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Submitted by: Group 14 PRIYANKA PRASAD RAJANIKAR KUMAR SHWETHA K B SOMYA HARSH SUNITHI AGARWAL
No. 1, Chamundi Hill Road, Siddharthanagar, Mysore-570 011, Karnataka, India Ph: 0821-2429722/161, URL: www.sdmimd.ac.in
Table of Contents
Introduction ...................................................................................................................................3 Maggis Legacy and the Market................................................................................................3 Growth of Maggi noodles: ............................................................................................................3 Competition faced by the brand: ...............................................................................................4 Maggis competitive strategy: ...................................................................................................4 Maggis positioning over the years: ..........................................................................................4 Maggis Brand sustenance strategy: ..........................................................................................5 ITC Yippee entry into noodle market ....................................................................................5 The Marketing Mix for Sunfeast Yippee Brand: - ....................................................................7 Yippee as No.2: the Challenger.................................................................................................8 Research Objectives ......................................................................................................................9 Primary Objective .....................................................................................................................9 Secondary Objectives ................................................................................................................9 Methodology and Sampling ..........................................................................................................9 Data Collection Methodology ...................................................................................................9 Sampling..................................................................................................................................10 Analysis Tool ..........................................................................................................................10 Descriptive Statistics ...............................................................................................................10 Data Analysis ..............................................................................................................................11 Jacard Analysis ........................................................................................................................11 SWOT Analysis.......................................................................................................................12 Stochastic Share ......................................................................................................................13 Consumers and Retailers Views and Observations ..................................................................13 Conclusion ..................................................................................................................................18 Annexure 1 ..................................................................................................................................19 Annexure 2 ..................................................................................................................................22
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Introduction
Maggis Legacy and the Market
Almost 30 years after Nestle introduced its iconic brand Maggi in India, the instant noodles market is for the first time witnessing a slugfest. For a category that is growing at 20% annually, and in a country in which instant foods are beginning to catch on with India's burgeoning middle class and growing youth population, you'd expect plenty of action in noodles. Recently, this product category has seen a lot of activity with the launch of many new brands like HorlickssFoodles by Glaxo Smithkline India, Knorr from HUL, Chings secret by Capital Foods Ltd, Tasty Treat by Future Group. But a relative new comer to the instant food market, ITC has mounted the strongest challenge to end Maggi's monopoly in the market for the instant noodles. Maggi still rules the roost, with more than 70% of the Rs 2,500 crore market in the bag, as of September 2012. The biggest advantage for brands like Maggi is its taste and first mover advantage in the instant noodle market. The brand Maggi is now become generic for the category and mere advertising is not going to do any harm to Maggi as brand loyalty built over the decades has been very strong. Though with a little dent here and there in its market share, Nestle India has been pretty active. Taking its Me & Meri Maggi campaign a step further, Nestle has roped in Indian cinemas man of the millennium Amitabh Bachchan to narrate consumers Maggi experiences in TVCs and hence recall the consumers who have grown up with Maggi and yet sound relevant to the new consumers as well.
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ITC has continued with the same approach for the newly launched noodles brand Sunfeast Yippee in the Indian market during September 2010, which is dominated by Maggi from decades. Recently, this product category has also seen a lot of activity with the launch of many new brands like HorlicksFoodles by Glaxo Smithkline India, Knorr from HUL, Chings secret by Capital Foods Ltd, Tasty Treat by Future Group, etc. And these players have been fighting out the competitive battles to get the most of the instant noodles market of the around Rs. 1300 crore and which is growing continuously at around 17-20 percent growth rate. All these players are giving Maggi a tough fight and are eating out into the almost 70 percent market share that Maggi has got in this market (Source Business Standard).There is a lot of business opportunity to be tapped and all the players in this category including the private label brands
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of big retail stores are ready to make sure that they do not miss this business opportunity and get a huge chunk of this large opportunity. And one interesting thing is that all the players in this product category are coming with a completely different positioning in the market, with GSK focusing on projecting the noodles as a healthy snack option and even HUL focusing on the soupy noodles as a positioning for their brands. And ITC has also taken the same approach by focusing its noodles brand Sunfeast Yippee as a brand using the benefit positioning concept in which they tried to position the product as a better alternative to Maggi on the basis of following three differentiating criteria : The first point used by Yippee to position itself as a better alternative over Maggi was that it was telling the customers that they should have the choice of variety of masala with two variants in their product portfolio Classic and Magic. The stress was made upon the point that we want choices in each and everything in life so why not have a choice while having instant noodles. The second point focused on the shape of the contents within the pack. The contents in other options available are in rectangular shape which has to be broken which leads to short pieces of noodles, whereas in Yippee noodle pack the cake is in round shape which keeps the noodles intact and long and smooth. Then third thing that it focuses upon is the fact that Maggi must be had immediately after it is cooked as after sometime the taste deteriorates and you cannot have it, whereas Yippee noodles promises that they can even be had after some time. Thus it has tried to give itself a totally different positioning from the other competitors present in the market and it is the only competitor to Maggi which has decided to take it head on while competing with it. The biggest advantages available with the Sunfeast Yippee noodles brand are as follows: The deeper penetration provided by the already well established and penetrative distribution channel provided to ITC by its channel member in the tobacco business which provides it the
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most penetrative distribution network both in rural and urban India. Then it used the Sunfeast brand, thereby using the Umbrella branding strategy, which had already become a well known name in the Indian households because of the equity that the brand had gained in the minds of the consumers. The financial muscle of the ITC conglomerate to back the company to tackle all the competitive moves in an efficient manner.
The Marketing Mix for Sunfeast Yippee Brand: Product It is a product that is different in terms of package (red and yellow contents), contents (which was round cake instead of the rectangular cakes as used by other brands), labelling, 90 gram pack (where as the biggest competitor Maggi is offering 85 gm pack), with two variants available and many more lined up for launch in the coming months. Price- Available at the price tag of Rs. 10 to match the competitive prices that the other competitors are offering. Place The distribution reach is the biggest asset that ITC has got and Yippee is also using this biggest advantage of ITC to penetrate especially into the rural market at a rapid pace. Promotion The Company is focusing very heavily on the benefit positioning concept in their ads focusing on the benefits or the advantages it has over Maggi as a competitor. Ads of Sunfeast Yippee
Choice of masala
Round noodles
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Thus all in all ITC has come up with an alternative which seems to be a bit different from all the options that have tried to compete with Maggi and the only alternative that has decided to take the market leader head on through its television commercials which are making direct comparisons with Maggi thought without naming it and showing how Sunfeast Yippee Noodles is a better option than Maggi. The competitive scenario in this industry is getting more intense as the customers habits are changing and they now want more options in anything and everything that they consume and the entry of these variants has provided the customers with a lot of options, and the brands are using their financial and marketing prowess to come out on top of the competitors. It now needs to be seen how Sunfeast Yippee Noodles from ITC is able to make a dent in stronghold of Maggi from Nestle and how it is able to come out on top in this battle of FMCG giants.
different positioning from the other competitors present in the market and it is the only competitor to Maggi which has decided to take it head on while competing with it. We are seeing retail shelves giving as much importance to Yippee as for Maggi, and even observed some consumers around us in college campus showing likeness towards Yippee over Maggi.
Research Objectives
Primary Objective
To unravel the current consumer perceptions about Nestls Maggi noodles and possibility of ITC Sunfeasts Yippee acting as its substitute.
Secondary Objectives
To study the brand positioning and promotions of both Maggi and Yippee and analyse their effect on consumers To study how a new brand like Yippee can breakthrough a monopoly market of an old brand by differentiating itself (from consumer behavior perspective)
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Sampling
Non-probabilistic convenient sampling is intended with sampling area being the Mysore city.
Analysis Tool
SPSS and MS Excel will be used for Multivariate Analysis.
Descriptive Statistics:
Factor Analysis- A brief questionnaire was prepared to capture the importance that customers
give to various variables related to instant noodles while purchasing the same. The factor analysis result is shown below:
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2 .762 .739 .696 .669 .625 .593 .500 .095 .435 .149 -.012 .162 .035 .248 .138 .230 .229 -.020 -.412 .469 .791 .673 .662 .200 .152 .449
3 .121 .357 .047 -.129 .055 .467 .470 .285 .123 .214 .772 .713 .614
Thus, three factors were identified by the Factor Analysis. These are named as follows: Value- This include Price, Offers and Variety Physical Characteristics- This include Taste, Aroma and Stickiness Promotion- This refers to Brand Ambassador, Packaging, Advertisement, Packaging and Reference Group Later, we included another variable "Availability (Distribution)" separately as it is supposed to be very important factor for the purchasing decision of instant noodles. Further, Questionnaire was designed to capture the perception of customers of brands of instant noodle with respect to various factors identified.
Data Analysis
Jacard Analysis:- Jacard analysis was done to identify the driving factor for making purchase
decision of instant noodles. Here, analysis was restricted to only two brands of instant noodles Maggi and Yippee
Factors Value Jacard Score 0.892 Rank 1 11 | P a g e
2 4 3
Thus, Rank of the Jacard score shows that Value (Price, Variety & Offers) perceived by customers is the most important driver in instant noodle market.
SWOT Analysis: Now, analysis was done to identify the strength and weakness of Maggi and
Yippee. Colour coding:
<-3.58 0 3.58 >3.58 Weakness Threat Opportunity Strength
Result of SWOT Analysis: Attributes Taste Shape Packaging Offers Stickiness Country of Origin Health Benefits Aroma Price Advertisements Variety Brand Ambassador Reference Group Availability Brand name Ease of Cooking Maggi -1.84 -0.84 -1.34 -6.84 -1.34 -4.84 -3.84 -0.34 0.66 5.66 3.16 0.66 -0.34 4.16 7.16 0.16 Yippee 1.84 0.84 1.34 6.84 1.34 4.84 3.84 0.34 -0.66 -5.66 -3.16 -0.66 0.34 -4.16 -7.16 -0.16
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Thus, for Maggi the strength is perceived in its popular Advertisements. Brand name and Availability where as Yippee's strength is perceived in its Offers Country of Origin and Health benefits. As per the responses Yippees's weakness lies in its Brand name, Availability and Advertisement. The perceived weakness of Yippee may be the result of Maggi's strong presence in terms of these attributes. Yippee' opportunities lies in terms of Taste, Shape, Packaging and Stickiness where Maggi lags behind Yippee
Stochastic Share: Now, Stochastic Share analysis was done to identify which brand has the
highest top of the mind recall Result: Preferred Set Size 1.585 0.878 0.439 0.171 0.098 0.073 Stochastic Share 22.51 15.63 14.59 16.05 18.68 12.54 100.00
Brands Maggi Yippee Top Ramen Knor Soupy Foodles Ching's Secret Total
Thus, Maggi enjoys the highest top of the mind recall followed by Foodles, Knor Soupy and then Yippee.
An interesting observation Brand Maggi is well established in Indian instant noodles market, and it becomes more evident, when people have started substituting Maggi for instant noodles like Xerox for photocopy. When we asked a small by-lane shop Manjunatha Stores (JC Nagar, Mysore)
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about whether they have Yippee, the shopkeeper thought for a while and then remarked: Oh! You want Yippee Maggi? Against Maggi dude firstly i dont like maggi nooddles, because i feel it to be tasteless & unhealthy. I would rather prefer other things than maggi noodles student Pro Yippee I prefer yeppiei over maggi as it is non-sticky, the masala they give includes vegetables which taste good, and one more thing I obserevd that there must be good margin given to small shops as whenever u ask for maggi they will be saying try yeppie it will be good. student
Below is the photograph of the rooms door of an avid Yippee lover student SDMIMD. His major attraction towards Yippee is due to the stickers and offers provided by Yippee. We can see the collection of Yippee stickers on his rooms door, and he takes pride in flaunting them.
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Dominance of Maggi and Mores private brand clearly visible on More Marts shelves, but Yippee in its bright red shining packaging is all over in small bunches from top to bottom shelf.
Shop owner Mr. Manju said: From last 3-4 months, the demand and hence the sales of Yippee has gone up Good taste is one of the primary reason for increasing demand by word of mouth among the consumers Masala Achha hai iska For every 5 Yippee packets sold, 1 Maggi is sold from his bakery.
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Here we can observe that how Yippee has been kept on the Second shelf (from bottom), clearly visible, while Maggi noodles on the First shelf are partially hidden (obstructed view). Mr. Manju said, customers students and nearby residents ask more for Yippee so we got to keep it here on shelf. He denied that ITC salesperson pays any extra money for the shelf space, and attributed Yippees presence purely on demand from the customers. We also observed that Mr. Manju himself was an advocate of Yippee noodles. Here is a recent promotional poster of ITC Sunfeast Yippee, in a shop nearby SDMIMD, which talks of Loot Maal offer and stickers to attract customers.
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Conclusion
Estimation shows that from a single meal eaten in a restaurant in a month a decade ago, the average urban Indian in the top eight metros is now consuming 7.8 meals a month in restaurants. The change in eating habit of the country is result of the country's young demographic profile, increasing family income, accelerating urbanization, the
cosmopolitization of major urban centers, unprecedented interstate migrations, increasing number of working couples, time constraints, shortage of household help, global travel, and increasing exposure to global cuisine and so on. That is why, instant noodles industry is growing at 25%. Now, the result of the analysis rightly captures the strength and weakness of Maggi and Yippee. Yippee, so far has been positioned in terms of its shape, stickiness etc. But, Yippee is clearly lagging in terms of Variety, Health benefits, and an appropriate brand ambassador. According to CERS, 2012, among the fifteen brands tested (including brands like Maggi, Top Ramen, Knorr, Chings Secret, Sunfeast Yippee!, Foodles, Tasty Treat and Wai Wai X-press), none of the brands was able to substantiate their tall claims of being healthy snacking option when interpreted against Food Standards Agency (FSA) of UK standards for fats and sodium. Some of the common findings for most of the samples tested included high level of sodium salts, significantly low fibre content, high amount of fats and several other shocking factors. The brands that claimed Healthy, wholesome, enriched with proteins and iron and full of fibre, were refuted by the test findings as going way above the safe limit of several harmful elements. Thus, it is clear that a right product, ensuring balance between health benefits and an appetizing instant food, is lacking in the market. The Yippee brand can be developed and positioned as healthy Indian instant noodle. This will be supported by the brand image of ITC, its country of origin and vast distribution system
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Annexure 1
Pilot Questionnaire (for Factor Analysis)
Knorr
Foodles
Tasty Treat
Yippee
Maggi
Others
Last question: Rate the driving factors you consider while purchasing Instant Noodles
Taste *swad
Least bothered
Most important
Shape *aakar
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Least bothered
Most important
Least bothered
Most important
Least bothered
Most important
Least bothered
Most important
Country of Origin *
Least bothered
Most important
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Least bothered
Most important
Least bothered
Most important
Least bothered
Most important
Advertisement *vigyapan
Least bothered
Most important
Least bothered
Most important
Brand Ambassador *
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Least bothered
Most important
Least bothered
Most important
Any other factor (not mentioned above) you consider while purchasing instant noodles?Rate it from 1 to
7.
Annexure 2
Horlicks Foodles (Glaxo Smithkline India) Chings secret (Capital Foods Ltd)
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No
Physical
Characteristics
Availability (distribution)
Overall
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No
Physical
Characteristics
Overall
Between Maggi & Yippee, choose the better one with respect to following attributes *
noodlesSunfeast
Yippee
noodles (ITC)
Shape
Packaging
Offers
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Maggi (Nestle)
noodlesSunfeast
Yippee
noodles (ITC)
Stickiness
Country of Origin
Health Benefits
Aroma
Price
Advertisements
Variety
Brand Ambassador
Reference Group
Availability
Brand name
Ease of Cooking
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