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Instant Noodle market in India

Noodles are a commodity which is consumed by everyone, right

from kids and teenagers to retirees. In fact, India consumes a

little less than 90,000 tones of noodles every year. A decade ago

the word ‘noodles’ was synonymous with Nestlé’s ‘Maggi’. Two-

and-a-half decades since its launch, ‘2 minute Maggi Noodles’ is

the numero uno brand in the Indian market. Overall, the instant

noodle market in India is worth over INR 1,300-crore (USD 260

million) and is growing at a phenomenal rate of over 17-20% peryear, according to Data monitor estimates. Inspired by the

success of Maggi, a number of F&B manufacturers ventured into

this market. Among the prominent names are Top Ramen

Smoodles and Cup Noodles manufactured by Indo-Nissin Ltd,

Ching's Instant Noodles, AA Nutrition’s Yummy, and Wai-Wai,

owned by the Chaudhary Group from Nepal and India.

In the early 80s, the conservative and typical food consumption

era, the concept of ‘ready-to-cook’ food was alien to the Indian

market. People were skeptical to experiment with food especially

food meant for their children. Despite the unfavorable

circumstances, Maggi took the challenge and launched itself in

1983. The brand’s appropriate realization of target segment,

effective positioning and effective promotion and sales made

Maggi the most-loved noodle brand in India. Maggi enjoys a

market share of over 70% today, despite the presence of a



number of other brands. In 2005, the Maggi brand was worth USD

3.7 billion in comparison to USD 1.7 billion recorded in 2003. In

2005, Maggi was the highest Indian spender in the Sales

Promotion department in the Noodles Category.

For much time since its launch, Nestlé’s Maggi Noodles was the

only kingpin in the noodle market. However, in the recent past

two well-known FMCG players in the country – Hindustan Unilever

(HUL) and GlaxoSmithKline (GSK) introduced their own brands of

instant food noodles and have managed to put their foot into thissegment. Today, Knorr from HUL and Foodles from GSK have

become well identified noodle brands besides Maggi Noodles and

Nissin’s Top Ramen. New investments by HUL and GSK are paying

off now. Individually, they hold 5% and 2% respectively of the

noodles market share. Interestingly, GSK plans to capture 10% of

the organized noodles market within a year. The newest entrant

in this sector, ITC, seems to be sending strong competitive vibes

to HUL and GSK as well as Maggi. ITC plans to launch noodles

under the ‘Sunfeast’ brand name. GSK, HUL and ITC’s entry into

noodles will heat up the competition for Maggi, which is already

facing traction from retailers’ private labels like Tasty Treat from

Future Group and Feasters from Aditya Birla Retail. According to

data provided by Nielson Co., Maggi’s share of instant noodles, on

an all-India basis, across urban markets, has slipped consistently

between December ’09 (90.7%) and July ’10 (86.5%).



Some of the Major Companies producing Noodles in India:

• Nestle (Maggi)

• Nissin (Top Ramen)

• Capital Foods Ltd (Ching’s Secret)

• Future Group (Tasty Treat)

• Aditya Birla Retail (Feasters)

• GlaxoSmithKline (Horlicks Foodles)

• Hindustan Unilever (Knorr)

• ITC (Sunfeast)

Maggi’s new Investments

To cope with the increasing competition from the new entrants,

Nestle India is investing INR 950 crore (USD 210.9 million) to set

up two units to manufacture instant noodles and infant foods in

Karnataka and Haryana. The unit in Karnataka will be up and

running in the first quarter of next calendar year, while the

Haryana unit is expected to commence its commercial production

by the end of the next calendar year. With three other units based

in Punjab, Uttarakhand and Goa, a fifth facility is expected to be

set up in a yet undisclosed location to manufacture instant

noodles; this will be put up for approval in the next two months.

Nestle also announced plans to set up its first Research and

Development Centre in India which will primarily focus on

developing products specifically aimed at the domestic market.



This R&D centre is valued at INR 230

crore (USD 51 million) and will be

based in Manesar, Haryana.

With increasing competition in the Indian noodles market, it is

very difficult to say whether Maggi can sustain its popularity over

the coming years. The new entrants have launched their own

brands of noodles which have already started hampering Maggi’s

hold on the Indian market. It will be interesting to see how Maggi

combats the competition with the big Indian conglomerates/new

entrants earmarking ambitious plans and high commitments.

About Nestle India & Maggi Noodles

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 andis 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 isacknowledged amongst India's 'Most Respected

Companies' and amongst the 'Top Wealth Creators of

India'.



Maggi Noodles is one of the largest & most loved snack food

brands that define the Instant Noodles category in India. Maggi

has recently launched two new flavors in the short space of two

months – Thrillin Curry & Tricky Tomato Noodles. Blending

Emotions with ingredients, the two new flavors deliver strongly on

“Taste Bhi Health Bhi”. It is now available in 5 delectable flavours:

Masala, Chicken, Tricky Tomato, Thrillin Curryand Romantic

Capsica.

Maggi noodles are a brand of instant noodles manufactured

by Nestlé. The brand is popular in Australia, India, South

Africa, Brazil, Nepal, New

Zealand, Brunei, Malaysia, Singapore, Sri

Lanka,Bangladesh, Pakistan, and the Philippines. Maggi noodles

are part of the Maggi family, a Nestlé brand of instant soups,

stocks, and noodles.

Maggi Brand in India

NIL introduced the Maggi brand to Indian consumers when it

launched Maggi 2 Minute Noodles, an instant food product, in

1982 . At that time, Indian consumers were rather conservative in

their food habits, preferring to eat traditional Indian dishes rather

http://en.wikipedia.org/wiki/Instant_noodle

http://en.wikipedia.org/wiki/Nestl%C3%A9

http://en.wikipedia.org/wiki/Australia

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/South_Africa


http://en.wikipedia.org/wiki/Brazil

http://en.wikipedia.org/wiki/Nepal

http://en.wikipedia.org/wiki/New_Zealand


http://en.wikipedia.org/wiki/Brunei

http://en.wikipedia.org/wiki/Malaysia

http://en.wikipedia.org/wiki/Singapore

http://en.wikipedia.org/wiki/Sri_Lanka


http://en.wikipedia.org/wiki/Bangladesh

http://en.wikipedia.org/wiki/Pakistan

http://en.wikipedia.org/wiki/Philippines

http://en.wikipedia.org/wiki/Maggi

http://en.wikipedia.org/wiki/Instant_noodle

http://en.wikipedia.org/wiki/Nestl%C3%A9

http://en.wikipedia.org/wiki/Australia

http://en.wikipedia.org/wiki/India



http://en.wikipedia.org/wiki/Brazil

http://en.wikipedia.org/wiki/Nepal



http://en.wikipedia.org/wiki/Brunei

http://en.wikipedia.org/wiki/Malaysia

http://en.wikipedia.org/wiki/Singapore



http://en.wikipedia.org/wiki/Bangladesh

http://en.wikipedia.org/wiki/Pakistan

http://en.wikipedia.org/wiki/Philippines

http://en.wikipedia.org/wiki/Maggi



than canned or packaged food. In fact, NIL was trying to create an

entirely new food category, instant noodles, in India. Initially, the

company targeted working women on the premise that Maggi

noodles were fast to cook and hence offered convenience.However, this approach failed as was evident from the fact that

the sales of Maggi noodles were not picking up despite heavy

media advertising. To get to the root of the problem, NIL

conducted a research, which revealed that it was children who

liked the taste of Maggi noodles and who were the largest

consumers of the product. After this, NIL shifted its focus from

working women and targeted children and their mothers through

its marketing. NIL's promotions positioned the noodles as a

'convenience product', for mothers and as a 'fun' product for

children. The noodles' tagline, 'Fast to Cook Good to Eat' was also

in keeping with this positioning. NIL aggressively promoted Maggi

noodles through several schemes like distributing free samples,giving gifts on the return of empty packs, etc. NIL's advertising

too played a great role in communicating the benefits of the

product to target consumers.

Through its ads, NIL positioned Maggi as a 'fun' food for kids

which mothers could prepare easily. Taglines like 'Mummy,

bhookh lagi hai' (Mom, I'm hungry), 'Bas 2-Minute,' (Only 2

minutes) and 'Fast to Cook Good to Eat' effectively communicated

the product's benefits to target consumers.



These ads had become so popular that the tagline 'Bas 2-Minute'

immediately reminded Indian consumers of Maggi noodles even

several years after the ads were taken off the TV. Maggi's first

product extension was Maggi instant soups launched in 1988.

With the launch of Maggi soups, NIL had become a pioneer in the

organized packaged soup market in India.

In July 2001, Maggi replaced Nescafé (NIL's coffee products

brand) as the company's core brand. Nescafé had been NIL's core

brand since 1998.

Commenting on the shift, Carlo Donati (Donati), chairman and

managing director, NIL, said, "The focused approach on Nescafé,

which was the company's flagship brand over the last few years,

has yielded rich dividends and we plan to replicate the same in

case of Maggi as well."A ccording to Donati, the new focus for

the Maggi brand was to provide 'the much needed impetus' forthe culinary segment as it had been lagging behind some of NIL's

other product segments like milk and milk products and coffee

products..

in the early 2000s, the Nestlé Group had been taking measures to

transform itself into a 'health and wellness' company. The

company had also set up new research and development facilities

with a view to improving the attributes of the existing Nestlé

products to make them healthier, and to develop new health and

wellness products. Since the early 2000s, the Nestlé Group had

been introducing 'health and wellness' products all over the



world. In India, NIL introduced new 'healthier' weaning and milk

products in 2004.

In March 2005, the Maggi brand too took to the health route with

the launch of Vegetable Atta Noodles. NIL made use of the

group's extensive research and development facilities in

developing this new 'healthy' product. According to NIL,

Vegetable Atta Noodles were healthier as they were made of

whole wheat flour instead of maida (refined wheat) and also

because they contained real vegetables

According to the FICCI 'Food and Beverage Survey' published in

February 2006, health foods, health food supplements,

convenience foods and branded foods were the 'rapidly rising'

segments of the food and beverage industry. The survey also

revealed that the market for branded food products was growing

at a healthy rate of around 15 percent in the early 2000s. The

changing lifestyles and eating habits of Indian consumers and theincreasing purchasing power of the growing middle income group

were thought to be the reasons behind this growth.

Even though the demand for convenience food was increasing in

India in the early 2000s, analysts said that most of the Indian

consumers were still conservative in their food habits, and gave

importance to the perceived health benefits of traditional food.

Therefore, it remained to be seen whether products like Maggi

Atta Noodles, despite their 'health' focus, would prevail in the

long run.



Marketing strategies of Maggi

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.

360 Marketing Strategy

To maintain the image of the brand Maggi, NIL has adopted the

360 degree marketing strategy. They promoted the product as ahealth product. Initially NIL aggressively promoted Maggi noodles

through several schemes like distributing free samples, giving

gifts on the return of empty packs, etc. the company has spent a

huge amount of money in communicating the product’s benefit to

the target consumers. They have spent the huge amount on

various small events for the kids and on advertisement of the

Maggi like electronic and print advertising.

Advertisements



NIL has use the celebrity endorsement strategy to endorse Maggi

noodles in order to strengthen the brand’s image. Celebrity was

endorsed in the advertisement because India is a country where

people are star-struck by film stars and brand communication

messages delivered by celebrities and famous personalities

generate a higher appeal, attention and recall than those

executed by non-celebrities.

Nestle Maggi as a Leader Strategies

Maggi was the first noodles product in India and it was accepted

by majority of its

target market which at the time of launch lay in the urban cities

of India but with time Maggi has substantially used different

strategies to expand its existing market space

and by doing so it has kept challengers like Top Ramens

Smoodles at bay and

maintained its position as market leader.

Strong Customer Relations:

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

were 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.

Good Packaging and Strong Dealer Vendor Relations:

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 toprepare. It was also the first fusion experiment on food in India.

Continuous process innovation:

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).

Repositioning as a healthier snack:

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. In 2008, two brand extensions — Maggi Bhuna

Masala and Maggi Cuppa Mania Instant Noodles.

Price Incentives

The company is taking no chances and is extending itsdistribution 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. 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.)

Capturing New Customer Base :

Maggi realised that one of the reasons for a low market share in

Gujarat was that most of gujaratis do not eat garlic and Onions so

for Gujarat Maggi has come up with a special product which is

devoid of onions and garlic and marketed it as Jain Maggi. This

helped them gain a completely unconquered market of Jain

Noodle eaters.

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

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.

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 Pasta 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.





SITUATION ANALYSIS

Nestlé’s Maggie noodles is the leading brand in the instant

noodles segment in India, enjoying

a market share of 79.3%. The brand has grown to an estimated

Rs 200 crore & contributes to

around 10% of Nestle India’s top line. Being the pioneer in the

noodles market has given it a

first mover’s advantage over other brands. Maggi has regularly

come up with new flavours

and has recently launched two variants- Vegetable Atta and Dal

Atta noodles, catering to the

increasing demand for healthy snacks

Market Summary

TARGET MARKETS

Primary target: Children (<16)

Nestle plans to widen its target audience by launching newvariants Vegetable and Dal atta

noodles for health conscious people.



MARKET DEMOGRAPHICS

Demographics:

Region: urban, semi-urban, rural (recent)

Occupation: Housewives, working professionals, self-employed

Sex : Unisex

Income: 1,20,000 p.a. upwards

Social class: Middle and upwards

Family life cycle: Young, single, married with children.

Behavioural:

Occasions: Regular, Everyday user-urban, rural-depends on the

temporal aspects of the

consumer’s life(varied usage in terms of time of time of day,

week, month, year)

User status: first time user-rural, potential users-semi-urban,

heavy users-urban

Usage rate: Heavy user-urban, light-rural, medium-semi-urban

Loyalty status: hard core and shifting loyals



Buyer-Readiness Stage: rural-some are aware, semi-

urban:some intend to buy(aware,

informed),urban: informed(some desire,some intend to buy)

Attitude toward product: Enthusiastic, positive

Psychographics:

Lifestyle: Hard pressed for time

BUSINESS STRATEGY

The Company’s strategy is guided by several fundamental

principles. Nestle’s existing products grow through innovation and

renovation while maintaining a balance in geographic activities

and product lines. Long term potential is never sacrificed for short

term performance. The Company’s priority is to bring the best

and most relevant products to people, wherever they are,

whatever their needs, throughout their lives.Nestlé's corporate objective is to be the world's largest and best

branded food manufacturer, whilst ensuring that the Nestlé name

is synonymous with products of the highest quality. In recent

years, the company has pursued a policy of expansion and

diversification through acquisition and divestment to achieve a

more balanced structure to the business.

Nestlé describes itself as a food, nutrition, health, and wellnesscompany. Recently they created Nestlé Nutrition, a global

business organization designed to strengthen the focus on their

core nutrition business. They believe strengthening their

leadership in this market is the key element of their corporate

strategy. This market is characterized as one in which the



consumer’s primary motivation for a purchase is the claims made

by the product based on nutritional content.

LIFESTYLE & PRODUCT DEVELOPMENT & INNOVATION

Nestle introduced the Maggi brand to Indian consumers as an

instant food product. At that time, Indian consumers were

rather conservative in their food habits, preferring to eat

traditional Indian dishes rather than canned or packaged food. In

fact, Nestle was trying to create an entirely new food category,

instant noodles, in India, which was fast to cook and hence

offered convenience.

When the sales started picking up and consumers were fond of

Maggi, Nestlé decided to change the formulation

of Maggi noodles. The purpose was not only to infuse ‘fresh

life’ into the brand, but also to save money through this new

formulation. The company used new noodle-

processing technology, so that it could air-dry instead of oil-fry

the noodles. The tastemaker’s manufacturing process was also

altered.

In July 1999, ‘Maggi’ the brand, was promoted as the biggest

brand in Nestlé’s portfolio of brands in India. Nestlé believed that

Maggi had immense potential as it was a very ‘flexible’ brand

under which regional variants could be introduced to meet

various market needs. With reasonable price points and

innovative products, Maggi emerged as a top brand and a

major growth driver for the company.

In the early 2000s, the Nestle group had been taking measures to

transform itself into a ‘health & wellness’ company. The company

had also set up new research and development facilities with a

view to improving the attributes of the existing Nestle products to

make them healthier, and to develop new health & wellness



products. In March 2005, the Maggi brand too took to the health

route with the launch of Vegetable Atta Noodles. They made use

of the group’s extensive research and development facilities in

developing this new ‘healthy’ product.

Nestle, however stress up on innovation has always been a part of

its culture and the new launches have nothing to do specifically

with what competition is doing. Food, Nestle India, says over the

years Maggi has focused on understanding the consumers’

changing lifestyles and innovated and renovated to create delight

in every day meals and bring happiness to everyday family

moments. This is Maggi’s DNA. The new launches will only grow

the market further.

MAGGI TO THE INDIAN MARKET & WHY THE SPECIFIC

BRAND POSITIONING?

Nestle wanted to explore the potential for such an instant food

among the Indian market. It took several years and lot of money

for Nestle to establish its Noodles brand in India. Now it enjoys

around 50% market share in this segment which is valued at

around 250 crores.

Maggi has faced lot of hurdles in its journey in India. NIL

introduced the Maggi brand to Indian consumers when it launched

Maggi 2 Minute Noodles, an instant food product, in 1982. At that

time, Indian consumers were rather conservative in their

food habits, preferring to eat traditional Indian dishes rather thancanned or packaged food. In fact, NIL was trying to create an

entirely new food category, instant noodles, in India. Initially, the

company targeted working women on the premise that Maggi

noodles were fast to cook and hence offered convenience.

However, this approach failed as was evident from the fact that



the sales of Maggi noodles were not picking up despite heavy

media advertising. To get to the root of the problem, NIL

conducted a research, which revealed that it was children who

liked the taste of Maggi noodles and who were the largest

consumers of the product. After this, NIL shifted its focus fromworking women and targeted children and their mothers through

its marketing. NIL's promotions positioned the noodles as a

'convenience product', for mothers and as a 'fun' product for

children. The noodles' tagline, 'Fast to Cook Good to Eat' was also

in keeping with this positioning.

BRAND STORY

Launched in 5 flavours initially – Masala, chicken, Capsicum,sweet & sour, and Lasagne –Maggi had to fight hard to

be accepted by Indian consumers with their hard-to-change

eating habits. The packaged food market was very small at this

time; Nestle had to promote noodles as a concept, before it could

promote Maggi as a brand. It therefore devised a two-pronged

strategy to attract mothers on the ‘convenience’ plank and lure

kids on the ‘fun’ plank. Gradually, the market for instant

noodles began to grow. The company also decided to focuson promotions to increase the brand awareness. In the initial

years, Nestle promotional activities for Maggi

included schemes offering gifts (such as toys and utensils) in

return for empty noodles pack.

According to analysts’ the focus on promotion turned out to

be the single largest factor responsible for Maggi’s rapid

acceptance. Nestle\’s Managers utilized promotions as

measured to meet their sales target. Gradually,sales promotion became a crutch for Maggi noodles sales.

Later many of the Maggi’s extensions also made considerable use

of promotional schemes. The focus of all Maggi’s extensions was

more on below the line activities rather than direct

communication. In addition to promotional activities, Maggi



associated itself with main stream television programme and

advertised heavily on kids programme and channels. After its

advertisements with taglines like “mummi bhookh lagi hai,bas

do minute” and fast to cook good to eat Maggi’s popularity

became highly attributed to its “extremely high appeal tochildren”. As a result, Maggi’s annual growth reportedly touched

15% during its initial years.

MAGGI’S BRAND EXTENSION

In 1998, Nestle launched Maggi’s first brand extension,

Maggi soup. At this stage, there was no organized packaged soup

market in India. Nestle planned to create a market for packaged

soup as it felt the category had a lot of potential. However,according to analyst, the company had introduced soups only to

cash in on the Maggi’s brand name, and was never very serious

about the segment.

However, the product failed to generate the desired sales volume

and Nestle was forced to withdraw it. At the end of the year,

Maggi noodles were generating sales volume

of around 5000 tons and remained a loss making proposition

for Nestle.

To boost sales, Nestle decided to reduce the price

of Maggi noodles. This was made possible by using thinner and

cheaper packaging material, the company also introduced

“money saver multi packs” in the form of 2-in-1 pack and 4-in-1

packs. As a result volume increased phenomenally. In order to

stretch Maggi’s brand to include Indian ethnic foods the company

launched pickles under the year 1995. The company reportedlysaw a lot of untapped potential in the market for ready to use

south Indian market.

NEW RANGE OF PRODUCTS



• Maggi 2 minute Noodles

• Maggi Vegetable Atta Noodles

• Maggi Dal Atta Noodles

• Maggi Rice Noodles Mania

• Maggi Sauces

• Maggi Pizzza Mazza

• Maggi Healthy Soups

• Maggi Healthy Soup - Sanjeevni

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

Current market of Maggi

Two and a half decades since its launch, the "2-minute Maggi

noodles" still dominates the instant noodles market in India. ThisNestle brand's runaway success can be regarded quite a feat,

especially in a country where most packaged products struggle to

make their presence felt.



Even today, Maggi enjoys a market share of over 70%, despite

the presence of a number of other brands. This decade old

dominance, however, is set to be shaken up. According to

Datamonitor estimates, the instant noodle market in India is

worth over Rs 1,300-crore and is growing at a phenomenal rate of over 17-20% per year

Even though there are a few new competitors in the market they

are still struggling to get a brand recall in the minds of Indian

public because for us Maggie is synonymous with noodles Maggi

Brand of products sustained recession in 2000 and 2001 in India

by introducing economy packets.

Segmentation

Apart from the traditional positioning for kids, manufacturers are

now targeting the adult consumers as well by leveraging on the

convenience aspect which has become more important given the

changing employment patterns

The major headings under segmentation are :-

• Age

• Lifestyle of youth

• 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

To cater for the health conscious like 'No MSG', 'Less Salt', and

'No Trans fat'. Flour based noodle variation marketed by the



name "Vegetable Atta Noodles" has been introduced in India (Atta

flour is used in preparing most forms of wheat based breads in

India) and caters to health conscious buyers wary of the refined

flour used in the regular Maggi noodles. This move helps the

brand in India as suburban mothers, who feed the noodles tochildren as an afterschool snack, are the primary customers of

the brand. Recently, a line of rice noodles and whole wheat with

pulses, carrots, beans, and onions has also been introduced

in India. In fact, "Maggi" has become a well-known brand for

instant noodles in India and Malaysia.

Positioning

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 promotionsand 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.

Positioned itself as a ‘Fast to cook, goodto eat’ snack Maggi has to

deal with the negative perception of it being unhealthy in an

increasingly health conscious market, a major threat in thecurrent scenario

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.

Targeting

Apart from the traditional positioning for kids, manufacturers are

now targeting the adult consumers as well by leveraging on the

convenience aspect which has become more important given the

changing employment patterns.

Now Indians are the largest eaters of Maggi Noodles in the world.

In 2005 Nestle made a very smart move. It knew that although

kids love noodles, the parents were bothered about the healthaspect of Noodles which was made of Maida. Hence Maggi

launched Maggi Atta Noodles with the baseline " taste bhi health

bhi" .Reports suggest that after 10 months of the launch , the

product has been well received by Indian consumers. Maggi

noodles are an example of a brand that knows the customer and

willing to learn from the mistakes.

• Kids

• Youth

• Working professionals

• Office goers

• Health conscious ppl

Differentiation

Magi has differentiated itself with its competitors on the basis of the flavors they offer and the special taste also the attractive

packaging plays an important role in differentiating itself from the

cluttered market of instant noodles



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