INTRODUCTION BACKGROUND NESTLE INDIA LTD

Nestle India Limited (NIL) is the Indian subsidiary of the global FMCG major, Nestle SA.

Nestle India Ltd. Introduced Maggi Brand to the Indian consumers with the launch of Maggi

2 Minute Noodles, an instant food product, in 1982. With the launch of Maggi noodles,

Nestle India Ltd. created an entirely new food category - instant noodles - in the Indian

packaged food market. Nestl, which world knows as cautious and conservatory company is

a Swiss originated 140 years old Multinational. The man at the helm is Swiss national Carlo

Donati, an all inspiration and image of the company. His philosophy isbottom line dictating

top line based on delegation and decentralization. It resulted from a merger in 1905 between

the Anglo-Swiss Milk Company for milk products established in 1866 by the Page Brothers

in Cham, Switzerland and the Farine Lacte Henri Nestl Company set up in 1867 by Henri

Nestl to provide an infant food product. Nestl Indias business objective and that of its

management and employees is to manufacture and market the Companys products in such a

way as to create value that can be sustained over the long term for consumers, shareholders,

employees, business partners. The product mix of Nestle India consists of milk products and

baby products (42.5%),beverages (29.3 %), processed foods (14.4 %), chocolate and

confectionary (13.8 %).Nestle India plans to expand business into similar and diversified

product categories. With an Employee strength of over 3000 and turnover of US$ 497 million

in 2003, Nestle India is one of the leading companies in the FMCG space in India. The

company is acknowledged among Indias most respected companies and among the top

Wealth Creators of India.

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 THE COMPANYS HISTORY

Year 1870

The Swiss Julius Michal Johannes Maggi (1846-1912) inherited the family business: a mill

in Kemptal, near Zurich.

Year 1886

Several women were factory workers, thus the time available for housework and the

preparation of meals was considerably reduced, and working class families suffered from

poor nutrition. In view of this state of affairs, the doctor Schuler recommended the wide use

of dried vegetables: peas and beans, given their rich nutritive value. Julius Maggi produced

appliances for roasting and grinding these vegetables, to make flour from peas, beans, lentils

etc., and enabling housewives to make a quick nourishing soup.

Year 1900

At the Universal Exhibition, Maggi won several medals and grand prizes. Jules Magi set up

home in Paris. The French head office was on the Placede lOpra, and the factory on the

Boulevard Arago. Maggi now had depositories in Paris, Berlin, Singen (Germany), Vienna

and Bregenz (Austria). A number of advertising texts written by Franck Wedekind had strong

military undertones:

Year 1947

Maggi merged with the Nestle India firm.

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Year 1948

Sopad took over from Nestle to handle production and marketing for Nestle and Maggi

products in France. Maggi now had eleven factories throughout the world.

Year 1982

Nestle India Ltd. Introduced Maggi to the Indian consumers with the launch of Maggi 2

Minute Noodles, an instant food product, in 1982. With the launch of Maggi noodles, Nestle

India Ltd. created an entirely new food category -instant noodles - in the Indian packaged

food market.

Year 1984

Eating habits changed, and Maggi adjusted their products, with low fat Bouillons, Bouquet

Garni ("a little extra to add taste and give your dishes a festive look!"), and "Soupes

Moulines", a new line to add to their "Soup Time" range. The ad announcing the new

"Maggi souffl mix" had two sections: on the "BEFORE" page, a man disguised as a oriental

wise man levitates a magnificent ouffl, on the "AFTER" page, the same man holds the

Maggi sachet in his hands "The magic formula to a successful souffl!"

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 BRAND STORY

Launched in 5 flavors initially Masala, chicken, Capsicum, sweet & sour, and Lasagna

Maggi had to fight hard to be accepted by Indian consumers with their hard-to-change eating

habits. The packaged food market was very small at this time, Nestle had to promote noodles

as a concept, before it could promote Maggi as a brand. It therefore devised a two-pronged

strategy to attract motherson the convenience plank and lure kids on the fun plank.

Gradually ,the market for instant noodles began to grow. The company also decided to focus

on promotions to increase the brand awareness. In the initial years, Nestle promotional

activities for Maggi included schemes offering gifts (such as toys and utensils) in return for

empty noodles pack. According to analyses the focus on promotion turned out to be the single

largest factor responsible for Maggis rapid acceptance. Nestles Managers utilized

promotions as measured to meet their sales target. Gradually ,sales promotion became a

crutch for Maggi noodles sales. Later manyof the Maggis extensions also made considerable

use of promotional schemes. The focus of all Maggis extensions was more on below the line

activities rather than direct communication. In addition to promotional activities, Maggi

associated itself with mainstream television programme and advertised heavily on kids

programme and channels. After its advertisements with taglines likemummi bhookh lagi

hai,bas do minute and fast to cook good to eat Maggis popularity became highly attributed

to its extremely high appeal to children. As aresult, Maggis annual growth reportedly

touched 15% during its initial years.

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 MANAGEMENT STRATEGIES 4Ps EVALUATION

Price

Considering the price points in the market for maggi, it should continue to position

itself in the Snacks.

Affordable by all income groups
Differentiated packaging
Lower price point strategy
Millipack for Rs.5 Targetting the lower middle class as well as those who want to

consume in lesser quantity.

Inflation effect on volume than price - Reduction of 100gm pack to 95gm, keeping

price as Rs. 10 only

Multi packs at cheaper price per noodles
Healthier products at higher price.

.Place

Wide distribution network.

Limited penetration in rural areas.
The company has a complex supply chain process
. Target hawkers/roadside eating joints
The distribution network is well spread
Easily available in all kirana stores, retail store etc.
Sales territories, Warehousing system.

Product

Quality
Models and sizes
Packing
Brands
Service

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Promotion

Nestle also followed up these launches with Its different ad campaigns.

Nestle was focusing their ads based on childrens taste and health.
In addition to promotional activities, Maggi associated itself with mainstream

television programme and advertised heavily on kids programme and channels.

Maggi is now targeting its products at the entire family and not only kids.
Maggi has recently launched MAIN AUR MERI MAGGI campaign in

commensuration of 25 years of Maggi in India.

Packaging (Often referred as 5th P)

Many consumers are not aware of the fact that packaging contributes substantially to

our current standards of living. Its state-of-the-art packaging that has made certain

items conveniently available to the general public and easy to handle. In the past

hundred or so years, the demands producers and consumers place on packaging have

developed significantly. While initially the transportation and protection of goods

were the primary functions served by packaging, today, it also acts as a brand-

defining marketing instrument as well as an innovative and practical shell with ever-

new advantages for consumers

Contemporary 21st century industrialized societies survive on a diet of the many,

highly popular TV cooking series. At the same time, the number of pre-cooked, easily

manageable dishes in which packaging plays a pivotal role is growing increasingly in

retail outlets. Whether discounter or gourmet store, all retailers know the value of

convenience. And convenience is made possible by sophisticated, market-oriented

packaging solutions, which often merely need to be popped in the oven or microwave,

contents and all, before serving.

Packaging innovations can be seen from two varying perspectives, one wherein in

adds to the basic functionality of the product through providing additional benefit to

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 the consumers and second would be when it enables trials and increased usage by

virtue of pack size (small).

Expected product benefit is proper packaging to ensure customers a good quality,

fully packed seasoning tastemaker at affordable price. The beliefs associated with a

brand constitute the brand image, and the customer may have uninformed beliefs

which are likely to generate a negative image about the brand. The marketer must

ensure that consumers have all relevant and correct information about the brand to

facilitate formation of a positive brand image. Certain beliefs develop dare neutral and

are more dependent on the situation or circumstances of purchase or usage of the

product.

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 BRAND STRATEGY IMC

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It is integration of all marketing tools, approached and resources within a company which

maximizes impact on consumer mind and which results into maximum profit at minimum

cost.

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Promotional tools of communication

Initial Strategies of Maggi:-

Maggi has faced lot of hurdles in its journey in india

The basic problem the brand faced is the Indian psyche
Initially Nestle tried to position Maggi in the platform of convenience targeting the

workingwomen. However, the sales of maggi was not picking up despite of heavy

media advertising. To overcome this Nestle conducted a research. Nestle promotion

positioning the magi product as a convenience product for mother and as a fun

product for children. The maggi Tagline, Fast To Cook Good To Eat was also in

keeping with its positioning. They promoted the product further by distributing free

samples. Giving gifts on return of empty packets, etc. Effective Tagline

Communication.

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Different communication media used by Maggi

TV Ads:-

Initially maggi was targeted at the workingwomen and later the upper middle class

kids. Maggi was a sponsor for Hum Log, a popular television show on Doordarshan,

Indias sole channel in 1984. Maggi is now targeting its products at the entire family

and not only kids. Maggi has recently launched Main Aur Meri Maggi campaign in

commensurate of 25yrs of maggi in India.

Print Ads: -

Maggi does not focus heavily on print media. During its launch since its initial target

audience was mother and kids. Some adv in the print media were used to highlight the

convenience factor of maggi. Recently maggi came out with advertisements in some

weekly magazines for its new atta noodles and rice noodles varients. Maggi rice

noodles mania had the highest column centimeter in print among the instant food

category. Growth in noodles/pasta print advertisement grew by 42% share in

2010.Maggis expenditure on print media is much lower compared to other media.

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 Sales Promotion: -

To introduce new products

To attract new customer and retain the existing ones
To maintain sales of seasonal products
To meet challenge of competition tools
Exchange schemes
Price Off offer Scratch and win offer

Discount offered to retailers: -

7%discount on 6-piece pack (56MRP), 5 rupee discount on 8-piece pack(78MRP). These are

promotional schemes given to retailers. Magg i is coming up with schemes like giving one

soup pack with 8-piece pack. Inpast company had promotional schemes like 4 piece pack

with that ofRs.36 instead of Rs.40.

Display: -

Large pack sizes at the top with decreasing pack sizes as going downward. This is because

that for a retail outlet the more value is generated large pack thus they try to project big size

at convenience place.

Public Relation: -

The Maggi Club the children under 14 were invited by press adv and distribution of leaflets to

become a member of maggi club any sending logos cut from 5 empty maggi wrappers. Maggi

projected it as maggi clubbers are fun lovers and intended to use it as reference group. Benefit

offered tomaggi- clubbers are various games like snap safari game, Cap and masksets, travel

india game, Disney today comic. To obtain each gift themember has to send 5 wrappers as

purchase proof. Some special privilegeswere given to regular members time to time like,

discounting tickets ofAppughar. Organisation maggi school quizzes and sketching.

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Result of PR Activity: -

Getting closer to regular customer boosted the sales. Making valuable direct marketing database.

Recently, again, they have started maggi fan club. This time it is operating online and they are

provided user name and password.

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 SALES AND MARKETING CHANNEL

Marketing channels

The focus of our market channel analysis is limited to culinary products, asmaggi falls

under this product category.

Customer upper and middle class family

Strategic intent selling and promotion form the strategic intent for this distribution

channel

Channel Type Maggi followed a market type channel for its culinary products

Marketing Channel Strategy: -

A hybrid strategy involving both a push as well as a pull strategy is used by maggi.

The push strategy employed through setting targets at various levels of the distribution

channel and a pull strategy is exercised through aggressive advertising and in store

promotion

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.Marketing Channel flows: -

Following are the different marketing flows in Maggi marketing channel

Physical Goods flow

Information Flow
Payment Flow
Promotion Flow
Title Flow

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MARKET PENETRATION STRATEGIES

Maggi started with promotional campaigns in the school to see the reaction of

children after eating Maggi.

Started their advertising straight focusing on kids.
Introduced new products like atta noodles dal atta noodles cuppa mania.
Products are made available in different packages like 50,100,200,400 Gms.
Keep on conducting market research to understand changes in market.

Though Maggi has been successful every time, there were times when it faced challenges.

Some of these are:

Sales saw decline in 1990: The Company saw a decline in the sales in 1990. When the

company tried to find out what the reason was, they came to know that there was

some thing wrong with the formula that spoiled the taste. So the formula was changed

from fried base to oiled dried base

Competition increased in noodle segment: When Maggi was enjoying being the only

noodle offering by any company Top ramen entered the market as a competition. This

was a big challenge for Maggi. Though Top Ramen couldnt do well in India.
New product launched in market but failed- Nestle decided to expand its offerings by

offering Dal atta noodles & Sambhar flavor noodles. But these products were not

welcomed by the people the very special taste of Maggi was still ruling the consumer
Maggi launched some new products: Ketchups, Soups, Taste makers etc. but they

were not successful.

TASTE AND PREFERENCES OF CONSUMERS

Health is the flavor of the season. Food companies in India are growing aware of the

increasingly changing consumption trends and taste preferences among the Indian junta. No

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surprises, but this is the reason more and more companies are coming up (or are actually re-

marketing) with products that are healthy. Take for example Coke and Pepsi; both have

already started looking into the non-carbonated drinks category section. Maggi first

introduced in the market Maggi Atta Noodles which it claimed was a healthy food as it

was made of wheat flour followed by soups.

Nestle India, in an effort to carry on with its trend of providing the Indian consumers healthy

food recently introduced a range of Healthy Soups. The entire range consists of the

following; maggi tomato, mixed vegetable, tomato vegetable ,mushroom, chicken, sweet corn

chicken and hot and sour vegetable. The product is priced at Rs 25 for 70 grams

.Maggi became successful because it understood consumers . The brand never wanted to

change Indian consumers habit. It did not had ambitions about changing Indians breakfast or

dinner preferences. What Maggi did was to slowly attach itself to Indian consumers need

without disruption

.Maggi was also closely watching consumer preferences. When consumers wanted healthy

food, Maggi launched Atta Noodle variants that was healthy . More importantly this move

addressed the concerns of Homemakers. The brand extended itself to multiple segment but

without diluting the core brand equity .

Maggi over these years have made lot of mistakes. It made mistakes because the brand was

willing to experiment. More importantly the brand learned from those mistakes and corrected

itself .Maggi also invested heavily in brand building. The campaigns for one of Maggis

products were always there in the media which kept the brand fresh in the mind ofthe

consumers. Maggi personifies the basic principles of understanding consumers ,innovating

and investing in the brand .

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Maggi is one packaged food brand that has only seen its popularity grow in the past many

years and the secret to the success is that instead of trying to change thefood habits of

consumers, it has tried to align itself with local tastes and preferences with the fast to cook

and good to eat promise.

To commemorate its successful journey through a quarter of a century in the worlds largest

consumer market, the brand, last year, launched an innovative campaign inviting its loyalists

to share with it their Maggi stories and promised to broad cast them to the world at large,

thereby, making them the superstars overnight. Along with television commercials, which

aired individual consumer stories of their lasting memories of Maggi, the brand displayed

pictures of these loyal customers on the Maggi packs. Nestle also introduced a website Me

and meri maggi in for engaging with them.

The company also rewarded its consumers by adding to the Maggi portfolio, thathitherto had

sauces and soups in various flavors, a range of prepared dishes andcooking aids such as

Maggi Bhuna Masala and Maggi Pazzta. So far focussed on urban consumers, the company

also made a pitch for rural consumers by launching Maggi Rasile Chow noodles at an

inviting price of Rs4. Again, local tastes andrecipes have been at the core of all these

marketing innovations.Creating delight and happiness in everyday meals is not just about

providing tasty food. It is about providing taste and health in a convenient combination, says

Shivani Hegde, general manager, foods.

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DEMOGRAPHY AND PSYCHOGRAPHY OF CONSUMERS

Demography: -

1) Age and sex: people of different age groups consume Maggi products. Children, teenagers,

adults as well as old people consume them. Both genders male and female consume them.

2) Income: - Maggi products are available at reasonable prices. So the lower, middle as well

as the higher class consume them.

3) Religion and nationality: - Maggi products are famous and are consumed by people of all

religions and nationality.

Psychography: -

1) Attitude: - Consumers of maggi have a positive attitude towards the product, which makes

it the leader in the market. Maggi dominates the market.

2) Lifestyle:- Lifestyle determines the way of living of people. It describes how a consumer

leads his life. All consumes Maggi products.

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 CONCLUSION

The food processing business in India is at a nascent stage. Currently, only about10%

of the output is processed and consumed in packaged form thus highlighting huge

potential for expansion and growth. Traditionally, Indians believe in consuming fresh

stuff rather then packaged or frozen, but the trend is changing and the new fast food

generation is slowly changing. Riding on the success of noodles, Nestle India, tried to

make extensions of the Maggi brand to a number of products like, sauces, ketchups,

pickles, soups, taste makers and macaroni in the mid-1990s. Unfortunately, the

macaroni and pickles didnt pick up as expected. The soups and sauces did somewhat

fine, gathering considerable sales volumes and have a satisfactory presence even

today. Maggi Noodles itself faced a bit of difficulty with respect to taste, and

nearly lost its position in the minds of Indian consumers in the late 1990s. When

Nestle changed the formulation of its tastemaker, the ominous packet that came along

with Maggi Noodles, a major chunk of consumers were put-off and sales started

dropping. Also, Maggis competitor Top Ramen took advantage of the situation and

started a parallel aggressive campaign to eat into Maggis market share. Butthe

company quickly realised this and went back into making the original formula coupled

with a free sampling campaign. This helped Maggi to win back its lost consumers and

pushed up its sales volumes again!

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 BIBLIOGRAPHY

Newspapers and Magazines

Economic Times Brand Equity Supplement 4Ps of Marketing

Magazine Marketing Today Magazine

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 WEBLIOGRAPHY

www.nestle.in
www.maggi-club.in
www.indianjournalofmarketing.com

www.careerdynamo.com/marketing_journals.html
www.wikipedia.com

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