Maggi vs Others..Part 1

This name has been synonymous to instant noodles in India for nearly three decades. In fact India accounts for the highest level of volume sales for Maggi. It has been the single dominant player in the category with no major competition for a long time. There has been some competition from Top Ramen but due to its limited distribution network, it has not been a major threat to the Nestle brand.

It was a couple of years back when big companies like GSK, HUL, ITC and Big Bazaar decided to enter the market. They entered the market through their power brands like Horlicks and Knorr. They offered a number of variants and flavours to the customers. As it is Maggi was never considered to healthy by the Indian mom.

A survey conducted by Nielsen shows that Maggi’s market share has fallen by around 15 percent since the launch of these new brands. And let me remind you, this happened in less than 2 years. We got curious by this data and wanted to understand the reasons behind this huge fall. Although we already knew that Maggi was the only dominant player in the category and any new major entrant would lead to a result in a fall in Maggi’s market share. But to have a better understanding about the great fall, the possible reasons behind it and the possible actions Maggi should take going forward we conducted out a research of our own.

Part 2
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Maggi vs Others..Part 2

Our research tried to analyze the reasons for the loss of Maggi’s market share. The research done by us provides an insight into what a customer wants from the instant noodles and what should be Maggi’s focus to recover its lost market share. Various tools like surveys, focus group discussion and quantitative methods as well as secondary sources of information have been utilized for the purpose of analysis.

Maggi has always been a fun brand with a “good to eat, fast to cook” anytime snack image among different age groups. Opportunities arose in terms of reach. Hence the onus of the company has been to make it easily available in various sizes and affordable rates, catering to different categories of users.

The Indian has not been too adventurous when it comes to trying out new flavors. As a result, Maggi has settled for standard flavors like curry, tomato, masala and chicken and hasn’t done much experimentation with other flavors. But ITC, HUL and GSK now seem to have woken up to potential of this category which is growing at over twenty percent consistently for the last few years. It is these players who are introducing the Indian consumer to newer flavors and asking them to experiment beyond Maggi.

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Maggi vs Others..Part 3

HUL and GSK are playing on their strengths of their strong distribution networks and strong media presence. HUL has extended its Knorr franchise. It combines noodles with soups and soups are generally considered healthy. GSK, with its Horlicks extension has launched Foodles, which is a multi grain noodle, pegged as healthier alternative to maida noodles which have been the most popular variant of Maggi. In terms of brand name all Horlicks, Knorr and Sunfeast have a wide ranging appeal because they have products that have extensive recall.

Nestle is not sitting idle. They have reacted to the situation by launching its Multigrain noodles. It has also launched new flavors like curry and capsicum. They have come also come out with a new campaign to engage the consumer to retain brand loyalty.  Through this interactive campaign they are trying to reinforce the emotional connect with its consumers.

Our research has confirmed some of these facts. We conducted a focused group discussion of ten people and following were our observations:

• · Instant noodles formed an important part of their menu especially when shortage of time
• · People also liked Maggi due to convenience of preparation
• · Many respondents were not aware of the new brands
• · Consumers preferred variety of flavors as compared to plain Maggi
• · They consume Maggi for snacks, and when they want to have a quick bite

Part 4
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Maggi vs Others..Part 4

Based on our qualitative analysis we found that instant noodles are preferred due to its ease of availability, a good alternative to ordering food out and preparing regular food at home and because it can be prepared quickly. Maggi, though having the highest recall among our respondents, was popular due to its brand image and availability. This is not very good for Maggi. Given newer brands that have a strong brand image and made easily available, consumers won’t mind switching.

We did some quantitative analysis as well. We found that over eighty percent of our correspondents prefer instant noodles and the awareness of the instant noodles is very high among the age group of 15 to 35. A bi-variate analysis showed that people have started to show dissatisfaction to the usual flavours like masala and chicken. A regression analysis confirmed that Maggi is preferred due to ease of preparation and availability whereas preference for other brands is increasing due to the variety of flavours offered them being healthy.

Other tools like Jaccard analysis, Stochastic analysis and SWOT analysis also had similar findings. Following are our observations and recommendations based on quantitative analysis:

• The brand loyalty among the consumers of Maggi is very low and there is a high chance of them shifting to a competitor’s product.
• We can see that the primary drivers for Maggi are availability and brand image but that for competition is variety of flavours offered and them being healthy.
• Maggi is widely available hence it sells more but as the supply of competitor product increases the share of Maggi is likely to fall.
• Maggi is not considered healthy and the shift of the younger generation towards health foods does not augur well for it.
• The stochastic share of Maggi is 55% confirming that Maggi has the highest mind share.
• Maggi can regain its lost market share by emphasizing on:

• Launching a variety of flavours which has already been done to some part
• Positioning Maggi as a healthy snack

Well, the competition is only going to get more intense. Maggi should focus on its strengths and try to overcome its weaknesses if it has to retain its market share.

Mirk

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