A PROJECT REPORT

“CONSUMER BUYING BEHAVIOUR AND

BRAND LOYALTY TOWARDS NESTLE
MAGGI”

Submitted by: Name: Utkarsh Verma

Faculty Guide : Prof. Vasantha Laxami Program : Marketing
Batch : 14-16

Institute for Technology and Management

Plot No. 25 / 26, Institutional Area,

Sector – 4, Kharghar, Navi Mumbai

 DECLARATION

I,hereby declare that this Project Report titled “CONSUMER BUYING BEHAVIOUR AND
BRAND LOYALTY TOWARDS NESTLE MAGGI” submitted by me is a bonafide work
undertaken by me and has not been submitted to any other University or Institution for
the award of any degree diploma / certificate or published any time before.

(Signature of the Student) Date: 30 / 01 /2016

Name: Utkarsh Verma
Batch.: Marketing
 ACKNOWLEDGEMENT

Survey is an excellent tool for learning and exploration. No classroom routine can
substitute which is possible while working in real situations. Application of theoretical
knowledge to practical situations is the bonanzas of this survey.

Without a proper combination of inspection and perspiration, it’s not easy to achieve
anything. There is always a sense of gratitude, which we express to others for the help
and the needy services they render during the different phases of our lives. I too would
like to do it as I really wish to express my gratitude toward all those who have been helpful
to me directly or indirectly during the development of this project.

I would like to thank my Project Mentor Prof. Vasantha Laxami who was always there to
help and guide me when I needed help. Their perceptive criticism kept me working to
make this project more full proof. I am thankful to them for their encouraging and valuable
support. Working under them was an extremely knowledgeable and enriching experience
for me. I am very thankful to her for all the value addition and enhancement done to me.

No words can adequately express my overriding debt of gratitude to my parents whose

support helps me in all the way. Above all I shall thank my friends who constantly
encouraged and blessed me so as to enable me to do this work successfully.

Utkarsh Verma
Marketing 1 (14-16)
 EXECUTIVE SUMMARY

The project aims at understanding the consumer's commitment to repurchase and stay
loyal to the product that keep consuming for long stretch of time. Research has
demonstrated conclusively that it is far more costly to win a new customer than it is to
maintain an existing one. And there is no better way to retain a customer than to exceed
his expectations. For this purpose it is essential to know the level of customer satisfaction.

The focus of my research was the measurement of Brand loyalty towards Nestle Maggi
after the recent ban that it went through. There can be no better opportunity to interact
with the external as well as the internal customers of an organization. Brand loyalty is
more than simple repurchasing, however. Customers may repurchase a brand due to
situational constraints, a lack of viable alternatives, or out of convenience. Such loyalty
is referred to as "spurious loyalty". True brand loyalty exists when customers have a
high relative attitude toward the brand which is then exhibited through repurchase
behavior. This type of loyalty can be a great asset to the firm: customers are willing to
pay higher prices, they may cost less to serve, and can bring new customers to the firm.
For example, if Joe has brand loyalty to Company A he will purchase Company A's
products even if Company B's are cheaper and/or of a higher quality.

The Research findings focuses on understanding the buying behavior that consumer
has towards maggi after the recent ban in which the Maggi samples were tested at
Kolkata's referral laboratory and the test results showed that there are added
monosodium glutamate and excess of lead. This lead to ban of maggi in several states
of India. However, Maggi has been relaunched and various marketing measures are
taken by Nestle to regain its old Image and gain the brand loyalty that it had earlier.
 TABLE OF CONTENTS

1. Introduction

2. Maggi: India

3. Maggi: Timeline of Events

4. Maggi During the Ban

5. Product Life Cycle

6. Pricing & Product Development

7. STPD Analysis

8. SWOT Analysis

9. Consumer Decision Making Process

10. Objectives and Research Methodology

11. Limitations

12. Research Analysis

13. Findings & Suggestions

14. Conclusions

15. References

16. Questionnaire
 INTRODUCTION
NIL introduced the Maggi brand to Indian consumers when it launched Maggi 2 Minute
Noodles, an instant food product, in1982. At that time, Indian consumers were rather
conservative in their food habits, preferring to eat traditional Indian dishes rather than
canned or packaged food. In fact, NIL was trying to create an entirely new food
category, instant noodles, in India. Initially, the company targeted working women on
the premise that Maggi noodles were fast to cook and hence offered convenience.

However, this approach failed as was evident from the fact that the sales of Maggi
noodles were not picking up despite heavy media advertising. To get to the root of the
problem, NIL conducted a research, which revealed that it was children who liked the
taste of Maggi noodles and who were the largest consumers of the product. After this,
NIL shifted its focus from working women and targeted children and their mothers
through its marketing. NIL's promotions positioned the noodles as a 'convenience
product', for mothers and as a 'fun' product for children. The noodles' tagline, 'Fast to
Cook Good to Eat' was also in keeping with this positioning.

NIL aggressively promoted Maggi noodles through several schemes like distributing
free samples, giving gifts on the return of empty packs, etc. NIL's advertising too played
a great role in communicating the benefits of the product to target consumers.

Through its ads, NIL positioned Maggi as a 'fun' food for kids which mothers could
prepare easily. Taglines like 'Mummy, bhookh lagi hai' (Mom, I'm hungry), 'Bas 2-
Minute,' (Only 2 minutes) and 'Fast to Cook Good to Eat' effectively communicated the
product's benefits to target consumers.

These ads had become so popular that the tagline 'Bas 2-Minute' immediately reminded
Indian consumers of Maggi noodles even several years after the ads were taken off the
TV. Maggi's first product extension was Maggi instant soups launched in 1988. With the
launch of Maggi soups, NIL had become a pioneer in the organized packaged soup
market in India.
Product Profile

Type: Noodles

Industry: Food

Founded: 1890

Headquarter: Cham, Switzerland

About Nestle

• Nestle is a multinational packaged food company founded and head quartered in

Vevey, Switzerland

• It was set up in 1866

• NIL is the Indian Subsidiary of Nestle

Nestle Product Range

Candy and Chocolates Frozen Foods

Pet Food Specialty Items

Maggi Seasoning Maggi Taste of Asia

Ice cream Baking

Beverages Bottle of water

 • The Maggi brand originates from Switzerland where in 1863 Julius Maggi created
the beginning of the Maggi brand

• In 1947 Nestlé acquired the Maggi brand.

• The brand is popular in Australia, India, South Africa, Brazil, New Zealand,
Brunei, Malaysia, Singapore, Sri Lanka, Bangladesh, Fiji and the Philippines

• Maggi has launched different flavors in India: Maida, Atta, rice, multi grain,
tomato, and chicken.

• Maggi noodles is recognized as a genre for instant noodles product category.

Maggi Product Extension

 Maggi Ketchup

 Maggi Bhuna Masala

 Soups: Soups and Instant Noodles

 2 Minutes Noodles: Masala, Chicken, Rice, Atta, Multigrain

Maggi’s Mantras

 Promise of Quality, health and nutrition, easy to cook and tasty.

Brand Element

 Slogan: me and meri Maggi.

 Jingle: http://www.youtube.com/watch?v=5ZIDu9J3oz8

 Packaging: Yellow and Red pack

 URL: http://www.maggi.in/

Pre Requisite for Maggi

 Transferability: Maggi ketchup, Maggi soup, Maggi bhuna masala

 Adaptability: packaging has been changed over the period of time

 Memorable: 2 minute noodles

 Meaningful: name “Maggi noodles” can be easily related to the instant noodles
product category
  Likeability: most favorite snack, whole family snack

 Protected: ® sign could be found on the packets of Maggi noodles

Evaluation of Print Ads and TV Ads

 Fast to cook, good to eat: focused on educating customers about nutritional

value of Maggi, convenient in cooking, healthy product.

 Maggi 2 minute noodle: change in target market

 Taste bhi, health bhi: Maida isn't consider good for health, hence they came
with Atta and rice variant.

 Me and meri Maggi: emotional bondage with the customer. Earlier sharing
Maggi moments on the packet and now Big B narrates them on TV. (hostel,
lakhan, rakhi’s wedding)

 Facebook Page-
Twitter Page-

Youtube Page-
 MAGGI – INDIA:

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.
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 NOODLES TIMELINE OF EVENTS

9 November 2015

 Now that the orders of the Bombay High Court have been complied with, Nestlé
India has made MAGGI Noodles available for sale once again

4 November 2015

 All three NABL (National Accreditation Board for Testing and Calibration
Laboratories) accredited laboratories - mandated by the Bombay High Court –
find samples of the newly manufactured MAGGI Noodles to be safe for
consumption, with lead content well within permissible limits.

16 October 2015

 Test results from all three laboratories mandated by the Bombay High Court
show MAGGI Noodles to be safe, with lead content well within the permissible
limits.
 In compliance with the orders of the Bombay High Court, Nestlé India
commences manufacturing MAGGI Noodles and submits the new batches for
fresh tests to reconfirm they are safe for consumption.

13 August 2015

 The Bombay High Court overturns the government's ban on MAGGI Noodles,
arguing that the move was "arbitrary" and "that principles of natural justice were
not followed."
 The court rules that Nestlé India can bring the product back to the market if fresh
tests – conducted in three accredited laboratories on the existing samples and
subsequently on the freshly manufactured product– find the product safe.

11 August 2015

 The National Consumer Disputes Redressal Commission (NCDRC) files a class

action lawsuit against Nestlé India on behalf of Indian consumers.
 It asks for close to USD 100 million (INR Rs 639.95 crore) in damages on
grounds of "unfair trade practices, sale of defective goods and sale of goods to
the public by selling MAGGI Oats Noodles without product approval."

30 June 2015

 The Bombay High Court allows Nestlé India to continue exporting MAGGI
Noodles.
11 June 2015

 Nestlé India files a legal petition with the Bombay High Court, seeking a judicial
review of this order. As the case progresses the company cites a number of
arguments, including the following:
 The FSSAI order was passed without giving Nestlé a proper hearing
 The government laboratories that tested MAGGI Noodles for lead – on behalf of
the FSSAI and some Indian state FDAs (food and drug administration) - were not
accredited for lead testing.
 Tests by Nestlé and an independent accredited laboratory have found MAGGI
Noodles safe to eat
 Tests by food standards authorities in six countries – USA, Canada, UK,
Australia, New Zealand and Singapore – also found Indian-made MAGGI
Noodles safe for consumption.
 MAGGI oats Noodles was launched when the FSSAI 'Product Approval' system
was under suspension.
 While legal proceedings are ongoing, Nestlé continues to comply with the FSSAI
order and destroys over 35,000 tonnes of the product.

5 June 2015

 In light of growing consumer confusion, Nestlé India decides to temporarily stop

selling MAGGI Noodles in India until the situation with the authorities is resolved.
 Later in the day, the Food Safety and Standards Authority of India (FSSAI)
issues an order to Nestlé India which includes, among others, the:
 Recall of all nine variants of MAGGI Noodles from the market
 Halt of commercial activities related to the product, including sale and production
 Removal of the "No Added MSG" claim from product packs
 Withdrawal / recall of MAGGI oats Noodles as it did not have 'Product Approval'

April 2015

 The referral government laboratory in Kolkata says it has detected lead levels
above permissible limits and the presence of MSG in its sample of MAGGI
Noodles.
 Ensuing tests on MAGGI Noodles samples - representing 165 million packets -
by both Nestlé India's own accredited laboratories and independent accredited
laboratories show lead levels to be within the limits set by the Indian food safety
authorities.
  Nestlé India states that although it does not add MSG to MAGGI Noodles, the
product contains glutamate from hydrolysed groundnut protein, onion powder
and wheat flour, which can produce a positive result in a test for MSG.
 Nestlé India says it will remove the "No added MSG" claim on the pack –
although 'factually correct and not in violation of regulations'.

January 2015

 The second sample is received by the referral laboratory in January 2015.

 It is analysed from January 2015 to April 2015 – significantly after the product's
shelf-life.

March 2014

 Authorities in the State of Uttar Pradesh inform Nestlé India that MSG was
detected in a sample of MAGGI Noodles that carried a "No added MSG" claim on
the pack.
 Nestlé India states it does not add MSG to MAGGI Noodles and requests a
second sample to be sent to a referral government laboratory in Kolkata.

MAGGI During the Ban:

On June 5 this year, Nestle India's popular Maggi noodles went off the shelves after the
Food Safety and Standards Authority of India (FSSAI) imposed a ban, calling it “unsafe
and hazardous” for consumption. The ban was imposed after several laboratories found
the instant noodles contained huge quantities of taste enhancer monosodium glutamate
(MSG) and lead, way beyond the permissible limit. Maggi off the shelves: Stock worth
nearly Rs 320 crore was recalled from across the country by Nestle India after it was
banned by FSSAI.

Destroying the stock: After the ban was imposed pan-India, Nestle India was ordered
to not only take Maggi off the shelves, but to also destroy the stock, which included
30,000 tonnes-worth of instant noodles. Ambuja Cements was paid Rs 20 crore by
Nestle India, to burn the entire stock at its cement plant in Chandrapur in Maharashtra.

Fine: The Corporate Affairs Ministry imposed a nearly-Rs 640 crore fine on Nestle India,
in lieu of finding MSG and lead beyond the permissible limit in Maggi noodles. The
government filed a Rs 640-crore class action suit before the consumer forum National
Consumer Disputes Redressal Commission (NCDRC).
Out of this Rs 284.45 crore was sought in basic damages, and another Rs 355.5 crore
in punitive damages. However, the government had said that the penalty could go
higher as it was still calculating further damages to be sought.

Market share/ share price

Nestle India's nine variants of Maggi noodles accounts for nearly 70% of the instant
noodles market, which took a massive hit when a blanket ban was imposed on the
product.

After the ban was imposed on June 5, the company's share price tanked. On June 8,
three days after the pan-India ban was imposed, Nestle India's share price was down to
Rs 5,539.8, the lowest level it had seen all year.

Since then, the company's scrip has seen major volatility, regaining the highest level
since the ban at Rs 6,831.95 per share on August 5. On the date, Goa deputy chief
minister Francis D'Souza had said that he favoured the re-think on the Maggi ban after
the latest tests conducted by a central government laboratory in Karnataka found the
instant noodles safe for consumption.

Madhuri Dixit tweets on Maggi Ban and so did many other celebrities and loyal Maggie
customers-
However,The ban was set aside, Nestle India has started production at three of the
eight factories, and wants to start production at all the factories soon. "We have
resumed manufacturing of Maggi Noodles at three of our plants, at Nanjangud
(Karnataka), Moga (Punjab) and Bicholim (Goa)," said a Nestle India Spokesperson.

Jobs

Nestle India employs nearly 7,200 prople in India, across its eight plants. However,
according to this NDTV report, Nestle India had assured that it will not be cutting any
jobs despite the production halt of one of its biggest brands. The report said that
employees and factory workers were reassigned to other job roles during the ban.

However, according to this Indian Express report, the company's Moga plant that
employed 1,000 contract workers apart from the regular staff, had only about 200
people during the ban.

The job losses weren't limited to Nestle India. The contagion effect was felt throughout
the value chain, the IE report says. The Maggi ban's effect percolated to the company's
suppliers, spice manufacturers and providers, maida suppliers, loaders and truckers,
and so on.

Advertising

With the ban now kept aside and Maggi cleared for production, Nestle India is gearing
to relaunch the instant noodles. For this, the company has said that it will be advertising
aggressively, increased its spending on tv commericals.
During the ban, Nestle India had come up with a series of advertisements to the theme
#WeMissYoutoo

Currently Maggi is advertising the theme #NothinglikeMaggi to gain the lost customer
and create the popularity of its main product MAGGI noodles

#Maggilicious2016 was done during the new year time and it helped nestle gain its old
customers and create a positive image in the market.

Apart from this many heart touching commercial ad has come up which shows a strong
influence and comeback of maggi and also to gain the past Image the company is
adopting various measures to get back the Image that it once had.
 Brand loyalty
Brand loyalty, in marketing, consists of a consumer's commitment to repurchase or
otherwise continue using the brand and can be demonstrated by repeated buying of a
product or service or other positive behaviors such as word of mouth advocacy. Brand
loyalty is more than simple repurchasing, however. Customers may repurchase a brand
due to situational constraints, a lack of viable alternatives, or out of convenience. Such
loyalty is referred to as "spurious loyalty". True brand loyalty exists when customers
have a high relative attitude toward the brand which is then exhibited through
repurchase behavior. This type of loyalty can be a great asset to the firm: customers are
willing to pay higher prices, they may cost less to serve, and can bring new customers
to the firm. For example, if Joe has brand loyalty to Company A he will purchase
Company A's products even if Company B's are cheaper and/or of a higher quality. An
example of a major brand loyalty program that extended for several years and spread
worldwide is Pepsi Stuff. Perhaps the most significant contemporary example of brand
loyalty is the dedication that many Mac users show to the Apple company and its
products. From the point of view of many marketers, loyalty to the brand - in terms of
consumer usage - is a key factor:
Loyalty
A second dimension, however, is whether the customer is committed to the brand.
Philip Kotler, again, defines four patterns of behaviour:
1. Hardcore Loyals - who buy the brand all the time.
2. Softcore Loyals - loyal to two or three brands.
3. Shifting Loyalty - moving from one brand to another.
4. Switchers - with no loyalty (possibly 'deal-prone', constantly looking for bargains or
'vanity prone', looking for something different).

METHODS TO FIND BRAND LOYALTY: COLOMBO MORRISON MODEL:

Colombo and Morrison distinguished buyers in to two groups.
Hard-core loyals, who buy the same brand with absolute certainty at every single
purchase occasion.
Potential switchers, who choose at every purchase occasionally one of the brands
according to a certain probability distribution.
Therefore, the two important parameters of the model reflect a brand’s reliance on
highly loyal customers and its success in attracting brand switchers.
The first groups are those who have a positive attitude toward the brand (prefer it) and
who buy it. The second groups are those who buy it on a given purchase but who may
prefer another brand. An assumption of the model is that every consumer has a
preferred brand. If these consumers have a preference, why are they “switching?”
Although all consumers have a preferred brand, some preferences are stronger than
others. Weak preferences characterize potential switchers. Potential switchers may be
variety seekers; or, they may be responding to sales promotions or other situational
factors. By considering the relative preferences and purchases, the model computes an
ability of each brand to attract consumers from each other brand.
Share Tier Model: This model takes into account two parameters Price & Quality. This
model takes in to account two parameters Price & Quality. It tests the belief and checks
whether the beliefs are getting translated into Behaviour, i.e. actual purchase. It also
helps to find out the price level of price sensitivity that a particular brand has. This
model also helps in gauging the resilience and leveragability of the brand. Rational for
choosing Colombo Morrison Model: The category noodles we have chosen falls under
low level of involvement that means people’s chance of trying other brand is high.
Analyzing Colombo Morrison Model gives the reasons why people choose other brand
over preferred brand. This model helps to find out the problems existing in the brand.
PRICE PREMIA: It is the ability of the brand to charge the premium
METHODS TO FIND PRICE PREMIUM: Brand Price Trade off Method: BPTO is one
of the simplest to find relative value of the brand compared to competitors. In this
method different brands are shown to customers and they are asked to choose their
preferred brand at the same comparable price level. Then prices of the products are
revised and then the customers are asked to choose from the adjusted price level. The
ranking of the preferred can be inferred in relation to the prices customers can pay or
willing to pay.
Van Westerndrops Price Sensitivity Meter:: The method was developed in the 1970s
by Dutch economist Peter H. Van Westendorp. The Price Sensitivity Meter (PSM) is a
market technique for determining consumer price preferences.
The traditional PSM approach asks four price-related questions, which are then
evaluated as a series of four cumulative distributions.
 At what price would you consider the product to be so expensive that you would
not consider buying it? (Too expensive)
 At what price would you consider the product to be priced so low that you would
feel the quality couldn’t be very good? (Too cheap)
 At what price would you consider the product starting to get expensive, so that it
is not out of the question, but you would have to give some thought to buying it?
(Expensive/High Side)
 At what price would you consider the product to be a bargain—a great buy for the
money? (Cheap/Good Value)
Changes Made to Van westendorps price sensitivity Meter: As per the method the
questionnaire should be open ended. Open ended questions in this method works well
when the level of involvement for the product is high. Since, the category we have
chosen fall under low level of involvement, Closed end questionnaire gives better
results.
Rational for choosing Van westendorps price sensitivity Meter: This method gives
clear about how consumers perception about a product changes with the change in
price of the product.
Rational for not choosing Brand Price Trade-off Method: This method gives relative
value of a brand compared to its competitors. Since, Maggi has a market share of
around 90% and the rest of the brands sharing 10% market share, adopting this method
makes results skewed towards Maggi. In order get better results using this method we
have take more sample size for competitors.
DISTRIBUTION: The main advantage of Maggi over other brands is early mover
advantage & distribution network. Only few noodles brands like Maggi, Yuppie & Knorr
has good distribution network. But Yuppie & Knorr are still in the early growth stage.
Wai-Wai is present only in Eastern region & Top Ramen has entered tie-up with Marico
to tap other markets. Clearly Maggi has the advantage over other brands in terms of
availability.
PRODUCT LIFE CYCLE: Product life cycle is a tool that provides a way to trace the
stages of product’s acceptance from introduction to decline. The market share of Maggi
noodles is around 90%. The present market size of instant noodles is Rs 1300 crore
and is expected to grow around Rs 3000 – 3500 crore by 2015. But, increased
competition from Sunfeast Yuppie, HUL’s Knorr & other brands make hard for Maggi to
increase its market share.
 PRODUCT LIFE CYCLE (MAGGI NOODLES)

What is the brand name that comes to your mind when we talk about noodles?
Most of us would say Maggi. Maggi is a brand of instant noodles, ketchup, sauces etc
that originally came into existence in the year 1872 in Switzerland and was founded by
Nestle. This brand is extremely popular in Australia, New Zealand, India and many other
places.

INTRODUCTORY STAGE:

Nestle launched Maggi in India in the year 1982 with it’s 2 minutes instant noodles.
When Nestle launched this product there were a lot of ups and downs, with high failure
rates. Maggi, then had no competition and incurred high production cost. A lot of
research was also done in this stage which caused frequent modifications.

Growth Stage:

Around 1985, the demand for Maggi had increased tremendously in India. The entire
development cost was recovered and moreover it’s sale rates had also increased. In
1990 the demand for Maggi had dropped a little because of an introduction of a new
brand named Top Ramen. So in order to increase it’s sales Nestle formulated a new
flavour which wasn’t well accepted by it’s consumers. Thus in 1999, Nestle re-launched
the old flavour of Maggi, which in turn increased it’s sales.

Maturity Stage:

 During it’s maturity stage, Maggi’s sales were at peak,

 production costs were low

 Declining sales growth.

 Saturated market.

 Extending product line.

 Large promotional offers.

 Entrance of new players - During the period of 90’s MAGGI faces the
tough competition from TOP RAMEN.
  PRODUCT: MAGGI introduced wide variety of products like Dal atta
noodles, chicken maggi, maggi cuppa mania.

 PRICE: Maggi still comes in very affordable prices starting from Rs. 5,they
reduced the quantity instead of increasing price.

 DISTRIBUTION: Distribution become more intensive. Various intensive

programs for encouraging products over other competitors.

Declining Stage:

As we all know that Maggi is now banned in India due to it’s high lead content. Thus it is
going through it’s declining stage now. Nestle is conducting a lot of research and if they
come up with something new and better, then Maggi might be selling it’s products in the
future, or else after the declining stage, this brand would become history in India.

To overcome its declining stage, Nestle has come up with one of the largest recalls in
the history of Nestlé, and in the rest of the food industry. Recalling 27,420 tonnes of
MAGGI Noodles. Around 400 million packets of MAGGI Noodles are being destroyed.
 Pricing and Product Development
It was at this point in time that Nestlé decided to change the formulation of Maggi
noodles. The purpose was not only to infuse 'fresh life' into the brand, but also to save
money through this new formulation. The company used new noodle-processing
technology, so that it could air-dry instead of oil-fry the noodles. The tastemaker's
manufacturing process was also altered. As a result of the above initiatives, costs
reportedly came down by 12-14%. To cook the new product, consumers had to add two
cups of water instead of one-and-a-half cups. The taste of the noodles was significantly
different from what it used to be. The customer backlash that followed the launch of the
new noodles took Nestlé by surprise. With volumes declining and customer complaints
increasing, the company began to work on plans to relaunch 'old Maggi' to win back
customers. In addition, in 1998, Nestlé began working out a strategy to regain Maggi's
position in the soup segment. To counter the Knorr threat, the company relaunched
Maggi soups under the 'Maggi Rich' brand in May 1998. The soups were not only
thicker in consistency than those produced earlier, the pricing was also kept competitive
and the packaging was made much more attractive. However, Knorr took Nestlé by
surprise by launching one-serving soup sachets priced as low as Rs 4. HLL too
launched two-serving sachets of Kissan soup priced at Rs 7. As Maggi did not have any
offerings in this price-range, it lost a huge portion of its market share to Knorr.

The relaunch prompted market observers to compare Nestlé's move with US soft drinks
major Coca-Cola's 'New Coke' fiasco. However, the company disagreed, "It's a hard-5
nosed strategy, that mixes nostalgia with the consumer's voiced preference for the
product it has been bred and rought up on. The reintroduction is Nestlé's
acknowledgement of the loyalty of the Indian mother and the child to the original
product." By May 1999, Nestlé's decision to bring back the 'old Maggi' seemed to have
paid off. Two months after the relaunch, the monthly average sales of Maggi noodles n
the northern region rose 50% in comparison to the previous year. In July 1999, 'Maggi'
the brand, was promoted as the biggest brand in Nestlé's portfolio of brands in India,
overtaking brands such as Nestum and Cerelac. Nestlé believed that Maggi had
immense potential as it was a very 'flexible' brand under which regional variants could
be introduced to meet various market needs. Company sources claimed that with
reasonable price points and innovative products, Maggi could emerge as a top brand
and a major growth driver for the company. To further support the brand, Nestlé carried
out various promotional activities as well. These included the August 1999 'Fun-Dooz'
campaign and Jungle Jackpot campaigns. 6 As a result of the above initiatives, Nestlé
claimed to have cornered an 81% market share of the 20,000 tonnes noodles market by
the end of 1999. Nestlé sources claimed that Maggi noodles outsold the competition
four times over and that more than four Maggi noodle cakes were consumed every
second in the country.
 STPD ANALYSIS OF MAGGI BRAND
Segmentation: Market Segmentation divides the heterogenous market into
homogenous groups of customers who share a similar set of needs/wants and could be
satisfied by specific products. Maggi Brand have segmented the market on the basis of
lifestyle and habits of URBAN FAMILIES.

Target: Market Targeting refers to evaluating and deciding from amongst the various
alternatives, which segment can be satisfied best by the company. The Maggi Brand
have mainly targeted the Kids, Youth, Office Goers & Working Woman which falls into
the category of "convenience-savvy time misers" who would like to get something
instant and be over with it quickly.

Positioning: Market Positioning is the act of designing the company's offerings and
image to occupy a distinctive place in the minds of the target market. The goal of
positioning is to locate the brand in the minds of consumers to maximise the potential
benefit to the firm. Maggi has positioned itself in the SNACKS category and not in the
meal category since Indians do not consider noodles as a proper food item. Therefore
Maggi have developed its brand image of instant food products with positioning
statements such as "2 minutes noodles" and "Easy to cook, good to eat".

Differentiations: Points-of-difference (PODs) are attributes or benefits consumers

strongly associate with a brand, positively evaluate and believe they could not find to
the same extent with a competitive brand. The Maggi Brand have also differentiated its
brand image from its competitors in terms of taste, flavours and packaging. Maggi have
launched wide varieties of products in different flavours which can attract larger set of
customers. Maggi products are also available in different sizes catering to different
customer needs.
 SWOT ANALYSIS

Strength:
 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,
Chocolate,Infant foods
 Pioneer and Leader so 1st mover advantage in Noodles, Sauce, Ketchups and
Soupmarket.
 Nestle symbolization of warm, family & shelter.Research and Development
Division in India
 New Noodles Plant in Uttarnchal
Weakness:
 Generic Brand to Noodles in India
 Low rural market presence constraints
 Uniform Brand for all food category
 Brand Proliferation
Opportunities:
 Growing package and canned food market in India by 15% annually.
 High brand awareness of Indian consumer
 Other product category like Biscuits, Chips and Ready to Eat Market still
unexplored.
 Opportunity to be substitute to other snacks category of food products.
Threats:
 Competitors with long history in product category Internationally like, HeinzSauce
and ketchups of Heinz Indian, Top Ramen in Noodle and Knorr Soups.
 Single product focused competitors like Heinz sauce and Wai Wai Noodles.Less
Entry Barriers in the Market segment for product category
 ITC has strong base in Indian Market.
 Substitute Product to Product Segment.
 Consumer Decision Making Process: Maggi

Consumer Decision Making Process, this basic psychological process plays an

important role in understanding how consumers actually make their buying decision.
Marketers must understand every facet of consumer behaviour in terms of “who, what,
when, where, how and why”. Smart companies like MAGGI try to fully understand the
consumer’s buying decision process – all their experiences in learning, choosing and
using of the product.

Maggi has always considered the following steps:

Problem Recognition

This is the first stage of the Buying Decision where the buyer recognizes a problem or
need. The need can be triggered by internal or external stimuli which a marketer must
identify by gathering information from number of consumers. They can then develop
marketing strategies that trigger consumer interest.

Nestle after carefully analysing the market, identified the need for a quick snack in
India. They adopted the first mover strategy and launched Maggi in India in the year
1982 as an instant fast food.

Thereafter, Nestle recognized the consumer’s need for Maggi in different sizes and
introduced the 50gms, Double Pack and Super Saver Pack (s).

Later on in the years 2005 and then 2006, consumer’s need for a healthy instant
food was catered by launching Maggi Atta Noodles and Maggi Dal Noodles. These
again emerged as successful products and were widely accepted by masses.

Further to suffice the need for different taste, Maggi Rice Mania was brought in the
market in Shahi Pulao, Chilli Chao and Lemon Masala flavors.

Information Search

An aroused customer will be inclined to search for more information. At this level, a
person simply becomes more receptive to information about a product. There are four
major information sources which are of key interest to the marketer. These are the
personal sources (family, friends, and acquaintances), commercial sources (advertising,
websites, packaging and displays), public sources (mass media, consumer rating
organizations) and experiential sources (handling, examining and using the product).

MAGGI has over the years well established itself in the market and has now become a
household name. This has helped the brand gain popularity through word of mouth.
Maggi’s Mass Advertising Campaigns targeted consumers of all ages. Their
advertisements have highlighted that Maggi is a good alternative available with the
consumers when it comes to having a quick snack.

Evaluation of Alternative

Once all the consumers gather all the information he then evaluates the various option
available to him. When evaluating the potential alternatives, consumer uses two types
of information the first is the “list” of brands from which they plan to make their selection
and the second is the criteria from which they plan to make their decision.

Beliefs and Attitude: Evaluations often reflects beliefs and attitudes. And these are
acquired by experiences and learnings.

MAGGI has always provided its consumers with something new from time to time which
has developed a good belief in the brand and thus has helped them to choose them
from their other alternatives. Their competitors like top ramen always find it difficult on
the evaluation front with magi because of strong association of consumers with it.

Awareness set is

 Maggi

 Tom Ramen
  Wai Wai

 Cup of Noodles

 Chings

So out of the above awareness set the consumers decides to choose Maggi because
after analyzing the different parameters of the brand Maggi was chosen as the best
alternative among the rest leading to its maximum market share.

Purchase Decision

In the evaluation stage the consumer forms preferences among the brands in the choice
set, the consumer may also form an intention to buy the most preferred brand .In
executing a preferred intention the consumer takes up five sub decisions

 Brand

 Dealer

 Quantity

 Timing

 Payment Method

In some cases consumer may decide not to formerly evaluate each and every brand; in
other cases intervening factors may affect the final decision.

Because of the strong consumer awareness about the brand MAGGI, consumer
generally prefer Maggi out of all the available brands , due to the mass distribution
strategy adopted by Maggi, any consumer can easily purchase it from their local grocery
store without wasting much of his/her time in searching for the product , Maggi comes
in various sizes like single , double and the supersaver packs so depending upon each
individuals need Maggi is catering each and every segment of the society not to
mention that as the size increase the saving on each pack increases.

Post Purchase

After the purchase the consumer might experience dissonance that stems from noticing
certain disquieting features or hearing favorable things about other brands and will be
alert to information that supports his/her decision. Marketer must monitor
  Post Purchase Satisfaction

 Post Purchase Action

 Post Purchase Product Uses

Post Purchase Satisfaction

Satisfaction is a function of the closeness between expectations and the product’s

perceived performance, if performance falls short of expectations the consumer is
disappointed and if it meets the expectation the consumer is satisfied and if it exceeds
the expectations then the consumer is delighted.

Post Purchase Actions

Satisfaction or dissatisfaction with the product will influence subsequent behavior if the
consumer is satisfied he will exhibit a higher probability of purchasing the product again.
The satisfied customer will also tends to say good things about the brand to others,
marketers says “our best advertisement is the satisfied customer”.

Post Purchase Use

Marketer should also monitor how buyers use and dispose of the product. A key driver
of sales frequency is product consumption rate – the more quickly buyers consume a
product the sooner they may be back in the market to repurchase it.

Maggi managed to cater efficiently to the Indian market,since Indians are very
conservative and concerned as to where the spend their money,Nestle adopted the
marketing and promotional strategies which best suited the Indian Market.
 OBJECTIVES & RESEARCH METHODOLOGY

Qualitative method will be used in the study. Qualitative method strives on understanding
data through giving emphasis on determining people words and actions.

TITLE OF THE PROJECT

 A study on consumer buying behavior and brand loyalty towards Maggi Noodles
in Navi Mumbai Region.

OBJECTIVE

 To understand the stimulus of Maggi Noodles as a brand on consumer mind set.

 To understand the Brand loyalty of Maggi Noodles.

 To understand the effectiveness of advertisement of Maggi Noodles to better its

image after the ban got uplifted.

 To understand the perception of the people about Maggi.

 Also to identifying the outliers causing decline in the customer satisfaction

Research Design

 In this project we will use descriptive research design

Research Methodology

 Primary data collection via questionnaire let alone online survey.

 Secondary data collection via internet

 Target population :- people in the age group of 18-50 years residing in Navi
Mumbai Region

 Sample size: - 50 people (approx.)

In this project with the help of advance descriptive statistics as well as with the help of
Loyalty Index, we will understand the consumption pattern and brand loyalty towards
Maggi noodles in Navi Mumbai. This report will also help as to find out the outliers as
well as non-value adding activities leading to decline in demand of the product and
acceptance of competitors by consumer.
 LIMITATION OF THE REPORT

Every attempt will be taken to obtain the error free and meaningful result but as nothing
in this world is 100% perfect I believe that there will still the chance for error on account
of following limitations-

(1) Respondent’s unavailability.

(2) Time pressure and fatigue on the part of respondents and interviewer.

(3) Courtesy bias.

(4) The project undertaken needs a lot of secondary data so the availability and precision
of this data forms the major limitation as the biasness has to be minimized.

(5) The results and conclusions of the project cannot be generalized in all area of an
organization.

(6) There was a shortage of time and resources for the functioning the operation.

(7) The data in this study is maximum taken from the primary sources .so, these data is
not fully exact.

(8) There was a hurdle in the collection of data from primary sources i.e. risky as well as
incomplete.
Research Analysis

Part A
Brand Loyalty Index: BLI is a competitive benchmarking tool that identifies the strength
of a brand. It is broadly classified into two types.

INTERNAL FACTORS: Internal factors are broadly classified in to four types. We are
relying on the secondary data for measuring these four factors, because consumers are
not aware/concerned about the internal factors of a brand & Internal factors are
maintained in secrecy by a company.The four factors are:

1. CLARITY: Its about what the brand stands for in terms of its values,
positioning proposition, audiences, customer insights & drivers. We
assign Maggi a score of 9 in this aspect because without these values
articulated internally and shared in the organization it is not possible for a
brand to be the leader in the category consequentially over the years.
2. COMMITMENT: It is the extent to which the brand receives the support in
terms of time, influence & Investment. We assign Maggi a score of 10 in
this aspect the reasons are Brand extension for other category of products
that shows company’s interest in the brand. Brand Campaign’s such as “2
Min mein khushiyan movement” & other advertisements shows company’s
time & Investment in the brand.
3. PROTECTION: It is how secured brand in dimensions such as legal
protection, propriety ingredients, scale or geographical spread. We assign
Maggi a score of 8 in this aspect. The reason is that The category itself
doesn’t have legal protection because the products across the brand are
easily replicable.When it comes to scale & geographical spread Maggi has
early mover advantage and a strong distribution channel and presence of
over 4.1 million outlets.
4. RESPONSIVENESS: It is the ability of the brand to respond to market
changes, challenges & opportunities. The brand should have a sense of
leadership internally & a desire and ability to constantly evolve & renew
itself. We assign Maggi a score of 9 in this aspect. The reason are
Introduced new products like Maggi Atta noodles, Veg multigrain noodles
in response to the competition.
 EXTERNAL FACTORS: It is mainly dependent on how consumers perceive the
brand. The ratings for the external factors are calculated based on our questionnaire.

1. Gender
Male Female

2. Age Group
O Under 18
O 18 – 24
O 25 and above

Loyalty: The following questions were asked to understand the customer loyalty
towards the brand or the product. We assign maggi 9 on terms of loyalty based
on the responses of the survey.
 3. What was your consumption frequency before Maggi Noodles was banned?

45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Zero in a Once a Twice a Thrice a Four times Five times
Week Week Week week a week a week

Consumtion Behaviour:
40% of the sample consumed Maggi Noodles at least once a week, 29% of
sample consumed twice a week, the remaining were less than 10% who
consumed it more than thrice a week. 10% of the sample was found to consume
less than a week, when questioned some of them denied the consumption totally
and the remaining said to have less frequently may be once or twice a month.
The youth are heavily addicted to Maggi Noodles but due to the recent ban there
has been a diminishing change in the consumption pattern of maggi noodles.

DIFFERENCIATION: This component measures how distinct the brand is from the
competition. Differentiation is the one that helps the brand to charge premium.

For measuring the differentiation of Maggi following question was asked

4. Did you consume any other Noodles other than maggi after the ban?
 no

yes

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%

56% of the sample consumed Noodles even after it was banned this shows the
level of addiction towards noodles, while the remaining 44% did not consume as
a few respondents said it was not available in the market and they missed maggi
more than any other noodles in the market.
This shows that there was a demand for maggi noodles even after the availability
of substitutes in the market.
The Spuriously loyal maggi consumers had to switch to other substitute noodle
only because its unavailability in the market.

PRESENCE: The degree to which a brand feels omnipresent and is talked about
positively by consumers, customers and opinion formers in both traditional and
social media.
The following questions were asked to find the presence of the Maggi
5. Do you now trust Nestle as a Brand?

No

Yes

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

After the increased levels of lead content found and coming clean after taking so
many remedial measures, 91.7% of the sample seem to have gain back the trust
on Nestle, where as 8.3% of respondents still don’t trust nestle as a brand.
Hence,Nestle should work to build up its brand and trust amongst the public to
keep its sales intact and continue its operations in keeping the primary goal to
 achieve maximum consumer satisfaction and regain the same Brand Image that
it once had.

UNDERSTANDING: This component in depth understanding of the distinctive

qualities and characteristics of the brand and those of the company.
6. Do you consume other products offered by Nestle?

No

Yes

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

91.7% of the sample size consumed other products that were offered by Nestle,
thus the ban on maggi noodles did not affect the sale of nestle`s other products.
Even after ban on Maggi Nestlé’s share have been rising. The reasons behind
this could be the clearance of tests in Singapore, UK, Canada, and other Indian-
made Maggi importing countries. Also market sees Maggi as a different brand
from nestle which is not expected to have an effect on Nestlé’s other products.
We assign a score of 8.

7. Would you prefer Maggi Noodles for the children?

No

Yes

40.00% 42.00% 44.00% 46.00% 48.00% 50.00% 52.00% 54.00% 56.00%

55% of the youth agreed that Maggi Noodles should be preferred for the children
whereas 45% of the youth denied preferring it for the children. Looking into the future
Nestle might face change in the sales of maggi noodles.

SAFETY: This components states how safe the brand and its focused products are.
The following questions are based on this component.

8. How will you rate Maggi Noodles on Health Safety?

50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Very Safe Safe Affects little Very Unsafe

Only 8% of the youth said Maggi Noodles was very safe for consumption, 48% said it
was safe, 35% said it affects little and 8% declared as it was very unsafe. Of the above
results we can state that half of sample have started consuming maggi noodles and
have considered it safe for consumption whereas the remaining are still feel that maggi
affects health.

9. Do you prefer Maggi Noodles after it is re-launched with approval of FSSAI?

22%

78%

Yes No
 78% of the youth said they are consuming Maggi Noodles after the re-launch,
whereas 22% of the youth denied consuming after the re-launch.

CONSISTENCY: This measures the degree to which a brand is experienced without fail
across all touch points and formats.

The following question is was asked to find the consistency of the brand

10. What is your Frequency of consuming Maggi after its relaunch?

Increased Remain the Same Decreased

6% of the youth said that the consumption frequency increased, 43% said its
consumption frequency decreased and the remaining 51% stated that it remains the
same. Thus more than 50% of the youth still favor Maggi after the Re-Launch.

Further it can be stated that it is the loyal customers of Maggi who helped it
survive through the hardships that the Nestle Maggi went through,the ban,impact in
sales,loss of customers etc.

Brand Loyalty Index:

Attribute Score
Clarity 9
Commitment 10
 Protection 8
Responsiveness 9
Loyalty 9
Differentitation 8
Safety 7
Presence 8
Understanding 7
Consistency 6
TOTAL 81
Maggie scored a 81 on Loyalty Index.
FINDINGS & SUGGESTIONS
FINDINGS

 56% of the youth consumed Maggi Noodles after the government banned it,
 91% of the youth still trust Nestle as a Brand,
 79% of the youth are now aware Maggi Noodles is safe to eat,
 45% of the youth still do not prefer Maggi Noodles for children,
 Two Third of the sample is still rate Maggi Noodles as unsafe,
 78% of the youth accepted consuming Maggi Noodles after its re-launch,
 More than 50% of the youth favours Maggi Noodles after it is Re-Launched.
SUGGESTIONS

 Maggi Noodles should double check the stock and get approved from experts
before sending the stocks to the market,
 Create an urge in the youth through advertisements and re-creating the old
memories through commercial ads and campaigns,
 Increase in the Marketing Campaigns will pick up the sales and gain the lost
consumers,
 Sales with Re-Launch Offers and F.A.Q about Maggi attached to the packet.
 Conduct Group Discussions in the top institutes of Management in India to create
awareness.
 CONCLUSION

Nestle will have to work hard to build up the faith among the people that it once used to
had though Nestlé India has conducted over 3,500 tests, representing over 200 million
packs, in both national as well as international accredited laboratories and all reports
are clear. In addition to these, various countries including USA, UK, Singapore,
Australia and others have found Maggi noodles manufactured in India safe for
consumption.

In India Nestle were asked by the regulator to recall the product and they stopped
selling it. In fact, before the order was issued, Nestlé India had announced it had
stopped selling MAGGI Noodles. This is because concerns about the product led to
confusion for the consumer to such an extent that Nestlé India felt it was necessary to
take the product out of the market while we engage closely with the regulators and
others to discuss the situation. They Further have received test results from all three
laboratories mandated by the Hon’ble Bombay High Court to test MAGGI Noodles
samples. All the 90 samples, covering 6 variants, tested by these laboratories are clear
with lead much below the permissible limits.

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, and it is evident by the emphasis it led on rebuilding
trust and consumer confidence at Bulcke’s press meet on June 16, 2015.
 REFERENCES
1. Retrieved from https://www.nestle.in/aboutus/ask-nestle/answers/maggi-noodles-
india-msg-lead-ban-recall

2. Retrieved from http://www.hindustantimes.com/india-news/maggi-noodles-in-soup-

everything-you-need-to-know-about-thecontroversy/article1-1354268.aspx

3. Retrieved from http://www.ukessays.com/essays/marketing/maggi-noodles-is-

manufactured-by-nestle-marketingessay.php#ixzz3jExPpVhB

4. Retrieved from http://www.hindustantimes.com/india-news/maggi-noodles-in-soup-

everything-you-need-to-know-about-the...

5. Retrieved from https://twitter.com/ngosindia

6. www.nestle.com

7. http://www.maggi.in/

8. www.facebook.com

9. Marketing Management: Philip Kotler

 QUESTIONNAIRE

Consumer Buying Behaviour towards Maggi

This Questionnaire is to ascertain the Acceptance and consumption pattern of Maggi Noodles after the recent
ban.

What was your consumption frequency before Maggi Noodles was banned?

On an average weekly consumtion.

o Zero in a Week
o Once a Week
o Twice a Week
o Thrice a week
o Four times a week
o Five times a week
 Did you consume Maggi Noodles after the ban?

o yes
o no
Do you now trust Nestle as a Brand?

Do you consume other products offered by Nestle?

atta noodles, Soup or any other packaged food by Nestle

Would you prefer Maggi Noodles for the children?

How will you rate Maggi Noodles on Health Safety?

o Very Safe
o Safe
o Affects little
o Very Unsafe
Do you prefer Maggi Noodles after it is re-launched with approval of FSSAI?

o Yes
o No
What is your Frequency of consuming Maggi after its relaunch?

o Increased
o Remain the Same
o Decreased
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