Beruflich Dokumente
Kultur Dokumente
ON
RESEARCH METHODOLOGY ON NESTLE PRODUCT
MAGGI
SUBMITTED BY:STELLA BALASUBRAMANIAM
ROLL NO: - 46
MASTER OF COMMERCE (PART-II)
ADVANCED ACCOUNTANCY
(SEM-III)
2015-2016
PROJECT GUIDE:PROF.
K.G JOSHI COLLEGE OF ARTS & N.G.BEDEKAR COLLEGE
OF COMMERCE.
PROJECT GUIDE
EXTERNAL EXAMINER
DATE:-
Student signature
STELLA BALASUBRAMANIAM
PLACE: - THANE
ACKNOWLEDGEMENT:I
express
my
grateful
thanks
to
project
guide
Prof.
For her timely guidance and help rendered at every stage of the project work.
I would also like to thank my friends who were also a great support while
working on the project.
I also wish to express my regards to the librarian for her co-operation in
providing me with necessary reference materials.
I also express my thanks to faculty members and for co-operation and
help given in completing this project.
INDEX
Sr. No.
Topic
EXECUTIVE SUMMARY
INTRODUCTION
PRODUCT VARIENTS
MARKET SHARE
RESEARCH METHODOLOGY
10
10
SURVEY RESULTS
11
12
SWOT ANALYSIS
13
STPD ANANYSIS
14
CONCLUSION
15
QUESTIONNAIRE
16
BIBLOGRAPHY
Page No.
INTRODUCTION:The industrial revolution in Switzerland in the late 1800s created factory jobs for
women, who were therefore left with very little time to prepare meals. This wide spread
problem grew to be an object of intense study by the Swiss Public Welfare Society. As a part
of its activities, the Society asked Julius Maggi miller to create a vegetable food product that
would be quick to prepare and easy to digest. Born on October 9, 1846 in Frauenfeld,
Switzerland, Julius Michael Johannes Maggi was the oldest son of an immigrant from Italy
who took Swiss citizenship. Julius Maggi became a miller and took on the reputation as an
inventive and capable businessman. In 1863, Julius Maggi came up with a formula to bring
added taste to meals. Soon after he was commissioned by the Swiss Public Welfare Society,
he came up with two instant pea soups and a bean soup - the first launch of the Maggi brand
of instant foods in 1882 - 83. Towards the end of the century, Maggi & Company was
producing not just powdered soups, but bouillon cubes, sauces and other flavourings. The
Maggi Company merged with Nestl in 1947. Today, Maggi is a leading culinary brand and
part of the NESTL family of fine foods and beverages. Under the Maggi brand, which is
today known worldwide for quality and innovation, Nestle offers a whole range of products,
such as packaged soups, frozen meals, prepared sauces and flavourings.
MAGGI BRAND IN INDIA:Maggi Comes to India teething troubles Maggi noodles was launched in India in the
early1980s. Carlo M. Donati, the present Chairman and Managing Director of Nestle India
Ltd, brought the instant noodle brand to India during his short stint here in the early eighties.
At that time, there was no direct competition. The first competition came from the ready-toeat snack segment which included snacks like samosas, biscuits or maybe peanuts, that were
usually the bought out type. The second competition came from the homemade snacks like
paratha or sandwiches. So there were no specific buy and make snack! Moreover both
competitors had certain drawbacks in comparison. Snacks like samosas are usually bought
out, and outside food is generally considered unhygienic and unhealthy. The other competitor,
homemade snacks overcame both these problems but had the disadvantage of extended
preparation time at home. Maggi was positioned as the only hygienic homemade snack!
Despite this, Nestl faced difficulties with their sales after the initial phase. The reason being,
the positioning of the product with the wrong target group. Nestle had positioned Maggi as a
convenience food product aimed at the target group of working women who hardly found any
time for cooking. Unfortunately this could not hold the product for very long. In the course of
many market researches and surveys, the firm found that children were the biggest consumers
of Maggi noodles. Quickly they repositioned it towards the kids segment with various tools
of sales promotion like colour pencils, sketch pens, fun books, Maggi clubs which worked
wonders for the brand.
BRAND STORY:Launched in 5 flavours initially Masala, chicken, Capsicum, sweet & sour, and
Lasagna Maggi had to fight hard to be accepted by Indian consumers with their hard-tochange 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 mothers on 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 analysis the focus on promotion turned out to be the single largest factor
responsible for Maggis rapid acceptance. Nestle\s Managers utilized promotions as
measured to meet their sales target. Gradually, sales promotion became a crutch for Maggi
noodles sales. Later many of 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 main stream television programme and advertised heavily on kids
programme and channels. After its advertisements with taglines like mummy bhookh lagi
hai, bas do minute and fast to cook good to eat Maggis popularity became highly attributed
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to its extremely high appeal to children. As a result, Maggis annual growth reportedly
touched 15% during its initial years.
MAGGIS BRAND EXTENSION:In 1998, Nestle launched Maggis first brand extension, Maggi soup. At this stage, there was
no organized packaged soup market in India. Nestle planned to create a market for packaged
soup as it felt the category had a lot of potential. However, according to analyst, the company
had introduced soups only to cash in on the Maggis brand name, and was never very serious
about the segment.
In 1993, Sweet Maggi, the first variant of Maggi noodles was launched. The company
supported the launch with a huge advertisement outlay that amounted to 75% of the total
yearly expenditure on the Maggi brand. However, the product failed to generate the desired
sales volume and Nestle was forced to withdraw it. At the end of the year, Maggi noodles
were generating sales volume of around 5000 tons and remained a loss making proposition
for Nestle. To boost sales, Nestle decided to reduce the price of Maggi noodles. This was
made possible by using thinner and cheaper packaging material, the company also introduced
money saver multi packs in the form of 2-in-1 pack and 4-in-1 packs. As a result volume
increases phenomenally to 9700 tonnes in 1994 and further to 13000 tonnes in 1995. Maggis
euphoria was, however, short lived, as sales stagnated in 1995 at the previous years level.
With soup business being threatened by a new entrant Knorr soups launched in 1995,
offering 10 flavours against Maggis 4 the company started rethinking its strategies towards
the soup market. In order to stretch Maggis brand to include Indian ethnic foods the
company tied up with a Pune based cordial foods to launch pickles under the year 1995. The
company also tied up with Indian foods fermentation (IFF), a Chennai based Food Company
to market popular south Indian food preparation such as sambher, dosa, vada and spices in
consumer packs in Dec 1995. The company reportedly saw a lot of untabbed potential in the
market for ready to use south Indian market.
In 1996, products from these two ventures received lukewarm response from the
market; sales were rather poor in the regions in which they were launched. Analysts attributed
the failure of these Maggi extensions to the fact that Nestl seemed to be particularly bad at
dealing with traditional Indian product categories. Maggi noodles performed badly in 1996.
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Despite slow sales in the previous two years, Nestl had set a sales target of 25,000 tonnes for
the year. However, Maggi couldnt cross even 14,000 tonnes. Adding to the company woes
was the failure of Maggi Tonights Special, a range of cooking sauces aimed at providing
restaurant-like-taste to food cooked at home. The range included offerings such as Butter
Chicken gravy and tomato sauce for pizzas.
Understanding these failures, and buoyed by the fact that the Maggi brand finally broke even
in 1997, Nestl continued to explore new options for leveraging on the brand equity of Maggi
noodles. The company realized that the kids who had grown up on Maggi noodles had
become teenagers by the late 1990s. As they associated the product with their childhood, they
seemed to be moving away from it. To lure back these customers and to explore new product
avenues, Nestl launched Maggi Macaroni in July 1997. According to analysts, Maggi
Macaroni was launched partly to deal with the growing popularity of competing noodles
brand Top Ramen. Maggi Macaroni was made available in three flavours, Tomato, Chicken,
and Masala. The company expected to repeat the success of Maggi noodles with Maggi
Macaroni. As with most of its product launches, Maggi Macaronis launch was backed by a
multi-media advertisement campaign including radio, television, outdoors and print media
with the tagline, Tum Roz Baby. The products pricing, however, proved to be a major
hurdle. A 75-gm Maggi Macaroni pack was priced at Rs 11, while a 100-gm noodles pack
was available at Rs 9. According to analysts, Nestl failed to justify this price-value anomaly
to customers, who failed to see any noted value addition in Maggi Macaroni (packaging and
flavour variants were similar to those of Maggi noodles). In addition, customers failed to see
any significant difference between Maggi Macaroni and the much cheaper macaroni that was
sold by the unorganized sector players. The biggest problem however was the taste of the
new product. Since macaroni is thicker than noodles, Maggi Macaroni did not absorb the
tastemaker well and consequently did not taste very good. The interest generated by the
novelty of the product soon died out and sales began tapering off. Eventually, Nestl had to
withdraw Maggi Macaroni completely from the market.
Nestl had not even recovered from Macaronis dismal performance, when it learnt to
its horror that Knorr had dethroned Maggi as the leader in the soup segment (end of 1997).
The only saving grace for Maggi seemed to its ketchups and sauces, which were turning out
to the rare successful extensions of Maggi. These products were supported by a popular
advertisement campaign for the Maggi Hot & Sweet sauce brand. These humorous
advertisements, featuring actors Pankaj Kapoor and Javed Jafri, used the tagline, Its
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different. However, during mid-1997, HLL began promoting its Kissan range of sauces
aggressively and launched various innovative variants in the category. Nestl responded with
a higher thrust on advertising and different size packs at different price points. Though Kissan
gained market share over the next few years, Maggi was able to hold on to its own market
share. Meanwhile the operational costs of Maggi noodles had increased considerably, forcing
the company to increase the retail price. By early 1997, the price of a single pack had reached
Rs 10. Volumes were still languishing between 13,000-14,000 tonnes.
PRICING AND PRODUCT DEVELOPMENT:It was at this point in time that Nestl decided to change the formulation of Maggi noodles.
The purpose was not only to infuse fresh life into the brand, but also to save money through
this new formulation. The company used new noodle-processing technology, so that it could
air-dry instead of oil-fry the noodles. The tastemakers manufacturing process was also
altered. As a result of the above initiatives, costs reportedly came down by 12-14%. To cook
the new product, consumers had to add two cups of water instead of one-and-a-half cups. The
taste of the noodles was significantly different from what it used to be. The customer
backlash that followed the launch of the new noodles took Nestl by surprise. With volumes
declining and customer complaints increasing, the company began to work on plans to
prelaunch old Maggi to win back customers. In addition, in 1998, Nestl began working out
a strategy to regain Maggis position in the soup segment. To counter the Knorr threat, the
company relaunched Maggi soups under the Maggi Rich brand in May 1998. The soups
were not only thicker in consistency than those produced earlier, the pricing was also kept
competitive and the packaging was made much more attractive. However, Knorr took Nestl
by surprise by launching one-serving soup sachets priced as low as Rs 4. HLL too launched
two-serving sachets of Kissan soup priced at Rs 7. As Maggi did not have any offerings in
this price-range, it lost a huge portion of its market share to Knorr.
The prelaunch
prompted market observers to compare Nestls move with US soft drinks major Coca-Colas
New Coke fiasco. However, the company disagreed, Its a hard-5 nosed strategy that mixes
nostalgia with the consumers voiced preference for the product it has been bred and rough up
on. The reintroduction is Nestls acknowledgement of the loyalty of the Indian mother and
the child to the original product. By May 1999, Nestls decision to bring back the old
Maggi seemed to have paid off. Two months after the prelaunch, the monthly average sales
of Maggi noodles n the northern region rose 50% in comparison to the previous year. In July
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1999, Maggi the brand, was promoted as the biggest brand in Nestls portfolio of brands in
India, overtaking brands such as Nestum and Cerelac. Nestl believed that Maggi had
immense potential as it was a very flexible brand under which regional variants could be
introduced to meet various market needs. Company sources claimed that with reasonable
price points and innovative products, Maggi could emerge as a top brand and a major growth
driver for the company. To further support the brand, Nestl carried out various promotional
activities as well. These included the August 1999 Fun-Dooz campaign and Jungle Jackpot
campaigns. 6 As a result of the above initiatives, Nestl claimed to have cornered an 81%
market share of the 20,000 tonnes noodles market by the end of 1999.
PRODUCT VARIENTS:The product mix of Maggi is divided into various categories defined below. The company has
launched various products under each category as mentioned below.
1. Noodles
Maggi Rice Noodles (Lemon Masala, Chilly Chow and Shahi Pulao)
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2. Sauces
Teekha masala
Tomoto chatpat
Tomato ketchup
Tomato pudina
3. Maggi Pichko
4. Soups Healthy
Chef Style
- Cream Mushroom
- Sweet Sour Tomato Noodles
Chinese Style
- Chinese Hot Sour Chicken
- Chinese Sweet Corn Chicken
- Chinese Sweet Corn Vegetables
- Chinese Hot & Sour Vegetables
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Amla
Badam
Spinach
Dal
Tomato
Chicken
Vegetarian masala
MARKET SHARE
15
45%
55%
Maggi
Others
20%
Maggi
Others
80%
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RESEARCH METHODOLOGY:OBJECTIVES
To understand the influence of Maggi as a brand on consumers mind set.
Sources of Brand equity of Maggi like Brand awareness, Brand image, Brand
association, Brand recall
To understand the Brand performance of Maggi products.
To understand Brand Imagery, Brand Quality perceived by customers, Brand
credibility, consideration, superiority and feelings.
Brand Extension of Maggi in terms of product diversity.
Analyse the repositioning of Maggi brand as a Healthy product and the consumers
perseverance towards the same.
RESEARCH PLAN
Research Design:
The research will be carried out in the form of a survey which will be done in areas near to
Delhi (NCR region). The population has been segmented on the basis of salary Group and
Age Group.
Sample Design:
The target population for our study is households. The sample will be selected by a simple
random sampling method.
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Looking at the success of noodles, Nestle India decided to extend the brand to a
number of products such as sauces, soups, pickles and macaroni in mid-1990s. Maggi
macaroni bombed and pickles didn't do well either. Maggi soups and sauces chugged along
and today have a decent presence in the market.
Maggi noodles' acceptance among Indian consumers didn't come easy. Nestle changed its
formulation some time back which was rejected by the consumer. So, the company had to
revert to the original make. Since then, it has been a smooth sailing for the brand.
Interestingly, it is only now, during Donati's second stint, in the country that the brand
has stabilized. "Maggi noodles have seen a robust double-digit growth in sales during the last
four years," said Donati. Last year, Nestle India launched Chinese Noodles as a snack food
for the adults.
METHOLODOGY:The research will be carried out in the form of a survey. This will include primary research in
addition to secondary research as stated below. The survey research method will be
descriptive research design. Each respondent will be interviewed through a Questionnaire.
The sample will be selected by a simple random sampling method.
The survey will address the following information area:
Information Areas:
The objective as spelt out can be elaborated into specific information areas to be studied.
How do customers perceive Maggi as a stable brand, their perception of noodles and
how do they associate themselves with Maggi?
Are the consumers aware of Maggi Brand or they associate noodles with some other
brand?
Do they consider noodle as a healthy product or they are aware of the companys
strategy of repositioning it to a healthy product by the launch of some of the new
products?
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Which product from the entire basket of Maggi products do the consumers consider as
the best selling product for Maggi and to which the consumers frequently buy?
Are the consumers willing to accept Maggi brand extensions to some other products
like chocolate, juices, chips etc?
20
HYPOTHESIS DONE FOR MAGGI NOODLES:Quick food styles are catching up fast because of more number of working couples,
domestic fuel crisis, non availability of reliable domestic servants and breaking up of joint
family system. Neither time nor patience to prepare the ingredients and wholesome food in
the house itself, the high price of ingredients and ready mix are also a significant factor
responsible for the spectacular increase in the demand for maggi noodles products.
HYPOTHESIS
1. There is no significant relationship between the impact of media and purchase decision.
2. There is no significant relationship between influencers and purchase decision.
3. There is no significant relationship between preference for more new varieties and
Purchase decision.
4. There is no significant relationship between quality of noodles and purchase
decision.
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METHODOLOGY
The study is based on primary data. The data were collected through
interview method by using a structured questionnaire. For the purpose of the
study the data have been collected in different places of the market especially in
retail shops. One hundred and twenty five nestle maggi noodles customers were
randomly selected for the study as sample.
Necessary data have also been collected from sources like books, magazines
and internet. Chi-square test has been applied for testing the hypotheses.
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SWOT ANALYSIS OF MAGGI:The SWOT analysis of Maggi brand clearly indicates the strengths of Maggi as a Brand in
Indian market. The Brand was found to be a leader in its category of Noodles, with strong
customer loyalty. Intensive distribution of Maggi as a Brand was seen in urban areas of the
country. The major threats of the brand as shown in the figure below indicates that Maggi has
made several attempts to revamp itself as a Healthy Product but till date its perseverance
towards the tag line is low by the consumers. The brand is in the growth stage of product life
cycle with a strong inclination towards the maturity stage.
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
THREAT
Increasing number of working youth
Price war with competitors.
Product has been acceptable in youth category
Strong presence of regional competitors
Shift to rural market
Consumers dont perceive it as a Healthy Product
Changing preference of consumer towards Chinese food and fast food.
Can foray into other food markets with its strong Brand name
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STPD ANALYSIS OF MAGGI BRAND:Segmentation: Market Segmentation divides the heterogeneous market into homogenous
groups of customers who share a similar set of needs/wants and could be satisfied by specific
products. Maggi Brand has segmented the market on the basis of lifestyle and habits of
URBAN FAMILIES.
Target: Market Targeting refers to evaluating and deciding from amongst the various
alternatives, which segment can be satisfied best by the company. The Maggi Brand have
mainly targeted the Kids, Youth, Office Goers & Working Woman which falls into the
category of convenience-savvy time misers who would like to get something instant and be
over with it quickly.
Positioning: Market Positioning is the act of designing the companys offerings and image to
occupy a distinctive place in the minds of the target market. The goal of positioning is to
locate the brand in the minds of consumers to maximise the potential benefit to the firm.
Maggi has positioned itself in the SNACKS category and not in the meal category since
Indians do not consider noodles as a proper food item. Therefore Maggi have developed its
brand image of instant food products with positioning statements such as 2 minutes noodles
and Easy to cook, good to eat.
Differentiations: Points-of-difference (PODs) are attributes or benefits consumers strongly
associate with a brand, positively evaluate and believe they could not find to the same extent
with a competitive brand. The Maggi Brand has also differentiated its brand image from its
competitors in terms of taste, flavours and packaging. Maggi have launched wide varieties of
products in different flavours which can attract larger set of customers. Maggi products are
also available in different sizes catering to different customer needs.
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CUSTOMER BASED BRAND EQUITY PYRAMID (CBBE):Maggis customer based brand equity pyramid seems to be equally strong on left hand side
and right hand side; it is also strong from bottom to top enjoying the highest brand awareness
of any fast food noodle brand in India as well as repeat purchase rate and high customer
loyalty.
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CONCLUSION:The food processing business in India is at a nascent stage. Currently, only about 10%
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 than
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, tastemakers 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 TopRamen took advantage of the situation and started a parallel aggressive
campaign to eat into Maggis market share. But the 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!
Maggi Today The year 2008 saw India leading in worldwide Maggi sales. The brand has
grown to an estimated value of Rs 160-170 crore and contributes at least 89% to Nestle
Indias top line. All the same, some FMCG analysts feel that the brand has not done much to
expand the noodles category. Even after 25 years of its launch, the size of the instant noodles
market is yet quite small at Rs 300 crore. But yes, the parent company, Nestle India Limited
has certainly encouraged the brand to enter into other culinary products.
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RECOMMENDATION:After the conducted study following recommendations could be sited for Maggi Brand.
- To gain maximum leverage in terms of profit the company should pay
emphasis on segments with age groups 25-35 and above .Advertising is the
key to success. Targeting these segments will not only enhance the companys
profit margins but also it will leverage the brand image of Maggi.
- The company should advertise its products by depicting attributes related to
Health like Nutrition values, % of Vitamins, Proteins etc.This would help in
customers perceiving the product as Healthy.
- Foray into other food products like chips, chocolates etc under its sole brand
name would not only help in Brand extension but will also enhance Maggis
market share.
FUTURE PLANS
- Nestl Indias objective is to manufacture and market the companys products
in such a way so as to create value that can be sustained over the long term for
consumers, shareholders, employees and business partners.
- Maggis aims 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 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
offerings.
LIMITATIONS:
The present study is confined to a minimal sample size and may not reflect the
opinion or response of the entire population in general. The results of our study are entirely
confined to the responses of the Delhi consumers and might deviate in terms of actual
population as a whole.Recomendations given after the study are entirely dependent on the
survey and the secondary analysis done in the report.
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BIBLOGRAPHY:-
www.google.com
www.wikipedia.com
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