By- M.S.Waseem Mohamed0000017138

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Nestle Lanka PLC is a Sri Lanka – based company involved in manufacturing, selling, marketing and distributing food and beverage products in Sri Lankan FMCG market,90% of the nestle products manufactured in locally.

Maggi instant noodle Maggi classic range - Maggi chicken, Maggi curry, Maggi Tikiri, Maggi

chicken double pack Maggi devilled - Devilled chilly chicken, Devilled kottu, Devilled X-Tra

spicy blast, Devilled X-Tra green chilli

Growth stage -Devilled X-Tra spicy blast, Devilled X-Tra green chilli, devilled chilly chicken and Devilled kottu

Maturity – Maggi Tikiri, Maggi 2 minute noodle and more spicy flavours in 2 minute noodles

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Revenue and revenue growth (last 5 years)

 

Prod

uct

Turnover (Rs)2008 2009 2010 2011 2012 2013

 

Noodles

 

1,618,129,662

 

1,739,924,368

 

1,912,004,800

 

2,148,320,000

 

2,295,580,000

 

 

2,620,662,500

 

Product

Turnover (Bn)

2008 2009 2010 2011 2012 2013

Maggi instant

Noodle

 

1,618,129,662

 

1,739,924,368

 

1,912,004,800

 

2,148,320,000

 

2,295,580,000

 

 

2,620,662,500

Actual revenue

growth

18%

 

8%

 

10%

 

12%

13%

 

15%

Expected sales

growth

   

1,909,393,001

 

1,879,118,317

 

2,103,205,280

 

 

2,406,118,400

 

2, 594,005, 400

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Product category

Market share

nestle brand competitor brand

Noodles

 

Maggi instant noodle

– 45- 50 %

Prima – 35- 40 %

Alli – 4 %

Others – 6 %

Cube based products Maggi cubes – 20% Knorr- 80 %

Coconut based products Maggi coconut milk –

80 %

Renuka – 20 %

Source- Nestle Brand Management

Current distribution system - modern trade, distributors , institutional sales

Pricing methods - competitive pricing strategy Promotional activities in last two years -

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External Environment Factors

Political•Government imposes though rules and regulation and charge in food and beverage industry•Government increasing duty on wheat grain imports to re-engineer the food habits of citizens

Economical •The local economy with a growth rate 7.3%. •Inflation continued its decrease with another year of single digit inflation to end 2015at 0.1%,

Social •Raising consumer awareness as to the negative impact of eating habits•29% of SRI Lankan children are deficient in vitamin A•Increasing ageing population, Women are employed more than ever

Technological •Lack of adaptation of new technology •Need of state of the art equipment and production facilities

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Ecological •Recognition is given to industries that practise ‘’Best Environmental Management System’’•Use of environmentally friendly and easily disposable packaging •Popularization of the green marketing concept

Ethical •Product issue –if there any changes the company must inform to customers.•Price issue- the price must be low to the brand value.•Details- put their product ingredient, which is one of the ethics

Legal •Health and safety regulation that need to be followed by food and beverage companies•Legal barrier in exporting to various countries

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• Total FMCG Turnover RS, 206,881 million

• Industry contribute to approximately 17% of the total corporate.

• The sector earning is growing at a moderate 12% years over a 30% growth at a value of approximately 21 million US dollars.

 Industry growth Sri Lanka’s GDP grew by 7.4% during in 2014 up slightly from 7.2% a year earlier. Continued high growth

was driven by faster expansion in industry

180,000 general trade retailers in order to determine the total volumes purchased by Sri Lankan consumers.

Over 8,000 tons of instant noodles are consumed annually in Sri Lanka. To this volume, the category has seen a growth of over 60% in the last few years

Market Trends

• Increase in demand from domestic consumers for convenience products

• Changing lifestyles and rising health consciousness.

• Gross domestic product grew by 7.4% during 2014, up slightly from 7.2% a year earlier.  

• The increasing dependence on the rural sector

• Introducing more affordable (smaller) packs which have made it affordable

• The urban sector starts reviving and urban consumers revert to their high spending ways

Market Analysis - Total sales, revenue & growth (industry)

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OPPORTUNITIES & THREATS

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Primary competitors

Secondary competitors

Possible new competitors

Instant noodles

Prima-Instant Noodle

Uswattaha

Alli – Instant Noodle

Harischandra

Noodles - Alli ,

Harischandra, Harvest,

Turkey, Nikada

Other noodles type

vemivelli, consous

Pasta, Spaghetti,

Marcaroni – Kraft, San

Remo, Roza

Foreign products

Serendib flour mills Sri

Lanka

Ceylon Biscuits LTD

John keels holdings

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COMPETITORS Ceylon Agro industries- prima instant noodle

Alli- instant noodle

Branding strategies Brand name – line extension Slogan – any time, any where Brand personality- fun , energetic, nutritious and spicy,

Alli company is local branded, it has a very low percentage of market share , so no activities as such

Mind & hart share for the competitor’s products

Spicy flavourSri Lankan originReady to eatFun and energetic brandEnvironmental friendly packaging

First locally owned manufacturer of Fully automated and 100% hygienic instant fried noodle production factory in Sri Lanka

Technological leadership The Prima noodle plant has been accredited with ISO 9002 quality certification system and SLS for the modern process.

highest slandered of quality, going through a completely hands free processHigh production standards and State of the art technology 12

SWOT analysis

Weaknesses•Maggi noodle is the star product while other categories are slow moving•Products have suspected indigents •Over reliance on noodle product category

• Government influence on the consumption of specific products which belong to culinary category

• Competitors initiating aggressive communication strategy that would result in increased brand awareness

• Raising consumer awareness as to the negative impact of eating habits

• Local/ foreign competitors

• Acceptance of the product in the youth market

• Changing preference of consumers towards fast foods

• Rapid economic growth and rising disposable incomes

• Increasing ageing population• 29% of children's are deficient in

vitamin A and iron

• Marked leader in the noodle market • Strong brand loyalty• Hugh distribution channel network

over thousands of distributors, retailers

• Innovative flavour’s for Sri Lankan taste buds

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Marketing objectiveThe main objective of the campaign would be to rejuvenate the Magi brand as a ‘Family Brand’ in the minds of the existing target group, these objectives are expected mainly to change the brand perception of Maggi. They are target particularly towards the existing customers and try to increase the sales from them as well as increase their product usage.

To increase the market share of the noodle range from its current 45- 50% to 50-60% within the next financial year of 2015/2016 in all islands

To increase overall brand awareness of Maggi by 10% within the next 12-8 months

To increase customer repeat purchasing in the Maggi noodle range by 25% to 30% within the next 12 months. .

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Scope Target

Product portfolio Maggi noodle range of products only 

 

 

 

 

 

 

 

 

Target Segment

 Geographical- Island wide

Demographic- Age 5 and above covering children’s

Young adults

Middle age and older generation

Behavioural – Selective usage for entertainment

Regular users for different occasions

 

Psychographic - Fun loving personalities,

Busy life style personalities

Who needs instant solution

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Positioning

Popularly Positioned Products (PPPs) are high-quality food products that provide nutritional value at an affordable cost and in appropriate formats .

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High product quality High product quality

Low product quality Low product quality

High costHigh costAffordable cost Affordable cost

Maggi

Harichandra

prima

Alli

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Growth strategy describe with analysis of Ansoff matrix

Existing

Market PenetrationUpgrade existing variantsMaggi noodle

•Maggi Tikiri•Maggi chicken double pack•Devilled chilly chicken •Devilled Kottu

Product Development

Introduce and innovate new variants of Maggi noodle

•Devilled X-Tra spicy blast•Devilled X-Tra green chilli•Maggi chicken•Maggi curry

Market Development

Finding new market for existing variants of Maggi

noodle

DiversificationLaunching new variety of washbasin into the new local markets as well as global too.

Existing New

New

Mar

ket

Product

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Product strategy

Re launched with Vitamin A Fortified with Calcium and the goodness of Vitamin A, Enriched with vegetables and an enhanced chicken taste that is bound to be a hit with the kids!

The Maggi Devilled range that caters  to young Sri Lankan adults with a love of hot and spicy food.The Maggi Noodles Devilled range comes with additional sachets of savoury sauce and spicy oil for that added fiery zest, taste and aroma. 19

The prevailing pricing objective of Maggi product range is to increase the market share and become the market leader in all noodles product categories.

The pricing strategy of noodle range is utilizing competitive pricing strategy and basing its product prices in line with the competitors because of the huge competition faced by the product category.

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Promotional strategySales promotion PR activities Free Gift

Radio, TV promotions Facebook, Twitter & website

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Distribution strategy180 distributors spared island wide. Modern Trade , Distributors, Institutional Sales

Physical evidence strategyPleasant appearance inside the Maggi noodle display, state of the art technology used, Web page of Maggi noodle – user friendliness Process strategyEfficiency of process Quality slandered Flexibility All information are provided via websites (www.nestle.lk)

People strategyStaffing levelsWage/Benefit tradeoffsReward strategyTraining and Development

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Action plan to achieve marketing mix Strategies for year 2015/2016

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The instant noodle categories are expected LKR 301 million sales according to the last three years sales achievement, combined with critical knowledge of general economic and industry trends.

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2012-2013 LKR (million)

2013-2014 LKR (million)

2014-2015 LKR (million)

2015-2016 LKR (million)

Distributor network

157 182 194 191

Modern trade

72 80 95 110

Total sales 229 262 289 301

Marketing budget of Maggi instant noodle for year2015/2016  LKR (Million) LKR

(Million)

LKR (Million)

Next year sales/ revenue  

  301  

Product

Change Maggi features

Introducing an Eco-friendly product package

New product development

 

 

05

05

15

 

 

 

 

 

 

 

 

 

 

 

 

Promotion

TV/ radio advertisement

Bill borders in new location

Point of sales materials

Sponsorship

Public relation

Trade offers

Retailer offer

Sampling through propaganda vehicle Seasonal promotion

Brand ambassador

 

15

05

05

07

10

8

3

2 

5

 

 

 

 

 

 

 

 

 

 

 

 

85

 

 

 

 

 

 

 

 

Profit before Tax     216

Tax    (6.)

Net Profit

     

21025

Monitoring and evaluation

Monitoring Conducting monthly sales review meetings

Building awareness among sales peoples

If any drop in sales, corrective measures should be taken

Training the staff

Motivating the Maggi customer service officers

Conducting customer researches

Conducting a market share analysis

Evaluation•Surveys•Smples•Communications audits•PR audits•CRM•Database searches

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