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Maggi oats positioning


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Maggi oats positioning

  1. 1. BRAND EXTENSION OF MAGGI GROUP 6 Avinash Ranjith Shushanta Swaitlana Thanmai
  2. 2. A BRIEF HISTORY • 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 worldThe 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:
  3. 3. A POSITIVE OUTLOOK Revenue % India’s food consumption grows at CAGR of 5.3% to Milk Products & Nutrition reach $230 Bn in 2013 14% 14% 44% Prepared dishes & Cooking aids Chocolates & 28% Confectionaries Increasing rural consumption of instant foods Beverages 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%)*Source: Research by dated March 23, 2012
  4. 4. SHIFT IN LANDSCAPE 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*Source: Research by dated March 23, 2012 generation customers who now have more choices for indulgence other than noodles
  5. 5. CURRENT BREAKFAST MARKET • There is a steady growth in the number of households adopting new breakfast categories at around 30% and the Packaged breakfast market (Crores) penetration of breakfast cereals has doubled* 1600 • Marketers estimate that this handsome growth rate will 1400 only increase, with key drivers being growing 1200 affluence, double-income couples and increasing 1000 800 Packaged breakfast acceptance of non-Indian foods.* 600 market (Crores) • Market for Oats was estimated at 150Cr in 2012. By 400 considering growth rate in the segment, by 2016 this 200 market can grow to 577Cr** 0 2011 2012 2013 2014 2015 2016 Strengths Weaknesses Healthy Requirement of steam / hot water Time saving High distribution network required Portable Perceived to be tasteless Flexibility in usage Nestle to enter Oats market Opportunities SWOT Increasingly health conscious audience Threats Microwave skeptics Low entry barriers Need for convenience food Highly established competitors Lesser number of players Current breakfast trendsSource: *Times of India report dated July 11,2011 **Times of India report dated June 21,2012
  6. 6. FORAY INTO OATS MARKET The attributes of PRODUCT the productThe pricing PRICEstrategy The marketing PROMOTION strategies and what needs to be conveyedDistribution techniques PLACE
  7. 7. PRODUCTAs the initial market share would be low, Oats productwould be in the ‘question mark’ quadrant. As it gains BCG Matrix : Nestlepopularity it is expected to move to ‘star’ or ‘cash cow’ Nescafe Miloquadrant High Cerelac Maggi Sauce Maggi Soup Kit-Kat Nestle Milk OatsObjective: To identify the essential attributes and values Maggi Noodles Nestea Growth ratethat consumers look for in a breakfast product Milky BarMethodology: Conjoint analysis based on questionnaire Low Munchand ladder technique based on FGD High Low Relative Market ShareCONJOINT ANALYSIS LADDERING TECHNIQUE RESULT The product features: Brand name, Nutrition and Convenience Value to be delivered: Sense of belonging, Self esteem, Accomplishment and Responsibility
  8. 8. PRODUCT:CONJOINT ANALYSIS Nutrition Time to YourS /N Brand Form Value (% Taste Cook (in Price Preference Each respondent is asked to rate the intent of RDA) mins) Rating to purchase based on the following 1 Quaker Snackbar High Sweet 0 High parameters: 2 Kelloggs Porridge Medium Salty 5 Medium • Brand Name (B) 3 Britannia Porridge Low Spicy 2 Low • Nutrition (N) 4 Saffola Additive High Salty 5 Medium • Form (F) 5 Saffola Porridge Medium Spicy 5 Low • Taste (T) • Convenience/Minutes to cook (M) 6 Kelloggs Snackbar Low Salty 0 Medium • Price (P) 7 Quaker Porridge High Sweet 2 High Base case: 8 Britannia Porridge High Sweet 5 High • Brand – Kelloggs 9 Quaker Snackbar Medium Salty 0 Medium • Nutrition- High10 Kelloggs Porridge High Sweet 5 Medium • Form- Snack bar11 Britannia Snackbar Low Sweet 0 Low • Taste- Sweet12 Saffola Porridge Low Salty 2 High • Convenience- 0 min13 Kelloggs Additive Low Salty 2 Low • Price- High (> Rs.130)14 Quaker Porridge Medium Sweet 5 Medium15 Britannia Additive High Spicy 2 Medium16 Quaker Snackbar Medium Spicy 0 High Rule of thumb for sample size17 Kelloggs Porridge High Salty 2 Low nta/c > 100018 Kelloggs Snackbar Medium Sweet 0 High n : no: of respondents19 Britannia Porridge High Sweet 5 Medium t : no: of tasks20 Quaker Porridge Medium Salty 2 Medium a : no: of alternatives21 Quaker Snackbar High Spicy 0 Low c : largest no: of level for one attribute22 Britannia Additive Low Salty 5 Low
  9. 9. Model Summary PRODUCT:CONJOINT ANALYSISModel R R Square Adjusted R Std. Error of Square the Estimate1 .952a .928 .698 .86753a. Predictors: (Constant), Pl, Bs, M2, Bk, Fa, Nm, Tp, Nl, Pm,M5, Ta, Bb Each respondent is asked to rate the intent ANOVAa to purchase based on the followingModel Sum of df Mean F Sig. parameters: Squares Square • Brand Name (B) Regression 67.177 15 4.478 5.951 .018b • Nutrition (N)1 Residual 4.516 6 .753 • Form (F) Total 71.693 21 • Taste (T)a. Dependent Variable: Rat • Convenience/Minutes to cook (M)b. Predictors: (Constant), Pl, Bs, M2, Bk, Fa, Nm, Tp, Nl, Pm, M5, Ta, Bb • Price (P) Base case: Coefficientsa • Brand – KelloggsModel Unstandardized Standardized t Sig. • Nutrition- High Coefficients Coefficients • Form- Snack bar B Std. Error Beta • Taste- Sweet (Constant) 6.111 .824 7.419 .000 • Convenience- 0 min Bk -1.076 .868 -.397 -1.240 .048 • Price- High (> Rs.130) 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 Unstandardized Standardiz ed Coefficients Coefficient t Sig. Nm -.147 .821 -.257 -.179 .062 s1 B Std. Error Beta Nl .092 .994 .934 .093 .928 (Constant) 6.111 0.824 7.419 0 Bk -1.076 0.868 -0.397 -1.24 0.048 Ta -.831 1.012 -.139 -.821 .433 Bb -1.027 1.12 0.669 -0.918 0.383 Bs -1.613 1.239 -0.459 -1.302 0.032 Tp .292 1.056 .102 .277 .788 Fa 1.395 0.938 0.446 1.486 0.171 Nm -0.147 0.821 -0.257 -0.179 0.062 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
  10. 10. PRODUCT:LADDERING TECHNIQUE•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) Sense of Self Esteem Accomplishment: Responsibility Belonging more from life Time for other activities Meeting Objectives Self Inc. Save Money Satisfaction Concentration Stress Buster Relax More work Good for body Saving time Shortage of Satisfaction Fun time Fast to cook Convenience Healthy Taste and Affordable Variety
  11. 11. PRICING•Price is not an important factor for products in this segment (breakfast) as understood from conjointanalysis•Pricing based on existing competitor’s offerings
  12. 12. PROMOTION• 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 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
  13. 13. PROMOTIONSocial Media can be leveraged to build Word of Mouth publicity perceived as the most trusted source ofadvertising 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
  14. 14. 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