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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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OVERVIEW

Nestle India Ltd. introduced Maggi brand in India in the year 1982 with its launch of Maggi 2 Minutes Noodles, an instant noodles product. With the launch of Maggi noodles, entirely a new food category was created in Indian food market. Because of its first mover advantage, it successfully managed to retain its leadership in noodles sector. It is the highest sold noodles in India, capturing 75% of Indian market. It is most loved eatable among children, youth and working class as it is easy to cook and does not require much efforts. It was first invented in Europe by a person named Julius Maggi. It contributes to around ¼ of revenue to Nestle.

OBJECTIVES OF MAGGI

To meet the various needs of the customers and deliver sufficient values with consistent high level quality to satisfy them. It believes in its slogan of “Eat tasty, Stay healthy”.

LAUNCH STRATEGY   FOLLOWED BY MAGGI

 TWO MINUTES NOODLES FORMULA: Maggi arrived in India in 1983-the year when India lifted Cricket World Cup for the first time, it instantly caught the nation's attention with its strategy of “Two minute noodles”, tasty noodles which can be cooked in no time with an authentic Indian taste loved by all age groups.

 PROMOTIONAL STRATEGIES:  In 1990s, through its promotional strategies like advertisement on television, it portrayed working women as multi-tasker who can efficiently manage both home and office, which attracted many Indian women.

 TARGETING THE RIGHT SEGMENT:  Maggi with its idea of two-minute instant noodles, its authentic Indian taste and various promotional strategies was able to attract its target customers like kids, youth, working people and gradually people of all ages started loving Maggi.

ORGANIZATIONAL STRUCTURE    OF MAGGI:

    MATRIX STRUCTURE

Since Maggi is a global brand, it follows a Matrix Organizational structure which means there are multiple reporting heads. In fact, it follows a mixture of both Functional and Divisional structure. As the different functions performed by Maggi's Regional Branches like Marketing, Personnel, Finance, etc. are internal and requires ongoing check so the employees there report to their respective superiors and since it is a part of Global company Nestle whose actual headquarters is in Switzerland, so Nestle India reports the whole working of Indian branches to it.

Success of Maggi in short period

Within a short period of its launch, Maggi became successful in Indian food industry. It was able to capture the attention of its target segments: children, youth, working class through its smart advertising and sales promotion techniques.

The following three determinants can clearly explain the success of Nestle's Maggi: -

 TIME

The timing of Nestle to introduce Maggi in India seemed to be perfect. For a long time, Indian consumers were in search of convenient, easy to cook product and Maggi through its Two Minutes Noodles gained popularity. Moreover, in the year 2005, when Indian consumers were driving towards health consciousness, the introduction of Maggi Atta Noodles, Vegetable Noodles, Dal Noodles helped Maggi to sustain in the market.

 COST

Maggi works with an aim of optimum utilisation of resources, thereby cutting unnecessary production costs and increasing profitability.

Economies of Scale: Due to large size of Nestle company and diversified range of products produced under brand of Maggi like Sauce, Pasta, Soups etc. mass production is being made possible which leads to low operating costs and efficient utilisation of resources which ultimately gives it a competitive advantage.

 SCOPE

As Maggi has been able to satisfy the diversified needs of customers over the years by repositioning its brand name, taking the health route of introducing Atta Noodles, Vegetable Noodles, Oats Noodles. it has immense scope in future because of its marketing performance.

Moreover, after researching on taste of Indian consumers, it has recently come up with the launch of hot heads which is a spicy range of noodles like Peri Peri, Green Chilli, Barbeque, etc.

    

CONSTRAINTS FACED BY MAGGI OVER THE YEARS

1.BAD DECISION OF CHANGING TASTE: In the year 1997-1998, when Indo Nissen came with Top Ramen Noodles, at that time only Maggi changed its taste which was a bad decision as it was rejected by its consumers, as a result of which its sales gradually declined so it moved back to its old formulation in 1999.

2.HEALTH AND WELLNESS ISSUES: As the Indian market was driving towards health and fitness awareness in the year 2005, people started viewing it as junk food and decreased its consumption, so ultimately the sales of Maggi suddenly declined.

So to solve this problem, they manufactured Vegetable Atta Noodles and exemplified the idea of “Taste Bhi, Health Bhi”. In 2006, it also launched Dal Atta Noodles which were made of pulses, dietary fibres and positioned it as healthy instant noodles.

3.BIGGEST CONSTRAINT FACED BY MAGGI LAST YEAR

BAN ON MAGGI

In May 2015, Food Safety Regulators from Barabanki, a district in Uttar Pradesh reported that samples of Maggi had unexpectedly high levels of Monosodium Glutamate(MSG) as well as upto 17 times more than permissible amount of lead.

On 3rd June 2015, New Delhi Government banned the sales of Maggi for 15 days due to all these findings. Gradually 11 states of India banned its sales. And finally as per the order of FSSAI and FDA, it was banned calling it “unsafe and hazardous” for consumption as it has adverse health affects.

As a result, Maggi had to pull stock worth Rs.320 Crore from the shelves and had to pay Rs.20 Crore to a cement factory to burn its products. In addition, Corporate Affairs Ministry imposed Rs.640 Crore fine on Nestle India for finding MSG and lead beyond permissible limit.  

    

IMPLICATIONS OF BAN ON MAGGI

1. FALL IN SALES: When Indian government declared ban on Maggi on July 2015, all the retailers and supermarkets started taking off Maggi from their shelves. Many states like Punjab, Karnataka stopped its production, as a result of which Maggi's sales fell by 60% in five months across India.

    

2.CONSUMER TRUST SLUMPED: When harmful chemicals like lead and MSG was found in Maggi, the trust of the consumers on the brand decreased. They felt their health at stake. Even the Public Relations strategy followed by Nestle failed.

3.FALL IN SHARE MARKET: As the investors started selling the stock, the share price of the Maggi fell by 13.5% in the next 15 days of ban.

4.ENTRY OF NEW COMPETITORS: The ban on Maggi became a boon to new players in the market like ITC'S Yippee which is the second big player in noodles industry, its sales suddenly started increasing. Moreover, the launch of Baba Ramdev's Patanjali Noodles attracted many health conscious consumers through its strategy of Atta Noodles and claimed it to be of lower price and more quantity than that of its competitors. Other brands like Ching's noodles, Wai-Wai, Horlicks Foodles also came into picture.

5.STAR ENDORSERS FACED CRITICISMS: A court in Bihar ordered to file a case against all those celebrities and brand ambassadors like Preity Zinta, Amitabh Bachchan, Juhi Chawla, etc. and arrest them if required as they had been acting in misleading advertisements of Maggi and encouraging us to consume the same.

SOLUTIONS

As Maggi was banned for more than five months which was really a very long time as till then many new competitors like ITC's Yippee, Wai-Wai, Patanjali Noodles, etc. entered and captured the market share of Maggi. Moreover, the trust of consumers also fell and they shifted to its competitor's products. So to establish and reposition the same name and status it was having earlier was really a very tough job for Maggi.

   

It initiated a Maggi Relaunch Project after a brief analysis of happenings in the market under name of “Welcome Back Maggi”.

In fact, this project gained a wide popularity on social media like Facebook, Twitter, etc. and people from all over India posted their love and waiting for Maggi return.

    

PROJECT CHARTER OF MAGGI RELAUNCH

Nestle India prepared a detailed blueprint on Maggi Relaunch Project stating the objectives, goals, strategies, roles and responsibilities of different heads, identifying its major stakeholders.

Mr. Suresh Narayanan, Chairman and Managing Director of Nestle India made a plan to take digital and social media as centre to brand building process so as to compete with digitally connected age. So the whole plan to relaunch Maggi was based on Digital Marketing.

It also leveraged upon the popularity of online sales by doing partnership with Snapdeal and used sales promotion strategies like special welcome box,gifts inside the packet, specially designed pack of 12, etc. to attract the attention of consumers.

OBJECTIVES:

 QUALITY MANAGEMENT

There were many questions raising in the minds of consumers when Maggi was declared “unsafe and hazardous for consumption” by FSSAI because of excessive amount of MSG and lead found in it. Over 3,500 tests representing over 200 million packs in both national as well as international accredited laboratories are done and all reports are clear. In fact, all the three NABL Accredited laboratories have confirmed that the MSG and lead are in permissible limits and is safe for consumption.

In fact, after this incident Nestle planned a system to Monitor and Control the quality check of its products periodically.

    

 TO REGAIN CONSUMER TRUST & CONFIDENCE:

The main objective of Maggi Relaunch project was to regain consumer trust and confidence again. To do so, Maggi stayed connected with its consumers through various social networking sites like Facebook, Twitter ensuring its consumers about the safety, various tests being conducted and the test results.

 COPE UP WITH LOSSES:

 Since the ban of Maggi caused severe loss to Nestle as it contributed to around 20% to 25% to Nestle's total sales. So the sales of Maggi fell by 70% in just five months. Moreover, after paying such huge sum of fine, it started facing severe crisis. So, to cope up with such losses, it partnered with “Snapdeal” and started selling specially designed welcome box of pack of 12, loaded with small gift items like Calendar for year 2016, refrigerator magnet stickers, etc. and it really turned out to be a boon for them as according to the report 60,000 packs were sold in just five minutes.

   

    

   

IMPLEMENTATION

To again build the same position and status was not easy for Maggi as the majority of the stakeholders were dissatisfied with it. Nestle made a detailed plan on how to reposition its brand Maggi as other products under its brand were also getting affected.

So, it established a Scope Statement Process specifying the Maggi Relaunch goal criteria on the basis of cost, schedule, performance, made Management plan and carefully established Work Breakdown Structure.

GOAL CRITERIA

The main goal of Maggi was to re-establish its brand with same image and status it had earlier. Also, since it faced heavy losses due to ban so it also focussed on cutting down its costs and perform well in market by capturing its market share again.

MANAGEMENT PLAN

Nestle India conducted an internal survey, seeking inputs from employees on how Maggi can be returned to its right position. They were encouraged to ask questions and raise doubts since they were the main victims of ban on Maggi. The main aim of doing so was to gather variety of ideas that can help it to come out of the crisis.

WORK BREAKDOWN STRUCTURE (WBS) OF MAGGI RELAUNCH

It listed a series of activities needed to be performed to achieve this task. Since it was a big and tough project, it divided the goals and objectives into sub divisions so as to efficiently achieve them on time.

They started using Digital and Social media and encouraged the curious audience also to raise doubts and issues. In fact, on the official website of Nestle it created “Ask Nestle” link in which all the queries related to safety consumption of noodles are given. In fact, throughout the ban period it stayed connected with its consumers through social media and ensured them about the safety of noodles, various tests conducted and its results.

It also laced into online sales by doing partnership with “Snapdeal” and using sales promotion techniques like specially designed pack of 12, small gift items, etc.

    

STATEMENT OF WORK IN MAGGI RELAUNCH

Maggi made detailed statement on what activities needs to be performed in order to make the Relaunch project successful after taking into consideration all the possible uncertainties. In fact, it made a strategy to relaunch Maggi in market so that it can have competitive advantages. The following strategies helped Maggi to reposition itself : -

 Right medium to target customers: Since people are going digital, Maggi found this as an opportunity and created a “Welcome Back Maggi” campaign on social media which went viral. During its ban also, it was getting positive responses from majority of target segment like kids, youth, working people on social media.

    

 Effective Promotion techniques: Maggi took the emotional and nostalgic route to reach its target customers like posts which went viral on social media like “#WelcomeBackMaggi”, “#WeMissYouTooMaggi” to a series of videos on YouTube telling the people that product is same and special it used to be before ban.

    

   

 Advanced approach of selling: Maggi decided to come out from its traditional approach of selling through wholesalers, retailers and supermarkets and going digital. It made a partnership with Snapdeal and started selling special designed welcome box of pack of 12 with good sales promotions techniques like small gifts loaded in it, which proved out to be a success to it as within 5 minutes of relaunch it was able to sell 60,000 packs.

 

    

 Digital Marketing: Maggi with its plan of being social and digital in brand building process tied up with surveymonkey, a website seeking feedback on how Maggi can be rebuilt. It also used online Flash sales model which provides much needed customer data at a faster rate than POS data.

FEEDBACK

Due to brand loyalty and customer satisfaction maintained by Nestle's Maggi over the years, it was able to relaunch itself successfully in the market within a short period of time.

POST ANALYSIS OF MAGGI RELAUNCH PROJECT

Within a week of relaunch of Maggi, it was able to sell 3.3 crore packs across 350 towns in India through 1.2 lakh outlets and 1,000 distributors.

Moreover, due to the innovative technique of advanced selling through Snapdeal, it was able to sell 60,000 packs in five minutes.

As per the reports of August 2016, it has again captured its lost market share and is leading in Noodles industry again. Nestle had earned a net profit of 4.1 billion Swiss francs in the first half year ending at June,2016.

In fact, it launched “Hot Heads Maggi Project” recently after conducting a market research on Indian consumers' tastes and preferences which has again helped it to attain a competitive advantage.

CONCLUSION

SCOPE OF MAGGI IN FUTURE

Nestle's Maggi has wide range of opportunities awaiting in future due to its well established brand name over the years, brand loyalty, customer satisfaction, wide range of products, etc.

The effective promotional strategies which has been used by Maggi according the changing market scenario has always helped it to attain a competitive advantage. Like now-a-days, creating a market using social media is very popular, so due to adaptation of the same, Maggi has been able to be a market leader in Noodles segment again.

Moreover, it also conducts market research and survey periodically to analyse the changing tastes and preferences of consumers and always comes out with a creative solution. For example: When Maggi analysed that consumers are driving towards health consciousness, it launched Vegetable Atta Noodles. Recently, it analysed that consumers are searching for some spicy noodles so it came out with “Hot Heads” theme based noodles.

Therefore, due to all such unique characteristics and distinct activities performed by Maggi over the years, it can be concluded that it has immense scope in future.

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