The Maggi Brand in India: Brand Extension and Repositioning


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Case Details:

Case Code : MKTG144
Case Length : 15 Pages
Period : 1982-2006
Organization : NestlÚ India Ltd.
Pub Date : 2006
Teaching Note :Not Available
Countries : India
Industry : Packaged foods

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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"What Xerox is to photocopier and Colgate to toothpaste, Maggi is to noodles in India."1

- The Economic Times, a prominent newspaper in India, in 2003.

"Maggi is the leader in the Instant Noodles category because it is constantly improving its understanding of the consumer to give them excellent and tasty products that provide nutrition, health, and wellness."2

- Martial Rolland, chairman and managing director, NestlÚ India Ltd., in 2006.

"Maggi has managed to enter Indian homes to change the traditional food habits of Indian children on their promise of convenience. This brand has understood the psychology of Indian mothers and positioned itself for mother-child indulgence."3

- Business Week, a prominent business magazine, in 2006.

Maggi takes the Health Route

In May 2006, NestlÚ India Ltd. (NIL), a major FMCG company in the country and a subsidiary of the Switzerland-based NestlÚ Group, launched a new instant noodles product called Maggi Dal Atta Noodles (Dal Atta Noodles) under the popular Maggi brand (Refer to Exhibit I for a brief profile of NIL). The Dal Atta Noodles were made of whole wheat and contained pulses, and positioned as a 'healthy'instant noodles product that provided 20 percent of the daily RDA of dietary fiber and protein for a child aged between 7 and 9. This was the latest addition to the range of 'healthy' products NIL had been launching over the early 2000s.

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.

During the 1990s, the sales of Maggi noodles declined, and this was attributed partly to the growing popularity of Top Ramen , another instant noodles product. In order to improve sales and attract more consumers, 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. 

However, these products were not as successful as the instant noodles.In the early 2000s, Maggi was the leader in the branded instant noodles segment, and the company faced little serious competition in this segment. In the early 2000s, NIL started introducing new 'healthy' products in accordance with the NestlÚ Group's global strategy to transform itself into a health and wellness company.

NIL also adopted the same strategy for the Maggi brand with the launch of the Maggi Vegetable Atta Noodles (Vegetable Atta Noodles), a 'healthy' instant noodles product made of whole wheat flour and vegetables (instead of refined flour), in 2005. The Dal Atta Noodles were another variant of Maggi's healthy instant noodles. 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. However, these products were not as successful as the instant noodles. In the early 2000s, Maggi was the leader in the branded instant noodles segment, and the company faced little serious competition in this segment.

In the early 2000s, NIL started introducing new 'healthy' products in accordance with the NestlÚ Group's global strategy to transform itself into a health and wellness company. NIL also adopted the same strategy for the Maggi brand with the launch of the Maggi Vegetable Atta Noodles (Vegetable Atta Noodles), a 'healthy' instant noodles product made of whole wheat flour and vegetables (instead of refined flour), in 2005. The Dal Atta Noodles were another variant of Maggi's healthy instant noodles.

The Maggi Brand in India: Brand Extension and Repositioning - Next Page>>


1] Bhanu Pandey and Chaitali Chakravarty, "Indians eat most Maggi noodles in the world," http://economictimes.indiatimes.com, May 21, 2003.

2] "Another Maggi variant from Nestle," www.blonnet.com, May 31, 2006.

3] Edwin Colyer, "India: A hot brand climate?" www.businessweek.com, May 31, 2006.

4] Recommended Dietary Allowances (RDA) for children of 7-9 years as per "Nutritive Value of Indian Foods", published by Indian Council of Medical Research. (Source: www.nestle.in)

5] Maggi's instant noodles were cooked in boiling water, and came with a flavoring agent called the 'tastemaker.'

6] Top Ramen was launched in India in 1991. The brand was owned by Indo Nissin Foods Ltd.

7] NIL used a new noodles-processing technology whereby the noodles were air-dried instead of fried in oil. The company also changed the manufacturing process of the tastemaker. The change in formulation led to a change in the cooking method of Maggi noodles. But more importantly, the taste of the new Maggi noodles differed significantly from the old noodles. The new formulation was also aimed at achieving some cost savings in the production of Maggi noodles.

 

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