August 21

NESTLE
MAGGI 2017
SUBMITTED BY: AMARENDRA UPADHYAY, YURAJ UPADHYAY, TURNAROUND
MAYANK LALWANI, AYUSH CHASTA, DEEPAK KUMAR, PRIYANKA STRATEGY OF
KUMARI, ANSHIKA SINGH
MAGGI
Project On Nestle

Contents
EXECUTIVE SUMMARY .................................................................................................................................. 2
SECTOR INFORMATION ................................................................................................................................. 3
BRIEF ABOUT THE SECTOR ........................................................................................................................ 3
SECTOR SIZE .............................................................................................................................................. 3
GROWTH OF THE SECTOR ......................................................................................................................... 3
COMPANY INFORMATION ............................................................................................................................ 5
HISTORY .................................................................................................................................................... 5
MILESTONE ............................................................................................................................................... 5
CURRENT CEO ........................................................................................................................................... 5
PRODUCTS OF NESTLE .............................................................................................................................. 5
STP ANALYSIS: ........................................................................................................................................... 6
SEGMENTATION: ................................................................................................................................... 6
TARGET:................................................................................................................................................. 6
POSITIONING:........................................................................................................................................ 6
SWOT ANALYSIS ........................................................................................................................................ 6
Strength................................................................................................................................................. 6
Weakness .............................................................................................................................................. 7
Opportunities ........................................................................................................................................ 7
Threats .................................................................................................................................................. 7
COMPETITORS OF MAGGI ............................................................................................................................. 7
List of leading Noodle Brands in India ...................................................................................................... 7
TURNAROUND STRATEGY OF MAGGI ........................................................................................................... 0
NESTLE MAGGI MAKES A COMEBACK WITHOUT MAJOR BRAND AMBASSADORS .................................. 1
REFERENCES .................................................................................................................................................. 2
Project On Nestle

EXECUTIVE SUMMARYi
The project aims at understanding the Marketing strategies of Nestle Maggi. Researches
demonstrated conclusively that it is far more costly to win a new customer than it is to maintain
an existing one. And there is no better way to retain a customer than to exceed his
expectations. For this purpose it is essential to know the level of customer satisfaction.

The focus of my research was the measurement of customer satisfaction provided by Nestle
Maggi. There can be no better opportunity to interact with the external as well as the internal
customers of an organization. Finally the results of the research verify the fact that keeping the
customer satisfied is the best strategy to not only retains the existing customers but also to
expand the business to new horizons.

Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are products that
are sold quickly and at relatively low cost. Examples include non-durable goods such as soft
drinks, toiletries, and grocery items. Though the absolute profit made on FMCG products is
relatively small, they generally sell in large quantities, so the cumulative profit on such products
can be substantial.

The term FMCG refers to those retail goods that are generally replaced or fully used up over a
short period of days, weeks, or months, and within one year. This contrasts with durable
goods or major appliances such as kitchen appliances, which are generally replaced over a
period of several years.

FMCG have a short shelf life, either as a result of high consumer demand or because the
product deteriorates rapidly. Some FMCGs such as meat, fruits and vegetables, dairy products
and baked goods are highly perishable. Other goods such as alcohol, toiletries, pre-packaged
foods, soft drinks and cleaning products have high turnover rates.
Project On Nestle

SECTOR INFORMATIONii
BRIEF ABOUT THE SECTORiii
The Indian food industry is poised for huge growth, increasing its contribution to world food
trade every year. In India, the food sector has emerged as a high-growth and high-profit sector
due to its immense potential for value addition, particularly within the food processing
industry.

India is the most attractive Instant Noodles market in the world. Instant Noodles market
matured in India over the years but still it is limited to few players. Not just India, USA, UK,
Australia, Vietnam and many other countries have tested the quality of Maggi and quantity of
lead content in it. All the countries including India have found that lead is in acceptable limits
and now Maggi is looking to revive its market in the country. Although, Nestle has to destroy
Maggi worth Rs. 56 Crore because of high lead content and registered a loss of more than Rs.
60 Crore in July-September Quarter in India, which is the first time when Nestle India faced a
loss in past 3 decades. Market witnessed a growth of 7.6% from 2010 to 2017. Despite of ban
on instant noodles in some states of India for short time, instant noodles market will witness a
growth of 6.65% till 2022.India with a share of 11.8% in FMCG sector as of now.

SECTOR SIZE
Nestle India's instant noodles brand Maggi, whose sales were severely hit by the Food Safety
and Standards Authority of India (FSSAI) ban in 2015, has now cornered close to 60 per cent
market share, a top company official said. Maggi commanded a market share of around 75 per
cent prior to the five-month ban in 2015.Nestle India, which is looking to consolidate its
leadership position in the noodles segment, is also working on new products and categories for
overall growth.

GROWTH OF THE SECTOR

According to India Instant Noodles, Pasta & Soup Market Overview, the total market for instant
noodles, pasta and soup is growing with more than 20% CAGR from last five years. The instant
noodles market in India was growing at a healthy rate from last few years but Maggi's MSG lead
controversy affected the category majorly with sales being reduced by almost 14% in the year
2015-16. As a result, other players like CG Foods and ITC Sunfeast Yippee are trying to grab a
larger share of the category.
Project On Nestle

INDIAN NOODLE MARKET

NESTLE MAGGI ITC YIPPEE OTHERS

12%

18%

70%
Project On Nestle

COMPANY INFORMATIONiv

HISTORY
Maggi is an international brand of seasonings, instant soups, and noodles that originated in
Switzerland in late 19th century. The Maggi Company was acquired by Nestle in 1947.

The company originated in Switzerland in 1884, when Julius Maggi took over his father's mill.
He quickly became a pioneer of industrial food production, aiming to improve the nutritional
intake of worker families. Maggi was the first to bring protein-rich legume meals to the market,
and followed up with a ready-made soup based on legume meals in 1886. After that Julius
Maggi introduced bouillon concentrates, first in capsules, then in cubes. In 1897, Julius Maggi
founded the company Maggi GmbH in Singen, Germany.

MILESTONE
Health and safety of our consumers is our highest priority. We have built our reputation around
the world for 150 years by providing products that meet the highest food quality and safety
standards. Nestl has been in India for over 103 years and MAGGI Noodles has been a trusted
brand in the country for over 33 years. We strongly reiterate that MAGGI Noodles have always
been safe for consumption as demonstrated by tests carried out in independent accredited
laboratories, our own accredited laboratories (over 3500 samples have been tested) and by six
(including USA, UK and Singapore) national food authorities. As per the directions of Honorable
High Court of Mumbai, samples were tested at accredited laboratories and were found to be in
order.

CURRENT CEO
Paul Bulcke (born 8, September 1954) (age 62) is a Belgian businessman who is the chairman
and former CEO of Nestle. In 1979, aged 25, he started working for the Nestl group and
worked in different countries, including Switzerland, Spain, Belgium, Peru, Ecuador, Chile,
Portugal, Czech Republic and Germany. Before his appointment as CEO of Nestl, he was the
executive vice president of its Americas divisions. As of 2016, there has been talk of possibly
succeeding him as a CEO of Nestle, with two potential candidates being Lauren Freixie the CEO
of Nestle American operations and Wan Ling Martello the CEO of Nestls Asia-Pacific
Operations. On 25 May 2012, he received the VMA Award from the Vlerick Leuven Gent
Management School for his "lifelong career, which has been distinguished by sustained
integrity, exceptional management capacity and inspiring leadership"

PRODUCTS OF NESTLE
Nestle has 6,000 brands, with a wide range of products across a number of markets Including
coffee (Nescaf), bottled water, other beverages (including Aero (chocolate) & Skinny
Project On Nestle

Cow), chocolate, ice cream, infant foods, performance and healthcare nutrition, seasonings,
frozen and refrigerated foods, confectionery and pet food.

STP ANALYSIS:v

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 maximize 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 as2 minutes noodles and Easy to cook, good to
eat.

SWOT ANALYSISvi
It is very important to have the strength, weakness, opportunity and threats. Every company
prepares its SWOT analysis and for Nestle Maggi explained as follows-

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.
Project On Nestle

Weakness
Product is dependent on each other.
Not so much presence in rural market.

Opportunities
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

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

COMPETITORS OF MAGGIvii
Due to fast cooking properties, instant noodles today have occupied an important position in
almost every Indian kitchen. Since most of the women in urban India are working, instant
noodles and ready-to-eat foods are slowly and steadily replacing the traditional rice and pulses.

Hot favorite among all the children in the country, noodles have come a long way since their
introduction in 1983. Consumed in almost every Indian household (prior to the lead and MSG
controversy), Maggi, which was initially considered a snack, had taken the place of a staple diet
in many Indian homes. Owing to the fast paced lives today, packaged and ready-to-eat foods
are gaining quite a formidable share in the Indian food market.

However, according to market experts, Nestle India's Maggi noodles, which has been
dominating the instant noodles market in India for nearly three decades, is currently witnessing
tough competition with a number of new entrants such as Sunfeast Yippee!, Hindustan
Unilever's (HUL) Knorr Soupy Noodles, Top Ramen and Ching's Secret.

List of leading Noodle Brands in India

Although, there are a number of noodle brands available in India, only a few have been able to
dominate the taste buds of the Indians.
Project On Nestle

Maggi

Maggi is a product of Nestle India, a subsidiary of the Nestle Group of Switzerland. It goes
without saying that Nestle India's Maggi is still undoubtedly the top noodle brand in India.
Maggi has been dominating the Indian noodle industry for almost 32 years. Maggi was the
pioneer of noodles in India. Launched in 1983 in the Indian market with the challenge of
entering a market that was conservative and had typical notions about food consumptions, this
product still managed to gain some space in almost every Indian kitchen.
Synonymous with noodles in India today, Maggi is known to be the fastest cooked tasty meal in
an Indian household
In 2015, Maggi got entangled in a major controversy when a few samples of Maggi were tested
and found 'unsafe and hazardous' for human consumption. The tests concluded that Maggi
contained much higher levels of monosodium glutamate (MSG) and lead than what was
permissible. The findings of the tests were followed by bans on Maggi in many states across and
outside India. Though Nestle denied the allegations that Maggi was 'unsafe and hazardous' to
human health, it pulled back all the stocks from across the country.

Yippee!

Another popular noodle brand in India is Sunfeast

Yippee!, which belongs to the Indian conglomerate
ITC. Yippee made its way into the Indian market in
the first decade of the 2000s and gradually made a
considerable presence. By the early 2010s, Yippee!
had started giving market leader Maggi some sort
of competition. Yippee! Noodles are available in
five different variants; namely, Classic Masala,
Magic Masala, Chinese Masala, Tricolor Pasta
(Creamy Corn) and Tricolor Pasta (Masala).

Top Ramen

Top Ramen, by Nissin, is another leading noodle
brand in India. Nissin is a Japanese company that
introduced its first noodle product in 1958 but
entered the Indian market 30 years later in
1988. It took a while for Top Ramen to become
one of the leading noodle brands in
India. Different variants of Top Ramen
noodles in India include Atta Noodles,
Cup Noodles, Curry Veg Noodles, Oats
Project On Nestle

Noodles, Scoopies Short Noodles and Super

Noodles.

Ching's Secret

Clings Secret is another popular noodle include Schwann Instant Noodles,

brand in India. It is a product of Capital Singapore Curry Instant Noodles, Hot Garlic
Food Indian Limited. Another popular brand Instant Noodles, Egg Hakka Noodles and
of noodles in India produced by Capital Veg Hakka Noodles.
Food India Limited is Smith & Jones. But
Ching's Secret is the more popular one and
is giving stiff competition to the top noodle
brands in India. Ching's Secret offers a vast
range of products to its customers that Knorr Soupy Noodles
Knorr Soupy Noodles is a product of Hindustan
Unilever and has turned out to be a popular brand in
India of late. Knorr is famous for its unique range of
soups in India and is the leading brand for the same
but has earned accolades for its unique combination of
noodles and soup, that is, Knorr Soupy Noodles. Knorr
noodles range consists of Mast Masala Soupy Noodles,
Knorr Chinese Noodle Hot Spicy, Knorr Chinese Noodle
Schwan, Chinese Noodles and Fried Rice.
TURNAROUND STRATEGY OF MAGGIviii

Nestle Indias popular instant noodles Maggi has made a comeback five months after the
company was banned from selling the product in India for allegedly containing lead beyond
permissible levels, but this time around the company will not leverage brand
ambassadors Amitabh Bachchan and Madhuri Dixit to reconnect with the masses.

Suresh Narayanan, chairman and managing director, Nestle India, said, Our promotional
strategy will be across three platforms. We will use traditional media to reassure our
consumers regarding the safety of our product. We will connect digitally with our target group.
Besides, there will be a lot of events for brand activation.

When asked about Nestle Indias contracts with brand ambassadors Amitabh Bachchan and
Madhuri Dixit for promoting Maggi, Narayanan said, The earlier contract has lapsed. We have
not reached fresh agreements. We are not ruling it out forever but as of now we do not plan to
use brand ambassadors for promoting the product. A court case had been filed against
Amitabh Bachchan and Madhuri Dixit in Uttar Pradesh in June when food regulators where
testing the product. Narayanan said there will be a fairly substantial increase in marketing
spends and advertising campaigns to bring back customers in whose minds a seed of doubt
has been planted due to the crisis.

Nestle India launched Maggi in 100 towns through 300-odd distributors on Monday. The
product will be rolled out in many more areas in the coming days. Prior to the ban, the
company was selling Maggi through four million outlets in 450 towns.

Maggi would now be available across the country except in Bihar, Odisha, Manipur, Nagaland,
Tripura, Punjab, Himachal Pradesh and Uttarakhand, where the company is yet to secure the
requisite clearances. The company is engaging with these eight states to complete due
diligence procedures.

Maggi noodles would now be available only in the masala variant at the same price as of June
2015. The other formats would be introduced gradually. We have relaunched Maggi. We have
been through arguably a very big crisis in the last couple of months. I am glad that we have
been able to vindicate once again, the quality, safety and credentials as we reintroduce Maggi
selectively, said Narayanan.

Narayanan added Nestle India has not changed the contents of Maggi. He informed, We are
giving what consumers have loved for 32 years, and the only change is on the package. There is
Project On Nestle

a small set of words that conveys the companys commitment to quality and goodness that
consumers can trust.

The company is presently manufacturing Maggi noodles at three locations Nanjangud

(Karnataka), Moga (Punjab) and Bicholim (Goa). Two more plants in Himachal Pradesh and
Uttarakhand, where the instant noodles is still banned, are yet to start. The company is
engaging with authorities there in order to start production in those two units at the earliest.

Maggi had to undergo tests in three government-accredited laboratories in Jaipur, Hyderabad

and Mohali, as ordered by the Bombay High Court prior to commencing sales in the market.

The Swiss food major has also partnered with online marketplace Snapdeal for selling Maggi.

Post the Maggi crisis, Narayanan said Nestle India will go for product portfolio diversification
with focus on dairy, coffee and beverages as well as chocolates and confectionery in order to
avoid over-dependence on a single product.

NESTLE MAGGI MAKES A COMEBACK WITHOUT MAJOR BRAND AMBASSADORS

Maggi would now be available across the country except in Bihar, Odisha, Manipur, Nagaland,
Tripura, Punjab, Himachal Pradesh and Uttarakhand, where the company is yet to secure the
requisite clearances.

Nestle Indias popular instant noodles Maggi has made a comeback five months after the
company was banned from selling the product in India for allegedly containing lead beyond
permissible levels, but this time around the company will not leverage brand ambassadors
Amitabh Bachchan andMadhuriDixit to reconnect with the masses.

Suresh Narayanan, chairman and managing director, Nestle India, said, Our promotional
strategy will be across three platforms. We will use traditional media to reassure our
consumers regarding the safety of our product. We will connect digitally with our target group.
Besides, there will be a lot of events for brand activation.

When asked about Nestle Indias contracts with brand ambassadors Amitabh Bachchan and
Madhuri Dixit for promoting Maggi, Narayanan said, The earlier contract has lapsed. We have
not reached fresh agreements. We are not ruling it out forever but as of now we do not plan to
use brand ambassadors for promoting the product. A court case had been filed against
Amitabh Bachchan and Madhuri Dixit in Uttar Pradesh in June when food regulators where
testing the product. Narayanan said there will be a fairly substantial increase in marketing
spends and advertising campaigns to bring back customers in whose minds a seed of doubt
has been planted due to the crisis.
Project On Nestle

Nestle India launched Maggi in 100 towns through 300-odd distributors on Monday; the
product will be rolled out in many more areas in the coming days. Prior to the ban, the
company was selling Maggi through four million outlets in 450 towns.

Maggi would now be available across the country except in Bihar, Odisha, Manipur, Nagaland,
Tripura, Punjab, Himachal Pradesh and Uttarakhand, where the company is yet to secure the
requisite clearances. The company is engaging with these eight states to complete due
diligence procedures.

Maggi noodles would now be available only in the masala variant at the same price as of June
2015. The other formats would be introduced gradually. We have relaunched Maggi. We have
been through arguably a very big crisis in the last couple of months. I am glad that we have
been able to vindicate once again, the quality, safety and credentials as we reintroduce Maggi
selectively said Narayanan.

Narayanan added Nestle India has not changed the contents of Maggi. He informed, We are
giving what consumers have loved for 32 years, the only change is on the package. There is a
small set of words that conveys the companys commitment to quality and goodness that
consumers can trust.

The company is presently manufacturing Maggi noodles at three locations Nanjangud

(Karnataka), Moga (Punjab) and Bicholim (Goa). Two more plants in Himachal Pradesh and
Uttarakhand, where the instant noodles is still banned, are yet to start. The company is
engaging with authorities there in order to start production in those two units at the earliest.

Maggi had to undergo tests in three government-accredited laboratories in Jaipur, Hyderabad

and Mohali, as ordered by the Bombay High Court prior to commencing sales in the market.

The Swiss food major has also partnered with online marketplace Snapdeal for selling Maggi.

Post the Maggi crisis, Narayanan said Nestle India will go for product portfolio diversification
with focus on dairy, coffee and beverages as well as chocolates and confectionery in order to
avoid over-dependence on a single product.ix

REFERENCES
i
https://www.nestle.in
ii
https:// WWW.IBEF.ORG
iii
https:// WWW.IBEF.ORG
iv
https://www.nestle.in
v
https://WWW.MBASKOOL.COM
Project On Nestle

vi
https:// WWW.MBASKOOL.COM
vii
https://www.scoopwhoop.com
viii
http://www.prmoment.in