Brand DossierOn

MAGGI NOODLES

-Alka Baid

-Arjun P.R

-Avishek Singal

-Ratnavel Subramanian

PHASE I

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ContentsHISTORY.................................................................................................................................. 4

Initial positioning and subsequent repositioning of Maggi noodles...........................................6

Maggi: Brand Positioning from 1982 through 2000s..............................................................6

Maggi: Brand Positioning from 2000 till 2012.......................................................................7

Advertisement and sales promotion of Maggi noodles...............................................................7

Different communications media used by Maggi noodles....................................................10

Sales Promotion:-................................................................................................................. 11

Analysis of the product............................................................................................................ 12

STPD Analysis:....................................................................................................................12

SWOT Analysis:...................................................................................................................12

4Ps Evaluation:.....................................................................................................................14

Competitors.......................................................................................................................... 15

Strategies followed to tackle competition:...............................................................................16

Maggi’s competition vs TopRamen......................................................................................16

Maggi’s competition vs Yippee Noodles..............................................................................17

Distribution Strategy................................................................................................................19

Types of Distribution............................................................................................................19

Distributors...........................................................................................................................19

Retailers................................................................................................................................20

Summary of the future plans of Maggi Noodles:.....................................................................21

References:...............................................................................................................................22

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PHASE II....................................................................................................................................... 23

Hypotheses...............................................................................................................................24

Justification:.............................................................................................................................24

Information to be collected:.....................................................................................................24

Instrument of data collection....................................................................................................25

Questionnaire........................................................................................................................26

Sampling plan and sample size:-..............................................................................................29

Data analysis methods:-........................................................................................................... 29

PHASE III...................................................................................................................................... 30

Q1 – Which of following would you prefer most for a snack?.............................................31

Q2 – Which of the following do you thing qualifies as a “quick-meal”?..............................32

Q3 – What brand comes to your mind when asked about “instant-noodles”?.......................34

Q4 - Which of the following do you think are varieties of Maggi?......................................34

Q6 - Would you like to consume Maggi on a regular basis?................................................39

Q7 – If yes, at what situation would you like to have “Maggi” Noodles?............................40

Q8 - If No, what are the possible reasons behind?................................................................41

Net take Away..........................................................................................................................43

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HISTORY

Creation of “MAGGI”The “Maggi” brand originates from Switzerland where in 1863 Julius Michael Johannes Maggi created a recipe of flavors to bring added taste to meals. This marked the beginning of the Maggi brand and its convenient products. Known for his nutrition-oriented approach, the Swiss Government asked Julius Maggi to create a product that would be quick to prepare yet nutritious as more and more women were working outside the home. The results were a success — two instant pea soups and an instant bean soup. In 1947 Nestlé acquired the Maggi brand and started its production.

Introduction of MAGGI in IndiaNestle India ltd (NIL) introduced Maggi to Indian consumers with the launch of Maggi 2 minute noodles, an instant food product in 1982. With the launch of Maggi noodles, Nestle India Ltd created an entirely new food category- Instant Noodles- in the Indian packaged food market. Maggi distributed free samples in the school to promote trial during the launch period. Their tagline “2 min noodles” attracted a large number of working mothers. This became a huge success in the Indian market. There were no worthy competitors for a very long time.

First real competitionIn the year 1990, Maggi Noodles came face to face with a real competitor(apart from the existing generic competitors) which led to decline in sales of Maggi. “TOP RAMEN” was growing popular as an instant noodle among the children.

Getting house in orderTo counter its competitor Maggi introduced a new formulation which turned to be a disaster for the company. The consumers did not like the taste. Things got out of control until 1999, when Maggi with proper surveys reintroduced a new formulation which helped it regain its consumers. In the year 2000, Maggi got his house in order and with proper marketing strategies it became the leader in the instant noodles category.

Introduction of new varietiesIn the year 2005, Maggi launched another instant Maggi called Vegetable Atta noodles. A healthy instant noodles product made of whole wheat flour and vegetables.

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TodayThe brand is popular in Australia, India, South Africa, Brazil, Nepal, New Zeeland, Brunei, Malaysia, Singapore, Sri Lanka, Bangladesh, Pakistan and the Philippines. In several countries it was also known as “MAGGI MEE” (Mee is Indonesian/ Malay/ Hokkien for Noodles).

Initial positioning and subsequent repositioning of Maggi noodles

Initially nestle tried to position the Noodles in the platform of convenience targeting the working women. However, the sales of Maggi was not picking up despite the heavy media advertising. To overcome this NIL(Nestle India Limited) 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 so they came up with Maggi- 2 minute noodles. 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.

The basic problem the brand faced was the Indian psyche. i.e Indians used to be conservative about the food habits so noodles faced a lot of problem in promoting sales.

Maggi : Brand Positioning from 1982 through 2000s

At the time, when Maggi made their entry in Indian mark, Indian customers were much conservative in their food habits, preferring homemade traditional food, rather than canned or packed food. At the initial stage, they targeted Indian women on the perception that they can be easily attracted since Maggi is easy to cook. But all such efforts did not really work in the expected fashion. To find out the exact problem, NIL conducted a market research and found that children are the largest consumers of the product. So, NIL positioned Maggi noodles as a ‘convenience product’ for mothers and as a ‘fun’ product for children by wearing the tagline of ‘Fast to Cook Good to Eat’ (in 1980s).

Advertising taglines like ‘’Mummy, bhookh lagi hai’, ‘Bas 2-Minute,’ and ‘Fast to Cook Good to Eat’ (in 1990s) easily positioned Maggi in the minds of target consumers. Along with aggressive advertising, NIL had adopted other measures like distributing free samples, giving gifts for empty packages, etc for increased product promotion. In 1988, Maggi launched its first extension product ‘Maggi instant soup’, which soon acquired a prominent position in the packaged soup market in India.

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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

Maggi : Brand Positioning from 2000 till 2012

From the year 2000 onwards NIL came up with a new marketing strategy that focused on the development of health and wellness products. They shaped their marketing strategy after considering the changing lifestyles and eating habits of Indian consumers. As an outcome of this, Vegetable Atta Noodles entered Maggi family in 2005. At this time they promoted their products with the with the tagline “Taste bhi, Health bhi”. By 2010, Maggi faced severe competition due to new entrants like ITC (Sunfeast Yippee), GlaxoSmithKline’s (GSK) Horlicks Foodles, Hindustan Unilever’s (HUL) Knorr Soupy noodles, and Big Bazaar’s Tasty Treat.

The competition continues, but still ‘Maggi’ stands as a market leader in instant noodles market. To maintain their market position, NIL has started to offer aggressive discounts and incentives to retailers on Maggi. Maggi’s market share had slipped from 90% (which was 2 years ago) to 80% in the last few months. But now, through innovative marketing strategies they have regained some ground and now they have 88% market share. But in the future Nestle expects the competition to hot up and it remains to be seen what all innovative steps that Nestle would take to arrest the erosion of their market share.

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. The noodles' tagline, 'Fast to Cook Good to Eat' was also in keeping with this positioning.

Advertisement and sales promotion of Maggi noodles

By its very nature, a product like Maggi 2- minute noodles offers convenience; indeed, that is one of its fundamental product features. However, a product feature even if it is definitive, is not necessarily a benefit to consumers. Giving the family, especially the kids, something nice to eat is a real issue for mothers. And a food product no matter how important or good it is considered

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by the mother stands little chance unless the kid also wants it. On the other hand, the kid may love the product, but the frequency and the quantum of consumption will be controlled by the mother depending on how good or bad she thinks it is for them. Therefore, the first thing was to make sure the brand meant something appealing to both the mother and the children. So for starters Maggi was presented as a convenient product for mothers and as a fun product for children.

A related factor was that the method of preparation also allowed a mother to add her individual touch to the end product: a touch of tomato cuts of capsicum, the magic of mushrooms. This gave the mother a relief as it was made in her style and was healthy for the child.

The second important component was the meaning given to 2 minutes. If the meaning that people assigned to these two minutes had primarily been ‘now the woman can finish the work quickly’, it would have conveyed that the user was a lazy mother. The campaign, therefore, converted the feature of ‘only two minutes of your cooking time’ into the benefit of ‘only two minutes of waiting by the kids’. This transference of benefit from the user of the product to the beneficiary of the product was a crucial element of the brand’s success combined in the line ‘fast to eat good to cook’.

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These ads have become so popular that the line “bas 2-min” entered the language, and immediately reminded the Indian consumers of Maggi noodles even several years after the ads were no longer being aired on T.V. other lines such as ‘Mummy, bhook lagi hai’ (Mummy, I’m hungry) strongly reinforced the association that the quick preparation was less about the convenience and more about not keeping the child hungry.

‘taste bhi, health bhi’’

In 2005 Maggi built this idea of a healthy noodle preparation into its Vegetable Atta Noodles. This product took away the negative that had been associated with noodles – the fact that they were made from ‘maida’ (refined wheat flour) by making the new product from ‘atta’ (whole wheat flour).

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As a celebration the unique bond that the brand shares with its ardent users that MAGGI Noodles has launched its newest campaign: “Meri MAGGI 2- minute Mein Khushiyan”, thereby acknowledging that “Meri MAGGI” gives you the power to create happiness in 2 minutes! The campaign gives MAGGI Noodles fans, the great opportunity to share their stories & stand a chance to feature in TV commercials & packs.

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.

Different communications media used by Maggi noodles

TV Ads:-

Initially Maggi Noodles was targeted at the working women and later the upper middle class kids. Maggi Noodles was a sponsor for Hum Log, a popular television show on Doordarshan, India’s sole channel in 1984. Maggi Noodles is now targeting its products at the entire family and not only kids. Maggi Noodles has recently launched “Main Aur Meri Maggi” campaign in commensurate of 25 years if Maggi Noodles in India.

Print Ads:-

Maggi Noodles does not focus heavily on print media. During its launch since its initial target audience was mother and kids. Some advertisements in the print media were used to highlight the convenience factor of Maggi Noodles.

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Recently Maggi Noodles came out with advertisements in some weekly magazines for its new atta noodles and rice noodles variants. Maggi rice noodles mania had the highest cvolumn centimeter in print among the instant food category. Growth in noodles print advertisements grew by 42% share in 2010. Maggi noodles expenditure on print media is much lower compared to other media.

Sales Promotion:-

Various sales promotions offered by Maggi to retain its customers were:

Discount offered to retailers:-

7% discount on 6-pieces pack (56MRP), 5 rupee discount on 8-pieces pack (78MRP). These are promotional schemes given to the retailers.

Display:-

Large pack sizes at the top with decreasing pack sizes as going downward. This is because that for a retail outlet the more value is generated large pack thus they try to project big size at convenience place.

Public Relation:-

The Maggi Club - the children under the age of 14 were invited by press advertisements and distribution of leaflets to become a member of Maggi club by sending logo cut from 5 empty Maggi wrappers. Maggi projected it as “Maggi Clubbers are fun lovers” and intended to use it as reference group. Benefits offered to Maggi-Clubbers are various games like snap safari game, Cap and mask sets, travel India game, Disney today comic. To obtain each gift the member has to send 5 wrappers as purchase proof. Some special privileges were given to regular members time to time like, discounting tickets of Appughar, organization Maggi school quizzes and sketching.

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Analysis of the product

STPD Analysis:Segmentation: Maggi Noodles as a brand have segmented the market on the basis of lifestyle and habits of urban families.

Target: Maggi Noodles brand have mainly targeted the kids, youth, working crowd who fall into the category of “convenience-savvy time misers” who like to get something instant and get over it quickly while considering the health factor.

Positioning: Maggi Noodles has positioned itself in the SNACKS category and not in the meal category since Indians do not consider noodles as a meal. Therefore Maggi Noodles has developed its brand image of instant food product with positioning statements such as “2 minute Noodles” and “Easy to cook, good to eat”. But in the recent times as it has established very well in its segment and far beyond the approach for any competitor, it’s slowly trying to enter into the MEAL category.

Differentiation: Maggi Noodles have also differentiated its brand image from its competitors in terms of taste, flavor and packaging. Maggi Noodles has also launched a wide variety of products in different flavor, thus attracting a large number of consumers. Maggi products are available in different sizes catering a variety of consumer needs.

SWOT Analysis:Maggi Noodles is the leader in its category with strong customer loyalty.

Strength:

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i. Established family brand: Maggi is a brand well established among both young and the middle-aged group of a family.

ii. Strong global corporate brand: Nestle, the corporate which created and are running Maggi, is a very strong brand internationally which makes Maggi Noodles a trustworthy product.

iii. Market leader: Maggi Noodles is the leader of the market in India.iv. Strong Marketing and Distribution channels: Maggi’s marketing strategy and

distribution channels to take out its competitors has been of top notch.v. Pioneer in the category: Maggi was the pioneer in the quick cooking noodles category.

Thus reaching the minds of everyone made easier.vi. Innovative Flavors: Maggi continuously launched new and exciting flavors to retain its

customers and also to gain new ones by creating an entirely new variant.

Weakness:

i. Not Authentic Noodles: Though the brand “Maggi Noodles” is synonymous with noodles in the minds of the consumers, it has not been able to conquer the market demanding authentic Chinese styled noodles.

Opportunities:

i. Growing packaged food market: India has a growing packaged food market of 15% annually which would help Maggi Noodles to increase their pool of consumers.

ii. Increasing brand consciousness: Over the time, Indian consumers have become very brand conscious with the introduction of many stable products in the country.

iii. Unexploited rural market: Packaged food has not yet reached the rural market as much as the urban areas.

iv. Youth: India has a majority of its population less the age of 25.

Threat:

i. Health issues: Over the time, the brand has received many allegations regarding the health risk with its products. Though it has taken several actions regarding this, the brand still is associated with these issues in the minds of the consumer.

ii. Incapable of flavor change: Maggi Noodles can never change its base flavoriii. Competitive pricing: It is constantly facing a competition with brands like TopRamen.iv. Regional competitors: Maggi’s competitors, though many in the packaged foods

segment, its constant competitors are the snack bars.

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4Ps Evaluation:Product:

Quality: Un-compromised quality in the product could be seen over the years. This stabilized their product in the market in spite of several threats.

Variants: The brand has a lot of variants. The ones present now in India are:i. Maggi 2 - minute noodles

ii. Vegetable Atta noodlesiii. Cuppa Maniaiv. Vegetable Multi Grain noodlesv. Vegetable Dal Atta noodles

vi. Chicken and Tomato Packaging: Maggi Noodles comes in various SKUs to fulfill the needs of a snack or a

family meal. It has packages starting from 50gm

Price:

Affordable: It positioned itself perfectly in such a way that it’s affordable by all income groups.

Competitive: The brand is priced in such a way that it is not far away from its competitors regarding price and yet a challenging one.

Inflation Strategy: During inflation, the brand was priced the same. But they reduced the quantity of the packages.

Promotion:

Initial promotions: Initially the brand focused its promotions was targeted on working women.

Later promotions: As they came to know more about the market, they switched their target to kids and young adults.

In addition to promotional activities, Maggi noodles associated itself with mainstream television programs and advertised heavily on kids programs and channels. Maggi is targeting its products at the entire family and not just kids.

Maggi has recently started to market itself as a meal.

Place:

Wide Distribution Network: Maggi has established its distribution network in almost every region in India.

Satisfactory Distributors: The margin for the retailer and main distribution agent has been made such a way that it reaches every part of the nation with ease.

Availability: It is available at every place; from ‘kirana’ stores to hypermarkets.

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Sales Territories and warehousing systems: This has ensured that no store will go out of stock at anytime during the year.

CompetitorsMaggi has had competition ever since its start. It had a generic competition with the existing snacks in the market such as “Kachori”, “Samosa”, etc. In spite of this kind of scenario that the company is facing, it has also had its competition with other ‘instant noodles’ brands during its tenure so far in the Indian market.

FMCG giants have entered the ‘instant noodles’ market with their respective brands. In addition, there are the private label brands of large retailers which are increasing finding a way into the consumer's shopping trolley.

Few popular and major competitors to Maggi are:

1. Top Ramen is the second largest Noodles brand in India trying hard for the past 18 years to beat Maggi Noodles. Top Ramen is a global brand from Nissin. Launched in 1991, Top Ramen has been trying all possible marketing tools to dethrone Maggi.

o Packet Noodles: Macho Masala, Funky Chicken, Oye Tomato, Curry Smoodles.

o Cup Noodles: Spicy Vegetable, Tangy Chicken

2. Sunfeast Yipee Noodles, launched by ITC, has yet to prove itself among the huge Maggi Noodles loving crowd. But its taste and the flavors are challenging.

o Classic masalao Magic masalao Chinese masala

3. Horlicks Foodles : The health drink brand from GSKCH – Horlicks – which has been traditionally targeted as a ‘great family nourisher,’ has entered into the highly competitive segment of instant noodles through its newly introduced Horlicks Foodles, aimed to explore the category of salty snack food market.

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In order to breach the position of the Maggi’s stronghold in the market of usual processed flour noodles; Horlicks Foodles seems to have, rightly, attempted to grab a share of this larger pie by sticking to its ever-green mantra of providing ‘health and nutritious’ food products.

o Regular (Masala, Spice and Curry & Tomato flavors)o 4 Grain (Masala, Spice and Curry & Tomato flavors)

Strategies followed to tackle competition:

It is not the first time Maggi has faced competition in the noodles category. In 1997-98, Indo Nissin came with its noodles brand Top Ramen.

For starters, the company is building on the brand lineage to take it forward. Maggi noodles has become household name over the years. The company is strengthening its emotional connect with the consumers. Last year saw Nestle launch its ‘Mein aur meri Maggi’ campaign that revolved around consumers sharing their experiences. The selected ones were published on the product packaging.

Maggi ’s competition vs TopRamen

Top Ramen is the second largest Noodles brand in India trying hard for the past 18 years to beat Maggi Noodles. Top Ramen is a global brand from Nissin. Launched in 1991, Top Ramen has been trying all possible marketing tools to dethrone Maggi.

Introduction of Smoodles

First occasion was when the brand was launched; the brand quickly went into limelight with its famous positioning as Smoodles. But after the initial trying, people again went back to Maggi noodles. The next occasion was when Maggi changed the taste. That was an occasion where, as a brand loyalist, people dumped Maggi .For a while people consumed Top Ramen. When Maggi reversed the taste, many people again switched back. Top Ramen at that point of time was one of the heavy advertisers in the media. And since the taste was also comparable, many Maggi users may have switched to this brand. But it could not retain all the customers. One factor is the price. Top Ramen was always perceived as a premium brand compared to the affordable Maggi. The high price may have prompted many Maggi users to switch back. Another factor was the promotion. Top Ramen could not sustain the share of mind it generated during the formative years.

Maggi’s mistake and Top Ramen’s dream:

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Nestle changed the formulation of Maggi 2-minute noodles around the same time which was rejected by the consumers. As a result, sales of Maggi noodles declined with the company finally bringing back the old formulation in 1999 to arrest drop in sales. Meanwhile, Indo Nissin had also become complacent, and Maggi was able to quickly consolidate its position as the leader. Though it will not be easy to dislodge Maggi from its perch today, given the huge brand equity it enjoys among consumers, experts say some loss of market share cannot be ruled out, given the deep pockets and vast distribution network of its new rivals.

Fighting against an established brand:

Maggi was able to bring in lot of noise because it had become an umbrella brand and was advertising for various other products. Top Ramen had an interesting distribution strategy. For the past 10 years, the brand has been distributed by Marico. It is a case of marketing alliance where Top Ramen was utilizing the distribution strength of Marico. In 2008, the alliance was mutually called-off. Now Nissin is building its own distribution network. It is puzzling to see that a global brand with lot of support from its parent could not put up a big fight with Maggi. The major issue faced by Top Ramen was the differentiation. Top Ramen could not offer any serious differentiation to Maggi either in terms of the product or brand. Since there was no serious differentiation, Maggi was able to gain back the lost ground because it was the pioneer brand who built the category.

Health Platform:

When Maggi repositioned itself as a healthy food, Top Ramen should have followed suit since the market was moving towards healthy foods. When Maggi launched its rice noodles, Top Ramen should have followed since it could have added value to the brand.

Except for the first phase of brand promotion, Top Ramen did not have any worthwhile campaign in its 18 years of existence. Hence as a customer, the brand is not giving enough reasons to change the addiction to Maggi brand. Even it is not giving enough reasons for kids to buy this brand.

Maggi ’s competition vs Yippee Noodles

ITC has always taken a very aggressive approach from the day it entered the FMCG sector and has been giving a very tough fight to the already established players because of the financial muscle that it has and the wider and deeper reach that ITC has got even in the rural markets because of its tobacco business. This always provides it an edge even over the established players in the market as not many players in India have got such a deep and a wider reach for making the products available to customers in almost every nook and corner in India. And ITC has taken the same approach for the newly launched noodles brand Sunfeast Yippee in the Indian market, which is dominated by Maggi from decades.

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ITC has also taken the same approach by focusing its noodles brand Sunfeast Yippee as a brand using the benefit positioning concept in which they tried to position the product as a better alternative to Maggi on the basis of following three differentiating criteria :-

i. The first point used by Yippee to position itself as a better alternative over Maggi was that it was telling the customers that they should have the choice of variety of masala with two variants in their product portfolio – Classic and Magic. The stress was made upon the point that we want choices in each and everything in life so why not have a choice while having instant noodles.

ii. The second point focused on the shape of the contents within the pack. The contents in other options available are in rectangular shape which has to be broken which leads to short pieces of noodles, whereas in Yippee noodle pack the cake is in round shape which keeps the noodles intact and long and smooth.

iii. Then third thing that it focuses upon is the fact that Maggi must be had immediately after it is cooked as after sometime the taste deteriorates and you cannot have it, whereas Yippee noodles promises that they can even be had after some time.

Thus it has tried to give itself a totally different positioning from the other competitors present in the market and it is the only competitor to Maggi which has decided to take it head on while competing with it. The biggest advantages available with the Sunfeast Yippee noodles brand are as follows:

i. The deeper penetration provided by the already well-established and penetrative distribution channel provided to ITC by its channel member in the tobacco business which provides it the most penetrative distribution network both in rural and urban India.

ii. Then it used the Sunfeast brand, thereby using the Umbrella branding strategy, which had already become a well-known name in the Indian households because of the equity that the brand had gained in the minds of the consumers.

iii. The financial muscle of the ITC conglomerate to back the company to tackle all the competitive moves in an efficient manner.

Thus all in all ITC has come up with an alternative which seems to be a bit different from all the options that have tried to compete with Maggi and the only alternative that has decided to take the market leader head on through its television commercials which are making direct comparisons with Maggi though without naming it and showing how Sunfeast Yippee Noodles is a better option than Maggi.

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Distribution Strategy

Nestle India has spend about a century in the country catering to its customers. Today it has presence across the country with 7 manufacturing units and 4 branch offices spread all across the region. From these Factories Maggi noodles are directly send to the carry and forwarding agencies located almost everywhere. CFA’s take care of taxes and octroi’s and different state level charges. Maggi noodles is being sold through 2, 60,000 outlets which comprise of grocers, convenience stores, supermarkets and miscellaneous channels. The average Indian is still in the habit of making daily purchases from traditional grocers or kirana’s. This comprises 63% of the distribution network. Over time, with the increase in popularity of the mall culture, in primarily urban and semi urban areas, there has been a slight increase in distribution through super markets and hyper markets.

Types of Distribution

1. Traditional Distribution System

In this system the stock of Maggi Noodles is available in almost every Kirana stores for the consumers. The flow of distribution goes from Factories to the CFA Agents, then to the Distributors, Wholesalers and finally to the retailers.

2. Modern Distribution System

Modern trade involves retail stores chain Example: Big Bazar, Reliance Fresh, Spencer’s Daily, etc. They are serviced through specially designated distributors. The number of distributors supplying goods to these major retailers is smaller than that of Traditional Trade.

Distributors1. Nestle offers 6% margins for distributors.

2. The distributors have to pay in advance to Nestle but he has to give the stock to retailers on credit.

3. They try to target small and big shops both so that they can cater and reach to every kind of customers from various strata of the society.

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RetailersRetailers get 10% margin from the distributors and 15% from the new products. Retailers stores are segmented based on their per week order. There are four broad categories.

1. Super “A” – Super High Volume retailers

2. “A”- High volume retailers

3. “B” – Medium volume retailers

4. “C” – Low volume retailers

Each retailers covers close to 400-500 retail stores. The product is shipped from distributor to wholesaler or retailer as per the order taken by the distributor’s salesman. There is a time gap of one day between taking the order and distributing the product.

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Summary of the future plans of Maggi Noodles:

1. Maggi Noodles 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.

2. The company continuously focuses its effort 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.

3. Nestle India (NIL) is planning to invest nearly Rs 500 crore on its eight Gujarat plant. The company will primarily focus on Maggie Noodles and confectionery-manufacturing.

4. As part of its aggressive business expansion policy in the western and eastern states by doubling capacities, the company is targeting Bihar for the ninth plant. Nestle procures 13 lakh litres of milk from one lakh farmers in Punjab, Haryana, Maharashtra and Rajasthan.

5. Moreover, Maggi is trying to make its product Maggi noodles as a meal category. This would definitely be a success as it has already been used as a meal by many all over India.

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References: Maggi’s website (www.maggi.in)

Nestle website (www.nestle.com)

Wikipedia (en.wikipedia.org/wiki/Maggi_Noodles)

Google (www.google.com)

AFAQs (www.afaqs.com)

Sunfeast Yippe (www.sunfeastyippee.com)

Economic Times (economictimes.indiatimes.com)

MBA Skool (www.mbaskool.com)

Study Mode (www.studymode.com)

Noodles Blog (the—noodles.blogspot.in)

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PHASE II

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Hypotheses

1. Maggi is perceived by the consumers as a ‘quick-meal’.

2. Maggi is considered healthy by both mothers and other consumers.

3. Masala Maggi has reached the minds of consumers more than its other variants.

4. Maggi was never seen as a substitute to regular Noodles.

Justification:

1. The country is very used to taste of instant noodles that the consumers have accepted it as meal

over time. Moreover, recent advertisements have shown us that Maggi is trying to reposition itself as a

meal.

2. Since the consumers mainly consist of children, it implies that the parents get the product for

them, keeping in mind their children’s health. So we think that maggi is considered to be a healthy snack.

3. Though Maggi has many varieties, its original Masala flavor has been in the market for a very

long time and hence, could easily be the most preferred variety among the consumers.

4. Maggi has always competed against generic snacks. This has been pretty successful over time.

But it was never seen as a substitute for the regular noodles that are available in restaurants.

Information to be collected:

1. Maggi is perceived by the consumers as a meal.

a. We need to know the preferences of the people when it comes to a quick-meal.

b. We also need to know if people have been using maggi as a meal.

2. Maggi is healthy.

a. We need to know the perception of the customers regarding maggi when it comes to a

healthy and balanced snack.

3. Masala Maggi is more popular than its other varieties

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a. We need to find out the awareness of the people about various varieties of Maggi.

b. What difference do they find between the flavors of Maggi?

c. Top of the mind of consumers when they think of a flavor.

4. Maggi was never a substitute to “Actual Noodles”

a. People’s preference regarding noodles as in packaged instant ones or the general noodles

available in the restaurants.

b. Difference in the various aspects of fresh noodles and Maggi.

Instrument of data collection

For any marketing research we have three main instruments for the collection of primary data

1 .Questionnaires

2. Qualitative measures

3. Technological measures

Out of the available options we have chosen the most common instrument questionnaire because of its

flexibility and convenience to administer on a large scale. In a questionnaire closed end questions specify

all the possible answers and the answers are easier to interpret and represent, whereas open end questions

allow the respondents to answer in their own words which often reveal more about how people think.

The reason for our team to choose questionnaire as an instrument is because of the following reasons.

1. The hypotheses we have chosen is based on the perception, views and eating habits of the

consumers regarding the product.

2. We have decided a sample size of 100~125. For this, questionnaire is a quick and effective

approach.

We would be concluding whether the hypothesis chosen by us is correct or not based on the information

collected via the survey.

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Questionnaire

1. Which of following would you prefer most for a snack?i. Samosa

ii. Vadaiii. Kachoriiv. Haldiram Snacksv. Biscuits

vi. Cakesvii. Instant-Noodles

viii. Chocolatesix. Chips

2. Which of the following do you thing qualifies as a “quick-meal”?i. Oats

ii. Cerealsiii. Dosa/Idlyiv. Rotiv. Fried rice

vi. Instant Noodlesvii. Sandwich

viii. Pav Bhaji

3. What brand comes to your mind when asked about “instant-noodles”?

______________________________________________________

4. Which of the following do you think are varieties of Maggi?i. Chicken

ii. Curry Masalaiii. Chilly Garliciv. Vegetable Atta Noodlesv. Masala Maggi

vi. Tricky Tomatovii. 4 Grain

viii. Egg Noodlesix. Halal Noodlesx. Thrillin Curry

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xi. Vegetable Multi-grainz

5. Between Maggi and regular noodles (served in Fast Foods/Restaurants), rate the parameters given below. (On a scale of 5. 1 being the lowest and 5 being the highest)

Parameter MaggiTasteHealthyExpensiveAvailabilityQuick to prepare

.

Parameter Regular Noodles

TasteHealthyExpensiveAvailabilityQuick to prepare

6. Would you like to consume Maggi on a regular basis?a. Yesb. No

7. If yes, at what situation would you like to have “Maggi” Noodles?a. Regular day Breakfastb. Evening Snackc. When you’re in a hurryd. For a proper meale. A late night snack

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8. If No, what are the possible reasons behind?a. It’s not tastyb. It’s not healthyc. Expensived. I like variety

9. Whom do you purchase Maggi for?a. My consumptionb. My children’s consumption

Name:

Age:

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Sampling plan and sample size:-

A sampling plan is a detailed outline of which measurements will be taken at what times,

on which material, in what manner, and by whom. Sampling plans should be designed in such a

way that the resulting data will contain a representative sample of the parameters of interest and

allow for all questions, as stated in the goals, to be answered.

We will be conducting the survey with the help of “Google Docs Forms”. The link to this

form will be sent to the sample population. All the responses will be stored as Google’s

spreadsheet which can be downloaded as an Excel sheet. Further analysis, explanation and result

of the survey will be determined with the use of analysis on the downloaded excel file.

Maggi is a brand which is being consumed by all age people, from children to adults, so

we plan to take a survey of around 80~100 people, mainly targeting the youth segment and the

parents to ensure that every member of the population gets an equal chance of selection.

Data analysis methods:-The data collected from the questionnaire will be analyzed with the help of various graphical and

statistical analysis tools along with Microsoft Excel. Each question will be analyzed separately

and the tools to be used are specified as follows:

o Question 1: Pie Chart / Bar Graph

o Question 2: Pie Chart

o Question 3: N/A

o Question 4: Pie Chart / Bar Graph

o Question 5: Bar Graph / Line-graph

o Question 6: Pie Chart

o Question 7: Pie Chart

o Question 8: Pie Chart

o Question 9: N/A

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PHASE III

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Q1 – Which of following would you prefer most for a snack?i. Samosa

ii. Vadaiii. Kachoriiv. Haldiram Snacksv. Biscuits

vi. Cakesvii. Instant-Noodles

viii. Chocolatesix. Chips

37%

20%

17%

5%

11%

3%3% 2% 2%

Distribution of people's first choice of snacks

SamosaVadaKachoriHaldiram's snacksBiscuitsCakesInstant NoodlesChocolatesChips

Maggi was positioned as snack from the very beginning. But in spite of a long stay in the market, Maggi has not been able to compete against the generic competition, i.e. Samosas, Vada and Kachori etc. Instant noodle market, majorly dominated by Maggi, is the first choice only for 3% of the sample population. In order get a clearer picture, we can also see the distribution of the first three choices in the histogram given.

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Samosa

Vada

Kachori

Haldiram's s

nacks

Biscuits

Cakes

Instant N

oodles

Chocolates

Chips0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%

Distribution of people's first 3 choices of snacks

Rank 1Rank 2Rank 3

Though instant noodles has not been in the first choice of many minds, it has covered around 10% and 8% in the second and third choice. But yet, this is not significant.

Q2 – Which of the following do you thing qualifies as a “quick-meal”?i. Oats

ii. Cerealsiii. Dosa/Idlyiv. Rotiv. Fried rice

vi. Instant Noodlesvii. Sandwich

viii. Pav Bhajiix. Hot Dogs

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26%

31%12%

10%

7%

2%2% 2%

7%

Distribution of people's first choice of quick meal

OatsCeralsDosa/ IdlyRotiFried RiceInstant NoodlesSandwichPav bhajiHot Dogs

Maggi has recently tried to reposition itself as a meal with new television and print advertisements. Whether it has reached people or not is secondary. But, the number of people who perceive Maggi as a quick meal in comparison with other generic quick meal like the ones given in the options is very low. 3% is the number of first choices for instant noodles. This shows that the major player in the market, Maggi, has failed to achieve what it has tried recently. But still, this does not prove the first hypothesis right or wrong.

If we look into the distribution of the first three choices, we can see that again, instant noodles has an increased number of people for the 2nd and 3rd choice. The histogram is as shown below.

OatsCera

ls

Dosa/ Idly

Roti

Fried Rice

Instant N

oodles

Sandwich

Pav bhaji

Hot Dogs

0.0%10.0%20.0%30.0%40.0%

Distribution of people's first 3 choices of quick meal

Rank 1Rank 2Rank 3

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Q3 – What brand comes to your mind when asked about “instant-noodles”?Out of the 121 surveys, 119 have mentioned Maggi here. This proves the fact that Maggi has imprinted its brand in the minds of the Indian market. It has probably reached the maximum level for awareness. This was concluded due to the fact that, TOM for 119 out of 121 of the sample population has been Maggi.

Q4 - Which of the following do you think are varieties of Maggi?i. Chicken

ii. Curry Masalaiii. Chilly Garliciv. Vegetable Atta Noodlesv. Masala Maggi

vi. Tricky Tomatovii. 4 Grain

viii. Egg Noodlesix. Halal Noodlesx. Thrillin Curry

xi. Vegetable Multi-grainz

30%

27%

19%

16%

7%

1%

Awareness of Variants of Maggi

Masala Maggi

Vegetable Atta Noodles

Vegetable Multi-grainz

Chicken

Tricky Tomato

Thrillin Curry

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This question has a few bogus options just to know if people actually knew the variants. We can see that the awareness of Vegetable Atta Noodles and Masala Maggi is almost the same. This could also be due to the intense advertisements to promote Vegetable Atta Noodles. But, either way, the hypothesis 3 has been proven wrong here.

Q5 – Between Maggi and regular noodles (served in Fast Foods/Restaurants), rate the parameters given below. (On a scale of 5. 1 being the lowest and 5 being the highest)

Parameter MaggiTasteHealthyExpensiveAvailabilityQuick to prepare

Tasty

Healthy

Worth th

e money

Easily ava

ilable

Quick to

Prepare0.001.002.003.004.005.00

Mean Rating

Mean Rating

One way of analysis would be simply taking the mean of the rating given for each parameter. This is shown above in the table. But a better understanding of the market would be taking a little more into the distribution of the rating given.

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1 2 3 4 50

10

20

30

40

50

60

70

80

90

100

Perception of Maggi among the minds of customers

Num

ber o

f peo

ple

This chart shows the distribution of the rating given by the sample population for various parameters of Maggi.

A constantly upward curve would say that the attribute is definitely accepted by most of the sample population. The parameter “Quick to Prepare” and “Easily available” are the most accepted parameters. Also, “Tasty” is another parameter which is very well accepted by the sample. This curve is also rising upward, but the difference between the number of highest and the lowest rating is a little lower than that of the first two parameters.

The parameter “Worth the money” is valued good. But it’s rating is majorly concentrated on 4 rather that 5. Hence, we can say that this was the second choice for a few.

“Healthy” is the least rated parameter for Maggi. Hence this could prove our 3nd hypothesis wrong. But we still cannot decide affirmatively. But definitely, the consumers do not think of Maggi as a healthy product.

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Parameter Regular Noodles

TasteHealthyExpensiveAvailabilityQuick to prepare

Tasty

Healthy

Worth th

e money

Easily ava

ilable

Quick to

Prepare0.00

1.00

2.00

3.00

4.00

Mean Rating for Regular Noodles

Mean Rating

The mean of the rating suggests that Taste and availability are the higher rated parameters. We can have detailed look at this from the chart given below.

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1 2 3 4 50

10

20

30

40

50

60

Perception of regular noodles among the minds of customers

Num

ber o

f peo

ple

This chart shows the distribution of the rating given by the sample population for various parameters of regular noodles.

The parameter “Tasty” is the most accepted parameter. The parameter “Availability” is also another well rated parameter. All the others are going downwards and the number of low ratings is way too high. This concluldes that taste is the major parameter for people to choose regular noodles.

From Q5, we can find that there is no relation in the person’s desire to have a Maggi or regular noodles. In simple, he/she does not choose between these. Thus, the hypothesis that Maggi was perceived as substitute to regular noodles is false. In other words, hypothesis 4 has been proven right.

The next three questions will be analysed based on the answer to the last question. That is we will be seeing the feedback of the entire sample and compare it with what the parents think regarding Maggi.

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Q6 - Would you like to consume Maggi on a regular basis?a. Yesb. No

26%

74%

Percentage of people who would consume Maggi regulalry

YesNo

Though people like the brand Maggi, only 26% of the people would like to have it regularly.

28%

72%

Percentage of parents who would consume/feed Maggi regulalry

YesNo

When we look at the response given by the parents, it is similar to the entire population. We shall see the reason behind this in the next two questions.

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Q7 – If yes, at what situation would you like to have “Maggi” Noodles?i. Regular day Breakfast

ii. Evening Snackiii. When you’re in a hurryiv. For a proper mealv. A late night snack

6%

46%

18%

30%

Maggi as perceived by frequent consumers of the product

HEALTHYTASTYMEALQUICK

This result is obtained by giving values of either 1 or 0 corresponding to each of the options for the parameters Health, Taste, Meal (Filling) and Quickness.

HEALTHY TASTY MEAL QUICKRegular breakfast 1 0 1 0Evening Snack 0 1 0 0When you’re in a hurry 0 0 1 1For a proper meal 1 1 1 0A late night snack 0 1 0 1

We see that from the 26% of the entire population, 46% consume it for the taste. Also, we can see that the parameter “Healthy” is just 6%.

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11%

33%

22%

33%

Maggi as perceived by the parents who consume/feed frequently

HEALTHYTASTYMEALQUICK

This is the chart to show what the parents value from Maggi for their frequent consumption/feeding. The major reasons are that it is quick to prepare and that it is tasty. Here too, health is not a parameter significantly associated with Maggi by the population.

Another detail to be noted in the two pie charts is that there is a few proportion of population who consider Maggi as a meal. There is also a major section who considers it quick. From these two result and from Q2, we can conclude that hypothesis 1 has been proven wrong.

Q8 - If No, what are the possible reasons behind?9. It’s not tasty10. It’s not healthy11. Expensive12. I like variety

27%

7%64%

2%

Reason why people would not consume Maggi regularly

I prefer more variety each timeIt's not tastyIt's not healthyIt's expensive

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This contributes majority of the survey sample (74%). Of this, 64% of the people do not consume because they find it not healthy. Also, there is a considerable amount (27%) of the sample who feel that Maggi is just monotonous to eat. We also infer that 2% find the product expensive. That means that the pricing of Maggi is being accepted even by the people who do not like to consume it regularly.

13% 5%

78%

5%

Reason why parents would not consume/feed Maggi regularly

I prefer more variety each timeIt's not tastyIt's not healthyIt's expensive

Again, according to parents, the percentage of people who consider Maggi unhealthy is 78% which is very high. Here too, few parents prefer variety.

From questions 6, 7 and 8, we can clearly conclude that both parents and the actual consumers consider Maggi to be very unhealthy for regular consumption. Hence, hypothesis 2 has been proven wrong.

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Net take Away

1. Maggi is the leader in Instant Noodles segment

2. Maggi is considered to be tasty but not healthy

3. Masala Maggi is equally popular as Vegetable Atta Noodles

4. Maggi still faces a good competition from generic snacks

5. It has done a huge amount of work to establish its brand

6. Maggi noodles has not been seen a substitute for regular noodles

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