PROJECT REPORT

(Submitted for the Degree of B.Com (Honours) in Accounting & Finance

under the University of Calcutta for the session 2017-18 )

TRUST ONCE LOST IS DIFFICULT TO GAIN:

A CASE STUDY OF 2-MINUTE NOODLES

SUBMITTED BY:

Name of the Candidate: FRIYA GUPTA

(CU) Registration No.: 235-1221-1069-16

(CU)Roll No.:1235 – 51 – 0061

Name of Collage: TARADEVI HARAKHCHAND KANKARIA JAIN COLLEGE

SUPERVISED BY:

Name of the Supervisor: SWATI SHAW

Name of Collage: TARADEVI HARAKHCHAND KANKARIA JAIN COLLEGE

Month & Year of Submission

FEBRURY ‘2019’

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ACKNOWLEDGEMENT
Words put on paper are mere ink marks, but when they have a purpose there exist a thought
behind them. I too have purpose to express my gratitude towards whole individuals without
whose guidance the project would not have been possible.

I would like to express my special thanks to my principal DR. Mousumi Singh Sengupta Who
has kindly provided me the opportunity to pursue the project.

I am also thankful to the HOD Prof. Sanbad Banerjee and all the department professors for
their kind support and guidance.

I also take this opportunity to express a great sense of gratitude towards Prof. Swati Shaw, as
well as who gave me the golden opportunity to do this wonderful project on the topic

“TRUST ONCE LOST IS DIFFICULT TO GAIN: A CASE

STUDY OF 2-MINUTE NOODLES”, which also helped me in doing a lot of
research hand I came to know about so many new thing, I am really thankful to them.

I would also like to thank my parents and friends who helped me a lot in to finalizing this
project in a limited frame. Lastly, I am extremely grateful to my statue T H K JAIN
COLLEGE, KOLKATA for providing me with the knowledge and necessary resources for
the successful completion of my project.

FRIYA GUPTA

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SUPERVISOR’S CERTIFICATE
This is to certify that FRIYA GUPTA, a student of B.COM Honours in
Accounting & Finance of “THK JAIN COLLEGE”, under the University of
Calcutta, has worked under my supervision and guidance for her project work
and prepared a project report with the title “TRUST ONCE LOST IS
DIFFICULT TO GAIN: A CASE STUDY OF 2-MINUTE NOODLES”
which she is submitting, in her genuine and original work to the best work of my
knowledge.

Place: Signature:

Date: Name: SWATI SHAW

Designation: FACULTY MEMBER

Name of the college: T.H.K JAIN COLLEGE

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STUDENT DECLARATION
I hereby declare that the Project Work with the title “TRUST ONCE LOST IS
DIFFICULT TO GAIN: A CASE STUDY OF 2-MINUTE NOODLES”
submitted by me for the partial fulfillment of the degree of B.Com. Honours in
Accounting & Finance under the University of Calcutta is my original work and
has not been submitted earlier to any other University / Institution for the
fulfillment of the requirement for any course of study.

I also declare that no chapter of this manuscript is whole or in part has been
incorporated in this report from any earlier work done by others or done by me.
However, extracts of any literature which has been used for this report has been
duly acknowledged providing details of such literature in the references.

Place: Signature:

Date: Name: FRIYA GUPTA

Address: 57/6/1J B.T ROAD

Registration no.: 235-1221-1069-16

Roll no.: 1235-51-0061

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5
EXECUTIVE SUMMARY
The Project entitled “TRUST ONCE LOST IS DIFFICULT TO GAIN:
A CASE STUDY OF 2-MINUTE NOODLES” “The Recent Controversy
on Maggi: Myth or Reality-Case Study” deals with the study of the Maggi Brand that was
launched in India in the year 1983, by Nestle India Limited, which became famous with
noodles. Mainly, this project studies the Marketing and Promotional strategies that are
adopted by Nestlé India Limited for Maggi over the years. To know about the market position
of Maggi as a Brand, how they survived in the past, what all strategies they adopted to
become a well-established brand and the recent controversy of Maggi and its effect in the
market and on the consumers. Now according to my project report the first chapter serves as
an introduction including background, literature review (which gives an overview of the
theoretical literature on come back of Maggi after its ban) objective, research methodology,
some limitation and chapter planning of my whole project report. Chapter two refers to
conceptual frame work which includes company profile (Nestle company) and about its
products as well as national and international scenario. Chapter three is basically consist of
primary and secondary data which analyses the case study of Maggi being banned in India
and the marketing strategies of relaunching the brand in India. The final chapter refers to
conclusion, recommendation & suggestion, bibliography and questionnaires of my primary
survey.

Being a consumer of any trusted brand, we play a vital role in the health of the economy
local, national or international. The decisions we make concerning our consumption affects
the demands of that particular product in the economy. So, I basically targeted Nestle Maggi
one of the most favorite brands of India. It was the Indian consumers, lunch, dinner and
breakfast. 2015 has been a nightmare for the brand Maggi after the discovery of Monosodium
Glutamate and unacceptable levels of lead content in the product.

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 TABLE OF CONTENT

CHAPTER NO NAME OF CHAPTER PAGE NO

1 INTRODUCTION

1.1 Background of the study 10

1.2 Need of the study 11
1.3 Literature review 12
1.4 Objective of the study 13
1.5 Research methodology 14
1.6 Limitation of the study 15
1.7 Chapter planning 16

2 CONCEPTUAL FRAMEWORK

2.1 Company profile 18-20

2.2 National and international scenario 21

3 PRESENTATION OF DATA
ANALYSIS AND FINDINGS

3.1 Primary data

(Table, chart and explanation) 24-40

3.2 secondary data

 Maggi : a successful brand 42-43

 Marketing mix of maggi 44-47
 Controversy regarding maggi 48-49
 Impact of maggi controversy 50-52
 Consumer sentiment after maggi 53-54
crises and withdrawal -
 Maggi comeback campaign 55-57
57-59
 Social media support towards
-
maggi
59-61
 Maggi relaunch in india
61-63
 Marketing strategy to relaunch
maggi

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4 CONCLUTION AND
RECOMMENDATION

4.1Conclution 65

4.2 Recommendation 66

5 Bibliography 67

6 Annexure 68-70

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CHAPTER 1

INTRODUCTION

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1.1 BACKGROUND OF THE STUDY
Brand Maggi was launched in India in the mid-1980s. Before Maggi, there were no instant
noodles available in the market. It was, in actual, the creator of the instant noodle market in
the country. The brand became so popular that it became synonymous with instant noodles
category in India. Other companies followed soon, yet they were not as successful as Maggi,
whose success can be attributed to its taste which was the biggest differentiator in the noodle
market. Soon after, other variants like Maggi Pazzta, Veg Atta Maggi, and the like. were
introduced under the Maggi brand name. Maggi had become India’s favorite brand. It was the
Indian consumers, lunch, dinner and breakfast, to say. 2015 has been a nightmare for the
brand Maggi after the discovery of Monosodium Glutamate and unacceptable levels of lead
content in the product. The problem had started in March 2014 itself but it was not taken
seriously by the company till it snowballed into a major controversy and a threat to the
brand’s existence. It has been a convenience food for the boys and girls who live away from
home in hostels and also the bachelors, apart from being a snack for children. Also, Maggi
efforts to console the consumers were in vain and finally it had to recall its product from the
market. Its robotic and standardized responses to the consumers had failed to find a
connection with them. The present case study focusses on the strength of the brand, gives a
background of the Maggi controversy and how Nestle Maggi has won back the trust of the
Indian consumers and regain its old position.

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1.2 NEED OF THE STUDY
Maggi was the most liked noodle brand among Indian population. Long way since their
introduction in 1983 it was consumed almost in every 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. And the last year, presence of lead and MSG above the
permissible limits startled the crowd and it became a hot potato. Being snoop, I wanted to
know the impact of controversy on consumers and their opinion about this controversy which
made me choose this as topic of my study. Maggi came back to the shelves in India in
November 2015. Nestle has also been running a campaign to win back trust of the Indian
community.

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1.3LITERATURE REVIEW
In May 2015, Food Safety Regulators from Uttar Pradesh, India found that samples of Maggi
2 Minute Noodles had unexpectedly high levels of monosodium glutamate, as well as up to
17 times the permissible limit of lead. On June 3, 2015 the New Delhi government banned
the sale of Maggi in New Delhi stores for 15 days due to these findings. Since June 4, 2015
after tests carried out at the state public health laboratory concluded the particular variety to
contain added MSG and excessively high lead content. Some of India’s biggest retailers like
Future Group which includes Big Bazaar, Easyday and Nilgiris have imposed a nationwide
ban on Maggi.

Ataman and Ulengin (2003) According to him the strength of the relationship between the
consumer and the brand will reflect the fit between the consumers own physical and
psychological needs and the brands functional attributes and symbolic values as perceived by
the consumer. Which create Maggi as a brand in the minds of the people.

According to Del Rio et al. (2001) explained that customers recognize the value of any brand
with respect to its different functions like guarantee, social and personal identification and
status symbol. These factors have positive effects on customers brand loyalty and willingness
to accept extension in brands. Brand association has a positive relation with buyer purchasing
intentions. Katyal (2007) According to katyal marketers spend enormous amount of money
annually on celebrity endorsement contracts based on the belief that celebrities are effective
spokespeople for their products or brands. Bashir and Malik (2009) stated that celebrities
used in ads have greater positive influence on people.

Most of the times, people rely on advertisements rather than other sources like family,
friends and reference group opinions regarding product. Pughazhendi et al.(2012), As per
them in emerging markets advertisers use dominant celebrities in ads to promote their

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product image. Single and multiple celebrity involvement in ads affect buying Behavior in
different ways. This study shows that consumer

Behaviour and attitude regarding brand, ads and purchase decision are positively affects by
multiple celebrities.

1.4 OBJECTIVE OF THE STUDY

The present case study focusses on the strength of the brand, gives a background of the
Maggi controversy.

To study the impact of controversy on consumer mind set

To study the impact of controversy on company sales and profit.
To study whether the move with Snapdeal is the smart move to regain the
market.
How Nestle Maggi has won back the trust of the Indian consumers and
regain its old position.

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1.5 RESEARCH METHODOLOGY
To know the response of both the primary and secondary method was used.

PRIMARY DATA :
The primary data used in this report includes the structured
questionnaire through which consumer responses are collected
regarding their views regarding Nestle Maggi

SECONDARY DATA :
The secondary data has been collected from various websites and books . Its
also includes data from company and other referral sites and sources .

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1.6 LIMITATIONS OF THE STUDY
Through adequate care has been taken while doing the project. This project still
suffers from certain limitations. They are;
It is a wider topic. It may have different dimensions. However, it is possible
that there will be other factors, which might not have been covered in this
study.
Some respondents did not properly respond to the questionnaire.
The results and conclusions of the project cannot be generalized in all area of
an organization.
There was shortage of time and resources for the functioning of operation
There are many companies offering ready to eat products in the market but the
study is limited only to Nestle Maggi and also further it is confined only to
Maggi Noodles.
The sample size is only 60 respondents so the result may not be appropriate.

15
1.7 CHAPTER PLANNING
The structure of my project report are as follows:

The first chapter serves as an introduction including background, literature review

(which gives an overview of the theoretical literature on come back of maggi after
its ban), objectives, research methodology, some limitation and chapter planning
of this dissertation.
Chapter two refers to conceptual frame work which includes company profile
(Nestle company) and about its products this chapter also includes national and
international scenario.
Chapter three is basically consist of primary and secondary data which analyses
the case study of Maggi being banned in India and the marketing strategies of
relaunching the brand in India.
Finally, the last chapter present some conclusion and recommendation or
suggestions for the further study.
Bibliography or references (list of books, articles, journals, websites used in the
project work).
Annexure (questionnaires, relevant reports).

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CHAPTER 2

CONCEPTUAL FRAMEWORK

17
2.1COMPAN PROFILE
Nestle originated in a 1905 merger of the Anglo-Swiss Milk company, which was
established in 1866 by brothers George Page and Charles Page, and the Farine Lactee Henri
Nestle Company, which was founded in 1866 by Henri Nestle, whose name meant “little nest”.
The company grew significantly during the First World War and following the Second World
War, eventually expanding its offerings beyond its early condensed milk and infant formula
products. Today, the company operates in 86 countries around the world and employs nearly
283,000 people.

NESTLE PRODUCT

Nestle has 64 brands, with a wide range of products across a number of markets, including
coffee, bottled water, milkshakes and other beverages, breakfast cereals, infant foods
performance and health care nutrition, seasonings, soups and sauces, frozen and refrigerated
foods and pet food.

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 MAGGI

Maggi is an international brand of seasonings, instant soups and noodles owned by

NESTLE since 1947. The original company was founded in Switzerland in 1872 by Julius
Maggi. Maggi is a leading culinary 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 flavoring.

. Maggi noodles were launched in India in the early 1980‟s. Carlo M. Donati, 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.

Market Share

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 Products of Maggi –

 NOODLES

Maggi 2-minute noodles

Maggi vegetable atta
noodles Maggi cuppa
mania

 SOUPS

 SAUCES

 PASTA

 COOKING AIDS

In INDIA and Malaysia, Maggi instant noodles were very popular; Nestle has 39% of the
market in Malaysia, where “MAGGI” is synonymous with instant noodles; and had a 90%
share in India. In Malaysia, fried noodles made from Maggi noodles are called Maggi goreng.

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2.2 NATIONAL AND INTERNATION

SCENARIO
FSSAI (June 5, 2015) Food Safety and Standards Authority of India ordered a recall of all
nine approved variants of Maggi instant noodles and oats masala noodles from India,
suggesting them unsafe and hazardous for human consumption.

On the same day, Food Safety Agency of United Kingdom launched an investigation to
find levels of lead in Maggi noodles. On June 6, 2015 the central government of India banned
nationwide sale of Maggi noodles for an indefinite period. Nepal indefinitely banned Maggi
over concerns about lead levels in the product. Maggi noodles has been withdrawn in five
African nations – Kenya, Uganda, Tanzania, Rwanda and South Sudan by a super-market chain
after a complaint by the Consumer Federation of Kenya. In August, tests performed by the US
health regulator FDA showed no dangerous lead levels in the products.

Food and Consumer Affairs Minister Ram Vilas Paswan reacting to the operation said that
“Standard products are being labeled as sub-standard and faulty products are being passed by
such corrupt officials.

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CHAPTER 3

DATA ANNALYSIS

AND INTERPRETATION

22
3.1 PRIMARY

DATA

23
 SR. PROFFESSION NO OF RESPONDENT PERCENTAGE
NO

1 A HOMEMAKER 3 5%

2 A STUDENT 46 76.7%

3 WORKING PROFESSIONAL 5 8.3%

4 BUSINESSMAN 4 6.7%

5 ANY OTHER PROFESSION 2 3.3%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above table and graph shows that out of 60 respondents 5 are from working profession, 4 are
businessman, 3 are home makers, 46 are students and other 2 are from different professions.

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 SR. DO YOU CONSUME MAGGI NO OF RESPONDENT PERCENTAGE
NO

1 YES 58 96.7%

2 NO 2 3.3%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above table and graph shows that only 2 persons don’t consume maggi but the remaining 58
person consume it to their daily life and this graph also shows that majority of persons want to
consume despite of the negative factors.

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 SR. HOW OFTEN DID YOU NO OF RESPONDENT PERCENTAGE
NO CONSUME MAGGI

1 ONCE A WEEK 23 38.3%

2 ONCE A MONTH 15 25%

3 TWICE A WEEK 20 33.3%

4 NEVER 2 3.3%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above table and graph shows that out of 60 people 20 people consume twice a week, 23 people
consume once a week, 15 people consume once a month, 2 people never consume it.

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 SR. HOW DO YOU PREFER THIS NO OF RESPONDENT PERCENTAGE
NO KIND OF READY TO EAT
FOOD

1 BY WATCHING ADVERTISE- 25 41.7%

MENT

2 RECOMMENDATION FROM 12 20%

FREIENDS AND RELATIVES

3 BY CHECKING PRODUCT 23 38.3%

QUALITY

TOTAL 60

ANALYSIS AND INTERPRETATION

Above table and graph shows the awareness of ready to eat foods through a medium in which
23 people are aware by checking product quality, 25 people by watching advertisement and 12
people by a friend recommendation.

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 SR. DO YOU THINK THAT BAN NO OF RESPONDENT PERCENTAGE
NO OF MAGGI HAS AN
IMPACT ON INDIAN
READY TO EAT PRODUCT
INDUSTRY

1 YES 49 81.7%

2 NO 11 18.3%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above graph and table shows the perception of people on impact on ready to eat product after
the ban of maggi, out of 60 people 49 people agree and the rest disagree.

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 SR. DO YOU KNOW ABOUT THE NO OF RESPONDENT PERCENTAGE
NO MAGGI CONTROVERSY

1 YES 57 95%

2 NO 3 5%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above graph and table shows awareness about maggi controversy among the people. Out of
60 people 57 people are aware about the Maggi controversy and remaining are not aware.

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 SR. NO WHEN MAGGI WAS NO OF RESPONDENT PERCENTAGE
BANNED WHICH NOODLES
DID YOU PREFER

1 SUNFEAST YIPPEE 22 36.7%

2 PATANJALI NOODLES 4 6.7%

3 WAI WAI 13 21.7%

4 TOP RAMEN 15 25%

5 OTHERS 6 10%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above graph and table shows the consumption of other ready to eat foods when maggi was
banned. Out of 60 people 22 people consumed Sun-feast yippee, 15 people consumed top
ramen, 13 people consume wai-wai, 4 people consume Patanjali noodles and the remaining are
consumer of other brands.

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 SR. NO WILL YOU SUGGEST NO OF REPONDENT PERCENTAGE
NOODLES FOR YOUR
CHILDREN OR RELATIVES

1 YES 36 60%

2 NO 24 40%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above graph and tables shows the recommendation of noodles to children and relatives. Out
of 60, 36 agree to recommend and the remaining 24 disagree.

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 SR. WERE YOU SATISFIED WITH NO OF RESPONDENT PERCENTAGE
NO ANY OTHER BRAND

1 YES 31 51.7%

2 NO 29 48.3%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above table and graph shows that out of 60 people, 31 people are satisfied with other brands
of instant noodles and 29 are not satisfied .

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 SR. HOW DID THE NO OF RESPONDENT PERCENTAGE
NO CONTROVERSY AFFECT
YOUR LOVE FOR MAGGI

1 ADVERSELY 18 30%

2 MILDLY 24 40%

3 NOT AT ALL 18 30%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above graph and table shows that the controversy towards the likeness of maggi after it was
banned. Out of 60, 24 people are adversely affected, 18 people are mildly affected and the
remaining were not affected at all .

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 SR. DO YOU THINK THAT NO OF RESPONDENT PERCENTAGE
NO MAGGI’S BAN IS THE
PROTECTION OF
CONSUMER RIGHTS

1 YES 41 69.5%

2 NO 18 30.5%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above table and graph shows that out of 60, 41 people think that Maggi band is protecting their
rights and remaining disagree.

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 SR. DO YOU THINK MAGGI WAS NO OF RESPONDENT PERCENTAGE
NO UNHEALTHY BEFORE 2015

1 YES 32 55.2%

2 NO 26 44.8%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above table and graph shows that out of 60 only 32 people agreed that band of maggi was
adversely affected in the year 2015 but remaining didn’t.

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 SR. NO MAGGI IS ONCE AGAIN NO OF RESPONDENT PERCENTAGE
AVAILABLE IN STORES,
DO YOU KNOW ABOUT IT?

1 YES 59 98.3%

2 NO 1 1.7%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above table and graph shows that how many people are known to come back of maggi once
again in the market only 58 people are known to it the remaining didn’t.

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 SR. DO YOU FIND THE NO OF RESPONDENT PERCENTAGE
NO PRODUCT ECONOMIC

1 YES 53 88.1%

2 NO 7 11.9%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above table and graph shows that out 60 people 53 people find the product to be economic and
the remaining 7 people disagree with the argument.

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 SR. DO YOU PURCHASE MAGGI NO OF RESPONDENT PERCENTAGE
NO NOW (AFTER BAN)

1 YES 53 88.3%

2 NO 7 11.7%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above table and graph shows that out of 60 respondents only 53 people purchased Maggi after
it was banned and remaining 7 did not purchase it.

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 SR. WHAT PERSUADE YOU TO NO OF RESPONDENT PERCENTAGE
NO BUY MAGGI AGAIN

1 THE TASTE 39 70.9%

2 THE TRUST 15 21.8%

3 THE BRAND 5 7.3%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above table and graph shows that after re-launch of Maggi what persuade the people to buy
Maggi again. Out of 60 people, 39 people buy it for its taste, 12 people for trust and remaining
9 people for the brand name.

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 SR. DO YOU GET THE SAME NO OF RESPONDENT PERCENTAGE
NO TASTE IN MAGGI AS
BEFORE

1 YES 47 82.5%

2 NO 13 17.5%

TOTAL 60

ANALYSIS AND INTERPRETATION

Above table and graph shows that how many people get the same taste of Maggi after and
before banned of Maggi. Out of 60 people only 47 people get the same taste as before and
remaining the 13 people did not get the same taste.

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3.2 SECONDARY

DATA

41
 MAGGI : A SUCCESSFUL BRAND
MAGGI 2-Minute Noodles is one of the major and most adored food brands that defines the
Instant Noodles category in India. The 2-minute noodles were first launched in India in 1982
(Nestlé, India). At that time, the Indian consumers preferred mostly homemade food. Maggi,
was introduced keeping in view the working women who are time poor to save their time and
thereby, making their life easy. But, marketing Maggi to employed women failed despite huge
spending on the promotions. Later on, it was found out that Maggi is more popular in children
as snacks, due to its taste, especially the signature taste of its Masala. Therefore, Maggi was
then marketed to children and their mothers as ‘fun’ food which was healthy as well as easy to
cook. The ad taglines were like ‘Mummy, bhookh lagi hai' (Mom, I'm hungry), 'Bas 2-Minute,'
(Only 2 minutes) and 'Fast to Cook Good to Eat’ communicated the consumers highlighting its
taste and ease of preparation. It is so deeply positioned in the consumers mind that most can
recognize ‘the 2-minute noodle’ as Maggi in India (ICMR, India).

In 2006, Business Week Magazine had written, "Maggi has managed to enter Indian homes to
change the traditional food habits of Indian children on its promise of convenience. This brand
has understood the psychology of Indian mothers and positioned itself for mother-child
indulgence." (BBC, World-Asia). In 2014, Maggi has been considered amongst the Top 5
Most Trusted Brands by Brand Equity and also the Most Powerful Brand by WPP- Milward
Brown survey. WPP- Milward Brown survey is a survey which judges the power of the brand
on several parameters such as, salience, importance, association, distinctiveness and dynamism
(Annual Report, 2014). Nestlé Maggi has been innovation and renovation itself with the

42
objective, ‘Health ko Mazedaar Banaao’. Its new campaign “Meri MAGGI 2- minute Mein
Khushiyan”, acknowledges that “Meri MAGGI” gives consumers the power to create
happiness in just 2 minutes! (Annual Report, 2014).

India is second largest in terms of market share for Maggi, Nestle and has been a market leader
since 2009. Its retail sales for Maggi reached $623 million in 2014. The size of the India’s
noodle market is around $ 0.8 billion in 2015, with 63% market share. By 2019 it is expected
to rise to $ 2 billion (Quartz, June 5, 2015). (See, Fig.1)

Fig 1 Brand share of noodles

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MAGGI MARKETING MIX

The marketing mix of Maggi has been its competitive strength and has helped it to gain and
retain the top spot in the instant noodles industry.

Product

Maggi has introduced a wide range of products under its brand name under several categories
like noodles, sauces, ketchups, seasonings, stocks, etc. Everybody’s favorite Maggi 2-minute
noodles is available in five flavors, viz. Tricky Tomato, Chicken, Masala, Romantic Capsica
and Thrillian Curry. The healthy variants such as Maggi Vegetable Multigrainz Noodles,
Maggi Vegetable Atta Noodles and Maggi Oats Noodles are also offered which are high in
fibre, calcium, protein contents. They were introduced keeping view the changing lifestyles
and need of healthy food in the market. Apart from these, Maggi Sauces, Pichkoo, Masala-e-
Magic, Healthy soups, etc. are also included in the offerings by Maggi.

44
 Place

Nestlé’s model of distribution has been the Maggi’s distribution channel. The distribution
process starts from company to distributor to retailers and finally to consumers. The
distribution of Maggi is done two ways. First, it is available at the local kirana store and
secondly, also at the malls and shopping centers. Distributor is offered 6% of the margin and
the retailer 15% on promotional products and 10% on usual products. Distribution has been the
strongest asset in the Nestle marketing mix which has eventually made it the successful brand
across the country. It seems as if it is sold everywhere. The brand is ubiquitous.

Price

Price of Nestle Maggi has been set keeping in view the pocket of the common man. It is sold
in family packs as well as the economy packs. This is because it caters to middle class as well
as the lower income groups. The type of pricing that Maggi follows is called ‘penetration
pricing’.

Promotion

The tagline of Maggi noodles as ‘2-minute noodles’ has been one of the most successful
taglines in the advertisement industry. Time to time various celebrities like Amitabh Bachhan,
Preity Zinta, Madhuri Dixit have been associated with Maggi’s promotional activities. The
advertisements have been of product recall and introduction of new variants in the past.
Recently, after the controversy these advertisements have become more nostalgic, making
people realize how much Maggi means to them and how much they miss Maggi. Brand Maggi
identifies with playful children screaming “Mummy bhookh lagi”, youth in hurry, relationship,
culture, fast to cook and good to eat Maggi Noodles, dual income families and also
,independence and fun-loving.

45
 PRODUCT LIFE CYCLE OF MAGGI

SWOT ANALYSIS

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 brand is in the growth stage of product life cycle with a strong inclination
towards the maturity stage

46
 STPD ANALYSIS

A marketing strategy is based on expected customer behavior in a certain market. In order to

know the customers and their expected buying behavior, a process of “Segmentation and
positioning” is used. These processes are chronological steps which are dependent on each
other.

47
 CONTROVERSY REGARDI MAGGI
In spite of the smooth sailing and success, Maggi found itself embroiled in a controversy which
would snowball into a major argument and a serious dispute for the company which it would
have never dreamt of.

In May, 2015; Maggi was found to be containing monosodium glutamate (MSG), a taste
enhancer, which it denies on the pack. Moreover, lead was also found to be present in the
noodles more than the permissible limits, by the Lucknow Food Safety and Drug
Administration in a routine test, in about two dozen packs. The administration wrote to the
Food Safety and Standards Authority of India (FSSAI) asking it to cancel the Maggi’s license.
To this allegation company defended itself by saying it might have come from the naturally
occurring sources and the company does not use them as raw materials in their production.
Tests were ordered to be conducted at more places by federal food inspectors in New Delhi
(Indian Express, May 27 & May 20, 2015).

On June5, 2015, an order issued by the Food Safety and Standards Authority of India (FSSAI)
directed Nestle, India to withdraw all the Maggi noodles in the market. This decision came
when Maggi had already decided to withdraw its noodles from the market voluntarily.
Moreover, all other brands selling noodles were ordered to be tested by the FSSAI and enforced
the Food Safety and Standards Act, 2006 (India Today, August 11, 2015). The adverse effects
of MSG include headache, flushing, perspiring, facial tautness, numbness, tingling sensation
in the face, neck and other areas, rapid heartbeats (heart palpitations), chest pain, nausea,
weakness, etc. (Indian Express, May 27, 2015). Meanwhile presence of lead up to 17.2 ppm

48
(parts per million) against the permissible limit of 2.50ppm is more dangerous for children than
adults, because it gets absorbed in them easily and children are its main consumer. Its adverse
effects on children include mental injury, learning difficulties, low IQ, growth delays, etc.
(Garg, 2015).

FSSAI suggested the Swiss major to accept the facts in a public statement and apologize to the
public about misleading them about MSG. Moreover, the lead content problem could be solved
by withdrawing several batches of the noodles suspected to be high in lead content. However,
Nestlé refused to issue a public statement. This acted as a flame to the Maggi controversy
(Business Standard, August 10, 2015).

It is Maggi’s worst ever branding crisis in India, where by June 9, 2015, apart from the recall,
about 169 tons of Maggi had been destroyed. About 40% of the 27,420 tons were impossible
to destroy, as they had reached consumer’s homes, although the company continued to uphold
the statement that ‘Maggi is safe for consumption’ (HT, June 16, 2015).

49
 IMPACT REGARDING MAGGI

CONTROVERSY
Maggi controls nearly 70% of the instant noodles market in India, worth Rs 5000 crore,
according to a report by Times of India. It is followed by ITC Sun-feast Yipee, which has a
market share of 18-20%. Hindustan Unilever's Knorr Soupy noodles makes up for the balance
share, But after controversy following are the impact of controversy on maggi.

Fall in the sales: As states across the country banned the product, Maggi sales fell
60% across India since the controversy began in the last week of May, according to a
Kotak Securities report.
Net Profit: Maggi contributed 30% of Nestle India's Rs 1,185 crore-worth profits in
201415, as per the media reports. Reeling under the Maggi ban, Nestle India had
reported 60.1 per cent decline in standalone net profit at Rs 124.20 crores for the third
quarter ended September, 2015.

50
Fall in Share Price: Its share price fell nearly 13.5% or by Rs. 941 in the fifteen
days to June 10, 2015. Most consumer goods companies have seen single-digit growth
in the recent past. Keeping this in mind, the current controversy is only expected to add
to Nestle's woes. Revenue growth may weaken in this financial year in the aftermath of
the controversy, Kotak said. The Nestle India stock currently trades at 33 times the
company's future Earnings per Share (EPS), according to Kotak Institutional Equities
report. This means, investors pay 33 times more than the company's expected profit in
FY16 to purchase the stock.

Panic in the market: As states across the country banned the product, many
retailers took Maggi off the shelves. Some states such as Punjab, Karnataka and
Uttarakhand also ordered Nestle to stop production until further orders

51
 Consumer confidence slumps: Trust plays a major factor when a consumer buys
a particular product. With harmful chemicals like lead and MSG found in samples
across the country, consumers may feel their health is at stake. This has shaken
consumers' confidence.

Jan-16 Jan-15
Market Share of market 42% 77%
Size of instant noodle
market Rs. 2000 cr Rs. 3400 cr

Nestle's net sales Net profit

17% 52.45%
Rs. 8123 cr Rs 563.27 cr

Its net sales declined 17 percent to Rs. 8,123 crores and its profit declined 52.45% to Rs. 563.27
crore. Nestle said sales in Asia, Oceania and sub- Saharan Africa (AOA) markets were
“overshadowed” by the issue in India.

52
CONSUMER SENTIMENTS AFTER
MAGGI CRISES AND WITHDRAWAL
The consumer sentiments in Maggi were deeply hurt and confidence shattered after the
declaration of MSG and lead presence. Moreover, some also stocked their shelves with Maggi
when they heard about the ban. People and celebrities took to social media to vent their anger
as well as sorrow. It was bashed as well as abused on social media by the Indian consumers.
Some of the celebrity who were sued for promoting Maggi tweeted, (NDTV, June 5, 2015)

Reading the news about me being sued for doing the Maggie commercial over 12 years ago?
12 years ago? How does that happen? — Preity zinta (@realpreityzinta) June 3, 2015.

Like most of India, I have enjoyed Maggi noodles for years. I was very concerned after recent
reports and met with the Nestle team (1/3). — Madhuri Dixit-Nene (@MadhuriDixit) May 30,
2015

Other celebrities tweeted: You know how you will stay with someone if they stop doing that
one thing? Yo Maggi, can you just drop the lead so we can still be together? — Vir Das
(@thevirdas) June 4, 2015

@MaggiIndiaWhat do you mean by "Excess Lead"? Why No Traces of Lead. Our Children
can nt hv Lead. Why MSG? — Gaurav Lakhani (@gauravlakhani) June 1, 2015

According to Raghu Vishwanath, MD, Verte-brand, a brand valuation company, said that
“They should come up with a new variant that is completely devoid of MSG and lead," and the
brand could bounce back like the soft drink brands (Pepsi and Coca Cola) have made a
comeback after the pesticide controversy. "For the kind of equity the brand has built, the

53
consumers will forgive them,” Vishwanath was quoted as saying. They need to avoid the
consumer sentiments to turn against them and take this crisis as an opportunity in disguise to
launch an MSG free Maggi, develop the product and maintain a high level of product
transparency (Business Today, June 1, 2015).

Parle Products manager, Mayank Shah, was of the opinion that the packaged food industry is
seeing a major growth. Therefore, sales of Maggi will not be hurt. He was quoted as saying,
“The ready-to-eat segment is only set to grow and this is a minor blip” (The Financial Express,
June 16, 2015)

54
MAGGI COMEBACK CAMPAIGN
The Maggi controversy has been tagged as the biggest PR disasters in the social media age for
a company. The lost trust of the consumers, a feeling of betrayal and deceit was imminent. The
brand value as well was at stake. The CEO’s comments also came late, which ascertained as
an insult and disregard to the sentiments of the Indian consumers. The report of MSG started
in 2014 and Maggi did not pay heed to the FDA admonitions. They expected Indian
government to remain indifferent to the problem, media and people will forget about it and the
controversy will die. But, this was not possible in this age of social media and with a more
educated and aware Indian consumers. Instead of taking concrete steps, the company stopped
all communication with the consumers and their social media response proved to be a
catastrophe. Maggi simply just refused to acknowledge their mistake and connect with the
consumers in spite of the fact that 50% of the company’s revenue came from the sales of Maggi
(June 6, 2015).

By August 14, 2015, the ban on Maggi had been lifted and the enormous task of regaining
brand loyalty and brand equity lay ahead. The uplifting of the ban was a moment of rejoice for
the consumers who seriously missed their Maggi. Still, Maggi had a tough road ahead to assure
the Indian consumers that their product was safe and healthy. It will be a tough task to rebuild
brand Maggi by just targeting the children as parents will not allow their children to eat it after
the controversy. They will have to build the consumers trust by portraying it as a brand which
actually cares for the consumer’s health and is working towards it. They have to focus on
‘consumer safety’ and be honest in their communications.

55
For the comeback campaign Prasoon Joshi was roped in to make a Maggi’s relaunch
campaign. Maggi released three videos on you tube as well on its Twitter handle with the

hashtag WeMissYouToo. Through these videos Maggi has tried to touch the emotional chords
of the Indian consumers and has tried to build a genuine connect with consumers with simple
advertisements. First video gives a message that as long as Maggi was there the protagonist
never had to worry about the food home delivery leaflets. Second video showed that the
character in the ad never used to bother his mother when he felt hungry at night. The third
video, talks about how he never needed to connect with his neighbors because of Maggi. These
videos were made to create a feeling of warmth with the consumers. To achieve this uphill task
of bringing back Maggi to its original position, spending of the company’s share in promotion
and advertising has been increased from 45% to 7%.

Still, Maggi has a long way to go to re-establish its lost brand image and loyalty in the Indian
market. It will soon be successful no doubt. This can be said because the soft drinks brand and
Cadbury have been able to bounce back after the crisis they have faced. The relationship of
Maggi with the Indian consumers is historic and deep. It has to slowly find its way back to the
consumers’ heart and thereby into the country.

56
The case recognizes that this type of controversy is a lesson not just for nestle but all the
companies. It is very important to be honest in the product communication and be very cautious
in the plant visits of the company because the Trust Once Lost is Difficult to Gain.

SOCIAL MEDIA SUPPORT TOWARDS

MAGGI
When the Maggi ban was first heard of, social media went buzzing with hilarious memes
as well as genuine queries from consumers.

According to an analysis done by Simplify360, it was found that the general tone of the
posts on the social media sites, tend to suggest a high degree of disbelief and hurt that a trusted
brand would stray from the path. Topics like #maggiban, #maggiinasoup kept on trending for
weeks. On June 5th, the global head of Nestle decided to withdraw all the variants of Maggi
from india, citing that the current scenario is not conducive for the brand.

57
Commenting on whether Maggi has taken the right social media strategy, Vinish Kathuria,
Chief Operating officer, Digital quotient said, “There is no right and wrong thing in this case.
Being a global brand, there must be few guidelines which they have to adhere to like-Don’t
speak much in moments of crisis. The reason being, sometimes overcommunication can in fact
magnify the initial problem and they may face some legal consequences because of it. but from
my point of view, right now the communication route which Maggi has taken is quite passive,
which loyalists might not appreciate. It is very important to keep these followers on your side;
a certain appreciation for the fans is not a bad idea. Don’t be aggressive, but a non-product
consumer centric strategy is recommended”.

58
 Vipin Dhyani, 6ounder N Chief Creative Director, Thought shop Advertising & film
productions feels the only reason why the brand should continue with its social media
communication is because, if you keep mum, then things have a tendency to blow out of
proportion. So whatever the situation might be, whether positive or negative, the brand needs
to communicate in a polite and a positive way. Even if, they don’t have any backup plan, they
should assure people that they are working towards it. Maggi has played a vital role in
everyone’s life and has been like their best friend in moments of crisis. It is now very difficult
for people to accept, that their favorite brand which boasts of several varieties is not there,he
cited. He further added, “Every brand works towards 100% efficiency and this controversy has
left a huge dent in terms of the loss for the company. People are aware, that this must be one
of the cases and obviously the R&D would love to save the product.

They should in fact, do something similar to what Cadbury and Coke did, when they were
faced with crisis. The brands used their celebrity endorsers in the campaigns, and showed them
in some R&D factory, telling the viewers that their products are absolutely safe for
consumption”.

MAGGI RELAUNCH IN INDIA

It was Diwali two days in advance for several grocery stores and customers in the city.
Departmental stores across Mumbai had a special display Monday, right on their entry gate in
bold letters “we are back”, “Maggi is back”. By the end of the day, several small-time grocery
shop owners admitted their entire stock had been sold out once the word spread in the locality.

In a special rollout, Nestle, apart from re-launching Maggi noodles back into the market,
also tied up with online portal Snap deal to register requests for home delivery of Maggi
noodles starting Tuesday. “we will start taking orders from Tuesday. but delivery will be made
after Diwali”, a Nestle spokesperson told supermarket on Yari Road in Versova, said he noticed
a palpable excitement among the customers when they spotted Maggi back on the shelves. “we
have already sold 15 to 20 packets. The word will spread to the entire area now”, he said.
Gayeri added that he had been receiving queries from regular customers frequently about the
anticipated relaunch date of Maggi. “while we did manage to sell other brands when Maggi
was banned, our sales dropped significantly”, he said. At his store, the maximum packets were
purchased by kids on Monday. At Society Stores, lokhandwala, three cartons of Maggi noodles

59
were ordered (288 packets). by 8.00 pm, less than a dozen were left. “we realized that people
have been tracking the launch date of Maggi. Everyone who visited the store purchased a packet
today”, said Manan Gade, who sits at the counter. The store had made special arrangements to
launch the noodles. “we had decorated the shelf with stickers. posters with “we are back” were
put everywhere”, Gade added.

while some shops managed to procure the product on the first day of its relaunch, several
stores were asked to wait due to high demand. At departmental chains such as big bazaar and
Star bazaar the product was yet to hit the shelves. “we placed an order for all our stores in
Mumbai. but the delivery will come on November 16”, said Suresh, from Great home stores,
Ahendri west. According to him, several small shops in his area are waiting for Maggi’s
delivery. “A lot of people have inquired about the noodles in the last few days”, Suresh admit

Maggi noodles is presently being manufactured at three locations -.Nanjangud (Karnataka),

Moga (Punjab) and Bicholim (Goa). For the other two locations at Tahliwal and Pantnagar,
nestle is engaging with authorities to obtain permissions to initiate manufacture

“we will make our best endeavor to reach the product to our consumers at the earliest. we
are in touch with our channel partners and distributors to achieve this”, a release from the
company said.

“The return of Maggi noodles on the auspicious occasion of Deepawali and on the day of
Dhanteras is a moment of celebration for all of us on behalf of over 7000 Nestle India
employees, I would like to thank all our suppliers, distributors, retailers, and millions of

60
consumers from every corner of India and overseas for their support”, said Suresh Narayanan,
Chairman and Managing Director, Nestle India. Meanwhile, the food and Drug Administration
(FDA) is set to routinely test samples of Maggi noodles once they hit the entire market in a few
days. “we will continue the routine procedure of testing packaged food items to check for any
contravention as per food Safety and Standards, Act. In this case, if any norm is flouted, we
can send another notice to Maggi”, said Dr Harshdeep kamble, FDA commissioner. last month,
Nestle received clearance from three laboratories, as per the Bombay high Court’s directive,
for safety of its noodles. The laboratory test was conducted to check whether excessive lead
was still present in its noodles. The product was banned earlier this year after excessive lead
and monosodium glutamate, a flavor enhancer, was found in it.

MARKETING STRATEGIES OF MAGGI

RELAUNGE IN INDIA
Nestle India has increased its marketing of Maggi as it prepares to present results of the re-
test conducted on samples of the instant noodles brand to the Bombay high Court. The court
had on August 13 order directed the company to complete the tests in six weeks. Nestle has
tied up with smartphone apps to create a buzz around the year-end re-launch. Users of apps
like Haaptik, an online directory, are receiving mailers that the service will alert them when
Maggi arrives in stores.

61
The company has been uploading videos for its Miss-You Maggi advertising campaign
unveiled a month ago. The advertisements speak of how Maggi was a crucial snack at any time.
The Miss-You Maggi campaign is supported by a twitter hashtag ‘wemissyoutoo’ that had
surfaced right after the Bombay high Court verdict on August 14. The hashtag has received
about five million impressions, according to Mind Shift Metrics, a digital agency that maps
reach and trends on social media.

62
 Nestle has also uploaded a new corporate advertisement on YouTube that highlights its
journey in India over 100 years. While Maggi is not part of this film, brand experts said the
assurances of safety and quality would rub of on the brand as well.

Nestle India Managing Director Suresh Narayanan recently said the company would ensure
Maggi’s relaunch was a memorable experience. Many of these initiatives would be digital,
Narayanan said, to address “24 by 7” audiences. It is unclear whether Nestle will appoint brand
ambassadors for Maggi. Narayanan admitted the company had not thought about it. During the
Maggi recall, the brand’s past and present endorsers, including actors Madhuri Dixit, Amitabh
Bachchan and Priety Zinta, were served notices by the Uttarakhand food and Drug
Administration for making false claims.

63
CHAPTER 4 CONCLUSION &
RECOMMENDATIONS

64
4.1 CONCLUSION
Traditionally Indians believe in consuming fresh stuff rather than packaged or frozen, but the
trend has changed India became a top market for fast food companies. There are various
companies like Nestle, Sunfeast, Horlicks, Ching’s, Maruchan Ramen competing each other in
Indian market.

Maggi is a product that belongs to Nestle India, which is one of the leading fast food companies
in the country. But few months back government of India banned Maggi Noodles because they
are using monosodium glutamate (MSG) and lead beyond the permissible limit in their product.
This Maggi issue has made a negative impact on whole Indian ready to cook products market.
The sale of the total industry declined by 60% to 70%.The total industry now under a radar
view because the customers and other authorities doubtfully watching these products. In order
to overcome these problems the study insisted that the companies should come out with new
advertisement techniques, promotional campaigns and especially customer awareness
programme.

Nestle India has also said it “regularly monitors” for lead, including testing by accredited
laboratories. On June 1, the company said it had submitted samples from almost 600 product
batches to an “external laboratory” for an “independent analysis”, but did not identify the lab.
It also said it had conducted in-house tests on 1,000 samples at its accredited laboratory. “These
samples represent around 125 million packets. All the results of these internal and external tests
show that lead levels are well within the limits specified by food regulations and that Maggi
noodles are safe to eat. We are sharing these results with the authorities,” Nestle said

65
4.2 SUGGESTION &

RECOMMENDATIONS

 I am suggesting that the company should form a separate Quality Administration

Committee in each production unit to ensure the quality of every product.

 The company should strengthen the social net working system of the company and

customer relationship.

 The companies should open its own various outlets throughout the country with

customer information centers.

 Maggi should introduce an alternative snack in the ready to cook market which will

help the relaunching of Maggi in a new format.

 Should launch new advertisement campaigns (TV, RADIO, etc...) with credible stars.

 Should strengthen the distribution channels of the company especially in rural areas.

 Conduct Promotional campaigns at schools, colleges, and towns where people are

more than 1000.

 The customers should check the ingredients and other relevant information before

purchasing a product.

66
 BIBLIOGRAPHY
BOOKS REFFERED

 LA STRATEGIE NESTLE (NESTLE STRATEGY), HELMUT MAUCHER.

 FAST FOOD: ROADSIDE RESTAURANTS IN THE AUTOMOBILE AGE,

JAKLE, JOHN (1999).

 DEVELOPMENT OF A MEASURE OF THE MOTIVES, UNDERLYING THE

SELECTION OF FOOD: THE FOOD CHOICE QUESTIONNAIRE,
APPETITE,ANDREW STEPTOE & TESSA M. POLLARD, (1995),

JOURNAL

 THE WALLSTREET JOURNAL.

 BRITISH FOOD JOURNAL
 JOURNAL OF FOOD PRODUCTS MARKETING

WEBSITES

 WWW.INSTANTNOODLES.ORG
 WWW.WIKIPEDIA.COM
 WWW.NESLTE.IN

ANNEXURE (SAMPLE QUESTIONNAIRE)

Name of Respondent:

67
 Gender: Male Female

Age:

[You are required to tick ( ) your preferred option]

 Profession

A Homemaker A Student Working Professional

Businessman Any other profession

 Do you consume Maggi?

Yes No

 How often did you consume Maggi?

Once a week Once a month

Twice a week Never

 How do you prefer this kind of ready to eat foods?

A.BY WATCHING ADVERTISEMENTS
B. RECOMMENDATIONS FROM FRIENDS AND RELATIVES
C. BY CHECKING PRODUCT QUALITY

 Do you think that ban of Maggi has an impact on Indian ready to eat product
industry?
(A) YES (B) NO
 Do you know about the Maggi controversy?

Yes No
 When Maggi was banned which noodles did you prefer then?

Sunfeast Yippee Patanjali Noodles

68
 Wai Wai Top Ramen Other

 Will you suggest noodles for your children or relatives now?

(A) YES (B) NO

 Were you satisfied with any other brand of instant noodles?

Yes No

 How did the controversy affect your love for Maggi?

Adversely Mildly Not at all

 Do you think that Maggi’s ban is the protection of consumer rights?

(A) YES (B) NO
 Do you think Maggi was unhealthy before 2015?

Yes No

 Maggi is once again available in the stores, do you know

about it?

Yes No

 Do you find the product (Maggi) economic?

Yes No

 Do you purchase Maggi now (after ban)?

Yes No

o (If yes) What persuade you to buy Maggi once again?

The Taste The Trust The Brand

69
o (If yes) Do you get the same taste in Maggi or do you
experience a change in the taste?

Yes No

o (If no) Why?

70