Analysis Of Marketing Strategies Of Nestle Maggi.docx

“ANALYSIS OF MARKETING STRATEGIES OF NESTLE MAGGI”

OBJECTIVES OF THE PROJECT:  To Understand the Marketing and Promotional Strategies adopted by Nestle Maggi.  To understand the brand performance of Maggi product.  To understand Brand Imagery, Brand Quality perceived by customers, Brand Credibility, consideration, superiority.  Brand extension of Maggi in terms of product diversity

INDUSTRY PROFILE

Fast Moving Consumer Goods (FMCG) goods are popularly named as consumer packaged goods. Items in this category include all consumables (other than groceries/pulses) people buy at regular intervals. The most common in the list are toilet, soaps, detergents, shampoos, toothpaste, shaving products, shoe polish, packaged foodstuff, and household accessories and extends to certain electronic goods. These items are meant for daily of frequent consumption and have a high return. The Fast-Moving Consumer Goods (FMCG) sector is the fourth largest sector in India. The FMCG sector has grown from US$ 31.6 billion in 2011 to US$ 52.8 billion in 2017-18. The sector is further expected to grow at a Compound Annual Growth Rate (CAGR) of 27.9% to reach US$ 103.7 billion by 2020. The sector witnessed

growth of 16.5% in value terms between June–September 2018; supported by moderate inflation, increase in private consumption and rural income. It is forecasted to grow at 12-13% between September– December 2018. FMCG's urban segment is expected to have a steady revenue growth at 8% in FY19 and the rural segment is forecasted to contribute 15-16% of total income in FY19. Accounting for a revenue share of around 4%, rural segment is a large contributor to the overall revenue generated by the FMCG sector in India. Urban segment accounted for a revenue share of 55% in the overall revenues recorded by FMCG sector in India. Revenues of FMCG sector reached Rs 3.4 trillion (US$ 52.8 billion) in FY18 and are estimated to reach US$ 103.7 billion in 2020. Growing awareness, easier access, and changing lifestyles are the key growth drivers for the consumer market. The focus on agriculture, MSMEs, education, healthcare, infrastructure and employment under the Union Budget 2018-19 is expected to directly impact the FMCG sector. These initiatives are expected to increase the disposable income in the hands of the common people, especially in the rural area, which will be beneficial for the sector. Leading players of consumer products have a strong distribution network in rural India; they also stand to gain from the contribution of technological advances like internet and e-commerce to better logistics. Godrej is focusing on rural market for household insecticides segment. At present, Godrej accounts for 25% of the household insecticides sales from rural areas. Rural FMCG market size is expected to touch US$ 220 billion by 2025. Low penetration levels in rural market offers room for growth. Disposable income in rural India has increased due to the direct cash transfer scheme. E-commerce segment is forecasted to contribute 11% of the overall FMCG sales by 2030.Rising incomes and growing youth population have been key growth drivers of the sector. Brand consciousness has also aided demand. India's contribution to global consumption is expected to more than double to 5.8% by 2020. The online FMCG market is forecasted to reach

US$ 45 billion in 2020 and the number of online users in India is likely to cross 850 million by 2025.

1. INTRODUCTION OF NESTLE COMPANY Nestle is the world's leading nutrition, health and Wellness Company. Their mission of "Good Food, Good Life" is to provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night. They believe that leadership is about behaviour, and they recognise that trust is earned over a long period of time by consistently delivering on their promises. Nestlé believes that it is only possible to create longterm sustainable value for their shareholders if their behaviour, strategies and operations also create value for the communities where they operate, for their business partners and of course, for their consumers. They call this 'creating shared value'. The Nestlé Corporate Business Principles are at the basis of their company’s culture, developed over 140 years, which reflects the ideas of fairness, honesty and long-term thinking. Nestlé can trace its origins back to 1866, when the first European condensed milk factory was opened in Cham, Switzerland, by the Anglo-Swiss Condensed Milk Company. One year later, Henri Nestlé, a trained pharmacist, launched one of the world’s first prepared infant cereals ‘Farine lactée’ in Vevey, Switzerland. The two companies merged in 1905 to become the Nestlé we know today, with headquarters still based in the Swiss town of Vevey. They employ around 328 000 people and have factories or operations in

almost every country in the world. Nestlé sales for 2011 were almost CHF 83.7 bn. "Good Food, Good Life" is the promise they commit to everyday, everywhere – to enhance lives, throughout life, with good food and beverages. Ever since Henri Nestlé invented Farine Lactée to alleviate infant mortality, Nestlé has been dedicated to enhancing lives. They strive to help consumers care for themselves and their families by offering tastier and healthier choices. Their dedication to great tasting, healthier and trusted products is tied to their respect for the environment and the people they work with. 1. INTRODUCTION TO MAGGI NOODLES Ever since its launch in India in 1983, this brand has become synonymous with noodles. The bright red and yellow colours of the packet with the brilliant blue “2-minute Noodles” printed on it has found a place on every kitchen. Over the years, Maggi has grown as a brand and positioned itself as a “Fast to cook! Good to Eat! “ Food product.

The history of this brand traces back to the 19th century when industrial revolution in Switzerland created factory jobs for women, who were therefore left with very little time to prepare meals. Due to this growing problem Swiss Public Welfare Society asked a miller named Julius Maggi to create a vegetable food product that would be quick to prepare and easy to digest. Julius, the son of an Italian immigrant came up with a formula to bring added taste to meals in 1863. Soon after he was commissioned by the Swiss Public Welfare Society, he came up with two instant pea soups & a bean soup- the first launch of Maggi brand of instant foods in 1882-83.Towards the

end of the century, Maggi company was producing not just powdered soups, but bouillon cubes, sauces and other flavourings.

However in India (the largest consumer of Maggi noodles in the world!) it was launched in 1980 by Nestle group of companies. Maggie had merged with Nestle family in 1947. When launched it had to face a stiff competition from the ready to eat snack segments like biscuits, wafers etc. Also it had other competitor the so called home made snacks which are till today considered healthy and hygienic. Hence to capture the market it was positioned as a hygienic home made snack, a smart move. But still this didn’t work, as it was targeted towards the wrong target group, the working women. After conducting an extensive research, the firm found that the children were the biggest consumers of Maggi noodles. Quickly a strategy was developed to capture the kids segment with various tools of sales promotion like pencils, fun books, Maggi clubs which worked wonders for it. No doubt the ads of Maggi have shown a hungry kid

saying “Mummy bhookh lagi hai” to which his mom replies “Bas do minute!” and soon he is happily eating Maggie noodles.

Further the MAGGI 2-MINUTE Noodles has been renovated to provide 20% of the RDA1 of Calcium and Protein for the core target group building on the nutrition proposition “Taste bhi health bhi”. The company could have easily positioned the product as a meal, but did not, as a study had shown that Indian mentality did not accept anything other than rice or roti as meal. They made it a easy to cook snack that could be prepared in just two minutes. The formula clicked well and Maggi became a brand name. COMPETITORS OF MAGGI Maggi has certainly been the leading brand in the noodle industry for decades .But there areother brands as well which have given close competition to Maggi in the past and in the present as well. MAGGI VS TOP RAMEN Top Ramen is the second largest Noodles brand in India trying hard for the past 18 years to beatMaggi Noodles. Top Ramen is a global brand from Nissin. Launched in 1991, Top Ramen hasbeen trying all possible marketing tools to dethrone Maggi.First occasion was when the brand was launched, the brand quickly went into limelight with itsfamous positioning as Smoodles. But after the initial trying, people again went back to Magginoodles.The next occasion was when Maggi changed the taste. That was an occasion where, as a brandloyalist , people dumped Maggi .For a while people consumed Top Ramen. When Maggireversed 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 thetaste was also comparable, many Maggi users may have switched to this brand. But it could notretain all the customers . One factor is the price. Top Ramen was always perceived as apremium brand compared to the affordable Maggi. The high price may have prompted manyMaggi users to switch back.Another factor

was the promotion. Top Ramen could not sustain the share of mind it generatedduring the formative years. Maggi was able to bring in lot of noise because it had become anumbrella brand and was advertising for various other products.Top Ramen had an interesting distribution strategy. For the past 10 years, the brand has beendistributed by Marico. It is a case of marketing alliance where Top Ramen was utilizing thedistribution strength of Marico. In 2008, the alliance was mutually called-off. Now Nissin isbuilding 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 bigfight with Maggi .The major issue faced by Top Ramen was the differentiation. Top Ramencould 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. Top Ramen also lost out when Maggi repositioned itself in the health platform. Maggi vs Yippee noodles 

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Yippee Magic Masala is product of Indian based company name Imperial Tobacco Company ITC ) while most famous Maggi is product of switzerland based company Nestle. Maggi small packet comes in market with a price tag of Rs. 5 and Yippee comes with a tag of Rs. 12. If we talked about packing, Yippee packed in most decorative way in red while Maggi also comes in yellow packing looking decorative as well.

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Yippee Magic Masala raw noodles comes in sticky circular shape while maggi comes in sticky rectangular shape. Yippee noodles contain dehydrated vegetables including small Ring beans, Carrot flakes and Cabbage but maggi haven’t. Small chopped vegetables can be seen in Yippee noodles with naked eyes that also increases their taste. Both Maggi and Yippee have masala packet inside. Both noodles having alike ingredients while some ingredients changes in Yippee noodles. Yippee magic masala came in a market with a slogan of “Long NonSticky Noodles”, Yippee doesn’t stick or merged including when it cooled this is their best part while Maggie sticks when it cooled, weird its taste. When Yippee cooked their color is fade red while maggi have fade yellow in color. Yippee is longer while it cooked but Maggi breaks down mostly decreases its size. At last, Yippee can be seen as better competitor to Maggi. Yippee invades its growth in market rapidly when Maggi was banned in India but Maggi tops market with a 70% share of market in India.