Ramdhar Maheshwari Lions Business School

Affiliated To:To:Tilak Maharashtra University, Pune.

Project of:of:-
Product Life Cycle:Cycle:Presented By:By:Ms. Neha agarwal Ms. Ramnik kaur Mst. A
mar jain Mst. Siddharth bajaj
¨What is brand name that comes to your mind when I say the word Noodles?
About ³Maggi´ 2-Minute Noodle
 Nestle India Ltd. (NIL). The Indian subsidiary of the global FMGC major, Nestle
SA, introduced the maggi brand in India in 1984.  It was found by the Maggi famil
y in Switzerland in the 19thcentury.  With a launch of Maggi noodles, NIL create
an entirely new food categoryinstant noodles- in the Indian package food market.
 The brand is popular in India, Malaysia, New Zealand, Singapore, South Africa,
Australia.  Nestle wanted to explore the potential for such an instant food among
the Indian market.  It took several years and lot of money for nestle to establi
sh its noodles brand in India.  In 2005, NIL started offering a range of new heal
thy products under the maggi brand, in a bid to attract health-conscious consume
rs.
Product of nestle ³Maggi´
        
Maggi Noodles Maggi Vegetable Noodles Maggi Dal Atta Noodles Maggi Rice Noodles
Mania Maggi Sauces Maggi Healthy Soups Maggi Magic Cubes Maggi Pichkoo Maggi Cup
pa Mania
³Maggi´ takes health route
 In May 2006, Nestle India Ltd. (NIL), launches a new instant noodles product cal
led Maggi Dal Atta noodles. This product id under the popular Maggi brand.  The d
al atta noodles were made of whole wheat and contained pulses, and positioned as
a healthy instant noodles.  NIL offered a variety of culinary product such as in
stant Noodles, soups, sauces and ketchups, cooking aids (seasonings), etc, under
the Maggi brand. Over the years, Maggi noodles became a popular snack food prod
uct in India.
Competition¶s of ³Maggi´
 During 1990s the sales of maggi noodles declined, and this was attributed partly
to the growing popularity of top ramen.  Also they are having a strong competiti
on with a local manufacture.  Maggi is also facing competition with the chowmin.
Initial Strategies of ³Maggi´
 It has faced lot of hurdles in its journey in India.  The basic problem the brand
faced is the Indian psyche.  However the sale of maggi was not picking up despit
e of heavy media advertising.  To overcome this NIL conducted.  The noodles taglin
e ³fast to cook, good to eat´ was also in keeping with this positioning.  They promot
ed the product further by distributing free samples giving gifts on return of em
pty packets.
Hurdle faced by ³Maggi´
 ³Maggi´ is a trusted brand because it has understood the consumers evolving needs, a
nd consistently innovated and renovated itself to make life easier and happier f
or them, But for being a trusted brand Maggi has also faced many hurdles.  In 199
0 the sale of Maggi was decline. Top Raman Noodles, Indo nissin a Japanese noodl
es had given Maggi a good competition.  Some Maggi Products were also failed e.g.
Dal Atta Noodles etc.  Maggi launched some new products under their brand, but t
hese products were not successful: Ketchups, Soups, Tastemakers, etc.  But Maggi
has taken care of consumers likes and dislikes and went through a good process o
f New Product Development to achieve the consumer satisfaction.
What is product life-cycle? life Product life cycle is a series of stages start f
rom introduction stage of product and end on decline stage.  At each stage organi
zation take different strategy according to product nature, environment, profits
, revenues and customers.  Product life cycle change from product to product each
company PLC is different from other.  Some product move from introduction stage
to maturity in a fly like fashion (shoes and clothes) and decline in a short spa
n of time.
Concept of PLC
 Product have a limited Life.  Product Sales pass through distinct Stages.  Profit
rise and fall at different stages.  Product requires different strategeies.
Benefits of PLC
 Reduced time to market  Improved product quality  Saving through the reuse of orig
inal data
Product Life-Cycle Applications Life Product class has the longest life cycle (e.
g., gas powered cars)  Product form tends to have the standard PLC shape (e.g., d
ial telephone)  Brand can change quickly because of changing competitive attacks
and responses (e.g.,Tide,Cheer)  Style is a basic and distinctive mode of express
ion (e.g., formal clothing, Danish modern furniture)  Fashion is a popular style
in a given field (e.g. business casual)  Fad is a fashion that enters quickly, is
adopted quickly, and declines fast (e.g., pet rocks)
Problems of PLC
 Hard to identify which stage of the PLC the product is in.  Hard to pinpoint when
the product moves to the next stage.  Hard to identify factors that affect produ
ct¶s movement through stages.  Hard to forecast sales level, length of each stage,
and shape of PLC.  Strategy is both a cause and result of the PLC
Four stages of Product Life-Cycle Life-
Introduction Stage
Growth Stage
Maturity Stage
Decline Stage
Introduction Stage
Summary of Characteristics, Objectives, & Strategies
Sales Costs Profits Marketing Objectives Product Price Distribution Advertising
Low Sales High cost per customers Negative Create product awareness and trial Of
fer a basic product Use cost-plus Build selective distribution Build product awa
reness among early adopters and dealers
Growth Stage
Summary of Characteristics, Objectives, & Strategies
Sales Costs Profits Marketing objectives Products Price Distribution Advertising
Rapidly rising sales Average cost per customer Rising profits Maximize market s
hare Offer product extensions, service, warranty Price to penetrate market Build
intensive distribution Build awareness and interest in the mass market
Maturity Stage
Summary of Characteristics, Objectives, & Strategies
Sales Costs Profit Marketing Objectives Product Price Distribution Advertising P
eak Sales Low cost per customer High profits Maximize profits While Defending Ma
rket Share Diversify Brand And Models Price to match or best competitors Build m
ore intensive distribution Stress brand Differences
Decline Stage
Summary of Characteristics, Objectives, & Strategies
Sales Costs Profit Marketing Objectives Product Price Distribution Advertising D
eclining Sales Low cost per Customer Declining Profits Reduce expenditure And mi
lk the brand Phase out weak items Cut price Go selective: phase out unprofitable
outlets Reduce to level needed to retain hard-core loyal customers
Managing the Life Cycle
 Successful life-cycle management requires predicting the shape of the curve and
then successfully adapting strategies at each stage  When to consider entering th
e market  How to manage to capitalize on growth  It is possible to develop strateg
ies that will extend the maturity stage; modify the product, devise new uses, or
design new appeals  Greatest challenge comes at the decline
Product life cycle of ³MAGGI´
A concept that provides a way to trace the stages of a product¶s acceptance, from
its introduction (birth) to its decline (death).
Introductory stage
     
High failure rates No competition Frequent product modification Limited distribu
tion High marketing and production costs Promotion focuses on awareness and info
rmation
Growth stage
Increasing rate of sales Entrance of competitors Initial healthy profit Price normal
ly falls Development cost are recovered During the 1990s the sale of Maggi noodles
declined due to, growing popularity of top ramen, another instant noodles produ
ct In order to improve sales, Nil change the formulation of Maggi noodles in 1997
. However, its proved to be a mistake, as consumer did not like taste of new prod
uct. In march 1999, NIL reintroduced the old formulation of the noodles, after wh
ich the sales revived. Over the year nil also introduced several other products
like soups, and cooking aids under the Maggi.
Maturity Stage
      
Declining sales growth Saturated markets Extending product line Stylistic Produc
t changes Heavy promotion to dealers and consumers. Price and profits fall In 20
03, Hindustan lever Ltd was all set to take on Nestlé's bestselling Maggi 2-min no
odles by launching a new category of liquid snacks under its food brand, knorr A
nnapurna.  The new product, called knorr annapurna soupy snacks, was priced aggre
ssively at Rs.5 and had four variants: Two chicken option & Two vegetarian.  Like
Maggi, soupy snacks will be an in-between- meals snacks and will be targeted at
all age groups, particularly office-goers.
Decline stage if no product Innovation brought
 Long run drop is sales  Large inventories of unsold items  Elimination of all non-
essential Marketing expenses.
SWOT ANALYSIS
Strengths, Weaknesses, Opportunities and Threats.
 SWOT stands for strengths, weaknesses, opportunities, and threats.  SWOT analysis
is a tool for auditing an organization and its environment.  It is the first sta
ge of planning and helps marketers to focus on key issues.  Strengths and weaknes
ses are internal factors.  Opportunities and threats are external factors.
 Strengths: attributes of the person or company that are helpful to achieving the
objective.  Weaknesses: attributes of the person or company that are harmful to
achieving the objective.  Opportunities: external conditions that are helpful to
achieving the objective.  Threats: external conditions which could do damage to t
he business's performance.
SWOT of Nestle ³Maggi´
Strength
 Market leader  Brand loyalty  Distribution channel  Advertising strategy
Weakness
 Heavily dependent on One flavour  Minor distribution problems  Health related issu
es
Opportunities
 Unexploited rural markets  Increasing number of working youth  Affinity of Indians
to Chinese food
Threats
 Competitors  Competitive pricing (Top Ramen)
BCG Matrix
 BCG Matrix, is a matrix developed by a group known as Boston Consulting Group in
USA.  The BCG matrix method is based on the product life cycle theory that can b
e used to determine what priorities should be given in the product portfolio of
a business unit.  To ensure long-term value creation, a company should have a por
tfolio of products that contains both high-growth products in need of cash input
s and low-growth products that generate a lot of cash.  It has 2 dimensions: mark
et share and market growth.  In 1960, Bruce Henderson the president of the Boston
consulting group Places the BCG matrix product according to market share & mark
et growth rate in the 4 celled matrix.  The market standing of the company can be
analysed in four different classess.
Four Celled Matrix Are:Are:BCG Matrix
STARS QUESTION MARKS DOGS
CASH COWS
Stars
 High growth, high market share  Have best profit  Use and generate large amounts o
f cash.  To maintain the market share product requires capital over and above the
re cash flow.
Cash cows
 Low growth, high market share.  Profits and cash generation is high , and because
of the low growth, investments needed is low.
Dogs
 Low growth, low market share.  Very low competitive position and profit.  Deliver
cash, otherwise liquidate.
Question marks
 High growth, low market share.  Have the worst cash characteristics of all, becau
se high demands and low returns due to low market share.
BCG matrix of ³MAGGI´ ³MAGGI
 Product: Maggi Noodles  Position: Cash Cow (1) Maggi Noodles, which has found mor
e households of consumption in India that any other country in the world and has
become the first preference of Indian children in terms of instant food, is onl
y a cash cow and not a star. (2)Maggi Noodles has a significantly high market sh
are in the Noodles market in India, the market growth rate of Noodle consumption
is not very high. (3) Though the number of repeat purchasers is high in case of
Maggi, the rate of increase among the new purchasers is not too high.
Now ³Maggi´ enjoys around 94% Market share in this segment.
MAGGI(94%) TOP RAMEN(4%)
4% 2%
OTHERS(2%)
94%
Current Scenario of ³Maggi´
 Leading Brand in India as well as World.  Current Sales: Approx. ± 90000 boxes ± Rs.
4,79,49,000 in Mumbai ± 10,00,000 boxes ± 55 cr. in India  Reasonable competitive pri
cing.  Creative interaction blogs for customers: www.maggi-club.in  Focus mainly o
n Health Benefits.
³Maggi´ turns 25, Nestle to unveil new campaign
 Nestle India is set to roll out a new marketing drive to mark the 25th anniversa
ry of its instant noodles brand, Maggi Called ÄMe & MeriMaggi , the campaign is su
pposed to celebrate the consumers bond with brand Maggi.  The company plans ³360 de
gree activation´ across television, print and the internet, beside on-ground activ
ities.  Nestle has launched an interactive website for the consumers, www.meandme
ri.in  In 2008, two brand extensions were made ²Maggi Bhuna Masala and Maggi Cuppa
Mania Instant Noodles.
Conclusion
 Plc analysis is very important tools in the hand of marketer.  Better understandi
ng is in managing profitable product and eliminating unprofitable one.  As produc
t moves from one stage to another stage in plc, marketer should evaluate and adj
ust this strategies for promoting, pricing and distribution of product.
Acknowledgement
We like to thanks Our Mam Ms. Mansi Gaur for helping us and giving us a valuable
suggestment and input throughout the project and we also like to thanks the stu
dent for showing their atmost patience.
Bibliography
 www.Maggi-club.in  www.Wikipedia.com  www.Google.com  www.Nestle.com  www.Meandmeri.
com  www.Scribd.com  www.Managementparadise.com  Principle of management:- Philip k
otler
Thank You