Instant Noodles

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Title Page No

Abstract 02

Introduction 02

Objective 03

Methodology 03

Sample Data Analysis and Inference 03

Indian Market of noodles 06

Market drivers of Maggi 07

Porter's five forces of Maggi 08

Conclusion 10

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Abstract:
Consumer behavior denotes the behavior that consumer show while buying, utilizing and assessing
the goods and services that they expect, will fulfill their need. Consumers are complex people
subject to an assortment of psychological and sociological requirements separated from their basic
needs. Necessities and priorities of various consumer segments contrast drastically. This study
analyses consumer buying behavior of Nestle Maggi by taking into consideration various traits
shown by the consumers while making the final purchase of Maggi.

Introduction:
The Indian subsidiary of Nestle SA – Nestle India Limited presented the brand Maggi in India in
1983. This introduction of Maggi noodles was the stage for a totally new food classification of
instant noodles in India. It immediately gained recognition as a quick snack and was generally
acknowledged in the Indian market. Nestle got the main mover advantage in this category and
therefore, was able to hold its leader position in the instant noodles’ category till the early 2000s.
The tagline of Maggi is “Fast to Cook Good to Eat'. Nestle India Limited (NIL) in the previous
years has aggressively advertised Maggi noodles by means of different strategies like free
distribution of Maggi samples, giving Maggi packets in return of void packs, etc. Nestle utilized
its publicizing strategically to make a sustainable effect on the communication of the advantages
of the Maggi to target consumers. Its commercials showed maggi as a fun snack for the children
which gave the mothers a simplicity of preparation. Utilization of taglines like 'Mummy, bhukh
lagi hai' (Mom, I'm hungry), 'Bas 2-Minute,' (Only 2 minutes) and 'Fast to Cook Good to Eat'
successfully imparted Maggi advantages to target consumers.
Maggi is packaged in a bright yellow color as it is eye catching to young people. This yellow color
makes Maggi both effectively discernable and furthermore lively. It has a robust distribution
channel and its accessibility is found in both conventional retail (kirana stores) and up-market rich
general stores. It sells generally in single size serving anyway it has inventively changed the
packaging permitting numerous serving inside a same packet.
Maggi's resurgence and reach are demonstrations of the intensity of good branding (and skillful
utilization of sentimentality in marketing). Nowadays, Maggi can be found in each and every
corner of the country. In the forty years since it vanquished India, in spite of competition from

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other instant noodle brands, a market that wasn't familiar to noodle dishes, Maggi figured out how
to fabricate a huge and steadfast client base. Through it all, its selling point has remained to a great
extent the same-convenience (2 Minute me ready), Healthiness ("Taste Bhi Health Bhi") and Joy
("2 Minute Mein Khushiyan").

Objective:
• To study the effect of prior knowledge about Maggi, Age and Gender differences,
consumption, liking/disliking of packaging, on the final purchase of Maggi.
• To study the effect of the buying environment such as availability of substitutes, behavior
of salesperson, availability of various payment mechanisms, on final purchase of Maggi.

Methodology:
The study is majorly based on primary data. The required information was collected through
observational study. For the purpose of the study, the information has been collected from
different places of the market. Necessary data have also been collected from sources like research
articles, and internet.

Sample Data Analysis and Inference:

The number of responses captured by on survey across different regions of the nation has been
depicted as shown below. The consumers observed were of several age groups and broadly
classified in different groups to get a better understanding.

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Consumer preference:

This expresses the preference of

noodles of the consumer on the basis
of age.
First priority of people at every age is
Maggi and second Priority of people at
every age is Yippie (ITC)
Making, Yippie the nearest competitor
followed by Patanjali

Maggi as a Snack

This shows the perception of

respondents aged between 26-40 for
maggi as a snack is mostly in
disagreement or having neutral views.

This shows the perception of

respondents aged between 19-25 for
maggi as a snack is mostly in
agreement, or have neutral views.

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Driving factors for Purchase:

In order to find the factors driving consumer towards purchasing and consumer retention over the
years, the questions were framed around factors such as Taste, Quality, Availability, Packaging
and Familiarity.

The interlinkages between these qualities is depicted by the Venn diagram.

The most prominent factor was taste, being the single most driving factor. In some instances, the
factors like availability and quality were collaboratively affecting the consumer decisions. The
other factors than these were consistency, trust over the years, texture of noodles, smoothness,
considering it as a healthy snack.

Packet Size Preference:

This shows the most bought packet by

consumers i.e. 36% of people prefer to
buy pack of 6 and 30% people prefer to
buy pack of 1.

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Consumption:

This expresses the effect of COVID on

the demand of Maggi. It is distributed
on the basis of age. The demand of
people between the age of 19-25
shows no change mostly but in the age
range of 26-40 we can see the
decrease in demand.

Covid effect on consumption:

This show how often a person eats

maggi in a month and by analyzing we
can see that people mostly eat 2 times
a month. And at most they eat at 15 in
a month which is 1.06% according to
our survey.

Ease of payment:

Nowadays people prefer to pay online.

Also, our data depicts the availability of
online payment options at the stores.

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Indian Market of Noodles:
According to the World Instant Noodles Association (WINA), India is the 4th largest instant
noodles market in the world. Noodles have a market of INR 93 billion in 2017 and it is expected
to grow at 5.6% CAGR from year 2020-25.
Maggi is the biggest brand in the Instant noodles category in India, capturing around 43 % of the
total market share. The sales of maggi, in terms of value and volume, surpassed the pre ban level
of 2015. In 2019, Nestle sold around 264,000 MT of maggi products which was 3.73% percent
higher as compared to 2014. In terms of value, nestle sold maggi worth Rs 3500 Crore in 2019,
compared to Rs 2961 Crore in 2014.

Market Drivers of Maggi

1. Maggi’s demand is expected to increase due to rapid urbanization and increase in the middle-
class population segment. Rate of urbanization is very high. Urbanized population, due to
higher discrepancies and hectic lifestyle, prefers quick meals which require minimal cooking.
These factors will drive the market for instant noodles
2. Robust growth of food retail channels with an increasing number of departmental stores,
hypermarkets, supermarkets and convenience stores across the tier 2 cities, is expected to
facilitate the sales of instant noodles. This supported by increasing consumption rates will also
help in better market penetration for maggi in future.
3. Recent launch of new variants of maggi is expected to broaden the target consumers. Nestle
Maggi is available in a wide range of flavors, texture along with vegetarian and non -vegetarian
variations in order to expand its consumer base.

Porter's 5 Forces for Maggi:

Threat of new entrants:

● Here we have considered the whole noodle market for maggi, as far as instant noodles are
concerned there is no threat of new entrants because of economies of scale and established
retail channels. But, for space like plain noodles, frozen and chilled noodles there is threat
of new entrants (evident from table 1,3, 4 and chart)

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 ● Product differentiation is already there in the instant noodle category which gives sufficient
variety to customers and hence reduces the threat of new entrants.
● Also, regulation by FSSAI makes it difficult for new entrants.

Threat of substitutes:
● Even after the 2015 maggi ban, maggi has been able to again gain and maintain market
share of 40+% from the past for consecutive years. (table 4) only. So, there is a very low
threat of substitution in the noodle market. also, no significant share of products in any
segment other than instant noodles (Table 1).
● But Maggi is mainly focused on instant noodles which can provide protein instantly and
substitute these are soup, pasta, salad etc. which are readily available and easy to switch
and at similar price. (For pasta, the procedure to bake is also similar to instant noodle).

Bargaining power of suppliers:

● Ingredients used in maggi are wheat flour, palm oil, salt, onion powder etc. which are
readily available from large no of suppliers making switching cost low. Because of high
numbers they can’t control prices and have very less to no bargaining power.
● These products are highly standardized and no product differentiation is there.
● Also, maggi and yippee have large market share and which makes them valuable customers
which also decreases bargaining power as their profits also depend on these two products.

Bargaining power of customers:

● There is very low product differentiation between competitors in instant noodles and also
these products are offered at almost similar prices (around Rs 10-12) making bargaining
power of customers low as they can switch between products but are offered at similar
price.
● Also, from chart we can see that small grocers have a high share of distribution and they
mainly sell small packets where profit margins are low which makes consumer’s
bargaining power low.

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● Also, only customers like D-mart, reliance fresh (modern retail) who are not end
consumers have bargaining power because of purchase volume but they also represent
18.8 % of sales by value (chart).

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Conclusion:

Maggi is consumed as ‘light meal’, it dominates the market majorly due to widespread availability,
rapid urbanization and diversification through variants. Masala Maggi being the most prominent
among all the variants offered by the brand.
Consumer preference is understood from the primary data collected. For all age groups, Maggi
remains the first priority. Yippee turns out as the main competitor of Maggi, as it is the second
most preferred choice across all ages after Maggi. Out of the driving factors, taste and quality are
the highest priority for consumers. With respect to the packet size, ‘Pack of 6’ is the top choice.
There was no significant change in demand for Maggi due to the pandemic.

References:
https://transfin.in/history-of-maggi-in-india
https://irmaelibrary.informaticsglobal.com:2147/portal/Analysis/Tab
https://www.marketresearch.com/Netscribes-India-Pvt-Ltd-v3676/Instant-Noodles-India-
12269917/
https://www.business-standard.com/article/companies/return-of-maggi-volume-and-value-
surpasses-pre-ban-level-of-2014-120060401532_1.html

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