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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Excerpts
The Story of Maggi
Launched in five 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 foods market was very
small at this point in time (Refer Exhibit III for a brief note on
the Indian packaged foods market).
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Nestlé 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's awareness.
In the initial years, Nestlé's promotional activities for Maggi included schemes offering gifts (such as toys and utensils) in return for empty noodle packs. According to analysts, the focus on promotions turned out to be the single largest factor responsible for Maggi's rapid acceptance...
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What's in Store for Maggi?
In July 2001, Nestlé revealed plans to increase its focus on Maggi. According to company sources, Maggi would now receive the same type of financial and marketing support that Nestle enjoyed.
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Donati said, “The focused approach on Nescafe, which was the company's flagship brand over the last few years has yielded rich dividends and we plan to replicate the same in case of Maggi as well.”
In 2001, Maggi noodles was able to sustain its leadership position by introducing small, 50 gm packs and launching of two new flavors -Tomato and Curry.
The company rationalized the prices of Maggi soups and launched a new Tomato-Vegetable variant. New flavors were introduced in the Maggi seasonings range as well. Maggi sauces also reportedly showed good volume growth... |
Exhibits
Exhibit I: Maggi -Product/Brand Profile*
Exhibit II: Nestlé India -Profit & Loss Statements
Exhibit III: A Brief Note on the Indian Packaged Food Market
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