Submitted To:

Dr. Monica Khanna

Submitted By:

Ayush Metha (09)

Debashis Rout (11)

Meenaz Alekar (27)

Saransh Sinyal (44)

Shruti Bansal (47)

Smriti Jain (48)

Akshita Shetty (56)

MARKETING MANAGEMENT - I

Brand Study - ASSIGNMENT

Maggi Noodles is a brand of instant noodles manufactured by Nestlé. The brand is popular in Australia, India, South Africa, Brazil, Nepal, New Zealand, Brunei, Malaysia, Singapore, Sri Lanka, Bangladesh, Pakistan, and the Philippines. In several countries, it is also known as "Maggi mee" (mee is Indonesian/Malay/Hokkien for noodles).

Nestle India LTD. (NIL), the Indian subsidiary of global FMGC major, Nestle SA, introduced Maggi brand in India in 1983. Maggi Noodles was launched in India in Jan’ 83. With the launch of Maggi Noodles, Nestle India Limited (NIL) created entirely new food category- instant noodles in Indian packaged food market. It was an instant hit thanks to ever overworked mothers and ever hungry kids. Maggi became phenomena. Because of its first mover advantage, NIL successfully managed to retain leadership in the instant noodles category until early 2000’s. In Malaysia, there are fried noodles made from Maggi noodles known as Maggi goreng. Over the years Nestle extended the Maggi brand to variety of culinary products like soups, sauces and ketchups, seasonings, etc.

Ever since its launch in India, this brand has become synonymous with noodles. The bright red and yellow colors of the packet with the brilliant blue “2-minute Noodles” printed on it has found a place on every kitchen. Over the years, Maggi has grown as a brand and positioned itself as a “Fast to cook! Good to Eat! “Food product". The history of this brand traces back to the 19th century when industrial revolution in Switzerland created factory jobs for women, who were therefore left with very little time to prepare meals. Due to this growing problem Swiss Public Welfare Society asked a miller named Julius Maggi to create a vegetable food product that would be quick to prepare and easy to digest. Julius, the son of an Italian immigrant came up with a formula to bring added taste to meals in 1863. Soon after he was commissioned by the Swiss Public Welfare Society, he came up with two instant pea soups & a bean soup- the first launch of Maggi brand of instant foods in 1882-83.Towards the end of the century, Maggi company was producing not just powdered soups, but bouillon cubes, sauces and other flavorings. However in India (the largest consumer of Maggi noodles in the world!) it was launched in 1980 by Nestle group of companies. Maggie had merged with Nestle family in 1947.When launched it had to face a stiff competition from the ready to eat snack segments like biscuits, wafers etc. Also it had other competitor the so called home made snacks which are till today considered healthy and hygienic. Hence to capture the market it was positioned as a hygienic homemade snack, a smart move. But still this didn’t work, as it was targeted towards the wrong target group, the working women. After conducting an extensive research, the firm found that the children were the biggest consumers of Maggi noodles. Quickly a strategy was developed to capture the kids segment with various tools of sales promotion like pencils, fun books, Maggi clubs which worked wonders for it. No doubt the ads of Maggi have shown a hungry kid saying “Mummy bhookh lagi hai” to which his mom replies “Bas do minute!” and

soon he is happily eating Maggie Noodles. Further the MAGGI 2-MINUTE Noodles has been renovated to provide 20% of the RDA 1 of Calcium and Protein for the core target group building on the nutrition proposition “Taste bhi health bhi”. The company could have easily positioned the product as a meal, but did not, as a study had shown that Indian mentality did not accept anything other than rice or roti as meal. They made it easy to cook snack that could be prepared in just two minutes. The formula clicked well and Maggi became a brand name.1 Recommended Dietary Allowances for children of 7–9 years as per “Nutritive Value of Indian Foods”, published by Indian Council of Medical Research, Reprinted ‘04.

Maggi noodles recently introduced a new variety of its noodles, to cater for the health conscious like 'No MSG', 'Less Salt', and 'No Trans fat'. Whole wheat flour based noodle variation marketed by the name "Vegetable Atta Noodles" has been introduced in India (Atta flour is used in preparing most forms of wheat based breads in India) and caters to health conscious buyers wary of the refined flour used in the regular Maggi noodles. This move helps the brand in India as suburban mothers, who feed the noodles to children as an afterschool snack, are the primary customers of the brand. Recently, a line of rice noodles and whole wheat with pulses, carrots, beans, and onions has also been introduced in India. In fact, "Maggi" has become a well-known brand for instant noodles in India and Malaysia.

NIL changed the formulation of Maggi Noodles in 1997. However this proved to be a mistake, as customers did not like the taste of new noodles.

NIL also adopted the same strategy for Maggi brand with the launch Maggi Atta Noodles in 2005.

In March 1999, NIL reintroduced the old formulation of noodles, after which the sales revived.

Flavors

Maggi Noodles are available in a large assortment of different flavors. They are:

Original Flavor

Chicken

Curry (a healthier alternative is also sold in supermarkets)

Kari Letup ("Explosive" Curry) in Malaysia

Laksa Lemak (discontinued)

Tom yam

Chicken & Corn

Beef

Oriental

Masala

Prawn

Dal Sambar (whole wheat noodles)

Dal Atta noodles

Asam Laksa

Cheese

Pizza (only in Saudi Arabia and South Africa, was available for a period of time in Australia and New Zealand)

Sup Tulang (bone soup) (in Malaysia)

Chatpata

Tomato

Ruhi

Dashi

Koki

Kapi

Stronger Chicken

Crispy Chicken

Vegetable Atta Noodles (whole wheat noodles)

Shahi Pulao (rice noodles)

Chilly Chow (rice noodles)

Lemon Masala (rice noodles)

Mi Goreng Char Mee

Mi Goreng Kicap Bawang

Mi Goreng Pluz Asli

Capsica

Itik (duck)

Mi Udang Pulau Pinang' (was available in Malaysia)

Maggi goreng sedap

Boerewors (in South Africa)

PRODUCT OFFERING:

Maggi Noodles comes in 4 variants:

1. MASALA: This is the original and most widely liked flavour of Maggi and hence has been brought out in 6 different packaging sizes; the maximum in any variant

2. CHICKEN 3. CURRY 4. TOMATO 5. VEGETABLE ATTA NOODLES : Launched in April 2005, this variant had contributed to 11

per cent in value to the instant noodle category within 7 months of its launch; this was the beginning of the “Taste bhi Health bhi” focus 6. VEGETABLE DAL ATTA NOODLES: Continuing the healthy snacks trend, this variant was launched in May 2006.

Maggi 2-minute Noodles

Pack Size(gm)

Price(Rs.)

Masala 50 5100 10200 20400 38600 54800 72

Chicken 100 10Curry 100 10

Tomato 100 10Vegetable Atta Noodles 100 13

400 50Vegetable Dal Noodles 100 13

400 50

Product Life Cycle:

Currently Maggi is growing above maturity stage

Introductory Stage :

High failure rates High production and marketing costs No competition Frequent medications Promotion focus on awareness and information

Growth Stage:

Increasing sales and profits Entrance of Competitors (Top Ramen) Initial healthy profits Change in the formulation in 1997 and reintroduction of old product in 1999

Maturity Stage :

Extending and introducing new product lines Repositioning itself as a healthy product Moving into new markets

4 P’s of MARKETING MIX:

A. Product: Ready to cook meal Variants for different segments

B. Price: Differentiated packaging Lower price point strategy

C. Place: Target rural markets Target hawkers/eating joints Kiryana stores

D. Promotion : Prime time electronic media advertisements Awareness campaigns Sponsor school quiz

Distribution :

1) Nestle

Decentralized Manufacturing 2 Types Distribution – Traditional ( Kirana Stores) , Institutional (Food outlets)

2) Distributor

6% Margin from Nestle Has to pay in advance to Nestle but has to give on credit to Retailers Target small & big shops both

3) Retailer

10% Margin from Distributor and goes to 15% for new and promotional products. Area space brought by Nestle for promotional purposes Sampling (Wet and Dry ) done here for promotional purpose

Competition:

The territory where Maggi has lorded over all these years, instant noodles, is being breached by big players. Fast moving consumer goods giants GlaxoSmithKline Consumer Healthcare (GSKCH) and Hindustan Unilever (HUL) have entered the Rs 1,000-crore instant noodles market with their respective brands, Foodles and Knorr. ITC Foods is reported to be waiting in the wings to enter the instant noodles market with its Sunfeast brand. In addition, there are the private label brands of large retailers which are increasing finding a way into the consumer's shopping trolley. Sauces too are a highly competitive space, with Maggi claiming to be the market leader but not with a huge margin. And the soup category is even tougher.

It is not the first time Maggi has faced competition in the noodles category. In 1997-98, Indo Nissin came with its noodles brand Top Ramen. Nestle changed the formulation of Maggi 2-minute noodles around the same time which was rejected by the consumers. As a result, sales of Maggi noodles declined with the company finally bringing back the old formulation in 1999 to arrest drop in sales. Meanwhile, Indo Nissin had also become complacent, and Maggi was able to quickly consolidate its position as the leader. Though it will not be easy to dislodge Maggi from its perch today, given the huge brand equity it enjoys among consumers, experts say some loss of market share cannot be ruled out, given the deep pockets and vast distribution network of its new rivals.

For starters, the company is building on the brand lineage to take it forward. Maggi noodles and sauces have become household names over the years. The company is strengthening its emotional connect with the consumers. Last year saw Nestle launch its ‘Me aur meri Maggi’ campaign that revolved around consumers sharing their experiences. The selected ones were published on the product packaging.

1. TOP RAMEN Don’t be a noodle, be a Smoodle, was the ad that brought the Top Ramen brand into limelight when it was launched in 1991.Market share FY 2005-2006: 14%Variety:

Packet Noodles : Macho Masala, Funky Chicken, Oye Tomato, Curry Smoodles.

Cup Noodles : Spicy Vegetable, Tangy Chicken

Packaging and Pricing: Pack Size Price Top Ramen (gm) (Rs) Packet Noodles 50 5 100 10 400 34 Cup Noodles 80 20

Distributor: Marico Industries Distributor strength: About 130000 USP: Don’t be a noodle, be a Smoodle, innovative flavors and its cup

noodles.

2. FOODLES: The health drink brand from GSKCH – Horlicks – which has been traditionally targeted as a ‘great family nourisher,’ has entered into the highly competitive segment of instant noodles through its newly introduced Horlicks Foodles, aimed to explore the category of salty snack food market.In order to breach the numero uno position of the Maggi’s stronghold in the market of usual processed flour noodles; Horlicks Foodles seems to have, rightly, attempted to grab a share of this larger pie by sticking to its ever-green mantra of providing ‘health and nutritious’ food products.Thus, Horlicks kick-off the Foodles offerings in two healthy variants: Regular and 4 Grain. Both variants come with a trademarked Healthmaker sachet which has 9 Power Vitamins. Besides, the 4 Grain variant is made with nutritious grains like Rice, Ragi, Wheat and Corn. As a sub-variant, each of the two varieties comes in three different flavors.

3. Sunfeast Yipee Noodles:

ITC launches its new food product Sunfeast Yippee instant noodles into the market with two variants, 1.Magic Masala, 2.Classic Masala.

The company is also planned to introduce more flavors in their noodles category within next 10 months.Sunfeast Yippee is supposed to have a big growth in market as it is having a limited competition at the present moment.Sunfeast Yippee needs to compete with GlaxoSmithKline (GSK), Horlics Foodles, Hindustan Unilever, Tasty Treat, Top Ramen and other small brands to achieve great Position.

Has Maggi finally got competition?

All it took was two minutes to woo the hungry souls. The country had just been introduced to a revolutionary product, which took over hundreds of households by their hunger pangs, offering them an instant solution. Maggi Instant Noodles had entered the kitchens of India, the first one of its kind to do so. It was not only a new brand, but also a new food product for many Indians. It's been 28 years since then, and Indian consumers have continued to be loyal to the brand.

The reason is because Maggi has not had much competition. Even though it has been nearly three decades, the brand did not face any serious competition. Instead, in all these years, Maggi has grown exponentially to become a generic brand, and has single-handedly taken the instant noodles category from being almost non-existent, to an Rs 1,200 crore one, of which it currently has, as per industry estimates, a 70 per cent share, approximately.

The only competition Maggi had until now was from the Japan-based Nissin Group's Top Ramen, and the Nepal based CG Foods' Wai-Wai Noodles.

Wai-Wai, till recently, was restricted to the eastern market of West Bengal and Sikkim, where it controlled 70 per cent of the market. Its strategy was to first build-up the distribution network, which it successfully did - the brand was available on the shelves of super stores, as much as in the local Kirana stores. It was then that they started building the brand.

Top Ramen, on the other hand, was aggressive in its marketing - it even roped in Shah Rukh Khan as the brand ambassador, but failed to get its distribution network in place. The brand had entered into a distribution tie-up with Marico, the owners of Saffola and Parachute.

However, the year 2010 saw a sudden spurt in this category.

Wai-Wai is now working towards a national presence. The company, which had manufacturing units in Assam and Sikkim, recently set up a new plant in Rudrapur, in Uttaranchal, and is also looking at acquiring a FMCG company in the South/ West.

Top Ramen also has moved to set up its own distribution network, besides hiring a new agency Dentsu, to give it a fresh marketing push. The brand plans to launch itself with a new look and a new taste.

And...

Two major FMCG players, GSK and ITC, decided to venture into the market, almost 20 years after Nissin Group's Top Ramen had decided to try its luck. GSK launched Foodles, while ITC launched Sunfeast Yippee. Unilever, too, tried to create some competition with Knorr Soupy Noodles.

Instant Gains

One reason why we see a spurt in this category is that it is still growing at the rate of 23 per cent. Prashant Pandey, general manager - marketing, GSK, says, "While it is true that consumers, both in the urban and semi-urban markets are aware of instant noodles, the markets in the hinterland and interiors are yet to be tapped. This provides a huge scope for growth. The category is yet to penetrate deeper into the deepest regions of this country," he says.

The other reason that experts attribute to the growth is that the profit margins in the instant noodles category are very high. This was a lucrative proposition for companies such as GSK and ITC, which were looking to diversify into other categories.

It is because of Maggi that instant noodles have become a part of the food habit of Indian homes. Maggi has moved from being a 7 pm-snack, to being a part of breakfast, lunch, and

dinner, of the average Indian household. Says Sunil Alagh, chairman, SKA Advisors, "It is all thanks to Nestle, which has done the initial and crucial job of establishing the instant noodles category in the consumer's mindset."

According to Alagh the market is ripe. "It's the perfect time for newer players to enter the category. They just need to launch a good tasty product, and work on its distribution," says Alagh.

Tasting Times

How well will the new brands be received? Brand consultant Ramanujam Sridhar, says, "The new entrants will perform well in areas where the brand equity of the parent company, or the brand itself is very high. For example, the Horlicks brand is very strong in the Tamil Nadu market, and there are chances that Foodles will do well in this market where it was first launched."

Industry observers like independent consultant Cajetan Vaz and Prateek Srivastava, president, South, Ogilvy India (he was in-charge of Sunfeast Yippee campaign), feel that while there will be a place for many players in a growing category, the new entrants will have to find a differentiating factor, and build the concept through advertising and marketing.

However, the new players still have a long way to go, especially when MAGGI continues to innovate itself with new product variations, be it Maggi Vegetable Atta Noodles, Maggi Vegetable Multigrainz Noodles, or several other variants.

STPD:

SEGMENTATION

TARGET POSITIONINGDIFFERENTITATIO

N

Age KidsFast to Cook Good

to eatTaste

Eating habits Youth 2-Minute Noodles Flavors

Lifestyle of Urban families

Office goers Taste bhi health bhi Packaging

SWOT:

STRENGTHS WEAKNESSOPPORTUNITIE

STHREATS

Market Leader Big product Line Unexploited Rural Market

Strong presence of regional competitor

Brand Loyalty Health related issuesIncreasing number of

working youth Competitive pricing

Distribution Channels

Affinity of Indian to Chinese food

TOP RAMEN Noodles

Innovative flavors of Indian taste buds

Leveraging Maggi kitchen

Advertising Strategies

Market Penetration Strategies:

1)Promotional Campaigns in Schools

2) Dry Sampling – Distributing Maggi packets

3) Wet Sampling – Distributing cooked Maggi

4)Product Innovation – Atta Maggi, Rice Mania Maggi, Tomato Maggi, Chicken Maggi

5)Availability in different packages: 50gm,100gm,200gm,400gm

6)Advertising Campaigns- 25 Years Celeb:

Maggi Noodles completed 25 years in India last year, and the response to the 'Me and

Meri Maggi' campaign generated a whole new line of thought, and in turn, three

new flavors. Shivani Hegde, general manager-Foods, Nestle India, explained,

"Consumer feedback plays a critical role in our marketing strategy and we

continuously keep listening to the consumer and getting into their lives, to

identify the 'Moment of truth'. We had earlier launched an innovative

advertising campaign ‘Me and Meri Maggi’ to celebrate the emotional

relationship Maggi has with consumers where we allowed the consumer to own

the brand and talk about their unique experiences with Maggi. The inspiration

for the new 'Me and Meri Maggi' range came from the consumers, and from

their overwhelming response to this campaign."

To make consumers part of the brand’s journey, its latest communication talks

about various memories people associate with Maggi. The ad has been

conceptualized by public’s India.

The latest Maggi ad opens with a voiceover, which says that one has many

memories attached with Maggi over a period of 25 years. The ad is a collection of

short vignettes, showcasing consumers’ memories of Maggi. For instance, one

child remembers eating Maggi on a camping trip; while another person

remembers serving Maggi, when people were stuck in the Mumbai floods. The

ad concludes with consumers being invited to share their own Maggi story,

through which they can get a chance to feature on the Maggi packs or ads. The

film has been directed by Arun Gopalan from Storytellers.IN. The team that has

worked on Maggi includes Anindya Banerjee, Ashutosh Sawhney, Vishal

Chemjong, Sudhir Das, Niloy Som, Lobsang Wangchen, Hozefa Alibhai, Istling

Mirc and Smriti Chawla.

As a part of its promotional drive, Maggi has launched a website, meandmeri.in,

where consumers can upload their Maggi moments and submit their favorite

Maggi recipe. Consumers, whose stories or recipes are a hit with the company,

will get a chance to be featured on Maggi packs or ads.

Maggi has generally stayed away from taking the celebrity endorsement route.

The only exception was roping in actor, Preity Zinta for a brief period, to

promote the Rs 5 Chotu Maggi and the Maggi family packs. All ads for the brand

usually focus on the mother-child relationship; therefore, the brand has

deliberately stayed away from celebrity endorsements.

Marketing Strategies:

TARGET CONSUMERS:

Maggi 2 Minute Instant Noodles is already associated with convenience and taste and is currently accepted as a valid filling snack between meals. Maggi will continue to leverage its brand equity and target the following segments for this product.

Children and Teenagers: This is a large segment and is Maggi’s stronghold. The age group between 4 and 14 years has largely similar tastes and is traditionally targeted by Maggi. These segments perceive Maggi instant noodles as a welcome change in taste from the regular Indian fare and they are fascinated by the curly shaped noodles. For these segments innovative products also have novelty value, however, certain dominant preferences emerge. Realizing this early, Maggi shifted focus from the lady of the house to the end consumer i.e. children themselves ending up as the market leader of the instant noodles segment. Early buy in of this segment will help Maggi to sell in other segments in future.

MAGGI CUP O MANIA:

Maggi Cup O Mania is Maggi’s answer to Nissin’s Cup Noodles. With reduced cooking time of ½ a minute, ease of preparation and no need of separate plates Maggi Cup O Noodles promises to appeal to anyone in need of a quick, convenient bite. Maggi Cup O Noodles being a premium priced product, the segment targeted should one which is ready to pay a premium for a quality convenient food. The following segment promises to be the best bet. Young Adults: The growing class of affluent young adults does not mind paying higher prices for quality products. They are hard pressed for time and would pay a premium for convenience. This segment has a good top of the mind recall of Maggi as a brand as the current members of this group were the targets of Maggi in the 1980’s and they retain fond memories of Maggi, a emotional bond which can be leveraged to win them over to Maggi Cup O Noodles. This segment is growing and has the potential of accepting Maggi as a mainstream food item as they see instant noodles as a natural part of Indian food culture.

POSITIONING OF MAGGI:

Maggi 2 Minute Noodles will continue with its current positioning of convenience and as a “fast to cook, good to eat” snack as this seems to be working well. To prevent Top Ramen, the main competitor, from eating into its market share some product innovation is required as otherwise Maggi may get stereotyped as an unexciting product. Top Ramen is following a cost differentiation technique. To deal with this Maggi has to position itself as a differentiated product. The market is very sensitive to taste and rejects any flavor it dislikes with Maggi having learnt it the hard way, thus the product cannot be greatly differentiated with on basis of taste. On the other hand Maggi has to deal with the negative perception of Maggi has of being unhealthy in an increasingly health conscious market, a major threat in the current scenario. Both these problems can be tackled by positioning Maggi as a snack with nutritional value. The recent launch of “Veg. Atta Noodles “and “Dal Atta Noodles” with the promise of good nutritional value ventures in this area. Maggi, the pioneer and creator of “Taste bhi Health bhi” has introduced another greasy tasting and healthy variant in its popular range of Maggi Noodle. Maggi Vegetable Multigrainz Noodles is made with Ragi, Corn, Jowar and Wheat. It offers the consumer multi-gun as it is source of protein, calcium and fiber. Ad has added vegetables. Maggi Vegetable Multigrainz Noodles is available with a delicious “Spice Remix” Tastemaker. The inspiration of product comes from growing consumer preference for a healthier lifestyle, and the deep understanding that Maggi has developed about Indian food habits and culture- the multiplicity of grains are used in everyday foods across country.

CUP O MANIA

The main USP of Cup O Maggi is convenience without compromising on taste. Nissin’s Cup Noodles is a huge hit with the consumers liking the concept of noodles served in a cup and the extra convenience of not dealing with cleaning/needing plates and the lesser time required for preparation. Cup O Maggi is targeted towards a segment that values time and convenience as well as is getting increasingly health conscious. So Cup O Maggi with added nutrition and wholesome components will position itself as a healthy and convenient food option that can be had anywhere, anytime. The crux of positioning will be “Healthy Snack Anywhere, Anytime”.

Maggi launched "Rasiley Chao" for Rural India, rural taste is taken in consideration for the product, and promotional activity for the same is going on in the rural market through wet sampling. Now Maggi is not the urban centric brand, they are penetrating it in rural with their taste preference with convenient to cook in rural environment.

Brand Recall and Future Trends

Introducing a fictitious character who can connect with kids for better brand recall

Organizing contests , games and industrial visits for school kids to further strengthen the brand image

Invite Housewives to send new innovative recipes made from Maggi and introduce rewards for the same

Foray into the Chinese food segment by introducing branded products for chowmeen, schezwan and hakka noodles