Nestle 4 Ps Challenger 2019

Team-Chargers

Akarsh Sourajit Sahoo Junoon Chakma

akarsh22@iimk.ac.in sourajits22@iimk.ac.in junoonc22@iimk.ac.in

PGP/22/218 PGP/22/179 PGP/22/219
nd
2 Year, PGDM nd
2 Year, PGDM nd
2 Year, PGDM

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 NOODLES MARKET ANALYSIS

Noodles market grows at 5.6% CAGR from 2018-2023

India is the 3rd largest Noodle market in the world Noodles demand in India growing at CAGR @ 5.6%
8000
50000 40250 In million
38970 7000
40000
6000
30000 5000

20000 12620 4000

12540
6060 5660 5200 3000
10000 5420 5780 5060
2000
0
1000
China Indonesia India Japan Vietnam
0
Source: InstantNoodles.org 2018 2017 2018 2019 2020 2021 2022 2023

Contribution in Instant Noodles by Nestle is 30 %

Nestle market leader by 60 % in instant noodles segment Source: Euromonitor

Contribution
Market Share 0% 5% 10% 15% 20% 25% 30% 35%
1.30% 12.8%
Maggie(Nestle) Additional Data:
2% o Sales of Packaged food (India) : INR 5091721
Chings
Yippee o Sales of Snacks: 13.4%(2018)
22% Knorr
o Nestle Share of packaged food : 2.2%
60%
Patanjani
o Maggie share of Packaged food : 0.7%
o Nestle crosses sales of INR 10000 Cr in 2017, with 33%
1.90% Others(Wai Wai, Joymee)
coming from the Maggi portfolio
Source: News Report
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 PROPOSED MAGGI FUSIAN STP

Value Proposition and Key

Differentiating factor

 Brand Extension product of

Maggi
 Yummy, vibrant and variety in
food
Segmentation Targeting Positioning  International flavours which
could give the joy of living
• Age 15-30 • Youth: High School • Position as a tasty food with
• Geographical: Students, College international flavours abroad
Metropolitan cities, students, young • Easy to cook  Takes no time, but satisfies to
Indian Tier 1 and 2 bachelors with busy • Let you dream the fullest
cities schedule(Approximatel • Positioning Statement: For  Less time to cook, more time
• SEC A1, A2, B1, B2 y 11% of India’s aspirational youth who wants to dream
• Lifestyle Population) to eat tasty food, the Maggi  Eco-friendly and bio-
Segmentation : • Aspiration: Food lovers Fusian is a instant noodle shall degradable packaged food
Busy, hasty, office- and highly career focus let you dream Asian, in spite of
goers and have no to live the Asian Dream your busy and hectic day
time to cook food but have no time
• Benefit • Taste bhi, Variety bhi THE
Segmentation: Both ASIAN
food and career DREAM
aspirants.
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 THE BRAND FUSIAN’S BRAND PRISM

PICTURE OF SENDER

Personality: Saviour,
Physique: Tasty, Easy to make, Hassle
innovative, aspirational an
free journey to your dream
career focused
destination

INTERNALIZATION
EXTERNALIZATION

Relationship: Emotional, Culture: Eco-friendly

Aspirational, Moment of Joy packaging, High Integrity in
when served after a tiring day at the organization, Survivor
work and a Winner attitude makes
it a market leader

Self-Image: Everyone love

Reflection: Self fulfilment , Hunger Maggi, Bliss for every mother
killer and Taste buds satisfier now a bliss for the youth

PICTURE OF RECEIVER
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 THE 4 P’s ANALYSIS
Product:
1. Aroma of tangy pepper, garlic, sweet chilli creates aroma
which creates the ambience for dining in at your
room/canteen/café
2. Packaging: Eco-friendly packaging, 1,4,6,8 sachets packaging
3. Cup Noodles should be started from Phase 2 because college
and officer goers prefer it
4. Build community : # Make Your Own Fusian
Community via app/website could help in experimenting with the
Fusian for example, adding cheese/egg/meat and posting pics
online
4 P’s
Price: PREMIUM PRICING
1. Value for Money @ INR 20/- sachet pack
2. Higher price could be used for eco-friendly packaging using
disposable plastic.
3. Price wont change in future. But quantity could be tweaked
4. Bundling of packages in 4, 6, and 8 saver packs
5. Pricing for 4 packs @ INR 75, 6 packs @ 110, 8 packs @ 145
6. After market penetration, mini packs for 35 gm @ INR 10
7. Maggi fusian masala for enhancing the taste buds @ INR 8 per
sachet/ 6 gms
8. Cup Noodles variety could be priced @ INR 50 for 60 gms
Place: METROS, TIER 1 and TIER 2
1. Urban Areas SEC A1, A2, B1 and B2
2. Tie up with kiosks and canteens in colleges, cafeteria in offices
and super markets like Reliance Fresh/ Big Bazzar
3. Phase wise launch:
• PHASE 1: Online Amazon/Flipkart/Paytm/ Ecomm (6 months)
• PHASE 2: College Kiosks, Supermarkets and Office Cafes(6
months)
• PHASE3: Retail outlets, Kirana stores ( Henceforth)
4. Phase 1 : 1 factory but with Phase 2 and 3 , Maggi Fusian
production shifts to multiple factory and distribution channel
Promotion:
1. In Phase 2, for a certain duration of time, a scratch would be
provided with every 4 pieces pack containing a
Paytm/recharge cashback code , needed to be redeemed
2. Campaigning like “Make your own Fusian” , “Fly to
Singapore/Hong Kong/ Bangkok” and “Make Maggi a street
food”
3. Above the belt marketing through Digital Marketing in social
networking sites and connecting with social influencers
4. Maggi Quizzes, Competitions in Facebook(Online) and In-
house in B-Schools, T-Schools ,Office Places and supermarkets
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 SWOT ANALYSIS
Existing brand equity of Maggi to help leverage Fusian sub-brand

STRENGTHS (+) WEAKNESSES (–)

1. Ambience (International feeling) 1. People addicted to old Maggi
2. 60% market share of Nestle 2. Price is premium ( INR 20 for 73 gms)
INTERNAL
FACTORS

3. Brand Loyalty 3. No Indian ingredients

4. Strong Global Brand 4. Low rural market penetration
5. Specialist since 1980s 5. Perceived as less healthy
6. Already distributed channels
7. Innovative International flavours

OPPORTUNITIES THREATS (–)

(+) Threats
EXTERNAL

1. High noodle eating industry

FACTORS

1. Competitors (ITC, Patanjali, Ching's, Regional

2. Fast life and increasing level of income of youth
3. Growing IT sector/IT parks
4. Growing number of educational institutes
5. Urbanisation
6. Shifting of youth from rural to urban areas
7. High Brand awareness amongst customers
producers)
2. Competitive pricing and predatory price hunting
3. Substitute products (Chow Mein, pasta etc)
4. Lack of acceptability of new flavours in Indian sub-
continent

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 PRIMARY RESEARCH
Primary research: 113 Responses
Response Analysis
Consumer Insights:
Based on Primary research, most of
youth are interested in purchasing
online, receiving cashbacks, desire to
visit Bangkok, Singapore, Hongkong,
Mumbai and Seoul for leisure and
prefer Spicy Garlic and Tangy Pepper
the most
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 CUSTOMER RETENTION STRATEGY

Promotion- Scratch cards with Paytm cash back codes for phase 2

Complementary- 6 Maggi Masala + 1 Maggi Fusian (free)

Bundling- 4 flavours in one box Strategy

Rural areas- Small packets of Rs.10 for 35gms

User content- “Make your own Fusian” Campaign

Social blogger- Tie up with experts

Lucky coupons- Fly to abroad to Hong Kong/ Singapore/ Bangkok

Customer feedback and recalibration based on inputs

Brand extension- Italiana, Mexicana, Americana flavours in future

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 LEVERAGING ON CONSUMER PROMOTION AND ECOMMERCE

Consumer Promotion Get a fusian free

with this
• Making Maggie as a street food, just like noodles and
pani-puri
• Tie-up with entrepreneurs and food enthusiasts to create
Maggi Zones where Hot Maggi is served
• Bundling of Classic Maggi with Fusian like with 6 sachets
of Classic Maggi, get a Fusian free
• Paytm/Mobile Recharges only in Phase 2
• Sell Fusian Masala separately to add favour to dish
• Promotion through social network like twitter hashtags,
more events like Maggi Fusian Quizzes and existing prizes

Ecommerce
• Phase 1 to be rolled out on E-commerce
• The E-commerce market is expected to reach US$ 200 billion by
Ab 2026 from US$ 38 billion in 2017.
dhanda • Internet users in India are expected to increase from 445 million in
mast hai, 2017 to 829 million by 2021.
• CAGR of Indian Ecommerce of over 60 percent in India now vis-à-
fusian jo
vis 8-10 % internationally
hai • 35% of shoppers are between 18-25 years, ensuring youth are
targeted
• Cost-effective, less sales and distribution costs improves bottle line
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 ESTIMATION AND FINANCIAL PROJECTIONS

Nestle’s Bottomline to could increase 6% by FY24 due to Fusian

in INR Million FY20 FY21 FY22 FY23 FY24 In Mn Fusian's Profit(FY20-24)
Market Share 65% 70% 72% 74% 75% 6000
Total Sales in Mn 5724 6044 6383 6740 7117 5000
4804

Maggie Sales 3720 4231 4595 4988 5338

4000 3292
Maggie Fusian Sales(% of Maggie Sales ) 1% 7% 9% 11% 15%
3000 2482
Number 37 296 414 549 801 1777
Price(INR) 20 20 20 20 20 2000

Additional Revenue 744 5923 8272 10973 16014 1000 223

Contribution (30%) 223 1777 2482 3292 4804 0
Predicted PAT 27157 35304 45895 59663 77562 FY20 FY21 FY22 FY23 FY24
Net Increase in Bottom Line(Due to Fusian) 1.4% 5.0% 5.4% 5.5% 6.2%
Net Increase in Nestle India's Bottom Line(Due to
CALCULATED ASSUMPTIONS: Fusian)
7.00%
6.19%
6.00% 5.41% 5.52%
1. Market Share of Maggi reaches to pre-crisis level of 75% due to higher 5.03%
5.00%
acceptance
4.00%
2. Maggi Fusian capture 1% of Maggi portfolio in FY 20 due to Phase 1 and
Phase 2 low penetration and Nov-Dec to March period(Less time) 3.00%

3. Slowly, it reached to 15% of the Maggi Portfolio by FY 24 2.00% 1.39%

4. Price recommended to be constant at INR for 5 years but quantity could 1.00%
be tweaked 0.00%
5. Maggi PAT increases 30% Y-o-Y based on historical data FY20 FY21 FY22 FY23 FY24

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THANK YOU