About the Company

Nestl S.A is the largest food and nutrition company in the world. Founded and headquartered in Vevey, Switzerland, Nestl originated in a 1905 merger of the AngloSwiss Milk Company, established in 1867 by brothers George Page and Charles Page, and Farine Lacte Henri Nestl, founded in 1866 by Henri Nestl. The company grew significantly during the First World War and again 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 over 280,000 people. The company dates to 1867, when two separate Swiss enterprises were founded that would later form the core of Nestl. In the succeeding decades, the two competing enterprises aggressively expanded their businesses throughout Europe and the United States. In August 1867, Charles and George Page, two brothers from Lee County, Illinois, USA, established the Anglo-Swiss Condensed Milk Company in Cham. Their first British operation was opened at Chippenham, Wiltshire, in 1873.

Nestle India Limited Nestl India is a subsidiary of Nestl S.A. of Switzerland. With seven factories and a large number of co-packers, Nestl India is a vibrant Company that provides consumers in India with products of global standards and is committed to long-term sustainable growth and shareholder satisfaction. The Company insists on honesty, integrity and fairness in all aspects of its business and expects the same in its relationships. This has earned it the trust and respect of every strata of society that it comes in contact with and is acknowledged amongst India's 'Most Respected Companies' and amongst the 'Top Wealth Creators of India'.

Nestle India Limited is an India-based company that is principally engaged in the food business. The food business incorporates product groups, such as milk products and nutrition, beverages, prepared dishes and cooking aids, chocolates and confectionery. The Company manufactures products under brand names, such as NESCAFE, MAGGI, MILKYBAR, MILO, KIT KAT, BAR-ONE, MILKMAID and NESTEA. It has also

introduced products of daily consumption and use, such as NESTLE Milk, NESTLE SLIM Milk, NESTLE Fresh 'n' Natural Dahi and NESTLE Jeera Raita. Nestle India Brands Milk Products and Nutrition Beverages Prepared dishes and cooking aids Chocolates and Confectionary

Brand Maggi Maggi 2-Minute Noodles Maggi Vegetable Atta Noodles Maggi Cuppa Mania Maggi Healthy Soups Maggi Masala-ae-Magic Maggi Sauces Maggi Pichkoo Maggi Pizza Mazza Maggi Magic Cubes Maggi Vegetable Multigrainz Noodles Maggi Bhunna Masala Maggi Coconut Milk Powder Maggi Pazzta Maggi Sanjeevni Cup Soup Maggi Imli Pichkoo Maggi Noodlez

Maggi 2-Minute Noodles

Maggi noodles is a brand of instant noodles manufactured by Nestl. The brand is popular in Australia, India, South Africa, Brazil, Nepal, New Zealand, Brunei, Malaysia, Singapore, Sri Lanka, Bangladesh, Pakistan, and the Philippines. In several countries, it is also known as "maggi mee" (mee is Indonesian/Malay/Hokkien for noodles). Maggi noodles are part of the Maggi family, a Nestl brand of instant soups, stocks, and noodles. In Malaysia, there are fried noodles

made from maggi noodles known as Maggi goreng. Maggi noodles recently introduced a new variety of its noodles, to cater for the health conscious like 'No MSG', 'Less Salt', and 'No Trans fat'. Whole-wheat flour based noodle variation marketed by the name "Vegetable Atta Noodles" has been introduced in India (Atta flour is used in preparing most forms of wheat based breads in India) and caters to health conscious buyers wary of the refined flour used in the regular Maggi noodles. This move helps the brand in India as suburban mothers, who feed the noodles to children as an afterschool snack, are the primary customers of the brand. Recently, a line of rice noodles and whole wheat with pulses, carrots, beans, and onions has also been introduced in India. In fact, "Maggi" has become a well-known brand for instant noodles in India and Malaysia. Nestl India Ltd (NIL) offered a variety of culinary products such as instant noodles, soups, sauces and ketchups, cooking aids (seasonings), etc., under the Maggi brand (Refer to Exhibit II for Maggi's product portfolio as of mid-2006). Of these, instant noodles had been NIL's main product category in the culinary segment since the launch of Maggi 2 Minute Noodles (Maggi noodles) in 1982. Over the years, Maggi noodles became a popular snack food product in India. In fact, the word "Maggi" has become a common term for any brand of noodles in India. In mid 2008, New Zealand supermarkets introduced replacement formulations for its Beef, Oriental, and Curry flavours. A new feature is an extra sachet containing dehydrated vegetables. Maggi claims the new range contains 88% less total fat and 86% less saturated fat than the average of top-three (unnamed) 2-minute-noodle competitors. The new Maggi range also has considerably lower fat than its own previous formulation. However, the salt content has been increased by 31 percent. Consumers have not reacted well to the new formulations, complaining that they want the original chicken flavour back. In the Philippines, packs of Maggi noodles were recalled by Nestle Philippines after it was said to be contaminated with salmonella. Maggi noodles also contain the additives E150d and E627. E150d is sometimes made from maize. Claimed to be "2 minute noodles", The Maggi noodle cake and seasoning is added into boiling water for two minutes and it is ready for consumption. Egg, seaweed, boiled vegetables or lemon can also be added to the noodles for a better flavor.

Product Life Cycle of Maggi 2-Minute Noodles

Introduction Stage (Year 1983) Product was launched in 1983 keeping working women and children in mind Faced stiff competition from ready to eat snack segments like biscuits, wafers etc. Overcame high chance of failure Had no competition Limited distribution High marketing and production costs Fully utilized first-mover advantage

Promotion focused upon awareness and information. Promoted with the tag line Bas do Minute. Initial pricing strategy was low to make product affordable. Initially priced at Rs. 2.10 with close to 100% margins.* Created an entirely new food category - instant noodles - in the Indian packaged food market & targeted middle class of metro & tire-1 cities. Successfully managed to retain its leadership in the instant noodles category.

Growth Stage Increasing rate of sales Increase in potential consumer base. Accepted as Ready to Eat Food Entrance of competitors Initial healthy profits Promotion emphasized brand ads. Promoted with tag line Fast to Cook , Good to Eat Prices were kept normal Development costs were recovered Growing popularity of Top Ramen , another instant noodles product

Maturity Stage Very short maturity stage Declining sales growth Saturated markets No new Product line Heavy promotions to dealers and consumers Profits fell as cost of production increased.

Reduced the quantity instead of increasing prices. During the period of 1990s Maggi faced tough competition from Top Ramen

Decline Stage 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. Formulation changed from Fried base to Air Dried base. However, this proved to be a mistake, as consumers did not like the taste of the new noodles.

Re-Introduction Stage (Year 1999) In March 1999, NIL reintroduced the old formulation of the noodles, after which the sales revived. Company increased distribution of its products. Along with children or working women, Maggi also focused on a larger consumer base. Now Maggi brand was offered in more sizes, flavors, options. In the early 2000s, Maggi was the leader in the branded instant noodles segment, and the company faced little serious competition in this segment. Came up with various interesting advertisement campaigns. Successfully recaptured their market share and became market leaders.

Maturity Stage Extending product line Stylistic product changes Still came in very affordable prices starting from Rs. 5.

Heavy promotions to dealers and consumers In 2003 Hindustan Lever Ltd was all set to take on Nestle's best selling Maggi 2minute 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.

Maggi Atta Noodles In 2005 Nestl India launched Maggi Atta Noodles Based on consumer needs and evolving trends for more whole grain based products Wanted to offer healthy products under the Maggi brand, in a bid to attract health conscious customers. Competition from Top Ramen and Maggi having to deal with the negative perception of being an unhealthy item, Maggi repositioned itself as a snack with nutritional value. Health issues and preference of traditional food habits of Indian consumer. Wanted to capitalize on strong brand recall.

Launch of Maggi Atta Noodles Noodles was renovated to provide 20% of the RDA of calcium and Protein for the core target group*. Built up on the nutrition proposition of Taste Bhi, Health Bhi. Extensive Research and Development expertise to develop Maggi Vegetable Atta Noodles Targeted at suburban mothers, who feed the noodles to children as an afterschool snack, were the primary customers. Changed their advertisement campaigns to focus mainly on wellness and nutrition. Were made available in a fresh, vibrant and eye-catching packaging. Positioned their product so as to get fast relief from hunger. Went for sales promotion in schools and offices.

Lately launched Maggi Dal Atta Noodles

Failure of Maggi Atta Noodles 1. Indian psyche: The basic problem the brand faced is the Indian Psyche. Indian consumer 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 noodles was little more than maggi 2 minutes noodle. 3. Targeted health conscious people but Maggi Atta noodle didnt appeal to them. 4. 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. Also, atta noodles are not entirely made of atta, they make use of maida (wheat flour) and atta is of much smaller quantity. 5. Not purely vegetarian: Atta maggi Noodles also contains the additives E150d and E627. E627 is partly prepared from fish, and is thus not suitable for vegetarians. 6. Lack of essential nutrients: The new maggi atta noodles lacked essential vitamins A, C, also the fat content was more than carbohydrates.

Announcement made by Maggi on this Problem (Source: http://www.nestle.in/pdf/maggi_mail_statement.pdf) YOUR FAVOURITE MAGGI NOODLES SAFE AND DELICIOUS You might have concerns with some misleading mails that are being circulated about MAGGI Noodles. The information in the mails is incorrect . There is no scientific basis for any such concern about your favourite MAGGI Noodles, that are trusted by generations in India. Nestl, the manufacturer of MAGGI Noodles, is recognised as the leading Nutrition, Health and Wellness company and Food Safety is non-negotiable at Nestle. Let us first correct some of the statements in the mail. 1. Contrary to what the mail says, we DO NOT ADD MSG to MAGGI Noodles ! 2. Contrary to what the mail says, MAGGI Noodles ARE NOT COATED WITH WAX !

3. MAGGI Noodles do not contain wax in any form. 4. Contrary to what the mail says, you DO NOT NEED TO DRAIN THE WATER in which you make MAGGI Noodles. The method of preparation is printed on MAGGI Noodles packs and is the correct and safe way to prepare it. We assure you that you can continue to trust your MAGGI Noodles. MAGGI constantly uses Nestl's global R&D expertise to innovate and renovate and develop products that provide 'Taste Bhi Health Bhi' and are safe for consumption . MAGGI Noodles are infact a source of Protein and Calcium. MAGGI Vegetable Atta Noodles provide the goodness of fibre of 3 Rotis. This misleading mail has been floating around on the internet for years . Many people have checked with us, and with independent sources, to confirm that this mail is a hoax. It has no scientific validity or legitimacy for MAGGI Noodles.

Maggi Cuppa Mania Each offering of MAGGI Noodles has been developed keeping in mind the Indian palate and what you like. Since in todays 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 mouth watering 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!

Launched in March 2006. Reduced cooking time of 1/2 a minute, ease of preparation and no need of separate plates. Launched as a premium price product. Is convenient to make Only boiling water needs to be added.

Was targeted at the whole family, but betting specially on 18-24 year old customer base. The crux of positioning was Healthy snack anywhere, anytime. Made available in two flavours, Masala and Chicken to cater to the overall market palate. Added an improved spicier tastemaker to the cup.

Analysis of Maggi Noodles BCG Matrix

STPD Analysis

Segmentation Age

Targeting

Positioning

Differentiation

Kids

Fast to Cook, Good to Eat

Taste

Eating Habits Youth Lifestyle of Urban Families Office Goers 2-mintues Noodles Taste Bhi, Health Bhi Flavors Packaging

Competitors of Maggi

1) Top Ramen
Advantages over Maggi Noodles Nearest Competitor Innovation Cup Noodles Curry Noodles

Major portion of market share in cup noodles market Positioned as a easy to cook meal not snack items Target audience (Youth 16-35 years old)

Issues Lack In promotional activities, apart from Initial Shahrukh Khan Campaign. Distribution issues- Earlier using distribution channel then changed and made their own channel.\

2) Horlicks Foodles
Launched in the December 2009 by Glaxo Smith Kline Consumer Healthcare The brand has launched two variants of noodles Multi-grain (4 nutritious grains like Rice, Ragi, wheat and corn) Regular variants.

Each of the two varieties comes in three different flavours. Variants come with a healthmaker sachet which has 9 power vitamins The main USP of Foodles is the " Health Maker The positioning is on the lines of 'Noodles Plus'

3) Knorr Soupy Noodles

Launched in the February 2010 by HUL Clubbed two category together that of soup + noodles First launched in Karnataka, Andhra Pradesh, Kerala and Tamil Nadu Launching noodles under the Knorr brand will help the company grab market share faster, as Knorr has a strong brand equity Soupy Noodles attracted kids who has now the option of best of both worlds Having said that Soupy noodles is not entirely an innovation since a similar version called Curry Noodles exists in the market Knorr had a bad history of extension failures and brand name confusion unlike Maggi

Current Scenario of Maggi

Leading Brand in India as well as World. Reasonable competitive pricing. Creative interaction blogs for customers: www.maggi-club.in Focus mainly on Health Benefits.

PROMOTION STRATEGIES THROUGHOUT THE PLC

Through its ads, NIL positioned Maggi as a fun food for kids which mothers could prepare easily. Tag lines of Maggi from the various ads include: Mummy, bhookh lagi hai (Mom, Im hungry) Bas 2-minute (Only 2 minutes) Health bhi, Taste bhi Its Different

NILs advertising too played a great role in communicating the benefits of the product to target consumers NILs promotions positioned the noodles as a convenience product for mothers and as a fun product for children. NIL aggressively promoted Maggi noodles through several schemes like: Distributing free samples Giving gifts on the return of empty packs Organizing contests, games and industrial visits for school kids to further strengthen the brand image. Inviting housewives to send new innovative recipes made from Maggi and introduce rewards for the same.

Future Strategic Options Change product Change product use

 Change product image Change product positioning Introduction of new product/revising the product by New to the world New product lines Product Line Additions Improvements/Revisions Repositioned products

Lower price products