Name : Arun Gupta

FT No. : FT173018

2. Market Analysis on the basis of consumer taste preference.

1. Indian Market as a scope for business.

3. Creating a differentiating strategy.

4. Product Introduction

Reason to believe: Feasibility Study

The utmost important thing to begin with is to do the feasibility study of introducing Indomie

noodles in Indian Market.

Various Viability aspects needs to be looked Upon:

1. Market Feasibility:

• Is there a demand and growth potential for noodle market in India?

Instant noodles market is estimated at INR 2200 crore (USD 402.7 million)

Projected to grow at a healthy annual rate of 15% over the next few years.

Several reasons behind the growth of this category in India:

• Changing consumer lifestyles : Has contributed to need for convenience food segment.

Basically because of : availability, affordability, anytime-anywhere consumption, a quick meal

with minimal cooking.

• Growing customer base: Consumed not just by kids but by everyone , Noodles has replaced

the indigenous evening snack. Market size is increasing with growing customer base at

workplace, colleges, etc.

• Untapped Market: Market scope in semi-urban and rural markets. The category’s penetration is

low in India (20-25%), thus presenting a lucrative opportunity for growth.

Market Feasibility

More options and Variants : Need for introduction of new flavours

Maggi’s Masala Noodles and Chicken Noodles V/S Indomei’s Range of Flavours for

you Palate.

Markov Migration: Its as simple as you cannot eat the same food again and again !!

Eventually you will switch to some other product.

Change in customer preference is common in FMCG sector.

Maggi has been there in market since early 1990’s with the same bland taste and

same flavor.

Indomei : “There’s something different about Indomie!!!”

Yes!! Its too Yummiee….

• Growing focus on health: A new market of healthy noodles has

emerged though market share is only 3%.

But I would advice not to focus on this market as of now.

Indian palate wants more spicy , more taste , more masala.

• More packaging variants :Category extension from pouch to cup

noodles.

• More packs of different sizes needs to be introduced.

“ Taste Hai toh

Sab Haii !!”

Market Feasibility

Growth Potential: Lets look at some Statistics!

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Projected Market Value (Million INR)

Market Value (INR Mn)

Looking at all this

Data

What do we

realize!!!

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Projected Market Volume (Million Kg)

Market Volume (Kg Mn)

Maggi Yippie Misc Indomei

2015 22468.032 5912.64 7883.52 3153.408

2016 27405.657 7212.015 9616.02 3846.408

2017 33564.507 8832.765 11777.02 4710.808

2018 41194.356 10840.62 14454.16 5781.664

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Projected Market value and brand wise Share (Million INR)

Market Share : Maggi : 57%

Yippie : 15% Misc : 20% Indomei : 8%

Maggi Yippie Misc Indomei

2015 137.997 36.315 48.42 19.368

2016 161.823 42.585 56.78 22.712

2017 190.266 50.07 66.76 26.704

2018 224.124 58.98 78.64 31.456

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Projected Market Volume and brand wise Share (Million Kg)

Market Share : Maggi : 57%

Yippie : 15% Misc : 20% Indomei : 8%

Resource/Operational Feasibility

• Experienced Player : Indomie is a brand of instant noodle by Indofood, the largest instant

noodle manufacturer in Indonesia with 72% of market share.

• Current Operations : in Australia, Asia, Africa, New Zealand, the United States, Canada and

European and Middle Eastern countries. Huge experience of being Africa’s #1 instant noodles

player under Dufil Prima Foods. Indomie Instant Noodles has grown to become a household

name across nations it is sold.

• Strategic Partnership: In Indonesia, Lay’s is marketed and produced as a joint venture

between Indofood and Fritolay International. Maggi goreng is marketed and produced as a joint

venture with Nestle

• Hence strategic partnership can be formed to introduce indomei in Indian Market.

• Expansion:In 1988 Indomie was introduced in Nigeria through import, and in 1995 opens its first

production factory in Nigeria under Dufil Prima Foods. It is the first instant noodles

manufacturing plant in Nigeria and the largest in Africa. Indomie Instant Noodles has grown to

become a household name across the country.

Indomei Introduction in India 1st stage – Introduce into the Indian

market through Imports.

2nd Stage – On receiving positive results, start manufacturing in

India.

Financial Feasibility

Indo Food Financial Highlights (2015): Consolidated net sales grew 19.6% to Rp30.02 trillion

• Income from operations increased 12.9% to Rp3.13 trillion • Income for the year attributable to equity holders of the parent entity rose 17.0% to Rp2.60 trillion • Earnings per share (“EPS”) increased to Rp447 from Rp382

Income from year 2015 (Indofood) : Rp 3,709,5 billion (USD 2.81 Billion)

ITC (FMCG) : 9,731 crore (US$1.5 billion) (2016) : 9,038 crore (US$1.39 billion) (2015)

Nestle : US$ 247 billion as of May 2015

Financial of Indofood looks good

Indofood financials are at par with ITC and hence we can benchmark our product with ITC’s Yippie.

Landscape and Competitive Analysis

• Gap Analysis(6-7 weeks) :Study the current market situation

• After doing feasibility of introducing our product the next step is : • Identify market gap which can help us to better position our product and then proceed with STP

analysis.

Noddle Market Share in India

Maggi

Yippie

Top

ramen

Others

SWOT Analysis M

ag

gi

• Strength: Market Leader in the noodle category

• Huge Brand Loyalty

• Emotional Connect “ Mummy Bhukh Lagi”

• Low Price (Survival Pricing)

• Weakness: Hit on Reputation, sales drop

• Few Flavours

• Opportunity: Unexploited rural market

• Market to grow

• Threat:

• Market Reputation affected after Fssai controversy

Ch

ing

’s

• Strength: Innovative Product

• Many new Flavors

• Weakness:

• Unable to trap market

• High Pricing

• Low market penetration

• Non availability

• Opportunity

• New in the Flavor sector

• Threat:

• Presence of branded competitors like maggi , top ramens etc

Ind

om

ie

• Strengths

• Experience in noodle sector

• Brand power of Indofood

• More variants in flavors

• Differential Pricing

• Weakness

• New Entrant in India

• Already too much competition

• Opportunity:

• Unexploited rural market

• Market to grow

• Threat:

• Ching’s Presence in the market with variety of flavors.

Yip

pie

• Strengths:

• Non Sticky noodles

• Long noodles

• Two variants

• Able to capture maggis’s share

• Backed by ITC

• Weakness:

• Few Taste variants

• No Emotional connect

• Lacks USP

• Low brand loyalty

• Opportunity

• Unexploited rural market

• Market to grow

• Can Cash on Maggi’s controversy

• Threat:

• Presence of branded competitors like maggi , top ramens etc

Gaps and Finding

Maggi has been in India from early 1990’s and is available in more than 100 cities, But what it

lacks are Flavor variants. Also maggi noodles after keeping it for 5 min becomes pudding.

Sunfeast captured this Gap and came up with longer and Non sticky noodles, but what they lack

are flavors and packaging variants

Indo Nissin came up with cup noodles and CG with Wei-Wei , but they Failed to understand the

Indian Taste preference and Gastronomical map of India.

They Lack Taste and Brand Value (Consumer Trust).

Learning from all these Gaps a Strong research should be done and a proposition should be

made to introduce Indomie by Indo Foods in India.

Which can capture the taste , price value and brand value.

North India is the strongest market for noodles, followed by Eastern region (Competitors

Existing Customer) , while southern India is the weakest (Potential Customer), largely due to a difference in dietary habits.

Proposition : Market Development • STP (3-4weeks): Before Beginning some

important question need to be answered.

• Segmentation: Whom all can I sell to?

• Segment the market on the basis of life style and eating habits of the Indian consumer.

• Focus mainly on Urban areas. • Target: Whom do I really want to sell to?

• Kids • Youth

• Working Women/Men • Almost everyone

• Position :How do I create my uniqueness? • As a specialty food (Pan Asian Flavors)

• Easy to make and convenient • Identifying a USP is very important as there

are many competitors already in the market

and Nestle Maggi clocks 57% market share. • Maggi is the Market Leader and offers 4-5

variants but lack different flavors. • Introduce different flavors the strategy

adopted by Ching’s (Desi-chinese) .

• Position product Indomei noddles asTaste of Asia with a tinge of Indian-ness in variety of

flavors.

Product What do i want to sell?

Product Variety

Quality

Design

Packaging

Price What do i want to realize?

List Prices

Decide on Pricing Strategy

Promotion

How do I communicate my uniqueness?

Sales

promotion

Advertising

Sales force

Public Relation

Place Where do I sell ?

Targeted Market

Channels

Coverage

Inventory

Locations

Transport

Marketing Mix(6-7 weeks) :Indomie Noodles

We Want to offer a range of products and their taste will be there USP.

We will be offering Following range of Indomie Noddles :

Categorized by Flavors : Indomie Classic , Indomie Chicken Flavor, Chicken Curry,

Pepper Chicken, Indomei Rajma Masala, Indomei Chole kulche. Schwezwan thai curry, mangolian pot, Indomei prawn Curry etc.

Packing Variants : Cup and Pouch

Product

Package Price points /vol

Classic Variants

Pouch : Rs 10 (70gm) Rs 20 (150gm) Rs 35 (280gm) Rs 80 (600gm)

Cup : Rs 25 (100 gm)

Premium Variants

Pouch : Rs 25(150gm Trial Pack),

Rs 40 (280gm) Rs 90 (600gm)

Cup : Rs 35 (100 gm)

We will be adopting differential Pricing strategy and 2 pronged approach.

Indomie Classic will be competing against Maggi masala and Yippie noodles , Offering same Quality at price lower than the market price.

Special Flavors will be at marginally higher price due to increased cost of production.

First target Tier 1 cities ( Delhi, Mumbai, Bangalore, Hyderabad, Pune, Gurgaon) and then Tier 2 cities

• Then target Tier 3 cities and semi-urban areas for further market penetration and establishing the

brand when distributor and retailer networks are formed

• Lastly untapped rural areas (good opportunity as big players are not much dominant there and rural

people are not that much brand conscious)

2 Pronged Approach

Same Quality with less Price

High Quality with marginally higher

Price

Pricing & Place

Promotion : The game Changer……!!

This is the most Crucial and the most important step cause making a visibility and making a

consumer move and buy your product is an art. There are three stages in promotion:

1. Cognitive Stage : Where you sow a seed in consumers mind. Make consumer think about your product.

This will be achieved by PR Exercises ,Teaser Ads , Curtain Raisers. 2. Affective Stage : Where you engage consumer to develop a liking for your product.

Brand comparisons, FAB , TV Ads, recall effects, OOH coverage (product follows you where you go)

Nation Wide Indomei Campaign: • Send us your Indomie Recipe and get a chance to win a holiday to Indonesia.

• Get a Chance to star in Indomei TV Commercial. • Indomei Noodles Presents Master Chef India.

3. Action Stage: Where you make the consumer to get up and make the move/Purchase. It will be achieved by mall promotions, distributing free samples ,discounts ,bundling

promos.

4.Emotional Approach: For Indians it is very essential that they can connect emotionally to a brand.

5. Target Buyer: Though the Target consumer for our product is everyone, But we should not

forget a fact that noodles is a grocery item and it will be shopped by “ Mother’s” . Hence it is very important to win their Trust.

One of the main reason for Maggi’s huge success is that it is a Nestle Brand and Mother’s have been feeding Nestle Products to their children’s since they were

infants. So , a huge amount of trust is associated with this Brand.

To capture this emotional and

motherly connect. A PR activity and an advertisement aimed at the success of the product

in Asia will be done

& How Indomei has made a name for

itself in other countries.

Indomei Classic :

Premium Indomei :

We would try to pitch the product as a youth’s Noodles Brand which is vibrant as the Youth, with various Variants in flavors and colorful packaging

Graduation

Indomei Classic Vs Maggi Indomei Premium : Differential Product

Market (and Market Plan)

To be Continued……. In Phase III

But Wait here’s a Teaser for You!!!!!

Blind Taste Test/Video Interview : Catching live Taste Testing

FGD (Focused Group Discussion) : What youth wants Mall Surveys : Real time Taste Testing and Promotions

Market Research : What drives sales of noodles in India

PS : “ If possible allocate budget and resources to do a real survey”

Route to Market and Market Plan

• Market Research(3-4 weeks runs parallel with STP) :Understanding Consumer Behavior and identifying variables that derives the sale of noddle in India

• Sampling : Selecting sample and method based on marketing mix(4P’s),As prior data is available we will go for cluster Sampling

• Survey: Do a Survey to understand customer taste preference

• Testing: Test with sample and identify USP and revalidate

• Market Planning(6-7 weeks): involves creating product awareness via:

• Advertising (adopt indirect method for lower MPI)

• Sales Promotion

• Marketing communication

• Online and offline marketing

• Depending on market research adopt ATL/BTL/TTL Marketing

• Sample Product(1 month) : Introduce a sample product and note responses. The process can be done with tie-ups with Organized Retailers in FMCG sector viz. More , Spencer's, Big Bazaar etc.

• Based on these responses we note the regions where we had the best responses and we launch the product full fledge in a promotional space to capture the pulse of the market and check the sale-through of our products for 1 months.

• Commercials and financials: Analyze the growth rate of noddle market in India currently 15%

• Predict market share in the coming year

• Accordingly target new markets

• Market Expansion: Keep extending the market seeing the trends and current market behavior with support from the retailers

• Strength supply chain and source planning

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An AKG Presentation