INTRODUCTION BACKGROUND NESTLE INDIA LTDNestle 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.
THE COMPANYS HISTORYYear 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.
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!"
BRAND STORYLaunched 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.
MANAGEMENT STRATEGIES 4Ps EVALUATIONPrice 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
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 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.
BRAND STRATEGY IMC
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.
Promotional tools of communicationInitial 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.
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.
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 offerDiscount 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.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.
SALES AND MARKETING CHANNELMarketing channelsThe focus of our
market channel analysis is limited to culinary products, asmaggi
falls under this product category. Customer upper and middle class
familyStrategic intent selling and promotion form the strategic
intent for this distribution channelChannel Type Maggi followed a
market type channel for its culinary productsMarketing 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
.Marketing Channel flows: -Following are the different marketing
flows in Maggi marketing channel Physical Goods flow Information
Flow Payment Flow Promotion Flow Title Flow
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 CONSUMERSHealth 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 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
.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.
DEMOGRAPHY AND PSYCHOGRAPHY OF CONSUMERSDemography: - 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.
CONCLUSIONThe 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!
BIBLIOGRAPHY Newspapers and Magazines Economic Times Brand
Equity Supplement 4Ps of Marketing Magazine Marketing Today
Magazine
WEBLIOGRAPHY www.nestle.in www.maggi-club.in
www.indianjournalofmarketing.com
www.careerdynamo.com/marketing_journals.html www.wikipedia.com21 |
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