Consumer Consumption Patterns - Case Study on Maggi

1. RESEARCH METHODOLOGY
By: Krishnav Ray Baruah
EXECUTIVE SUMMARY
The report entitled “Consumer Consumption Patterns: A Case Study
on Maggi” deals with the study of Maggi brand that was launched in
India in the year 1983, by Nestle IndiaLimited, which became
synonymous with noodles. This research paper tries to find asolution to
a real life problem of Maggi to launch its products as a Healthy
Product.The introduction provides the company background, operational
& other importantinformation provided by the company which would
assist in taking the decision for the right brand extension strategy for
Maggi.
INTRODUCTION
The industrial revolution in Switzerland in the late 1800s created
factory jobs for women, who were therefore left with very little
time to prepare meals. This widespread problem grew to be an
object of intense study by the Swiss Public Welfare Society. As
a part of its activities, the Society asked Julius Maggi miller to
create a vegetable food product that would be quick to prepare
and easy to digest. Born on October 9, 1846 in Frauenfeld,
Switzerland, Julius Michael Johannes Maggi was the oldest son
of an immigrant fromItaly who tookSwiss citizenship. Julius
Maggi became a miller and took on the reputation as an
inventive and capable businessman. In 1863, Julius Maggi came
up with a formula to bring added taste to meals. Soon after he
was commissioned by the Swiss Public Welfare Society, he
came up with two instant pea soups and a beansoup - the first launch
of theMaggi brand of instant foods in 1882 - 83. Towards the end
of the century, Maggi & Company was producing not just
powdered soups, but bouillon cubes, sauces and other
flavourings. The Maggi Company merged with Nestlé in 1947.
Today, Maggi is a leading culinary brand and part of the
NESTLÉ family of fine foods and beverages. Under the Maggi
brand, which is today known worldwide for quality and

2. innovation, Nestle offers a whole range of products, such as pac
kaged soups, frozen meals, prepared sauces and flavourings.
MAGGI BRAND IN INDIA
Maggi Comes to India – teething troubles Maggi noodles was launched
in India in the early1980s. Carlo M. Donati, the present Chairman and
Managing Director of Nestle India Ltd, brought the instant noodle brand
to India during his short stint here in the early eighties. At that time,
there was no direct competition. The first competition came from the
ready-to-eat snack segment which included snacks like samosas, biscuits
or maybe peanuts, that were usually the bought out type. The second
competition came from the homemade snacks like paratha
or sandwiches. So there were no specific buy and make snack! Moreover
both competitors had certain drawbacks in comparison. Snacks like
samosas are usually bought out, and outside food is generally considered
unhygienic and unhealthy. The other competitor, „homemade‟ snacks
overcame both these problems but had the disadvantage of extended
preparation time at home. Maggi was positioned as the only hygienic
homemade snack! Despite this, Nestlé faced difficulties with their sales
after the initial phase. The reason being, the positioning of the product
with the wrong target group. Nestle had positioned Maggi as a
convenience food product aimed at the target group ofworking women who
hardly found any time for cooking. Unfortunately this could not hold the
product for very long. In the course of many market researches and
surveys, the firm found that children were the biggest consumers of
Maggi noodles. Quickly they repositioned it towards the kids
segmentwith various tools of sales promotion like colour pencils, sketch
pens, fun books, Maggi clubs which worked wonders for the brand.
OBJECTIVES
 To understand the influence of Maggi as a brand on
consumers mind set.
 Sources of Brand equity of Maggi like Brand awareness,
Brand image, Brand association, Brand recall
 To understand the Brand performance of Maggi products.

3.  To understand Brand Imagery, Brand Quality perceived by
customers, Brand credibility, consideration, superiority and
feelings.
 Brand Extension of Maggi in terms of product diversity.
 Analyze the repositioning of Maggi brand as a “Healthy
product” and the consumers perseverance towards
the same.
RESEARCH PLAN Research Design:
The research will be carried out in the form of a survey which
will be done in areas near to Amity region. The population has
been segmented on the basis of salary Group and Age Group.
Sample Design:
The target population for our study is households. The sample
will be selected by simple random sampling method.
SAMPLE SIZE
The sampling unit is 50 which are divided as follows:
Number of respondents:50
Age-group: 10 - 45
Monthly Household Income :25000 - 75000 IN
Group No income 25K -40K 40K -60K 60K -75K
Number of Respondents: 30 50 70
Age Group 10 - 25, 25- 35, 35-45
Number of Respondents 50 50 50
DATA COLLECTION PLAN
Data Gathering:
This study involves data collection (primary research) from
Amity region.
Review of Literature

4. The research conducted as a part of our study would include
Primary as well as Secondary research. Primary research would
include a survey that would be conducted in selected localities
of Amity and nearby areas where the responses of consumers
would be recorded through a designed questionnaire. Secondary
research would include various aspects of Brand management
through Internet, Journals, company reports, expert views etc.
ECONOMICS TIMES
INDIANS EAT MOST MAGGI NOODLES IN THE WORLD
"India has emerged as the largest consumer of Maggi noodles
across all Nestle operations in the world," Donate told ET. It was
Donate who brought the instant noodle brand to the country during his
short stint in the early 1980s. Maggi went on to create a whole
new product category and caught the fancy of kids across the
country in no time. Today, while India tops in world-wide
Maggi sales, the latter has grown to an estimated Rs 160-170
crore brand contributing as much as 8-9% to Nestle India's
topline. Maggi noodles sell in most Asian countries, Australia
and Africa. However, FMCG analysts are not impressed. They
say Maggi has done little to expand the noodles category per se.
"
Nestlé’s investment on Maggi has been squarely disproportionate
to the growth of the brand," Mumbai-based equity research firm
ASK Raymond James senior vice-president (research) Nikhil
Vorasaid.Today, after 20 years of flogging the Maggi brand, the
size of instant noodles market is a small Rs 200 crore. Yet, most
analysts agree that Nestle India has done well to leverage the
brand to enter a large number of culinary products. Just for the
record, "In 10 years, I want to sell two and a half times of what I
am selling today," said Donati. So, the learning curve
is shrinking. Launched in early 1980s, Maggi was positioned on
the convenience plank which yielded good results. Looking at
the success of noodles, Nestle India decided to extend the brand
toe number of products such as sauces, soups, pickles and
macaroni in mid-1990s.Maggi macaroni bombed and pickles
didn't do well either. Maggi soups and sauces chugged along and
today have a decent presence in the market. Maggi noodles'

5. acceptance among Indian consumers didn't come easy. Nestle
changed its formulation some time back which was rejected by
the consumer. So, the company had to revert to the original
make. Since then, it has been a smooth sailing for the brand.
Interestingly, it is only now, during Donati's second stint, in the
country that the brand has stabilized. "Maggi noodles have seen
a robust double-digit growth in sales during the last four years,"
said Donati. Last year, Nestle India launched Chinese Noodles
as a snack food for the adults.
METHOLODOGY
The research will be carried out in the form of a survey. This
will include primary research in addition to secondary research
as stated below. The survey research method will be descriptive
research design. Each respondent will be interviewed through a
Questionnaire. The sample will be selected by a simple random
sampling method. The survey will address the following
information area:
Information Areas:
The objective as spelt out can be elaborated into specific
information areas to be studied.
 How do customers perceive Maggi as a stable brand, their
perception of noodles and how do they associate
themselves with Maggi?
 Are the consumers aware of Maggi Brand or they associate
noodles with some other brand?
 Do they consider noodle as a healthy product or they are
aware of the company’s strategy of repositioning it to a
healthy product by the launch of some of the new products?
 Which product from the entire basket of Maggi products do
the consumers consider as the bestselling product for
Maggi and to which the consumers frequently buy?

6.  Are the consumers willing to accept Maggi brand
extensions to some other products like chocolate, juices,
chips etc.?
SURVEY RESULTS
Brand Associations
Sources of Brand equity like brand association of Maggias a Brand was
found highest with the age group of 10-25 and the product
category associated with it was the noodles category.
1). Consumers in the age segment of 10-25 could easily relate
Maggi to noodles. In the income wise category the brand
association was highest with the income group of 25k-40k were
more than 40 respondents associated Maggi with noodles
2). The implications from the findings discussed above seem
that Maggi has good brand association in terms of noodles.
ConsumerspresumeMaggias Noodles and the company‟s philos
ophy of projecting the brand as noodles brand seem to be viable
in this regard.
HYPOTHESIS DONE FOR MAGGI NOODLES
Quick food styles are catching up fast because of more number
of working couples, domestic fuel crisis, non-availability of
reliable domestic servants
and breaking up of joint family system. Neither time nor patienc
e to prepare theingredients and wholesome food in the house
itself, the high price of ingredients and ready mix are also a
significant factor responsible for the spectacular increase in the
demand for Maggi noodles products.

7. HYPOTHESIS
H0: There is no significant relationship between the impact of
media and purchase decision.
H1. There is no significant relationship between influencers and
purchase decision.
H1. There is no significant relationship between preferences for
more new varieties and Purchase decision.
H0. There is no significant relationship between quality of
noodles and purchase decision.
METHODOLOGY
The study is based on primary data. The data were collected
through interview method by using a structured questionnaire.
For the purpose of the study the data have been collected in
different places of the market especially in retail shops.
One hundred and twenty five nestle Maggi noodles customers
were randomly selected for the study
assample. Necessary data have also been collected from sources
like books, magazines andinternet. Chi-square test has been
applied for testing the hypotheses.
FINDINGS
1. 32 percent of the respondents prefer Maggi 2-minute noodles.
2. Vast majority (85 percent) of the respondents have tasted all
brands of nestle Maggi noodles.
3.72 percent of the respondents purchase nestle Maggi noodles
for its quality with low price.
4.60 percent of the respondents purchase nestle Maggi noodles
whenever needed.

8. 5. Television advertisements are a major factor in purchase
decision compared to other Medias.
6. The foremost influencer in purchase decision of the
respondents is children.
7. 60 percent of the respondents were expecting new varieties of
Maggi noodles from Nestle.
8. 38 percent of the respondents wanted a change in the quantity
of present brands. The respondents want small quantity packets.
9. 50 percent of the respondents feel that the advertisements are
good.
10. 44 percent of the respondents feel that prices are cheap.
11. 49 percent of the respondents are moderately satisfied with
the quality of nestle Maggi noodles.
12. Majority (68 percent) of the respondents consider that the
packing is attractive.
13. Higher percentage (60) of the respondents is awareness on
contents/ ingredients
CONCLUSION
The food processing business in India is at a nascent stage.
Currently, only about 10% of the output is processed and
consumed in packaged form thus highlighting huge potential for
expansion and growth. Traditionally, Indians believe in
consuming fresh stuff rather than packaged or frozen, but the
trend is changing and the new fast food generation is slowly
changing. Riding on the success of noodles, Nestle India, tried
to make extensions of the Maggi brand to a number of products
like, sauces, ketchups, pickles, soups, tastemakers and macaroni
in the mid-1990s. Unfortunately, the macaroni and pickles
didn’t pick up as expected. The soups and sauces did somewhat

9. fine, gathering considerable sales volumes and have a
satisfactory presence even today. „Maggi Noodles‟ itself faced a
bit of difficulty with respect to „taste‟, and nearly lost its
Position in the minds of Indian consumers
in the late 1990s. When Nestle changed the formulation of its
tastemaker, the ominous packet that came along with
Maggi Noodles, a major chunk of consumers were put-off and
sales started dropping. Also,
Maggi’s competitor „Tournament‟ took advantage of the
situation and started
a parallel aggressive campaign to eat into Maggi‟s market share.
But the company quickly realized this and went back into
making the original formula coupled with free sampling
campaign. This helped Maggi to win back its lost consumers
and pushed up its sales volumes again! Maggi Today The year
2008 saw India leading in worldwide Maggi sales. The brand
has grown to an estimated value of Rs 160-170 crore and
contributes at least 89% to Nestle India’s top line. All the same,
some FMCG analysts feel that the brand has not done much to
expand the noodles category. Even after 25 years of its launch,
the size of the instant noodles market is yet quite small at Rs300
crore. But yes,
the parent company, Nestle India Limited has certainly encourag
ed the brand to enter into other culinary products.
RECOMMENDATIONS
After the conducted study following recommendations could be sited for
MaggiBrand.
- To gain maximum leverage in terms of profit the company should pay
emphasis on segments with age groups 25-35 and above .Advertising is
the key to success. Targeting these segments will not only enhance the
company‟s profit margins but also it will leverage the brand image of
Maggi.
- The company should advertise its products by depicting
attributesrelated to Health like Nutrition values, % of Vitamins, Proteins
etc.Thiswould help in customers perceiving the product as Healthy.

10. - Foray into other food products like chips, chocolates etc under its
sole brand name would not only help in Brand extension but will also
enhance Maggi‟s market share.
FUTURE PLANS
- Nestlé India‟s objective is to manufacture and market the company‟s
products in such a way so as to create value that can be sustained
over the long term for consumers, shareholders, employees and
business partners.
-Maggi‟s aims to create value for consumers that can be sustained over
the long term by offering a wide variety of high quality, safe
food products at affordable prices.
-The company continuously focuses its efforts to better understand
thechanging lifestyles of modern India and anticipate consumer needs
inorder to provide convenience, taste, nutrition and wellness through
its product offerings.
LIMITATIONS:
The present study is confined to a minimal sample size and may not
reflect the opinion or response of the entire population in general. The
results of our study are entirely confined to the responses of the Delhi
consumers and might deviate in terms of actual population as a whole.
Recommendations given after the study are entirely dependent on the
survey and the secondary analysis done in the report.