Maggi noodles was launched in India in 1984 by Nestle. It is today the highest sold

noodles in India. With 60% market share (2010 report)in its bowl, Maggi Noodles

continues to be an undisputed leader for almost 30 years.

Back in 1980’s, instant noodles was an entirely new category. Now, the challenge was

to establish an alien product and yet find a relevant consumption benefit in the market.

Maggi was therefore, positioned as snack made for children who like to experiment food

and was billed as a fast to cook and good to eat snack. The Rs. 2.50 per 100gm Maggi

was an instant success.

“Mummy Bhook Lagee- Bas Do Minute was a rendition of this approach. It fit well with

the mother’s child caring relationship. These ads became so popular that “Bas Do

Minute” instantly reminded Indian consumers of Maggi noodles.

Health Factor was gaining importance. Several other brands, for example, HUL

launched the Knorr Soupy noodles for a ‘healthy’ afternoon snacking option. Maggi did

not want to stay behind. It rolled out a new noodle with multi-grain variant called

Multigrainz and aggressively advertised it as a nutritious food for kids.

Apart from noodles, Maggi has sauces and soups available in various flavours. But,

Maggi tops it all by being the market leader with the maximum share. Some more

products in its kitty are Maggi Cuppa Mania, Maggi Masala and Maggi Magic Cubes.

Maggi Noodles

Maggi Noodles Marketing Strategy

1997-1999: Nestle changed the taste of Maggi noodles, but it proved to be a failure. In

1999, Maggi reintroduces the old formulation and revived sales with the punchline-

“Fast to Cook, Good to Eat”.

2000: Maggi noodles became the leader in instant noodles space.

2005: Marketing strategy to keep Maggi brand fresh and as a ‘health product’ with its

tagline – “Health Bhi -Taste Bhi” with the launch of Maggi Atta noodles.

2009- Maggi celebrates 25 years of Maggi noodles with ‘Me and Meri Maggi’ campaign

and the launch of Maggi Pazzta. This campign invited consumers to share their Maggi

moments. As a part of this promotional drive, magi launched a website, where the

consumer could upload their Maggi moments and their favourite recipes or stories hit

with the company will get a chance to be featured on Maggi packets or ads.

2012 – Maggi has generally stayed away from the celebrity endorsements. In general,

mother and child have been the celebrities for Maggi for the longest time. With its only

exceptions, when Preity inta promoted the Rs.5 Chotu Maggi and the family packs.

Recently, Amitabh Bachchan has been made the brand ambassador of Maggi. Maggi’s

“Do minute Mein Khushiyan” with Amitabh Bachchan was launched in 2012.

Of late, the brand had been facing some competition from other brands in the same

segment like, Top Ramen, Sunfeast Yippie, Wai Wai, etc. In addition, the brand was

feeling a disconnect with the newer generation who have many choices in food

indulgence. Big B in the new campaign is a story teller who narrates the stories given by

the consumers. The aim is to bring back the segments of consumers who moved away

from the brand since they have grown up. A powerful celebrity as a brand ambassador

adds a big boost which is the need of the hour for Maggi with so many competitors

around.

The problem with such a heritage brand is that the communication becomes boring over

a period of time. And it needs the right energy to move ahead and face the competition.

1. Submitted By:ABHISHEK SRIVASTAVA 002BEENA VENUGOPALAN

012JOTINDER SINGH 022NISHANT DHORELIYA 032 RADHA A

042SOUBHAGYA RATH 052YOGESHWAR DUTT 062

2. EXECUTIVE SUMMARYNestlé India is a subsidiary of Nestlé S.A. of

Switzerland. With six factories and a largenumber of co-packers, Nestlé

India is a vibrant Company that provides consumers in Indiawith products

of global standards and is committed to long-term sustainable growth

andshareholder satisfaction. The company is known for its brands in the

Milk Products &Nutrition, Prepared Dishes & Cooking Aids, and Chocolates

& Confectionery segments.Nestlé leads the value sales of noodles in India

with a market share of 79.3%. A testament toNestlés domination of the

sales of plain noodles is the fact that for its instant noodles brandMaggi,

among all its global offices, India accounts for the highest level of volume

sales forthe company.This marketing plan analyses the current marketing

mix of Maggi Noodles, studies thepopularity of the two new health variants

Vegetable Atta and Dal Atta Noodles and makessuggestions with regard to

introducing a new brand “Cup O Maggi” in the cup noodlessegment.

Various tools like surveys and secondary sources of information have been

utilizedfor the purpose of this analysis.

3. TABLE OF CONTENTS2. SITUATION

ANALYSIS.....................................................................................................

5 2.1 Market

Summary........................................................................................................

.... 5 2.1.1 TARGET

MARKETS ........................................................................................... 5

2.1.2 MARKET

DEMOGRAPHICS ............................................................................. 5 2.1.3

MARKET

NEEDS ................................................................................................. 6

2.1.4 MARKET

TRENDS .............................................................................................. 6

2.1.5 MARKET

GROWTH............................................................................................ 8 2.2

SWOT.............................................................................................................

............... 10 2.3

COMPETITION..............................................................................................

............. 11 2.3.1 TOP

RAMEN .......................................................................................................

11 2.3.2 ITC SUNFEAST

PASTA .................................................................................... 11 2.4

CURRENT MAGGI NOODLES

BRAND................................................................... 12

IDENTITY/KAPFERER’S

PRISM................................................................................... 12 2.5

PRODUCT

OFFERING .............................................................................................. 13

2.6 PRODUCT

DISTRIBUTION ...................................................................................... 13

2.7 KEYS TO

SUCCESS....................................................................................................

14 2.7 CRITICAL ISSUES AND

CHALLENGES ................................................................ 143. MARKETING

STRATEGY............................................................................................. 15

3.1

MISSION........................................................................................................

.............. 15 3.2 MARKETING

OBJECTIVES ..................................................................................... 15 3.3

INDUSTRY

SEGMENTATION .................................................................................. 16

3.4 TARGET SEGMENTS FOR MAGGI

NOODLES ..................................................... 22 3.4.1 MAGGI 2 MINUTE

NOODLES ........................................................................ 22 3.4.2 MAGGI

CUP O NOODLES ............................................................................... 23

3.5 POSITIONING OF

MAGGI ....................................................................................... 23 3.5.1

MAGGI 2 MINUTE

NOODLES ........................................................................ 23 3.5.2 CUP O

MAGGI....................................................................................................

234. MARKETING

MIX .......................................................................................................... 24

4.1 CONSUMER

SOLUTION ........................................................................................... 24

4.1.1 IMPROVING THE DAL ATTA

VARIANT..................................................... 24 4.1.2 NEW PRODUCT:

THE CUP-O-MAGGI ......................................................... 24 4.1.3

PACKAGING .................................................................................................

..... 24 4.2 CONSUMER

COST ..................................................................................................... 25

4.3

CONVENIENCE.............................................................................................

............. 26 4.4

COMMUNICATION........................................................................................

............ 27 4.5 MARKETING

RESEARCH ........................................................................................ 285.

FINANCIALS .................................................................................................

................... 31 5.1 BREAKEVEN ANALYSIS OF A 100 TONNE

CAPACITY PLANT OF CUP O MAGGI

NOODLES .....................................................................................................

...... 31 5.1.1 BREAK-EVEN

ANALYSIS................................................................................ 31 FINAL

TOTAL COST ANALYSIS ............................................................................

33 5.1.2 ANALYTICAL BREAK-EVEN

ANALYSIS.................................................... 33 5.1.3 GRAPHICAL BREAK-

EVEN ANALYSIS ...................................................... 34 5.2 SALES

FORECAST....................................................................................................

. 34APPENDIX A: INDIAN INSTANT NOODLES MARKET GROWTH

GRAPHS ........ 36APPENDIX B: NESTLE MAGGI NOODLES FORECAST

RETAIL SALES .............. 37

4. 1. INTRODUCTIONEver since its launch in India in 1983, this brand has

become synonymous with noodles. Thebright red and yellow colours of the

packet with the brilliant blue “2-minute Noodles”printed on it has found a

place on every kitchen. Over the years, Maggi has grown as a brandand

positioned itself as a “Fast to cook! Good to Eat! “food product.The history

of this brand traces back to the 19th century when industrial revolution

inSwitzerland created factory jobs for women, who were therefore left with

very little time toprepare meals. Due to this growing problem Swiss Public

Welfare Society asked a millernamed Julius Maggi to create a vegetable

food product that would be quick to prepare andeasy to digest. Julius, the

son of an Italian immigrant came up with a formula to bring addedtaste to

meals in 1863. Soon after he was commissioned by the Swiss Public

Welfare Society,he came up with two instant pea soups & a bean soup- the

first launch of Maggi brand ofinstant foods in 1882-83.Towards the end of

the century, Maggi company was producing notjust powdered soups, but

bouillon cubes, sauces and other flavourings.However in India (the largest

consumer of Maggi noodles in the world!) it was launched in1980 by Nestle

group of companies. Maggie had merged with Nestle family in 1947.When

launched it had to face a stiff competition from the ready to eat snack

segments likebiscuits, wafers etc. Also it had other competitor the so called

home made snacks which aretill today considered healthy and hygienic.

Hence to capture the market it was positioned as ahygienic home made

snack, a smart move. But still this didn’t work, as it was targetedtowards

the wrong target group, the working women.After conducting an extensive

research, the firm found that the children were the biggestconsumers of

Maggi noodles. Quickly a strategy was developed to capture the kids

segmentwith various tools of sales promotion like pencils, fun books, Maggi

clubs which workedwonders for it. No doubt the ads of Maggi have shown

a hungry kid saying “Mummy bhookhlagi hai” to which his mom replies

“Bas do minute!” and soon he is happily eating Maggienoodles. Further the

MAGGI 2-MINUTE Noodles has been renovated to provide 20% of theRDA

1 of Calcium and Protein for the core target group building on the nutrition

proposition“Taste bhi health bhi”. The company could have easily

positioned the product as a meal, butdid not, as a study had shown that

Indian mentality did not accept anything other than rice orroti as meal.

They made it a easy to cook snack that could be prepared in just two

minutes.The formula clicked well and Maggi became a brand name.1

Recommended Dietary Allowances for children of 7–9 years as per

“Nutritive Value of Indian Foods”, published by IndianCouncil of Medical

Research, Reprinted ‘04.

5. 2. SITUATION ANALYSISNestlé’s Maggie noodles is the leading brand

in the instant noodles segment in India, enjoyinga market share of 79.3%.

The brand has grown to an estimated Rs 200 crore & contributes toaround

10% of Nestle India’s top line. Being the pioneer in the noodles market has

given it afirst mover’s advantage over other brands. Maggi has regularly

come up with new flavoursand has recently launched two variants-

Vegetable Atta and Dal Atta noodles, catering to theincreasing demand for

healthy snacks.2.1 Market Summary2.1.1 TARGET MARKETSPrimary

target: Children (<16)Nestle plans to widen its target audience by

launching new variants Vegetable and Dal attanoodles for health conscious

people.2.1.2 MARKET DEMOGRAPHICSDemographics:Region: urban,

semi-urban, rural (recent)Occupation: Housewives, working professionals,

self-employedSex : UnisexIncome: 1,20,000 p.a. upwardsSocial class:

Middle and upwardsFamily life cycle: Young, single, married with

children.Behavioural:Occasions: Regular, Everyday user-urban, rural-

depends on the temporal aspects of theconsumer’s life(varied usage in

terms of time of time of day, week, month, year)User status: first time user-

rural, potential users-semi-urban, heavy users-urbanUsage rate: Heavy

user-urban, light-rural, medium-semi-urbanLoyalty status: hard core and

shifting loyalsBuyer-Readiness Stage: rural-some are aware, semi-

urban:some intend to buy(aware,informed),urban: informed(some

desire,some intend to buy)Attitude toward product: Enthusiastic,

positivePsychographics:Lifestyle: Hard pressed for time

6. 2.1.3 MARKET NEEDSThe urban Indian is used to having his dinner

late from around 8:30 pm to as late as 11 pm.Hence a convenient snack

between lunch and dinner is an often exercised option. In ruralareas,

smaller priced packs stimulates demand.Maggi is a fun and convenience

brand which sits strongly in its position as a "good to eat, fastto cook"

anytime snack and is popular across different age groups. Opportunities

inpractically all consumption categories arise in terms of "reach" and

"medium ofconsumption". Hence the onus is on the company to make it

easily available and affordableand in different sizes, catering to different

categories of users like the new Maggi chota packconveniently priced at Rs

5 for 50gms. The Indian palate is not too adventurous in terms oftrying out

new flavours.In fact today, Maggi have settled at standard flavours such as

curry,masala, tomato and chicken and not much experimentation is

necessarily required in thenoodles market. People prefer to have it easily

available and affordable.2.1.4 MARKET TRENDS The FMCG market is set

to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015.

Penetration level is only 30% for Maggi Noodles in urban areas as well as

per capita consumption for the Instant noodles and pasta segment is low

indicating the untapped market potential. Urban Rural Population 2005-06

(mn household) 53 135 Population 2009-10 (mn household) 69 153 %

Distribution (2005-06) 28 72 Markets (Towns) 3,758 62,700 Universe of

Outlets (mn) 1 3.3 Urban profile Source:Statistical Outline of India (2005-

2006) Burgeoning Indian population, particularly the middle class segments

and the rural segments, presents an opportunity to makers of branded

products to convert consumers to branded products. Growth is also likely

to come from consumer upgrading in the matured product categories. At

4% constant value CAGR into the forecast period, value growth for

packaged food is predicted to remain healthy. Growth will continue to be

fuelled by convenience products such as noodles and ready meals with

200 million people expected to shift to processed and packaged food by

2010 Manufacturers are introducing low-priced goods in smaller pack

sizes. As a result, the rural marketing efforts have pushed the demand for

sachets in many consumer goods

7. markets. Priced at Rs0.50-1.00, sachets have proved to be extremely

popular insmaller towns and villages, where households cannot afford to

buy larger packs dueto financial constraints. Consumption pie Source: KSA

Technopak Consumer Outlook 2004.An average Indian spends around 40

per cent of his income on grocery products. 1996 2001 2006Population

(millions) 846 1,012 1,087Population <25 years of age 480 546

565Urbanisation % 26 28 31 Consumer Profile Source: Statistical Outline

of India (2005-2006)Rapid urbanisation, increased literacy and rising per

capita income, have all causedrapid growth and change in demand

patterns, leading to an explosion of newopportunities. Around 45 per cent

of the population in India is below 20 years of ageand the young population

is set to rise further.While instant noodles are still not generally consumed

as main meals in India, moreindividuals are bucking this trend and

accepting them as an option. This is, however,mostly restricted to busy

working adults who live independently or only with theirspouse, away from

their parents, and who have little time to prepare their own mealsat home.

Given the requirements for convenience and saving time, these

individualsresort to easy-to-prepare meals, such as instant

noodles.Increased health consciousness and abundant production of

quality soyabean alsoindicates a growing demand for soya food segment.

8. 1200 1000 800 600 Incom e (US $/annum ) 400 200 0 2003 2015 Rise

in disposable income (US$/annum) Source:Euro monitor, BRICs Report

(Goldman Sachs) The BRICs report indicates that Indias per capita

disposable income, currently at US$ 556 per annum, will rise to US$ 1150

by 2015 -another demand driver. Spurt in the industrial and services sector

growth is also likely to boost the urban consumption demand. Only about

8-10 per cent of output is processed and consumed in packaged form, thus

highlighting the huge potential for expansion of this industry. Currently, the

semi processed and ready to eat packaged food segment has a size of

over US$ 70 billion and is growing at 15 per cent per annum. FICCI

Federation of Indian Chambers of Commerce and Industry has predicted

an overall growth of culinary products/snack food (10%)2.1.5 MARKET

GROWTHGeneral growth of the Indian Noodles sector FY 2005-2006

FICCI states that the culinary products and snack category, under which

Maggi noodles is classified, has had a robust growth of 8%. Growing by a

more than robust 21% in current value and 16% in volume, growth in

noodles will be among the fastest in the various packaged food products in

India. (Refer Appendix A: Indian Instant Noodle Market Growth Graphs)

Current value sales of noodles in stood at slightly over Rs 9 billion, with

pouch instant noodles accounting for more than 66% of the total value

sales.Growth of Maggi Noodles FY 2005-2006 For the FY 2005-2006, the

growth of Maggi noodles was an impressive 15%, with sales at Rs 6.75

billion and profit at Rs 2 billion.

9. Maggi Market Share in Instant Noodles Category 79.5 79 Market Share

(%) 78.5 78 77.5 77 2000 2001 2002 2003 2004 2005 2006 Maggi Market

Share in Instant Noodles Category (2000-2005) Source: Euromonitor

International Packaged Food in India May 2006 It has maintained a market

share of around 78% despite increasing competition. The relative

performances of the Maggi variants has been presented using the BCG

matrix The Boston Consulting Group’s Growth-Share Matrix High STARS

QUESTION MARKS ( MAGGI Veg Atta Noodles) (MAGGI Chicken, Dal

Atta Noodles)MarketGrowthRate CASH COW DOGS (MAGGI Masala

flavour) (MAGGI Tomato, Curry Low flavours) High Low Relative Market

Share

10. 2.2 SWOTStrengths Weakness Strong brand recall and the product is

Tagged as a product having no health value. almost eponymous to the

brand. It has tried to bring in innovation but has Market leader with 79.3%

market failed.(Dal Atta Noodles refer survey share in terms of value.

noodles). Highest advertising share(72% (TV The product features have

remained almost AdEx 2004-05)). constant since inception in 1983 with

any Emotional relationship with the trial of innovation misfiring. consumer.

Market share has fallen from the 80% in A strong distribution network of

the 1998-99 to 79.3% in 2005-06. parent company Nestle.Opportunities

Threats The instant noodles segment is Competition is increasing with

established projected to grow at a tremendous competitors in other

segments are foraying rate with the market size doubling by into the

noodles segment seeing the 2010. capacity of growth. Increase in the

potential consumer Top ramen the prime competitor has come base i.e.

single working professionals up with new exciting instant noodle and

student population offerings like cup noodles and mug noodles Rapid

economic growth and rising which threatens to eat into Maggi’s market

disposable incomes make a strong share. case for a premium brand like

Maggi. Foreign players like Wai Wai and Rum Upward trend of

convenience food Pum have forayed into the noodles market consumption.

and have made their brand presence in Huge untapped serviceable

upward eastern markets while indigenous class rural base. Parle is

threatening to offer their distribution network to international noodle brands

wishing to make an entry. Top Ramen has repositioned itself on a health

platform with a new baseline “Get on Top” fortifying its product with calcium

and vitamins. The product as priced higher than its main rival Top Ramen.

11. 2.3 COMPETITION2.3.1 TOP RAMENDont be a noodle, be a

Smoodle, was the ad that brought the Top Ramen brand intolimelight when

it was launched in 1991.Market share FY 2005-2006: 14%Variety:a)

Packet Noodles: Macho Masala, Funky Chicken, Oye Tomato, Curry

Smoodles.b) Cup Noodles: Spicy Vegetable, Tangy ChickenPackaging and

Pricing: Pack Size Price Top Ramen (gm) (Rs) Packet Noodles 50 5 100

10 400 34 Cup Noodles 80 20Distributor: Marico IndustriesDistributor

strength: About 130000USP: Dont be a noodle, be a Smoodle, innovative

flavours and its cup noodles2.3.2 ITC SUNFEAST PASTAITC launched

Indias first instant pasta snack, Sunfeast Pasta Treat in 2005. Made from

highprotein Durum wheat, Sunfeast Pasta Treat is not fried and does not

contain maida, making ita nutritious snack. This ready to cook pasta comes

with a sauce maker inside the pack.

12. Market share FY 2005-2006: The ready-to-eat Sunfeast Pasta Treat

has clocked 6% of thebranded noodles volume in just one year.Variety: It is

currently available in four exciting flavours: Masala, Tomato and Cheese,

SourCream Onion and Cheese.Pricing: priced at Rs. 12/- for the Masala

flavour and Rs.15/- for Tomato and Cheese, SourCream Onion and

Cheese.Packaging: Each pack is an 83 gm pack with a 15 gm sauce

makerDistributor: ITC LimitedUSP: Sunfeast is made from durum wheat

and is promoted as a healthy alternative to instantnoodles made from the

less healthy maida (a type of wheat flour that is slightly lower inquality).2.4

CURRENT MAGGI NOODLES BRAND IDENTITY/KAPFERER’S PRISM

Physique Personality Yellow packaging, Playful children, Tasty Hurried

youth Relationship Culture Fast to cook and good to Maggi Noodles

Family, eat, Dual Income, “Mummy bhookh lagi”, “Taste bhi health bhi Self

Image Reflection Kid, Family oriented Independence Fun-loving

13. 2.5 PRODUCT OFFERINGMaggi Noodles comes in 4 variants: 1.

MASALA: This is the original and most widely liked flavour of Maggi and

hence has been brought out in 6 different packaging sizes; the maximum in

any variant 2. CHICKEN 3. CURRY 4. TOMATO 5. VEGETABLE ATTA

NOODLES: Launched in April 2005, this variant had contributed to 11 per

cent in value to the instant noodle category within 7 months of its launch;

this was the beginning of the “Taste bhi Health bhi” focus 6. VEGETABLE

DAL ATTA NOODLES: Continuing the healthy snacks trend, this variant

was launched in May 2006. Pack Size Price MAGGI 2 Minute Noodles

(gm) (Rs) Masala 50 5 100 10 200 20 400 38 600 54 800 72 Chicken 100

10 Curry 100 10 Tomato 100 10 Vegetable Atta Noodles 100 13 400 50

Vegetable Dal Atta Noodles 100 13 400 50 Variants, Packaging, Prices

Source: Nestle India2.6 PRODUCT DISTRIBUTIONMaggi Noodles is

being sold through 2,60,000 outlets (FY 2005-2006), which comprise

ofgrocers, convenience stores, supermarkets and miscellaneous channels.

The average Indianstill prefers shopping through the traditional grocers or

“kiranas” as can be inferred from thehigher distribution of 62.8%.The rising

popularity of the “mall-culture” in the urban andsemi-urban areas also

reflects on the slight increase in distribution through supermarkets

/hypermarkets. Channel 2005 2006 Traditional grocers 63.0 62.8

Convenience stores 20.0 20.0 Supermarkets/hypermarkets 16.6 16.8

Others 0.4 0.4 Overall 100.0 100.0India Dried Pasta & Noodles off-trade

distribution channels, by value, 2005-2006 (%) Source: Denis Mason,

Datamonitor

14. 2.7 KEYS TO SUCCESS Maggi has had the first mover advantage with

respect to the Instant noodles segment in the Indian market. Continued

innovation in terms of flavours and themes – from an ordinary 2 minute bite

to a healthy snack.2.7 CRITICAL ISSUES AND CHALLENGES To sustain

its growth and maintain its position as the leader in the Instant Noodles

segment: Nissin’s Top Ramen and recently ITC’s Sunfeast pasta have

been eating into Maggi Noodles’ market share of the Instant Noodles

Market. To be increasingly viewed as the preferred snack of Indians.

15. 3. MARKETING STRATEGY3.1 MISSIONTo be considered as the

number one snacking option of India combining the values ofconvenience,

taste and health.3.2 MARKETING OBJECTIVES Increase value market

share to 80% in the instant noodles market by 2007-08 from the current

79.3%. To promote Maggi noodles as a healthy ready to eat convenient

food among mothers and single working professionals. To provide line

extension by introducing Cup Noodles/Mug Noodles. To upgrade the

existing product features viz. packaging, ingredients, special additives

based on consumer feedback. The objectives were arrived at based on the

analysis of Ansoff’s Grid. ANSOFF’S PRODUCT/MARKET EXPANSION

GRID Existing products New products MARKET PENETRATION

PRODUCT DEVELOPMENT Existing Markets ( Upgrade existing variants

of (Introduce new variants of MAGGI) MAGGI) New MARKET

DEVELOPMENT DIVERSIFICATION Markets (Finding new markets for

(Launch totally new variants of existing variants of MAGGI) MAGGI in

totally new markets)

16. 3.3 INDUSTRY SEGMENTATION The taste preferences and eating

habits of consumers bear a high correlation with their age. Based on this,

we can segment the market into the following age groups: 1990 1995 2000

2005 2010 2015Children: (2-9 years old) 169,999 181,521 187,940

189,211 184,457 184,376Tweenagers: (10-14 years old) 89,781 100,560

109,302 114,583 117,137 114,226Teenagers: (13-19 years) 120,293

127,645 142,432 153,781 160,728 162,495Studying Age: (18-22 years old)

80,812 85,918 92,074 103,179 110,642 115,126Young Adults: (15-29

years old) 230,839 249,149 270,576 294,103 319,267 336,193Middle-

Aged Adults: (30-59 years old) 243,295 277,343 316,065 358,164 398,405

440,655Baby Boomers: (40-59 years old) 134,212 151,646 174,986

202,754 232,801 261,349Pensioners: (aged 60+) 57,029 65,643 75,712

86,585 99,728 117,168 Age wise break up and forecast of the population

Source: UN census data, Euromonitor database Age wise break up of the

population (2005) 86,585 189,211 202,754 Children: (2-9 years old)

114,583 Tweenagers: (10-14 years old) Teenagers: (13-19 years) Studying

Age: (18-22 years old) 153,781 Young Adults: (15-29 years old) Middle-

Aged Adults: (30-59 years old) 358,164 103,179 Baby Boomers: (40-59

years old) Pensioners: (aged 60+) 294,103 Agewise Breakup of

Population, 2005 1) CHILDREN Children as an age group are a marketer’s

delight. With “pester power” children play a significant role in decision

making and purchase choices of just about anything ranging from food

items to beverages to chocolates. As consumers, children know exactly

what they want and do not experiment too much with flavour or colour.

Children rule Indian families consider children to precious gifts of God, and

parents in all income groups do all they can for their offspring. Indian

parents are still not completely comfortable with paid

17. baby sitters or day care help and use the larger extended family or

friends to help with careand supervision of children.Rush for pre-school

admissionsThroughout urban India, parents of nursery age children are

looking to send them in the bestprivate school they can afford. Pre-schools

for toddlers in the 2-3 age group are mushroomingall over the country, as

anxious parents recognise the perceived benefits these can bring.000 1990

1995 2000 2005 2010 2015Male 87,953 93,797 97,055 97,624 95,041

94,897Female 82,046 87,724 90,885 91,588 89,416 89,478TOTAL

169,999 181,521 187,940 189,211 184,457 184,376as % of 20.29 19.67

18.63 17.37 15.82 14.88totalpopulation Children (2-9 years old) 1990-2015

Source:Euromonitor International from national statistics and UN2)

TWEENAGERSThe tweenagers age group consists of children on the

threshold of adolescence and as asegment are a difficult lot. Though they

are not sure about their choices on an emotionalplane, they are a trendy

new group that is extremely savvy and self assured when it comes totaking

decisions regarding consumer goods and wants. Urban children in this age

groupwould have some amount of pocket money with an upper limit of

Rs100 per month. Thoughallowances have gone up, parental control still

exists over this market segment. Impulse foodsrule the preference scale as

far as the buying behaviour of tweenagers in India is concerned.In fact, the

top six expense items for tweenagers seem to be impulse foods: 17% of

the totalpocket money spent on ice creams, 12% on chocolates and 10%

each on soft drinks and fastfood according to a newspaper report in the

“The Times of India”.A key role to play in decision makingWith increased

awareness through television and advertising, tweenagers are an

importantinfluence on family decision-making in urban India. They have

also mastered the art ofnagging their parents into making purchases of

gadgets or products that they want. Among theareas where they make

their influence felt are the purchase of such items as a newly

launchedchocolate bar, instant noodles and breakfast cereal.With a

penchant for hi-tech and an ease with new technology far superior to their

parents,these tweenagers are more familiar with operating mobile phones,

the TV remote, DVDplayer and computer programmes, as well as the

product features.Cricket-crazy boysCricket is the obsession and passion of

boy tweenagers in India. This interest cuts acrossincome and socio-

economic groups. Low income boys will play on the streets with

makeshiftbats and stumps, middle-income children can be seen playing in

gardens and at school, whileboys from more well-to-do families go and

play in organised coaching camps. With theireducation demanding less

time at this age, parents are generally quite happy to see their

boysspending so much time on cricket.

18. Lifestyle concerns in urban IndiaA 2005 study of 10-16 year olds in

urban India revealed a sedentary lifestyle among 72% ofthe 20,000

children sampled by Lifetime Wellness Rx Ltd in the cities of Allahabad in

thenorth and Hyderabad in the south. Of those sampled, 52% of children

showed a risk ofdeveloping chemical dependence, with the problem

probably attributable to a scarcity ofplaygrounds and too much TV

viewing.Even television channels are zeroing in on this segment in

recognition of this fact. There isnothing subtle about the age group any

more. They like to hear it straight and then make theirindependent choices

and judgements. On the flip side, they are becoming increasinglyvulnerable

to media blitzkrieg.000 1990 1995 2000 2005 2010 2015Male 46,682

52,240 56,672 59,329 60,571 58,960Female 43,098 48,320 52,630 55,254

56,565 55,266TOTAL 89,781 100,560 109,302 114,583 117,137

114,226as % of 10.71 10.90 10.84 10.52 10.04 9.22totalpopulation

Tweenagers (10-14 years old) Source: Euromonitor International from

national statistics and UN3) TEENAGERSOn the brink of adulthood,

teenagers like to emphasize and express themselves in a mannerthat

catches attention. They have experimental with their food with a preference

towardsinnovative offerings but form strong opinions which they carry

forward in life. They are alsopredisposed towards snack items as they tend

to feel hungry between traditional meals. Theyhave a lot of say about the

food that they want to consume with limited parental control.Mobile

phonesThis is the mobile phone generation in India. They are completely at

ease with newtechnology and are heavy users of value-added services like

SMS, ring tone downloads andcricket score updates. Most still depend on

their parents for pocket money but are heavy usersof these services. In

many urban, middle-income households teenagers are now given a pre-

paid SIM card with a certain value for the month, in addition to allowances

for travel andentertainment.Hard pressed for timeTeenagers like buying

books, music and expensive branded footwear, as well as watchingfilms

and socialising with friends. Older college-going teenagers high school

pupils tend tofrequent coffee bars, which are a relatively new focal point for

socialising. Teenagers are alsoamong the regular users cinema

multiplexes and entertainment zones.This age group is extremely

conscious of their facial and physical looks. They are expected tofuel

demand for skin care products as well as health and nutrition-related

goods. Urbanteenagers are far more socially active today and find some

difficulty in balancing their schoolroutines with their personal schedules.

19. 000 1990 1995 2000 2005 2010 2015Male 62,853 66,433 74,027

79,765 83,246 84,033Female 57,440 61,212 68,405 74,017 77,482

78,462TOTAL 120,293 127,645 142,432 153,781 160,728 162,495as % of

14.35 13.83 14.12 14.12 13.78 13.11totalpopulation Teenagers (13-19

years old) Source: Euromonitor International from national statistics and

UN4) STUDYING AGEA rise in the number of colleges and institutions of

higher learning both government ownedand privately financed has enabled

a larger number of youth to graduate from their portals.This population

grew since 2000 but is set to stagnate in the forecast period with

couplesactually postponing the child bearing decision and some even

rejecting the idea of having oneat all. This age group has taken up to

snacking as a way of life as they keep missing regularmeals due to erratic

schedules. They have longer waking hours and due to this the

traditionalthree meals does not suffice with the need for filling

snacks.Rising financial freedomWith growing aspirations on the academic

front and shrinking global boundaries this agegroup has an unquenchable

thirst for information whether through their PCs or cell phones.With a rise in

employment opportunities in the Business Process Outsourcing (BPO)

sector,more and more consumers in this age group are juggling jobs along

with their studies for thesake of the financial freedom it gives them.Summer

jobsUntil the 1990s, summer vacations were a time to relax, read and

catch up with friends. Thisis no longer the case. Now, teenagers either find

a summer job, or undertake activities such asa trek in the mountains, river

rafting or rock climbing. Summer jobs may cover a range ofactivities from

delivering newspapers to working in a restaurant.000 1990 1995 2000

2005 2010 2015Male 42,311 44,932 47,947 53,651 57,402 59,638Female

38,501 40,986 44,127 49,528 53,240 55,489TOTAL 80,812 85,918 92,074

103,179 110,642 115,126as % of 9.64 9.31 9.13 9.47 9.49

9.29totalpopulation Studying age (18-22 years old) Source: Euromonitor

International from national statistics and UN5) YOUNG ADULTSYoung

adults (15-29 years old) represent the largest spending segment in the

country.Youngsters are part of a middle-class boom in India. Of the US$30

billion spent by Indians onthemselves in 2003, young adults spent close to

US$10.5 billion with their spending levels

20. rising 12% each year at twice the pace of the economy’s growth

according to various tradepress publications. Young adults grew 8% in

numbers over the 1999-2004 period and is likelyto grow at approximately

the same pace.Rising disposable incomesCollege graduates and students

still studying are landing well-paying jobs in a host ofemerging industries

that barely existed at the start of the new millennium – retail chains,

fastfood restaurants, mobile phone companies, call centres and data

processing firms. Many haveaccess to disposable incomes of Rs8,000-

10,000 per month thanks to the BPO boom in India.This age group still

does not have responsibilities of running a household, marriage or

worryabout their children’s education. Thus, this income is almost entirely

spent on non-essentialitems. Most purchases made by this age group are

on impulse. There are 16 million urbanconsumers in the 20-25 age

group.Need for convenienceMany single working professionals have to live

away from their parents due to the demand ofthe jobs. This yuppies (young

upwardly mobile professionals) class has a hard time preparingfood and for

them convenience is major issue. They are ready to pay a premium for

qualityand convenience. Also always being on the move they have a need

for food item that can beeasily consumed and disposed of.000 1990 1995

2000 2005 2010 2015Male 120,916 130,305 141,223 153,026 165,790

174,236Female 109,923 118,843 129,353 141,077 153,477

161,957TOTAL 230,839 249,149 270,576 294,103 319,267 336,193as %

of 27.55 27.00 26.83 27.00 27.38 27.13totalpopulation Young adults (15-29

years old) Source: Euromonitor International from national statistics and

UN6) MIDDLE-AGED ADULTSThese middle aged men have strict

preferences over food and they generally stick to theirchoices. They

experiment less and go for products that will enhance their social

status.The women in this age group are ones who the primarily buy food

items for the entirehousehold though their choices are shaped by the

preferences of the household members. Thewomen in this segment play

an important role as most of the choices of food items have topass their

scrutiny before it is consumed in the household.ResponsibilitiesBetween

the ages of 45 and 55, men find themselves with children who are able to

leaveschool or facing crucial board examinations. Some may also have

wives with settled careers.These factors make them reluctant to leave or

move from their city of residence and theywould rather resign and move to

another job rather than displace the family. Others findthemselves

redundant in the new hire and fire labour environment. There is a trend for

suchpeople to enter the BPO sector as well.

21. Mid-life career changeIn urban India, among the middle class, there are

a significant number of men who are makingcareer switches, some out of

choice and others out of necessity. Tired of their current salariedjobs, some

are taking the entrepreneurial plunge, setting up businesses such as small

IT-service firms, adventure tourism companies or leadership training

consultancies.000 1990 1995 2000 2005 2010 2015Male 125,217 143,223

163,764 186,055 206,920 228,338Female 118,079 134,120 152,300

172,109 191,486 212,317TOTAL 243,295 277,343 316,065 358,164

398,405 440,655as % of 29.03 30.06 31.34 32.89 34.16

35.56totalpopulation Middle-aged adults (30-59 years old) Source:

Euromonitor International from national statistics and UN7) BABY

BOOMERSThe concept of baby boomers may not be that relevant to India

notwithstanding the impact ofand its participation in World War II. This

generation has virtually seen it all right fromIndian Independence (1947) to

the Indo-Pakistan war (1965). However, having been born inan age of

constrained resources, this segment is somewhat cautious about its

approach toconsumerist tendencies although it is adopting some of them.

For example, a number usemobile phones for their functional use but frown

on the use of credit cards and buyingbranded clothing.Health-related

products, children’s education, automobiles, retirement planning,

insuranceproducts and vacations form the bulk of their expense.000 1990

1995 2000 2005 2010 2015Male 68,010 77,278 89,882 104,720 120,490

135,142Female 66,202 74,368 85,105 98,034 112,310 126,207TOTAL

134,212 151,646 174,986 202,754 232,801 261,349as % of 16.02 16.43

17.35 18.62 19.96 21.09totalpopulation Baby boomers (40-59 years old)

Source: Euromonitor International from national statistics and UN8)

PENSIONERSIn the 1950s and 1960s, government jobs were among the

few acceptable job occupations forpeople from respectable households.

Changing technology and globalisation have changedthat with

unconventional income opportunities now presenting themselves to

Indians. Somepensioners have sought and enjoyed success in information

technology-related endeavourswhilst others have put their considerable

English language skills to good use in serviceindustries. Pensioners have

been the hardest hit section of the population. With declininginterest rates,

they have had to play a more active role in financial management. Some of

22. them are even trying to keep abreast of current happenings and

learning how to use acomputer or access the Internet.There food

preferences are shaped by their health conditions and they stick to their

preferredfood items.Independent living on the riseFrom the 1980s

onwards, there has been a steady migration of young adults and students

tothe US, in search of better opportunities. Most have chosen to settle and

make their lives inthat country. Therefore, their ageing parents have had to

learn to continue to liveindependently.Retirement communities viewed as

an optionRetirement homes were previously viewed negatively in India. If

the elderly went there, itmeant they had no one to care for them, and were

in a sense for the destitute elderly. In thenew urban India, however, well-

appointed retirement communities are mushrooming, andcouples in their

60s are going there of their own volition.While the numbers are not yet

significant, a trend is likely to increase in line with growth inthe numbers of

India’s elderly. It is also now an option for the middle-income and

salariedclasses. In families where there is a proprietary business, or a

family practice, two-to-threegenerations will continue to live together.000

1990 1995 2000 2005 2010 2015Male 28,085 31,905 36,292 41,109

47,286 55,928Female 28,944 33,737 39,420 45,476 52,441 61,240TOTAL

57,029 65,643 75,712 86,585 99,728 117,168as % of 6.81 7.11 7.51 7.95

8.55 9.45totalpopulation Pensioners (aged 60+) Source: Euromonitor

International from national statistics and UN3.4 TARGET SEGMENTS

FOR MAGGI NOODLES3.4.1 MAGGI 2 MINUTE NOODLESMaggi 2

Minute Instant Noodles is already associated with convenience and taste

and iscurrently accepted as a valid filling snack between meals. Maggi will

continue to leverage itsbrand equity and target the following segments for

this product. Children and Tweenagers: This is a large segment and is

Maggi’s stronghold. The age group between 4 and 14 years has largely

similar tastes and is traditionally targeted by Maggi. These segments

perceive Maggi instant noodles as a welcome change in taste from the

regular Indian fare and they are fascinated by the curly shaped noodles.

For these segments innovative products also have novelty value, however,

certain dominant preferences emerge. Realizing this early, Maggi shifted

focus from the lady of the house to the end consumer i.e. children

themselves ending up as the market leader of the instant noodles segment.

Early buy in of this segment will help Maggi to sell in other segments in

future.

23. Studying Age: The studying age segment though not traditionally

targeted specifically has been devouring Maggi 2 minute noodles. The

proposition of convenience of cooking as well as that of a tasty filling snack

attracts this segment which due to erratic schedules keeps missing their

regular meals.3.4.2 MAGGI CUP O NOODLESMaggi Cup O Noodles is

Maggi’s answer to Nissin’s Cup Noodles. With reduced cookingtime of ½ a

minute, ease of preparation and no need of separate plates Maggi Cup O

Noodlespromises to appeal to anyone in need of a quick, convenient bite.

Maggi Cup O Noodles beinga premium priced product, the segment

targeted should one which is ready to pay a premiumfor a quality

convenient food. The following segment promises to be the best bet.

Young Adults: The growing class of affluent young adults does not mind

paying higher prices for quality products. They are hard pressed for time

and would pay a premium for convenience. This segment has a good top

of the mind recall of Maggi as a brand as the current members of this

group were the targets of Maggi in the 1980’s and they retain fond

memories of Maggi, a emotional bond which can be leveraged to win them

over to Maggi Cup O Noodles. This segment is growing and has the

potential of accepting Maggi as a mainstream food item as they see instant

noodles as a natural part of Indian food culture.3.5 POSITIONING OF

MAGGI3.5.1 MAGGI 2 MINUTE NOODLESMaggi 2 Minute Noodles will

continue with its current positioning of convenience and as a“fast to cook,

good to eat” snack as this seems to be working well. To prevent Top

Ramen,the main competitor, from eating into its market share some

product innovation is required asotherwise Maggi may get stereotyped as

an unexciting product.Top Ramen is following a cost differentiation

technique. To deal with this Maggi has toposition itself as a differentiated

product. The market is very sensitive to taste and rejects anyflavour it

dislikes with Maggi having learnt it the hard way, thus the product can not

begreatly differentiated with on basis of taste. On the other hand Maggi has

to deal with thenegative perception of Maggi has of being unhealthy in an

increasingly health consciousmarket, a major threat in the current scenario.

Both these problems can be tackled bypositioning 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.Another3.5.2 CUP O MAGGIThe main USP of Cup O Maggi is

convenience without compromising on taste. Nissin’s CupNoodles is a

huge hit with the consumers liking the concept of noodles served in a cup

and theextra convenience of not dealing with cleaning/needing plates and

the lesser time required forpreparation. Cup O Maggi is targeted towards a

segment that values time and convenience aswell as is getting increasingly

health conscious. So Cup O Maggi with added nutrition andwholesome

components will position itself as a healthy and convenient food option that

canbe had anywhere, anytime. The crux of positioning will be “Healthy

Snack Anywhere,Anytime”.

24. 4. MARKETING MIX4.1 CONSUMER SOLUTIONThe instant noodles

segment of Maggi is the market leader in its segment. Available in

4flavours, the Masala flavour is the hot favourite by a huge margin followed

by MaggiVegetable Atta and Tomato flavour. The Maggi Dal Atta variant

shows a poor response.4.1.1 IMPROVING THE DAL ATTA

VARIANTMaggi Dal Atta variant ranks really low on taste as suggested by

the Marketing ResearchSurvey. The existing Sambar taste doesn’t go too

well with consumers even from the southIndian market. For which we plan

to replace the existing Tastemaker with a SpicierTastemaker to go with the

traditional Spicy Indian taste.4.1.2 NEW PRODUCT: THE CUP-O-

MAGGIMaggi is market leader in its segment but it still has no product to

challenge the growingthreat posed by Cup Noodles from Top Ramen, its

closest competitor. The cup noodle marketis expanding rapidly and there is

a huge scope for gaining further market share by enteringthis segment

which is currently dominated by Top Ramen. To challenge this threat

wepropose to launch a new product to directly compete in this segment

with the name Cup- O –Maggi.Features of Cup –O – Maggi To be made

available in two flavours Masala and Chicken to cater to the overall market

palate. The noodles will be available in a Plastic cup and just require hot

water to be added to prepare them. This is to capture the market which has

a growing demand towards convenience foods. Dried Vegetables and

Dried Chicken chunks to be made available inside the cup The new

improved spicier Tastemaker also to be added to the cupThe Market

Research Survey importuned us to improve the taste and provide better

healthbenefits. For this purpose the improved Tastemaker has been added

to Cup-O-Maggi. To caterto the demands of the growing health conscious

people nutritious veggies and chicken chunkshave also been added. These

extra pieces are already available with the Maggi range of soupsand the

same can be used in Cup-O-Maggi also thus dispenses the need for

setting up of anew processing factory specially for the manufacturing of

food pieces.4.1.3 PACKAGINGMajor changes are required in the

packaging of Maggi noodles as suggested by the MarketingResearch

Survey: Maggi noodles packets to be flimsy which require to be torn apart

carefully so as to not spill the contents. Another issue is with the multi brick

packets. Once opened they cannot be stored as it is and the contents have

to be transferred to another container.

25. To counter the problem, we plan to Increase the thickness of the plastic

sheets used in the Maggi Noodles packets to give more strength to the

packet and allow easy & safe opening of the pack To provide a Zip-Seal

facility along with the existing sealing to allow the packets to be stored

easily4.2 CONSUMER COSTPricing strategy for the existing variants of

Maggi Noodles is based on the objective of‘Maximising Market Share”.

These variants are competitively priced. As the segment ishighly price

sensitive, any price change initiates an instant price check reaction from

thecompetitor. Pack Size Current Price Revised Price MAGGI 2 Minute

Noodles (gm) (Rs) (Rs) Masala 50 5 5 100 10 10 200 20 20 400 38 36 600

54 54 800 72 72 Chicken 100 10 10 Curry 100 10 10 Tomato 100 10 10

Vegetable Atta Noodles 100 13 13 400 50 50 Vegetable Dal Atta Noodles

100 13 13 400 50 50 Maggi 2 Minute Noodles Proposed Revised Prices for

existing package sizesReducing the price of the 400g pack of Maggi

Masala is a very aggressive move to directlyattack the competitor whose

400g variant is priced at Rs 34. The effect of the downwardrevision in price

can be offset by the increase in sales volume.Pricing strategy for the

launch of Cup-O-Maggi is based on the objective of achieving“Product

Quality leadership”. Its segment is less price-sensitive so it will be premium

pricedto target the higher end customers. Creation of a premium brand

gives the company anopportunity to provide a differential pricing and

service offering to the customer therebycreating a key differentiator.

26. CUP-O-MAGGI Pack Size (gm) Price (Rs) Masala 80 20 Chicken 80 20

Cup O Maggi Proposed Pricing and PackagingProduct pricing is based on

offering high value to our customers compared to most pricepoints in the

market. Thus using the Competitive- Parity method, Cup-O-Maggi has

beenpriced at Rs 20 for an 80g pack of Masala and Chicken flavours to

directly compete againstthe competitor cup noodles which are also priced

at Rs 20 for an 80g pack.The pricing will be regularly revised according to

the changing forces in the marketenvironment.4.3 CONVENIENCETo keep

up with the growing trends in the Noodles sector, an intensive dealer-

distributornetwork is desired. Maggi has a well established distribution

network. As of now, the strengthof our already robust distribution network

could be leveraged to introduce and sell our newproduct: ‘Cup-o-Maggi’

noodles, as also the improved versions of the Dal Atta variant. Thetarget

markets of ‘Cup-o-Maggi’ are primarily present in the metropolitan cities as

well as thetier-II cities.In addition for Cup O Maggi we propose that: Maggi

Noodles have tie-ups with Corporate Houses Depending on the initial sales

of Cup O Maggi, introduce vending machines for the same at schools,

colleges as well as corporate houses.

27. 4.4 COMMUNICATIONPROMOTION OF CUP O MAGGIWith the

introduction of Cup-o-Maggi noodles, we propose to move away from the

‘Childand Mother’ approach of Maggi. The Cup noodles would be targeted

at the young singleprofessionals, as also the housewives, basically people

who might prefer to go for a quickmeal instead of cooking a whole

traditional Indian meal, specially in case of early work-daymornings or a

‘tired’-evening quick snack (in case of professionals). An associated

taglinewith the Cup-o-Maggi advertisement campaign could be: ‘Cup-o-

Maggi’: ‘Healthy SnackAnywhere, Anytime! “SUGGESTED FUTURE CUP

O MAGGI ADVERTISING CAMPAIGNWorld Cup 2007 (13th March 2007

to 28th April 2007)Families, couples, kids all enjoying their cricket with Cup

O Maggi; at home, drive-inscreens. Get a cricketer to endorse Maggi

noodles.GENERAL PROMOTIONEvents and Experiences: Hold the Online

Maggie Recipe Challenge, wherein innovativerecipes with Maggi Noodles

as a base are invited. Winning entries are compiled into an e-cookbook

which is published online.Celebrity endorsement: Maggi has associated

itself with celebrities like Bollywood actressPriety Zinta recently. The

reason being Maggi has always been the kids snack. The same isbrought

out and highlighted in the charms of Preity and her bubbly and vivacious

zing, withwhich she portrays the brand that is Maggi.Television

Advertisements: Portraying hassled double income families, finding relief at

theend of a tiring day with a quickly conjured up bowl of Maggi 2 Minute

noodles. Portraydifferent flavours available and focus on the health aspect

of the fortified 2 minute Noodlesand the Dal and Vegetable Atta Noodles.

Communicate the new improved east-to-usepackaging and the going spicy

of Dal Atta Noodles.

28. 4.5 MARKETING RESEARCHAn online survey was undertaken at

http://www.createsurvey.com/c/39191-OSMZz4/The following sections deal

with the results obtained on the basis of the 30 pointquestionnaire put forth

in the survey.4.5.1 Maggi Noodles Performance on various attributes 1400

1200 1000 800 600 400 200 0 ed ty ty e ila h e ck ste H g Va ts ic ag va alt

in gr bili rie n Pr Ta ag ie Im e nd Pa ra In A B4.5.2 Attributes on which Top

ramen smoodles performs better then Magginoodles Ingredients

Packaging No. of people ranking Top Taste Ramen smoodles better then

Maggi noodles Price 0 20 40 60 80 100 120 140

29. 4.5.3 Attributes on which Top ramen cup noodles performs better then

Maggi noodles Ingredients Convenience in cooking Packaging Taste 0 20

40 60 80 100 1204.5.4 Maggi Packaging size preference 800 gms 600 gms

400 gms 200 gms 100 gms 50 gms 0 0.1 0.2 0.3 0.4 0.5

30. 4.5.5 How do you like to consume your Maggi ? 11.02% 6.82% Plain

maggi 43.31% With vegetables With chicken 38.85% Your secret recipe

31. 5. FINANCIALS5.1 BREAKEVEN ANALYSIS OF A 100 TONNE

CAPACITY PLANTOF CUP O MAGGI NOODLESIn this analysis we will

look for the different costs involved in the production of Maggi cupnoodles

and then comparing it with the total sales to find out the minimum efficiency

at whichthe plant should operate in order to have a neither loss nor profit

relationship. This is done byfinding the Break-Even point of operation. If the

plant operates at the efficiency higher thanthat indicated by the Break-Even

point than the plant operates at a profit and vice-versa.5.1.1 BREAK-EVEN

ANALYSISThe cost involved in the production can be divided into two

categories viz. fixed cost andvariable cost. They can be defined asFixed

cost: This is the cost which is independent of the quantity of the product

produced e.g.Land &Building cost, plant & Machinery cost etc.Variable

Cost: this is the cost that varies with per unit of product produced e.g. Raw

materialcost, packaging cost etc.The break up of the various costs is

shown below1. Fixed CostA. Land and BuildingA plot of land of about 200

sq.mtrs. with built-up area of 100 sq.mtrs. is sufficient. Landwould cost

around Rs.60,000/- whereas cost of construction could be Rs.2.50 lacs.

Mainproduction area would occupy around 50 sq.mtrs. whereas packing

room and storage areawould occupy balance area.Particulars Area (sq.

mtrs.) Cost (Rs.)Land 200 60,000Building 100 2,50,000 TOTAL 3,10,000B.

Plant and MachineryMarketing is the key success determinant and the

production capacity has to be finalizedaccordingly. Keeping in mind the

financial viability, the rated production capacity is assumedto be 100

tonnes per year with 300 working days and 2 shifts per day.

32. This would necessitate installation of following machines:Item Qty.

Price (Rs)Extrusion Machine 1 1,00,000Pre-conditioner 1 80,000Mixer ( 50

kgs capacity) 1 1,00,000Pouch Packing and Sealing 1

1,00,000MachineWeighing Scale 1 10,000 TOTAL 3,90,000C.

Miscellaneous AssetsOther assets like furniture and fixtures, storage

facilities, working tables, SS utensils, etc.would call for expenditure of Rs.

50,000/-.D. UtilitiesPower requirement shall be 20 HP whereas per day

water requirement would be 500-550liters. Annual expenditure at full

capacity utilization will be Rs. 1,10,000/-.2. Variable costsA.MANPOWER

REQUIREMENTSParticulars Nos. Monthly Total Monthly Salary (Rs)

Salary (Rs)Machine Operators 2 4,000 8,000Skilled Workers for 2 3,000

6,000PackingSemi-skilled Workers 2 2,000 4,000Helpers 2 1,000

2,000Salesman 2 2,000 4,000 Total 24,000B. Raw and Packing

MaterialsNoodles are made with the help of many ingredients with major

input being wheat flour.Other materials required are corn and rice flour,

protein isolates, salt, spices, edible oil,preservatives etc. All of them are

easily available. Packing materials are equally important.Colourful and

attractive pouches shall have to be printed and outer packing will be

corrugatedboxes.

33. This cost can be shown asProduct Qty. Price/Ton Value (Tonnes)

(Rs.)Raw Material 100 70,000 70,00,000Packing Material 100 @

Rs.20,000/ Ton of 20,00,000 Finished Goods Total 90,00,000C. Selling

ExpensesMarketing will be a key element. Expenses shall have to be

incurred on transportation,Publicity in local media like newspapers,

hoardings and TV scroll, selling commission, freeSampling etc. A provision

of 30% of sales value is made every year to take care of theseExpenses

since the product is new thus more emphasis is given on this section. This

expensecan be reduced once the product is well established in

market.FINAL TOTAL COST ANALYSISFIXED COSTS In Rs.Land and

Building 3,10,000Plant and Machinery 3,90,000Miscellaneous Assets

50,000Utilities 1,10,000TOTAL FIXED COST 8,60,000VARIABLE COSTS

Per tonne of productionManpower Requirements 24,000Raw and Packing

Materials 90,000Selling Expenses @ 30% of Total sales5.1.2

ANALYTICAL BREAK-EVEN ANALYSISLet total production be X tones.

Since the 80 gm pack of Maggi is available for Rs.20 i.e.Rs.250/kg so lets

say that Maggi Noodle is supplied to the market agent at Rs. 180/kgSo for

no profit no loss equation is860000+ (1,14,000*X) + (30/100)*X*1000*180=

(180*X*1000)860000 = (180000-114000-54000)*XX = 71.66 tonnes

34. Final conclusion: The plant must operate at the minimum efficiency of

71.66% in order toreach break-even analysis point i.e. not to suffer any

loss.5.1.3 GRAPHICAL BREAK-EVEN ANALYSISThe result obtained

above can be verified by plotting a graph between the total cost

andQuantity of Maggi produced. The graph is shown below. Break Even

Analysis 20 Rupees (in millions) 15 10 Variable Cost Revenue 5 Cash

Balance 0 0 20 40 60 80 100 120 -5 Sales (in tonnes)5.2 SALES

FORECAST5.2.1 MAGGI INSTANT NOODLESSales by valueFor the year

2007 Projected value of instant noodles category (Refer Appendix B)=

Rs.8,611.1 millionThe desired market share by value = 80%Therefore,

projected value the sales need to be 80% * Rs.8611.11 = Rs. 6888.88

million.Sales by volumeAverage retail price per 100 gms of Maggi (across

all SKUs) = Rs.9Price for one thousand Tonnes of Maggi = 9 * 10^7

rupeesProjected value of sales = Rs. 6888.88 millionTherefore, Projected

volume sales = (Projected Value of Sales / Price per thousand Tonnes) =

76.5 thousand Tonnes.For year 2007 projected category sales = 96.9

thousand Tonnes.Therefore, volume market share of 78.95 % for the year

2007 is projected.

35. 5.2.2 PROPOSED : CUP O MAGGI NOODLESSales by valueFor the

year 2007 Projected value of cup noodles category (Refer Appendix B) =

Rs. 143.1millionThe suggested target market share by value =

20%Therefore, projected value the sales need to be 20% * Rs.143.1 = Rs.

28.62 million.Sales by volumeSuggested retail price per 80 gms of Cup O

Maggi = Rs.20Price for one thousand Tonnes of Cup O Maggi = 20 /80*

10^9 rupeesProjected value of sales = Rs. 28.88 millionTherefore,

Projected volume sales = (Projected Value of Sales / Price per thousand

Tonnes) = 0.115 thousand Tonnes.For year 2007 projected category sales

= 0.6 thousand Tonnes.Therefore, volume market share of 19.17 % for the

year 2007 is projected.

36. APPENDIX A: INDIAN INSTANT NOODLES MARKETGROWTH

GRAPHS Indian Instant Noodles Market Retail volume growth trends

Indian Instant Noodles Market Retail value growth trends

37. APPENDIX B: NESTLE MAGGI NOODLES FORECASTRETAIL

SALES Nestlé India Ltd Shares of Packaged Food by Subsector 2001-

2004% retail valuersp 2001 2002 2003 2004Instant noodles 79.3 77.3 78.1

78.5 Forecast Retail Sales of Noodles by Subsector: Value 2005-2010Rs

million 2005 2006 2007 2008 2009 2010Instant 6,077.5 7,300.6 8,611.1

9,959.2 11,319.4 12,667.3noodlesCups/bowl 84.8 112.6 143.1 175.2 206.8

237.6instantnoodles Forecast Retail Sales of Noodles by Subsector:

Volume 2005-2010000tonnes 2005 2006 2007 2008 2009 2010Instant

59.9 71.6 84.0 96.9 110.1 123.1noodlesCups/bowl 0.3 0.5 0.6 0.8 0.9

1.1instantnoodlesSource: Trade press (The Economic Times, The Hindu

Business Line, Financial Express, Business Standard, India Infoline,

agencyfaqs.com, Mid-day, rediff.com), Company research, Trade

interviews, Euromonitor International estimates

Malaysia

Maggi Instant Noodles Curry

A good to eat, fast to cook and instant snack to satiate hunger – Maggi, a brand of instant noodles manufactured by Nestle has gained huge popularity across the globe. The brand is popular in Australia, India, South Africa, Brazil, New Zealand, Brunei, Malaysia, Singapore, Sri Lanka, Bangladesh, Fiji and the Philippines. It is also called Maggi Mee in many countries.

Over the years, many brands of instant noodles have emerged but Maggi still rules the roost across the globe. With the growing popularity of Maggi, noodles are no longer considered as processed food and have slowly been accepted as part of regular household menu. Apart from strong brand equity and affordable price, the taste of Maggi noodles makes it really appealing among consumers buying Maggie noodles in cups/bowl instant noodles and pouch instant noodles.

Maggi enjoys the reputation of being staple food in many countries. For instance in Malaysia, it will not be any exaggeration to call Maggi Mee as national dish of Malaysia. No single social stratums in Malaysia can deny the temptation of Maggi and it has slowly evolved in several culinary forms. Among the most popular are Maggi Goreng, Maggi instant noodles curry and fried Maggi noodles.Maggi instant noodle curry is one of the favourite instant snacks in Malaysia and Singapore, which adorn the table of Mamak stalls across the country. It has a very unique curry flavor that blends perfectly with the texture of the noodles.

Many Malaysian traders export Maggi products to neighbourhood countries at wholesale prices.Hanyaw Malaysia is one such well known Malaysian exporter engaged in exporting high quality branded products at competitive prices with increasing number of international and Philippines customers discovered every day. It exports a wide range of Maggi products to international market including Malaysia origin Maggi Noodles Instant Curry, Maggi Noodles Instant Chicken, Maggi Noodles Instant Tom Yam, Maggi Noodles Instant Asam Laksa , Maggi Mi Goreng Perencah Cili Lazat and Maggi Mi Goreng Perencah Kari Ori. It also exports a wide range of grocery items such as food, beverage, cooking oil and daily use products of popular Asian brands to many foreign destinations.

Nestlé’s Maggi Noodles on Thursday introduced a new range of ‘devilled’ noodles which is expected to

ignite the taste buds of local youth.

Coming under three categories – devilled chicken, devilled kottu and devilled chilli chicken – the range

has been created to suit the local palate, which often craves hot and spicy food.

Taking the new range forward, the company also introduced its Brand Ambassador for the devilled

noodles, Sri Lankan-born Bollywood actress Jacqueline Fernandez.

The new range, the first in a line up of innovations to be introduced by Nestlé this year, has been

produced using the company’s world-renowned research and development expertise after an in-depth

consumer research carried out among the youth.

Results showed that the local youth favoured hot and spicy dishes, mainly in the ‘devilled’ form, thereby

giving root to the new range.

“Before venturing into developing a new product we gathered insight from the local youths behaviour,

trends, favourites and then assessed it and came up with what we call the ultimate taste experience for

the Sri Lankan youth,” Nestlé Assistant Vice President Priyadarshanie Karunaratne said.

Maggi devilled noodle packs comes with additional sachets of savoury sauce and spicy oil to add that

extra fiery zest, taste and aroma to the product.

“As Sri Lanka’s leading nutrition, health and wellness company, we are constantly innovating to make our

products more relevant to our consumers in line with evolving trends and needs,” she added.

“Maggi Noodles is a brand that has found a place in the hearts of Sri Lankan adults and children alike. Its

strong brand equity encouraged us to develop a new range of instant noodle products for youth with new

indigenous flavours to cater to changing consumer needs. The delicious spicy flavours of our new range

are sure to delight our consumers with great taste and the familiar tang of home.” Brand Ambassador

Fernandez acknowledged that the new noodle range was a definite new-found-love for her. “It tastes

incredible and has got such a fun, vibrant and youth-centric persona. I am definitely excited to be a part of

it. Nestlé has such huge brand ambassadors all over the world that I am honoured to be given a chance

to represent one of their products, especially such a tasty one made especially for the youth.”

Nestlé’s Managing Director Alois Hofbauer noted that Jacqueline was picked since she represents a new

Sri Lanka.

“Maggi Devilled Noodles are extremely youth centric with dynamic, vibrant, fun and hot brand

personalities. Jacqueline Fernandez fits very well with this youth-centric range. As a young, dynamic and

vibrant youth icon of international fame with a strong Sri Lankan identity, she blends perfectly with the

essence of our Maggi Devilled Noodles.”

Nestlé, the world’s leading Nutrition, Health and Wellness Company, recently launched its most

indigenous MAGGI Noodles product in Sri Lanka, MAGGI Ricey – a delicious and nutritious noodles

product made with the goodness of locally produced, premium rice and complemented with Sri Lanka’s

favourite chicken curry flavour.“It gives me great pleasure to introduce MAGGI Ricey, developed by our local team with the support of our world renowned Nestlé R&D. MAGGI Ricey caters exclusively to the tastes and nutritional needs of Sri Lankans. With an in-depth understanding of our local consumers, we have under the umbrella brand of MAGGI, combined the enriching goodness of Sri Lankan premium rice with a blend of chicken curry flavour.  We look forward to delighting thousands of MAGGI consumers across the country with our latest MAGGI noodles innovation!” said Nestlé Lanka Managing Director Alois Hofbauer.As a locally manufactured product, MAGGI Ricey is produced with high premium rice that has been cultivated by local rice farmers, enabling Nestlé to make a positive impact on their livelihood and on rural economies overall. “Creating Shared Value for Nestlé and for society that’s the way we do business,” added Hofbauer.  The launch of the product comes in the wake of the opening of the Noodles plant commissioned by Nestlé early this year, with the aim of expanding production capacity for all MAGGI Noodles products. The Noodles plant has further enabled Nestlé to contribute towards rural development by providing job opportunities to many individuals in the community.“MAGGI ‘two minute’ noodles has delighted generations of Sri Lankans since 1984,” said Nestlé Lanka Assistant Vice President – Food Priyadarshinie Karunaratne.  “A trusted Sri Lankan household favourite, MAGGI has, over the years, won the hearts of Sri Lankan adults and children alike with its range of diverse flavours that cater to consumers of all ages. As a brand that strives to uphold our consumers’ trust in us, we continuously endeavour to delight and add further value to our consumers’ diets and lifestyles. It therefore gives us great pleasure to offer MAGGI Ricey, a locally popular combination of rice and chicken curry, to our loyal consumers. With the launch of MAGGI Ricey, Nestlé combines its expertise in the world’s most cutting edge R&D together with indigenous favourites to offer our MAGGI fans a product that will undoubtedly excite their palettes.”With Sri Lanka keenly focused on developing a self-sustained economy, MAGGI Ricey is developed in

line with the country’s strong focus to promote the use of locally produced raw materials for the manufacture of food and beverages. Minister of Economic Development Basil Rajapaksa recently announced aims to reduce the per capita consumption of wheat flour since Sri Lanka has achieved self-sufficiency in rice production as of this yeaMaggi Devilled range with indigenous flavours caters to young adults who love hot and spicy food. The delicious spicy flavours of our new range are sure to delight the youth of Sri Lanka.Maggi Noodles Devilled range - Devilled Chicken, Devilled Chilli Chicken and Devilled Kottu are 3 new scintillating flavours. It also comes with additional sachets of savoury sauce/spicy oil for that added fiery zest, taste and aroma.Variants:

Devilled Chicken Devilled Chilli Chicken Devilled Kottu

Internationally acclaimed youth icon, Bollywood actress, Sri Lankan beauty queen and superstar, Jacqueline Fernandez is the face of Nestlé’s new hot Maggi Noodles Devilled range.

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