Maggi The Product Life Cycle

Introduction of Maggi 2-minutes Noodles

Its a Brand of instant Noodle made Nestle wanted to explore the

potential for such an Instant food by Nestle India Ltd. among the Indian market. It was found by the Maggi family in Switzerland in the 19th century. It took several years and lot of money for Nestle to establish its Nestle launched Maggi for the first Noodles brand in India. time in India in the year 1982.
The Brand is popular in: Now it enjoys around 90% market

share in this segment.

- Australia - India - Malaysia - New Zealand - Singapore - South Africa.

Over the years Maggi has

launched several products under its Brand Name.

ISSUES
Different phases product life cycle of maggi Why atta noodle was a failure? Strategies taken to establish new product category What measures NIL should take to sustain the image of a popular brand image. Stage at which maggi is in the product life cycle.

PRODUCT LIFE CYCLE

A concept that provides a way to trace the stages of a products acceptance, from its introduction (birth) to its decline (death).

GRAPHICAL REPRESENTATION OF A TYPICAL LIFE CYCLE

Introductory Growth Stage Stage Dollars Maturity Stage Decline Stage Product Category Sales Product Category Profits

Time

Introductory Stage

Full-Scale Launch High failure rates of New Products No competition Frequent product modification Limited distribution High marketing and production costs Promotion focuses on awareness and information 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 With the launch of Maggi noodles, NIL created an entirely new food category - instant noodles - in the Indian packaged food market. Because of its first-mover advantage, NIL successfully managed to retain its leadership in the instant noodles category

STPD Analysis
Segmentation
Age

Targeting
Kids

Positioning
Fast to cook good to eat 2-minute noodles Taste bhi health bhi

Differentiation
Taste

Eating Habits

Youth

Flavours

Lifestyle of urban families

Office goers

Packaging

Working Women Health conscious people

Market Penetration Strategies

Promotional campaigns in school. Advertising strategies: - focusing on kids. New product innovation according to the need of consumers: Veg. Atta Noodles. Dal Atta Noodles. Cuppa Mania. Availability in different packages: 50 gms. 100 gms. 200 gms. family packs (400gms.). Conducting regular market research

Growth Stage
Increasing rate of sales Offered in more Entrance of competitors sizes, Initial healthy profits flavors, options Promotion emphasizes brand ads Prices normally fall Development costs are recovered 10 yrs back it enjoyed around 50% market share in this segment which was valued at around 250 crores. During the 1990s, the sales of Maggi noodles declined, due to growing popularity of Top Ramen , another instant noodles product. In order to improve sales , NIL changed the formulation of Maggi noodles in 1997. However, this proved to be a mistake, as consumers did not like the taste of the new noodles. In March 1999, NIL reintroduced the old formulation of the noodles, after which the sales revived. Over the years, NIL also introduced several other products like soups and cooking aids under the Maggi brand.

Maturity Stage
Declining sales growth Saturated markets Extending product line Stylistic product changes Heavy promotions to dealers and consumers Prices and profits fall

Many consumer products are in Maturity Stage

In 2003 Hindustan Lever Ltd was all set to take on Nestle's bestselling Maggi 2minute noodles by launching a new category of liquid snacks under its food brand, Knorr Annapurna. The new product, called Knorr Annapurna Soupy Snax, was priced aggressively at Rs 5 and had four variants: two chicken options and two vegetarian. Like Maggi, Soupy Snax will be an in-between-meals snack and will be targeted at all age groups, particularly office-goers.

STPD Analysis
Segmentation to Differentiation: Classic Noodles 5 10 yrs. Veg. Atta Noodles Health Conscious. Rice Mania Teenage Cuppa Mania Office goers, Working women.

Decline Stage If no product innovation brought

Long-run drop in sales

Large inventories of unsold items

Elimination of all nonessential marketing expenses

Rate of decline depends on change in tastes or adoption of substitute products

Extending the PLC

Change product
Change product use Change product image Change product positioning

CATEGORIES OF NEW PRODUCT/REVISING THE PRODUCT

New-To-The-World
New Product Lines

Six Categories of New Products

Product Line Additions Improvements/Revision s Repositioned Products Lower-Priced Products

Analysis(why Atta Noodles Failed?)

In 2005 Nestl India launched MAGGI Vegetable Atta Noodles. Based on consumer needs and evolving trends for more whole grain based products. Extensive Research and Development expertise to develop Maggi Vegetable Atta Noodles. Maggi Vegetable Atta Noodles will provide the dietary fibre of whole wheat to facilitate good health and wellness .

The health angle

Comparing the prices

FAILURE CAUSES
1. Indian psycheThe basic problem the brand faced is the Indian Psyche. Indian Palate is not too adventurous in terms of trying new tastes. So a new product with a new taste that too from a different culture will have difficulty in appealing to Indian market.

2. PriceThe price of atta noodle was little more than maggi 2 minutes noodle 3. False claimsIn October 2008, Nestle mistakenly aired an advert that noodle "help to build strong muscles and bone". The British Advertising Standards Authority said that it was a false claim. 4. Not purely vegetarianMaggi Noodles also contains the additives E150d and E627.E627 is partly prepared from fish,and is thus not suitable for vegetarians. E150d is sometimes made from genetically modified maize

5. Lack of essential nutrientsThe new maggi atta noodles as can be seen from the fig. lacked essential vitamins A, C,also the fat content was more then carbohydrates 6. Targeted health conscious peoplebut atta noodle didnt appealed thembecause of other Substitute supplements in the market

Suggestive Promotional Strategies

1. They should conduct test marketing before launching new product. 2. Focus on creating distinctive image, based on twin benefits of INSTANT and HEALTHY. 3. Conduct promotional campaigns at schools in small towns with population more than 10,000. 4. Strengthen the distribution channel of the rural areas within 100 KM of all the metros. 5. Launch new advertisement campaign (T.V., Radio and print media commercials) with the brand ambassador. 6. Conduct Market Research to find out the market penetration of the product in the rural areas covered.

Current Scenario of Maggi

Leading Brand in India as

well as World. Current Sales: Approx. 90000 boxes Rs. 4,79,49,000 in Mumbai 10,00,000 boxes 55 cr. in India Reasonable competitive pricing. Creative interaction blogs for customers: www.maggi-club.in Focus mainly on Health Benefits.

World Market Share

Maggi 94%

Top Ramen 4%

Other Local 2%

Maggi 94%

Top Ramen 4%

Other Local 2%

Thank you