1. Maggi-Nestle’s Problem Child ?
Case Study
Presented By:-
Aon
Amrut
Ankita
Arijit
Bhuvan
Christopher
Deepanshu
Darshan

2. Index
• Case Content
• Background
• SWOT Analysis
• Problems
• Measures & Outcomes
• Extensions
• Recommendations
• Learnings & Conclusion

3. Content
• Examination of brand & Line extension strategies
• Promotion & Advertisement strategies
• Rationale behind the launches & failures under
the Umbrella Brand: MAGGI
• Problems Maggi faced during the years
• Strategies formulated to overcome the problems
• Recommendations & Conclusion

4. Background
• Nestlé S.A is a multinational packaged foods
company founded and headquartered in vevey,
switzerland
• Set up in 1866 by Henri Nestlé
• Produces Beverages,milk products,cooking
aids,processed foods,chocolates etc.
• Presence in 83 Countries worldwide with 509
factories spread across the globe
• World leader in coffee,mineral water & chocolates
• Ranked 55 in 2002 Fortune 500 list and established
itself one of the most successful FMCG company

5. Continued….
• Entered India in 1959 through Nestle India
• Manufacturing Operations began in 1962 from Moga,Punjab
to produce condensed milk brand “Milkmaid”
• In 1964 production of Nescafe started at the same factory
• Some of the products including Condensed milk(100%),baby
food(87%),Coffee(60%) & Ketchup(43%) were market leaders
in their respective categories
• By 2001 Nestle India was able to generate revenue of 18bn
rupees with a net profit of 1.7bn
• Was adjudged the third largest food company after HUL and
Amul

6. Giant In The Making
• Maggi was founded by maggi family in
Switzerland in 19th century & was merged with
NESTLE in 1947.
• Introduced in India in 1982
• Launched Instant Noodles,Soups,Ketchups &
Pickles
• Created Noodles market from scratch
• Launched Maggi with a tagline “Fast to cook &
Good to eat”

7. Contd….
• Need recognition of Indian Consumer
• Varieties: Tomato,Masala,Curry,Chicken
• No competition
• Because of its first-mover advantage

8. SWOT Analysis
Strengths:
• Market leader in its segment
• Strong brand,loyal Consumer base
• Wide range of distribution channel
• Effective Advertising
• Innovative product range

9.  Weakness:
• New Innovations were not always successful
• Lack of research
• Undermines Competitor’s threat
 Opportunity:
• Product has been acceptable in youth category
• Shift to rural market
• Changing preference of consumer towards fast
food

10. Threats:
• Price war with competitors
• Strong presence of regional competitors

11. Problems,Measures & Outcomes
 Traditional food preference by Indian consumers
• Company’s deviced a two point stratergy to attract mothers on the
convenience plank & lure kids on fun plank
• Promotional activities of maggi included schemes offering gifts in return of
empty noodles packs
• Taglines like ‘Mummy bhookh lagi hai’, ‘Bas 2-minute’ , ‘Fast to cook –
Good to eat’ became part of indian advertising
 In 1993, “Sweet Maggi” variant of maggi noodles was launched only to
withdraw it at the end.
• As the product was launched without any reseach,it failed to generate the
desired sales. Nestle brought down the price of 100 gram pack of noodles
to Rs 5 from Rs 7 which resulted into increase sales
• Used thinner & cheaper packaging material,Moneysaver Multipacks

12.  Sales stagnated in 1995 at the previous year’s
level
• Nestle was in a fix to solve this issue during the
year
 Knorr entered into soup business and launched
ten flavours against Maggi’s four backed up by
strong vegetarian theme
• Maggi relaunched its soups under the maggi rich
brand . Packaging was made much more
attractive along with key competitive prices

13.  Forayed into Pickles under the maggi brand & south indian
food preparations
• Very limited success
 Failure of Maggi Tonite’s special
• As the product was launched without any market research
so the response to the whole range was very poor
 Competition from rival brand TOP RAMEN
• Maggi macaroni was launched to deal with the growing
popularity of noodels brand top ramen
 Pricing issues between Maggi macaroni & noodles
• Company failed to justify price anomalies between the two
amounting to decrease in market share

14. • Taste of the new product i.e Maggi macaroni
leads to its complete wipeout
 Knorr dethroned maggi as leader in soup
segment in the end of 1997
• Relaunched maggi soups under the “Maggi rich”
brand in 1998 to counter Knorr threat but was
not counter-productive
 New formulation lead to decline of maggi in 1997
• Brought back old maggi due to customer backlash
with the tagline’ Ab sab kuch pehle jaisa’ in
march 1999

15. Extensions
• The company continuously focuses its efforts to understand
the changing lifestyles of modern India and anticipate
consumer needs in order to provide convenience, taste,
nutrition, and wellness through its products.
• Launching of new flavours
• Packaged Coconut milk
• Maggi tamarind sauce and Chinese Noodles
• An offering that exemplifies ‘taste bhi health bhi’, MAGGI
Vegetable Atta noodles is sucessful because it is loaded with
everyone’s favorite MAGGI ‘masala’ and healthy because it
now has more real vegetables and is packed with the power
of fiber.

17. Recommendations
• Emphasis on segments with age goups 25-35
and above
• Advertise its products by depicting attributes
related to health like nutritional values
• Help customers perceiving the product as
healthy
• Foray into other food products like
Chips,Chocolate etc. under its sole brand
name

18. Learnings
&
Conclusion