Assignment: Decision Making

Date
of
Submission
Group
Number/Section

07 November,
2015
6A

CEO

Aseem Maheshwari

Group
Members

Anirudh Todi
Hoang Nguyen Huong Ngoc
(Hanna)
Karthik Nair
Tanushree Lahoti

Brand selected: MAGGI noodles, Nestle

Quick Introduction :
Maggi was introduced to the Indian market in 1983. In India, the word Maggi is
synonymous with 2 minute noodles. Over the next 25 years, they enjoyed a 90%
share in the instant noodle market. Indias proximity to China & Nepal, has made
noodles a part of the urban Indian diet. The 2 minute noodles can be found
anywhere in India even in the remotest village.
Maggi relies on nostalgia to keep ahead of the growing noodle competition.
However, recently Maggi noodles has landed itself in trouble after high quantities of
lead was found in the noodles. This had resulted in the ban of the consumption of
Maggi noodles for some time. This has drastically affected the sales, a drastic
reduction of market share & loss of consumer trust in the brand. Lets understand
what went wrong with the brand Maggi using some essential techniques.

I/ PROBLEM IDENTIFICATION
A. S.W.O.T Analysis of Maggi
Strengths
Market leader in noodles category with
high brand loyalty.
Availability of varieties and flavors.
Memorable taglines that make their
advertising strategy super hit.
With availability of varieties it has a strong
product line.
Extremely efficient distribution channel.
USP- fast to cook and eat.
Better price than competitors.
Popularization of Maggi in restaurants,
canteens and road side stalls has been a
major contribution in its success.

Weakness
Not a great presence in the rural
markets.
Negative word of mouth about the ill
effects of Maggi by media, dissatisfied
customers spoils the brand image in
social media.
Alleged presence of lead in its
products hurt its brand image.
Products are dependent on each
other.

Opportunities
Growing trends of convenience cooking.
Potential to tap the untapped region of
rural markets.
Despite having varieties the company still
has a potential for increasing its offering
choice.
Changing consumer preference towards of
Chinese and quick to eat food.
The company can foray into other markets
of food and beverage category because of
strong brand name and thus a brand
extension.

Threats
Price wars with key competitive
players.
Volatile cost and impacts of inflation.
Changing perception of consumers
towards healthy eating habits.
Tough competition from local players
and increased competition such as
Top Ramen, Knorr Instant Noodles
etc...

B. 5 WHYs:
1. How was Maggi affected by the lead crisis?
Nestl has been through a tough time, witnessing a dramatic decrease in
Maggi brands revenue as well as market share in India in the past few
months. In a recent report, Nestls revenue coming from Maggi declined to
19.34 billion rupees ($302 million) in the three months ended June 30,
compared with 24.19 billion in the same period a year earlier. The company
posted a net loss of 644 million rupees, compared with a net profit of 2.88
billion rupees a year earlier.
2. Why has Maggi suffered such loss in sales?
Maggi noodles was found to contain lead and Monosodium Glutamate (MSG)
in excess. With that discovery by Food Safety and Standards Authority of
India's (FSSAI), it was banned in Delhi and stopped in Kerala government's
retail outlets. Other States followed suit. More important than that, Maggi has
lost its reputation as well as its consumers trust and has had to face a
nationwide crisis as this story has been hogging the headlines of both local
and international media for months now.
3. Why has Maggi products been found hazardous and unsafe for
human consumption?
Lead content was found in the taste-maker sachet but it was not added
deliberately. There might be two source that lead was added in, one was the
raw material (wheat, water) that used as ingredients and the other source,
though is highly unlikely but still a possibility, was from some machine part
causing lead dust through processing. The inefficient food safety and quality
control process might be mainly responsible for this issue.
4. Why does not Nestl have an efficient and stringent quality control
process?
That cost-driven strategy might have led Nestle to the decision of cutting
down cost, through its raw material supply selection and improvement of the
quality control process and therefore, leading to putting its consumers at a
health risk.
5. Why does Nestle have to cut down cost?

Due to an increasing competition in the local FMCG market, especially in

instant noodle product segment, Nestle Maggi had strived to keep product
price reasonably and even more appealing to consumers to protect its market
share.

C. Fish Bone Analysis:

D. 6 Thinking Hats:
White (Information gathering) Maggi noodles are part of the Maggi family,
Nestl brand of instant soups, stocks, and noodles. came into existence in 1875 in
Switzerland, Maggi has a 90% share in India , is synonymous with instant noodles,
In June 2015, it was reported in India that tests had found high amounts of lead and
MSG in Maggi noodles, FSSAI ordered country-wide withdraw and recall for all 9
variants of Maggi Instant Noodles.

Red (Emotions) a true childhood buddy, Maggi memories, perfect quick-snack

between meals, easy availability, childhood, lunch breaks, SST, happiness,
convenience, easy to cook, even bachelors can make Maggi.

Black (Discernment) Difficult to regain the trust of Indian consumers, health

conscious consumers will stay away, Not just the brand, but the company and its
culture and ethos will be tested., other healthier noodles have captured the
market, the new Maggi may not have the same taste as the old one and therefore
not sell, trust once broken cannot be repaired.

Yellow (Optimistic opportunities) well-recognized brand name, synonymous

with instant noodles, brand loyalty, no other noodles have the same kind of
emotional connect as Maggi does, habituated taste buds, strong advertising
campaign, good network of PR , strong distribution channel.

Green (Creativity) new innovative marketing campaign, apologize to the

consumers, transparency in manufacturing, regular checks on Maggi noodles.

Blue (Managing) The problem is with brand perception that it is no longer safe
to consume Maggi, the notion that a snack that mothers have been routinely
feeding their kids for the last three decades is tainted with excess lead, has caused
a major shock in the country.

E. MINDMAP:

II. PROBLEM SOLVING

New Rules of Business that could revive the brand Maggi
1) Rule of 3:
Rule 1- Make a better product not a cheaper one.

Maggi continuously has been trying to change its perception in the mind of its
consumers and trying to be on the top of the game by persistent focus on
quality. On its introduction the target market was working women but later on
they realized that there real target market is children and thus they changed
their positioning as a healthy fast food. Trying not to compromise on quality
and always trying to improve Maggi has been the reason why Maggie today is
a famous household brand.

Rule 2- Focus on revenues and not on cost.

The company has a very affordable product pricing starting from INR 5/- and
maximum being INR 140/- and it can effectively generates revenues but it is
also cost effective for the consumers. Consumers in both rural and urban
areas find Maggi very economical.
Rule 3 Stay focused in these 2 above-mentioned rules. Because the rule 3
says, there is no rule 3.
2) Eliminating Consumers pain point:The concern about Maggis product
quality has become the pain point that makes consumers to stop choosing
Maggi. To bounce back and be sustainably successful in the market, Nestle
should strive to eliminate this pain point of consumers. Nestle should invest
more in the improvement of the quality control system. Also, they should
carefully select and screen the raw materials to ensure product quality and
enhance customers satisfaction as well as their loyalty. The company should
clear out the doubts in the customers mind through social media & other
media channels.
3) Mindfulness: Maggi has been mindful in its activities and have been aware
of the environment prevailing around it. Due to this reason Maggie's target
market has been transforming from time to time. In order to expand their
market share, we suggest Maggi to move onto targeting the Youth in India to
grab their attention and keep them hooked to their product. Moreover, Nestle
must be more mindful by living in the present & being aware of their
immediate environment. To keep a watchful eye on unnecessary rumors that
could further tarnish the face of the brand.
4) Determinant benefits:
Maggi, must cater to their customer needs i.e. identify their pain points &
offer them a healthy product that they want & their competitors dont have to
offer. By doing this they can win back the loyalty of their former consumers &
increase the number of potential consumers & gradually win back the market
share that they held.
5) PIVOT Strategy: TWIST: This refers to changing strategy midway. With
recent development and changes that allege the increased content of lead in
Maggi that is more than permissible limits. Following different strategies since
its inception Maggi is continuously innovating. Starting with focus on working
women then realizing that their actual target market is children they started

focusing on healthy food. Thus Maggi has been constantly changing the way
it operates. Maggi has new and creative ways of advertising such as asking
housewives about their innovative recipes and publishing them. The recent
changes have tarnished the image but Maggi is coming up with a great
comeback strategy to reinstate their position back in the market. To build a
better reputation and paving path for a better future Maggi (Nestle) should be
indulged in some social causes or environmental causes. This strategy would
bring maximum amount of positive review and coverage to the brand.
6) Innovation: As Maggis USP has been tapping the sentiments of their
customers i.e. they rely on nostalgia to stay ahead in competition. The
consumers still love Maggi. They are just hesitant to purchase the same due
to the recent issues that have risen.
- Incremental innovation: Nestle should invest in R&D department to
have more diversified products by introducing new flavors that inspired
from other countries cuisine, e.g. Japaneses ramen or Vietnameses Pho
flavors, or adding new ingredient from organic products which is testified
as good for health.
- Transformative innovation: Maggi All-in-One product: Your
traditional Maggi noodles now come with a side-dish: soup, mashed
potato and bread sticks. The launch of these new product combination will
satisfy all consumers need for a healthy, safe and convenient meal that
they have not even thought that they need it before.
7) Competition from Rumors:
In order to stop the rumors and win back customers trust, it is suggested
that Maggi should run an intensive and aggressive communication campaign,
targeting both nation-wide consumer.
-

Campaign idea: Mommy loves Maggi, Mommy trusts Maggi

Maggi has long been positioned itself as a convenient product for mothers,
it is now a good time for Maggi to re-emphasize that Maggi noodles are
still a best choice for them. Mother always carefully considers both safe
and convenient factors so that she can choose the best products for her
family and her children. Through this campaign, Maggi can convince its
customers that once mothers trust Maggi, Maggi is absolutely safe to use.
Campaign objectives:
o Convince customers about Maggi consistent quality
o Strengthen customers emotional bonding with Maggi products
o Improve and enhance Maggis position in customers heart and win
back the market.
Campaign activities:
o Press conference with nation-wide media to clarify its statement
about products quality commitment.
o Endorsement by Health experts on TV talk-show and newspaper
o Testimonials by Key Opinion Leaders using celebrities who are
mothers to tell the stories how they have chosen Maggi noodles for
their family and their children by editorials and advertorials on
newspaper/magazines.

Creative advertisement and viral video to drive audiences

attention.

8) Inside Out: The truth behind the lead content crisis is that Nestle does not
add them deliberately. To soon overcome this crisis and moreover, to gain
back customers trust and loyalty, Nestle should apply the Inside Out model
to tell customers a more convincing and compelling story about its product.
Starting from touching their unconscious behavior relating to health
awareness, then creating their self-interest for a convenient and safe
products by offering a Maggi pack of instant noodle which have been through
a stringent series of quality and chemical test as a solution for customers,
Nestle can soon get back to the game and win back their former and
potential customers.
9) Invisible competition: To stay ahead of competition from the growing trend
in consuming green products, which are not only good for consumers health
but also can help to protect surrounding environment, we suggest Nestle to
launch a Corporate Social Responsibility (CSR) project to prove its
commitment for sustainable growth and contribution to green environment in
India. Some key activities that Nestle can think of are river cleaning and
purifying, new trees planting, cooperating and sponsoring for the government
to save natural conservations, etc.

10)
Be consumer driven, not competitor driven:
In order to be consumer driven, Maggi should understand what its consumers
need and want. Consumers are not only looking for quality and convenient
products, which we have already suggested way to innovate Maggi products
to satisfy this need, but also seeking for an emotional bonding with that
product. It is Maggis mission to enhance this bonding through an emotional
marketing strategy, reminding its customers about their nostalgia: My
Maggi memories contest. Maggi motivates and encourages consumers to
share their special stories behind every packet of Maggi they had consumed
or to share their own unique way to cook Maggi, and the joyfulness that
Maggi has brought to their life. These memories and stories will later be
published on media channels nationally so that consumers can be reminded
about how they have connected to Maggi for all these years.

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