A PROJECT REPORT

ON
NEW PRODUCT DEVELOPMENT

PREPARED BY :

MANISH KHATRI

IN PARTIAL FULFILMENT OF THE REQUIREMENT

OF POST GRADUATION DIPLOMA IN MANAGEMENT

UNDER THE GUIDANCE OF

AIR MSHL PRAKASH HONMODE

SINHGAD BUSINESS SCHOOL, PUNE

DECEMBER 2008
AKNOWLEDGEMENT
I take the opportunity to thank Sinhgad Business School, Pune for giving me this
opportunity to do this project.

I would like to thank our Director Sir Mr. Anil Keskar, our class coordinator Mrs. Sridevi,
special thanks to the Guide Sir Air Mshl Prakash Honmode and all faculty members and
all those people who have helped me directly and indirectly in the successful completion
of this project.

Manish Khatri
 STUDENT DECLARATION

I hereby declare that the project report entitled

NEW PRODUCT DEVELOPMENT

Submitted in partial fulfillment of the requirement for the award of diploma of

POST GRADUATION DIPLOMA IN MANAGEMENT

to Sinhgad Business School, Pune is prepared by me.

Place: PUNE
Date: 08/12/2008
Signature of the student
SBS281032
 APPROVAL CERTIFICATE

The Project Report of

Mr. MANISH KHATRI

NEW PRODUCT DEVELOPMENT

is approved and is acceptable in quality and form.

Examiner
Signature: _____________________
Name: ________________________
 GUIDE’S CERTIFICATE
This is to certify that the Project Report entitled

NEW PRODUCT DEVELOPMENT

Submitted in partial fulfillment of the requirement for the award of diploma of

POST GRADUATION DIPLOMA IN MANAGEMENT

Of
Sinhgad Business School, Pune

MANISH KHATRI
Has prepared under my supervision and guidance and the Project Report is made by
him only.

CERTIFIED
Signature_______________________
(Prof.) AIR MSHL PRAKASH HONMODE
 TABLE OF CONTENTS
S.no. Particulars
1. New Product Development
2. New Product and its need and uses
3. New Product Classification
4. New Product Planning
5. Stages in New Product Development
6 Factors for Success of a New Product
7 Reasons for Failures of a Launched Product
8 Challenges in New Product Development
9 Use of New Product Development for managing product
lines
10 Daewoo : Factors Affecting
11. Crisis History
12. Current Status
13. Global Marketing And Manufacture
14. Daewoo Matiz
15. Why Daewoo Matiz Fail?
16. Nestle India
17. Nestle Maggi
18. Maggi Products
19. Strategies of Maggi
20. Hurdles Faced

NEW PRODUCT DEVELOPMENT

 New Product Development is a process which is designed to develop, test
and consider the viability of products which are new to the market in order to ensure the
growth or survival of the organization.

NEW PRODUCT
New product can be described as follows:-

• The products open up an entirely new market.

• The product adapts and replaces an existing product.

• A product significantly broadens the market for an existing product.

• An old product introduced in a new market.

• An old product packaged in a different way.

• An old product marketed in a different way.

NEED TO DEVELOP A NEW PRODUCT

New Product Development is the major component of the firm’s
product policy. Its necessities are as follows:-

• To add product portfolio.

• To replace declining products.

• To take advantages of a new products.

• To maintain/increase market share.

• To defeat rivals.

• To keep up with rivals.

• To maintain competitive advantage.

• To fill a gap in the market.

• To bring new customers.

 USE OF NEW PRODUCT
New products can be used to increase or to defend market share by offering more
choice or updating older products. It can be diversified into new markets and appealed
to new segments. New products help to improves relations with distributers. Firm’s
reputation can be maintained by new product. It makes better use of the organizations.

NEW PRODUCT CLASSIFICATION

New product can be classified into six categories which are as follows:-
a) Major innovations: - This type of new products are new to the world
called as innovative products.TV, iPod, Flat screen TV etc are the
examples of innovative products.
b) New product lines: - When a company enters in an existing market
segment the product is new to the company. For examples- Tata indicom
for Tata, Reliance Fresh for Reliance because Tata is an existing brand but
they newly entered in the Tele-communication lines as Tata indicom.
c) Product line extension: - Additions to product line to supplement the
firms existing product lines. When a company add new products to its
existing product line extensions. Civic by Honda is the best example for
product line extension.
d) Product improvements: - When a company improves or revises its
existing product then it is also a new product. We can have an example of
Intel which provides processors. At its nascent stage it was just as a
processor but after few years down the line due to introduction of new
technologies it improves its processor which is now Centurion.
e) Repositioning: - When an already existing product is targeted towards a
new market segments is known as Repositioning. For this as we can see
today Dairy milk is more focusing on adults for its chocolates with tagline
of “Pappu pass ho gaya”.
f) Cost reductions: - New product is modified to provide similar
performance but at a lower cost is cost reductions. We can have a best
example for cost reduction is Nokia. Nokia is providing same features in
low cost mobile which was earlier at a high price.
 NEW PRODUCT PLANNING

New product planning is a strategic stage. In this stage

firm assess its current product portfolio and also assess the opportunities and
threats.
The firm than determines the type of products which would be best fit
with the corporate strategies.

STAGES IN NEW PRODUCT DEVELOPMENT

New product development in respect of intrinsically new

products goes through these important stages:-
 Each of these stages requires careful planning. Let us discuss them one by
one.

 Generating New Product Ideas: - New products ideas may emanate

from customers, dealers, in-company sources, including the market
 research group and external research organizations. Consumers problem
are the most fertile ground for the generation of new product ideas. R and
D staffs and salesmen are also sources of new product ideas.
Sometimes new
product ideas emanate just ‘as a matter of happening’. The development
of Walkman, the personal, portable stereo cassette player of Sony of
Japan, which became legend brand in entertainment electronics, is a good
example for it.
The Walkman story shows that new product ideas can come from any
nook and corner of the environment. The story also reveals that it needs
new product champions to nurture a new product idea and translate it into
a reality.

 Idea Screening: - The second stage of new product development is idea

screening. In this stage, screening of products takes place to spot good
ideas and drop poor ones as soon as possible. Ideas are also checked for
technical feasibility, financial viability and marketability. The business
analyzes the product to evaluate its demand, marketability and profit
potential and given ideas rating according to marketing production and
strategic factors takes place.
Criteria for evaluating new products are
as follows:-

• Is there sufficient demand?

• Will it be profitable?

• Does it fit the firm’s image?

• What is the likely payback period?

• What is the state of the market and competition?

The more attractive looking ideas pass on to the concept testing stage.

 Concept Development and Testing: - This stage is the detailed version

of new product idea stated in meaningful consumer terms. Turning of
ideas into Tangible products that consumer perceive as being valuable
comes under concept development.
 Testing of new products process with a group of consumers
to find out if the concept have strong consumer appeal or not is concept
testing. This stage has a special importance when totally new products are
being planned for introduction.

 Marketing Strategy Development: - From the stage of concept

development and testing new product travels to the stage of market
strategy development. In this stage an initial marketing strategy is
designed for a new product based on the product concept.
Formal market
research is also carried out to assess the products market potential.

 Business Analysis: - Business analysis is the next stage. This stage is of

special importance in the new product development process because
several vital decisions regarding the projects are taken based on the
analysis done at this stage. This stage is the review of the sales, costs and
the profit projection for a new product to find out whether these factors
satisfy the firms objective. It estimates potential sales, income, breakeven
point, profit and return on investments from new ideas and projecting
probable costs and sales to see, will profit reach the firms target.

 Actual Development of the New Product: - In this stage, the firm

develops the product as such. R and D turn the idea into product. This
stage is concerned with design, materials, production processes, quality
and safety.
Developing the product concept into physical product to ensure that
the product idea can be turned into a workable product.
Answers are sought to questions like: -

• Does the product look good?

• Does it work?

• Is it reliable?
 • Does design allow it to be made efficiently?

• Does it will be at cost which allows for profits?

 Test Marketing: - In test marketing, the new product, with the support of
the chosen marketing mix, is actually launched and marketed in a small
but representative market where consumer reactions can be assessed
and marketing mix checked and adjusted. Aims of this stage are as
follows: -

• To forecast likely results of a national launch.

• To test the operational effectiveness of the marketing plan.

• To identify possible problems.

• To assess customer reaction.

 Commercialization/Product Launch: - At this stage, the company

takes the decision to go in for large scale manufacturing and marketing
the product. It gets to this stage when all the previous steps are
favorable signals .Timing is critical for success and the product has to be
well targeted and positioned.

FACTORS FOR SUCCESS OF A NEW PRODUCT

Many new ideas do not reach the market at all. Only little get success, in
many cases, the success is short lived; they die out after the initial boom. Factors for the
success of a new product are as follows: -

• Development of a new superior product

• Differentiation from rivals

 • Well conceived , properly executed launch

• Top management backing

• Market attractiveness –the product should be aimed at attractive

markets

• Resources must be in place

• Speed and timely

• Quality

• Market driven on customer focus

REASONS FOR FAILURE OF LAUNCHED PRODUCTS

It is found that new products suffer from a high
attrition rate. New products which manage to react the market after years of preparation
and works, get failed. The rationale for these is as follows: -

• Neglect of market research

• Inaccurate market research

• Poor marketing after launch

• Poor distribution

• Product performance below expectation

• Product too complex

• Unforeseen products

• Market not ready for the products

• Inadequate support for the market

CHALLENGES IN NEW PRODUCT DEVELOPMENT

Companies coming up with innovative market offerings often face challenges which we
can discuss with help of these points: -

• Develop innovative products that capture the imagination of consumers to

retain existing customers and attract new ones.
• Bring new ideas to market ahead of the competition to grow revenue and
market share.
• Achieve global development excellence and efficiency by leveraging core
competencies of the value chain to increase profit margins.
• Integrate regulatory compliance into product lifecycle processes to reduce
business risk and sell products in global markets.
• Effectively manage the global manufacturing supply chain to ensure on-time,
on-cost and quality product delivery.

In today's competitive global market, innovative products are not

enough. To compete effectively, companies need to accelerate new product
development and reduce product cost. The only way to accomplish all these objectives
is to radically rethink the way new product introductions (NPI) are managed.

USE OF NEW PRODUCT DEVELOPMENT FOR MANAGING

PRODUCT LINES

Managing product lines is an essential part of any company’s NPD efforts. In larger
companies it is important that a cross-functional NPD team be assembled to control the
overall workload going through the NPD system for the duration of a specific project.
Management can facilitate innovation by providing support, commitment and buy-in and
by ensuring that projects are managed efficiently. Top management support in particular
from the CEO or owner/manager is a critical success factor in NPD. This information
can then be used to: -

• • Develop an NPD management system

• • Allocate resources and management support

• • Set up a team/allocate staff

• • Identify opportunities for new products (idea generation)

• • Screen and prioritize ideas

• • Conduct feasibility studies

• • Develop the concept

• • Prepare a business case

 • • Develop the product

• • Promote and launch the new product

• • Monitor and measure performance of product, project and team

• • Continually improve your NPD system

DAEWOO

Daewoo was a major South Korean conglomerate. It was founded in March 22, 1967 as
Daewoo Industrial and was dismantled by the Korean government in 1999.

History

The Daewoo Group was founded by Kim Woo-Jung in March 1967. It became one of
the Big Four chaebol in South Korea. An industrial and multi-faceted service
conglomerate, Daewoo was prominent in expanding its global market through joint
ventures all over the world.

Daewoo benefited from government-sponsored cheap loans based on potential export

profits. The company initially concentrated on labor-intensive clothing and textile
industries that provided high profit margins. The most significant resource in this plan
was South Korea's large workforce.

The third and fourth of the five-year plans occurred from 1973 to 1981. During this
period, the country's labor force was in high demand. Competition from other countries
began eroding Korea's competitive edge. The government responded to this change by
concentrating its effort on mechanical and electrical engineering, shipbuilding,
petrochemicals, construction, and military initiatives. At the end of this period, the
government forced Daewoo into ship buildings. Kim was reluctant to enter this industry,
but Daewoo soon earned a reputation for producing competitively priced ships and oil
rigs.

During the next decade, the Korean government became more liberal in economic
policies. Small private companies were encouraged, protectionist import restrictions
were loosened, and the government reduced positive discrimination, to encourage free
market trade and to force the chaebol to be more aggressive abroad. Daewoo
responded by establishing a number of joint ventures with U.S. and European
companies. It expanded exports of machine tools, defense products, aerospace
interests, and semiconductor design and manufacturing. Eventually, it began to build
civilian helicopters and airplanes, priced considerably cheaper than those produced by
its U.S. counterparts. It also expanded efforts in the automotive industry and was ranked
as the seventh largest car exporter and the sixth largest car manufacturer in the world.
Throughout this period, Daewoo experienced great success at turning around faltering
companies in Korea.
In the 1980s and early 1990s, the Daewoo Group also produced consumer electronics,
computers, telecommunication products, construction equipment, buildings, and musical
instruments (Daewoo Piano).

FACTORS THAT AFFECTED DAEWOO’S PERFORMANCE

• Government intervention: Government policy served as a double edged sword: it

protected the chaebol, providing them with massive subsidies, unlimited cheap
credit, and protection against foreign competition. However, the price for these
services was total loyalty to the government. Chaebol were forced to take over
industries against their will. The government was constantly involved in their
businesses and stifled their creativity.
• Labor market: The traditional work ethic that helped Korea reach economic
prosperity has been threatened as workers have begun increasingly violent
protests against years of long hours and low pay. Daewoo shipbuilding suffered
heavy losses due to workers' demands for pay raises.
• Operating in a global economy: International demand for free trade is forcing the
Korean government to open its market. The chaebol will lose its protectionist
import controls. Most recently, the North American Free Trade Agreement and the
European Economic Community imposed trade limitations.
• Product quality from Korea: Korean products were considered to be of low
quality.
• By the 1990s, Daewoo Group was heavily leveraged, major markets were
stagnant, expenditures on R&D were increasing, labor unrest was continuing,
and government policy was turning against the company.
• Kim was most recently charged with allegedly paying campaign contributions to
former president Roh Tae Woo in exchange for a large government contract to
build a submarine base.
 Crisis history

Daewoo Group ran into deep financial trouble in 1998 due to the Asian financial crisis,
increasingly thin relationships with the Korean government under President Kim Dae
Jung, and its own poor financial management. With the Korean government in deficit,
traditional reliance on access to cheap and nearly unlimited credit was severely
restricted. According to an article by the "Economist," dated August 19, 1999, not long
after Daewoo's insolvency, "Its failure was a long time coming. [In 1998], when the
economic crisis forced most of the chaebol to cut back, Daewoo brazenly added 14 new
firms to its existing 275 subsidiaries—and this in a year where the group lost a
combined 550 billion won ($458m) on sales of 62 trillion won ($51 billion). At the end of
1997, South Korea’s four biggest chaebol averaged debt of nearly five times their equity.
But while Samsung and LG [two other considerable chaebols] cut back during the
subsequent year of economic crisis, Daewoo acted as if nothing had changed: it added
40% more debt.

By 1999, Daewoo, the second largest conglomerate in South Korea holding interests in
approximately 100 countries, went bankrupt, with debts of about 80 billion won (84.3
million USD).

Soon after the company's demise, Chairman Kim Woo-jung fled to France, and many
former Daewoo factory workers put up "Wanted" posters with his picture. Kim Woo-jung
returned to Korea in June 2005 and was promptly arrested, after spending six years
abroad. Mr. Kim was charged with masterminding accounting fraud worth 41 trillion won
($43.4 billion), illegally borrowing 9.8 trillion won ($10.3 billion) and smuggling $3.2
billion out of the country, according to South Korea's Yonhap News Agency. On May 30,
2006 a court in Seoul sentenced Kim to 10 years in prison after convicting him on
charges of fraud and embezzlement. On the last day of the trial, Mr. Kim tearfully
addressed the court, "I cannot dodge my responsibility of wrongly buttoning up the final
button of fate."

The downfall of Daewoo was and still is considered highly contentious, due to the
integral nature that chaebols play in South Korean life. The collapse caused billions of
dollars in losses for both South Korean banks and the government. However, the
bankruptcy of the company was not merely a financial but also a political crisis, and
came as a large shock to much of the nation's population.

CURRENT STATUS

Daewoo Electronics survives to this day despite bankruptcy, with a new brand logo
"DE", but many of the other subsidiaries and divisions have become independent or
simply perished under the "reorganization" of the Korean government under Kim Dae
Jung. In North America, Target stores market Daewoo Electronics products under their
"Trutech" brand on an ODM basis.

The group was reorganized into three parts: Daewoo International, Daewoo Engineering
& Construction and Daewoo Corporation. It is active in many markets; the most
important are steel processing, ship building and financial services.

In 2004, General Motors pulled the Daewoo brand of vehicles out of Australia and New
Zealand, citing irreparable brand damage. Later that same year, GM announced that
Daewoo Motors in Europe would change its name to Chevrolet as of January 1, 2005. In
2005, it was announced that Daewoo cars would have a Holden badge in Australia and
New Zealand. In South Africa, Thailand and the Middle East, Daewoo models were
already being sold as Chevrolets. Only in South Korea and Vietnam does the Daewoo
marquee survive.

The Daewoo commercial vehicle manufacturer was taken over by Tata Motors - the
world's 5th largest medium and heavy commercial vehicle manufacturer.

Daewoo is also moving into the oil & gas industry. While many western oil & gas
companies decline to conduct business in Burma on account of the abysmal human
rights record of the ruling military junta, Daewoo is one of three(the others the French
company Total and American company Unicol) which is already or is close to starting
gas production in the country(at the Yadana Field). During explorations Daewoo found
one of the largest gas fields in SE Asia located in Blocks A-1 and A-3 at the Shwe Field
about 100km off Sittwe in Rakhine State, which is planned to go into production within
the next 5 years, thereby providing a lucrative (and probably the largest) source of hard
currency finance for the ruling junta. It is unclear whether the association between
Daewoo and the oppressive military regime in Burma(Burma strikes Gold, Upstream
28.08.08), responsible for recent bloody crackdown of peaceful monk-led anti-
government protesters in September and October 2007, wholly inadequate warning and
response to Cyclone Nargis in May 2008, will further hurt the reputation of the company.
However, Daewoo has long been known as one of the largest foreign investors in the
country.

Related to its involvement in the Burmese oil & gas industry, the Daewoo International
President Lee Tae-yong, has been convicted and sentenced in South Korea for illegally
selling military hardware to the junta (Burma strikes Gold, Upstream 28.08.08). These
sales to the military were directly related to award of the offshore concession blocks to
Daewoo. In court, President Lee defended his actions as being in "South Korea's
national interest" (Burma strikes Gold, Upstream 28.08.08).

On Thursday, November 15th, 2007 Lee Tae-yong and thirteen other South Koreans
were convicted of illegally exporting weapons technology and equipment to Burma
along with other related charges.

DAEWOO MATIZ

The Daewoo Matiz is a city car produced by the South Korean

automaker GM Daewoo that has been marketed worldwide since
1998. Available solely as a five-door hatchback with two engine
configurations, and replacing the Daewoo Tico, the Matiz was
originally designed by Italdesign Giugiaro and has been facelifted
twice.

The Matiz has won the Best City car in the 1998 World's Most
Beautiful Automobile competition and it draws involuntary smiles from
even the wierdest of cretin. Even the rear of this car is cute to look at.
The engine is packaged tightly to provide a great deal of front leg
room and is throughly refined in its behaviour. However, all this
cuteness is lost when compared with the competition. The Santro an
immediate competitor scores over most features over the Matiz
except in the looks department. Nevertheless, Matiz offers good
value for money.The Matiz was developed by GM Daewoo. It also
called as Chevrolet Matiz, Chevrolet Spark, Chevrolet Joy, Pontiac
Matiz G2, Pontiac Matiz, Pontiac G2, Chevrolet Exclusive, FSO
Matiz, Chevrolet Taxi 7:24 Chronos, UZ Daewoo Matiz.

The Daewoo Matiz started production in 1998 and sold in South

Korea and many European markets with the code name M100. The
exterior design is based on the Lucciola, a Fiat Cinquecento concept
by Italdesign Giugiaro which had been rejected by Fiat. The 0.8-litre
gasoline engine and the transmission were carryovers from the
Daewoo Tico. The car became the best selling Daewoo model in
Europe for the next four years. The Matiz is available in one body
style: a five-door hatchback. Its Curb weight was 847 kg (1867 lb)

The Matiz was originally launched with just a 0.8 L 3-cylinder

engine, however with the 2001 model-year revisions a 1.0 L 4-
cylinder was added to the upper models of the range. In 2008 the
0.8 L was revised to fall below the 120g/km level, thus qualifying for
the UK's £35 road tax band and no London Congestion Charge.
 GLOBAL MARKETING AND MANUFACTURE
Asia

• From 1998 until 2001, the Matiz was sold in Japan under Chevrolet Matiz. From
2001 until 2006, it was sold under Chevrolet Matiz II. In fact, both models were
distributed and marketed by Suzuki Motor Corporation. In 2006, it took the
Daewoo marque.

• In India, it was launched in 1999 as the Daewoo Matiz. General Motors India
relaunched it as the Chevrolet Spark in 2007.

• In Pakistan, the car was initially introduced as Chevrolet Exclusive in 2003. It is

currently manufactured by Nexus Automotive under the name Chevrolet Joy.

• In the Philippines, the Matiz was available during the years 1999-2000 through
the Grey Market. In 2007, it was released under the name Chevrolet Spark.

Europe

• From 1998 until 2004, the Matiz was sold in Europe under the Daewoo badge. In
2005, it took the Chevrolet marque, as well as the other South Korean models of
General Motors.

• Since 2000, CKD kits have been supplied UzDaewooAuto, FSO and Rodae, to
be built and sold in Uzbekistan, Poland and Romania respectively. At the
beginning of 2005, the Polish Matiz started to be sold under the marque FSO
(FSO Matiz), which obtained autonomy. New models of Matiz are sold as
Chevrolet Spark.

Latin America

• In Mexico, the Matiz was introduced to the market in 2003. The 2006 model was
renamed to Pontiac Matiz G2. It was also sold as Pontiac Matiz and Pontiac G2.

• In the Dominican Republic it is sold as the Chevy Spark. Also sold is the Chery
QQ.

• In Colombia, the Matiz was imported by Daewoo distributors between 2002 and
2005 and then GM Colmotores began to assemble and sell it branded as
Chevrolet Spark. In 2006, a taxi version called 7/24 was launched.

• In Argentina, Ecuador and Peru it is sold as the Chevrolet Spark.

 • In Paraguay, it was initially sold as Daewoo Matiz,
but from 2008 it is sold through Chevrolet
dealers.

WHY DAEWOO MATIZ FAILS?

Designed by Giorgetto Guigiaro, the Matiz has won international acclaim -

'Most Beautiful Automobile' - Milan Show & 'Best Small Car' - UK Motor Show.
The interiors are not cluttered, are comfortable and hold much space for a car its size.
The car conforms to European Safety Regulations. The Matiz forms a protective shell
around the passengers to protect them in case of serious accidents.
The Matiz is the only car in India to have successfully passed the stringent 40% Offset
Frontal Crash Test. The Matiz also meets the Euro II norms. The car runs on a 796-cc
engine that produces 52bhp with a torque of 7.3kg-m.It has a Multi-Point Fuel Injection
system. With a seating capacity of upto five people and five doors, it sure is a car to be
in.
In spite of these specialities Matiz Fails. It is the main part which is very important to
think upon where would be the new product will fail. Daewoo Matiz definitely left some
part of new product development that is why it fails. Let us see why Matiz fails:-

• The main problem was the Matiz' positioning. They had launched ONLY a fully
loaded variant at 4 lacs in Mumbai. Compare that to the Santro and Zen, which
had fully loaded as well as mid-range and basic versions
• Its design was allegedly copied outright by Chinese manufacturer Chery's QQ.

• It was not much powerful for highways.

• When the car was launched it was overpriced by Daewoo. Matiz price was later
on corrected and the sales gap to Santro was coming down fast, and when it was
just abt to overtake, Daewoo collapsed..

• Hyundais determination and Daewoos lack of it.

• They suddenly brought down their prices by Rs 1 lakh. This created very bad
impression on public.

• The car was never properly customised for India faulty fuel pumps, etc.

• It had lots of problems with the cooling system and suspension.

 • Its wheel rims were awful - got bent very fast and wore out the tyres even faster

• It was most difficult to repair, because aesthetics overtook convenience inside the
bonnet
Daewoo Matiz failed but after this a new car launche by
Chevrolet Matiz which was the just modifications of Daewoo Matiz it got good success.
So as per this new product development’s every process is very important for a new
product.

INDIA
Nestlé India is a subsidiary of Nestlé S.A. of Switzerland. With seven factories and a
large number of co-packers, Nestlé India is a vibrant Company that provides consumers
in India with products of global standards and is committed to long-term sustainable
growth and shareholder satisfaction.

The Company insists on honesty, integrity and fairness in all aspects of its business and
expects the same in its relationships. This has earned it the trust and respect of every
strata of society that it comes in contact with and is acknowledged amongst India's
'Most Respected Companies' and amongst the 'Top Wealth Creators of India'.

Nestlé’s relationship with India dates back to 1912, when it began trading as The Nestlé
Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished
products in the Indian market.
After India’s independence in 1947, the economic policies of the Indian Government
emphazised the need for local production. Nestlé responded to India’s aspirations by
forming a company in India and set up its first factory in 1961 at Moga, Punjab, where
the Government wanted Nestlé to develop the milk economy. Progress in Moga required
the introduction of Nestlé’s Agricultural Services to educate, advise and help the farmer
in a variety of aspects. From increasing the milk yield of their cows through improved
dairy farming methods, to irrigation, scientific crop management practices and helping
with the procurement of bank loans. Nestlé set up milk collection centres that would not
only ensure prompt collection and pay fair prices, but also instil amongst the community,
a confidence in the dairy business. Progress involved the creation of prosperity on an
on-going and sustainable basis that has resulted in not just the transformation of Moga
into a prosperous and vibrant milk district today, but a thriving hub of industrial activity,
as well. For more on Nestlé Agricultural Services,

Nestlé has been a partner in India's growth for over nine decades now and has built a
very special relationship of trust and commitment with the people of India. The
Company's activities in India have facilitated direct and indirect employment and
provides livelihood to about one million people including farmers, suppliers of packaging
materials, services and other goods.
The Company continuously focuses its efforts to better understand the changing
lifestyles of India and anticipate consumer needs in order to provide Taste, Nutrition,
Health and Wellness through its product offerings. The culture of innovation and
renovation within the Company and access to the Nestlé Group's proprietary
technology/Brands expertise and the extensive centralized Research and Development
facilities gives it a distinct advantage in these efforts. It helps the Company to create
value that can be sustained over the long term by offering consumers a wide variety of
high quality, safe food products at affordable prices.

Nestlé India manufactures products of truly international quality under

internationally famous brand names such as NESCAFÉ, MAGGI, MILKYBAR, MILO,
KIT KAT, BAR-ONE, MILKMAID and NESTEA and in recent years the Company has
also introduced products of daily consumption and use such as NESTLÉ Milk, NESTLÉ
SLIM Milk, NESTLÉ Fresh 'n' Natural Dahi and NESTLÉ Jeera Raita.

Nestlé India is a responsible organization and facilitates initiatives that help to improve
the quality of life in the communities where it operates.

PRESENCE IN INDIA

Beginning with its first investment in Moga in 1961, Nestlé’s regular and substantial
investments established that it was here to stay. In 1967, Nestlé set up its next factory at
Choladi (Tamil Nadu) as a pilot plant to process the tea grown in the area into soluble
tea. The Nanjangud factory (Karnataka), became operational in 1989, the Samalkha
factory (Haryana), in 1993 and in 1995 and 1997, Nestlé commissioned two factories in
Goa at Ponda and Bicholim respectively. Nestlé India has commissioned in 2006 its 7th
factory at Pant Nagar in Uttarakhand

NESLE MAGGI

Maggi is a Nestlé brand of instant soups, stocks, bouillons, ketchups, sauces,

seasonings and instant noodles. The original company came into existence in 1872 in
Switzerland, when Julius Maggi took over his father's mill. It quickly became a pioneer of
industrial food production, aiming at the improvement of the nutrition of worker families.
It was the first to bring protein-rich legume meal to the market, which was followed by
ready-made soup based on legume meal in 1886. In 1897, Julius Maggi founded the
company Maggi GmbH in the German town of Singen where it is still established today.

In parts of Europe, including German-speaking countries as well as the Netherlands,

Czech Republic, Slovakia, Poland, and France, "Maggi" is still synonymous with the
brand's "Maggi-Würze" (Maggi spice), a dark sauce which is very similar to East Asian
soy sauce without actually containing soy[citation needed]. It was also introduced in 1886, as a
cheap substitute for meat extract. It has since become a well-known part of everyday
culinary culture in Switzerland, Austria and especially in Germany.

The bouillon cube or 'Maggi cube' was introduced in 1908, which was another meat
substitution product.

Because chicken and beef broths are so common in the cuisines of many different
countries, the company's products have a large worldwide market. Today Maggi is
particularly well known in New Zealand, Australia, Pakistan, India, Malaysia and
Singapore for its instant noodles.

In West Africa, Maggi cubes are used as part of the local cuisine. Throughout Latin
America, Maggi products, especially bouillon cubes, are widely sold with some
repackaging to reflect local terminology. In the German, Dutch and Danish languages
lovage has come to be known as "Maggi herb" (Ger. Maggikraut, Du. maggikruid or Da.
maggiurt) because of a supposed resemblance to the taste of Maggi sauce.
 MAGGI PRODUCTS
Maggi Noodles

MAGGI 2-MINUTE Noodles is one of the largest snack food brands in the country and
defines the Instant Noodles category in the country. MAGGI 2-MINUTE Noodles has
been renovated to provide 20% of the RDA* of Calcium and Protein for the core target
group. It is available in 4 flavours: Masala, Chicken, Tomato and Curry.

Maggi Vegetable Noodles

It is an innovative product and the first of its kind in India. Nestlé India used the Group's
extensive Research and Development expertise to develop MAGGI Vegetable Atta
Noodles which contain whole wheat and real vegetables. A 90g pack of MAGGI
Vegetable Atta Noodles meets 20% of your child's RDA* for Protein and 35% of your
child's RDA** for Dietary Fibre. Taste Bhi , Health Bhi !

Dal Atta Noodles

To provide the family with more good food, Nestlé India has now launched yet another
innovative product - MAGGI Dal Atta Noodles, further building on the nutrition
proposition of TASTE BHI HEALTH BHI. In addition to the wholesome nutrition of
Dietary Fibre contained in whole wheat ( 'Atta'), the new product offers the goodness of
protein coming from the unique combination of 'Atta' and 'Dal'. Every serve of MAGGI
Dal Atta Noodles provides over 20% of a child's* daily requirement of dietary fibre and
protein, therefore making it a healthy choice. .

Maggi Rice Noodles Mania

Chaska Taste ka, Health Rice ka

Maggi Rice Noodles Mania comes as another unique TASTE BHI HEALTH BHI offering
from the house of MAGGI. The all-new exciting flavour range viz. Lemon Masala, Chilly
Chow and Shahi Pulao to appeal to all members of the family across different regions of
the country. The sheer range of flavours will fulfill the craving / MANIA for taste and the
goodness of rice with ‘balanced energy’ (i.e. at least 60% Energy from carbohydrates,
not more than 30% from fat and 10% from Protein)

Maggi Sauces

Nestlé India has always focused its efforts to better understand the changing lifestyles of
consumers and their needs. Based on such insights, the Company continuously
innovates and renovates. Recent examples are that of MAGGI Tomato Chatpat, a mix of
Tomato, Ginger, Garlic & Coriander and Maggi Tomato Pudina mix of Tomato, Mint &
Coriander, MAGGI Teekha Masala mix of Tomato, Cumin, Chillies & Coriander.
Maggi Healthy Soups

Nestlé pioneered the dehydrated soups market in India and was the first to introduce
tasty and convenient packaged soups. The new MAGGI Healthy Soups have been
carefully prepared through the Research and Development efforts of Nestlé Group and
are even more delicious, quick to prepare, convenient and healthy. Taste Bhi, Health
Bhi!. MAGGI Healthy Soups contain real vegetables, are low fat, low cholesterol and
free from synthetic colours and added MSG. These superior healthy soups are now
available in an enhanced range of 10 delicious variants.

MAGGI MAGIC Cubes

Maggi Magic Cubes are taste enhancers - "Chutki bhar Jadoo!" MAGGI MAGIC Cubes
are available in two flavours - Vegetarian Masala and Chicken.

Maggi Pichkoo

Pichkoo is a small doy pack which makes MAGGI Tomato Ketchup affordable to a host
of new consumers. Alongwith affordability, it's packaging makes it easy to handle and
carry. It's endearing name, packaging and great taste evoke a resounding reaction.

Maggi Cuppa Mania

New Maggi Cuppa Mania has been launched keeping exactly the consumers likes and
dislikes in mind as Maggi Cuppa Mania can be had anytime on the go. Maggi Cuppa
Mania Offers delicious taste combined with goodness of real vegetables ,Comes in two
mouth watering variants MAGGI CUPPA MANIA is an ideal offering for the new
generation pressed hard for time trying to juggle multiple roles all at once. Therefore the
line… “Just add garam paani … Carry on jaani”

STRATEGIES OF MAGGI

To cover the market every company has to go with some

strategies. Maggi has also its own strategy to cover the market. Let us see the
Initial strategies of Maggi:-

► Maggi has faced lot of hurdles in its journey in India.

► The basic problem the brand faced is the Indian Psyche.
► Initially Nestle tried to position the Noodles in the platform of convenience
targeting the working women.
► However, the sales of Maggi was not picking up despite of heavy Media
Advertising.
► To overcome this NIL conducted a research.
► NIL's promotions positioned the noodles as a 'convenience product', for mothers
& as a 'fun' product for children.
► The noodles' tagline, 'Fast to Cook Good to Eat' was also in keeping with this
positioning.
 ► They promoted the product further by distributing free samples. Giving gifts on
return of empty packets, etc.

HURDLES FACED

“Maggi is a trusted brand because it has understood the

consumers’ evolving needs, and consistently innovated and renovated itself to make life
easier and happier for them,”. But for being a trusted brand Maggi has also faced many
hurdles. In 1990 the sale of Maggi was decline. Top Raman Noodles, Indo nissin a
Japanese noodles 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 these products were not successful: Ketchups,
Soups, Tastemakers,etc. But Maggi has taken care of consumers likes and dislikes and
went through a good process of New Product Development to achieve the consumer
satisfaction.

BIBLIOGRAPHY

Websites:-

1. www.google.com

2. www.yahoo.com

3. www.msn.com

4.

Books:-

1. Marketing Management(Kotler)