Marketing Plan

For

Nestle Maggi Noodles

3/4/2012

Prachi Tiwari 2011-MBA-014

Contents
Contents .................................................................................................................................... 2 1. 2. Executive Summary ................................................................................................................... 3 Situation Analysis....................................................................................................................... 3 2.1. 2.2. 2.3. 2.4. 2.5. 3. 4. Customers.......................................................................................................................... 3 Competitors ....................................................................................................................... 3 Company............................................................................................................................ 3 Context .............................................................................................................................. 3 SWOT Analysis ................................................................................................................... 4

Marketing Objectives ................................................................................................................. 4 Marketing Strategy .................................................................................................................... 5 4.1. Mission ................................................................................................................................... 5

5. 6.

Market Segmentation ................................................................................................................ 5 Target Markets .......................................................................................................................... 5 6.1. Maggi 2 minutes noodles ........................................................................................................ 5 6.2. Anytime Maggi Cup Noodles ................................................................................................... 6

7.

Positioning................................................................................................................................. 6 7.1. Maggi 2 minutes noodles: ....................................................................................................... 6 7.2. Anytime Maggi Cup Noodles: .................................................................................................. 6

8.

Marketing Mix ........................................................................................................................... 7 8.1. 8.2. 8.3. 8.4. Product .............................................................................................................................. 7 Price................................................................................................................................... 7 Place .................................................................................................................................. 7 Promotion .......................................................................................................................... 7

9.

Financials................................................................................................................................... 8 9.1. Break even Analysis:........................................................................................................... 8 Review and Control ................................................................................................................ 9

10.

1. Executive Summary
Nestle is the leading FMCG company of Switzerland established by Henri Nestle. Nestle is serving worldwide with its more than 500 factories in 86 countries comprising almost all continents. Nestls product portfolio is more than 500 products all over the world serving best to their customers. Henri Nestl endowed his company with the symbol derived from his name. His family coat of arms, the nest with a mother bird protecting her young, became the Company's logo and a symbol of the Company's care and attitude to life-long nutrition. The Nestle nest represents the nourishment; security and sense of family that are so essential to life. Nestle has been serving worldwide with its excellence in product safety, quality and value. It provides many products which include dairy products, beverages, water, and infant dietetic and confectionary. Nestle leads the value sales of noodles in India with a market share of 79.3%. A testament to Nestls domination of the sales of plain noodles is the fact that for its instant noodles brand Maggi, among all its global offices, India accounts for the highest level of volume sales for the company. This marketing plan analyses the current marketing mix of Maggi Noodles, studies the popularity of the two new health variants Vegetable Atta and Dal Atta Noodles and makes suggestions with regard to introducing a new brand Anytime Maggie in the cup noodles segment. Various tools like surveys and secondary sources of information have been utilized for the purpose of this analysis.

2. Situation Analysis
2.1. Customers

Maggi is a product by Nestle which is a well recognized and established brand in the market. Apart from it since the day it came into market Maggi has established itself as a brand itself. It has gained huge popularity among the consumers and the market share is expected to increase day by day.

2.2.

Competitors

The Major competitors for Maggie are Top Ramen and Sunfeast Pasta both these brands are turning out to be the very close substitutes for Maggi due to their low price. The top competitor of Maggi has come up with the healthy Noodles which pose a threat to the market share of Maggi.

2.3.

Company

Nestle as a brand is well recognized for its food products. Nestle exists in the food market since last many years and it had helped it gain a huge customer base as well as a good market share. Thus the largest selling product of Nestle i.e. Maggi will continue gaining pace and will soon capture 90% of market value.

2.4.

Context

Thus with the increasing population and the fast moving life style of people Maggi captures a huge chance of becoming highly consumed snack by people. The migration of women from housewives to professionals and working ladies can help Maggi attain a high market share.

2.5.

SWOT Analysis

Strengths
Strong brand recall and the product is almost eponymous to the brand Market leader with 79.3% market share in terms of value. Highest advertising share (72% (TV AdEx 2004-05)). Emotional relationship with the consumer. A strong distribution network of the parent company Nestle.

Weaknesses
Tagged as a product having no health value. It has tried to bring in innovation but has failed. (Dal Atta Noodles). The product features have remained almost constant since inception in 1983 with any trial of innovation misfiring. Market share has fallen from the 80% in1998-99 to 79.3% in 2005-06

Opportunities The instant noodles segment is projected to grow at a tremendous rate with the market size doubling by2010. Increase in the potential consumer base i.e. single working professionals and student population Rapid economic growth and rising disposable incomes make a strong case for a premium brand like Maggi. Upward trend of convenience food consumption. Huge untapped serviceable upward class rural base.

Threats Competition is increasing with established competitors in other segments are foraying into the noodles segment seeing the capacity of growth. Top ramen the prime competitor has come up with new exciting instant noodle offerings like cup noodles and mug noodles which threatens to eat into Maggis market share. Top Ramen has repositioned itself on a health platform with a new baseline Get on Top fortifying its product with calcium and vitamins. The product as priced higher than its main rival Top Ramen

3. Marketing Objectives
Increase the value market share to 90% in the instant noodle market by 2012-13 from the current 88%. To promote Maggi noodles as a healthy, ready to eat convenient food among mothers and single working professionals. To provide line extension by introducing Anytime Maggi Cup noodles. To upgrade the existing product features viz. Packaging, ingredients, special additives based on consumer feedback. To introduce the anytime Maggi as a convenient food for young adults as well as students particularly for people associated with adventure sports and travelling schedules.

4. Marketing Strategy
4.1. Mission: To be considered as the No. 1 snacking option of India combining the values of
convenience, taste and health. Provide a snack that can be cooked as well as consumed anywhere and anytime.

5. Market Segmentation
The taste preferences and eating habits of consumers bear a high correlation with their age. Based on this we can segment the market into the following categories:

Segments
Children (2-9 years old) Tweenagers (10-14 years old) Teenagers (13-19 years old) Studying Age (18- 22 years old) Young Adults ( 15-29 years old) Middle aged adults (30-59 years) Baby boomers (40-59 years old) Pensioners (aged 60+)

2012
187,569 109,302 142,432 92,074 270,576 316,065 174,986 75,712

2013
189,211 114,583 153,781 103,179 294,103 358,164 202,754 86,585

2014
184,457 117,137 160,728 110,642 319,267 398,405 232,801 99,728

2015
184,376 114,226 162,495 115,126 336,193 440,655 261,349 117,168

Table 1: Age wise break up and the forecast of population As per the table given we have segmented the market in order of the age group of people who consume Maggi noodles. Among these the larger consumption share is carried out by Children, teenagers & young adults. The population forecast of the consecutive years has been made and accordingly the consumption of Magi Noodles have been analysed.

6. Target Markets
6.1. Maggi 2 minutes noodles
Maggi 2 Minute Instant Noodles is already associated with convenience and taste and is currently accepted as a valid filling snack between meals. Maggi will continue to leverage its brand equity and target the following segments for this product. Children and Tweenagers: This is a large segment and is Maggis stronghold. The age group between 4 and 14 years has largely similar tastes and is traditionally targeted by Maggi. These segments perceive Maggi instant noodles as a welcome change in taste from the regular Indian fare and they are fascinated by the curly shaped noodles. Maggi shifted focus from the lady of the house to the end consumer i.e. children themselves ending up as the market leader of the instant noodles segment. Early buy in of this segment will help Maggi to sell in other segments in future.

Studying Age: The studying age segment though not traditionally targeted specifically has been devouring Maggi 2 minute noodles. The proposition of convenience of cooking as well as that of a tasty filling snack attracts this segment which due to erratic schedules keeps missing their regular meals.

6.2. Anytime Maggi Cup Noodles

With a further innovation in its cup noodles segment Anytime Maggi provides convenience and does not involves the must usage of hot water which cannot be arranged anywhere. During the day time Anytime Maggie could be a best solution. The technique of just putting some water into the cup covering it with a solar lid provided along with the same cup and keeping it out in the sun for 2-3 minutes seems a best solution for young adults. Young Adults: This age group of people who are working and are financially independent would not mind paying a little more for the convenience and the ease of cooking provided in this new brand. This segment has a good top of the mind recall of Maggi as a brand as the current members of this group were the targets of Maggi in the 1980s and they retain fond memories of Maggi, a emotional bond which can be leveraged to win them over to Anytime Maggi Cup Noodles. This segment is growing and has the potential of accepting Maggi as a mainstream food item as they see instant noodles as a natural part of Indian food culture.

7. Positioning
7.1. Maggi 2 minutes noodles:
Maggi 2 Minute Noodles will continue with its current positioning of convenience and as a fast to cook, good to eat snack as this seems to be working well. To prevent Top Ramen, the main competitor, from eating into its market share some product innovation is required as otherwise Maggi may get stereotyped as an unexciting product. Top Ramen is following a cost differentiation technique. To deal with this Maggi has to position itself as a differentiated product. The market is very sensitive to taste and rejects any flavour it dislikes thus it is hard for Maggi to bring about any innovation in terms of taste, so the only alternative is to focus on the pricing part of this brand.

7.2. Anytime Maggi Cup Noodles:

The main USP of Anytime Maggi Cup Noodles is convenience without compromising on taste. Consumers may like the concept of cooking Maggie without using kitchen or hot water even. The concept of pouring in cold water and let the cup stay in sunlight for 2-3 minutes is the most convenient technique and could be carried out anywhere. Anytime Maggi cup noodles is targeted towards a segment that values time and convenience as well as is getting increasingly health conscious. The slogan for positioning could be Healthy snack Anywhere Anytime.

8. Marketing Mix
8.1. Product

Anytime Maggie Cup Noodles: As the cup noodle market is expanding rapidly so there is a huge scope for gaining further market share. There are varieties of cup noodles companies but none have this technical innovation of solar lid. Therefore we propose to launch a new product to directly compete in this segment with the name Anytime Maggi Cup Noodles. The convenience of adding just water is useful for people and is helpful for situations when warm water could not be arranged. Packaging: Increasing the thickness of the plastic sheets used in the Maggi noodles packet to give more strength to the packet and allow easy and safe opening of the packet. To provide zip sealing facility along with the existing seal to allow the packets to be stored easily.

8.2.

Price

Anytime Maggi Cup Noodles Masala Chicken

Pack size(gm) 80 80

Price (Rs.) 30 30

Using the Competitive- Parity method, Cup-O-Maggi has been priced at Rs 30 for an 80g pack of Masala and Chicken flavours to directly compete against the competitor cup noodles.

8.3.

Place

For Anytime Maggi Cup Noodles we propose that: Maggi noodles have tie ups with Corporate houses. Depending on the initial sales introduce vending machine at school, colleges as well as corporate houses.

8.4.

Promotion

We propose to move away from the Child and Mother image of Maggi. The cup noodles will be targeted at the single young professionals who will go for quick easy meal instead of preparing the whole food. The associated tagline could be: Anytime Maggie: Healthy snack Anywhere, Anytime! General Promotion: Events and Experiences Celebrity Endorsements Television Advertisements

9.
9.1.

Financials
Break even Analysis:

In this section the focus is on the breakeven analysis of 100 Tonne capacity plant of Anytime Maggie Cup Noodles. Here we will look at the various costs associated with the with the production of Anytime Maggie Cup Noodles and compare it with total sales to find out the minimum efficiency at which the plant should operate in order to have no profit no loss relationship. 1. Fixed Cost: A. Land and building: Particulars Land Building

Area (sq.mtrs.) 200 100 Total

Cost(Rs.) 60,000 2,50,000 3,10,000

B. Plant and Machinery: Item Extrusion Machine Pre-Conditioner Mixer Packing and sealing machine Weighing Scale

Quantity 1 1 1 1 1 Total

Price (Rs.) 1,00,000 80,000 1,00,000 1,00,000 10,000 3,90,000

C. Miscellaneous Assets: Furniture, storage etc. costing Rs. 50,000/D. Utilities: Power and water requirement have a total cost of Rs. 1,10,000/2. Variable Cost: A. Manpower: Particulars Machine operators Skilled Workers for Packing Semi-skilled Workers Helpers Salesman

Nos. 2 2 2 2 2

Monthly Salary(Rs.) 4,000 3,000 2,000 1,000 2,000 Total

Total Monthly Salary(Rs.) 8,000 6,000 4,000 2,000 4,000 24,000

B. Raw and Packing material: Product Qty(Tonnes) Raw material 100 Packing Material 100

Price/Ton(Rs.) 70,000 Rs. 20,000/Ton of finished goods Total

Value 70,00,000 20,00,000 90,00,000

C. Selling Expenses: We are assuming the selling expenses 30% of the total sales.

Final Total Cost Analysis:

Fixed Cost Land and building Plant and machinery Miscellaneous Assets Utilities Total Fixed Cost Variable Cost Manpower Requirement Raw and Packing material Selling Expenses In Rs. 3,10,000 3,90,000 50,000 1,10,000 8,60,000 Per tonne of production 24,000 90,000 30% of total sales

Let total production be X tones. Since the 80 gm pack of Maggi is available for Rs.30 i.e.Rs.250/kg so lets say that Maggi Noodle is supplied to the market agent at Rs. 180/kg. So for no profit no loss equation is 8, 60,000+ (1, 14,000*X) + (30/100)*X*1000*180= (180*X*1000) 8, 60,000 = (1, 80,000-1, 14,000-54,000)*X X = 71.66 tonnes Plant must operate at a minimum efficiency of 71.66% to not to suffer any loss.

10.

Review and Control

Revenues and unit sales Expenses Customer Feedback Market Log

Maggie can have a simple, decision friendly, weekly, monthly, and annually reports focusing on