Maggi

The Product Life Cycle

Prepared by
D. Ramakrishna
RIMS-KKD
 Introduction of Maggi 2-minutes
Noodles
 It’s a Brand of instant Noodle made  Nestle wanted to explore the potential
for such an Instant food among the
by Nestle India Ltd. Indian market.
 It was found by the Maggi family in
Switzerland in the 19th century.  It took several years and lot of money
for Nestle to establish its Noodles brand
 Nestle launched Maggi for the first in India.
time in India in the year 1982.
 Now it enjoys around 90% market share
in this segment.
 The Brand is popular in:
- Australia  Over the years Maggi has launched
- India several products under its Brand Name.
- Malaysia
- New Zealand
- Singapore
- South Africa.
 ISSUES
• Different phases product life cycle of maggi
• Why atta noodle was a failure?
• Strategies taken to establish new product
category
• What measures NIL should take to sustain the
image of a popular brand image.
• Stage at which maggi is in the product life
cycle.
 PRODUCT LIFE CYCLE

A concept that provides a way to trace the

stages of a product’s acceptance, from its
introduction (birth) to its decline (death).
 GRAPHICAL REPRESENTATION OF A
TYPICAL LIFE CYCLE
Introductory Growth Maturity Decline
Stage Stage Stage Stage Product
Category
Sales
Dollars

Product
Category
Profits
0

Time
 Introductory Stage
• High failure rates Full-Scale
Full-Scale Launch
Launch
• No competition of
of New
New Products
Products
• Frequent product modification
• Limited distribution
• High marketing and production costs
• Promotion focuses on awareness and information
• Nestlé India Ltd. (NIL), the Indian subsidiary of the global FMCG major,
Nestlé SA, introduced the Maggi brand in India in 1982, with its launch of
Maggi 2 Minute Noodles, an instant noodles product
• 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-
mover advantage, NIL successfully managed to retain its leadership in the
instant noodles category
 STPD Analysis
Segmentation Targeting Positioning Differentiation
Age Kids Fast to cook Taste
good to eat

Eating Habits Youth 2-minute Flavours

noodles

Lifestyle of Office goers Taste bhi Packaging

urban health bhi
families

Working
Women
Health
conscious
people
 Market Penetration Strategies
 Promotional campaigns in school.

 Advertising strategies: - focusing on kids.

 New product innovation according to the

need of consumers:
– Veg. Atta Noodles.
 – Dal Atta Noodles.
 – Cuppa Mania.

 Availability in different packages:

– 50 gms.

 – 100 gms.
 – 200 gms.
 – family packs (400gms.).

 Conducting regular market research

 Growth Stage
• Increasing rate of sales Offered
Offered inin more
more
• Entrance of competitors sizes,
sizes,
• Initial healthy profits
• Promotion emphasizes brand ads
flavors,
flavors, options
options
• Prices normally fall
• Development costs are recovered
• 10 yrs back it enjoyed around 50% market share in this segment which was valued at around
250 crores.
• During the 1990s, the sales of Maggi noodles declined, due to growing popularity of Top
Ramen , another instant noodles product.
• In order to improve sales , NIL changed the formulation of Maggi noodles in 1997.
• However, this proved to be a mistake, as consumers did not like the taste of the new noodles.
• In March 1999, NIL reintroduced the old formulation of the noodles, after which the sales
revived. Over the years, NIL also introduced several other products like soups and cooking aids
under the Maggi brand.
•
 Maturity Stage
• Declining sales growth
• Saturated markets
• Extending product line Many
• Stylistic product changes
Many consumer
consumer
products
products are
are in
in
• Heavy promotions to dealers and consumers
•
Maturity
Maturity Stage
Stage
Prices and profits fall

• In 2003 Hindustan Lever Ltd was all set to take on Nestle's bestselling Maggi 2-
minute noodles by launching a new category of liquid snacks under its food
brand, Knorr Annapurna.
• The new product, called Knorr Annapurna Soupy Snax, was priced aggressively at
Rs 5 and had four variants: two chicken options and two vegetarian.
• Like Maggi, Soupy Snax will be an in-between-meals snack and will be targeted
at all age groups, particularly office-goers.
 STPD Analysis
Segmentation to
Differentiation:
■ Classic Noodles –
5 – 10 yrs.
■ Veg. Atta Noodles –
Health Conscious.
■ Rice Mania – Teenage
■ Cuppa Mania – Office
goers, Working women.
Decline Stage If no product innovation
brought
• Long-run drop in sales
• Large inventories of
unsold items
• Elimination of all nonessential
marketing expenses

Rate
Rate of
of decline
decline depends
depends on
on
change
change inin tastes
tastes or
or
adoption
adoption of
of substitute
substitute products
products
 Extending the PLC

• Change product

• Change product use

• Change product image

• Change product positioning

 CATEGORIES OF NEW
PRODUCT/REVISING THE PRODUCT
New-To-The-World
New-To-The-World

New
New Product
Product Lines
Lines
Six
Six
Categories
Categories Product
Product Line
Line Additions
Additions
of
of Improvements/Revision
Improvements/Revision
New
New ss
Products
Products
Repositioned
Repositioned Products
Products

Lower-Priced
Lower-Priced Products
Products
 Analysis(why Atta Noodles Failed?)
• In 2005 Nestlé India
launched MAGGI Vegetable Atta
Noodles.
• Based on consumer needs
and evolving trends for more
whole grain based products.
• Extensive Research and
Development expertise to
develop Maggi Vegetable Atta
Noodles.
• Maggi Vegetable Atta
Noodles will provide the dietary
fibre of whole wheat to
facilitate good health and
wellness .
The health angle…
Comparing the prices…
 FAILURE CAUSES
1. Indian psyche-
The basic problem the brand faced is the
Indian Psyche. Indian Palate is not too
adventurous in terms of trying new tastes. So
a new product with a new taste that too from
a different culture will have difficulty in
appealing to Indian market.
2. Price-
The price of atta noodle was little more than maggi
2 minutes noodle
3. False claims-
In October 2008, Nestle mistakenly aired an advert
that noodle "help to build strong muscles and
bone". The British Advertising Standards Authority
said that it was a false claim.
4. Not purely vegetarian-
Maggi Noodles also contains the additives E150d
and E627.E627 is partly prepared from fish,and is
thus not suitable for vegetarians. E150d is
sometimes made from genetically modified maize
5. Lack of essential nutrients-
The new maggi atta noodles
as can be seen from the fig.
lacked essential vitamins A,
C,also the fat content was
more then carbohydrates
6. Targeted health conscious
people…………but atta
noodle didn’t appealed
them……because of other
Substitute supplements in
the market
 Suggestive Promotional Strategies
1. They should conduct test marketing before launching new
product.
2. Focus on creating distinctive image, based on twin benefits of
“INSTANT” and “HEALTHY”.
3. Conduct promotional campaigns at schools in small towns
with population more than 10,000.
4. Strengthen the distribution channel of the rural areas within
100 KM of all the metros.
5. Launch new advertisement campaign (T.V., Radio and print
media commercials) with the brand ambassador.
6. Conduct Market Research to find out the market penetration
of the product in the rural areas covered.
 Current Scenario of Maggi
 Leading Brand in India as
well as World.
 Current Sales: Approx.

– 90000 boxes

– Rs. 4,79,49,000 in
Mumbai
– 10,00,000 boxes

– 55 cr. in India
 Reasonable competitive
pricing.
 Creative interaction blogs
for customers:
– www.maggi-club.in
 Focus mainly on Health
Benefits.
Thank you
 What is the Product Concept?
• Product Attributes
• Branding
• Labeling
• Packaging
• Support services
• Introduction Stage – This stage of the cycle
could be the most expensive for a company
launching a new product. The size of the
market for the product is small, which means
sales are low, although they will be increasing
• Growth Stage – The growth stage is typically
characterized by a strong growth in sales and
profits, and because the company can start to
benefit from economies of scale in production,
the profit margins, as well as the overall
amount of profit, will increase.
• Maturity Stage – During the maturity stage,
the product is established and the aim for the
manufacturer is now to maintain the market
share they have built up. This is probably the
most competitive time for most products and
businesses need to invest wisely in any
marketing they undertake.
• Decline Stage – Eventually, the market for a
product will start to shrink, and this is what’s
known as the decline stage. This shrinkage
could be due to the market becoming
saturated (i.e. all the customers who will buy
the product have already purchased it), or
because the consumers are switching to a
different type of product.
 Product Life Cycle Examples
• Introduction - 3D TVs
• Growth - Blue ray discs/DVR
• Maturity - DVD
• Decline - Video cassette