SWOT Analysis of Maggi

Strengths

· Established Family Brand

· Strong Global Corporate Brand ( NIL )
· Specialization in food processing category marketing and distribution in Urban market
· Presence of other product segments of food category : Dairy Products, Chocolate, Infant
foods
· Pioneer and Leader so 1st mover advantage in Noodles, Sauce, Ketchups and Soup
market.
· Nestle symbolization of warm, family & shelter.
· Research and Development Division in India
· New Noodles Plant in Uttarnchal

Weakness

· Generic Brand to Noodles in India

· Low rural market presence constraints
· Uniform Brand for all food category
· Brand Proliferation

Opportunities

· Growing package and canned food market in India by 15% annually.

· High brand awareness of Indian consumer
· Other product category like Biscuits, Chips and Ready to Eat Market still unexplored.
· Opportunity to be substitute to other snacks category of food products.

Threats

· Competitors with long history in product category Internationally like, Heinz Sauce and
ketchups of Heinz Indian, Top Ramen in Noodle and
· Knorr Soups.
· Single product focused competitors like Heinz sauce and Wai Wai Noodles.
· Less Entry Barriers in the Market segment for product category
· ITC’s strong base in Indian Market.
· Substitute Product to Product Segment
Maggi in India
Magi noodles is a brand of instant noodles made by nestle.

It was found by magi family in swizerland in 19th century.

Magi is nestles culinary brand not only in India but globally..

Magi in India is best known for its flagship product of instant noodles with its various
desi subsegments such as traditional dal atta, veg aata,rice noodles with their various
variants such as curry,masala,tomato,chicken in d traditional shahi pulao,lemon
masala,and chilly chow in rice noodles segment.

Nestle unleashed brand magi in India almost 25 yrs. Ago in 1983 with the launch of its
traditional 2-minute noodles in its masla,tomato and chicken flavours followed by its
curry flavours some years down d line…

Magi launched at dat time when masala noodles was not well known as a category.

Fast to cook good to eat was tagline at d launch of magi in India

Strategies of magi
Maggi's turned 25 and it is still going strong, but there are challenges ahead.

Few ad jingles have survived 25 years. Some long-playing ones like Lifebuoy have been discontinued, while
others like Titan are yet to celebrate their silver jubilee. Nestlé’s Maggi has stuck to the jingle that marked its
entry in the country 25 years ago with instant noodles.

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The jingle has indeed helped in creating a formidable brand. Maggi’s market share is well above 90 per cent.
It has seen no serious rival in the years it has been around, though some FMCG companies like ITC have
tried to attack its flanks by launching ready-to-eat pasta. A survey carried out by the National Council of
Applied Economic Research named Maggi the country’s most valued FMCG brand. Only briefly in 25 years
has the brand taken on board a celebrity (actress Preity Zinta). Maggi is the biggest brand in the Nestlé
portfolio in the country, having overtaken Nescafé in the earlier part of the decade. So, why kill the jingle.

In fact, the campaign designed by Nestlé for Maggi’s silver jubilee hopes to work on the brand’s strong
consumer connect through television, the Internet and print. The jingle gets a prominent play in the television
campaign. Nestlé, India’s largest food products company, has decided not to litter the sky with hoardings on
the occasion. Instead, the ads will play on nostalgia. Consumers who first sampled the brand as kids now
run households. The campaign seeks to strengthen the association.

Thus, customers will be invited to share their “Maggi moments” with the company. If the company likes the
way you prepare Maggi, you could find your photo on Maggi packs. A new website called
www.meandmerimaggi.com is also in the works.
 Convenience was the unique selling proposition of Maggi when it was launched 25 years ago. For the first
time, consumers got something that was hygienically packed and convenient to prepare. It was also the
first fusion experiment on food in India. Instant noodles was an entirely new category in the country, but it
was given an Indian twist. Maggi came in four variants: Masala, chicken, sweet & sour and capsicum. Of
these, only two have survived — masala and chicken which sells largely in the eastern states. Masala
continues to be the flagship flavour. In the days that followed, it experimented with more variants, like a
garlic- and onion-free one for Gujarat. Some of these still exist, others were discontinued.

The turning point came in 2005, when Nestlé came out with Maggi atta (whole-wheat flour) instant noodles.
All over the country, atta is considered healthier than maida or refined flour which the company was using
from day one. This helped the company take the health platform, though Nestlé General Manager (food
business) Shivani Hegde insists that the product never ran the danger of being classified junk food. It was
then that it added the tagline, health bhi, taste bhi (health as well as taste). Maggi’s properties were
expanded from convenience alone to include taste and health as well. “It is an ally to the mother in the
kitchen to make tasty and healthy food with convenience,” says she.

That was also the time when Nestlé was repositioning itself worldwide as a health and wellness company. At
the grassroots level, Maggi started associating with quiz contests and other such events connected to
mental and physical wellbeing.

This positioning gave Nestlé the platform to launch more products under the Maggi brand. It already had
Maggi soups, sauces and coconut milk in the market, but given the strong equity of the brand, Nestlé could
now extend it to newer categories. Thus, it recently came out with fried masala paste. More categories could
follow, though Hegde is tight-lipped about it. But these could be distinctly Indian products. At the moment,
over 90 per cent of the Maggi products in the country cannot be found elsewhere in the world.

Not that all Maggi brand extensions have met with success in the past. Nestlé had launched its Maggi range
of pickles some years back. But the product was withdrawn. It has also experimented with Maggi soup
cubes, the sales of which are now restricted to a handful of markets in the country.

Two reports recently put out by investment analysts, one by IDFC-SSKI Securities and the other by Citi
Investment Research, say that the slowdown in the urban markets could impact adversely Nestlé’s prepared
dishes and cooking aids business which accounts for 21 per cent of the company’s annual revenue. Maggi,
in other words, could become a victim of down-trading. “Nestlé may not gain significantly in an economic
recovery led by the rural sector given its high urban exposure,” says the Citi report released early-March.

Hegde says that there is no evidence of down-trading so far.

Still, the company is taking no chances and is extending its distribution reach to smaller towns and cities.
Maggi happens to be Nestlé’s most widely distributed brand in the country. Through independent channels,
it reaches those villages where the company has no presence, according to Hegde. This is also the time that
Maggi’s value-for-money pack priced at Rs 5 is expected to come handy. (The regular pack comes for Rs
10.) “It is no longer an aspirational product for any socio-economic category of consumers,” says Hegde.

The IDFC-SSKI report says that almost 60 per cent of the FMCG volumes in the country come from price
points below Rs 10. The share of such products for Nestlé has improved from 21 per cent some years ago
to 30 per cent now and is expected to rise further. This is a clear indication of the company’s pricing
strategy.

In the recent past, Nestlé has moved fast to plug any flank that could be attacked by rivals. It first launched
Maggi rice noodles targeted at consumers in the east and south, where rice for the staple meal. Next, it
came out with instant noodles in a cup which is ready to eat after pouring some hot water in it. This was
meant for consumption on the go, including offices. It was a product for the urban markets. The volumes
might be low but it has a wide lead over any company which might target these categories.

But some challenges remain. Large retailers like Vishal Retail have decided to launch instant noodles under
their own private label. These are priced 25 per cent below Maggi, yet give the retailers a profit margin of up
to 30 per cent. FMCG companies, in contrast, offer retailers margins between 12 per cent and 15 per cent.
Hence, they have decided to push their own labels to improve their profit margins.
The same retailers, to be sure, had driven Nestlé’s growth in the last two years, the IDFC-SSKI report says.
“Nestlé’s product portfolio is best suited to the Indian consumerism story and rides piggyback the organised
retail platform. However, organised retail is seeing a slowdown…in metro markets it is also seeing a
decline.” These are issues that Hegde, a veteran of over 20 years at Nestlé, and her team need to address
in the days to come.

Analysts and sector experts admit that Maggi is no longer an impulse purchase like a chocolate or an
aerated beverage. “It is now on the shopping list of most people,” says Technopak Advisors Associate Vice-
president Purnendu Kumar. But some of them say the brand has got straitjacketed as an evening snack
eaten by children. Indeed, much of Maggi’s promotion is centred on kids.

Hegde says instant noodles are now consumed right through the day by all members of the family, young
and old. Some Maggi ads clearly show that it is targeted at all family members. Nowhere in the world does
Nestlé sell such large volumes of instant noodles as in India. Hegde hopes to grow, notwithstanding the
urban slowdown.

………………………………………………………………………………
………

Nestle India Limited is the market leader in Indian Noodle Market with it’s Maggi
Brand of Noodles which was pioneer brand launched in 1983 in the packaged food
market of India. It took the challenge and established Maggi in Indian market
considered to be conservative and typical about food consumption. It appropriate
realization of target segment, effective positioning and effective promotion and sales
made Maggi to Noodles in India as Xerox it to photocopier. NIL had introduced
sauces, ketchups and soups under Maggi brand to reap benefit of brand popularity and
image and contribute to financial gains by 1990.Maggi also became successful in
sauces, ketchups and soups Market in India. Though NIL tried to extend to other
ready to eat products like pickles, cooking aids and paste, It was unsuccessful so
dumped those products. Maggi Brand of products sustained recession in 2000 and
2001 in India by introducing economy packets

To fulfill novelty needs of customers and revitalize Maggi Noodles Brand NIL made
different attempts by introducing new formulation to new taste but customers resisted
change and Maggi had to reintroduce Maggi Noodles in same taste. Maggi Noodle
had till 2005 five product line on noodles with four variant in Maggi 2 Minutes
Noodle. In 2006 in compliance with NIL target to be “health and Wellness Company”
Maggi repositioned it as health and taste food products. NIL has also introduced with
taste and product line in Sauces and Soup Market under Maggi to catch new segment,
revitalize brand, compete with other producers and fulfill expectation of customers.
In 2005 Maggi brand worth was 3.7 billion from 1.7 billion market worth in 1.7
billion in 2003. Maggi Noodle is Market leader with around 80% market share in
Noodles/Pasta and Maggi Sauce is market leader with almost 37% of market share in
2005 in 1.8 billion market of India. Knorr has taken over Maggi in Soup market
recently.
In 2005 Maggi was the highest spender in the Promotion and Sales in the
Indian
Market in the Noodles Category.
Current Scenario of
Maggi
Leading Brand in
India as well as
World.
Current Sales:
Approx.
– 9 0000
boxes
–
Rs. 4,79,49,000 in
Mumbai– 10,00,000

boxes
– 55
cr. in India
Reasonable
competitive pricing.
Creative interaction
blogs for customers

current
world
market share maggi 94%

top reman 4%
others 2%