STUDY OF IMPACT OF WAI WAI NOODLES ON MAGGIS AUTHORITY IN INDIAN

MARKET

(Term Paper towards the fulfilment of the assessment in the subject of Marketing

Management)

SUBMITTED BY:

SUBMITTED TO:

RADHIKA MALPANI DR. ARCHI MATHUR

II SEMESTER, B.B.A. LL.B. F ACULTY OF MARKETING

MANAGEMENT

ROLL NUMBER- 1398

National Law University, Jodhpur

Winter Semester

(January- May 2015)

 TABLE OF CONTENTS

EXECUTIVE SUMMARY.3

OBJECTIVES..5

1. MARKETING STRATEGY...6

2. WAI WAI.8

3. MAGGI..22

4. MARKETING STRATEGIES ADOPTED BY WAI WAI..25

5. DATA TABULATION..31

6. ANALYSIS....35

7. CONCLUSION..40

8. RECOMMENDATIONS...44

BIBLIOGRAPHY.47

2
 EXECUTIVE SUMMARY

1. To identify and analyse the marketing strategies adopted by Wai Wai in the Indian

market.

This objective is attained by Chapter 3 in which it has been stated that after mouth-to-mouth

publicity of the product during the past decade Wai Wai has finally in 2016 roll down a

promotion campaign to increase its market share and attract more customers by making them

aware of the product. This has proved to be a step forward to foray into the Indian noodle

market and attaining the market share of 27% in the Indian market.

2. To analyse the impact of the strategies on Maggi.

Due to the rolling of the marketing plan in August 2016, Wai Wai has gained a lot of

popularity but it would be hard to say that it has substantially challenged Maggis authority in

India. It has no doubt made consumers to shift from Maggi to Wai Wai but not to that an

extent that it can have majority market share. Still the market share of Maggi is 57%. But,

after Maggis ban due to the presence of lead content more than the prescribed limit, Wai Wai

has gained an advantage by assuring people safety and health. There is no denying the fact

that still many people are not aware of the product and also the loyal and staunch customers

of Maggi started consuming Maggi the day after it re-arrived in the market.

3. To identify the steps taken by Maggi to counter this challenge

Since Maggi is a well-established and base noodle industry present in India, it was not much

affected by the entrance of one more candidate in the noodle market, but still it has also

suffered huge loss due to its ban. As for that Maggi tried to regain customer confidence and

3
trust by withdrawing the old packets from the shelves and introducing new packets

complying with proper health standards and also starting the campaign taste bhi health bhi.

4. To suggest strategies to enable Wai Wai to challenge the authority of Maggi.

As mentioned before Maggi is already the market leader, Wai Wai has to go a long way to

challenge the authority of Maggi. However, it has got a unique selling proposition which no

other brand offers, ready to eat as against ready to cook. This might help it challenge the

authority of Maggi.

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 OBJECTIVES

1. To identify and analyse the marketing strategies adopted by Wai Wai in the Indian

market.
2. To analyse the impact of the strategies on Maggi.
3. To identify the steps taken by Maggi to counter this challenge
4. To suggest strategies to enable Wai Wai to challenge the authority of Maggi.

5
 1. MARKETING STRATEGY

In basic terms, a marketing strategy analyzes all aspects of your sales activity and combines it in

a way so that all departments know what it going on. Hence, a marketing strategy is the process

that allows the organization to focus on available resources and utilize them in the best possible

manner to boost sales and gain leverage over competitors. It not only includes what the

organizational goal is but also how to go about it.

No marketing strategy can begin without first determining the business goals. These are the

long-term objectives of the organization, i.e. where it wants to see itself in, lets say, the next five

years. Of course, there will be business goals for each marketing plan as well.

Marketing strategy includes all basic, short-term, and long-term activities in the field

of marketing that deal with the analysis of the strategic initial situation of a company and the

formulation, evaluation and selection of market-oriented strategies and therefore contribute to the

goals of the company and its marketing objectives.

The process usually begins with a scan of the business environment, both internal and external,

which includes understanding strategic constraints. It is generally necessary to try to grasp many

6
aspects of the external environment, including technological, economic, cultural, political and

legal aspects. Goals are chosen. Then, a marketing strategy or marketing plan is an explanation

of what specific actions will be taken over time to achieve the objectives. Ideally, strategies are

both dynamic and interactive, partially planned and partially unplanned, to enable a firm to react

to unforeseen developments while trying to keep focused on a specific pathway; generally, a

longer time frame is preferred. There are simulations such as customer lifetime value models

which can help marketers conduct "what-if" analyses to forecast what might happen based on

possible actions, and gauge how specific actions might affect such variables as the revenue-per-

customer and the churn rate. Strategies often specify how to adjust the marketing mix; firms can

use tools such as Marketing Mix Modeling to help them decide how to allocate scarce resources

for different media, as well as how to allocate funds across a portfolio of brands. In addition,

firms can conduct analyses of performance, customer analysis, competitor analysis, and target

market analysis. A key aspect of marketing strategy is often to keep marketing consistent with a

company's overarching mission statement.

Marketing strategy should not be confused with a marketing objective or mission. For example, a

goal may be to become the market leader, perhaps in a specific niche; a mission may be

something along the lines of "to serve customers with honor and dignity"; in contrast, a

marketing strategy describes how a firm will achieve the stated goal in a way which is consistent

with the mission, perhaps by detailed plans for how it might build a referral network, for

example. Strategy varies by type of market. A well-established firm in a mature market will

likely have a different strategy than a start-up. Plans usually involve monitoring, to assess

progress, and prepare for contingencies if problems arise.

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8
 2. WAI WAI

2.1 CHAUDHARY GROUP

The $250 million Chaudhary Group, which, apart from being present in several activities - in

automobiles, consumer goods and hospitality - also makes the tangy and crisp Wai Wai noodles.

CG Foods India Pvt.Ltd. was incorporated during the Financial Year 2002-03, under the

Companies Act, 1956 having its registered office at Guwahati, Assam. In three years of operation

it has established its business offices at Siliguri, Delhi and Kolkata. Its registered office has now

been shifted to New Delhi. Food and Beverages is one of the core competence areas of the

company. The company is promoted by Cinnovation Group, a multinational company, for the

manufacturing and trading of Instant Noodles and ready to eat snacks in India. The Cinnovation

Group has the Technical tie up with Chaudhary Group of Nepal which is one of the largest

Noodle Production Centre in the South East Asia Region. CG FOODS INDIA PVT. LTD. has set

up its first plant in Sikkim to manufacture WAI WAI both Brown and White Noodles, Bhujiya,

Cheese Balls and many others snack foods will be added to meet the increasing demand of India

and abroad. The Sikkim Plant started commercial production from April 2006. The group started

its second manufacturing unit the Rudrapur plant in Uttaranchal that commenced production

from June 2008. Third factory situated at Guwahati, North East commenced its production from

2010.

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10
 2.2 Wai Wai

Wai Wai is an international brand of instant noodles produced initially in Thailand by Thai

Preserved Food Factory Co. since 1972. Chaudhary Group owned the company introduced it

worldwide from Nepal in 1985. Wai Wai is pre-cooked and flavored before packaging, so it can

be eaten straight from the package or cooked in soup form. CG Corp Global has been ramping up

its manufacturing capacity for Wai Wai in India, besides investing in an aggressive pan-India

branding campaign. Wai Wai Noodles claims to have a share of about 27 per cent in the instant

noodles segment which is pegged at about 2,500-3,000 crore.

Since Wai Wai is a brown noodle product, the company believes it will give it enough room for

experimentation and enable it to offer a variety of dishes on its menu such as classic, crunchy,

roasted and pan fried noodle dishes.

The Chaudhary Group has built two plants in Nepal and six plants in India for the manufacture

and distribution of Wai Wai noodles. It is expanding more new plants

in Nepal, India, Bangladesh, Serbia, and Saudi Arabia. Wai Wai is mostly consumed raw but also

can be consumed cooked as well. Along with other noodle brands, one segment of Wai Wai was

banned in Tamil Nadu state of India in 2015 for a period of 3 months citing higher level of lead

11
in similar noodle brand known as Maggi. Assam Government had also banned Wai Wai under

investigation for one month under Food Safety and Standard Act 2006. Subsequently, concerned

authorities gave the popular noodles a clean sheet as it proved to contain no lead and harmful

materials.Wai Wai, which claims 20 percent market shares in the Indian market, has apparently

benefited from the noodle controversy and has resurfaced in the Indian market with aggressive

business plans from the Chaudhary Group.

Vision- We have made a conscious decision to take the brand and the noodle industry to the next

level. The total India market is around Rs 2,500 crore and our intent is to grow it to Rs 25,000

crore in the next 10 years. And we want to have at least 50% market share for Wai Wai in that

time frame. That's our target and we are confident of achieving it in the coming decade," said

Chaudhary.

Aim-"We aim to reach Rs 300 crore (Rs 3 billion) in three years, being the second biggest noodle

maker

Future plans- After establishing itself in noodles, CG Foods plans to get into other snacks like

potato chips and cheese balls.

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 2.3 PRODUCT

Wai Wai is a ready to cook product different from the other brands in the sense that others are

ready to eat. This USP of Wai Wai would provide it an edge over other brands available.

2.3.1 PRODUCT FEATURES AND APPEARANCE

Its available in white as well as brown noodles.

Its more than that of a noodle bar and 3 sachets with it including the oil, chili, and masala

blended in right proportion.

Its already roasted and so can be eaten just after opening the packet.

2.3.2 QUALITY

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The product is energized & enriched with Protein, Calcium, Vitamins, Iron and Dietary Fibers

which are good for human body.

CG Foods India Pvt. Ltd in technical collaboration with CG Foods Nepal Pvt.Ltd. to ensure the

quality of finished products and all the incoming raw material and packing material as per

international standard, ensure their demand in the market and as such observing highest quality

control standards are undertaken seriously .CG Foods Nepal Pvt. Ltd. has successfully achieved

the Certification of Quality Management System of ISO 9001:2000 on June 26,2007 by the

internationally renowned certification body Det Norske Veritas. Quality control department of

CG Foods Pvt. Ltd is equipped with the most modern analytical instruments complying with

Good Laboratory Practices which conduct the testing in accordance with the applicable

international monographs. At CG Foods Pvt. Ltd analysts carry out raw material, packaging

material analysis, bulk and finished product analysis and review the batch documents besides

performing process monitoring of the plant through effective quality management system.

2.3.3 BRAND NAME

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The noodles are sold under the brand name-WAI WAI throughout the geographical area of India

which is a brand of CG Foods Pvt Ltd. and is in the Indian market since 1985. By now it has

become a well-established brand and act as an umbrella for different FMCG products.

2.3.4 VARIETIS OF NOODLES AVAILABLE

2.3.4.1. Brown Noodles

Wai Wai Ready to Eat is a popular brown noodle (3 Seasonings) available in 2 different

flavour-Vegetable and Chicken.

Wai Wai Quick is brown noodles (Curry Base-3 Seasonings) available in Vegetable and

Chicken flavor.

2.3.4.2. White Noodles

Wai Wai X Press is a white noodle (with two seasonings sachets) available in Vegetable

and Chicken flavours . These are available in various flavours as below.

Masala Delight in Masala flavour.

Masala Fusion is a fusion of Masala flavours blended to give a unique taste

Pizza gives a taste of Veg Pizza flavour

Fish Curry in Fish Curry flavour

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 Jain Masala in Masala flavour without onion and garlic.

Soaltee is a white noodle available in Chicken flavour.

2.3.4.3. Snack Noodles

Mimi, is a snack noodle (with two seasonings) available in Chicken & Veg

flavour.
Wai Wai Quick is a snack noodle (with two seasonings) available in Chicken &

Veg flavour.
Wai Wai Mini is a snack noodle (with two seasonings) available in Chicken &

Veg flavour.
High Five is a snack noodle (with two seasonings) available in Chicken & Veg

flavour.

2.3.5. PACKAGING

The expected product benefit is proper packaging to ensure customers a good quality, fully

packed seasoning tastemaker at affordable price. It act as a brand defining marketing instrument

as well as an innovative and practical shell.

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Its packaged in different colors and design for differentiating between different varieties

available. But the standard packaging is that of a green color displaying the brand name, type of

noodle, a picture of cooked noodles on it with a tagline so healthy so tasty.

Its packed in a layer and the material used to wrap it is a polythene and also there are three

sachets inside the packet consisting of Onion oil, Chilly, and the special masala of Wai Wai

which is also packed.

Cups are also produced by the brand currently; which needs a different kind of packaging and

also the labeling has to be different as it would be circular in shape.

Its available in mini(40g), small(70g), family pack(180g) and super saver pack(450g).

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 2.4 PRICE

2.4.1 PRICING OF VARIETIES

BROWN NOODLES

Wai Wai Ready to Eat Wai Wai Quick

70 gm at MRP Rs. 10/- 70 gm at MRP Rs. 10/-

WHITE NOODLES

Wai Wai X Press Soaltee

40 gm MRP Rs. 5/- 45 gm MRP Rs. 5/-

180 gmMRP
70 gm MRPRs.
Rs.10/-
20/-

450 gm MRP Rs. 50/-

SNACK NOODLES

Mimi Wai Wai Quick Wai Wai Mini High Five

40 gm MRP Rs. 5/- 35 gm MRP Rs. 5/- 35 gm MRP Rs. 5/- 35 gm MRP Rs. 5/-

Affordable by all income groups.

Differentiated packaging.
Mini pack- targeting lower middle class and also those who want to consume less

quantity.

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2.4.2. PRICING STRATEGIES

Adapted market penetration pricing strategies in which it entered the Indian market with low

price so as to gain market share and create a market stand in a market where majority

consumption of noodles is that of Maggi. Also to gain competitive edge over the already existing

brands as people prefer cheap products with better quality. Also it is FMCG product which has to

be kept at affordable price to attract more and more target segment.

However there is not much difference in the price of other brands, so it can use its ready to eat

rather than ready to cook formula for more acceptability and sales volume which in turn would

increase its profits and facilitate more investment in upgraded technology. Hence, cost reduction

and more profit margins.

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 2.5 PLACE

2.5.1 DISTRIBUTION CHANNEL

PRODUCTION UNIT

MOTHER GODOWN

DISTRIBU SUPER
TOR STOCKIES

WHOLESA RE-
LER DISTRIBUTOR

RETAILER

CONSUME RETAILER
R

CONSUME
R

Enhanced distribution network.

Limited penetration in rural areas.
Not easily available everywhere, inaccessible sometimes.
Sales territories, warehousing systems.

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2.5.2 PRODUCTION UNITS

WAI WAI is present with the product across all the States and now has the capability to grow.

The Sikkim Plant started commercial production from April 2006. The plant is spread over an

area of 6 acres and has an annual Production Capacity of 11,000 MT of Noodles. The company

has entered into an agreement with the owners of WAI WAI Brand to use this Brand in India

for manufacturing Noodles. The group started its second manufacturing unit the Rudrapur plant

in Uttaranchal that commenced production from June 2008. Third factory situated at Guwahati,

North East commenced its production from 2010.

In the South it has a plant now and that's grown immensely too. The West doesn't have a

manufacturing outlet, now its looking at a plant in Ajmer.

It is strengthening its foothold in India in terms our presence between different ethnic groups.

South India is a largely unpenetrated market so it see scope there.

2.5.3 MARKET COVERAGE

Almost throughout the territory of India the brand has established its market but still the west and

the south region is less exploited. There is a large scope of increase in the customer base of Wai

Wai as after the ban of Maggi customers are trying other products. Also, it already holds 27% of

the market share in India which is second largest in the noodle industry after Maggi which holds

57% of the share. Around 65% of the sales are done in the north-east region of the country.

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According to geographical demographics all age people including adults enjoy the taste of Wai

Wai. This is a brand built by three generations of the 18-24 year old age group. But it's also

popular with the older adults. India as a country is nowhere close to where the market for

noodles should be. The per capita consumption is four packets per year. Compare this to

Nepal, which is at 40 and China is close to 80. So the brand wants to enhance the overall noodles

market. It is expanding more new plants in Nepal, India, Bangladesh, Serbia, and Saudi Arabia.

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 2.6 PROMOTION

INTEGRATED PROMOTINAL STRATEGY

ADVERTISING PUBLIC MOUTH SALES INTERACTIVE

RELATIONS PUBLICITY PROMOTION MARKETING

BILLBOARDS VISUAL MEDIA PRINT MEDIA SOCIAL MEDIA

NEWSPAPER MAGAZINE PAMPHLETS

Having banked on word of mouth for building visibility of instant noodle brand Wai Wai in India

for almost a decade now, CG Foods is now embarking on a 360-degree promotional campaign as

it looks to capture market share in west and south India regions. Advising the company on its

advertising and promotional plans is Colvyn Harris founder of Harris-Mint and former executive

director global growth and client development of J Walter Thompson Co (JWT).

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Part of the $1.16 billion multinational conglomerate CG Corp Global, CG Foods claims to be the

only company to have a widespread noodle manufacturing facility across India. "Our exposure,

particularly for the noodles business, is Rs. 250 crore. Growing annually at 40%, we currently

have 27% market share in the Indian noodles industry. With the new campaign rolled out (on

August 5, 2016), it should give us a huge vertical growth in the coming years," said Chaudhary,

adding that the company currently has eight manufacturing facilities across India with an annual

capacity of 2.3 billion packets.

The company has over the past six months invested significantly in improving the distribution of

its stock keeping units (SKUs) across traditional and modern trade. CG Foods hopes the product

availability scenario to improve significantly now the campaign has rolled out and youth in the

western and southern region start demanding Wai Wai noodles in the respective markets.

"Consumer pull combined with trade pull for our SKUs will come from the marketing campaign

and eventually help us increase market share in these regions," Chaudhary said.

Colvyn Harris, CEO, Harris-Mint and strategic advisor to CG Foods, said that a comprehensive

strategic roadmap has been chalked out for the brand. "The product has a unique category

benefit in the snack and meal space which is anytime, anywhere, anyhow. We are the only

brand in the ready-to-eat category while all the other brands are ready-to-cook. The core brand

positioning is 'Munch It! Soup It! Lunch It!' and the campaign will showcase this versatility and

taste edge, besides creating a strong connect with its primary audience i.e. the youth in the 16 to

25 year age group. The intent is to be the leading brand within the next three years, in the

markets we operate in. We are looking at two clear market segments - mainstream India and

digital India with a dominant online presence," said Harris.

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25
 3. MAGGI

3.1 NESTLE

Nestl S.A is a Swiss transnational food and drink company headquartered in Vevey, Vaud,

Switzerland. It has been the largest food company in the world, measured by revenues and other

metrics, for 2014, 2015 and 2016. It ranked No. 72 on the Fortune Global 500 in 2014and No. 33

on the 2016 edition of the Forbes Global 2000 list of largest public companies.

Nestl's products include baby food, medical food, bottled water, breakfast cereals, coffee and

tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Twenty-nine of

Nestl's brands have annual sales of over CHF1 billion (about US$1.1 billion),

including Nespresso, Nescaf, Kit Kat, Smarties, Nesquik, Stouffer's, Vittel, and Maggi. Nestl

has 447 factories, operates in 194 countries, and employs around 339,000 people. It is one of the

main shareholders of L'Oreal, the world's largest cosmetics company.

Nestl was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in

1866 by brothers George Page and Charles Page, and Farine Lacte Henri Nestl, founded in

1866 by Henri Nestl (born Heinrich Nestle). The company grew significantly during the First

World War and again following the Second World War, expanding its offerings beyond its

26
early condensed milk and infant formula products. The company has made a number of

corporate acquisitions, including Crosse & Blackwell in 1950, Findus in 1963, Libby's in

1971, Rowntree Mackintosh in 1988, and Gerber in 2007.

Nestl has a primary listing on the SIX Swiss Exchange and is a constituent of the Swiss Market

Index. It has a secondary listing on Euronext. In 2011, Nestl was listed No. 1 in the Fortune

Global 500 as the world's most profitable corporation. With a market capitalisation

of US$239.6 billion, Nestl ranked No. 11 in the FT Global 500 2014.

27
 3.1 MAGGI

Nestle in the year 1982 launched Maggie in the Indian market. The brand Maggi which is famous

for 2-minutes noodles is today an umbrella brand in a category that it created for itself in the

packaged food segment in India largely because of its first mover advantage. The product

became so prominent in the Indian markets that Maggi became a generic name for noodles. What

Xerox copies did to photocopiers Maggi did to noodles. Its a product which not only caters to

the needs of the whole geographical territory of India but also each and every segment of people

including adults and old age people. Also, lower income group consume Maggi as it is quite

affordable and accessible in the Indian market. Maggi in a sort became an alternative to food. As

the tagline of Maggi suggest kahi bhi kabhi bhi Maggi has become omnipresent. It has also

been a source of survival for the one who dont know how to cook and can easily cook Maggi.

College students do consume a lot of Maggi and it has become a trend for them to eat Maggi at

least once a week. India has always been a great market for FMCG (fast moving consumer

goods) products as people in India love food. But owing to concerns of parents of the children

with regards to the health of them Maggi in 2005 came up with Maggi Atta Noodles and a new

tagline for that Taste bhi health bhi and thus maintaining its sales volume all over the country.

28
However a recent issue of presence of lead content higher than the prescribed limits has proved

to be fatal to the brand. This led to the ban of Maggi in India and Maggi incurred huge losses.

But it revived in the market and has been doing a great job since then.

4.1 MARKETING STRATEGIES ADOPTED BY WAI WAI

Hami sabaiko Wai Wai(our own Wai Wai) is the tagline most commonly used by Wai Wai to

create a sense of belongingness among the consumers. It has come out with innovative

techniques to push its product to the target segment. An all India promotional campaign was

organized by it in 2016 where it started its advertisement and various other communicating

channels. Not many people knew of Wai Wai back then in 2000 but now there has been an ever

growing demand for this product. Wai Wai means quick, the name itself is complementary to

the USP of the product.

The most prominent and striking feature of Wai Wai which differentiate it from other brands is

that it can be eaten without even cooking. Its ready to eat feature has gained a lot of popularity.

Till now no brand of noodle has come up with such a feature and this gives Wai Wai an

advantage over other brands. It can easily exploit this unadventured new venture and gain huge

market share. Wai-Wai noodles in his view appeals to a very different set of people - the young

adult, as opposed to a slightly younger audience for Maggi. The noodle for adults position is

there for the taking.

Helping realise Wai Wai's ambitions of increasing its national footprint, is Colvyn Harris, CEO,

Harris-Mint who is also the strategic advisor to CG Foods. Elaborating on the differentiators for

the noodle brand, Harris shares, "It is ready to eat against ready to cook, is on a youth specific

platform, and is playing in a very mature category that has not had much innovation." The

29
communication will carry forward the brand's positioning 'Munch It! Soup It! Lunch It!' with

its primary audience, the youth. The brand plans to deploy mainstream as well as digital media.

The latter platforms are going to be used for customised communication and even recipes.

The challenge is of course generating trial, especially in a Maggi-eating nation like India.

Whether it pitches itself directly against the leader or makes a riskier play and pegs on its

differentiated offering may well play a part in deciding its fortunes, both at the dining table as

well as the retail-shelf.

The noodle brand now has big ambitions to capture a large chunk of the under-penetrated Indian

market as it launches its first national brand campaign. The multimedia campaign has been

conceptualised under the charge of Colvyn Harris, -CEO, Harris-Mint who is also the strategic

advisor to CG Foods. "All these years, we were fighting to catch up with the demand that existed

without any campaign, thanks to the three generations of Wai-Wai consumers here in India," says

Dr Binod Chaudhary, chairman, CG Corp Global. Now with the campaign roll-out the brand

hopes to have a larger footprint in this market. With a stronghold in markets like North East and

East of India, the brand already claims to have a market share of nearly 27%.

The brand is optimistic about disrupting the category dominated by Maggi noodles, followed

by others like Yippee, Top Ramen etc. with its unique ready to eat offering (as against the

ready to cook fare from most other players.). "We are no competition to Maggi and vice versa

since we are the only fully-cooked product and can be consumed straight from the packet

without any cooking," explains Chaudhary. The product has been pegged for its multiple

consumption options - as a bhel-like snack, as a soup, or like a meal.

While the roll out has a major TV component, it would also have a sizable digital part which

30
would be quirkier and engaging, and with targeted reach. According to Harris, "It is an

underground brand that has come of age."

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 4.2 HOW MAGGI WOULD REGAIN ITS AUTHORITY

4.2.1 Maggis ban

In todays world of citizen journalism, news goes viral in a flash. And if it is bad news, it

acquires a spin and speed that is virtually impossible to stop. Brands, therefore, are more

susceptible to a tarnished image today, than in any other day and age. And the loss of goodwill

can play out in the form of decreased revenue, loss of clients or suppliers and loss of market

share.

The latest brand to find itself in this quagmire is Maggi, the instant noodles brand from food and

beverage company Nestle. One of Indias most trusted brands and perhaps the countrys most

favoured comfort food, it has taken a huge knock in terms of brand value and sales ever since the

recent controversy broke over allegations that it had lead and monosodium glutamate (MSG) in

excess of permissible limits and was, therefore, unsafe to consume. The controversy arose after

the Uttar Pradesh Food Safety and Drug Administration ordered the recall of a batch of 200,000

Maggi noodle packs. With more and more states deciding to randomly test samples and banning

sales in the interim, coupled with retail chains removing it from their shelves, the company has

had no other choice but to retract the product.

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It is expected to have eroded in brand value by at least 30-40%, say brand specialists. Sales

dropped by at least 60-70%, say retail analysts.

4.2.2 Denial versus acceptance

A statement from Nestle India said that the company will take the product off the shelves, and

yet insisted that the quality standards had been met. Speaking at a press conference in New

Delhi, Paul Bulcke, global chief executive, Nestle said, The trust of our consumers and the

safety and quality of our products is our foremost priority everywhere in the world.

Unfortunately, recent developments and unfounded concerns about the product have led to an

environment of confusion for the consumer, to such an extent that we have decided to withdraw

the product off the shelves, despite the product being safe. We promise that the trusted Maggi

Noodles will be back in the market as soon as the current situation is clarified.

33
4.3.3 After ban what can help Maggi regain its brand value.

Regaining customer confidence isnt easy once consumers have a negative perception of a brand.

Crisis management requires more than a hurriedly called press conference.

Nabankur Gupta, founder of Nobby Brand Architects & Strategic Marketing Consultants says

that Nestle India needs to get its product right before it goes into damage control. Its not

enough to say that its the same formulation for Maggi globally. Nestle needs to re-formulate

Maggi as per Indian standards and regulations, and replace them in stores. The cost could be

considerable, but it is not an impossible task. Once you do that, you can build the brand up

slowly by investing in corporate social responsibility activities, signing up a credible endorser,

effective public relations etc.

Other brand custodians advocate honestly and reassurance, in the face of sticky situations.

34
Winning back the trust of consumers and investors is key to reviving the brand image. The

business performance of the company originates from the consumer performance. Nestle

certainly recognizes this, as evidenced by the emphasis on rebuilding trust and consumer

confidence at Bulckes press meet. With the consumer I mind, we will do everything it takes,

are fully engaged with the authorities to clarify the situation, Bulcke said, adding: Our priority

now is to engage all stakeholders to clear the confusion. Maggi will be back on store shelves

soon. But staging a comeback will be a formidable task.

Maggi initiated a new campaign by advertising that it is healthy and safe to eat. This was not

enough as people were insecure. So Maggi used its brand value and loyalty as the means to

regain market share. It advertised that it is a trusted brand since 32 years and a small controversy

cant shake the confidence and trust it built since then. It also ensured that the product is

authentically certified.

Wai Wai is a competitive brand but it never challenged the authority of Maggi before. It was only

after this controversy which aggravated Maggis downfall. Also, the survey clearly depicts that

Maggi is still loved by its customers.

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 5. DATA TABULATION

1. To identify and analyse the marketing strategies adopted by Wai Wai in the Indian

market.

36
2. To analyse the impact of the strategies on Maggi.

37
3. To identify the steps taken by Maggi to counter this challenge

4. To suggest strategies to enable Wai Wai to challenge the authority of Maggi.

38
39
40
 6. ANALYSIS

1. Do you know product Wai Wai?

o Yes
o No
o Maybe

Out of 50 respondents 29 respondents are aware that there is a product called Wai Wai for

noodles in India. It constitutes 58% of the respondents which leads us to think that two-fifth of

the population is not even aware of the presence of Wai Wai noodles in India. Wai Wai needs to

roll its promotional policy in a wider way so that at people get to know what the product is. Until

and unless the target segment is not aware of the product, the prospective buyers wont be there.

2. What comes first to your mind when you hear the word noodles
o Maggi
o Topramen
o Chings
o Yippie
o Wai Wai
o Nothing

To this question around 78% of the respondents responded Maggi. This shows that Maggi still

retains market leadership and people are staunch and loyal customers of Maggi. Its really hard

for Wai Wai to become the market leader till the time Maggi is in the picture. Also, Wai Wai is a

different product and can create a whole lot of target segment altogether as it is a ready to eat

noodle brand. Only 6% of the respondents have stated Wai Wai as their favourite product. This

means it needs to increase customer satisfaction and loyalty.

3. Which size packets do you generally purchase?

o Mini
o Small
o Family packs

41
 o Super saver packs

Around 41% of the respondents chose family packs as their most purchased packet size. This

would provide an insight to Wai Wai on how to increase the customer base by offering special

discounts and using sales promotional techniques to attract more buyers. Also around 35% of the

respondents prefer Small packets of noodles. The reason may be convenience and also mentality

among the consumers that instead of purchasing one big packet they purchase several small ones.

Quantity of packets has some psychological link with the consumers and Wai Wai can take

advantage of the same by offering schemes like buy a dozen get 1 free.

4. Are you a consumer of Wai Wai?

o Yes
o No

To this 56% responded that they consume Wai Wai. This still means that remaining 44% people

are consuming some other brand and also have probably never tried this one. Also the 56% does

not suggest that they only consume Wai Wai, it merely suggest that they are consuming Wai Wai

along with other brands. But as we know its market share in the whole Indian market is 27%, its

quite substantial.

5. How frequently do you purchase Wai Wai noodles?

o Daily
o Weekly
o Fortnight
o Monthly
o Other
o Never

42% of the respondents never purchase Wai Wai. This implies and states the consumption of Wai

Wai. Also, people dont frequently buy the product even though its an FMCG product. This

42
means either inaccessibility of the product or less willingness among buyers. 26% of the

respondents purchase the product after months pass. Only 16% of the consumers purchase it

monthly and that too the quantity is unascertained. The survey was conducted in the state of

Rajasthan where there is a less trend of eating noodles apart from Maggi. But if we take the

survey of North-eastern region, results would be different as around 65% of the sales of Wai Wai

come from this region.

6. How did you come to know about the product?

o Mouth-to-mouth publicity
o Advertisement
o Billboard
o Other

There is somewhat a balance between mouth-to-mouth (41%) publicity and other sources

(43.5%). The other sources are not ascertained but surely they do play a very big role if they

constitute 43%. Also advertisement and commercials created only 6% awareness. This means

that the commercial has not gone viral and some other strategies need to be formulated by the

brand.

7. Are you satisfied with the product?

o Yes
o No
o Maybe

Around 48% of the respondents are satisfied with the product and so they constitute the regular

customer of the brand. They may be retained by the brand by maintaining the same standards.

Around 32.5% of customers are not sure which means that they can be turned into prospective

loyal customers if the brand is somehow able to satisfy their needs and provide them with the

services to fill the void and become customers of the product. Also, the remaining 19.5% who

43
are not satisfied should not be ignored. Rather they should be provided importance as they might

provide the brand with the future course of action to cope up with the unsatisfied customers by

bringing new variants or improving the existing products.

8. Is it better than Maggi?

o Yes
o No
o Not sure
o Both are differentiated

As many as 40% of the respondents believe that Maggi is a better product than Wai Wai, out of

which many would not even have tried the product. Also the % of people who are not sure and

who believe it to be better than Maggi is same (20.8%). The one who are not sure are the one

vulnerable and can be attracted to the product. Also, 19% of the respondents feel that both the

products are differentiated by their very nature i.e. ready to eat v ready to cook. This brings us to

a conclusion that Wai Wai can target a new target segment and also could get an edge over other

products.

Analysis of how objectives achieved through the project.

Objective 1 was achieved through Chapter 2.and Chapter 4. In which the marketing strategies

adopted by Wai Wai were discussed in detail.

Objective 2 was achieved through Chapter 4. and also Chapter 6. Where we analysed how Wai

Wai has not challenged Maggis authority to substantial extent even after Maggis ban. This

shows that Maggi has in past years has developed such a liking amongst the consumers that they

refrain from trying any other noodle brand available in India. Still Maggis ban has to some

extent contributed towards decrease in its market share due to which other brands gained sales.

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Objective 3was also achieved in chapter 4. Wherein we discussed how Maggi tried to regain its

market share after such a huge lump in its sales.

Objective 4 was achieved through Chapter 8. in which some suggestions are made to Wai Wai to

challenge the authority of Maggi and gain market leadership in the noodle industry.

45
 7. CONCLUSION

There has been no denying the fact that Maggi has become an inherent part of every household.

Especially in college hostels it is widely consumed. This implies that it would be a waste to try to

gain those consumers. So Wai Wai can create a new demand altogether in the market as it is a

differentiated product from Maggi. It can create demand amongst the young youth and as stated

before it is also consumed by older people.

These are the reasons for increase in the demand of noodles in India

Changing consumer lifestyles - Over the years, the change in consumers preferences and

eating habits, and their wider global exposure, along with an increasingly younger population,

the growth in the middle class, with more nuclear families, and the growing time-poverty (as a

result of the rise in the number of working couples) has given a boost to the convenience food

segment. As a result, the instant noodles market has charted a high growth trajectory thanks to its

availability, affordability, anytime-anywhere consumption and convenience, being a quick meal

requiring minimal cooking. Instant noodles have also emerged from being a snack food or an

occasional, alternate eating option to a mainstream food item of choice featuring regularly in

consumers grocery baskets.

Growing customer base - The emergence of instant noodles has added a new dimension to

consumers meals; noodles are being consumed not just by kids (who are the core target

audience) as an evening snack or a tiffin meal but by consumers across all age groups, as an

eating option beyond the mundane ones. While it continues to be a home snack, it is also

increasingly being consumed at workplace, colleges, etc. Geographically too, the appetite for

46
instant noodles is growing with players now eyeing the semi-urban and rural markets. The

categorys penetration is low in India (~20-25%), thus presenting a lucrative opportunity for

growth.

More options and variants: Players present in the space are innovating and adding value to

establish a unique brand proposition in the consumers mind. Some of the major developments in

this direction include:

Introduction of new flavors: To kindle the consumers interest in the category and also

cater to the diverse and changing tastes of the consumer, instant noodles brands

constantly enhance their product offerings by adding new flavors. In addition to the

classic Masala and Chicken flavors, a wide range of flavors including Indo-Chinese,

Chinese, tomato, etc. have been launched.

Growing focus on health: Despite their fondness for instant noodles, consumers in India

hold the notion that noodles are unhealthy, being made from maida which is seen as not

being as healthy as atta. To address this concern, brands are proactively introducing

healthy offerings as part of their product portfolio. Maggi and Top Ramen have their

atta noodles, while Horlicks Foodles was launched entirely on the health platform, with

the noodles made from wheat or multiple grains and including a vitamin-supplying

Health Maker. Additionally, HUL has also positioned its Knorr Soupy Noodles as a

healthy, fun-filled snack.

47
 More packaging variants: Brands have introduced packs in different sizes, right from

single noodle packs of 50-75 gm. to value eight noodle packs. Further, to increase the

categorys penetration, brands like Maggi and Wai Wai have extended product offerings

in an even smaller pack size, priced at INR 5.

Category extension from pouch to cup noodles: A vital development in the market was

the extension from pouch noodles to cup noodles that are ready-to-eat, on adding hot

water, unlike pouch noodles that require to be cooked. The driving factor here is that

convenience (the need for an on-the-go meal) is gaining in prominence in consumers

lives owing to the rise in a younger working population and a migrant population, the

increasing population of double income households with more working women, etc. Top

Ramen offers different flavors in cup noodles, mini cup noodles, and mug noodles.

Maggi and Wai Wai have extended to cup noodles as well.

Modern formats, which provide high product visibility and good product displays, are acting as a

good marketing platform for brands to promote their product offerings via consumer schemes

like price discounts, bundled offers, sampling for new launches, etc. However, about 80-90% of

instant noodles sales takes place through traditional formats (mom and pop stores), which is not

surprising since noodles are a regular grocery item. Thus players need to invest significantly in

distribution and establish a widespread retail reach and tap into a larger consumer base.

Therefore, distribution remains an important enabler for this category. Another key challenge for

players is to maintain price points and margins given the fluctuations in input costs. Usually, they

opt to reduce pack sizes, while keeping prices constant, to counter the challenge.

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In its journey of 28 years, the instant noodles market has undergone several changes, viz. the

entry of several new players, innovations in products and value-addition in packaging, the

emergence of modern formats, a shift in consumption towards convenience foods, etc. Going

forward, this market will continue to register a double-digit growth and will witness higher

competitive intensity. The strength of the distribution networks and media campaigns of the new

entrants has the potential to be a game-changer and may eventually cause Maggi to face some

serious competition, and perhaps even make this pioneering brand fight to defend its dominance.

This category is finally coming of age and promises to be an interesting space to watch in the

next few years.

49
 8. RECOMMENDATION

Here are some suggestions that might help Wai Wai to gain market leadership and challenge

the authority of Maggi in India

As Wai Wai has launched in India, it requires an altogether change in the packaging

according to the demands of the customers. Packaging plays a vital role in the

promotion and selling of a product. If the noodle is packed in a different way, it

would gain the attention of prospective buyers. We can change the packaging by

introducing variant colours as they attract people. Also we can at the back of the

packet provide recipes of different kinds. We can also allot a place for customersto

share their experience with Wai Wai. This would make the target segment relate with

the product and then eventually increase the sale of the product. Also the color of the

packaging would change with the flavours so that the buyers would be able to

differentiate between the varieties available.

As Wai Wai has already launched cup noodles, so has Maggi, so we can introduce a

fork with the cup for convenience and also provide different flavours in the cups as

we are offering in the packets.

We can also widen the target segment by introducing flavours such as no garlic no

onion. This would specifically cater to the needs of the prospective buyers who dont

eat garlic or onion. We can also introduce flavours like tomato, American onion,

Pudina flavour, jeera flavour etc. to increase the sales volume. This is a risky venture

as the sales wholly depend on the taste of the customers. After launching these

variants in the market, we can analyse their sales and produce accordingly. Also

50
 through this well get to know on which flavour more emphasis has to be laid. We can

also ask the customers suggestion on which new flavour they want in the market.
As Chaudhary group is planning to extend the brand, it can do so by introducing

Quick Service Restaurant segment and set up noodle bars across the country. This

would not only increase the sales but also develop a liking amongst the consumers.

The restaurants will have open kitchen, free Wi-fi facility and also affordable prices

of the meals so that people dont hesitate coming to the restaurant. It can use

franchise route for the same which would incur less expenditure. This would be an

attempt to bring brand Wai Wai closer to our consumers in a more tangible format.

The biggest strength of Wai Wai is its taste and we will be leveraging on it to offer

different dishes and flavours to consumers.

We can use ANSOFFS PRODUCT/MARKET EXPANSION GRID

Existing products New products

Existing markets Market Penetration Product development
(Upgrade existing variants of (Introduce new variants of Wai

Wai Wai) Wai)

New markets Market Development Diversification
(Finding new markets for (Launch totally new variants of

already existing variants of Wai Wai in totally new market)

Wai Wai)

To promote Wai Wai noodles as healthy ready to eat convenient food among mothers

and single working professions. It can act as a necessity also, as sometimes if both the

parents are working; the child can eat the noodles. If we are able to convince the

prospective buyers health, it would become a lot easier to sell the product in the

market. Also for health issues, Atta noodles can be emphasized upon. After the

51
 Maggi controversy, people have become more alert as they want safe and healthy

food. This is an opportunity for Wai Wai to ensure health and taste at the same time.
We need to enhance the distribution channel to increase accessibility of the product.

As stated above, the product is not easily available on the grocery store. A campaign

of anytime, anywhere anyhow should be focused on.

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 BIBLIOGRAPHY

http://www.cgfmcg.com/images/BrandEquity17Aug2016.pdf
http://www.financialexpress.com/industry/Maggi-noodles-caught-in-the-loop/85227/
https://issuu.com/saketraushan/docs/wai_wai_noodles
http://www.dnaindia.com/money/report-wai-wai-hungry-for-a-bigger-pie-cooks-a-

new-strategy-2240865
http://www.slideshare.net/PraneshSharma/43379925-Magginoodlesmarketingplan
https://prezi.com/nacuurrwk4i8/marketing-project-group-1/
http://www.rediff.com/money/2005/nov/15noodles.htm
http://nepalitimes.com/news.php?id=9196#.WIA8ARt97IU
http://www.cgfmcg.com/production_unit.php
http://www.business-standard.com/article/management/the-why-behind-wai-wai-

105111501012_1.html
http://www.slideshare.net/probikersagar/brand-study-Maggi
www.wikipedia.com
www.google.com
www.waiwai.in
https://www.nestle.in/aboutus/ask-nestle/answers/Maggi-noodles-india-msg-lead-

ban-recall

ANNEXURE

QUESTIONNAIRE

1. Do you know product Wai Wai?

o Yes
o No
o Maybe
2. What comes first to your mind when you hear the word noodles

53
 o Maggi
o Topramen
o Chings
o Yippie
o Wai Wai
o Nothing
3. Which size packets do you generally purchase?
o Mini
o Small
o Family packs
o Super saver packs
4. Are you a consumer of Wai Wai?
o Yes
o No
5. How frequently do you purchase Wai Wai noodles?
o Daily
o Weekly
o Fortnight
o Monthly
o Other
o Never
6. How did you come to know about the product?
o Mouth-to-mouth publicity
o Advertisement
o Billboard
o Other
7. Are you satisfied with the product?
o Yes
o No
o Maybe
8. Is it better than Maggi?
o Yes
o No
o Not sure
o Both are differentiated

54