Maggi The Product Life Cycle

MaggiThe Product Life Cycle

Introduction of Maggi 2-minutes Noodles Its 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 maggiWhy atta noodle was a failure?Strategies taken to establish new product categoryWhat 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 products acceptance, from its introduction (birth) to its decline (death).

GRAPHICAL REPRESENTATION OF A TYPICAL LIFE CYCLETimeDollarsProductCategory ProfitsProductCategory SalesIntroductoryStageGrowthStageMaturityStageDeclineStage0Introductory StageHigh failure ratesNo competitionFrequent product modificationLimited distributionHigh marketing and production costsPromotion focuses on awareness and informationNestl India Ltd. (NIL), the Indian subsidiary of the global FMCG major, Nestl SA, introduced the Maggi brand in India in 1982, with its launch of Maggi 2 Minute Noodles, an instant noodles productWith 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 AnalysisSegmentationTargetingPositioningDifferentiationAge KidsFast to cook good to eatTasteEating HabitsYouth2-minute noodlesFlavoursLifestyle of urban families Office goersTaste bhi health bhiPackagingWorking WomenHealth conscious people

7Market 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

8Growth StageIncreasing rate of salesEntrance of competitorsInitial healthy profitsPromotion emphasizes brand adsPrices normally fallDevelopment costs are recovered10 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 StageDeclining sales growthSaturated marketsExtending product lineStylistic product changesHeavy promotions to dealers and consumersPrices 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.

11Decline Stage If no product innovation broughtLong-run drop in salesLarge inventories of unsold itemsElimination of all nonessential marketing expensesRate of decline depends on change in tastes or adoption of substitute products

Extending the PLCChange product

Change product use

Change product image

Change product positioningCATEGORIES OF NEW PRODUCT/REVISING THE PRODUCTNew-To-The-WorldNew Product LinesProduct Line AdditionsImprovements/RevisionsRepositioned ProductsLower-Priced ProductsSixCategoriesofNewProductsAnalysis(why Atta Noodles Failed?) In 2005 Nestl 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 CAUSESIndian 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 noodle3. 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 carbohydrates6. Targeted health conscious peoplebut atta noodle didnt appealed thembecause of other Substitute supplements in the market

Suggestive Promotional StrategiesThey should conduct test marketing before launching new product.Focus on creating distinctive image, based on twin benefits of INSTANT and HEALTHY. Conduct promotional campaigns at schools in small towns with population more than 10,000.Strengthen the distribution channel of the rural areas within 100 KM of all the metros.Launch new advertisement campaign (T.V., Radio and print media commercials) with the brand ambassador.Conduct Market Research to find out the market penetration of the product in the rural areas covered.

22Current 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 IndiaReasonable competitive pricing.Creative interaction blogs for customers: www.maggi-club.in Focus mainly on Health Benefits.

23Thank you