Maggi case study

1. THE FALL AND
RISE OF
MAGGI
Presented by,
Ashik Appanna
Sahana S
Sushmitha N

2. INTRODUCTION
• The MAGGI brand was founded by Swiss entrepreneur Julius Maggi
in Switzerland( 1884)
• He first invented a pea and bean ready-to-use soup powder, to
provide nutritious and easy to prepare food for busy women who
worked in factories and didn't have time to prepare healthy meals.
• The first MAGGI product was followed two years later with the
invention of ready-to-use soups.
• Maggi was later acquired by Nestle in the year 1947.

3. • Maggi is sold in 130 countries across the world and sells over a
billion packets in a day.
• Maggi instant noodles first arrived in India in the year 1983 - the
year when India lifted the cricket World Cup for the first time.
INTRODUCTION

4. JULIUS MAGGIE
(9 October 1846 – 19 October 1912)

5. MAGGIE- PRODUCT MIX

6. BRANDING
• When Maggi made their entry in Indian market, Indian customers were
much conservative in their food habits, preferring homemade
traditional food, rather than canned or packed food.
• Initially, the company targeted working women on the premise that
Maggi noodles were fast to cook. However, this approach failed despite
of strong advertising.
• To get to the root of the problem, NIL conducted a research, which
revealed that it was children who liked the taste of Maggi noodles and
who were the largest consumers of the product.
• After this, NIL shifted its focus from working women and targeted
children and their mothers through its marketing.

7. MAGGI AND ITS PROMOTION IN
INDIA
• The product was aggressively promoted through advertising
and was positioned as a ‘fun food‘ for kids which mothers can
easily cook and ‘convenience’ for mothers.
• NIL had adopted other measures like distributing free samples,
giving gifts for empty packages etc for increased product
promotion.
• Its taglines effectively communicated message amongst the
consumers to consume the Maggi Noodles when they are
feeling hungry.
Mummy, bhookh lagi hai
Bas 2-Minute mein tayyar
Fast to Cook Good to eat
Taste bhi Health bhi

8. MAGGI’S FALL
• For three decades, it was a smooth sailing for Maggi; But a storm
struck in 2014 when a laboratory in Gorakhpur proved that samples
of Maggi contained lead and MSG much beyond the permissible
limit.
• Nestle India challenged this decision but the results by Kolkata
central laboratory in 2015 confirmed the previous results.
• On 3rd June 2015, the New Delhi Government banned the sale of
Maggi in New Delhi stores for 15 days due to these findings.
• Consequently, several state governments began testing samples
and banned the product. Within a few days, Maggi was off the
shelves.

9. MAGGI’S FALL
Maggi instant noodles came under the scanner for TWO main reasons:
• The first was the violation of the regulations for adding lead and
MSG into the product. As against the maximum limit of 2.50 parts
per million(ppm), the amount of lead detected in the Maggi
samples was perilously high at 17.2 ppm.
• The second offence was mentioning 'No added MSG' on the
packaging, which is an act of mislabeling. On June 5, 2015, a
nationwide ban was imposed on Maggi by FSSAI (Food Safety and
Standards Authority of India).

10. WHAT IS MSG?
• Monosodium Glutamate or MSG is naturally present in various food
items such as mushrooms, tomatoes, Parmesan cheese and soy
sauce.
• It has a unique taste which is different from salty, sweet, sour or
bitter. The taste is described as ‘meaty’ and termed as Umami.
• Excess of lead intake could damage the nervous system and cause
brain disorders.
• Excess consumption of MSG promotes sluggishness in the body. It
may also cause headache, nausea, increased thirst and a twitching
sensation in the mouth. In some cases one may feel numbness, skin
rashes and excessive sweating too

11. EFFECTS OF BAN
• Prior to the ban, Maggi owned nearly 80% of the market share in
the instant noodles segment. In the blink of an eye, its share
jumped to zero.
• The company was neither prepared for it nor did it have any
immediate plan of action to overcome it.
• Maggi initially denied the allegations of hazardous composition of
Maggi. But when it was proven guilty for the second time, the
customers were furious.
• There were mass protests by Maggi lovers who were hurt by the
severe breach of trust. Maggi was losing not only its market share
but also credibility.

12. EFFECTS OF BAN
• Ban of Maggi have helped brands such as Yippee Noodles, Top -
Ramen, Chings, Wai- Wai and Bambino a lot to increase their shares.
• The company had to recall 38,000 tonnes of Maggi noodles from
millions of retail shelves and destroy them.
• Maggi lost over Rs 1,000 crore in sales and a serious dent to its brand
image.
• Using this opportunity to fill the vacuum of the noodles market, Baba
Ramdev launched Patanjali noodles on 16th November 2015
• The Consumer Affairs Ministry had also filed a class action suit against
Nestle India, seeking about Rs 640 crore in damages for alleged unfair
trade practices, false labeling and misleading advertisements.

13. CRISIS MANAGEMENT BY NESTLE
• The company started engaging actively in social media and built a
strong digital presence to strengthen the Maggi brand.
• Along with TV and print campaigns the company engaged with
customers via Facebook and Twitter. Nestle used their twitter and
facebook accounts to sort out the queries of their consumers about
the levels of MSG and Lead found in their product
• Nestle continued to keep its customers up to date on the
investigation into the safety of Maggi noodles on the official Maggi
noodles Facebook page, Twitter and website, that extensive testing
revealed no excess lead in Maggi noodles
• They also launched a new page i.e. FAQ page on their official site.

14. CRISIS MANAGEMENT BY NESTLE
• Maggi had a tie up with a famous e-commerce website
‘Snapdeal.com’ and came up with the idea of selling maggi
welcome kit which was a box containing around 12 packets
of Maggi before it was made available in stores. This would
give the customer an experience of exclusiveness.

15. CRISIS MANAGEMENT BY NESTLE

16. REASONS WHY NESTLE REGAINED THE
LOST POSITION AND MARKET SHARE
• Not dependable on single product - Nestle India didn’t only
rely on Maggi brand. In the recent few quarters, it launched
several products like Greek yoghurt, kids breakfast cereal
Nestle Ceregrow, health food drink Nestle A+ Pro-Grow,
Nescafe RTD chilled Latte, everyday masala, Maggi Hot Heads,
and variants of Maggi noodles
• Focusing on health and nutrition - Nestle India is facing stiff
competition from home-brand Patanjali and due to this, it has
changed its strategy as the company is focusing more on
health and nutrition products.

17. REASONS WHY NESTLE REGAINED THE
LOST POSITION AND MARKET SHARE
• More selling in the top cities - company is looking to tap India’s
top 600 cities which will account for half of the consumption
growth over the next 10 years or so.
• Relationship with the stake-holders - Nestle India has always
maintained good relations with the customers, suppliers,
distributors and retailers and this has helped company re-gaining
its lost share in the Indian market.

18. CONCLUSION
• The Nestle India could succeed in sustaining and regaining its lost
image after the rigorous struggle period of five months on its
ethical issues of hyper usage of MSG and lead in their product.
• In spite of facing a huge loss, Nestle India managed the period of
crisis properly by regularly interacting with their consumers through
social media.
• The role played by the Maggi higher officials made it possible to get
the approval of its re-sale in India