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1 – Theory 4.2 – Industry perspective Positioning 5.1 – Theory 5.2 – Industry perspective Category Product Life Cycle and Consumer Adoption process 6.1 – Product Life Cycle 6.2 – Consumer Adoption Process Marketing Mix - Product - Price - Place - Positioning Research Design and Objectives Discussion on findings Strategy and conclusion Page Nos.
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1. Aim/Objective of Thesis The objective of this report is to study the Noodle Industry in general however the focus would be on understanding Instant Noodles Market and the current trends. The study is also intended to understand that given an option of traditional snacks, burgers, etc. why users (kids, teens and youth) opt for noodles, specifically instant noodles as snacks or sometimes lunch or dinner. The major players of instant noodles are trying to associate “health” with instant noodles. This study therefore attempts to understand whether instant noodles are perceived as “Healthy” food.” 2. Industry Overview: Food Industry in India: India is the second largest producer of food and holds the potential to be the biggest on global food and agriculture canvas, according to a Corporate Catalyst India (CCI) survey. The food industry in India comprises the food production industry and the food processing industry. The food processing industry is one of the largest in India – it is ranked fifth in terms of production, consumption, export and expected growth. Growth Drivers of India’s food Industry The growth of the food industry is driven by: • Higher disposable incomes • Change in spending pattern • Increasing organised food retailing • Increasing export opportunities • Favourable regulatory environment and Government support and investment inflows Market Size of Indian food Industry The Indian food industry is projected to grow by US$ 100 billion to US$ 300 billion by 2015, according to a report by a leading industry body and Technopak. The industry, estimated at US$ 200 billion in 2006-07, is projected to reach US$ 300 billion by 2015. During the period, the share of processed food in value terms is expected to increase from 43 per cent to 50 per cent. Food Processing Industry Food processing Industry is one of the largest industries operating in India, and is highly fragmented. Segments The Food Processing Industry operates across various segments that include: • Fruits & vegetables • Meat & poultry
Dairy Marine products, grains and consumer foods (that includes packaged food, beverages and packaged drinking water). Value addition of food products is expected to increase from 8 per cent to 35 per cent by the end of 2025. Fruit & vegetable processing is also expected to increase to 25 per cent of total production in 2025 from the current level of 2 per cent, states the CCI report. Dairy sector – that holds highest share in processed food market – holds large potential to be exploited. The report reveals that 37 per cent of the total dairy produce is processed of which only 15 per cent is done by the organised sector. Hence, there still lies a lot of scope for investment and development. The sector has attracted foreign direct investment (FDI) worth US$ 1,253.79 million from April 2000 to April 2011, according to the data provided by Department of Industrial Policy and Promotion (DIPP). The amount of FDI inflow for Food Processing Sector in India during the financial year 2010-11 up to November 2010 (8 months) is US$ 129.2 million. (source: http://www.ibef.org/artdispview.aspx? cat_id=498&art_id=29252&in=22 -website of India Brand Equity Foundation)
Industry Overview of Noodles, including Instant Noodles: About Noodles: As per the research conducted by the Chinese Scholars, oldest known noodles, 4000 years old, were found in China at the Qijia culture Lajia site in Qinghai province (BBC News 12.10.2005). Hence they claim that noodles were originated in China. However controversies on origin of noodles still remains continued. The website http://www.world-foodhistory.com, powered by Blogger shows history of Noodles as under: 5000 B.C. Wheat flour, believed to originate in the Middle East, serves as the basis of the first “noodles.” Chinese ate pasta as early as 5,000 BC. Wheat was grown in northern China by end of the second millennium. By fourth and third centuries BC, version of pasta existed in many cultures. Indian called it sevika, or thread; the French, noulles; German, Nudeln and the English, noodles. Guangzhou in China considered to be culinary mecca of China. When the first Arab merchants arrived in the fourth century to serve as intermediaries between the Chinese and Greek, they established a steady commerce between China, India, Africa and Europe.
It was via this route that the noodle is said to have found its way from China, through the Middle East to Europe. 300 500-600 The Chinese form whole grain paste into various noodle-like products. Amidst numerous cultural exchanges, China shares Buddhism and the art of noodle-making with Japan. Buckwheat noodles become a staple of the Japanese tea ceremony. Arab geographer, Idrisi, travels to Sicily and writes about “triyah,” a food resembling threads and produced in large quantities. Explorer Marco Polo introduced pasta to Italy after encountered it at the court of Kublai Khan in China in 1295. However, the history shows that pasta, maccheroni and vermicelli were known foods before Marco Polo return to Italy. German bakers made a precursor to pasta in the 13th century, when they rolled dough into symbolic shapes such as swords, breads and stars, which they baked and served as bread. Early in the 1600s., the beginning of Japan’s Edo period, somen noodles and soba (buckwheat) noodles gained popularity in Tokyo and along the east coast. Because of a demand for soba as breakfast and festival food and street fare, farmer began sowing more grain. The very first spaghetti is produced in Napoli, Italy. Japanese specialty shops create noodles, similar to those eaten today, but requiring considerable preparation time and effort. It is believed that noodles originated from China as early as 5000 BC, then spread to other Asian countries.
The noodle is food made from different types of dough (rice, wheat, buckwheat, potato, maize, legume, nut), formed into long thin ribbons, strips, curly-cues, waves, helices, pipes, tubes, strings, or other various shapes, sometimes folded. They are usually cooked in a mixture of boiling water and/or oil. The word derives from the German Nudel (noodles). Chinese noodles, known collectively as mien. Today, about 40% of the flour consumed in Asia is for Noodle manufacture. In recent years, noodles have also become very popular outside Asia and this popularity is likely to increase.
they fall into three main categories. but originates from China) Flat Tibetan noodles used to make Tibetan Noodle soup. yellow Chinese noodles. thin as spaghetti or thick as fettucine. knife-cut wheat flour Korean noodles are used for making Kalguksu It is a type of hand-made or hand-pulled Chinese noodle. Flat. especially in Indonesia and in Thailand. Types of Noodles Wheat Flour Noodles Rice Noodles Starch Based Noodles Wheat Flour Noodles: The most common are wheat flour noodles. It is also the name of the dishes that use these noodles Bakmi is a wheat based noodle which was brought to Southeast Asia by Chinese merchants. It is popular in Tibet. stiff or extremely elastic. hand made. Japan) and yakisoba (a dish of fried noodles sold during festival time in Japan. Bhutan. Ladakh. which can be made with or without eggs. popular in Southeast Thukpa (Tibetan : Wylie: thug pa) Kalguksu (Korean) Lamian (Chinese) Bakmi (Chinese) Mee pok (Chinese) . chanpon (regional cuisine of Nagasaki.Types of Noodles: Types of Noodle vary from Country to Country. Arunachal Pradesh and some other parts of India. Wheat noodles are used for preparation of different noodle dishes in different countries as under: Chūka men (Japanese) Used for ramen (Japanese Noodle Dish). however. wheat noodles can be white or yellow. and is today a common noodle dish. Depending on the remaining ingredients. Nepal and also in the states of Sikkim.
They are found in the cuisine of Germany and of Austria. There are also rice paper wrappers which come in either circular or triangular shape. Alsace and South Tyrol. (Wikipedia) Rice Noodles: Rice based noodles can be： 1. Idiyappam is Indian rice noodles. Mung bean starch noodles will often be cut with tapioca starch to make them more chewy and reduce production costs.Sōmen (Japanese) Spätzle Udon (Japanese) Reshte (Central Asia) Erişte (Azerbaijan) Also known as Kesme (Turkish) Asia Thin variety of Japanese wheat noodles. very pale in colour (almoste white). flat noodle. Extruded from a paste and steamed into strands of noodles 2. Reshte are Persian style noodles used in soups. . Switzerland. Starch based noodles These noodles are made using various plant starches like Mung Bean Starch or Potato Starch. Steamed from a slurry into sheets and then sliced into strands These noodles are typically made only with rice and water without the addition of salt. or the prepared dish made with them. Rice noodles can also be thick or very thin . Although unorthodox. often coated with vegetable oil A Swabian (dialect spoken in Swabia region of Germany’s southwestern state) type of noodle made of wheat and eggs.almost resembling long strings of coconut. mixed with rice or with deserts. some producers may choose add other plant starches to modify the texture of the noodles. The term may refer to the noodles themselves. It refers to a traditional Central Asian noodle dish made by the Kazakhs or the Kyrgyz. Central Asian. The same is true of rice sticks. yellow or reddish brown wheat noodles. Thin rice noodles are also known as Rice Vermicelli. It is flat. Hungary. The udon noodle is made from wheat flour and is typically the largest and thickest noodle found in Japan.
Cellophane noodles (also known as Chinese vermicelli. History of Instant Noodles Momofuku Ando Nissin Foods invented "CHICKEN RAMEN ™". Eventually the paste is transformed into long. Japan. noodles. About Instant Noodles: Instant noodles are dried or precooked noodles and are often sold with packets of flavoring including seasoning oil. and water. bean threads. the world's first instant noodle product 1958 . potato starch. While in China it is still possible to watch vendors make hand-pulled noodles. making "hand-pulled" noodles is an art involving holding the stretched out paste in both hands and whirling it around several times. Dried noodles are usually eaten after being cooked or soaked in boiling water for 2 to 5 minutes.Other variant of starch based noodles is ‘cellophane noodles’. yam. cassava or canna starch). crystal noodles. bean thread noodles. Then the paste is laid out on a board and folded and refolded repeatedly. today most noodles are made by machine. thin. Instant noodles were invented by Momofuku Andō of Nissin Foods. Hand-pulled Noodle: In China. or glass noodles) are a type of transparent noodle made from starch (such as mung bean starch. while precooked noodles can be reheated or eaten straight from the packet.
This method became the basis for all instant noodle production. Momofuku established the Japan Convenience Foods Industry Association to promote the growth of the instant noodle industry 1971 Worl'ds first "CUP NOODLE ®" was developed by Mr.1964 Mr. Momofuku. 2005 Space Ram (first instant noodle to be consumed in outer space) developed by Momofuku Ando and the product was carried into space by Japanese astronaut Soichi Noguchi aboard the Space Shuttle Discovery in July 2005. cooking vessel and serving dish was the basis for cuptype instant noodles. 2010 About 95 billion servings of instant noodles are eaten world wide The development of Instant Noodles The technology of "CHICKEN RAMEN ™" developed by Momofuku Ando in a humble shed behind his home involved rapidly drying noodles through flashfrying in oil. These two inventions by Momofuku Ando revolutionized culinary culture on a global scale. Sub-Category of Noodles: . His revolutionary "CUP NOODLE ®" concept in which a single container serves as packaging.
The Brand became a synonymous with instant noodles much as Cadbury with Chocolate. 45). Market Size: Market Size of Packaged Food Sector: “Noodles” falls in ‘Packaged Food Sector’ category. meal replacement products. and now even Maggi has a cup variant. dressings and condiments. Top Ramen from Indo Nissin. Nestle India pioneered the convenience food segment in the country by introducing Maggi. Market Size of Noodles: Noodles other than instant noodles are largely produced by small and medium enterprises. market size of instant noodles as per different news articles is studied and given here under. Maggi was the first brand of Instant Noodle introduced in India by Nestle India in the year 1982/1983. 45 to a dollar). 1300 crore ($ 0. sauces. Market Size of Instant Noodles: The Market size of instant noodle is of Rs. bakery products. dairy products. spreads sweet and savoury snacks. However.67 Bn at an exchange rate of Rs. 3. ice cream. But most of the other new entrants have been sticking to the pouch model with the taste maker as an additive.000-3. Ching's Secret from Capital Foods. The category is growing at the rate of 15-20%.500 crore ($ 0. The main categories of packaged food include baby food. bowls and pouches. pasta. Packaged food was 4 per cent of the overall Food and Grocery (F&G) market in 2008 and it is expected to reach 5 per cent of F&G market by 2014. the largest category within Noodles is “Instant Noodles”. etc. Market size could not be found for this category. ready meals. . The former category includes Indo Nissin’s Top Ramen mainly. snack bars. frozen processed food. soup. Major Players of Instant Noodles in India: Major players in the industry are Maggi of Nestle India. the market size is expected to be of Rs.The sub-category of instant noodles includes cups. noodles nutrition/staples. which Horlicks Foodles prefers to call the health maker. in India.29 Bn where exchange rate is $1= Rs. Taking this growth rate year-on-year. canned/ dried processed food confectionery. Therefore. The size of the packaged food market in India was estimated at US$ 10 Bn in 2008 and is expected to reach US$ 20 Bn by the year 2014. Foodles from GlaxoSmithKline (GSK) and Wai Wai from CG Foods also wooed the space.
was the pioneering firm. which introduced instant noodle category. Ltd.Until 1988. As per May 2009 edition of Progressive Group Magazine by Juhi Sharma. Top Ramen at 9.. Besides them. In 2002-2003. the founder of Nissin Foods.4%. Food Bazaar. imported brands such as Wan Thai Foods Industry Co. launched Authentic Chinese Food Ingredients Brand “Ching’s Secret” and International Food Brand ‘Smith & Jones’ in India. private labels at 0. ITC has launched noodles under its mother Sunfeast brand in Chennai. In the year 2010. According to Euromonitor International’s Global report on packaged food that came out in 2009 (it comes out every two years) the brand share of the players in the instant noodle category included Maggi at 80. Mumbai based Capital Foods Ltd. under its mother Brand Horlicks.’ in India to introduce their flagship Brand “Wai Wai”. In 1996. instant noodle category was monopolized by Maggi. Nissin at 1. incorporated ‘CG Foods India Pvt. Spencer’s. They launched Top Ramen and Cup Noodle in India in 1991. Ltd – entered in India through an Indian subsidiary. Wai Wai was launched in the year 2005. In the year 2009. Chaudhary Group of Nepal.7% and others at 1. Ko-Lee instant noodles etc. also share retail space in the category now. dried instant noodles. convenient food product that is ready to eat just by adding some hot water. In 1988 Japanese noodle giant – Nissin Food Products Co. Indo Nissin Foods Ltd.’s yum-yum instant noodles. Reliance Fresh.4%.9%. Ltd. based in Meghalaya. GlaxoSmithKline (GSK) introduced Foodles.. Aditya Birla Retail etc. the instant noodle category today also accommodates a host of private labels offered by modern food and grocery retailers such as More. had invented instant noodles as a quality. Coimbatore and Kerala. Nissin Food Products Co.9%. has also stepped into the instant noodle market with its Ready-to-Eat 'Yummy' Noodles. Chaudhary Group’s Wai Wai at 5.Ltd. .8%. Hence in the world market. in 1958. Momofuku Ando. The Brand name for ITC’s Instant Noodle is ‘Sunfeast Yippie’ AA Nutritions.
the share dropped to 86. on an all-India basis.0.80% As per news report by Ratna Bhushan. but add that Nestle has the potential to expand the Rs 1.5% in July '10 on an all-India basis. others like Indo-Nissin's Top Ramen. Maggi's share of instant noodles.300-crore instant noodles category – which itself is growing at a rapid 15% annually.90% 9.Bra S re of the pla nd ha yersinInsta Noodle ca ory(E Monitor's Report of nt teg uro 2009) Wai Wai. 80.40% Pvt Labels. While Maggi instant noodles (minus vermicelli) had a 90. across urban markets. 1. private brands like Big Bazaar's Tasty Treat and Aditya Birla Retail's Feasters are notching up share.40% Maggi .90% Nissin. Apart from HUL and GSK which have positioned their noodles as 'healthy' snacking options targeting kids and mothers. has slipped consistently between December '09 to July '10.70% Others. though around for long. Besides. 2010.7% share in December '09. The report further says that with new competition. are stepping up marketing efforts to take advantage of category growth. Aug 30. Economic Times Bureau dtd. .1. Maggi's market share is certain to get impacted . Capital Foods' Ching's Secret and CG Foods's Wai-Wai . Top Ram en 5.
National Trends in Instant Noodles Demands Country / Region Total China.1 149. 11346.3 408. An HUL spokesman said: "We are very pleased with the performance of Knorr Soupy noodles.0 1 2 . marketing.Mania. Shubhajit Sen.6 million was held by instant cup noodles. who were pioneering in Cup Noodles and are the market leaders in Cup Noodles market having 90% share in cup noodles market. 2011 2008 2009 2010 913. it is Indo Nissin. From a snack food targeted at children. GSK's executive VP." On the other hand.9 425." GSK. While Nestles’s Maggi was the first instant noodles in pouch form.Manoj Menon. of which Rest." Private brands are whetting appetites of consumers too. The brand packaging was revamped last year and Future plans to roll out additional variants in a month's time taking the number of variants to nine from the existing three. which rolled out Knorr Soupy noodles in the South this February. which entered the category in December 2009. had to postpone the brand's national launch due to capacity constraints because of heavy consumer offtake. wrote in a report: "Maggi faces product substitution risk and brands like Knorr and Foodles could potentially impact its incremental growth. Nestle faces a challenging competitive environment in culinary. the market size of instant noodles was around Rs. Future group: "The category boundary is set to be re-drawn.1 918.3 144." Mr. has taken away share from Maggi mainly in the South and East riding on the equity of Horlicks and its wellentrenched distribution in the regions.7 million was the share led by pouch instant noodles and remaining Rs 174. said: "Consumers were looking for a choice in instant noodles. As per the Euromonitor’s statistical information given in its research report. The initial response to Foodles is much higher than our expectations. combined with that.6 423. the equity of Horlicks is leading to a lot of trails. Maggi has recently entered the cup-noodles market with its brand Cuppa. HUL.0 139.2 458. business head.0 137. private brands. instant noodles category has evolved as a mainstay meal even for grown ups. 11171.3 million in 2008. Hong Kong Indonesia 2007 947.0 953. FMCG analyst at brokerage firm Kotak Securities. published in September 2008. According to Devendra Chawla. Chawla said Tasty Treat was the second biggest instant noodles brand in its Big Bazaar stores after Maggi.9 Updated on May 10.
1 Poland.3 0.3 Ukraine Cambodia 2.2 0.2 7.7 39.1 Nigeria 10.7 12.5 1.9 48.8 South Africa 0.2 0.8 23.1 2.8 Brazil 15. Qatar and Kuwait) Estimated by World Instant Noodles Association (WINA) .4 0.8 1.8 Bangladesh New Zealand 0.9 5.2 0.2 0.3 7.0 Russia 27.4 16.0 2.0 40.0 1.6 8.1 8.2 0.2 Peru 0.4 0. Bahrain. Oman.8 7.2 0.6 Myanmar 2.5 Singapore 1.6 2.0 12.2 Philippines 24.7 21.8 Australia 1.7 25.5 25.4 Norway.6 34.1 27.4 3.0 8.4 43.2 0. Czech 2.3 Thailand 22.1 2.6 2.2 0. 0.1 1.6 0.0 Republic of Korea 32.3 5.6 1.0 16. Sweden.4 3.1 2.4 3.6 0.3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 Country / Region 2007 Japan 54.1 5.2 Canada 2.2 0.9 24.6 7.1 2.0 16.3 5.2 0.2 8.3 3.6 8.0 918.4 2.3 0.8 Malaysia 11.6 Vietnam 39.1 Others 2.0 Total 947.4 27.8 GCC Countries * 6.0 2010 52.3 0.9 Unit : 100 Million Packets (Bags/Cups) *Gulf Cooperation Council Countries (United Arab Emirates.8 1.2 Belgium 0.1 2.2 Fiji and outskirt islands 0.0 19. Saudi Arabia.0 913.8 34.4 France 0.9 0.5 33.0 Taiwan 8.8 1.0 14.0 953.1 2009 53.0 Germany 1.2 Netherlands 0.3 0.6 1.1 USA 39.8 21.9 1.9 0.8 0.4 14.3 0.8 Mexico 9.2 39.0 2.0 20.2 India 12.9 0.5 18.6 2.0 1.8 22.0 40.2 2008 51. Hungary.5 0.4 0.4 0.7 Nepal 4.4 0.9 5. Finland.4 6.7 UK 2.9 0.1 2.3 Denmark Costa Rica 0.1 29.2 2.0 12.1 2.4 0.
1) 2) 3) 4) 5) 6) 7) 8) 9) 10) . Changing Food Habits: Brand consultant Harish Bijoor estimates that from a single meal eaten in a restaurant in a month a decade ago.growth of retail sector – better visibility. managing director of Wazir Consultants describes reasons for change in Indian food habits: the country's young demographic profile. time constraints. The growth possibilities. increasing number of working couples. shortage of household help. global travel. While HUL introduced “Knorr Soupy Noodles” . increasing family income. the cosmopolitization of major urban centers. accelerating urbanization. cooking pastes and purees (US$33 million). increasing exposure to global cuisine and so on.The “Instant Noodles” category has shown tremendous growth in last few years. instant pasta (US$22 million) and ready-to-eat meals (US$17 million) reflects the shift in food habits. unprecedented interstate migrations.8 meals a month in restaurants. He further adds that “The localization of cuisines to match customer tastes regionally has played a major role in the acceptability of different cuisines in the country. Teens and Youth has compelled Global FMCG players like Unilever and GlaxoSmithkline Consumer Healthcare to enter in instant noodle market. Not only this. GSK introduced Foodle a dried noodle version with “health” perception to earn market share in this category. There is one more element which has contributed to changing food Other factors include – . Harminder Sahni. increasing demand for ready-to-eat packaged food and changing food habits of the Urban Indian Toddlers. market sizes of Powdered soups (estimated market size: US$55 million).a mix of soup and noodle. depth and length of assortments generates awareness amongst the customer this results in impulse purchase. the average urban Indian in the top eight metros is now consuming 7.” These are the drivers of growing interest and action in the instant noodles market.
etc. Segmentation of Instant Noodles: Understanding Segmentation: Segmentation is essentially the identification of subsets of buyers within a market who share similar needs and who demonstrate similar buyer behavior.g.- new product introduced by various brands – e. with a series of connected but distinctive segments. The world is made up from billions of buyers with their own sets of needs and behavior. Think of your market as an orange. Manchuria. Market segmentation aims to increase a company’s precision marketing. Hot Garlic Instant Noodles by Ching’s Secret. dried noodles (Foodles) by GSK. Chiken. Schezwan. atta noodles by Maggi. Segmentation aims to match groups of purchasers with the same set of needs and buyer behavior. Such a group is known as a 'segment'. . each with their own profile. Smith & Jones’ Curry Noodles.
Opportunities will depend upon factors such as: the potential growth of the segment the state of competitive rivalry within the segment how much profit the segment will deliver how big the segment is how the segment fits with the current direction of the company and its vision. model type. the auto market could be segmented by: driver age.such as class. Segmentation is a form of critical evaluation rather than a prescribed process or system. The diagram above depicts how segmentation information is often represented as a pie chart diagram . engine size. However the more general bases include: • by geography .such as age.such as where in the world was the product bought. sex. For example. • by demography . and hence no two markets are defined and segmented in the same way. and so on. • by psychographics . • by socio-cultural factors . cost.such as lifestyle or beliefs. However there are a number of underpinning criteria that assist us with segmentation: • Is the segment viable? Can we make a profit from it? • Is the segment accessible? How easy is it for us to get into the segment? • Is the segment measurable? Can we obtain realistic data to consider its potential? There are many ways that a segment can be considered. Bases for Segmentation • Geographic Segmentation . and so on.the segments are often named and/ or numbered in some way.Of course you can segment by all sorts of variables. A company will evaluate each segment based upon potential business success.
West. Colgate with different flavors for the age group of 7-15 years. counties. • Demographic Segmentation: In demographic segmentation. Cold.size/country size: Metropolitan Cities. o Density of Area . East. o Climate . or neighborhoods. • Catalog sales: In catalog sales direct marketing. etc. South. • Product selection: Different geographic segments have differing consumption patterns.Geographic segmentation calls for dividing the market into different geographical units such as nations. North. Also. the market is divided into groups on the basis of age. for practical reasons. coastal. Segmentation can also reveal information for advertisement media. Humid. generally demographic information of customers is not available. Variables of Geographic Segmentation: o Region . there is often much more data available to help with the demographic segmentation process.Urban.of the world or country. states. The company can operate in one or a few geographic areas or operate in all but pay attention to local variations. pricing and communication. Ginny . regions. Semi-urban. Demographic segmentation variables are amongst the most popular bases for segmenting customer groups. Introducing different products for different geographic segment can bring more sales! • Military recruitment: Military recruits have certain demographic attributes. gender. • Advertising: Areas for advertisement can be identified. towns. cities.Hot. Geographic Segmentation is considered for designing product. etc. small cities. Examples include the marketing of toothpaste – Jr. family size. Focusing on geographic segments with such profiles. Central. o Country . The main demographic segmentation variables are summarised below: Age Consumer needs and wants change with age although they may still wish to consumer the same types of product. Geographical segmentation can be used for various purposes. The followings are geographic segmentation examples. income. Census information derived from geographic data can be used to develop better customer segmentation and predictive models. military can find new recruits more efficiently. package and promote products differently to meet the wants of different age groups. hilly. Rainy. Rural. This is partly because customer wants are closely linked to variables such as income and age. • Shop outlets: Locations for new shop outlets can be identified. So Marketers design.
and travel. boats.particularly in markets such as leisure and tourism. Lifestyle Marketers are increasingly interested in the effect of consumer "lifestyles" on demand. E. hairdressing. where price is the only factor to buy a product. They design cars to suit the affordability of their customers. For expanding sales in highly competitive markets many FMCG companies introduced sachets or small packets to suit low income group or poor section’s demand. cosmetics. 16 Cohorts are groups of people who share experiences of major external events (such as World War II) that have deeply affected their attitudes and preferences. . there are many different lifestyle categorisation systems. clothing. Automobile sector highly dependent on income levels of the consumers. and events of that period. Gender Gender segmentation is widely used in consumer marketing. Family Size Important for the products like food grains where the packaging sizes could start from 1 kg (considering nuclear families) or 5 to 10 kgs (considering joint families).g. clothes. etc. Life-cycle stage A consumer stage in the life-cycle is an important variable . home furnishings. Another good examples are family or party packs of ice-creams and soft drinks. magazines and toiletries and cosmetics. retailers. There is a clear link here with income-based segmentation. Income segmentation is a long-standing practice in such categories as automobiles. while others target Baby Boomers (those born between 1946 and 1964). leisure activities. Some marketers target Generation Xers (those born between 1964 and 1984). reading habits. many of them designed by advertising and marketing agencies as a way of winning new marketing clients and campaigns! Generations: Each generation is profoundly inﬂuenced by the times in which it grows up—the music. contrast the product and promotional approach of Club 18-30 holidays with the slightly more refined and sedate approach adopted by Saga Holidays. The best examples include clothing. For example.and Jony concentrates only on kids’ wear where segmentation is done for infants (just born up to 6 months) and toddlers (1 to 5 years) too. Unfortunately. 15 Meredith and Schewe have proposed a more focused concept they call cohort segmentation. Social class Many Marketers believe that a consumers "perceived" social class influences their preferences for cars. movies. Income Another popular basis for segmentation. Armani shirts for premium market where income levels are pretty high. politics.
For example. homemakers. managers. craftspeople. Muslim. retired.g. children still living at home with parents). Hindu. sales. other • Psychographic Segmentation: Psychographics is the science of using psychology and demographics to better undertant consumers. The main types of psychographic segmentation are: Lifestyle – different people have different lifestyle patterns and our behaviour may change as we pass through different stages of life.Professional and technical. Jewish. and • Late (parents with children who have left home. buyers are divided into different groups on the basis of psychological/personality traits. a family with young children is likely to have a different lifestyle to a much older couple whose children have left home. Each group is then further subdivided according to income and occupation. Titan watches have a wide range of sub-brands within their Titan range such as Edge. students. Protestant.Because members of a cohort group feel a bond with each other for having shared these experiences. forepersons. lifestyle or values. the “sagacity lifestyle model”. • Pre-family (with their own households but no children). • Family (parents with at least one dependent child). therefore.Grade school or less. and Raga. unemployed. some college. and proprietors. identifies four main stages in a typical lifestyle: • Dependent (e. Nebula. and there are. BPO/Call Centre people. .. effective marketing appeals use the icons and images that are prominent in the targeted cohort group’s experience. high school graduate. People within the same demographic group can exhibit very different psychographic proﬁles. Ragalia. likely to be significant differences in consumption patterns between the two groups. Other Variables include o Occupation . Banking professionals. Fastrack brand appeals youth and Titan’s value-for-money brand Sonata targeted at people who want to own good-looking watches at affordable prices. etc. clerical. college graduate o Religion: Catholic. One of the most well-known lifestyle models. ofﬁcials. some high school. To appeal different lifestyle segments. farmers. In psychographic segmentation. operatives. or older childless couples). o Education .
” and it failed. presumably because people saw no need for such a specialized product. at a basic level.occasions. attitude toward. beneﬁts. wine or boxes of chocolates for celebrating birthdays or Christmas. • Behavioral variables: In behavioural segmentation marketers divide buyers into groups on the basis of their knowledge of. The opinions that consumers hold and the activities they engage in will have a huge impact on the products they buy and marketers need to be aware of any changes. Good recent examples include the growth of demand for organic foods or products that are (or are “perceived” to be) environmentally friendly Occasions – this segments on the basis of when a product is purchased or consumed. Values: Core values are the belief systems that underlie consumer attitudes and behaviors. use of. usage rate. views on the environment. sporting and recreational activities and arts and cultural issues. stylish personality that appeals to buyers who do not want boring. or response to a product. buyer-readiness stage. For example. whereas other consumers may buy these products on a . and attitude—are the best starting points for constructing market segments. Many marketers believe that behavioral variables . user status. Opinions. some consumers may only purchase flowers. interests and hobbies – this covers a huge area and includes consumers’ political opinions. it is possible to inﬂuence purchase behavior. for example. loyalty status.But lifestyle segmentation does not always work: Nestlé introduced a special brand of decaffeinated coffee for “late nighters. have a friendly. Personality: Marketers can endow their products with brand personalities that correspond to consumer personalities. and determine. Core values go much deeper than behavior or attitude. ordinary personal computers. people’s choices and desires over the long term. Apple Computer’s iMac computers. Marketers who use this segmentation variable believe that by appealing to people’s inner selves.
The relative numbers make a big difference in designing the marketing program. medicinal properties and suitability to hair types. and they vary their promotional efforts accordingly. some are aware. In mobile phone service market. Buyer-readiness stage – A market consists of people in different stages of readiness to buy a product: Some are unaware of the product. etc. At the beginning most of the women may be unaware of the Pap test. Usage Rate – Markets can be segmented into light. some are informed. For example. heavy users account for a significant proportion of the revenue and hence mobile service providers target this segment by giving special package or offer to retain their patronage. medium. is not only bought to maintain healthy teeth and gums. belief. Marketers often try to change customer perception of the best time to consumer a product by promoting alternative uses for a product. rather than simply a breakfast meal. Market leaders focus on attracting potential users. for example. Raksha Bandhan. buyers are classified according to the benefit sought. whereas smaller ﬁrms try to lure users away from the leader. potential users. Marketers usually prefer to attract one heavy user rather than several light users. but also because of its taste and in order to help combat bad breath! Shampoos offer benefits such as basic cleaning of hair. Heavy users are often a small percentage of the market but account for a high percentage of total consumption. recently Kellogg’s has attempted to change the image of cereals to that of an ‘any time’ snack. and heavy product users. Benefits sought – Here. first time user and regular user. It is essential for the marketer to understand whether a it is consumer’s attitude. The marketing effort therefore . some are interested. some desire the product. Cadbury’s brand Celebration introduced to replace Sweet Meat as a gift to offer at the time of various festivals like Diwali. Another example – suppose a health agency want to encourage women to have annual Pap test to detect cervical cancer. Usage status – Every product has nonusers. conditioning effects. and some intend to buy. It is nothing but a consumer adoption process. ex-users. behaviour or lack of knowledge of product or brand benefits and usage? The company’s market position also inﬂuences its focus.at what stage “kamwali bai” would adopt mobile telephony. which as simple as . This requires marketers to identify and understand the main benefits consumers look for in a product. Toothpaste. Many product categories offer different sets of benefits.weekly basis.
Companies that sell in such a market have a hard time gaining more market share. believe all salt is the same. Later advertising should dramatize the benefits of the Pap test and risk of not taking it. and new competitors have a hard time breaking in. Furthermore. (4) negative. try to win the votes of indifferent voters. . but hair color is not relevant to the purchase of salt. (3) indifferent. To be useful. and (5) hostile. and (4) switchers (who show no loyalty to any brand). a brand-loyal market has a high percentage of hard-core loyals. One caution: What appears to be brand loyalty may actually reﬂect habit. Loyalty status – Buyers can be divided into four groups according to brand loyalty status: (1) hard-core loyals (who always buy one brand). for example. reinforce those who are positively disposed. and would pay only one price for salt. or the nonavailability of other brands. Attitude – Five attitude groups can be found in a market: (1) enthusiastic. So. and characteristics of the segments can be measured. marketers must carefully interpret what is behind observed purchasing patterns. Each market consists of different numbers of these four types of buyers. Effective Segmentation Even after applying segmentation variables to a consumer or business market. (2) split loyals (who are loyal to two or three brands). thus. They may thank enthusiastic voters and remind them to vote. indifference. (2) positive. mar keters must realize that not all segmentations are useful. workers in a political campaign use the voter’s attitude to determine how much time to spend with that voter. a low price. (3) shifting loyals (who shift from one brand to another. a high switching cost. and spend no time trying to change the attitudes of negative and hostile voters. market segments must be: Measurable: The size. this market would be minimally segmentable from a marketing perspective. For example.should go into awareness building advertising using simple message. if all salt buyers buy the same amount of salt each month. table salt buyers could be divided into blond and brunette customers. For this reason. purchasing power.
2) Selective Specialization M1 M2 M3 E. which are as under: 1) Single Segment Concentrate M1 M2 M3 P1 P2 P3 P = Product M = Market Meaning – offering one product to one market and concentrating on one segment only. many companies prefer to operate in more than one segment.g. growth.whether investing in the segment makes sense given the firm’s objectives and resources. the firm gains a thorough understanding of the segment’s needs and achieves a strong market presence. the marketer then decides which segment presents the greatest opportunity. In evaluating different market segments. Meaning – a firm selects a number of segments. and low risk. the firm enjoys operating economies by specializing its production. but each segment . the company can consider five patterns of target market selection. they do not constitute separate segments. such as size. primarily targeted at agricultural market. the firm develops a market offering that it positions in the minds of the target buyers as delivering some central benefit (s). For each target market. distribution. Mahindra and Mahindra . However. if it attains segment leadership. and promotion. that means which are its Target Markets. the firm must look at two factors: 1) The segment’s overall attractiveness . For these reasons. Having evaluated different segments. Substantial: The segments are large and proﬁtable enough to serve.whether a potential segment has the characteristics that make it generally attractive. profitability. Through concentrated marketing. If two segments respond identically to a particular offer. There may be little or no synergy among the segments. it can earn a high return on its investment. concentrated marketing involves higher than normal risks if the segment turns sour because of changes in buying patterns or new competition. each objectively attractive and appropriate. Actionable: Effective programs can be formulated for attracting and serving the segments. A segment should be the largest possible homogeneous group worth going after with a tailored marketing program. Furthermore. Differentiable: The segments are conceptually distinguishable and respond differently to different marketing mixes. 2) The company’s objectives and resources . Targeting Strategy Definition After identifying the market segments. Accessible: The segments can be effectively reached and served. scale economies. Farm Equipment Division concentrates only on tractors.
the firm builds a strong reputation in the specific product area. Only very large firms can undertake a full market coverage strategy. An example would be a firm that sells an assortment of products only to university laboratories. Large firms can cover a whole market in two broad ways: through undifferentiated marketing or differentiated marketing. oscilloscopes. the company can turn its lower costs into lower prices to win the price-sensitive segment of the market. and chemical flasks. 4) Market Specialization M1 M2 M3 P1 P2 P3 Meaning . The firm makes different microscopes for different customer groups but does not manufacture other instruments that laboratories might use. the downside risk is that the customer group may have its budgets cut. initial target segment included newly engaged women and brides. government laboratories. General Motors (vehicle market). Focusing on a basic buyer need. Through a product specialization strategy. IBM (computer market).Another approach is to specialize in making a certain product for several segments. E. A) Undifferentiated Marketing: The firm ignores market-segment differences and goes after the whole market with one market offer. An example would be a microscope manufacturer that sells microscopes to university laboratories. Meaning . However.With market specialization. and commercial laboratories. The firm gains a strong reputation in serving this customer group and becomes a channel for further products that the customer group could use.g. P & G when introduced Crest Whitestrips. Meaning . E. and Coca-Cola (drink market). 5) Full Market Coverage M1 M2 M3 P1 P2 P3 . it designs a product and a marketing program that will appeal to the broadest number of buyers. Presumably.g. the firm concentrates on serving many needs of a particular customer group. This multi-segment coverage strategy has the advantage of diversifying the firm’s risk.Here a firm attempts to serve all customer groups with all of the products they might need. Only very large firms can undertake a full market coverage strategy. The downside risk is that the product may be supplanted by an entirely new technology.P1 P2 P3 3) Product Specialization M1 M2 M3 P1 P2 P3 promises to be a moneymaker. including microscopes.
manufacturing. and promotion. companies should be cautious about oversegmenting their market. administration.Young adults . However. and cavity protection. Johnson & Johnson broadened its target market for its baby shampoo to include adults.Age .Family size Urban. Still. they may want to use countersegmentation to broaden their customer base. business. and video markets. Segmentation for Instant Noodles is as under: Geographics . where husband and wife both are working. we cannot generalize regarding this strategy’s profitability. networking. inventory. Semi-urban and Rural 5 to 12 – Kids – primary 13 to 18 – Teens – primary 20 to 35 . the need for different products and marketing programs also increases the firm’s costs for product modification. digital imaging.B) Differentiated Marketing: The firm operates in several market segments and designs different programs for each segment. Differentiated marketing typically creates more total sales than does undifferentiated marketing. For example. . Intel does this with chips and programs for consumer.Region Demographics .secondary 3 to 5 family members. whiter teeth. If this happens. Smith Kline Beecham introduced Aquafresh toothpaste to attract three benefit segments simultaneously: those seeking fresh breath. Products P1 P2 Pn Segment S1 S2 Sn Benefit Area B1 B2 Bn General Motors does this with its various vehicle brands and models. Because differentiated marketing leads to both higher sales and higher costs. small business. Segmentation Basis for Instant Noodle Category: Based on the above theoretical explanation.
Usage Status . However. fond of tasty. upwards Working Professionals. teens and bachelors Potential users – Kids. married with children 1. teens and young adults of .20.Occupation Psychographics .g.a.Benefits .Personality .Attitude towards product . Generally.Income . migrates (to abroad or cities). western and chinese food. Less time for cooking. Foodels).g. kids would like to have instant noodle as their friends too have the same plus taste and influence of advertisements created focusing kids and mothers. Awareness about instant noodles in metros is higher than that in rural India.000 p.Socio-Economic Class Behavioural . bachelors.Buyer’s readiness stage . For Young adults instant noodle is convenient food and they consume it when time is a constraint. Self employed. Brands like Maggi and Wai Wai (particularly North-East India) have spread their reach to Rural India too.Lifestyle . Middle class upwards Kids. Hard pressed for time.Family life cycle . Out going.Loyalty Status . knorr soupy noodles.Usage Rate . wide ad campaign through multiple channels of communication PAN India helped creating awareness of “Instant Noodles” in emerging cities and smaller towns. single. teens and bachelors/singles are regular users. Enthusiastic and positive Hard Core and Shifting Loyals Urban – heavy user Semi-urban – medium Rural – light First time users – Senior citizens. TV ads play major role in creating awareness. people staying in rural areas Regular users – urban kids. Working Women Working professionals. Instant noodles are now creating awareness on “Health” and “Nutritional value” benefit to attract health conscious mothers (e. Maggi atta and dal noodles) and young adults (e..Occasions Young.
Instant Noodles are marketed in two forms 1) Pouch forms 2) Cup Noodles . The benefit areas they concentrated were “good food” and “time saving”. Maggi was launched in India at the time when instant noodle was not that well known a category. When Nestle India launched maggi in country. Top Ramen Smoodles. Maggi was the first brand of Instant Noodles. Nestle targeted kids for their product to be acceptable in India. it used the tagline. introduced by Nestle India. Indo Nissin introduced Cup Noodles in Indian Market targeting adults who can consume the instant noodles on the move. followed by its curry flavor some years down the line. individuals aged between 14 to 25 years. however. Nestle segmented the customers based on following parameters 1) Lifestyle – Saving time in preparation and Convenience to make food 2) Eating Foods habits of Indian consumers 3) Focus was mainly on age and appetite of the urban families When Maggi introduced in India by Nestle. however. To beat the competition. Elders if instant noodles are perceived as healthy snacks or healthy food. However Ching’s Chinese Instant Noodles and to some extent Foodles are targeting the grown ups. with its traditional 2 minutes noodles in its masala. their target audience was working women.semi-urban area. Segmentation of Instant Noodles: In India. tomato and chicken flavors. they failed in attracting this target audience and after conducting detailed research. Nestle visualized that there would be demand for the product that provides good quality food and at the same time it is convenient to prepare so that time is saved for other works. Smith & Jones. Wai Wai. the first competitor of Nestle also targeted kids for their initial offerings. to not only promote the product’ but also to educate the ever growing aspirant consumer about the advantages of using it. Top Ramen’s Curry Noodle were also targeted to youth of India. Yippie and other private labels etc. Nestle introduced Maggi in 1982-83. The key audience for the instant noodles category continues to be children for players like Top Ramen. ‘fast to cook and good to eat’. Indo Nissin Foods.
attributes. youth and adults by creating perception “healthy food to eat”. advantages/benefits that help the brand to move away from competition and gives the buyer that preferential reason to purchase the brand over competition.The recent instant noodle makers are targeting kids. . which can replace other evening snacks or second meals. Differentiation: Definition of differentiation It is the act of identifying distinguished/distinctive features.
repeat purchases may not occur.The extra value proposition (EVP) should help the company to realize a higher price for the same product offering as compared to competition. Principles of Differentiation: ⇒ It should be credible. Differentiation Variables: Product Form Features Customizat ion Performanc e Quality Conforman ce Durability Reliability Repairabilit y Style Design Service Ordering ease Delivery Installation Customer training Customer consulting Maintenan ce and repair Miscellane ous Personnel Competence Courtesy Credibility Reliability Responsiven ess Communicat ion Channel Coverage Expertise Performan ce Image Symbols Media Atmosphe re Events Product Differentiation: Physical products vary in their potential for differentiation. aspirin. Bayer’s Aspirin and . ⇒ Do not attempt to over differentiate since raising levels of differentiation adds to the ‘input cost’ and may/may not be realized pricing. ⇒ Differentiation is “Brand’s Promise” which has to be fulfilled during product delivery. At one extreme we ﬁnd products that allow little variation: chicken. Successful differentiation is the key strategy to achieve competitive advantage. some differentiation is possible: Venky’s Chiken. believable and should be perceived as value by consumers ⇒ It should help the firm move away from the competition due to its “distinct identity” created by credible differentiation which helps it realize a better price. Yet even here. steel. The differentiation variable selected is communicated to the targeted segment through creative advertising. No amount of good advertising can help to sell a “bad product” since the consumer does not perceive value delivery. ⇒ A company should initiate differentiation in all ‘internal value chain activities’ starting from procurement of Raw Materials as well as in all internal Value driven processes.
e. for consumers. such as automobiles and furniture. Cup Noodles. Maggi had to create this category and it launched Maggi Cupa Mania. i. cup noodles are more of product consumed by people on the move. Here the seller faces an abundance of design parameters. most of the instant noodle variants are in rectangular form however. Ajaay Gupta of Capital Foods India says . E.Features are the characteristics that supplement the product’s basic function. At the other extreme are products that are capable of high differentiation. is given in the next section). customization would not be possible. Similarly. each with a separate brand identity.Tata Steel. noodle consumption is largely restricted to homes. Yet there are diminishing returns to higher . In terms of need. E. for FMCG products like instant noodles.g.” Customization – Differentiating product by making it customized to an individual. Performance Quality – Performance quality is the level at which the product’s primary characteristics operate.e. paying a premium for cup noodles doesn’t make sense. the size. Sunfeast Yippie Noodles have differentiated the product giving round shape to the same and the TVC also gives information on its new shape. At this point of time. company cost for each potential feature. Not only this. However. Mass Customization is the ability of a company to meet each customer’s requirement – to prepare on a mass basis individually designed products. shape. the followers have created different varieties of instant noodle to differentiate their product from Maggi’s basic Masala and Chicken variants (a chart on different varieties introduced by Top Ramen. Mr. it is essential for a marketer to identify and select appropriate new features by surveying recent buyers and then calculating customer value v/s. or physical structure of a product. etc. including: Form – i. our belief is that price sensitivity is very strong for cup noodles. Ching’s secret has created a niche to cater Chinese food lovers by offering Chinese Instant Noodles in four different flavours. The Strategic Planning Institute found a signiﬁcantly positive correlation between relative product quality and return on investment. Features .“It has been a great innovation and movement from pouch/bag to cup noodles. programs and communications. Top Ramen had introduced a new category under Instant Noodles. Indians as consumers are not consuming a lot of noodles on the move. However. as they are priced slightly higher than pouch noodles. Ching’s Secrete. So. However. which is easier to prepare and available in different flavours too.g. In case of instant noodles. services.
However. the extra price must not be excessive.performance quality. Style – Style describes the product’s look and feel to the buyer. strong style does not always mean high performance. use. Maytag. durability. To the company. An automobile made with standard parts that are easily replaced has high repairability. The designer has to take all of these factors into account. To the customer. this means the designer has to ﬁgure out how much to invest in form. Reliability – Buyers normally will pay a premium for high reliability. Durability – Durability. Repairability – Buyers prefer products that are easy to repair. repair. Duracell advertise itself as a long lasting battery and brand commands a premium price. Montblanc pens. has an outstanding reputation for creating reliable appliances. and Harley-Davidson motorcycles. Buyers are normally willing to pay a premium for products that are attractively styled. which manufactures major home appliances. conformance. which is the degree to which all of the produced units are identical and meet the promised speciﬁcations. repairability. design offers a potent way to differentiate and position a company’s products and services. and style. a measure of the probability that a product will not malfunction or fail within a speciﬁed time period. and the product must not be subject to rapid technological obsolescence. Repairability is a measure of the ease of ﬁxing a product when it malfunctions or fails. Service differentiation: . so marketers must choose a level suited to the target market and rivals’ performance levels. Style has the advantage of creating distinctiveness that is difﬁcult to copy. install. reliability. The problem with low conformance quality is that the product will disappoint some buyers. a welldesigned product is one that is pleasant to look at and easy to open. feature development. a well-designed product is one that is easy to manufacture and distribute. performance. and dispose of. however. Design is the integrating force that incorporates all of the qualities just discussed. Aesthetics have played a key role in such brands as Apple computers. Ideal repairability would exist if users could ﬁx the product themselves with little cost or time. a measure of the product’s expected operating life under natural or stressful conditions. is important for products such as vehicles and kitchen appliances. Design – As competition intensiﬁes. Conformance Quality – Buyers expect products to have a high conformance quality.
and perform more reliably than competitors’ dealers. an important consideration for many products.When the physical product cannot be differentiated easily. covering speed. reliability. expertise. the IBM people are professional. Channel Differentiation Companies can achieve competitive advantage through the way they design their distribution channels’ coverage. information systems. Singapore Airlines enjoys an excellent reputation in large part because of its ﬂight attendants.g. Customer consulting – refers to data. accuracy. Differentiation by installation is particularly important for companies that offer complex products such as computers. Welltrained personnel exhibit six characteristics: competence. Caterpillar’s success in the construction-equipment industry is based partly on superior channel development. Buyers of heavy equipment expect good installation service. and communication. The main service differentiators are: Ordering ease – refers to how easy it is for the customer to place an order with the company. credibility. General Electric not only sells and installs expensive X-ray equipment in hospitals. Marketers of refrigerators. Personnel Differentiation: Companies can gain a strong competitive advantage through having bettertrained people. but also gives extensive training to users of this equipment. Customer training – refers to how the customer’s employees are trained to use the vendor’s equipment properly and efﬁciently. Its dealers are found in more locations. Maintenance and repair – describes the service program for helping customers keep purchased products in good working order. Baxter Healthcare has eased the ordering process by supplying hospitals with computers through which they send orders directly to Baxter. responsiveness. and the Disney people are upbeat. air conditioners. are better trained. and performance. Dell . The McDonald’s people are courteous. Domino’s delivers pizza within 30 minutes. the key to competitive success may lie in adding valued services and improving their quality. Delivery – refers to how well the product or service is delivered to the customer. E. and customer care. etc. washing machines. courtesy. install the products in customer’s premises. Installation – refers to the work done to make a product operational in its planned location. and advising services that the seller offers to buyers.
whereas image is the way the public perceives the company or its products. MacMillan and McGrath list a set of questions marketer can use to help them identify new consumer-based point of differentiation. Louis Philippe. it conveys this character in a distinctive way. Ian C. ColorPlus. works hard to develop a distinctive image for their brands. For the image to work. including logos. media. Identity comprises the ways that a company aims to identify or position itself or its product. MacMillan and Rita Gunther McGrath argue that if companies examine the customers’ entire experience with a product or services – the consumption chain – they can uncover opportunities to position their offerings in ways that neither they nor their competitors thought possible. brands such as Park Avenue. An effective image establishes the product’s character and value proposition. Van Heusen. In readymade apparel and accessory category. Maggi ranked as 9th Most Trusted Brand of India as per the Brand Equity's (Economic Times) Most Trusted Brands survey. etc. it must be conveyed through every available communication vehicle and brand contact. Image is affected by many factors beyond the company’s control. How do people become aware of their need for your product and service? How do consumers find your offerings? How do consumers make their final selection? How do consumers order and purchase your product or services? What happens when your product or service is delivered? How is your product installed? How is your product or service paid for? How is your product stored? How is your product moved around? . Image Differentiation Buyers respond differently to company and brand images. and special events. and it delivers emotional power beyond a mental image. How to derive fresh consumer insights to differentiate products and services: In “Discovering New Points for differentiation”.Computers has also distinguished itself by developing and managing superior direct-marketing channels using telephone and Internet sales.
Growth of the Instant Noodle category is driven primarily by value addition and innovation. re-launches and makeovers coupled with convenience. and so on. Further. features (variants and flavours). etc. Atta Noodles. the major differentiation variables are ‘product differentiation. Top Ramen Oat Noodles in three different flavours . Different Flavours like Tricky Tomato. Cup Indo Nissin Food’s Top Ramen . nutritional information about the product and most of all.Yummy Masala. value addition in terms of packaging is also one of the most important factors in pushing consumption in this category. Knorr Soupy Noodles have compelled Maggi to introduced whole-wheat variant – Atta Noodles. The recent feature that has been stressed upon to differentiate is “Health” factor. i. product forms. taste and affordability features. Tangy Tomato and Creamy Cheese. It has also helped in pushing impulse purchases. Romantic Capsica. shelf stable functionality. packaging size and ‘Channel Differentiation’. Introduced Curry Noodles and Cup Noodles to beat competition with Maggi On health front. Differentiation done by different Instant Noodles Makers: Nestle’s Maggi When launched – Convenience and Taste Competition from Top Ramen – Maggi Cupa Mania was introduced Competition from Other Instant Noodle Brands like Wai Wai – More flavours added with different healthy options like Veg. Packaging introductions have added convenience. exciting graphics. Dal Noodles. What is the consumer really using your product for? What do consumers need help with when they use your product? What about returns or exchanges? How is your product repaired or serviced? What happens when your product is disposed of or no longer used? Differentiation strategies adopted by various Instant Noodle Brands: In case of instant noodle category. Foodles. Top Ramen has introduced Oat Noodles. variations in serving sizes to suit cross-functional needs. thereby generating awareness and wider consumption.e. Maggi Rice Mania. Thrillin Curry. Veg.
and this has definitely given us an edge over competitors. Indo Nissin Foods Ltd. for mothers & as a 'fun' product for children. Among its most iconic messages was of course. flavours (Top Ramen Oat Noodles and Top Ramen Mug Noodles) and new variant Cup Noodles (cup noodles are also available in pani-puri and manchurian flavours). 'Fast to Cook Good to Eat' was used not only to promote the product. a cup noodle category. Speaking about Indo Nissin’s brand USP. Over a period of time there was no change in the product features by maggi till Indo Nissin Foods entered launching “Top Ramen” in India by positioning it as “Smoodles”. M N V V Prasad. sales and marketing. We started communicating our instant noodle invention story on all our packs.” Hence. but also to educate the ever-growing aspirant consumer about the advantages of using it. The tagline. The brands commercials always highlighted Maggi noodles as an instant snack option for children. it didn’t work. product features. Maggi was positioned as 'convenience product'. With such innovations by Top Ramen. Nestle was compelled to introduce new variants with new flavours and Cupa Mania. DGM. The brand maggi initially positioned on the platform of ‘convenience’ targeting the working women. says. the ‘2-minute noodles’ legend to highlight the instant nature of the product at that point of time the target audience for Maggi was children. After detailed research conducted by Nestle India. and one that was easy for mothers to prepare. To cope up competition with Nestle’s Maggi. a new variant and created Cup Noodles targeting at grown-ups. “Our USP is good quality product at a lower price. Indo Nissin introduced curry noodle. .Noodles Nestle India being pioneer in instant noodle category has made lot of effort to position “Maggi” to consume as snack instead of other traditional snacks. Top Ramen’s differentiation variables are good quality at lower price. Competition has always been very stiff and our communication has always addressed our USP at point-blank range. however.
which were missing in the existing Brands like Maggi. “We are not playing the taste card because we are confident the flavours will play out over time. ITC Foods Divisional Chief Executive Chitranjan Dar says. informs Dar. the company introduced another variant. Capital Foods also offers Masala. which has led to a shift from regular or standard masala. as opposed to the usual rectangular ones to ensure longer noodles strands. Chicken and Curry Noodles under the popular range. Pizza and Masala Curry and Mimi noodles in Veg and Chicken flavours. “It has taken us a while to launch but we wanted to ensure we had a differentiated product. Instead. It is available in Veg and Chicken flavours. ITC differentiates on the basis of circular shape of the instant noodle and new feature ‘resisting clumping’. Yippie comes in round stacks. The company offers brown ready-to-eat noodles that can be eaten without cooking. which offers three scrumptious Chinese flavours Schezwan. Manchurian and Hot Garlic it had added a Chicken Roast Garlic variant to the Ching’s Chinese range in the same pack sizes and price tags. One is a premium Chinese range under the Ching’s Secret brand. Capital Foods currently offers two instant noodles ranges. namely Masala Tadka Marke.” Consumer research conducted by the company revealed a few traits as being high on the wish list of consumers of instant noodles. This range offers instant noodles in pack sizes of 75g and 300g respectively. To tap the growing awareness among Indians of the importance of a healthy snack food.ITC’s Sunfeast. which is branded Smith & Jones. In February ’09. which the company has incorporated in its new product. CG Foods deserves special mention because of its unique offerings. .” adds Dar. Top Ramen and Wai Wai. however differentiate on different feature. just with the addition of taste maker and a small sachet of edible flavoured oil available in the pack. the company offers brands and variants such as Wai-Wai 1-2-3 noodles in Veg. Global FMCG firm GlaxoSmithkline Consumer Healthcare announced its entry into the noodles segment in the year 2010. chicken and tomato flavours to authentic Chinese-flavoured noodles. The brand has launched two variants of noodles. Also it resists clumping when served. which is an easy-to-cook format similar to Maggi and Top Ramen. Capital Foods has gone a step ahead on innovation. CG Foods’ brand portfolio also has Wai-Wai X-Press instant noodles. In the RTE format. Foodles are being promoted as innovative options devoid of the pitfalls of traditional snack . Spinach and Chicken flavours Wai-Wai Quick noodles in the flavours of Chicken Curry. under its popular instant noodles range. Hence.Regular and Multi-grain. we are giving consumers what they had been missing in existing products all this while.
health bhi” and then later brought in Maggi Vegetable Multigrainz Noodles. Gauging the concerns over health issues. Even though Maggi has traditionally used the mother and kid connect to advertise its products. It encompassed 360 degrees communication and leveraged the curiosity quotient very well.food. the other brands were sparsely distributed and restricted to modern trade. the name is synonymous with instant noodles in India. Channel Differentiation: ‘Channel differentiation’ also plays major role in the building brand images of these instant noodle brands. which has worked well for the brand. Indo-Nissin’s Top Ramen. The campaign did good for the brand in terms of involving the consumers and hence making a greater connect. It now includes flavours like the old time hits Masala and Chicken with new flavours like Tricky Tomato. Thrillin Curry. which has taken up positioning strategies hinging on variety in flavours. which actually meant riding on the convenience factor and became the generic name to define the category in the absence of competition for years. tastes and health to make inroads into this category. which was a fabulous effort to recognise consumers who have made the brand no less than iconic in India. Maggi has also been expanding its portfolio.” . The brand has in fact gone a step ahead and now started a conversation with its consumers in recent times. and Romantic Capsica. When it completed 25 years in the market it started a campaign called Me & Meri Maggi where it featured real life stories on people’s experiences with Maggi and came out with human stories that was both endearing and a perfect engagement platform with its consumers. which has been going on for its new flavour. Taking a cue from the competition. “Till now. Menon of Kotak points out. it has failed to move beyond that because of distribution debacles — its tie-ups with the then Hindustan Levers Limited and later Marico failed. It once again managed to create a buzz with its ‘Guess the Taste’ campaign. Looking at the leader Maggi. However. The main unique selling proposition (USP) of Foodles is the vitaminpacked health-maker sachet that comes with the pack. The new entrants have the potential to spread out quickly. It has built its brand equity on the ‘bas do minute’ promise. it is now increasingly using a cross section of the society to feature in its advertising. which has been around since 1991 has been able to hold on to its share of 6-8 per cent because of its clutch of loyalists. People who shared their stories also had a chance to be featured on the pack of Maggi. Nestle’s Maggi has been the all-India player. Nestle also launched Maggi Vegetable Atta noodles with the tag line “Taste bhi. as maida is the main constituent for Maggi.
Also.” Supporting the evolution of modern retail formats. Modern supermarkets/ hypermarkets are still emerging channels and contributed only percent of sales in the category. which dominate the retailing landscape in the country.the brand was available on the shelves of super stores. will leverage their core strength in distribution and marketing in the food category to make deeper inroads in noodles market. Modern Trade – Partners or rivals? New Retail Formats helping category to grow. Capital Foods. as much as in the local Kirana stores. It was then that they started building the brand.While Nestle is having strong distribution network PAN India. The other established players. Its strategy was to first build-up the distribution network. however they are rivals too. For FMCG behemoth Unilever promoting its noodles under the Knorr brand seems to be a well crafted strategy since Knorr is a direct competitor of Maggi in soup category. as consumers get to see and compare competing products. vast distribution reach and intricate marketing network in both urban and rural areas. says. till recently. along with their price points and pick the one that suits them best.” Mr. There is high recall of Knorr soups and some of it will rub off in the noodles space as well. CEO of Aditya Birla Retail. Therefore. says. MD. They have also helped in boosting consumption due to shelf visibility. where it controlled 70 per cent of the market. namely ITC and Unilever. Varghese states “Modern trade channels are especially a boon for emerging categories due to the larger shelf display and visibility offered by . “Our Feasters instant noodles has witnessed a very high level of consumer acceptance and has grown steadily in revenue share contribution. the company is saved of establishing a relatively unknown brand from scratch. modern retailers themselves offer private labels instant noodles. Wai-Wai. GSK and ITC are the players who have got well-oiled supply chain networks. Mr. Confirming private label growth in the category. In 2008 around 86 percent of noodles sales were accounted for by traditional grocers. which it successfully did . Ajaay Gupta. Euromonitor’s findings suggest that a majority of noodles sales take place through small independent grocery stores. ITC has successfully established its potato chips brand ‘Bingo’ in the last two years and is giving Pepsi brand ‘Lays’ a run for its money. Thomas Varghese. “Modern retail stores provide manufacturers with a platform to propagate their innovation. Feasters is the second largest brand within the category at More grocery stores. was restricted to the eastern market of West Bengal and Sikkim.
He further adds that even though some retailers can claim some private label share in the category.them in comparison with traditional grocers. there has been no significant sales loss for national brands in any of the retail chains who also offer private labels of instant noodles. Modern Retail chains do attract impulse purchases of instant noodles. GM of sales and marketing at CG Foods India Pvt. it will take more time for in-store brands to establish themselves as serious competition. today’s shopping trend in urban and semi-urban areas of India.g. . at present.” Mr. Top Ramen). Manoj K Sharma. all major Brands with all variants of Maggi. Yes. depth and length of the category provided by the retailers to all brands (e. says feels that while private labels do offer a certain degree of competition. The reasons are good shelf visibility. However. Until now. Yippie. private labels are also growing but are offered by only a few retailers as of now. New retail formats also”. in the long run in-store brands will only help in enlarging the consumer base in the category. Ltd.
➤ Affordable: The buyer can afford to pay for the difference. or even a person. . Positioning and top of mind recall is created through superior advertising and communication. a service. A difference is worth establishing to the extent that it satisﬁes the following criteria: ➤ Important: The difference delivers a highly valued beneﬁt to a sufﬁcient number of buyers. . Positioning is an act of designing company’s offerings and image to occupy a distinctive palce in the minds of the target markets. It is the act of creating “top of mind” recall amongst the consumers by creating a special emotional connects of the “value proposition” in the minds and hearts of the consumers. A piece of merchandise.Positioning: All products can be differentiated to some extent. The word positioning was popularized by two advertising executives. Al Ries and Jack Trout. Positioning is what you do to the mind of the prospect. But not all brand differences are meaningful or worthwhile. a company. But positioning is not what you do to a product. ➤ Superior: The difference is superior to other ways of obtaining the beneﬁt. a cogent reason why the target market should buy the product. . The end result of positioning is the successful creation of a market-focused value proposition. holds the position of world’s largest soft-drink ﬁrm. ➤ Preemptive: The difference cannot be copied easily by competitors. ➤ Proﬁtable: The company will ﬁnd it proﬁtable to introduce the difference. for example. (2) grab an unoccupied position . ➤ Distinctive: The difference is delivered in a distinctive way. Coca-Cola. They see positioning as a creative exercise done with an existing product: “Positioning starts with a product. Each firm needs to develop a distinctive positioning for its market offering. a rival can (1) strengthen its own current position in the consumer’s mind (the way 7-Up advertised itself as the Uncola).” Ries and Trout argue that well-known products generally hold a distinctive position in customers’ minds. To compete against this kind of position. you position the product in the mind of the prospect. That is. an institution.
Positioning of Instant Noodles: Calorie count . Cheapest Airlines – Air Deccan. Maruti Cars. g. largest no. or (4) promote the idea that it is in the club with the “best. Over Positioning: e. Big Bazar.g. Under Positioning: e. b.g. Moove spray. Single/Double/Triple point positioning: Single point positioning – Lux beauty soap Double point positioning – Maggi “Taste bhi Health bhi” Triple point positioning – Aquafresh toothpaste – three coloured toothpaste – red for anti-germ.” Types of positioning: EST Method / Brand reinforcement: e. fastest relief – Eno. etc. etc.g.g. (3) deposition or reposition the competition. Competitor positioning: creating positioning value proposition on a higher perception scale vis-à-vis competition. Mc Donald.g. Reliance Mobiles. Mountain Dew “Darr ke aage jeet hai” c. Sprite “bujaye pyas” Leader Positioning: It is a method of brand reinforcement. of units sold. Bisleri – leadership in bottled drinking water. blue for freshness and white for mouth paste. d. Quality: conveying quality at a penetrative price points. E. f. a.(as Snapple did with its tea-based beverages). BMW increases customer’s aspirations. Best Sedan for Middle Class – Indigo. More the numbers of positioning points lesser would be the positioning strength. e.g. Application Positioning: generally refers to mode of usage of the product in a specific benefits area e. E. Nirma. h.
Veg Curry. More competition will also mean lower margins as Nestle will have to make do with lower pricing power than it has enjoyed in the past. . Nestle took a beating but quickly corrected the situation. The difference between these competitors and any Nestle has seen earlier is that they are deep-pocketed. 5 441 435 369 Attack on Fort Maggi. Manchurian. Chicken Pizza and Kimchi flavours among others now shared space with Maggi’s limited offering of Masala. One of the first attacks on Maggi Noodles came from unexpected quarters — from smaller players like Wai-Wai and Chings. that was introduced for the local market 25 years ago by Nestle. GSK Consumer and HUL are competitors that will be in for the long haul. ITC (Sunfeast Pasta).Noodles Nestle Maggi Vegetable Atta Noodles Nestle Maggi Dal Atta Noodles Nestle Maggi 2 minute Noodles (masala) Nissin Top Ramen Smoodles Masala (80 g .toloseweight. chicken and prawn. (Source: The taste of India – article by By Mohammed Ekramul Haque | Sep 12. Indian students going to university in India and abroad carry packets of it to give them a "taste of home" because they can't get their preferred spice mix in the instant noodle brands available across the world. The upstarts quickly captured 5 per cent market share at Maggi’s expense. The biggest challenge though came from the biggies — HUL (Knorr Soupy noodles). Spinach. Now it has more than 10 flavours on the shelves. 2011) Who are the consumers Becoming that staple can be done. Chicken Curry. for instance.org/caloriecount. and GSK (Foodles) —who entered the market nearly simultaneously. It is estimated that Maggi’s market share could fall to around 82 per cent by FY12. The customer now had choice: Veg.calories per serving specified) http://www. ITC.html Competition 441. even by foreign brands. Schezwan. Look at Maggi. Their secret weapon? They introduced a slew of flavours that customers could not get from Maggi. is known to have no qualms about losing money in the first few years in any new category that it enters as long as it captures market share (think biscuits at the expense of Britannia). an instant noodle with masala flavors.
com p.30. With changing social ethos and the rise of demographic profile the fast food category will witness more action in the future. Foram: www.com/Presentation/kanishk029-166965-nestlepresentation-nestlle-education-ppt-powerpoint/ nestle’s distribution http://www. (from report by Technopack “Opportunities in the packaged food market in India”) maggi’s positioning http://www.authorstream.com/docs/30195704/Distribution-and-marketingcommunication-strategy-for-Nestle-Maggi From the days of a fringe dish targeted at children the instant noodles category has come a long way. re-launched Maggi Two Minute Noodles fortified with 20 per cent of the RDA of calcium and protein in 2008.India . Today.foram p/w – gate#156 .2009 By DEVITA SARAF Nestlé India. it has been evolved as a mainstay meal even for grown-ups. The noodles market will witness an interesting battle ahead. for example.surveymonkey.docstoc.09.a Continent of an Emerging Market The wall street journal .