Maggi

The Product Life

Cycle

Submitted ByVIT b- school

Vellore

Introduction of Maggi 2minutes 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
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 products acceptance, from its
introduction (birth) to its decline (death).

GRAPHICAL REPRESENTATION
OF A TYPICAL LIFE CYCLE
Maturity
Stage

Dollars

Introductory Growth
Stage
Stage

Decline
Stage Product
Category
Sales
Product
Category
Profits

Time

Introductory Stage

Full-Scale
Full-Scale Launch
Launch
High failure rates
of
No competition
of New
New Products
Products
Frequent product modification
Limited distribution
High marketing and production costs
Promotion focuses on awareness and information
Nestl 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
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

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

Offered
Offered in
in more
more
sizes,
sizes,
flavors,
flavors, options
options

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.

Maturity Stage

Declining sales growth

Saturated markets
Extending product line
Many
consumer
Many
consumer
Stylistic product changes
products
products are
are in
in
Heavy promotions to dealers and consumers
Maturity
Maturity Stage
Stage
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.

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
Rate of
of decline
decline depends
depends on
on
change
change in
in tastes
tastes or
or
adoption
adoption of
of substitute
substitute products
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-To-The-World

Six
Six
Categories
Categories
of
of
New
New
Products
Products

New
New Product
Product Lines
Lines
Product
Product Line
Line Additions
Additions
Improvements/Revision
Improvements/Revision
ss
Repositioned
Repositioned Products
Products
Lower-Priced
Lower-Priced Products
Products

Analysis(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 CAUSES
1. Indian psycheThe 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. PriceThe price of atta noodle was little more

than maggi 2 minutes noodle
3. False claimsIn 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 vegetarianMaggi 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
nutrientsThe 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
peoplebut atta
noodle didnt appealed
thembecause 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.

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 whats 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