2. INTRODUCTION
• A make-or-buy decision is an act of choosing between
manufacturing a product in-house or purchasing it from an
external supplier.
• Make-or-buy decisions, like outsourcing decisions, speak to
a comparison of the costs and advantages of producing in-
house versus buying it elsewhere.
• There are many factors at play that may tilt a company from
making an item in-house or outsourcing it, such as labor
costs, lack of expertise, storage costs, supplier contracts,
and lack of sufficient volume.
• Companies use quantitative analysis to determine whether
making or buying is the most cost-efficient method.
3. INTRODUCTION IN INDIA
By 1947, Nestle gained rights to Maggi and brought it to
India. Since then, Maggi has been a revolution in the country.
Nestle spent more than Rs. 100 crores to market Maggi across
the country. In its initial days, no one took Maggi seriously.
Even Nestle didn’t realise that it would become the part and
parcel of every household. Now, if you’re in for a snack,
Maggi is the easiest thing that you can make! In the 90s,
Maggi used to have black and white ads denoting how kids
craved for some snacks and their mothers would indulge in
boiling a packet of Maggi to satiate their hunger. This made
this brand one of the best snacks of the urban region. With
changing lifestyles, quick fix solutions became the need of
the hour for most working class professionals.
4. ETHICAL ISSUES OF MAGGI
There are four ethical issues that emerged from the conduct of
Nestlé India with reference to marketing of Maggi:
1. They were misleading the label information on the package
of Maggi noodles stating No added MSG’ (Monosodium Glutamate)
but still it was found.
2. Presence of lead was detected in the product in excess of
the permissible level of 2.5ppm.
3. Also Nestlé released a non standarsied food product 'Maggi
Oats Masala Noodles with Tastemaker' in the market without
proper assessment and approvals.
4. Nestlé appointed top bollywood actors for endorsing their
brand which puts them equally liable for action of the
advertisement.
5. NESTLE FAILED APPROACHES
1. Utilitarian approach: In the case, Nestle India
became second most populous country on Earth. Being the first
to introduce instant noodles in India as brought them over 70%
market share. They mislead their customers by not providing
proper information about their product and kept them in dark,
which was very harmful and could lead to brain-damage,
anaemia, damage to kidneys, etc. They also targeted rural
school-going children creating a low unit price packaging for
maximizing their sales. In the end it failed in this approach
as it doesn't bring greater number of benefit or doesn't
create least amount of harm.
6. NESTLE FAILED APPROACHES
2. Rights approach: Nestle India miserably
failed in this approach by violating 'Rights to
Information 'by giving false statements and not
providing proper information about the product. The
key issues in marketing ethics arise by the marketer
as they have more information about the product thus
this position of the marketer is taking the
advantage and on the contrary they exploit the
consumer.
7. NESTLE FAILED APPROACHES
3. Amoral - The stage at which an organisation's
concern for profits far outweighs its concern for
ethics. As in this case of Nestle Maggi we see that
for earning profit the organisation mislead the
customers by using improper labels so that slight
amount of doubt could not hit their customers mind.
8. Products
Currently, Maggi has tons of products
in addition to its noodles. You can
find Maggi kappa mania instant noodles,
roasts, soups, instant mix food items,
and even sauces! In the last 2 decades,
Maggi has given a 25% increase in
profits to Nestle making the annual
turnover more than Rs. 1000 crores for
the brand.
9. RATIONALE APPROACH OF
NESTLE INDIA
Nestlé tried to reach customers directly through its website.
It published
statements saying that tests had been carried out by public
agencies in the US,
Canada, Vietnam, Australia, EU and Singapore and these did not
find lead beyond
permissible label in Maggi Noodles sourced from India, and
confirmed that Maggi
noodles are safe to eat. Nestlé India challenged the ban
imposed on Maggi noodles by FSSAI in the Bombay High Court,
praying for a stay on the FSSAI order.
On June 5th 2015, Nestlé issued the following statement. “The
trust of our
consumers and the safety of our products is our first
10. IMPACT OF NESTLE
MARKETING
After the ban to regain the customers again
Nestle planned to increase the investments on
advertisements their ad growth value increased by
96%.
Maggi also took the advantage of one of the most
powerful advertisement platforms called SOCIAL
MEDIA like Facebook Instagram etc.
By using social media, they started to reduce the
gap between their consumers and the company.
