Maggi’s 1994 and further to 13000 tons

Maggi’s 1994 and further to 13000 tons

Maggi’s Brand Extension: In 1998, Nestle launched Maggi’s first brand extension, Maggi soup.

At this stage, There was no organized packaged soup market in India. Nestle planned to create a market for packaged soup as it felt the category had a lot of potential. However, according to analysis, the company had introduced soups only to cash in on the Maggi’s brand name, and was never very serious about the segment. In 1993, “Sweet Maggi”, the first variant of Maggi noodles was launched.

The company supported the launch with a huge advertisement outlay that amounted to 75% of the total yearly expenditure on the Maggi brand. However, the product failed to generate the desired sales volume and Nestle was forced to withdraw it. At the end of the year, Maggi noodles were generating sales volume of around 5000 tons and remained a loss making proposition for Nestle. To boost sales, Nestle decided to reduce the price of Maggi noodles. This was made possible by using thinner and cheaper packaging material, the company also introduced “money saver multi packs” in the form of 2-in-1 pack and 4-in-1 packs.

As a result volume increases phenomenally to 9700 tons in 1994 and further to 13000 tons in 1995. Maggi’s euphoria was, however, short lived, as sales stagnated in 1995 at the previous year’s level. With soup business being threatened by a new entrant “Knorr soups” launched in1995, offering 10 flavors against Maggi’s 4 the company started rethinking its strategies towards the soup market. In order to stretch Maggi’s brand to include Indian ethnic foods the company tied up with a Pune based chordia foods to launch pickles under the year 1995.The company also tied up with Indian foods fermentation (IFF), a Chennai based Food Company to market popular south Indian food preparation such as sambher, dosa, vada and spices in consumer packs in Dec1995. The company reportedly saw a lot of untabbed potential in the market for ready to use south Indian market. In 1996, products from these two ventures received lukewarm response from the market ;sales were rather poor in the regions in which they were launched.

Analysts attributed the failure of these Maggi extensions to the fact that Nestle seemed to be particularly bad at dealing with traditional Indian product categories.Maggi noodles performed badly in 1996. Despite slow sales in the previous two years, Nestle had set a sales target of 25,000 tonnesfor the year.

However, Maggi couldn’t cross even 14,000 tones. Adding to the company woes was the failure of Maggi Tonight’s Special, a range of cooking sauces aimed at providing ‘restaurant-like-taste’ to food cooked at home. The range included offerings such as Butter Chicken gravy and tomato sauce for pizzas. Understanding these failures, and buoyed by the fact that the Maggi brand finally broke evening 1997, Nestle continued to explore new options for leveraging on the brand equity of Maggi noodles.The company realized that the kids who had grown up on Maggi noodles had become teenagers by the late 1990s. As they associated the product with their childhood ,they seemed to be moving away from it. To lure back these customers and to explore new product avenues, Nestle launched ‘Maggi Macaroni’ in July 1997.

According to analysts ,Maggi Macaroni was launched partly to deal with the growing popularity of competing noodles brand Top Ramen. Maggi Macaroni was made available in three flavors ,Tomato ,Chicken, and Masala. The company expected to repeat the success of Maggi noodles with Maggi Macaroni.As with most of its product launches, Maggi Macaroni’s launch was backed by a multi-media advertisement campaign including radio, television, outdoors and print media with the tagline, ‘Tum Roz Baby .

The product’s pricing, however, proved to be a major hurdle. A 75-gm Maggi Macaroni pack was priced at Rs 11, while a 100-gm noodles pack was available at Rs 9. According to analysts, Nestle failed to justify this price-value anomaly to customers, who failed to see any noted value addition in Maggi Macaroni (packaging and flavor variants were similar to those of Maggi noodles).In addition, customers failed to see any significant difference between Maggi Macaroni and the much cheaper macaroni that was sold by the unorganized sector players. The biggest problem however was the taste of the new product.

Since macaroni is thicker than noodles, Maggi Macaroni did not absorb the tastemaker well and consequently. The product mix of Maggi is divided into various categories defined below. The company has launched various products under each category as mentioned below. 1. Noodles • Maggi 2-Minute Noodle ( Masala , Chicken,Curry and Tomato) • Maggi Dal Atta Noodles ( Sambhar taste) • Vegetable Atta Maggi Noodles Maggi Rice Noodles (Lemon Masala, ChillyChow and Shahi Pulao) • Maggi Cuppa mania (Masala yo, Chilli chow yo) 2. Sauces • Teekha masala • Tomoto chatpat • Imli khata mitha • Tomato ketchup • Hot and sweet • Tomato pudina • Ginger, Garlic & Coriander • Maggi Oriental Chilli Garlic • Ginger, Garlic & Coriander 3.

Maggi Pichko 4. Soups: • Chef Style – Cream Mushroom – Sweet Sour Tomato Noodles – Tangy Tomato Vegetables • Home Style – Creamy Chicken – Mixed Vegetable – Rich Tomato Chinese Style – Chinese Hot Sour Chicken – Chinese Sweet Corn Chicken – Chinese Sweet Corn Vegetables – Chinese Hot & Sour Vegetables