Maggi
The Product Life Cycle
Submitted By-
VIT b- school
Vellore

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.

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.

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).

GRAPHICAL REPRESENTATION OF A
TYPICAL LIFE CYCLE
Time
Dollars
Product
Category
Profits
Product
Category
Sales
Introductory
Stage
Growth
Stage
Maturity
Stage
Decline
Stage
0

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

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

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

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

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

STPD Analysis
Segmentation to
Differentiation:
■ Classic Noodles –
5 – 10 yrs.
■ Veg. Atta Noodles –
Health Conscious.
■ Rice Mania – Teenage
■ Cuppa Mania – Office
goers, Working women.

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

Extending the PLC
• Change product
• Change product use
• Change product image
• Change product positioning

CATEGORIES OF NEW
PRODUCT/REVISING THE PRODUCT
New-To-The-World
New Product Lines
Product Line Additions
Improvements/Revision
s
Repositioned Products
Lower-Priced Products
Six
Categories
of
New
Products

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 .

The health angle…

Comparing the prices…

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.

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

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

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.

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%

Thank you

What is the Product Concept?
• Product Attributes
• Branding
• Labeling
• Packaging
• Support services

• Introduction Stage – This stage of the cycle
could be the most expensive for a company
launching a new product. The size of the
market for the product is small, which means
sales are low, although they will be increasing

• Growth Stage – The growth stage is typically
characterized by a strong growth in sales and
profits, and because the company can start to
benefit from economies of scale in
production, the profit margins, as well as the
overall amount of profit, will increase.

• Maturity Stage – During the maturity stage,
the product is established and the aim for the
manufacturer is now to maintain the market
share they have built up. This is probably the
most competitive time for most products and
businesses need to invest wisely in any
marketing they undertake.

• Decline Stage – Eventually, the market for a
product will start to shrink, and this is what’s
known as the decline stage. This shrinkage
could be due to the market becoming
saturated (i.e. all the customers who will buy
the product have already purchased it), or
because the consumers are switching to a
different type of product.

Product Life Cycle Examples
• Introduction - 3D TVs
• Growth - Blue ray discs/DVR
• Maturity - DVD
• Decline - Video cassette