NESTLE AND MAGGI IN INDIA

OBJECTIVES
 What are the principal marketing challenges created by the ban on Maggi ?
 What are possible changes that you would recommend to the campaigns and why?
 Understand and evaluate the different advertising and promotion schemes over time before the
launch and in the 6 months after the launch and its implementation in terms of impact on
i) Sales over time
ii) Building brand strength
iii) Bringing back customers
iv) Creating loyalty

5C ANALYSIS

Company Customers Collaborators Context Competitors

•Nestle India - 9,000 •Kids, Teenagers, •Nestle SA •Samples of Maggi • ITC 'Yipee' - 22%
crore annual revenue College students •3 Accredited NABL Instant noodles Nissin ' Top ramen' -
• 8 Factories & many and Young labratories contained MSG and 1%, Patanjali -4%
co-packers •3 Million outlets higher than permitted
bacherlors levels of Lead
•55 year operation in •Snapdeal - E
India commerce •FSSAI issued order to
•Various superbrands recall all nine
like Nescafe, variants of noodles.
Maggi,Kitkat •Halt production and
,Milkmaid & Nestea sale in India while
export was allowed
•Neslte launched
Maggi oat noodles
when FSSAI Product
approval sytems was
under suspension
•Nestle destroyed
30,000 tonnes of
product

MARKETING CHALLENGES POST BAN

 Consumer and shareholder activism, random decisions by government bodies, volatile social groups, and hatchet
jobs by competing firms made it very difficult for Maggi to come out stronger after the ban.

 Loyal customers felt cheated and they felt that it was not just the Maggi, but they themselves have failed too;
Therefore convincing market at this point to regain consumers trust seem super difficult. Moreover most of
consumers were unconscious Maggi buyer, it was even more disappointing for them to overcome shock.

 Nestle has to recall current Maggi inventory from market, although it was done in right spirit , it somehow sent
wrong signaling that product could actually be unsafe.

 Nestle could not come up with any substantial evidence until high court decision in Oct 2015, to prove that MSG
content and lead content present in Maggi is optimal and it is safe to eat the noodles.

 #Social media back lash - #maggiban got viral , Many loyal customers were angry as they feel cheated by their
favorite brand. More and more Trends like #maggieinsoup #maggiban #Maggiinhotwater were doing rounds on
social networking site, making it difficult to effectively counter the social media backlash.
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 Ban led to the brand crises, and fear of long term brand dilution. The loss of goodwill played out in the form of
decreased revenue, loss of clients or suppliers and loss of market share.

 Competitors such as Patanjali started campaign that their brand is safe and healthy to eat. Yippee managed to grab
33 percent of consumer by Jan 26, 2016.

 Whole noodle market contracted to 50 percent, making it even more difficult to make comeback.

E V AL U A T I O N O F A D V E R T I S I N G AN D P R O M O T I O N S C H E M E
Post lifting of ban Maggi did aggressive campaigning and got successful in regaining much of the lost share. Loyal Customer
emotional stories were beautifully leveraged during that time. They Build the brand strength with Personal stories of real
consumers were used over the celebrity brand endorsement after the crisis to go with mundane family image, as Maggi was a
part of every middle class household. loyalty was created with from various advertising campaigns such as #WeMissyoutoo,
#Letyourmomknow etc, and it paid off really well in 6 months time. Sales grew, and overall market share increased; Moreover
sales promotion such as Snap deal flash sale that gave fridge magnet, welcome kit etc were used for creating loyalty.

Advertising campaigns with "Your Maggi is safe, it has always been" were directed towards Bringing back the loyal customers.
It resonated well with the consumers and response was amazing even after brand crises. In Nov 2015 only .5 Million stores had
maggi , and 6 months after ban stores increased to 2 million; Overall perception of ban had change and brand did not seem to
be tainted. Sales promotion played important role in bringing customer loyalty back as, just after the relaunch were super
successful as around 60000 kits were sold in just 5 mins of flash sales. Nestlé's tie up with Snapdeal and its digital strategy
again created buzz around the brand.

Overall Maggi's simple and clear advertisement and sales promotion connected well with the customers, as it stated facts in
simple authentic way. Ultimately raising Maggi's market share of 10 percent (during ban) to 55 percent within 6 months post
ban; Around June 2016 Nestle India rolled out new sub brand of Maggi under the name hot heads, for young adults who liked
to experiment with tastes .

Below picture shows timelines, various advertising campaigns, and market share during that time .

77%
58%
3,000 T
Market Share 42% 2,200 T

2 M Outlets 1,600 T
0%
1 0 0 To w n s

0T  6 0 k we lc ome kit- 5 min s

3.8 M Outlets
 Ne ws pa pe r A dvt  O n lin e s a le s - Home
4 5 0 To w n s de live ry
 T h a n kin g & R e a s s u rin g  Me rc h a n dis in g
 C orpora te V ide o
 5 mn S oc ia l me dia imp c u s tome rs  Hot h e a ds – D iff F la vors
B ANNE D  O n lin e s a le s – C h ic ke n Noodle
 6 s imple vide os
C L E AN L AB R E S U L T

JUN'15 AUG '15 OCT'15 NOV '15 FEB '16

# L e t your mom know
D i w a l i fe s ti v a l r e l e a s e
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4 P ANALYSIS

Product

• Maggi Noodles
• Multiple variants - Maggi Oat noodles, Chicken Noodles
• Hot Heads

Promotion

 Special Display in retail shops during relaunch

 Launch during festive period of Diwali to make resonate maggi relaunch with a festival
 Snap deal flash sales
 Home delivery facility
 Inclusion of Merchandise and welcome kit- Maggi fridge magnet, Post cards, welcome letter etc.
 Intensive advertisement campaigns capturing emotional family values
 Social media Campaigns #wemissyoutoo #YourMaggiissafe #Letyourmomknow
 Corporate Advertisement on YouTube to protect potential brand dilution.
 Bright yellow Print Ads synonymous with Brand
Place
• Retailers
• Online channels such as Snapdeal
Pricing
• Nominal pricing 10 rs per piece
• 120 per pack of 8 maggi + gift

RECOMMEDATIONS

 They should have communicated to customers within a week of ban in a simple clear manner that Maggi
is safe to eat and will come back soon after regulatory hurdles. They were pretty silent for few days.

 Just after the ban Top Management and their families should have gone to national television and should
have eaten Maggi at prime time for reassurance that maggi is safe and healthy; They should have also
given assurance that products are manufactured in state of the art, world-class facilities, and Strict quality
and hygiene norms are followed in the manufacture of all products.

 They could have tried the possibility of not burning 350 caror of maggi stock by considering more on
options such as exporting to other countries , where maggi was tested and declared safe to eat. Moreover,
they could have thought of stocking it until few months with help of agencies (until high court results).

 They should have tracked the particular lot from a factory and isolated on production samples; In that
way, we could have just recalled stock selectively instead of Pan India level.

 Brand Manager or Chief marketing officer should have done PR - to effectively communicate the value ;

 Nestle should have asked external Lab representatives of different countries where maggi was deemed as
safe to come forwarded and talked about the results of test done in their laboratories.