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  • 7/25/2019 FMCG Nestle Maggi







    ANSHUL GOYAL- 2014071


    ASHISH SOOD - 2014073ASHLESHA SALKAR- 2014074

    ATANU PRAMANIK- 2014075

    CHRISTINA RAJ- 2014076

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    Impact Of Five Forces On Profitability.........................................03

    Distribution Channel05

    Stp Analysis ................................................................................................................................................. 06

    Marketing Mix ............................................................................................................................................. 08

    Consumer Behaviour..10

    Swot Analysis......................................14

    Market Analysis ....................................................................................................................................... .16

    Marketing Strategy & Marketing Plan ...................................................................................... .16References ....................................................................................................................... 18

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    Fast-Moving Consumer Goods(FMCG) are products that are sold quickly and at relatively low cost.The

    Indian FMCG sector is the fourth largest in the economy and has a Market size of US$13.1 billion. Well-

    established distribution networks, as well as intense competition between the organized and

    unorganized segments arethe characteristics of this sector. FMCG in India has a strong and competitive

    MNC presence across the entire value chain. It has been predicted that the FMCG market will reach to

    US$ 33.4 billion in 2015 from US $ billion 11.6 in 2003.The middle class and the rural segments of the

    Indian population are the most promising market for FMCG, and give brand makers the opportunity to

    convert them to branded products. Most of the product categories like jams,

    toothpaste, skin care, shampoos, etc, in India, have low per capita consumption as well as low

    penetration level, but the potential for growth is huge.


    Nestl was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in 1866

    by brothers George Page and Charles Page, and Farine Lacte Henri Nestl, founded in 1866 by

    Henri Nestl. Swiss multinational food and beverage company, the largest food company in the world

    measured by revenues.

    Nestl has 447 factories, operates in 194 countries, and employs around 333,000 people. It is

    one of the main shareholders ofLOreal,the worlds largestcosmetics company.

    Nestl has a market cap of more than 200 billion U.S. dollars and in 2013, consolidated sales

    were 92.16 billion and net profit was 10.02 billion.

    Nestle has more than 8000 brands and its largest international competitors are PepsiCo, Kraft

    Foods,Unilever andMars Incorporated.


    In India Maggi instant noodles are very popular; "Maggi" is synonymous with instant noodles.

    Nestle maggi has 60% share in India where it was the first instant noodle brand

    It roosts market of more than 1750 crores, as of 2012.

    Other popular brands include Top Ramen Smoodles and Cup Noodles manufactured by Indo-

    Nissin Ltd,AA Nutritions's Yummy, ITC s Yippee noodle.

    Local flavours such as masala and chicken dominate. A package sells for 1012 rupees.
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    Its a Fast-Moving Consumer Good, that is sold quickly and at relativelylow cost.

    Though the profit margin is relatively small, they are generally sold in large quantities; thus, the

    cumulative profit on such products can be substantial.

    MAGGI is probably the most classic case of low margin and high volume business.

    We will get to know a large supply-chain business starting from the manufacturer to the retailer.

    It is a very large scale business with mostly perishable products so doing everything on time isvery important.

    MAGGI Noodles

    The fast moving consumer goods (FMCG) segment is the fourth largest sector in the Indian economy.

    Maggi noodles is a brand of Instant noodles by Nestle. It was founded by the Maggi family in Switzerland

    in the 19th century and is the Iconic brand of Nestle. It is not only a hit brand in India but globally as



    The first preference of Indian children in terms of instant food.

    It has low growth rate in the market but a high market share. The reason essentially is that the

    market growth rate of Noodle consumption is not very high.

    Though the number of repeat purchasers is high in case of Maggi, the rate of increase among

    the new purchasers is not too high.


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    As part of project we are required to interact with at least 3 retailers. The following is a questionnaire

    which was prepared by us and the answers are recorded as follows:

    Q-1What are the competitive products of Maggi that you sell?

    A-1 The competitive products of Maggi that they sell are Yippee and YAI-YAI.

    Q-2 What is the general stock turnover time of Maggi variants?

    A-2 Stock generally comes every 2 weeks.

    Q-3 Maggi comes in how many varieties?

    A-3 Maggi comes in five varieties-Veg, Chicken, Atta, Multigrain and Rice.

    Q-4In how many variety does Yippee come?

    A-4 Yippee comes in 2 varieties Veg and Chicken

    Q-5What is the credit period given to you by Nestle Maggi?

    A-5 After the receipt of stock one week time is given by Nestle Maggi to make the payment.

    Q-6What is the main factor besides demand that enables you to sell Maggi? What is the uniqueness

    that Maggi offers to you?A-6While interacting with the retailer this is the most interesting thing that we

    got to know. Retailer told us that Maggi pays them rent for placing the container or box in which Maggi

    is displayed and they are asked to place it strategically in the front part of the shop so that it is visible to

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    everyone and at the same time ITC Yippee was also in the shop but it was placed at the back so it was

    less visible as compared to Maggi. This is the most important marketing strategy of Maggi which makes

    it not only the market leader but Maggi in the Indian market context has become synonym of instant


    Picture 1 maggi noodles Pict ure 2 Yippee

    noodles at the back of the shop

    Q-7What is the age group that prefers Maggi most?

    A-7 Maggi lovers are mostly in age group of 12-28 years.

    Q-8What is the market share of Maggi?

    A-8 Maggi has market share of 80% while Yai-Yai and Yippee have a combined share of 20%.

    Q-9What is the profit margin that you get on Maggi?


    Profit margin from per packet of Maggi is 60 paise.

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    The distribution network is well spread almost everywhere in India as it is very easily available at most

    retail and wholesale stores. Nestle has over 200 partnerships and collaborations per year including

    external suppliers; universities and private research institutes.


    It is compulsory for distributors to have Food Safety and Standards Authority of India (FSSAI)

    license and to be registered with Nestle.

    Maggi has the largest market share (80%) because of its first entry into the Indian market.

    Bestselling Maggi flavor is the Masala Maggi Noodles.

    In Sanquelim demand for 5.00 packet is the highest whereas in Panjim demand for 10.00 is

    the highest as it depends on the economic condition of the place.

    Infrastructure consists of warehouses and coolers. Nestle uses the Pallet storage method in the

    warehouse. Pallets prevent the goods from getting infested or damaged.

    The Distributor gets a margin of 5.8% on Maggi noodles.

    Total number of distributors in Goa is 15.

    Average monthly turnonver of the distributor in Sanquelim is approximately 36lakhs.

    The distributor in Sanquelim covers areas like Bicholim, Thivim, Assnora, Ponda and Valpoi.

    Nestle is the only company that accepts expired goods back without any loss to the retailer. The

    bad goods are personally destroyed by the sales officer. The amount of returns per month

    cannot exceed 10% per month.

    The distributor also receives incentives on certain Sales Incentive Products which change every


    Nestle has a yearly meeting with all the distributors to take feedback and sort out issues.

    Distributors get a certificate of acknowledgement for achieving their targets.

    Distributor has to have an advance stock of 15 days at all times in case of any unforeseen

    situations. This changes from place to place.

    Orders are places are twice a week i.e Wednesday and Fridays and goods are received the nextday. Orders are placed through ERP system.









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    The following criteria are followed by Nestle while selecting a distributor:


    Depends on both present and future capital investments by distributors.


    Prior experience in FMCG sector is preferred to save on training expenses.

    Distributor shall not be dealing in competitors products.

    Should handle entire range of Nestle products.


    Godown/ storage space with appropriate refrigeration as per product needs.

    Delivery vehicles




    This launch of Maggi noodles was the platform for an entirely new food category of instant noodles in

    India. It quickly gained popularity as a quick snack and was widely accepted in the Indian market. Its

    main focus was the age group of 6-14 years, which has a fascination for tasty and fast-food.

    In order to target the health conscious consumers, in the year 2005, Nestle India Limited expanded by

    brand extension offering various healthy food products under the brand name Maggi.In an effort to

    extend its healthy foods concept, in May 2006, Nestle launched a new variety of instant noodles product

    called Maggi Dal Atta Noodles (Dal Atta Noodles) under the popular Maggi brand. These Dal Atta

    Noodles, unlike the traditional Maggi noodles, were made of whole wheat and pulses, and were

    positioned as a 'healthy instant noodles

    Segmentation Targeting Positioning

    Age Kids Fast to cook, Good to eat

    Lifestyle Teenagers 2- minute noodles

    Eating habits Office going people Taste bhi, Health bhi

    Working women

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    Maggi 2-minute instant noodles are associated with convenience and taste, and is currently accepted as

    a valid filling snack between meals. Maggi will continue to leverage its brand equity and target the

    following segments for its product.

    Children and teenagers: Its primary target audience is the children in the age group between 6-14 years. This is a large segment and is Maggis stronghold. This age group has largely similar tastes

    and is traditionally targeted by Maggi. These segments consider Maggi as a snack which is tasty,

    easy to make and different from the contemporary Indian snacks. For these segments innovative

    products is a major criterion, though certain other aspects are also preferred. The curly shape of the

    noodles is also a fascination for this segment. Maggi has skillfully shifted its focus from the lady of

    the house to the end- consumer i.e. the children, which led to its capturing of the market in the

    noodles sector. Also Maggi has become a food of the category of people with erratic working hours,

    when timely meals are not available then Maggi is automatically the food of choice since its tasty

    and convenient to prepare in a short time span.

    Office going people and working women: The households today have children whose parents are

    working and a maid is usually responsible for preparing meals. In such cases the preferred food ofchoice during snack time is Maggi, as it is easy to prepare and it is also t he childrens preference

    over other snacks.


    Maggi noodles by Nestle comes under the food products category and can be specifically placed

    under instant food category. Maggi was introduced in 1982 as a snack food and since then has

    gone through a series of repositioning and brand extension strategies to suit the need of the


    'Fast to Cook Good to Eat is the tagline for Maggi.

    Nestle India Limited (NIL) in the past years has aggressively promoted Maggi noodles via various

    methods like free sample distribution, distributing gifts in exchange of empty packs, etc. The

    company used its advertising strategically to create an effective impact on the communication

    of the benefits of the product to its target consumers.

    Its advertisements projected Maggi as a fun snack for the kids which gave the mothers ease of

    preparation. Use of taglines like 'Mummy, bhookh lagi hai' (Mom, I'm hungry), 'Bas 2-Minute,'

    (Only 2 minutes) and 'Fast to Cook Good to Eat' effectively communicated the product's benefits

    to the target consumers.

    It has tried to cater to the low income householders by introducing the Rs. 5/- pack. It was

    designed to be consumed as an evening snack. The commercial designed for the same show kids

    of the fore-mentioned age group in the evening time consuming Maggi. Over the period of time

    with the need for healthy food (Vegetable Atta Noodles) gaining ground, it repositioned itself by

    positioning it as healthy food. This was of paramount importance as the buyers in this case were

    mothers who were going to feed their children who were in the growing age group. Given the

    special care that mother take of children in this age group Nestle has been trying to promote the

    healthy part more effectively.

    It is packaged in bright yellow color given that this color is quite attractive to younger people.

    This color makes Maggi both easily distinguishable and also lively.

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    It has a strong distribution channel and its availability is present in both traditional retail (kirana

    stores) and up-market posh supermarkets.

    It sells mostly in single size serving however it has innovatively changed the packaging allowing

    multiple serving inside the same packet. Through this it wants to increase brand loyalty.

    Typically the higher sizes are for regular consumption households and are available at slight

    discounts. Also from time to time it has been trying to leverage and rejuvenate the brand with

    interesting Brand extensions.



    In terms of variety there is a lot of demand for maggi masala and lesser demand for curry and cuppa

    mania. Maggi is provided in four different ingredients namely Maggi Vegetable Multigrain Noodles,Maggi 2 Minute Noodles, Maggi Veg Atta Noodles and Maggi Cuppa Mania.

    To diversify and to sustain as a leader maggi also provides Maggi Sauces, Maggi Pichkoo, Maggi Pazzta,

    Maggi Magic cubes, Maggi BhunaMasala, MaggiCoconut MilkPower, MaggiPasta & Pizza Sauce

    Maggi Pichkoo etc.

    Maggi differentiates its Product from its competitors in the sense that Maggi Masala Noodles come in

    packs of 150,300,450,560 gm Pouch and Atta Noodles come in 80 gm Pouch, Noodles Chicken come in

    152 gm Pouch. Since Maggi comes in different sizes and there is wide variety of products which


    Maggi from its competitors while you can find Yippee Noodles magic masala pack only in 75gm Packand 280gm Pouch at the price of 10 Rs and 40 Rs, so there is less variety in terms of Product

    differentiation in Yippee whereas Yai-Yai is available in single pack and single flavour. That why Maggi

    has edge over its competitors.


    The basic strategy of instant noodles is that it should be priced low so that it is available for everyone.

    Nestle Maggi which is the market leader sells maggi in the denominations of Rs.5,10,15,20 and 80 for

    the family pack thus making it accessible for all. Generally a 5% margin is available for the retailers.

    Market offerings: Maggi: Available in packs ranging from Rs. 5 to 80. Different flavours are priced

    differently for eg. The atta noodles variety costs Rs. 20 whereas the plain masala variety costs Rs.10.

    In India instant noodles is still considered to be a snack item and thus its demand is very price sensitive

    thus companies are left with no alternatives but price competitively for the different variants.

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    Nestle Maggi Noodles has been started by Nestle in India, famous not only in urban areas but also in

    rural areas. It is rightly available in number of retail shops so that consumers can easily purchase them.

    Nestl India manufactures Maggi from 8 factories throughout India, as:

    1. Moga (Punjab), in 1961.

    2. Choladi (Tamil Nadu), in 1967.


    Nanjangud (Karnataka), in 1989.


    Samalkha (Haryana), in 1993.

    5. Ponda (Goa), in 1995

    6. Bicholim (Goa), in 1997.

    7. Pantnagar (Uttarakhand), in 2006.

    8. Tahliwal (Himachal Pradesh), in 2012.

    From these factories, the product is distributed all over the country towards the warehouses,

    from where it goes to wholesalers and then to the retailers, according to the sectors defined to

    the particular manufacturing plants. Coming to local market, as per the observations in Kirana

    Stores, they sell maximum 2 brands i.e., Maggi and Yuppie noodles. Maggi sale is higher than

    yuppie because of brand equity. We found both the brands are promoting their brands in Kirana

    stores. There are limited flavours available and distribution of Maggi is better than Yuppie

    distribution. Distribution is done through sales man, weekly they come and fulfill the orders of

    stores. Rs.10 packs are highly preferred and fast moving in Kirana stores and family pack is not

    preferred because the consumer who comes to these stores are daily customers. It is rightly

    available in number of retail shops so that consumers can easily purchase them. According to

    MAHESH, owner of Goa Super Market (opp. Sanquelim bus stop) and KAILASH, owner of Kailash

    corner (GIM).


    The Maggi noodles' tagline, 'Fast to Cook Good to Eat' was also in keeping with this positioning.

    They promoted the product by

    1.Distributing free samples.

    2. Giving gifts on return of empty packets.

    3.Dry sampling-distributing Maggi packets.4.Wet sampling - distributing cooked Maggi.

    5.Availability in different packages 50gm,100gm,200gm,etc.. and

    6.Effective Tagline Communication.

    Through its ads, NIL positioned Maggi as a 'fun' food for kids which mothers could prepare

    easily. Taglines like 'Mummy, bhookh lagi hai' (Mom, I'm hungry), 'Bas 2-Minute,' and 'Fast to

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    Cook Good to Eat' effectively communicated the product's benefits to target consumers.

    These ads had become so popular that the tagline 'Bas 2-Minute' immediately reminded Indian

    consumers of Maggi noodles even several years after the ads were taken off the TV.


    Consumer Decision Making Process, this basic psychological process plays an important role in

    understanding how consumers actually make their buying decision. Marketers must understand every

    facet of consumer behaviour in terms of who, what, when, where, how and why. Smart companies

    like MAGGItry to fully understand the consumers buying decision process all their experiences in

    learning, choosing and using of the product.


    Ques1) Consumer of Maggi age group wise:

    Response: in this research we found that consumption of Maggi noodles is highest in 18-25 years age

    group, than 26-30 years age group.





    31-40 Years


    41-50 years


    Age Group: People Prefering


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    Ques2). Consumption of Maggi category wise:

    Response: Out of 30 respondent we found that consumption of Maggi noodle is very high in Working

    men and women that is 57% (17 respondent)

    Ques3) Do you Buy Maggi Noodles:

    Response: Out of 30 Response, we find that acceptability of Maggi Noodles in Sanquelim is 100%.

    Variable Frequency Percentage

    Yes 30 100%

    No 0 0%

    Total 30

    Ques4) Have you tried different variant of Maggi?

    Response: Out of 30 respondents only 8 respondents tried other variants of Maggi Noodles

    Have you tried Different Variants of Maggi Response Percentage

    Yes 8 22.6%

    No 22 73.4%

    Total 30








    Consumption of Maggi category wise

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    Ques5) Which Factor motivates you to buy this product?

    Response: In this analysis we found that consumer is 100% satisfied with Taste, Price, Ease to


    Ques 6) Which of the following Maggi variants do you relish?

    Response: Out of 30 Respondents we found 23 respondents (77%) relish on Maggi 2 minutes noodles





    Ease to










    Motivational Factor

    2 minutes-




    Atta noodles



    multi grain



    Cuppa mania


    Maggi Variants

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    Ques7) Which of the following brand would you like buy if price is not taken into consideration?

    Response: In this analysis we found that if price is not taken into consideration respondent will buy

    Maggi noodles.

    Ques8) On the basis of past experience would you like to buy the product(maggi) again and also

    suggest to you family and dear ones?

    Response: Out of 30 respondents 24 respondents would like to buy and refer this product to their family

    and dear ones, let alone customer satisfaction level of this product is 80% .

    Yes 24

    No 6

    Total 30

    Satisfaction level 80%

    Ques9) What comes first in your mind when you hear the word Maggi?

    Response: Here we tried to check the perception of consumer towards the product and we found that

    out of 30 respondents, for 24 respondents Maggi is just Noodles and for rest of the 2 respondents

    Maggi is a Snacks.










    Brand You Would like to


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    Ques10) You came to know about Maggi from?

    Response: The survey suggested that a majority of the people came to know about Maggi throughtelevision advertisements. Maggi advertisements are quite famous with the consumers.

    SWOT Analysis Comparison of Maggi and Yippee:



    Fast food




    None of



    Perception: Maggi is?

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    STP Analysis of Yippee


    Segmented for youngsters mainly.


    Mainly targeted towards working individuals.

    Mothers:as they purchase and want healthy food for their children.


    It attacks the largest selling variant of Maggi, Maggi Masala, and gives consumers the choice of

    two masala Magic and Classic.

    Maggi comes in rectangular shape and while cooking it is broken into two pieces. On

    the contrary Yippee comes in round shape and can easily fits into round vessel with no breaking.

    The biggest problem with cooked Maggi is that it is to be eaten when freshly cooked. Get sticky

    becomes inedible. Yippee promises that Yippee noodles can be eaten even after some time.

    Trends in Indian noodle market

    1. Increasing competition: Competition in instant noodle category has intensified with players

    such as GlaxoSmithKline (Horlicks Foodles), ITC (Sunfeast Yippee noodles), Capital Foods and

    Hindustan Unilever launching new products in the market.Private label brands such as Tasty

    Treat by Future Group (Big Baazar retail chain) have also been launched an it is expected thatmany more private label brands may hit the market.

    2. New product launches and extensive marketing: All players new or old have been busy

    launching new products and marketing campaigns. Maggi has launched an extensive campaign

    with their new product vegetable multigrain noodle. Yippee is stressing upon choice in the


    3. Stress on health and wellness: As on all other food categories, players are stressing on health

    and wellness aspects of their products. Maggi launched Atta noodles and multigrain noodles to

    woo customers while Glaxos Foodles also stresses on the multigrain aspect of their product


    Traditional flavors still dominate: Masala, chicken and tomato are most popular flavors in themarket

    5. Addressing rural market: Noodles are primarily consumed in urban India and to expand this

    market companies such as Nestle have introduced small sized and low cost products to address

    the demand of rural market. The success of this effort is still to be seen.

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    Market Analysis of Instant Noodles Segment:

    The competitive scenario in the noodle segment is getting more intense as the customer habits are

    changing, and now they want more options in anything and everything they consume and the entry of

    new variants has provided the customers with a lot of options, and the brands are using their financial

    and marketing prowess to come out on top of the competitors.

    Indias noodles market is estimated at overRs. 3,000 crore in annual sales and includes pasta, vermicelli

    and instant noodles. It is growing at 20% per annum. Nestle is the market leader with 58.3% market

    share in the overall category and over 80% in the pure noodles category. Knorr managed to grab a

    market share of only 2.6% in a span of two years while even after a late entry ITCs Yippee captured a

    market share of 6% in a year, according to data from industry researcher Nielsen. Nestles Maggi has

    been synonymous with noodles and both Nestle and ITC have also penetrated the market with Rs.5

    packs. Top Ramen from Nissin Foods of Japan, which entered the country in 1988, has a share of 4.3%.

    In 2010, ITC entered the Rs. 2000-3000 crore instant noodles category.

    Marketing Strategy and Marketing Plan

    Yippees visibility in the market in comparison to Maggi is very low. In the field study, it was found that

    the retailers are given special glass cases by Maggi, and hence it is more physically visible in stores.

    Whereas, the Yippee packets were lying at the back of the store, with absolutely no visibility. Yippee

    should focus on giving better incentives or monetary gains to retailers.

    ITC should promote Yippee more aggressively. Maggi has their advert focusing on 2 minute noodles,

    Fast to cook, good to eat. Yippee should indulge in digital marketing campaigns, and introduce anadvert with an impactful jingle, which will dispute Maggis 2 minute strategy

    The product has two intrinsic components - the noodle block and the masala mix. Wheat is a key

    ingredient of the noodle block. The sourcing and blending expertise that has made ITCs Aashirvaad the

    countrys No 1 branded Atta has been leveraged to make a truly delightful noodle block. Sun feast

    Yippee noodles do not lump even 30 minutes after cooking and they are non-sticky. This factor should

    be used in promoting the brand. Also, the existing flavors include magic masala and classic masala.

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    Whereas, Maggi offers various veg and non-veg flavors, with numerable variants in veg. Yippee should

    come up with more mass appealing Indian flavors. And also consider getting into the healthy noodle


    Schools can also be targeted for awareness among the kids because they are the major consumers. The

    color of Yippees packaging is attractive and eye-catching, it uses yellow and red colors which are a part

    of the Maggi packaging too. Yippee can possibly add a small toy or sticker to their packets, which will

    create more enthusiasm among the children.

    Target young consumers who are about to start eating noodles (i.e. children of the age group 3-6 years).

    Instigating the brand Sunfeast Yippee from a young age can help the brand in the long term sustenance,

    wherein in a few years the children will connect to the brand Yippee and get attached to the product

    with a sense of nostalgia.

    Maggi launched the Me and Meri Maggi, where brand attachment of consumers was taken advantage

    of and they were told to share their stories related to Maggi. Yippee could bring in a brand ambassador

    who can help connect the consumers to the brand.

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