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A Project Repot On "Branding": (Case Study of MAGGI As A Brand)
A Project Repot On "Branding": (Case Study of MAGGI As A Brand)
Project Repot
on
BRANDING
(Case study of MAGGI as a Brand)
Under the Guidance ofProf. Nikhil Rao.
Project By
JAYSHREE KATKAR
XMBA-09
ITM, Vashi
Roll No. VA09MBA09P03
CONTENTS
Brand
Brand Building
Brand Equity
Brand Personality
Brand Repositioning
Case Study-Maggi
What is Brand ?
A brand is the identity of a specific product, service, or business. A brand can take
many forms, including a name,sign, symbol, color combination or slogan. The word
brand began simply as a way to tell one person's cattle from another by means of a
hot iron stamp. A legally protected brand name is called a trademark.
The word brand has continued to evolve to encompass identity - it affects the
personality of a product, company or service.
A brand is the name of a particular business enterprise. There are several reasons
why a brand is important. A brand can help to differentiate a particular company
from others in a market.
The brand is the sum total of the consumer's impressions about the product and
service. The less distinctive these impressions, the greater the risk that a
competitor's products or services may gain a stronger perceptionand competitive
advantage.
Brand management is a process that combines various techniques and strategies
that go into making a particular brand. Marketing plans are important parts of the
process. Since brands are essential to the success of the company it is important
to work hard at the creating a brand.
Famous Brand-
Brand Building
It has been noticed that brand loyalty is an important factor in maintaining the
number one position. The fact that brands are a part of the company equity is now
a universal concept, however what this awareness implies has not yet been fully
analyzed. As is often the case, phrases such as brands are our equity become
company leitmotivs. The truth is that, when taken at its word, this brand equity
awareness has actually revolutionized operational marketing.
Brand Equity is imperative for a company to succeed in today's market to have a
decent brand development system in place.
Brand equity involves both the component value of a brand and brand value. Brand
equity enhances the value of a product and creates a positive environment for the
company to increase prices.
Brand Equity is defined as the aggregation of two aspects of a product. The first
being the component value of a Brand i.e a product value prior to marketing.
The second is brand value I.e. the increased value of a product due to branding.
Branding has been shown to transform the perceived value of a product by making
it well known to customers through aggressive promotion and marketing.
It has been observed that this transformation infuses a value into the name and
consequently increases its price.
There are many apparel companies for a product in domestic as well as foreign
markets. But only a few have qualified themselves as a brand . Clearly, the price
range of these well known brands is much higher than the others. The main factor
behind this price differential is the added brand value. Thus, brand equity of such
product includes its component as well as the brand value.
Brand equity refers to the intangible value that accrues to a company as a result
of its successful efforts to establish a strong brand. A brand is a name, symbol, or
other feature that distinguishes the company's goods or services in the
marketplace. Consumers often rely upon brands to guide their purchase decisions.
The positive feelings consumers accumulate about a particular brand are what
makes the brand a valuable asset for the company that owns it.
Many companies structure their marketing programs around building and
preserving their brand equity. "To be a strong brand, a company must instill a
clear, unwavering consumer perception of the distinctive emotional or functional
benefits
of
its
products
and
services,"
Brand Repositioning:Brand Repositioning - changing the appeal of a brand in order for it to attract new
market segments; brand repositioning may or may not involve modifying the
Product . Brand Repositioning is an attempt to change consumer perceptions of a
particular brand.
Repositioning is a change, principally about triggering the vision, mission and
values in a new direction that is more suited for the brand in future.
The location of a brand in relation to its competitors in some pre-defined space.
The space may be defined by criteria used by consumers, such as "value for
money" or "age of consumer" etc.
Following are main factors that plays an important role in defining a brand
repositioning.
1. Brand Attributes -What the brand delivers through features and benefits to
consumers.
2. Consumer Expectations -What consumers expect to receive from the brand.
3. Competitor attributes -What the other brands in the market offer through
features and benefits to consumers.
4. Price -An easily quantifiable factor Your prices vs. your competitors
prices.
5. Consumer perceptions -The perceived quality and value of your brand in
consumers minds (i.e.,does your brand offer the cheap solution, the good
value
for
the
money
solution, the high-end, high-price tag solution, etc.?)
Brand Personality
Brand Personality is a set of human characteristics associated with a brand.
Personality is how the brand behaves. Gender, age, socio-economic class, psycho
graphic, emotional characteristics. Following are few examples
Case Background
Nestle India Limited is the market leader in Indian Noodle Market with its Maggi
Brand of Noodles which was pioneer brand launched in 1983 in the packaged food
market of India. It took the challenge and established Maggi in Indian market
considered to be conservative and typical about food consumption. It appropriate
realization of target segment, effective positioning and effective promotion and
sales made Maggi to Noodles in India as Xerox it to photocopier.
NIL had introduced sauces, ketchups and soups under Maggi brand to reap benefit
of brand popularity and image and contribute to financial gains by 1990.Maggi also
became successful in sauces, ketchups and soups Market in India. Though NIL tried
to extend to other ready to eat products like pickles, cooking aids and paste, It
was unsuccessful so dumped those products. Maggi Brand of products sustained
recession in 2000 and 2001 in India by introducing economy packets.
To fulfill novelty needs of customers and revitalize Maggi Noodles Brand NIL made
different attempts by introducing new formulation to new taste but customers
resisted change and Maggi had to reintroduce Maggi Noodles in same taste. Maggi
Noodle had till 2005 five product line on noodles with four variant in Maggi 2
Minutes Noodle. In 2006 in compliance with NIL target to be health and Wellness
Company Maggi repositioned it as health and taste food products. NIL has also
introduced with taste and product line in Sauces and Soup Market under Maggi to
catch new segment, revitalize brand, compete with other producers and fulfill
expectation of customers.
In 2005 Maggi brand worth was 3.7 billion from 1.7 billion market worth in 1.7
billion in 2003. Maggi Noodle is Market leader with around 80% market share in
Noodles/Pasta and Maggi Sauce is market leader with almost 37% of market share
in 2005 in 1.8 billion market of India. Knorr has taken over Maggi in Soup market
recently.
In 2005 Maggi was the highest spender in the Promotion and Sales in the Indian
Market in the Noodles Category.
Maggi is competing with Heinz Sauces and Ketchup, Knoor Soups, Kissin Sauces and
Ketchup, Top Ramen, Sunfeast Pasta Wai Wai and 2 PM in corresponding categories
of products and variants
Maggi Comes to India teething troubles Maggi noodles was launched in India in
the early1980s. Carlo M. Donati, the present Chairman and Managing Director of
Nestle India Ltd, brought the instant noodle brand to India during his short stint
here in the early eighties. At that time, there was no direct competition.
The first competition came from the ready-to- eat snack segment which included
snacks like samosas, biscuits or maybe peanuts, that were usually the bought out
type.
The second competition came from the homemade snacks like pakoras or
sandwiches. So there were no specific buy and make snack! Moreover both
competitors had certain drawbacks in comparison. Snacks like samosas are usually
bought out, and outside food is generally considered unhygienic and unhealthy.
The other competitor, homemade snacks overcame both these problems but had
the disadvantage of extended preparation time at home. Maggi was positioned as
the only hygienic home made snack! Despite this, Nestl faced difficulties with
their sales after the initial phase.
The reason being, the positioning of the product with the wrong target group.
Nestle had positioned Maggi as a convenience food product aimed at the target
group of working women who hardly found any time for cooking.
Unfortunately this could not hold the product for very long. In the course of many
market researches and surveys, the firm found that children were the biggest
consumers of Maggi noodles. Quickly they repositioned it towards the kids segment
with various tools of sales promotion like colour pencils, sketch pens, fun books,
Maggi clubs which worked wonders for the brand.
BRAND STORY
Launched in 5 flavors initially Masala, chicken, Capsicum, sweet & sour, and
Lasagna Maggi had to fight hard to be accepted by Indian consumers with their
hard-to-change eating habits. The packaged food market was very small at this
time, Nestle had to promote noodles as a concept, before it could promote Maggi
as a brand. It therefore devised a two-pronged strategy to attract mothers on the
convenience plank and lure kids on the fun plank. Gradually, the market for
instant noodles began to grow. The company also decided to focus on promotions
to increase the brand awareness. In the initial years, Nestle promotional activities
for Maggi included schemes offering gifts( such as toys and utensils) in return for
empty noodles pack.
According to analysits the focus on promotion turned out to be the single largest
factor responisible for Maggis rapid acceptance. Nestle\s Managers utilized
promotions as measured to meet their sales target. Gradually, sales promotion
became a crutch for Maggi noodles sales. Later many of the Maggis extensions
also made considerable use of promotional schemes. The focus of all Maggis
extensions was more on below the line activities rather than direct
communication. In addition to promotional activities, Maggi associated itself with
main stream television programme and advertised heavily on kids programme and
channels. After its advertisements with taglines like mummi bhookh lagi hai, bas
do minute and fast to cook good to eat Maggis popularity became highly
attributed to its extremely high appeal to children. As a result, Maggis annual
growth reportedly touched 15% during its initial years.
Key Issues
How Nestle India Limited is ahead in Noodles Market with brand Maggi since
1982
How NIL extended its brand and line of products to leverage the brand and
established Maggi as family brand.
NILs positioning and repositioning strategy to catch market and consumer
expectation.
How to continue NIL capability to Maintian Point of Difference ( POD) and
Point of Party (POP) while bradn extension and repositioning.
Maggis challenge to protect its market leader position in situations where
there is emergence of competitors like Hindustan Lever Limited, Indo
Nissan, ITC, Dabur India, Heinz are competing with their corresponding
brand on the product category.
STARQUE
STION ?
Maggi
Noodles
Maggi
Soups
Market
growth
10 %
rate
Maggi
Sauces
CASH
COWDOG
0 %
10 x
1x
0.1x
Weakness
Opportunities
Threats
Possible Alternatives :Strengthen and use the Distribution : NIL should focus on distribution channels
and use of the distribution channel to expand its market to Rural India with
products targeted to the market. It is the way it could increase its volume of
sales.
Increase the Usage of Maggi Brand Products: Since Maggi Noodles and Maggi
Sauce is market leader it has to adopt strategy to increase the usage of the
product to protect its market share. As it cannot further grow sales drastically in
the same segment, only way is to increase product usage like Noodles for
breakfast Ketchups in biscuits.
Lunch Health Awareness Promotion Campaign : NIL should launch Health
Awareness campaign to educate consumers about the benefits of health food. It
could sponsors health camps, publish health information.
Enter into other product category like Biscuits, Chips and Snacks with New
Brand : To enlarge its domain, NIL should enlarge its product segment. It would
spread economies of scale to customers in the form of price.
Repositioning of Maggi
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.
With the launch of Maggi noodles, NIL created an entirely new food category instant noodles - in the Indian packaged food market. Because of its first-mover
advantage, NIL successfully managed to retain its leadership in the instant noodles
category even until the early 2000s.
Over the years, NIL extended the Maggi brand to a variety of culinary products like
soups, sauces and ketchups, and cooking aids among others. However, these
product extensions were not as successful as the instant noodles. In 2005, NIL
started offering a range of new 'healthy' products under the Maggi brand, in a bid
to
attract
health-conscious
consumers.
This case looks at the various phases in the product life cycle of Maggi noodles in
India. It talks about the various measures taken by NIL to keep the Maggi brand
fresh in the minds of Indian consumers. The case also talks about the various
extensions of the Maggi brand and tries to analyze why only the sauces and
ketchups category, among all the other product extensions, managed to succeed.
Maggi became successful because it understood consumers . The brand never
wanted to change Indian consumer's habit. It did not had ambitions about changing
Indian's breakfast or dinner preferences. What Maggi did was to slowly attach itself
to
Indian
consumer's
need
without
disruption.
Maggi was also closely watching consumer preferences. When consumers wanted
healthy food, Maggi launched Atta Noodle variants that was healthy . More
importantly this move addressed the concerns of Homemakers. The brand
extended itself to multiple segment but without diluting the core brand equity.
Maggi did change the masala [taste maker]few years back and sales declined and
the company was forced to go back to the old masala and nestle ran an add
campaign ,that old taste is back.
The resultant yellow masala-flavoured spongy strands were wolfed down by us and
before you could say noodles, Maggi became a quintessential Indian food. As a
consumer, Maggi has been part of numerous memorable experiences of my life.
From being a midnight snack to helping with early hours of mugging for exams to
eating plates of cheese and anda Maggi at the night canteen after an evening of
drunken revelry.
From hot Maggi after getting drenched in the rain to it being the first cooking
experience for numerous youngsters when the folks were away. From carrying
packets of it on a trek to carrying packets for friends who live abroad (they insist
that the Indian flavours are unique). Everyone, rich or poor, has his or her own
Maggi
tale
to
tell.
As an observer of branding and advertising too, the brands a shoo-in for the India
Marketing Hall of Fame, if such a hall were ever to be constituted. For starters this
was the brand that pioneered the entire category of packaged food in India. Not
easy in a country where freshly cooked food was the norm.
The outstanding sampling exercise apart, the first commercial for the brand was
one of the most memorable commercials of its time (from that great ad agency of
the 1980s, HTA Delhi). It was probably the first example of Hinglish in a
mainstream commercial from the opening Mummy bhook lagi hai to the tag
line that went Fast to cook and good to eat, Maggi makes a tasty treat and two
minutes
became
a
part
of
the
popular
lexicon.
It further discusses the measures taken by NIL to reposition Maggi as a 'health
product'. The case ends with a discussion whether NIL would be successful in
sustaining this new image for Maggi in the market.