The Maggi Brand in India Brand Extension and Repositioning

Made By: Gaurav Poonam,Kamal Pragya

Introduction to case
y This case looks at the various phases in the product life cycle y y y y

of Maggi noodles in India. It talks about the various measures taken by NIL to keep the Maggi brand fresh in the minds of Indian consumer. The case also talk about the various extension of the Maggi brand. It further discuss the measures taken by NIL to reposition Maggi as a health product. The case ends with a discussion whether NIL would be successful in sustaining the new image for Maggi in the market.

DID YOU KNOW......

Nestle is a Swiss company founded in 1866 by Henri Nestle.

DID YOU KNOW......

Nestle invest around CHF 1.5 billion in Research and Development every year.

DID YOU KNOW......

Nestle market in 130 countries across the world.

DID YOU KNOW......

Nestle manufactures around 1,000 different product and employs some 2,50,000 people.

DID YOU KNOW......

Nestle sells over a billion products every day.

Maggi in India
y Maggi noodles is a brand of instant noodles made by

nestle. y It was founded by the Maggi family in Switzerland in the 19th century. y Maggi in India has been well known for its flagship product of instant noodles with its various desi sub-segments such as traditional dal atta noodles, vegetable atta noodles and rice noodles.

Maggi in India
y Nestle unleashed brand Maggi in India almost 25 yrs ago in

1983 with the launch of its 2-minute noodles in its masala tomato and chicken flavours followed by many other flavours down the line. y When Nestle India launched Maggi in the country it used the tagline Fast to cook and good to eat,to not only promote the product ,but also to educate the ever growing aspirant consumer about the advantages of using it.

The Maggi Brand in India Brand Extension and Repositioning

y Nestle India Limited is the market leader in Indian Noodle

Market with its Maggi Brand of Noodles which was pioneer brand launched in 1983 in the packaged food market of India. y It took the challenge and established Maggi in Indian market considered to be conservative and typical about food consumption. It appropriate realization of target segment, effective positioning and effective promotion and sales made Maggi to Noodles in India as Xerox it to photocopier. NIL had introduced sauces, ketchups and soups under Maggi brand to reap benefit of brand popularity and image and contribute to financial gains by 1990. y Maggi also became successful in sauces, ketchups and soups Market in India.

y To fulfill novelty needs of customers and revitalize Maggi

Noodles Brand NIL made different attempts by introducing new formulation to new taste but customers resisted change and Maggi had to reintroduce Maggi Noodles in same taste. y Maggi Noodle had till 2005 five product line on noodles with four variant in Maggi 2 Minutes Noodle. In 2006 in compliance with NIL target to be health and Wellness Company Maggi repositioned it as health and taste food products. NIL has also introduced with taste and product line in Sauces and Soup Market under Maggi to catch new segment, revitalize brand, compete with other producers and fulfill expectation of customers.

y In 2005 Maggi brand worth was 3.7 billion from 1.7 billion

market worth in 1.7 billion in 2003. Maggi Noodle is Market leader with around 80% market share in Noodles/Pasta and Maggi Sauce is market leader with almost 37% of market share in 2005 in 1.8 billion market of India. Knorr has taken over Maggi in Soup market recently. y In 2005 Maggi was the highest spender in the Promotion and Sales in the Indian Market in the Noodles Category.

y Maggi is competing with Heinz Sauces and Ketchup, Knoor

Soups, Kissan Sauces and Ketchup, Top Ramen, Sunfeast Pasta Wai Wai and 2 PM in corresponding categories of products and variants.

y July 2001-Maggi replaced Nescafe as core brand

PRODUCTS LAUNCHED BY MAGGI

y In 2001-Tomato and curry flavored Maggi noodles and y y y y

Maggi Imli Sauce In 2002-New product Maggi Chinese Noodles was introduced Extended Maggi soup brand to Maggi Hot Cup Maggi Hot Cup had two variants-Tomato and Chicken to compete with knorr soups During 2003,NIL test-marketed ready-to-cook recipe mix called Maggi 2 Step Mixes in 3 variant-PaneerTikka ,Chicken Biryani and Chicken Tikka In 2004 launched Maggi cube,a cooking aid product

STRATEGIES ADOPTED BY MAGGI

y During 2001-2002 Smaller packs at lower price point y 50gm packs at Rs5 y Nescafe sachets priced at Rs. 2 y Smaller packs of chocolate products y Maggi Soups were available in 3 different sizes

STRATEGIES ADOPTED BY MAGGI(cont.)

y To improve sales of small packs was to improve their y y y y y

distribution in market NIL sold soups through vending machines These vending machines were placed at busy locations such as offices,railway stations In 2004,NIL roped in Preity Zinta to endorse Maggi noodles in order to strengthen the brands image In 2004,NIL signed on Ranvir and Vijay, to promote Maggi sauces. Tag line changed from Its different! to Enjoy the difference!

COMPETETORS OF MAGGI
y In 2003,Top Ramen introduced Cup Noodles as iny y y y

between-snack HLL launched knorr Annapurna Soupy Snax at Rs. 5 per pack Another player was WaiWai In 2004,Heinz shed its premium tag by bringing down the prices of its ketchup by 30 percent Maggis market share came down to 39.7% in period from jan to sep 2004 from 41.9% in 2003

The Health Angle

y Health and wellness y Launch of Vegetable Atta Noodles y With a tagline Taste bhi, health bhi y New maggi noodles y Healthy soups y Tough competition was given by Dabur India Ltd, Heinz,

HLL y Tagline Enjoy the difference y Launch of Dal Atta Noodles.

SWOT Analysis of Maggi as Brand

Strengths 1)Market leader in their segment. 2)Strong brand loyal consumer base. 3)Wide range of distribution channel. 4)Innovative product

Weakness Generic Brand to Noodles in India y Low rural market presence constraints y Uniform Brand for all food category y Brand Proliferation

Opportunities Growing package and canned food market in India by 15% annually. y Opportunity to be substitute to other snacks category of food products. y High brand awareness of Indian consumer y Other product category like Biscuits, Chips and Ready to Eat Market still unexplored.

Threats Competitors with long history in product category Internationally like, Heinz Sauce 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.

y y y y y

Problem
y Maggi sales declined in 1990s. y Competition increased in noodles segment. y New product in market but rejected by consumers,due to

taste.

Possible Alternatives
y Strengthen and use the Distribution : NIL should focus

on distribution channels and use of the distribution channel to expand its market to Rural India with products targeted to the market. It is the way it could increase its volume of sales. Increase the Usage of Maggi Brand Products: Since Maggi Noodles and Maggi Sauce is market leader it has to adopt strategy to increase the usage of the product to protect its market share.

Contd.
y Lunch Health Awareness Promotion Campaign : NIL

should launch Health Awareness campaign to educate consumers about the benefits of health food. It could sponsors health camps, publish health information. Enter into other product category like Biscuits, Chips and Snacks with New Brand : To enlarge its domain, NIL should enlarge its product segment. It would spread economies of scale to customers in the form of price.

STP Analysis
Segmentation: Age Lifestyle Eating habits of urban families Targeting: Kids Youth Working Women Office goers Positioning: Easy to cook, good to eat. 2-minute noodles Taste bhi, Health bhi Enjoy the difference

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