Maggie Project

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New product development. Customer buying behavior

Text of Maggie Project

1. INTRODUCTION TO FMCG INDUSTRYFMCG industry,alternatively called as CPG (Consumer packaged goods) industry primarilydealswith theproduction, distributionand marketingofconsumer packaged goods. The ast!oving Consumer Goods (!CG) are those consumables which are normally consumed by theconsumersat aregularinterval. "omeoftheprimeactivitiesof!CGindustryareselling,marketing, financing, purchasing, etc.Theindustryalsoengagedinoperations, supplychain,production and general management.The ast !oving Consumer Goods (!CG) industry in #ndia is one of the largest sectors in thecountryandover theyearshasbeengrowingat averysteadypace. Thesector consistsofconsumer non$durable products which broadly consists, personal care, household care and food% beverages. The #ndian !CG industry is largely classified as organi&ed and unorgani&ed. Thissector is also buoyed by intense competition. 'esides competition, this industry is also markedby a robust distribution network coupled with increasing influ( of !)Cs across the entire valuechain. This sector continues to remain highly fragmented.Industry ClassificationThe !CG industry is volume driven and is characteri&ed by low margins. The products arebrandedandbackedbymarketing, heavyadvertising, slickpackagingandstrongdistributionnetworks. The !CGsegment canbe classifiedunder the premiumsegment andpopularsegment. The premium segment caters mostly to the higher*upper middle class which is not asprice sensitive apart from being brand conscious. The price sensitive popular or mass segmentconsists of consumers belonging mainly to the semi$urban or rural areas who are not particularlybrand conscious. Products sold in the popular segment have considerably lower prices than theirpremium counterparts.Th facts a!out th FMCG Industry!CG, otherwise known as CPG, is one of the biggest industries in the world and there are a lotof facts that stand the !CG industry apart as a career choice+FMCG co"#anis ar !hind th !i$$st !rands in th %orld. !CG is all about names, the products which everyone recogni&es from trips to the supermarketor from ads on television. The brands that make up this sector are the high profile ones, the oneseverybody knows and loves. Think Coca$Cola, ,ettol and ,ove. This is an industry that puts youin living rooms, kitchens and bathrooms across the globe.Th FMCG industry chan$s fast and is constantly &ol&in$. #t-s fair to say there is never a dull moment in !CG. rom the pace at which goods leave theshelves to the rate of product innovation and career progression, things move .uickly. /nd itdoesn-t end there. The brands themselves are changing 0ust as .uickly. 123 of brands on the top422 list twenty years ago have already been replaced by new names today.FMCG fir"s thri& on "#loy and custo"r rtntion. 5mployee investment is a big part of the ethos of the !CG world. Perhaps it-s because weunderstandthe importance of loyalty. Customer loyaltycanmake or breaka brand. TakeTwinning6s, for e(ample 7 a century after they entered the top 422 brand list, they are still thereandgoingstrong. "oit makessensefor!CGcompaniestoencouragetheloyaltyoftheiremployees too.FMCG co"#anis can !at th rcssion. This isanindustrythat hasproveditself veryresilient torecession7withthema0orityofcompaniesinthesector weatheringthefinancial storminawaythat veryfewothershavemanaged. 8hy9 8ell, consumers will always needtobuytheproducts createdby!CGcompanies. They may not buy big items like refrigerators or cars in a recession, but floors stillneed to be cleaned, clothes need to be laundered and aches and pains still need to be soothed.Th FMCG industry thin's !i$$r ( and !ttr. This is an industry that offers things on a whole new scale. 8here else could you find yourselfhandling :4;2 million accounts9 8orking in !CG gives you the chance to be a part of someglobal successstoriesandinfluencethewayconsumersshopforproducts. !CGfirmsarealways thinking of the ne(t great discovery or innovation 7 always developing and ever$changingto meet consumer-s needs.FMCG has a history of dli&rin$ %hat consu"rs %ant. "ome !CG companies-roots are over two centuries old 7 driving the industry to a value of:;ere it re.uires thehigh cash re.uirement to come into the stars areas. Thus we can take the product is !/GG# ,al/tta )oodles.C*S+ CO,S4Cash cows are with the strong market position and low growth rate. "uch markets are usually ina position to make their product favourite with the low price in the market. >ere the e(ample is!/GG# !asala lavours which is very popular in today6s market.DOGS4>ere the marketing position and market growth rate both are very low and it is not profitable forthe company. Thus company must have to stop the production of the products coming under thisarea.2ortr8s Fi& ForcsThe Porter-s ive orces tool is a simple but powerful tool for understanding where power lies ina business situation. This is useful, because it helps you understand both the strength of yourcurrent competitive position, and the strength of a position you are considering moving into.2OT-NTI*5 N-, -NTR*NTS INTO T+- INST*NT NOOD5-SM*R7-T IN INDI*.#nitially, !aggi noodles with its Btwo minute formulaD dominated the #ndian noodles market.Keport published by The 5conomic Times on A2th august, C242 shows that !aggi is losing itsmarket share because of entryof newer entrants like Gla(o"mithQline-s (G"Q) >orlicksoodles,>industanJnilever-s (>JN) Qnorr "oupynoodles, 'ig'a&aar-s TastyTreat, TopKamen and several other smaller players, according to data by market research firm )ielsen. EtherslikeCapital oods- Ching-s"ecret andCGoods-s8ai$8ai, "pencer6ssmartchoice noodles, /ditya 'irla Ketail-s easters are notching up share. >JN and G"Q have positioned their product as Ohealthy snacking6.oodles comes with the punch line of B)oodles without the O)o6+ /vailable only in themulti$grain and wheat variant, the product is being promoted as having higher nutritionalvalue compared to other popular brands. The main uni.ue selling proposition (J"P) ofoodles is the vitamin$packed health$maker sachet that comes with the pack. The data shows that !aggi-s share of instant noodles, on an all$#ndia basis, across urbanmarkets, has slipped consistently between ,ecember -2? to Guly -42. 8hile !aggi instantnoodles had a ?2.ealth bhiD1. 'ring different types of variety with different flavour !aggi C minutes noodleRs lavour Chicken ,Megetable,Pi&&aCurry, Cheese Tomato masala ,etc ;.They target Qids, office goers,youths, working women H. They began to make a brand image using high promotion eavy promotions to dealers and consumers Prices and profits fall #n C22A>industan Never Ntd was all set to take on )estle-s bestselling !aggi C$minutenoodles bylaunchinganewcategoryof li.uidsnacks under its foodbrand, Qnorr/nnapurna. The new product, called Qnorr /nnapurna "oupy "na(, was priced aggressively at Ks ;and had four variants+ two chicken options and two vegetarian. Nike !aggi, "oupy "na( will be an in$between$meals snack and will be targeted at allage groups, particularly office$goers.Dclin Sta$ If no #roduct inno&ation !rou$ht5ventually, the market for a product will start to shrink, and this is what6s known as the declinestage. This shrinkage could be due to the market becoming saturated (i.e. all the customers whowill buy the product have already purchased it), or because the consumers are switching to adifferent type of product. Nong$run drop in sales. Narge inventories of unsold items.Brand Value chain analysis- Nestle Maggi Marketing Program Investment: a. Product: )estle !aggi has made significant investment in product. #t has came up withseveral product linelikeCminutenoodles, pasta, Qetchups, soups etc, indifferent flavors,different packaging like value saver packs, sachet etc. !aggi )oodles is the lagship product of)estle !aggi. b. Communications:)estle!aggi mainlycommunicateits products %benefits viaadvertising primarily TM advertising. /nd have also launched several marketing campaigns fromtime to time like B"hare your e(perienceD Campaign, BGuess the tasteD campaign etc. /nd alsopromotional campaigns in schools, colleges % offices, free sample distribution, gift on return ofempty pack etc c. Trade: /vailable at ma0or retail outlets, provision stores. d. Ethers+ #nvites housewives tosend innovative recipes made from !aggi, organi&ed contests % industry visits for students andseveral other interactive activities.Multilier ! Program"uality:)estle !aggi marketing programs are high on clarity, relevance,distinctiveness and consistency part. /ll the marketing programof nestle !aggi wereunderstandable. !aggi was launched in #ndia with tagline Bast to cook, Good to eat BC !inutenoodles. Nater focus was shifted to health and nutrition factor. They launched BTaste bhi healthbhiD campaign which is synonymous for !aggi. Gingle of !aggi is .uite catchy and still familiarin respective target audience. The ads featuring Gaved and Panka0 kapoor were also popular./llthese programs were well integrated and consistent with its core BGood food good lifeD.Customer Mindset:'rand /wareness+ 'rand recall for !aggi is high, still !aggi is instant recalled in its flagshipproduct category$ Cmin noodles. b. Brand #ssociations: "trong$ Tasty % >ealthy, Mariety, 5(perience, Convenient. c. Brand#ttitudes:Positive%favorableattitude, as !aggi has always provided%maintained its products6 .uality. d. Brand #ttachment: !aggi still have its loyal customer base, it6s been long !aggi isone of the ma0or players in #ndian market (since 4?@A). "till consumers adhere to !aggi. e. Brand #ctivity:#t is high for !aggi as many consumers still use !aggi products.D /survey carried out by the )ational Council of /pplied 5conomic Kesearch named !aggi thecountry-s most valued !CG brand.D (#t is clear from the fact that in C22; !aggi had A.< billionmarket share from 4.< billion in C22A.)Multilier-Marketlace Conditions:a. Cometit