AProject RepotonBRANDING (Case study of MAGGI as a Brand)Under the Guidance of-Prof. Nikhil Rao.

Project ByJAYSHREE KATKAR XMBA-09ITM, VashiRoll No. VA09MBA09P03

CONTENTS Brand Brand Building Brand Equity Brand Personality Brand Repositioning Case Study-Maggi What is Brand ?

A brand is the identity of a specific product, service, or business. A brand can takemany forms, including a name,sign, symbol, color combination or slogan. The wordbrand began simply as a way to tell one person's cattle from another by means of ahot iron stamp. A legally protected brand name is called a trademark.The word brand has continued to evolve to encompass identity - it affects thepersonality of a product, company or service.A brand is the name of a particular business enterprise. There are several reasonswhy a brand is important. A brand can help to differentiate a particular companyfrom others in a market.The brand is the sum total of the consumer's impressions about the product ands e r v i c e . T h e l e s s d i s t i n c t i v e t h e s e impressions, the greater the risk that a competitor's products or services may gain a stronger perceptionand competitiveadvantage.Brand management is a process that combines various techniques and strategiesthat go into making a particular brand. Marketing plans are important parts of theprocess. Since brands are essential to the success of the company it is importantto work hard at the creating a brand.

Famous Brand-

Brand Building

It has been noticed that brand loyalty is an important factor in maintaining thenumber one position. The fact that brands are a part of the company equity is nowa universal concept, however what this awareness implies has not yet been fullyanalyzed. As is often the case, phrases such as brands are our equity becomecompany leitmotivs. The truth is that, when taken at its word, this brand equityawareness has actually revolutionized operational marketing.Brand Equity is imperative for a company to succeed in today's market to have adecent brand development system in place.Brand equity involves both the component value of a brand and brand value. Brandequity enhances the value of a product and creates a positive environment for thecompany to increase prices.Brand Equity is defined as the aggregation of two aspects of a product. The firstbeing the component value of a Brand i.e a product value prior to marketing.The second is brand value I.e. the increased value of a product due to branding.Branding has been shown to transform the perceived value of a product by makingi t well known to customers through aggressive p r o m o t i o n a n d m a r k e t i n g . It has been observed that this transformation infuses a value into the name andconsequently increases its price.There are many apparel companies for a product in domestic as well as foreignmarkets. But only a few have qualified themselves as a brand . Clearly, the pricerange of these well known brands is much higher than the others. The main

factorbehind this price differential is the added brand value. Thus, brand equity of suchproduct includes its component as well as the brand value.Brand equity refers to the intangible value that accrues to a company as a resultof its successful efforts to establish a strong brand. A brand is a name, symbol, oro t h e r f e a t u r e t h a t d i s t i n g u i s h e s the company's goods or services in t h e marketplace. Consumers often rely upon brands to guide their purchase decisions. The positive feelings consumers accumulate about a particular brand are whatmakes the brand a valuable asset for the company that owns it.M a n y c o m p a n i e s s t r u c t u r e their marketing programs around building a n d preserving their brand equity. "To be a strong brand, a company must instill aclear, unwavering consumer perception of the distinctive emotional or functionalb e n e f i t s o f i t s p r o d u c t s a n d s e r v i c e s , " Building Brand Equity The basis of brand equity lies in the relationship that develops between a consumer and the company selling the products or services under the brand name.A consumer who prefers a particular brand basically agrees to select that brandover others based primarily on his or her perception of the brand and its value.T h e b u y e r may even pay a higher price for the company's g o o d s o r s e r v i c e s because of his commitment, or passive agreement, to buy the brand. In return forthe buyer's brand loyalty, the company essentially assures the buyer that theproduct will confer the benefits associated with, and expected from, the brand.I n order to benefit from the consumer r e l a t i o n s h i p a l l o w e d b y b r a n d i n g , a company must painstakingly strive to earn and maintain brand loyalty.

Building abrand requires the company to gain name recognition for its product, get theconsumer to actually try its brand, and then convince the buyer that the brand isa c c e p t a b l e . O n l y a f t e r t h o s e t r i u m p h s c a n t h e c o m p a n y h o p e t o s e c u r e s o m e degree of preference for its brand.Name awareness is a critical factor in achieving brand success. Companies mayspend vast sums of money and effort just to attain recognition of a new brand. Butgetting consumers to recognize a brand name is only half the battle in buildingbrand equity. It is also important for the company to establish strong, positiveassociations with the brand and its use in the minds of consumers. The first step inb u i l d i n g b r a n d equity is for the company to define itself and w h a t i t h o p e s t o represent for consumers. The next step is to make sure that all aspects of thecompany's operations support this image, from its product and service offerings toi t s m a r k e t i n g p r o g r a m s t o i t s customer service policies. When all of t h e s e elements support a distinctive image of the company and its products in the mindsof consumers, the company has established brand equity.

Measuring and Protecting Brand Equity

Although measuring brand equity can be difficult, it can also provide managerswith a good indication of their company's future profitability. "Companies whichdevelop good measures of their brand equity have an early warning indicator oflikely future profit trends, and can get a much better feel of the dangers of short-termism," Mitchell noted. "If brand equity isfalling, you're storing up trouble for yourself. If brand equity is rising, you'reinvesting in future performance, even if it's not showing through in profits today.Real business performance therefore equals short-term results plus shifts in brandequity."Unfortunately, measuring brand equity is not as simple as counting the number ofpeople who recognize a brand name or symbol. It is also dangerous to assume thatsimply because its brand is well-known, a company enjoys strong or growing brande q u i t y . I n f a c t , the most powerful brands can easily be diluted b y c o m p a n y missteps or inconsistent marketing messages. Mitchell explained that the best wayto measure brand equity depends on the particular company and its industry. Forexample, in some cases assessing consumer perceptions of product quality mayp r o v i d e the best indication of brand equity. In other c a s e s , m o r e t r a d i t i o n a l business measures such as customer satisfaction or market share may be moreclosely correlated with brand equity.Finding an appropriate measure of brand equity is vital in order for companies toensure that they protect this valuable asset. In his Risk Management article, Knappc l a i m s t h a t m a n a g e r s m u s t r e m a i n c o n s t a n t l y v i g i l a n t t o p r o t e c t t h e i r b r a n d equity, since a declining brand image poses a significant risk to company earnings.If a brand loses its distinctive image in the minds of consumers, then the brandedproduct becomes more like a commodity and must compete on the basis of pricerather than value. Customer loyalty decreases, which has a corresponding negativeeffect on market share and profit margins. In order to prevent this decline,

Knapprecommends that companies consider the impact of major decisions on consumerperceptions and brand equity. Every action taken by managementincluding theintroduction of new products or advertising strategies, or the decision to lay offemployees or relocate a factoryshould be assessed for its effect on brand equity. Brand Repositioning:Brand Repositioning - changing the appeal of a brand in order for it to attract newmarket segments; brand repositioning m a y o r m a y n o t i n v o l v e m o d i f y i n g t h e Product . Brand Repositioning is an attempt to change consumer perceptions of aparticular brand.Repositioning is a change, principally about triggering the vision, mission andvalues in a new direction that is more suited for the brand in future.The location of a brand in relation to its competitors in some pre-defined space.T h e s p a c e m a y be defined by criteria used by consumers, such a s " v a l u e f o r money" or "age of consumer" etc.F o l l o w i n g are main factors that plays an important role i n d e f i n i n g a b r a n d repositioning.1.Brand Attributes -What the brand delivers through features and benefits toconsumers.2.Consumer Expectations -What consumers expect to receive from the brand.3.Competitor attributes -What the other brands in the market offer throughfeatures and benefits to consumers.4 . P r i c e - A n easily quantifiable factor Your prices vs. your c o m p e t i t o r s prices. 5. Consumer perceptions -The perceived quality and value of your brand inconsumers minds (i.e.,does your brand offer the cheap solution, the goodv a l u e f o r t h e

m o n e y solution, the high-end, high-price tag solution, etc.?) Brand Personality Brand Personality is a set of human characteristics associated with a b r a n d . Personality is how the brand behaves. Gender, age, socio-economic class, psychographic, emotional characteristics. Following are few examples Marlboro is masculine while Virginia slims is feminine. IBM is Older while Apple is Younger. India Today is old fashioned while Out Look is trendier. Coke is confirming while Pepsi is irreverent .Brand Personality, is like human personality, is both distinctive and enduring. Inother word brand personalitys is weighted average of previous impression. Inconsumers mind, these impressions merge to form overall concept of what toexpect from brand.Importantly, brand personality is often a sustainable point of differentiation.Sustainable because it is very difficult to copy a personality.B r a n d Personality is eagerly searched by brand s t r a t e g i e s a n d r e s e a r c h e s . Differences in responses from different consumers provides useful insights.Personality traits are what the brand will live and die for. Activities such as eventssponsored by the brand will influence its personality. Ponds sponsoring FeminaMiss India contest. Pepsi sponsoring Cricket matches.A symbol can be the powerful influence of the brand personality since it can becontrolled and can have extremely strong association. e.g a) Apples bitten apples.b) Nike swooshc) Metlifes peanuts characteristics.T h e p e r s o n a l i t y t h a t s r e p r e s e n t s a

f u n c t i o n a l b e n e f i t s o r a t t r i b u t e m a y b e relatively ineffective if it lacks a visual image established in consumers mind. Acountry or region of origin can add credibility to an identity. It can generate astrong personality that provides a quality cue and a key point of differentiation.

The Maggi Brand in India

Case Background Nestle India Limited is the market leader in Indian Noodle Market with its MaggiBrand of Noodles which was pioneer brand launched in 1983 in the packaged foodm a r k e t o f India. It took the challenge and established M a g g i i n I n d i a n m a r k e t considered to be conservative and typical about food consumption. It appropriaterealization of target segment, effective positioning and effective promotion andsales made Maggi to Noodles in India as Xerox it to photocopier.NIL had introduced sauces, ketchups and soups under Maggi brand to reap benefitof brand popularity and image and contribute to financial gains by 1990.Maggi alsobecame successful in sauces, ketchups and soups Market in India. Though NIL triedto extend to other ready to eat products like pickles, cooking aids and paste, Itwas unsuccessful so dumped those products. Maggi Brand of products sustainedrecession in 2000 and 2001 in India by introducing economy packets. To fulfill novelty needs of customers and revitalize Maggi Noodles Brand NIL madedifferent attempts by introducing new formulation to new taste but customersresisted change and Maggi had to reintroduce Maggi Noodles in same taste. MaggiN o o d l e h a d t i l l 2005 five product line on noodles with four v a r i a n t i n M a g g i 2 Minutes Noodle. In 2006 in compliance with NIL target to be health and WellnessCompany Maggi repositioned it as health and taste food products. NIL has alsointroduced with taste and product line in Sauces and Soup Market under Maggi tocatch new segment, revitalize brand, compete with other producers and fulfillexpectation of customers.In 2005 Maggi brand worth was 3.7 billion from 1.7 billion market worth in 1.7billion in 2003. Maggi Noodle is Market leader with around 80% market share inNoodles/Pasta and Maggi Sauce is market leader with almost 37% of market sharein 2005 in 1.8 billion market of India. Knorr has taken over Maggi in Soup

marketrecently.In 2005 Maggi was the highest spender in the Promotion and Sales in the IndianMarket in the Noodles Category.Maggi is competing with Heinz Sauces and Ketchup, Knoor Soups, Kissin Sauces andKetchup, Top Ramen, Sunfeast Pasta Wai Wai and 2 PM in corresponding categoriesof products and variants

Maggi Comes to India teething troubles Maggi noodles was launched in India inthe early1980s. Carlo M. Donati, the present Chairman and Managing Director ofNestle India Ltd, brought the instant noodle brand to India during his short stinthere in the early eighties. At that time, there was no direct competition.The first competition came from the ready-to- eat snack segment which includedsnacks like samosas, biscuits or maybe peanuts, that were usually the bought outtype.T h e second competition came from the homemade snacks like pakoras o r sandwiches. So there were no specific buy a n d m a k e s n a c k ! M o r e o v e r b o t h competitors had certain drawbacks in comparison. Snacks like samosas are usuallybought out, and outside food is generally considered unhygienic and unhealthy.The other competitor, homemade snacks overcame both these problems but hadthe disadvantage of extended preparation time at home. Maggi was positioned asthe only hygienic home made snack! Despite this, Nestl faced difficulties withtheir sales after the initial phase. The reason being, the positioning of the product with the wrong target group.Nestle had positioned Maggi as a convenience food product aimed at the targetgroup of working women who hardly found any time for cooking.Unfortunately this could not hold the product for very long. In the course of manymarket researches and surveys, the firm found that children were the biggestconsumers of Maggi noodles. Quickly they repositioned it towards the kids segmentwith various tools of sales promotion like colour pencils, sketch pens, fun books,Maggi clubs which worked wonders for the brand. Why the specific Brand positioning? Maggi was positioned as 2-minute noodles with a punch line that said Fast tocook! Good to eat! And this gave the implied understanding to the consumer thatit was a between meals snack. The company could have easily positioned theproduct as a meal, either lunch or

dinner. But, it chose not to do so, because theIndian consumer mindset did not accept anything other than rice or roti as a meal.Hence trying to substitute it with noodles would have been futile. The firm did notposition it as a ready-to-eat meal either, as the housewife prefers to make am e a l f o r h e r k i d s r a t h e r t h a n b u y i t f o r t h e m . A n d i f s h e c a n m a k e i t i n t w o minutes with very little effort, then obviously its a hit with her! Whats more, ifkids also love the taste, the product is as good as sold! So the 2-minute fundacoupled with the yummy taste worked! BRAND STORY Launched in 5 flavors initially Masala, chicken, Capsicum, sweet & sour, andLasagna Maggi had to fight hard to be accepted by Indian consumers with theirhard-to-change eating habits. The packaged food market was very small at thistime, Nestle had to promote noodles as a concept, before it could promote Maggias a brand. It therefore devised a two-pronged strategy to attract mothers on theconvenience plank and lure kids on the fun plank. Gradually, the market forinstant noodles began to grow. The company also decided to focus on promotionsto increase the brand awareness. In the initial years, Nestle promotional activitiesfor Maggi included schemes offering gifts( such as toys and utensils) in return forempty noodles pack.According to analysits the focus on promotion turned out to be the single largestf a c t o r r e s p o n i s i b l e f o r M a g g i s r a p i d acceptance. Nestle\s Managers u t i l i z e d promotions as measured to meet their sales target. Gradually, sales promotionbecame a crutch for Maggi noodles sales. Later many of the Maggis extensionsa l s o m a d e c o n s i d e r a b l e u s e o f promotional schemes. The focus of all Maggise x t e n s i o n s w a s m o r e o n b e l o w the line activities rather than d i r e c t communication. In addition to promotional activities, Maggi associated itself withmain stream television

programme and advertised heavily on kids programme andchannels. After its advertisements with taglines like mummi bhookh lagi hai, basdo minute and fast to cook good to eat Maggis popularity became highlyattributed to its extremely high appeal to children. As a result, Maggis annualgrowth reportedly touched 15% during its initial years. Key Issues How Nestle India Limited is ahead in Noodles Market with brand Maggi since1982 How NIL extended its brand and line of products to leverage the brand andestablished Maggi as family brand. NILs positioning and repositioning strategy to catch market and consumerexpectation. How to continue NIL capability to Maintian Point of Difference ( POD) andPoint of Party (POP) while bradn extension and repositioning. Maggis challenge to protect its market leader position in situations wherethere is emergence of competitors like Hindustan Lever Limited, IndoNissan, ITC, Dabur India, Heinz are competing with their correspondingbrand on the product category. BCG Martix ( Maggi Brand Products in 2006 ) STARQUESTION ?CASHCOWDOGRelative Market Share STARS : Maggi Noodles is the market leader with 80 % market share in NoodlesMarket and Maggi Sauces and Ketchup is leader with 37 % market share. Theproducts are producing cash for the company consistently. The Market is growingby 15 % in the Product Category of Noodles. QUESTIONS ?

: Maggi Soups is the category which is in Question mark as themarket is growing and the brand as less market share then market leader Knorrbrand of Hidustan Lever Limited. There are more chances for Maggi Soups to go todog it does not stay competitive and increase market share in the category. 10 %20 %0 %1 0 x 1 x 0 . 1 x MaggiNoodlesMaggiSaucesMaggiSoups Marketgrowthrate SWOT Analysis of Maggi as Brand Strengths Established Family BrandStrong Global Corporate Brand ( NIL )Specialization in food processing category marketing and distribution in UrbanmarketPresence of other product segments of food category : Dairy Products,Chocolate, Infant foodsPioneer and Leader so 1 st mover advantage in Noodles, Sauce, Ketchups andSoup market.Nestle symbolization of warm, family & shelter.Research and Development Division in IndiaNew Noodles Plant in Uttarnchal Weakness Generic Brand to Noodles in India Low rural market presence constraints Uniform Brand for all food category Brand Proliferation Opportunities Growing package and canned food market in India by 15% annually. High brand awareness of Indian consumer

 Other product category like Biscuits, Chips and Ready to Eat Market stillunexplored. Opportunity to be substitute to other snacks category of food products. Threats Competitors with long history in product category Internationally like, HeinzSauce and ketchups of Heinz Indian, Top Ramen in Noodle and Knorr Soups. Single product focused competitors like Heinz sauce and Wai Wai Noodles. Less Entry Barriers in the Market segment for product category ITCs strong base in Indian Market. Substitute Product to Product Segment.

Repositioning of Maggi Nestl India Ltd. (NIL), the Indian subsidiary of the global FMCG major, Nestl SA,introduced the Maggi brand in India in 1982, with its launch of Maggi 2 MinuteN o o d l e s , a n i n s t a n t n o o d l e s p r o d u c t . With the launch of Maggi noodles, NIL created an entirely new food category -instant noodles - in the Indian packaged food market. Because of its first-moveradvantage, NIL successfully managed to retain its leadership in the instant

noodlescategory even until the early 2000s.Over the years, NIL extended the Maggi brand to a variety of culinary products likes o u p s , s a u c e s a n d k e t c h u p s , a n d cooking aids among others. However, t h e s e product extensions were not as successful as the instant noodles. In 2005, NILstarted offering a range of new 'healthy' products under the Maggi brand, in a bidt o a t t r a c t h e a l t h - c o n s c i o u s c o n s u m e r s . This case looks at the various phases in the product life cycle of Maggi noodles inIndia. It talks about the various measures taken by NIL to keep the Maggi brandf r e s h i n t h e m i n d s o f Indian consumers. The case also talks about the variousextensions of the Maggi brand and tries to analyze why only the sauces a n d ketchups category, among all the other product extensions, managed to succeed.Maggi became successful because it understood consumers . The brand neverwanted to change Indian consumer's habit. It did not had ambitions about changingIndian's breakfast or dinner preferences. What Maggi did was to slowly attach itselft o I n d i a n c o n s u m e r ' s n e e d w i t h o u t d i s r u p t i o n . Maggi was also closely watching consumer preferences. When consumers wantedh e a l t h y f o o d , M a g g i l a u n c h e d A t t a N o o d l e variants that was healthy . Morei m p o r t a n t l y this move addressed the concerns of H o m e m a k e r s . T h e b r a n d extended itself to multiple segment but without diluting the core brand equity.Maggi did change the masala [taste maker]few years back and sales declined andt h e c o m p a n y w a s f o r c e d t o g o back to the old masala and nestle ran an a d d campaign ,that old taste is back.The resultant yellow masala-flavoured spongy strands were wolfed down by us andbefore you could say noodles, Maggi became a quintessential Indian food. As aconsumer, Maggi has

been part of numerous memorable experiences of my life.From being a midnight snack to helping with early hours of mugging for exams toeating plates of cheese and anda Maggi at the night canteen after an evening ofdrunken revelry.From hot Maggi after getting drenched in the rain to it being the first cookingexperience for numerous youngsters when the folks were away. From carrying packets of it on a trek to carrying packets for friends who live abroad (they insistthat the Indian flavours are unique). Everyone, rich or poor, has his or her ownM a g g i t a l e t o t e l l . As an observer of branding and advertising too, the brands a shoo-in for the IndiaMarketing Hall of Fame, if such a hall were ever to be constituted. For starters thiswas the brand that pioneered the entire category of packaged food in India. Note a s y i n a c o u n t r y w h e r e f r e s h l y c o o k e d f o o d w a s t h e n o r m . The outstanding sampling exercise apart, the first commercial for the brand wasone of the most memorable commercials of its time (from that great ad agency oft h e 1 9 8 0 s , H T A D e l h i ) . I t w a s probably the first example of Hinglish i n a mainstream commercial from the opening Mummy bhook lagi hai to the tagline that went Fast to cook and good to eat, Maggi makes a tasty treat and twom i n u t e s b e c a m e a p a r t o f t h e p o p u l a r l e x i c o n . It further discusses the measures taken by NIL to reposition Maggi as a 'healthp r o d u c t ' . T h e c a s e ends with a discussion whether NIL would be s u c c e s s f u l i n sustaining this new image for Maggi in the market.