A 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
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Brand Brand Building Brand Equity Brand Personality Brand Repositioning Case Study-Maggi
. A brand can help to differentiate a particular company from others in a market. The less distinctive these impressions. service. A legally protected brand name is called a trademark. Marketing plans are important parts of the process. The word brand has continued to evolve to encompass identity . The brand is the sum total of the consumer's impressions about the product and service. A brand can take many forms. including a name. the greater the risk that a competitor's products or services may gain a stronger perception—and competitive advantage. The word brand began simply as a way to tell one person's cattle from another by means of a hot iron stamp.it affects the personality of a product. color combination or slogan.What is Brand ?
A brand is the identity of a specific product. There are several reasons why a brand is important. Since brands are essential to the success of the company it is important to work hard at the creating a brand. or business. company or service.sign. Brand management is a process that combines various techniques and strategies that go into making a particular brand. A brand is the name of a particular business enterprise.
Consumers often rely upon brands to guide their purchase decisions.e. It has been observed that this transformation infuses a value into the name and consequently increases its price. phrases such as ‘brands are our equity’ become company leitmotivs. Branding has been shown to transform the perceived value of a product by making it well known to customers through aggressive promotion and marketing. Brand Equity is defined as the aggregation of two aspects of a product.Brand Building
It has been noticed that brand loyalty is an important factor in maintaining the number one position. the increased value of a product due to branding. Brand equity involves both the component value of a brand and brand value. The fact that brands are a part of the company equity is now a universal concept. when taken at its word. The truth is that. 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. Brand Equity is imperative for a company to succeed in today's market to have a decent brand development system in place. As is often the case.
. symbol. or other feature that distinguishes the company's goods or services in the marketplace. There are many apparel companies for a product in domestic as well as foreign markets. this brand equity awareness has actually revolutionized operational marketing. Clearly. Thus. the price range of these well known brands is much higher than the others. The first being the component value of a Brand i.e a product value prior to marketing. A brand is a name. however what this awareness implies has not yet been fully analyzed. But only a few have qualified themselves as a brand . Brand equity enhances the value of a product and creates a positive environment for the company to increase prices. The second is brand value I. The main factor behind this price differential is the added brand value.
The first step in building brand equity is for the company to define itself and what it hopes to represent for consumers. and then convince the buyer that the brand is acceptable. a company must instill a clear. When all of these elements support a distinctive image of the company and its products in the minds of consumers. get the consumer to actually try its brand.The positive feelings consumers accumulate about a particular brand are what makes the brand a valuable asset for the company that owns it. to buy the brand. unwavering consumer perception of the distinctive emotional or functional benefits of its products and services. Many companies structure their marketing programs around building and preserving their brand equity. It is also important for the company to establish strong. Name awareness is a critical factor in achieving brand success. Companies may spend vast sums of money and effort just to attain recognition of a new brand. or passive agreement. A consumer who prefers a particular brand basically agrees to select that brand over others based primarily on his or her perception of the brand and its value. a company must painstakingly strive to earn and maintain brand loyalty. the company essentially assures the buyer that the product will confer the benefits associated with."
Building Brand Equity
The basis of brand equity lies in the relationship that develops between a consumer and the company selling the products or services under the brand name. the brand. the company has established brand equity. The next step is to make sure that all aspects of the company's operations support this image. Building a brand requires the company to gain name recognition for its product.
. and expected from. But getting consumers to recognize a brand name is only half the battle in building brand equity. In return for the buyer's brand loyalty. "To be a strong brand. In order to benefit from the consumer relationship allowed by branding. positive associations with the brand and its use in the minds of consumers. from its product and service offerings to its marketing programs to its customer service policies. The buyer may even pay a higher price for the company's goods or services because of his commitment. Only after those triumphs can the company hope to secure some degree of preference for its brand.
" Unfortunately. it can also provide managers with a good indication of their company's future profitability. Finding an appropriate measure of brand equity is vital in order for companies to ensure that they protect this valuable asset. If a brand loses its distinctive image in the minds of consumers. Customer loyalty decreases. you're storing up trouble for yourself….
. It is also dangerous to assume that simply because its brand is well-known. "If brand equity is falling. "Companies which develop good measures of their brand equity have an early warning indicator of likely future profit trends." Mitchell noted. in some cases assessing consumer perceptions of product quality may provide the best indication of brand equity. then the branded product becomes more like a commodity and must compete on the basis of price rather than value. Knapp claims that managers must remain constantly vigilant to protect their brand equity.Measuring and Protecting Brand Equity
Although measuring brand equity can be difficult. since a declining brand image poses a significant risk to company earnings. In fact. In his Risk Management article. and can get a much better feel of the dangers of shorttermism. In order to prevent this decline. which has a corresponding negative effect on market share and profit margins. even if it's not showing through in profits today. Real business performance therefore equals short-term results plus shifts in brand equity. more traditional business measures such as customer satisfaction or market share may be more closely correlated with brand equity. you're investing in future performance. measuring brand equity is not as simple as counting the number of people who recognize a brand name or symbol. a company enjoys strong or growing brand equity. Mitchell explained that the best way to measure brand equity depends on the particular company and its industry. In other cases. the most powerful brands can easily be diluted by company missteps or inconsistent marketing messages. Knapp recommends that companies consider the impact of major decisions on consumer perceptions and brand equity. If brand equity is rising. Every action taken by management—including the introduction of new products or advertising strategies. or the decision to lay off employees or relocate a factory—should be assessed for its effect on brand equity. For example.
e.” Following are main factors that plays an important role in defining a brand repositioning. Competitor attributes -What the other brands in the market offer through features and benefits to consumers. principally about triggering the vision. 5. Repositioning is a change. etc. The space may be defined by criteria used by consumers.?)
. mission and values in a new direction that is more suited for the brand in future. Consumer perceptions -The perceived quality and value of your brand in consumer’s minds (i. 1. the good value for the money solution. 2. Price -An easily quantifiable factor – Your prices vs. The location of a brand in relation to its competitors in some pre-defined space.Brand Repositioning:Brand Repositioning .changing the appeal of a brand in order for it to attract new market segments. 3. the high-end. Consumer Expectations -What consumers expect to receive from the brand. such as "value for money" or "age of consumer" etc. 4. your competitors’ prices. Brand Repositioning is an attempt to change consumer perceptions of a particular brand.. brand repositioning may or may not involve modifying the Product .does your brand offer the cheap solution. high-price tag solution. Brand Attributes -What the brand delivers through features and benefits to consumers.
In other word brand personality’s is weighted average of previous impression. age.
Brand Personality. Differences in responses from different consumers provides useful insights. A symbol can be the powerful influence of the brand personality since it can be controlled and can have extremely strong association. socio-economic class. is both distinctive and enduring. Gender. Coke is ‘confirming’ while Pepsi is ‘irreverent’. Ponds sponsoring Femina ‘Miss India’ contest. In consumer’s mind. brand personality is often a sustainable point of differentiation.
. Personality traits are what the brand will live and die for.Brand Personality –
Brand Personality is a set of human characteristics associated with a brand. The personality that’s represents a functional benefits or attribute may be relatively ineffective if it lacks a visual image established in consumer’s mind. Sustainable because it is very difficult to copy a personality. Pepsi sponsoring Cricket matches. IBM is ‘Older’ while Apple is ‘ Younger’. Activities such as events sponsored by the brand will influence its personality. e. b) Nike swoosh c) Metlife’s peanuts characteristics. Importantly. emotional characteristics. is like human personality.g – a) Apple’s bitten apples. It can generate a strong personality that provides a quality cue and a key point of differentiation. psycho graphic. Following are few examples• • • • Marlboro is masculine while Virginia slims is feminine. A country or region of origin can add credibility to an identity. these impressions merge to form overall concept of what to expect from brand. India Today is ‘old fashioned’ while Out Look is ‘trendier’. Brand Personality is eagerly searched by brand strategies and researches. Personality is how the brand behaves.
The Maggi Brand in India
. Maggi Brand of products sustained recession in 2000 and 2001 in India by introducing economy packets. It appropriate realization of target segment. Though NIL tried to extend to other ready to eat products like pickles. cooking aids and paste. effective positioning and effective promotion and sales made Maggi to Noodles in India as Xerox it to photocopier. It took the challenge and established Maggi in Indian market considered to be conservative and typical about food consumption. It was unsuccessful so dumped those products. 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. NIL had introduced sauces. ketchups and soups Market in India.Case Background
Nestle India Limited is the market leader in Indian Noodle Market with it’s Maggi Brand of Noodles which was pioneer brand launched in 1983 in the packaged food market of India.
NIL has also introduced with taste and product line in Sauces and Soup Market under Maggi to catch new segment. revitalize brand. In 2005 Maggi was the highest spender in the Promotion and Sales in the Indian Market in the Noodles Category. In 2005 Maggi brand worth was 3.8 billion market of India. Sunfeast Pasta Wai Wai and 2 PM in corresponding categories of products and variants
. 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. compete with other producers and fulfill expectation of customers. 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.7 billion in 2003. Top Ramen.7 billion market worth in 1.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. Kissin Sauces and Ketchup. Maggi is competing with Heinz Sauces and Ketchup. Knorr has taken over Maggi in Soup market recently. Knoor Soups.7 billion from 1.
brought the instant noodle brand to India during his short stint here in the early eighties. Snacks like samosas are usually bought out.Maggi Comes to India – teething troubles Maggi noodles was launched in India in the early1980s. biscuits or maybe peanuts. Nestlé faced difficulties with their sales after the initial phase. The other competitor. that were usually ‘the bought out’ type. Carlo M.eat snack segment which included snacks like samosas. The second competition came from the homemade snacks like pakoras or sandwiches. Maggi was positioned as the only hygienic home made snack! Despite this. and outside food is generally considered unhygienic and unhealthy. So there were no specific buy and make snack! Moreover both competitors had certain drawbacks in comparison.
. ‘homemade’ snacks overcame both these problems but had the disadvantage of extended preparation time at home. the present Chairman and Managing Director of Nestle India Ltd. The first competition came from the ready-to. there was no direct competition. At that time. Donati.
Nestle\’s Managers utilized promotions as measured to meet their sales target. Gradually. In the course of many market researches and surveys. The company could have easily positioned the product as a meal.
Why the specific Brand positioning?
Maggi was positioned as ‘2-minute noodles’ with a punch line that said ‘Fast to cook! Good to eat!’ And this gave the implied understanding to the consumer that it was a ‘between meals’ snack. sales promotion became a crutch for Maggi noodles sales. sketch pens. the positioning of the product with the wrong target group. After its advertisements with taglines like “mummi bhookh lagi hai. The firm did not position it as a ‘ready-to-eat’ meal either. then obviously it’s a hit with her! What’s more. the product is as good as sold! So the ‘2-minute’ funda coupled with the ‘yummy taste worked!
Launched in 5 flavors initially – Masala. And if she can make it in two minutes with very little effort. The company also decided to focus on promotions to increase the brand awareness. as the housewife prefers to ‘make’ a meal for her kids rather than buy it for them. The focus of all Maggi’s extensions was more on below the line activities rather than direct communication. it chose not to do so. Maggi associated itself with main stream television programme and advertised heavily on kids programme and channels. Maggi clubs which worked wonders for the brand. The packaged food market was very small at this time. But. fun books. Quickly they repositioned it towards the kids segment with various tools of sales promotion like colour pencils.The reason being. because the Indian consumer mindset did not accept anything other than rice or roti as a meal. before it could promote Maggi as a brand. the firm found that children were the biggest consumers of Maggi noodles. Maggi’s annual growth reportedly touched 15% during its initial years. Nestle promotional activities for Maggi included schemes offering gifts( such as toys and utensils) in return for empty noodles pack. sweet & sour. In addition to promotional activities. Unfortunately this could not hold the product for very long. Nestle had to promote noodles as a concept. and Lasagna – Maggi had to fight hard to be accepted by Indian consumers with their hard-to-change eating habits. According to analysits the focus on promotion turned out to be the single largest factor responisible for Maggi’s rapid acceptance. either lunch or dinner. Nestle had positioned Maggi as a convenience food product aimed at the target group of working women who hardly found any time for cooking. Later many of the Maggi’s extensions also made considerable use of promotional schemes. Hence trying to substitute it with noodles would have been futile. bas do minute” and fast to cook good to eat Maggi’s popularity became highly attributed to its “extremely high appeal to children”. Gradually. Capsicum. In the initial years. chicken. the market for instant noodles began to grow.
. It therefore devised a two-pronged strategy to attract mothers on the ‘convenience’ plank and lure kids on the ‘fun’ plank. As a result. if kids also love the taste.
How to continue NIL capability to Maintian Point of Difference ( POD) and Point of Party (POP) while bradn extension and repositioning. The Market is growing by 15 % in the Product Category of Noodles. NIL’s positioning and repositioning strategy to catch market and consumer expectation.
BCG Martix ( Maggi Brand Products in 2006 )
STARQUE STION ?
Maggi Noodles Maggi Soups Maggi Sauces
Market growth 10 % rate
0 % 10 x 1x
Relative Market Share
STARS : Maggi Noodles is the market leader with 80 % market share in Noodles Market and Maggi Sauces and Ketchup is leader with 37 % market share. QUESTIONS ? : Maggi Soups is the category which is in Question mark as the market is growing and the brand as less market share then market leader Knorr brand of Hidustan Lever Limited. Indo Nissan. There are more chances for Maggi Soups to go to dog it does not stay competitive and increase market share in the category. Dabur India.Key Issues
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How Nestle India Limited is ahead in Noodles Market with brand Maggi since 1982 How NIL extended it’s brand and line of products to leverage the brand and established Maggi as family brand. Heinz are competing with their corresponding brand on the product category.
. The products are producing cash for the company consistently. Maggi’s challenge to protect it’s market leader position in situations where there is emergence of competitors like Hindustan Lever Limited.
Chips and Ready to Eat Market still unexplored. Nestle symbolization of warm.
. Single product focused competitors like Heinz sauce and Wai Wai Noodles. Chocolate. Substitute Product to Product Segment. Heinz Sauce and ketchups of Heinz Indian. Less Entry Barriers in the Market segment for product category ITC’s strong base in Indian Market. High brand awareness of Indian consumer Other product category like Biscuits. family & shelter. Top Ramen in Noodle and Knorr Soups. Sauce. Research and Development Division in India New Noodles Plant in Uttarnchal
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Generic Brand to Noodles in India Low rural market presence constraints Uniform Brand for all food category Brand Proliferation
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Growing package and canned food market in India by 15% annually.SWOT Analysis of Maggi as Brand
Established Family Brand Strong Global Corporate Brand ( NIL ) Specialization in food processing category marketing and distribution in Urban market Presence of other product segments of food category : Dairy Products. Infant foods Pioneer and Leader so 1st mover advantage in Noodles. Opportunity to be substitute to other snacks category of food products.
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Competitors with long history in product category Internationally like. Ketchups and Soup market.
NIL should enlarge it’s product segment. Lunch Health Awareness Promotion Campaign : NIL should launch Health Awareness campaign to educate consumers about the benefits of health food. It would spread economies of scale to customers in the form of price. It is the way it could increase it’s volume of sales. only way is to increase product usage like Noodles for breakfast Ketchups in biscuits. Chips and Snacks with New Brand : To enlarge it’s domain.
. Enter into other product category like Biscuits. It could sponsors health camps.Possible Alternatives :Strengthen and use the Distribution : NIL should focus on distribution channels and use of the distribution channel to expand it’s market to Rural India with products targeted to the market. As it cannot further grow sales drastically in the same segment. publish health information. 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 it’s market share.
Competitors have high grounds to capture the market differentiating then from being Maggi. By doing so. As pasta of ITC has been seen as products capturing the market of noodles and Maggi failing to lunch pasta under Maggi brand also support the argument for new brand introduction by NIL. It makes others possible product category vulnerable if lunched under Maggi. NIL could avoid the draw backs associated with the Maggi brand. So it’s is important for NIL to concentrate on other ready to eat category to benefit consumers from economies of scale reflect in price. India is huge market where distribution advantage plays major role and economies of scale pays back. It could position new brand in competition with other competitor’s brand where there is no fit of product with the Maggi brand. Old Indian Brands are also regaining momentum worldwide. So to avoid proliferation of brand and introduce new products to capture opportunities in other snacks and ready to eat product category NIL has to introduce new branding strategy. NIL other option is acquiring products manufacturers of different products like biscuits. there care more chances that NIL would be successful if it create a brand close to Indian culture in wording to positioning. Hindustan Lever has tea to it. Maggi though has been able to differentiate itself from other Noodles.
.BEST COURSE OF ACTION
Introduce different new brand or acquire emerging brand in biscuits. Other companies have advantage of such products. As India is growing. NIL could catch the trend of market. Maggi being taken as generic to Noodles is hampering other extended product category. chips and snacks as it is very essential for it’s market leader position. As Indian Market is Brand conscious. other competitors are coming up with more Indianized brand of products. chips and snacks category. and as Indian being more aware of their culture and large segment being typical and conservative about their culture. ITC has biscuits to it.
Maggi was also closely watching consumer preferences. Maggi became a quintessential Indian food. It talks about the various measures taken by NIL to keep the Maggi brand fresh in the minds of Indian consumers.an instant noodles product. When consumers wanted healthy food. Maggi became successful because it understood consumers .that old taste is back. the Indian subsidiary of the global FMCG major. More importantly this move addressed the concerns of Homemakers. NIL started offering a range of new 'healthy' products under the Maggi brand. The brand never wanted to change Indian consumer's habit. NIL successfully managed to retain its leadership in the instant noodles category even until the early 2000s. in a bid to attract health-conscious consumers. NIL created an entirely new food category instant noodles . As a consumer. these product extensions were not as successful as the instant noodles. The case also talks about the various extensions of the Maggi brand and tries to analyze why only the sauces and ketchups category. The brand extended itself to multiple segment but without diluting the core brand equity. In 2005. NIL extended the Maggi brand to a variety of culinary products like soups. Over the years.Repositioning of Maggi
Nestlé India Ltd. With the launch of Maggi noodles. and cooking aids among others. The resultant yellow masala-flavoured spongy strands were wolfed down by us and before you could say noodles. What Maggi did was to slowly attach itself to Indian consumer's need without disruption. introduced the Maggi brand in India in 1982. sauces and ketchups. Nestlé SA. Maggi launched Atta Noodle variants that was healthy . among all the other product extensions. 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. It did not had ambitions about changing Indian's breakfast or dinner preferences. From carrying
. (NIL). 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 . with its launch of Maggi 2 Minute Noodles.in the Indian packaged food market. However. managed to succeed. Because of its first-mover advantage. Maggi has been part of numerous memorable experiences of my life. This case looks at the various phases in the product life cycle of Maggi noodles in India.
has his or her own Maggi tale to tell. the first commercial for the brand was one of the most memorable commercials of its time (from that great ad agency of the 1980s. Not easy in a country where freshly cooked food was the norm.
. It further discusses the measures taken by NIL to reposition Maggi as a 'health product'. The outstanding sampling exercise apart. if such a hall were ever to be constituted. the brand’s a shoo-in for the India Marketing Hall of Fame. Everyone. The case ends with a discussion whether NIL would be successful in sustaining this new image for Maggi in the market. As an observer of branding and advertising too. 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.packets of it on a trek to carrying packets for friends who live abroad (they insist that the Indian flavours are unique). HTA Delhi). rich or poor. For starters this was the brand that pioneered the entire category of packaged food in India. Maggi makes a tasty treat’ and ‘two minutes’ became a part of the popular lexicon.