IMC Assnmt_Maggi_33185

8/2/2019 IMC Assnmt_Maggi_33185

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Diksha Human Resources Roll No. - 33185

Marketing

Strategy of

MAGGIIntegrated Marketing

Communication Assignment

Submitted By:

Diksha

MBA II

Human Resources

Roll No. - 33185


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INTRODUCTION

The industrial revolution in Switzerland in the late 1800s created factory jobs for women, who

were therefore left with very little time to prepare meals. This wide spread problem grew to be

an object of intense study by the Swiss Public Welfare Society. As a part of its activities, the

Society asked Julius Maggi miller to create a vegetable food product that would be quick toprepare and easy to digest. Born on October 9, 1846 in Frauenfeld, Switzerland, Julius Michael

Johannes Maggi was the oldest son of an immigrant from Italy who took Swiss citizenship.

Julius Maggi became a miller and took on the reputation as an inventive and capable

businessman. In 1863, Julius Maggi came up with a formula to bring added taste to meals.

Soon after he was commissioned by the Swiss Public Welfare Society, he came up with two

instant pea soups and a bean soup - the first launch of the 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. The Maggi Company merged with

Nestle in 1947.

Today, Maggi is a leading culinary brand and part of the NESTLE family of fine foods and

beverages. Under the Maggi brand, which is today known world wide for quality and innovation,

Nestle offers a whole range of products, such as packaged soups, frozen meals, prepared sauces

and flavourings.

MAGGI BRAND IN INDIA

Maggi Comes to India teething troubles Maggi noodles was launched in India in the

early1980s.

Competitions:

1. The first competition came from the ready-to-eat snack segment which included snackslike samosas, biscuits or maybe peanuts, that were usually the bought out type.

2. The second competition came from the homemade snacks like pakoras or sandwiches. Sothere were no specific buy and make snack!

Maggi was positioned as the only hygienic home made snack! Despite this, Nestle faced

difficulties with their sales after the initial phase.

Nestle had positioned Maggi as a convenience food product aimed at the target group of working

women who hardly found any time for cooking. Unfortunately this could not hold the product forvery long. In the course of many market researches and surveys, the firm found that children

were the biggest consumers of Maggi noodles.

Quickly they repositioned it towards the kids segment with various tools of sales promotion

like colour pencils, sketch pens, fun books, Maggi clubs which worked wonders for the

brand.


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Why the specific Brand positioning?

Maggi was positioned as 2-minute noodles with

a punch line that said Fast to cook! Good to eat!

And this gave the implied understanding to the

consumer that it was a between meals snack.The firm did not position it as a ready-to-eat

meal either, as the housewife prefers to make a

meal for her kids rather than buy it for them. And

if she can make it in two minutes with very little

effort, then obviously its a hit with her!

Whats more, if kids also love the taste, the

product is as good as sold! So the 2-minute funda coupled with the yummy taste worked!

BRAND STORY

Launched in 5 flavours initially Masala, chicken, Capsicum, sweet & sour, and Lasagna

Maggi had to fight hard to be accepted by Indian consumers with their hard-to-change eating

habits.

Nestle had to promote noodles as a concept, before it could promote Maggi as a brand. It

therefore devised a two-pronged strategy to attract mothers on the convenience plank and lure

kids on the fun plank.

Nestles Managers utilized promotions as

measured to meet their sales target. Gradually,

sales promotion became a crutch for Maggi

noodles sales. Later many of the Maggis

extensions also made considerable use of

promotional schemes. The focus of all Maggis

extensions was more on below the line

activities rather than direct communication. In

addition to promotional activities, Maggi

associated itself with main stream television programme and advertised heavily on kids

programme and channels.

After its advertisements with taglines like mummi bhookh lagi hai, bas do minute and fast to

cook good to eat Maggis popularity became highly attributed to its extremely high appeal tochildren. As a result, Maggis annual growth reportedly touched 15% during its initial years.


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Maggis Brand Extension

1993 - Sweet Maggi,the first variant ofMaggi noodles waslaunched.Huge advertisementoutlay of 75% of thetotal yearlyexpenditure on theMaggi brand.Product failed andwithdrawn

Price Reduction ofMaggi Noodles toBoost Sales - Use ofthinner and cheaperpackaging materialMoney saver multi

packs in the form of 2-in-1 pack and 4-in-1

packs.Volume Increase to9700 tonnes in '94 andfurther to 13000tonnes in '95.

1995 - With soupbusiness beingthreatened by a newentrant Knorrsoups , offering 10flavours againstMaggis 4 the

company startedrethinking itsstrategies towardsthe soup market.

1995 - To stretch Maggisbrand to include Indianethnic foods - Tie up with

Pune based chordia foods tolaunch pickles.Tie up with Indian foodsfermentation (IFF), to marketpopular south Indian foodpreparation such as sambher,dosa, vada and spices inconsumer packs.The company reportedly sawa lot of untabbed potential inthe market for ready to use

south Indian market.

1996 - Productsfrom these twoventures failed;poor sales. Magginoodlesperformed badly

in 1996.

Adding to thecompany woeswas the failure ofMaggi Tonights

Special, a range ofcooking saucesaimed at providingrestaurant-like-taste to foodcooked at home.

Maggi brandfinally broke evenin 1997.The companyrealized that thekids who hadgrown up onMaggi noodles hadbecome teenagersby the late 1990s.

To lure back thesecustomers and toexplore newproduct avenues,Nestle launchedMaggi Macaroniin July 1997.

Product failed andwithdrawn

Launch of MaggiHot & Sweet

sauce. Used thetagline, Itsdifferent.


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Pricing and Product Development

It was at this point in time that Nestle decided to change the formulation of Maggi noodles. The

purpose was not only to infuse fresh life into the brand, but also to save money through this

new formulation. The company used new noodle-processing technology, so that it could air-dryinstead of oil-fry the noodles. The tastemakers manufacturing process was also altered. As a

result of the above initiatives, costs reportedly came down by 12-14%. To cook the new product,

consumers had to add two cups of water instead of one-and-a-half cups. The taste of the noodles

was significantly different from what it used to be. The customer backlash that followed the

launch of the new noodles took Nestle by surprise. With volumes declining and customer

complaints increasing, the company began to work on plans to relaunch old Maggi to win back

customers. In addition, in 1998, Nestle began working out a strategy to regain Maggis position

in the soup segment. To counter the Knorr threat, the company launched Maggi soups under the

Maggi Rich brand in May 1998. The soups were not only thicker in consistency than those

produced earlier, the pricing was also kept competitive and the packaging was made much more

attractive. However, Knorr took Nestle by surprise by launching one-serving soup sachets priced

as low as Rs 4. HLL too launched two-serving sachets of Kissan soup priced at Rs 7. As Maggi

did not have any offerings in this price-range, it lost a huge portion of its market share to Knorr.

The relaunch prompted market observers to compare Nestles move with US soft drinks major

Coca-Colas New Coke fiasco. However, the company disagreed, Its a hard-5 nosed strategy

that mixes nostalgia with the consumers voiced preference for the product it has been bred and

brought up on. The reintroduction is Nestles acknowledgement of the loyalty of the Indian

mother and the child to the original product. By May 1999, Nestles decision to bring back the

old Maggi seemed to have paid off. Two months after the relaunch, the monthly average salesof Maggi noodles and the northern region rose 50% in comparison to the previous year. In July

1999, Maggi the brand, was promoted as the biggest brand in Nestles portfolio of brands in

India, overtaking brands such as Nestum and Cerelac. Nestle believed that Maggi had immense

potential as it was a very flexible brand under which regional variants could be introduced to

meet various market needs. Company sources claimed that with reasonable price points and

innovative products, Maggi could emerge as a top brand and a major growth driver for the

company. To further support the brand, Nestle carried out various promotional activities as well.

These included the August 1999 Fun-Dooz campaign and Jungle Jackpot campaigns. 6 As a

result of the above initiatives, Nestle claimed to have cornered an 81% market share of the20,000 tonnes noodles market by the end of 1999.

Nestle sources claimed that Maggi noodles outsold the competition four times over and that

more than four Maggi noodle cakes were consumed every second in the country.


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PRODUCT VARIENTS

The product mix of Maggi is divided into various categories defined below. The company has

launched various products under each category as mentioned below.

1. Noodles

Maggi 2-Minute Noodle (Masala, Chicken, Curry andTomato) Maggi Dal Atta Noodles (Sambhar taste) Vegetable Atta Maggi Noodles Maggi Rice Noodles (Lemon Masala, Chilly Chow and

Shahi Pulao)

Maggi Cuppa mania (Masala yo, Chilli chow yo)2. Sauces

Teekha masala Tomoto chatpat Imli khata mitha Tomato ketchup Hot and sweet Tomato pudina Ginger, Garlic & Coriander Maggi Oriental Chilli Garlic Ginger, Garlic & Coriander

3. Maggi Pichkoo

4. Soups Healthy

Chef Style- Cream Mushroom- Sweet Sour Tomato Noodles- Tangy Tomato Vegetables

Home Style- Creamy Chicken- Mixed Vegetable- Rich Tomato

Chinese Style-

Chinese Hot Sour Chicken- Chinese Sweet Corn Chicken- Chinese Sweet Corn Vegetables- Chinese Hot & Sour Vegetables

5. Maggi soup sanjivni

Amla Badam Spinach Tomato

6. Maggi bhuna masala

Bhuna masala for gravy dishes


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Bhuna masala for vegetable dal7. Maggi magic cubes

Chicken Vegetarian masala

SWOT ANALYSIS OF MAGGI BRAND

The SWOT analysis of Maggi brand clearly

indicates the strengths of Maggi as a Brand in

Indian market. The Brand was found to be a

leader in its category of Noodles, with strong

customer loyalty. Intensive distribution of

Maggi as a Brand was seen in urban areas of

the country. The major threats of the brand asshown in the figure below indicates that

Maggi has made several attempts to revamp

itself as a Healthy Product but till date its

perseverance towards the tag line is low by

the consumers. The brand is in the growth

stage of product life cycle with a strong

inclination towards the maturity stage.

15%

52%

23%

10%

Customer Perception

Poll

Good for Health

Ready to Eat

Junk Food

Tasty/ Fun

Snack


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STRENGTH

1. Market leader in their segment

2. Strong brand loyal consumer base

3. Wide range of distribution channel

4. Product according to the need ofIndian consumer

5. Innovative Product

WEAKNESS

1. Product are dependent on each

other

2. Not so much presence in rural

market

OPPORTUNITY

1. Increasing number of working youth

2. Product has been acceptable inyouth category

3. Shift to rural market

4. Changing preference of consumertowards Chinese food and fast food.

5. Can foray into other food marketswith its strong Brand name

THREAT

1. Price war with competitors

2. Strong presence of regionalcompetitors

3. Consumers dont perceive it as aHealthy Product of convenience-savvy time misers who would like toget something instant and be over withit quickly.

SWOTANALYSIS


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CONCLUSION

The food processing business in India is at a nascent stage. Currently, only about 10% of the

output is processed and consumed in packaged form thus highlighting huge potential for

expansion and growth. Traditionally, Indians believe in consuming fresh stuff rather then

packaged or frozen, but the trend is changing and the new fast food generation is slowlychanging.

Riding on the success of noodles, Nestle India, tried to make extensions of the Maggi brand to a

number of products like, sauces, ketchups, pickles, soups, tastemakers and macaroni in the mid-

1990s. Unfortunately, the macaroni and pickles didnt pick up as expected. The soups and sauces

did somewhat fine, gathering considerable sales volumes and have a satisfactory presence even

today. Maggi Noodles itself faced a bit of difficulty with respect totaste, and nearly lost its

position in the minds of Indian consumers in the late 1990s. When Nestle changed the

formulation of its tastemaker, the ominous packet that came along with Maggi Noodles, a major

chunk of consumers were put-off and sales started dropping. Also, Maggis competitor Top

Ramen took advantage of the situation and started a parallel aggressive campaign to eat into

Maggis market share. But the company quickly realised this and went back into making the

original formula coupled with a free sampling campaign. This helped Maggi to win back its lost

consumers and pushed up its sales volumes again!

Maggi Today The year 2008 saw India leading in world wide Maggi sales. The brand has grown

to an estimated value of Rs 160-170 crore and contributes at least 89% to Nestle Indias top

line. All the same, some FMCG analysts feel that the brand has not done much to expand the

noodles category. Even after 25 years of its launch, the size of the instant noodles market is yet

quite small at Rs 300 crore. But yes, the parent company, Nestle India Limited has certainly

encouraged the brand to enter into other culinary products.

Documents

IMC Assnmt_Maggi_33185