maggi oats positioning
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GROUP 6AvinashRanjith
ShushantaSwaitlanaThanmai
BRAND EXTENSION OF MAGGI
• The Company was founded in 1866 by Henri Nestlé in Vevey, Switzerland
• Employs around 2,80,000 people• Has factories or operations in almost every country in the world
The Indian Story• 1912: Began trading as The Nestlé Anglo-Swiss Condensed Milk Company (Export) Limited, importing and
selling finished products in the Indian market.• set up its first factory in 1961 at Moga, Punjab, where the Government wanted Nestlé to develop the milk
economy• Manufactures products under internationally famous brand names such as NESCAFÉ, MAGGI, MILKYBAR,
KIT KAT, BAR-ONE, MILKMAID, NESTEA ,NESTLÉ Milk, NESTLÉ SLIM Milk, NESTLÉ Dahi and NESTLÉ Jeera Raita
• In India Maggi was launched in 1980s by Nestle group of companies• Maggi had merged with Nestle family in 1947.• The brand is popular in Australia, India, South Africa, Brazil, New
Zealand, Brunei, Malaysia, Singapore, Sri Lanka, Bangladesh, Fiji and the Philippines
Offerings under Maggi brand in India:
A BRIEF HISTORY
44%
28%
14%14%
Revenue %
Milk Products & Nutrition
Prepared dishes & Cooking aids
Chocolates & Confectionaries
Beverages
India’s food consumption grows at CAGR of 5.3% to reach $230 Bn in 2013
Increasing rural consumption of instant foods
By constantly launching new products and leveraging the distribution network NIL has doubled its revenues by growing at CAGR of 20.6%
Company enjoys high brand equity. Profitability growth at 25.1% CAGR
Expected growth (CAGR CY11-13E) in prepared dishes & cooking aids (Maggi) to be 20.5% (volume growth of 17%)
A POSITIVE OUTLOOK
*Source: Research by ICICIdirect.com dated March 23, 2012
With the instant noodles market estimated at 1500 crore (FY11) the total consumption is only 1500 million packs (considering | 10/pack) thereby accounting a mere 1.3 packs/person per annum
With the segment growing at 20% p.a. and expected to reach 3200~3500 crore by 2015 consumption would only reach 2.7 packs/person per annum
In the last two years, many new players have entered the noodles category like GSK’s Foodles, ITC’s Sunfeast Yippee and HUL’s Knorr soupy noodles.
Simultaneously, most of the brands have been launched in different variants like multi grain, masala and atta noodles.
A survey conducted by Nielsen shows that Maggi’s market share has fallen by around 15 percent since the launch of these new brands
Escalating competitive pressure could slightly trim NIL’s volume growth (CAGR) to 17.0% and the price led growth to 3.0%,
Volume growth in CY11 has been 7.7% as against average 14.2% in the previous five years
Maggi brand is feeling a disconnect with the new generation customers who now have more choices for indulgence other than noodles
SHIFT IN LANDSCAPE
*Source: Research by ICICIdirect.com dated March 23, 2012 www.valueresearchonline.com
CURRENT BREAKFAST MARKET
2011 2012 2013 2014 2015 20160
200400600800
1000120014001600
Packaged breakfast market (Crores)
Packaged breakfast market (Crores)
• There is a steady growth in the number of households adopting new breakfast categories at around 30% and the penetration of breakfast cereals has doubled*
• Marketers estimate that this handsome growth rate will only increase, with key drivers being growing affluence, double-income couples and increasing acceptance of non-Indian foods.*
• Market for Oats was estimated at 150Cr in 2012. By considering growth rate in the segment, by 2016 this market can grow to 577Cr**
Source: *Times of India report dated July 11,2011 **Times of India report dated June 21,2012
StrengthsHealthyTime savingPortableFlexibility in usage
WeaknessesRequirement of steam / hot waterHigh distribution network requiredPerceived to be tasteless
OpportunitiesIncreasingly health conscious audienceMicrowave skepticsNeed for convenience foodLesser number of players
ThreatsLow entry barriersHighly established competitorsCurrent breakfast trends
SWOTNestle to enter Oats market
PRODUCT The attributes of the product
PRICE
PROMOTION
The marketing strategies and what needs to be conveyed
PLACEDistribution techniques
FORAY INTO OATS MARKET
The pricing strategy
BCG Matrix : Nestle
NescafeCerelac
MiloMaggi SauceMaggi SoupKit-KatNestle MilkOats
Maggi Noodles NesteaMilky BarMunch
Relative Market Share
Gro
wth
rate
High Low
Low
Hig
h
PRODUCT
Objective: To identify the essential attributes and values that consumers look for in a breakfast productMethodology: Conjoint analysis based on questionnaire and ladder technique based on FGD
As the initial market share would be low, Oats product would be in the ‘question mark’ quadrant. As it gains popularity it is expected to move to ‘star’ or ‘cash cow’ quadrant
CONJOINT ANALYSIS LADDERING TECHNIQUE
RESULTThe product features: Brand name, Nutrition and ConvenienceValue to be delivered: Sense of belonging, Self esteem, Accomplishment and Responsibility
PRODUCT:CONJOINT ANALYSIS
Each respondent is asked to rate the intent to purchase based on the following parameters:• Brand Name (B)• Nutrition (N)• Form (F)• Taste (T)• Convenience/Minutes to cook (M)• Price (P)Base case:• Brand – Kellogg's• Nutrition- High• Form- Snack bar• Taste- Sweet• Convenience- 0 min• Price- High (> Rs.130)
S /N Brand Form Nutrition Value (% of RDA)
Taste Time to Cook (in
mins) Price
Your Preference
Rating 1 Quaker Snackbar High Sweet 0 High 2 Kelloggs Porridge Medium Salty 5 Medium 3 Britannia Porridge Low Spicy 2 Low 4 Saffola Additive High Salty 5 Medium 5 Saffola Porridge Medium Spicy 5 Low 6 Kelloggs Snackbar Low Salty 0 Medium 7 Quaker Porridge High Sweet 2 High 8 Britannia Porridge High Sweet 5 High 9 Quaker Snackbar Medium Salty 0 Medium
10 Kelloggs Porridge High Sweet 5 Medium 11 Britannia Snackbar Low Sweet 0 Low 12 Saffola Porridge Low Salty 2 High 13 Kelloggs Additive Low Salty 2 Low 14 Quaker Porridge Medium Sweet 5 Medium 15 Britannia Additive High Spicy 2 Medium 16 Quaker Snackbar Medium Spicy 0 High 17 Kelloggs Porridge High Salty 2 Low 18 Kelloggs Snackbar Medium Sweet 0 High 19 Britannia Porridge High Sweet 5 Medium 20 Quaker Porridge Medium Salty 2 Medium 21 Quaker Snackbar High Spicy 0 Low 22 Britannia Additive Low Salty 5 Low
Rule of thumb for sample sizenta/c > 1000
n : no: of respondentst : no: of tasksa : no: of alternativesc : largest no: of level for one attribute
PRODUCT:CONJOINT ANALYSISModel Summary
Model R R Square Adjusted R
Square
Std. Error of
the Estimate
1 .952a .928 .698 .86753
a. Predictors: (Constant), Pl, Bs, M2, Bk, Fa, Nm, Tp, Nl, Pm,
M5, Ta, BbANOVAa
Model Sum of
Squares
df Mean
Square
F Sig.
1
Regression 67.177 15 4.478 5.951 .018b
Residual 4.516 6 .753 Total 71.693 21
a. Dependent Variable: Rat
b. Predictors: (Constant), Pl, Bs, M2, Bk, Fa, Nm, Tp, Nl, Pm, M5, Ta, Bb
Coefficientsa
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig.
B Std. Error Beta
1
(Constant) 6.111 .824 7.419 .000
Bk -1.076 .868 -.397 -1.240 .048
Bb -1.027 1.120 .669 -.918 .383
Bs -1.613 1.239 -.459 -1.302 .032
Fa 1.395 .938 .446 1.486 .171
Fp 1.256 .563 .195 1.067 .249
Nm -.147 .821 -.257 -.179 .062
Nl .092 .994 .934 .093 .928
Ta -.831 1.012 -.139 -.821 .433
Tp .292 1.056 .102 .277 .788
M5 .916 1.006 .965 .910 .386
M2 .486 .803 .188 .605 .056
Pm .490 .890 .200 .551 .595
Pl -.074 .981 -.029 -.075 .942
a. Dependent Variable: Rat
Each respondent is asked to rate the intent to purchase based on the following parameters:• Brand Name (B)• Nutrition (N)• Form (F)• Taste (T)• Convenience/Minutes to cook (M)• Price (P)Base case:• Brand – Kellogg's• Nutrition- High• Form- Snack bar• Taste- Sweet• Convenience- 0 min• Price- High (> Rs.130)
Standardized
Coefficients
B Std. Error Beta
(Constant) 6.111 0.824 7.419 0
Bk -1.076 0.868 -0.397 -1.24 0.048
Bb -1.027 1.12 0.669 -0.918 0.383
Bs -1.613 1.239 -0.459 -1.302 0.032
Fa 1.395 0.938 0.446 1.486 0.171
Nm -0.147 0.821 -0.257 -0.179 0.062
Unstandardized Coefficients t Sig.
Healthy Taste and Variety
Affordable
Sense of Belonging
Self Esteem Accomplishment: more from life
Responsibility
ConvenienceFast to cook
Saving time Shortage of time
Relax More work
Meeting ObjectivesSelf
Satisfaction
Good for bodyFunSatisfaction
Stress Buster
Inc. Concentration
Time for other activities
Save Money
•3 rounds of FGD with 10 respondents who indicate oats as their preferred breakfast• Laddering technique used to elicit response from participants (Attribute->Consequence->Value)
PRODUCT:LADDERING TECHNIQUE
•Price is not an important factor for products in this segment (breakfast) as understood from conjoint analysis•Pricing based on existing competitor’s offerings
PRICING
PROMOTION
Television• Ads which show the entire family consuming oats : children, parents and
grandparents• Scope to show the different variants of the product, catering to different segments
Print• Ads in health magazines such as Health, Stay Fit, Diabetic Living etc
Publicity• Press conference depicting the dual health+taste benefit of oats• Nestle’s history of expertise and innovation to be highlighted to create goodwill
Sales promotion• Consumer franchise building promotions • Sampling in schools, gymnasiums and retail stores (breakfast bars)
Place Advertising• Point of purchase advertising in the form of attractive posters in stores• In store strategies for effective product placements in retail outlets
• IMC to aim at overcoming the consumer perception about the negative correlation between taste and health • Focus on the values of accomplishment and self esteem which can be traced back to the attributes of health and
convenience
PROMOTION
Social media is becoming a huge part of our culture with Facebook fan pages, apps etc.
Customers now have more power to express their opinion and share their experience with their online social circles
Each one of your customer has a circle of 250 people – Thanks to the influence of social media
Special Occasion menus with oats on the website or Facebook page – to attract first timers
Regular updating with special offerings and promotions and sampling of new product, detailed customer feedback & review section
Social Media can be leveraged to build Word of Mouth publicity perceived as the most trusted source of advertising
PLACE
• Nestle ’s distribution channel to be leveraged• Can be introduced in tier one cities initially• Trade promotions in the form of financial incentives or discounts given to retailers, distributors, and
other members of the trade to stock, display, and in other ways facilitate the sale of the product can be given to push retail sales