Yippee Noodles

Project Report

Submitted to: Dr. H. Gayathri Submitted by GROUP 9 SECTION C BANALI. KC (13136) DINESH. MR (13141) J. ADITYA (13146) SRUTHI MADADI (13151) MOHNISH MISHRA (13156)

Marketing Management

Yippee Noodles

Section C, Group 6

TABLE OF CONTENTS

1. Introduction.2 1.1 Instant noodle industry in India.2 1.2 Market share..3 1.3 Trends in Noodles Industry...3 1.4 Key players in Noodle Market..4 1.5 Opportunities in Indian Noodle Market4 2. ITC5 2.1 History..5 2.2 Diversification timeline6 2.3 Sunfeast.7 2.4 Yippee Noodles 8 2.4.1 4Ps8 2.4.2 STP...9 2.4.3 SWOT Analysis...10 3. Competitor Analysis..10 3.1 Maggi10 3.1.1 SWOT Analysis...11 3.2 Foodles..11 3.2.1 SWOT Analysis.. 12 4. Recommendations.12 5. Bibliography. 13

Marketing Management

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Section C, Group 6

1. Introduction
1.1 Instant noodle industry in India

Instant noodles have become one of the worlds most popular food items owing to its versatility and convenience. It is one of the first ready-to-eat foods launched widely in the global food industry and now it has successfully become an important part of modern lifestyle. Instant noodles market has undergone many innovations in recent years which have led to the introduction of multiple flavours of the product in the market suiting to local preferences. With widespread acceptance of the product, instant noodle has become a daily product in majority of the nations around the globe. Demand for the product is driven by convenience, low cost and product variety. Indian instant noodle market is estimated at INR 1,300 to 1,600 crore (USD 300 USD 350 million). According to estimates, the market is expected to reach INR 3,000-3,500 crore by 2015 clocking a CAGR of 20%. The market is dominated by Nestls brand Maggi. It was the first noodle brand to be introduced in India in mid 1980s. Nestle is the market leader with 58.3% market share in the overall category and over 80% in the pure noodles category. But Maggis domination is facing a tough competition in the market today due to the entrance of brands like Hindustan Unilevers Knorr Soupy noodles, GlaxoSmithKlines Foodles, ITCs Sunfeast Yippee Noodles, Nissins Top Ramen and Big Bazaars Tasty Treat.

According to industry analysts, the Indian consumer is a lot more open to the "instant food" categories and is far more demanding of more choices now than he or she ever was before. With ITC entering the market, Maggi is going to have a tough time as ITC is known for its in the eye kind of advertising campaigns and extensive supply channel. ITC claims to grab 10% of the market by the year 2012 for which they rely on their current network.

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1.2 Market Share

1.3 Trends in Noodles Industry

1. Increasing competition: Competition in instant noodle category has intensified with players such as GlaxoSmithKline (Horlicks Foodles), ITC (Sunfeast Yippee noodles), Capital Foods and Hindustan Unilever launching new products in the market. Private label brands such as Tasty Treat by Future Group (Big Baazar retail chain) have also been launched an it is expected that many more private label brands may hit the market. 2. New product launches and extensive marketing: All players new or old have been busy launching new products and marketing campaigns. Maggi has launched an extensive campaign with their new product vegetable multigrain noodle. Tasty Treat increased its variants from two to five. Similarly, Foodles is stressing on the health aspect of its products. 3. Stress on health and wellness: As on all other food categories, players are stressing on health and wellness aspects of their products. Maggi launched Atta noodles and multigrain noodles to woo customers while Glaxos Foodles also stresses on the multigrain aspect of their product 4. Traditional flavours still dominate: Masala, chicken and tomato are most popular flavours in the market 5. Addressing rural market: Noodles are primarily consumed in urban India and to expand this market companies such as Nestle have introduced small sized and low cost products to address the demand of rural market. The success of this effort is still to be seen.

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1.4 Key Players in Indian Noodle Market

The instant noodle market is dominated by MNCs, very few local players have a sizeable presence. Some of the key players in the market along with their brands are: 1. Nestle (Maggi) 2. Hindustan Unilever (Knorr Soupy Noodles) 3. GlaxoSmithKline Consumer Healthcare (Foodles) 4. Capital Foods Ltd. (Ching's Secret) 5. ITC (Sunfeast Yippee noodles) 6. CG Foods India Pvt. Ltd.(Wai Wai) 7. Future Group (Tasty Treat)

1.5 Opportunities in Indian Noodle Market

1. Health and wellness theme: Health and wellness theme based packaged food is gaining popularity in India and the market of such noodles is still open as traditional player Maggi is not associated with health but with convenience and taste. 2. Huge Rural market: rural India where close to 60% of Indian population resides is a huge consumption market virtually un-penetrated by any player. Low cost products with appropriate marketing can open up this huge market

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Yippee Noodles

Section C, Group 6

2. ITC
2.1 History
ITC was founded on August 24, 1910 as Imperial Tobacco Company of India Limited and shares ancestry with Imperial Tobacco of the United Kingdom, but later it became fully independent, and was rechristened to India Tobacco Company in 1970 and then to I.T.C. Limited in 1974.The Company got rechristened as 'ITC Limited' after the full stops got removed with effect from September 18, 2001. ITC has a wide range of businesses.

The first six decades of the Company's existence were primarily devoted to the growth and consolidation of the Cigarettes and Leaf Tobacco businesses. The company witnessed the beginnings of a corporate transformation that would usher in momentous changes during the Seventies. Now ITC is one of India's foremost private sector companies with a market capitalisation of over US $ 34 billion and a turnover of US $ 7 billion. ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine. It is also ranked among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today. ITC ranks among India's `10 Most Valuable (Company) Brands', in a study conducted by Brand Finance and published by the Economic Times. ITC also ranks among Asia's 50 best performing companies compiled by Business Week.

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ITC has a diversified presence in FMCG (Fast Moving Consumer Goods), Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and Information Technology. While ITC is an outstanding market leader in its traditional businesses of Hotels, Paperboards, Packaging, Agri-Exports and Cigarettes, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. With its headquarters located in Kolkata, the current chairman of ITC Limited is Mr Yogesh Chander Deveshwar. ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building capabilities and effective supply chain management. Overtime, the strategic forays into new businesses are expected to garner a significant share of these emerging high-growth markets in India. As one of India's most valuable and respected corporations, ITC is widely perceived to be dedicatedly nation-oriented. Chairman Y C Deveshwar calls this source of inspiration "a commitment beyond the market".

2.2 The diversification timeline of ITC

In 1925, ITC's Packaging & Printing Business was set up as a backward integration for ITC's Cigarettes business. In 1975, the Company entered into Hotels business with the acquisition of a hotel in Chennai which was renamed as 'ITC-Welcome group Hotel Chola (now renamed My Fortune, Chennai). ITC chose the Hotels business for its potential to earn high levels of foreign exchange, create tourism infrastructure and generate large scale direct and indirect employment. Since then ITC's Hotels business has grown to occupy a position of leadership, with over 100 owned and managed properties spread across India under four brands namely, ITC Hotels - Luxury Collection, Welcome Hotels, Fortune Hotels and Welcome Heritage. In 1979, ITC entered the Paperboards business by promoting ITC Bhadrachalam Paperboards Limited. In 1990, leveraging its agri-sourcing competency, ITC set up the Agri Business Division for export of agri-commodities. In 2000, ITC's unique and now widely acknowledged e-Choupal initiative began with soya farmers in Madhya Pradesh. Now it extends to 10 states covering over 4 million farmers. Also, through the 'Choupal Pradarshan Khet' initiative, the agri services vertical has been focusing on improving productivity of crops while deepening relationship with the farming community. In 2000, ITC also entered the Lifestyle Retailing business with the Wills Sport range of international quality relaxed wear for men and women. In 2000, ITC spun off its information technology business into a wholly owned subsidiary, ITC Infotech India Limited. Today ITC Infotech is one of India's fastest 6

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growing global IT and IT-enabled services companies and has established itself as a key player in offshore outsourcing, providing outsourced IT solutions and services to leading global customers across key focus verticals - Banking Financial Services & Insurance (BFSI), Consumer Packaged Goods (CPG), Retail, Manufacturing, Engineering Services, Media & Entertainment, Travel, Hospitality, Life Sciences and Transportation & Logistics. In 2001, ITC's foray into the Foods business is an outstanding example of successfully blending multiple internal competencies to create a new driver of business growth. It began with the introduction of 'Kitchens of India' ready-to-eat Indian gourmet dishes. In 2002, ITC also initiated a foray into the popular segment with its men's wear brand, John Players. In 2002, ITC entered the confectionery and staples segments with the launch of the brands mint-o and Candyman confectionery and Aashirvaad atta (wheat flour). In 2002, ITC's philosophy of contributing to enhancing the competitiveness of the entire value chain found yet another expression in the Safety Matches initiative. ITC now markets popular safety matches brands like iKno, Mangaldeep and Aim. In 2003, the Classmate range of notebooks was launched. In 2003, Sunfeast was introduced in the market as the Company entered the biscuits segment. In 2005, ITC entered the Personal Care Business. In seven years, the Personal Care portfolio has grown under 'Essenza Di Wills', 'Fiama Di Wills', 'Vivel' and 'Superia' brands which have received encouraging consumer response and are also being progressively extended nationally. In 2007, ITC entered the fast growing branded snacks category with Bingo. In 2010, ITC launched Sunfeast Yippee! to enter the Indian instant noodles market. In 2010, ITC launched its hand rolled cigar, Armenteros, in the Indian market. Armenteros cigars are available exclusively at tobacco selling outlets in select hotels, fine dining restaurants and exclusive clubs.

2.3 Sunfeast

In July 2003, ITC forayed into the Biscuits market with the Sunfeast range of Glucose, Marie and Cream Biscuits. Sunfeast's brand essence connotes happiness, contentment, satisfaction and pleasure. In a span of 9 years, Sunfeast has well-established presence in almost all categories of biscuits and is also a key player in the pasta and instant noodles segments. Sunfeast Biscuits straddle all segments of the market led by Dark Fantasy at the premium end. High quality married with exciting innovations has helped drive this category. Dark Fantasy Choco Fills has wowed the Indian consumer with its innovative centre-filled format and highquality packaging. In addition, the launch of the Dream Cream range of biscuits in two exciting and innovative dual cream formats further reinforces ITCs commitment to continuously delight the consumer. 7

Marketing Management

Yippee Noodles

Section C, Group 6

2.4 Yippee Noodles

In the year 2010 ITC expanded its portfolio by entering into instant noodles category by introducing Sunfeast Yippee! Instant Noodles. Three years of exhaustive developmental work has gone into the creation of Sunfeast Yippee! They banked on the wide expanded distribution network of ITC and used the Umbrella branding strategy and they also utilized the brand name of ITC.

2.4.1 4Ps
Product It is a product that is different in terms of Packaging - Using combination of red, yellow, orange and brown colours on covers Contents - Which is round cake instead of the rectangular cakes as used by other brands Variants classic masala, magic masala and Chinese masala.

Price- 10 for 85 gram pack and 40 for 320 gram pack to match the competitor's price. Promotion The company is focusing very heavily on the benefit positioning concept in their ads focusing on the benefits or the advantages it has over Maggi as a competitor. Till date, the advertisements released by Yippee has the common tagline Its better no? Some of the popular ones focus on the benefits of Yippee over Maggi such as:

The Punishment ad: in which the roundness of the noodles is emphasized The Cricket ad: The non-lumpy characteristic is highlighted The Salon ad: where the choices of Masala is brought forth The Genie ad: incorporates all the USPs of Yippee.

Place - ITC has a very strong distribution network for their cigarette brands and they are using this network for Sunfeast biscuits also. They keep their goods on constant move from low sales area to high sales area. They collect the expired goods four times a year and destroy them. The benefits received by the retailers depend upon their sales volume and also the location of their shops. The company says the brand is now available in nearly 1.8 million outlets.

Marketing Management

Yippee Noodles

Section C, Group 6

2.4.2 STP

Segmentation: Demographic: Urban, Semi-urban, rural areas Behavioural: Regular users (urban), first time users (regular) Usage status: Heavy users (urban), light (rural), medium (semi-urban)

Targeting: Children from upper and middle class. Positioning: Benefit Positioning Concept.

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Yippee Noodles

Section C, Group 6

2.4.3 SWOT Analysis

Strengths: 1. 2. 3. 4. Wide distribution network. Well established image of ITC. Attractive packing. Use of umbrella branding.

Weakness: 1. Low product visibility. Opportunities: 1. Rural noodle market is growing twice the rate of urban market. 2. Market is expected to reach 3000-3500 crore by 2015. Threats: 1. Maggis strong market presence. 2. Competition from other private players. 3. Local Players.

3. Competitor Analysis
3.1 Maggi

Nestle India Ltd (NIL) the Indian subsidiary of global FMCG player introduced Maggi brand in year 1982. NIL created entirely new food category-instant noodles. Being the first mover NIL could retain its market leader position till date. Maggi occupies nearly 80% of noodles market share in India. Maggi is the market leader and has a strong brand loyalty among its consumers. Its distribution channel is also wide and it has developed many innovative flavors for the Indian taste buds. It has an effective advertising strategy as well. Entrance of competitors like Yippee, Foodles and local players pose a challenge to Maggi however they see opportunities in the rural market which is yet to be tapped into.

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Marketing Management

Yippee Noodles

Section C, Group 6

3.1.1 SWOT Analysis Strengths: Weakness: Maggis new innovative products has all failed Market Leader Brand Loyalty Distribution Channel Innovative flavors for Indian taste buds Advertising strategy

Opportunities: Threats: Competition from other private players. Local Players. Rural noodle market is growing twice the rate of urban market. Market is expected to reach 3000-3500 crore by 2015.

3.2 Foodles:
Fast moving consumer goods (FMCG) company GlaxoSmithkline Consumer Healthcare announced its entry into the instant noodles segment. It launched the product under the popular Horlicks brand, named Foodles It was launched in South India in 2009 and later spread out to Eastern parts of the country in 2011. They occupy a market share of 4% and they positioned the brand by focusing on health (the more nourishing noodles). The competition in the market is fierce as there are atleast two national players in Maggi and Yippee and regional players coming up. Foodles comes from a background of healthcare and they have innovative packaging. They have followed Umbrella branding strategy. They lack experience however and need to gain traction in Northern India as it was launched in South India first and then branched out to the Eastern regions of the country.

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Marketing Management

Yippee Noodles

Section C, Group 6

Its major competitors include the market leader Maggi and upcoming brands like Yippee while local brands like Wai Wai can also cause a problem. They can use the opportunities in the rural market which is yet to be tapped into.

3.2.1 SWOT Analysis Strengths: Weakness: High Price. Opportunities: Rural noodle market is growing twice the rate of urban market. Market is expected to reach 3000-3500 crore by 2015. Getting the advantage of having healthcare background. Innovative packaging Umbrella Branding

Threats: Competition from other private players. Local Players.

4. Recommendations

Quality improvement and image advertising as compared to market leader. The premium and super premium segments according to industry experts are believed to be growing at around 30% annually. So sunfeast can come up with new varieties in premium segment.

Sunfeast should provide better benefits to wholesalers and retailers as Nestle is providing higher margin to retailers to compete with.

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Marketing Management

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Section C, Group 6

5. BIBLIOGRAPHY:
Kotler, P., Koshy, A., Jha, A., Keller, J. (1974). Marketing Management, New Delhi Press: Pearson Boerstein, D. (1992). Food Processing Whitebook, New York: Random House. Sengupta, Subroto (1999). Brand Positioning: Strategies for Competitive Advantage, New Delhi, Tata McGraw-Hill http://en.wikipedia.org/wiki/Instant_noodles

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