Strategic Brand Management

BRAND STUDY EXERCISE on

PRESENTATION BY
ABHISHEK PAN (02)
ADITYA SHETTY(03)
ARPIT CHABBRA (08)
SNEHI JAIN(27)
HARSH PATEL(41)
SURYAPRATAP
CHAUHAN(54)

MOTHER BRAND.NESTLE!
Nestl

S.A is a multinational packaged foods

company founded and headquartered in vevey,
switzerland
Set up in 1866 by Henri Nestl
Produces Beverages,milk products,cooking
aids,processed foods,chocolates etc.
Presence in 83 Countries worldwide with 509
factories spread across the globe
World leader in coffee,mineral water & chocolates
Ranked 55 in 2002 Fortune 500 list and established
itself one of the most successful FMCG company

Continued.
Entered

India in 1959 through Nestle India

Manufacturing Operations began in 1962 from
Moga,Punjab to produce condensed milk brand
Milkmaid
In 1964 production of Nescafe started at the
same factory
Some of the products including Condensed
milk(100%),baby food(87%),Coffee(60%) &
Ketchup(43%) were market leaders in their
respective categories
By 2001 Nestle India was able to generate
revenue of 18bn rupees with a net profit of
1.7bn
Was adjudged the third largest food company

Giant In The Making

Maggi

was founded by Maggi family in

Switzerland in 19th century & was
merged with NESTLE in 1947.
Introduced in India in 1982
Launched Instant Noodles, soups,
ketchups & pickles
Created Noodles market from scratch
Launched Maggi with a tagline Fast
to cook & Good to eat

STDP ANALYSIS OF MAGGI

Segmentation
Based on lifestyle
Based on habits of urban families
Targeting
Kids and students
Office goers
Positioning
With statements such as 2minutes noodles and Easy to
cook, good to eat
Differentiation

SWOT ANALYSIS
STRENGTH
Market leader in their segment
Strong brand loyal consumer base
Wide range of distribution channel
Product according to the need of
Indian consumer
Innovative Product

WEAKNESS
Product are dependent on
each other
Not so much presence in
rural market

SWOT ANALYSIS

OPPORTUNITY
Increasing number of working youth
Product has been acceptable in youth
category
Shift to rural market
Changing preference of consumer
towards Chinese food and fast food.
Can foray into other food markets with
its strong Brand name

THREAT
Price war with competitors.
Strong presence of regional
competitors
Consumers dont perceive it
as a Healthy Product

PESTLE Analysis

Political:- Changing regulations surrounding food standards and marketing

actions
Economical:- Awareness and knowledge of changing inflation, economic
growth rates and income levels
Also, changing consumer budgets, rise of the cost conscious consumers
Rising price of raw materials

Social:- Changing consumer attitudes- move towards healthier products in

line with government initiatives

Technological:- Rise of social media, consumers interacting with firms and

being able to do so across a range of platforms
Innovation in the products and e-commerce as a platform for development

Legal:- Changing nature of regulation

Need to adhere to global guidelines and changes across different
international markets

Environmental:- Increased attention towards corporate social responsibility

Environmental concerns from consumers including concerns over
packaging/ repackaging

PRODUCT LIFE CYCLE OF MAGGI

INTRODUCTORY
STAGE

Full-Scale
Full-Scale Launch
Launch
of
of New
New Products
Products

High failure rates

No competition

Frequent product modification

Limited distribution

High marketing and production costs

Promotion focuses on awareness and information

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 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

GROWTH
STAGE

Increasing rate of sales

Entrance of competitors

Offered
Offered in
in more
more
sizes,
sizes,
flavors,
flavors, options
options

Initial healthy profits

Promotion emphasizes brand ads
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

Maturity Stage

Many
Many consumer
consumer
products
products are
are in
in
Maturity
Maturity Stage
Stage

Declining sales growth

Saturated markets
Extending product line
Stylistic product changes
Heavy promotions to dealers and consumers
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

Decline Stage If no product innovation

brought

Long-run drop in sales

Large inventories of
unsold items

Elimination of all nonessential

marketing expenses

MSG issues

Maggi banned from market

Rate
Rate of
of decline
decline depends
depends on
on
change
change in
in tastes
tastes or
or
adoption
adoption of
of substitute
substitute products
products

MARKETING
MIX OF
MAGGI

PRODUCT
Maggi 2 Minute Noodles - Tricky Tomato, Chicken, Masala, Romantic
Capsica and Thrillian Curry.
Maggi Vegetable Multigrainz Noodles
Maggi Vegetable Atta Noodles
Maggi Cuppa Mania - Chilly Chow Yo and Masala Yo
Maggi Oats Noodles
Maggi Sauces
Maggi Pichkoo
Maggi Pazzta
Maggi Healthy Soups
Maggi Magic Cubes
Maggi Coconut Milk Powder
Maggi Masala -ae- Magic
Maggi Bhuna Masala
Maggi Pasta and Pizza Sauce

PLACE
Maggi has followed the distribution channel of Nestle to Distributor to Retailer to Consumer, as a
chain system is helpful in proper distribution of the product. Even if you go in the Himalayas, you
will find Maggi selling there at select places. This single factor distribution, has been the
backbone for the success of the product.
Nestle- The Company has decentralized the process of manufacturing where every plant is
responsible for its own production. It follows a twofold path for distribution. In the first, the
product is available to every local store and the second where the stock is available for every malls
and shopping centres.
Distributors- The Company offers its distributors a clear-cut margin of 6%. In this scheme, the
distributor makes advance payment to the company but supplies the product on credit to the
retailers.
Retailer- The retailer in turn gets a 15% margin on promotional products and 10% margin on
normal products.

PRICE

Maggi has a penetration pricing strategy because it knows it has to penetrate the
market the world over. There are many indirect competitors to Maggi as well.

Maggi has a very clear-cut policy regarding its prices. From its initial years it has
kept low pricing policy because, its consumers mostly belong to the average
middle class group.

To make the product affordable they had to tone down their prices but the
volumes the product generates has helped the company in maintaining a healthy
profit.

Therefore, the prices have always been kept normal without any dramatic
changes. In order to keep with the changing economic times Maggi has reduced
the quantity, instead of the prices.

Along with this, to cater to the middle and low income class customers, Maggi
offers different sizes of packets at various prices so that the customer can buy as
per budget.

PROMOTIONS
When the parent company Nestle decided to launch Maggi in India, its promotional activities
included creating awareness amongst the females and kids. Toys and utensils were offered as gifts
along with packets of Noodles.
This turned out to be a huge booster for the brand and made it an instant household name. Maggi
advertised on kids channels and between main programs in the television. Its tagline 2 minute
noodles is known to be the smartest tagline in the advertising industry and is still very famous
amongst the consumers.
Maggi has also announced many offers and schemes over the years to attract its consumers like Fun
books, free Maggi products, scratch and win coupons, discounts and money back offer.
In an exciting commercial for Maggi Oats Noodles, a consumer can see the famous Bollywood actors
commending the product to the viewers. The convincing advertisement has proved to be a hit with
the audiences taking the company to new heights.
In all its campaigns, since the year 1982, the product has been advertised as 2 minute noodles.
The famous actor Amitabh Bachchan is also seen in the promotional activities of Maggi.
the Maggi masala for ready made food is advertised time to time to keep the product in the minds of
the consumer.
On the other hand, the 2 minute noodles are advertised heavily when there is a new variant such as
Oats noodles or Aata noodles.

Product Variants of Maggi

Physique

Well
Packaged
Food,
E
X Yellow &
T
Red
E
R
N
A
L
I
S
A
T
I
Reflection
O
N High on

Family
Value,
Trustworth

Constructe
d Source

Relationshi
p

Affection,
Trust,
Quality

Personality

Traditional,
Familiar

Culture

Familial
Affection,
Love

Self-Image

Constructe
d Receiver

Fast,
Tasty,
Convenien
t,

I
N
T
E
R
N
A
L
I
S
A
T
I
O
N

CBBE Model

Brand acceptance

Launched in 5 flavors initiallyMasala,Chicken,Capsicum,Sweet and Sour and

lasagnahad to fight hard to be accepted by Indian
customers
It devised a two-pronged strategy to attract mothers
on the convenience pack and lure kids on the fun
prank.
The company decided to focus on promotions to
increase brand awareness

Brand acceptance(contd)
The

focus on promotions turned out to be the

success in Maggi
Its advertisements like mummi bhookh lagi
hai,bas do minute and fast to cook good to eat
Maggi's popularity became highly attributed to
its extremely high appeal to children
With its packaging, brand extensions and
effective pricing maggi grew rapidly becoming
Nestles highest revenue generating brand

Technology impact
Nestl who owns Maggi has developed, and/or is a worldleader in a large number of different technologies
Fermentation and probiotics: The Nestl Research Centre
was one of the first to look at the molecular interaction of
probiotics with intestinal cells. We have sequenced several
probiotic genomes, so that we can better understand their
characteristics and mechanisms of action.
Healthier fats: We have also developed technologies that
allow us to use natural vegetable oils instead of partially
hydrogenated fats in ourMaggibouillon cubes and
seasonings

Technology impact(contd)
Nestle

India has about 1,500 permanent workers who were

directly involved in Maggi production across five plants in
India.
About 70-80 flour mills across the country, which supply
nearly 1,800 tonnes of flour each day to Nestl's five plants
200 tonnes of spices are used every month for the
manufacture of Maggi

Reasons for survival of Maggi

First mover advantage and quickly establishing it as
generic brand
Great loyalty of Maggi brand among its consumers
Instant noodle category growing at the rate of 23
per cent
Great taste, not matched by its competitors till no
Competitors not able to differentiate or give a
unique value proposition to give tight competition to
Maggi

Direct Competitors
Top Ramen Strategy
Aggressive in marketing
Roped Shah Rukh Khan as brand ambassador
Entered in distribution tie-up with Marico
Currently it has setup its own distribution
network
Hired new agency Datsu to give a marketing
push

Direct Competitors
Wai-Wai Strategy
Initially it restricted its market to eastern
market of West Bengal and Sikkim
Controlled 70 % of the market in both above
areas
Build up its own distribution network
Brand available in shelves of superstores as
well as Kirana stores.

Direct Competitors
Yipee Noodles Strategy
Direct communication to push sales via retailers,
providing leaflet to customers of Yipee quality and
safety standards
ITC is also wooing noodle lovers with advertisements
and on-field customer awareness programmes
After Maggi Yippe noodles is most sold with 18 %
market share
Strong support of robust distribution channel of
parent company ITC

Indirect Competitors
Knorr noodles Strategy

Unique

combination of noodles and soup which has earned

accolades in Indian market

Utilization of distribution channel of its parent firm Hindustan

Unilever Limited

Knorr used the electronic media, bill boards and internet for
promotion

Knorr products have the logo of Choices Foundation, an

international health board giving importance for health
benefits

Indirect Competitors
Patanjali Atta Noodles Strategy
Noodles will use rice-bran oil and not cheap
and inferior palm oil as used by others is
current focus of Patanjali
Jhat pat pakao, aur befikr khao is the
catchline of the Patanjali noodles
Utilisation of Patanjali wide distribution
network will aid in its noodle sales

Recommendations
Emphasis

on segments with age groups 2535 and above

Advertise its products by depicting attributes
related to health like nutritional values
Help customers perceiving the product as
healthy
Foray into other food products like Chips,
Chocolate etc. under its sole brand name

Future Challenges
Revive

Brand Reputation and Brand Image

Regaining the trust in the brand
Maggi is introducing new products (Maggi
OatMeal) to capture the lost market share
but adding new products will not guarantee
market share and comes at a cost
Ruined Brand Perception
Brand Repositioning and brand acceptance
by the customers who may have switched
or become non users
Rise in competition from substitute brands
that could position themselves better than
Maggi and try to beat Maggi down

Future Strategies
To

create value that can be sustained over the

long
term
for
consumers,
shareholders,
employees and business partners.

Maggi

should aim to create value for consumers

that can be sustained over the long term by
offering a wide variety of high quality, safe food
products at affordable prices.

The

company should continuously focuses its

efforts to better understand the changing
lifestyles of modern India and anticipate
consumer needs in order to provide convenience,
taste, nutrition and wellness through its product

Brand Repositiong as

Healthy and safe

Lead free

Nutritious

Trust worthy brand

Maggi can run
Hashtag, Social media and Interactive marketing
campaigns

(Social media campaign )-FB,Twitter,Instagram

Meri Maggi Se Judi Yaaydein

Play on the trust factor-Who do you trust the most ?

(social media campaign)

Second chances-When did you give a second chance to

someone

 Viral

video and an ad campaign with a brand ambassador

(Madhuri or Amitabh) of the maggi making process
highlighting cleanliness and highlight on the ingriedients
used
Ad campaign to position maggi as a brand that can be
trusted
Second chance ad campaign
Poster Ads
Radio ad campaignTrustworthy Maggi
Healthy and Safe Maggi
Everyone deserves a second chance
Addition of new products to the portfolio to capture
the lost market share which the brand is already doing
Focus on Customer Retention rather than Customer
Acquistion

THANK
YOU