INTRODUCTION

The Maggi company was acquired by Nestle in 1947. Maggi is an international brand
of seasonings, instant soups, and noodles that originated in Switzerland in the late 19th century.
Nestlé S.A. is among the largest consumer packaged goods companies in the world, founded
and headquartered in Vevey, Switzerland. Nestlé originated in a 1905 merger of the Anglo-
Swiss Milk Company, which was established in 1866 by brothers George Page and Charles
Page, and the Farine Lactée Henri Nestlé Company, which was founded in 1866 by Henri
Nestlé, whose name meant "Little Nest". The company grew significantly during the First
World War and following the Second World War, eventually expanding its offerings beyond
its early condensed milk and infant formula products. Today, the company operates in 86
countries around the world and employs nearly 283,000 people.

FOUNDER: Julius Maggi

FOUNDED IN: 1872

TYPE: Food

OWNED BY: Nestle

 COMPANY PROFILE
Nestle S.A. is among the largest consumer packaged goods companies in the world,
founded and headquartered in Vevey, Switzerland. Nestle originated in a!905 merger of the
Anglo-Swiss Milk Company, which was established in 1866 by brothers George Page and
Charles Page, and the Farinc lactee Henri Nestle Company, which was founded in 1866 by
Henri Nestle, whose name meant "Little Nest". The company grew significantly during the
First World War and following the Second World War, eventually expanding its offerings
beyond its early condensed milk and infant formula products. Today, the company operates in
86 countries around the world. NESTLE is the world's leading Nutrition, Health and Wellness
company. Our mission of "Good Food, Good Life" is to provide consumers with the best
tasting, most nutritious choices in a wide range of food and beverage categories and eating
occasions, from morning to night. The Company was founded in 1866 by Henri Nestle in
Vevey, Switzerland, where our headquarters are still located today. We employ around
2,80,000 people and have factories or operations in almost every country in the world.
NESTLE’s relationship with India dates back to 1912, when it began trading as The NESTLE
Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished
products in the Indian market. After India's independence in 1947, the economic policies of the
Indian Government emphasised the need for local production. NESTLE, responded to India's
aspirations by forming a company in India and set. up its first factory in 1961 at Moga, Punjab,
where the Government wanted NESTLE to develop the milk economy. The Company's
activities in India have facilitated direct and indirect employment and provides livelihood to
about one million people including farmers, suppliers of packaging materials, services and
other goods. The Company continuously focuses its efforts to better understand the changing
lifestyles of India and anticipate consumer needs in order to provide Taste, Nutrition, Health
and Wellness through its product offerings. NESTLE India manufactures products of truly
international quality under internationally famous brand names such as NESCAFE, MAGGI,
MILKYBAR, KIT KAT, BAR-ONE, MILKMAID and NESTEA and in recent years the
Company has also introduced products of daily consumption and use such as NESTLE Milk,
NESTLE SLIM Milk, NESTLE Dahi and NESTLE Jeera Raita.

INDUSTRY PROFILE
Maggi belongs to the fast-moving consumer goods (FMCG). Fast Moving Consumer Goods
(FMCG) goods are popularly named as consumer package goods. Items in this category include
all consumables (other than groceries/pulses). People buy these products at regular intervals. It
broadly consists of personal care, household care and food & beverages. The most common in
the list are detergents, shampoos, toothpaste, shaving products, shoe polish, packaged
foodstuff, and household accessories and extends to certain electronic goods.
MAGGI IN INDIA

Maggi Comes to India – teething troubles. Maggi noodles was launched in India in the
early1980s. Carlo M. Donati, the present Chairman and Managing Director of Nestle India Ltd,
brought the instant noodle brand to India during his short stint here in the early eighties. Maggi
was positioned as the only hygienic homemade snack! Despite this, Nestlé faced difficulties
with their sales after the initial phase. The reason being, the positioning of the product with the
wrong target group. Nestle had positioned Maggi as a convenience food product aimed at the
target group of working women who hardly found any time for cooking. In the course of many
market researches and surveys, the firm found that children were the biggest consumers of
Maggi noodles.

HISTORY
 Julius Maggi, from Switzerland, named the company Maggi in 1872. Experts point out
that it was a period of the industrial revolution in Switzerland. At that time, women had
to go home and cook after working long hours in factories. In such a difficult time, the
Swiss Public Welfare Society had taken the help of Julius Maggie, and Maggi noodles
was born under compulsion. In the meantime, Julius named the product after her
surname.

 Initially he invented a powdered pea and bean soup, to provide nutritious and easy to
cook food.

INTERESTING FACTS ABOUT MAGGI:

• Every second, 4,600 food portions are prepared with Maggi across the world
• Every minute, consumers add 100 tonnes of fresh ingredients (meat, vegetables, rice and so
on) to their Maggi meals
• Every hour, Maggi delivers 900,000 portions of vegetables to consumers through its
products
• Compared to 2005, a year’s production of Maggi products already contains more than
12,000 tonnes less salt - the equivalent of the Eiffel tower in weight.
DAY- 1
VISION AND MISSION

VISION:

“A convenience platform to prepare easy and delicious foods and to create memories
at the same time”.

MISSION:

“To bring people closer by encouraging homemade cooking and for the
family to spend time together when preparing food at home. They also aim to help
mothers to prepare quick and easy meals for their family members”.

SLOGAN:

“Happiness is homemade”.

SKILL GAINED:

I have learned about the vision, mission and slogan of the nestle Maggi.
DAY 2

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 prelaunch ‘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.

SKILL GAINED:

I have gained knowledge about the product development of the nestle Maggi.
DAY 3

PRICING STRATEGY:

Maggi uses a Cost-based Pricing Strategy to tap into different markets in the world.
The competitive prices are repaid with a high volume of the products. This shows the cost and
competition are the major factors in the marketing mix price strategy of MAGGI.
Because of rising prices in different countries, MAGGI has smartly started decreasing the
quantity to keep the price unchanged. Nestle strives to capture a high market share with
minimum prices and maximum quality standards. As Maggi is trying to tap into all segments
of income factors, it keeps differential prices depending on the locations across countries. Also,
its offering is available in a broad variety of packages so that people can buy according to their
needs. Recently, Maggi has started coming up with fresh products like the Hot Head Noodles
and Cup range which it targets for the higher income level segment and hence are priced at a
higher range. The company is taking no chances and is extending its distribution reach to
smaller towns and cities. Maggi happens to be Nestle’s most widely distributed brand in the
country. Through independent channels, it reaches those villages where the company has no
presence, according to Hegde. This is also the time that Maggi’s value-for-money pack priced
at Rs 5 is expected to come handy. (The regular pack comes for Rs 10.)

SKILL GAINED:

I have learned about the pricing strategy of the nestle Maggi.

DAY 4

PRODUCT VARIANT:

Maggi has introduced numerous products in the market according to the need and tastes
of its consumers. The brand has been known for its noodles, wuze, bouillon cubes, instant
soups, stocks, sauces, ketchups and seasonings. The products that have surpassed the
expectations of the people and have become a hit in the minds of the consumers are-

• Maggi 2 Minute Noodles- The flagship product in the Maggi umbrella brand, this
product is available in five flavours that are Tricky Tomato, Chicken, Masala,
Romantic Capsica and Thrillian Curry.
• Maggi Vegetable Multigrain Noodles is a product that has Fiber, Calcium,
protein and added vegetables.
• Maggi Vegetable Atta Noodles is made from wheat flour that has fiber content
and added vegetables.
• Maggi Cuppa Mania is available in an easy cup format with two variants Chilly
Chow Yo and Masala Yo
• Maggi Oats Noodles is an innovative, healthy and delicious dish that is made
from Wholegrain Oats.
• Maggi Sauces
• Maggi Pichkoo
• Maggi Pasta
• Maggi Healthy Soups
• Maggi Magic Cubes
• Maggi Coconut Milk Powder
• Maggi Masala -ae- Magic
• Maggi Bhuna Masala
• Maggi Pasta and Pizza Sauce

SKILLS GAINED:

I have learned about the various kinds of products produced in Maggi.

DAY 5

PLACE AND DISTRIBUTION STRATEGY:

Maggi products are widely available due to the strong presence of Nestle. The
distribution strategy followed by Nestlé is Producers to Distributors to Wholesalers to Retailers
to Consumers. This is because it is consumed in a lot of volumes and generally in small
quantities. Due to its so deep reach even into rural areas and small towns, it has gained it the
top position. Maggi products are directly taken from the factories which are independently
managed to Carry and Forward Agencies who then store in the large warehouses and pass them
onto the wholesalers according to their demanded quantities. These quantities are then
distributed among the retailers or to the end customer through hypermarkets, other small
businesses and even its own kiosks to corporates. The retailers can be convenience stores or
local supermarkets.

The key ingredient in the marketing mix of Maggi has been its distribution. It is one
thing to have a successful product in your hand, it is a completely different ball game to ensure
time and time again the product reaches the nooks and corners of the world. Even if you go in
the Himalayas, you will find Maggi selling there at select places. Isn’t that something!! This
single factor – distribution, has been the backbone for the success of the product.

SKILL GAINED:

I have gained knowledge about the place and distribution of the nestle Maggi.
DAY 6

PROMOTION OF MAGGI

When the parent company Nestle decided to launch Maggi in India, its promotional
activities included creating awareness amongst the females and kids. Toys and utensils were
offered as gifts along with packets of Noodles. This turned out to be a huge booster for the
brand and made it an instant household name. Maggi advertised on kid’s channels and between
main programs in the television. Its tagline 2-minute noodles” is known to be the smartest
tagline in the advertising industry and is still very famous amongst the consumers. Till date,
no one has been able to cook a Maggi in 2 minutes J but still, people love the product for the
quick way they can get an excellent snack. Maggi has also announced many offers and schemes
over the years to attract its consumers like Fun books, free Maggi products, scratch and win
coupons, discounts and money back offer.

In an exciting commercial for Maggi Oats Noodles, a consumer can see the famous
Bollywood actors commending the product to the viewers. The convincing advertisement has
proved to be a hit with the audiences taking the company to new heights. In all its campaigns,
since the year 1982, the product has been advertised as “2-minute noodles”. The famous actor
Amitabh Bachchan is also seen in the promotional activities of Maggi.

SKILL GAINED:

I have learned about the promotion of Maggi in the marketing mix.

DAY 7

MARKETING CAMPAIGNS OF MAGGI

Nestle India recently launched an inveigle campaign in which Maggi lovers would get
a chance to vote for their special favourite flavour. The new variants by Maggi such as Tomato,
Chatpata, Yummy Caprica, and Desi Cheesy offer rotation to every enjoyable flavour profit
yet manages to fire up the natural sense of familiarity among the consumers that Maggi has
developed through its years of experience.
The Campaign has become even more interesting and exciting when it is coupled with this
chance to vote for the favourite flavour, making the whole experience inclusive, invigorating
as well as energizing. Maggi urges everyone to enjoy its new variations of flavours and to rate
and vote for consumers’ special favourite ones among them, as Maggi always wishes to give
their best to its customers.

SKILL GAINED:

I have gained knowledge about the market campaign of the Maggi.

DAY 8

DIGITIAL MARKETING STRATEGY

Maggi is one famous brand of Nestle and has a major focus on developing and
executing digital and social media initiatives. The company is engaging actively in social
media, and is building a strong digital presence to strengthen the Maggi brand. Along with TV
and print campaigns the company is engaging with customers via Facebook and Twitter.
“Digital and social media is central to our brand-building process.

The brand adopts a sharp engagement strategy across its social media presence, holding upon
the strengths of each platform to deliver its brand message and manage consumer engagement.
The brand is engaging actively in social media platforms and is building a powerful digital
presence to strengthen the brand MAGGI. Along with TV, the company is engaging with
consumers via Twitter and Facebook. Digital and Social-media is a central focus of their brand-
building process. Digital acceleration team of the brand, which was responsible for the Maggi
Campaign. “WE MISS YOU TOO”. It has also set up 24×7 toll-free customer services to
address customer concerns. Maggi had a tie-up with one of the top famous e-commerce
platforms ‘Snapdeal’ and came up with the Maggi welcome kit idea.

SKILL GAINED:

I have learned about the digital marketing strategy of nestle Maggi.

DAY 9

LEVARAGING ANALYTICS

Nestle Maggi are partnering with the world's leading digital innovators to reshape their
marketing and commerce practices for the digital world. They are leveraging our scale to
generate value and build new capabilities backed by powerful data models and algorithms.
They goal is to empower teams to make smarter, quicker decisions by transforming data into
an accessible, reusable asset.

A key focus of these efforts is understanding the return on each marketing and commercial
investment. To deliver on this, they are upgrading their end-to-end analytics capabilities to
measure the value of each consumer and customer touchpoint and the impact of every
campaign. These efforts are helping them to:

▪ Understand the effectiveness of brand interaction.

▪ Generate efficiencies by improving resource allocation.
▪ Capture insights that can be used to optimize channel strategies in real time.
▪ Identify opportunities for innovation and the scaling up of new launches.
▪ Maximize the value of our strategic direct-to-consumer investments, for example with
Freshly.

SKILL GAINED:

I have learned about the leverage analytics of the brand nestle Maggi.
DAY 10

DIGITIALIZING OPERATION:

Across their operational network, they are deploying flexible and scalable digital solutions
to enhance the responsiveness. These multi-year initiatives are enabling to better leverage
technologies such as artificial intelligence, predictive analytics and collaborative robotics to
support factory automation and end-of-line customization. They expanded the scope of these
programs to increase the flow, accessibility and utility of real-time data in areas such as
procurement and supply chain management. These efforts support them drive to enhance:

▪ Consumer and customer-centricity.

▪ Manufacturing flexibility and agility.
▪ Transparency and traceability along our supply chains.
They work with supply chain partners to pilot solutions that will better balance efficiency and
resiliency. For example, they increased the scope of Transport Hub technologies to cover 50%
of their global logistics network. In parallel, they extended the scope of their AI-powered
network optimization tools to evaluate different product sourcing and delivery scenarios. This
has enhanced their ability to respond quickly to changes in demand and to optimize transport
and production schedules. These tools enable to better service their customers and reduce
operational carbon footprint. Indeed, beyond efficiency and growth, they see digitalization as
an enabler of sustainability agenda. To that end they are stepping up their efforts to build
systems and tools that will enable to more accurately calculate and track progress in areas such
as:

▪ Sustainable packaging.
▪ Carbon emissions reduction.
▪ Water management.
For example, they are working with partners such as OpenSC, a pioneer in supply chain
transparency backed by the WWF, to build a fit-for-purpose platform of 'feeding' technologies
to increase raw material traceability.

SKILL GAINED:

I have gained knowledge about the digitalizing operation of nestle Maggi.

DAY 11

BUSINESS STRATEGY:

They focus their energy and resources where unlocking the power of food can make the
greatest difference to the lives of people to protect and enhance the environment and generate
significant value for their shareholders and other stakeholders alike. This is why they:

▪ Apply their expertise in nutrition, health and wellness - developed over more than 150
years - to help people and their families live happier, healthier lives.
▪ Meet the needs of the modern consumer with healthy, delicious, convenient products
for conscious, time-constrained lifestyles.
▪ Bring affordable, safe and high-quality nutrition everywhere to everyone, regardless of
their income level.
▪ Bring distinctive, premium innovations to market fuel by creative exploration,
consumer insights, pioneering nutrition science and culinary excellence.
▪ Advance their sustainability agenda to enhance the health of the planet, drive societal
progress and support a sustainable food system, particularly in terms of:
1. Packaging and delivering the products in ways that are safe and protect the
environment.
2. Offering more plant-based food and beverage options to enable us to be the
consumers' preferred choice as they diversify their diets.

SKILL GAINED

I have learned about the business strategy of Maggi.

DAY 12

CONTINUOUS PROCESS INNOVATION:

Instant noodles were an entirely new category in the country, but it was given an Indian
twist. Maggi came in four variants: Masala, chicken, sweet & sour and capsicum. Of these,
only two have survived — masala and chicken which sells largely in the eastern states. Masala
continues to be the flagship flavour. In the days that followed, it experimented with more
variants, like a garlic- and onion-free one for Gujarat. Some of these still exist, others were
discontinued. The turning point came in 2005, when Nestlé came out with Maggi atta (whole-
wheat flour) instant noodles. All over the country, atta is considered healthier than Maida or
refined flour which the company was using from day one. This helped the company take the
health platform, though Nestlé General Manager (food business) Shivani Hegde insists that the
product never ran the danger of being classified junk food. It was then that it added the tagline,
health bhi, taste bhi (health as well as taste)

SKILL GAINED:

Today I learned the continuous innovation process of Maggi.

DAY 13

REPOSITIONING AS A HEALTHY SNACKS:

It is no longer an aspirational product for any socio-economic category of consumers,

says Hegde That was also the time when Nestlé was repositioning itself worldwide as a health
and wellness company. At the grassroots level, Maggi started associating with quiz contests
and other such events connected to mental and physical wellbeing. This positioning gave Nestlé
the platform to launch more products under the Maggi brand. It already had Maggi soups,
sauces and coconut milk in the market, but given the strong equity of the brand, Nestlé could
now extend it to newer categories. Thus, it recently came out with fried masala paste. In 2008,
two brand extensions — Maggi Bhuna Masala and Maggi Cuppa Mania instant noodles.

GOOD PACKAGING AND STRONG DEALER VENDOR RELATIONS:

Convenience was the unique selling proposition of Maggi when it was launched 25
years ago. For the first time, consumers got something that was hygienically packed and
convenient to prepare. It was also the first fusion experiment on food in India.

SKILL GAINED:

I have learned that Maggi is thriving to become a healthier snack for people and also
improve their packaging, vendor relationship.
DAY 14

MARKET PENETRATION STRATEGY

Maggi started with promotional campaigns in the school to see the reaction of children
after eating Maggi.

• Started their advertising straight focusing on kids.

• Introduced new products like atta noodles dal atta noodles cuppa mania.

• Products are made available in different packages like 50,100,200,400 Gms.

• Keep on conducting market research to understand changes in market.

Though Maggi has been successful every time, there were times when it faced challenges.
Some of these are:

• Sales saw decline in 1990: The Company saw a decline in the sales in 1990. When the
company tried to find out what the reason was, they came to know that there was something
wrong with the formula that spoiled the taste. So, the formula was changed from fried base to
oiled dried base.

• Competition increased in noodle segment: When Maggi was enjoying being the only noodle
offering by any company Top ramen entered the market as a competition. This was a big
challenge for Maggi. Though Top Ramen couldn’t do well in India.

• New product launched in market but failed- Nestle decided to expand its offerings by offering
Dal atta noodles & Sambhar flavour noodles. But these products were not welcomed by the
people the very special taste of Maggi was still ruling the consumer.

• Maggi launched some new products: Ketchups, Soups, Taste makers etc. but they were not
successful as instant noodles.

SKILL GAINED:

I have learned about the market penetration strategy of Maggi.

DAY 15

STPD ANALYSIS
SEGMENTATION: Market Segmentation divides the heterogeneous 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 has 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

SKILL GAINED:

I have learned about the STPD analysis of nestle Maggi.

DAY 16

SWOT ANALYSIS

The SWOT analysis of Maggi brand clearly indicates the strengths of Maggi as a Brand
in Indian market. The Brand was found to be a leader in its category of Noodles, with strong
customer loyalty. Intensive distribution of Maggi as a Brand was seen in urban areas of the
country. The major threats of the brand as shown in the figure below indicates that Maggi has
made several attempts to revamp itself as a ‘Healthy Product” but till date its perseverance
towards the tag line is low by the consumers. The brand is in the growth stage of product life
cycle with a strong inclination towards the maturity stage.

WEAKNESS:
-Products are depend on each
other
-Not so much presence in the
rural market

THREATS:
STRENGTH:
-Price war with
-Market leader in
the competitors
their segment
-Wide range of
SWOT -Strong presence
of religion
distribution
channel Analysis competitiors
-Consumer don't
-Innovation
perceive it as
product
healthy food.
OPPORTUNITY:
-Incresing number of working
youth.
-Shift to rural market
-can foray into other food market
with its strong brand name

SKILL GAINED:

I have learned about the SWOT Analysis of nestle Maggi.

DAY 17

MAGGI CRISIS – ROOT CAUSE

The whole issue is all about health and safety. MSG and lead are the main culprit here.
The presence of these two contents in Maggi products have brought them under the scanner of
FSSAI. So, basically what are they and what is the problem due to their presence? MSG i.e.
Monosodium Glutamate is a flavour enhancer that occurs naturally in many foods, such as
tomatoes and cheeses. People have been eating glutamate rich foods throughout the world.
USA FDA (Food & Drug Administration) considers the addition of MSG to food to be
generally recognized as safe (GRAS). So, what is the problem here? The problem is the
labelling on Maggi products of ‘No added MSG’. It was misleading and in violation of the FSS
(Packaging & Labelling) Regulation, 2011.Another problem is the presence of lead content to
17.2 ppm in the noodles that is beyond the maximum permissible limit of 2.50 ppm. This is a
matter of serious concern given the fact that most of the consumers of Maggi are children and
the children are more vulnerable to the adverse effects of lead than adults. Lead accumulates
in the body and also gets absorbed quickly when taken on empty stomach. It can cause mental
injury, learning difficulties, low IQ, growth delays, etc. Under FSS (Food Safety & Standards)
Act, every manufacturer has the responsibility to ensure that the food that he sells is safe in all
respects and confirm to the standards prescribed under the law. So due to these violations of
major food regulations, various states have banned the sale of nine variants of Maggi- Uttar
Pradesh, Delhi, Gujarat, Tamil Nadu, Maharashtra, Kerala, Madhya Pradesh, Jammu &
Kashmir, Telangana, Bihar and several other states.

SKILLS GAINED:

I have learned about what caused the huge controversies about Maggi products being
unhealthy.
DAY 18

STATEMENT OF PROBLEM

The well renowned Swiss based Nestle company’s Maggi2 minute noodles has
defaulted on FSSAI (Food Safety and Standards Act)regulations owing to the presence of lead
detected in product in excess of the maximum permissible levels of 2.50 parts per million
(ppm), misleading labelling information on the package reading ‘No added MSG’, and thirdly,
the release of a non-standardized food product ‘Maggi Oats Masala Noodles with Taste maker’
in the market, without risk assessment and grant of product approval. It has led to the imposition
of ban on 9 variants of Maggi product and shuffle in the whole food industry and Indian
economy. It has impacted various parts of Indian economy. This study helps us to know the
impact of Maggi row in India.

The senior officials also admit that Nestle could have averted this crisis, and the impact
would not have been so much had Nestle been proactive. Also, according to a local Magistrate,
the same could have been settled by paying a fine of INR 25000. If Nestle would have paid
INR 25000 fine in this case and not gone for appeal against the report, the situation could have
been different now. It could also have changed the labelling to comply with the FSS
regulations. Later on also, as the matter intensified with more states claiming Maggi as unsafe,
the Company did not do so much apart from issuing statements invalidating these findings. By
the time, the FSSAI issued ban and recall order on June 5, 2015, the matter had gone out of
hand. Even the presence of Paul Bulcke, Nestlé’s Global CEO, in India could not help rescue

SKILLS GAINED:

I have learned about the global problems and how it became a disaster.
DAY 19

IMPACT OF MAGGI CRISIS IN INDIA

Maggi noodles, which at estimated INR 2500crore revenue that makes up over 30% of
the Nestle’s revenue and commands 80% of the market, has severely affected India. Maggi
noodles sales have been hit hard ever since it was revealed that the samples tested by
Government lab contained MSG and lead beyond permissible limits. The brand Maggi which
has become the generic name of noodles in India, has therefore also witnessed a severe dent in
its popularity and image. Following are the few glimpses of the impact of Maggi row in India:

• AROUND 1500 WORKERS AND OTHER EMPLOYEES IMPACTED: Around 1500

workers involved in manufacturing of Maggi in India have been impacted by the stoppage of
production after ban on Maggi. According to senior company official, these workers have been
redeployed, engaged in other units and in a way impacted. Company has not fired any of its
permanent workers but has engaged them in other activities like training, team building
exercise, etc. but their future is uncertain. Hundreds of contractual workers have lost their jobs
due to Maggi production stop. Nestle India is not granting leaves to the employees unless there
is emergency and the employees who were on leave have been called back.

• SUPPLIERS IMPACTED: Owing to the Maggi ban, the production of Maggi has stopped
and thus, the suppliers have also been hit. Suppliers have to look for new customers after the
ban on Maggi. Nestle India’s largest supplier of spices, Moga based Paras Spices Ltd., has
already ended the services of some of the workers out of 200 temporary employees.

SKILLS GAINED:

I have learned about the things happened when there was a ban throughout India.
DAY 20

IMPACT OF MAGGI CRISIS ON SHARE MARKET

The Maggi row has not even spared the share market from its impact. This crisis has
made the investors bearish. Since BSE Sensex is considered as the best indicator of the
economy’s position and also the benchmark index of Indian equities market. So, taking BSE
Sensex as the base, position of Nestle India Ltd. has been shown. Earlier during the year, the
Nestle India Ltd. had performed better than the BSE Sensex on bourses. Its growth rate was
better before the ban on Maggi was imposed on June 5. Three months before the ban on Maggi
i.e., on March 5, the picture was totally different as compared to now. Growth rate of Nestle
India Ltd. shares was 18.71% as compared to 8.1% of BSE Sensex that means Nestle had
performed brilliantly well on bourses. On April 6, Nestle India’s growth rate was 15.91% as
compared to BSE Sensex growth rate of 4.64%, also better progress than BSE Sensex. On May
5, i.e., one month back from the imposition of Maggi ban, the growth rate of Nestle India Ltd.
on bourses was 11.08% as compared to 0.73% of BSE Sensex; it was extremely well i.e., gap
of 10.35%. On May 27, growth rate of Nestle India Ltd. was 15.21% as compared to 1.91% of
BSE Sensex i.e., gap of 14.02%. This all shows that Nestle India has performed well, earlier
than the Maggi ban. But as the Maggi row began to emerge in media, share market suddenly
collapsed for Nestle India Ltd. On June 5, day on which Maggi ban was imposed, the growth
rate of Nestle India Ltd. was -2.81% as compared to -1.74% of BSE Sensex i.e., BSE Sensex
had performed better as compared to Nestle India Ltd. in the share market. The situation
worsened on June 8 as the growth rate of Nestle India Ltd. went down to -9.61% as compared
to -2.64% of BSE Sensex. On June 29, the situation was recovering in the hope of getting some
relief as Nestle India Ltd. showed the growth rate of -1.05 % as compared to 1.48% of BSE
Sensex. On June 30, as a result of Bombay High Court relief of permission to export Maggi,
Nestle India Ltd. showed the growth rate of 3.51% as compared to 1.98% of BSE Sensex. It
showed improvement. Owing to Nestle India Ltd.’s nearly three-decade old presence and
considerable size, stock analysts are even now somewhat patient and adopting BUY, HOLD
strategies till the final results are out i.e., analysts are not in favour of selling Nestle India Ltd.
Shares.

SKILLS GAINED:

I have learned about the down-fall of Nestle’s market shares and its impact in the global share
market.
DAY 21

MAGGI CRISIS HIT NESTLE REVENUE BADLY

The instant noodles market is estimated at about INR 2500crore. Maggi noodles
contribute over 30% of the company’s total revenue (as can be seen under in figure 3) and have
80% of the market share. According to analysts, the Maggi noodles controversy is eating into
the Nestle India’s market size and could take away a big chunk of its revenue for a few quarters.
As a result of countrywide ban on Maggi, large retailers like Reliance, Big Bazar, Nilgiris, etc.
took the Maggi products off shelf. Some retailers said Maggi sales fell down by 30% after the
issue came up. According to an analyst at a domestic brokerage, Maggi was perhaps the only
growing brand (in volume) for Nestle India last quarter. Following this controversy, company’s
volume growth in second quarter (April-June) could even be negative. Losses due to safety
concerns are INR 320crore as a result of recalling and destroying Maggi. Maggi issue has also
affected the sale of other Nestle products like Tomato Ketchup and soups. Maggi was the
favourite snack for children, tourists, youngsters, etc., but now, according to dhaba owners,
many tourists now prefer paranthas and other alternatives instead of Maggi. So, on an all, in
every state of the country, Maggi row has affected Nestle’s revenue adversely.

SKILLS GAINED:

I have learned that due to the global crisis of Maggi ban caused a downfall in Maggi
and Nestle’s total market revenue.
DAY 22

LOSS OF $200 MILLION IN BRAND VALUE

According to brand Finance, an independent asset valuation consultancy, Maggi is

going to lose $200 million in brand value after imposition of ban on Maggi’s nine variants (as
can be seen from figure 3). Maggi is going to destroy $50 million worth of noodles labelled as
‘unsafe and hazardous’ after imposition of ban by FSSAI. $50 million loss of goods include
the estimated sales value of the stock in the market including those with trading partners as
INR210crore and estimated stock at its factories and distribution centres of INR 110crore.
According to Brand Finance, the Maggi brand was worth $2.4billion before the recall of Maggi
products. The brand was ranked as 23rd most valuable food brand in the world as ranked by
Brand Finance. The consultancy calculated $50 million loss of goods along with a damage to
brand that resulted in a reduced Maggi brand value of $2.2billion. Any health concern raised
by any reputed organization, such as FSSAI, most negatively affects a food brand. Now, Nestle
will have to ensure its dominance in the Indian market.

SKILLS GAINED:

I have learned about the how Maggi lost its brand value through the global ban of Nestle
products.
DAY 23

CENTRAL GOVERNMENT HAS USED THE PROVISION OF COMPLAINING ON

ITS OWN TO NCDRC FOR THE FIRST TIME:

In further troubles for Nestle over Maggi row, the Central Government has filed a
complaint with the National Consumer Disputes Redressal Commission (NCDRC) on its own
in the interest of consumers. Usually, NCDRC acts on the complaints filed by a consumer but
section 12-1-D of the Consumer Protection Act, 1986 also provides for Government to register
a complaint on its own if it deems fit. For the first time in three decades, the Central
Government has used this provision. The raising of issue by the Central Government has shown
the seriousness of the issue. So, the Maggi row has impacted the workers, suppliers, share
market, Nestle’s revenue, brand ambassadors, Central Government, etc. This particular section
deals with the manner in which a complaint can be made before NCDRC.

It states that “a complaint in relation to any goods sold or delivered or agreed to be sold or
delivered or any service provided or agreed to be provided may be filed by the Central
Government or the State Government, as the case may be, either in its individual capacity or
as a representative of interests of the consumers in general.”

While the government has already asked central food safety regulator FSSAI to look into the
matter, it had earlier said that NCDRC would look into this issue if a complaint is filed. Since
there would be delay in getting FSSAI (Food Safety and Standards Authority of India) reports
and since it is concerned about consumers, central government decided to file a written
complaint before NCDRC in the interest of consumers

SKILLS GAINED:

I have learned that due to the seriousness of Maggi products the central government
field a case against Maggi in the supreme court.
DAY 24
HOW NESTLE INDIA LTD HAS DONE TO HANDLE THE SITUATION
Nestle India Ltd has been on firefighting mode ever since the Maggi row became the
news headlines. No doubt, the brand’s reputation has taken a serious hit and it takes some time
for the brand to regain the trust of customers. The Indian subsidiary of the $100 billion Swiss
based major, after a slow response to the crisis initially is now moving quickly to contain the
damage and of course, to hasten its comeback in the Indian market. Its crisis management began
on June 5, 2015, with the company releasing a press statement to announce a voluntary recall
of Maggi noodle but maintained the product was actually safe as the company’s own analysis
had shown. At press conference in New Delhi, understanding the delicacy of the matter, the
senior management was there to answer the questions and to maintain the trust of its customers.
Global CEO Paul Bulcke and Company Sri Lanka head Shivani Hegde, who is believed to be
the key person behind Maggi’s success in early 1980s, were in the conference to control the
damage to the brand. Reports have also suggested that the employees and their families have
been told to act as Company ambassadors in these hard times. Nestle had also moved to
Bombay High Court for relief and to some extent has got some relief with the court allowing
the export of Maggi outside India. A visit organized for the media to the Company’s production
facility at Moga in Punjab and Hassangarh plant in Haryana and opening the doors of its
production facilities to scrutiny is a sure sign that Nestle is trying to bounce back at the earliest.
According to media reports, in an attempt to do some damage control, Nestle India is looking
to tie up with US based public relations firm APCO Worldwide. Nestle has also conducted
tests of the samples at their accredited labs and are also cooperating with the regulators in the
enquiry. They are also answering the questions of the public regarding Maggi on their website-
www.nestle.com, for more information enquirer can contact the consumer services at
consumerservices@in.nestle.com or 18002661188. Company has also provided the facility of
returning the bought but unused packets of Maggi so to maintain better customer relationship

SKILLS GAINED:

I have learned about the strategies that Nestle used to overcome this problem through
the world.
DAY 25

MAGGI’S COME-BACK

Nestle should not have denied the probability of finding lead and MSG in Maggi which
the government authorities claimed on the basis of the laboratory test reports.

A rather different approach should have been taken where the company should have
expressed their flow into investigating the issue

Nestle Maggi shares a degree of emotional connection with the consumers which they
have established over their span of 30 years. This could be one of the marketing strategies
where Maggi could gain the advantage to win back the shares in the Noodles market. Consumer
needs to be bombarded with quotes like “Maggi is back” over television, newspapers, radio,
billboards and magazines.

Digital marketing over social networking sites like Facebook and twitter should be used
extensively to promote pre-launch and re-launch of Maggi. Fan pages and articles with
keywords like “no MSG”, “no lead”, and “meri same original Maggi” can be promoted and
add to the already started hashtag moments like #WeMissMaggi and #BringMaggiBack.

Nestle should initiate trustworthy public figures to conduct checks the quality of Maggi
in the production process and tag it safe for consumption. Media channels like National
Geographic and Discovery should be requested to prepare a documentary of the manufacturing
process within the factory, the chemical analysis of the product and its harmful & non-harmful
effects, if any.

From the point of view of a marketing manager, small packs of Maggi can be placed near the
billing counters at the grocery stores to promote the awareness of “#WeAreBack” and position
the brand back at the same aisle levels of the consumer. In addition, free samples to children in
schools can lead to sales.

SKILLS GAINED:

I have learned that after overcoming the global problem Maggi improvised there marketing and
quality of their products.
DAY 26

BRANDING THROUGH MARKETING MIX ELEMENTS

• Products: Variety, Quality, Packaging/sizes – family packs available, Name, Logo

• Price: Discounts, Low prices, Offers in different package sizes

• Place: Retailers – Intensive distribution network in the city

• Promotion: Word of mouth, Advertising, Sales promotion – Use of posters, Point of sales

USING THE NOSTALGIA FACTOR: Maggi has always made family-based advertisements
to attract its customers. Most of the ad’s centre around mothers delighting their children with
their favourite two-minute noodles with a storyline of how the child was having a bad day at
school or the child growing up to use the mother’s special Maggi recipe to show her that she
still needs her. Either which way, the narrative revolving around the mother-child duo (in most
of the ads) strikes a chord with the users, who then subconsciously start noting the family value
the product manages to sell. Quite naturally, the first ad after the Maggi re-launch was of a
mother speaking nostalgically about her child’s tryst with his favourite noodles, thus further
adding to the emotional value of the customers, right there.

MAKING IT EXCLUSIVE: Like with everything else, consumers thrive on the feeling of
owning a product or service ‘exclusively’. Maggi played its cards smartly when it decided to
take this into account by making a deal with Snapdeal, which became the only platform where
Maggi packets were sold before its official comeback into the shelves of all stores. This raised
its demand by a roof and customers were trying to outbid each other for the ownership of the
packets, sometimes even paying more, before it went out of stock. The company thus set the
stage for Maggi’s official comeback into the markets. Today, we are back devouring our
favourite pack of two-minute noodles without a single thought about the fact that it was banned
for health reasons a little over a year ago. Not only did Maggi manage to save its reputation
and get back a steady customer base, it taught us a how to be effective at marketing

SKILLS GAINED:

I have learned about the different kind of marketing tools used by Maggi to promote
their products
DAY 27

INNOVATION AND MAGGI

In line with its new focus, Nestle India has lined up a slew of initiatives for its culinary
flagship brand Maggi. For Maggi Ketchup the company has taken a strategic decision to expand
the tiny ketchup market by focusing on the ‘consumer’ rather than rely on trade discounts to
merely push its products. To guard its turf and offset the challenge of newcomers such as Heinz,
nestle is planning to launch new products in this category; increase penetration of ketchup and
develop more effective communication and marketing strategies.

The company has already taken the first step: it recently launched a new TVC reviving
its highly successful theme, “It’s different “to promote its Maggi ketchup. One area where
nestle is putting this mantra to practice is into its best-selling product, instant noodles brand
Maggi. Aimed at growing the instant noodles market—currently pegged at 15,000-16,000
tonnes with a growth rate of 15 per cent—Nestle apart from launching Maggi noodles’ new
variants, also plans to widen its target audience.

In Maggi soups, the company has changed its packaging and introduced new flavours
such as mixed vegetable. The company also plans to introduce its instant soups shortly.

With such ‘Renovation and Innovation’ in place, it might not take long for Nestle India
to crack the culinary category.

SKILLS GAINED:

I have learned about the innovation that Maggi has used so that it could succeed through
the global market.
DAY 28

BRAND EQUITY SOURCE

The brand equity for Maggi comes from Brand Loyalty and Brand Awareness. Maggi
always highlighted and emphasized its consumers and customers as their ambassadors. They
made it clear that it is only because of the mothers and their kids love and likings; they are now
one of the strongest brands in instant food market. So, the consumers through the years have
become loyal to this brand and its products and of course the result of all this is brand
awareness. The “2-minute noodle” product created a bond that no other brand in the category
or even across categories of instant food could build. Maggi is to instant noodle what Xerox is
to photocopies, where the product and brand have become synonymous. Maggi has achieved
differentiation through the other competitors in the category of Noodles. That has as a result
other products to be blocked from extending. The brand needs loyal customers to all of its
products. New strategies could be followed in order to help other products become popular,
too.

BRAND PERSONALITY

Brand Personality is the psychological nature of a particular brand as intended by its

sellers, though consumers may see the brand otherwise (brand image). Most of the times we
choose brands that are familiar with our personalities. As a result, Maggi can be characterized
as:

• Traditional

• Honest

• Domestic

SKILLS GAINED:

I have learned about the ways that Nestle holds their brand equity throughout the course
of the company.
DAY 29

DIFFERENT COMMUNICATION MEDIA USED BY MAGGI

TV ADVERTISEMENTS: Initially Maggi was targeted at the working women and later the
upper-middle class kids. Maggi was a sponsor for Hum Log, a popular television show on
Doordarshan, India’s sole channel in 1984. Maggi is now targeting its products at the entire
family and not only kids. Maggi has recently launched “Main Aur Meri Maggi”, campaign in
commensurate of 25 years of Maggi in India. In 2019, as it turns 36, Maggi has tweaked its
advertising strategy to highlight how parents are teaching their children key life skills,
including cooking, as they venture out in the real world on their own.

PRINT ADVERTISEMENTS: Maggi does not focus heavily on print media. During its launch
since its initial target audience was mother and kids. Some adv in the print media were used to
highlight the convenience factor of Maggi. Recently Maggi came out with advertisements in
weekly magazines for its new Atta noodles and rice noodles variants. Maggi rice noodles mania
had the highest column centimetre in print among the instant food category. Growth in
noodles/pasta print advertisement grew by 42% share in 2010. Maggi’s expenditure on print
media is much lower compared to other-media.

SALES PROMOTION: Some of the strategies used by Maggi for promotion: To meet
challenge of competition tools Exchange schemes Price –Off offer Scratch and win offer
Discount offered to retailers: 7%discount on 6-piece pack, 5-rupee discount on 8-piece pack.
These are promotional schemes given to retailers. Maggi is coming up with schemes like giving
one soup pack with 8-piece pack. In past company had promotional schemes like 4-piece pack
with that ofRs.36 instead of Rs.40. Display: -Large pack sizes at the top with decreasing pack
sizes as going downward. This is because that for a retail outlet the more value is generated
large pack, thus they try to project big size at convenience place.

SKILLS GAINED:

I have learned about the different communication medias used by Maggi to spread it’s
safe to consumers.
DAY 30

COMPETITORS OF NESTLE MAGGI

Maggi instant noodles, foods major Nestle's flagship brand that has dominated the
Indian instant noodles market for nearly three decades, is losing market share on a monthly
basis to newer entrants such as Patanjali Noodles, GlaxoSmithKline's (GSK) Horlicks Foodies,
Hindustan Unilever's (HUT.) Knorr Soupy noodles, Big Bazaar's Tasty Treat, Top Ramen and
several other smaller players.

Below are the top 2 Maggi competitors:

• RAMEN- The Ramen is the second top brand of Noodles in India and has been trying
hard for the last 18 years to beat Maggi. It is a global brand from Nissin, which was
launched in 1991. Top Ramen then was the heavy advertiser in the media. Another
factor was the promotion strategy and its interesting distribution strategy. Top Ramen
could not offer any serious differential to Maggi either in terms of the brand or product.
However, Maggi was able to gain back the lost position because it was the pioneer
brand that built the category.
• YIPPEE- SunFest Yippee is the recently launched noodles brand in India, which has
been dominated by Maggi for many years. Recently, this product has also seen a lot of
activity with the launch of many new brands like Knorr from HUL, Ching’s Secret by
Capital Foods, etc.
Thus, it has tried to give itself a different positioning from the other competitors in the market
and it is the only competitor of Maggi who has decided to head on while competing with it.

SKILLS GAINED:

I have learned about the major competitors of Maggi and how does Nestle still find a
way to remain in the top position.
 CONCLUSION

This iconic brand is on a mission to champion the goodness of home cooking, renewing
its global product portfolio with ingredients that people are familiar with, like those they might
find in their kitchen cupboard. The Brand Maggi is strongly established as a Family Brand with
crisp brand equity in Indian market. The brand has always been known to have the first movers’
advantage in the portfolios like noodles, ketchups, soups, sauce, etc. The parent brand Nestle
has been the strong symbol of family, shelter and warmth which brand Maggi has innovatively
capitalized.

Nestle motto 'Good Food, Good Life' will have to prove its credibility and put a lot of
efforts again as it has ended up in scratch. Nestle should concentrate on product portfolio
diversification with focus on diary, beverages and coffee and also chocolates as well as
confectioner}' in order to avoid over-dependence on single product. It is rightly said one can
do anything but only if God and Time permit. Those who fail to analyse the happenings in the
surroundings become losers and those who accommodate and adjust according to time rule the
world. The controversy started igniting last year but no officials of Nestle India paid heed to
do the necessary rectification resulting now a bad name and shame for the company. Health is
of prime concern for everyone though taste also matters. It is very difficult to restore the faith
lost because even the school going kids now say -Maggi is bad. This controversy will surely
lead to increased awareness among consumers for understanding the impact of any product
before consumption rather than blindly believing on false claims in the advertisements. It will
also pressurise the other food product giants to move cautiously by abiding the norms of Food
and Safety regulatory norms.

Through this study I learned about the ways that Nestle holds their brand equity
throughout the course of the company, the pricing strategy of the nestle Maggi, marketing mix
and marketing strategy, Maggi crisis, impact of Maggi of crisis, and Maggi comeback after the
crisis.