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CHAPTER II

INTRODUCTION

1.1Background of Study

This task has been assigned to me by Mr. Prakash C. Bhattarai, course instructor and Ace
Institute of Management for the partial fulfillment of the requirements of the BBA degree. One
of the most important and obvious goals of this summer project is the acquisition of practical
knowledge and skills necessary to conduct the research activities. Thus, being involved in
summer projects is a great way to learn many things and enhance our skills and knowledge by
linking the academic environment with workplace and professional realities in terms of
opportunities and challenges.

Instant are dried or precooked noodles and are often sold with packets of flavoring including
seasoning oil. As it is easy to cook and even it can be eaten raw. This feature has given instant
noodles and edge over other products. Hence, Instant noodles are gaining popularity and their
demands are getting high.

As I am analyzing the market of Instant Noodles in Kathmandu only thus, my report would be
based upon the information gathered from the consumer and retailer residing in Kathmandu.
Analyzing the market of Instant Noodles in large scale is a difficult job therefore I am selecting
random retailers and consumer inside Kathmandu i.e. around New and old Baneshwor. This may
report may not reflect the whole situation of the market but it shall give an idea about it.

With this research, I hope to understand the current market condition of Surya inside Kathmandu
valley and discover constraints on its sale.
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1.2 Statement of Problem

As far the noodles industries are concerned they are producing many brands of noodles and the
main problem is in maintaining and building the brand image of each one without overlapping
with each other. The companies have to make sure that the brand is being perceived by the
consumers as being positioned in the market. Thus, managing the different brand is a challenge.

Management Decision Problem:

a) What should be the strategy for the promotion of noodles industries?

b) How can the companies be able to maintain and build brand image?
Research Question:
a) What are the major factors for the growth of noodles industries in Nepal?
b) What are the most important considerations taken into account by the
customers while making purchase decisions?
c) How do customers discern the brand image of noodles?

1.3 Objectives of the Study

1.3.1 General Objective

The main objective of this research is to analyze the current market condition of Instant Noodles
in Kathmandu.

1.3.2 Specific Objectives

To identify the existing situation of the noodles industry

To identify the perceived image of instant noodles in consumers
To measure the satisfaction level of different attributes towards the brand
To identify the possible attributes towards the brand
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1.4 Importance of Study

The finding of this study will generate information regarding the consumption pattern and the
reasons for choosing the particular brand by the consumers. Hence, the information can be useful
for the FMCG (Fast Moving Consumers Goods) companies to manage the positioning of their
brand with appropriate branding strategy as well as help them implement appropriate marketing
strategies. Hence, it will provide useful information not only for the students but also for the
brand managers of FMCG companies to help them improve their companys strategic position
for longer period.

This study will be useful in understanding the current state of Instant Noodles industry of
Kathmandu. It will help to determine, as well as, understand the obstacles and constraints faced
by the retailers who sell instant noodles. This research shall also help viewers to know about the
existing instant noodles brands in Kathmandu. It will also help viewers to know why consumer
prefers instant noodles.

It will also be helpful to those people who will want to go in Noodles industry in the future, for
creative or business purposes, as the project will illuminate where this industry is heading. This
research acts as a keystone in exploring the possibility of doing business on instant noodles. With
the completion of this research, areas of potential or scope of the noodles industry or where this
industry should be heading will be clear and the possibility of generation of market in instant
noodles will be illustrated.
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1.5 Limitation of Study

This study is not absolutely free from limitations; the limitations observed while conducting this
summer project are as follows:
a. Since the study use primary and secondary data in order to prepare report, the data
collection might be influenced by social and personal influence of the data collector.
b. Since the summer project is to be submitted on time, there was insufficient time to
make detail study.
c. The limitations of the secondary sources of data might have influenced the study.
d. The primary data used in this research will be from only a random sample of
boutiques, which may not reflect the opinions of the boutique owners of the entire
industry.

e. Many of the respondents may not answer the questions provided in the questionnaire.
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CHAPTER II

REVIEW OF RELATED STUDIES

2.1 Literature Review

Nepal's instant noodles production began in the early 1980s when Pokhara-based Gandaki
Noodles stepped into a Nepalese market with Rara brand of instant noodles. This came at time
when there was a growing demand for instant noodles in Kathmandu but the only ones available
were the expensive Thai brands. Soon the Nepalese brand of noodles took the market followed
by effective marketing strategies. The major players for popularizing instant noodles in Nepal are
Gandaki Noodles and Chaudhary Group.

But today the Nepalese market is flushed with various brands of instant noodles which cover the
market share of more than 2 billion. The changing life style of people and shift of larger part of
population in urban areas are considered as a major factor for increase in sales of the Fast
Moving Consumers Goods (FMCG)s like noodles and biscuits in Nepal. Apart from these
factors, their inexpensiveness and particularly in the case of instant noodles, ease of preparation
have resulted in high consumption of it.

Despite of various top international brands of noodles available in Nepalese market like Ramen,
Maggi, etc. the popularity and consumption for the Nepalese brand is growing due to its unique
taste. The below is the list of major players in noodles industries of Nepal.
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Manufactures Brands
Himalayan Snacks Noodles (P) Ltd. Mayos, Lekali, MayosShangarila,
Shakalaka Boom Boom, Ruchi, Hurray
Chaudary Group Wai-Wai, Wai-WaiTenz, Wai-Wai Quick,
Golmol, Bingo
Asian Thai Foods (P) Ltd. 2PM, Rumpum, Fatafat, Mama, krish
Gandaki Noodles (P) Ltd. Rara
Pokhara Noodles JoJo, Leader
Multi Foods Min Min

In addition to it, today the consumption pattern of consumers is strongly connected with the
brand popularity. Further, the increasing awareness of brand and preference for branded products
among Nepalese is taking a stand. Since, brand is a trademark connected with a product or
producer. Brands have become increasingly important components of culture and the economy,
now being described as "cultural accessories and personal philosophies."
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2.2 Conceptual/Theoretical Framework

Market of Instant noodles

Distribution Consumer Price Government

System Preferences

Wholesalers Quality Labor &

Manufacturing
cost
Retailers
Tax

Availability

Sale of Instant
Noodles

Challenges Competition
from
Substitute
goods
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The report aims at analyzing the Market of the Instant Noodles in Nepal. In order to accomplish
this indicators like the number of brands in the market, their distribution system through
wholesale and retail and their availability in the market, the brand preferred by the consumers,
and the reasons for the preference like quality, price and availability, the challenges faced in the
market, and the level of competition in the noodle market, the reasons for consumption of the
noodles and few others have been analyzed at depth in this report.
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3. RESEARCH METHODS

3.1 Study Area and Rationale for Selection

The prime concern in this research is to find out the market condition of instant noodles in the
Kathmandu Valley. Since, Kathmandu is the most growing city in Nepal therefore; inhabitants
of the Kathmandu Valley may be a better option for getting effective responses. Hence, the
required information had been gathered from the markets of the Kathmandu valley, New and
Old Baneshwor regarding condition of instant noodles so, that the study is more convenient to
carry out.

3.2 Nature and Source of Data

Both primary and secondary data were used for the study. Since the study use both sources of
information, both qualitative and quantitative data were utilized for the study. To get information
on this study about the current state of Instant noodles industry, various published articles were
used. And in order to learn about the future scope of the fashion industry and current market as
well, primary data was viewed. Primary data was collected from the randomly selected consumer
and retailers of new and old baneshwor and secondary data and information was collected from
various published articles and reports, though very little secondary data was used.

3.3 Study Population and Sample

The study will be based on descriptive research i.e. gathering of information using scientific
methods and procedures to collect the data with an aim to be aware about the types, preferences
and opinion of the Instant noodles consumer.

The method of collecting information would be both quantitative and qualitative. This method
will give us an idea about the noodles consumer's preferences and opinion. Interviewing or direct
interaction with concerned people would be the mode of gathering information.
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3.4 Data Collection Tools and Techniques

The structured questionnaire was used to collect the primary data for the study is attached in
Annex 2. A set of structured questionnaire was developed to conduct interviews with owners of
fashion boutiques. All the information that includes the current market, constraints and scope of
the instant noodles industry was asked with the help of the closed questionnaire.

For the sampling procedure, 20 consumers were selected and 10 retailers were asked questions
about their understandings and opinions of instant noodles industry of Kathmandu. The
convenience sampling technique was made use of in the study area.

3.5 Data Analysis and Interpretation

All the collected data has been properly processed by entering the collected data in the computer
software SPSS. In SPSS, through the use of various mathematical and statistical tools, the
collected data has been refined and analyzed. Different tables, charts, diagrams and graphs have
been used as applicable. All these findings have been presented well in the summer project
report.

3.6 Ethical Consideration

This research shall not publish the respondents real name who feels insecure. A fake name shall
be given. Also, there are other ethical factors to be considered. While performing this research,
ethical factor shall be looked upon.