STP strategy: Segmentation, Targeting and Positioning

Segmentation: It’s grouping people according to similar needs and behaviors

Targeting: Its group of people you are targeting and for whom you are specifically designing the
product to satisfy their needs.

Positioning: forming mental image of your product in people’s mind using marketing.

Segmentation Targeting Positioning

Eating habits Working Women Maggi campaign “Me & Meri

Lifestyle Kids Maggi
Urban habits Health conscious mother 'Fast to cook good to eat’
Children(4 to 14 years) ‘Taste bhi, Health bhi’
Office goers 2 minute noodles
Yummy taste
'add garam paani and carry on
jaaani'
advertisements in weekly
magazines

Geographic Segmentation:

 Launched MAGGI pickles for south Indian market and tied up with Chennai based food
company Indian foods fermentation (IFF)
 Launched sambhar Noodles flavor and dal atta Noodles for south Indian segment

Demographic Segmentation

 Introduced family packs of 6-piece and 8-piece with discount

 Different prices for all income class groups.

Psychographic Segmentation

 Launched Maggi Tonight’s Special , a range of cooking sauces aimed at providing

“restaurant-like-taste” to food cooked at home such as butter chicken gravy and tomato
sauce for pizzas.
 They also launched instant noodles as “add garam paani and carry on jaaani” with two
variants ‘Masala Yo!’ and ‘Chilli Chow Yo!’ with forks to make it seem as easier snacking
option
  Introduced veg atta noodles for health conscious people and launched health awareness
campaign to educate people

PESTLE Analysis

Political factors:
 Tax Brexit impacted EU labour recruitment
 Inflation rate

Economic factors:
 MAGGI has introduced many innovative products in various categories such as noodles,
sauces, soups, cubes and recipe mixes
 Nestle gave a higher thrust on advertising and different size packs at different price points.
Increase nin operational cost forced Maggi to increase the retail price. By early 1997,price of
single pack had reached Rs 10

Social factors:

 Launched Veg atta noodles for health conscious people and launched health awareness
campaign to educate consumers about benefits of healthy food.
 Sponsored health camps, publish health information and build awareness among masses.
 Clean drinking water facilities reaching out to approx 140000 students while sanitation
facilities provided to approx 150000 girls students in village schools
 Joined hands with NASVI and national and local food authorities to ensure proper training
to the street food vendors

Technological factors:
 Online Maggi fan clubs and online challenges for promotion

Legal Factors:

 Government regulations regarding lead percentage and health benefits

Environmental Factors:
 In last 15 years, nestle has reduced water usage by around 51%,waste water by around
57%,specific greenhouse gas emission by around 51% and energy consumption by around
43%.
 Five forces Model:
Competitive rivalry:

 Top Ramen
 Local Manufacturers
 Sunfeast Yippee noodles
 Chings Instant noodles
 Patanjali Noodles

Threat of new entry:

 Maggi instant noodles has dropped from 90.7% to 86.5%

 HUL Knorr noodles
 GSK Horlicks Foodles:
o “Noodles without the ‘No’”
o Available only in multigrain and wheat variant, promoted as having higher
nutritional value
o USP of Foodles is vitamin packed health maker sachet that comes with pack
 Big Bazaar Tasty treat

Supplier power:

 Packaging
 Raw materials
 Distributers

Buyer power:

 Brand Image:
o Name slowly “attached” itself to the sentiments of Indian consumer’s need without
disruption.
o Maggi personifies the basic principles of understanding consumers, innovating and
investing in the brand
 Consumer mind set

Threat of substitutes:

 Chowmein
 Pasta
 Fast food

Threat of new entry

HUL Knorr Noodles
GSK Horlicks Foodles

Competitive rivalry
Supplier power Buyer power
Top Ramen
Packaging Brand Image
Sunfeast Yippee noodles
Raw materials Consumer mind set
Chings Instant noodles
Distributers
Patanjali

Threat of substitutes
Pasta
Chowmein
Fast food
 Challenges faced by MAGGI

 Sales declined in 1990, due to something wrong in formula that spoiled the taste. So they
changed the formula from fried base to oiled dried base.
 It has faced a lot of hurdles during its journey in India. Basic problem they faced is Indian
psyche. Indians are not too adventurous in term of trying new tastes.
 In 2015 faced market ban due to high level of lead found in noodles during sample test.
 During Ban time MAGGI lost more than Rs 500 crore which forced it to destroy more than
37,000 tones of Maggi noodles
 Faced a tough competition from local manufacturers, top ramen
 In 1997 changed the noodles formulation but failed due to negative consumer response
 Nestle launched ‘Maggi Macaroni’ in three flavors Tomato, Chicken and Masala to compete
with Top Ramen. It was backed by multimedia advertisement campaign including radio,
television, outdoors and print media with tagline ‘Tum Roz Baby’. But due to failure it had
to withdraw from market.
 At the end of 1997,Knorr had dethroned maggi as leader in the soup segment.
 SWOT Analysis: Strength, Weakness, Opportunity and Threat
Strength:

 Introduced Large varieties of products like sauces, cubes, noodles and recipes mixes
 Brand name:
o Maggi: ”Ready to cook”
o In 2001, Maggi replaced Nescafe as company’s core brand.
o Brand value of Rs 3.7 billion
o In India ‘Maggi Noodles’ is recognized as a genre of products known as instant
noodles.
o It has become a lifestyle , a new food habit, great idea, cheapest branded food item
available in market
o Creating a superb taste needs a vision of adding value to food habits of people , it is
just more than satisfying crave.
o Name slowly “attached” itself to the sentiments of Indian consumer’s need without
disruption.
o Maggi personifies the basic principles of understanding consumers, innovating and
investing in the brand.
 Marketing techniques:
o it uses various jingles and taglines like “Mummy bhook lagi, Bas do minute, maggi
maggi maggi”, ”2-minute noodles”, ”Taste bhi, health bhi”, ”Just add garam paani
and carry on jaani” with its punch line ”Fast to cook good to eat”.
 Global presence
 Distribution channels
 Packaging:
o Differentiated Packaging
o Reduction of 100gm to 95 gm , keeping price as 10rs only.
 Affordable by all income groups
 Multi packs at cheaper price per noodles

Weakness:

 Negative mindset of consumer regarding its health consequences

 Same flavor in all categories of product
 Low availability in rural areas
 Limited penetration in rural areas

Opportunities:
  Can introduce different flavors in different categories
 Rural markets
 Indians Affinity to Chinese food
 Working youth

Threat:

 Ready to eat snacks like samosas, biscuits or peanuts

 Homemade snacks like pakoras or sandwiches
 Top Ramen is following cost differentiation technique, Maggi needs some product
innovation else it will get stereotyped as unexciting product. To deal with this it needs to
position itself as differentiated product.
 Negative perception of Maggi of being unhealthy in this health conscious market is a major
threat.

Large varieties of
products Rural markets

S Brand name
Marketing techniques
Global presence O
Working youth
Different flavors
Indians Affinity to
Distribution channels Chinese food

Ready to eat snacks

Negative mindset of
Homemade snacks

T
consumer

W Low availability
Limited penetration
Same flavor products
Top Ramen
Negative perception
of Maggi