1

A MINOR PROJECT REPORT

ON

PRODUCT MIX OF MAGGI

SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF

THE DEGREE OF BACHELOR IN BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF:

Ms. SWEETY GUPTA

ASSISTANT PROFESSOR, RDIAS

SUBMITTED BY:

Name of the Student: MANISH BISHT

Enrollment No.: 00680301711

BBA (II SHIFT), Semester III

Batch 2011- 2014

RUKMINI DEVI INSTITUTE OF ADVANCED STUDIES

NAAC Accredited, A Grade

Category A+ Institute

High Grading 81.7% by Joint Assessment

An ISO 9001:2008 Certified Institute

Approved by AICTE, HRD Ministry, Govt. of India

Affiliated to Guru Gobind Singh Indraprastha University, Delhi

2A & 2B, Madhuban Chowk, Outer Ring Road, Phase-1, Delhi-110085

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TABLE OF CONTENTS

Page no.

Student Declaration 3

Certificate from Guide 4

Acknowledgement 5

Executive summary 6-7

CHAPTER 1- PLAN OF THE STUDY 8-14

1.1 Introduction

1.2 Purpose of the study

1.3 Literature Review

CHAPTER -2 15-33

About the industry/Company profile

CHAPTER -3 34-45

Reasearch Methodology

CHAPTER -4 46-58

Data Analysis and Interpretation

CHAPTER -5 59-61

Findings and Conclusion

CHAPTER-6 62-63

Recommendations

Bibliography 64-65

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STUDENTs DECLARATION

This is to certify that I have completed the Project titled PRODUCT MIX OF MAGGI

under the guidance of Ms. SWEETY GUPTA in the partial fulfilment of the requirement

for the award of the degree of Bachelor in Business Administration from Rukmini Devi

Institute of Advanced Studies, New Delhi.

This is an original work and I have not submitted it earlier elsewhere.

Name of the Student- MANISH BISHT

Enrollment No. - 00680301711

Class & Section- BBA II

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CERTIFICATE OF GUIDE

This is to certify that the project titled PRODUCT MIX OF MAGGI is an academic work

done by MANISH BISHT submitted in the partial fulfilment of the requirement for the

award of the degree of Bachelors in Business Administration from Rukmini Devi Institute

of Advanced Studies, New Delhi. under my guidance and direction.

To the best of my knowledge and belief the data and information presented by her in the

project has not been submitted earlier elsewhere.

Name of the Faculty- Ms. SWEETY GUPTA

Designation of the Faculty- Assistant professor

RDIAS

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ACKNOWLEDGEMENT

I offer my sincere thanks and humble regards to Rukmini Devi Institute Of Advanced

Studies, GGSIP University, New Delhi for imparting us very valuable professional

training in BBA

I pay my gratitude and sincere regards to MS. SWEETY GUPTA my project Guide for

giving me the cream of her knowledge. I am thankful to her as she has been a constant

source of advice, motivation and inspiration. I am also thankful to her for giving her

suggestions and encouragement throughout the project work.

I take the opportunity to express my gratitude and thanks to our computer Lab staff and

library staff for providing me opportunity to utilize their resources for the completion of

the project.

I am also thankful to my family and friends for constantly motivating me to complete the

project and providing me an environment which enhanced my knowledge.

Name of the Student- MANISH BISHT

Enrollment No. 00680301711

Class & Section- BBA- II

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EXECUTIVE SUMMARY

In this chapter the basic introduction of the project is given. In this topics like Plan of the

study, objectives of the study along with literature review are introduced. It also covers the

the introduction of the study, the data used and the limitations occurred during the project

making are also covered. The real aim of this project is to study the effectiveness and

responses towards marketing strategies adopted by Nestle maggi. But many sub objectives

are also included under this project so as to make it comprehensive one.

It is important to understand that the total feasible market is the portion of the market that can

be captured provided every condition within the environment is perfect and there is very little

competition. In most industries this is simply not the case. There are other factors that will

affect the share of the feasible market a business can reasonably obtain. These factors are

usually tied to the structure of the industry, the impact of competition, strategies for market

penetration and continued growth, and the amount of capital the business is willing to spend

in order to increase its market share.

The objective behind the making of the project is to study the Importance and development

of product mix, to study present and future product mix of maggi, To study the growth of the

company.

In this chapter the company is studied in detail i.e the companies policies, operations,

executive head etc. and its operations in India. History of the company and its future

operations are also covered. The internal study of companies- history, vision, business areas

etc. to analyse how well poised the company are to compete or rather just exist in the market

that is providing itself to be the most competitive in post liberalization Indian economy. The

SECONDARY DATA has been used in this project to collect the useful information.

This chapter discusses about the findings made during the making of the project i.e the

marketing mix of the company, marketing strategies of the company. Here SWOT analysis of

the company are also covered. Indian economy is emerging one and is growing very fast in

market competition level among their over all product mix. New competition is coming

which will intensify the competition. New products and new schemes are being offered by

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the company itself. The need for large information capacity has grown tremendously due to

the demand of real information.

As Indian Market is Brand conscious, other competitors are coming up with more Indianized

brand of products, and as Indian being more aware of their culture and large segment being

typical and conservative about their culture, there care more chances that NIL would be

successful if it create a brand close to Indian culture in wording to positioning. As India is

growing, Old Indian Brands are also regaining momentum worldwide, NIL could catch the

trend of market.

By doing so, NIL could avoid the draw backs associated with the Maggi brand. It could

position new brand in competition with other competitors brand where there is no fit of

product with the Maggi brand.

NIL other option is acquiring products manufacturers of different products like biscuits, chips

and snacks as it is very essential for its market leader position. Other companies have

advantage of such products. ITC has biscuits to it, Hindustan Lever has tea to it. India is huge

market where distribution advantage plays major role and economies of scale pays back. So

its is important for NIL to concentrate on other ready to eat category to benefit consumers

from economies of scale reflect in price.

In this chapter we conclude about the project in brief and expressing personal opinion.

.

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CHAPTER -1

PLAN OF THE STUDY

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INTRODUCTION

The product mix of a company, which is generally defined as the total composite of products

offered by a particular organization, consists of both product lines and individual products. A

product line is a group of products within the product mix that are closely related, either

because they function in a similar manner, are sold to the same customer groups, are

marketed through the same types of outlets, or fall within given price ranges. A product is a

distinct unit within the product line that is distinguishable by size, price, appearance, or some

other attribute. For example, all the courses a university offers constitute its product mix;

courses in the marketing department constitute a product line; and the basic marketing course

is a product item. Product decisions at these three levels are generally of two types: those that

involve width (variety) and depth (assortment) of the product line and those that involve

changes in the product mix occur over time.

PRODUCT MIX involves planning and developing the right type of product that will satisfy

fully the needs of customers. A product has several dimensions. These dimensions are

collectively called product mix. Product mix for example may consist of size and weight of

the product, volume of output, product quality, product design, product range, brand name,

package, product testing, warranties and after sales services and the like.

Product mix, also known as product assortment, refers to the total number of product lines that a

company offers to its customers. For example, a small company may sell multiple lines of products.

Sometimes, these product lines are fairly similar, such as dish washing liquid and bar soap, which are

used for cleaning and use similar technologies. Other times, the product lines are vastly different, such

as diapers and razors. The four dimensions to a company's product mix include width, length, depth

and consistency.

The tools for product mix are :

Width

The width of a company's product mix pertains to the number of product lines that a company

sells. For example, if a company has two product lines, its product mix width is two. Small

and upstart businesses will usually not have a wide product mix. It is more practical to start

with some basic products and build market share. Later on, a company's technology may

allow the company to diversify into other industries and build the width of the product mix.

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Length

Product mix length pertains to the number of total products or items in a company's product

mix, according to Philip Kotler's textbook "Marketing Management: Analysis, Planning,

Implementation and Control." For example, ABC company may have two product lines, and

five brands within each product line. Thus, ABC's product mix length would be 10.

Companies that have multiple product lines will sometimes keep track of their average length

per product line. In the above case, the average length of an ABC Company's product line is

five.

Depth

Depth of a product mix pertains to the total number of variations for each product. Variations

can include size, flavor and any other distinguishing characteristic. For example, if a

company sells three sizes and two flavors of toothpaste, that particular brand of toothpaste

has a depth of six. Just like length, companies sometimes report the average depth of their

product lines; or the depth of a specific product line.

Consistency

Product mix consistency pertains to how closely related product lines are to one another--in

terms of use, production and distribution. A company's product mix may be consistent in

distribution but vastly different in use. For example, a small company may sell its health bars

and health magazine in retail stores. However, one product is edible and the other is not. The

production consistency of these products would vary as well.

Product Market Mix Strategy

Small companies usually start out with a product mix limited in width, depth and length; and

have a high level of consistency. However, over time, the company may want to differentiate

products or acquire new ones to enter new markets. A company can also sell the existing

products to new markets by coming up with new uses for their product.

The product lines are defined in terms of academic departments. The depth of each line is shown by

the number of different product item source offerings offered within each product line. (The examples

represent only a partial listing of what a real university would offer.) The state university has made

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the strategic decision to offer a diverse market mix. Because the university has numerous academic

departments, it can appeal to a large cross-section of potential students. This university has decided to

offer a wide product line (academic departments), but the depth of each department (course offerings)

is only average.

PRODUCT MIX-MANAGEMENT AND RESPONSIBILITIES

It is extremely important for any organization to have a well-managed product mix. Most

organizations break down managing the product mix, product line, and actual product into

three different levels.

Product-mix decisions are concerned with the combination of product lines offered by the

company. Management of the companies' product mix is the responsibility of top

management. Some basic product-mix decisions include: (1) reviewing the mix of existing

product lines; (2) adding new lines to and deleting existing lines from the product mix; (3)

determining the relative emphasis on new versus existing product lines in the mix; (4)

determining the appropriate emphasis on internal development versus external acquisition in

the product mix; (5) gauging the effects of adding or deleting a product line in relationship to

other lines in the product mix; and (6) forecasting the effects of future external change on the

company's product mix.

Product-line decisions are concerned with the combination of individual products offered

within a given line. The product-line manager supervises several product managers who are

responsible for individual products in the line. Decisions about a product line are usually

incorporated into a marketing plan at the divisional level. Such a plan specifies changes in the

product lines and allocations to products in each line. Generally, product-line managers have

the following responsibilities: (1) considering expansion of a given product line; (2)

considering candidates for deletion from the product line; (3) evaluating the effects of

product additions and deletions on the profitability of other items in the line; and (4)

allocating resources to individual products in the line on the basis of marketing strategies

recommended by product managers.

Decisions at the first level of product management involve the marketing mix for an

individual brand/product. These decisions are the responsibility of a brand manager

(sometimes called a product manager). Decisions regarding the marketing mix for a brand are

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represented in the product's marketing plan. The plan for a new brand would specify price

level, advertising expenditures for the coming year, coupons, trade discounts, distribution

facilities, and a five-year statement of projected sales and earnings. The plan for an existing

product would focus on any changes in the marketing strategy. Some of these changes might

include the product's target market, advertising and promotional expenditures, product

characteristics, price level, and recommended distribution strategy.

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OBJECTIVES OF THE PROJECT

1. To study the various products of Nestle Maggi.

2. To study about the Maggi and its competitors.

3. To make an analysis of it through SWOT and STP and its marketing strategies.

4. To get to know what is Product mix

5. To come across different problems being faced in Product Mix.

6. To study the PLC.

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LITERATURE REVIEW

Product Mix as a management function which in its simplest term refers to the basic

functions of management namely planning, organizing, leading and controlling (POLC).

These four functions are necessary for the achievement of organizational goals. It is

important that these activities should operate in harmony with one another since they are

interrelated. For instance, according to Cole (1996), a manager cannot just do planning and

ignore the other aspects. Although these four functions do not tell the whole story about what

constitutes management, they are a convenient way of describing most of the key aspects of

the roles of management.

A Product Mix Rooted in History and Culture

Developing an appropriate product mix is key to Gallardo's achieving its growth ambitions

and to successfully move to sell and market its products south of the border in Mexico. We

know for certain that people in Mexico still place flavor above convenience, so developing

products that are only convenient would lead to certain failure for Gallardo's in Mexico. To

date, the company has achieved its success by offering a product mix that includes sauces,

seasonings and salsas that were aligned with its Tex-Mex restaurant flavors. Though this mix

helped the company earn significant market share in major areas of the United States,

modifying this mix will be key to helping it achieve similar success, and what Eric Meyer,

CEO of Gallardo's Salsa and Sauces, would consider a "win," in Mexico. And, more

importantly, for Gallardo's to differentiate itself from California brands, its main competitor

in the Mexico.

Gallardos must include the main staples of Mexican flavors into its products. These include:

chilies, beans, tomatoes, fruit and a variety of spices. But in order to revise its product mix

for Mexican markets, Gallardo's needs to take a variety of key issues into consideration.

Several of these have already been researched at length by Gallardo's management team, such

as special demographic characteristics, relevant emotional, psychological and functional

needs related to cookingparticularly the enjoyment of the whole cooking process and its

role as an outlet to express and receive familial love and affection by Mexican womenand

the special role cooking aids can play in creating enhanced flavors and dishes.

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CHAPTER 2

COMPANY PROFILE

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INTRODUCTION

MAGGI

Maggi is a Nestl brand of instant stocks, 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. He quickly became a pioneer of industrial food production, aiming to

improve the nutritional intake of worker families. Maggi was the first to bring protein-rich

legume meal to the market, and followed up with a 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 based today.

In parts of Europe, Mexico, Malaysia, Brunei, German-speaking countries, the Netherlands,

the Czech Republic, Slovenia, Slovakia, Poland and France, "Maggi" is still synonymous

with the brand's "Maggi-Wrze" (Maggi seasoning sauce) (in Spain it is sold under name

Jugo), a dark, hydrolysed vegetable protein-based sauce which is very similar to East

Asian soy sauce, except it does not actually contain soy. 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. Maggi Wrze has huge popularity in Serbia and Macedoniadespite not

being officially available in those countries.

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The bouillon cube or "Maggi cube", which was another meat substitute product, was

introduced in 1908. 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 home base as Nestl S.A.

Today, Maggi is known throughout the world for its dry soups, seasoning sauce and instant

noodle dishes. In New Zealand, Maggi Onion Soup mix is often combined with reduced

cream to create an onion dip for potato chips that has come to be generally accepted as a Kiwi

favourite.

In India, Maggi instant noodles are a favourite for an anytime meal. From dorm rooms of

colleges to late-night cooking in home kitchens, its an all-time favourite.

In Malaysia, Indonesia, Thailand and Vietnam, Maggi seasoning sauce is a popular

condiment, and the bottles are familiar sights on restaurant tables.

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NESTLE

Nestl S.A. is a Swiss multinational nutritional and health-related consumer goods company

headquartered in Vevey, Switzerland. It is the largest food company in the world measured

by revenues.

Nestl's products include baby food, bottled water, breakfast cereals, coffee,

confectionery, dairy products, ice cream, pet foods and snacks. 29 of Nestl's brands have

annual sales of over 1 billion Swiss francs (about $ 1.1

billion), including Nespresso, Nescaf, KitKat, Smarties, Nesquik, Stouffers, Vittel,

and Maggi. Nestl has around 450 factories, operates in 86 countries, and employs around

328,000 people. It is one of the main shareholders of LOreal, the world's

largest cosmetics company.

Nestl was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in

1866 by brothers George Page and Charles Page, and Farine Lacte Henri Nestl, founded in

1866 by Henri Nestl. The company grew significantly during the First World War and again

following the Second World War, expanding its offerings beyond its early condensed milk

and infant formula products. The company has made a number of corporate acquisitions,

including Crosse & Blackwell in 1950, Findus in 1963, Libby's in 1971, Rowntree

Mackintosh in 1988 and Gerber in 2007.

Nestl has a primary listing on the SIX Swiss Exchange and is a constituent of the Swiss

Market Index. It has a secondary listing on Euronext. In 2011, Nestl was listed No. 1 in

the Fortune Global 500 as the world's most profitable corporation. With a market

capitalization of $ 200 billion, Nestl ranked No. 13 in the FT Global 2011.

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HISTORY OF NESTLE

Nestl's origins date back to 1866, when two separate Swiss enterprises were founded that

would later form the core of Nestl. In the succeeding decades, the two competing enterprises

aggressively expanded their businesses throughout Europe and the United States.

In August 1867 Charles (US consul in Switzerland) and George Page, two brothers from Lee

County, Illinois, USA, established the Anglo-Swiss Condensed Milk Company in Cham,

Switzerland. Their first British operation was opened at Chippenham, Wiltshire, in 1873.

Henri Nestl

In September 1866 in Vevey, Henri Nestl developed a milk-based baby food, and soon

began marketing it. The following year saw Daniel Peter begin seven years of work

perfecting his invention, the milk chocolate manufacturing process. Nestl's was the crucial

cooperation that Peter needed to solve the problem of removing all the water from the milk

added to his chocolate and thus preventing the product from developing mildew. Henri Nestl

retired in 1875 but the company under new ownership retained his name

as SocitFarineLacte Henri Nestl.

In 1877 Anglo-Swiss added milk-based baby foods to their products and in the following year

the Nestl Company added condensed milk so that the firms became direct and fierce rivals.

http://en.wikipedia.org/wiki/Henri_Nestl%C3%A9

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The logo that Nestl used until 1966

In 1905 the companies merged to become the Nestl and Anglo-Swiss Condensed Milk

Company, retaining that name until 1947 when the name Nestl Alimentana SA was taken as

a result of the acquisition of Fabrique de Produits Maggi SA (founded 1884) and its holding

company Alimentana SA of Kempttal, Switzerland. Maggi was a major manufacturer of soup

mixes and related foodstuffs. The companys current name was adopted in 1977. By the early

1900s, the company was operating factories in the United States, United Kingdom, Germany,

and Spain. The First World War created demand for dairy products in the form of

government contracts, and, by the end of the war, Nestl's production had more than doubled.

After the war, government contracts dried up, and consumers switched back to fresh milk.

However, Nestl's management responded quickly, streamlining operations and reducing

debt. The 1920s saw Nestl's first expansion into new products, with chocolate-manufacture

becoming the company's second most important activity. Louis Dapples was CEO till 1937,

when succeeded by douard Muller till his death in 1948.

The Brazilian president, Lula da Silva, inaugurates a factory in Feira de Santana (Bahia), in February

2007

Nestl felt the effects of the Second World War immediately. Profits dropped from

US$20 million in 1938, to US$6 million in 1939. Factories were established in developing

countries, particularly in Latin America. Ironically, the war helped with the introduction of

http://en.wikipedia.org/wiki/Brazilhttp://en.wikipedia.org/wiki/Lula_da_Silvahttp://en.wikipedia.org/wiki/Feira_de_Santanahttp://en.wikipedia.org/wiki/Bahia

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the company's newest product, Nescafe ("Nestl's Coffee"), which became a staple drink of

the US military. Nestl's production and sales rose in the wartime economy.

The end of World War II was the beginning of a dynamic phase for Nestl. Growth

accelerated and numerous companies were acquired. In 1947 Nestl merged withMaggi, a

well-known manufacturer of seasonings and soups. Crosse & Blackwell followed in 1950, as

did Findus (1963), Libby's (1971) and Stouffer's (1973). Diversification came with a

shareholding in LOreal in 1974. In 1977, Nestl made its second venture outside the food

industry, by acquiring Alcon Laboratories Inc.

In 1984, Nestl's improved bottom line allowed the company to launch a new round of

acquisitions, notably American food giant Carnation and the British confectionery

company Row tree Mackintosh in 1988, which brought the Willy Wonka brand - among

others - to Nestl.

The first half of the 1990s proved to be favourable for Nestl. Trade barriers crumbled, and

world markets developed into more or less integrated trading areas. Since 1996, there have

been various acquisitions, including San Pellegrino (1997), Spillers Petfoods (1998),

and Ralston Purina (2002). There were two major acquisitions in North America, both in

2002 in June, Nestl merged its U.S. ice cream business into Dreyer's, and in August a

US$2.6 billion acquisition was announced of Chef America, the creator of Hot Pockets.

In the same time-frame, Nestl came close to purchasing the iconic American

company Hershey's, one of its fiercest confectionery competitors, although the deal

eventually fell through. Another recent purchase included the Jenny Craig weight-loss

program, for US$600 million.

In December 2005, Nestl bought the Greek company Delta Ice Cream for 240 million. In

January 2006, it took full ownership of Dreyer's, thus becoming the world's largest ice cream

maker, with a 17.5% market share.

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Nestle Headquarters in Vevey

In November 2006, Nestl purchased the Medical Nutrition division of Novartis

Pharmaceutical for $2.5B, also acquiring, in 2007, the milk-flavouring product known

as Ovaltine.In April 2007, returning to its roots, Nestl bought US baby-food

manufacturer Gerber for $5.5 billion.In December 2007, Nestl entered into a strategic

partnership with a Belgian chocolate maker, Pierre Marcolini.

Nestl agreed to sell its controlling stake in Alcon to Novartis on 4 January 2010. The sale

was to form part of a broader US$39.3 billion offer, by Novartis, for full acquisition of the

worlds largest eye-care company.

On 1 March 2010, Nestl concluded the purchase of Kraft Foods North American frozen

pizza business for $3.7 billion.In July 2011, Nestl SA agreed to buy 60 percent of Hsu Fu

Chi International Ltd. for about $1.7 billion. On 23 April 2012, Nestl agreed to

acquire Pfizer Inc.'s infant-nutrition unit for $11.9 billion. Before the acquisition, there was a

'bidding war' between the three shareholders Nestl, Mead Johnson Nutrition and Danone.

Each of the companies held a share, with Nestl holding the biggest share (17%) (Johnson

held 15%, Danone 13%).

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HISTORY OF MAGGI

In Switzerland in 1863, Julius Michael Johannes Maggi developed a formula to bring added

taste to meals. This marked the beginning of the Maggi brand and its lines of convenient food

products.

In 1882, the Swiss Public Welfare Society commissioned Maggi to create a vegetable food

product that would be quick to prepare and easy to digest to help with the problem of women

having less time to prepare meals as more and more worked outside the home. The results

two instant pea soups and an instant bean soup were a huge success. By the turn of the

century, Maggi & Company was producing not only powdered soups, but also bouillon

cubes, sauces and flavourings. Maggi merged with Nestl in 1947. Maggi has been offering

high quality and innovative products ever since.

MAGGI BRAND IN INDIA

Maggi Comes to India teething troubles Maggi noodles was launched in

India in theearly1980s. Carlo M. Donati, the present Chairman and Managing

Director of Nestle India Ltd, brought the instant noodle brand to India during his short

stint here in the early eighties.

At that time, 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 competit ion

came from the homemade s n ac k s l i k e p ak o r a s o r s an d w i ch es . S o t h e r e

w e r e n o s p e c i f i c b u y an d m a k e s n a c k ! Moreover both competitors had certain

drawbacks in comparison.

Snacks like samosas are usually bought out, and outside food is generally considered

unhygienic and unhealthy.

Theo t h e r c o m p e t i t o r , h o m e m a d e s n a c k s o v e r c a m e b o t h t h e s e p r o b l e

m s b u t h a d t h e disadvantage of extended preparation time at home. Maggi

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was positioned as the only hygienic homemade snack! Despite this, Nestl faced

difficulties with their sales after the initial phase. The reason being, the positioning

of the product with the wrong target group.

Nestle had positioned Maggi as a convenience food product aimed at the target

group of working women who hardly found any time for cooking. Unfortunately this could

not hold the product for very long. In the course of many market researches and surveys, the

firm found that children were the biggest consumers of Maggi noodles.

Quickly they repositioned it towards the kids segment with various tools of sales

promotion like colour pencils, sketch pens, fun books, Maggi clubs which worked

wonders for the brand.

Why the specific Brand positioning? Maggi was positioned as 2-minute noodles with a

punch line that said Fast to cook! Good to eat! And 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, i t 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 its a hit with

her! Whats more, if kids also love the taste, the product is as good as sold! So the 2-

minute fund a coupled with the yummy taste worked.

MAGGIS BRAND EXTENSION

In 1998, Nestle launched Maggis first brand extension, Maggi soup. At this stage, there was

no organized packaged soup market in India. Nestle planned to create a market for packaged

soup as it felt the category had a lot of potential. However, according to analyst, the company

had introduced soups only to cash in on the Maggis brand name, and was

never very serious about the segment.

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In 1993, Sweet Maggi, the first variant of Maggi noodles was launched.

The company supported the launch with a huge advertisement outlay that amounted

to 75% of the total yearly expenditure on the Maggi brand. However, the product failed to

generate the desired sales volume and Nestle was forced to withdraw it. At the end of

the year, Maggi noodles were generating sales volume of around 5000 tons and remained a

loss making proposition for Nestle.

To boost sales, Nestle decided to reduce the price of Maggi noodles. This

was made possible by using thinner and cheaper packaging material, the company

also introduced money saver multi packs in the form of 2-in-1 pack and 4-in-1 packs.

As a result volume increases phenomenally to 9700 tonnes in 1994 and further

to 13000 tonnes in 1995.

Maggis euphoria was, however, short lived, as sales stagnated in 1995 at the

previous years level. With soup business being threatened by a new entrant Knorr soups

launched in1995, offering 10 flavours against Maggis 4 the company started

rethinking its strategies towards the soup market. In order to stretch Maggis brand to

include Indian ethnic foods the company tied up with a Pune based chordia foods to launch

pickles under the year 1995.

The company also tied up with Indian foods fermentation (IFF), a Chennai based Food

Company to market popular south Indian food preparation such as sambhar, dosa, vada and

spices in consumer packs in Dec1995. The company reportedly saw a lot of untapped

potential in the market for ready to use south Indian market.

In 1996, products from these two ventures received lukewarm response from the

market; sales were rather poor in the regions in which they were launched. Analysts

attributed the failure of these Maggi extensions to the fact that Nestl seemed to be

particularly bad at dealing with traditional Indian product categories.

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PRODUCT PROFILE

Pricing and Product Development

It was at this point in time that Nestl decided to change the formulation of Maggi noodles.

The purpose was not only to infuse fresh life into the brand, but also to save money through

this new formulation.

The company used new noodle-processing technology, so that it could air-dry instead of oil-

fry the noodles. The tastemakers manufacturing process was also altered. As a result of the

above initiatives, costs reportedly came down by 12-14%.

To cook the new product, consumers had to add two cups of water instead of one-and-a-half

cups. The taste of the noodles was significantly different from what it used to be. The

customer backlash that followed the launch of the new noodles took Nestl by surprise.

With volumes declining and customer complaints increasing, the company began to work on

plans to prelaunch old Maggi to win back customers. In addition, in 1998, Nestl began

working out a strategy to regain Maggis position in the soup segment.

To counter the Knorr threat, the company relaunched Maggi soups under the Maggi Rich

brand in May 1998. The soups were not only thicker in consistency than those produced

earlier, the pricing was also kept competitive and the packaging was made much more

attractive. However, Knorr took Nestle by surprise by launching one-serving soup sachets

priced as low as Rs 4. HLL too launched two-serving sachets of Kissan soup priced at Rs 7.

As Maggi did not have any offerings in this price-range, it lost a huge portion of its market

share to Knorr.

The relaunch prompted market observers to compare Nestls move with US soft drinks

major Coca-Colas New Coke fiasco. However, the company disagreed, Its a hard -5

nosed strategy, that mixes nostalgia with the consumers voiced preference for the product it

has-been bred and rough up on.

The reintroduction is Nestls acknowledgement of the loyalty of the Indian mother and the

child to the original product. By May 1999, Nestls decision to bring back the old Maggi

seemed to have paid off.

Two months after the prelaunch, the monthly average sales of Maggi noodles n the northern

region rose 50% in comparison to the previous year. In July 1999, Maggi the brand, was

27

promoted as the biggest brand in Nestls portfolio of brands in India, overtaking brands such

as Nestum and Cerelac.

MAGGI BOUILLONS

1. Vegetable Bouillon

2. Chicken Less Salt Bouillon

3. Chicken Bouillon

4. Beef Bouillon

5. Mutton Bouillon

28

MAGGI SOUPS

1. Rich Tomatoes

2. Mixed Vegetable

3. Creamy Chicken

4. Cream Of Mushroom

5. Hot & Sour Vegetable

6. Sweet Corn Vegetable

7. Masala Noodle Soup

8. Tangy Tomato Soup

29

9. Broccoli Soup

10. Chicken with ABC Pasta Soup

MAGGI BHUNA MASALA

30

MAGGI SAUCES

1. Rich Tomato Sauce

2. Hot & Sweet Chilly Sauce

3. Chilly Garlic Sauce

31

MAGGI AND ITS COMPETITORS

Maggi versus Knorr

There is a pitched battle between Nestle Nigeria Plc, producers of Maggi seasoning and

Unilever since Unilever Nigeria Plc took over the manufacturing and sale of Knorr seasoning

from Cadbury Nigeria Plc in December 2005.

Today, Knorr and Maggi are competing in the menu recipe of many Nigerian homes for top

spot in the seasoning market. Virtually, in almost every meal served in the restaurants or in

any social gathering, be it stew, vegetable soup, jollof rice, fried rice, beans porridge,

moimoi, you will not miss the wonderful taste of these seasonings, which are definitely used

while preparing any meal.

Maggi, which had occupied a big space in the hearts of consumers before now, has managed

to endear the brand to customers thanks to its marketing communication activities. For

example, its annual Cook for Mama competition and recently, its Maggi Million and More

Promo have produced 13 millionaires in 13 weeks. Moreover, some advertising materials

created by Nestle not only strengthened its market presence but also entrenched the brands

relevance in the market.

32

On the other hand, Knorr launched the Cook n Win promotion where winners received cars

as prizes as if it confirms that it is not left out in the fray. Furthermore, the Power of Meal

Times campaign project was introduced by organising family picnics, as a way of preaching

meal times bonding. In order to push the brand messages, Integrated Marketing

Communication (IMC) concept was used as an effective tool.

According to the results of a recent random survey conducted by Vanguard investigation in

Lagos, Abuja, some parts of the North, East, and South-South, Maggi controls about 43 per

cent of the market compared to Knorrs 41 per cent. Although Maggi is the oldest in the

market, there is no doubt that Maggi is facing a serious challenge in the leadership position,

by losing its first comer advantage in the market.

Probing further into public acceptance and perception of the brands, it was found that both

seasonings are readily available at supermarkets, open markets and street shops, and well

packaged too, which respondents say they liked. However, 45 per cent of the respondents

said the price of Knorr was worth the value offered by the product, while 55 per cent said the

price was on the high side compared to Maggi. On taste, 60 per cent preferred Knorr taste for

its salt level, against Maggis 40 per cent.

33

For example, a house wife interviewed in the survey, namely Mrs. Josephine Ikechi, said that

she switched over to Knorr from Maggi due to the salty nature of Maggi. She added that

Maggi made her miscalculate the amount of salt to add to her cooking.

However, 60 per cent of respondents admit they are aware and could easily recall Maggis

marketing communication tools on television, radio, billboards, posters, magazines, internet

and directional signs and other below-the-line platforms, as well promotional items,

compared to 40 per cent respondents who recall Knorrs promotional activities.

It seems that Knorr, working assiduously to outwit Maggi, has something wrong in

advertising and promotional activities to endear the brand in the perception of customers.

According to the respondents, the reason why Knorr lags behind is about its promotional

engagements.

34

CHAPTER 3

RESEARCH

METHODOLOGY

35

RESEARCH METHODOLOGY

MEANING OF RESEARCH

Research in common parlance refers to a search for knowledge. Once can also define

research as a scientific and systematic search for pertinent information on a specific topic. In

fact, research is an art of scientific investigation. The Advanced Learners Dictionary of

Current English lays down the meaning of research as a careful investigation or inquiry

especially through search for new facts in any branch of knowledge. Redman and Mory

define research as a systematized effort to gain new knowledge.

Some people consider research as a movement, a movement from the known to the unknown.

It is actually a voyage of discovery. We all possess the vital instinct of inquisitiveness for,

when the unknown confronts us, we wonder and our inquisitiveness makes us probe and

attain full and fuller understanding of the unknown. This inquisitiveness is the mother of all

knowledge and the method, which man employs for obtaining the knowledge of whatever the

unknown, can be termed as research.

Research is an academic activity and as such the term should be used in a technical sense.

According to Clifford Woody research comprises defining and redefining problems,

formulating hypothesis or suggested solutions; collecting, organising and evaluating data;

making deductions and reaching conclusions; and at last carefully testing the conclusions to

determine whether they fit the formulating hypothesis.

D. Slesinger and M. Stephenson in the Encyclopaedia of Social Sciences define research as

the manipulation of things, concepts or symbols for the purpose of generalising to extend,

correct or verify knowledge, whether that knowledge aids in construction of theory or in the

practice of an art.

Research is, thus, an original contribution to the existing stock of knowledge making for its

advancement. It is the persuit of truth with the help of study, observation, comparison and

experiment.

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In short, the search for knowledge through objective and systematic method of finding

solution to a problem is research. The systematic approach concerning generalisation and the

formulation of a theory is also research.

As such the term research refers to the systematic method consisting of enunciating the

problem, formulating a hypothesis, collecting the facts or data, analysing the facts and

reaching certain conclusions either in the form of solutions(s) towards the concerned problem

or in certain generalisations for some theoretical formulation.

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OBJECTIVES OF RESEARCH

The purpose of research is to discover answers to questions through the application of

scientific procedures. The main aim of research is to find out the truth which is hidden and

which has not been discovered as yet. Though each research study has its own specific

purpose, we may think of research objectives as falling into a number of following broad

groupings:

1. To gain familiarity with a phenomenon or to achieve new insights into it (studies with this

object in view are termed as exploratory or formulative research studies);

2. To portray accurately the characteristics of a particular individual, situation or a group

(studies with this object in view are known as descriptive research studies);

3. To determine the frequency with which something occurs or with which it is associated

with something else (studies with this object in view are known as diagnostic research

studies);

4. To test a hypothesis of a causal relationship between variables (such studies are known as

hypothesis-testing research studies).

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TYPES OF RESEARCH

The basic types of research are as follows:

Descriptive vs. Analytical: Descriptive research includes surveys and fact-finding enquiries

of different kinds. The major purpose of descriptive research is description of the state of

affairs as it exists at present. In social science and business research we quite often use the

term Ex post facto research for descriptive research studies. The main characteristic of this

method is that the researcher has no control over the variables; he can only report what has

happened or what is happening. Most ex post facto research projects are used for descriptive

studies in which the researcher seeks to measure such items as, for example, frequency of

shopping, preferences of people, or similar data. Ex post facto studies also include attempts

by researchers to discover causes even when they cannot control the variables. The methods

of research utilized in descriptive research are survey methods of all kinds, including

comparative and correlational methods. In analytical research, on the other hand, the

researcher has to use facts or information already available, and analyze these to make a

critical evaluation of the material. the term Ex post facto research for descriptive research

studies. The main characteristic of this method is that the researcher has no control over the

variables; he can only report what has happened or what is happening. Most ex post facto

research projects are used for descriptive studies in which the researcher seeks to measure

such items as, for example, frequency of shopping, preferences of people, or similar data. Ex

post facto studies also include attempts by researchers to discover causes even when they

cannot control the variables. The methods of research utilized in descriptive research are

survey methods of all kinds, including comparative and correlational methods. In analytical

research, on the other hand, the researcher has to use facts or information already available,

and analyze these to make a critical evaluation of the material.

Applied vs. Fundamental: Research can either be applied (or action) research or

fundamental (to basic or pure) research. Applied research aims at finding a solution for an

immediate problem facing a society or an industrial/business organisation, whereas

fundamental research is mainly concerned with generalisations and with the formulation of a

theory. Gathering knowledge for knowledges sake is termed pure or basic research.

Research concerning some natural phenomenon or relating to pure mathematics are examples

39

of fundamental research. Similarly, research studies, concerning human behaviour carried on

with a view to make generalisations about human behaviour, are also examples of

fundamental research, but research aimed at certain conclusions (say, a solution) facing a

concrete social or business problem is an example of applied research. Research to identify

social, economic or political trends that may affect a particular institution or the copy

research (research to find out whether certain communications will be read and understood)

or the marketing research or evaluation research are examples of applied research. Thus, the

central aim of applied research is to discover a solution for some pressing practical problem,

whereas basic research is directed towards finding information that has a broad base of

applications and thus, adds to the already existing organized body of scientific knowledge.

Quantitative vs. Qualitative: Quantitative research is based on the measurement of quantity

or amount. It is applicable to phenomena that can be expressed in terms of quantity.

Qualitative research, on the other hand, is concerned with qualitative phenomenon, i.e.,

phenomena relating to or involving quality or kind. For instance, when we are interested in

investigating the reasons for human behaviour (i.e., why people think or do certain things),

we quite often talk of Motivation Research, an important type of qualitative research. This

type of research aims at discovering the underlying motives and desires, using in depth

interviews for the purpose. Other techniques of such research are word association tests,

sentence completion tests, story completion tests and similar other projective techniques.

Attitude or opinion research i.e., research designed to find out how people feel or what they

think about a particular subject or institution is also qualitative research. Qualitative research

is specially important in the behavioural sciences where the aim is to discover the underlying

motives of human behaviour. Through such research we can analyse the various factors

which motivate people to behave in a particular manner or which make people like or dislike

a particular thing. It may be stated, however, that to apply qualitative research in practice is

relatively a difficult job and therefore, while doing such research, one should seek guidance

from experimental psychologists. practice is relatively a difficult job and therefore, while

doing such research, one should seek guidance from experimental psychologists. practice is

relatively a difficult job and therefore, while doing such research, one should seek guidance

from experimental psychologists.

40

Conceptual vs. Empirical: Conceptual research is that related to some abstract idea(s) or

theory. It is generally used by philosophers and thinkers to develop new concepts or to

reinterpret existing ones. On the other hand, empirical research relies on experience or

observation alone, often without due regard for system and theory. It is data-based research,

coming up with conclusions which are capable of being verified by observation or

experiment. We can also call it as experimental type of research. In such a research it is

necessary to get at facts firsthand, at their source, and actively to go about doing certain

things to stimulate the production of desired information. In such a research, the researcher

must first provide himself with a working hypothesis or guess as to the probable results. He

then works to get enough facts (data) to prove or disprove his hypothesis. He then sets up

experimental designs which he thinks will manipulate the persons or the materials concerned

so as to bring forth the desired information. Such research is thus characterised by the

experimenters control over the variables under study and his deliberate manipulation of one

of them to study its effects. Empirical research is appropriate when proof is sought that

certain variables affect other variables in some way.

MY RESEARCH IS DESCRIPTIVE IN NATURE

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SIGNIFICANCE OF RESEARCH

All progress is born of inquiry. Doubt is often better than overconfidence, for it leads to

inquiry, and inquiry leads to invention is a famous Hudson Maxim in context of which the

significance of research can well be understood. Increased amounts of research make

progress possible. Research inculcates scientific and inductive thinking and it promotes the

development of logical habits of thinking and organisation.

The role of research in several fields of applied economics, whether related to business or to

the economy as a whole, has greatly increased in modern times. The increasingly complex

nature of business and government has focused attention on the use of research in solving

operational problems. Research, as an aid to economic policy, has gained added importance,

both for government and business. Research provides the basis for nearly all government

policies in our economic system. For instance, governments budgets rest in part on an

analysis of the needs and desires of the people and on the availability of revenues to meet

these needs. The cost of needs has to be equated to probable revenues and this is a field

where research is most needed. Through research we can devise alternative policies and can

as well examine the consequences of each of these alternatives.

Data Collection

Data collection is any process of preparing and collecting data, for example, as part of a

process improvement or similar project. The purpose of data collection is to obtain

information to keep on record, to make decisions about important issues, or to pass

information on to others. Data are primarily collected to provide information regarding a

specific topic.

Data collection usually takes place early on in an improvement project, and is often

formalised through a data collection plan which often contains the following activity.

Pre collection activity agree on goals, target data, definitions, methods

Collection data collection

Present Findings usually involves some form of sorting analysis and/or presentation.

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Prior to any data collection, pre-collection activity is one of the most crucial steps in the

process. It is often discovered too late that the value of their interview information is

discounted as a consequence of poor sampling of both questions and informants and poor

elicitation techniques. After pre-collection activity is fully completed, data collection in the

field, whether by interviewing or other methods, can be carried out in a structured, systematic

and scientific way.

A formal data collection process is necessary as it ensures that data gathered are both defined

and accurate and that subsequent decisions based on arguments embodied in the findings are

valid. The process provides both a baseline from which to measure from and in certain cases

a target on what to improve.

Other main types of collection include census, sample survey, and administrative by-product

and each with their respective advantages and disadvantages. A census refers to data

collection about everyone or everything in a group or Statistical population and has

advantages, such as accuracy and detail and disadvantages, such as cost and time. A

Sampling (statistics) is a data collection method that includes only part of the total population

and has advantages, such as cost and time and disadvantages, such as accuracy and detail.

There are two basic types of data:

PRIMARY DATA

Data that has been collected from first-hand-experience is known as primary data. Primary

data has not been published yet and is more reliable, authentic and objective. Primary data

has not been changed or altered by human beings; therefore its validity is greater than

secondary data.

SOURCES OF PRIMARY DATA

Sources for primary data are limited and at times it becomes difficult to obtain data from

primary source because of either scarcity of population or lack of cooperation. Regardless of

any difficulty one can face in collecting primary data; it is the most authentic and reliable

data source. Following are some of the sources of primary data.

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Experiments: Experiments require an artificial or natural setting in which to perform logical

study to collect data. Experiments are more suitable for medicine, psychological studies,

nutrition and for other scientific studies. In experiments the experimenter has to keep control

over the influence of any extraneous variable on the results.

Survey: Survey is most commonly used method in social sciences, management, marketing

and psychology to some extent. Surveys can be conducted in different methods.

Questionnaire: is the most commonly used method in survey. Questionnaires are a list

of questions open-ended or close -ended for which the respondent gives answers.

Questionnaire can be conducted via telephone, mail, live in a public area, or in an

institute, through electronic mail or through fax and other methods.

Interview: Interview is a face-to-face conversation with the respondent. In interview

the main problem arises when the respondent deliberately hides information otherwise

it is an in depth source of information. The interviewer can not only record the

statements the interviewee speaks but he can observe the body language, expressions

and other reactions to the questions too.

SECONDARY DATA:

Data collected from a source that has already been published in any form is called as

secondary data. The review of literature in nay research is based on secondary data. Mostly

from books, journals and periodicals.

Sources of Secondary Data:

Published Printed Sources: There are varieties of published printed sources. Their

credibility depends on many factors. For example, on the writer, publishing company and

time and date when published. New sources are preferred and old sources should be avoided

as new technology and researches bring new facts into light.

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Published Electronic Sources: As internet is becoming more advance, fast and reachable to

the masses; it has been seen that much information that is not available in printed form is

available on internet. In the past the credibility of internet was questionable but today it is

not. The reason is that in the past journals and books were seldom published on internet but

today almost every journal and book is available online. Some are free and for others you

have to pay the price.

Government Records: Government records are very important for marketing, management,

humanities and social science research.

Census Data/population statistics:

Health records

Educational institutes records

MY REPORT IS BASED ON SECONDARY DATA.

Limitation

Although the project has been worked out at its best, yet there are some limitations which

cannot be overlooked. Had these limitations been overcome the findings would be accurate.

SOME LIMITATIONS:

1. Time Constraint

The project was vast and complex in nature, therefore it took time in obtaining

,analysing and interpreting the data, which consumed a lot of time leading to time

constraint.

2. Data Constraint

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The project is entirely made on secondary data, although data is reliable but

unavailability of primary data is a constraint to accuracy.

3. Limited Research

The research of the project is limited; I have not conducted PEST and BCG analysis

which leads to limitation of limited research.

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CHAPTER 4

DATA ANALYSIS AND

INTERPRETATION

47

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.

Strength:

Market leader in their segment.

Strong brand loyal consumer base.

Wide range of distribution channel.

Product according to the need of Indian consumer.

Innovative Product.

Weakness:

Products are dependent on each other.

Not so much presence in rural market.

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Opportunities:

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

Threats:

Price war with competitors.

Strong presence of regional competitors

Consumers dont perceive it as a Healthy Product

STPD ANALYSIS OF MAGGI BRAND

Segmentation:

Market Segmentation divides the heterogeneous market into homogenous groups of

customers who share a similar set of needs/wants and could be satisfied by specific products.

Maggi Brand has segmented the market on the basis of lifestyle and habits of URBAN

FAMILIES.

Target:

Market Targeting refers to evaluating and deciding from amongst the various alternatives,

which segment can be satisfied best by the company. The Maggi Brand have mainly targeted

the Kids, Youth, Office Goers & Working Woman which falls into the category of

convenience -savvy time misers who would like to get something instant and be over with

it quickly.

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Positioning:

Market Positioning is the act of designing the companys offerings and image to

Occupy a distinctive place in the minds of the target market. The goal of positioning is to

locate the brand in the minds of consumers to maximise the potential benefit to the firm.

Maggi has positioned itself in the SNACKS category and not in the meal category since

Indians do not consider noodles as a proper food item. Therefore Maggi have developed its

brand image of instant food products with positioning statements such as 2 minutes noodles

and Easy to cook, good to eat.

Differentiations:

Points-of-difference (PODs) are attributes or benefits consumers strongly associate with a

brand, positively evaluate and believe they could not find to the same extent with a

competitive brand. The Maggi Brand has also differentiated its brand image from its

competitors in terms of taste, flavours and packaging. Maggi have launched wide varieties of

products in different flavours which can attract larger set of customers. Maggi products are

also available in different sizes catering to different customer needs

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MARKET ANALYSIS

Instant food means simple, fast and convenient food. The Indian instant food market is

growing at the rate of 30-35% per annum.

Trends fuelling the Indian instant food market :

1. Changing Demographics of the Indian population.

2. Convenience

3. Nutritional and Health Benefits

4. Urbanisation

5. Growth of Organisational Retail

6. Improvement in Packaging Technology

Maggi enjoys around 50% market share in this segment which is valued at around 250 crores.

About 15-20 percent of the total stock of both the leading retail stores is instant food. A

survey carried out by the National Council of Applied Economics Research named Maggi the

countrys most valued FMCG brand.

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MARKET PENETRATION STRATEGIES

1. Promotional campaigns in school

2. Advertising Strategies:

Focussing on kids

3. New product innovation according to the need of the consumers:

Veg Atta Noodles

Dal Atta Noodles

Cuppa Mania

4. Availability in different packages:

50 gms

100 gms

200 gms

400s (Family Packs)

5. Conducting regular market research

SUGGESTIVE PROMOTIONAL STRATEGIES

Focus on creating distinctive image, based on twin benefits of INSTANT and HEALTHY

with emphasis on health conscious and rural market Conduct promotional campaigns at

schools in small town with population more than 10000 Strenghten the distribution channel

of the rural areas within 100 km of all the metros Foray into other food products like chips,

chocolates etc under its sole brand

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name would not only help in Brand extension but will also enhance Maggis market share.

The Product Life Cycle

A new product progresses through a sequence of stages from introduction to growth,

maturity, and decline. This sequence is known as the product life cycle and is associated with

changes in the marketing situation, thus impacting the marketing strategy and the marketing

mix.The product revenue and profits can be plotted as a function of the life-cycle stages as

shown in the graph below:

Product Life Cycle Diagram

Introduction Stage

In the introduction stage, the firm seeks to build product awareness and develop a market for

the product. The impact on the marketing mix is as follows:

Product branding and quality level is established, and intellectual property protection

such as patents and trademarks are obtained.

Pricing may be low penetration pricing to build market share rapidly, or high skim

pricing to recover development costs.

Distribution is selective until consumers show acceptance of the product.

http://www.quickmba.com/marketing/market-share/

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Promotion is aimed at innovators and early adopters. Marketing communications

seeks to build product awareness and to educate potential consumers about the

product.

Growth Stage

In the growth stage, the firm seeks to build brand preference and increase market share.

Product quality is maintained and additional features and support services may be

added.

Pricing is maintained as the firm enjoys increasing demand with little competition.

Distribution channels are added as demand increases and customers accept the

product.

Promotion is aimed at a broader audience.

Maturity Stage

At maturity, the strong growth in sales diminishes. Competition may appear with similar

products. The primary objective at this point is to defend market share while maximizing

profit.

Product features may be enhanced to differentiate the product from that of

competitors.

Pricing may be lower because of the new competition.

Distribution becomes more intensive and incentives may be offered to encourage

preference over competing products.

Promotion emphasizes product differentiation.

Decline Stage

As sales decline, the firm has several options:

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Maintain the product, possibly rejuvenating it by adding new features and finding new

uses.

Harvest the product - reduce costs and continue to offer it, possibly to a loyal niche

segment.

Discontinue the product, liquidating remaining inventory or selling it to another firm

that is willing to continue the product.

The marketing mix decisions in the decline phase will depend on the selected strategy. For

example, the product may be changed if it is being rejuvenated, or left unchanged if it is

being harvested or liquidated. The price may be maintained if the product is harvested, or

reduced drastically if liquidated.

PRODUCT-MIX ANALYSIS

Since top management is ultimately responsible for the product mix and the resulting profits

or losses, they often analyze the company product mix. The first assessment involves the area

of opportunity in a particular industry or market. Opportunity is generally defined in terms of

current industry growth or potential attractiveness as an investment. The second criterion is

the company's ability to exploit opportunity, which is based on its current or potential

position in the industry. The company's position can be measured in terms of market share if

it is currently in the market, or in terms of its resources if it is considering entering the

market. These two factorspportunity and the company's ability to exploit itrovide four

different options for a company to follow.

1. High opportunity and ability to exploit it result in the firm's introducing new products

or expanding markets for existing products to ensure future growth.

2. Low opportunity but a strong current market position will generally result in the

company's attempting to maintain its position to ensure current profitability.

3. High opportunity but a lack of ability to exploit it results in either (a) attempting to

acquire the necessary resources or (b) deciding not to further pursue opportunity in

these markets.

4. Low opportunity and a weak market position will result in either (a) avoiding these

markets or (b) divesting existing products in them.

http://www.quickmba.com/marketing/mix/

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These options provide a basis for the firm to evaluate new and existing products in an attempt

to achieve balance between current and future growth. This analysis may cause the product

mix to change, depending on what management decides.

The most widely used approach to product portfolio analysis is the model developed by the

Boston Consulting Group (BCG). The BCG analysis emphasizes two main criteria in

evaluating the firm's product mix: the market growth rate and the product's relative market

share. BCG uses these two criteria because they are closely related to profitability, which is

why top management often uses the BCG analysis. Proper analysis and conclusions may lead

to significant changes to the company's product mix, product line, and product offerings.

The market growth rate represents the products' category position in the product life cycle.

Products in the introductory and growth phases require more investment because of research

and development and initial marketing costs for advertising, selling, and distribution. This

category is also regarded as a high-growth area (e.g., the Internet). Relative market share

represents the company's competitive strength (or estimated strength for a new entry). Market

share is compared to that of the leading competitor. Once the analysis has been done using

the market growth rate and relative market share, products are placed into one of four

categories.

Stars: Products with high growth and market share are know as stars. Because these

products have high potential for profitability, they should be given top priority in

financing, advertising, product positioning, and distribution. As a result, they need

significant amounts of cash to finance rapid growth and frequently show an initial

negative cash flow.

Cash cows: Products with a high relative market share but in a low growth position

are cash cows. These are profitable products that generate more cash than is required

to produce and market them. Excess cash should be used to finance high-opportunity

areas (stars or problem children). Strategies for cash cows should be designed to

sustain current market share rather than to expand it. An expansion strategy would

require additional investment, thus decreasing the existing positive cash flow.

Problem children: These products have low relative market share but are in a high-

growth situation. They are called "problem children" because their eventual direction

is not yet clear. The firm should invest heavily in those that sales forecasts indicate

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might have a reasonable chance to become stars. Otherwise divestment is the best

course, since problem children may become dogs and thereby candidates for deletion.

Dogs: Products in the category are clearly candidates for deletion. Such products have

low market shares and unlike problem children, have no real prospect for growth.

Eliminating a dog is not always necessary, since there are strategies for dogs that

could make them profitable in the short term. These strategies involve "harvesting"

these products by eliminating marketing support and selling the product only to

intensely loyal consumers who will buy in the absence of advertising. However, over

the long term companies will seek to eliminate dogs.

As can be seen from the description of the four BCG alternatives, products are evaluated as

producers or users of cash. Products with a positive cash flow will finance high-opportunity

products that need cash. The emphasis on cash flow stems from management's belief that it is

better to finance new entries and to support existing products with internally produced funds

than to increase debt or equity in the company.

Based on this belief, companies will normally take money from cash cows and divert it to

stars and to some problem children. The hope is that the stars will turn into cash cows and the

problem children will turn into stars. The dogs will continue to receive lower funding and

eventually be dropped.

57

58

59

CHAPTER 5

FINDINGS AND

CONCLUSION

60

CONCLUSION

The food processing business in India is at a nascent stage. Currently, only about 10%

of the output is processed and consumed in packaged form thus highlighting huge

potential for expansion and growth.

Traditionally, Indians believe in consuming fresh stuff rather then packaged or frozen,

but the trend is changing and the new fast food generation is slowly changing.

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. Unfortunately, the macaroni and pickles didnt pick up as

expected.

The soups and sauces did somewhat fine, gathering considerable sales volumes and

have a satisfactory presence even today. Maggi Noodles itself faced a bit of

difficulty with respect to taste, and nearly lost its position in the minds of Indian

consumers in the late 1990s.

When Nestle changed the formulation of its tastemaker, the ominous packet that came

along with Maggi Noodles, a major chunk of consumers were put-off and sales started

dropping. Also, Maggis competitor t

Top Ramen took advantage of the situation and started a parallel aggressive

campaign to eat into Maggis market share. But the company quickly realised this and

went back into making the original formula coupled with a free sampling campaign.

This helped Maggi to win back its lost consumers and pushed up its sales volumes

again! Maggi Today The year 2008 saw India leading in worldwide Maggi sales. The

brand has grown to an estimated value of Rs 160-170 crore and contributes at least 8

9% to Nestle Indias top line.

All the same, some FMCG analysts feel that the brand has not done much to expand

the noodles category.

Even after 25 years of its launch, the size of the instant noodles market is yet quite

small at Rs 300 crore. But yes, the parent company, Nestle India Limited has certainly

encouraged the brand to enter into other culinary products.

61

FINDINGS

Maggi though has been able to differentiate itself from other Noodles, Maggi being

taken as generic to Noodles is hampering other extended product category.

Competitors have high grounds to capture the market differentiating then from being

Maggi. It makes others possible product category vulnerable if lunched under Maggi.

So to avoid proliferation of brand and introduce new products to capture opportunities

in other snacks and ready to eat product category NIL has to introduce new branding

strategy.

As pasta of ITC has been seen as products capturing the market of noodles and Maggi

failing to lunch pasta under Maggi brand also support the argument for new brand

introduction by NIL.

As Indian Market is Brand conscious, other competitors are coming up with more

Indianized brand of products, and as Indian being more aware of their culture and

large segment being typical and conservative about their culture, there care more

chances that NIL would be successful if it create a brand close to Indian culture in

wording to positioning. As India is growing, Old Indian Brands are also regaining

momentum worldwide, NIL could catch the trend of market.

By doing so, NIL could avoid the draw backs associated with the Maggi brand. It

could position new brand in competition with other competitors brand where there is

no fit of product with the Maggi brand.

NIL other option is acquiring products manufacturers of different products like

biscuits, chips and snacks as it is very essential for its market leader position. Other

companies have advantage of such products. ITC has biscuits to it, Hindustan Lever

has tea to it. India is huge market where distribution advantage plays major role and

economies of scale pays back. So its is important for NIL to concentrate on other

ready to eat category to benefit consumers from economies of scale reflect in price.

Introduce different new brand or acquire emerging brand in biscuits, chips and

snacks category

62

CHAPTER 6

SUGGESTIONS AND

RECOMMENDATIONS

63

SUGGESTIONS

Strenghten and use the Distribution-NIL should focus on distribution channels and use of

the distribution channels to expand its market to Rural India with products targeted to the

market. It is the way it could increase its volume of sales.

Increase the Usage of Maggi Brand Products Since Maggi Noodles and Maggi Sauce is

market leader it has to adopt strategy to increase the usage of the product, to product its

market share. As it cannot further grow sales drastically in the same segment, only ways is to

increase product usage like noodles for breakfast and ketchups for biscuits.

Launch Health Awareness Promotional Campaign NIL should launch health awareness

campaign to educate consumers about the benefits of health food. It could sponsors health

camps, publish health information.

Enter into other product category like Biscuits, chips and snacks with Nestle Brand To

enlarge its domain, NIL should enlarge its product segment. It would spread economies of

scale to customers in the form of price.

64

BIBLOGRAPHY

65

BIBLIOGRAPHY

Books

Kothari, C.R, Research Methodology, 3rd edition, 1997, Vikas Publishing House

Pvt. ltd., New Delhi.

Dr. Gupta S.P & Dr. Gupta M.P., Business Statistics by Addition 2004, New Delhi.

Websites

http://en.wikipedia.org/wiki/Maggi last accessed on Saturday, September 22, 2012,

10:45:45 AM

http://marketingpractice.blogspot.in/2006/01/maggi-its-different.html last accessed on

Sunday, November 23, 2012, 7:30:45 PM

http://en.wikipedia.org/wiki/Nestle last accessed on Sunday, October 7, 2012, 4:45:45

PM

http://mgmtfunda.com/swot-analysis-of-maggi/#last accessed on Saturday, November

13, 2012, 5:40:10 PM

marketingpractice.blogspot.in/2006/01/maggi-its-different.html last accessed on

Sunday, November 11, 2012, 8:50:30 AM

http://marketingpractice.blogspot.in/2006/01/maggi-its-different.htmlhttp://en.wikipedia.org/wiki/Nestlehttp://mgmtfunda.com/swot-analysis-of-maggi/