TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

PRODUCT AND BRAND MANAGEMENT

T E R M PA P E R P R O P O S A L

A STUDY OF

MAGGI BRAND
EXTENSION AND REPOSITIONING

I N T E R N AT I O N A L M A N A G E M E N T I N S T I T U T E , N E W D E L H I
E X E C U T I V E P O S T G R A D U AT E D I P L O M A I N M A N A G E M E N T

SUBMITTED TO:
Prof. S. Balasubramanian

S U B M I T T E D B Y:
A L O K G U P TA ( 0 8 X P G D M 0 5 )
MODAK PRIY (08XPGDM31)
S AT E N D R A T O K A S ( 0 8 X P G D M 4 6 )
SUDEEP KUMAR KUNDU (08XPGDM50)
VINEET DIXIT (08XPGDM59)

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

ACKNOWLEDGEMENT

We hereby regard our sincere thanks to Prof. S. Balasubramanian , IMI New Delhi under

whose guidance this project was undertaken.

We would like to thank our friends for their generous support and the respondents who gave

their valuable piece of time for participating in the survey to complete the study.

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

TABLE OF CONTENTS

1. EXECUTIVE SUMMARY……………………………………………………………….…04

2. INTRODUCTION…………………………………………………………………………...05

3. MAGGI BRAND IN INDIA………………………………………………………………….05

4. BRAND STORY……………………………………………………………………………..06

5. PRODUCT VARIENTS……………………………………………………………….…….10

6. MARKET SHARE…………………………………………………………………………....11

7. RESEARCH METHODOLOGY…………………………………………………………....12

8. OBJECTIVE………………………………………………………………………………….12

9. RESEARCH PLAN…………………………………………………………………………..12

10. DATA COLLECTION PLAN…………………………………………………………………13

11. METHODOLOGY……………………………………………………………………………..13

12. SURVEY RESULT…………………………………………………………………………….14

13. SWOT ANALYSIS OF MAGGI BRAND……………………………….……………………19

14. STPD ANALYSIS OF MAGGI BRAND………………………………….…………………..20

15. CUSTOMER-BASED BRAND EQUITY PYRAMID (CBBE)………………………..……..21

16. BRAND PRISM OF MAGGI…………………………………………………………………..22

17. CONCLUSION………………………………………………………………………………….23

18. RECOMMENDATION………………………………………………………………………….23

19. FUTURE PLAN………………………………………………………………………………….24

20. LIMITATION…………………………………………………………………………………......24

21. APPENDIX-1(QUESTIONAIRE)……………………………………..……………………….25

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

EXECUTIVE SUMMARY

The report entitled “A study of Maggi Brand Repositioning and Extension” deals with the
study of Maggi brand that was launched in India in the year 1983, by Nestle India Limited,
which became synonymous with noodles. This research paper tries to find a solution to a real
life problem of Maggi to launch its products as a Healthy Product. The introduction provides
the company background, operational & other important information provided by the
company which would assist in taking the decision for the right brand extension strategy for
Maggi.

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

INTRODUCTION

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. 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

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

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 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

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

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 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 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

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

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:

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

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

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. 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.

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

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)

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
- Tangy Tomato Vegetables
 Home Style
- Creamy Chicken
- Mixed Vegetable
- Rich Tomato
 Chinese Style
- Chinese Hot Sour Chicken
- Chinese Sweet Corn Chicken

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TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

- Chinese Sweet Corn Vegetables

- Chinese Hot & Sour Vegetables

5.Maggi soup sanjivni

 Amla
 Badam
 Spinach
 Dal
 Tomato

6. Maggi bhuna masala

 Bhuna masala for gravy dishes
 Bhuna masala for vegetable dal

7.Maggi magic cubes

 Chicken
 Vegetarian masala

MARKET SHARE

Maggi's Market Share in Ketchup Maggi's Market Share in Noodles

Category Category

20%
45% Maggi Maggi
55% Others Others
80%

RESEARCH METHODOLOGY

OBJECTIVES

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

 To understand the influence of Maggi as a brand on consumers mind set.

 Sources of Brand equity of Maggi like Brand awareness, Brand image, Brand
association, Brand recall

 To understand the Brand performance of Maggi products.

 To understand Brand Imagery, Brand Quality perceived by customers, Brand

credibility, consideration, superiority and feelings.

 Brand Extension of Maggi in terms of product diversity.

 Analyse the repositioning of Maggi brand as a “Healthy product” and the consumers
perseverance towards the same.

RESEARCH PLAN

Research Design:
The research will be carried out in the form of a survey which will be done in areas near to
Delhi (NCR region). The population has been segmented on the basis of salary Group and
Age Group.

Sample Design:
The target population for our study is households. The sample will be selected by a simple
random sampling method .

Sample Size:
The sampling unit is 150 which are divided as follows:

Number of
150
respondents
Age-group 10 - 45
Monthly Household
25000 - 75000 INR
Income
Delhi,
Survey Locations Faridabad,Gurgoan,Noida,Greater
Noida

25K - 40K - 60K -

Salary Group No income 40K 60K 75K
Number of Respondents 30 50 70

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

Age Group 10 - 25 25 - 35 35 – 45
Number of Respondents 50 50 50

DATA COLLECTION PLAN

Data Gathering:
This study involves data collection (primary research) from different households in four
different areas Delhi, Faridabad, Gurgoan, and Noida.

Literature Review
The research conducted as a part of our study would include Primary as well as Secondary
research. Primary research would include a survey that would be conducted in selected
localities of Delhi and nearby areas where the responses of consumers would be recorded
through a designed questionair.Secondary research would include various aspects of Brand
management through Internet , Journals, company reports , expert views etc.

METHOLODOGY

The research will be carried out in the form of a survey. This will include primary research in
addition to secondary research as stated below. The survey research method will be
descriptive research design. Each respondent will be interviewed through a Questionnaire.
The sample will be selected by a simple random sampling method.
The survey will address the following information area:

Information Areas:

The objective as spelt out can be elaborated into specific information areas to be studied.

 How do customers perceive Maggi as a stable brand, their perception of noodles and
how do they associate themselves with Maggi?

 Are the consumers aware of Maggi Brand or they associate noodles with some other
brand?

 Do they consider noodle as a healthy product or they are aware of the company’s
strategy of repositioning it to a healthy product by the launch of some of the new
products?

 Which product from the entire basket of Maggi products do the consumers consider as
the best selling product for Maggi and to which the consumers frequently buy?

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TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

 Are the consumers willing to accept Maggi brand extensions to some other products
like chocolate, juices, chips etc?

SURVEY RESULTS:

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 with noodles ( see exhibit 2). 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.

Brand Association(Agewise)
40
35
30
25
10yr - 25yr
20
15 25yr - 35yr
10
35yr - 45yr
5
0
Noodles Fast Food Snacks None of
These

Exhibit 1

Brand Association(Incomewise)
50

40
Noodles
30
Fast Food
20 Snaks
10 None of These

0
No Income 25K - 40K 40K - 60K 60K - 75K
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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

Exhibit 2

2. Brand Recall:

From the Exhibit 3 & 4 given below it seems a clear trend that Maggi has a good brand recall
as compared to its competitors like Top Ramen, Surya noodles etc. Consumers could easily
associate Maggi with noodles. 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.

Brand Recall(Agewise)
50
40

30 10yr - 25yr
20 25yr - 35yr
10 35yr - 45yr
0
Maggi Top Ramen Surya Anil Noodles
Noodles

Exhibit 3

Brand Recall(Genderwise)
In the gender wise category
25 the company’s strategy of positioning of Maggi brand for working
women seems to be20adaptive and gaining shape as women respondents had a brand recall
Brand Recall(Incomwise)
15
more than male. 10 Maggi
50
5 Top Ramen
40 0
Surya Noodles
Maggi
Male

Male

Male

Male
Female

Female

Female

Female

30 Anil Noodles
Top Ramen
20 Surya Noodles
10 No Income 25K - 40K 40K - 60K 60K Anil
- 75KNoodles

0 15
No Income 25K - 40K 40K - 60K 60K - 75K
 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

Exhibit 3

3. 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
associated maggi as noodles and only 20 % of the respondents knew ,Maggi as a Ketchup,
9% as soup etc.

Masala
Brand Awareness
6% Soup
9%
Ketchup
20%

Noodles
65%

The trend indicated that Maggi’s brand extension strategy to increase its basket has not been
Brand Awareness(Agewise)
quite successful in other food segments .This might be because of the larger share of market
captured by the competitors
40 hence Maggi has a high potential in markets like ketchup, soups
etc. 35
30
25 10yr - 25yr
20
25yr - 35yr
15
10 35yr - 45yr
5
0
Ketchup Noodles Soup Masala 16
 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

4. 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”.

Maggi rice Repositioning Awareness

noodles mania Others
7% 3%
Maggi dal atta
noodles
14% Maggi masala
Maggi (Regular)
vegetable atta 53%
noodles
23%

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.

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TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

Perception of Maggi Noodles

As a Healthy
Product
40%

As a non
Healthy Product
60%

Tasty/Fun Perception of Maggi Product

Eating Good for
10% Health
15%

Junk Food
23%

Ready to Eat
52%

SWOT ANALYSIS OF MAGGI BRAND

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

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TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

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.

STRENGTH WEAKNESS
Market leader in their segment Product are dependent on each
Strong brand loyal consumer base other
Wide range of distribution channel Not so much presence in rural
Product according to the need of market
Indian consumer
Innovative Product

SWOT
ANALYSIS

OPPORTUNITY THREAT
Increasing number of working youth Price war with competitors.
Product has been acceptable in youth Strong presence of regional
category competitors
Shift to rural market Consumers don’t perceive it as
Changing preference of consumer a “Healthy Product”
towards Chinese food and fast food.
Can foray into other food markets with
its strong Brand name

STPD ANALYSIS OF MAGGI BRAND

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

Segmentation: Market Segmentation divides the heterogenous 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.

CUSTOMER BASED BRAND EQUITY PYRAMID (CBBE)

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TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

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.

zzz

BRAND PRISM OF MAGGI

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TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

BRAND PRISM OF MAGGI

CONCLUSION

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

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 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.
- 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.

FUTURE PLANS

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

- 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.
- 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.

LIMITATIONS:

The present study is confined to a minimal sample size and may not reflect the opinion or
response of the entire population in general. The results of our study are entirely confined to
the responses of the Delhi consumers and might deviate in terms of actual population as a
whole.Recomendations given after the study are entirely dependent on the survey and the
secondary analysis done in the report.

APPENDEX 1

QUESTIONAIRE

When you fill in this questionnaire please use a pen and mark (√) on the best response.

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

Q-1 what product would you associate with the tag line mentioned below?
 Its different.  …………………………………………………………………..
 Don’t be a noodle, be a snoodle………………………………………………. 
 2 minute noodles/ Bas 2 minute………………………………………………. 
 Jitna tasty, utna healthy……………………………………………………….. 
 Mummy bhook lagi ……………………………………………………………
 Try it with a twist ……………………………………………………………..
 Hearty soups warm you from inside …………………………………………..
 Fast to cook, Good to eat ………………………………………………………

Q-2 What comes first in your mind when you hear the word Maggi ?
 Noodles
 Fast food
 Snacks
 None of these

Q-3 what is the brand that comes to your mind when we say the word noodles?
 Maggi
 Top Ramen
 Surya Noodles
 Anil Noodles

Q-4 Rank the following Maggi products w.r.t. frequency of purchase with 1 being the highest
rank RANK

 Noodles _________
 Ketchup _________
 Soup _________
 Pickles _________
 Cubes _________

Q-4 With what products would you associate the brand Maggi?
 Ketchup
 Noodles
 Soup
 Masala

Q-5 On a scale of 1 to 5 rate Maggi on the following parameters

 Taste ____________
 Variety/Flavours ____________
 Hygiene/Purity ____________
 Availability ____________
 Packaging (SKUs) ____________

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 TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

Q6 Rank the categories which Maggi should look in future in order of your importance :
 Chocolates _____________
 Salted Potato Chips _____________
 Fruit Juices _____________
 Processed foods(Ready to use pastes, masalas) ____________
 Others ( Please mention) _____________

Q-7 how do you rate Maggi brand in terms of following parameters:

 Expertise (Competent, Innovative, Market leader)

 Trustworthiness (Dependable and keep customers interest in mind)
 Liability ( Fun ,interesting)
 None of these

Q-8 How do you perceive Maggi products?

 Good for health.
 Ready to eat.
 Junk food
 Tasty / Fun eating
Q-9 Which Maggi products in noodles category do you regularly buy? (Repositioning
awareness)
 Maggi masala
 Maggi vegetable atta noodles
 Maggi dal atta noodles
 Maggi rice noodles mania
 Others
Q-10 Do you perceive Maggi noodles as a healthy product?
 Yes
 No
Q-11 If No then your suggestions for improvement as a healthy product?

________________________________________________

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Profile Sheet
 Age :
 Sex :
 Profession :
 Monthly Income :

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TITLE: Maggi’s Brand Extension and Repositioning Subject: Product And Brand Management

 Marital Status :

Thank you for your answers.

It has been a pleasure interacting with you.

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