REBIRTH OF

MAGGI
Submitted By : -
Prajwal.P.Rahangdale(102)
 ABOUT MAGGI

-Maggi as a company was started in 1863 by Julius

Maggi in Switzerland selling condensed protein-rich
legume soup. Later in 1947, Maggi was merged with
Nestlé S.A hardhearted in Switzerland.

-In India, Maggi instant noodles were launched in 1983

and has become synonymous with instant noodles. Prior
to a nationwide ban by the FSSAI (Food Safety and
Standards Authority of India), Maggi had a market share
of 70% in Instant Noodles in India and was a Rs. 2000
Crore brand, the biggest in Nestlé India’s portfolio.

-When Maggi instant noodles arrived in India in 1983 —

the year when India lifted the cricket World Cup for the
first time — they instantly caught the nation’s
imagination with it’s tag line “Bus Do Minute”.
Maggi’s advertisement in the initial days
 Controversy before 2015

-Nestlé has faced hurdles during 1990, when there was national furor on usage of MSG (Monosodium glutamate) in food and
there was a demand in Indian parliament to ban processed food that used MSG, including Maggi noodles.
 
-Maggi not only survived but thrived during this difficult time by using messages like “Maggi is healthy”, “Nestlé’s focus on
quality”, “no added MSG” and using endorsements by well known celebrities like Amitabh Bachan and Madhuri Dixit.

-Nestlé Maggi “2 minute noodles” garnered a fan following that would be an envy of any major movie star.
 2015 Controversy

-The year 2015 was a nightmare for Nestlé and Maggi fans. The horror story began in April 2015, when Uttar Pradesh’s FSDA
found MSG and lead in higher than the permissible limit in their tests.

-UP FSDA served notice to Nestlé India in the first week of May to recall Maggi instant noodles. At that time, it could have
been dealt as a localized technical issue. Instead, Nestlé referred to it’s internal quality processes and said there are no issues
with MSG or lead level and they are safe for human consumption.

-After that FSSAI ordered several state FSDAs to test Maggi samples and submit reports. On June 5 FSSAI ordered Nestlé to
withdrew all of it’s Maggi products.
 Impact of the Controversy

-Maggi reported its first quarterly loss in at least 17 years.

The brand which had been enjoying over 75% of the market
share since ages saw the worst days in 2015.
-The entire market with sales of worth Rs 250–300 crore a
month went down to 5–10% during the controversy. The nightmare for Maggi
ended when it was cleared
by NABTC. 
 Crisis Management by Nestle

-During the crisis, Nestlé leadership team failed to communicate

with consumers and press resulting in loss of brand loyalty and
earning customer anger. Many Indians perceived its silence as
admission of guilt.

-Nestlé showed its arrogance when it argued that its own test
results of Maggi noodles were correct, which prompted
confrontation with regulators who found different results.

Instead of bringing in someone who is well versed with Indian

sensuality to handle the crisis they tried to apply the strategy
used in USA or Switzerland.

“This is a case where you can be so right and yet so wrong.

We were right on factual arguments and yet so wrong on
arguing.” — Paul Bulcke, Nestlé Global CEO.
 Strategies Nestle adopted to re-launch
Maggi.

Pricing Competition

Communication Product
 Strategy Nestle adopted to re-launch Maggi
(Communication)

Using the nostalgia factor — Maggi has

always made family-based advertisements to
attract its customers. the narrative revolving
around the mother-child duo (in most of the
ads) strikes a chord with the users, who then
subconsciously start noting the family value
the product manages to sell. Quite naturally,
the first ad after the Maggi re-launch was of a
Increased Campaign — After the fiasco of the mother speaking nostalgically about her
Maggi ban, its parent company Nestle decided to child’s tryst with his favorite noodles, thus
increase its spending on television commercials, further adding to the emotional value of the
ads thru social media thus leading to a growth of customers right there.
its ad volume to about 96 % by September, 2015,
two months prior to the re-launch of the famous
noodles, according to various data estimates. The
first print advertisement that accompanied the
announcement of the re-launch read, “Your Maggi
is safe, has always been”,
“#WeMissYouToo”.
 Strategy Nestle adopted to re-launch Maggi
(Communication)

-Internal Employee Engagement: Nestlé

India created a dedicated web page for the
purpose, collaborating with survey-monkey, a
website, seeking feedback from employees
on how Maggi can be ‘rebuilt’. This survey
was not visible to outsiders. Employees had
been encouraged to ask questions and raise
doubts.
 Strategies Nestle adopted to re-launch
Maggi(Pricing and Competition)

-Various new brands emerged into

the market such as Knorr Soupy
Noodles, Ching’s Secret and Atta Noodles.
Nestle analyzed the strategies adopted by their competitors by utilizing
various analysis tools such as,
SWOT Analysis, Value Chain Analysis, Porters Five Force
Model, Mckinsey 7S Model, GE Nine Cell Matrix, BCG
Matrix, etc., to understand the market and competition.

-Reduction in the Manufacturing Cost: Nestle focused on increasing its

production, which in-turn
lead to reduction in the cost of production.

-Offered High Profit Margin to Middlemen.

Strategies Nestle adopted to re-launch
Maggi(Product)

-Targeted Online Sales for products.

-Increased the Product Line.

-Reintroduced product with free MSG, free lead tags.

-Ensured FSSAI approval. “Good product labeling”

Strategy Nestle adopted to re-launch Maggi

Making it exclusive — Like with everything

else, consumers thrive on the feeling of owning a
product or service ‘exclusively’. Maggi played its
cards smartly when it decided to take this into
account by making a deal with Snapdeal, which
became the only platform where Maggi packets
were sold before its official comeback into the
shelves of all stores. This raised its demand by a
roof and customers were trying to outbid each
other for the ownership of the packets, sometimes
even paying more, before it went out of stock.
The company thus set the stage for Maggi’s
official comeback into the markets.
 RESULT
In 2019, Nestle sold some 264,000 tonnes of Maggi products, compared to 254,500 tonnes in
2014. The country’s largest food company, Nestlé India, has finally managed to exorcise the ghost
of the Maggi crisis that bogged it down four years ago.