Contemporary Marketing Report: Maggi Noodles in India Analysis

This report provides a comprehensive marketing analysis of Maggi Noodles in India. It begins with an executive summary and an introduction that outlines the report's objectives. A detailed background of Maggi Noodles is presented, followed by a situation analysis using PESTEL and micro-environmental factors. The report includes a SWOT analysis, identifying Maggi's strengths, weaknesses, opportunities, and threats. The target market and positioning strategies are discussed, followed by a marketing mix analysis, covering product, price, place, and promotion. The report concludes with recommendations for Maggi Noodles to sustain growth and increase profitability in the Indian market, supported by references.

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Marketing and Management
Maggi Noodles in India

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Executive Summary
The aim of this report is to evaluate the background of Maggi Noodles product in
India and conduct its situational analysis by evaluating both macro and micro environment
factors. The recent ban imposed by the government on Maggi Noodles resulted in affecting
the operations of the company; however, effective marketing and quality products assisted
Maggi in capturing its market share. Based on SWOT analysis, key strengths, weaknesses,
opportunities and threats faced by the company are identified. The target market of the
company includes kids, youth, officer goers and women workers, and it has positioned itself
in the market as healthy snack that is prepared instantly. Based on the marketing mix
analysis of the company, it is identified that it offers a diverse range of variety of its products
to a large customer base in India. Lastly, a conclusion is drawn, and recommendations are
given for Maggi Noodles in India to sustain its growth in the market by increasing its
profitability.

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Table of Contents
Introduction...............................................................................................................................3
Background of the Product....................................................................................................3
Situation Analysis.......................................................................................................................4
Macro Environmental Factors (PESTEL Analysis)...................................................................4
Micro Environmental Factors.................................................................................................5
SWOT Analysis............................................................................................................................6
Target Market and Positioning...................................................................................................7
Marketing Mix Analysis..............................................................................................................8
Conclusion and Recommendations..........................................................................................12
References................................................................................................................................13

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Introduction
The objective of this report is to prepare a marketing report based on Maggi Noodles
in India and analyse its current market condition, target market, marketing mix. This report
will use PESTEL, SWOT, Target Market, Positioning and Marketing Mix analysis in order to
formulate recommendations for the company.
Background of the Product
The Swiss brand Maggi is owned by Nestle that invented the ‘Maggi Noodles’
products in the mid-19th century. Due to its instant nature and flavours, Maggi Noodles
quickly become popular in Indian markets after arriving in 1983 (BBC, 2015). Effective
marketing has made Maggi Noodles a key part of the fast food culture in the country. Maggi
was recently banned by the Indian government because its noodles contained monosodium
glutamate (MSG) and led above the prescribed limit. MSG is banned in India and Maggi did
not give information regarding this ingredient on its packaging due to which the company
lost 80 per cent of its market share (Mitra, 2017a). The ban was lifted in 2018 after which
the company started offering its products in the country.

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Situation Analysis
Macro Environmental Factors (PESTEL Analysis)
Political
Modi Administration has implemented policies to increase strictness for foreign
companies in India in order to support local companies and start-ups. Food safety
regulations have also become stricter, which affects operations of Maggi Noodles (Economic
Times, 2016).
Economic
The efficiency of financial markets in India ensures easy availability of liquidity and
the company can able to hire skilled labour at cheap costs. The liberalisation of trading
policies also makes it easier for Maggi Noodles to expand its operations in the market
(Dhanesh & Sriramesh, 2018).
Social
The attitude of customers in India towards health and safety is increased, which
affects the sales of Maggi. In order to address this issue, the company has launched
healthier noodle options for customers. The sales of the company dropped by 60 per cent
after the ban; however, it comes on top once again with 60 per cent market share due to
effective marketing (Business Today, 2018).
Technology
Use of technology enables Maggi to reduce its cost of production and improve its
products by launching new flavours and variants. The company invests in research and
development (R&D) operations to use new technology in its operations, which has
shortened the product life cycle that increases its profitability (NDTV, 2015).
Environmental

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Maggi has implemented effective environmental sustainability policies which
allowed it to reduce its energy usage by 47 per cent and water consumption by 55 per cent
per tonne of production in just 15 years (Nestle, 2016).
Legal
The Food Safety and Standards Authority of India (FSSAI) have implemented specific
legal policies for noodles in India after Maggi ban, which the company has to comply with
(Economic Times, 2016). The changes made in the Food Safety and Standards Act 2006
creates new legal restrictions on Maggi to make sure that the ingredients used in its noodles
are not hazardous.
Micro Environmental Factors
Competitors
The key competitors of Maggi Noodles in India include Sunfeast YiPPee, Ching’s
Secret instant noodles, Patanjali Atta Noodles, Knorr Soupy Noodles, Top Ramen and
Horlicks Foodles (Anand, 2017). However, Maggi has generated a competitive advantage
over other competitors despite facing ban in 2015 due to its effective marketing strategy
and flavours.
Suppliers
Suppliers of Maggi in India have low bargaining power since its raw materials are
readily available from a wide range of suppliers. It uses raw materials such as salt, sugar,
spices, wheat, packaging and others. The company made purchased in bulk, which gives
large business to its suppliers; thus, they also offer the company high discounts (Dhanesh &
Sriramesh, 2018).
Distributors
There are a large number of distributors of Maggi Noodles in India since its products
are available easily at local stores, supermarkets, wholesales and others.
Customers

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Customers bargaining power is high in the industry since substitute products of
Maggi Noodles are easily available at similar prices; however, customers are loyal to the
brand due to its quality and flavours (Mishra, 2017).
Publics
Public relations of Maggi Noodles were affected after its ban in India, which harmed
the profitability and market share of the company. However, the company has quickly
recovered its position by offering new flavours and variants of instant noodles such as oats,
wheat and masala magic (Mishra, 2017).
Company
After the ban, the company recovered its market position by capturing 60 per cent of
the market share, and its annual sales have crossed the major milestone of 10,000-crore
rupees in 2017 (Business Today, 2018).
SWOT Analysis
Strengths
Maggi Noodles offer exhaustive product mix options to its customers in India, which
enable the company in catering to the demand of various customer segments. The company
also has strong brand recognition as it spends 445-crore (around US$64 million) on
marketing (NDTV, 2015). It has also hired talented and skilled employees, and it relies on
innovation to change its offerings that meet the demand of customers.
Weaknesses
Declined market share due to the entry of new domestic and international
competitors such as Patanjali, Ching’s, Knorr, Top Ramen and others. It only spends 19-core
(around US$2.7 million) on research and development (R&D) operations, which limit its
ability to innovate. Lack of product diversification is another challenge for Maggi Noodles
(NDTV, 2015).
Opportunities

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The company can increase the customer base in lower segments by launching new
low-cost products that are targeted at the new customer base. Due to strictness in
government regulations, it becomes difficult for un-organised players and small operators to
expand their operations, which open local collaboration opportunities for Maggi Noodles
(Economic Times, 2016).
Threats
Changing policies environment and strictness in food regulations will bring new
threats for Maggi Noodles by affecting its current operations. The demographics are also
changing, and the demand for healthy food is growing, which is likely to reduce the market
share of Maggi Noodles (Mitra, 2017b).
Target Market and Positioning
Target Market
The targeting strategy of a company focuses on segmenting the market and choosing
which segments are the most appropriate based on the products and services offered by the
company. The target market is referred to the group of customers that are most likely to
purchase the products or services of a company. The target market of Maggi Noodles
include kids, youth, working women and office goers who want a flavourful meal that is
prepared with much efforts (Adbi & Chatterjee, 2017). The company is able to attract these
customer bases by marketing its products as healthy since they contain vitamins and
nutrients that give energy to the people.
The convenience is a key factor that attracts youth and working women for this
product because they want something that is prepared without much effort and available
easily in the market. The company has also diversified the type of noodles which it offers to
its customers such as wheat, oats and masala noodles that are popular among customers. It
is also easier for them to include other ingredients in Maggi Noodles to prepare it as per
their liking. It uses taglines like “Mummy bhook lagi hai” (Mom I’m hungry) and “Bas 2
minutes” (only 2 minutes) to appeal to its target audience (Pandey & Puntambekar, 2016).
Positioning

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Positioning is referred to the act of designing the products or services and image of
the company in order to occupy a unique position in the target market. Maggi Noodles are
positioned in the ‘snacks’ category since people often eat them as snacks rather than as a
meal. Indian consumers did not consider noodles as a proper food item for a meal (Nichols,
2017). The company has positioned its products in the market by using slogans such as
“taste bhi health bhi” (easy to cook, good to eat) and “2 minutes noodles”.
Positioning Map
Figure 1: Positioning Map of Maggi Noodles
(Source: By Author)
Marketing Mix Analysis
The marketing mix is referred to a set of actions and tactics which assist companies
in promoting their brand or products in the market. Following is a marketing mix of Maggi
Noodles in India.
Product
Product is referred to what the company is selling, which include details regarding
their features, benefits, and advantages which customers receive for buying the same.
Maggi Noodles are a leading brand in the Indian market under the umbrella of Nestle that
offers a wide range of products in the country. Broadly, the products of the company are

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categorised into instant noodles, soups, pasta, sauces, bouillons and seasonings (Mitra,
2017a). The products of the company include 2-minutes noodles, Cuppa Mania, Oats
noodles, Vegetable Multigrain noodles, Atta noodles, Hot Heads and Chicken noodles. The
company continuously change the packaging and flavours of its products by launching new
products to celebrate special occasions or for the taste of a particular customer base of the
company. For example, it has recently launched ‘New Maggi Special Masala Noodles’ in
order to celebrate the diversity of flavours in India. Mainly, the company focuses on
including traditional and local flavours of India in its products to appeal to a specific
demographic; however, these products are available throughout the country (Mishra, 2017).
The easy availability of these products and the convenience of their preparation lead to
promoting the popularity of Maggi Noodles in India.
Price
It is referred to the pricing strategy implemented by companies along with an
evaluation of how it affects their customers. In order to expand its growth in the market and
reach a diverse customer base, Maggi Noodles has adopted a cost-based pricing strategy.
Due to its competitive prices, the company is able to drive its sales in the market. The
company has also reduced the quantity of its products in order to make sure that its prices
remain unchanged (Jaggi & Bahl, 2015). Furthermore, different products of Maggi Noodles
also tap into various segments of customers based on their income; for example, Hot Heads
noodles are doubled the normal price of Maggi Noodles in India. Similarly, Cuppa Mania is
four times the price of normal noodles because customers only required hot water to
prepare them, which saves their time. After the lifting of the ban on its products, the
company has slightly raised its prices since most of its competitors have also raised their
prices, which did not affect its sales performance.
Place
It is referred to the place where products or services of the company are available,
made, sold or distributed. In India, Maggi has a strong presence and its noodles widely
available across the country. The key parties involved in the distribution strategy of Maggi
include the producers, distributors, wholesalers and retailers (Dhanesh & Sriramesh, 2018).
The company sells its products in a large volume which is consumed by customers in small

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quantities. Furthermore, the company has made sure that its products are easily available in
villages as well as remote areas to make sure that when people visit these areas, they have
access to the similar taste of Maggi (Dhanesh & Sriramesh, 2018). It also increases the
customer base of the company since its retailers include local stores to supermarkets in all
cities of India. The products are directly sent from factories through independent
transportation agencies to distributors and wholesalers that maintain the supply in large
warehouses.
Promotion
It is referred to the promotional activities that are used by companies in order to
make customers aware regarding their products or services through advertising,
promotions, direct marketing, or sale tactics (Khan & Sharma, 2016). Effective marketing
and advertisement strategies are the key to the success of Maggi in the Indian market,
which focuses on increasing awareness regarding its brand and the quality of its products.
The advertisements of Maggi Noodles are shown on kids and family channels which contains
popular taglines such as ‘taste bhi health bhi’, ‘bus 2-minutes’ and ‘Miss you Maggi’ (Khan &
Sharma, 2016). The company invest heavily (US$64 million) in its marketing strategy by
hiring popular stars of Bollywood in order to endorse its products. The company also uses
various other promotional strategies such as attaching free goodies with its products for kids
and offering free sample books and toys with every purchase of its products.
People
People refer to those individuals who work for the business, including employees
and salespeople. Nestle manufactures Maggi Noodles in its plants situated in different
locations in India, and it has hired a qualified and skilled workforce to meet the demand of
customers in the industry. The company has also appointed a senior level executive team in
the country that is responsible for making decisions regarding its marketing, production and
distribution operations (Parameswaran, 2016). The company has also built positive
relationships with its suppliers in order to handle its operations that are also included in the
people of the company.
Process

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It involves the procedures relating to the delivery of products or services of a
company to its customers. The company focuses on handling different procedures in the
country relating to the manufacturing and distribution of Maggi Noodles in India. The
company also focuses on improving customer service to maintain its positive brand
reputation in the market. The company achieves this by educating its employees regarding
its processes and preparing them for ensuring that they are able to deliver effective services
to customers (Anand, 2017). Without control over the process of manufacturing of Maggi
Noodles, it becomes difficult for the company to make sure that it maintains the taste and
quality of its products. Effective control over the supply chain process is the key to
maintaining consistency in the flavour and quality of the products of the company.
Physical evidence
It refers to everything which is seen by the customers when they interact with the
business. In the case of Maggi Noodles, the branding and logos used by the company are the
first things which customers interact with while purchasing its products. The company
makes changes in the packaging of its products to make it easier for its customers to make
sure that they are able to differentiate between different products and their characteristics
(Parameswaran, 2016). The company also puts a picture of its products on their packages
along with details regarding how they are prepared to make it easier for customers to
purchase and use them.