Impact of Product Characteristics on Company Reputation (Maggi Case)

This report analyzes the influence of product characteristics on a company's reputation, using the Nestle Maggi noodles controversy as a case study. It begins with an introduction to the topic, emphasizing the importance of customer perception and the impact of product quality on brand image. The report then provides a literature review, discussing the role of brand reputation, market share, and the effects of the Maggi controversy in India. It explores factors such as hazardous chemicals, customer trust, and the impact of advertisements and celebrity endorsements on consumer behavior. The report also identifies gaps in the existing literature and outlines the research methodology, including the research approach, philosophy, design, strategy, and sampling methods. The aim of the research is to determine the effect of Nestle Noodles on the company's reputation and identify the characteristics essential in the product. The report concludes with a discussion of the methods, ethical considerations, strengths, limitations, and value of the research. The study employs an inductive research approach and interpretivism philosophy, utilizing an exploratory research design and interview strategy to gather in-depth data and insights from participants. The research questions address how the Maggi controversy eroded consumer trust and how marketers can amend consumer attitudes in response to such crises. Overall, the report provides a comprehensive analysis of the factors influencing company reputation and the impact of product characteristics on consumer perception, with a focus on the Nestle Maggi case.

Running Head: Business Research 1
Business Information System
Title: "Product characteristics and its influence on company's reputation"( Study
of Nestle Maggi Noodles)

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Contents
Introduction......................................................................................................................................3
Background of the research.............................................................................................................3
Aim (Purpose statement/ research question/ hypothesis)................................................................6
Methods...........................................................................................................................................7
Ethical Consideration.......................................................................................................................9
Strengths and Limitations................................................................................................................9
Value..............................................................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

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Introduction
The role of the customer keeps huge importance in the health of the national or international
economy. The demand of the commodities can get affected due to the buying decisions of the
customers. All kind of marketing initiates with the customers that is why the consumer is
considered as the vital person to a marketer. This research proposal will elaborate on the
importance of the product characteristics and its influence on the reputation of the company.
Nestle Maggie noodles will be studied in depth manner to draw an effective conclusion by taking
consideration of the proposed topic. It is the continuation part of the previous assignment.
Research methodology will be elaborated under this research proposal so that a better
understanding can be made regarding the collection of the data. Along with that the ethical
consideration, strengths, and limitation regarding the topic will be mentioned.
Literature review
Maggi is considered as the international brand of seasonings and noodles which is owned by
Nestle since 1947. It has been found that the original company was invented in Switzerland in
1872 by Julius Maggi (Vander Schee, Aurand, Pickens, Ma and Girap, 2011). Nestle is the
company that provides a huge range of products to the people with best quality and innovation.
According to Garg, (2015), the role of the brand reputation can be considered as the source of
demand as well as lasting attractiveness. Along with that, it can be assumed as the image of the
superior quality and included value justifies a premium price. It is required for the business to
have the reputable brand which is the strong asset that can give advantages from the high extent
of stability and loyalty of potential sales (Balakrishnan, Shuaib, Dousin and Permarupan, 2012).
It has been found that the controversy of Maggie has disappointed many customers of the Nestle.

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For instance, the disappointment case of Maggie in India makes feel people of India betrayal by
one of the effective brand of food in India.
Figure 1: Market Share
Source: (Mishra, 2017).
According to Pandey and Puntambekar, (2016), there are many reasons that impact the overall
performance of the company. It has been found that the controversy of Maggie Noodles affects
the image of the company in the view of the outsiders. The sale of the Maggie fall as many states
in India banned the product which makes an adverse image of the company. In the context of the
net profit, the contribution of Maggi in India is around 30% which is 1,185 crore according to the
media reports. Rollin under the ban of Maggie noodles, it has been reported by Nestle India that
around 60% decline in outside net profit at Rs 124.20 crores (Dhanesh and Sriramesh, 2018).
The impact of this controversy affects the share prices of the company as well in which the share
price of the company fell closely 13.5% within the fifteen days in 2015 (Desai, 2016). It has
been found that there are many companies that have seen single-digit growth in the recent past.
This controversy has added the woes of Nestle and the revenue of the company affected
adversely. The trust of the customer over the products keeps huge importance and due to

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hazardous chemicals such as MSG and lead has been found in the sample of Maggie noodles that
being the major reason behind the confidence slumps (Biswas, Tortajada, Biswas-Tortajada,
Joshi and Gupta, 2013).
According to Souiden and Pons, (2009), the great bonding of the relationship between the brand
and the consumer will show fit between the physical and psychological requirements and the
functional attributes of the brand and the symbolic values because of the perceived by the
customers which being the major reason behind making brand in the minds of the people.
Dijkmans, Kerkhof, and Beukeboom, (2015), demonstrated that the customers identify the value
of any kind of brand regarding its various functions such as personal identification, guarantee
and the status symbol. It has been found that these kinds of factors have affirmative
consequences on the brand loyalty of the customers to adopt the expansion in the brands. Along
with that, it has been found that the brand associations have an affirmative bonding with the
purchaser buying intentions.
According to Brun and Castelli, (2008), there are numerous marketers that invest their money
annually on celebrity endorsement contracts on the basis of the beliefs. It has been found that
advertisements have the potential to influence the people regarding the products in which most of
the times, people rely on the advertisements sooner than different kinds of sources such as
friends, family and reference group opinions related to the product. Sharma and Garg, (2013),
state that emerging markets advertisers utilize the dominant celebrities in an advertisement in
order to promote their product image. It has been apparent that the customer behavior attitude
related to the brand, advertisements and purchase decisions are completely influenced by a
number of celebrities (Henard and Dacin, 2010).

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It has been found in the context of the Nestle Maggie Noodles that the characteristics of the
product of Nestle impacted the entire company in an adverse manner. With respect to
controversy, it has been found that there is a slow response, an appearance of arrogance, lack of
customer engagement, lack of foresight, media relations inadequacies, overly complex answers
and neglected public opinion. It has been found that Maggi is focused towards the regulatory and
technical factors of the issues at the time of avoiding the communications and public opinion
(Karmee, 2018). It has been stated by the company that the test of the company and more than
3500 samples revealed that lead levels of the product were effective below regulatory limits. At
the same time as Indian officials initially ordered the product recall on the date of 30th April
2015, Nestle did not give an effective statement to address the media in Delhi for the purpose of
representing it in India (Comcowich, 2018). It has been found that the company could have
changed the company regarding the rapidly developing, worrying media coverage and facilitated
it respond. The team of Nestle was not active in responding to customers on social media by
which number of Indians perceived its silence in the form of the admission of guilt.
Gap in the literature review
It has been found that there is a current gap in the literature because there has been limited
research on the chosen topic that has focused on the various factors of the controversy of the
Maggi. Most of the articles have been chosen related to the Nestle Company but there should be
articles related to the product characteristics. Along with that it has been found that the research
is bound up to one single product of Nestle which limit the access of the researcher of
researching. The gap of the literature review can be filled by taking various articles related to the
product characteristics which will enhance the value of the research to different kinds of
occupations.

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However, this study is developed insights related to the chosen topic as the research work is
unique but there should be core research on the selected topic. This gap can be filled by taking
examples of various product characteristics and the influence of them on the performance of the
company.
Aim (Purpose statement/ research question/ hypothesis)
The aim of the research proposal is to search out the effect of Nestle Noodles over the reputation
of the company. Along with that this research will recognize the characteristics that are essential
in the product. This will be helping out the company to find out the weaknesses in order to
manage the product.
Problem statement
Product characteristics and its influence on a company’s reputation
Research questions
 How does Maggie controversy obliterate the trust and confidence of consumers in the
affected Nestle Brand?
 How can the attitude of the consumers towards the product of Nestle be amended by the
manner the marketer's answer to the controversy of Maggie Noodles?
Hypothesis
 The characteristics of product influence the reputation of the company.
 The characteristics of product do not influence the reputation of the company.

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Methods
Research Approach
The role of the research approach keeps huge importance in this research proposal which would
be helpful to evaluate the selected research designs and methods. With the help of this research,
the researcher would be able to show the data in an appropriate way. Inductive and deductive are
two approaches which help researchers to rationalize the use of specific data analysis and data
collection for projects. The researcher would use inductive approach over the deductive approach
as this would be facilitated the researcher to attain the more subjective knowledge related to the
research concerns. The inductive approach of research will be used for this research as it would
facilitate researcher to amplify the validity as well as the reliability of the research results. By
taking consideration of this approach, the researcher helped to gather the data and enhance the
particular conclusion to demonstrate the product characteristics and its influence on the
reputation of the company (McNabb, 2015).
Research philosophy
There are three kinds of research philosophy such as interpretivism, positivism and realism
philosophy. The role of the interpretivism philosophy sustains the researchers for the purpose of
making in-depth understanding regarding the research concerns through gathering the point of
views and insights of participants (Schwartz-Shea and Yanow, 2013). The use of Interpretivism
philosophy will be taken for this research proposal because, with the help of this philosophy, the
researcher would be able to get the access of the perceptions and the views of participants
(Marshall and Rossman, 2014). It will help out the researcher to draw an effective conclusion
regarding the product characteristics and its influences on the reputation of the company.

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Research designs
There are three kinds of research designs such as exploratory, casual and descriptive. The use of
exploratory research design is considered for this research proposal which helps the researcher to
gather in-depth data regarding the product characteristics and its influence on the reputation of
the company. The use of exploratory research design shows the preliminary research, in which
researchers reach the explore matter by considering the developed hypothesis.
Research strategy
The research strategy is an important aspect for the research which helps researchers to explore
the concerns of the research by responding to the proposed research questions in an adequate
way. There are various kinds of research strategies such as observation, literature review,
questionnaire, survey, case study and experiment which help the researcher to attain the aim and
objectives of the research. Interview as the research strategy is considered for this research
proposal by which researcher would be able to gather a huge amount of information and data
regarding the product characteristics and its influence on the reputation of the Nestle Company.
The questionnaire is prepared for the research which would be asked by the researcher to the
selected people for interview. Sample of Questionnaire is attached in Appendices. For this
research study, survey and interview research strategies are used by the researcher. Interview
strategy of the research would help out the researcher to complete the needs of the participants
on an individual basis and get their perceptions regarding the research issues. Along with that,
this would be helpful in the embryonic validity of the research (Balasubramanian, Gopal and
Reefana, 2016).
Sampling

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The importance of sampling in the research refers to the selection of adequate participants for the
research study for the purpose of answering the research questions in the interview. Probability
and non-probability are two kinds of a sampling method for the research that facilitates
researcher to choose the effective observation from a distinct population (Robinson, 2014). The
research will use probability sampling strategy wherein the samples are accumulated in a way
that provides the equal change to all individuals in the population of being selected. For
Interview, the researcher selects the University Students in Melbourne, particularly from India.
Random sampling technique which is the aspect of the probability sampling strategy will be
chosen for this research study as it gives equal chance to everyone to get selected. Along with
that, it is the fast form of data collection. For this 50 people will be selected for interview in this
the participants are moved towards when they are free to give their point of view regarding the
research concerns and interview questions.
Data collection methods
Data collection is the method of collecting the data in an adequate manner by taking help of the
various sources in order to complete the research objectives. Primary and secondary are two
kinds of data collection in which primarily refers the data which is collected for the very first
time by the researcher. For this research study on “Product characteristics and its influence on
a company's reputation”, both methods will be considered for the research in order to draw an
effective conclusion regarding the same. Qualitative data collection has various kinds such as
interviews, focus groups, case studies, videoing (observations), and qualitative analysis of
document. With respect to primary data, the researcher would use the interview research strategy
to gather the information regarding the proposed topic. Face to face interview will be conducted
in which open-ended questions will be asked which allows participants to develop option for

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responding and participants can voice their experiences. The interview question will be in-depth
in which interviewees’ perspectives will be explored on a particular topic.
The role of the secondary data collection sources is appropriate for the aim of generating the
theoretical perceptive about the research concern. By taking consideration of this collection
method, the researcher will be enabled to gather the data from various resources such as article,
websites, journals, and books in order to develop the reliability and validity of research results.
Data Analysis
Data analysis is the method which is done after collecting the data. The collected data will be
analyzed by taking consideration of the thematic analysis as it will be help out to identify the
pattern across a dataset. There are various ways of analysing the TA that is inductive way,
deductive way, systematic way, realist way and constructionist way. An inductive approach will
be chosen for this research in which three themes will be chosen. These three themes are
“influence of product characteristics”, “trust of the customer” and “strategy to regain trust of the
customer”. The data will be analyzed by considering above mentioned three themes. The
questionnaire will be analyzed in an effective manner as it entails all sight of the research which
will be helpful in gaining view of participants towards the products.
Ethical Consideration
For this research study, the meaning of ethics is linked to the accomplishing of each and every
task of research by taking consideration of valid way by complying with the University Students
in Melbourne particularly from India guidelines and confidentiality of the participants. This
would be helpful for the researcher to implement an appropriate behavior for the aim of

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completing the research in an appropriate method. There is another issue regarding the ethics in
the relation of the plagiarism and copyright act’s violation with respect to the collection of the
secondary data. Researcher uses references and in-text referencing in order to reduce this issue.
Along with that the researcher has taken earlier appointment from the participants and the
researcher does not force anyone to participate in the interview. Apart from that, the researcher
will make sure participants that their information would not be revealed and their personal
information would be destroyed by the researcher after using in the research.
Strengths and Limitations
With respect to the strength of this research proposal, it was evidence that this would be helpful
for the readers to understand the concepts of the characteristics of the products and their
influence on the reputation of the company. The data collection method of the research is
effective in which both primary as well as secondary research methods are considered. The
strength of this research is the selection of the right sampling method in which the random
sampling method is being selected for the research proposal which would give equal chance to
all participants. Along with that, it can be elaborated that an effective purpose of research
methodology will empower the researcher to fulfill the aim of the research in a sophisticated
manner. The researcher can enable to accumulate the information and the data regarding the
product characteristics and its impact on the reputation of the company by investigating the
research approaches, strategies, and philosophy and data collection method. Along with that, the
researcher would be able to perform in an efficient manner by considering the ethical way.
In the context of the limitations, it can be said that the findings are not generalized to a wider
population. Throughout the process of completing the research study, the researcher can face a