Maggi

The Product Life Cycle

Submitted By-
VIT b- school
Vellore
 Introduction of Maggi 2-minutes
Noodles
 It’s a Brand of instant Noodle made  Nestle wanted to explore the
by Nestle India Ltd. potential for such an Instant food
among the Indian market.
 It was found by the Maggi family in
Switzerland in the 19th century.  It took several years and lot of
 Nestle launched Maggi for the first money for Nestle to establish its
time in India in the year 1982. Noodles brand in India.

 Now it enjoys around 90% market

 The Brand is popular in: share in this segment.
- Australia
- India
 Over the years Maggi has
- Malaysia launched several products under
- New Zealand its Brand Name.
- Singapore
- South Africa.
 ISSUES
• Different phases product life cycle of maggi
• Why atta noodle was a failure?
• Strategies taken to establish new product
category
• What measures NIL should take to sustain the
image of a popular brand image.
• Stage at which maggi is in the product life
cycle.
 PRODUCT LIFE CYCLE

A concept that provides a way to trace the

stages of a product’s acceptance, from its
introduction (birth) to its decline (death).
 GRAPHICAL REPRESENTATION OF A
TYPICAL LIFE CYCLE
Introductory Growth Maturity Decline
Stage Stage Stage Stage Product
Category
Sales
Dollars

Product
Category
Profits
0

Time
 Introductory Stage
• High failure rates Full-Scale Launch
• No competition of New Products
• Frequent product modification
• Limited distribution
• High marketing and production costs
• Promotion focuses on awareness and information
• Nestlé India Ltd. (NIL), the Indian subsidiary of the global FMCG major,
Nestlé SA, introduced the Maggi brand in India in 1982, with its launch of
Maggi 2 Minute Noodles, an instant noodles product
• With the launch of Maggi noodles, NIL created an entirely new food
category - instant noodles - in the Indian packaged food market. Because of
its first-mover advantage, NIL successfully managed to retain its leadership
in the instant noodles category
 STPD Analysis
Segmentation Targeting Positioning Differentiation
Age Kids Fast to Taste
cook
good to
eat
Eating Youth 2-minute Flavours
Habits noodles

Lifestyle Office Taste bhi Packaging

of urban goers health
families bhi

Working
Women
Health
conscious
people
 Market Penetration Strategies
 Promotional campaigns in school.

 Advertising strategies: - focusing on

kids.

 New product innovation according to

the need of consumers:
– Veg. Atta Noodles.
 – Dal Atta Noodles.
 – Cuppa Mania.

 Availability in different packages:

– 50 gms.
 – 100 gms.
 – 200 gms.
 – family packs (400gms.).

 Conducting regular market research

 Growth Stage
• Increasing rate of sales Offered in more
• Entrance of competitors sizes,
• Initial healthy profits flavors, options
• Promotion emphasizes brand ads
• Prices normally fall
• Development costs are recovered
• 10 yrs back it enjoyed around 50% market share in this segment which was valued at
around 250 crores.
• During the 1990s, the sales of Maggi noodles declined, due to growing popularity of Top
Ramen , another instant noodles product.
• In order to improve sales , 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.
•
 Maturity Stage
• Declining sales growth
• Saturated markets
• Extending product line Many consumer
• Stylistic product changes
products are in
• Heavy promotions to dealers and consumers
• Prices and profits fall
Maturity Stage

• In 2003 Hindustan Lever Ltd was all set to take on Nestle's bestselling Maggi 2-
minute noodles by launching a new category of liquid snacks under its food
brand, Knorr Annapurna.
• The new product, called Knorr Annapurna Soupy Snax, was priced aggressively at
Rs 5 and had four variants: two chicken options and two vegetarian.
• Like Maggi, Soupy Snax will be an in-between-meals snack and will be targeted at
all age groups, particularly office-goers.
 STPD Analysis
Segmentation to
Differentiation:
■ Classic Noodles –
5 – 10 yrs.
■ Veg. Atta Noodles –
Health Conscious.
■ Rice Mania – Teenage
■ Cuppa Mania – Office
goers, Working women.
Decline Stage If no product innovation
brought
• Long-run drop in sales
• Large inventories of
unsold items
• Elimination of all nonessential
marketing expenses

Rate of decline depends on

change in tastes or
adoption of substitute products
 Extending the PLC

• Change product

• Change product use

• Change product image

• Change product positioning

 CATEGORIES OF NEW
PRODUCT/REVISING THE PRODUCT
New-To-The-World

New Product Lines

Six
Categories Product Line Additions
of
Improvements/Revision
New s
Products
Repositioned Products

Lower-Priced Products
 Analysis(why Atta Noodles Failed?)
• In 2005 Nestlé India
launched MAGGI Vegetable
Atta Noodles.
• Based on consumer needs
and evolving trends for more
whole grain based products.
• Extensive Research and
Development expertise to
develop Maggi Vegetable Atta
Noodles.
• Maggi Vegetable Atta
Noodles will provide the
dietary fibre of whole wheat to
facilitate good health and
wellness .
The health angle…
Comparing the prices…
 FAILURE CAUSES
1. Indian psyche-
The basic problem the brand faced is the
Indian Psyche. Indian Palate is not too
adventurous in terms of trying new tastes. So
a new product with a new taste that too from
a different culture will have difficulty in
appealing to Indian market.
2. Price-
The price of atta noodle was little more than maggi
2 minutes noodle
3. False claims-
In October 2008, Nestle mistakenly aired an advert
that noodle "help to build strong muscles and
bone". The British Advertising Standards Authority
said that it was a false claim.
4. Not purely vegetarian-
Maggi Noodles also contains the additives E150d
and E627.E627 is partly prepared from fish,and is
thus not suitable for vegetarians. E150d is
sometimes made from genetically modified maize
5. Lack of essential nutrients-
The new maggi atta noodles
as can be seen from the fig.
lacked essential vitamins A,
C,also the fat content was
more then carbohydrates
6. Targeted health conscious
people…………but atta
noodle didn’t appealed
them……because of other
Substitute supplements in
the market
 Suggestive Promotional Strategies
1. They should conduct test marketing before launching
new product.
2. Focus on creating distinctive image, based on twin
benefits of “INSTANT” and “HEALTHY”.
3. Conduct promotional campaigns at schools in small
towns with population more than 10,000.
4. Strengthen the distribution channel of the rural areas
within 100 KM of all the metros.
5. Launch new advertisement campaign (T.V., Radio and
print media commercials) with the brand ambassador.
6. Conduct Market Research to find out the market
penetration of the product in the rural areas covered.
 Current Scenario of Maggi
 Leading Brand in India as World Market Share
well as World.
 Current Sales: Approx.
– 90000 boxes
– Rs. 4,79,49,000 in Mumbai
– 10,00,000 boxes Maggi 94%
– 55 cr. in India
 Reasonable competitive
pricing.
 Creative interaction blogs for Top Ramen
customers: – 4%
www.maggi-club.in Other Local
2%
 Focus mainly on Health
Benefits.
Maggi 94% Top Ramen 4% Other Local 2%
Thank you