Maggi - Nestle's Problem Child?
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Case Details:
Case Code : MKTG021
Case Length : 10 Pages
Period : 1997 - 2001
Pub Date : 2002
Teaching Note : Available
Organization : Nestle India
Industry : Food, Beverages and Tobacco
Countries : India
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Maggi Under Pressure Contd...
Even after more than 15 years of heavy advertising, promotion, and brand building, the Maggi brand remained a loss-making proposition for the company.
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Though Nestlé had successfully created an entire product segment afresh with Maggi noodles in India, analysts commented that the company had made some serious blunders somewhere down the line.
Questions were raised about Nestlé's marketing acumen and whether its brand/line extension decisions had stretched Maggi 'too thin.'
Background Note
Established in 1866, the Switzerland based Nestlé S A was a wholly owned subsidiary of Nestlé Holdings Ltd., Nassau, and Bahama Islands.
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The Group produced, among other things, beverages, milk products, processed foods, cooking aids, bakery products, chocolates, confectioneries, and pharmaceutical products. Nestlé Holdings had a presence in 83 countries worldwide with 509 factories spread across Europe, America, Africa, Asia, and Oceania.
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Nestlé S A was the world leader in many product categories like coffee, mineral water, snack foods, beverages, and chocolates.
In 2001, the company earned revenues of $ 50.2 billion and a net profit of $ 3.9 billion, and was ranked 55 in the 2002 Fortune 500 list.
With a workforce of around 229,765 people, Nestlé had established itself as one of the world's most successful FMCG companies.
The Group entered India in 1959 through Nestlé India, a wholly-owned subsidiary of Nestlé Holding Ltd. Initially, it imported and sold condensed milk and infant food. |
Manufacturing operations began in 1962 when a factory was set up in Moga, Punjab to produce Nestlé's condensed milk brand, Milkmaid. In 1964, the company started manufacturing the Group's flagship coffee brand, Nescafe, at the same factory. The company set up another factory at Cherambadi in Tamil Nadu, for manufacturing infant food and coffee...
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