“CONSUMER BUYING BEHAVIOUR AND BRAND

LOYALTY TOWARDS NESTLE MAGGI”

A Dissertation
Submitted in partial fulfilment
Of the requirement for
The award of degree

“MASTER OF BUSINESS ADMINISTRATION”

2017-2019

GUIDED BY: SUBMITTED BY:

Dr. A K Das Mohapatra Prativa Majhi
(Professor) Roll No- 1417MBA39
Deptt. Of Business Administation
Sambalpur University

DEPARTMENT OF BUSINESS ADMINISTRATION

SAMPALPUR UNIVERSITY
JYOTI VIHAR, BURLA, PIN-768019
 DECLARATION

I hereby declare that this project work entitled “CONSUMER BUYING BEHAVIOUR
AND BRAND LOYALTY TOWARDS NESTLE MAGGI” carried out under the

guidance of organization guide Dr. A K Das Mohapatra. This report is

exclusively prepared and conceptualized by me in partial fulfilment of the
requirement for the award of degree “Master of Business Administration” and is
not submitted to this institution or any other institution or published anywhere
before.

Place:- PRATIVA MAJHI

Date:- ROLL-NO:-1417MBA39
Dr. A K Das Mohaptra
Professor
P.G. Department of Business Administration
Sambalpur University, Odisha-768019
Email:

CERTIFICATE

This is to certify that Prativa Majhi bearing roll number 1417MBA39 a student
of MBA 4th semester of the P.G Department of Business Administration,
Sambalpur University has undergone her dissertation Work entitled
“CONSUMER BUYING BEHAVIOUR AND BRAND LOYALTY
TOWARDS NESTLE MAGGI” under my super-vision and guidance. The
dissertation is original to the best of my knowledge and belief. I recommend the
Dissertation for Evaluation.

(A K Das Mohapatra)
Professor
Dept. of Business Administration
Sambalpur University
 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. A K DAS MOHAPATRA 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.

PRATIVA MAJHI
 PREFACE
Dissertation aims at imparting an in-depth knowledge on the specified topic.
On completion of the study, a project is prepared on the topic chosen depending
upon one’s specialization area. Thus, this study report is a part of the study of
MBA curriculum. The importance of study lies in the fact that, it facilitates the
student to remain close to the practical situations and enable them to study various
functional areas related to the topic studied and worked.
The dissertation work enables the student to acquire an in-depth knowledge
about various aspects on the subject of their interest as it applies to practical
situations in the current business environment. The student, in course of their
dissertation work, gets an avenue to learn more practically, the intricacies of
different situations, which helps him / her to groom as a successful professional
manager.
In this research work, an effort has been made know the food shopping
behaviour of children in retail store During the course of Study, care has been
taken to compile relevant data relating to this project from different sources,
interaction with the concerned guide & interpret various aspects of the topic
closely and other related aspects.
 TABLE OF CONTENTS

CHAPTER 1 Introduction

1.1 Introduction
1.2 Objectives
1.3 Research Design
1.4 Research Methodology
CHAPTER 2 Review of Literature

CHAPTER 3 Company Profile

3.1 Noodles Industry Profile
3.1.1 Trends in India Noodles Market
3.2 Company Profile about Nestle
3.2.1 History
3.3 About Maggie
3.3.1 Product of Maggie
3.3.2 Maggie-India
3.3.3 Timeline of events
3.3.4 Maggie during ban
CHAPTER 4 Consumer Decision Making Process about Maggie

CHAPTER 5 Analysis and interpretation

CHAPTER 6 Findings

Suggestion

Conclusion

Annexture
 LIST OF TABLES

Page no.

TABLE 1

Gender

TABLE 2

Age group

TABLE 3

Aware of Maggie

TABLE 4

Consumption of Maggie before ban

TABLE 5

Consume any other noodkes other than Maggie after

the ban

TABLLE 6

Trust nestle as a Brand

TABLE 7

Consume other products offered by nestle.

TABLE 8

Do you prefer Maggie noodles for the children

TABLE 9

Rate Maggie noodles on health safety

TABLE 10
Prefer Maggie noodles after re-launched

TABLE 11

Frequency of consuming Maggie after its re-launch

CHI SQUARE:

HYPOTHESIS 1

Age relationship with awareness.

HYPOPTHESIS 2

Consumption of Maggie relationship with age

category.

HYPOTHESIS 3

Consumption with Maggie relationship with Gender

basis.
 CHAPTER 1
INTRODUCTION
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.
1.2 OBJECTIVES

 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 study the consumer behavior and their satisfaction towards the products of nestle.
 To analyze the factor influencing the buyer decision of the consumers.
1.3 RESEARCH DESGIN
 In this project we will use descriptive research design

1.4 RESERCH 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 jharsuguda
 Sample size: - 80 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
jharsuguda. 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.

1.5. SCOPE OF THE STUDY

 The main purpose of this project is to study consumers buying behaviour and brand
loyalty towards nestle Maggie.
 This study is mainly focused on various factors that affect consumers buying decision.
Such as social, psychological and personal.
 The survey was conducted among different groups and all possible local areas in
jharsuguda were considered for the study. The sample size was of 80 people who
 included people from various age groups. The data was collected through filling of
questionnaire and interview.
 The survey helped in understanding the various factors that influenced the buying
decisions of the customers.
 This study helps to understand the satisfactory level of consumers towards the brand.
 This study helps in understanding the consumer attitudes and their buying motives by
means of company brand image.

1.6. LIMITATION

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.
 CHAPTER 2

REVIEW OF LITERATURE
The topic of consumer behaviour is one of the massively studied topics by the researchers and
marketers in the past and still being studied. Researchers show different reasons as to why
consumer behaviour has been the topic of many academics and researchers. One of the common
views is that understanding consumer behaviour has become a factor that has a direct impact on
the overall performance of the businesses (Kotler and Keller, 2012). Another view suggests that
understanding consumer behaviour has become crucial especially due to fierce competition in
retail industry in the UK and worldwide (Lancaster et al, 2002). This chapter will introduce some
other areas of research background of consumer behaviour addressing the works
of researchers and marketers. Moreover, consumer decision making process, in particular, five
stages of consumer decision making process will be discussed in detail.

Psychologists have long been interested in the topics of buying and shopping behaviour. Some
major perspectives in psychology such as behaviourism and cognitive have formulated different
theories to explain buying motivation and behaviour. The behaviourists stress the process of
operant conditioning and individuals history of reinforcement, while the cognitive approach puts
its accent on individuals free will and intentional, voluntary action. The views of these two
perspectives can be examined in terms of the nature of buying behaviour and the process of
choice. With regard to the nature of buying behaviour, the behaviourists consider it as a response
to a reinforce. One of the famous behaviourists, Alhadeff (1982) represents buying behaviour as
the outcome of the relative strengths of conflicting approach and escape behaviours, each of
which is determined by its own reinforcers. Etc. On the other hand, the cognitive perspective
views buying behaviour as more voluntary, rational and intentional in nature rather than mere
response to the environment. People buy what they want to buy and their reasons for buying
embrace "whatever consideration induced, inclined, weighed with or decided them to buy"
(Beck, 1975). Etc. Based on their different conception about the nature of buying behaviour, the
behaviourist and the cognitive theorists have different views on the process of choice when
buying. The behaviourists propose that consumer choice begins with an external stimulus such as
an advertising message or word-of-mouth communication. Etc. However, the cognitive
psychologists adopt a different approach to explain the process of choice. They consider the
choice of buying as a rule-following behaviour Etc. To the behaviourists, therefore, choice of
buying is simply a behaviour, the only way of acting in a given set of circumstances defined in
terms of controlling contingencies. On the other hand, the cognitive theorists present choice of
buying as an outcome of internal, mental deliberation and psychological decision. Actually,
although the behaviourists and the cognitive theorists have different ideas of the content of
choice, they do share similar view on the unconscious feature of choice (rather involuntary
response to discriminative stimulus and the following of rules).
 CHAPTER 3
COMPANY PROFILE
3.1 NOODLES INDUSTRY PROFILE

Indian noodles market (instant noodles) is estimated at INR 1,300 to 1,600 crores (USD 300
USD 350 mn) in 2010. According to estimates, the market is expected to reach INR 3,000 -
3,500crore by 2015 clocking a CAGR of 20%.The market is dominated by instant noodles and
nestle’s brand – Maggi (which was first noodle brand to be introduced in india in mid 1980s).
Nestle has virtually dominated the Indian noodle market till now but lately many large FMGG
players and retail chains have launched their product in this lucrative space. Urbanization , rising
income levels , working couples, interstate migration and changing lifestyle of young India are
key drivers for the noodles market . The product was positioned as meal which is filling and can
be prepared in just a few minutes , thus offering both convenience and time saving.

3.1.1 TRENDS IN INDIA NOODLE MARKET

1.Increasing competition :competition in instant noodle category has intensified with players
such as Glaxo Smith Kline(Horlicks foodles), ITC (sunfeast Yippee noodles ) , capital foods and
Hindustan Unilever launching new product in the market .Private label brands such as Tasty
Treat by Future Group (Big Baazar retail chain ) have also been launched an it is expected that
many more private label brands may hit the market .

2.New product launches and extensive marketing :All players new or old have been busy
launching new products and marketing campaigns . Maggi has Launched an extensive campaign
with their new product vegetable multigrain noodles. Tasty Treat increased its variants from two
to five . Similarly, foodles is stressing on the health aspect of its products.

3.Stress on health and wellness :As on all other food categories, players are stressing on health
and wellness aspects of their products . Maggi launched Atta noodles and multigrain noodles to
customers while Glaxo’s Foodles also stresses on the multigrain aspect of their product.

4.Traditional flavours still dominate: Masala , chicken and tomato are most popular flavours in
the market

5.Addressing rural market: Noodles are primarily consumed in urban India and to expand this
market companies such as Nestle have introduced small sized and low cost products to address
the demand of rural market . The success of this effort is still to be seen.

3.2 COMPANY PROFILE

3.2.1 COMPANY PROFILE NESTLE

Our history begins in 1866, with the foundation of the Anglo-Swiss Condensed Milk Company.
Henri Nestlé develops a breakthrough infant food in 1867, and in 1905 the company he founded
merges with Anglo-Swiss, to form what is now known as the Nestlé Group. During this period
cities grow and railways and steamships bring down commodity costs, spurring international
trade in consumer goods.

3.2.2 HISTORY
1866
US brothers Charles and George Page help establish Anglo-Swiss Condensed Milk Company. Using
abundant supplies of fresh milk in Switzerland, they apply knowledge gained in their homeland to
establish Europe’s first production facility for condensed milk in Cham. They start supplying Europe’s
industrial towns with the product under the Milkmaid brand, marketing it as a safe, long-life alternative to
fresh milk.

1867
Nestlé’s founder, German-born pharmacist Henri Nestlé, launches his ‘farine lactée’ (‘flour with
milk’) in Vevey, Switzerland. It combines cow’s milk, wheat flour and sugar, and Nestlé
develops it for consumption by infants who cannot be breastfed, to tackle high mortality rates.
Around this time he starts using the now iconic ‘Nest’ logo.
1875
Henri Nestlé sells his company and factory in Vevey to three local businessmen. They employ
chemists and skilled workers to help expand production and sales.
1878
Fierce competition develops between Nestlé and Anglo-Swiss, when both companies start selling
rival versions of the other’s original products: condensed milk and infant cereal. Both firms
expand sales and production abroad.

1882-1902
In 1882 Anglo-Swiss expands into the US, but the death of George Page frustrates its plans. In
1902 it sells its US-based operations, which paves the way for an eventual merger with Nestlé.

1904
Nestlé begins selling chocolate for the first time when it takes over export sales for Peter &
Kohler. The Nestlé company also plays a role in the development of milk chocolate from 1875,
when it supplies his Vevey neighbour Daniel Peter with condensed milk, which Peter uses to
develop the first such commercial product in the 1880s.

1905
Nestlé & Anglo Swiss has more than 20 factories, and starts using overseas subsidiaries to
establish a sales network that spans Africa, Asia, Latin America and Australia. As World War
One approaches, the firm benefits from the period of prosperity known as the Belle Époque or
‘Beautiful Age’, and becomes a global dairy company.

1914
War breaks out across Europe and disrupts production for the company, but hostilities also drive
demand for Nestlé dairy products, in the form of large government contracts

1915
Condensed milk is long-lasting and easy to transport, which makes it popular with armed forces.
For example, in 1915 the British Army starts issuing Nestlé canned milk to soldiers in their
emergency rations. Strong demand for the product means that the company’s milk refineries are
working flat out.
1916
Nestlé & Anglo-Swiss acquires Norwegian dairy company Egron, which has patented a spray-
drying process for producing milk powder – a product its new owner starts selling.

1921-1922
Falling prices and high stock levels lead to the first, and only ever, financial loss for Nestlé &
Anglo-Swiss in 1921. Banker Louis Dapples joins as Crisis Manager, and encourages the
company to appoint professional managers for the first time. Administration is centralised, and
research is consolidated at one laboratory in Vevey, Switzerland.

1929
The company buys Switzerland’s largest chocolate company Peter-Cailler-Kohler, the origins of
which date back to 1819 when François Louis Cailler creates one of the country’s first chocolate
brands Cailler. Chocolate now becomes an integral part of the Nestlé & Anglo-Swiss business.

1938
Nescafé is launched as a ‘powdered extract of pure coffee’ that retains coffee’s natural flavour,
but can be prepared by simply adding hot water. The product is the brainchild of Max
Mergenthaler, who begins work on it in 1929, when the Brazilian government asks Nestlé &
Anglo-Swiss to find an outlet for its huge coffee surplus.

The outbreak of World War Two in 1939 affects virtually every market, but Nestlé & Anglo-
Swiss continues to operate in difficult circumstances, supplying both civilians and armed forces.

1947

The company adds Maggi soups and seasonings to its product range, and adopts the name
Nestlé Alimentana.

1960-1980

Acquisitions enable Nestlé to enter fast-growing new areas such as frozen foods, and to expand
its traditional businesses in milk, coffee and canned foods. In the 1970s the company diversifies
into pharmaceuticals and cosmetics. It starts to attract criticism from activist groups that allege
its marketing of infant food is unethical. Nestlé later becomes one the first companies to apply
the WHO code on breast-milk substitutes across its business.

1981-2005

Towards Nutrition, Health and Wellness Following years of growth, Nestlé disposes of
unprofitable brands and promotes those that satisfy increasingly health conscious consumers, in
line with its new ‘Nutrition, Health and Wellness’ ambition. The company expands in the US,
Eastern Europe and Asia, and targets for global leadership in water, ice cream and animal food.

2006-TODAY

Nestlé articulates its Creating Shared Value approach to business for the first time, and launches
its Nestlé Cocoa Plan and Nescafé Plan to further develop sustainable supply chains in cocoa and
coffee. While strengthening its position in traditional segments, infant formula and frozen foods,
Nestlé strengthens its focus on medical nutrition

3.3 ABOUT MAGGIE:

Maggi is an international brand of seasonings, instant soups, and noodles that originated in
Switzerland in late 19th century. The Maggi Company was acquired by Nestlé in 1947.

The company originated in Switzerland in 1884, when Julius Maggi took over his father's mill.
He quickly became a pioneer of industrial food production, aiming to improve the nutritional
intake of worker families. Maggi was the first to bring protein-rich legume meals to the market,
and followed up with a ready-made soup based on legume meals in 1886. After that Julius Maggi
introduced bouillon concentrates, first in capsules, then in cubes. In 1897, Julius Maggi founded
the company Maggi GmbH in Singen, Germany.

In 1947, following several changes in ownership and corporate structure, Maggi's holding
company merged with the Nestlé company to form Nestlé-Alimentana S.A. currently known in
its francophone home base as Nestlé S.A.
3.3.1 Products of Maggi

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.
 Packaging: Yellow and Red pack.

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)

3.3.2 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.

3.3.3 MAGGI NOODLES TIMELINE OF EVENTS

3 June2015

 The New Delhi Government banned the sale of Maggi in New Delhi stores for 15 days
due to these findings First Information Reports (FIRs) against Bollywood Maggi Brand
Ambassadors Amitabh Bachchan, Madhuri Dixit, and Preity Zinta were lodged by Sudhir
Kumar Ojha, a lawyer, at Muzaffarpur district court, asking the authorities to arrest them
if required. He complained that he fell sick after eating Maggi which he had purchased
from a shop at Lenin Chowk on 30 May.

4 June 2015

 The Gujarat FDA banned the noodles for 30 days after 27 out of 39 samples were
detected with objectionable levels of metallic lead, among other things, and Assam
banned sale, distribution, and storage of Maggi's "extra delicious chicken noodles"
variety for 30 days after tests carried out at the state public health laboratory concluded
that the particular variety contained added an excessively high amount of lead. On June 4,
2015 the government of Tamil Nadu banned Maggi foods due to an unacceptable amount
of lead and other components.

5 June 2015

 The Andhra Pradesh Government also banned Maggi foods

 Also on June 5, 2015, the Food Safety and Standards Authority of India (FSSAI) ordered a
recall of all nine approved variants of Maggi instant noodles and oats masala noodles,
suggesting that they were unsafe and hazardous for human consumption. On the same day,
the Food Standards Agency of the United Kingdom launched an investigation into the level
of lead in Maggi noodles.
6 June 2015

 The Central Government of India banned nationwide sales of Maggi noodles for an
indefinite period.

26 June 2015

 During a press meeting, the Minister for Health and Family Welfare of Karnataka, U. T.
Khader, stated that Maggi foods would not be banned.

July, 2015

 The Bombay High Court allowed the export of Maggi while the ban in India remained.

August 2015

 Tests performed by the US health regulator FDA showed no dangerous lead levels in the
products. On 13 August 2015, the nationwide ban was struck down by the Bombay high
court. The court stated that proper procedure was not followed in issuing the ban and called
into question the test results, as the samples were not tested at authorized laboratories
accredited to the National Accreditation Board for Testing and Calibration Laboratories
(NABL).

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

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

January 2019

 Maggi instant noodles were again under the scanner for lead content in the noodles. Nestlé
India admitted to presence of lead in the product. The Supreme Court on 3 January was given
this admittance by the lawyers of the company.

3.3.4 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.

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

Than Maggi was 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.
 CHAPTER 4

CONSUMER DECISION MAKING PROCESS

ABOUT MAGGIE
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 behavior 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 flavours.

 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.
 CHAPTER 5

ANALYSIS AND INTERPRETATION

Analysis and Interpretation through Questionnaire

Questionnaires were prepared in a view to study of consumer behaviour and brand loyalty
towards nestle maggie For this I have taken a sample size of 80 employees and made an analysis.

1.Gender
GENDER NO. OF RESPONDENTS PERCENTAGE
MALE 32 40
FEMALE 48 60

TABLE 1

40
MALE
FEMALE

2.AgeGroup:

Age No. Of Respondents Percentage

Under 18 40 50
18-24 20 25
25- 30 20 25
 TABLE 2

25
UNDER 18
50 18-24
25- ABOVE
25

3.Are you aware of Maggi?

Awareness No. Of Respondents Percentage

Yes 56 70
No 24 30
Interpretation: 70% of the respondents are RESPONDENTS on the YES and 30% are say
NO.

TABLE 3

10

YES
NO

90

4. What was your consumption frequency before Maggi Noodles was banned?
Particular No. Of Respondents Percentage
Zero in a week 8 10
Once in a week 32 40
Twice in a week 28 35
Thrice in a week 8 10
Interpretation:40% of the sample consumed Maggi Noodles at least once a week, 35% 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.
Differentiation: 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.

TABLE 4

10% 10%

ZERO IN A WEEK
ONCE A WEEK

35% TWICE A WEEK

40%
THRICE A WEEK

5.Did you consume any other Noodles other than maggi after the ban?

Particular No. Of Respondents Percentage

Yes 45 56
No 35 44
Interpretation: 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.
 TABLE 5

44% YES
56% NO

6.Do you now trust Nestle as a Brand?

Particular No. Of Respondents Percentage

Yes 74 91.70
No 6 8.30
Interpretation: 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.

TABLE 6
8.30%

91.70%

7.Do you consume other products offered by Nestle?

Particular No. Of Respondents Percentage

Yes 74 91.70
No 6 8.30
Interpretation: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.

TABLE 7
8.30%

YES
NO

91.70%

8.Would you prefer Maggi Noodles for the children?

Particular No. Of Respondents Percentage

Yes 44 55
No 36 45
Interpretation: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.

TABLE 8

45% YES
55% NO

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

Particular No. Of Respondents Percentage

Very safe 7 8
Safe 39 48
Affect Little 28 35
Unsafe 7 8
Interpretation: 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.

TABLE 9
8% 8%
VERY SAFE
SAFE
35%
48% AFFECT LITTLE
UNSAFE

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

Particular No. Of Respondents Percentage

Yes 62 78
No 18 22
Interpretation: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

TABLE 10

22%
YES
NO
78%

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

Particular No. Of Respondents Percentage

Increase 4 5
Remain same 40 51
Decrease 36 43
Interpretation: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.

TABLE 11
6%

INCREASE
43%
REMAIN THE SAME
51%
DECREASE

Analysis using Chi-square:

Hypothesis:

Ho1: Age relationship with awareness.

Ho2: Consumption of Maggie relationship with age category.

Ho3: Consumption with Maggie relationship with Gender basis.

HYPOTHESIS

Ho1: Age relationship with awareness.

AGE YES NO TOTAL

AWARENESS
UNDER 18 25 15 40
18-24 20 10 30
25-40 5 2 7
40-ABOVE 3 0 3
 TOTAL 53 27 80

Chi-square Table:

Sl.No O E (O-E) (O-E)2 (O-E2)/E

1 25 26.5 -1.5 2.25 0.084905
2 20 19.875 0.125 0.015625 0.0007861
3 5 4.6375 0.3625 0.13140 0.028334
4 3 1.9875 1.9875 3.95015 1.987496
5 15 13.5 1.5 2.25 0.166667
6 10 10.125 -0.125 0.015625 0.001543
7 2 2.3625 -0.3625 0.13140 0.055619
8 0 1.0125 -1.0125 1.02515 1.01249
TOTAL 80 80 0.975 9.76935 3.33784
Critical value = 5%

Degree of freedom =3

Tabulated value = 7.815

Here, the tabulated value of the hypothesis at 5% is found to be 7.81, where the calculated value
is 3.33784 which is less than the tabulated value. So H01: There is no significant relationship
between age and awareness is accepted.

Ho2: Consumption of Maggie relationship with age category.

AGE Zero in a Once in a Twice in a Thrice in a TOTAL

week week week week
CONSUMPTION
Under 18 20 6 5 0 31
18-24 25 0 5 0 30
25-40 3 6 0 0 9
40-above 5 0 0 5 10
TOTAL 53 12 10 5 80

Sl.No O E (O-E) (O-E)2 (O-E2)/E

 1 20 20.53 -0.53 0.2809 0.01368
2 25 19.87 5.13 26.3169 1.3244
3 3 5.96 -2.96 8.76 1.496
4 5 6.62 -1.62 2.62 0.395
5 6 4.65 1.35 1.822 0.391
6 0 4.5 -4.5 20.25 4.5
7 6 1.35 4.65 21.622 16.016
8 0 1.5 -1.5 2.25 1.5
9 5 3.87 1.23 1.51 0.3901
10 5 3.75 1.25 1.56 0.416
11 0 1.125 -1.125 1.26 1.12
12 0 1.25 -1.25 1.56 1.248
13 0 1.93 -1.93 1.423 0.7373
14 0 1.87 -1.87 3.49 1.866
15 0 0.56 -.56 0.31 0.5535
16 5 0.625 4.375 19.14 30.624
114.1748 36.9549
Critical value = 5%

Degree of freedom =9

Tabulated value =16.919

Here, the tabulated value of the hypothesis at 5% is found to be 16.919, where the calculated
value is 36.9549 which is greater than the tabulated value. So Ho2: There is no significant
relationship between age and consumptions is not accepted.

Ho3:Consumption with Maggie relationship with Gender basis.

Gender Zero in a Once in a Twice in a Thrice in a Total

week week week week
Consumption
Male 20 7 8 9 44
Female 20 3 7 6 36
Total 40 10 15 15 80
 Sl.No O E (O-E) (O-E)2 (O-E2)/E
1 20 22 -2 4 0.1818
2 20 18 2 4 0.2222
3 7 5.5 1.5 2.25 0.409
4 3 4.5 -1.5 2.25 0.5
5 8 8.25 -0.25 0.0625 0.0075
6 7 6.75 0.25 0.0625 0.01
7 9 8.25 0.75 0.5625 0.06818
8 6 6.75 -0.25 0.0625 0.01
TOTAL 0.5 13.25 1.40868

Critical value = 5%

Degree of freedom =3

Tabulated value = 7.815

Here, the tabulated value of the hypothesis at 5% is found to be 7.815, where the calculated value
is 1.40868 which is less than the tabulated value. So H03: There is no significant relationship
between gender and consumption is accepted.

Brand Loyalty Index:

Attribute Score
Clarity 9
Commitment 10
Protection 8
Responsiveness 9
Loyalty 9
Differentiation 8
Safety 7
Presence 8
Understanding 7
Consistency 6
TOTAL 81
Maggie scored a 81 on Loyalty Index.
CHAPTER 6
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.
 ANNEXTURE -1
BIBLOGRAPHY

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

ANNEXTURE -2
1. Gender
MALE ( ) FEMALE( )

2. Age Group:
UNDER 18( ) 18-25( ) 25-40( ) 40-ABOVE( )

3.Are you aware of Maggi?

YES( ) NO( )

4. What was your consumption frequency before Maggi Noodles was banned?
Zero in a week ( ) Once in a week( )
Twice in a week( ) Thrice in a week( )
5. Did you consume any other Noodles other than maggi after the ban?
YES( ) NO( )
6. Do you now trust Nestle as a Brand?

YES( ) NO( )

7. Do you consume other products offered by Nestle?

YES( ) NO( )

8. Would you prefer Maggi Noodles for the children?

YES( ) NO( )

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

Very Safe( ) Safe( ) Affect Little( ) Unsafe( )
10. Do you prefer Maggi Noodles after it is re-launched with approval of FSSAI?

YES( ) NO( )

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

Increase( ) Remain Safe( ) Decrease( )