Maggi Noodles Marketing Plan

Submitted By:

ABHISHEK SRIVASTAVA BEENA VENUGOPALAN JOTINDER SINGH NISHANT DHORELIYA RADHA A SOUBHAGYA RATH YOGESHWAR DUTT

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EXECUTIVE SUMMARY Nestlé India is a subsidiary of Nestlé S.A. of Switzerland. With six factories and a large number of co-packers, Nestlé India is a vibrant Company that provides consumers in India with products of global standards and is committed to long-term sustainable growth and shareholder satisfaction. The company is known for its brands in the Milk Products & Nutrition, Prepared Dishes & Cooking Aids, and Chocolates & Confectionery segments. Nestlé leads the value sales of noodles in India with a market share of 79.3%. A testament to Nestlé's domination of the sales of plain noodles is the fact that for its instant noodles brand Maggi, among all its global offices, India accounts for the highest level of volume sales for the company. This marketing plan analyses the current marketing mix of Maggi Noodles, studies the popularity of the two new health variants Vegetable Atta and Dal Atta Noodles and makes suggestions with regard to introducing a new brand “Cup O Maggi” in the cup noodles segment. Various tools like surveys and secondary sources of information have been utilized for the purpose of this analysis.

TABLE OF CONTENTS 2. SITUATION ANALYSIS..................................................................................................... 5 2.1 Market Summary............................................................................................................ 5 2.1.1 TARGET MARKETS ........................................................................................... 5 2.1.2 MARKET DEMOGRAPHICS ............................................................................. 5 2.1.3 MARKET NEEDS ................................................................................................. 6 2.1.4 MARKET TRENDS .............................................................................................. 6 2.1.5 MARKET GROWTH............................................................................................ 8 2.2 SWOT............................................................................................................................ 10 2.3 COMPETITION........................................................................................................... 11 2.3.1 TOP RAMEN ....................................................................................................... 11 2.3.2 ITC SUNFEAST PASTA .................................................................................... 11 2.4 CURRENT MAGGI NOODLES BRAND................................................................... 12 IDENTITY/KAPFERER’S PRISM................................................................................... 12 2.5 PRODUCT OFFERING .............................................................................................. 13 2.6 PRODUCT DISTRIBUTION ...................................................................................... 13 2.7 KEYS TO SUCCESS.................................................................................................... 14 2.7 CRITICAL ISSUES AND CHALLENGES ................................................................ 14 3. MARKETING STRATEGY............................................................................................. 15 3.1 MISSION...................................................................................................................... 15 3.2 MARKETING OBJECTIVES ..................................................................................... 15 3.3 INDUSTRY SEGMENTATION .................................................................................. 16 3.4 TARGET SEGMENTS FOR MAGGI NOODLES ..................................................... 22 3.4.1 MAGGI 2 MINUTE NOODLES ........................................................................ 22 3.4.2 MAGGI CUP O NOODLES ............................................................................... 23 3.5 POSITIONING OF MAGGI ....................................................................................... 23 3.5.1 MAGGI 2 MINUTE NOODLES ........................................................................ 23 3.5.2 CUP O MAGGI.................................................................................................... 23 4. MARKETING MIX .......................................................................................................... 24 4.1 CONSUMER SOLUTION ........................................................................................... 24 4.1.1 IMPROVING THE DAL ATTA VARIANT..................................................... 24 4.1.2 NEW PRODUCT: THE CUP-O-MAGGI ......................................................... 24 4.1.3 PACKAGING ...................................................................................................... 24 4.2 CONSUMER COST ..................................................................................................... 25 4.3 CONVENIENCE.......................................................................................................... 26 4.4 COMMUNICATION.................................................................................................... 27 4.5 MARKETING RESEARCH ........................................................................................ 28 5. FINANCIALS .................................................................................................................... 31 5.1 BREAKEVEN ANALYSIS OF A 100 TONNE CAPACITY PLANT OF CUP O MAGGI NOODLES ........................................................................................................... 31 5.1.1 BREAK-EVEN ANALYSIS................................................................................ 31 FINAL TOTAL COST ANALYSIS ............................................................................ 33 5.1.2 ANALYTICAL BREAK-EVEN ANALYSIS.................................................... 33 5.1.3 GRAPHICAL BREAK-EVEN ANALYSIS ...................................................... 34 5.2 SALES FORECAST..................................................................................................... 34 APPENDIX A: INDIAN INSTANT NOODLES MARKET GROWTH GRAPHS ........ 36 APPENDIX B: NESTLE MAGGI NOODLES FORECAST RETAIL SALES .............. 37

1. INTRODUCTION 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 didn’t 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 RDA 1 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.

1

Recommended Dietary Allowances for children of 7–9 years as per “Nutritive Value of Indian Foods”, published by Indian Council of Medical Research, Reprinted ‘04.

2. SITUATION ANALYSIS Nestlé’s Maggie noodles is the leading brand in the instant noodles segment in India, enjoying a market share of 79.3%. The brand has grown to an estimated Rs 200 crore & contributes to around 10% of Nestle India’s top line. Being the pioneer in the noodles market has given it a first mover’s advantage over other brands. Maggi has regularly come up with new flavours and has recently launched two variants- Vegetable Atta and Dal Atta noodles, catering to the increasing demand for healthy snacks.

2.1 Market Summary 2.1.1 TARGET MARKETS Primary target: Children (