AN ANALYSIS ON THE MARKETING STRATEGIES OF

MAGGI

PRESENTED BY-VAIBHAV AGARWAL ROLL-44

CONTENTS• OBJECTIVES 3• INTRODUCTION 4• PRODUCT LIFE CYCLE 5• MARKETING OBJECTIVES 6• NEW PRODUT RANGE 7• COMPETITORS 8• MARKET SHARE 9• MARKET SEGMENTATION 10• STP ANALYSIS 12• SWOT ANALYSIS OF MAGGI 14• P’S OF MARKETING 17• FIVE FORCE ANALYSIS 22• QUESTIONNAIRE 23• RESEARCH FINDINGS 24• CONCLUSION 25• ACKNOWLEDGEMENTS 26

OBJECTIVES

• To determine the various instruments of marketing communication used by Nestle India Limited

• To determine how maggi has managed to remain the market leader in instant noodles category

• To suggest measures to improve further sales

INTRODUCTION

• It’s a brand of instant noodle made by Nestle India Limited

• It was found by the Maggi family in Switzerland in 19th century.

• Nestle launched maggi in India for the 1st time in 1982• Nestle wanted to explore the potential for such an

Instant food among the Indian market.• It took several years and lot of money for Nestle to

establish its Noodles brand in India.• Now it enjoys around 90% market share in this segment.

MARKETING OBJECTIVES

• Increase value market share to 95% in the instant noodles

market by 2011-12 from the current 93.3%. • To promote Maggi noodles as a healthy ready to eat

convenient food among mothers and single working professionals.

• To provide line extension by introducing Cup Noodles/Mug Noodles.

• To upgrade the existing product features viz. packaging, ingredients, special additives based on consumer feedback.

COMPETITORS

Maggi is competing with: Heinz Sauces and Ketchup Knorr Soups Kissan Sauces and Ketchup Top Ramen Sunfeast Pasta- Wai Wai in corresponding

categories of products and variants

MARKET GROWTH

For the FY 2005-2006, the growth of Maggi noodles was an impressive 15%, with sales at Rs 6.75 billion and profit at Rs 2 billion.

Nestlé’s Maggie noodles is the leading brand in the instant noodles segment in India, enjoying a market share of 93.3%. Maggi has regularly come up with new flavours and has recently launched two variants- Vegetable Atta and Dal Atta noodles, catering to the increasing demand for healthy snacks.

Primary target: Children (<16) Nestle plans to widen its target audience by launching new variants Vegetable and Dal atta noodles for health conscious people.

Demographic:Region: urban, semi-urban, rural (recent)

Occupation: Housewives, working professionals, self-employed

Sex : Unisex

Income: 1,20,000 p.a. upwards

MARKET SEGMENTATION

Social class: Middle and upwards

Family life cycle: Young, single, married with children.

Behavioural: Occasions: Regular, Everyday user-urban, rural-depends on the temporal aspects of the consumer’s life(varied usage in terms of time of time of day, week, month, year) User status: first time user-rural, potential users-semi-urban, heavy users-urban Usage rate: Heavy user-urban, light-rural, medium-semi-urban

Loyalty status: hard core and shifting loyals

Buyer-Readiness Stage: rural-some are aware, semi-urban:some intend to buy(aware, informed),urban: informed(some desire,some intend to buy)

Attitude toward product: Enthusiastic, positive

Psychographic:

Lifestyle: Hard pressed for time

STP ANALYSISSEGMENTATION POSITIONING-Age -Easy to cook, good to -Lifestyle eat-Eating habits of families -2 minute noodlesTARGETING-Kids-Youth-Office goers-Working women

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 a easy to cook snack that could be prepared in just two minutes. The formula of STP analysis clicked well & maggi became a brand name. That’s precisely what is required in making a product a brand. The brand has grown to an estimated 200 crore & contributes to around 10% of Nestle India’s top line.

SWOT ANALYSIS OF MAGGI

Other toolsSponsoring School Sports event

Organizing Maggi painting competition, for school children.

Introducing Maggi news letter for teenagers every month

Moving Van, painted about maggi, near colleges and shopping places, which would provide cooked maggi for Rs. 5

It was at this point in time that Nestle 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 throughthis new formulation.

The company used new noodle-processing technology, so that it could air-dry instead of oil-fry the noodles. The tastemaker’s 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 Nestle by surprise. With volumes declining and customer complaints increasing, the company began to work on plans to relaunch ‘old Maggi’ to win back customers.

THE P’S OF MARKETINGPRICING AND PRODUCT

DEVELOPMENT

By May 1999, Nestle’s decision to bring back the ‘old Maggi’ seemed to have paid off. Two months after the relaunch, themonthly average sales of Maggi noodles n the northern region rose 50% in comparison to the previous year.

PROMOTIONWith the introduction of Cup-o-Maggi noodles, we propose to move away from the ‘Child and Mother’ approach of Maggi. The Cup noodles would be targeted at the young single professionals, as also the housewives, basically people who might prefer to go for a quick meal instead of cooking a whole traditional Indian meal, specially in case of early work-day mornings or a ‘tired’-evening quick snack (in case of professionals).

An associated tagline with the Cup-o-Maggi advertisement campaign could be: ‘Cup-o-Maggi’: ‘Healthy Snack Anywhere, Anytime! “ GENERAL PROMOTION:

Events and Experiences: Hold the Online Maggie Recipe Challenge, wherein innovative recipes with Maggi Noodles as a base are invited.

Celebrity endorsement: Maggi has associated itself with celebrities like Bollywood actress Priety Zinta recently. The reason being Maggi has always been the kids snack.

Television Advertisements: Portraying hassled double income families, finding relief at the end of a tiring day with a quickly conjured up bowl of Maggi 2 Minute noodles.

PRODUCT VARIANTS1. 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.

PHYSICAL DISTRIBUTION

Maggi Noodles is being sold through 3,24,000 outlets (FY 2009-2010), which comprise of grocers, convenience stores, supermarkets and miscellaneous channels.

The average Indian still prefers shopping through the traditional grocers or “kiranas” as can be inferred from the higher distribution of 62.8%.

The rising popularity of the “mall-culture” in the urban and semi-urban areas also reflects on the slight increase in distribution through supermarkets / hypermarkets.

FIVE FORCE ANALYSIS

1. When you think of noodles, which brand comes to your mind? Maggi Top Ramen Others2. Why do you prefer it? Flavour Price Taste Brand Image3. According to you, which age group prefers maggi most?

4-12 13-26 27-40 Above 414. Do you think maggi is affordable?

Yes No5. Since when have you been eating maggi?

Less than a yr 1-5 yrs 6-10 yrs Above 10 yrs6. Do you think maggi is a healthy product?

Yes No7. Are you aware of new variants of maggi?

Yes No8. Have you tried the new variants?

Yes No9. If you have tried the new variant, do you think it is better than maggi masala?

Yes No10. Do you think attractive advertisement helped maggi to increase their sales?

Yes No11. What is your overall experience with maggi? Very good Good Average Bad12. What suggestions would you give to increase the sales of maggi? Improve promotions Evolve new flavours Improve packaging Reduce price13. Do you plan switching to another brand?Yes No

QUESTIONNAIRE

92% of the respondents feel that maggi is affordable.

Awareness about new variants in maggi is high it is almost 96%

But only 36% have actually tried the new ones.Rest are either brand loyal to masala maggi or perceive no other flavor can be comparative to masala flavor. Many gave reasons that all flavors are not available at the their retail shop.61% out of who have tried the new variants did not like the taste as much as masala maggi.

Thus, it becomes a negative word of mouth.60% of the people feel that maggi is not healthy inspite of the new healthy variants. This was the primary reason why they are inhibited to consume maggi regularly by their parents. If Maggi variants connoted with healthy food contents and also satisfying as a meal, it would be preferred by the respondents.

86% of the respondents were satisfied with maggi and do not plan switching to other products in the future. Packaging is attractive and good but few suggested that its now time to bring some change in packing as it has grown old.

RESEARCH FINDINGS

CONCLUSIONThe 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.

Unfortunately, the macaroni and pickles didn’t 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, Maggi’s competitor ‘TopRamen’ took advantage of the situation and started a parallel aggressive campaign to eat into Maggi’s 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 world wide Maggi sales.

ACKNOWLEDGEMENTS

• I would like to convey my thanks to all the people who helped and supported me during the making of this project. Deepest thanks to

• PROF .S.BANERJEE the Guide of the project for guiding me through and helping with a better understanding of the product and the company I was conducting my research upon, helping me with different guide books on marketing and various search engines online to extract and study in detail, correcting various documents of mine with attention and care. He has taken pain to go through the project and make necessary correction as and when needed.

-Do have your maggi today!!!