K.C.

COLLEGE
TYBBI (SEM V)
(2009-2010)
SUBJECT: MARKETING IN B & I
GROUP: 02
TOPIC:
MARKETING STRATEGY
OF

ON

SUBMITTED TO:
MS. NEHA SINGH
 GROUP MEMBERS:

Manali Jain (02)

Sadhana Chaurasia (06)
Priyal Jain (12)
Nidhi Talajia (25)
Zarna Radia (43)
Chaya Gupta (54)
 ACKNOWLEGEMENT
In the pursuit of this project, we would like to thank Ms.
Neha Singh for giving us this opportunity to explore our knowledge
and enhance our skill and talent in Marketing through the selected
topic for the project. We would also like to thank people who
indirectly helped us with information in the project topic.
 INTRODUCTION
Nestle Company:

Nestlé S.A. is the largest nutrition and foods company in the world,[2]
founded and headquartered in Vevey, Switzerland. It was founded in
1866 by Henri Nestlé. 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 individuals.

Nestlé India is a subsidiary of Nestlé S.A. of Switzerland. With seven

factories and a large number of co-packers, Nestlé India is a vibrant
Company that provides consumers in India with products of global
standards and is committed to long-term sustainable growth and
shareholder satisfaction.

The Company insists on honesty, integrity and fairness in all aspects

of its business and expects the same in its relationships. This has
earned it the trust and respect of every strata of society that it comes
in contact with and is acknowledged amongst India's 'Most Respected
Companies' and amongst the 'Top Wealth Creators of India'.

Nestlé has 6,000 brands, with a wide range of products across a

number of markets including coffee (Nescafé), bottled water, other
beverages (including Aero (chocolate) & Skinny Cow), chocolate, ice
cream, infant foods, performance and healthcare nutrition, seasonings,
frozen and refrigerated foods, confectionery and pet food.

The Company’s transparent business practices, pioneering

environment policy and respect for the fundamental values of
different cultures have earned it an enviable place in the countries it
operates in. Nestlé’s activities contribute to and nurture the
sustainable economic development of people, communities and
nations. Above all, Nestlé is dedicated to bringing the joy of ‘Good
Food, Good Life’ to people throughout their lives, throughout the
world.
Nestle Products:

(1) Milk Products and nutrition: includes Nestle NIDO, Nestle

milk, Nestle Natural Dahi, etc.
(2) Beverages: includes Nescafe coffee, Nescafe Cappuccino,
Nestea, etc.
(3) Prepared dishes and cooking aids: Maggi 2 minute noodles,
Maggi soups, Maggi Masala-e-magic, Maggi Sauces, etc.
(4) Chocolates & Confectionery: Nestle Kitkat, Nestle Munch,
Nestle Milky bar, bar one, polo, etc.

Focus on Brand - Maggi:

As soon as you hear the words, 2 minute noodles, the first thing which
strikes to your mind is the brand Maggi………!!! And this is just
because since years, Nestle has been successful in creating such a
good image about its noodle brand in customer’s mind.

MAGGI 2-MINUTE Noodles is one of the largest & most loved

snack food brands that define the Instant Noodles category in India.
Maggi Brand was introduced to the Indian consumers by NIL with the
launch of Maggi 2 Minute Noodles, an instant food product, in 1982.
With the launch of Maggi noodles, NIL created an entirely new food
category - instant noodles - in the Indian packaged food market.
Initially Nestle tried to position the Noodles in the platform of
convenience targeting the working women. At that time, Indian
consumers were rather conservative in their food habits, preferring to
eat traditional Indian dishes rather than canned or packaged food. But
it found that the sales are not picking up despite heavy promotion
.Research then showed that Kids were the largest consumers of the
brand. Realizing this, NIL shifted its focus from working women to
children and their mothers and repositioned the brand towards the
kids using sales promotions and smart advertising. NIL aggressively
promoted Maggi with taglines such as “Mummy Bhook Lagi”, “Bas
2Minute”, “Fast to cook, good to eat” and through several schemes of
free samples, gifts on return of empty packs, etc. Later was observed
 that people of all age group started liking Maggi. Over the years, NIL
extended the Maggi brand to a variety of culinary products like soups,
sauces and ketchups, and cooking aids among others. In 2005, NIL
started offering a range of new 'healthy' products under the Maggi
brand, in a bid to attract health-conscious consumers.
Marketing Strategy used in popularizing Maggi Brand:
Nestle aspired to create a Maggi kitchen. It observed a burgeoning craze
for Chinese food & easy to cook meals. The product targeted towards
middle class of metros & tier-1 cities. Maggi was positioned an easy
to cook meal in India. Target customers were children and youth.
Being the first-mover, NIL successfully managed to retain its
leadership in the instant noodles category even until the early 2000s.
In 2005, NIL started offering a range of new 'healthy'
products under the Maggi brand, in a bid to attract health-conscious
consumers.

The first marketing strategy was through TV commercials,

Promotional campaigns & the various tag lines used to promote the
product.
It adopted STPD Method:
Segmentation: It is based on lifestyle and habits of urban families
depending on their consumption per week, type of flavor sold etc.
Maggi introduced various types of the brand noodles depending upon
the taste of its consumers. For e.g. it introduced Maggi masala as a
basic product, then Maggi noodles tomato flavor for kids, Veg Atta
noodles for health conscious people and Maggi chicken flavor for
non-veg lovers.

Targeting: Kids, Office goers are their main targets as it is very easy
to cook and less time consuming so office goers prefer it. And kids
love its taste.

Positioning: With statements such as 2 min noodles, easy to cook and

good to eat, they create their own position in the market, and their
tagline is the most effective way to get the positioning done. It has
made various tag lines famous in the minds of children like “Mummy
bhook lagi”, bas do min, etc.

Differentiation: Different taste for different flavors and attractive

packaging has helped them to differentiate their product from others.

Branding strategies/ Market Penetration Strategies

Adopted by NIL:

(1) It held Promotional campaigns in various schools initially as

children were the main targets and to see the reaction of them.
(2) It adopted various Advertising strategies like ‘It’s Different’,
‘bas
2-Minute’, ‘Health Bhi, taste Bhi’ etc which caught the heart
and imagination of Indian consumers.
(3) It made its brand available in different pack sizes like
50,100,200,400 Gms.
(4) It came up with new product innovations in the market
introducing different flavors, tastes, Maggi Cuppa Mania, Rice
Mania, Maggi Pazzta, etc.
(5) It
Organized contests, games and industrial visits for school kids
to further strengthen the brand image.
(6) It invited Housewives to send new innovative recipes
made from Maggi and introduce rewards for the same.
(7) In 2007, it completed its 25 years as a brand name. So it
came up with ads focusing on 25 years of joy.
(8) NIL's
promotions positioned the noodles as a 'convenience
product', for mothers and as a 'fun' product for children
(9) NIL aggressively promoted Maggi noodles through several
schemes like: - distributing free samples, giving gifts on the
return of empty packs.
 (10) NIL's advertising too played a great role in communicating
the benefits of the product to target consumers.
(11) In recent time, i.e., last year it came up with new strategy
of ‘Me & Meri Maggi’. In this case, it asked consumers to share
their Maggi experiences and win a chance to be in the Maggi
ads on TV and also on the Maggi packs. This strategy helped
them a lot in gaining attention from customers and they earned a
huge amount of profit. The company did “360 degree
activation” across television, print and the internet, beside on-
ground activities. Nestle had also launched an interactive
website for the consumers, www.meandmeri.in. The packaging
had been tweaked to accommodate the pictures of consumers
whose entries the Company chose.
(12) It keeps on conducting market research to understand
changes in market.

Distribution Strategy:
Maggi distribution strategy is a 3 chain system i.e.
Nestle – Distributor – Retailer
Nestle: It has decentralized Manufacturing where each plant operates
on its own requirement of production. There is no monolithic or
centralized approach in the production process. It follows two types of
distribution paths. The first one being traditional (Kirana Stores) in
which the stock of Maggi is available to almost all the small Kirana
stores for the consumers. The second one is the institutional food
outlets in which the stock is available with every food malls like big
bazaar, Apna Bazaar, Reliance food outlets. So by making the product
available everywhere, Nestle tries to reach to its customers easily.
Distributor: Nestle offers 6% margin for distributors. The distributor
has to pay in advance to Nestle but he has to give the stock to the
retailers on credit. Here they try to target small and big shops both so
that they can cater and reach to every kind of customers from various
strata of the society.
Retailer: Retailer gets 10% margin from distributor and 15% margin
for new & promotional products. Nestle also has brought various area
space for different promotional purposes. For promotional purposes,
Nestle does the sampling both wet and dry sampling at these
promotional places.
Competition:
Though Maggi has been successful every time, there were times when
it faced challenges. Some of these are:
(1) Sales saw decline in 1990: The Company saw a decline in the
sales in 1990. When the company tried to find out what the
reason was, they came to know that there was something
wrong with the formula that spoiled the taste. So the formula
was changed from fried base to oiled dried base.
(2) Competition increased in noodle segment: When Maggi was
enjoying being the only noodle offering by any company Top
ramen entered the market as a competition. This was a big
challenge for Maggi, though Top Ramen couldn’t do well in
India.
(3) New product launched in market but failed- Nestle decided to
expand its offerings by offering Dal atta noodles & Sambhar
flavor noodles. But these products were not welcomed by the
people the very special taste of Maggi was still ruling the
consumer.
(4) Maggi launched some new products: Ketchups, Soups, Taste
makers etc. but they were not successful.

Competitive Strategy:

To beat the competition from Top Ramen and others in this segment,
Nestle did the following things:
(1) Nestle introduced Maggi in new packs with different contests
for the customers.
(2) It came up with innovative products like Maggi Pazzata in
two different flavors – Masala & cheese Macroni.
 (3) It
also focused on its advertising strategies by introducing new
ones in order to keep in touch with customers so that the
image of the product does not get washed away.
(4) It made its product affordable by introducing small Maggi
pack of Rs.5.
These competitive strategies are overlapping as the company has
always thought of different kind of strategies keeping in mind its
competitors.
Though other brands came up with something similar to Maggi, but
they had temporary effects on consumers mind as consumers
switched to the Maggi brand for its taste.
Maggi Product life cycle:
It has three stages: Introductory stage, Growth Stage and Mature
Stage.
The introductory stage includes High marketing of the brand through
various means and promoting the product through making the
customers aware and providing them with nutritional information.

The Growth stage involves the increased sales and profits. It entered
into the competition with top Ramen. It changed its formulation
in1997 and reintroduced the old product in 1999.

The Mature stage includes extending and introducing new products

lines. It repositioned itself as a healthy product. It tried to move into
new markets.

Brand Extension:
Brand extension is using the leverage of a well known brand name in
one category to launch a new product in a different category. Brand
Extension Strategies are frequently undertaken by the companies
when they launch any new product. The companies try to reap benefit
out of their established Brand Name and Brand Equity. Brand
Extension Strategy refers to the strategy in which a company uses the
same Brand Name in order to promote products of different category.
It is commonly found that, a company which has already established
its brand name in the market for a specific product category, uses the
same Brand Name at the time of launching a new product of different
category.
In this case, the new product easily develops an acceptance range as
the customers are already familiar with the Brand Name.
Example: NIL used the brand extension strategy and offered a variety
of culinary products such as instant noodles, soups, sauces and
ketchups, cooking aids (seasonings), etc., under the Maggi brand
name. In order to obtain cost economies, companies leverage the
strength of the existing brand to launch new variants and product
lines. Nestlé’s Maggi is the classic example, which extended the
brand Maggi to sauces, noodles, seasonings and pickle. They want to
cash the image of the mother brand to make their new products
successful and acceptable in the market. (e.g.-Nivea, Colgate, etc.).
Customers have a relationship and emotional feeling with brand
Maggi.

Brand Retention:
To sustain the image of the brand, Nestle had adopted the 360 degree
marketing strategy. They promoted themselves as a health product.
They promoted the product with whom the consumer’s can play with,
according to their taste. They also gave the opportunity of posting the
recipe to the women. They also had organized the various small
events for the kids. They have spent the huge amount on the
advertising of the Maggi like electronic and print advertising.

BCG Matrix:

BCG (Boston Consulting Group) Matrix is designed to develop

business strategy in 1960 by Bruce Henderson, president of the
Boston Consulting Group. According to this technique, businesses or
products are classified as low or high performers depending upon
their market growth rate and relative market share.
Market share is the percentage of the total market that is being
serviced by your company, measured either in revenue terms or unit
volume terms.
X axis represents RELATIVE MARKET SHARE (RMS) and Y axis
represents MARKET GROWTH RATE
STARS
High growth, High market share

Stars are leaders in business.

They also require heavy investment, to maintain its large market
share.
It leads to large amount of cash consumption and cash generation.
Attempts should be made to hold the market share otherwise the
star
will become a CASH COW.
CASH COWS
Low growth, High market share
They are foundation of the company and often the stars of
yesterday.
They generate more cash than required.
They extract the profits by investing as little cash as possible
They are located in an industry that is mature, not growing or
declining
QUESTION MARKS
High growth, Low market share
Most businesses start of as question marks.

They will absorb great amounts of cash if the market share remains
unchanged, (low).

Why question marks?

Question marks have potential to become star and eventually cash
cow but can also become a dog.

Investments should be high for question marks

DOGS
Low growth, Low market share
Dogs are the cash traps.
Dogs do not have potential to bring in much cash.

Number of dogs in the company should be minimized.

Business is situated at a declining stage
BCG Matrix for Nestle:
Stars: Nescafe and cerelac
Nescafe (Star)
Nescafe is one of the leading coffee brands in the Indian market.
It has find a dominance which is unparalleled by any other brand
in the country.
Not only does it have a high market share but it growth rate is also
significantly high.
The name Nescafe has become generic with coffee
Ceralac (Star)
Ceralac has become one of the leading baby food products
It has witnesses quite a long hold in its market share with its sales
increasing on a continuous basis for almost more than one and a half
decade.
Its different variants have kept competitors at bay and its finds a
place easily at almost every general or provisional store in the Indian
market.
It is a major contributor for Nestle India’s revenues.
Qs Mrks:Milo, Maggi sauce,maggi soup,kit kat, Bar one, Nestle
milk, Nestle fruit N’ milk. (Nestle Butter, Nestle Pickles)
Maggi Pickles (?)
Limited variety (especially in this taste crazy country)
Maggi Pickles is doubted for the twin reasons:
 1. High price and packing, which seems to target it to the upper
substrata.
2. Lack of significant number of variants poses it a challenge to
maintain itself in such households.
It is not a dog because it is not the market which has low growth
rate.
The market of packaged pickle is growing but Maggi Pickles which
is unable to gather a substantial share in this growing market

Nestle Butter (?)

Salt less
Yet to grow from its pre-launch
Huge competition fromAmul, the market leader in this field.
Nestle Butter seems to be rejected by the consumers for the reason
that its taste does not suit the Indian psyche.

Cash cows: Maggi Noodles

Maggi Noodles (Cash Cows)

Maggi Noodles, has more households of consumption in India than
any other country in the world and has become the first
preference of Indian children in terms of instant food, is only a
cash cow and not a star.
Maggi Noodles has a significantly high market share in the
Noodles market in India, the market growth rate of Noodle
consumption is not very high. Since it has not still reached to every
nook and corner of rural India.
Number of repeat purchasers is high in case of Maggi, the rate of
increase among the new purchasers is not too high

Dogs: Nestea, milky bar, Crunch, Munch (Nestle Dahi):

Unaware that Nestle offers a Dahi.

Competition from Amul’s Masti Dahi.
The concept of packaged Dahi is not being accepted by the
consumer who prefers to play it safe with the local manufacturer
Lack of a growing market makes Nestle Dahi to be placed in as a
Dog.

Limitations of BCG Matrix

BCG Matrix uses only two dimensions, Relative market share and
Market growth rate.
Problems of getting data on market share and market growth.
High market share does not mean profits all the time.
Business with low market share can be profitable too.
High market share is not the only success factor
Market growth is not the only indicator for attractiveness of a
market
Sometimes Dogs can earn even more cash as Cash Cows
SWOT Analysis:

(1) Strengths: Market leader in the noodles category. Anytime

anyone prefers Maggi as noodles. It has a huge brand
loyalty. It has developed the huge distribution channel
network over thousands of distributors, retailers etc. hence
Maggi is available in every shop right from the supermarket
till food malls. Innovative products for Indian taste buds such
as Maggi, Maggi masala, chicken Maggi, tomato flavor
which helped them grabbing more market as customer needs
variety and they loved those flavors as well. The advertising
strategy for Maggi was a super hit as their tagline itself was
very effective and grabbed the consumer’s mind.

(2) Weakness:
The weakness of the product was it was earlier heavily
dependent on only one flavor which consumers get bored after a time
and stops buying the product which hits the market sales of the
product. It contains Maida, so there are some health related issues for
this product such as constipation and it does not give sufficient
required proteins and vitamins to children.
 (3) Opportunities: The greatest opportunity for the product Maggi
is their unexploited rural markets as so far they have mainly
targeted cities and developed areas. Number of youths
working nowadays are increasing rapidly, so they can open
new branches and employ these people and increase
production and their by sales and profits by targeting rural
markets. Increased affinity of Indians towards Chinese
cuisine creates new opportunity for Maggi to improve its
taste further and capture large market share.

(4) Threat: Presence of regional competitor’s e.g. Top Raman,

Ching’s noodles. Price war strategies adopted by other brands
like Top Raman.

Profits made by Nestle:

According to 2009,

Nestlé’s revenue: CHF 107.6 billion

Operating income: CHF 15.70 billion

Profit: CHF 10.43 billion

 CONCLUSION:

Maggi right now is a leading brand in India as well as world. It has

successfully established itself as a noodle brand that can be made in 2
minutes and can be cooked very easily. The simple process of making
and different taste makes it most loved noodle brand.

Nestle took the challenge and established Maggi in Indian market,

considered to be conservative and typical about food consumption.
It’s appropriate realization of target segment, effective positioning
and effective promotion and sales made Maggi to Noodles in India as
Xerox is 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.

The company has a creative interaction blogs for customers where

people can discuss about various topics if any problem is discussed
about the product the company gets to know it. Direct and continuous
contact with customers is maintained at .www.maggi- club.in .

Maggi normally focuses mainly on health benefits; it not only wants

itself to be tasty but nutritious as well. This is the reason why it
always keeps on adding nutritional value to it.

So through this project, we would like to focus on the fact that

Marketing is something which has to be planned very well for the
product to be successful. It has to be done keeping in mind your
prospective consumers. For promoting eatable products, a 360 degree
marketing approach plays a very significant part for a company.
Nestle has promoted the products of its brand Maggi in such a way
that it has left an unforgettable impact on its customers.
 Suggestions: Promotional Strategies

• Maggi should focus on creating distinctive image of its own based

on twin benefits of being easily & instantly ready to be made.

• It should conduct promotional campaigns at schools in small towns

with population not more than 1000.

• It should strengthen the distribution channel of the rural areas within

100km of all the metros.

• It should launch new advertisement campaign (TV, radio, print

media commercials) with a brand ambassador or mascot
So we can see that Maggi has a story of its own to tell. A story with
success & failures. A story where Nestle gave the country something
to eat, that it had not eaten before and now the country loves it so
much that it has become one of the most well established brands as
well as a part of many household. We can conclude that Maggi as a
brand has a long way to go.
 Bibliography:
 www.nestle.in
 www.google.com
 www.wikipedia.com
 www.nestle.com
 www.scribd.com