CHANGE MANAGEMENT

(The Maggi Noodles’live case)

Submitted by: B.S.ASHRITHA PRIYA

ROLL NO: 1234114104
 FAST FOOD INDUSTRY IN INDIA

The fast food industry in India has evolved with the changing lifestyles of the young Indian
population. The sheer variety of gastronomic preferences across the regions, hereditary or
acquired, has brought about different modules across the country. It may take some time for the
local enterprise to mature to the level of international players in the field.

Many of the traditional dishes have been adapted to suit the emerging fast food outlets. The
basic adaptation is to decrease the processing and serving time. For example, the typical meal
which called for being served by an ever alert attendant is now offered as a Mini-Meal across
the counter. In its traditional version, a plate or a banana leaf was first laid down on the floor or
table. Several helpers then waited on the diner, doling out different dishes and refilling as they
got over in the plate.

In the fast food version, a plate already arranged with a variety of cooked vegetables and curries
along with a fixed quantity of rice and Indian flatbreads is handed out across the counter against
a prepaid coupon. The curries and breads vary depending on the region and local preferences.
The higher priced ones may add a sweet to the combination. Refills are generally not offered.

GLOBAL NOODLE MARKET

Instant noodles have become one of the world's most popular food items owing to their
versatility and convenience. This product is one of the first ready-to-eat foods launched widely
in the global food industry and now it has successfully become an important part of modern
food consumption. The major trends observed in the global instant noodles market are product
innovation; focus on nutritional value of product and instant marketing of instant noodles.
Disposable income and purchasing power parity of consumers in various regions across the
globe represent major economic factors that influence the demand, and consumption for instant
noodles.

MAGGI - the brand

MAGGI noodles as a product has been a household name and was going strong since
three decades. Its positioning as an in between snacks for children was very successful
and with the times it was also accepted by students and young professionals. Its
availability has always been its strength and they were ruling the markets based on its
strength. According to the World Instant Noodles Association, India consumed 5,340
million cups or bags of instant noodles in 2014. India was also visualized as one of the
fastest growing markets in the world in the snacks category, and its turnover got
doubled since 2010. MAGGI, today, accounted fora market share of 70 percent and
gave a contribution of 30 percent in the company’s annual turnover (9000 crores).

Maggi Noodles were first introduced in India by Nestle in 1982. Although the Indian
population was not very familiarized with the habit of consuming canned or packed
food, Nestle introduced this product with the clear intention of targeting working
women who don’t have a lot of time to cook and therefore could find this type of
product very convenient.

However, this strategy proved to be wrong as the sales of the Maggi noodles were not as
good as it was expected, even with a significant investment in media advertisement. To
have a clearer view of what was the cause of this failure, Nestle India conducted a
research in which they found that the target audience was different then what they
expected. The children were the ones who liked the taste of Maggi Noodles more and
therefore a change in the marketing strategy to address the costumers had to be done.
For that reason, Nestle started a new marketing campaign, this time with the strategy of
targeting not only the mothers as a “convenience product”, but also the children as a
“fun product”.
To separate the masala from the Noodles may be considered a good example of
reverse/disruptive innovation as the product was divided in two different parts with the
objective of turning it into a more attractive product to the target audience. Which kind
of advantages this separation brought? First, as the target audience changed from
women to children, bigger concerns about the food being healthy and pleasant to their
taste came into picture. Keeping the massala separately allows the mother to add only
the amount of massala, and therefore spices, that they think it is needed and that their
children would like. Adding to this, by keeping the massala in a seperated package,
Nestle is allowing the mothers to give their “special touch” to the Noodles since this
allows them to create different recipes with the massala by adding other ingredients to
it.
Trends in Indian Noodle Market

1. Increasing competition: Competition in instant noodle category has intensified with

players such as GlaxoSmithKline (Horlicks Foodles), ITC (Sunfeast Yippee noodles),
Capital Foods and Hindustan Unilever launching new products in the market.Private label
brands such as Tasty Treat by Future Group (Big Baazar retail chain) have also been
launched an it is expected that many more private label brands may hit the market.
2. New product launches and extensive marketing: All players new or old have been busy
launching new products and marketing campaigns. Maggi has launched an extensive
campaign with their new product vegetable multigrain noodle. Tasty Treat increased its
variants from two to five. Similarly, Foodles is stressing on the health aspect of its
products.
3. Stress on health and wellness: As on all other food categories, players are stressing on
health and wellness aspects of their products. Maggi launched Atta noodles and multigrain
noodles to weak customers while Glaxo’s Foodles also stresses on the multigrain aspect of
their product
4. Traditional flavors still dominate: Masala, chicken and tomato are most popular flavors
in the market
5. Addressing rural market: Noodles are primarily consumed in urban India and to expand
this market companies such as Nestle have introduced small sized and low cost products to
address the demand of rural market. The success of this effort is still to be seen

Positioning of Maggi
Will continue positioning as “fast to cook, good to eat”

To deal with top Romen , Maggi has to position itself as a differentiated product. The market is
very sensitive to taste and rejects any flavour it dislikes with Maggi having learnt it the hard
way, thus the product cannot be greatly differentiated with on basis of taste

Maggi has to deal with the negative perception of Maggi has of being unhealthy.

Both these problems can be tackled by positioning Maggi as a snack with nutritional value. The
recent launch of “Veg Atta Noodles” and “Dal Atta Noodles” with the promise of good
nutritional value ventures in this area.
 Marketing Mix of Maggi.

Product Price Promotion Place

MAGGI-2 As we talk about maggi, it is Advertising : Print Physical distribution of
minute noodles very popular now a day in all media, Television, Maggi noodle :
over the world and its main radio are effective
MAGGI- customers are children and ways to entice  Maggi factory
Vegetable atta youngsters. And MAGGI customers and make  Factory
Noodles Noodles price is not very them aware of the warehouse
high, but there are so many brand’s existence.  Agent
MAGGI -Cuppa competitors in the market so Taglines also increase  Distributor
Mania company cannot set price the recall value of the  Wholesalers
different from their brand amongst the  Direct Retailers
MAGGI- competitors. Currently customers.  End Consumer
Vegetable company is having the tough
Multigrainz competition with Sun feast Word of mouth :
Noodle Yuppie Noodles and One satisfied customer
Foodles. One advantage of brings ten more
the company is that noodle’s customers along with
packets are available in him whereas one
different size comparing it dissatisfied customer
with the brand called Top takes away ten more
Ramen. customers. That’s the
importance of word of
mouth. Positive word
of mouth goes a long
way in promoting
brands amongst the
customers.
Key Players in Indian Noodle Market

The instant noodle market is dominated by MNCs; very few local players have a sizeable
presence. Some of the key players in the market along with their brands are:

1. Nestle (Maggi)
2. Hindustan Unilever (Knorr Soupy Noodles)
3. GlaxoSmithKline Consumer Healthcare (Foodles)
4. Capital Foods Ltd. (Ching's Secret)
5. ITC (Sunfeast Yippee noodles)
6. CG Foods India Pvt. Ltd.(wai wai)
7. Future Group (tasty Treat)

Opportunities in Indian Noodle Market

1. Health and wellness theme: Health and wellness theme based packaged food is gaining
popularity in India and the market of such noodles is still open as traditional player Maggi
is not associated with “health” but with convenience and taste.

2 Huge Rural market: rural India where close to 60% of Indian population resides is a huge
consumption market virtually un-penetrated by any player. Low cost products with

YEAR 2010 2011 2012 2013 2014

CONSUMPTION (TONNES) 2940 3530 4360 4980 5340

appropriate marketing can open up this huge market.

The following table shows India’s noodle consumption in the last 5 years.
MAGGI BRAND IN INDIA

Maggi is an international brand of seasonings, instant soups, ketch ups and noodles
owned by Nestle since 1947. The original company was founded in Switzerland in 1872
by Julius Maggi. The original company came into existence in 1875 in Switzerland
when Julius Maggi took over his father's mill. He quickly became a pioneer of industrial
food production, aiming to improve the nutritional intake of worker families. Maggi
was the first to bring protein-rich legume meal to the market, and followed up with a
ready-made soup based on legume meal in 1886. In 1897, Julius Maggi founded the
company Maggi GmbH in the German town of Singen, where it is still based today.

In 1947, following several changes in ownership and corporate structure, Maggi's

holding company merged with the Nestle Company to form Nestle - Alimentana S A,
currently known in its francophone home base as Nestle S.A. The Nestle India which is
subsidiary of Nestle S A introduced Maggi brand in India 1982, with its launch of 2
Minute Noodles, an instant noodles product. With the introduction of Maggi 2 Minute
noodles Nestle India created an entirely new food category – instant foods in Indian
packaged food market. Because of its first-mover advantage Nestle India successfully
retained to manage its leadership in noodles category. Nestle India offered a variety of
products such as instant noodles, soups, sauces, and ketch ups, cooking aids, etc…under
the Maggi brand. Out of these instant noodles were Nestle’s main products which
contributing around 20% of the company revenue.

During 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 increase
sales and attract customers Nestle India changed the formulation of Maggi noodles in
1997.That was unsuccessful, customers did not like the taste of new noodles. In 1999
Nestle reintroduced the old formulation of the noodles, after the sales revived. Over the
years Nestle 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
2000 the company set up new research and development facilities with a view to
improving the attributes of the existing Nestle products.

In 2005 they introduced Vegetable Atta Noodles in the market. Up to mid of 2015
Maggi was synonymous with instant noodles and had an 80% share in Indian noodles
market. In the mid of 2015 the Food Safety and Standard Authority of India (FSSAI)
found that Maggi Noodles has Monosodium glutamate, and Lead beyond the
permissible amount. The central government of India banned Maggi in Indian markets.

The following diagram shows the position of Maggi in Indian noodle market and other
ready to eat food products market.

Market share of
Maggi in other ready
to eat product
market in India

45%
Maggi
55%
others

Market shareof
Maggi in noodles
market of India
20%

80% Maggi
others
Various Varieties of Maggi Noodles in Indian Market

Maggi 2- Minute Noodles

It is one of the largest and most loved food brands that defines instant noodles in india.This
Maggi noodles is available in 4 delectable flavors - Masala, Chicken, Tomato and Curry

Maggi Vegetable Atta Noodles

Maggi atta noodles are introduced mainly for vegetarians. It was filled with real vegetables and
offering with masala flavor.

Maggi Cuppa Mania

Maggi cuppa mania was a mixture of above two variants.Maggi cuppa mania comes in two
mouth watering variants, masala, real vegitables and calcium.

Strengths in the SWOT analysis of Maggi

1. With the presence in different product categories under the umbrella brand of
Maggi with large SKU’s (Stock keeping unit).Maggi have edge over its
competitors.
2. 1st Mover Advantage: Maggi has established itself a pioneer in changing the eating
habits & acceptance of Noodles as easy meal. Although now the market is full of
local & national players in different product categories but still Maggi
Holds market leader place .
3. High Customer Pull: With its distinguished promotion strategies & branding hence
creating strong customer connects had helped Maggi to have High TOMA score.
4. Distribution Channel: Robust & well established distribution channel of the parent
company (NESTLE) is helping in making the product available in the Market.
5. Popularization of Maggi in Restaurants & Road side stall, Canteens is contributing
to its success.
6. With rich history and financially stable parent company is on the growing path.
Weaknesses in the SWOT analysis of Maggi

1. Risk of Over Dependence: Company is playing hard on the risk of over

dependability on Maggi Noodles, as 57% (2014) of the revenue of the brand
Maggi comes from Noodles knowing the fact that their market share has been
decreased significantly (in 2012 “84%” to 63% in 2014).Although with more &
more competitors the market size is still on the expansion mode.
2. Ill effects of Maggi: Awareness about ill effects of Maggi is gaining momentum
with more & more educated class becoming more health conscious.

Opportunities in the SWOT analysis of Maggi

1. Brand Extension: Maggi can expand its product categories by venturing out in
corn flakes ,Chips & Pickles( Although it failed in 2003 but now with presence of
local & national players in this product category ,company can reap the benefits).
2. Although it’s been used majorly by the educated class in order to save their time
what if the long potential rural markets can also be penetrated with the innovative
strategies pertaining to consumers engagement with the brand.
3. Also Company can target the Restaurants chains by offering some customized or
special offerings to make it more short of part of the daily life of the consumers.

Threats in the SWOT analysis of Maggi

1. Competition: Tough competition from the local & national player is the area of
concern for the co. .
2. Negative word of mouth: Propagation of ill effects of Maggi noodles through
online & Social Media possess threats to the existence of Maggi. As deterioration
in perceived value of the Maggi brand due to its Noodles product category can
affect the brand as a whole.
3. Commoditized name: For majority of population the name Maggi is
being commoditized for Noodles just like Coalgate, Surf etc.
THE MAGGI PROBLEM

In May 2015, Food Safety Regulators from Uttar Pradesh, India found that samples of
Maggi 2 Minute Noodles had unexpectedly high levels of monosodium glutamate, as
well as up to 17 times the permissible limit of lead. On 3 June 2015, the New
Delhi Government banned the sale of Maggi in New Delhi stores for 15 days due to
these findings. On June 4, 2015, the Gujarat FDA banned the noodles for 30 days after
27 out of 39 samples were detected with objectionable levels of metallic lead, among
other things. Assam had banned sale, distribution and storage of Maggi's "extra
delicious chicken noodles" variety for 30 days since June 4, 2015 after tests carried out
at the state public health laboratory concluded the particular variety to contain
added MSG and excessively high lead content. Some of India's biggest retailers
like Future Group which includes Big Bazaar, Easyday and Nilgiris have imposed a
nationwide ban on Maggi. Thereafter multiple state authorities in India found an
unacceptable amount of lead and it has been banned in more than 5 other states in India.
On June 4, 2015 the government of Tamil Nadu also banned maggi due to unacceptable
amount of lead and other components. On June 5th the Andhra Pradesh Government
Banned Maggi. Maggi will not be banned in Karnataka for now, declared minister for
health and family welfare U T Khader during a press meet on June 26.

On June 5, 2015, Food Safety and Standards Authority of India (FSSAI) ordered a
recall of all nine approved variants of Maggi instant noodles and oats masala noodles
from India, suggesting them unsafe and hazardous for human consumption. On the
same day, Food Safety Agency of United Kingdom launched an investigation to find
levels of lead in Maggi noodles. On June 6, 2015 the Central Government of India
banned nationwide sale of Maggi noodles for an indefinite period. Nepal indefinitely
banned Maggi over concerns about lead levels in the product. Maggi noodles has been
withdrawn in five African nations- Kenya, Uganda, Tanzania, Rwanda and South Sudan

It was revealed later that the United States Food and Drug Administration (FDA) had
refused import of the noodles in January 2015 on grounds similar to the reasons for ban
in India. Ironically, the Bombay High Court allowed the export of Maggi while the ban
in India remained. FIRs against Bollywood Maggi Brand Ambassadors Amitabh
Bachchan, Madhuri Dixit & Preity Zinta were lodged at a local court, asking the
authorities to arrest them if required.
 Presence of MSG and Lead

The brand, MAGGI was among the top 5 most trusted Indian brands(according to the
last year’s Brand Equity survey). But, it got a big jolt when Mr V.K.Pandey an officer
with U.P’s Food Safety and Drug Administration came up with a report of the presence
of MSG (monosodium glutamate) and higher than permissible levels of lead in
itsnoodles. This report was challenged by Nestle, but the labs even came up with
another damaging reportclaiming that apart from the presence of MSG the lead levels
found in the sample was 7 times more than the permissible limits. On 30th of April, the
authorities in Lucknow ordered Nestle to recall a batch of noodles. The company further
claimed that they were not agreeing with the orders and were filing the requisite
representations with the authorities. But the controversy spread like fire through social
media and therefore became a full blown crisis. Nestle as an MNC did not take it
seriously. They thought that generally there are a number of complaints which come in
front of them from time to time and it will also die down soon. They therefore did not
do anything and started looking the other way. But information spread like fire and
MAGGI noodles were temporarily banned in Delhi, Tamil Nadu, Uttarakhand and
Jammu & Kashmir. Kerala took it off the shelves from all its government shops, the
army issued an advisory to its canteens against the product and was dropped from its
shelves by retailers like Big Bazar, Walmart, Hyper City and online store Big basket.

Damages done to brand MAGGI

Already the damage to MAGGI was done through the Food Safety and Drug
Administration report and even when deep pocketed global multinational could not do
anything to weaken the brand.

Sales reported by Nestle’s Cost Nestle had to incur Brand Loss

flagship brand ( MAGGI)before because of recall
the ban
Rs 2000 crore Rs 320 crore and Rs 640 Rs 1270 crore
crore penalty slammed by the
govt.
The controversy broke in May but for over a week, the company did not issue any
definitive statement to address the concerns of regulators or its consumer. The story
moved from local to national very quickly and the multinational company took time to
react. It got played out through a huge lot of publicity. The social media created lot of
fuel to fire.

Strategies adopted by Nestle

The first line of defence by Nestle was a four page PDF sheet with no company logo
and a highly technical explanation. Though they started posting it in social media from
21st May but it was seen only on 1st of June. The consumers and the market thought it as
an admission of guilt by the company. Situations like this were not a new phenomenon
in the market. Even MNC of popular soft drinks in the country were earlier blamed of
presence of pesticides in it, but they as a company conversed with the customer and
never discontinued communication with their loyal customers. Because whatever
controversy happens, the consumers pause for a while and wait further for clarity by the
company. The brand therefore needs to come out and engage themselves further to keep
their dialogue going further.

Even at times there has been enormous disasters like the Union Carbide Bhopal gas leak
tragedy of 1984 or the verdict of the POSCO steel giant who faced for the environment
damage. But in those times the social media as well as the other media was also not as
active as we see today. But today,the scenario has totally changed. The MNC who today
operate in the market must therefore be adaptable to the situation and care for the
welfare of the public. They must not take their success for granted as everybody is
careful and conscious today. They cannot bring any of their products and claim it to be
the best without printing of the test reports or about the substances or ingredients
present in their products.

Missteps that led to product withdrawal

So, the total blame in this was on its social media strategy which was not properly well
defined. Their response was late. It is said that in the digital era today, being a day late
is like being a month late. Enough conversations started in the Indian living homes and
this was not good news for the brand. Their response had to be a press statement and a
few tweets. Tweeting automated responses and sharing heavy text files with
clarifications showed how they could not understand the functioning of the micro-
blogging site. When someone interacts with a brand online, it is sure that they expect a
human response rather than a robotic one. They therefore lost the plot by posting PDF
files there. Most twitter users access it through a smartphone and who will see the PDF
files there. The brand therefore risked it more by underestimating the problem as food is
a high priority item for all and the MAGGIbrand in itself had a deep mother-child
relationship for many years. This convenience food was given by the mother to their
kids with lot of trust. Reassurance therefore was very necessary to the mothers. Nestle
being a quiet company never wanted to tom-tom itself and wanted to take one step at a
time. They never wanted to make this mess larger for them because of their other food
products like milk, curd, soya milk etc. which were their gold standards.

Nestle did not had an inbuilt response mechanism to withstand and counter this swelling
crisis. They reacted late in reassuring both the regulator as well as their consumers. For
a week when the controversy first broke in May, the company did not issue any
definitive statement to address the concerns of regulators or their consumers. Nestle
officials held a press conference after almost two weeks when the news broke. So, they
might not have been at fault if the management had provided communication and
evidence to their customers and have also blocked the negative campaigns being done
for their product. Confusion after all has to be confronted with possible communication
and not be left to be discussed among the consumers themselves.Their brand
ambassadors were also scared of coming out open and talking further as they were
scared of being pulled into the legal imbroglio. The leadership team might have come
out openly and taken the ownership of the problem. A press release or an automated
tweet could not be the answer to such a problem as the responsibility in such cases has
to be taken by the company through a human face for answering objections in regards to
the quality of the product. The consumers today are smart enough and they do not want
to be taken for a ride and look further for more transparency and responsibility by
companies. A communication must therefore be given by the company through a face
and then the management must say sorry to their consumers if necessary, to pacify and
clarify their doubts. They might have then easily found their loyalists and had an honest
discussion with them about this issue. This was very important for them as this
perspective of the brand would have become their first line of defence. This was
necessary for them as the credibility of their brand got damaged badly.

In 2003 reports surfaced about a few instances of worms in Dairy Milk chocolate bars
of Cadbury India Limited (now Mondelez India Foods Limited) , the company launched
a public relations campaign for the trade in two weeks. In three months they revamped
the entire packaging and also came up with a massive advertising campaign featuring
Amitabh Bachchan to reassure their customers about the safety of their product.

Wake-up call for Multinationals

The processed food therefore needs an explanation further as the snacks promoted by
them are unhealthy-fried Maidanoodles. This incident may take the consumer as well as
the discussion in another direction i.e. on the health plank. Once the lead and MSG
stories die down, the focus will changer further and this will impact the brand more and
more in metros as well as urban centres.The loss of MAGGI sales was not transformed
and transferred to other competitive brands which imply a distrust of customers in the
entire category. Now, the parents will think twice and check before offering these
products to their children. They will check all the health indicators in all the brands
available in the market. This is therefore a wakeup call for multinationals that have
dominated markets since decades and have flanked it by their sheer money power. They
must therefore not take the market;consumer and the competition for granted and rectify
their mistakes. They must also come up with better products, promises as well as
testimonials because any wrong move or silence can destroy them to a limit from where
it will be hard for them to resurrect.

MAGGI in this case started learning from its early mistakes and used its digital
channels to explain its customers as why the decision to withdraw their noodles has
been taken after the regulator response. They were ready to answer all the questions
which emanated in their consumers mind. They also explained the science behind the
reason for the ban in simple terms, so that the consumers can understand it well
Who’s to be blamed the Company or the Government

The report given by the Uttar Pradesh Food Safety and Drug Administration mentioned
that it had high levels of lead as well as had presence of MSG (monosodium glutamate).
The reports later on gave a different picture where it was again tested and found at
permissible levels in different countries around the world. It was later visualized that the
way it was tested in India especially in most parts of the country had errors. So, who is
to be blamed, the company authorities who could not visualize the surging tide against
them or the testing authorities who tested the wrong way.

Nestle filed a legal petition in June’2015 with the Bombay High Court seeking a
judicial review as they claimed that FSSAI order was passed without giving them a
proper hearing. The govt. Labs that tested their noodles for lead on behalf of the FSSAI
and some state FDA (Food & Drug Administration) were not accredited for lead testing.
The tests done by Nestle and an independent accredited laboratory have found MAGGI
noodles safe to eat. The tests done by food standards authorities in six countries- USA,
Canada, UK, Australia, New Zealand and Singapore also found Indian made MAGGI
safe.

On 30 th June’15 the Bombay High Court allowed Nestle India to continue exporting
MAGGI noodles. On 13 August’2015 the court overturned the government’s ban on
MAGGI noodles arguing that the move was ‘arbitrary” and in this the principles of
natural justice were not followed. The court therefore ruled that Nestle India can bring
the product back to the market if fresh tests are conducted in three accredited
laboratories on the existing samples and on freshly manufactured product, if found safe.
On 4 November 2015 all three NABL (National Accreditation Board for Testing and
Calibration Laboratories) mandated by the Bombay High Court found the samples to be
safe for consumption (with lead content in permissible limits. After 9 November’2015
Nestle made sales of MAGI noodles available once again in Indian markets.

The food minister also slammed the FSSIA (Food Safety and Standards Authority of
India) for creating an environment of fear in the food industry. MAGGI noodles were
cleared in many more foreign countries and they also got permission from the Bombay
High Court to export Indian MAGGI noodles.

Silent Treatment by Nestle

The controversy spread like fire through social media. But Nestle didn’t cared much
about it and seemed unaccountable for it and assumed that there will be a response
mechanism. They used to get complaints now and then roughly around every three
years and they thought that this probably will also die down if they didn’t do anything.
But this was not a minor incident but Nestle looked the other way as it had confidence
in its product as well as on the strength of the brand. They came up via impersonal and
template based responses to consumers who keyed in the words MAGGI with MSG. Its
first line of defence was a four page PDF sheet with no company logo and a highly
technical explanation. They started posting it from 21st of May and this came back to
life only on 1st of June. The consumers in the critical days were free to interpret the
silence in whatever way they chose. A common interpretation therefore was the
admission of guilt by the company. For a brand which was so strong and popular, the
first thing required by the company was to converse with its customer. Whether guilty
or not, it didn’t matter but communication must not have been broken by the company.
The delay created suspicion in the minds of the customer because whenever there is a
controversy, the consumers wait for clarity. The brand therefore must come out
immediately after understanding the situation, engaging itself further and then try to
keep the dialogue going. Part of the blame was in regard to their response and strategy
of social media. They must have immediately crafted a message over film or print and
posted it there. But this much loved product was given an assembly line treatment on
Facebook and Twitter. They did not had a well-defined strategy of communicating with
their customers openly, by giving the company a face and say sorry if necessary. They
might have found their loyalists after having an honest discussion with them. They
might have given an insight into the brand’s perspective and tried to make them their
first line of defence at a time when their brand’s credibility was damaged. Nestledid a
campaign recently around the theme ‘Main Aur Meri MAGGI’ and invited its
consumers for sharing their stories. This might have been a good base for them as they
already had a database ready of their loyalists, some of which may have already enjoyed
the social clout. They have then easily involved these loyal customers in the social
media and might have also tapped into numerous bloggers and people who were
speaking up for them and who were waiting to have an explanation from the company.
Instead they opted to be uncommunicative. They might have taken cues from the market
happenings around like Flipkart’s Big BillionDay Sale to the Air Asia crash where a
quick response from the management made a lot of difference. Nestle may not be at
fault but where is the evidence from the company, so that the consumers believe on it.
Responsibility needs a human face, not a press release or an automated tweet.
Remember the recent Air Asia plane crash, where their CEO himself was at the
forefront of the rescue work and he himself supervised the rescue operations himself,
talking to press and providing all the information and help. This resulted in less
backlashes for them as compared to Malaysia Airlines who also had a similar accident
before. The difference therefore lies in the transparency as well as responsibility of the
company.
COME BACK STORY OF MAGGI

Started salivating at the thought of your favourite two-minute noodles? That’s right,
that’s how iconic Maggi noodles is — anyone can recognise its four-word tagline.
We’ve grown up with Maggi being our ‘special meal’, dangled before us as an incentive
for finishing our homework on time or cleaning our rooms. Maggi is something
everybody knows how to make and swears by, but somehow when we think of home,
we think of our mums making it for us as a reward, because there’s something special
about it.

The company had bounced back from the biggest existential threat in its 104-
year history in India.

MARKETING FACTORS:

The real credit goes to Maggi’s campaign team for pushing all the right buttons and
ensuring its presence in every household. Their strategy when it comes to television
advertisements or even stills is so apt that when we see it, we can not only feel the hot
masala-filled noodles detangling in our mouths, but we can smell it too.

Maggi may have been acquired by Nestle way back in 1947, but till this day holds
centre stage independently and dominantly, unofficially of course. As is viral news, it
suffered a massive setback when above-acceptable MSG levels were discovered in June
2015, after which further tests were performed in Kolkata. Following this, as per the
Government’s decision, Maggi was removed from the counters of every store,
supermarket, and ‘thela shop’ in the country, much to the heartbreak of millions. The
internet exploded with Maggi-smuggling memes and people were forced to turn towards
other, less popular noodles, only to have some of them taken away for testing as well.

Five dreary months later, the people of India woke up to the news that Maggi was going
to make its comeback into polite society and everyone was ready to battle it out for the
first few packets. Today Maggi has almost got back its pre-ban customer percentage
and continues to be right at the top of the packeted food chain. How did it manage to
come back from such bad press and renew its former reputation? Here are some of the
tactics it used, and which can teach us a lot about marketing as well.

Using the nostalgia factor

Maggi has always made family-based advertisements to attract its customers. Most of
the ads centre around mothers delighting their children with their favourite two-minute
noodles with a storyline of how the child was having a bad day at school or the child
growing up to use the mother’s special Maggi recipe to show her that she still needs her.
Either which way, the narrative revolving around the mother-child duo (in most of the
ads) strikes a chord with the users, who then subconsciously start noting the family
value the product manages to sell. Quite naturally, the first ad after the Maggi relaunch
was of a mother speaking nostalgically about her child’s tryst with his favourite
noodles, thus further adding to the emotional value of the customers right there.

Keeping in touch through increased ad space

After the fiasco of the Maggi ban, its parent company Nestle decided to increase its
spending on television commercials, leading to a growth of its ad volume to about 96
percent by September, 2015 — two months prior to the relaunch of the famous
noodles, according to various data estimates. The first print advertisement that
accompanied the announcement of the relaunch read — “Your Maggi is safe, has
always been.”

The perfect medium for the launch

Along with increased spending on television ad space, Maggi was relentless in its
promotions of the upcoming relaunch on social media. Using the full force of its high
held presence on a platform like Facebook, which has about 261,433 likes on it (on last
count), and an 87,700 following on Twitter.

Making it exclusive

Like with everything else, consumers thrive on the feeling of owning a product or
service ‘exclusively’. Maggi played its cards smartly when it decided to take this into
account by making a deal with Snapdeal, which became the only platform where Maggi
packets were sold before its official comeback into the shelves of all stores. This raised
its demand by a roof and customers were trying to outbid each other for the ownership
of the packets, sometimes even paying more, before it went out of stock. The company
thus set the stage for Maggi’s official comeback into the markets.

Today, they are back devouring our favourite pack of two-minute noodles without a
single thought about the fact that it was banned for health reasons a little over a year
ago. Not only did Maggi manage to save its reputation and get back a steady customer
base, it taught us a thing or two about smart marketing!
Porter Five Forces that Determine Industry Structure

Porter Five Forces model is heavily borrowed from the traditional field of micro
economics. The five forces that determine the industry structure of organization in
casename case study are -

1. Threat of substitute products and services - If the threat of substitute is high then
Nestla Maggi has to either continuously invest into R&D or it risks losing out to
disruptors in the industry.

2. Threat of new entrants - if there is strong threat of new entrants then current players
will be willing to earn less profits to reduce the threats.

3. Rivalry among existing players – If competition is intense then it becomes difficult

for existing players such as Nestla Maggi to earn sustainable profits.

4. Bargaining power of suppliers of Nestla Maggi - If suppliers have strong

bargaining power then they will extract higher price from the Nestla Maggi.

5. Bargaining power of buyers of Nestla Maggi – If the buyers have strong bargaining
power then they usually tend to drive price down thus limiting the potential of the
Nestla Maggi to earn sustainable profits.
Product
lifecycle
Change
management

The company rejected the allegation that the noodles are not safe. It is stated
on the company‘s website that their top priorities are to provide safe and
quality products. They claimed the strict adherence of food safety and quality
control at their Maggi factories. Also, they disagree with their any kind of use of MSG
in the Maggi Noodles. They regularly monitor the lead content for the safety of the
consumers. Nestle continued to keep its customers up to date on the
investigation into the safety of Maggi noodles in India. Nestle stated on the official
Maggi noodles Facebook page, Twitter and website, that extensive testing revealed no
excess lead in Maggi noodles.

Nestle used their twitter and facebook accounts to sort out the queries of their
consumers about the levels of MSG and Lead found in their product. They also
launched a new page i.e. FAQ page on their official site.

Nestle decided to destroy more than $50million worth of Maggi Noodles in India
after they were deemed unsafe by regulator.

 REPOSITIONING

After the lift of 5 months ban from Maggi Noodles, the production got started
from its Tahliwal plant, Himachal Pradesh with its other plants located at
Nanjangud, Karnataka, Moga, Punjab Bicholim, Goa and Pantnagar, Himachal
Pradesh.
The food regulator FSSAI on 16 Novermber, 2015 moved to the Supreme Court
against the Mumbai High Court order to lift a ban on Maggi noodles in India. The
FSSAI claimed that the High Court favored the company.

The company stated that they would continue with the existing formula of the product
and would not change their ingredients.

The orders of FSSAI and Maharashtra Food regulator FDA was annulled by High
Court for the ban of 9 variants of Maggi Noodles. The court stated that the hearing was
not given to the manufacturer which does not entail the natural justice.

On August 13, the Bombay High Court gave a significant respite to the company by
lifting the ban on the sale of the noodle, while also ordering fresh tests to be
conducted in three separate labs to ascertain that the product complied with the
country's food safety norms. The court order meant the original product safety
certificate of the watchdog remained valid.
Recommendations based on study:

 the company should form a separate Quality Administration Committee in each

production unit to ensure the quality of every product.

 The company should strengthen the social net working system of the company and

customer relationship.

 The companies should open its own various outlets throughout the country with

customer information centers.

 Maggi should introduce an alternative snack in the ready to cook market which will

help the relaunching of Maggi in a new format.

 Should launch new advertisement campaigns (TV, RADIO, etc...) with credible stars.

 Should strengthen the distribution channels of the company especially in rural areas.

 Conduct Promotional campaigns at schools, colleges, and towns where people are more

than 1000.

 The customers should check the ingredients and other relevant information before

purchasing a product.
Conclusion

 When MAGGI noodles their top selling product with a major share in the total
company’s sales turnover was deemed unsafe in India.
 The company initially defended its product and rejected all claims through all
digital channels. They were present on Facebook as well as multiple twitter
accounts to reassure their customers about the safety of their product. They
responded to all the comments made to them on social media.
 They also created a section on their main website to keep their customers
updated.But with the growing pressure the CEO had to announce the
withdrawal of the product from the market to comply with the regulators.
Again Nestle used the digital channels to explain their decision of withdrawal
and the science behind the reason for ban to their customers in simple terms.
 They also re-assured their customers that the noodles are safe and that they are
a transparent company working closely with the Indian authorities to resolve
this issue.
