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Imperial Journal of Interdisciplinary Research (IJIR)

Vol-2, Issue-10, 2016


ISSN: 2454-1362, http://www.onlinejournal.in

Managing Marketing Crisis: Case Study


Research From Nestle's Maggi Ban In India
Debashish Sakunia1 & Ruchi Jha2
1
Department of Electrical Engineering
2
Department of Computer Science And Engineering

Abstract: This research paper is based on a market 1.2 Social Media


case study which discusses the marketing techniques Many view social media just as a way to engage
used by Nestle's Maggi, an instant noodle company people. Information on the social web spreads fast,
when and after the High Court banned it for being but often at the expense of deeper personal
guilty of adding lead to its product. The Product was relationships. Marketers can reach customers in new
criticized by The Food Safety and Standards ways and get feedback more quickly than before but
Authority of India (FSSAI), and various other instant miss to personalizing communications and
noodle companies took advantage of the conditions engagement to the benefit of clients and the
and launched its advertisement campaign which organizations they serve or work along. Most social
targeted to negative market Maggi and encouraged media content of corporates are often re-purposed
the use of their product. from another channel or vague and not customized to
the prospects' preferences of different social
channels.
1. Introduction to marketing crisis
catalysts
2. Background
1.1 Effect of Negative Marketing
2.1 Maggi
Negative Marketing is making other competitors
look bad. It's a plot to make one's product look better Maggi is an international brand of soup, noodles, and
to customers than the competitor's product. While seasonings which originated from Switzerland and
many find it unethical, it has been in use for decades was acquired by Nestle in 1947. Maggi instant
now and is rather considered an aggressive form of noodles are so famous in India and Malaysia that it
marketing in present scenarios. Though it isn't has almost replaced the word instant noodles there.
labelled as sabotaging the victim company's fame, it Maggi instant noodles had a market share of 39%
does utilize the sponsor company's customer trust to share in Malaysia and had 90% of shares in India
affect other businesses image. until FSSAI imposed a wide national ban on it and
today contributes 53% of the markets noodle supply.
1.1.1 Affect of Negative Branding. History has it
that information marketed with cynical marketing 2.2 Maggi noodles safety concerns in India
stays in customer's mind for long. It makes customer
explore its emotions and therefore leads to increase On May 15th, 2015, food safety regulators from
in sales of advertising brand. While the advertising Barabanki district in India reported that certain
company makes a straight benefit of the advertising samples of Maggi instant noodles had the
campaign, the effects on the business on the flip side unexpectedly high level of monosodium glutamate
are dangerous. Customers shy from negatively and as much as 17 times of permissible level of lead.
branded from products for a long term. These findings lead to a series of a ban on the
domestic sale of Maggi instant noodles in India.
1.1.2 Rise of Negative Demand. It is that condition, Though, Maggi was allowed to export the instant
when consumers avoid a product, firm or service noodles; domestic sales were stopped until it cleared
with negative image or connotations, such as being the FSSAI standard tests. It could come back to
associated with unfair labour policies or the practices shelves by November 2015.
that harm the environment. In such cases, often,
consumers are willing to pay more to switch their These bans resulted in the serious effect on Maggi's
allegiance from one product or firm to another. brand in the country. Maggi recalled stocks worth
Rs. 320 Crores and MCA imposed a ban of Rs. 640
Crores on it. It paid Rs. 20 Crores to a cement
factory to burn the recalled stocks.

Imperial Journal of Interdisciplinary Research (IJIR) Page 958


Imperial Journal of Interdisciplinary Research (IJIR)
Vol-2, Issue-10, 2016
ISSN: 2454-1362, http://www.onlinejournal.in

2.3 Competitors ban status. It has also ensured to address varied


consumer segments in its video series – young boys
Competitors such as Patanjali Ayurved Limited and girls living in hostels, and bachelor pads to the
(PAL) announced the launch of instant atta noodles Indian moms who’ve been making Maggi for their
after re-launch of Nestle’s Maggi instant noodles. It kids are some good examples of its storytelling
was positioned with a tagline, 'jhatpat banao, befikar campaign.
khao' which means to 'make instantly, eat safely.' The
'safely' part in its motto as seen by most of it's 3.1.3. Denial versus acceptance. A statement from
advertisements were mostly made to negative brand Nestle India said that the company will take the
Maggi Instant Noodles, keeping in mind its alien product off the shelves, and yet insisted that the
origin and previous health hazards. quality standards had been met. The fact that the
trust of their consumers and the safety and quality of
2.3.1. Negative Marketing by PAL for Nestle their products is the foremost priority everywhere in
Maggi Instant Noodle. Baba Ramdev, Board of the world was communicated well. "Unfortunately,
Directors, made the most of it when Nestle Maggi recent developments and unfounded concerns about the
was in turmoil and had just re-launched the product. product have led to an environment of confusion for the
Additionally, it also took advantage of the "desi vs. consumer, to such an extent that we have decided to
videshi" war, i.e., it negative marketed Maggi playing withdraw the product from the shelves, despite the product
on morals that domestic production is better for the being safe. We promise that the trusted Maggi Noodles
will be back in the market as soon as the current situation
national economic.
is clarified”, said Mr. Paul Bulcke, global chief
Maggi had to fight on two fronts: first, the negative executive, Nestle in a press conference in New Delhi.
brand perception created later that year and the
3.1.4. No Brand Ambassadors for some period.
negative brand efforts put by PAL.
Brand Ambassadors are not so secret weapons to
marketing a product. It helps build a brand and
establish trust, but Maggi knew that this costly affair
3. Surviving Crisis wouldn't be of great use. Their contract with
Amitabh Bachchan and Madhuri Dixit had elapsed.
Maggi Noodles did a great job as they returned to the Moreover, at the current scenario, they weren't
market. Not only did they get back the majority of looking for brand ambassadors but having campaigns
their customers but also cleared all allegation and i.e., Brand endorsing events.
charges against them. Today, Maggi has more than
55% of the market share of the Rs. 2000 crore noodle 3.1.5. Mothers as Brand Advocates. Using
business. It has actively followed few strategies to mothers to stamp their seal of approval would have
rebuild its brand which is discussed in the coming been obvious, and perhaps the only route to take, as
section. opposed to taking a celebrity endorser (Also, none of
them must have been willing to take the risk in the
3.1. Key strategies from Maggi branding light of the controversy surrounding the brand and
campaign. endorsers).

3.1.1. Emotional and Nostalgic memories. The strategy will go some way in assuaging doubts
Beginning from #WeMissYouToo, #MaggiMother, about the safety of the product, but I still think that it
and #WelcomeBackMaggi, the brand has taken yet will be quite a while before everyone stops thinking
another emotional route to reach out to its customers about it with a little suspicion.
with #NothingLikeMaggi.
3.1.6. Partnering with Snapdeal (Web store with
Manish Bhatt, Founder Director, Scarecrow Nationwide delivery and coverage) for exclusive
Communications, who loved the new idea, opines sale. Struggling with a delivery network is always a
that the brand is trying to occupy the space in the problem for a brand fighting to return market and
lives of people. There are two things. One is the surrounded by competitors cynical marketing it's
product that says all and second is good product.
communication with a complete message. Here, by
touching the emotional side of the masses, they are As Maggi was not available in many states, so they
playing around the communication that says that were providing them through snapdeal, with a small
Maggi is irreplaceable because emotions can't be message, to connect with the customers during
replaced. Diwali. It's timing and exclusive availability on pre-
order basis created a demand and curiosity amongst
3.1.2. Branding through Storytelling. Maggi its clients.
systematically rolled out films in each phase of its

Imperial Journal of Interdisciplinary Research (IJIR) Page 959


Imperial Journal of Interdisciplinary Research (IJIR)
Vol-2, Issue-10, 2016
ISSN: 2454-1362, http://www.onlinejournal.in

3.2. Key Takeaways from Maggi Noodles the employees. Also, storytelling is important as it
connects the customers directly to company's
Maggi focused on two strategies during the crisis problems and helps gain sympathy.
period to avoid the negative marketing
4.2. Don't forget Social Media
3.2.1. Traditional Method.
If the crisis isn't managed well, it wipes out decades
• Before Diwali, several grocery stores and of brand building hard work. Establishing a social
departmental chains across Mumbai placed media team to monitor, post and react to social media
a special display on their gate written in activity throughout the crisis is important. It
bold letter "Maggi is Back." essentially becomes the medium to communicate
• They had decorated the shelves with your story with the customer base.
stickers and posters.
• Users of apps like Haaptik, received the 4.3. PR and Feedbacks are important
alert when Maggi arrived.
Intelligence gathering is an essential part of both
3.2.2. Digital Marketing crisis prevention and crisis response. TO have a
Knowledge of what’s being said about you on social
• Setting up 24x7 toll-free consumer services media, in traditional media, by your employees,
to connect with the customers. customers, and other stakeholders allow you to catch
• Television and print campaigns, engaging a negative “trend” that, if unchecked, turns into a
with customers via Facebook and Twitter.. crisis.
• They have a digital acceleration team,
which was responsible for the ' we miss you Likewise, monitoring feedback from all interested
too' Maggi campaign. parties and customers during a crisis allows you to
adapt your strategy and tactics accurately.
4. Conclusion 4.4. Finalize and Adopt Key Messages

Daily headlines are filled with cases of companies Essentially, part of the story telling, it is important
facing a crisis. In such situations, crisis management for the organization to keep continuing developing
is one important art to learn. As we learn from the crisis-specific messages required for a given
Maggi's incident, the crisis can hit at any moment situation.
and to believe that it will never happen to a company Also, it is important to keep it simple - messages that
can be one big mistake. go to all stakeholders, customers and, the audience
with specific messages for individual groups.
Usually, the common traits in a crisis are as follows:

• The operational response breaks down.


• Stakeholders quickly become confused,
angry, and negatively reactive. 5. References
• The organization is often perceived as inept,
at best, and criminally negligent, at worst. [1] Retrieved from:
• The length of time required to get full a http://www.adageindia.in/marketing/cmo-strategy/heres-
resolution to the issue will be extended, how-nestl-is-using-nostalgia-as-a-strategy-in-maggis-
often dramatically. comeback-ads/articleshow/51675250.cms

Before working on a plan to help get over the crisis, [2] Retrieved from: http://lighthouseinsights.in/maggi-
the managers should make sure they properly comeback-campaign.html/
[3] Retrieved from:
acknowledge it affects and work accordingly. http://www.financialexpress.com/industry/companies/mag
gi-noodles-caught-in-the-loop/85227/
Here are few things we learn from Maggi incidence:
[4] Retrieved from:
4.1. Story telling is important http://articles.economictimes.indiatimes.com/2016-06-
20/news/73900779_1_instant-noodles-market-maggi-wai-
If the crisis potentially affects the health or well- wai
being of the customers, it attracts media. To ensure [5] Retrieved from:
that the company conveys one talk it's important to http://www.afternoonvoice.com/maggi-vs-other-
story tell and communicate the story correctly to all noodles.html/
[6] Retrieved from:

Imperial Journal of Interdisciplinary Research (IJIR) Page 960


Imperial Journal of Interdisciplinary Research (IJIR)
Vol-2, Issue-10, 2016
ISSN: 2454-1362, http://www.onlinejournal.in

http://www.firstpost.com/business/ramdev-makes-maggi-a- 29/news/55559123_1_maggi-knorr-soupy-noodles-wai-w
desi-vs-bideshi-war-pitches-healthy-patanjali-made- [8] Retrieved from: http://www.marketing91.com/swot-
noodles-2283144.html analysis-of-maggi/
[7] Retrieved from: [9] Retrieved from: http://negativemarketing.com/
http://articles.economictimes.indiatimes.com/2014-10-

Imperial Journal of Interdisciplinary Research (IJIR) Page 961

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