Presentation on Product Strategies (MAGGI)

BYASHWANI DADHICH

About Nestle

FMCG industry provides a wide range of consumables .The competition among FMCG manufacturers is also growing and as a result of this, investment in FMCG industry is also increasing, specifically in India.

It market its products in 130 countries across the world.. Nestle put nutrition as the core of their business.. Nestle is a Swiss company founded in 1986 by Henri Nestle Basically the company started to meet the need of the milk in world war I..

 Henri Nestle developed a milk-based baby food and soon began marketing it . It was the first product of Nestle. The Maggi Company merged with Nestle in 1947. Today, Maggi is a leading culinary brand and part of the NESTLE family of fine foods and beverages.

Main focus is on health and wellness.. Good Food, Good Life to All Consumers..
August 27, 2013 3

What is the brand name that comes to your mind when you hear the word

NOODLES ?

The Brand Maggi

4th Oct, 2007

Tolani Institute of Management studies

STORY OF MAGGI 2-MINUTE NOODLES

Its a Brand of instant noodle made by Nestle India Ltd.

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

The Brand is popular in: -Australia -India -Malaysia -New Zealand -Singapore -South Africa

 Nestle wanted to explore the potential for such an instant food among the Indian market.

Now it enjoys around 90% market share in this segment. Over the years Maggi has launched several products under its Brand name.

The Birth in India

Nestl India Ltd. (NIL), the Indian subsidiary of the global FMCG major, Nestl SA, introduced the Maggi brand in India in 1982, with its launch of Maggi 2 Minute Noodles, an instant noodles product. initially priced at Rs.2.10 with a close 100% margin

PRODUCT VARIANTS

Taste Bhi, Health Bhi

INITIAL STRATEGIES OF MAGGI

Maggi has faced a lot of hurdles in its journey in India
The basic problem the brand faced is the Indian Psyche.

Initially Nestle tried to position the Noodles in the platform of convenience targeting the working women.
However, the sales of maggi was not picking up despite of heavy Media Advertising. To overcome this NIL conducted a research.

(CONT.)
NILs promotions positioned the noodles as a convenience product for mothers & as a fun product for children. The noodles tagline , Fast to Cook, Good to Eat was also in keeping with this positioning. They promoted the product further by distributing free samples, giving gifts on return of empty packets ,etc. Effective Tagline Communication.

PRODUCT DIFFERENTIATION
Product differentiation strategy means how a particular product is different from others on the basis of: Form, Features Performance quality Convenience Durability, Reliability, Style. the form shape, size, physical structure of Maggi is very attractive as it is easy to carry, comes in various packs and sizes according to customers convenience..

The various features of Maggi noodles are first of all its perfect taste according to the Indian touch & spices

 performance level of Maggi is excellent there are various other brands offered target market, but Maggi prevailed as the winner out of them.. Quality is the main factor on which emphasizes as it is Maggis main strength which provides Maggi an edge over its competitors .. Maggi products are durable as due to its preparation these products are easy to store, have a long shelf life and can be stored at any given temperatures which is tested and approved. Reliability is also one of Maggis strength, as one can always rely on a Maggie product for a particular taste which it guaranties.. It is an Indian customers psyche that whatever looks good and feels good would be of good quality so Maggi packs had been designed keeping in mind the same concept

The 4 Ps

MAGGI-Product mix
MAGGI 2-MINUTE Noodles MAGGI Vegetable Atta Noodles MAGGI CUPPA MANIA MAGGI Vegetable Multigrain Noodles

PRODUCT LEVELS: CUSTOMER VALUE HIERARCHY

Core benefit - FAST TO COOK & GOOD TO EAT.
Basic product benefit - good taste with proper nutrition levels and good health. TASTE BHI HEALTH BHI Expected product benefit - proper and a good package & fully packed seasoning tastemaker & affordable prices.

MAGGI-Pricing
Maggi 2-Minute Noodles (Chicken) Maggi 2-Minute Noodles (Curry) Maggi 2-Minute Noodles (Masala - spicy) Maggi Rice Noodles Maggi 2-Minute Noodles (Veg atta) Maggi Dal Atta Noodles 95 gms 100 gms 100 gms 12.00 13.00 12.50

95 gms 15.00 200 gms 30.00 100 gms 13.00

Nestle had extended Maggi noodles and seasoning to the bottom-of-thepyramid segment by selling Rs. 4 and Rs. 2 packs at select low-income markets like Mumbai's Dharavi.

The Economic Times, Aug12, 2010

MAGGI-PLACEMENT
The distribution network is well spread almost everywhere in India,as it is easily available in all kirana stores, retail store etc.

Whenever, Wherever, However Connecting with Customers out of homeon the move Maggi Fun spots Supply in other nestle kiosks ITES/BPO employees

MAGGI: Promotion
Sales Promotion Exchange schemes Price-off offer Scratch n Win Offers Money back offer.. Sponsor school quiz.. Awareness campaign..

Advertisement
Effective Taglines

Video

Competition Analysis

SWOT analysis
Strength Market leader USP- Easy to cook & tasty Variety Brand loyalty Advertising strategy.. Distribution channels Opportunities Availability of New segments (e.g. old age people) Threats ITC, the competitor provides higher margins to its distributors and growing Weakness Perceived as made up of Maida not good for health and calories.. Heavily dependent on one flavor ..

Increasing level of income of

consumers and fast life. Unexploited rural market..

fast.
Top Raman has adopted the strategy of reducing the price of its product.

PORTERS FIVE FORCES MODEL

NEW ENTRANTS F Foodles

SUPPLIERS Distributors, Raw F material suppliers, Packaging

INDUSTRIAL RIVALRY F Top Ramen, Chowmein etc

BUYERS Customer of Mind F image set, Brand

SUBSTITUTES F fast Chowmein, Food, Pasta

STPD ANALYSIS
SEGMENTING AGE TARGETING KIDS POSITIONING FAST TO COOK, GOOD TO EAT DIFFERENTIATIO N TASTE

EATING HABITS

YOUTH

2-MINUTE NOODLES

FLAVORS

LIFESTYLE

OFFICE GOING PEOPLE

TASTE BHI, HEALTH BHI

PACKAGING

WORKING WOMEN

 PRODUCT LIFE CYCLE OF MAGGI

INTRODUCTION
The course of a products sales and profits over its lifetime is called the Product Life Cycle..

Product life cycle is a concept that provides a way to trace the stages of a products acceptance , from its introduction (birth) to its decline..

STAGES IN PLC
Introduction Stage.. Growth Stage.. Maturity Stage.. Decline Stage..

PLC OF MAGGI

TIME

Introduction Stage..
Sales growth tends to be slow at this stage. Cost per customer is high.

Negative profits.
Competitors are few. The marketing objective is to create product awareness.

. INTRODUCTORY STAGE OF MAGGI

The product launched keeping in mind the working women and children No competition It was the pioneer in the instant noodle market.

Distribution channel Producer -- Distributor -Retailer -- Consumer

INTRODUCTION CONT
PRICING The initial pricing strategy was low pricing strategy to make product affordable. PROMOTION Promotion focuses on awareness and information Promoted with the tag line BAS 2 MINUTE. Promotion done by - Giving gifts on empty packets.

Growth Stage
Rapidly rising sales.
Rising profits. Unit manufacturing cost declines. The marketing objective is to maximize market share.

MAGGI GROWTH STAGE

Sales increased. 50% market share. No.1 brand. PRICE- prices were kept normal.
Entry of Competitor

PRODUCT- no any new changes

PROMOTION-GOOD TO EAT FAST TO

COOK

MARKET PENETRATION STRATEGIES

Promotional campaigns in school.

Advertising strategies: Focusing on kids

New product innovation according to the need of consumers: -Veg. Atta Noodles -Dal Atta Noodles -Cuppa Mania Availability in different packages: -50 gms -100 gms -200 gms -family packs(400 gms) Conducting regular market research.

Maturity Stage

Sales are at peak. Profits are high. Cost per customer low.

The marketing objective is to maintain

or extend the market share.

MAGGI MATURITY STAGE

Introduced new Variety.

Price Rs. 5 Onwards. Big Time Promotional Offers. Slow Down In Sales. Market Saturation.

MATURITY CONT
PRODUCT - Maggi introduced wide variety of products like Dal atta noodles, Chicken maggi, Maggi cuppa mania.
PRICE - Maggi still comes in very affordable prices starting from Rs. 5, they reduced the quantity instead of increasing price. DISTRIBUTION - Distribution became more intensive. Adopted various intensive programme for encouraging the product over their competitors in the market.

Segmentation To Differentiation
Classic Noodles - 5 to 10 yrs.. Veg. Atta Noodles - health conscious.

Rice Mania teenagers..

Cuppa Mania - office goers.

Decline Stage
Sales started declining
Profits are at decline Cost per customer still at low The marketing objective is to reduce the expenditure

MAGGI DECLINE STAGE

Sales saw a decline in 1990s. -Formulation changed from fried base to . air dried base. New product launched but failed. -Dal atta noodles of sambur flavour. Tough competition from TOP RAMEN.

Reintroduction of MAGGI Noodle

Reintroduced in 1999 Increased Distribution Focus on new segments of

Society
New & Interesting TV Commercial

CURRENT SCENARIO OF MAGGI

Leading Brand in India as well as World. Reasonable competitive pricing.

Maggis share of instant noodles, on an all-India basis, across urban markets, has slipped consistently between December 09 to July 10. While Maggi instant noodles had a 90.7% share in December 09, the share dropped to 86.5% in July 10 on an all-India basis..

Maggis market share is certain to get impacted , but add that Nestle has the potential to expand the Rs 1,300-crore instant noodles category which itself is growing at a rapid 15% annually

MARKET RESEARCH

Cont

MARKET SHARE
market share

others, 13.5, 14%

maggi others

maggi, 86.5, 86%

TO conclude
Here are some who leads called market leader and there are some who follows, called follower. Maggi has been a leader for decades and it is Maggi who educated Indian consumer about noodles. Of course, their market share might got depleted in course of time, by the entry of some very big players but Maggi will not sit silent. They will also reinforce their activities which will ultimately benefit the consumer. People will definitely taste for a change, but it is very difficult to change ones taste bud and the top of mind game, as Maggi has become a generic name in India for their long presence..

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 towns with population more than 10,000. - Strengthen 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 name would not only help in Brand extension but will also enhance Maggis market share. - Launch new advertisement campaign (T.V., Radio etc) with the Brand Ambassador.

THANK YOU