EXECUTIVE SUMMARY

The project aims at understanding the Marketing strategies

of Nestle Maggi. Research has demonstrated conclusively that it is far more costly
to win a new customer than it is to maintain an existing one. And there is no better
way to retain a customer than to exceed his expectations. For this purpose it is
essential to know the level of customer satisfaction.
The focus of my research was the measurement of customer satisfaction provided
by Nestle Maggi. There can be no better opportunity to interact with the external as
well as the internal customers of an organization. Finally the results of the research
verify the fact that keeping the customer satisfied is the best strategy to not only
retains the existing customers but also to expand the business to new horizons.
Fast-moving consumer goods (FMCG) or consumer packaged goods (CPG) are
products that are sold quickly and at relatively low cost. Examples include nondurable goods such as soft drinks, toiletries, and grocery items. Though the
absolute profit made on FMCG products is relatively small, they generally sell in
large quantities, so the cumulative profit on such products can be substantial.
The term FMCG refers to those retail goods that are generally replaced or fully used
up over a short period of days, weeks, or months, and within one year. This
contrasts with durable goods or major appliances such as kitchen appliances, which
are generally replaced over a period of several years.
FMCG have a short shelf life, either as a result of high consumer demand or because
the product deteriorates rapidly. Some FMCGs such as meat, fruits and vegetables,
dairy products and baked goods are highly perishable. Other goods such as
alcohol, toiletries, pre-packaged foods, soft drinks and cleaning products have high
turnover rates.
TABLE OF CONTENTS
1. Introduction
2. Company profile
3. Review of literature
4. Objective & scope of report
5. Methodology
6. Limitation
7. Analysis & interpretation.
STP Analysis
SWOT Analysis
8. Conclusion & recommendation
Annexure
Questionnaire
Bibliography

CHAPTER 1
INTRODUCTION TO THE PROJECT

The Project entitled ANALYSIS OF MARKETING AND PROMOTIONAL STRATEGIESOF

MAGGI deals with the study of the Maggi Brand that was launched in India in the
year 1983, by Nestle India Limited, which became synonymous with noodles.
Mainly, this project studies the Marketing and Promotional strategies that are
adopted by Nestle India Limited for Maggi over the years. And also to know about
the market position of Maggi as a Brand, how they survived in the past, what all
strategies they adopted to become a well known and well established brand.
OBJECTIVES OF THE PROJECT:
To Understand the Marketing and Promotional Strategies adopted byNestle Maggi.
To understand the brand performance of Maggi product.
To understand Brand Imagery, Brand Quality perceived by customers, Brand
Credibility, consideration, superiority.
Brand extension of Maggi in terms of product diversity.
COMPANY PROFILE

INTRODUCTION TO NESTLE:
NESTLE:

Nestl S.A. is among the largest consumer packaged goods companies in the world,
founded and headquartered in Vevey, Switzerland. Nestl originated in a1905
merger of the Anglo-Swiss Milk Company, which was established in 1866
bybrothers George Page and Charles Page, and the Farine Lacte Henri NestlComp
any, which was founded in 1866 by Henri Nestl, whose name meant "Little Nest".
The company grew significantly during the First World War and following the Second
World War, eventually expanding its offerings beyond its early condensed milk and
infant formula products. Today, the company operates in 86 countries around the
world and employs nearly 283,000 people.

HISTORY OF NESTLE:
The company dates to 1867, when two separate Swiss enterprises were founded
that would later form the core of Nestl. In the succeeding decades the two
competing enterprises aggressively expanded their businesses throughout Europe
and the United States.
In August of 1867 Charles A. and George Page, two American brothers from Lee
County, IL, established the Anglo-Swiss Condensed Milk Company in Cham. Their
first British operation was opened at Chippenham, Wiltshire in 1873.
In September 1867, in Vevey, Henri Nestl developed a milk-based baby food and
soonbegan marketing it. Henri Nestl retired in 1875, but the company, under newo
wnership, retained his name as Farine Lacte Henri Nestl.

Henri Nestl.
In 1877 Anglo-Swiss added milk-based baby foods to its products, and in
the following year the Nestl company added condensed milk, so that the firms
became direct and fierce rivals.
In 1905 the companies merged to become the Nestl and Anglo-Swiss Condensed
Milk Company, retaining that name until 1947, when the name Nestl Alimentana
SA was taken as a result of the acquisition of Fabrique de Produits Maggi SA
(founded 1884)and its holding company, Alimentana SA of Kempttal, Switzerland.
Maggi was a major manufacturer of soup mixes and related foodstuffs. The
companys current name was adopted in 1977. By the early 1900s, the company
was operating factories in the United States, United Kingdom, Germany and Spain.
World War I created new demand for dairy products in the form of government
contracts; by the end of the war, Nestls production had more than doubled.

After the war, government contracts dried up and consumers switched back to fresh
milk. However, Nestl's management responded quickly, streamlining operations
and reducing debt. The 1920s saw Nestl's first expansion into new products, with
chocolate the company's second most important activity.

Nestls logo used until 1970s.

Nestl felt the effects of World War II immediately. Profits dropped from US$20
million in 1938 to US$6 million in 1939. Factories were established in developing
countries,
particularly Latin America. Ironically, the war helped with the introduction of thecom
pany's newest product, Nescaf, which was a staple drink of the US military. Nestls
production and sales rose in the wartime economy.
The end of World War II was the beginning of a dynamic phase for Nestl. Growth
accelerated and companies were acquired. In 1947 came the merger with Maggi
seasonings and soups. Crosse & Blackwell followed in 1950, as did Findus (1963),
Libbys (1971) and Stouffer's (1973). Diversification came with a shareholding in
LOreal in 1974. In 1977, Nestl made its second venture outside the food industry
by acquiring Alcon Laboratories Inc.
In 1984, Nestl's improved bottom line allowed the company to launch a new round
of acquisitions, notably American food giant Carnation and the British confectionery
company Row tree Mackintosh in 1988, which brought the Willy Wonk Brand to
Nestle.
The first half of the 1990s proved to be favorable for Nestl: trade barriers crumbled
and world markets developed into more or less integrated trading areas. Since 1996
there have been acquisitions including San Pellegrino (1997), Spillers Pet foods
(1998), and Ralston Purina (2002). There were two major acquisitions in North
America, both in2002: in June, Nestl merged its U.S. ice cream business into
Dreyer's, and in August aUS$2.6 billion acquisition was announced of Chef America,
the creator of Hot Pockets. In the same time frame, Nestl came close to purchasing
the iconic American company Hersheys, though the deal fell through. Another
recent purchase includes the Jenny Craig weight loss program for US $ 600 million.
In December 2005 Nestl bought the Greek company Delta Ice Cream for 240
million. In January 2006 it took full ownership of Dreyer's, thus becoming the world's
biggest ice cream maker with a 17.5% market share.
In November 2006, Nestl purchased the Medical Nutrition division of NovartisPhar
maceutical for $2.5B, also acquiring in 2007 the milk flavoring product known as
Ovaltine. In April 2007 Nestl bought baby food manufacturer Gerber for $5.5
billion.
In December 2007 Nestl entered in a strategic partnership with a Belgian
chocolate maker Pierre Marcolini. Nestl agreed to sell its controlling stake in Alcon
to Novartis on 4 January 2010. The sale forms part of a broader US $39.3 billion
offer by Novartis to fully acquire the worlds largest eye-care company.

PRODUCTS OF NESTLE:
Nestl has 6,000 brands, with a wide range of products across a number of markets
including coffee (Nescafe), bottled water, other beverages (including Aero
(chocolate) & Skinny Cow), chocolate, ice cream, infant foods, performance and
healthcare nutrition, seasonings, frozen and refrigerated foods, confectionery and
pet food.
EARNINGS OF NESTLE:
In 2009, consolidated sales were CHF 107.6 billion and net profit was CHF 10.43
billion. Research and development investment was CHF 2.02 billion.
Sales by activity breakdown: 27% from drinks, 26% from dairy and food products,
18% from ready-prepared dishes and ready-cooked dishes, 12% from chocolate,
11% from pet products, 6% from pharmaceutical products and 2%from baby milks.
Sales by geographic area breakdown: 32% from Europe, 31% from Americas(26%
from US), 16% from Asia, 21% from rest of the world.
JOINT VENTURES:
Nestl holds 26.4% of the shares of LOreal, the world's largest company
in cosmetics and beauty. The Laboratories Inneov is a joint venture in nutritional
cosmetics between Nestle and LOreal, and Galderma a joint venture in dermatology
with LOreal. Others include Cereal Partners Worldwide with General Mills, Beverage
Partners Worldwide with Coca-Cola, and Dairy Partners Americas with Fonterra.

INDUSTRY PROFILE
Fast Moving Consumer Goods (FMCG) goods are popularly named as
consumer packaged goods. Items in this category include all consumables (other
than groceries/pulses) people buy at regular intervals. The most common in the list
are toilet soaps, detergents, shampoos, toothpaste, shaving products, shoe polish,
packaged foodstuff, and household accessories and extends to certain electronic
goods. These items are meant for daily of frequent consumption and have a high
return.
The Indian FMCG sector with a market size of US$14.8 billion is the fourth largest
sector in the economy. The FMCG market is set to double from USD 14.7 billion
in2008-09 to USD 30 billion in 2012. FMCG sector will witness more than 60 per cent
growth in rural and semi-urban India by 2010. Indian consumer goods market is
expected to reach $400 billion by 2010.Hair care, household care, male grooming,
female hygiene, and the chocolates and confectionery categories are estimated to
be the fastest growing segments. At present, urban India accounts for 66% of total
FMCG consumption, with rural India accounting for the remaining 34%. However,
rural India accounts for more than 40% consumption in major FMCG categories such
as personal care, fabric care, and hot beverages. In urban areas, home and personal

care category, including skin care, household care and feminine hygiene, will keep
growing at relatively attractive rates. Within the foods segment, it is estimated that
processed foods, bakery, and dairy are long-term growth categories in both rural
and urban areas. The growing incline of rural and semi-urban folks for FMCG
products will be mainly responsible for the growth in this sector, as manufacturers
will have to deepen their concentration for higher sales volumes.
Major Players in this sector include Hindustan Unilever Ltd., ITC (Indian Tobacco
Company), Nestl India, GCMMF (AMUL), Dabur India, Asian Paints (India), Cadbury
India, Britannia Industries, Procter & Gamble Hygiene and Health Care, Marico
Industries, Nirma, Coca-Cola, Pepsi and others. As per the analysis by ASSOCHAM,
Companies Hindustan Unilever Ltd , Dabur India originates half of their sales from
rural India. While Colgate Palmolive India and Marico constitutes nearly 37%
respectively, however Nestle India Ltd and GSK Consumer drive 25 per cent of sales
from rural India.
A rapid urbanization, increase in demands, presence of large number of young
population, a large number of opportunities is available in the FMCG sector. The
Finance Minister has proposed to introduce an integrated Goods and Service Tax
by April 2010.This is an exceptionally good move because the growth of
consumption, production, and employment is directly proportionate to reduction in
indirect taxes which constitute no less than 35% of the total cost of consumer
products - the highest in Asia..The bottom line is that Indian market is changing
rapidly and is showing unprecedented consumer business opportunity.

MAJOR COMPETITORS OF NESTLE MAGGI

Maggi instant noodles, foods major Nestls flagship brand that has dominated the
Indian instant noodles market for nearly three decades, is losing market share on
monthly basis to newer entrants such as GlaxoSmithKline's (GSK) Horlicks Foodles,
Hindustan Unilever's (HUL) Knorr Soupy noodles, Big Bazaar's Tasty Treat, Top
Ramenand several other smaller players, according to data by market research firm
Nielsen.
The data shows that Maggi's share of instant noodles, on an all-India basis, across
urban markets, has slipped consistently between December '09 to July '10. While
Maggi instant noodles (minus vermicelli) had a 90.7% share in December '09, the
share dropped to 86.5% in July '10 on an all-India basis.
A regional split of the data shows that Maggi's instant noodles' value market share
has fallen across the east, south, north and west zones for the same period.
Analysts say with new competition, Maggi's market share is certain to get impacted,
but add that Nestle has the potential to expand the Rs 1,300-crore instant noodles
category which itself is growing at a rapid 15% annually. A detailed email sent
to Nestle on Thursday elicited no response.

Apart from HUL and GSK which have positioned their noodles as 'healthy' snacking
options targeting kids and mothers, others like Indo-Nissin's Top Ramen, Capital
Foods' Ching's Secret and CG Foods's Wai-Wai , though around for long, are stepping
up marketing efforts to take advantage of category growth. Besides, private brands
like BigBazaar's Tasty Treat and Aditya Birla Retail's Feasters are notching up share.
Manoj Menon, FMCG analyst at brokerage firm Kotak Securities, wrote in a report
earlier this month: "Maggi faces product substitution risk and brands like Knorr and
Foodles could potentially impact its incremental growth. Nestle faces a challenging
competitive environment in culinary."
GSK, which entered the category in December last year, has taken away share from
Maggi mainly in the South and East riding on the equity of Horlicks and its wellentrenched distribution in the regions.
GSK's executive VP, marketing, Shubhajit Sen, said: "Consumers were looking for a
choice in instant noodles; combined with that, the equity of Horlicks is leading to a
lot of trails. The initial response to Foodles is much higher than our expectations."
On the other hand, HUL, which rolled out Knorr Soupy noodles in the South this
February, had to postpone the brand's national launch due to capacity constraints
because of heavy consumer off take. An HUL spokesman said: "We are very pleased
with the performance of Knorr Soupy noodles."
Private brands are whetting appetites of consumers too. According to Devendra
Chawla, business head, private brands, Future group: "The category boundary is set
to be re-drawn. From a snack food targeted at children, instant noodles category
has evolved as a mainstay meal even for grown ups.
"Mr. Chawla said Tasty Treat was the second biggest instant noodles brand in its
BigBazaar stores after Maggi. The brand packaging was revamped last year and
Future plans to roll out additional variants in a month's time taking the number of
variants to nine from the existing three.
INTRODUCTION
HISTORY OF MAGGI INDIA:
Nestl India Ltd. (NIL), the Indian subsidiary of the global FMCG major, Nestl SA,
introduced the Maggi brand in India in 1982, with its launch of Maggi 2 Minute
Noodles, an instant noodles product.
With the launch of Maggi noodles, NIL created an entirely new food category instant noodles - in the Indian packaged food market. Because of its first-mover
advantage, NIL successfully managed to retain its leadership in the instant noodles
category even until the early 2000s.
NIL offered a variety of culinary products such as instant noodles, soups, sauces and
ketchups, cooking aids (seasonings), etc., under the Maggi brand (Refer to Exhibit II
for Maggi's product portfolio as of mid-2006). Of these, instant noodles had been
Nils main product category in the culinary segment since the launch of Maggi 2
Minute Noodles (Maggi noodles) in 1982. Over the years, Maggi noodles became a
popular snack food product in India.

During the 1990s, the sales of Maggi noodles declined, and this was attributed
partly to the growing popularity of Top Ramen, another instant noodles product. In
order to improve sales and attract more consumers, NIL changed the formulation of
Maggi noodles in 1997. However, this proved to be a mistake, as consumers did not
like the taste of the new noodles. In March 1999, NIL reintroduced the old
formulation of the noodles, after which the sales revived. Over the years, NIL also
introduced several other products like soups and cooking aids under the Maggi
brand.
However, these products were not as successful as the instant noodles. In the early
2000s, Maggi was the leader in the branded instant noodles segment, and the
company faced little serious competition in this segment.

In the early 2000s, NIL started introducing new 'healthy' products in

accordance with the Nestl Group's global strategy to transform itself into a
health and wellness company. In March 1999, NIL reintroduced the old
formulation of the noodles, after which the sales revived.
Over the years, NIL also introduced several other products like soups and
cooking aids under the Maggi brand. However, these products were not as
successful as the instant n o o d l e s . I n t h e e a r l y 2 0 0 0 s , M a g g i w a s
t h e l e a d e r i n t h e b r a n d e d i n s t a n t n o o d l e s segment, and the
company faced little serious competition in this segment.
In July 2001, Maggi replaced Nescafe (NIL's coff ee products brand)
as the company score brand. Nescafe had been NIL's core brand since
1998.
Commenting on the shift, Carlo Donati (Donati), chairman and
managing director, NIL, said, "The focused approach on Nescaf, which
was the company's flagship brand over the last few years, has yielded rich
dividends and we plan to replicate the same in case of Maggi as well."
In the early 2000s, the Nestl Group had been taking measures to transform
itself into
a'health and wellness' company. The company had also set up new research
anddevelopment facilities with a view to improving the attributes of the
existing Nestle products to make them healthier, and to develop new health
and wellness products. Since the early 2000s, the Nestl Group had been
introducing 'health and wellness products all over the world. In India, NIL
introduced new 'healthier' weaning and milk products in 2004.

In March 2005, the Maggi brand too took to the health route with the launch
of Vegetable Atta Noodles. NIL made use of the group's extensive research a
nddevelopment facilities in developing this new 'healthy' product.

MAGGI INDIA
Nestle India Limited is the market leader in Indian Noodle Market with its
Maggi Brand of Noodles which was pioneer brand launched in 1983 in the
packaged food market of India. It took the challenge and established Maggi

in Indian market considered to be conservative and typical about food

consumption. It appropriate realization of target segment,
effective positioning and effective promotion and sales made Maggi toNoodle
s in India as Xerox it to photocopier. NIL had introduced sauces, ketchups and
soups under Maggi brand to reap benefit of brand popularity and image and
contribute to financial gains by 1990.Maggi also became successful in
sauces, ketchups and soups Market in India. Though NIL tried to extend to
other ready to eat products like pickles, cooking aids and paste, It was
unsuccessful so dumped those products.
MaggiBrand of products sustained recession in 2000 and 2001 in India by intr
oducingeconomy packets.

To fulfill novelty needs of customers and revitalize Maggi Noodles Brand NIL
made different attempts by introducing new formulation to new taste but
customers resisted change and Maggi had to reintroduce Maggi Noodles in
same taste. Maggi Noodle had