1.

INTRODUCTION TO FMCG INDUSTRY

FMCG industry, alternatively called as CPG (Consumer packaged goods) industry primarily
deals with the production, distribution and marketing of consumer packaged goods. The Fast
Moving Consumer Goods (FMCG) are those consumables which are normally consumed by the
consumers at a regular interval. Some of the prime activities of FMCG industry are selling,
marketing, financing, purchasing, etc. The industry also engaged in operations, supply chain,
production and general management.
The Fast Moving Consumer Goods (FMCG) industry in India is one of the largest sectors in the
country and over the years has been growing at a very steady pace. The sector consists of
consumer non-durable products which broadly consists, personal care, household care and food
& beverages. The Indian FMCG industry is largely classified as organized and unorganized. This
sector is also buoyed by intense competition. Besides competition, this industry is also marked
by a robust distribution network coupled with increasing influx of MNCs across the entire value
chain. This sector continues to remain highly fragmented.

Industry Classification
The FMCG industry is volume driven and is characterized by low margins. The products are
branded and backed by marketing, heavy advertising, slick packaging and strong distribution
networks. The FMCG segment can be classified under the premium segment and popular
segment. The premium segment caters mostly to the higher/upper middle class which is not as
price sensitive apart from being brand conscious. The price sensitive popular or mass segment
consists of consumers belonging mainly to the semi-urban or rural areas who are not particularly
brand conscious. Products sold in the popular segment have considerably lower prices than their
premium counterparts.

The facts about the FMCG Industry

FMCG, otherwise known as CPG, is one of the biggest industries in the world and there are a lot
of facts that stand the FMCG industry apart as a career choice:

FMCG companies are behind the biggest brands in the world.

FMCG is all about names, the products which everyone recognizes from trips to the supermarket
or from ads on television. The brands that make up this sector are the high profile ones, the ones
everybody knows and loves. Think Coca-Cola, Dettol and Dove. This is an industry that puts you
in living rooms, kitchens and bathrooms across the globe.

The FMCG industry changes fast and is constantly evolving.

It's fair to say there is never a dull moment in FMCG. From the pace at which goods leave the
shelves to the rate of product innovation and career progression, things move quickly. And it
doesn't end there. The brands themselves are changing just as quickly. 40% of brands on the top
100 list twenty years ago have already been replaced by new names today.

FMCG firms thrive on employee and customer retention.

Employee investment is a big part of the ethos of the FMCG world. Perhaps it's because we
understand the importance of loyalty. Customer loyalty can make or break a brand. Take
Twinnings, for example a century after they entered the top 100 brand list, they are still there
and going strong. So it makes sense for FMCG companies to encourage the loyalty of their
employees too.

FMCG companies can beat the recession.

This is an industry that has proved itself very resilient to recession with the majority of
companies in the sector weathering the financial storm in a way that very few others have
managed. Why? Well, consumers will always need to buy the products created by FMCG
companies. They may not buy big items like refrigerators or cars in a recession, but floors still
need to be cleaned, clothes need to be laundered and aches and pains still need to be soothed.

The FMCG industry thinks bigger and better.

This is an industry that offers things on a whole new scale. Where else could you find yourself
handling $150 million accounts? Working in FMCG gives you the chance to be a part of some
global success stories and influence the way consumers shop for products. FMCG firms are
always thinking of the next great discovery or innovation always developing and ever-changing
to meet consumer's needs.

FMCG has a history of delivering what consumers want.

Some FMCG companies' roots are over two centuries old driving the industry to a value of
$570.1 billion. In short, to quote Sam Walton, founder of Wal-Mart: "High expectations are the
key to everything"

BRAND INFORMATION

History
Ever since its launch in India in 1983, this brand has become synonymous with noodles. The
bright red and yellow colours of the packet with the brilliant blue 2-minute Noodles printed on
it has found a place on every kitchen. Over the years, Maggi has grown as a brand and positioned
itself as a Fast to cook! Good to Eat! food product.
The history of this brand traces back to the 19th century when industrial revolution in
Switzerland created factory jobs for women, who were therefore left with very little time to
prepare meals. Due to this growing problem Swiss Public Welfare Society asked a miller named
Julius Maggi to create a vegetable food product that would be quick to prepare and easy to
digest. Julius, the son of an Italian immigrant came up with a formula to bring added taste to
meals in 1863. Soon after he was commissioned by the Swiss Public Welfare Society, he came up
with two instant pea soups & a bean soup- the first launch of 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.
However in India (the largest consumer of Maggi noodles in the world!) it was launched in 1980
by Nestle group of companies. Maggie had merged with Nestle family in 1947. When launched it
had to face a stiff competition from the ready to eat snack segments like biscuits, wafers etc. Also
it had other competitor the so called home made snacks which are till today considered healthy
and hygienic. Hence to capture the market it was positioned as a hygienic home made snack, a
smart move. But still this didnt work, as it was targeted towards the wrong target group, the
working women. After conducting an extensive research, the firm found that the children were
the biggest consumers of Maggi noodles. Quickly a strategy was developed to capture the kids
segment with various tools of sales promotion like pencils, fun books, Maggi clubs which
worked wonders for it. No doubt the ads of Maggi have shown a hungry kid saying Mummy
bhookh lagi hai to which his mom replies Bas do minute! and soon he is happily eating
Maggie noodles.

Further the MAGGI 2-MINUTE Noodles has been renovated to provide 20% of the RDA1 of
Calcium and Protein for the core target group building on the nutrition proposition Taste bhi
health bhi. The company could have easily positioned the product as a meal, but did not, as a
study had shown that Indian mentality did not accept anything other than rice or roti as meal.
They made it a easy to cook snack that could be prepared in just two minutes. The formula
clicked well and Maggi became a brand name.

GROWTH TRENDS
General growth of the Indian Noodles sector FY 2012-2014
FICCI states that the culinary products and snack category, under which Maggi

noodles is

classified, has had a robust growth of 8%. Growing by a more than robust 21% in current value
and 16% in volume, growth in noodles will be among the fastest in the various packaged food
products in India. (Refer Appendix A: Indian Instant Noodle Market Growth Graphs) Current
value sales of noodles in stood at slightly over Rs 9 billion, with pouch instant noodles
accounting for more than 66% of the total value sales.

Growth of Maggi Noodles FY 2012-2014

For the FY 2012-2014, the growth of Maggi noodles was an impressive 15%, with sales at Rs
6.75 billion and profit at Rs 2 billion.
It has maintained a market share of around 78% despite increasing competition.

PRODUCTS VARIANTS

MAGGI Vegetable Multigrainz Noodles

MAGGI 2-Minute Noodles

MAGGI Vegetable Atta Noodles

MAGGI Cuppa Mania

MAGGI Healthy Soups

Sanjeevni MAGGI Healthy Cup Soup

MAGGI Sauces

MAGGI Pichkoo

MAGGI MAGIC Cubes

MAGGI Bhuna Masala

MAGGI Coconut Milk Powder

MAGGI Pizza Mazza

MAGGI Masala-ae-Magic

Competitor Analysis
1. TOP RAMEN
'Don't be a noodle, be a Smoodle,' was the ad that brought the Top Ramen brand into limelight
when it was launched in 1991. Market share FY 2012-2014: 14%

Variety:
a) Packet Noodles: Macho Masala, Funky Chicken, Oye Tomato, Curry Smoodles.
b) Cup Noodles: Spicy Vegetable, Tangy Chicken
Distributor: Marico Industries
Distributor strength: About 130000
USP: 'Don't be a noodle, be a Smoodle,' innovative flavours and its cup noodles
2. ITC SUNFEAST PASTA

ITC launched India's first instant pasta snack, Sunfeast Pasta Treat in 2005 Made from high
protein Durum wheat, Sunfeast Pasta Treat is not fried and does not contain maida, making it a
nutritious snack. This ready to cook pasta comes with a sauce maker inside the pack.

Market Share FY 2012-2014:

The ready-to-eat Sunfeast Pasta Treat has clocked 6% of the branded noodles volume in just one
year. Variety: It is currently available in four exciting flavours: Masala, Tomato and Cheese, Sour
Cream Onion and Cheese.

Pricing: priced at Rs. 12/- for the Masala flavour and Rs.15/- for Tomato and Cheese, Sour
Cream Onion and Cheese.

Packaging: Each pack is an 83 gm pack with a 15 gm sauce maker

Distributor: ITC Limited
USP: Sunfeast is made from durum wheat and is promoted as a healthy alternative to instant
noodles made from the less healthy maida (a type of wheat flour that is slightly lower in quality).

Positioning of Maggi
Maggi 2 Minute Noodles will continue with its current positioning of convenience and as a fast
to cook, good to eat snack as this seems to be working well.
To prevent Top Ramen, the main competitor, from eating into its market share some product
innovation is required as otherwise Maggi may get stereotyped as an unexciting product. Top
Ramen is following a cost differentiation technique.
To deal with this Maggi has to position itself as a differentiated product. The market is very
sensitive to taste and rejects any flavour it dislikes with Maggi having learnt it the hard way, thus
the product cannot be greatly differentiated with on basis of taste.

On the other hand Maggi has to deal with the negative perception of Maggi has of being
unhealthy in an increasingly health conscious market, a major threat in the current scenario.
Both these problems can be tackled by positioning Maggi as a snack with nutritional value. The
recent launch of Veg Atta Noodles and Dal Atta Noodles with the promise of good
nutritional value ventures in this area.

CBBE Pyramid of MAGGI

Brand equity is incremental utility and value endowed to a product or service by its brand
name.This study is basically framed by implementing Customer Based Brand
Equity (CBBE) Modelin Nestle Maggi.Brand loyalty is a measure of the attachment that a
customer has to a brand. So this study will help to identify their loyalty level with six dimensions
(Salience,Performance,Imagery,Judgement,FeelingandResonance)ofCBBEModel.Various
literature reviews are used for deep study and for framing questionnaire.Empirical researchd
esign is used to describe the existing phenomenon about position of Nestle Maggi noodle
samong customers.The main findings of the study give about the factors which influence
customer to purchase Nestle Maggi noodles in each dimension of CBBE.
The CBBE model is built by s equentially establishingsix brand building blockswith
customer,that can be assembled as a brand pyramid.Brand salience relates to the awareness of
the brand.Brand performance relates to the satisfaction of customers
Satisfaction of customerspsychological needs.Brand judgement focuces on customersemotional
responses and reactions to the brand.Brand resonance is the relation ship and level of
identification of the customer with the brand

Research Design:-

The research design is the conceptual structure within which research is conducted;I tconstitutes
the blue print for the collection,measurement and analysis of data.Since the research problem is
well defined and an attempt is made to describe the existing phenomena relating to the
measurement of brande quity,this research fits well into the empirical research design.

Applying CBBE model in age wise on nestle maggi.

Comparative study can be conduct on noodle market.

The understanding of CBBE of maggi noodle to develop Brand Positioning strategies,to

introduce new variants for the schemes and to extend the brand too thercategories

Findings
1) 100 percent of respondents have awareness towards magi noodles.
2) 96 percent of respondents use magi noodles
3) 65 percent of respondents said magi noodles is very popular
4) 71 percent of respondents said that TV advertisement are popular media to promote magi
noodle
5) 45.5 percent respondents recall magi noodles weekly

SUGGESTIONS

To gain maximum leverage interms of profit the company should pay emphasis on segments
with age group 25-35 and above.Advertising is the key to success.Targeting the resegments will

not only chance the companys profit margin but also it will leverage the brand image of maggi.

The company should advertise its products by depicting attributes related to health like
nutrition,values,percentage of vitamins,proteins etc.this would help in customers perceiving the
product as healthy.
Maggi concentrate more on TV advertisement so it orders to extend market;they need to
concentrate on other media also for promotion.
Maggi noodle had capture urban market than rural market,so they should concentrate on rural to
extend their market.

From this study,the result gives clear picture about contributing factors of CBBE to Nestle Maggi
Noodles.These factors indicate the level of loyalty among customer upon Nestle Maggi
Noodles.Riding on the success of noodles,nestle India tried to make extensions of the maggi
noodle in the mind1990s.Maggi itself faced a bit of difficulty with respect to taste and nearly
lost its position in the minds of Indian customers in the late1990s,because the Indian customers
mindset did not accept anything other than rice or rotiasameal.Hence try to sustain it with
noodles would have been futile.The firm did not position it as ready to eat meal either as the
house wife prefers to make the meal for her kids rather than saying it for them.And if she can
make it in 2 mins with very little effort than obviously itshit with her the kids also love the taste
does the 2mins with the yummy taste worked NILs promotions position the noodle as
convenience product for another and as a fun product for children.The tag line such asfast to
cook good to eat,2-minsnoodles are the study brand elements of maggi which have helped in
buildingbrand equity.

The Portfolio Matrix applied in MAGGI Noodles Products:

The Boston consulting group developed the business portfolio matrix-shows the linkage between
the growth rate of the firm and relative competitive position of the firm, identified by the market
share.

The Boston Consulting Groups

Porfolio Matrix

High

Market
Growth

STARS

QUESTION MARKS

(MAGGI Veg Atta Noodles)

(MAGGI Dal Atta Noodles)

CASH COWS

DOGS

(MAGGI Masala Flavour)

Rate

(MAGGI Tomato ,curry

flavour)

Low
High
Relative Market Share

STARS:
Stars is the portion of the market where the market position and growth both are very high thus it
is very good position of the company addressed by the product-MAGGI Veg Atta Noodles.

QUESTION MARKS:
Business in these areas states the weak market share with high growth rate. Here it requires the
high cash requirement to come into the stars areas. Thus we can take the product is MAGGI Dal
Atta Noodles.

CASH COWS:
Cash cows are with the strong market position and low growth rate. Such markets are usually in
a position to make their product favourite with the low price in the market. Here the example is
MAGGI Masala Flavours which is very popular in todays market.

DOGS:
Here the marketing position and market growth rate both are very low and it is not profitable for
the company. Thus company must have to stop the production of the products coming under this
area.

Porter's Five Forces

The Porter's Five Forces tool is a simple but powerful tool for understanding where power lies in
a business situation. This is useful, because it helps you understand both the strength of your
current competitive position, and the strength of a position you are considering moving into.

POTENTIAL NEW ENTRANTS INTO THE INSTANT NOODLES

MARKET IN INDIA.
Initially, Maggi noodles with its two minute formula dominated the Indian noodles market.
Report published by The Economic Times on 30th august, 2010 shows that Maggi is losing its
market share because of entry of newer entrants like GlaxoSmithKline's (GSK) Horlicks
Foodles, Hindustan Unilever's (HUL) Knorr Soupy noodles, Big Bazaar's Tasty Treat, Top
Ramen and several other smaller players, according to data by market research firm Nielsen.

 Others like Capital Foods' Ching's Secret and CG Foods's Wai-Wai, Spencers smart
choice noodles, Aditya Birla Retail's Feasters are notching up share.
HUL and GSK have positioned their product as healthy snacking.
Foodles comes with the punch line of Noodles without the No: Available only in the
multi-grain and wheat variant, the product is being promoted as having higher nutritional
value compared to other popular brands. The main unique selling proposition (USP) of
Foodles is the vitamin-packed health-maker sachet that comes with the pack.
The data shows that Maggi's share of instant noodles, on an all-India basis, across urban
markets, has slipped consistently between December '09 to July '10. While Maggi instant
noodles had a 90.7% share in December '09, the share dropped to 86.5% in July '10 on an
all-India basis.
A regional split of the data shows that Maggi's instant noodles' value market share has
fallen across the east, south, north and west zones for the same period.
Noodles war ends Maggis monopoly.
Manoj Menon, FMCG analyst at brokerage firm Kotak Securities, wrote in a report
earlier this month: "Maggi faces product substitution risk and brands like Knorr and
Foodles could potentially impact its incremental growth. Nestle faces a challenging
competitive environment in culinary."
Market estimates put the instant noodles sector in the country currently at around `1,300 crore
(US$288 million) and growing at around 15% to 20% annually.

THREAT OF SUBSTITUTES

 Substitute of noodles are also products like PASTA, SOUP,VEG CAKES which many
customers are now preferring due to increased health consciousness.
The existence of products outside of the realm of the common product boundaries
increases the propensity of customers to switch to alternatives.
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market.
Ease of substitution. Information-based products are more prone to substitution, as online
product can easily replace material product.
Quality depreciation
Maggi is sold in some supermarkets, and the logo is fairly widely recognisable across the UK.
However, they are not nearly as popular as they are in the Far East, India,Australia,NZ,etc.
The most popular instant noodles in the UK is Pot Noodle (a cup noodle founded by Golden
Wonder in the late-1970s).

BARGAINING POWER OF CUSTOMERS

Maggi noodles faces various competitors in market those increases the customer`s bargaining
power of customer
YIPPEE (ITC)
WAI WAI (C.G FOODS)
Knorr Soupy Noodles(HUL)
Horlicks Foodles(GlaxoSmithKline)
Feasters(Aditya Birla Groups)

Top Ramen(Nissin Food Products Co.)

Big Bazaars Tasty Treat
Very intelligently Maggi had taken different type of strategies to held their existing customer and
to attract new customers. They began to repesent or promote the product in the following way:
1. They said it is very easy to cook and tasty also.
2.

It takes only 2 minutes to prepare.

3. They presented the tag line Taste bhi Health bhi

4. Bring different types of variety with different flavour
Maggi 2 minutes noodle`s Flavour
Chicken ,Vegetable,PizzaCurry, Cheese Tomato masala ,etc
5.They target Kids, office goers,youths, working women
6. They began to make a brand image using high promotion
7. Promotional campaign in schools
8.Packing is the biggest plus point of maggi (even in different sizes).
9.Introducing a fictitious character who can connect with kids for better recall.

BARGAINING POWER OF SUPPLIERS

Bargaining power of a brand only increase , when there are more availability of suppliers
for the raw materials.
The vice-versa effect takes place when there are less availability of suppliers.
With the consideration of all the above both the brand as well suppliers have to keep in
their mind about the quality of the product.

COMPETITION WITHIN INDUSTRY

 1.Maggi instant noodles, food major Nestles flagship brand that has dominated the
indian instant noodle market for nearly three decades,is losing market share on a monthly
basis to newer entrants such as,Glaxosmithklines Horlicks Foodles,HULS Knorr soupy
noodles,Big Bazaars Tasty Treat,Top Ramen and several other smaller players.
2.The latest to join the battle ,business conglomerate ITC Ltd.has decided to take its
instant noodle brand,Sunfeast Yipee,Pan-India after tasting initial success in South India.
3.WAI WAI
1-2-3 noodles.

PRODUCT LIFE CYCLE

A concept that provides a way to trace the stages of a products acceptance, from its introduction
(birth) to its decline (death).

Dollars

Introductory
Growth
Maturity
Decline
Product
Stage Stage
Stage
Stage
Category
Sales
Product
Category
0
Profits
Time

Introductory Stage
This stage of the cycle could be the most expensive for a company launching a new product.
The size of the market for the product is small, which means sales are low, although they will
be increasing.

High failure rates

No competition

Frequent product modification

Limited distribution

High marketing and production costs

Promotion focuses on awareness and information

Nestl India Ltd. (NIL), the Indian subsidiary of the global FMCG major, Nestl SA,
introduced the Maggi brand in India in 1982, with its launch of Maggi 2 Minute Noodles,
an instant noodles product

With the launch of Maggi noodles, NIL created an entirely new food category - instant
noodles - in the Indian packaged food market. Because of its first-mover advantage, NIL
successfully managed to retain its leadership in the instant noodles category.

Growth Stage
The growth stage is typically characterized by a strong growth in sales and profits, and because
the company can start to benefit from economies of scale in production, the profit margins, as
well as the overall amount of profit, will increase.

Increasing rate of sales

Entrance of competitors

Initial healthy profits

Promotion emphasizes brand ads

Prices normally fall

Development costs are recovered

10 yrs back it enjoyed around 50% market share in this segment which was valued at
around 250 crores.

During the 1990s, the sales of Maggi noodles declined, due to growing popularity of Top
Ramen , another instant noodles product.

In order to improve sales , NIL changed the formulation of Maggi noodles in 1997.
However, this proved to be a mistake, as consumers did not like the taste of the new
noodles.

In March 1999, NIL reintroduced the old formulation of the noodles, after which the sales
revived. Over the years, NIL also introduced several other products like soups and
cooking aids under the Maggi brand.

Maturity Stage
During the maturity stage, the product is established and the aim for the manufacturer is now to
maintain the market share they have built up. This is probably the most competitive time for
most products and businesses need to invest wisely in any marketing they undertake.

Declining sales growth

Saturated markets

Extending product line

Stylistic product changes

Heavy promotions to dealers and consumers

Prices and profits fall

In 2003 Hindustan Lever Ltd was all set to take on Nestle's bestselling Maggi 2-minute
noodles by launching a new category of liquid snacks under its food brand, Knorr
Annapurna.

The new product, called Knorr Annapurna Soupy Snax, was priced aggressively at Rs 5
and had four variants: two chicken options and two vegetarian.

Like Maggi, Soupy Snax will be an in-between-meals snack and will be targeted at all
age groups, particularly office-goers.

Decline Stage If no product innovation brought

Eventually, the market for a product will start to shrink, and this is whats known as the decline
stage. This shrinkage could be due to the market becoming saturated (i.e. all the customers who
will buy the product have already purchased it), or because the consumers are switching to a
different type of product.

Long-run drop in sales.

Large inventories of unsold items.

Brand Value chain analysis- Nestle Maggi

Marketing Program Investment:

a. Product: Nestle Maggi has made significant investment in product. It has came up with
several product line like 2 minute noodles, pasta, Ketchups, soups etc, in different flavors,
different packaging like value saver packs, sachet etc. Maggi Noodles is the Flagship product of
Nestle Maggi.
b. Communications: Nestle Maggi mainly communicate its products & benefits via
advertising primarily TV advertising. And have also launched several marketing campaigns from
time to time like Share your experience Campaign, Guess the taste campaign etc. And also
promotional campaigns in schools, colleges & offices, free sample distribution, gift on return of
empty pack etc
c. Trade: Available at major retail outlets, provision stores. d. Others: Invites housewives to
send innovative recipes made from Maggi, organized contests & industry visits for students and
several other interactive activities.

Multiplier
Program Quality: Nestle Maggi marketing programs are high on clarity, relevance,
distinctiveness and consistency part. All the marketing program of nestle Maggi were
understandable. Maggi was launched in India with tagline Fast to cook, Good to eat 2 Minute
noodles. Later focus was shifted to health and nutrition factor. They launched Taste bhi health
bhi campaign which is synonymous for Maggi. Jingle of Maggi is quite catchy and still familiar
in respective target audience. The ads featuring Javed and Pankaj kapoor were also popular.All
these programs were well integrated and consistent with its core Good food good life.

Customer Mindset:
Brand Awareness: Brand recall for Maggi is high, still Maggi is instant recalled in its flagship
product category- 2min noodles.
b. Brand Associations: Strong- Tasty & Healthy, Variety, Experience, Convenient.
c. Brand Attitudes: Positive & favorable attitude, as Maggi has always provided &
maintained its products quality.
d. Brand Attachment: Maggi still have its loyal customer base, its been long Maggi is
one of the major players in Indian market (since 1983). Still consumers adhere to Maggi.
e. Brand Activity: It is high for Maggi as many consumers still use Maggi products. A
survey carried out by the National Council of Applied Economic Research named Maggi the
country's most valued FMCG brand. (It is clear from the fact that in 2005 Maggi had 3.7 billion
market share from 1.7 billion in 2003.)

Multiplier-Marketplace Conditions:
a. Competitive Superiority: Main competitors of Maggi are - Heinz Sauces and
Ketchup, Knorr Soups, Kissan Sauces and Ketchup, Top Ramen, Sun feast Pasta, Yippee

noodles, Horlicks Foodles, Knorr Soupy noodles, Big Bazaar's Tasty Treat and several other
smaller players. (As per data by market research firm Nielsen)
b. Channels & other intermediary support: There seems to be sufficient
channel & other intermediaries support as Maggi products are available in several retail outlets
with sufficient shelf space & at provision stores as well.
c. Customer Size & Profile: Children, Students, Working people, Parents.

Market Performance:
a. Market Share: Maggi is the leading player with 86.5% market share in July'10 on an
all-India basis, as per Nielson report (Source: Economic Times)
b. Price Premium: As varieties of products are available and number of competitors also
increasing, thus no premium charged.
c. Price Elasticity: There has been elastic response to increase in price. As varieties of
products are available and switching cost is low, thus competitive pricing being followed so far.
d. Expansion Success: Maggi has expanded via introducing innovative product variants,
new product lines; these are accepted by the consumers in market. It has been a success overall.

Multiplier- Investor Sentiment:

a. Growth Potential: Growth prospects are there, though competition has increased and
market share declined from 90% to 86.5% still Maggi is one of the most valued FMCG brand
and has high potential to grow further. As per Nielsen report 2010- Nestle has the potential to
expand the Rs 1,300-crore instant noodles category which itself is growing at a rapid 15%
annually.
b. Risk Profile: As now days consumers are becoming more health conscious and various
health oriented products are being introduced, thus health could be a risk factor even though

Maggi is in health & nutrition segment also. And also competition is increasing. Maggi's share of
instant noodles has declined consistently from December '09 to July '10. Maggi had a share of
90% in December, 2009, which declined to 86.5% in July, 2010. (Source: Economic times,
Nielson report)
c. Brand Contribution: It is highly important as Maggi is the flagship brand of Nestle
since 2001.

Product Development Process

Idea Gathering
All the Ideas will be Gathered
Idea Screening
Ideas will be filtered
Concept Development Process
According to the concept product will be developed
Sample Packs
Release sample product

 Feed Back
Takes the feed back from the Customer
Further Improvement
It changes the product as per customer requirement

BRAND HIERARCHY OF NESTLE

Need Family

The need family of Nestle is Health Good Food Good life.

Product Family: The product family of Nestle is Health Care.

Product line: Milk product

NESTL MILKMAID Creations

NESTL a+ milk
NESTL MILKMAID
NESTL Slim Milk

Coffee

NESCAF CLASSIC
NESCAF My First Cup
NESCAF CAPPUCCINO
NESCAF SUNRISE Premium
NESCAF SUNRISE

Product Class or Product Category:

Nestle Put all the Product in one class which related to each other under one Product Category.

Prepared Dishes

MAGGI 2-MINUTE Noodles

MAGGI Dumdaar Noodles
MAGGI Bhuna Masala
MAGGI CUPPA MANIA

MAGGI Healthy Soups

MAGGI MAGIC Cubes
MAGGI Masala-ae-Magic
MAGGI Noodletz
MAGGI Sauces
MAGGI Pichkoo
MAGGI Vegetable Atta Noodles
MAGGI Vegetable Multigrainz Noodles
MAGGI Imli Pichkoo Sauce

Product Types:
Nestle has different Product types in Chocolate.

NESTL DARK CHOCOLATE

NESTL DARK CHOCOLATE Dry Fruits
NESTL Fudges
NESTL SELECTIONS Fine Chocolates
NESTL SELECTIONS Panned Dry Fruits
NESTL KITKAT
NESTL BAR-ONE
NESTL MUNCH
NESTL MUNCH POP CHOC
NESTL Milk Chocolate
NESTL MILKYBAR
NESTL MILKYBAR CHOO
NESTL MILKYBAR Crispy Wafer

Item :
Nestle has 5 variant of coffee and available in 4 size.
So the Nestle has 5*4=20 items in Coffee.

Holistic Marketing
The all encompassing promoting idea is focused around the advancement and outline of the
advertising program, techniques and exercises that perceives the expansiveness and between
conditions. It endeavors to create and keep up different points of view on the organizations
business exercises. Everything matters, is the motto. This boils down to the fact that one must
take into consideration every external factor which affects or is affected by the business.

Internal marketing-

It is important to establish secure and informative internal

communication for the benefit of both employers and employees.

Integrated marketing-

The integration of product, place and promotion of the

marketing plan to touch all aspects of marketing. The product offering has to be communicated
to the customer using appropriate promotional methods and it has to be made easily available

too. Nestle Maggi is available across all major departmental stores in Tier one cities and is
promoted as a healthy diet-free Noddles for health conscious audience.

Relationship marketing-

This is possibly the most important element of

holistic marketing. It is important to maintain cordial and mutually beneficial relations with the
suppliers, distributors and of course customers to ensure long term effective partnership.Nestle
has maintain a good relationship with all its vendors for the success of the product Maggi.

Socially responsible marketing-

A firm needs to fulfill its responsibilities

towards the society. Only having a profit making approach with no consideration for the
environment will result in bad word of mouth, loss of reputation, loss of customers in to future,
imposing penalties and loss of license to continue the business.Nestle has played a vital role in
by making socially responsible marketing.

Umbrella Branding
Umbrella brands are brand names that are utilized by a range of different but related products.
Sometimes referred to as family branding.
An umbrella branding strategy, is a marketing practice that involves marketing many related
products under a single brand name.
When a group of products are given the same brand name
It becomes a case of family brand/umbrella brand.
A company may resort to different branding approaches for different product lines.
Umbrella branding involves creating huge brand equity for a single brand.
Umbrella branding is also known as family branding. It is very common to find umbrella
branding in FMCG products.

Basic idea of umbrella branding

Enhance marketability of product.
The concept conveyed to consumers is - any product that carries the brand name is produced
using the same high standards of quality.
Umbrella Branding only works when the company has a line of very similar products.
The master brand has to be acknowledged on products because it commands trust, respect &
loyalty

MAGGI 2-minute Noodles cover of UMBRELLA BRANDING

Nestle MAGGI India's most successful dairy product company follows umbrella
branding.

Compared the umbrella brand and individual brands to an Indian family.

MAGGI created its brand equity by the help of UB.

Where in umbrella brands - like the Indian family, the father is the head, looking over the
children.

When they grow up and become independent, they hold the umbrella for the family.

Individual brands on the other hand are like a western family, who grow up fast and leave
the father behind.

MAGGIs advertising and marketing spend has never exceeded 1% of its revenues.

Despite a limited budget, MAGGI 2-minute Noodles campaignhave always managed

to evoke a larger-than-life brand feel.

Customer knows NESTLE as a quality provider so they believes all products of

NESTLE as a quality product.

It is easy for NESTLE now to launch new products as customer got idea about company
and its products.

When people see a common identity they will want to try other variants of same identity
because of the umbrella brand.

Brand Identity
Brand identity and packaging are intrinsically linked, but even iconic designs sometimes need
updating to match the needs of the market. PCI talks to Philippe Roulet, head of packaging for
Nestle, about his approach to maintaining brand identity.

It is in making an impact on consumers in a split second from a crowded shelf that successful
packaging stands out in the Fast Moving Consumer Goods (FMCG) market. With more products
vying for attention in a competitive market, maintaining a strong link between brand and
packaging is important to secure market share, but at the same time companies must constantly
update their packaging in line with consumer trends, regulatory compliance issues and evolving
technology.
Getting this balance right is crucial for firms in many markets, not least the food and beverage
sector.
'For Nestl, packaging has a key role to play in brand recognition,' says Philippe Roulet, Head of
Packaging for Nestl. 'Packaging is the first contact consumers have with our brands. Just
remember that 70% of purchase decisions are taken at the Point Of Purchase (POP). Only a few
seconds are needed for the purchase decision.'
Under Roulet's control are many well-known brands, many of which have established a strong
identity through their distinctive packaging. The familiar circular Smarties tube with is popping
lid is but one example. However, it is also an example of how established designs such as this are
not immune to improvement by redesign. Nestl recently relaunched Smarties in a new hexatube
pack with a flip-top lid in a bid to broaden its market appeal with a more modern look and a
design that is more convenient to use.
Marketing strategy, however, is not the only major force in shaping the design of food and
beverage packaging.

Co-Branding of MAGGI
Maggi maker Nestle India is drawing up plans to relaunch its banned instant noodles in a new
way, if the court permits the company to sell them locally.
On Tuesday, the Bombay High Court allowed the company to export Maggi noodles, currently
banned in several states in the country.

On 5 June, India's food safety regulator, the Food Safety & Standards Authority of India
(FSSAI), had ordered Nestle India to recall all available stock of Maggi noodles from the market
after more-than-permissible levels of lead and monosodium glutamate (MSG) were found to be
present in samples of the noodles that were tested across laboratories by various states.
Experts believe that the issues related to Maggi noodles recall and its ban are likely to be settled
in the coming three to six months.
Nestle India is readying itself to recommence the sales of Maggi noodles if the Bombay High
Court lifts the ban. The company has initiated several steps on how to reposition Maggi noodles
in a "rightful" way in the domestic market, Business Standard reported.
Toward achieving this, the company has rolled out an internal survey to get "inputs" from its
employees.
"We are determined to resolve the Maggi noodles issue in the best possible way. We will return
Maggi to its rightful position as 'the most trusted food brand in India'. You have a role to play,
too. We know many of you will have suggestions or comments as to how this can be achieved,"
Nestle India's Managing Director Etienne Benet said in a recent e-mail to the company's
employees.
The company has launched a separate web page for this and has partnered with surveymonkey,
an online survey company, to elicit suggestions from employees on rebuilding the Maggi brand.
However, the company restricted outsiders from viewing this survey.
The intention is to bring out ideas to deal with the crisis over its flagship brand and also chalk
out a plan for the future, said a source.
The relaunch of Maggi noodles is likely to involve a revamp of product packaging by Nestle
India, as the company tries to "mark a complete break from the past."
The company is likely to focus more on the labelling issue, in order to make sure that it doesn't
violate the food safety standards.

"Labels such as 'No added MSG' could be removed from the new packs," said a source.
A Nestle India spokesperson said that the company would look at all the options available to
relaunch Maggi.
"But no concrete plan can be drawn on the matter before complete clarity on the issue," the
spokesperson said.

PRODUCT PORT FOLIO OF THE BRAND: MAGGI

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

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).
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.
Maggi Pichko
Tomato ,imli
Soups Healthy
Chef Style - Cream Mushroom - Sweet Sour Tomato Noodles - 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.
Maggi Soup Sanjivni
Amla Badam Spinach Dal Tomato
Maggi Bhuna Masala
Bhuna masala for gravy dishes Bhuna masala for Vegetable Dal
Maggi Magic Cubes
Chicken Vegetarian masala
Maggi Pasta: White, Red

ANSOFFS PRODUCT/MARKET EXPANSION GRID

Ansoff Matrix represents the different options open to a marketing manager when considering
new opportunities for sales growth.

Existing products
New products

MARKET
PENETRATION

PRODUCT
DEVELOPMENT

(Upgrade

existing (Introduce new variants

variants of MAGGI)
of MAGGI)

MARKET
DEVELOPMENT

Existing
Markets

New

DIVERSIFICATION

Markets

(Finding new markets (Launch totally new

for existing variants variants of MAGGI in
of MAGGI)

totally new markets)

MARKET PENETRATION
This is the objective of higher market share in existing markets.
In 2010 Maggi announced a reduction in prices from Rs.10 to Rs.5 in India in order to encourage
purchases.

MARKET DEVELOPMENT
This is the strategy of selling an existing product to new markets. This could involve selling to
an overseas market, or a new market segment.
Nestle Maggi are making hand held games consoles (e.g. DS) appeal to the adult/Children by
introducing games such as Brain Train.

PRODUCT DEVELOPMENT
Least risky of all four strategies
This involves taking an existing product and developing it in existing markets.
Maggi has introduce different variant of products in the last five years in the FMCG market.

DIVERSIFICATION
This is the process of selling different, unrelated goods or services in unrelated markets
This is the most risky of all four strategies
From Maggi Noddles to Ketchups,Masala soups etc.

CONCLUSION
Maggi though has been able to differentiate itself from other Noodles, Maggi

Being taken as generic to Noodles is hampering other extended product category. Competitors
have high grounds to capture the market differentiating then from being Maggi. It makes others
possible product category vulnerable if lunched under Maggi. So to avoid proliferation of brand
and introduce new products to capture opportunities in other snacks and ready to eat product
category NIL has to introduce new branding strategy. By doing so, NIL could avoid the draw
backs associated with the Maggi brand. It could position new brand in competition with other
competitors brand where there is no fit of product with the Maggi brand.