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I would like to whole hearty thank and express my sincere gratitude to Mr.
Manish Jain Head of the Department GIMS for suggesting me this problem
and for giving an insight in delaing with the subject
guiding me in various aspects of this project like conducting field work and
designing questionnaire and suggesting me the Project Work and helping me
in finalising the Report. I express my gratitude to all the customers who very
kindly discussed various aspects of this study and provided useful
suggestions for discussing various problems.
Lastly, I Must express my gratitude to all the elders of the family and
citizen of the city who blessed me in course of discussion. I also extend my
sincere thanks to my family and my friends for their encouragement and
support.
CERTIFICATE
This to certify that Mr. Pradeep Kumar Luhar Student of B.B.A. (Hons) IIIRD
SEM , GIMS Has diligently worked on the Project Report of the Consumer Buying
Behaviour of Maggi. He has done this Work under My Guidance and Supervision.
This project work is original and not submitted earlier for the award of any degree or
associate ship of any other University.
During this study he made meticulous efforts for its completion. I wish him all
the best in this sincere endeavors for a bright and successful future.
DECLARATION
I hereby declare that the project work entitled MAGGI submitted to
the GYANVEER INSTITUTE OF MANAGEMENT AND SCIENCE SAGAR is a
record of an original work done by me under the guidance of MR. HIMANSHU
KATARE
MANAGEMENT AND SCIENCE SAGAR I also ensure that this work done by me is
purely original and is my own creativity.
Date :
Place :
TABLE OF CONTENTS
1.
EXECUTIVE SUMMARY.04
2.
INTRODUCTION...05
3.
4.
BRAND STORY..06
5.
PRODUCT VARIENTS..10
6.
MARKET SHARE....11
7.
RESEARCH METHODOLOGY....12
8.
OBJECTIVE.12
9.
RESEARCH PLAN..12
EXECUTIVE SUMMARY
The report entitled CONSUMER BUYING BEHAVIOUR OF MAGGI 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.
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 Nestl in 1947. Today, Maggi is a leading culinary brand and part of the
NESTL 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.
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 Maggis 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 Maggis extensions also made considerable use of
promotional schemes. The focus of all Maggis 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 Maggis popularity became highly attributed to its
extremely high appeal to children. As a result, Maggis annual growth reportedly touched
15% during its initial years.
Maggis Brand Extension:
In 1998, Nestle launched Maggis 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 Maggis brand name, and was
never very serious about the segment.
In 1993, Sweet Maggi, the first variant of Maggi noddles was launched. The company
supported the launch with a huge advertisement outlay that amounted to 75% of the total
yearly expenditure on the Maggi brand. However, the product failed to generate the desired
sales volume and Nestle was forced to withdraw it. At the end of the year, Maggi noodles was
generating sales volume of around 5000 tonns and remained a loss making proposition for
Nestle.
To boost sales, Nestle decided to reduce the price of Maggi noodles. This was made possible
by using thinner and cheapeer packaging material, the company also introduced money
saver 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. Maggis
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 Maggis 4 the company started rethinking its strategies towards
the soup market.
In order to stretch Maggis 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 Nestl 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, Nestl had set a sales target of 25,000 tonnes
for the year. However, Maggi couldnt cross even 14,000 tonnes. Adding to the company
woes was the failure of Maggi Tonites 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, Nestl continued to explore new options for leveraging on the brand equity of Maggi
10
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, Nestl 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 Macaronis launch was backed
by a multi-media advertisement campaign including radio, television, outdoors and print
media with the tagline, Tum Roz Baby.
The products 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, Nestl failed to justify this price-value anomaly to customers, who failed to see any
noted value addition in Maggi Macaroni (packaging and flavor variants were similar to those
of Maggi noodles). In addition, customers failed to see any significant difference between
Maggi Macaroni and the much cheaper macaroni that was sold by the unorganized sector
players. The biggest problem however was the taste of the new product. Since macaroni is
thicker than noodles, Maggi Macaroni did not absorb the tastemaker well and consequently
did not taste very good. The interest generated by the novelty of the product soon died out
and sales began tapering off. Eventually, Nestl had to withdraw Maggi Macaroni completely
from the market.
Nestl had not even recovered from Macaronis 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, Its
different. However, during mid-1997, HLL began promoting its Kissan range of sauces
aggressively and launched various innovative variants in the category.
Nestl 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
11
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 13,00014,000 tonnes.
Pricing and Product Development:
It was at this point in time that Nestl 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 tastemakers 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 Nestl 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, Nestl began working out a
strategy to regain Maggis 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 Nestl
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 Nestls move with US soft drinks
major Coca-Colas New Coke fiasco. However, the company disagreed, Its a hard-5 nosed
strategy, that mixes nostalgia with the consumers voiced preference for the product it has
been bred and rought up on. The reintroduction is Nestls acknowledgement of the loyalty of
the Indian mother and the child to the original product. By May 1999, Nestls 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
12
Nestls portfolio of brands in India, overtaking brands such as Nestum and Cerelac. Nestl
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, Nestl
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, Nestl
claimed to have cornered an 81% market share of the 20,000 tonnes noodles market by the
end of 1999. Nestl 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.
13
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 Rice Noodles (Lemon Masala, Chilly Chow and Shahi Pulao)
2. Sauces
Teekha masala
Tomoto chatpat
Tomato ketchup
Tomato pudina
3. Maggi Pichko
4. Soups Healthy
Chef Style
- Cream Mushroom
14
- Rich Tomato
Chinese Style
- Chinese Hot Sour Chicken
- Chinese Sweet Corn Chicken
- Chinese Sweet Corn Vegetables
- Chinese Hot & Sour Vegetables
Amla
Badam
Spinach
Dal
Tomato
Chicken
Vegetarian masala
15
MARKET SHARE
RESEARCH METHODOLOGY
OBJECTIVES
16
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
respondents
Age-group
Monthly Household
Income
150
10 45
25000 - 75000 INR
Delhi,
Survey Locations
Faridabad,Gurgoan,Noida,Greater
Noida
Salary Group
No income
25K
- 40K
- 60K
40K
60K
75K
17
Number of Respondents
30
50
70
Age Group
Number of Respondents
10 - 25
50
25 - 35
50
35 45
50
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?
18
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 companys
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?
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 25k40k were more than 40 respondents associated Maggi with noodles ( see exhibit 2). The
19
implications from the findings discussed above seem that Maggi has good brand association
in terms of noodles. Consumers presume Maggi as Noodles and the companys philosophy
of projecting the brand as noodles brand seem to be viable in this regard.
Exhibit 1
20
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.
21
Exhibit 3
In the gender wise category the companys strategy of positioning of Maggi brand for working
women seems to be adaptive and gaining shape as women respondents had a brand recall
more than male.
22
3. Brand Awareness:
From the responses of the respondents in the conducted survey it was evident than Maggis
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.
The trend indicated that Maggis brand extension strategy to increase its basket has not been
quite successful in other food segments .This might be because of the larger share of market
captured by the competitors hence Maggi has a high potential in markets like ketchup, soups
etc.
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.
24
25
STRENGTH
Market leader in their segment
Strong brand loyal consumer base
Wide range of distribution channel
Product according to the need of
Indian consumer
Innovative Product
WEAKNESS
Product are dependent on each
other
Not so much presence in rural
market
SWOT
ANALYSIS
OPPORTUNITY
Increasing number of working youth
Product has been acceptable in youth
category
Shift to rural market
Changing preference of consumer
towards Chinese food and fast food.
Can foray into other food markets with
its strong Brand name
THREAT
Price war with competitors.
Strong presence of regional
competitors
Consumers dont perceive it as
a Healthy Product
26
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 companys 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.
27
zzz
28
CONCLUSION
29
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 didnt 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,
Maggis competitor TopRamen took advantage of the situation and started a parallel
aggressive campaign to eat into Maggis 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 89% to Nestle
Indias 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
30
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 companys 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 Maggis
market share.
FUTURE PLANS
- Nestl Indias objective is to manufacture and market the companys 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.
- Maggis 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.
31
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
32
When you fill in this questionnaire please use a pen and mark () on the best response.
Q-1 what product would you associate with the tag line mentioned below?
Its different. ..
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
_________
33
Pickles
_________
Cubes
_________
Q-4 With what products would you associate the brand Maggi?
Ketchup
Noodles
Soup
Masala
Taste
____________
Variety/Flavours
____________
Hygiene/Purity
____________
Availability
____________
Packaging (SKUs)
____________
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)
_____________
_____________
_____________
____________
_____________
None of these
34
Ready to eat.
Junk food
Q-9 Which Maggi products in noodles category do you regularly buy? (Repositioning
awareness)
Maggi masala
Others
Yes
No
Age
Sex
Profession
Monthly Income
Marital Status
35