PROJECT REPORT

IN

ANALYSIS OF MARKETING AND PROMOTIONAL STRATERGIES OF MAGGI

SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT OF BACHELOR OF

BUSINESS ADMINISTRATION (B.B.A.)

Submitted To: Submitted By:

Name of Guide – Mrs Soma Kulshreshta Name- Sidhant Jain
Roll No- 3110

Prn:08020621250

Symbiosis Centre for Management Studies(UG)

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STUDENT’S UNDERTAKING

I have been undertaking that this is my original work and have never been submitted elsewhere

Project Guides:
(By Student Name)
• Faculty

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ACKNOWLEDGEMENT

I would like to take an opportunity to thank all the people who helped me in collecting

necessary information and making of the report. I am grateful to all of them for their

time, energy and wisdom.

Getting a project ready requires the work and effort of many people. I would like all

those who have contributed in completing this project. First of all, I would like to send

my sincere thanks to MRS. SOMA KULSHRESHTA for his helpful hand in the

completion of my project.

NAME: SIDHANT JAIN

DATE: 18/02/11

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TABLE OF CONTENTS

Acknowledgment

Contents

1) Executive Summary……………………………………………………………5

2) Introduction to the Topic…………………………………………………..6

a .Establishing The Objective ………………………………………….10

b. Major Consume Promotion………………….……….……………...11

3) Company Profile…………………………………………………………..14

4) Brand Prism Of Maggi………………………………………….………..29

5) Research Methodology ……………………………………………….…59

a. Primary Data

b. Secondary Data

6) Analysis and Interpretation…………………………………………….…….60-63

7) Conclusion and Recommendation………………………………………66

a. Questionnaire………………………………………………………….66
Bibliography……………………………………………………………………67
a. Books
b. Magazines
c. Internet
i. Sites……………………………………………………………..

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EXECUTIVE SUMMARY

Maggi Comes to India – teething troubles Maggi noodles was launched in India in the
early1980s. Carlo M. Donati, the present 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. The first competition came from the ready-to-eat snack
segment which included snacks like samosas, biscuits or maybe peanuts, that were usually ‘the
bought out’ type. The second competition came from the homemade snacks like pakoras or
sandwiches. So there were no specific buy and make snack! Moreover both competitors had
certain drawbacks in comparison. Snacks like samosas are usually bought out, and outside food
is generally considered unhygienic and unhealthy. The other competitor, ‘homemade’ snacks
overcame both these problems but had the disadvantage of extended preparation time at home.
Maggi was positioned as the only hygienic home made snack! Despite this, Nestlé faced
difficulties with their sales after the initial phase. The reason being, the positioning of the
product with the wrong target group. Nestle had positioned Maggi as a convenience food product
aimed at the target group of working women who hardly found any time for cooking.
Unfortunately this could not hold the product for very long. In the course of many market
researches and surveys, the firm found that children were the biggest consumers of Maggi
noodles. Quickly they repositioned it towards the kids segment with various tools of Marketing
Promotion like colour pencils, sketch pens, fun books, Maggi clubs which worked wonders for
the brand.

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CHAPTER I

INTRODUCTION TO THE TOPIC

Marketing Promotion, a key ingredient in marketing campaigns, consists of a diverse collection

of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of
particular products or services by consumers or the trade.1
Whereas advertising offers a reason to buy, Marketing Promotion offers an incentive to buy.
Marketing Promotion includes tools for consumer promotion (samples, coupons, cash refund
offers, process off, premiums, prizes, patronage rewards, free trials, warranties, tie-in
promotions, cross-promotions, point-of-purchase displays, and demonstrations); trade promotion
(prices off, advertising and display allowances, and free goods); and sales force promotions
(trade shows and conventions, contest for sales reps, and specialty advertising). These tools are
used by most organizations, including non-profit organizations. Churches, for example, often
sponsor bingo games, theatre parties, testimonial dinners and raffles.
A decade ago, the advertising to sales-promotion ratio was about 60:40. Today, in many
consumer packaged-good companies, Marketing Promotion accounts for 65 to 75 percent of the
combined budged. Marketing Promotion expenditures have been increasing as a percentage of
combined budget expenditure annually for the last two decades. Several factors contribute to this
rapid growth, particularly in the consumer markets. 2 Promotion is now more accepted by the top
management as an effective sales tool; more product managers are qualified to use sales-
promotion tools; and product managers are under pressure to increase current sales. In addition,
the number of brands has increased; competitors use promotions frequently; many brands are
seen as similar; consumers are more price-oriented; the trade has demanded more deals from the
manufacturers; and the advertising efficiency has declined because of rising costs, media clutter,
and legal restraints.
The rapid growth of sales-promotion media has created clutter similar to the advertising clutter.
Manufacturers have to find ways to rise above the clutter-for instance, by offering larger coupon-
redemption values or using more dramatic point-of purchase displays and demonstrations.

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Purposes of Marketing Promotion

Sales-promotion tools vary in their specific objectives. A free sample stimulates consumer trial,
whereas a free management-advisory service aims at cementing long-term relationship with a
retailer.
Sellers use incentive-type promotion to attract new triers, to reward loyal customers, and to
increase the repurchase rates of the occasional users. Marketing Promotion often attracts brand
switchers, who are primarily looking for low price, good value, or premiums. Marketing
Promotions are unlikely to turn them into loyal users. Marketing Promotions used in markets of
high brand similarity produce a high sales response in the short term but little permanent gain in
the market share. In markets of high dissimilarity, Marketing Promotion can alter market shares
permanently.
Farris and Quelch cite a number of Marketing Promotion benefits flowing to manufacturers and
consumers.3 Marketing Promotion enable manufacturers to adjust to short-term variations in
supply and demand. They enable manufacturers to test how high a list price they can charge,
because they can always discount it. They induce the customers to try new products instead of
never straying from current ones. They lead to more varied retail formats, such as every-day-
low-price store and the promotional-pricing store. They promote greater consumer awareness of
prices. They permit manufacturers to sell more than they would sell at list price. They help the
manufacturer adapt programs to different consumer segments. Consumer themselves enjoy some
satisfaction from being smart shoppers when they take advantage of price specials.
Today many marketing managers first estimate what they need to spend in trade promotion, then
what they need to spend in consumer promotion. Whatever is left they will budget for
advertising. There is danger, however, in letting advertising take a back seat, because advertising
typically acts to build brand loyalty. The question of whether or not Marketing Promotion
weakens brand loyalty is subject to different interpretations. Marketing Promotion, with its
incessant prices off, coupons, deals and premiums, may devalue the product offering in the
buyers’ minds. Buyers learn that the list price is largely a fiction. However, before jumping to
any conclusion, we need to distinguish between price promotions and added-value promotions.
However, usually, when a brand is price promoted too often, the consumer begins to devalue it
and buy it mainly when it goes on sale. So there is risk in putting a well-known brand leader on

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promotion over 30 percent of time.() Dominant brands offer deals frequently, because most deals
only subsidize current users. Brown’s study of 2,500 instant-coffee buyers concluded that:
• Marketing Promotions yield faster and more measurable responses in sales than
advertising does.
• Marketing Promotions do not tend to yield new, long term buyers in mature markets
because they attract mainly deal-prone consumers who switch among brands as deals
become available.
• Loyal brand buyers tend not to change their buying patterns as a result of competitive
promotion.
• Advertising appears to be capable of deepening brand loyalty.4

There is also evidence that price promotions do not build permanent total category volume.
Small share competitors find it advantageous to use Marketing Promotion, because they cannot
afford to match the market leaders’ large advertising budgets; nor can they obtain shelf-space
without offering trade allowances or stimulate consumer trials without offering incentives. Price
competition is used by small brand seeking to enlarge its share, but it is less effective for
category leader whose growth lies in expanding the entire category.5 The upshot is that many
consumer packaged goods companies feels that they are forced to use more Marketing
Promotions than they wish. They blame the heavy use of Marketing Promotion for decreasing
brand loyalty; increasing consumer price-sensitivity; brand quality image dilution, and a focus on
short-run-marketing planning.

Major decisions in Marketing Promotions

In using Marketing Promotion, a company must establish its objectives, select the tools, develop
the program, pretest the program, implement and control it, and evaluate the results.
Establishing the objectives
Marketing Promotion objectives are derived from broader promotion objectives, which are
derived from more basic marketing objectives developed for the product. For consumers,
objectives include encouraging purchase of larger-sized units, building trial among non-users,
and attracting switchers away from competitors’ brands. For retailers, objectives include
persuading retailers to carry new items and higher levels of inventory, encouraging stocking of

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related items, offsetting competitive promotions, building brand loyalty, and gaining entry into
new retail outlets. For the sales force, objectives include encouraging support of a new product
6
or model, encouraging more prospecting, and stimulating off-season sales. See “Marketing
Memo: Marketing Promotions as brand builders.”)

Marketing Memo: Marketing Promotions as brand builders

Building brand awareness is a long-term process. What a brand does today predicts what it
will do tomorrow. Sales promotions are short term and temporary. Here are some of the
tips on how to make a sale promotion an effective brand-building tool.
• Make sure the promotion is justified: A new store opening, a company anniversary,
and other kinds of celebrations are all good reasons for running a promotion
• Tie the promotion to brand’s image: Birth dates and anniversaries are good
• Look at every both for the sales job it can do and as a communication tool: A
promotion is one of a brand’s many voices; it can help build brand awareness if it
says the right things

Selecting Consumer-promotion tools

The promotion planner should take into account the type of the market, Marketing Promotion
objectives, competitive conditions, and each tool’s cost effectiveness.
The main consumer promotion tools are summarized in the following table. We can distinguish
between manufacturer promotions and retailer promotions. Marketing Promotions are most
effective when used together with advertising. In one study, a price promotion alone produced 15
percent increase in sales volume. When combined with feature advertising, sales volume
increased 19 percent; when combined with feature advertising and a point-of-purchase display,
sales volume increased 24 percent.7

Major Consumer promotion tools:

Samples: Offer of a free amount of a product or service delivered door to door, sent in the mail,
picked up in a store, attached to another product, or featured in an advertising offer.

Coupons: Certificates entitling the bearer to a stated saving on the purchase of a specific
product; mailed, enclosed in other products or attached to them, or inserted in the magazine and
newspaper ads.

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Cash Refund Offers (rebates): Provide a price reduction after purchase rather than at retail shop;
consumer sends a specified “proof of purchase” to the manufacturer who “refunds” part of the
purchase price by mail.

Price Packs (cents-off deals): Offers to consumer savings off the regular price of a product,

flagged on the label or package. A reduce price pack is a single package sold at the reduce price

(such as two for the price of one). A banded pack is two related products banded together (such

as a toothbrush and toothpaste)

Premiums (gifts): Merchandise offered at a relatively low cost or free as an incentive to

purchase a particular product. A with-pack premium accompanies the product inside or on the
package. A free in-the-mail premium is mailed to the consumers who send a proof of purchase.
A self-liquidating premium is sold below its normal retail price to consumers who request it.

Frequency Programs: Programs rewarding the consumers whose frequency and intensity in
purchasing the company’s products and services is higher.

Prizes (Contests, sweepstakes, games): Prizes are offers of the chance to win cash, trips, or
merchandise as a result of purchasing something. A contest calls consumers to submit an entry to
be examined by panel of judges who will select the best entries. A sweepstake asks consumers to
submit their names in a drawing. A game presents the consumers with something every time they
buy to help them win prizes.

Patronage awards: Values in cash or in other forms that are proportional to patronage of a
certain vendor or group of vendors.

Free Trials: Inviting prospective purchasers to try the product without cost in the hope that they
will buy.

Product Warranties: Explicit or implicit promises by sellers that the product will perform as
specified or that the seller will fix it or refund the customer’s money during a specified period.

Tie-in promotions: Two or more brands or companies team up on coupons, refunds, and contests
to increase the pulling power

Cross-promotions: Using one brand to advertise another noncompeting brand.

Point-of-purchase (POP) Displays and Demonstrations: POP displays and demonstrations take
place at the point-of-purchase or sale

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Selecting trade-promotion tools

Manufacturers use a number of trade promotion tools. Surprisingly a higher percentage of
promotion pie is devoted to trade promotion tools (46.9 percent) than to consumer promotion
(27.9 percent), with media advertising capturing remaining 25.2 percent. Manufacturers use
award money to the trade
• To persuade the wholesaler or retailer to carry the brand;
• Persuade the retailer or wholesaler to carry more units than the normal amount;
• To induce the retailers to promote the brand by featuring, display, and price reductions
and;
• To stimulate retailers and their sales clerks to push the product.
The growing power of large retailers has increased their ability to demand trade promotion at the
cost of consumer promotion and advertising.8 The different trade promotions are

Price off (off-invoice or off list): A straight discount off the list price on each case purchased
during a stated time period.
Allowance: An amount offered in return for the retailer’s agreeing to feature the manufacturer’s
products in some way. An advertising allowance compensates the retailers for advertising the
manufacturer’s product. A display allowance compensates them for carrying a special product
display

Free Goods: Offers of extra cases of merchandise to intermediaries who buy a certain quantity
or who feature a certain flavor or size

Selecting Business- and sales-force-promotion tools

Companies spend billions of dollars on business-and sales-force-promotion tools as shown in the
table. These tools are used to gather business leads, impress and reward customers, and motivate
the sales force to greater effort. Companies typically develop budgets for each business-
promotion tool that remain fairly constant from year to year.
Trade Shows and Conventions: Industry associations organize annual trade sows and
conventions. Business marketers may spend as much as 35 percent of their annual
promotion budget on trade shows

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Sales Contests: A sales contest aims at including the sales force or dealers to increase their
sales over a stated period, with prizes (money, trips, gifts or points) going to those who
succeed

Specialty Advertising: Specialty advertising consists of useful, low cost items bearing the
company’s name and address, and sometimes an advertising message that salespeople give
to prospects and customers. Common items are ballpoint pens, key chains, flashlights, tote
bags, and memo pads.

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CHAPTER II
COMPANY PROFILE
The industrial revolution in Switzerland in the late 1800s created factory jobs for women, who
were therefore left with very little time to prepare meals. This wide spread problem grew to be an
object of intense study by the Swiss Public Welfare Society. As a part of its activities, the
Society asked Julius Maggi miller to create a vegetable food product that would be quick to
prepare and easy to digest. Born on October 9, 1846 in Frauenfeld, Switzerland, Julius Michael
Johannes Maggi was the oldest son of an immigrant from Italy who took Swiss citizenship.
Julius Maggi became a miller and took on the reputation as an inventive and capable
businessman. In 1863, Julius Maggi came up with a formula to bring added taste to meals. Soon
after he was commissioned by the Swiss Public Welfare Society, he came up with two instant
pea soups and a bean soup - the first launch of the Maggi brand of instant foods in 1882 - 83.
Towards the end of the century, Maggi & Company was producing not just powdered soups, but
bouillon cubes, sauces and other flavourings. The Maggi Company merged with Nestlé in 1947.
Today, Maggi is a leading culinary brand and part of the NESTLÉ family of fine foods and
beverages. Under the Maggi brand, which is today known world wide for quality and innovation,
Nestle offers a whole range of products, such as packaged soups, frozen meals, prepared sauces
and flavourings.

MAGGI BRAND IN INDIA

Maggi Comes to India – teething troubles Maggi noodles was launched in India in the
early1980s. Carlo M. Donati, the present 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. The first competition came from the ready-to-eat snack
segment which included snacks like samosas, biscuits or maybe peanuts, that were usually ‘the
bought out’ type. The second competition came from the homemade snacks like pakoras or
sandwiches. So there were no specific buy and make snack! Moreover both competitors had
certain drawbacks in comparison. Snacks like samosas are usually bought out, and outside food
is generally considered unhygienic and unhealthy. The other competitor, ‘homemade’ snacks
overcame both these problems but had the disadvantage of extended preparation time at home.

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Maggi was positioned as the only hygienic home made snack! Despite this, Nestlé faced
difficulties with their sales after the initial phase. The reason being, the positioning of the
product with the wrong target group. Nestle had positioned Maggi as a convenience food product
aimed at the target group of working women who hardly found any time for cooking.
Unfortunately this could not hold the product for very long. In the course of many market
researches and surveys, the firm found that children were the biggest consumers of Maggi
noodles. Quickly they repositioned it towards the kids segment with various tools of sales
promotion like colour pencils, sketch pens, fun books, Maggi clubs which worked wonders for
the brand.

Why the specific Brand positioning?

Maggi was positioned as ‘2-minute noodles’ with a punch line that said ‘Fast to cook! Good to
eat!’ And this gave the implied understanding to the consumer that it was a ‘between meals’
snack. The company could have easily positioned the product as a meal, either lunch or dinner.
But, it chose not to do so, because the Indian consumer mindset did not accept anything other
than rice or roti as a meal. Hence trying to substitute it with noodles would have been futile. The
firm did not position it as a ‘ready-to-eat’ meal either, as the housewife prefers to ‘make’ a meal
for her kids rather than buy it for them. And if she can make it in two minutes with very little
effort, then obviously it’s a hit with her! What’s more, if kids also love the taste, the product is as
good as sold! So the ‘2-minute’ funda coupled with the ‘yummy taste worked!

BRAND STORY

Launched in 5 flavors initially – Masala, chicken, Capsicum, sweet & sour, and Lasagna –
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 focus on promotions to

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increase the brand awreness. 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 analysits the focus on promotion turned out to be the single largest factor
responisible 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 to children”. 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.

In 1993, “Sweet Maggi”, the first variant of Maggi noddles was launched. The company
supported the launch with a huge advertisement outlay that amounted to 75% of the total yearly
expenditure on the Maggi brand. 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 was
generating sales volume of around 5000 tonns 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 cheapeer packaging material, the company also introduced “money saver

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multi packes” in the form of 2-in-1 pack and 4-in-1 packs. As a result volume increases
phenomenally to 9700 tonnes in 1994 and further to 13000 tonnes in 1995. Maggi’s euphoroia
was, however, short lived, as sales stagnated in 1995 at the previous years level. With soup
business being threatned by a new entrant “Knorr soups” launched in 1995, offering 10 flavors
against Maggi’s 4 the company started rethinking its strategies towards the soup market.

In order to stretch Maggi’s brand to include Indian ethenic foods the company tied up with a
Pune based chordia foods to launch pickles under the year 1995. The company also tied up with
Indian foods fermentation (IFF), a Chennai based food company to market popular south Indian
food preparation such as sambher, dosa, vada and spices in consumer packs in Dec 1995. The
company reportedly saw a lot of untabbed potential in the market for ready to use south Indian
market.

In 1996, products from these two ventures received lukewarm response from the market; sales
were rather poor in the regions in which they were aunched. Analysts attributed the failure of
these Maggi extensions to the fact that Nestlé seemed to be particularly bad at dealing with
traditional Indian product categories. Maggi noodles performed badly in 1996. Despite slow
sales in the previous two years, Nestlé had set a sales target of 25,000 tonnes for the year.
However, Maggi couldn’t cross even 14,000 tonnes. Adding to the company woes was the
failure of Maggi Tonite’s Special, a range of cooking sauces aimed at providing ‘restaurant-like-
taste’ to food cooked at home. The range included offerings such as Butter Chicken gravy and
tomato sauce for pizzas.

Understanding these failures, and buoyed by the fact that the Maggi brand finally broke even in
1997, Nestlé continued to explore new options for leveraging on the brand equity of Maggi
noodles. The company realized that the kids who had grown up on Maggi noodles had become
teenagers by the late 1990s. As they associated the product with their childhood, they seemed to
be moving away from it. To lure back these customers and to explore new product avenues,
Nestlé launched ‘Maggi Macaroni’ in July 1997. According to analysts, Maggi Macaroni was
launched partly to deal with the growing popularity of competing noodles brand Top Ramen.
Maggi Macaroni was made available in three flavors, Tomato, Chicken, and Masala. The

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company expected to repeat the success of Maggi noodles with Maggi Macaroni. As with most
of its product launches, Maggi Macaroni’s launch was backed by a multi-media advertisement
campaign including radio, television, outdoors and print media with the tagline, ‘Tum Roz Baby.

The product’s pricing, however, proved to be a major hurdle. A 75-gm Maggi Macaroni pack
was priced at Rs 11, while a 100-gm noodles pack was available at Rs 9. According to analysts,
Nestlé failed to justify this price-value anomaly to customers, who failed to see any noted value
addition in Maggi Macaroni (packaging and flavor variants were similar to those of Maggi
noodles). In addition, customers failed to see any significant difference between Maggi Macaroni
and the much cheaper macaroni that was sold by the unorganized sector players. The biggest
problem however was the taste of the new product. Since macaroni is thicker than noodles,
Maggi Macaroni did not absorb the tastemaker well and consequently did not taste very good.
The interest generated by the novelty of the product soon died out and sales began tapering off.
Eventually, Nestlé had to withdraw Maggi Macaroni completely from the market.

Nestlé had not even recovered from Macaroni’s dismal performance, when it learnt to its horror
that Knorr had dethroned Maggi as the leader in the soup segment (end of 1997). The only
saving grace for Maggi seemed to its ketchups and sauces, which were turning out to the ‘rare’
successful extensions of Maggi. These products were supported by a popular advertisement
campaign for the Maggi Hot & Sweet sauce brand. These humorous advertisements, featuring
actors Pankaj Kapoor and Javed Jafri, used the tagline, ‘It’s different.’ However, during mid-
1997, HLL began promoting its Kissan range of sauces aggressively and launched various
innovative variants in the category.

Nestlé responded with a higher thrust on advertising and different size packs at different price
points. Though Kissan gained market share over the next few years, Maggi was able to hold on
to its own market share. Meanwhile the operational costs of Maggi noodles had increased
considerably, forcing the company to increase the retail price. By early 1997, the price of a
single pack had reached Rs 10. Volumes were still languishing between 13,000-14,000 tonnes.

Pricing and Product Development:

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It was at this point in time that 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. As a
result of the above initiatives, costs reportedly came down by 12-14%. To cook the new product,
consumers had to add two cups of water instead of one-and-a-half cups. The taste of the noodles
was significantly different from what it used to be. The customer backlash that followed the
launch of the new noodles took Nestlé by surprise. With volumes declining and customer
complaints increasing, the company began to work on plans to relaunch ‘old Maggi’ to win back
customers. In addition, in 1998, Nestlé began working out a strategy to regain Maggi’s position
in the soup segment. To counter the Knorr threat, the company relaunched Maggi soups under
the ‘Maggi Rich’ brand in May 1998. The soups were not only thicker in consistency than those
produced earlier, the pricing was also kept competitive and the packaging was made much more
attractive. However, Knorr took Nestlé by surprise by launching one-serving soup sachets priced
as low as Rs 4. HLL too launched two-serving sachets of Kissan soup priced at Rs 7. As Maggi
did not have any offerings in this price-range, it lost a huge portion of its market share to Knorr.

The relaunch prompted market observers to compare Nestlé’s move with US soft drinks major
Coca-Cola’s ‘New Coke’ fiasco. However, the company disagreed, “It’s a hard-5 nosed strategy,
that mixes nostalgia with the consumer’s voiced preference for the product it has been bred and
rought up on. The reintroduction is Nestlé’s acknowledgement of the loyalty of the Indian
mother and the child to the original product.” By May 1999, Nestlé’s decision to bring back the
‘old Maggi’ seemed to have paid off. Two months after the relaunch, the monthly average sales
of Maggi noodles n the northern region rose 50% in comparison to the previous year. In July
1999, ‘Maggi’ the brand, was promoted as the biggest brand in Nestlé’s portfolio of brands in
India, overtaking brands such as Nestum and Cerelac. 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. Company sources claimed that with reasonable price points and
innovative products, Maggi could emerge as a top brand and a major growth driver for the
company. To further support the brand, Nestlé carried out various promotional activities as well.

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These included the August 1999 ‘Fun-Dooz’ campaign and Jungle Jackpot campaigns. 6 As a
result of the above initiatives, Nestlé claimed to have cornered an 81% market share of the
20,000 tonnes noodles market by the end of 1999. Nestlé sources claimed that Maggi noodles
outsold the competition four times over and that more than four Maggi noodle cakes were
consumed every second in the country.

PRODUCT VARIENTS

The product mix of Maggi is divided into various categories defined below. The company has
launched various products under each category as mentioned below.

1. Noodles

•
• Maggi 2-Minute Noodle ( Masala , Chicken, Curry and Tomato)
• Maggi Dal Atta Noodles ( Sambhar taste)
• Vegetable Atta Maggi Noodles
• Maggi Rice Noodles (Lemon Masala, Chilly Chow and Shahi Pulao)

•
• Maggi Cuppa mania (Masala yo, Chilli chow yo)

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2. Sauces

•
• Teekha masala
• Tomoto chatpat
• Imli khata mitha
• Tomato ketchup
• Hot and sweet
• Tomato pudina
• Ginger, Garlic & Coriander
• Maggi Oriental Chilli Garlic
• Ginger, Garlic & Coriander

3. Maggi Pichko

4. Soups Healthy
• Chef Style
• Cream Mushroom
• Sweet Sour Tomato Noodles

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•
• Tangy Tomato Vegetables
• Home Style
• Creamy Chicken
• Mixed Vegetable
• Rich Tomato
• Chinese Style

•
• Chinese Hot Sour Chicken
• Chinese Sweet Corn Chicken
• Chinese Sweet Corn Vegetables
• Chinese Hot & Sour Vegetables

5. Maggi soup sanjivni

• Amla
• Badam
• Spinach
• Dal

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•
•
• Tomato

6. Maggi bhuna masala

• Bhuna masala for gravy dishes
• Bhuna masala for vegetable dal

7. Maggi magic cubes

• Chicken
• Vegetarian masala

MARKET SHARE

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
major threats of the brand as shown in the figure below indicates that Maggi has made several
attempts to revamp itself as a ‘Healthy Product” but till date its perseverance towards the tag line
is low by the consumers. The brand is in the growth stage of product life cycle with a strong
inclination towards the maturity stage.

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STPD ANALYSIS OF MAGGI BRAND

Segmentation: Market Segmentation divides the heterogeneous market into homogenous groups
of customers who share a similar set of needs/wants and could be satisfied by specific products.
Maggi Brand have segmented the market on the basis of lifestyle and habits of URBAN
FAMILIES.

Target: Market Targeting refers to evaluating and deciding from amongst the various
alternatives, which segment can be satisfied best by the company. The Maggi Brand have mainly
targeted the Kids, Youth, Office Goers & Working Woman which falls into the category of
“convenience-savvy time misers” who would like to get something instant and be over with it
quickly.

Positioning: Market Positioning is the act of designing the company’s offerings and image to
occupy a distinctive place in the minds of the target market. The goal of positioning is to locate
the brand in the minds of consumers to maximise the potential benefit to the firm. Maggi has
positioned itself in the SNACKS category and not in the meal category since Indians do not
consider noodles as a proper food item. Therefore Maggi have developed its brand image of
instant food products with positioning statements such as “2 minutes noodles” and “Easy to
cook, good to eat”.

Differentiations: Points-of-difference (PODs) are attributes or benefits consumers strongly

associate with a brand, positively evaluate and believe they could not find to the same extent
with a competitive brand. The Maggi Brand have also differentiated its brand image from its
competitors in terms of taste, flavours and packaging. Maggi have launched wide varieties of
products in different flavours which can attract larger set of customers. Maggi products are also
available in different sizes catering to different customer needs.

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CUSTOMER BASED BRAND EQUITY PYRAMID (CBBE)

Maggi’s customer based brand equity pyramid seems to be equally strong on left hand side and
right hand side, it is also strong from bottom to top enjoying the highest brand awareness of any
fast food noodle brand in India as well as repeat purchase rate and high customer loyality.

BRAND PRISM OF MAGGI

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BRAND PRISM OF MAGGI

In mid-1988, Nestle SA (Nestle), the world's largest consumer packaged foods company based in
Switzerland, acquired Rowntree Mackintosh PLC (Rowntree), in the largest ever acquisition deal
of a British company during that time. Rowntree was the world's fourth largest manufacturer of
chocolates and confectionery products, with well-known brands like Kit Kat, After Eight,
Smarties and Rolo. The deal attracted considerable attention all over the world since several
bids2 to acquire Rowntree were rejected. Rowntree claimed that the bids were too low for its
valuable, well-recognized brands. In the end, Rowntree was acquired by Nestle for £2.5 billion,

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two and a half times the pre-bid price and eight times the net asset value of the company. This
acquisition made Nestle the largest chocolate manufacturer in the world. Analysts felt that Nestle
had paid £2.5 billion because of Rowntree's brands, not its past financial performance. Industry
observers wondered how Nestle would manage Rowntree's brands. Rowntree followed a "one
product, one brand" policy. The brands were simply Kit Kat, After Eight, Smarties and Rolo,
Rowntree was never mentioned. Moreover, Rowntree's brands were not strongly managed
European brands. In fact, according to an analyst, Kit Kat was one of the worst cases of an over-
localized brand of a company across Europe. In the mid-1860s, Henri Nestle (Henri), a
merchant, chemist, and innovator experimented with various combinations of cow's milk, wheat
flour and sugar. The resulting product was meant to be a source of infant nutrition for mothers
who were unable to breast-feed their children. In 1867, his formula saved the life of a
prematurely born infant. Later that year, production of the formula, named Farine Lactee Nestle,
began in Vevey, and the Nestle Company was formed. Henri wanted to develop his own brands
and decided to avoid the easier route of becoming a private label. He also wanted to make his
company a global company. Within a few months of establishing his company, Henri began to
sell his products in many European countries. In the initial years, Henri restructured the
organization to facilitate research, improve product quality, and develop new products. In 1875,
Daniel Peter, Henri's friend and neighbor, developed milk chocolate.
He soon became the world's leading chocolate maker. Later, his company was acquired by
Nestle. In 1905, Nestle merged with Anglo-Swiss Condensed Milk Company, a manufacturer of
milk-based infant food. During World War I, there was a huge demand for dairy products and
Nestle capitalized on this opportunity by executing military contracts of various countries
involved in the war. In 1938, after eight years of research, Nestle discovered a soluble powder
that revolutionized coffee drinking around the world. The product was launched under the brand
name Nescafe and became an instant success.
The end of the World War II marked the beginning of a new phase of growth for Nestle. The
company added many new products. In its effort to expand its operations further, Nestle merged
or acquired several companies. In 1947, Nestle expanded into culinary products by merging with
Alimentana, a Swiss company that produced and sold Maggi soups, spices and other food
products in many countries.

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Nestle's Branding Strategy

The Nestle brand itself had played a key role in the company's globalization efforts. In 1996,
about 40% of the total revenues were generated from products covered by the Nestle corporate
brand. Nestle's logo was an important part of the company's corporate identity. The 'nest' was a
graphic translation of Henri Nestle's name, which meant "little nest."...
Internationalizing the "Kit Kat" Brand

When Nestle acquired Rowntree's brands in 1988, the major challenge before the company was
managing them. Rowntree had a "one product, one brand" policy. The brands Kit Kat, After
Eights, Smarties and Rolo were marketed with no mention of Rowntree. Rowntree's brands were
not strongly managed European brands. Before the 1980s, 'country managers' outside the UK in
several European countries managed Rowntree's business. They were free to run their units
provided business objectives were met. The orientation at Rowntree was short-term just to meet
annual business objectives and country managers added nothing to the overall organization. Even
though Kit Kat was a leading brand in UK, it was ignored outside the country. In the early 1980s,
Rowntree established Rowntree Continental Europe, which handled business responsibilities
outside the UK in Europe. However, this did not benefit Kit Kat, which was launched in Europe
by Rowntree Continental Europe as a multi-local brand...

Divesting Non-Strategic Brands

The success of the Kit Kat brand inspired Nestle to think and act 'glocally' i.e. establishing global
as well as local brand identity. Nestle had taken a similar approach to several other acquired sub-
brands. Moreover, Nestle introduced the Kit Kat brand in several other countries across the
globe. Nestle's brand management strategy included the divestment of non-strategic brands. In
February 1999, Nestle negotiated the sale of its Findus brand of frozen food to EQT Scandinavia
BV With the proposed foray of Kraft Foods Inc into India, the branded processed foods sector
will soon witness a major tussle between Indian and international players. To take on new rivals,
Gujarat Co-operative Milk Marketing Federation (GCMMF) and Godrej Hershey Food &
Beverages Ltd (GHL) are drawing up fresh game plans which include extension of distribution
network & product portfolio and modern trade retail initiatives. For instance, after launching

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Hershey’s chocolate syrup in domestic markets, Godrej Hershey’s is planning to launch its other
global brands (including chocolates) in India. “We are evaluating different options in our supply
chain management. Also, we are looking at the launch of Hershey’s brands which are relevant to
Indian markets,” said Vivek Mathur, managing director of GHL. On the other hand, Amul is
extending its distribution network to reach out to a wider target audience across the country. “We
will consolidate our product portfolio and improve the availability of our brands across the
country,” said RS Sodhi, chief manager of Amul. Meanwhile, Nestlé India is getting ready to
launch a host of brand building exercises to promote its flagship brands, Munch and Kit Kat, in
India. “Nestle is currently fine-tuning its advertising strategy to woo consumers. The company
will soon launch new mass media campaigns to promote its chocolate brands in India,” informed
industry sources.US-based Kraft’s $19.7-billion acquisition of Cadbury Plc now pits the world’s
second-largest food company against global rivals such as Nestle and Hershey’s in the Indian
market too. Recently, Irene Rosenfeld, chief executive , Kraft Foods Inc, has said owning UK-
based Cadbury would enable the American confectionery giant to expand its footprint into the
developing market, including India.

According to industry analysts, Kraft Foods will utilise Cadbury’s existing distribution network
to push its own allied products such as Kraft cheese in India. At present, Kraft’s has no major
presence in India except for its three brands––powdered flavoured drink Tang, chocolate brand
Toblerone and biscuit brand Oreo.On Godrej’s strategy, Vivek Mathur, said: “We are planning
introduce many initiatives in modern trade channels. Also, we are planning to expand our
distribution in premium general trade channels.” GHL (formed in 2007), a joint venture between
The Hershey Company (USA) and Godrej Group, at present, operates in multiple categories such
as confectionery, beverages and grocery items. In its portfolio, GHL has brands like Hershey,
Mahalacto, Nutrine, Jumpin & Sofit. Nestlé has decided to take on Cadbury’s Dairy Milk head
on

The street-smart friend slaps his forehead when he comes to know what’s going on and says,
“Arre Bhai, ye Munch hai, isse kisi bhi din kha sakte hain.” (My friend, this is Munch and it can
be eaten on any day of the month.) Hearing it, the boy puts the Munch bar in his mouth. “Khao
bina tareekh dekhe,” (Eat without looking at the date) intones the voiceover. “That’s why mera

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crunch mahan (my crunch of Munch is so great).” In the last shot, the cuckoo reappears from the
recess in the clock to say the 12th day of the month will fall next week. That its tongue hangs out
and eyes are laden with boredom are hard to miss.

Spoof attack
Nestlé, on its part, is not saying that it is a spoof. “Over the years, we have used different
treatments to emphasise the basic proposition that Munch is a light, crunchy and chocolaty treat
that is affordable and can be enjoyed any day, anytime, anywhere. This is woven into all the
commercials,” the company spokesperson said in an e-mail response.

And JWT, the agency which did the ad, does not want to be drawn into a discussion. But it does
admit that it is a “tactical” campaign. “It’s a tactical ad which again brings out the affordability
and great taste of Munch. It will be aired on TV and radio,” says JWT India Managing Partner
Rohit Ohri. “We have another Munch ad running simultaneously which is also centered on taste
and affordability, but while this ad is more (generic) on the product, the other is more tactical.”

“The consumption of chocolate and confectionery is still evolving in India and has to expand
from treats for special occasions to any day, anytime, anywhere. The objective of our
communication is to reinforce that Munch is an affordable and great-tasting light eat,” adds the
Nestlé spokesperson.

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The company also feels that the campaign gels with the imagery of fun that has come to be
associated with the brand. Nestlé, to be sure, had signed on film actress Rani Mukherjee some
years ago for Munch and ran several ads with her. She played pranks in an essentially rural
setting. (The contract ended over a year ago). The latest ad, the company feels, will take the
message further down. “Munch is a vibrant brand with a personality that is clearly associated
with fun. Our advertising has always highlighted the fun in consumption. The current campaign
along with various other activities initiated by the company will strengthen its leadership even
further,” the e-mail said.

The chocolate market in the country is worth Rs 2,000 crore per annum. The market leader is
Cadbury which has brands like Dairy Milk and Five Star in its portfolio. However, with growing
health awareness amongst consumers, there has been a steady shift towards lighter chocolates.
This category, say industry experts, is growing faster than the traditional chocolates.

In this category, there are three players: Nestlé Munch and Kit Kat and Cadbury Perk. Nestlé
introduced Munch in 2000. The chocolate, which the company calls an enrobed wafer, was
developed by Nestlé in India with support from its global research and development team. Over
the years, Munch has become the leader in this category. It’s available at two price points: Rs 2
and Rs 5. Recently, the company had launched a bigger pack size priced at Rs 10 and called it
Munch Guru.

And this is where the new ad fits in. It is clear that Nestlé is now targeting Cadbury’s old
warhorse Dairy Milk for a larger slice of the market. Its competition is no longer just Cadbury’s
Perk. “The campaign reinforces the popularity of Munch as affordable great taste,” the
spokesperson said. “It is very extensively distributed across geographies and is enjoyed by
different target segments. The TV commercial is part of a larger campaign that will be rolled out
in formats that support the needs of the different markets.”

Will it click?
At the moment, the question is will the ad work? Will it dent the buzz that the latest Cadbury
campaign has created amongst consumers? Brand strategy specialist and Harish Bijoor Consults

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CEO Harish Bijoor says that when a market leader occupies a higher ground as Cadbury has
done with the pahli tarikh campaign, which has been very popular, one should be ready for
spoofs from rivals. “This is a positive move for the category. There is nothing unethical about
spoofs — they need to be looked at very positively. They make brands which haven’t been able
to make much of an impact come alive; they make the whole category much more alive and
bring more consumers to it. This advertisement has certainly livened up the chocolate category.”

Bijoor feels that the Nestlé Munch ad has been executed very well and it clearly makes an impact
on the target audience in a positive way. “Categories like chocolates and colas cater to the mass
of young people in the country. With 54 per cent of the population below the age of 25 and 72
per cent below the age of 35, it is only right to have an advertising proposition where the ad
language is very edgy-buzzy and excites the youth.”
More important, how will Cadbury react to this ad? Most experts expect it to come out with a
counter campaign. “The response to the pahli tarikh ad has been terrific and the spoof stands
nowhere up to it. We are certainly not looking at any counter-spoof,” says Ogilvy & Mather
National Creative Director Abhijit Avasthi. O&M was the agency that devised the Cadbury
campaign. “Spoofs are about puncturing any pretence, but then the brand character’s has to be
such. That’s certainly not the case with Nestlé Munch. It’s not in the brand’s natural scheme,” he
adds. In other words, the ad war is unlikely to go on forever. Sales Management systems can also
create competitive advantage. Here are some examples:

• As mentioned above, productivity will increase. Sales staff will use their time more
efficiently and more effectively. The sales manager will also become more efficient and
more effective. (see above) This increased productivity can create a competitive
advantage in three ways: it can reduce costs, it can increase sales revenue, and it can
increase market share.
• Field sales staff will send their information more frequently. Typically information will
be sent to management after every sales call (rather than once a week). This provides
management with current information, information that they will be able to use while it is
still valuable. Management response time will be greatly reduced. The company will
become more alert and more agile.

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• These systems could increase customer Sales Management if they are used with wisdom.
If the information obtained and analyzed with the system is used to create a product that
matches or exceeds customer expectations, and the sales staff use the system to service
customers more expertly and diligently, then customers should be satisfied with the
company. This will provide a competitive advantage because customer Sales
Management leads to increased customer loyalty, reduced customer acquisition costs,
reduced price elasticity of demand, and increased profit margins.

Disadvantages

Detractors claim that sales force management systems are:

• variables have a leading "0", which makes JavaScript interaction cumbersome

• integration with Extensible Hypertext Markup Language (XHTML) is nearly impossible
since the few remaining JavaScript actions that work with Salesforce are depreciated
difficult to work with
• require additional work inputting data dehumanize a process that should be personal
• require continuous maintenance, information updating, and system upgradingcostly
• difficult to integrate with other management information systems

Encouraging use

For all the reasons stated above many organisations have found it difficult to persuade sales
people to enter data into the system. For this reason many have questioned the value of the
investment. Recent developments have embedded sales process systems that give something
back to the seller within the CRM screens. Because these systems help the sales person plan and
structure their selling in the most effective way they give a reason to use the CRM. The sales and
marketing relationship

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Marketing and sales are very different, but have the same goal. Marketing improves the selling
environment and plays a very important role in sales. If the marketing department generates a
potential customers list, it can be beneficial for sales. The marketing department's goal is to
increase the number of interactions between potential customers and company, which includes
the sales team using promotional techniques such as advertising, sales promotion, publicity, and
public relations, creating new sales channels, or creating new products (new product
development), among other things. It also includes bringing the potential customer to the
company's website for more information, or to contact the company for more information, or
interact with the company via social media such as Twitter, Facebook, a blog, etc.

The relatively new field of sales process engineering views "sales" as the output of a larger
system, not just that of one department. The larger system includes many functional areas within
an organization. From this perspective, sales and marketing (among others, such as customer
service) are labels for a number of processes whose inputs and outputs supply one another to
varying degrees. Considered in this way, to improve the "output" (namely, sales) the broader
sales process needs to be studied and improved as would any system, since the component
functional areas interact and are interdependent[5].

In most large corporations, the marketing department is structured in a similar fashion to the
sales department[citation needed] and the managers of these teams must coordinate efforts in
order to drive profits and business success. For example, an "inbound" focused campaign seeks
to drive more customers "through the door" giving the sales department a better chance of selling
their product to the consumer. A good marketing program would address any potential
downsides as well.

The Sales department's goal would be to improve the interaction between the customer and the
sales facility or mechanism (example, web site) and/or salesperson. Sales Management would
break down the selling process and then increase the effectiveness of the discrete processes as
well as the interaction between processes. For example, in many out-bound sales environments,
the typical process is out bound calling, the sales pitch, handling objections, opportunity

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identification, and the close. Each step of the process has sales-related issues, skills, and training
needs as well as marketing solutions to improve each discrete step, as well as the whole process.
One further common complication of marketing involves the inability to measure results for a
great deal of marketing initiatives. In essence, many marketing and advertising executives often
lose sight of the objective of sales/revenue/profit, as they focus on establishing a
creative/innovative program, without concern for the top or bottom lines. Such is a fundamental
pitfall of marketing for marketing's sake. Many companies find it challenging to get marketing
and sales on the same page. Both departments are different in nature, but handle very similar
concepts and have to work together for sales to be successful. Building a good relationship
between the two that encourages communication can be the key to success even in a down
economy. Sales Management Marketing potentially negates need for sales Nestle India Limited
is one of the fastest growing FMCG Company with its strengths for ongoing product innovation
& renovation. It performs very well. 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 today acknowledged amongst India’s
‘Most respected Companies and amongst the Top Wealth Creators Of India’.
MAGGI PAZZTA:
Twenty-five years after it brought Maggi instant noodles to India, Nestle has extended the brand
to ready-to-eat pasta. It has come out with Maggi Nutri-licious (nutritious and delicious) Pazzta.
There are two flavours: Masala Penne and Cheese Macaroni. The first has been priced at Rs 12
and the other at Rs 15.
Ready-to-eat pasta is a nascent category in the country. The only national brand is
ITC’sSunfeast. So, Nestle has a more or less open field ahead of it. Thus, it is believed that
Maggi Nutri-licious Pazzta will define and create the market.
According to Nestle General Manager (foods) Shivani Hegde, the product has been developed
specifically for India. “It required tremendous R&D efforts and food expertise. Our team in India
has worked extensively with the Nestle R&D centre in Germany to develop pasta made from 100
per cent suji which is known to be healthy in India,” says she. “It uses advanced international

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technology to deliver a short cooking time of only five minutes and a product that is suited to the
Indian palate.”
Of course, the company has decided to market the pasta under the Maggi brand. It is widely
recognised as the most-popular brand in the food category in India. After the success of instant
noodles, Nestle has extended the brand to other categories like sauces, soups and pickles. Now it
is the turn of pasta.
Consumers have strong bonds with Maggi noodles. Maggi Nutri-licious Pazzta is another
innovative concept and will further grow the market for tasty, healthy and convenient light
meals. Nestle has decided to position the pasta as a tasty, healthy and convenient light meal for
the entire family. Nestle has tweaked the Maggi instant noodles line a bit for the pasta, which
now says “Taste Bhi, Health Bhi...Khushiyan Bhi” (taste, health and also happiness). The initial
feedback from the market has been positive and consumers have found it tastier than rival
products.

NESCAFE COFFEE:
Nescafé is a brand of instant coffee made by Nestlé. It comes in the form of many different
products. The name is a portmanteau of the words "Nestlé" and "café”. In Hebrew, the word
'NES” means MIRACLE & 'CAFÉ' means COFFEE. So, together it's a miracle with coffee.
Nestlé's flagship powdered coffee product was introduced in Switzerland on April 1, 1938, after
being developed for seven years by Max Morgenthaler and Vernon Chapman.
MODERN TRADE
Modern format retail is witnessing phenomenal growth, driven by the impact of increasing
urbanisation, the new well-travelled, knowledgeable Indian consumer and a youth-driven culture.
Modern trade, the characteristic of which is having everything under one roof and with a great
array of products displayed in an uncluttered fashion where the touch and feel factor prevails, is
providing an environment to access products driven by convenience and fashion. Nestle has
created two new divisions - channel and category sales development and national key accounts
management organisation - to focus on modern formats in retail trade. This will help the
company to respond faster and in a more focused manner to consumer expectations.
CONCEPT OF MODERN INDIA

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The Indian economy is on a bull run. Over the last decade, India has registered an average Gross
Domestic Product (GDP) growth of 6 %. Per capita income has increased at about the same rate
during the last five years. In the fiscal year 2009-10, the economy recorded a growth of 6.9 %,
based largely on the developments in the services sector and trade. The economy today is strong
and vibrant owing to the progressive liberalisation of government policies, increase in foreign
direct investment, increased global competitiveness, and investment in infrastructure and growth
in domestic as well as international demand for Indian goods and services. A survey says India
ranks fourth in terms of Purchasing Power Parity, after the USA, China and Japan. A young,
services-driven economy India is home to the youngest population in the world, where 50% are
under the age of 25, and 85 % below that of 50. The median age of the population is 24 years.
This year, over 100 million Indians fall in the 17-21 age bracket. This growing working
population in India is providing ‘fire-power’ to the demand for lifestyle products and services.
Indians are consuming more than ever before, as incomes and purchasing power increase.
Discretionary spending has increased by 16 % for the upper and middle class Indians.
STRONG AND SUBSTAINABLE GROWTH
There is great confidence in India’s potential to sustain a period of high growth. India’s GDP
growth is predicted at 7.3 % in the current year and in the range of 6.5 % to 8 % in the next five
years. According to the widely discussed Goldman Sachs report of October 2003, over the next
50 years, Brazil, Russia, India and China - the BRIC economies - could become a much larger
force in the world economy. “India could emerge as the world’s third largest economy", as India
has the potential to show the fastest growth over the next 30 to 50 years. The report also states
that “Rising incomes may also see these economies move through the ‘sweet spot’ of growth for
different kinds of products, as local spending patterns change”. To keep the momentum going,
the Government has recently proposed various policy initiatives, including the promotion and
enhancement of FDI in various sectors that were hitherto restricted. The rising levels of foreign
direct investment and interest shown by global companies suggest that this strategy is succeeding
and that no global player can afford to ignore India any more. Retail is identified as one such
area that will soon be opened for Foreign Direct Investment.
Modern Trade is defined as any organised form of retail or wholesale activity, (food and non-
food under multiple formats), which is typically a multi-outlet chain of stores or distribution
centres run by professional management. The feasibility of modern trade in India is no longer a

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question, even though India is one of the last large Asian economies to liberalise its retail sector.
In the last few years, India has witnessed a strong resurgence in organised retail, with several
large domestic retailers such as Trent, Pantaloon and Shopper’s Stop expanding into new cities
and exploring new retail formats. Global retailers such as Marks & Spencer and Tommy Hilfiger
have managed to enter India through various other options open to them and
have made a mark on the Indian market. Thanks to the increasingly aware and assertive Indian
consumers, the seeds of retail revolution have already been sown.

• Today 21 million people are employed in the retail sector in India, which is 7% of the
total national workforce. As retail is largely labour-intensive, various studies (based on
the level of investment envisaged in the near future), have predicted generation of an
additional 8 million jobs.
• By 2010, 35 million to 40 million square feet of retail space will have been created.
Modern trade’s effect will be most apparent at the bottom of the population pyramid, as it
will unleash opportunities such as non-agricultural employment to rural youth and better
quality of living for the existing agricultural society. At present 72% of the Indian
population lives in the villages and is employed in agriculture.
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• The traditional mom-and-pop stores in India cater for 97% of the total market and have
developed indigenous processes and skills in retaining their customers, thanks to their
unparalleled proximity, convenience and services offered. Taking a cue from their
competitive advantage, modern trade companies in India will have to reach the existing
service levels and match the Indian consumers’ expectations. This will happen partly
with the adoption of better processes and technologies, but also through creation of fresh
employment.
• Global retailers like Carrefour and Kingfisher1 have already invested significantly in the
local economies they are present in. In the process, they have improved living standards
of consumers, suppliers, farmers and employees and generated greater quantity and
quality of employment.
• It can be expected, from the trends in China and Mexico that with flourishing modern
trade and increasing global retailer presence, domestic competitors will still hold majority
stake in the Indian market. In China, Carrefour and Wal-Mart2 have more than 100
stores, despite which domestic competitors hold more than 90% of the market.
• Similarly in Mexico in spite of the presence of global retailers including Wal-Mart, the
number of retail outlets, including mom-and-pop stores, increased by 2%.

According to a study by the McKinsey Global Institute (MGI), 'Bird of Gold': The Rise of India's
Consumer Market, Indian incomes are likely to grow three-fold over the next two decades and
India will become the world's fifth largest consumer market by 2025, moving up from its 2007
position as the world's 12th largest consumer market.
India ranks second in the Nielsen Global Consumer Confidence survey released on January 7,
2010—an indication that recovery from the economic downturn is faster in India with consumers
more willing to spend. The survey showed that in addition to the emerging markets of Indonesia
and India, eight of the top ten most confident markets in the fourth quarter of 2009 came from
the Asia Pacific region.
Retail
Estimates by the Retailers Association of India (RAI), the apex body of organised, modern
retailers, have shown that the country's US$ 21.05-billion organised retail segment has grown 20
per cent in the September quarter 2009-10.

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Approximately 315 hypermarkets are expected to come into existence in Tier-I and Tier-II cities
across India by the end of 2011, according to a joint study by consultancy firm KPMG and
industry body ASSOCHAM named 'Reinventing India's Retail Sector'.
Consultancy firm Technopak has said the organized modern retail segment in India will grow by
over three times during the next five years (from 2010), to reach a figure of US$ 80 billion.
Technopak President Raghav Gupta has said that the country's modern consumption level will
double within five years (taking 2010 as reference) to an annual figure of US$ 1.5 trillion from
the present level of US$ 750 billion.
The hypermarket chain, Big Bazaar, and other retailer such as Raheja-owned Shoppers Stop Ltd
and RPG's Spencer's Retail has seen the year 2010 start off with good sales. Big Bazaar raked in
US$ 53.4 million at its shopping festival built around the Republic Day in January 2010.
Spencer's Retail saw 20-25 per cent year-on-year growth in same-store sales (SSS) in the days
around Republic Day, while Shoppers Stop saw its ticket size and average selling price grow
11.8 per cent, in the December 2009 quarter.
Technopak has stated that the main growth in the organized retail market would be driven by the
food and grocery segment, followed by the apparels, consumer electronics and footwear
segments.
Rural Consumers
As socio-economic changes sweep across India, the country is witnessing the creation of many
new markets and a further expansion of the existing ones. According to Pradeep Kashyap, chief
executive officer of MART Rural Solutions, speaking at the Calcutta Management Association
Rural Marketing Meet, over 300 million people would move up from the category of rural poor
to rural lower middle class between 2005 and 2025 and rural consumption levels are expected to
rise to current urban levels by 2017.
Mega retail chains are looking to build a high-quality supply chain—retailers such as Bharti-
Wal-Mart, Carrefour and Reliance are working to strengthen their supply chain formula by
roping in farmers as stakeholders. Despite being the biggest names in the trade, these retailers are
ploughing rural areas to teach innovative farming methods and find the best suppliers among
them.
FMCG

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According to a FICCI-Technopak report, despite the economic slowdown, India's fast moving
consumer goods (FMCG) sector is poised to reach US$ 43 billion by 2013 and US$ 74 billion by
2018. The report states that implementation of the proposed Goods and Services Tax (GST) and
the opening of Foreign Direct Investment (FDI) are expected to fuel growth further and raise the
industry's size to US$ 47 billion by 2013 and US$ 95 billion by 2018.
The Ministry of Food Processing Industries is also planning to double the market size of the food
processing industry to US$ 165.1 billion by 2009-10 and treble it to US$ 271.8 billion by 2014-
15.
Demand for personal care products such as shampoos, toothpastes and hair-oils grew faster in
rural areas than urban areas during April-September 2009, a period that includes the peak
monsoon months, as per the numbers released by market researcher AC Nielsen.
As of February 5, 2010, results of fast moving consumer goods (FCMG) companies have
revealed that most of them have sustained growth in the October-December 2009 quarter which
saw average growth in net sales stand at 14 per cent, while net profit posted 24 per cent growth
during the same period, according to analysts.

BUSINESS PRINCIPLES

Nestlé is committed to the following Business Principles in all countries, taking into account
local legislation, cultural and religious practices: Nestlé's business objective is to manufacture
and market the Company's products in such a way as to create value that can be sustained over
the long term for shareholders, employees, consumers, and business partners. Nestlé does not
favor short-term profit at the expense of successful long-term business development.
Nestlé recognizes that its consumers have a sincere and legitimate interest in the behavior,
beliefs and actions of the Company behind brands in which they place their trust, and that
without its consumers the Company would not exist. Nestlé believes that, as a general rule,
legislation is the most effective safeguard of responsible conduct, although in certain areas,
additional guidance to staff in the form of voluntary business principles is beneficial in order to
ensure that the highest standards are met throughout the organization. Nestlé is conscious of the
fact that the success of a corporation is a reflection of the professionalism, conduct and the

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responsible attitude of its management and employees. Therefore recruitment of the right people
and ongoing training and development are crucial.
Nestlé continues to maintain its commitment to follow and respect all applicable local laws in
each of its markets.

 Nestle was promoted by Nestle Alimentana, Switzerland, a wholly owned subsidiary of Nestle
Holdings Ltd., Nassau, Bahama Islands. Nestle is one of the oldest food MNC operating in India,
with a presence of over a century. For a long time, Nestle India’s operations were restricted to
importing and trading of condensed milk and infant food. Over the years, the Company expanded
its product range with new products in instant coffee, noodles, sauces, pickles, culinary aids,
chocolates and confectionery, dairy products and mineral water. Nestle was incorporated as a
limited company in 1959. In 1978, the Company issued shares to the Indian public to reduce its
foreign holdings to 40%. Its name was changed from Foods Specialties Ltd. to the current name
in 1981.The parent held 51% stake in the company as at 2000 end. It has FIPB approval to hike
stake by 10% and has been gradually acquiring shares from the open market. Parent stake in the
company as at 2001 end stood at 53.8%. The parent plans to continue hiking stake through open
market purchases.

Nestle India Ltd, 51% subsidiary of Nestle SA, is among the leading branded food player in the
country. It has a broad based presence in the foods sector with leading market shares in instant
coffee, infant foods, milk products and noodles. It has also strengthened its presence in
chocolates, confectioneries and other semi processed food products during the last few years.
The company has launched Dairy Products like UHT Milk, Butter and Curd and also ventured
into the mineral water segment in 2001. Nestle’s leading brands include Cerelac, Nestum,
Nescafe, Maggie, Kitkat, Munch and Pure Life.

HISTORY
Henri Nestlé founded Nestlé in 1866 in Switzerland. Nestlé means ‘little nest’ in Swiss German.
Nestlé first customer was a premature infant who could tolerate neither his mother’s milk nor
any other conventional substitute. Thus, Henri’s ultimate goal was to help fight the problem of
infant mortality due to malnutrition for which he developed a product combining various cow’s
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milk, wheat flour and sugar and name it Farine Lactee Nestlé, which was the first product of
Nestlé being marketed in Europe. In 1974, Jules Monnerat purchased Nestlé and collectively
they launched a condensed milk product of its own. In 1905, Nestlé got merged with Anglo-
Swiss condensed milk. After some time, when Nestlé got fully established and all its operation
were properly functioning in Europe and was gaining fame around Europe, then Nestlé decided
to set up production plants around the globe to ensure the growth of the organization and to
become multinational. The decision to set up industrial operation in new market needs a lot of
research, as there are various factors that effect the growth of the organization and turns out to be
a loss for the company. Such factors are as follows :
• The availability of raw material
• Cost factor
• Economic climate
• Consumer purchasing power
• Consumer tastes
The decision to become multinational turned fruitful for Nestlé and today Nestlé has its own
operations and products in America, England, India, Brazil, Australia, Pakistan, Hungary,
France, Belgium, Italy, Spain and various other countries around the globe.
PLANT LOCATIONS

Nestle started its manufacturing operations with Milkmaid in 1962 at Moga factory.
Manufacturing of Nescafe started in 1964 at the same factory. The company set up another
factory at Cherambadi in Tamil Nadu, for manufacture of infant foods, coffee etc. For almost
two decades there were no new additions of manufacturing facilities due to restrictive policy
environment. The company set up its Nanjangad (Karnataka) factory in 1989 and the Samlakha
(Haryana) factory in 1992. The Ponda (Goa) factory started operations in 1995. The Company
set up its sixth manufacturing unit in 1997 at Bicholim in Goa

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BUSINESS PRINCIPLES

Since Henri Nestlé developed the first milk food for infants in 1867, and saved the life of a
neighbor’s child, the Nestlé Company has aimed to build a business based on sound human
values and principles.

While our Nestlé Corporate Business Principles will continue to evolve and adapt to a changing
world, our basic foundation is unchanged from the time of the origins of the Company, and
reflects the basic ideas of fairness, honesty, and a general concern for people.

People first
Employees, people and products are more important at Nestlé than systems. Systems and
methods, while necessary and valuable in running a complex organization, should remain
managerial and operational aids but should not become ends in themselves. It is a question of
priorities. A strong orientation toward human beings, employees and executives is a decisive, if
not the decisive, component of long-term success.

Quality products
Our focus is on products. The ultimate justification for a company is its ability to offer products
that are appealing because of their quality, convenience, variety and price -- products that can
stand their ground even in the face of fierce competition.

Long-term view
Nestlé makes clear a distinction between strategy and tactics. It gives priority to the long-range
view. Long-term thinking defuses many of the conflicts and contentions among groups -- this
applies to employment conditions and relations with employees as well as to the conflicts and
opposing interests of the trade and the industry. Of course, our ability to focus on long-term
considerations is only possible if the company is successful in the struggle for short-term
survival. This is why Nestlé strives to maintain a satisfactory level of profits every year.

Decentralization
Switzerland is home to Nestlé's Swiss subsidiary, its international headquarters and the registered
office of Nestlé's holding company, but Nestlé does not regard its Swiss headquarters as the
center of the universe. Decentralization is a basic principle of Nestlé. Our policy is to adapt as
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much as possible to regional circumstances, mentalities and situations. By decentralizing

operational responsibility, we create strength and flexibility and are able to make decisions that
are better attuned to specific situations in a given country. Policies and decisions concerning
personnel, marketing and products are largely determined locally. This policy creates stronger
motivation for Nestlé's executives and employees and a greater sense of identification with
Nestlé's business. It is not Nestlé's policy to generate most of its sales in Switzerland,
supplemented by a few satellite subsidiaries abroad. Nestlé strives to be an "insider" in every
country in which it operates, not an "outsider."

Uniformity
A very important concern at Nestlé has to do with uniformity: how consistent Nestlé's principles,
policies, rules of conduct and strategies should be, and to what extent they should differ
depending on the country, subsidiary, region, branch or group of products. In general, Nestlé
tries to limit the uniformity of its policy to a requisite minimum. This minimum is then
systematically enforced, unless there are compelling reasons in a given market that justify
deviation from policy.

Diversification
Nestlé does not want to become either a conglomerate or a portfolio manager. Nestlé wants to
operate only those businesses about which it has some special knowledge and expertise. Nestlé is
a global company, not a conglomerate hodgepodge. We regard acquisitions and efforts at
diversification as logical ways to supplement our business, but only in the context of a carefully
considered corporate marketing policy.

Nestlé is committed to the following Business Principles in all countries, taking into account
local legislation, cultural and religious practices:

• Nestlé's business objective is to manufacture and market the Company's products in such
a way as to create value that can be sustained over the long term for shareholders,
employees, consumers, and business partners.

• Nestlé does not favor short-term profit at the expense of successful long-term business
development.

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• Nestlé recognizes that its consumers have a sincere and legitimate interest in the
behavior, beliefs and actions of the Company behind brands in which they place their
trust and that without its consumers the Company would not exist.

• Nestlé believes that, as a general rule, legislation is the most effective safeguard of
responsible conduct, although in certain areas, additional guidance to staff in the form of
voluntary business principles is beneficial in order to ensure that the highest standards are
met throughout the organization.

• Nestlé is conscious of the fact that the success of a corporation is a reflection of the
professionalism, conduct and the responsible attitude of its management and employees.
Therefore recruitment of the right people and ongoing training and development are
crucial.

• Nestlé continues to maintain its commitment to follow and respect all applicable local
laws in each of its

Research and development

The Nestlé research and development centers have two main tasks: to create new products and
manufacturing processes and to improve those that already exist. These centers play a key role in
product safety and quality and also have their role in conserving resources and protecting the
environment. Environmental concerns are an integral part of any development process to ensure
that our future commercial operations meet the desired criteria.

The Nestlé Research Center provides the scientific support needed to prevent and solve
environmental problems arising in the development groups as well as manufacturing. In addition,
studies are carried out to find new ways of using industrial residues to create valueadded
byproducts. This will reduce total emissions and effluents.

The Nestlé development centers prepare environmental impact studies for new products and
manufacturing processes. These cover all aspects, from raw materials, through processing, to the
final packed product. These analyses provide additional elements for use in deciding whether to
commercialize a new product, or to introduce a new or modified process.

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Foresight
At present, the world faces daunting questions about its ability to provide enough wholesome
food for everyone. Malnutrition and poor eating habits are still serious problems in many
developing countries. By 2100, the world's population will double. Will it be possible to feed a
world with so many inhabitants? At Nestlé, the big picture is all about feeding the world and
providing food and nutrition for an ever-growing population. Our response to this situation is to
intensify research, strive for innovations and improve quality.

Flexibility and simplicity

The public's sense of the power and size of a corporation is often inaccurate, for a company's
power is limited by a host of factors including legislation, competition, regulatory bodies and
publicity. From a business point of view, it is desirable for a firm to achieve the size best suited
to a specific industry or mode of production. To be competitive internationally and make
significant investments in research and technology, a larger company has an advantage. From a
strictly organizational point of view, flexible, simple structures work best and excessively large
units should be avoided whenever possible. In both respects Nestlé has a natural advantage:
Although it is a big company, it is spread out over many countries and each of Nestlé's factories
has its own management and responsibility.

Handling of raw materials

The Nestlé Group is in principle not directly involved in primary production of raw materials and
other food ingredients. In general we use locally available raw materials and purchase them
either directly from producers or through existing trade channels.

Raw materials have to meet clearly established quality criteria and are checked for possible
contaminants including environmental contaminants. Our purchasing specifications comply not
only with legal requirements but go further to ensure highest safety and wholesomeness of our
products.

Whenever possible we give preference to those goods for which environmental aspects have
been taken into consideration. In those cases where the required agricultural raw materials are

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not available locally, but the natural production conditions exist, we encourage local production
and provide assistance for cultivation and dairy farm management.

We support plant growing and livestock husbandry methods which:

• preserve and improve natural soil productivity and economize and protect water
resources

• allow the lowest, most appropriate and safe use of agro-chemicals

• use the least energy.

Packaging
Manufacturing comprises all unit operations necessary to transform perishable raw materials into
finished products, with the aim to make them safe and convenient for the consumers. The
manufacturing activities of the Nestlé Group:

• respect natural resources by efficient use of raw materials and energy

• minimize waste generation and emissions

• ensure environmentally safe disposal of all waste which cannot be recycled.

Regular assessments of processing practices are carried out. These assessments include:

• evaluation of individual plant performance with regard to operations which have an

impact on the environment

• definition of targets for improvement

• review of plant compliance with local government regulations, company environmental

standards, as well as results achieved in comparison with targets for improvement

• full investigation of incidents which may affect the environment.

Information on developments in environmental protection technology and practices is

disseminated as required to ensure that all plants are using the most effective environmental
practices for their type of processing. This applies also for co packers.

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Marketing and distribution

Marketing is based on the principle of satisfying consumer needs. This is the foundation also for
the environmental marketing approach of Nestlé.

Environmental product claims in advertising, promotional material and on packaging are in

accordance with legal requirements, based on solid scientific evidence and used in a serious and
reasonable manner. Our aim is to minimize wastage in communication, publicity and
promotional material, in particular through more precise targeting of marketing activities.
Consumer promotions and merchandising material such as consumer offers, instore promotions,
display material, leaflets, printed matter, etc. take environmental aspects into account. This
means due consideration of environmental impact in selecting both materials and printing
methods. In distribution, energy efficient and pollution controlled methods are encouraged
wherever possible.

Information, communication and education

Nestlé's policy is designed to provide correct and coherent information on the activities of the
Group. Activities related to the environment benefit from the same treatment and their
communication is secured through all currently available means inside and outside the Group. It
is furthermore Nestlé's duty to create awareness, to train and motivate employees on their
personal responsibility with regard to the protection of the environment.

Legislation and regulations

It is the policy of the Nestlé Group to strictly comply with all laws and regulations relevant to
our activities. We participate in discussions on food legislation and regulations between
international organizations, government representatives, industry, the scientific world and
consumer associations. We also apply this policy to environment related matters. In doing so, we
cooperate with legislators through local industry associations in order to promote laws and
regulations in the field of environment which are reasonable, rational, realistic, applicable and
enforceable. We oppose unjustified bans and any other discriminatory measures. We favor the
harmonization of food regulations in order to remove existing trade barriers and to avoid the
creation of new ones. This applies also to environmental issues. We favor the exchange of
information, of experience and of knowledge between the various interested parties. Thanks to

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all these synergies, we can contribute to valuable discussions and be recognized as an active
partner in helping authorities to formulate comprehensive strategies in the field of the
environment.

NESTLE BRANDS

• Milk products and nutrition-

• Nestle Everyday Dairy Whitener

• Nestle Everyday Ghee

• Nestle Milk

• Nestle Slim Milk

• Nestle Nesvita Pro-Heart Milk

• Nestle Fresh ‘n’ Natural Dahi

• Nestle Fresh ‘n’ Natural Slim Dahi

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• Nestle Jeera Raita

• Nestle Nesvita Dahi

• Nestle Milkmaid Fruit Yoghurt

• Nestle Milkmaid

• Nestle Nido

Baby Foods-

• Nestle Lactogen

• Nestle NAN

• Nestle Nestogen

• Nestle Cerelac

• Nestle Nestum

Beverages-

• Nescafe Classic

• Nescafe Sunrise Premium

• Nescafe Sunrise Special

• Nescafe Cappuccino

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• Nestea Iced Tea with Green Tea

• Nestea Iced Tea

• Nestea Instant Hot Tea Mixes

• Nescafe 3 in 1

• Prepared Dishes and Cooking Aids

• Maggi 2-Minute Noodles

Magge Vegetable Atta Noodles

Maggi Cuppa Mania

• Maggi Healthy Soups

• Maggi Masala-ae-Magic

• Maggi Sauces

• Maggi Pichkoo

Maggi Pizza Mazza

• Maggi Magic Cubes

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• Maggi Bhuna Masala

• Maggi Coconut Milk Powder

• Maggi Pazzta

• Maggi Sanjeevni Cup Soup

• Chocolates and Confectionery-

• Nestle Kit Kat

• Nestle Kit Kat Chunky

• Nestle Munch

• Nestle Munch Pop Choc

• Nestle Milkybar

• Nestle Milkybar Choo

• Nestle Bar-One

• Nestle Milk Chocolate

• Polo

• Nestle Eclairs

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• Nestle Milkybar Eclairs

• Nestle Milkybar Crispy Wafer

RESEARCH METHODOLOGY

• Sample size

For the investigator study, the scope is being restricted with to the commercial department of the
Nestle which is dealing with the management of inventory (including raw material, stores and
spares, finished goods), would be 100 customer.

• Primary data

Is the first hand data, which are selected a fresh and thus happen to be original in character.
Primary Data was crucial to know various customers and past consumer views about bikes and to
calculate the market share of this brand in regards to other brands. Primary data is collected
during the survey with the help of questionnaires

• Secondary data

Secondary data are those which have been collected by someone else and which already have
been passed through statistical process. Secondary data has been taken from internet, newspaper,
magazines and companies web sites.

• Limitation (if any)

• It was observed that the most of the customers were not playing Proper attention
to fill the questionnaire

• The research is confined to a certain parts of New Delhi and does not necessarily shows a
pattern applicable to all of Country.

• Some respondents were reluctant to divulge personal information which can affect the
validity of all responses.

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CHAPTER-III
ANALYSIS AND FINDINGS

1. Brand Associations:
Sources of Brand equity like brand association of Maggi as a Brand was found highest with the
age group of 10-25 and the product category associated with it was the noodles category ( see
exhibit 1).
Consumers in the age segment of 10-25 could easily relate Maggi to noodles. In the income wise
category the brand association was highest with the income group of 25k-40k were more than 40
respondents associated Maggi Pazzta with . The implications from the findings discussed above
seem that Maggi has good brand association in terms of noodles. Consumers presume Maggi as
Noodles and the company’s philosophy of projecting the brand as noodles brand seem to be
viable in this regard.

2. Consumer buying Area

As study suggested that 92% of the people who are visiting to the modern retail outlet are
actually consuming or consumer the Pasta item from the different brand which is good sign for
the Maggie and huge potential to target the people those are eating pasta outside of the home.

3. Brand Recall:
From primary data and graph given below it seems a clear trend that Maggi has a good brand
recall as compared to its competitors like one the major sunfeast pasta. Consumers could easily
associate Maggi with noodles but our data suggested that they have problem to choose the Maggi
Pazzta. In the Age wise category, the respondents of the age group of 25-45 were highly cautious
of Maggi brand and seemed to be consuming Maggi more as compared to other age segments.

In the gender wise category the company’s strategy of positioning of Maggi brand for working
women seems to be adaptive and gaining shape as women respondents had a brand recall more
than male.
4. Brand Awareness:
From the responses of the respondents in the conducted survey it was evident than Maggi’s
Brand awareness was very high in terms of noodles were around 65 % of the respondents

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associated maggi as noodles and only 20 % of the respondents knew ,Maggi as a pazzta, 9% as
soup etc.

The trend indicated that Maggi’s brand extension strategy to increase its basket has not been
quite successful in other food segments .This might be because of the larger share of market
captured by the competitors hence Maggi has a high potential in markets like ketchup, Pazzta
etc.

5. Repositioning Maggi as a healthy product:

The company’s strategy to reposition Maggi as a “Healthy product” was not found conducive as
per the survey results. The survey showed that consumers did not perceived Maggi as a healthy
product with 53% of them consumed Maggi’s traditional products as compared to the rest who
consumed other variants of Maggi’s brand that were positioned as “Healthy products”.

From the pie chart given below it can be clearly seen that Maggi is still perceived as a non
healthy products by the consumers and in spite of the efforts to position Maggi as a healthy
product by the company the brand is still perceived as a “ready to eat” food brand that has a high
market share in the noodle category in India.

6. Perception of the Customer towards the Maggi Pazzta

About the 60% of the people suggested that they will prefer magi Pazzta as a Non healty product
because it contains Maida which is not good for health. Consideration of this fact 40% of the
people suggested that they believe pazzta is a healthy to eat.

7. Overall perception towards the Maggi product.

The overall perception towards the magi product, would differ from the person to person as 52%
of the people suggested that it is a ready to eat product which is good for the image of Maggi
Pazzta as well because they are successful to create there brand presence in the ready to eat

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segment. Adding to this 23% of the people suggested that they believe it is just a junk food
which is one of the area where Maggie can change this image amongst the different customer

8. What all you consider while purchasing

As this study suggested that, people choice are changing while they purchasing the pasta, i.e.
they look for quality 18% of the people suggested this , 13% of them are said they would go for
flavour while this study also reflects that Indian consumer are very price sensitive as 28% of the
people are purchasing because of the price discrimination amongst the different brand.

9. Offer affect

As per the study revealed that in modern trade people prefer to have price off promotion which
has been told by the 26 % of the people adding to this 15% of them are suggested they go for
product if company providing the complimentary gift. 20% of them are suggested that they will
go for product if the combo offer available because they can easily save some money.

FINDING AND INFERENCES

The food processing business in India is at a nascent stage. Currently, only about 10% of the

output is processed and consumed in packaged form thus highlighting huge potential for

expansion and growth. Traditionally, Indians believe in consuming fresh stuff rather then

packaged or frozen, but the trend is changing and the new fast food generation is slowly

changing.

Riding on the success of noodles, Nestle India, tried to make extensions of the Maggi brand to a

number of products like, sauces, ketchups, pickles, soups, tastemakers and macaroni in the mid-

1990s. Unfortunately, the macaroni and pickles didn’t pick up as expected. The soups and sauces

did somewhat fine, gathering considerable sales volumes and have a satisfactory presence even

today. ‘Maggi Noodles’ itself faced a bit of difficulty with respect to ‘taste’, and nearly lost its

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position in the minds of Indian consumers in the late 1990s. When Nestle changed the

formulation of its tastemaker, the ominous packet that came along with Maggi Noodles, a major

chunk of consumers were put-off and sales started dropping. Also, Maggi’s competitor

‘TopRamen’ took advantage of the situation and started a parallel aggressive campaign to eat

into Maggi’s market share. But the company quickly realised this and went back into making the

original formula coupled with a free sampling campaign. This helped Maggi to win back its lost

consumers and pushed up its sales volumes again!

Maggi Today The year 2008 saw India leading in world wide Maggi sales. The brand has grown

to an estimated value of Rs 160-170 crore and contributes at least 8–9% to Nestle India’s top

line. All the same, some FMCG analysts feel that the brand has not done much to expand the

noodles category. Even after 25 years of its launch, the size of the instant noodles market is yet

quite small at Rs 300 crore. But yes, the parent company, Nestle India Limited has certainly

encouraged the brand to enter into other culinary products.

RECOMMENDATION

After the conducted study following recommendations could be sited for Maggi Brand.

• To gain maximum leverage in terms of profit the company should pay emphasis

on segments with age groups 25-35 and above .Advertising is the key to success.

Targeting these segments will not only enhance the company’s profit margins but

also it will leverage the brand image of Maggi.

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• The company should advertise its products by depicting attributes related to

Health like Nutrition values, % of Vitamins, Proteins etc.This would help in

customers perceiving the product as Healthy.

• Foray into other food products like chips, chocolates etc under its sole brand name

would not only help in Brand extension but will also enhance Maggi’s market

share.

CONCLUSION

• Nestlé India’s objective is to manufacture and market the company’s products in

such a way so as to create value that can be sustained over the long term for

consumers, shareholders, employees and business partners.

• Maggi’s aims to create value for consumers that can be sustained over the long

term by offering a wide variety of high quality, safe food products at affordable

prices.

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• The company continuously focuses its efforts to better understand the changing

lifestyles of modern India and anticipate consumer needs in order to provide

convenience, taste, nutrition and wellness through its product offerings.

BIBLIOGRAPHY

•BOOKS/MAGAZINES REFFERED:

•MARKETING RESEARCH By- Sunanda Easwaran,Shama J.Singh

•Marketing management By- Phillip Kotler

WEBSITES REFFERED:

I have collected all the above information from the following sources:

•www.nestle.in

•www.wikipedia.com

•From the employees of the company

•By visiting the various stores and their respective merchandisers.

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