Maggi

The Product Life Cycle

Submitted By-
VIT b- school
Vellore
 Introduction of Maggi 2-minutes
Noodles
Its a Brand of instant Noodle made Nestle wanted to explore the
by Nestle India Ltd. potential for such an Instant food
among the Indian market.
It was found by the Maggi family in
Switzerland in the 19th century. It took several years and lot of
Nestle launched Maggi for the first money for Nestle to establish its
time in India in the year 1982. Noodles brand in India.

Now it enjoys around 90% market

The Brand is popular in: share in this segment.
- Australia
- India
Over the years Maggi has
- Malaysia launched several products under
- New Zealand its Brand Name.
- Singapore
- South Africa.
 ISSUES
Different phases product life cycle of maggi
Why atta noodle was a failure?
Strategies taken to establish new product
category
What measures NIL should take to sustain the
image of a popular brand image.
Stage at which maggi is in the product life
cycle.
 PRODUCT LIFE CYCLE

A concept that provides a way to trace the

stages of a products acceptance, from its
introduction (birth) to its decline (death).
 GRAPHICAL REPRESENTATION OF A
TYPICAL LIFE CYCLE
Introductory Growth Maturity Decline
Stage Stage Stage Stage Product
Category
Sales
Dollars

Product
Category
Profits
0

Time
 Introductory Stage
High failure rates Full-Scale Launch
No competition of New Products
Frequent product modification
Limited distribution
High marketing and production costs
Promotion focuses on awareness and information
Nestl India Ltd. (NIL), the Indian subsidiary of the global FMCG major,
Nestl 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
 STPD Analysis
Segmentation Targeting Positioning Differentiation
Age Kids Fast to Taste
cook
good to
eat
Eating Youth 2-minute Flavours
Habits noodles

Lifestyle Office Taste bhi Packaging

of urban goers health
families bhi

Working
Women
Health
conscious
people
 Market Penetration Strategies
Promotional campaigns in school.

Advertising strategies: - focusing on

kids.

New product innovation according to

the need of consumers:
Veg. Atta Noodles.
Dal Atta Noodles.
Cuppa Mania.

Availability in different packages:

50 gms.
100 gms.
200 gms.
family packs (400gms.).

Conducting regular market research

 Growth Stage
Increasing rate of sales Offered in more
Entrance of competitors sizes,
Initial healthy profits flavors, options
Promotion emphasizes brand ads
Prices normally fall
Development costs are recovered
10 yrs back it enjoyed around 50% market share in this segment which was valued at
around 250 crores.
During the 1990s, the sales of Maggi noodles declined, due to growing popularity of Top
Ramen , another instant noodles product.
In order to improve sales , 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.

 Maturity Stage
Declining sales growth
Saturated markets
Extending product line Many consumer
Stylistic product changes
products are in
Heavy promotions to dealers and consumers
Prices and profits fall
Maturity Stage

In 2003 Hindustan Lever Ltd was all set to take on Nestle's bestselling Maggi 2-
minute noodles by launching a new category of liquid snacks under its food
brand, Knorr Annapurna.
The new product, called Knorr Annapurna Soupy Snax, was priced aggressively at
Rs 5 and had four variants: two chicken options and two vegetarian.
Like Maggi, Soupy Snax will be an in-between-meals snack and will be targeted at
all age groups, particularly office-goers.
 STPD Analysis
Segmentation to
Differentiation:
Classic Noodles
5 10 yrs.
Veg. Atta Noodles
Health Conscious.
Rice Mania Teenage
Cuppa Mania Office
goers, Working women.
Decline Stage If no product innovation
brought
Long-run drop in sales
Large inventories of
unsold items
Elimination of all nonessential
marketing expenses

Rate of decline depends on

change in tastes or
adoption of substitute products
 Extending the PLC

Change product

Change product use

Change product image

Change product positioning

 CATEGORIES OF NEW
PRODUCT/REVISING THE PRODUCT
New-To-The-World

New Product Lines

Six
Categories Product Line Additions
of
Improvements/Revision
New s
Products
Repositioned Products

Lower-Priced Products
 Analysis(why Atta Noodles Failed?)
In 2005 Nestl India
launched MAGGI Vegetable
Atta Noodles.
Based on consumer needs
and evolving trends for more
whole grain based products.
Extensive Research and
Development expertise to
develop Maggi Vegetable Atta
Noodles.
Maggi Vegetable Atta
Noodles will provide the
dietary fibre of whole wheat to
facilitate good health and
wellness .
The health angle
Comparing the prices
 FAILURE CAUSES
1. Indian psyche-
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 will have difficulty in
appealing to Indian market.
2. Price-
The price of atta noodle was little more than maggi
2 minutes noodle
3. False claims-
In October 2008, Nestle mistakenly aired an advert
that noodle "help to build strong muscles and
bone". The British Advertising Standards Authority
said that it was a false claim.
4. Not purely vegetarian-
Maggi Noodles also contains the additives E150d
and E627.E627 is partly prepared from fish,and is
thus not suitable for vegetarians. E150d is
sometimes made from genetically modified maize
5. Lack of essential nutrients-
The new maggi atta noodles
as can be seen from the fig.
lacked essential vitamins A,
C,also the fat content was
more then carbohydrates
6. Targeted health conscious
peoplebut atta
noodle didnt appealed
thembecause of other
Substitute supplements in
the market
 Suggestive Promotional Strategies
1. They should conduct test marketing before launching
new product.
2. Focus on creating distinctive image, based on twin
benefits of INSTANT and HEALTHY.
3. Conduct promotional campaigns at schools in small
towns with population more than 10,000.
4. Strengthen the distribution channel of the rural areas
within 100 KM of all the metros.
5. Launch new advertisement campaign (T.V., Radio and
print media commercials) with the brand ambassador.
6. Conduct Market Research to find out the market
penetration of the product in the rural areas covered.
 Current Scenario of Maggi
Leading Brand in India as World Market Share
well as World.
Current Sales: Approx.
90000 boxes
Rs. 4,79,49,000 in Mumbai
10,00,000 boxes Maggi 94%
55 cr. in India
Reasonable competitive
pricing.
Creative interaction blogs for Top Ramen
customers: 4%
www.maggi-club.in Other Local
2%
Focus mainly on Health
Benefits.
Maggi 94% Top Ramen 4% Other Local 2%
Thank you
 What is the Product Concept?
Product Attributes
Branding
Labeling
Packaging
Support services
 Introduction Stage This stage of the cycle
could be the most expensive for a company
launching a new product. The size of the
market for the product is small, which means
sales are low, although they will be increasing
 Growth Stage The growth stage is typically
characterized by a strong growth in sales and
profits, and because the company can start to
benefit from economies of scale in
production, the profit margins, as well as the
overall amount of profit, will increase.
 Maturity Stage During the maturity stage,
the product is established and the aim for the
manufacturer is now to maintain the market
share they have built up. This is probably the
most competitive time for most products and
businesses need to invest wisely in any
marketing they undertake.
 Decline Stage Eventually, the market for a
product will start to shrink, and this is whats
known as the decline stage. This shrinkage
could be due to the market becoming
saturated (i.e. all the customers who will buy
the product have already purchased it), or
because the consumers are switching to a
different type of product.
 Product Life Cycle Examples
Introduction - 3D TVs
Growth - Blue ray discs/DVR
Maturity - DVD
Decline - Video cassette