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PATIL UNIVERSITY IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTERS IN BUSINESS ADMINISTRATION SUBMITTED BY: PRIYA BHAGWAT (ROLL NO. MBA-MARKETING-01082)
RESEARCH GUIDE: ASST. PROF. VIDHYA KSHIRSAGAR DEPARTMENT OF BUSINESS MANAGEMENT PADMASHREE DR. D.Y. PATIL UNIVERSITY CBD BELAPUR, NAVI MUMBAi
A STUDY OF MAGGIE BRAND EXTENSION AND REPOSITIONING WITH RESPECT TO NAVI-MUMBAI
Dissertation Submitted to the Padmashree Dr. D.Y. Patil University in partial fulfillment of the requirements for the award of the Degree of MASTERS IN BUSINESS ADMINISTRATION Submitted by: PRIYA BHAGWAT (Roll No.MBA-MARKETING-01082)
Research Guide: Asst. Prof. Vidhya Kshirsagar
Department of Business Management Padmashree Dr. D.Y. Patil University CBD Belapur, Navi Mumbai March 2012
I hereby declare that the dissertation “A Study of Maggie Brand Extension and Repositioning With Respect to Navi-Mumbai” submitted for the MBA Degree at Padmashree Dr. D.Y. Patil University’s Department of Business Management is my original work and the dissertation has not formed the basis for the award of any degree, associate ship, fellowship or any other similar titles.
Place: Mumbai Date: (Priya Bhagwat)
Signature of the Student
This is to certify that the dissertation entitled “A Study of Maggie Brand Extension and Repositioning With Respect to Navi-Mumbai” is the bona fide research work carried out by Mrs. Priya Bhagwat, student of MBA, at Padmashree Dr. D.Y. Patil University’s Department of Business Management during the year 2010 -2012, in partial fulfillment of the requirements for the award of the Degree of Master in Business Management and that the dissertation has not formed the basis for the award previously of any degree, diploma, associate ship, fellowship or any other similar title.
(Asst. Prof. Vidhya Kshirsagar)
(Dr. R. Gopal, Director, Department of Business Management,
Padmashree Dr. D.Y. Patil University)
Place: Mumbai Date:
In the first place, I thank Asst. Prof. Vidhya Kshirsagar, Department of Business Management, Padmashree Dr. D.Y. Patil University, Navi Mumbai for having given me her valuable guidance for the project. Without her help it would have been impossible for me to complete the project.
I would also like to thank the various people who have put in their efforts and responded to my survey and filled in the questionnaire. I would also like to thank my friends who have helped me with their suggestions in the project.
I would be failing in my duty if I do not acknowledge with a deep sense of gratitude the sacrifices made by my parents and thus have helped me in completing the project work successfully.
Signature of the Student
While searching for a suitable topic for the MBA Dissertation, I thought of doing a project on Brand Equity. This will ensure that I learn many things related to branding and repositioning of products. Branding and repositioning are an indispensible part of Marketing.
To study the Brand Extension, there were many products to choose from. But finally I chose Nestlé’s Maggie Brand.
The Maggi Company merged with Nestlé in 1947. Today, Maggi is a leading culinary brand and part of the NESTLÉ family of fine foods and beverages. Through this project, an attempt is been made to study the the Maggi brand, which is today known world wide for quality and innovation, Nestle offers a whole range of products, such as packaged soups, frozen meals, prepared sauces and flavourings to build a Brand image.
It is strongly hoped that this project finds out the true customer perspective regarding the deodorants.
Signature of the Student
TABLE OF CONTENTS
Chapter No. A B List of Figures List of Abbreviations
Page No. 9 10
Ch 1 Ch 2 Ch 3 Ch 4 Ch 5 Ch 6 Ch 7
Executive Summary Objectives of the Study Research Methodology Review of Literature Introduction to Maggie Brand in India Introduction to Product Variants Market Share of the Maggie Brand
11 -13 14 - 15 16 - 20 21 - 25 26 - 33 34 - 37 38 - 45
Ch 8 8.1 8.2 8.3 Ch 9 Ch 10 Ch 11 Ch12 Ch12 Ch12 Ch12 Ch12
Introduction to Maggie Brand Equity Maggie Brand Image Maggie Brand Association Maggie Brand Recall Brand Performance of Maggie Products Brand Extension of Maggie SWOT Analysis of Maggie Brand STPD ANALYSIS OF MAGGI BRAND CUSTOMER BASED BRAND EQUITY PYRAMID (CBBE) BRAND PRISM OF MAGGI
46 - 48 49 - 61 62 - 74 75 - 79 80 - 81 82 - 88 89 - 100 101 - 107 108 109 - 113 114 - 118 119 - 121
122 - 125
Data Analysis and interpretation
126 - 129
Ch 9 Ch 10
Recommendations and suggestions Conclusion
130 - 154 155 - 157
Ch 11 Ch 12
Limitations Reference Section 12.1 Annexure 12.2 Bibliography
158 - 159 160 161 - 166
167 - 168
LIST OF FIGURES No. 6.1 8.1 Title Pg. No. 38 109
The report entitled “A study of Maggi Brand Repositioning and Extension” deals with the study of Maggi brand that was launched in India in the year 1983, by Nestle India Limited, which became synonymous with noodles. This research project tries to find a solution to a real life problem of Maggi to launch its products as a Healthy Product. The introduction provides the company background, operational & other important information provided by the company which would assist in taking the decision for the right brand extension strategy for Maggi.
INTRODUCTION Maggi noodles is a brand of instant noodles manufactured by Nestlé. The brand is popular in Australia, India, South Africa, Brazil, New Zealand, Brunei, Malaysia, Singapore, Sri Lanka, Bangladesh, Pakistan, Fiji and the Philippines. In several countries, it is also known as "maggi mee" (mee is Indonesian/Malay/Hokkien for noodles). Maggi noodles are part of the Maggi family, a Nestlé brand of instant soups, stocks, and noodles. In Malaysia, there are fried noodles made from maggi noodles known as Maggi goreng. Maggi noodles recently introduced a new variety of its noodles, to cater for the health conscious like 'No MSG', 'Less Salt', and 'No Trans fat'. A wholewheat flour based noodle variation marketed by the name "Vegetable Atta Noodles" has been introduced in India (Atta flour is used in preparing most forms of wheat based breads in India) and caters to health conscious buyers wary of the refined flour used in the regular Maggi noodles. This move helps the brand in India as suburban mothers, who feed the noodles to a line of rice noodles and whole wheat with pulses, carrots, beans, and onions has also been introduced in India. In fact, "Maggi" has become a well-known brand for instant noodles in India and Malaysia.
Nestlé India Ltd (NIL) offered a variety of culinary products such as instant noodles, soups, sauces and ketchups, cooking aids (seasonings), etc., under the Maggi brand (Refer to Exhibit II for Maggi's product portfolio as of mid-2006). Of these, instant noodles had been NIL's main product category in the culinary segment since the launch of Maggi 2 Minute Noodles (Maggi noodles) in 1982. Over the years, Maggi noodles became a popular snack food product in India. In fact, the word "Maggi" has become a common term for any brand of noodles in India. In mid 2008, New Zealand supermarkets introduced replacement formulations for its Beef, Oriental, and Curry flavours. A new feature is an extra sachet containing dehydrated vegetables. Maggi claims the new range contains 88% less total fat and 86% less saturated fat than the average of top-three (unnamed) 2-minute-noodle competitors. The new Maggi range also has considerably lower fat than its own previous formulation. However, the salt content has been increased by 31 percent. Consumers have not reacted well to the new formulations, complaining that they want the original chicken flavour back. In the Philippines, packs of Maggi noodles were recalled by Nestle Philippines after it was said to be contaminated with salmonella. Maggi noodles also contain the additives E150d and E627. E150d is sometimes made from maize. Claimed to be "2 minute noodles", The Maggi noodle cake and seasoning is added into boiling water for two minutes and it is ready for consumption. Egg, seaweed, boiled vegetables or lemon can also be added to the noodles for a better flavour. The industrial revolution in Switzerland in the late 1800s created factory jobs for women, who were therefore left with very little time to prepare meals. This wide spread problem grew to be an object of intense study by the Swiss Public Welfare
Society. As a part of its activities, the Society asked Julius Maggi miller to create a vegetable food product that would be quick to prepare and easy to digest. Born on October 9, 1846 in Frauenfeld, Switzerland, Julius Michael Johannes Maggi was the oldest son of an immigrant from Italy who took Swiss citizenship. Julius Maggi became a miller and took on the reputation as an inventive and capable businessman. In 1863, Julius Maggi came up with a formula to bring added taste to meals. Soon after he was commissioned by the Swiss Public Welfare Society, he came up with two instant pea soups and a bean soup - the first launch of the Maggi brand of instant foods in 1882 - 83. Towards the end of the century, Maggi & Company was producing not just powdered soups, but bouillon cubes, sauces and other flavourings. The Maggi Company merged with Nestlé in 1947. Today, Maggi is a leading culinary brand and part of the NESTLÉ family of fine foods and beverages. Under the Maggi brand, which is today known world wide for quality and innovation, Nestle offers a whole range of products, such as packaged soups, frozen meals, prepared sauces and flavourings.
MAGGI BRAND IN INDIA
Maggi Comes to India – teething troubles Maggi noodles was launched in India in the early1980s. Carlo M. Donati, the present Chairman and Managing Director of Nestle India Ltd, brought the instant noodle brand to India during his short stint here in the early eighties. At that time, there was no direct competition. The first competition came from the ready-to-eat snack segment which included snacks like samosas, biscuits or maybe peanuts, that were usually ‘the bought out’ type. The second competition came from the homemade snacks like pakoras or sandwiches. So there were no specific buy and make snack! Moreover both competitors had certain drawbacks in comparison. Snacks like samosas are usually bought out, and outside food is generally considered unhygienic and unhealthy. The other competitor, ‘homemade’ snacks overcame both these problems but had the disadvantage of extended preparation time at home. Maggi was positioned as the only hygienic homemade snack! Despite this, Nestlé faced difficulties with their sales after the initial phase. The reason being, the positioning of the product with the wrong target group.
Nestle had positioned Maggi as a convenience food product aimed at the target group of working women who hardly found any time for cooking. Unfortunately this could not hold the product for very long. In the course of many market researches and surveys, the firm found that children were the biggest consumers of Maggi noodles. Quickly they repositioned it towards the kids segment with various tools of sales promotion like colour pencils, sketch pens, fun books, Maggi clubs which worked wonders for the brand.
WHY THE SPECIFIC BRAND POSITIONING? Maggi was positioned as ‘2-minute noodles’ with a punch line that said ‘Fast to cook! Good to eat!’ And this gave the implied understanding to the consumer that it was a ‘between meals’ snack. The company could have easily positioned the product as a meal, either lunch or dinner. But, it chose not to do so, because the Indian consumer mindset did not accept anything other than rice or roti as a meal. Hence trying to substitute it with noodles would have been futile. The firm did not position it as a ‘ready-to-eat’ meal either, as the housewife prefers to ‘make’ a meal for her kids rather than buy it for them. And if she can make it in two minutes with very little effort, then obviously it’s a hit with her! What’s more, if kids also love the taste, the product is as good as sold! So the ‘2-minute’ funda coupled with the ‘yummy taste worked!
MAGGI BRAND STORY Launched in 5 flavors initially – Masala, chicken, Capsicum, sweet & sour, and Lasagna – Maggi had to fight hard to be accepted by Indian consumers with their hard-to-change eating habits. The packaged food market was very small at this time, Nestle had to promote noodles as a concept, before it could promote Maggi as a brand. It therefore devised a two-pronged strategy to attract mothers on the ‘convenience’ plank and lure kids on the ‘fun’ plank. Gradually, the market for instant noodles began to grow. The company also decided to focus on promotions to increase the brand awreness. In the initial years, Nestle promotional activities for Maggi included schemes offering gifts( such as toys and utensils) in return for empty noodles pack. According to analysits the focus on promotion turned out to be the single largest factor responisible for Maggi’s rapid acceptance. Nestle\’s Managers utilized promotions as measured to meet their sales target. Gradually, sales promotion became a crutch for Maggi noodles sales. Later many of the Maggi’s extensions also made considerable use of promotional schemes.
The focus of all Maggi’s extensions was more on below the line activities rather than direct communication. In addition to promotional activities, Maggi associated itself with main stream television programme and advertised heavily on kids programme and channels. After its advertisements with taglines like “mummi bhookh lagi hai, bas do minute” and fast to cook good to eat Maggi’s popularity became highly attributed to its “extremely high appeal to children”. As a result, Maggi’s annual growth reportedly touched 15% during its initial years.
Maggi’s Brand Extension:
In 1998, Nestle launched Maggi’s first brand extension, Maggi soup. At this stage, There was no organized packaged soup market in India. Nestle planned to create a market for packaged soup as it felt the category had a lot of potential. However, according to analyst, the company had introduced soups only to cash in on the Maggi’s brand name, and was never very serious about the segment.
In 1993, “Sweet Maggi”, the first variant of Maggi noddles was launched. The company supported the launch with a huge advertisement outlay that amounted to 75% of the total yearly expenditure on the Maggi brand. However, the product failed to generate the desired sales volume and Nestle was forced to withdraw it. At the end of the year, Maggi noodles was generating sales volume of around 5000 tonns and remained a loss making proposition for Nestle.
To boost sales, Nestle decided to reduce the price of Maggi noodles. This was made possible by using thinner and cheapeer packaging material, the company also introduced “money saver multi packes” in the form of 2-in-1 pack and 4-in-1 packs. As a result volume increases phenomenally to 9700 tonnes in 1994 and further to 13000 tonnes in 1995. Maggi’s euphoroia was, however, short lived, as sales stagnated in 1995 at the previous years level. With soup business being threatned by a new entrant “Knorr soups” launched in 1995, offering 10 flavors against Maggi’s 4 the company started rethinking its strategies towards the soup market.
In order to stretch Maggi’s brand to include Indian ethenic foods the company tied up with a Pune based chordia foods to launch pickles under the year 1995. The company also tied up with Indian foods fermentation (IFF), a Chennai based food company to market popular south Indian food preparation such as sambher, dosa, vada and spices in consumer packs in Dec 1995. The company reportedly saw a lot of untabbed potential in the market for ready to use south Indian market.
In 1996, products from these two ventures received lukewarm response from the market; sales were rather poor in the regions in which they were aunched. Analysts attributed the failure of these Maggi extensions to the fact that Nestlé seemed to be particularly bad at dealing with traditional Indian product categories. Maggi noodles performed badly in 1996. Despite slow sales in the previous two years, Nestlé had set a sales target of 25,000 tonnes for the year. However, Maggi couldn’t cross even 14,000 tonnes. Adding to the company woes was the failure of Maggi Tonite’s Special, a range of cooking sauces aimed at providing ‘restaurant-
like-taste’ to food cooked at home. The range included offerings such as Butter Chicken gravy and tomato sauce for pizzas.
Understanding these failures, and buoyed by the fact that the Maggi brand finally broke even in 1997, Nestlé continued to explore new options for leveraging on the brand equity of Maggi noodles. The company realized that the kids who had grown up on Maggi noodles had become teenagers by the late 1990s. As they associated the product with their childhood, they seemed to be moving away from it. To lure back these customers and to explore new product avenues, Nestlé launched ‘Maggi Macaroni’ in July 1997.
According to analysts, Maggi Macaroni was launched partly to deal with the growing popularity of competing noodles brand Top Ramen. Maggi Macaroni was made available in three flavors, Tomato, Chicken, and Masala. The company expected to repeat the success of Maggi noodles with Maggi Macaroni. As with most of its product launches, Maggi Macaroni’s launch was backed by a multimedia advertisement campaign including radio, television, outdoors and print media with the tagline, ‘Tum Roz Baby.
The product’s pricing, however, proved to be a major hurdle. A 75-gm Maggi Macaroni pack was priced at Rs 11, while a 100-gm noodles pack was available at Rs 9. According to analysts, Nestlé failed to justify this price-value anomaly to customers, who failed to see any noted value addition in Maggi Macaroni (packaging and flavor variants were similar to those of Maggi noodles). In addition, customers failed to see any significant difference between Maggi
Macaroni and the much cheaper macaroni that was sold by the unorganized sector players. The biggest problem however was the taste of the new product. Since macaroni is thicker than noodles, Maggi Macaroni did not absorb the tastemaker well and consequently did not taste very good. The interest generated by the novelty of the product soon died out and sales began tapering off. Eventually, Nestlé had to withdraw Maggi Macaroni completely from the market.
Nestlé had not even recovered from Macaroni’s dismal performance, when it learnt to its horror that Knorr had dethroned Maggi as the leader in the soup segment (end of 1997). The only saving grace for Maggi seemed to its ketchups and sauces, which were turning out to the ‘rare’ successful extensions of Maggi. These products were supported by a popular advertisement campaign for the Maggi Hot & Sweet sauce brand. These humorous advertisements, featuring actors Pankaj Kapoor and Javed Jafri, used the tagline, ‘It’s different.’ However, during mid1997, HLL began promoting its Kissan range of sauces aggressively and launched various innovative variants in the category.
Nestlé responded with a higher thrust on advertising and different size packs at different price points. Though Kissan gained market share over the next few years, Maggi was able to hold on to its own market share. Meanwhile the operational costs of Maggi noodles had increased considerably, forcing the company to increase the retail price. By early 1997, the price of a single pack had reached Rs 10. Volumes were still languishing between 13,000-14,000 tonnes.
MAGGI :- Pricing and Product Development: It was at this point in time that Nestlé decided to change the formulation of Maggi noodles. The purpose was not only to infuse ‘fresh life’ into the brand, but also to save money through this new formulation. The company used new noodleprocessing technology, so that it could air-dry instead of oil-fry the noodles. The tastemaker’s manufacturing process was also altered.
As a result of the above initiatives, costs reportedly came down by 12-14%. To cook the new product, consumers had to add two cups of water instead of one-anda-half cups. The taste of the noodles was significantly different from what it used to be. The customer backlash that followed the launch of the new noodles took Nestlé by surprise. With volumes declining and customer complaints increasing, the company began to work on plans to relaunch ‘old Maggi’ to win back customers. In addition, in 1998, Nestlé began working out a strategy to regain Maggi’s position in the soup segment.
To counter the Knorr threat, the company relaunched Maggi soups under the ‘Maggi Rich’ brand in May 1998. The soups were not only thicker in consistency
than those produced earlier, the pricing was also kept competitive and the packaging was made much more attractive. However, Knorr took Nestlé by surprise by launching one-serving soup sachets priced as low as Rs 4. HLL too launched two-serving sachets of Kissan soup priced at Rs 7. As Maggi did not have any offerings in this price-range, it lost a huge portion of its market share to Knorr.
The relaunch prompted market observers to compare Nestlé’s move with US soft drinks major Coca-Cola’s ‘New Coke’ fiasco. However, the company disagreed, “It’s a hard-5 nosed strategy, that mixes nostalgia with the consumer’s voiced preference for the product it has been bred and rought up on. The reintroduction is Nestlé’s acknowledgement of the loyalty of the Indian mother and the child to the original product.” By May 1999, Nestlé’s decision to bring back the ‘old Maggi’ seemed to have paid off. Two months after the relaunch, the monthly average sales of Maggi noodles n the northern region rose 50% in comparison to the previous year. In July 1999, ‘Maggi’ the brand, was promoted as the biggest brand in Nestlé’s portfolio of brands in India, overtaking brands such as Nestum and Cerelac. Nestlé believed that Maggi had immense potential as it was a very ‘flexible’ brand under which regional variants could be introduced to meet various market needs.
Company sources claimed that with reasonable price points and innovative products, Maggi could emerge as a top brand and a major growth driver for the company.
To further support the brand, Nestlé carried out various promotional activities as well. These included the August 1999 ‘Fun-Dooz’ campaign and Jungle Jackpot campaigns. 6 As a result of the above initiatives, Nestlé claimed to have cornered an 81% market share of the 20,000 tonnes noodles market by the end of 1999. Nestlé sources claimed that Maggi noodles outsold the competition four times over and that more than four Maggi noodle cakes were consumed every second in the country. PRODUCT VARIENTS The product mix of Maggi is divided into various categories defined below. The company has launched various products under each category as mentioned below.
Noodles • Maggi 2-Minute Noodle ( Masala , Chicken, Curry and Tomato) • Maggi Dal Atta Noodles ( Sambhar taste) • Vegetable Atta Maggi Noodles • Maggi Rice Noodles (Lemon Masala, Chilly Chow and Shahi Pulao) • Maggi Cuppa mania (Masala yo, Chilli chow yo)
Healthy soups Chef Style – Cream Mushroom – Tangy Tomato Vegetables – Sweet Sour Tomato Noodles
Home Style – Creamy Chicken – Mixed Vegetable – Rich Tomato
Chinese Style – Chinese Hot Sour Chicken – Chinese Sweet Corn Chicken – Chinese Sweet Corn Vegetables
– Chinese Hot & Sour Vegetables
Sauces • Teekha masala • Tomoto chatpat • Imli khata mitha • Tomato ketchup • Hot and sweet • Tomato pudina • Ginger, Garlic & Coriander • Maggi Oriental Chilli Garlic
• Ginger, Garlic & Coriander
Maggi soup sanjivni • Amla • Badam • Spinach • Dal
Maggi Bhuna Masala • Bhuna masala for gravy dishes
• Bhuna masala for vegetable dal
Maggi magic cubes • Chicken • Vegetarian masala
According to the 2010 data by
market research firm Nielsen,
Nestle's Maggi is losing market share on a monthly basis to newer entrants such as GlaxoSmithKline's (GSK) Horlicks Foodles, Hindustan Unilever's (HUL) Knorr Soupy noodles, Big Bazaar's Tasty Treat, Top Ramen and several other smaller players. The data shows that Maggi's share of instant noodles, on an all-India basis, across urban markets, has slipped consistently between December '09 to July '10. While Maggi instant noodles (minus vermicelli) had a 90.7% share in December '09, the share dropped to 86.5% in July '10 on an all-India basis.
INTRODUCTION TO MAGGI BRAND EQITY:Brand Equity is the value and strength of the Brand that decides its worth. It can also be defined as the differential impact of brand knowledge on consumers response to the Brand Marketing. Brand Equity exists as a function of consumer choice in the market place. The concept of Brand Equity comes into existence
when consumer makes a choice of a product or a service. It occurs when the consumer is familiar with the brand and holds some favourable positive strong and distinctive brand associations in the memory. Factors contributing to Brand Equity Brand Awareness :- Brand awareness is the probability that consumers are familiar about the life and availability of the product. It is the degree to which consumers precisely associate the brand with the specific product. It is measured as ratio of niche market that has former knowledge of brand. Brand awareness includes both brand recognition as well as brand recall. Brand recognition :- is the ability of consumer to recognize prior knowledge of brand when they are asked questions about that brand or when they are shown that specific brand, i.e., the consumers can clearly differentiate the brand as having being earlier noticed or heard. While brand recall is the potential of customer to recover a brand from his memory when given the product class/category, needs satisfied by that category or buying scenario as a signal. In other words, it refers that consumers should correctly recover brand from the memory when given a clue or he can recall the specific brand when the product category is mentioned. It is generally easier to recognize a brand rather than recall it from the memory. Brand Associations :- Brand association is anything which is deep seated in customer’s mind about the brand. Brand should be associated with something positive so that the customers relate your brand to being positive. Brand associations are the attributes of brand which come into consumers mind when the brand is talked about. It is related with the implicit and explicit meanings which a consumer relates/associates with a specific brand name. Brand association can also be defined as the degree to which a specific product/service is recognized within it’s product/service class/category. While choosing a brand name, it is essential
that the name chosen should reinforce an important attribute or benefit association that forms it’s product positioning Brand Loyalty Brand Loyalty is a scenario where the consumer fears purchasing and consuming product from another brand which he does not trust. It is measured through methods like word of mouth publicity, repetitive buying, price sensitivity, commitment, brand trust, customer satisfaction, etc. Perceived Quality: refers to the customer’s perception about the total quality of the brand. While evaluating quality the customer takes into account the brands performance on factors that are significant to him and makes a relative analysis about the brand’s quality by evaluating the competitors brands also. Thus quality is a perceptual factor and the consumer analysis about quality varies. Higher perceived quality might be used for brand positioning. Perceived quality affect the pricing decisions of the organizations. Superior quality products can be charged a price premium. Perceived quality gives the customers a reason to buy the product. It also captures the channel member’s interest. For instance - American Express. Other Proprietary Brand Assets: Patents, Trademarks and Channel Interrelations are proprietary assets. These assets prevent competitors attack on the organization. They also help in maintaining customer loyalty as well as organization’s competitive advantage.
Brand equity is the added value endowed to products and services. This value may be reflected in how consumers think feel and act with respect to the brand as well as the prices market share and profitability that the brand commands for the firm. Brand equity is an important intangible asset that has psychological and financial value to the firm. Marketers and researchers use various perspectives to study brand equity.
Maggi is the brand owned by Nestle. Nestle India launched Maggi 2 minute noodles, an instant noodles, in the year 1982. Maggi noodles became an instant hit, and found an unmissable feature in the middle class Indian household. The product was so popular, that Maggi did to noodles in India, what Xerox did to photocopiers worldwide. Nestle, having the first mover advantage, was able to maintain market leadership until the early 2000s even. The Maggi story is also a lesson for marketers who wish to extend a band name successfully across different products. Maggi had launched soups, ketchup, and sauces to leverage the brand equity by the year 1990. Later Nestle also forayed into other food segments like pickles, using the Maggi brand, but it was unsuccessful and the products were dumped. Maggi also introduced a range of pastas in the year 2009 to complement the consumers need for variety in snack foods. In the early 80s Maggi was positioned as a quick to cook noodles. The tagline used was “Fast to Cook. Good to Eat”. The same theme continued in the 90s as well, but the communication was a little different. In the 90s the communication changed from the kids coming home hungry and asking their mother for something, to the kids saying that they were hungry and they wanted Maggi quickly. This emphasized the brand’s popularity, and also reflected on the role children played in influencing buying decisions (subtly). In the year 2006, Nestle began rebranding itself as a Health and Wellness company. In line with this, Maggi products were promoted with the tagline “Taste bhi, Health bhi”. This has been done across the product range of Maggi. Currenlty the following are the products which are being marketed by Nestle India, under the Maggi brand maggi Brand image :-
Brand image is the current view of the customers about a brand. It can be defined as a unique bundle of associations within the minds of target customers. It signifies what the brand presently stands for. It is a set of beliefs held about a specific brand. In short, it is nothing but the consumers’ perception about the product. It is the manner in which a specific brand is positioned in the market. Brand image conveys emotional value and not just a mental image. Brand image is nothing but an organization’s character. It is an accumulation of contact and observation by people external to an organization. It should highlight an organization’s mission and vision to all. The main elements of positive brand image are- unique logo reflecting organization’s image, slogan describing organization’s business in brief and brand identifier supporting the key values. Brand image is the overall impression in consumers’ mind that is formed from all sources. Consumers develop various associations with the brand. Based on these associations, they form brand image. An image is formed about the brand on the basis of subjective perceptions of associations bundle that the consumers have about the brand. Volvo is associated with safety. Toyota is associated with reliability. The idea behind brand image is that the consumer is not purchasing just the product/service but also the image associated with that product/service. Brand images should be positive, unique and instant. Brand images can be strengthened using brand communications like advertising, packaging, word of mouth publicity, other promotional tools, etc. Brand image develops and conveys the product’s character in a unique manner different from its competitor’s image. The brand image consists of various associations in consumers’ mind - attributes, benefits and attributes. Brand attributes are the functional and mental connections with the brand that the customers have. They can be specific or conceptual. Benefits are the rationale for the purchase decision. There are three types of benefits: Functional benefits - what
do you do better (than others ),emotional benefits - how do you make me feel better (than others), and rational benefits/support - why do I believe you(more than others). Brand attributes are consumers overall assessment of a brand. Brand image has not to be created, but is automatically formed. The brand image includes products' appeal, ease of use, functionality, fame, and overall value. Brand image is actually brand content. When the consumers purchase the product, they are also purchasing it’s image. Brand image is the objective and mental feedback of the consumers when they purchase a product. Positive brand image is exceeding the customers expectations. Positive brand image enhances the goodwill and brand value of an organization. NIL conducted a research, which revealed that it was children who liked the taste of Maggi noodles and who were the largest consumers of the product. After this, NIL shifted its focus from working women and targeted children and their mothers through its marketing. NIL's promotions positioned the noodles as a 'convenience product', for mothers and as a 'fun' product for children. The noodles' tagline, 'Fast to Cook Good to Eat' was also in keeping with this positioning
Maggi Brand Association Brand Associations are not benefits, but are images and symbols associated with a brand or a brand benefit. For example- The Nike Swoosh, Nokia sound, Film Stars as with “Lux”, signature tune Ting-ting-ta-ding with Britannia, Blue colour with Pepsi, etc. Associations are not “reasons-to-buy” but provide acquaintance and differentiation that’s not replicable. It is relating perceived qualities of a brand to a known entity. For instance- Hyatt Hotel is associated with luxury and comfort; BMW is associated with sophistication, fun driving, and superior engineering.
Most popular brand associations are with the owners of brand, such as - Bill Gates and Microsoft, Reliance and Dhirubhai Ambani. Brand association is anything which is deep seated in customer’s mind about the brand. Brand should be associated with something positive so that the customers relate your brand to being positive. Brand associations are the attributes of brand which come into consumers mind when the brand is talked about. It is related with the implicit and explicit meanings which a consumer relates/associates with a specific brand name. Brand association can also be defined as the degree to which a specific product/service is recognized within it’s product/service class/category. While choosing a brand name, it is essential that the name chosen should reinforce an important attribute or benefit association that forms it’s product positioning Brand associations are formed on the following basis: • Customers contact with the organization and it’s employees; • Advertisements; • Word of mouth publicity; • Price at which the brand is sold; • Celebrity/big entity association; • Quality of the product; • Products and schemes offered by competitors; • Product class/category to which the brand belongs; • POP ( Point of purchase) displays; etc Positive brand associations are developed if the product which the brand depicts is durable, marketable and desirable. The customers must be persuaded that the brand possess the features and attributes satisfying their needs. This will lead to
customers having a positive impression about the product. Positive brand association helps an organization to gain goodwill, and obstructs the competitor’s entry into the market. Maggi Brand Recall :Brand Recall is the extent to which a brand name is recalled as a member of a brand, product or service class, as distinct from brand recognition. Common market research usage is that pure brand recall requires "unaided recall". For example a respondent may be asked to recall the names of any cars he may know, or any whisky brands he may know. Some researchers divide recall into both "unaided" and "aided" recall. "Aided recall" measures the extent to which a brand name is remembered when the actual brand name is prompted. An example of such a question is "Do you know of the "Honda" brand?" In terms of brand exposure, companies want to look for high levels of unaided recall in relation to their competitors. The first recalled brand name (often called "top of mind") has a distinct competitive advantage in brand space, as it has the first chance of evaluation for purchase.
➢ To understand the influence of Maggi as a brand on consumers mind set. ➢ Sources of Brand equity of Maggi like Brand awareness, Brand image, Brand association, Brand recall
➢ To understand the Brand performance of Maggi products.
To understand Brand Imagery, Brand Quality perceived by customers, Analyse the repositioning of Maggi brand as a “Healthy product” and the consumers perseverance towards the same.
➢ Brand Extension of Maggi in terms of product diversity.
RESEARCH METHODOLOGY The research method will be descriptive research. Each respondent will be interviewed through a Questionnaire. The sample will be selected by a simple random sampling method.
Primary data This study involves data collection through questionnaire from different households from Navi- Mumbai. Primary research would conduct in selected localities of Navi-Mumbai and nearby areas where the responses of consumers would be recorded through a designed questionnaire. Secondary data The research conducted as a part of our study would include Primary as well as Secondary research. Secondary research would include to gather information regarding various aspects of Brand management through Internet , Journals, company reports , etc.
Research Design: The research will be carried out in the form of questionnaire which will be done in areas near to Navi Mumbai. The population has been segmented on the basis of salary Group and Age Group. Sample Design: The target population for research is households. The sample will be selected by a simple random sampling method. Sample Size: The sampling unit is 50 which are divided as follows: Number of respondents Age-group Monthly Household Income Survey Locations 50 10 - 45 15000 - 45000 INR Navi-Mumbai
25K Salary Group No income 40K 10 Number of Respondents
- 40K 60K 20
- 60K 75K 30
Age Group Number of Respondents
10 - 25 20
25 - 35 30
35 – 45 10
Sources of Brand equity like brand association of Maggi as a Brand was found highest with the age group of 10-25 and the product category associated with it was the noodles category. Consumers in the age segment of 10-25 could easily relate Maggi to noodles.
Brand Association according to income In the income wise category the brand association was highest with the income group of 25k-40k were more than 40 respondents associated Maggi with noodles. The implications from the findings discussed above seem that Maggi has good
brand association in terms of noodles. Consumers presume Maggi as Noodles and the company’s philosophy of projecting the brand as noodles brand seem to be viable in this regard.
From the given below it seems a clear trend that Maggi has a good brand recall as compared to its competitors like Top Ramen, Surya noodles etc. Consumers could easily associate Maggi with noodles. In the Age wise category, the respondents of the age group of 25-45 were highly cautious of Maggi brand and seemed to be consuming Maggi more as compared to other age segments.
Brand Recall according to gender
In the gender wise category the company’s strategy of positioning of Maggi brand for working women seems to be adaptive and gaining shape as women respondents had a brand recall more than male.
From the responses of the respondents in the conducted survey it was evident than Maggi’s Brand awareness was very high in terms of noodles were around 65 %of the respondents associated maggi as noodles and only 20 % of the respondents knew ,Maggi as a Ketchup, 9% as soup etc.
Brand Awareness according to the age The trend indicated that Maggi’s brand extension strategy to increase its basket has not been quite successful in other food segments .This might be because of the larger share of market captured by the competitors hence Maggi has a high potential in markets like ketchup, soups etc.
Repositioning Maggi as a healthy product: The company’s strategy to reposition Maggi as a “Healthy product” was not found conducive as per the survey results. The survey showed that consumers did not perceived Maggi as a healthy product with 53% of them consumed Maggi’s traditional products as compared to the rest who consumed other variants of Maggi’s brand that were positioned as “Healthy products”.
Perception of Maggi Noodles From the pie chart given below it can be clearly seen that Maggi is still perceived as a non healthy products by the consumers and in spite of the efforts to position Maggi as a healthy product by the company the brand is still perceived as a “ready to eat” food brand that has a high market share in the noodle category in India.
Perception of Mag i Noodles g
As a Healthy Product 40%
As a non Healthy Product 60%
Perception of Maggi Product From the pie chart given below it can be clearly seen that Maggi is still perceived as a junk food by the consumers and in spite of the efforts to position Maggi as a healthy product by the company the brand is still perceived as a “ready to eat” food brand. and also very less consumers prefer magi for its taste and fun eating.
SWOT ANALYSIS OF MAGGI BRAND
– – – –
Market leader in their segment Strong brand loyal consumer base Wide range of distribution channel Product ac Innovative
– Product cording to the need of Indian consumer
Product are dependent on each other Not so much presence in rural market
OPPORTUNITY –Increasing number of working youth
– – –
Product has been acceptable in youth category Shift to rural market Changing preference of consumer towards Chinese food and fast food.
Can foray into other food markets with its strong Brand name
– – –
Price war with competitors. Strong presence of regional competitors Consumers don’t perceive it as a “Healthy Product”
The SWOT analysis of Maggi brand clearly indicates the strengths of Maggi as a Brand in Indian market. The Brand was found to be a leader in its category of Noodles, with strong customer loyalty. Intensive distribution of Maggi as a Brand was seen in urban areas of the country. The major threats of the brand as shown in the figure below indicates that Maggi has made several attempts to revamp itself as a ‘Healthy Product” but till date its perseverance towards the tag line is low by the consumers. The brand is in the growth stage of product life cycle with a strong inclination towards the maturity stage.
STPD ANALYSIS OF MAGGI BRAND
Segmentation: Market Segmentation divides the heterogenous market into homogenous groups of customers who share a similar set of needs/wants and could be satisfied by specific products. Maggi Brand have segmented the market on the basis of lifestyle and habits of URBAN FAMILIES.
Target: Market Targeting refers to evaluating and deciding from amongst the various alternatives, which segment can be satisfied best by the company. The Maggi Brand have mainly targeted the Kids, Youth, Office Goers & Working Woman which falls into the category of “convenience-savvy time misers” who would like to get something instant and be over with it quickly.
Positioning: Market Positioning is the act of designing the company’s offerings and image to occupy a distinctive place in the minds of the target market. The goal of positioning is to locate the brand in the minds of consumers to maximise the potential benefit to the firm. Maggi has positioned itself in the SNACKS category and not in the meal category since Indians do not consider noodles as a proper food
item. Therefore Maggi have developed its brand image of instant food products with positioning statements such as “2 minutes noodles” and “Easy to cook, good to eat”.
Differentiations: Points-of-difference (PODs) are attributes or benefits consumers strongly associate with a brand, positively evaluate and believe they could not find to the same extent with a competitive brand. The Maggi Brand have also differentiated its brand image from its competitors in terms of taste, flavours and packaging. Maggi have launched wide varieties of products in different flavours which can attract larger set of customers. Maggi products are also available in different sizes catering to different customer needs.
CUSTOMER BASED BRAND EQUITY PYRAMID (CBBE)
Maggi’s customer based brand equity pyramid seems to be equally strong on left hand side and right hand side, it is also strong from bottom to top enjoying the highest brand awareness of any fast food noodle brand in India as well as repeat purchase rate and high customer loyality.
BRAND PRISM OF MAGGI
CONCLUSION The food processing business in India is at a nascent stage. Currently, only about 10% of the output is processed and consumed in packaged form thus highlighting huge potential for expansion and growth. Traditionally, Indians believe in consuming fresh stuff rather then packaged or frozen, but the trend is changing and the new fast food generation is slowly changing. Riding on the success of noodles, Nestle India, tried to make extensions of the Maggi brand to a number of products like, sauces, ketchups, pickles, soups, tastemakers and macaroni in the mid-1990s. Unfortunately, the macaroni and pickles didn’t pick up as expected. The soups and sauces did somewhat fine, gathering considerable sales volumes and have a satisfactory presence even today. ‘Maggi Noodles’ itself faced a bit of difficulty with respect to ‘taste’, and nearly lost its position in the minds of Indian consumers in the late 1990s. When Nestle changed the formulation of its tastemaker, the ominous packet that came along with Maggi Noodles, a major chunk of consumers were put-off and sales started dropping. Also, Maggi’s competitor ‘TopRamen’ took advantage of the situation and started a parallel aggressive campaign to eat into Maggi’s market share. But the company quickly realised this and went back into making the original formula
coupled with a free sampling campaign. This helped Maggi to win back its lost consumers and pushed up its sales volumes again! Maggi Today The year 2008 saw India leading in world wide Maggi sales. The brand has grown to an estimated value of Rs 160-170 crore and contributes at least 8–9% to Nestle India’s top line. All the same, some FMCG analysts feel that the brand has not done much to expand the noodles category. Even after 25 years of its launch, the size of the instant noodles market is yet quite small at Rs 300 crore. But yes, the parent company, Nestle India Limited has certainly encouraged the brand to enter into other culinary products.
RECOMMENDATION After the conducted study following recommendations could be sited for Maggi Brand.
To gain maximum leverage in terms of profit the company should pay emphasis on segments with age groups 25-35 and above .Advertising is the key to success. Targeting these segments will not only enhance the company’s profit margins but also it will leverage the brand image of Maggi.
– The company should advertise its products by depicting attributes related to Health like Nutrition values, % of Vitamins, Proteins etc.This would help in customers perceiving the product as Healthy. Foray into other food products like chips, chocolates etc under its sole brand name would not only help in Brand extension but will also enhance Maggi’s market share.
– Nestlé India’s have to set objective to manufacture and market the company’s products in such a way so as to create value that can be sustained over the long term for consumers, shareholders, employees and business partners. – Maggi’s should have to aims to create value for consumers that can be sustained over the long term by offering a wide variety of high quality, safe food products at affordable prices. – The company should continuously focuses its efforts to better understand the changing lifestyles of modern India and anticipate consumer needs in order to provide convenience, taste, nutrition and wellness through its product offerings.
LIMITATIONS: The present study is confined to a minimal sample size and may not reflect the opinion or response of the entire population in general. The results of our study are entirely confined to the responses of the Navi-Mumbai consumers and might deviate in terms of actual population as a whole. Recommendations given after the study are entirely dependent on the questionnaire and the secondary analysis done in the report.
BIBLIOGRAPHY :en.wikipedia.org/wiki/Maggi en.wikipedia.org/wiki/Maggi_noodles www.maggi.in/ www.foodproductiondaily.com/ www.nestle.com › Home › Media › News & Features
Through consumer research, the company (Food Specialities Limited) felt that the most profitable position (for Maggi) would be as a tasty, instant snack, made at home and initially aimed at children. The target market was the in-home segment of the very substantial snack category. This positioning decision automatically determined the competition which included all snack products in general. These would range from ready to eat snacks – biscuits, wafers and peanuts – to ready prepared snacks such as samosas. All were bought out items.” “Traditional pasta products (Chinese noodles and macroni) were considered to be near. Competitors forming a rapidly growing product group. But they were invariably used for meals, requiring a fair amount of cooking time and garnishing was essential.” “Maggi Noodles was launched in Delhi in January 1983 and it became an overnight success.” The reasons? Maggi Noodles, as market results show, found a vacant strong position and sat on it as “the good to eat, fast to cook anytime snack.”
Maggi brand extension and repositioning
In May 2006, Nestlé India Ltd. (NIL), a major FMCG company in the country and a subsidiary of the Switzerland-based Nestlé Group, launched a new instant noodles product called Maggi Dal Atta Noodles (Dal Atta Noodles) under the popular Maggi brand (Refer to Exhibit I for a brief profile of NIL). The Dal Atta Noodles were made of whole wheat and contained pulses, and positioned as a 'healthy'instant noodles product that provided 20 percent of the daily RDA of dietary fiber and protein for a child aged between 7 and 9. This was the latest
addition to the range of 'healthy' products NIL had been launching over the early 2000s. NIL offered a variety of culinary products such as instant noodles, soups, sauces and ketchups, cooking aids (seasonings), etc., under the Maggi brand (Refer to Exhibit II for Maggi's product portfolio as of mid-2006). Of these, instant noodles had been NIL's main product category in the culinary segment since the launch of Maggi 2 Minute Noodles (Maggi noodles) in 1982. Over the years, Maggi noodles became a popular snack food product in India.
During the 1990s, the sales of Maggi noodles declined, and this was attributed partly to the growing popularity of Top Ramen , another instant noodles product. In order to improve sales and attract more consumers, NIL changed the formulation of Maggi noodles in 1997. However, this proved to be a mistake, as consumers did not like the taste of the new noodles. In March 1999, NIL reintroduced the old formulation of the noodles, after which the sales revived. Over the years, NIL also introduced several other products like soups and cooking aids under the Maggi brand. However, these products were not as successful as the instant noodles.In the early 2000s, Maggi was the leader in the branded instant noodles segment, and the company faced little serious competition in this segment. In the early 2000s, NIL started introducing new 'healthy' products in accordance with the Nestlé Group's global strategy to transform itself into a health and wellness company. NIL also adopted the same strategy for the Maggi brand with the launch of the Maggi Vegetable Atta Noodles (Vegetable Atta Noodles), a 'healthy' instant noodles product made of whole wheat flour and vegetables (instead of refined flour), in 2005. The Dal Atta Noodles were another variant of Maggi's healthy
instant noodles. proved to be a mistake, as consumers did not like the taste of the new noodles. In March 1999, NIL reintroduced the old formulation of the noodles, after which the sales revived. Over the years, NIL also introduced several other products like soups and cooking aids under the Maggi brand. However, these products were not as successful as the instant noodles. In the early 2000s, Maggi was the leader in the branded instant noodles segment, and the company faced little serious competition in this segment.
In the early 2000s, NIL started introducing new 'healthy' products in accordance with the Nestlé Group's global strategy to transform itself into a health and wellness company. NIL also adopted the same strategy for the Maggi brand with the launch of the Maggi Vegetable Atta Noodles (Vegetable Atta Noodles), a 'healthy' instant noodles product made of whole wheat flour and vegetables (instead of refined flour), in 2005. The Dal Atta Noodles were another variant of Maggi's healthy instant noodles.
NIL introduced the Maggi brand to Indian consumers when it launched Maggi 2 Minute Noodles, an instant food product, in 1982 (Refer to Exhibit III for the history of the Maggi brand). At that time, Indian consumers were rather conservative in their food habits, preferring to eat traditional Indian dishes rather than canned or packaged food. In fact, NIL was trying to create an entirely new food category, instant noodles, in India. Initially, the company targeted working women on the premise that Maggi noodles were fast to cook and hence offered convenience.
However, this approach failed as was evident from the fact that the sales of Maggi noodles were not picking up despite heavy media advertising. To get to the root of the problem, NIL conducted a research, which revealed that it was children who liked the taste of Maggi noodles and who were the largest consumers of the product. After this, NIL shifted its focus from working women and targeted children and their mothers through its marketing. NIL's promotions positioned the noodles as a 'convenience product', for mothers and as a 'fun' product for children. The noodles' tagline, 'Fast to Cook Good to Eat' was also in keeping with this positioning
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