Meri Maggi, Vahi Maggi (My Maggi, Same Maggi)

Suresh Narayanan, MD

Mumbai, India

This is a time for learning and not for panic

Alex Walkey, Andrea Mamchur, Rishabh Gandhi, Kendra Scurfield

HASKAYNE CONSULTANTS H C

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HASKAYNE CONSULTANTS H C

Executive Summary

Target Area Strategy Details

Communication Policy Customer Channel -Heavy emphasis on lower income levels -Emphasize only 1 sample was affected -Consumer reassurance

Retailers & Distributors -Offer 10% discount on all orders for next

Quality Control Audits -Quarterly audits, supplier scorecards

Supplier reduction -Reduce number of plants from 20-15

Supervisor -Hiring quality control supervisors (~20)

Marketing Recovery Reinvigoration & Nostalgia -Customer coupons (local newspapers & SM) -IPL (cricket), Roadside Shacks, Midnight Maggi

Back on track by Q4 (Rs 25.15B)

Untangling the noodles

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HASKAYNE CONSULTANTS H C

Communications:

´  It has been several months since the contaminated samples were first discovered and the time for crisis management has passed

´  The messages going forward:

´  The same great Maggi is back: “Vahi Maggi”

´  Appeal to the nostalgia that Maggi brings to its customers

´ MSG and Lead were each only found in one sample

´ These findings were never replicated in internal or independent analysis

´ Strict quality controls have been implemented including quality control audits and a quality score card for suppliers

Now is the time for a message of quality control, not crisis control.

Inform customers that the same Maggi they have always loved is back

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HASKAYNE CONSULTANTS H C

Communications:

Target low and middle class Indians in rural communities

53% of the population lives in rural India 70% of Maggi is consumed by low and middle

income Indians

•  Low education levels •  Their opinions are hard to change and they are susceptible to viral

messaging à “confusion for the customer” •  Will have to work harder to change back their perceptions

•  Primary method of communication is local newspapers •  Offer 2 for 1 coupons along with brief messaging that Maggi is safe

and the same great Maggi is back

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HASKAYNE CONSULTANTS H C

Message for distributors and retailers

´  You also need a message for distributors and retailers

´  Will have to win back loyalty from your supply chain that may have allocated capacity to competitors

´  Offer a 10% discount to both distributors and retailers for the first 3 months on all new orders

Don’t neglect your distributors and retailors

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HASKAYNE CONSULTANTS H C

Crisis Management

´  At the first sign of a problem pull product off the shelf independently until you can verify the problem

´ Not an admission of guilt or liability but a message that you accept nothing but absolute product quality and safety

´  Communicate via social media (Facebook) and local newspapers

´  Although this seems drastic, your products would ultimately be off the shelf for a shorter time period

´  Makes you a market leader in product safety

´  Sends the message that product defects are not acceptable by Nestle

Be proactive, not reactive

Quality Control

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HASKAYNE CONSULTANTS H C

Quality Control

´  Hire new supervisors for each man plant

´  Introduce quality score card for each manufacturing plant

´  Conduct quarterly audits on ongoing basis

´  Reduce outsourcing plants to 15 and transfer production Meri Maggi

Vahi Maggi

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HASKAYNE CONSULTANTS H C

Implantation of quality control

1 month

Hire supervisors

3 month

Introduce scorecard

Introduce audits

6 months- 1 year

Transfer production to reduced number or existing plants.

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HASKAYNE CONSULTANTS H C

Costs

´  Hiring quality supervisors approx. 20 at a cost of 30,000 Rs per month

´  Total cost .6 million Rs

´  Quarterly Audits and Score cards

´  Total cost of .4 million Rs

My Maggi

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HASKAYNE CONSULTANTS H C

Timeline of events

March 30, 2014

Lab found MSG in Maggi

May 2015

Food Scare June 2015

Found lead FSSAI forced a recall

August 2015

Ads returned October 2015

Nestle claimed Maggi was clear for relaunch

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Relaunch: November 2015

PR Marketing Quality Control

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Marketing:

´  Maggi’s will Relaunch with an integrated Public Relations, Stakeholder Relations, and Marketing Campaign.

´  When executed our Marketing and Public Relations campaign will mitigate threats form our competitors.

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HASKAYNE CONSULTANTS H C

Public Relations:

´  Editorial Commercial Campaign: ´  Aimed at moms to rebuild trust for their kids. Focus will be what Maggi has done to fix the issue and

insure that it does not happen again.

´  Brand Activations: ´  Maggi shows up to lunch breaks, Indian Premier League Hockey Games and Cricket Games

´  My Maggie, how do you make Maggi yours?

´  Social Media:

´  Transparent social media campaign, communicate the current status update on Facebook and Whatsapp

´  Be Real

´  Feature pictures of family

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HASKAYNE CONSULTANTS H C

Shareholder Relations

´  How we communicate trust to our distributors

´  We will provide a 10% discount

´  Promise to buy back product if it doesn’t sell.

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HASKAYNE CONSULTANTS H C

Marketing

We are suggesting a 200 million Rs marketing Budget

´  Packaging

´  Bring Bank My Maggi campaign, put pictures of families on the

´  Media Buy

´  100 million Rs on Newspaper ads

´  Social Media

´  25 million Rs on social media (including give away coupons and advertising)

´  Brand Activations

´  75 Rs for bringing Maggi’s to work or the game. Will need to a hire a chef, have lots of product for giveaway, support team, and give-a-ways.

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HASKAYNE CONSULTANTS H C

Risks and Mitigations

Risk Mitigation Likelihood Impact

Lost of trust Communicate what we’ve done to change

L M

This happens again Increase quality control, and reporting. Work with suppliers

L H

Lost market share due to competition

Remind India, why we are India’s favorite

L M

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HASKAYNE CONSULTANTS H C

You asked ´  What makes sense at this time, quality control or crisis?

´  Quality Control needs to be our primary focus, yet we need to address the crisis.

´  What should have been it’s corporate strategy? ´  Maggi should have followed the Tylenol example and recalled the product out of good will.

´  How do we ensure that no permanent damage is done? ´  We ensure that the product is safe for consumers prior to launch. We communicate our apologies

and what we’ve done to address the issue in a transparent manner.

´  How do we address the competitors? ´  We provide customers and incentive to purchase via a coupon in the paper, on facebook, and

whatsapp.

´  Activate the brand by showing up at work lunch breaks to give free Maggi’s

´  What should Maggi’s communication strategy to win back customers be? ´  Clearly, focus on clean and consistant messaging.

´  How will Maggie regain it’s pre-fiasco market share? ´  By executing our recomendation

Love, Maggi

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HASKAYNE CONSULTANTS H C

Results

17 19

22.86

25.15

0

5

10

15

20

25

30

Q1 Q2 Q3 Q4

Estimated Revenue 2016

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HASKAYNE CONSULTANTS H C

Results

Back on track by Q4 (Rs 25.15B)

Following our plan, by the end of Q4, 2016 you will be back at December 2014 revenue levels (of Rs 25.15B) and growing strongly.

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HASKAYNE CONSULTANTS H C

Executive Summary

Target Area Strategy Details

Communication Policy Customer Channel -Heavy emphasis on lower income levels -Emphasize only 1 sample was affected -Consumer reassurance

Retailers & Distributors -Offer 10% discount on all orders for next

Quality Control Audits -Quarterly audits, supplier scorecards

Supplier reduction -Reduce number of plants from 20-15

Supervisor -Hiring quality control supervisors (~20)

Marketing Recovery Reinvigoration & Nostalgia -Customer coupons (local newspapers & SM) -IPL (cricket), Roadside Shacks, Midnight Maggi

Back on track by Q4 (Rs 25.15B)