PROBLEM FACED BY NESTLE

MAGGIE
A RESEARCH METHODOLOGY ASSIGNMENT

SUBMITTED BY:
AVINASH STEVE LAKRA (37)
TANNU SHREE (38)
NAVNEET PATEL (39)
AKASH KUMAR (40)
DARSHAN DOSHI (41)
INTRODUCTION
NESTLE MAGGIE
 SOME FACTS

1 Nestle originated in a
1905 merger of the 2 The company grew
significantly during the First
Anglo-Swiss Milk
company, which was
established in 1866 by
George Page and the
Farine Lactee Henri
Nestle Company, which
was founded in 1866 by
Henri Nestle, whose
name meant “little nest”.
4 5
Maggi is an international
brand of seasonings,
instant soups and noodles
owned by NESTLE since
1947
3 Today, the company operates
World War and following
the Second World War,
eventually expanding its
offerings beyond its early
condensed milk and infant
formula products
6
Maggi is a leading culinary
brand, which is today known
worldwide for quality and
innovation.
in 86 countries around the
world and employs nearly
283,000 people. Nestle has 64
brands, with a wide range of
products across a number of
markets, including coffee,
bottled water, milkshakes and
other beverages, breakfast
cereals, infant foods
Maggi noodles were
launched in India in the early
1980‟s. Carlo M. Donati,
chairman and managing
director of Nestle India Ltd,
brought the instant noodle
brand to India during his
short stint here in the early
eighties.
3
 MAGGI MARKET SHARE IN NOODLES

1 MARKET SHARE OF MAGGIE 2

NESTLE MAGGIE has a market NOODLES Nestle Maggie is also working on
share of 60% in India. new products and categories for
overall growth.

OTHER
NOODLES,

3 4
40%, 40%

MAGGIE
The company has launched 35 products NOODLES, Nestle renovation and
across categories in the last six months 60%, 60% innovation is a key dimension of
to diversify its portfolio. the growth equation of the
company.

4
 WHAT WAS MAGGI CONTROVERSY

Withdraw and recall all the nine approved variants of its Maggi Instant Noodles from the market having
been found unsafe and hazardous for human consumption, and stop further production, processing,
import, distribution and sale of the said product with immediate effect.

Presence of lead detected in
FSSAI has noted three the product in excess of the
major violations maximum permissible levels of
2.5 ppm.
Release of a non-standardized
food product in the market,
“Maggi Oats Masala, Noodles
with Tastemaker” without risk
assessment and grant of
product approval.
Misleading labeling
information on the
package reading “No
added MSG”.
 TESTING COTROVERSIES

Testing found some

MSG in Maggi
noodles. The packet Out of the 13/10
stated “No added samples had lead
MSG”. However content exceeding
MSG naturally this limit. The court
MSG occurs in hydrolyzed mandated testing to
groundnut protein, be done at three
(Monosodium onion powder and LEAD: specific laboratories
Glutamate) wheat flour. Maggi (Punjab, Hyderabad
offered to remove and Jaipur) where
the words “No Maggi was found
added MSG” from safe. Some lead
the package to occurs natural
overcome the
objection.
 PROBLEM AND HEALTH HAZARD

WHAT IS MONOSODIUM GLUTAMATE? MSG SIDE EFFECTS

• MSG, is a flavor-enhancing food additive • Headaches Nausea and
used in Asian cooking. Dizziness
• It's also commonly found in fast foods • Rapid or irregular heartbeat
and commercially packaged food • Flushing or excessive
products like chips. sweating
• MSG is derived from an amino acid • Skin rash
called glutamic acid, which occurs • Numbness
naturally in foods such as mushrooms,
• Intense thirst
aged parmesan cheese and fermented
soybean products like soy sauce.
• Glutamic acid belongs to a broad
category of compounds called
glutamates
 PROBLEM AND HEALTH HAZARD

HOW DOES LEAD GET INTO MAGGIE? LEAD CONCENTRATION IN MAGGI

• Lead occurs in the earth’s crust and is • FDA found a lead concentration of 17.2
present in air, soil and dust. parts per million (ppm), nearly seven times
• Experts say the way noodles are processed the permissible limit. The FDA officials said
could have theoretically exposed them to the acceptable limit of lead ranges between
lead. 0.01 ppm and 2.5 ppm.
• One source of contamination imagined was
the water used to manufacture the noodles.
• May come from agricultural sources, all
vulnerable to lead contamination.
• Even if the noodles and flavoring were
clean, sometimes food can be contaminated
by the packaging used.
 SOURCES OF INFORMATION

SOURCES

PRIMARY SECONDARY

GOOGLE,
TELEPHONIC
DIRECT INTERVIEW RESEARCH THESIS,
INTERVIEW
NEWS PAPERS
DISTRIBUTION CHANNEL OF MAGGI IN INDIA
PROBLEMS OF INTERMEDIARIES
Problems of
Retailer in Bundu
district

Problems of
Wholeseller in
Ranchi district

Problems of Carry
and Forward Agent
in Jharkhand
 PROBLEM OF A RETAILER
Q1. What are the problem
faced by you after the ban
of Maggi ?
Answer: The problem what we faced
was how to substitute that products as
we don’t have much stock of the
substitutes like yippee. The demand of
noodles especially instant noodles
amongst youth was popular. We had to
connect to the new wholeseller as in
Bundu there is a separate wholeseller
for Nestle and ITC and basically Yippee
noodles. Connecting to new
wholeseller was the problem.
 PROBLEM OF A WHOLESELLER

Q1 : As a wholeseller what was the problem faced

by you after ban?

Answer: Before the ban of Maggi, our almost 60% revenue came from the
Maggi noodle and rest by nestle other products. When it was banned we
actually lost too much revenue, company refunded but the problem was
that what we would sell instead of Maggi noodles. Wholeselling other
companies product like for ITC , we were not sure whether we will get the
rights or not , and it was an immediate need for us.
PROBLEM OF CARRY AND FORWARD AGENT

QUESTION: What Answer: After the ban the issue was

was the problem to recall the packets from the retail
you faced and shops and wholeseller we have
what do you think deployed five trucks for Jamshedpur
about the current and Chaibasa . these will bring back
issues and how stocks to distributors and we will
you see the level collect the cartoons. Here in Ranchi,
of impact of carry we deployed four executives for the
and forward job. They were making trips to 800-
agents? 900 shops and retail chains.
 PROBLEM DEFINITION

Problem of NESTLE MAGGI was:

Maintaining
Trust : People are still Procuring of raw
standards: as people
sceptic about the materials: One of the
The substitutes and Revenue loss: 60% of are still spectic ,
Recapturing the product, though youth main reason was the
increased competition revenue was generated definitely the product
market : Though Maggi has been accepted it concentration of lead
: there are lots of by Maggi products of will remain under
has again relaunched after relaunch but in the product, which
substitutes in the total revenue of scrutiny for at least
itself in the market , it parents still preferred some expert said can
market after the ban. Nestle. What should several coming years.
will take time to place other substitutes like be in the raw materials
So what should be the be the financial The question is that
itself in the market, the yippee for their provided to
marketing strategy of strategy they should what should be the
problem is HOW? children. How to gain manufacturers. Form
the company? take to fill this gap? step company should
the trust of the where NESTLE should
take to maintain its
customers back? buy the raw materials?
standards?

After the ban around 1500
employees lost their jobs.
More incentives to retain campaign to gain the trust
the old employees in the
manufacturing plant.
HYPOTHESIS
Usage of advance
technology to maintain the
standards as the main
Effective social media
reason of higher lead
concentration in NESTLE
of the customers again.
Maggi was lower standard
of technology used by
NESTLE Maggi
 PROBLEM
SOLVING
HOW NESTLE REACTED AND SORTED OUT
THE PROBLEM
 RECALL PROCESS OF MAGGI

The withdrawal It was estimated that there were 27,420 tones of MAGGI Noodles in the factories,
was announced on distribution centers, distributors market on 5th June.
5th June, 2015 and
the operation was
fully operational 2
days later.
There were three Blocking the distribution of stock at our own warehouses and distribution centers.
parts to the This was done immediately.
withdrawal: Blocking orders by our 1400 distributors so that no more stock went into the market.
This was done immediately.
Getting the stock back from our 1400 distributors, and their distributors, and their
customers, and from consumers.
 GETTING LOOSE PACKETS OF MAGGIE NOODLES BACK

CARTONS: Estimated
REFUNDS: There were
that 40% of the 27,420
multiple cash and credit
tones of MAGGI Noodles TRUCKS: 27,420 tones
transactions that need
that were recalled was of MAGGI Noodles
to be paid throughout
no longer in cartons, but would fill 2,500 trucks.
the process as the
in packets. So Nestle But there were multiple
product changes its
sourced 1.4 million journeys involved.
hands on its way back
cartons to move the MAGGI Noodles are sold
to Nestlé India. This
packets of MAGGI all over the country.
added more complexity
Noodles back to our
to the situation.
facilities.
 ANOTHER CHALLENGE

BUSINESS CONTINUITY
• The other logistical challenge is that Nestlé India’s supply chain is at the same time
continuing to supply customers with our other brands.
• Usually product flows in one direct from Nestlé India to its customers.
• Now the system has had to be reconfigured to manage product flowing in both directions.
MARKETING
REASERCH
PROBLEM
NESTLE MAGGI
 DEFINING MARKET RESEARCH PROBLEM

Marketing and promotional strategies

adopted by NESTLE India Limited post
ban.
Using the nostalgia factor: Maggi has
always made family-based advertisements
to attract its customers. Most of the ads
Maggi re-launched with a digital center around mothers delighting their Keeping in touch through increased
media campaign “#WeMissYouToo” children with their favorite two-minute
ad space: Its parent company Nestle
and they have been promoting it noodles. The first ad after the Maggi
relaunch was of a mother speaking decided to increase its spending on
forcefully on all brand’s social media
nostalgically about her child’s tryst with his television commercials.
channels.
favorite noodles, thus further adding to the
emotional value of the customers right
there.
MARKET STRATEGY OF NESTLE MAGGI POST BAN
Re-launched the Maggi kit after five
months exclusively on Snapdeal through
a flash sale model with the online retailer
seeking pre-registrations of buyers for
buying the instant noodles brand.
In April 2017, Nestle India had
collaborated with Google and Paytm Mall

Making it to roll out new variants of Maggi

noodles.

exclusive!! Nestle India has joined hands with

AMAZON to sell newly launched nutri-
lucious range of Maggi noodles on 20th of
August 2017.
Paytm Mall had created a special Maggi
brand store to sell the Maggi Masalas of
India box and later revealed that it had
sold more than 150,000 Maggi Masalas
of India packets.
Thank You!