, dairy major and ice cream specialist, Amul Dairy, has announced plans to enter India's US$ 500 million snack food market.  Future Group and its private equity arm, Indivision India Partners, have acquired a controlling 50 per cent plus equity stake in the multi-cuisine lifestyle restaurants chain, Blue Foods. Blue Foods's flagship brands include Noodle Bar, Gelato Italiano, Spaghetti Kitchen, Copper Chimney, Bombay Blue, Cream Centre and a franchisee agreement with the California-based coffee chain, Coffee Beans & Tea Leaf.  Texas Chicken, the chicken fast-food brand of the US-based Church's Chicken has already opened its first outlet in Hyderabad and plans to open at least 300 outlets in India over the next 10 years.  The world's third largest pizza chain, Papa John's, plans to open 100 outlets in different parts of the country with an investment of US$ 51 million.  Fast-food chain McDonalds is pumping in US$ 83.4 million on increasing its footprint in India.  On the domestic front, RJ Corp-owned Devyani Food Industries has acquired 100 per cent stake in ice-cream venture Cream Bell, valued at approximately US$ 92 million.  ITC is planning to set up a world-class processing infrastructure in Rajasthan for an integrated 'cleaning-cum-sorting' facility for spices like cumin, coriander and pepper. Moreover, ITC is also planning investments to automate the different operations in its supply chain. It is planning to set up a pepper garbling and steam- washing facility in Kerala, apart from a 'blended spices' facility over the next two years.  Sapat International, a Mumbai-based tea company, is reportedly in talks with EPIC, a private equity firm in the UK, for the acquisition of its stake in Whittard, an upmarket tea and coffee retailer in the UK.

 Cafe Coffee Day is planning an investment of US$ 24.68 million - US$ 30.86 million for expanding its number of cafes to around 1,000 from the current 700, over 2009.  France-based Belvedere Group, which is the worlds second-largest vodka producer, is planning to enter India via the travel retail channel.

Government Initiatives
The new trade policy places increased focus on agro-based industries.  Food processing industries have been put in the list of priority sectors for bank lending.  Fruit and vegetable processing units have been completely exempted from paying excise duty.  Automatic approval for foreign equity upto 100 per cent is permitted for most of the processed food items.  Items like fruits and vegetables products, condensed milk, ice cream, meat production, fist/poultry, pectins, pasta, and dairy machineries have been completely exempted from Central Excise Duty.  Excise duty on ready to eat packaged foods and instant food mixes have been brought down to 8 per cent from 16 per cent ;  Excise duty on aerated drinks has been reduced to 16 per cent from 24 per cent.  National bank for agriculture and rural development (NABARD) has set up a refinancing window with a corpus of US$ 204.92 million for agro processing infrastructure and market development.

Furthermore, Agriculture and Processed Food Products Export Development Authority (APEDA) has been making efforts to encourage export of agricultural and processed food products.

 APEDA has set up centres and other infrastructural facilities for perishable cargo at various International Airport  Set up and upgraded testing laboratories export of fruits & vegetables.  Set up Agri-export zones for fruits and vegetables.  Participation and organization of international trade fairs and promotional campaigns.  Provided financial assistance to its registered exporters.

Looking ahead 10

A report by the US Department of Agriculture, citing a study by McKinsey & Company, suggests that the Indian food market is set to more than double by 2025. The market size for the food consumption category in India is expected to grow from US$ 155 billion in 2005 to US$ 344 billion in 2025 at a compound annual growth rate (CAGR) of 4.1 per cent. The government has undertaken major initiatives to give a push to the industry. It has decided to set up 30 greenfield mega food parks (MFP) during the Eleventh Plan, with each park receiving an investment of US$ 51.39 million. In the first phase, he said the MFPs would be established in ten states. Each project will be spread over about 50100 acres, and will have around 30-35 food processing units. It is expected that each project would yield an annual turnover of about US$ 92.53 million-US$ 102.78 million and generate around 40,000 direct and indirect jobs. Work on 10 MFPs would commence in the current financial year.

The MFP scheme has been set up to increase processing of perishables from the present 6 per cent to 20 per cent. Further, the scheme targets value addition of food items from 20 per cent to 35 per cent and increasing Indias share in global trade from 1.5 per cent to 3 per cent by the year 2015. Furthermore, according to the India Food and Drink Report Q3 2008 by research analysis firm Research and market, by 2012, Indias processed food output is likely to grow by 44.2 per cent to touch US$ 90.1 billion, while packaged food sales will increase by 67.5 per cent to reach US$ 21.7 billion. On a per capita basis, per capita packaged food spending is expected to grow by 56.5 per cent to US$ 18.06 by 2012.

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Company profile
History of Maggi
Julius Michael Johannes Maggi was a Swiss entrepreneur, inventor of precooked soups and the Maggi spice. He was the youngest of five children of Michael Maggi, an immigrant from Italy, and his Swiss wife Sophie. He died in 1912 after a stroke. He married twice, and had four daughters and two sons. After his father death Julius Maggi took over his father's mill. It quickly became a pioneer of industrial food production, aiming at improving the nutritional intake of worker families. It was the first to bring protein-rich legume meal to the market, which was followed by ready-made soup based on legume meal in 1886. In 1897, Julius Maggi founded the company Maggi GmbH in the German town of Singen where it is still established today. In parts of Europe, Mexico, Malaysia, and Brunei, In German-speaking countries as well as the Netherlands, Czech Republic, Slovenia, Slovakia, Polandand France, "Maggi" is still synonymous with the brand's "Maggi-Wrze" (Maggi seasoning sauce), a dark, hydrolysed vegetable protein based sauce which is very similar to East Asian soy sauce without actually containing soy.[1] It was introduced in 1886, as a cheap substitute for meat extract. It has since become a well-known part of everyday culinary culture in Switzerland, Austria and especially in Germany. It is also well known in Poland and the Netherlands.

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The bouillon cube or "Maggi cube" was introduced in 1908, which was another meat substitution product. Because chicken and beef broths are so common in the cuisines of many different countries, the company's products have a large worldwide market. In 1947, following several changes in ownership and corporate structure, Maggi's holding company merged with the Nestl company to form Nestl-Alimentana S.A., currently known in its francophone homebase as Nestl S.A.. Today, Maggi is particularly well known in the Baltic states for its dry soups.

In Bangladesh, India, Pakistan, Nigeria, Australia, New Zealand, Brazil,Mexico and the Philippines, for its seasonings, such as Maggi sauce, which is a household product. And in Malaysia, Indonesia, India and Singapore for its instant Maggi noodles (Maggi Mee). In West Africa, and parts of the Middle East, Maggi cubes are used as part of the local cuisine. Throughout Latin America, Maggi products, especially bouillon cubes, are widely sold with some repackaging to reflect local terminology. In the German, Dutch and Danish languages, lovage has come to be known as "Maggi herb" (Ger.Maggikraut, Du. maggikruid or Da. maggiurt), because it tastes similar to Maggi sauce, although, paradoxically, lovage is one of the few herbs not present in the sauce. In Indonesia, Thailand and Vietnam Maggi seasoning sauce is a popular condiment used in flavouring meals, and the bottles are familiar sights on restaurant tables.

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SWOT ANALYSIS OF MAGGI BRAND

The SWOT analysis of Maggi brand clearly indicates the strengths of Maggi as a Brand in Indian market. The Brand was found to be a leader in its category of Noodles, with strong customer loyalty. Intensive distribution of Maggi as a Brand was seen in urban areas of the country. The major threats of the brand as shown in the figure below indicates that Maggi has made several attempts to revamp itself as a Healthy Product but till date its perseverance towards the tag line is low by the consumers. The brand is in the growth stage of product life cycle with a strong inclination towards the maturity stage.

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STRENGTH Market leader in their segment Strong brand loyal consumer base Wide range of distribution channel Product according to the need of Indian consumer

WEAKNESS Product are dependent on each other Not so much presence in rural market

SWOT ANALYSIS

OPPORTUNITY Increasing number of working youth Product has been acceptable in youth category Shift to rural market Changing preference of consumer towards Chinese food and fast food. Can foray into other food markets with its strong Brand name

THREAT Price war with competitors. Strong presence of regional competitors Consumers dont perceive it as a Healthy Product

TASTE AND PREFERENCES OF CONSUMERS

Health is the flavour of the season. Food companies in India are growing aware of the increasingly changing consumption trends and taste preferences among the Indian junta. No surprises, but this is the reason more and more companies are coming up (or are actually re-marketing) with products that are healthy. Take for example Coke and Pepsi; both have already started looking into the non-carbonated drinks category section. Maggi first introduced in the market Maggi Atta Noodles which it claimed was a healthy food as it was made of wheat flour followed by soups.

Nestle India, in an effort to carry on with its trend of providing the Indian consumers healthy food recently introduced a range of Healthy Soups. The entire range consists of the following; maggi tomato, mixed vegetable, tomato vegetable, mushroom, chicken, sweet corn chicken and hot and sour vegetable. The product is priced at Rs 25 for 70 grams.

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Maggi became successful because it understood consumers . The brand never wanted to change Indian consumer's habit. It did not had ambitions about changing Indian's breakfast or dinner preferences. What Maggi did was to slowly attach itself to Indian consumer's need without disruption. Maggi was also closely watching consumer preferences.When consumers wanted healthy food, Maggi launched Atta Noodle variants that was healthy . More importantly this move addressed the concerns of Homemakers.The brand extended itself to multiple segment but without diluting the core brand equity. Maggi over these years have made lot of mistakes. It made mistakes because the brand was willing to experiment. More importantly the brand learned from those mistakes and corrected itself.

Maggi also invested heavily in brand building. The campaigns for one of Maggi's products were always there in the media which kept the brand fresh in the mind of the consumers. Maggi personifies the basic principles of understanding consumers, innovating and investing in the brand. Maggi is one packaged food brand that has only seen its popularity grow in the past many years and the secret to the success is that instead of trying to change the food habits of consumers, it has tried to align itself with local tastes and preferences with the fast to cook and good to eat promise. To commemorate its successful journey through a quarter of a century in the worlds largest consumer market, the brand, last year, launched an innovative campaign inviting its loyalists to share with it their Maggi stories and promised to broadcast them to the

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