ACKNOWLEDGEMENT

To list to who all helped me is difficult because they are so numerous and the depth is so
enormous.

I would like to acknowledge the following as being idealistic channel and fresh dimension and
completion of project.

I take this opportunity to thank the University of Mumbai for giving me chance to do this
project.

I would like to thank my Principal, Dr. N.N. Pandey and our Vice-Principal Prof. Subhashini
Naikar for providing the necessary facilities required for completion of this project.

I take this opportunity to thank our Co-ordinator Prof. Pankaj Jain for his moral support and
guidance.

I would also like to express my sincere gratitude towards my project guide Prof. Aarti Singh
whose guidance and care made the project successful.

I would like to thank my college library for having provided various reference books and
magazines related to my project.

Lastly I would like to thank each and every person directly or indirectly helped me in the
completion of the project, especially my Parents and my peers who supported me through out
of my project.

Priya Indrasan Vishwakarma

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Abstract

As consumers, we play a vital role in the health of the economy local, national or international.
The decisions we make concerning our consumption affect the demand. Maggi is an international
brand of seasonings, instant soups and noodles owned by NESTLE since 1947. The Maggi
controversy has shattered many hearts, as found MSG and Lead more than standard limit. This
paper shows the impact of controversy on the consumer mind set and the company itself. Reeling
under the Maggi ban, Nestle India had reported 60.1 per cent decline in standalone net profit at
Rs 124.20 crores for the third quarter ended September, 2015, Fall in share prices and panic in
the market etc. But after coming back, it was concluded from the study that Maggi is the most
preferred noodle brand among noodle consumers. 82% people still trust Maggi beside all the
adulteration and controversy. The study showed that beside the entire quarrel faced by Maggi,
consumer’s opinion about their loved product didn’t change much. They kept supporting and
were eager for its comeback. Infect only 28% people witnessed variation in their consumption
while all this controversy had no impact over the consumption pattern on rest of the population.

The focus of my research was the measurement of customer satisfaction provided by Nestle
Maggi. There can be no better opportunity to interact with the external as well as the internal
customers of an organization. Finally the results of the research verify the fact that keeping the
customer satisfied is the best strategy to not only retains the existing customers but also to
expand the business to new horizons.

The term FMCG refers to those retail goods that are generally replaced or fully used up over a
short period of days, weeks, or months, and within one year. This contrasts with durable
goods or major appliances such as kitchen appliances, which are generally replaced over a period
of several years.

FMCG have a short shelf life, either as a result of high consumer demand or because the product
deteriorates rapidly. Some FMCGs – such as meat, fruits and vegetables, dairy products and
baked goods – are highly perishable. Other goods such as alcohol, toiletries, pre-packaged foods,
soft drinks and cleaning products have high turnover rates.

Keywords: Maggi, Controversy, consumers

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1. INTRODUCTION

As consumers, we play a vital role in the health of the economy local, national or international.
The decisions we make concerning our consumption affect the demand. All marketing starts with
the consumer. So consumer is a very important person to a marketer. Consumer decides what to
purchase, for whom to purchase, why to purchase, from where to purchase and how much to
purchase.

1.1 Nestle

Nestle originated in a 1905 merger of the Anglo-Swiss Milk company, which was established in
1866 by brothers George Page and Charles Page, and the Farine Lactee Henri Nestle Company,
which was founded in 1866 by Henri Nestle, whose name meant “little nest”. The company grew
significantly during the First World War and following the Second World War, eventually
expanding its offerings beyond its early condensed milk and infant formula products. Today, the
company operates in 86 countries around the world and employs nearly 283,000 people.
The company dates to 1867, when two separate Swiss enterprises were founded that would later
form the core of Nestlé. In the succeeding decades the two competing enterprises aggressively
expanded their businesses throughout Europe and the United States.
In August of 1867 Charles A. and George Page, two American brothers from Lee County, IL,
established the Anglo-Swiss Condensed Milk Company in Cham. Their first British operation
was opened at Chippenham, Wiltshire in 1873.
In September 1867, in Vevey, Henri Nestlé developed a milk-based baby food and soon began
marketing it. Henri Nestlé retired in 1875, but the company, under new ownership, retained his
name as Farine Lactée Henri Nestlé.

Henri Nestlé.

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In 1877 Anglo-Swiss added milk-based baby foods to its products, and in the following year the
Nestlé company added condensed milk, so that the firms became direct and fierce rivals.
In 1905 the companies merged to become the Nestlé and Anglo-Swiss Condensed Milk
Company, retaining that name until 1947, when the name Nestlé Alimentana SA was taken as a
result of the acquisition of Fabrique de Produits Maggi SA (founded 1884) and its holding
company, Alimentana SA of Kempttal, Switzerland. Maggi was a major manufacturer of soup
mixes and related foodstuffs. The company’s current name was adopted in 1977. By the early
1900s, the company was operating factories in the United States, United Kingdom, Germany and
Spain. World War I created new demand for dairy products in the form of government contracts;
by the end of the war, Nestlé's production had more than doubled.
After the war, government contracts dried up and consumers switched back to fresh milk.
However, Nestlé's management responded quickly, streamlining operations and reducing debt.
The 1920s saw Nestlé's first expansion into new products, with chocolate the company's second
most important activity.

Nestlé's logo used until 1970s.

Nestlé felt the effects of World War II immediately. Profits dropped from US$20 million in 1938
to US$6 million in 1939. Factories were established in developing countries, particularly Latin
America. Ironically, the war helped with the introduction of the company's newest product,
Nescafé, which was a staple drink of the US military. Nestlé's production and sales rose in the
wartime economy.
The end of World War II was the beginning of a dynamic phase for Nestlé. Growth accelerated
and companies were acquired. In 1947 came the merger with Maggi seasonings and soups.
Crosse & Blackwell followed in 1950, as did Findus (1963), Libby's (1971) and Stouffer's
(1973). Diversification came with a shareholding in L'Oréal in 1974. In 1977, Nestlé made its
second venture outside the food industry by acquiring Alcon Laboratories Inc.
In 1984, Nestlé's improved bottom line allowed the company to launch a new round of
acquisitions, notably American food giant Carnation and the British confectionery company
Rowntree Mackintosh in 1988, which brought the Willy Wonka Brand to Nestlé.

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The first half of the 1990s proved to be favorable for Nestlé: trade barriers crumbled and world
markets developed into more or less integrated trading areas. Since 1996 there have been
acquisitions including San Pellegrino (1997), Spillers Petfoods (1998), and Ralston Purina
(2002). There were two major acquisitions in North America, both in 2002: in June, Nestlé
merged its U.S. ice cream business into Dreyer's, and in August a US$2.6 billion acquisition was
announced of Chef America, the creator of Hot Pockets. In the same time frame, Nestlé came
close to purchasing the iconic American company Hershey's, though the deal fell through.
Another recent purchase includes the Jenny Craig weight loss program for US $ 600 million.
In December 2005 Nestlé bought the Greek company Delta Ice Cream for €240 million. In
January 2006 it took full ownership of Dreyer's, thus becoming the world's biggest ice cream
maker with a 17.5% market share.
In November 2006, Nestlé purchased the Medical Nutrition division of Novartis Pharmaceutical
for $2.5B, also acquiring in 2007 the milk flavoring product known as Ovaltine. In April 2007
Nestlé bought baby food manufacturer Gerber for $5.5 billion.
In December 2007 Nestlé entered in a strategic partnership with a Belgian chocolate maker
Pierre Marcolini. Nestlé agreed to sell its controlling stake in Alcon to Novartis on 4 January
2010. The sale forms part of a broader US $39.3 billion offer by Novartis to fully acquire the
world’s largest eye-care company.

Nestles’ products

Nestle has 64 brands, with a wide range of products across a number of markets, including
coffee, bottled water, milkshakes and other beverages, breakfast cereals, infant foods,
performance and health care nutrition, seasonings, soups and sauces, frozen and refrigerated
foods and pet food.

Sales per category in CHF

o 20.3 billion powdered and liquid beverages

o 16.7 billion milk products and ice cream
o 13.5 billion prepared dishes and cooking aids
o 13.1 billion nutrition and health science
o 11.3 billion pet care
o 9.6 billion confectionery
o 6.9 billion water

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 Percentage of sales by geographic area breakdown
o 43% from Americas
o 28% from Europe
o 29% from Asia, Oceania and Africa
According to a 2015 global survey of online consumers by the Reputation Institute, nestle
has a reputation score of 74.5 on a scale of 1 – 100.

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1.2 Maggi

Maggi is an international brand of seasonings, instant soups and noodles owned by

NESTLE since 1947. The original company was founded in Switzerland in 1872 by Julius
Maggi. Maggi is a leading culinary brand, which is today known worldwide for quality
and innovation. Nestle offers a whole range of products, such as packaged soups, frozen
meals, prepared sauces and flavorings.

Maggi noodles were launched in India in the early 1980‟s. Carlo M. Donati,
chairman and managing director of Nestle India Ltd, brought the instant noodle brand
to India during his short stint here in the early eighties. At that time, there was no direct
competition.

Market Share

Fig 1

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Products of Maggi
NOODLES

o MAGGI 2-Minute Noodles is one of the largest and most loved food brands that defines
Instant Noodles in India. Continuing to spread joy as it has done for the last 25 years,
your favorite MAGGI Noodles is as tasty as ever and even provides essential nutrients for
all stage of your life. With the goodness of Protein and Calcium, MAGGI Noodles is
available in 4 delectable flavors – Masala, Chicken, Tomato and Curry.

o MAGGI VEGETABLE ATTA NOODLES: An offering that exemplifies ‘Taste Bhi

Health Bhi’, MAGGI Vegetable Atta Noodles is tasty because it is loaded with
everyone’s favorites MAGGI ‘Masala’ and healthy because it now has more real
vegetables and is packed with the power of fiber.

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o MAGGI CUPPA MANIA: Each offering of MAGGI Noodles has been developed
keeping in mind the Indian palate and what you like. Since in today's fast-paced busy
life, multitasking is a reality, you need something that fits with your rushed lifestyle - a
product which is tasty and healthy, is convenient to prepare and eat and also satiates your
hunger. MAGGI Cuppa Mania is a combination of all the above! In an easy to carry on-
the-go Cup format, MAGGI Cuppa Mania comes in two mouthwatering variants - Masala
Yo! And Chilly Chow Yo! Packed with real vegetables and the goodness of Calcium, just
add garam paani* to the Noodles and voila! A cupful of delicious MAGGI Cuppa Mania
is ready for you to carry on jaani!

SOUPS

 MAGGI HEALTHY SOUPS:

MAGGI was the pioneer of Instant Soups in India.The new MAGGI Healthy
Soups have been carefully prepared through the Research and Development
efforts of Nestlé Group and are even more delicious, quick to prepare, convenient
and healthy. Taste Bhi, Health Bhi!. MAGGI Healthy Soups contain real
vegetables, are low fat, low cholesterol and free from synthetic colours and added
MSG. These superior healthy soups are now available in an enhanced range of 12
delicious variants:

 Healthy Style
- Rich Tomato
- Mixed Vegetable
- Creamy Chicken
- Masala Noodles

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  Chinese Style
- Hot & Sour Vegetable
- Sweet Corn Vegetable
- Sweet Corn Chicken
- Oriental Thai Noodles
 Chef Style
- Cream of Mushroom
- Tangy Tomato Vegetable
- Sweet n Sour Tomato Noodles
- Palak Corn

SAUCES

MAGGI SAUCES: MAGGI Sauces have been an integral part of the Indian
consumers' household for decades now. To cater to the diverse Indian palate,
MAGGI has a host of variants like:

- The quintessential Rich Tomato Ketchup and Rich Tomato Sauce.

- The unique Hot & Sweet Tomato Chilli Sauce and Oriental Chilli Garlic
sauce.
- The Indian style Tomato Chatpat Sauce

Lip-smacking tastes and vibrant packaging make MAGGI Sauces true to its
slogan - It's different!

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PASTA

MAGGI PICHKOO: Pichkoo is a small doy pack which makes MAGGI Tomato
ketchup affordable to a host of new consumers. And now, MAGGI makes the
delight "Bigger' by introducing a Bada Pichkoo. A large Tomato Ketchup doy
pack which ensures that the fun goes on and on. It's endearing name, packaging
and great taste evoke a resounding reaction."New MAGGI Pichkoo - It's
different!"

COOKING AIDS
MAGGI MAGIC CUBES: MAGGI Magic Cubes enhance the taste of your
everyday dish, making it a special for the entire family. Available in two variants
– Vegetarian Masala & Chicken – MAGGI Magic Cubes are an ideal seasoning
for a variety of dishes such as Veg Biryani, Chicken Biryani, and Chicken Curry
etc. And it’s so easy to use!

MAGGI BHUNA MASALA: MAGGI is revolutionizing the Indian kitchen with

its latest offering – MAGGI Bhuna Masala. It is any mother’s ally for
conveniently cooking great tasting, wholesome food for the family everyday.
Based on intensive research and in-depth understanding of Indian food habits and
cooking practices, MAGGI Bhuna Masala allows the housewife to prepare a large
variety of tasty dishes without the hassle of chopping and frying. The dishes retain
that ‘special touch’ of the housewife as she adds her own spices….. Standing
strong on its promise of “Taste Bhi, Health Bhi”, MAGGI Bhuna Masala comes

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 with "no added preservatives", "contains only 1 tbsp* of oil" and "tastes just
like homemade." Gives you a perfect dish in three simple steps:

 Open the pack & pour contents in the pan

 Add vegetables/paneer/chicken/rajma etc.
 Add spices and cook

MAGGI Kitchen Secrets Bhuna Masala comes in two variants:-

Bhuna Masala for Gravy Dishes- a ready- mix of Onion, Tomato, Ginger and
Garlic fried in refined oil. (Use it to make tasty dishes like Zaikedaar Chicken,
Rajma, Kolhapuri Mutton, Aloo Potol etc.)

Bhuna Masala for Vegetables and Dal- a ready- mix of Onion and Tomato,
fried in refined oil. (Use it to make tasty dishes like Palak corn, Dal Tadka, Bhindi
Masala, Urlai Roast etc.)

In INDIA and Malaysia, Maggi instant noodles were very popular; Nestle has 39% of the
market in Malaysia, where “MAGGI” is synonymous with instant noodles; and had a 90%
share in India. In Malaysia, fried noodles made from Maggi noodles are called Maggi goring.

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1.3 Maggi controversy
The Maggi controversy has s shattered many hearts, Maggi was not merely a product or a brand
in India, Indian consumer who is not unused to suspect food standards, feels a deep sense of
betrayal by one of the most trusted food brand in India. In India, Maggi noodle are specifically
formulated to serve vegetarians, and carry the green dot. The product in other countries is non-
vegetarian, unless imported from India.

FSSAI has noted three major violations

1. Presence of lead detected in the product in excess of the maximum Permissible levels
of 2.5 ppm.
2. Release of a non-standardized food product in the market, viz. “Maggi Oats Masala,
Noodles with Tastemaker” without risk assessment and grant of product approval.
3. Misleading labeling information on the package reading “No added MSG”.

Testing controversies:
 MSG (Monosodium Glutamate): Testing found some MSG in Maggi noodles. The
packet stated “No added MSG”. However MSG naturally occurs in hydrolyzed groundnut
protein, onion powder and wheat flour. Maggi offered to remove the words “No added
MSG” from the package to overcome the objection.
 LEAD: Out of the 13 samples tested by Delhi authorities, 10 of them had lead
content exceeding this limit. Testing outside of India (Singapore USA) resulted in
reports that Maggi noodles are safe. The court mandated testing to be done at three
specific laboratories (Punjab, Hyderabad and Jaipur) where Maggi was found safe. Some
lead occurs naturally in plants and soil. Some lead is found in Indian spices, although
within acceptable limits.

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1.4 Impact of the Maggi Controversy
Maggi controls nearly 70% of the instant noodles market in India, worth Rs 5000 crore,
according to a report by Times of India. It is followed by ITC Sunfeast Yipee, which has a
market share of 18-20%. Hindustan Unilever's Knorr Soupy noodles makes up for the balance
share, but after controversy following are the impact of controversy on Maggi.

Fall in the sales: As states across the country banned the product, Maggi sales fell 60% across
India since the controversy began in the last week of May, according to a Kotak Securities
report.

Net Profit: Maggi contributed 30% of Nestle India's Rs 1,185 crore-worth profits in 2014-
15, as per the media reports. Reeling under the Maggi ban, Nestle India had reported 60.1
per cent decline in standalone net profit at Rs 124.20 crores for the third quarter ended
September, 2015.

Fall in Share Price: Its share price fell nearly 13.5% or by Rs. 941 in the fifteen days to
June 10, 2015. Most consumer goods companies have seen single-digit growth in the recent
past. Keeping this in mind, the current controversy is only expected to add to Nestle's woes.
Revenue growth may weaken in this financial year in the aftermath of the controversy,
Kotak said. The Nestle India stock currently trades at 33 times the company's future
Earnings per Share (EPS), according to Kotak Institutional Equities report. This means,
investors pay 33 times more than the company's expected profit in FY16 to purchase the
stock.

Panic in the market: As states across the country banned the product, many retailers took
Maggi off the shelves. Some states such as Punjab, Karnataka and Uttarakhand also ordered
Nestle to stop production until further orders.

Consumer confidence slumps: Trust plays a major factor when a consumer buys a
particular product. With harmful chemicals like lead and MSG found in samples across the
country, consumers may feel their health is at stake. This has shaken consumers' confidence.

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In a tangle

Nestle’s net sales Net Profit Particular Jan 2016 Jan 2015
Market Share of Maggi 42% 77%
17% 52.45%
Rs. 8,123 Cr. Rs. 563.27 Cr. Size of instant Noodles Market Rs. 2,000 Cr. Rs. 3,400 Cr.

(Jan-Dec 2015)

Its net sales declined 17 percent to Rs.8, 123 crores and its profit declined 52.45% to Rs.
563.27 Crore. Nestle said sales in Asia, Oceania and sub- Saharan Africa (AOA) markets were
“overshadowed” by the issue in India.

Market research agency Nielsen's data for January 2016 put Maggi's market share at 42
percent, 35 percentage points lower than the share of the brand a year ago. The company,
however, has gained significant market share since its relaunch on November 9, to beat ITC‟s
Yippee noodles within two months to regain the top slot in January. Implying there remains
significant potential for the brand to regain its lost ground. Yippee had 33 percent market
share under review.

At its peak, Maggi‟s market share was 77-80 percent. A year ago, Yippee had 14 per cent,
according to industry estimates. The jump in a year, therefore, works out to 19 percentage
points for Yippee noodles, industry sources said. Nestlé India executives say the gap with its
closest rival will widen after the launch of new variants in the coming months. “The
response to the masala variant was relaunched in November has been good. We followed
this with the popular chicken variant that was unveiled online recently and is now being
placed in stores,” said a company executive.

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Nestlé has successfully increased the reach of Maggi noodles since last November, when it was
totally absent from retail shelves. By the end of November, Maggi could be reached to some half
a million outlets, by January, its reach touched 1.4 million retail shops across 27 states and seven
Union Territories. Prior to the ban, Maggi noodles used to be supplied to some 3.8 million
outlets.

The north, for the record, remains the strongest market for Maggi noodles, followed by the
east and west. In a recent interaction, Suresh Narayanan, chairman and managing director of
Nestle India, said the company was working on introducing earlier variants as well as new
variants of Maggi over the next few months. “We are taking a call on whether all nine
variants should be out or whether a few of them should be re-introduced and whether new
variants should be rolled out. Our plan is to get the full Maggi portfolio out as quickly as
possible. You will see this unfold in the coming months.”

While Nestle has been cutting its losses sequentially - for the three months ended December
2015, the Indian subsidiary reported a 44 percent decline in net profit versus a 60 percent
decline in bottom line in the September 2015 quarter - sales growth has been sluggish.

For the December 2015 quarter, Nestle India's net revenue stood at Rs 1,946 crore, higher than
what it was in the three months ended September 2015, when net revenue was Rs 1,736 crore,
but in line with June quarter revenues of Rs1,934 crore.

The plan, according to Narayanan, was to quickly restore Maggi sales to pre-ban levels, before
moving to other categories. “I will be spending 2016 on expanding the portfolio of the existing
categories. Some of the categories that have not delivered as strongly in the past such as
chocolates, confectionery and beverages, I will look at new propositions in those segments.

Nestle India, which took a hit of Rs. 450 crores, including destroying over 30,000 tons of the
instant noodles since June when it was banned, had stated it would continue with the product’s
existing formula and would not change ingredients. India, maker of Maggi noodles, has said it is
working on widening the gap with rivals. According to Wan Ling Martello, executive vice
president said that it could take three years Nestle BSE to completely recover its Indian
revenue.

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2 RESEARCH METHODOLOGY

2.1 Research design

A research design is the arrangement of condition for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in procedure.

2.2 Need of the study

Maggi was the most liked noodle brand among Indian population. Long way since their
introduction in 1983 it was consumed almost in every household (prior to the lead and MSG
controversy). Maggi which was initially considered a snack had taken the place of a staple diet in
many Indian homes.

And the last year, presence of lead and MSG above the permissible limits startled the
crowd and it became a hot potato. Being snoop, I wanted to know the impact of
controversy on consumers and their opinion about this controversy which made me
choose this as topic of my study. Maggi came back to the shelves in India in
November 2015. Nestle has also been running a campaign to win back trust of the
Indian community.

2.3 Objectives of the study

Followings are the objectives of my research:

o To study the impact of controversy on consumer mind set.

o To study the impact of controversy on company sales and profit.
o To study whether the move with Snapdeal is the smart move to regain the market.
o To study whether Maggi Brand in India is Successful comeback.

2.4 Scope of the study

o The scope of the study is limited to the city of Mumbai.
o The study focused on MAGGI 2-minute noodles only.
o The number of respondents taken for the study is 50.

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2.5 Data collection
To know the response, both primary and secondary method was used. A well-
structured questionnaire was personally administrated to the selected sample to collect the
primary data. Questionnaires were distributed to respondents and they were asked to
answer the questions given in the questionnaire. In the present study questions were
arranged and interconnected logically.

Secondary data
Internal data was generated from company’s brochures, manuals and annual
reports. On the other hand, external data was generated from magazines,
newspapers, research books and internet.

2.6 Sampling technique

Convenient sampling technique was used for the survey of this project. This is the least reliable
design but normally the cheapest and the easiest to conduct. In this method researcher have the
freedom to choose whomever they want. Thus the name “convenience” includes informal pools
of colleagues, friends and neighbors.

2.7 Tools & techniques

I have analyzed the data and then I have used graphical method, bar graphs, line charts, pie
charts, conical graphs and percentage method to present the data.

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2.8 LIMITATIONS OF THE STUDY

In attempt to make this project authentic and reliable, every possible aspect of the topic
was kept in mind. The main limitations are as follows:

 The scope of the project is limited to the city of Mumbai. So, generalization is not
possible on the basis of given city. We cannot conclude the response for whole nation.

 A small sample size of 50 is taken, so we cannot draw inferences about the whole
population from the sample size.

 This study is based on the prevailing consumer satisfaction. But the consumer
satisfaction may change according to time, fashion, technology, development etc.

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3 LITERATURE REVIEW
In May 2015, Food Safety Regulators from Uttar Pradesh, India found that samples of Maggi 2
Minute Noodles had unexpectedly high levels of monosodium glutamate, as well as up to 17
times the permissible limit of lead. On June 3, 2015 the New Delhi government banned the sale
of Maggi in New Delhi stores for 15 days due to these findings. Since June 4, 2015 after tests
carried out at the state public health laboratory concluded the particular variety to contain
added MSG and excessively high lead content. Some of India’s biggest retailers like Future
Group which includes Big Bazaar, Easy day and Nilgiris have imposed a nationwide ban on
Maggi.

Ataman and Ulengin (2003): According to him the strength of the relationship between the
consumer and the brand will reflect the fit between the consumer’s own physical and
psychological needs and the brand’s functional attributes and symbolic values as perceived by
the consumer. Which create Maggi as a brand in the minds of the people.

According to Del Rio et al. (2001): explained that customers recognize the value of any brand
with respect to its different functions like guarantee, social and personal identification and
status symbol. These factors have positive effects on customer’s brand loyalty and willingness to
accept extension in brands. Brand association has a positive relation with buyer purchasing
intentions.

Katyal (2007): According to katyal marketers spend enormous amount of money annually on
celebrity endorsement contracts based on the belief that celebrities are effective spokespeople for
their products or brands.

Bashir and Malik (2009): Stated that celebrities used in ads have greater positive influence on
people. Most of the times, people rely on advertisements rather than other sources like family,
friends and reference group opinions regarding product.

Pughazhendietal. (2012): As per them in emerging markets advertisers use dominant

celebrities in ads to promote their product image. Single and multiple celebrity involvement in
ads affect buying Behavior in different ways. This study shows that consumer Behavior and

20 | P a g e
attitude regarding brand, ads and purchase decision are positively affects by multiple
celebrities.

FSSAI (June 5, 2015) Food Safety and Standards Authority of India ordered a recall of all nine
approved variants of Maggi instant noodles and oats masala noodles from India, suggesting
them unsafe and hazardous for human consumption.

On the same day, Food Safety Agency of United Kingdom launched an investigation to find
levels of lead in Maggi noodles. On June 6, 2015 the central government of India banned
nationwide sale of Maggi noodles for an indefinite period. Nepal indefinitely banned Maggi
over concerns about lead levels in the product. Maggi noodles has been withdrawn in five
African nations – Kenya, Uganda, Tanzania, Rwanda and South Sudan by a super-market
chain after a complaint by the Consumer Federation of Kenya. In August, tests performed by
the US health regulator FDA showed no dangerous lead levels in the products.

Food and Consumer Affairs Minister Ram Vilas Paswan reacting to the operation said that
“Standard products are being labeled as sub-standard and faulty products are being passed by
such corrupt officials.

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4.1 FINDINGS
From the analysis following inferences can be drawn:

The Maggi controversy has exposed the pathetic condition of India’s processed and
packaged food industry.

 70% of people prefer Maggi, 18% prefer Yipee noodles, 6% prefer Wai Wai and 6%
other noodle brand.

 98% people are aware of the Maggi controversy, 2% people are unaware of the
controversy.

 40% people think political conspiracy was the reason of ban, 50% people consider
adulteration, and 10% people consider monopoly of Maggi which landed it in trouble.

 82% people had their trust intact over Maggi whereas 18% people lost their trust.

 28% population had variation in the consumption of Maggi while 72% people had no
variation.

 84% population considered Maggi noodles as safe and healthy product, 16% population
found it as unsafe and unhealthy product for consumption.

 74% people think Maggi can gain the same market which it used to hold, 26% think it
cannot gain the same market.

 Ban over 2-minute noodles impacted the purchase pattern of 40% consumers but didn’t
impacted 60% consumers purchase and consumption pattern of other products endorsed
by brand Maggi.

 70% people view sales of Maggi via flash sale method through Snapdeal was a smart
move, 30% does not view it as smart move.

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4.2 RESULTS AND DISCUSSIONS
The process of extracting, compiling and modeling raw material data for purpose of obtaining
constructive information that can be applied to formulating conclusions, predicting outcomes
or supporting decisions in business is called data analysis. Data from various sources is
gathered, reviewed, and then analyzed to form some sort of finding or conclusion. Here is the
result on the basis of respondent’s data.

Chart – I

From the above chart – I, it is concluded that out of 50 people 35 consume Maggi. Whereas 9
people like Yipee while 3 people each liked either Knoor noodles or other brand. Maggi is the
most liked noodle brand among all. It seems a clear trend that Maggi has a good brand recall as
compared to its competitors.

Chart – II Chart – III

The survey showed that 98% of consumers are aware of the controversy faced
by Maggi whereas 2% was not aware. It is clear that 20 respondents think
political conspiracy was the reason of ban, 25 respondents consider adulteration as
the reason whereas 5 respondents think it was the monopoly of Maggi which landed
it in controversy.

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 Chart – IV Chart – V

The lead and MSG controversy left the population stunned but beside that out of 50
respondents, 82% respondents continued trusting Maggi but 18% respondents lost their trust.
After the controversy, the expectation was that there would be change in consumption pattern
but not large extent of change was evident. There were only 14 respondents whose quantity of
purchase reduced to either from occasionally consumption to no consumption or reduced to
50%-60%, while other 72% respondent’s quantity of purchase remained same.

Chart - VI Chart - VII

It indicates from the above chart – VI that out of total respondents only 16% respondents view
Maggi as unsafe after the controversy whilst this controversy didn’t impact 84% respondents
views Maggi as unsafe. The above chart – VII presents that whether Maggi can gain same
market or not. It is clear that 74% respondents believe Maggi can gain same market,
contradictory 26% respondents believe Maggi cannot gain the same market it used to hold
previously.

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 Chart – VIII Chart – IX

It is depicted from the above Chart - VIII that with the ban over 2-minute noodles it was
expected that sales of other products endorsed by Maggi would be hampered. Out of 50
respondents, the purchase for other products was limited by 40% respondents; on the other side
60% respondents didn’t change their demand pattern for other products. Maggi re-launched its
noodles by partnering with e-commerce website snapdeal to roll out some of fresh and
exclusive batches. 30% respondent’s didn’t view it as smart move while 70% respondents
viewed it as smart move as it offered freebies along with noodles.

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CONCLUSION
It was concluded from the study that Maggi is the most preferred noodle brand among noodle
consumers. 82% people still trust Maggi beside all the adulteration and controversy face by
the Maggi brand .The study showed that beside the entire quarrel faced by Maggi, consumer’s
opinion about their loved product didn’t change much. They kept supporting and were eager
for its comeback. Infect only 28% people witnessed variation in their consumption while all
this controversy had no impact over the consumption pattern on rest of the population. Health is
an issue for today’s generation. Proved is the presence of lead and MSG but even then 84%
population considered Maggi as a healthy product. Regaining lost market is quite difficult but
most of the people believe Maggi can gain its market back easily. Maggi used flash sale
method to resale its noodles via Snapdeal. The concept was hit among 70% of the total
population. Whatever was the controversy or whatever were the facts, consumers of Maggi
noodles had and have faith in Maggi and sticked to it no matter what.

It is also concluded from the secondary sources that that there's no denying that food safety
regulations leave a lot to be desired. Despite establishment of the Food Safety and Standards
Authority of India in 2006 and subsequent promulgation of the Food Safety and Standards
Regulations, 2011, implementation of rules is haphazard and erratic. Food safety demands
adequate oversight and inspection at each step of the food production and supply chain.
However, such a principle is rarely followed in India.

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SUGGESTIONS
Retailers should be encouraged to ask questions and raise doubts. The idea should be to
generate a bank of ideas to help the company deal with the crisis.

India needs to embrace structural changes to ensure food safety for future generations. My main
concern stems from the Food Safety Standards Authority of India (FSSAI), created under the
Food Safety and Standards Act, 2006. This has been enacted in accordance with international
codex guidelines. There are a lot of provisions in the Act that require revamping, but what we‟re
seeing is a patchwork implementation of both the old PFA (Prevention of Food Adulteration Act)
guidelines as well as the new FSSAI laws.

 The government should completely overhaul the Food Safety and Standards Authority of
India (FSSAI) and state authorities.

 The re-launch should change the product packaging to give it a new start. The company
should also change its labeling to ensure it does not violate food safety norms.

 Routine checks for packaged food items to check for any contravention as per Food
Safety and Standards, Act should be begun.

 Distribution channels may be kept same. Marketing mix, like -Maggi has a distribution
channel of Nestle to Distributor to Retailer to Consumer. It is one thing to have a
successful a product in your hand; it is completely different ball game to ensure time
and time again that this top of the line product reaches the nooks and corners of the
world. Even if you go in the Himalayas, you will find Maggi selling there at select
places. This single factor - distribution, has been the backbone for the success of the
product which will continue.

 The southern region is the weakest due to differences in eating habits, company should
work on strengthening its presence in different markets as it looks to improve sales.

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  Prices should be kept normal without many changes. In order to keep with the changing
economic times Maggi has reduced the quantity, instead of the prices. To cater to the
middle and low income class customers, Maggi should be available in different sizes of
packets at various prices so that consumer can buy as per budget.

 Coming to the Nestle India, the company has disclosed having spent Rs. 445 crore on
Advertising and sales promotion last year while the expenses towards quality testing
was less than 5% of such amounts that itself explains everything, the company needs to
be more forthcoming in communicating actively and transparently to the public.

 Increase the number of private labs: Recently after the incidence of Maggi imbroglio,
The FSSAI has notified 82 laboratories accredited by National Accreditation Board for
Testing and Calibration Laboratories (NABL) in India for testing food samples taken
under the Food Safety and Standards Act, 2006. That should be increased in number.

 Uniform and Clear guidelines on how to go about monitoring the industry with a clear
timeframe such that such random, arbitrary testing is done away with. This will ensure
transparency and also simplify the FSSAI guidelines.

It will take time to get back the market share which presently lies distributed with the
other competitors of Maggi but a faith and strong planning is the key to success.

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FUTUTE IMPLICATIONS

FUTUTE IMPLICATIONS
Maggi has lost the trust of many customers & rebuilding that trust will be a challenge for
Nestle. There is an immense window of opportunity for Maggi’s rival brands. One can derive
that the crisis will most certainly have an impact on Nestlé's revenue. Lack of communication
and „wait n watch‟ strategy of Maggi officials proved fatalistic for the brand and its image.
Consumers felt cheated and it probably would leave the scars for a long time to come.

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REFERENCES / BIBLIOGRAPHY
 Singh, S and Sasi, A. (2015), the noodles and the soup. The Indian Express
 Retrieved from http://theindiaexpress.com/c/5502414.
 Ataman, B. and Ulengin, B. (2003), “A note on the effect of brand image of
 sales”, The Journal of Product and Brand Management, 12(4):237-250
 Katyal, Saurbh (2007), “Impact of Celebrity Endorsement on a Brand”,
 Chillibreeze writer, available at www.chillibreeze.com/articles/ accessed on 12th
July, 2008.
 Vijayalakshmi Kanteti, (2015), “Saga of “noodle doodles” - an analysis of do’s and
don’ts during crisis communication with reference to nestle India’s Maggi noodles”,
 International journal of Business and administration Research review, Vol. 2,
Issue 11, and July-September.
 Shamily Jaggi and Sanjay Kumar Bahl, (2015) “Trade-off of Advertising and
Publicity: A Case Study on Maggi in PAN India” IOSR Journal of Business
and Management, Volume 17, Issue 8. Ver. IV (Aug. 2015), PP 97-103.
 Pughazhendi, A., D.K.A Baskaran, M.R. Prakash and R.N. Balamurugan
(2012), “A study on effectiveness of multiple and single celebrity
endorsement on considerable product advertisements in Chennai perspective,
India”, Far east Journal of Psychology and Business, 6(2):11-18.
 Jakstiene, S., D. Susniene and V. Narbutas (2008), “The Psychological
Impact of Advertising on the Customer Behavior ”, Communications of the
IBIMA, 3:50-55
 www.maggi.in
 www.economictimes.co

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 ANNEXURE

QUESTIONNAIRE
NAME: GENDER:

AGE:

Dear Sir/Madam

You are requested to fill this questionnaire complete so that I can conduct my study on Maggi
controversy and its impact.

 Which noodle brand do you prefer

Maggi Yipee

Wai Wai Others

 Are you aware of the Maggi controversy?

Yes No

 What was the frequency of its consumption in your routine prior to its ban?

Once a day________
Twice a day________
Once in two or four days____
Once in a week__________
Occasionally______________

 What do you think was the reason of ban?

Political conspiracy

Adulteration

Monopoly of Maggi

Other

specify_________________________
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 • Do you trust Maggi now?

Yes No

• Is there any variation in quantity of purchase?

Yes No

 If yes, then how much___________________

 Do you consider Maggi noodles to be safe (based on controversy and its

comeback)

Yes No

• Do you think Maggi can gain same market?

Yes No

• Does ban over Maggi 2 – minute noodles impacted your purchase for
other products endorsed by Maggi Company?

Yes No

• Should Maggi reduce its prices to gain the market?

Yes No

 Was Maggi resale via Snapdeal a smart move?

Yes No

 Any suggestions or other improvements you would like to suggest?

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