A STUDY ON MARKETING STRATEGY OF MAGGIE AFTER BAN IN 2015-16

Introduction
Since Maggi is a well-known brand all over the world, it does not need to be said. In 1983, Maggi noodles'
parent company, Nestlé introduced, MAGGI to the Indian market. Since it entered the Indian market, Maggi
has been ranked among "The Most Powerful & Influential Brands in India." The famous Maggi Noodles' ban
and resurgence in India are the focus of this case study. As a result of reports that MSG (monosodium
glutamate) and lead levels were above the recommended limit, the Maggi controversy damaged the trust of
many consumers. In some of the tests that were carried out on samples of Maggi in India in 2015, it was
discovered that MSG and lead levels were higher than the permissible. The Bombay High Court ordered all
Maggi variations to be removed and destroyed nationwide. The value of the brand was affected. Maggi 2-
Minute Noodles, a brand that had been around in India for more than three decades and was adored by
everyone, from housewives to hostesses, had fallen apart. The ban scenario and the sequence of events
following the discovery that "MSG and Lead levels" exceeded the prescribed limit in "2-Minute Maggi" are
discussed. In addition, the case focuses on the brand's resurgence following the ban's lifting. The brand was
revived with several tactics, including emotional touch, television advertising, and exclusive retail
availability.

The ready-to-cook (RTC) food industry is made up of all the companies that manufacture foods that can be
opened and eaten right away and that don't need any additional ingredients or preparation. It is one of the
largest and most vibrant segments of the food industry. Ready-to-eat foods are developed to stay fresh for a
long time and are packaged in airtight sealed solutions for use in packed lunches, frozen food, at-home meal
replacements, ready dinners, and more. A substitute for fresh, canned, and cooked foods is frozen food.

The Ready-to-Eat (RTE) food category was first introduced to the Indian market in the 1980s but was not
well embraced, due to preference for traditional cooking methods. Once more in the early 2000s, RTE grew
in popularity in the Indian market as a result of the advent of fresh technological developments aimed at
extending or improving a product's shelf life. The number of storage and distribution centers (warehouses)
also increased significantly, which helped RTE items acquire favor once more. As a result of the introduction
of several industry segments, there is now more product differentiation. Retort technology was used to create
one of these parts, which later became known as the Heat and Eat Food Industry
Almost a decade back, Indian housewives was fond of cooking foods for their families following traditional
cooking methods which was followed from generations, despite of having many cooking aids facilities in the
market eg(ready dosa batter). As a result, there are now several brands selling ready-to-cook (RTC) items on
the market. In the current environment, the young generation is more interested in the ready-to-eat (RTE)
food sector than the ready-to-cook segment (RTC). Due to changing consumer lives, high-income families,
the availability of home delivery services, young people's lack of interest in cooking, etc., customers are
moving away from Ready to Cook products and toward the Ready-to-Eat category. Numerous studies in
emerging nations have revealed a decline in young people's interest in cooking and improving their culinary
abilities. Due to their affection for their families, the elder generation is more eager to serve them and display
their cooking talents.

Major players in Ready-to-Eat industry are:

(a) Nestle

(b) Kelloggs

c) H.J Heinz

(d) ConAgra

(e) ADF Foods Ltd

(f) ITC Ltd

g) Kohinoor Foods Ltd

(h) Haldiram Manufacturing Company Pvt

(i) MTR Foods Pvt. Ltd

(j) McCain

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TRENDS IN INDUSTRY

According to a Tech Science study titled "Research on Indian Ready-to-Eat Food Market Forecast and
Opportunities, 2019," the business is predicted to increase by up to 22% CAGR over the next five years as a
result of changing consumer lifestyles, advancements in the retail sector, urbanisation, etc. According to
forecasts made by numerous research for the projected time period, consumer desire for the RTE category is
growing in India as a result of job creation and changing consumer lifestyles. The majority of the workforce
in India is made up of the country's sizable youth population. Due to their hectic schedules and disinterest in
cooking, young people in India provide a large market opportunity for ready-to-eat foods. The makers of
ready-to-eat food goods have significant problems in providing affordable products for the price-conscious
consumer despite increased disposable income of Indian consumers. Indian consumers are extremely cost-
conscious and want to save money, therefore even a small modification in the product's pricing strategy
might have an impact on consumers' decisions to switch brands. Manufacturers continually offer the greatest
quality and reasonable costs in an effort to solve this issue. Retail chains are crucial for educating the public
and raising awareness of RTE products. Retail players such as Reliance Smart, Vishal Mega Mart, Easy day
etc. that offer display of each product item offered for sale are a great contributor for the increasing demand
of the RTE products in the country.

Growth Leading Factors

(a) Changing Lifestyle

(b) Rising Dual-Income Families

(c) Diminishing Culinary Skills

(d) Technological Advancements

(e) Rapid Urbanisation

(f) Increasing Disposable Income

(g) Improving Retail Sector

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(h) Consumer Behaviour

(i) Time Saviour

NESTLE

Henri Nestle established the worldwide food and beverage corporation Nestle, which has its headquarters in
Vevey, Switzerland. During the first world war, Nestle began to develop, and by the second, the company's
product range had grown to include more than just infant food and condensed milk. With over 2000 brands
under its umbrella, Nestle is present in more than 200 nations worldwide.

(a) Nestle India

NESTLÉ's with the Indian market dates back to 1912, the year Nestle began operating as "The
NESTLE Anglo-Swiss" in 1947. At that time, bureaucrats' plans for the nation's economic welfare
led to Nestle's entry into India. In response to Indian economic policies, NESTLÉ formed and
established its business in India and built its first manufacturing facility in 1961 in the Punjab district
of Moga. The government asked Nestle to develop and expand India's milk economy by introducing
technologies into the Indian market that resulted in high milk production.
Ever since it entered the Indian market, NESTLÉ has created a variety of production facilities, units,
and businesses. One such business is Condensed Milk Company (Export) Limited, which Nestle
formed and which imports and distributes completed goods for the Indian market. Following India's
independence, Nestle and Indian citizens forged a unique relationship based on trust, a dedication to
provide for their needs, and devotion. The company's expansion into the Indian market has boosted
both direct and indirect job opportunities, improving the standard of living for almost 1 million
people. Farmers who offer agricultural outputs, manufacturers of packaging materials, administrative
employees, etc. are examples of those who are employed. The company continually attempts to
comprehend and adapt to the changing demands and wishes of the Indian customers and create goods
that are tasty and full of nutrients to meet their changing lifestyle (Nestle official website).
(b)Nestle Maggi
Maggi is an internationally recognised company that sells a wide range of goods, including tomato
ketchup, noodles, soups, and more. Maggi has been a Nestle brand since 1947. Julius Maggi
established the business in 1886. He is credited with its founding. The two key characteristics for

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 which Maggi is renowned worldwide are quality and inventiveness. One of the top firms in the world,
its parent company Nestle, provides a wide variety of products to its customers. In the 1980s, the idea
of quick 2 Minute Maggi noodles was established. According to Maarten Geraets, General Manager,
―MAGGI is like our mothers who are constantly understanding us.
lifestyles as we grow, anticipating our needs, preparing for them and nurturing them, sensing the
change in our personalities and speaking our language.

Product Mix of Maggi

MAGGI 2 MINUTE NOODLES

a.Veg. Atta noodles

b. Maggi Oats Noodles

c. Maggi 2-minute masala noodles

d. Maggi cuppa mania

 Cuppa Masala

 Chilly Chow

e. Maggi Hot Heads

f. Maggi Chicken Noodles

MAGGI PAZZTA

a. Masala Penne

b. Cheese Macaroni

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c. Tomato Twist

d. Mushroom Penne

MAGGI SAUCES

a. Rich Tomato Ketchup

b. Tomato Chilli Sauce(Hot & Sweet)

c. Masala Sauce

d. ImliPichkooo

MAGGI CUP-A- LICIOUS SOUPS

a. Tomato Margherita

b. Winter Vegetables

c. Vegetable with Chilli Pepper

d. Green Pea with Coriander

e. Dal Shorba

f. Cream of Corn

MAGGI COOKING AIDS

a. Maggi Bhuna Masala

 For Makhani Dishes

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 For Korma Dishes

 For Gravy Dishes, Dals &Vegetables

b.Maggi Magic Cubes

 Vegetarian Masala

 Chicken Masala

c. Maggi Masala-E-Magic

d. Maggi Coconut Milk Powder

MAGGI: SWOT ANALYSIS

(a) Strengths

(i) High Share in the Market: Maggi had the highest market share in the Indian market when it came to the
noodles. When it comes to noodles a customer always recalls of Maggi. Such was the brand image of Maggi
before the ban.

(ii) Image of Brand: Maggi in India is known as ―Family Brand‖ as everyone, no matter what age they are
can enjoy a bowl of Maggi anytime and anywhere. With an enormous product mix of the Maggi, it has an
advantage over its competitors in the market

(iii) Market leader: Maggi was the industry leader for instant, two-minute noodles. And despite the
prohibition, Maggi resurrected its brand and regained market dominance.

(iv) Pull Approach: Maggi uses a pull strategy to draw customers, which is very advantageous for the
business.

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(v) Distribution Channel: The success of any business depends on having a well-connected distribution
channel

(b) weakness

(i) Maggi Controversy Affected its Brand Value: The ban controversy significantly lowered Maggi's
market share in India, which fell from 70% to 0%. During that time, its rivals took advantage of the crisis to
expand their market share. Yippie Noodles was the first to respond to the Maggi incident. But after being
outlawed for five months, Maggi's brand value was recovered in the eyes of Indian customers by means of
effective marketing efforts that catered to their emotional intelligence.

(ii) Brand dependence: Nestle, which derives the majority of its profits from the Maggi brand, runs the
danger of becoming overly dependent on it. Health Awareness: People today are increasingly concerned with
their health, which is a weakness for Maggi.

(c) Opportunities
(i)Expansion: One of Maggi's opportunities is to broaden its product offering. Maggi may grow its
company by selling cereals, pickles, and other foods.
(ii) Repositioning of the Maggi: Moving the Maggi was both difficult and simple because
physicians would not encourage their patients to incorporate it in their diet because of how it was
warped in appearance. Many even acknowledge that, after rice and wheat, it is India's third most
important food source. One of the top five brands in India, it is estimated to be worth Rs 16,000
crore, but the ban has caused the competition to fear it for the first time.
(d) Threats
(i) Competitors: Many of Nestle's rivals are significant market players and pose a serious threat to
the company both domestically and internationally.
(ii) Word Of Mouth: Negative word of mouth on social media and other platforms poses a
serious danger to the business, which can damage its image.
(iii) Name has become commoditized: Maggi has become into a brand unto itself. Everyone
requests Maggi when it comes to noodles. Much like how everyone in India says "surf" when it
comes to laundry detergents.

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 MAGGI V-BRAND IMAGE
With a $1,127 million valuation, Maggi was placed number 18 in Millward Brown's 2014
Brand Z Top 50 Most Valuable Indian Brands survey, which was commissioned by WPP.
There was essentially no competition for this brand even after 25 years of domination and more
than 70% of the market. This is precisely what a strong brand does to a product over time.
Maggi is the brand that most exemplified the power of branding. Maggi had a market share of
70 per cent of instant noodles with all the brands heating up in competition, as with such a huge
market share there is a lot of brand loyalty and trust, that had to be protected

Issue And Controversy

It all started in May 2015 when food safety inspectors from the Barabanki region of Uttar
Pradesh, India, reported that samples of "Maggi Two Minute Noodles" had lead levels up to
seventeen times the allowable limit as well as surprisingly high amounts of monosodium
glutamate. A follow-up test was also carried out at the referral lab, the Central Food Laboratory
in Kolkata. To verify Nestle's claim that Maggi had no monosodium glutamate (MSG), the
Gorakhpur lab conducted a test. Both tests revealed MSG, and according to officials in Uttar
Pradesh, the Kolkata lab also discovered extremely high levels of lead, 17.2 parts per million.
Due to these results, the New Delhi Government prohibited the sale of Maggi in New Delhi
retailers for 15 days on June 3, 2015.
After finding undesirable amounts of metallic lead in 27 out of 39 tests, among other things, the
Gujarat FDA prohibited the noodles for 30 days on June 4th, 2015. Since June 4, 2015, Assam
has prohibited the sale, distribution, and storage of Maggi's "super tasty chicken noodles"
variation after tests conducted at the state public health laboratory revealed that the specific
type included additional MSG and an excessive amount of lead.
A statewide ban on Maggi was also enforced by some of India's largest merchants, including
Future Group, which owns Big Bazaar, Easyday, and Nilgiris. Following the discovery of an
unacceptable level of lead, it was outlawed in more than 5 additional Indian states by state
authorities. Due to an unsafe level of lead and other ingredients, Maggi was also outlawed by
the Tamil Nadu government on June 4th, 2015. The Andhra Pradesh government outlawed
Maggi on June 5.
All nine authorised varieties of Maggi instant noodles and oats masala noodles from India were
ordered recalled on June 5, 2015, by the Food Safety and Standards Authority of India

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 (FSSAI), on the grounds that they were potentially harmful and unfit for ingestion. The Food
Safety Agency of the UK began an inquiry the same day to determine the lead content of Maggi
noodles. The selling of Maggi noodles was outlawed nationally on June 6, 2015, by the Indian
Central Government. Nepal also permanently banned Maggi due to worries about the product's
lead content. A supermarket chain removed Maggi noodles from five African countries—
Kenya, Uganda, Tanzania, Rwanda, and South Sudan—after receiving a complaint from the
Consumer Federation of Kenya.
Ram Vilas Paswan, India's food minister, ordered the Food Safety and Standards Authority of
India (FSSAI) to perform the countrywide test on Maggi following the FDA's allegation in
Uttar Pradesh before the Barabanki court.
Despite the yellow packages' claim that "no additional MSG" was used, the FSSAI took Nestle
to task by stating that 30 of the 72 samples tested positive for dangerously high levels of lead
and even MSG.
Food for infants less than 12 months should not include MSG, a "flavour enhancer," under the
Food Safety and Standards Rules, 2011. Over 50 goods, including "Pastas and noodles (only
dry products)," are prohibited from containing MSG; nevertheless, spice used in noodles and
pastas is authorised.
Nestle India declared that it will temporarily suspend selling Maggi Noodles till the problem is
handled in view of the rising customer misunderstanding caused by an Indian Government
laboratory finding lead levels beyond acceptable limits. An order to halt the sale and
manufacturing of Maggi was issued by the Food Safety and Standards Authority of India
(FSSAI).
Nestle India carried out over 3500 tests following the prohibition.
including approximately 200 million packets on a national and international level.

as well as all internationally recognised testing laboratories The reports are plain. Additionally
to this, several nations US, UK, Singapore, Australia, and other countries have
Maggi Noodles shipped from India were confirmed to be safe. consumption. Each and every
sample of the recently produced batches received a clean bill of health from three National
Accreditation Board for Calibration and Testing Laboratories (NABL)
The Bombay High Court has directed that laboratory be certified. Nestle India as a result
submitted a legal request to the Bombay High Court is asking for a court to reconsider this

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 ruling. The government's ban on Maggi noodles was overturned by the Court after fresh testing
from three independent laboratories revealed lead levels that were far within the permitted
limits. After an absence of five months, Nestle India will bring Maggi Noodles back to the
market for sale now that the Bombay High Court's directives have been followed. The Food
Safety and Standards Authority of India (FSSAI) took the problem of Maggi breaking the law
so seriously that it also requested the testing of four Maggi varieties. Pazzta with tastemakers is
nefarious. Later, it ordered the testing of different pasta, macaroni, and noodles.

Losses and decline in sales

Exceptional item charge of Rs. 451.6 crore, which resulted from the withdrawal of Maggi
noodles and Nestle stock, caused losses and a decline in sales. India's first quarterly deficit in at
least 17 years was revealed on Wednesday when it declared a net loss of Rs. 64.40 crore for the
second quarter that ended on June 30, 2015. This follows net profits of Rs. 287.8 crore in the
same quarter last year and Rs. 320 crore in the prior quarter that ended in March 2015. The
primary cause of this loss is the prohibition on Maggi, which generates about 20% of Nestle
India's income. The Maggi issue has affected the company's revenue as well as earnings.
During the quarter, Nestle India reported a 20.1% fall in net total sales. The domestic net sales
fell by 20.6%. This is a setback for the company, which in the most recent quarters posted
record earnings. The company's net profit initially exceeded the 300 crore level in September
2014, but it reached an all-time high of 326 crore in December. In addition to the revenue lost
due to the interruption in operations, net sales of Rs. 288.4 crore were reversed during the
quarter due to Maggi noodle supplies that had previously been sold and taken off the market.
The extraordinary item is a loss due to stock withdrawals. While Nestle's gross sales quantity
(measured in metric tonnes) for the fiscal year that ended in December 2014 decreased 0.6%
from that of 2013, the PDCA segment saw sales quantity increase 3.7%. The milk products and
nutrition business, which is Nestle India's largest segment and represents over 45% of the
company's total sales income, shrank by 2.3% in 2014 to reach 135 591 MT. In comparison to
2012, the segment's volumes likewise decreased in 2013. This segment's volume has been
declining for several years, and it is currently 1,35,591 MT lower than it was in 2010 (1,44,397
MT).

ISSUE WITH FSSAI

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 In October 2015, the India Today television crew carried out a sting operation where they
pretended to have a food item with excessive lead levels and contacted FSSAI authorities. This
was done in response to the ban on Maggi. Without doing any testing, one of them consented to
accept the samples. He informed the group that they must pay a fee of Rs. 20,000 annually.
He disclosed that milk samples from one of the most well-known corporations in India had
been rejected after being purposefully adulterated because the company had refused to pay
inspectors' bribes. He said that they occasionally face pressure to label food samples from some
well-known companies as dangerous. He said that because Maggi is a well-known brand across
the world, it's possible that someone requested a gift and the corporation declined. He said that
the government is in charge of the labs and the samples, and that it has unlimited power.
In response to the investigation, Food and Consumer Affairs Minister Ram Vilas Paswan stated
that "Flawed items are being passed by such corrupt authorities and are being labelled as
substandard." Although FSSAI is not administered by his ministry, this is a severe crime, and I
urge the harshest measures against all those found guilty and promising to take serious action.
Commenting on the reports, Union Health Ministry stated that FSSAI has clarified that the
officials who have figured in the sting operation are not working in FSSAI but are employees
of the UP State Government.

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