1. maggi the-product-life-cycle

MaggiThe Product Life Cycle

Submitted By-

VIT b- school

Vellore

Introduction of Maggi 2-minutes

Noodles It’s a Brand of instant Noodle made

by Nestle India Ltd.

It was found by the Maggi family in Switzerland in the 19th century.

Nestle launched Maggi for the first time in India in the year 1982.

The Brand is popular in:

- Australia

- India

- Malaysia

- New Zealand

- Singapore

- South Africa.

Nestle wanted to explore the potential for such an Instant food among the Indian market.

It took several years and lot of money for Nestle to establish its Noodles brand in India.

Now it enjoys around 90% market share in this segment.

Over the years Maggi has launched several products under its Brand Name.

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

Time

Do

llars

ProductCategory Profits

ProductCategory Sales

IntroductoryStage

GrowthStage

MaturityStage

DeclineStage

0

Introductory Stage

• High failure rates

• No competition

• 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

Full-Scale Launchof New Products

STPD AnalysisSegmentation Targeting Positioning Differentiation

Age Kids Fast to cook

good to eat

Taste

Eating Habits Youth 2-minute

noodles

Flavours

Lifestyle of urban

families

Office goers Taste bhi health

bhi

Packaging

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

• Entrance of competitors

• 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 which the sales revived. Over the years, NIL also introduced several other products like soups and cooking aids under the Maggi brand.

•

Offered in more sizes,

flavors, options

Maturity 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 will be targeted at all age groups, particularly office-goers.

Many consumer products are in Maturity Stage

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 of decline depends on change in tastes or

adoption of substitute 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 Product Lines

Product Line Additions

Improvements/Revisions

Repositioned Products

Lower-Priced Products

SixCategories

ofNew

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 maggi2 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 Authoritysaid that it was a false claim.

4. Not purely vegetarian-

Maggi Noodles also contains the additives E150dand 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 attanoodle didn’t appealed them……because of other Substitute supplements in the market

Suggestive Promotional Strategies1. 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.

World Market Share

Maggi 94%

Top Ramen

4%

Other Local

2%

Maggi 94% Top Ramen 4% Other Local 2%

Thank you

What is the Product Concept?

• Product Attributes

• Branding

• Labeling

• Packaging

• Support services

• Introduction Stage – This stage of the cyclecould be the most expensive for a companylaunching a new product. The size of themarket for the product is small, which meanssales are low, although they will be increasing

• Growth Stage – The growth stage is typicallycharacterized by a strong growth in sales andprofits, and because the company can start tobenefit from economies of scale inproduction, the profit margins, as well as theoverall amount of profit, will increase.

• Maturity Stage – During the maturity stage,the product is established and the aim for themanufacturer is now to maintain the marketshare they have built up. This is probably themost competitive time for most products andbusinesses need to invest wisely in anymarketing they undertake.

• Decline Stage – Eventually, the market for aproduct will start to shrink, and this is what’sknown as the decline stage. This shrinkagecould be due to the market becomingsaturated (i.e. all the customers who will buythe product have already purchased it), orbecause the consumers are switching to adifferent type of product.

Product Life Cycle Examples

• Introduction - 3D TVs

• Growth - Blue ray discs/DVR

• Maturity - DVD

• Decline - Video cassette