marketing project on 4P's of Maggi Tomato Ketchup - May 10th, 2009 EXECUTIVE SUMMARY In 1991 we opened our country

to foreign brands. As per this liberalization policy many a foreign players ventured into our country finding it a lucrative large mass market. Indias market potential lures foreign companies. Many international companies that ventured in after 1991 are tallying their profits and losses and wondering what the future holds for this market of 950 million people. But India is a diverse country where different states have different consumption patterns and customs. Thus competition has become the key word in todays scenario. Till 1970s and 80s Maggie and Kissan were the major ketchup brands but after liberalization Heinz entered Indian market which offered tough competition. These major giants are also facing competition from many local players like Tops, Cremica and other local brands. Through this project we have studied 4 Ps of marketing mix which includes PRODUCT, PRICE, PLACE and PROMOTION for Maggi Tomato Ketchup. Product highlights various attributes of the product. Price helps us in analyzing whether it is competitively priced or not. Promotions showcases which mode of promotion is most effective and how do consumers respond to various celebrity endorsements. Place focuses on efficiency of distribution network of Maggi Tomato Ketchup. We have also drawn out some inferences by applying various statistical tools like SIGN TEST. Towards the end we have suggested some recommendations as a group on how can we improve the marketing mix of the product.

Nestl, which world knows as cautious and conservatory company is a Swiss originated 140 years old Multinational. The man at the helm is Swiss national Carlo Donati, an all inspiration and image of the company. His philosophy is bottom line dictating top line based on delegation and decentralization. It resulted from a merger in 1905 between the Anglo-Swiss Milk Company for milk products established in 1866 by the Page Brothers in Cham, Switzerland and the Farine Lacte Henri Nestl Company set up in 1867 by Henri Nestl to provide an infant food product. The first Nestl factory to begin production in the United States was opened in Fulton, Oswego County, New York. Nestl India Ltd. (NIL), the Indian subsidiary of the global FMCG major, Nestl SA, introduced the Maggi brand in India in 1982, with its launch of Maggi 2 Minute Noodles,

an instant noodles product. Nestl Indias business objective and that of its management and employees is to manufacture and market the Companys products in such a way as to create value that can be sustained over the long term for consumers, shareholders, employees, business partners and the national economy. The product mix of Nestle India consists of milk products and baby products (42.5%), beverages (29.3 %), processed foods (14.4 %), chocolate and confectionary (13.8 %). Nestle India plans to expand business into similar and diversified product categories. The management wants to leverage all the hard work done to establish a particular brand by extending the brand in some other areas, where it sees an opportunity to make further money. In other words to derive the maximum benefit from having established the brand Nestle did exactly, what it wanted with one of their brands- Maggi. Objective of the study In this project, our main focus was to analyze Tomato Ketchup taking into consideration the 4 Ps of the marketing mix. To analyze various product attributes of Ketchups & Sauces and its management in the current scenario. To study the entire distribution mix of the product line. To critically comment on the pricing strategy adopted by the company. Lastly our study will also focus on the various promotional aspect of the brand in lieu of ketchup and also promotional mix of the product line. All these objective were to analyze the performance of a particular product line of a brand followed by the suggestions which we as a group have given in order to improve their performance in the future and also learned various useful aspects which they have devised and implemented that has bettered their performance. Scope of the Study The brand value of Nestle is $9.11bn which is approximately 5% of the enterprise value as in August 2008(Source: The daily newspaper journal The Mint dated 17 September, 2008). According to this report, Nestle is reported to be among top 100 brands globally positioned at 77th place with a brand rating of AAA. Last year, it was positioned at 87th spot. The ketchup market in India is estimated to be around Rs 220 crore, largely dominated by Nestls Maggi that owns 47% of the market and the Kissan that owns 26%. Globally, it's only a blip- but India consumes about 13,800 tons of ketchup a year. The Company launched a new variant of Maggi Tomato Ketchup called Pichkoo. A higher-than-expected increase in raw material prices is posing a bigger threat for the company as of now but past have proved that their innovative market strategies has contributed a lot to their overall growth. Through our study we have determined the positive and negative product attributes and thus determined the expectations of the product. This information can be used by the company for further product modification. We also determined the acceptability and adaptability towards introduction of new variants.

MAGGI Maggi is an over 100-year-old Nestl brand of instant soups, stocks, bouillons, ketchups, sauces, seasonings and instant noodles. The original company came into existence in 1872 in Switzerland, when Julius Maggi took over his father's mill. It quickly became a pioneer of industrial food production, aiming at the improvement of the nutrition of worker families. Over time the scope of MAGGI has been extended from a predominantly dehydrated cooking aid brand towards a general savory food brand including many types of ready meals and also frozen food. This is in line with the fact that people all over the world are cooking less and less from scratch. There is a wide range of MAGGI products marketed worldwide in several countries. These include dehydrated bouillon, granulated seasoning, soups, recipe mixes, snacks, frozen foods, etc. In 1863 Julius Maggi developed a formula for bring added taste to meals, which later became lead to the beginning of Maggi and convenience food products. MAGGI, known worldwide for innovation and quality worldwide, understands that consumers are usually under great pressure in terms of time, budget, cooking skills etc and therefore tries to establish a bond through giving ideas and advice that make providing food easier. This results in the food provider being appreciated by family and friends. Maggi as a brand is globally known in the product category of bouillon or soup cubes. Nestle decided to introduce Maggi brand in India in the same product category. This soup was initially test marketed in 1974 in Kerala. The response was not encouraging. Having then realized that the dietary habits of Keralites are not conductive to the idea of drinking soup, test marketing of the brand extended to Goa with the idea that Goan food habits have some similarity with western habits. Fortunately for the company, the test turned out to be positive and Maggi became an accepted brand in India. Maggi has faced lot of hurdles in its journey in India. The basic problem the brand faced is the Indian Psyche. Indian Palate is not too adventurous in terms of trying new tastes. That may be the reason why we are still stuck with Idli and Sambhar. So a new product with a new taste that too from a different culture will have difficulty in appealing to Indian market. As of now, Maggi is the brand for 2-minute noodles, Chinese noodles, ketchups and sauces for Nestle. As per the latest available data, sales of Maggi 2-minute noodle in India are highest among all other Nestle products worldwide. Analysts say Nestle, which faced one of the most challenging years in the FMCG industry in 2003, has realised that unless it continuously innovates in an endeavour to provide value-for-money to consumers, the company's bottomline may be impacted in the long run. TOMATO KETCHUP The ketchup market in India is estimated to be around Rs 220 crore, largely dominated by Nestls Maggi that owns 47% of the market and the Kissan that owns 26%. Upto mid eighties Kissan was the number one brand in Tomato Ketchup and around that time the competition came from Maggi -- a Nestls brand. With Maggi launching several varieties of Tomato Ketchup there was a growth in the market. With Kissan and Maggie fighting neck to neck other smaller but established brands like Dipy's from Herbertsons,

Volfruit from Voltas, Noga of Nagpur Orange Federation and SunSip of Wimco gradually disappeared from the market. Delmonte now has joined hands with Paoma Industries, the manufacturers of Rasna Brands of soft drink concentrate and is expected to launch Tomato Ketchup shortly. The biggest global player in Tomato Ketchup Heinz is still waiting and watching. It was expected that they will launch Tomato Ketchup in Indian market soon. Some of the unknown local brands of course still existing only on price competition. The price competition has also kept some of the other categories of food products still alive. At a time when Kissan had become generic to tomato sauce, Maggi came in with its sauces range. Maggi was the upstad newcorner who came in with a loud aggressive national burst. It did not come in with one, but with a range of sauces in order to increase market share and expand the market by offering more usage occasions, bring consumers with different needs into the Maggi Sauces fold and weaning away users of different brands to Maggi. From a market share of 14% in 1985, Maggi Sauces now enjoys a share of about 50% of the market. MAGGI TOMATO KETCHUP Maggi Tomato Ketchup is primarily a taste enhancer, giving the food provider taste, aroma and also contains iodised salt. Nestle was seriously working on brand extension to leverage brand success in some potential product categories. The company finally decided to enter ketchup market with the brand Maggi. Finally in 1985 when Maggi noodles had reached 4000 tonnes business, they ensured the establishment of the brand Maggi and launched their Maggi ketchup. Market leader Kissan was selling its ketchup in 500 gm. Nestle decided upon 400 gm bottle to give the consumer a price- point advantage. The main launched its product all over India. The main focusing aspect of their advertisement was what ketchup does to your food- tasty and more palatable. It was a very clever move, which paved way for subsequent variants such as 1. Tomato Chilli 2. Masala Chilli 3. Chilli Garlic PRODUCT LINE Tomato Ketchup Hot & Sweet Tomato Ketchup (With onion & garlic) Teekha Masala Tomato Chatpat Tomato Pudina MARKETING MIX Marketing decisions generally fall into the following four controllable categories: Product Price

 Place (distribution) Promotion The term "marketing mix" became popularized after Neil H. Borden published his 1964 article, The Concept of the Marketing Mix. Borden began using the term in his teaching in the late 1940's after James Culliton had described the marketing manager as a "mixer of ingredients". The ingredients in Borden's marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients into the four categories. These are the 4 Ps of Marketing Mix. These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive response. 4 Ps of MARKETING MIX Marketing decision variables are those variables under the firm's control that can affect the level of demand for the firm's products. They are distinguished from environmental and competitive action variables that are not totally and directly under the firm's control. It is a great way to help us focus on the elements of a good marketing plan that we can't control but must be aware of and anticipate such as: - new competitors, - new legislation, - change in consumer confidence, - change in consumer tastes; and The four marketing decision variables are: Price variables Allowances and deals Distribution and retailer mark-ups Discount structure Product variables Quality Models and sizes Packaging Brands Service Promotion variables Advertising Sales promotion Personal selling Publicity Place variables Channels of distribution Outlet location Sales territories

 Warehousing system The 4 Ps of marketing classify the controllable elements of your marketing plan. Product, place [distribution] and promotion are all expenses; price brings in revenue. MAGGI KISSAN PRODUCT Available in different variants: Maggi Ketchup Maggi Hot & Sweet Sauce, Maggi Masala Chilli Sauce, Maggi Chilli Garlic Sauce, Maggi Tamarind Sauce, Maggi Tomato Sauce (Without onion & garlic), Maggi Tomato Ketchup (With onion & garlic), tomato chatpat, Teekha masala, Tomato pudina. The product is bright red in color. The thickness is less as compared to Kissan. PRODUCT It is available in different variants: Kissan Ketchup and Kissan Sauce (no onion no garlic), Kissan Tomchi. The colour is dark red. The thickness is more as compared to Maggi Ketchup. PROMOTION They promote their product very effectively through television, They have applied the strategy of brand extension. They also sponsor various cookery shows to promote alternate usage of products. They also use strategy of free product samples to promote it. Celebrity endorsements. Eg. Javed Jafferi PROMOTION Less promoted as compared to maggi. No particular celebrity endorsement. The utter confusion regarding the long-term strategy for Kissan brand was visible through the experiments that were conducted on this brand by Hll. But with a brand which had a tremendous equity during the late nineties and early 2000, HUL had weird plans. One of the major casualties of MS Banga's Power brand strategy was Kissan. During the early 2000, the brand Kissan was rebranded as Kissan Annapurna. Kissan Annapurna was marketing not jams and squashes by Atta, salt and other staple foods. Later Annapurna and Kissan was splited into two separate brands , one concentrating on staple foods and other on processed foods. This migration strategy proved to be very costly for both Kissan and Annapurna brand. Kissan was synonymous with Jams and Squashes during its initial years. Kissan Ketchup was a market leader in ketchup segment but these experiments and myopic strategies pushed the brand behind the focused and aggressive Maggi. So all through the period 2001-2005, Kissan was in a sticky wicket. But now according to reports, the brand mandarins of HUL is now clear about Kissan as a brand for processed food like Jams , ketchups and like. That change is visible in the recent campaign of Kissan which takes a unique view of Ketchup. Taking the tagline " Aao banaye pakode behtar" translated to " Making Pakode taste better". In these series of ads, the brand plays a second fiddle to the main snack. The brand takes the positioning of a "Great Accompaniment " PLACE

 The distribution network is well spread as it is easily available in all kirana stores, retail store etc. PLACE The distribution network is well spread as it is easily available in all kirana stores, retail store etc. PRICE Its Maggi Rich Tomatoes is priced at Rs 90 (1 kg bottle with 20% free offer) and Rs 26 (200 gm bottle). PRICE Its Kissan Ketchup and Kissan Sauce (no onion no garlic) are priced at Rs 91 (1 kg bottle), Rs 49 (500 gm bottle) and Rs 60 (600 gm squeezy pack), while Kissan Tomchi is priced at Rs 53 (500 gm).

PRODUCT LEVELS: CUSTOMER VALUE HIERARCHY There are five segments in customer value hierarchy that is: 1. Core benefit 2. Basic product benefit 3. Expected product benefit 4. Augmented product benefit 5. Potential product benefit. Now if we classify these heads according to our Brand Maggi The Core benefit which Maggie provides is its instant recipe and a tag line which assures that it is FAST TO COOK & GOOD TO EAT. The Basic product benefit which our product provides to our target market is a good taste with proper nutrition levels and good health, as one of its punch line says Taste Bhi Health Bhi. The Expected product benefit which Maggi provides is a proper and a good package which is vacuum zed which ensures customers a good quality, fully packed seasoning tastemaker & affordable prices. In most of the underdeveloped and developing countries like India competition takes place in the expected product benefit as Augmented product benefit stage is still to come. PRODUCT DIFFERENTIATION Product differentiation strategy means how a particular product is different from others on the basis of: 1. Form 2. Features 3. Performance quality 4. Convenience 5. Durability 6. Reliability 7. Style

According to our product, the form shape, size, physical structure of Maggi is very attractive as it is easy to carry, comes in various packs and sizes according to customers convenience. For example Maggi Pichkoo ketchup packs which is a smaller quantity consumption variant. The various features of Maggi Tomato Ketchup are first of all its perfect taste according to the Indian touch & spices, its pocketabililty factor, packaging, easily transformation of recipe according to the different tastes of consumers, an ideal preparation recipe at the back of its pack & above all its competitive prices. As according to our survey report we found out the performance level of Maggi Tomato Ketchup was excellent there were various other brands offered to our target market, but Maggi prevailed as the winner out of them because of its various factors (taste, less consumption of time in preparation, prices, pack etc.) Quality is the main factor on which Maggi Tomato Ketchup emphasizes as it is Maggis main strength which provides Maggi an edge over its competitors. As all the products of Maggi are produced identical which fulfills its promise to its target market. Maggi products are durable as due to its preparation these products are easy to store, have a long shelf life and can be stored at any given temperatures which is tested and approved. Reliability is also one of Maggis strength, as one can always rely on a Maggie product for a particular taste which it guaranties that is no matter which pack you are buying you would be provided with the same taste, aroma & seasoning. It is an Indian customers psyche that whatever looks good and feels good would be of good quality so Maggi packs had been designed keeping in mind the same concept, its promotional schemes, color of the packages and the pictures depicted on the pack appeals to the customers. Maggi leveraged the brand equity very effectively. The product quality was good and the communication was excellent. The brand was positioned as a "Different" sauce with the baseline "Its different". Brand Image: Young - Teenager, Ever changing, humorous, unpredictable and "whacky" Customers were intrigued as to what is different about the brand and was curious to try the sauce. The ads featuring Javed and Pankaj kapoor was superb and funny. It was created by JWT. The new campaigns are handled by Publicis and the baseline has been changed to "Enjoy the Difference". In this case even though the new baseline "Enjoy the Difference" was not very different from the old one. We strongly feel that the brand managers should take the ownership of the brand and the way it is communicated. If it is left to agency alone, every time the agency changes, the communication changes. These additions made a point of difference against competitors Tomato Ketchup. Their main positioning message is Enjoy the difference. With the successful extension of brand and right positioning, Nestle emerged as market leader in ketchup segment by 1999.

The Consumer Magazine has published its in-house laboratory test findings on 15 brands of tomato sauce and ketchup from across the country and 2 unbranded samples from Ahmedabad. Overall, Maggi Ketchup (79) scored the highest among the national brands followed by Kissan Sauce (78) and Heinz Ketchup (78). INNOVATION PROCESS ADOPTED BY MAGGI TO COMPETE THE PRICE WAR.. the innovation process of maggi. OUTCOME CONSTRAINTS Ingredients Cost Formulations Manufacturer conservatism Processes Quality Additives Safety Packaging Consumer expectations Marketing Consumer conservatism Distribution Sociological, Political Patent Legal MEANS Innovation DRIVING FORCES Recruiting Strategy Training Quality R&D Know-how Technology watch SOURCES Profit Technology transfer Market environment Information Know-how Fashions, trends Knowledge Creativity Competition Academic Inventors Suppliers RESEARCH METHODOLOGY The present study constitutes the comparison of the 4 Ps of the Maggi of Nestle India Ltd. and Kissan of Hindustan Unilever Ltd. This will be done from the secondary data collected from the websites and the food consultants. We have established some hypothesis and some inferences on the basis of the primary data collected. The steps involved in the research are: 1. SURVEY METHODS

Customer survey for primary data: We asked the customers to rank the various attributes on a scale of very important, important and not very important. To find-out the brand perception of various brands, paired comparison between them is used.

2. QUESTIONNAIRE DESIGN In designing the questionnaire we paid particular attention to the content and wording of the questions. There were some questions which could be easily framed. The questionnaire was meticulously prepared by identifying the various variables i.e product, price, place, promotion. The same scale of yes/no and very important, moderately important and least important was used to make the respondents comfortable.