Marketing Mix Strategies for Maggi Essay
Marketing Mix Strategies for Maggi
In year 1872, the factory job was created for women during the industrial revolution in Switzerland. Therefore, women were busy and have not enough time to prepare meals for their family. Julius Maggi, who took over his father’s mill, was requested to create a vegetable food product that would be quick to prepare and easy to digest. Maggi noodle was the first that contain protein rich legume meal to the market and followed by readymade soup based on legume meal in 1886. Maggi had merged with Nestle family in 1947 and launched in 1980 by Nestle group of companies. The nature of Maggi is Food Company. The products involve soups, sauces and instant noodles. The mission of Maggi is to become an inspiring growth partner that delivers creative, branded food and beverage solutions enabling operators to innovate, and delight consumers. Vision of Maggi is Nestle Norden’s aim, is to meet the various need of the consumer every day by marketing and selling food of a consistently high quality. Three objectives of Maggi are good to know, which means factual information on nutrition content, good to remember, means that the tips for healthy lifestyle, cooking and diet, and good to talk, means consumer call to their consumer services teams or log on their website. The target customers of Maggi noodles are kids, youth and working women, but the biggest consumer is children.
2.0 The Marketing Mix Strategies
2.1 Product Strategy
2.1.1 Product Classification
Maggi noodles is a consumer product that bought by final consumer for personal consumption. Nestle had positioned Maggi as a convenience food product. Consumers bought Maggi noodles frequently with lower price. There are many purchase locations for consumers to buy Maggi. For example is 7-eleven.
2.1.2 Product and Service Decisions
Maggi noodles recognized the need of consumers with provide quality food and convenient at once. It is a “fast relief from hunger” product. Maggi noodles have settled at standard flavours such as curry, masala, tomato and chicken and not much experimentation is required in the noodles market. Maggi noodles have launched many products like Maggi Vegetable Atta Noodles, Maggi Vegetable Multigrain Noodles. It added Maggi Dal Atta Noodles in its product portfolio targeting health conscious people. This was followed with the Rice Noodles. Maggi 2 Minute Noodles already associated with convenience and taste and is currently accepted as a valid filling snack between meals. Branding
Maggi noodles are a brand of instant noodles manufactured by Nestle. The advantages of having branding to buyers are easier for them to identify. For sellers, branding provides legal protection for its company and help to segment market. After realizing its target group was young children and their mother, Maggi come up with tagline: “Mummy bhook lagi hai”, “Bus 2 minute”, “Fast to cook, good to eat” and “Health bhi taste bhi”. The brand of Maggi noodles is positioned as a health and convenience product. Packaging
Nestle has developed a good package for Maggi noodles. They increase the thickness of the plastic sheets used in Maggi noodles packets to make the product more strength and allow easy and safe to open. To allow the packets to be stored easily, they provide a Zip-Seal facility along with the existing sealing.
The labeling of Maggi noodles helps Maggi to promote the product through attractive graphics. The information labeled of Maggi noodles include logo, weight of each packages, ingredients of the product, expired date, cooking instructions, consumer services line, information of the manufacturer (address, telephone or fax number and others) and nutrition information of the product. Product Support Service
Maggi introduced “money saver multi packs” in the form of 2-in-1 pack and 4-in-1 pack. There contain the service which let the consumers tried their products in order to get feedback of consumers of the products. They also give gifts to consumers who return on empty packets.
2.1.3 Major Brand Strategy Decision
Nestle tried to position Maggi noodles in the platform of convenience targeting the working women but the sales of Maggi was not picking up even though it had doing a lot of media advertising. After conducted a research, they realizes that children were the largest consumers of the product as children like the taste of Maggi noodles. So, they change their target from working women to children and their mother. They positioned the noodles as a ‘convenience product’ for children’s mother and a ‘fun product’ for children.
Brand Name selection
Nestle introduced the Maggi brand in India in 1982, with its launch of Maggi 2 Minute Noodles, an instant noodles product. In several countries, it also knows as “maggi mee”. The original company comes into existence in 1872 in Switzerland, when Julius Maggi took over his father’s mill. Maggi was the first to bring protein-rich legume meal to the market and followed by readymade soup based on legume meal in 1886. In 1863, Julius Maggi developed a formula to add taste to meal. Maggi had merged with Nestle family in 1947. Brand Sponsorship
Maggi is under manufacturer’s brands that also called national brands which brand name owned by a manufacturer or other producer. Maggi brand name owned by a manufacturer, that is Nestle Company. Brand Development
Nestle using the strategy of brand extension for attracting customers. They use the successful brand name to launch a new or modified product in a new category. Maggi has launched various products such as noodles, sauces, maggi pichko, soups healthy, maggi soup sanjivini, maggi bhuna masala and maggi magic cubes. Maggi extended their brands for attracting the families which are more health conscious. Nestle using brand extension to overcome the problem of declining the sale.
2.2 Pricing Strategy
2.2.1 Pricing Objectives
Pricing strategy for the existing variants of Maggi noodles based on the objective of “Maximizing Market Share”. These variants are competitively priced. As it is highly price sensitive, any price change initiates an instant price check reaction from the competitor. The effect of the downward revision in price can be offset by the increase in sales volume. Nestle tried to survive if they are plagued with intense competition. They tried to covers variable costs and some fixed costs in order to remain in the industry. Nestle believe that a higher sales volume will lead to lower unit’s costs and higher long run profit. For product quality, Maggi brand strive to be affordable luxuries products by high levels of perceived quality, tests and status with a price. The launch of Cup-O-Maggi is based on the objective of achieving “Product Quality Leadership”. Its segment is less-price sensitive so it will be premium priced to target the higher end customers. Creation of a premium brand gives the company an opportunity to provide a differential pricing and service offering to the customer thereby creating a key differentiator.
2.2.2 New Product Pricing Strategies
Maggi is using market penetration in marketing Maggi noodles. Nestle introduce Maggi noodles to the market with low price in order to increase consumer incentives in the competitive market. For example, Nestle tend to charge almost the same price for the different flavor of Maggi 2 minute noodles when initially introduced it. Nestle hope to gain high sales volume which in turn would lower the costs. This strategy also makes the customers loyalty and attracts more new customers to Maggi noodles product as a result of low price. Maggi has successfully implied market penetration in the market as they have 80% market share in noodles market nowadays.
2.2.3 Product Mix Pricing Strategies
Maggi set price steps between various items in a product line since there are a wide price differences among maggi stocks, soups, 2 minute noodles and ketchup. The mix and types of flavor of Maggi noodles sold will affect the average selling price of their products and have a substantial impact on their revenue and gross margin. For instance, Maggi 2 minute noodles and Cup-O-Maggi have differences of their selling prices. In addition, Maggi uses product bundle pricing when they are merge several products in the same package such as five packages of Maggi noodles are packing together sell at once to the customer.
2.2.4 Price Adjustment Strategies
Maggi adjusted price by using promotional pricing techniques. For example, Maggi offer Buy One Get One Free when the mega sales season. Furthermore, Nestle also imply segmented pricing. For the different location, the prices set of Maggi noodles is different. Maggi also set the price a bit different for their new flavor of Maggi noodles introduced. Psychological pricing also apply by Maggi noodles. Most of the price set by the retailer is “odd prices”. For example in Tesco, the price of a package Maggi noodles is RM3.89. It purposes to attract more customers to buy for it.
2.3 Distribution Strategy
Maggi has a well established distribution network. Maggi has its own factory which means that it manufacture its own product in its factory. Maggi noodles will directly ship to Carry and Forward agencies (CFAs) that located in each state when the product is completely manufactured. Carry and Forward agencies means an organization that provides the facilities such as warehousing. Warehousing carried the meaning of holds goods for moderate to long periods in an attempt to balance supply and demand for producers and purchasers. After that, distributors will deal with wholesaler. Wholesaler is the one who takes title to the goods handles and then distributes these goods to retailers or business users, and sometime end consumers also. Maggi distributors will distribute the goods to wholesaler such as hypermarket, for example Tesco Extra.
Maggi noodles will be shipped from Maggi warehouse to the wholesaler as per the order taken by the distributor sales men. Wholesaler will then distributes Maggi noodles to retailers or even direct to end consumers. A retailer owned and operated by someone other than the manufacturer of the products it sells. For example, Tesco Extra distributes Maggi noodles to the retailers such as supermarket and convenience stores. The examples for supermarket are Tesco, Giant and Carrefour, while the examples for convenience store are 7-eleven or mini market. An end consumer is the individual or business who uses products and services. End consumers will buy Maggi noodles from supermarket or convenience stores.
2.4 Promotional Strategy
2.4.1 Sales Promotion
Sales promotion was used by Maggi noodles to attract customers and maintain the sales in off season. Dry sampling and wet sampling are some strategies we can often see in the super market. The promoters always distribute the Maggi noodles packet (dry sampling) and cooked Maggi (wet sampling) to the consumer. From Nestle webpage, the consumer can get the items that have promotion in the specified month. For example, customer can save RM0.30 for every purchase of Maggi 2 Minute Noodles Asam Laksa from 1st August 2011 to 31st August 2011. Besides that, a lot of contests were hold by Maggi noodles such as Win a Family Holiday with MAGGI 2 MINUTE NOODLES. The winner of this contest will have the chance travel to the Gold Coast. Moreover, Maggi noodles promote their product through a different way, which is attracting the children who is under 14 years old to become a member of Maggi Club. They distributed the club membership card to children and list of gifts has been provided in the fun programs. Some games and gifts (known as premium) are offered by Maggi Club such as Snap Safari Game, Disney Today Comic and Mask set. Children must send 5 wrappers as purchase proof in order to acquire these benefits. This has successfully attracted mothers who were being persuaded from their children to consume Maggi noodles because they would like to collect the gift.
For Maggi noodles, the advertisement can be widely spread to their potential buyers by the cheapest way. Hum Log, which is the first Soap Opera in Indian Television, was advertised the Maggi 2-Minute Noodle. This advertisement has an effective tag line which is “Bas do Minute” (only two minutes). This tag line was easy to remember and reinforce to the people who do not want to spend their time in kitchen. Maggi noodle has advertised their product based on different segment. For example, the new Dal-Atta noodles advertisement demonstrate a grandfather and father eating the noodles. Because of Dal-Atta noodles, which contain the Calcium and Protein components, they become a healthy family. For the product of “Mania”, the advertisement show the mom as a relax housewife. Besides that, Maggi noodles also advertise through magazine and their respective webpage. In year 2003, Maggi introduced their product in various magazines to celebrate 20 years in India. Furthermore, this brand has advertised their new atta noodles and rice noodles variants in some weekly magazines. For the Maggi webpage, they not only show the new product but also teach people how to use Maggi noodles to cook in various ways.
2.4.3 Public Relations
Public relations also done by Maggi noodles through organize some innovative campaign. For illustration, the campaigns of “Remembering your good ol’ days with Maggi” and “MAIN AUR MERI MAGGI” campaign were hold by Maggi noodles to celebrate Maggi was completed in 25 years. Besides that, the campaign of “Me and Meri Maggi” was launched to celebrate the emotional relationship between Maggi and consumer. This campaign was given consumer an opportunity to speak out their unique experiences with Maggi and an overwhelming response has given by consumer. Apart of that, Maggi noodles also sponsor some primary school in India to organize the contest for student. The “Maggi Quiz Competition” which held at G.D Goenka Public School in year 2011 show cases the talents of student’s up to date knowledge in all fields. Moreover, Maggi is one of the sponsors of MasterChef. This show is a popular cooking reality programme which organized by Astro.
3.0 Market Opportunities
In Malaysia, there has an increased affinity of Indians towards Chinese cuisine. It creates new market opportunity for Maggi to improve its taste further and capture larger market share. The creative nature of Malaysian food proprietors in Malaysia had made Maggi noodles evolved and now comes in several culinary forms. Among the most popular would be the Maggi Goreng (fried Maggi noodles) which adorns the table of mamak stalls across the country. The upward trend of convenience food consumption has also increase the potential consumer base of Maggi noodles. For example, the single working professionals and student population. The localization of Maggi noodles in Malaysia can boost its sales and earn more consumers purchases.
Next, the market opportunity for Maggi noodle is their unexploited rural markets as so far they mainly targeted cities and developed areas. Maggi has earned certain level of government appraisal and recognition for their product offering and operation. Besides, the government is currently encouraging the civil society and the private sector to help transform rural areas into a computer literate society. Thus, it is easier for Maggi to advertise and marketing their product into rural market. Maggi also being the market leader employs some of the most sophisticated technologies in their production unit to ensure they constantly meet up with the demand from customers. As technology is getting advanced, there has been introduction of new machineries helps Maggi come out with new product, product improvement and new marketing techniques which can fit to rural market.
It is often to see Maggi noodles become one of the cuisines at the Indian restaurants. But, it is rare to see Maggi noodles used by Chinese restaurants. Therefore, we suggest that Maggi can do some research by adding some characteristic of Chinese cuisine inside the new product. Two characteristics of Chinese cuisine are the product must be distinctive color and aromatic flavor. Chinese food preparation has focus on the appearance. They believe that a pleased and harmonious color can increase in appetite. Another important element in Chinese food is aromatic flavor. Some aroma ingredient such as aniseed and cinnamon will cover the ingredient’s particular smells. Meanwhile, shallot, ginger, cooking wine and sesame oil are added to make the food fragrant in flavor. All of these aroma ingredients have their own function that will benefit our health. For example, aniseed can reducing our oiliness in the skin and improves the memory function. Therefore, Maggi noodles can try to create new product in order to attract more Chinese and also other races. In order to promote Maggi noodles in the rural markets, Maggi can choose to give traditional form of advertising and marketing such as distributing pamphlets or advertising on radio. It helps to educate consumers about a never before used product in a more direct and engaging way. Maggi can also organize “Home-to-Home” campaigns and Van Campaigns.
For instance, preparing Maggi noodles and serves to rural areas consumer in hot and cooked condition. Consumers will direct impacted by the campaign and feel special, so next time around, they will repeat purchase Maggi noodles for consuming. Besides, Maggi can bring in new machines to produce more in lesser time as well as keeping its manufacturing quality precision at its best. Maggi should also continuously focuses its efforts to better understand the changing lifestyles and anticipates consumer needs in order to provide convenience, taste, nutrition, and wellness through Maggi noodles product. As the government is going to turn rural areas into technology society, Maggi can introduce the Internet and e-commerce to market their Maggi noodles in rural market.
We had chosen Maggi noodles as our product. After doing this assignment, we know that Maggi are manufactured by Nestle Company. The brand of Maggi is positioned as a ‘convenience product’ for children’s mother and a ‘fun product’ for children with tagline ‘Fast to cook Good to eat’. Maggi has launched various products such as noodles, sauces, maggi pichko, soups healthy, maggi soup sanjivini, maggi bhuna masala and maggi magic cubes to extend its brand. The company tried to covers variable costs and some fixed costs in order to remain in the industry and make sure the customer will not move to competitor because Maggi has many substitute products. Maggi noodles introduced to market with a low price in order to increase consumer incentives in the competitive market.
The company promoted Maggi noodles by using sales promotion, advertising and public relations. We can see the promoters distribute the Maggi noodles packet (dry sampling) and cooked Maggi (wet sampling) to consumers at the supermarket. Maggi noodles always selling at the convenient places which are the neighborhood places that can gather many consumers. It has been seen that a company need to do many things in order to come out a successful brand. It is not easy to make a brand successful. Before create a brand, company need to recognize the need satisfaction of consumers, target customers and set the mission to meet the need of consumers. Company need to develop marketing mix strategies (4Ps) after developed a product. The company also needs to find out the opportunities to improve their brand and overcome the threat. Marketers have to maintain the sales and earned the consumers loyalty.