The document discusses product life cycles and provides details about Maggi noodles in India. It describes Maggi's introduction in India in 1982 and how Nestle created a new instant noodles category. Over several years and with modifications to the formula, Maggi established itself as the market leader with around 90% share. The document outlines the typical stages of a product life cycle - introduction, growth, maturity, and decline - and analyzes where Maggi is currently in the cycle as the top brand in India and globally.
2. Product Life Cycles
• Product Life Cycle – shows the stages that products
go through from development to withdrawal
from the market
• Product Portfolio – the range
of products a company has in development or
available for consumers at any one time
3. Product Life Cycles
• Product Life Cycle (PLC):
– Each product may have a different life cycle
– PLC determines revenue earned
– Contributes to strategic marketing planning
– May help the firm to identify when
a product needs support, redesign, reinvigorating,
withdrawal, etc.
– May help in new product development planning
4. Claims of Product Life Cycles
• Products have a limited life
• Product sales pass through distinct stages
each with different challenges and
opportunities
• Profits rise and fall at different stages
• Products require different strategies in each
life cycle stage
7. Introduction of Maggi 2-minutes
Noodles
It’s a Brand of instant Noodle made
by Nestle India Ltd.
It was found by the Maggi family in
Switzerland in the 19th century.
Nestle launched Maggi for the first
time in India in the year 1982.
The Brand is popular in:
- Australia
- India
- Malaysia
- New Zealand
- Singapore
- South Africa.
Nestle wanted to explore the
potential for such an Instant food
among the Indian market.
It took several years and lot of
money for Nestle to establish its
Noodles brand in India.
Now it enjoys around 90% market
share in this segment.
Over the years Maggi has
launched several products under
its Brand Name.
8. Product Life Cycles
• The Development Stage:
• Initial Ideas – possibly large number
• May come from any of the following –
– Market research – identifies gaps in the market
– Monitoring competitors
– Planned research and development (R&D)
– Luck or intuition – stumble across ideas?
– Creative thinking – inventions, hunches?
– Futures thinking – what will people be using/wanting/needing
5,10,20 years hence?
9. 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.
10. PRODUCT LIFE CYCLE
A concept that provides a way to trace the
stages of a product’s acceptance, from its
introduction (birth) to its decline (death).
11. – New ideas/possible inventions
– Market analysis – is it wanted? Can it be produced at a
profit? Who is it likely
to be aimed at?
– Product Development and refinement
– Test Marketing – possibly local/regional
– Analysis of test marketing results and amendment of
product/production process
– Preparations for launch – publicity, marketing
campaign
Product Development: Stages
13. – Advertising and promotion campaigns
– Target campaign at specific audience?
– Monitor initial sales
– Maximise publicity
– High cost/low sales
– Length of time – type of product
Introduction/Launch:
14. Introduction Stage of the PLC
Sales
Costs
Profits
Marketing Objectives
Product
Price
Low sales
High cost per customer
Negative
Create product awareness
and trial
Offer a basic product
Use cost-plus
Distribution Build selective distribution
Advertising Build product awareness among early
adopters and dealers
15. Introductory Stage
• High failure rates
• No competition
• Frequent product modification
• Limited distribution
• High marketing and production costs
• Promotion focuses on awareness and information
• Nestlé India Ltd. (NIL), the Indian subsidiary of the global FMCG major,
Nestlé 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
Full-Scale Launch
of New Products
16. STPD Analysis
Segmentation Targeting Positioning Differentiation
Age Kids Fast to cook
good to eat
Taste
Eating Habits Youth 2-minute
noodles
Flavours
Lifestyle of urban
families
Office goers Taste bhi health
bhi
Packaging
Working Women
Health conscious
people
18. Growth Stage (Strategies for Sustaining
Rapid Market Growth)
• Improve product quality, add new features, and
improve styling
• Add new models
• Enter new market segments
• Increase distribution coverage
• Shift from product-awareness advertising to product-
preference advertising
• Lower prices to attract the next layer of price-
sensitive buyers
19. Sales
Costs
Profits
Marketing Objectives
Product
Price
Rapidly rising sales
Average cost per customer
Rising profits
Maximize market share
Offer product extensions, service,
warranty
Price to penetrate market
Distribution Build intensive distribution
Advertising Build awareness and interest in the
mass market
20. Growth Stage
• Increasing rate of sales
• Entrance of competitors
• Initial healthy profits
• 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.
•
Offered in more
sizes,
flavors, options
21. 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
22. – Sales reach peak
– Cost of supporting the product declines
– Ratio of revenue to cost high
– Sales growth likely to be low
– Market share may be high
– Competition likely to be greater
– Price elasticity of demand?
– Monitor market – changes/amendments/new
strategies?
Maturity:
23. Sales
Costs
Profits
Marketing Objectives
Product
Price
Peak sales
Low cost per customer
High profits
Maximize profit while defending
market share
Diversify brand and models
Price to match or best competitors
Distribution Build more intensive distribution
Advertising Stress brand differences and benefits
24. Stages in the Maturity Stage
Growth Stable
Decaying
maturity
25. Maturity Stage
• Declining sales growth
• Saturated markets
• Extending product line
• Stylistic product changes
• Heavy promotions to dealers and consumers
• Prices and profits fall
• In 2003 Hindustan Lever Ltd was all set to take on Nestle's bestselling Maggi 2-
minute 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.
Many consumer
products are in
Maturity Stage
28. Ways to Increase Sales Volume
• Convert nonusers
• Enter new market segments
• Attract competitors’ customers
• Have consumers use the product on more
occasions
• Have consumers use more of the product on
each occasion
• Have consumers use the product in new ways
30. – Product outlives/outgrows its usefulness/value
– Fashions change
– Technology changes
– Sales decline
– Cost of supporting starts to rise too far
– Decision to withdraw may be dependent on availability
of new products and whether fashions/trends will
come around again?
Decline and Withdrawal:
31. 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
32. Decline Stage of the PLC
Sales
Costs
Profits
Marketing Objectives
Product
Price
Declining sales
Low cost per customer
Declining profits
Reduce expenditure and milk the brand
Phase out weak items
Cut price
Distribution Go selective: phase out unprofitable
outlets
Advertising Reduce to level needed to retain
hard-core loyal customers
33. Extending the PLC
• Change product
• Change product use
• Change product image
• Change product positioning
35. CATEGORIES OF NEW
PRODUCT/REVISING THE PRODUCT
New-To-The-World
New Product Lines
Product Line Additions
Improvements/Revisions
Repositioned Products
Lower-Priced Products
Six
Categories
of
New
Products
36. Analysis(why Atta Noodles Failed?)
• In 2005 Nestlé 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 .
40. FAILURE CAUSES
1. Indian psyche-
The 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.
41. 2. Price-
The price of atta noodle was little more than maggi
2 minutes noodle
3. False claims-
In 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 vegetarian-
Maggi 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
42. 5. Lack of essential nutrients-
The 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
people…………but atta
noodle didn’t appealed
them……because of other
Substitute supplements in
the market
43. 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.
44. 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%
