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A project report on consumer buying

behaviour towards

Submitted to Submitted By

Prof M.D.Kakade Md Javed Khan(25)

Neeshu Agarwal (27)

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BHARTI VIDYAPEETH DEEMED UNIVERSITY, PUNE

INSTITUTE OF MANAGEMENT AND ENTREPRENUERSHIP DEVELOPMENT,

PAUD ROAD, ERANDWANE

PUNE-38

CERTIFICATE OF COMPLETION

This is to certify that Md Javed Khan and Neeshu Agarwal are a bonafide

student of MBA (BA) program of the university in this institute for the year

2010-2012. As a part of the , the student has completed the project report

titled, “A STUDY CONSUMER BUYING BEHAVIOUR TOWARDS NOODLES”

The project report is prepared by the student under the guidance of Prof.

M.D.KAKADE

(Teacher Guide)

Date:

Place: Pune

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D E C L A R A T I O N

I, MD JAVED KHAN AND NEESHU AGARWAL undersigned

hereby declare that the project report entitled: “A STUDY

CONSUMER BUYING BEHAVIOUR TOWARDS NOODLES”.

Written and submitted by us is submitted to Prof.M.D.KAKADE is our

original work. The empirical findings in this report are based on the data

collected by myself. While preparing the report I have not copied from

any report.

MD JAVED KHAN (25)

NEESHU AGARWAL (27)

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PREFACE

Marketing has to go beyond the various influences on buyers and develops an

understanding of how consumers actually make their buying decisions. We are

exposed to marketing in almost everything we do; we see marketing in the

advertisement that fills our newspapers. But marketing is not that simple as it

appears to be. The mission of present day marketing is not 'telling and selling', but,

satisfying customer 'needs' and 'Customer delight'. Customer is the fulcrum around

which all marketing activities revolve.

To start any business the success entirely depends on the marketing research

done about the particular and the consumer attitude towards the product.

Marketing research plays a vital role in a business to make it success. In this era

where time is very big factor for everyone. Every person wants to save his every

second to utilize it to achieve more and more goals, and with less time, people want

the better facilities and in short time.

When the traveling is the factor, people choose that how best, they can travel, what

facilities they can get and how much time and money they can save.

In the marketing point of view, the behavior of the consumers effects deeply on the

concerned organization. So that why, I am here to analyzing and study the consumer

behavior towards the Maggi noodles and Horlicks foodles.

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INDEX

SERIAL NO NAME PAGE NO

1 Executive summery 6

2 Introduction

7

3 Strategic analysis of Maggi and Horlicks foodles (Company Profile)

33

4 RESEARCH METHODOLOGY

63

5 Survey Results

65

6 SUGGESTIONS AND CONCLUSION 73

7 Bibliography 77

8 Annexure 78

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EXECUTIVE SUMMERY

The report entitled ―A study of consumer buying behaviour towards Maggi

and Foodles‖ deals with the study of Maggi brand and Horliks foodles that was

launched in India in the year 1983, by Nestle India Limited, and foodles in the year of

2009 which became synonymous with noodles. This research paper tries to find

consumer buying behaviour towards these products. This research paper also finds of

reach of foodles and Maggi .Describes the level of involvement and types of

consumer problem solving process. This research will also explain how situational

influences may affect the consumer buying decision process. Understand the

psychological influences that may affect the consumer buying decision process.

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INTRODUCTION

CONSUMER BUYING BEHAVIOUR :

All marketing starts with the consumer. So consumer is a very important person to a

marketer. Consumer decides what to purchase, for whom to purchase, why to

purchase, from where to purchase, and how much to purchase. In order to become a

successful marketer, he must know the liking or disliking of the customers. He must

also know the time and the quantity of goods and services, a consumer may

purchase, so that he may store the goods or provide the services according to the

likings of the consumers. Gone are the days when the concept of market was let the

buyer‘s beware or when the market was mainly the seller‘s market. Now the whole

concept of consumer‘s sovereignty prevails. The manufacturers produce and the

sellers sell whatever the consumer likes. In this sense, ―consumer is the supreme in

the market‖.

As consumers, we play a very vital role in the health of the economy local, national or

international. The decision we make concerning our consumption behaviour affect

the demand for the basic raw materials, for the transportation, for the banking, for

the production; they effect the employment of workers and deployment of resources

and success of some industries and failures of others. Thus marketer must

understand this. The consumer behaviour suggest how individual, groups and

organization select, buy, use and dispose of goods, services, ideas or experience to

satisfy their needs and wants. It also clues for improving or introducing products or

services, setting price, devising channels etc. Since liberalization 100% FDI is allowed

in India. This has attracted foreign companies to penetrate the Indian market. The

marketers always look for emergent trends that suggest new.

As a consumer we are all unique and this uniqueness is reflected in the consumption

pattern and process purchase. The study of consumer behaviour provides us with

reasons why consumers differ from one another in buying using products and

services. We receive stimuli from the environment and the specifics of the marketing

strategies of different products and services, and responds to these stimuli in terms

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of either buying or not buying product. In between the stage of receiving the stimuli

and responding to it, the consumer goes through the process of making his decision.

CONSUMER BEHAVIOUR

Consumer behaviour is the study of how people buy, what they buy, when they buy

and why they buy. It is a subcategory of marketing that blends elements from

psychology, sociology, socio psychology, anthropology and economics. It attempts to

understand the buyer decision making process, both individually and in groups. It

studies characteristics of individual consumers such as demographics,

psychographics, and behavioural variables in an attempt to understand people's

wants. It also tries to assess influences on the consumer from groups such as family,

friends, reference groups, and society in general.

Consumption is the ―process of production, acquisition, utilization and destruction of

goods, services, experiences or places‖

Understanding Demographics -

1) Youth – 60% of India‘s teens stay in rural area.

2) Women – Only 23 % house wives in urban areas have jobs outside their homes

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STAGES OF CONSUMER BUYNG PROCESS

Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual

purchasing is only one stage of the process. Not all decision processes lead to a

purchase. All consumer decisions do not always include all 6 stages, determined by

the degree of complexity...discussed next.

The 6 stages are:

1. Problem Recognition: The buying process starts with need or problem

recognition—the buyer recognizes a problem or need. The buyer senses a difference

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between his or her actual state and some desired state. The need can be triggered by

internal stimuli when one of the person's normal needs—hunger, thirst, sex—rises to

a level high enough to become a drive. A need can also be triggered by external

stimuli.

Hunger--Food. Hunger stimulates your need to eat. Can be stimulated by the

marketer through product information--did not know you were deficient? I.E., see a

commercial for a new pair of shoes, stimulates your recognition that you need a new

pair of shoes

At this stage, the marketer should research consumers to find out what kinds of

needs or problems arise, what brought them about, and how they led the consumer

to this particular product.

2. Information search— an aroused consumer may or may not search for more

information. If the consumer's drive is strong and a satisfying product is near at

hand, the consumer is likely to buy it then. If not, the consumer may store the need

in memory or undertake an information search related to the need. At one level, the

consumer may simply enter heightened attention.

The consumer can obtain information from any of several sources. These include

personal sources (family, friends, neighbors, acquaintances), commercial sources

(advertising, salespeople, dealers, packaging, displays, Web sites), public sources

(mass media, consumer-rating organizations), and experiential sources (handling,

examining, using the product). The relative influence of these information sources

varies with the product and the buyer. Generally, the consumer receives the most

information about a product from commercial sources—those controlled by the

marketer. The most effective sources, however, tend to be personal. Commercial

sources normally inform the buyer, but personal sources legitimize or evaluate

products for the buyer.

People often ask others—friends, relatives, acquaintances, professionals—for

recommendations concerning a product or service. Thus, companies have a strong

interest in building such word-of-mouth sources. These sources have two chief

advantages. First, they are convincing: Word of mouth is the only promotion method

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that is of consumers, by consumers, and for consumers. Having loyal, satisfied

customers that brag about doing business with you is the dream of every business

owner. Not only are satisfied customers repeating buyers, but they are also walking,

talking billboards for your business. Second, the costs are low. Keeping in touch with

satisfied customers and turning them into word-of-mouth advocates costs the

business relatively little.

A successful information search leaves a buyer with possible alternatives, the evoked

set. Hungry, want to go out and eat, evoked set is

Chinese food

Indian food

Burger king

3. Evaluation of Alternatives--need to establish criteria for evaluation, features

the buyer wants or does not want. Rank/weight alternatives or resume search. May

decide that you want to eat something spicy, Indian gets highest rank etc. If not

satisfied with your choices then return to the search phase. Can you think of another

restaurant? Look in the yellow pages etc. Information from different sources may be

treated differently. Marketers try to influence by "framing" alternatives.

4. Purchase decision—In the evaluation stage, the consumer ranks brands and

forms purchase intentions. Generally, the consumer's purchase decision will be to

buy the most preferred brand, but two factors can come between the purchase

intention and the purchase decision. The first factor is the attitudes of others

The second factor is unexpected situational factors. The consumer may form a

purchase intention based on factors such as expected income, expected price, and

expected product benefits. However, unexpected events may change the purchase

intention.

5. Purchase--May differ from decision, time lapse between 4 & product availability

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6. Post-Purchase Evaluation--outcome: The marketer's job does not end when

the product is bought. After purchasing the product, the consumer will be satisfied or

dissatisfied and will engage in post purchase behavior of interest to the marketer.

What determines whether the buyer is satisfied or dissatisfied with a purchase? The

answer lies in the relationship between the consumer's expectations and the

product's perceived performance. If the product falls short of expectations, the

consumer is disappointed; if it meets expectations, the consumer is satisfied; if it

exceeds expectations, the consumer is delighted. The larger the gap between

expectations and performance, the greater the consumer's dissatisfaction. This

suggests that sellers should make product claims that faithfully represent the

product's performance so that buyers are satisfied. Some sellers might even

understate performance levels to boost consumer satisfaction with the product.

Almost all major purchases result in cognitive dissonance, or discomfort caused by

post purchase conflict. After the purchase, consumers are satisfied with the benefits

of the chosen brand and are glad to avoid the drawbacks of the brands not bought.

However, every purchase involves compromise. Consumers feel uneasy about

acquiring the drawbacks of the chosen brand and about losing the benefits of the

brands not purchased. Thus, consumers feel at least some postpurchase dissonance

for every purchase.

Why is it so important to satisfy the customer? Such satisfaction is important

because a company's sales come from two basic groups—new customers and

retained customers. It usually costs more to attract new customers than to retain

current ones, and the best way to retain current customers is to keep them satisfied.

Customer satisfaction is a key to making lasting connections with consumers—to

keeping and growing consumers and reaping their customer lifetime value. Satisfied

customers buy a product again, talk favorably to others about the product, pay less

attention to competing brands and advertising, and buy other products from the

company. Many marketers go beyond merely meeting the expectations of

customers—they aim to delight the customer. A delighted customer is even more

likely to purchase again and to talk favorably about the product and company.

A dissatisfied consumer responds differently. Whereas, on average, a satisfied

customer tells 3 people about a good product experience, a dissatisfied customer

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gripes to 11 people. In fact, one study showed that 13 percent of the people who had a

problem with an organization complained about the company to more than 20

people. Clearly, bad word of mouth travels farther and faster than good word of

mouth and can quickly damage consumer attitudes about a company and its

products.

Therefore, a company would be wise to measure customer satisfaction regularly. It

cannot simply rely on dissatisfied customers to volunteer their complaints when they

are dissatisfied. Some 96 percent of unhappy customers never tell the company

about their problem. Companies should set up systems that encourage customers to

complain. In this way, the company can learn how well it is doing and how it can

improve

TYPES OF COMSUMER BUYING BEHAVIOUR :

Types of consumer buying behaviour are determined by:

Level of Involvement in purchase decision. Importance and intensity of interest in a

product in a particular situation. Buyer‘s level of involvement determines why he/she

is motivated to seek information about a certain products and brands but virtually

ignores others. High involvement purchases--Honda Motorbike, high priced goods,

products visible to others, and the higher the risk the higher the involvement. Types

of risk:

Personal risk

Social risk

Economic risk

The four type of consumer buying behaviour are:

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Routine Response/Programmed Behaviour--Buying low involvement frequently

purchased low cost items; need very little search and decision effort; purchased

almost automatically. Examples include soft drinks, snack foods, milk etc.

COMPLEX BUYING BEHAVIOUR:

Consumers undertake complex buying behavior when they are highly involved in a

purchase and perceive significant differences among brands. Consumers may be

highly involved when the product is expensive, risky, purchased infrequently, and

highly self-expressive. Typically, the consumer has much to learn about the product

category. For example, a personal computer buyer may not know what attributes to

consider. Many product features carry no real meaning: a "Pentium Pro chip," "super

VGA resolution," or "megs of RAM."

This buyer will pass through a learning process, first developing beliefs about the

product, then attitudes, and then making a thoughtful purchase choice. Marketers of

high-involvement products must understand the information-gathering and

evaluation behavior of high-involvement consumers. They need to help buyers learn

about product-class attributes and their relative importance, and about what the

company's brand offers on the important attributes. Marketers need to differentiate

their brand's features, perhaps by describing the brand's benefits using print media

with long copy. They must motivate store salespeople and the buyer's acquaintances

to influence the final brand choice.

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DISSONANCE- REDUCING BUYING BEHAVIOUR:

Dissonance-reducing buying behavior occurs when consumers are highly involved

with an expensive, infrequent, or risky purchase, but see little difference among

brands. For example, consumers buying carpeting may face a high-involvement

decision because carpeting is expensive and self-expressive. Yet buyers may consider

most carpet brands in a given price range to be the same. In this case, because

perceived brand differences are not large, buyers may shop around to learn what is

available, but buy relatively quickly. They may respond primarily to a good price or to

purchase convenience.

After the purchase, consumers might experience post purchase dissonance (after-

sale discomfort) when they notice certain disadvantages of the purchased carpet

brand or hear favorable things about brands not purchased. To counter such

dissonance, the marketer's after-sale communications should provide evidence and

support to help consumers feel good about their brand choices.

HABITUAL BUYING BEHAVIOUR:

Habitual buying behavior occurs under conditions of low consumer involvement and

little significant brand difference. For example, take salt. Consumers have little

involvement in this product category—they simply go to the store and reach for a

brand. If they keep reaching for the same brand, it is out of habit rather than strong

brand loyalty. Consumers appear to have low involvement with most low-cost,

frequently purchased products.

In such cases, consumer behavior does not pass through the usual belief-attitude-

behavior sequence. Consumers do not search extensively for information about the

brands, evaluate brand characteristics, and make weighty decisions about which

brands to buy. Instead, they passively receive information as they watch television or

read magazines. Ad repetition creates brand familiarity rather than brand

conviction. Consumers do not form strong attitudes toward a brand; they select the

brand because it is familiar. Because they are not highly involved with the product,

consumers may not evaluate the choice even after purchase. Thus, the buying process

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involves brand beliefs formed by passive learning, followed by purchase behavior,

which may or may not be followed by evaluation.

Because buyers are not highly committed to any brands, marketers of low-

involvement products with few brand differences often use price and sales

promotions to stimulate product trial. In advertising for a low-involvement product,

ad copy should stress only a few key points. Visual symbols and imagery are

important because they can be remembered easily and associated with the brand. Ad

campaigns should include high repetition of short-duration messages. Television is

usually more effective than print media because it is a low-involvement medium

suitable for passive learning. Advertising planning should be based on classical

conditioning theory, in which buyers learn to identify a certain product by a symbol

repeatedly attached to it.

Marketers can try to convert low-involvement products into higher-involvement ones

by linking them to some involving issue. Procter & Gamble does this when it links

Crest toothpaste to avoiding cavities. Or the product can be linked to some involving

personal situation. Nestlé did this in its series of ads for Taster's Choice coffee, each

consisting of a new soap-opera-like episode featuring the evolving romantic

relationship between two neighbors. At best, these strategies can raise consumer

involvement from a low to a moderate level. However, they are not likely to propel

the consumer into highly involved buying behavior.

VARIETY SEEKING BUYING BEHAVIOUR:

Consumers undertake variety-seeking buying behavior in situations characterized by

low consumer involvement but significant perceived brand differences. In such cases,

consumers often do a lot of brand switching. For example, when buying cookies, a

consumer may hold some beliefs, choose a cookie brand without much evaluation,

then evaluate that brand during consumption. But the next time, the consumer might

pick another brand out of boredom or simply to try something different. Brand

switching occurs for the sake of variety rather than because of dissatisfaction.

In such product categories, the marketing strategy may differ for the market leader

and minor brands. The market leader will try to encourage habitual buying behavior

by dominating shelf space, keeping shelves fully stocked, and running frequent

reminder advertising. Challenger firms will encourage variety seeking by offering

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lower prices, special deals, coupons, free samples, and advertising that presents

reasons for trying something new.

Factors Affecting the Consumer Buying Decision Process

A consumer, making a purchase decision will be affected by the following four

factors:

1. Cultural and sub culture Factor

2. Social Factor

3. Personal Factor

4. Psychological

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1. Culture and Sub-culture

Culture refers to the set of values, ideas, and attitudes that are accepted by a

homogenous group of people and transmitted to the next generation. Culture also

determines what is acceptable with product advertising. Culture determines what

people wear, eat, reside and travel. Cultural values in the US are good health,

education, individualism and freedom. In American culture time scarcity is a growing

problem that is change in meals. Big impact on international marketing. Culture can

be divided into subcultures: Geographic regions

Human characteristics such as ethnic background.

Culture affects what people buy, how they buy and when they buy.

2. Social Factors

Consumer wants, learning, motives etc. are influenced by opinion leaders, person's

family, reference groups, social class and culture.

Roles and Family Influences--

Role...things you should do based on the expectations of you from your position

within a group. People have many roles. Husband, father, employer, employee.

Individuals role are continuing to change therefore marketers must continue to

update information. Family is the most basic group a person belongs to. Marketers

must understand: that many family decisions are made by the family unit consumer

behaviour starts in the family unit family roles and preferences are the model for

children's future family (can reject/alter/etc) family buying decisions are a mixture

of family interactions and individual decision making. Family acts an interpreter of

social and cultural values for the individual.

The Family life cycle: families go through stages; each stage creates different

consumer demands

Family members can strongly influence buyer behavior. The family is the most

important consumer buying organization in society, and it has been researched

extensively. Marketers are interested in the roles and influence of the husband, wife,

and children on the purchase of different products and services.

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Husband-wife involvement varies widely by product category and by stage in the

buying process. Buying roles change with evolving consumer lifestyles. In the United

States, the wife traditionally has been the main purchasing agent for the family,

especially in the areas of food, household products, and clothing. But with 70 percent

of women holding jobs outside the home and the willingness of husbands to do more

of the family's purchasing, all this is changing. For example, women now buy about

45 percent of all cars and men account for about 40 percent of food-shopping dollars.

Such changes suggest that marketers who've typically sold their products to only

women or only men are now courting the opposite sex. For example, with research

revealing that women now account for nearly half of all hardware store purchases,

home improvement retailers such as Home Depot and Builders Square have turned

what once were intimidating warehouses into female-friendly retail outlets. The new

Builders Square II outlets feature decorator design centers at the front of the store.

To attract more women, Builders Square runs ads targeting women in Home, House

Beautiful, Woman's Day, and Better Homes and Gardens. Home Depot even offers

bridal registries

Children may also have a strong influence on family buying decisions. Chevrolet

recognizes these influences in marketing its Chevy Venture minivan. For example, it

ran ads to woo these "back-seat consumers" in Sports Illustrated for Kids, which

attracts mostly 8- to 14-year-old boys. "We're kidding ourselves when we think kids

aren't aware of brands," says Venture's brand manager, adding that even she was

surprised at how often parents told her that kids played a tie-breaking role in

deciding which car to buy.

Groups

A person's behavior is influenced by many small groups. Groups that have a direct

influence and to which a person belongs are called membership groups. In contrast,

reference groups serve as direct (face-to-face) or indirect points of comparison or

reference in forming a person's attitudes or behavior. People often are influenced by

reference groups to which they do not belong. For example, an aspirational group is

one to which the individual wishes to belong, as when a teenage basketball player

hopes to play someday for the Utah Jazz. Marketers try to identify the reference

groups of their target markets. Reference groups expose a person to new behaviors

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and lifestyles, influence the person's attitudes and self-concept, and create pressures

to conform that may affect the person's product and brand choices.

The importance of group influence varies across products and brands. It tends to be

strongest when the product is visible to others whom the buyer respects.

Manufacturers of products and brands subjected to strong group influence must

figure out how to reach opinion leaders—people within a reference group who,

because of special skills, knowledge, personality, or other characteristics, exert

influence on others.

Reference Groups--

Individual identifies with the group to the extent that he takes on many of the

values, attitudes or behaviours of the group members.

Families, friends, sororities, civic and professional organizations. Any group that has

a positive or negative influence on a person‘s attitude and behaviour.

Membership groups

(Belong to) Affinity marketing is focused on the desires of consumers that belong to

reference groups. Marketers get the groups to approve the product and communicate

that approval to its members. Credit Cards etc.!!

Aspiration groups

(Want to belong to) Disassociate groups (do not want to belong to)

Honda tries to disassociate from the "biker" group. The degree to which a reference

group will affect a purchase decision depends on an individual‘s susceptibility to

reference group influence and the strength of his/her involvement with the group.

Social Class

An open group of individuals who have similar social rank. US is not a classless

society. US criteria; occupation, education, income, wealth, race, ethnic groups and

possessions. Social class influences many aspects of our lives. i.e.; upper middle class

Americans prefer luxury cars Mercedes.

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Upper-upper class, .3%, inherited wealth, aristocratic names .Upper uppers are

the social elite who live on inherited wealth and have well-known family

backgrounds. They give large sums to charity, run debutante balls, own more than

one home, and send their children to the finest schools. They are a market for

jewelry, antiques, homes, and vacations. They often buy and dress conservatively

rather than showing off their wealth. Although small in number, upper uppers serve

as a reference group for others.

Lower-upper class, 1.2%, newer social elite, from current professionals and

corporate elite.

Lower uppers have earned high income or wealth through exceptional ability in the

professions or business. They usually begin in the middle class. They tend to be

active in social and civic affairs and buy for themselves and their children the

symbols of status, such as expensive homes, schools, swimming pools, and

automobiles. They include the new rich who consume conspicuously to impress those

below them. They want to be accepted in the upper-upper stratum, a status more

likely to be achieved by their children than by themselves.

Upper-middle class, 12.5%, college graduates, managers and professionals

Upper middles possess neither family status nor unusual wealth. They are primarily

concerned with "career," They have attained positions as professionals, independent

businesspersons, and corporate managers. They believe in education and want their

children to develop professional or administrative skills. They are joiners and highly

civic-minded. They are the quality market for good homes, clothes, furniture, and

appliances.

Middle class, 32%, average pay white collar workers and blue collar friends.

The middle class is made up of average-pay white- and blue-collar workers who live

on "the better side of town" and try to "do the proper things." To keep up with the

trends, they often buy products that are popular. Most are concerned with fashion,

seeking the better brand names. Better living means owning a nice home in a nice

neighborhood with good schools. They believe in spending more money on

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worthwhile experiences for their children and aiming them toward a college

education.

Working class, 38%, average pay blue collar workers.

The working class consists of those who lead a "working-class lifestyle," whatever

their income, school background, or job. They depend heavily on relatives for

economic and emotional support, for advice on purchases, and for assistance in

times of trouble. The working class maintains sharper sex role division and

stereotyping.

Lower class, 9%, working, not on welfare

Upper lowers are working (are not on welfare), although their living standard is just

above poverty. They perform unskilled work for very poor pay although they strive

toward a higher class. Often, upper lowers lack education. Although they fall near the

poverty line financially, they manage to "present a picture of self-discipline" and

"maintain some effort at cleanliness."

Lower-lower class, 7%, on welfare

Lower lowers are on welfare, visibly poverty stricken, and usually out of work or have

"the dirtiest jobs." Often they are not interested in finding a job and are permanently

dependent on public aid or charity for income. Their homes, clothes, and possessions

are "dirty," "raggedy," and "broken-down."

Social class determines to some extent, the types, quality, and quantity of products

that a person buys or uses. Lower class people tend to stay close to home when

shopping; do not engage in much pre-purchase information gathering.

Stores project definite class images.

Family, reference groups and social classes are all social influences on consumer

behaviour. All operate within a larger culture.

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Celebrity Influence

This is an important tool which is able to influence Indian consumer buying

behaviour. In India, celebrities are being increasingly used in marketing

communication by marketers to lend personality to their products. With the visual

media becoming more popular the use of celebrities in the TV media has increased.

Celebrities create headlines. Their activities and movements are being closely

watched and imitated. What they endorse sell like hot cakes. It is not surprising

therefore that using celebrities in advertisements has become common practice. In

India especially, it is not difficult to look for the reasons as to why companies are

increasingly using celebrities. Indians always love their heroes and heroines.

Consumers like advertisements more if they are admirers of the celebrities in the

advertisements. When a consumer likes the celebrity in the advertisement, he or she

is more likely to accept what the celebrity says about the advertised product and

therefore will develop more positive feelings toward the advertisement and the brand

itself. Famous celebrities are able to attract attention and retain attention by their

mere presence in the advertisement

In the midst of the advertisement clutter, the advertisements that celebrities endorse

also achieve high recall rates. When people see their favoured reference group

members or celebrities in the advertisements, they pay more attention to them.

Celebrities may also help reposition products. Products with sagging sales needs

some boosting and in these Indian celebrities can help by way of the endorsing the

product concerned.

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Personal factors

Ability and Knowledge—

Need to understand individual‘s capacity to learn. Learning, changes in a person's

behaviour caused by information and experience. Therefore to change consumers'

behaviour about your product, need to give them new information re: product...free

sample etc. When making buying decisions, buyers must process information.

Knowledge is the familiarity with the product and expertise.

Inexperience buyers often use prices as an indicator of quality more than those who

have knowledge of a product. Non-alcoholic Beer example: consumers chose the

most expensive six-pack, because they assume that the greater price indicates greater

quality.

Learning is the process through which a relatively permanent change in behaviour

results from the consequences of past behaviour.

•

Attitudes--

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Knowledge and positive and negative feelings about an object or activity-maybe

tangible or intangible, living or non living.....Drive perceptions Individual learns

attitudes through experience and interaction with other people. Consumer attitudes

toward a firm and its products greatly influence the success or failure of the firm's

marketing strategy. Honda "You meet the nicest people on a Honda‖ dispels the

unsavoury image of a motorbike rider, late 1950s. Changing market of the 1990s,

baby boomers aging, Hondas market returning to hard core. To change this they have

a new slogan "Come ride with us". Attitudes and attitude change are influenced by

consumer‘s personality and lifestyle.

Consumers screen information that conflicts with their attitudes. Distort information

to make it consistent and selectively retain information that reinforces our attitudes.

IE brand loyalty. There is a difference between attitude and intention to buy (ability

to buy)

Personality-- all the internal traits and behaviours that make a person unique,

uniqueness arrives from a person's heredity and personal experience. Examples

include:

Work holism

Compulsiveness

Self confidence

Friendliness

Adaptability

Ambitiousness

Introversion

Extroversion

Aggressiveness

Competitiveness

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Traits affect the way people behave. Marketers try to match the store image to the

perceived image of their customers.

There is a weak association between personality and Buying Behaviour; this may be

due to unreliable measures. Nike ads. Consumers buy products that are consistent

with their self concept.

Lifestyles--

People coming from the same subculture, social class, and occupation may have quite

different lifestyles. Lifestyle is a person's pattern of living as expressed in his or her

psychographics. It involves measuring consumers' major AIO dimensions—activities

(work, hobbies, shopping, sports, social events), interests (food, fashion, family,

recreation), and opinions (about themselves, social issues, business, products).

Lifestyle captures something more than the person's social class or personality. It

profiles a person's whole pattern of acting and interacting in the world.

Several research firms have developed lifestyle classifications. The most widely used

is the SRI Consulting's Values and Lifestyles (VALS) y typology (see Figure 5.3).

VALS classifies people according to how they spend their time and money. It divides

consumers into eight groups based on two major dimensions: self-orientation and

resources. Self-orientation groups include principle-oriented consumers who buy

based on their views of the world; status-oriented buyers who base their purchases

on the actions and opinions of others; and action-oriented buyers who are driven by

their desire for activity, variety, and risk taking. Consumers within each orientation

are further classified into those with abundant resources and those with minimal

resources, depending on whether they have high or low levels of income, education,

health, self-confidence, energy, and other factors. Consumers with either very high or

very low levels of resources are classified without regard to their self-orientations

(actualizers, strugglers). Actualizers are people with so many resources that they can

indulge in any or all self-orientations. In contrast, strugglers are people with too few

resources to be included in any consumer orientation

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Economic Situation

A person's economic situation will affect product choice. Anna Flores can consider

buying an expensive Nikon if she has enough spendable income, savings, or

borrowing power. Marketers of income-sensitive goods watch trends in personal

income, savings, and interest rates. If economic indicators point to a recession,

marketers can take steps to redesign, reposition, and reprice their products closely.

4. Psychological factors

A person's buying choices are further influenced by four major psychological factors:

motivation, perception, learning, and beliefs and attitudes.

Motivation

A person has many needs at any given time. Some are biological, arising from states

of tension such as hunger, thirst, or discomfort. Others are psychological, arising

from the need for recognition, esteem, or belonging. Most of these needs will not be

strong enough to motivate the person to act at a given point in time. A need becomes

a motive when it is aroused to a sufficient level of intensity. A motive (or drive) is a

need that is sufficiently pressing to direct the person to seek satisfaction.

Psychologists have developed theories of human motivation. Two of the most

popular—the theories of Sigmund Freud and Abraham Maslow—have quite different

meanings for consumer analysis and marketing.

Perception

A motivated person is ready to act. How the person acts is influenced by his or her

own perception of the situation. All of us learn by the flow of information through

our five senses: sight, hearing, smell, touch, and taste. However, each of us receives,

organizes, and interprets this sensory information in an individual way. Perception is

the process by which people select, organize, and interpret information to form a

meaningful picture of the world.

People can form different perceptions of the same stimulus because of three

perceptual processes: selective attention, selective distortion, and selective retention.

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People are exposed to a great amount of stimuli every day. For example, the average

person may be exposed to more than 1,500 ads in a single day. It is impossible for a

person to pay attention to all these stimuli. Selective attention—the tendency for

people to screen out most of the information to which they are exposed—means that

marketers have to work especially hard to attract the consumer's attention.

Even noted stimuli do not always come across in the intended way. Each person fits

incoming information into an existing mind-set. Selective distortion describes the

tendency of people to interpret information in a way that will support what they

already believe. Selective distortion means that marketers must try to understand the

mind-sets of consumers and how these will affect interpretations of advertising and

sales information.

People also will forget much that they learn. They tend to retain information that

supports their attitudes and beliefs. Because of selective retention, Anna is likely to

remember good points made about the Nikon and to forget good points made about

competing cameras. Because of selective exposure, distortion, and retention,

marketers have to work hard to get their messages through. This fact explains why

marketers use so much drama and repetition in sending messages to their market.

Learning

When people act, they learn. Learning describes changes in an individual's behavior

arising from experience. Learning theorists say that most human behavior is learned.

Learning occurs through the interplay of drives, stimuli, cues, responses, and

reinforcement.

We saw that Anna Flores has a drive for self-actualization. A drive is a strong internal

stimulus that calls for action. Her drive becomes a motive when it is directed toward

a particular stimulus object, in this case a camera. Anna's response to the idea of

buying a camera is conditioned by the surrounding cues. Cues are minor stimuli that

determine when, where, and how the person responds.

Beliefs and Attitudes

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Through doing and learning, people acquire beliefs and attitudes. These, in turn,

influence their buying behavior. A belief is a descriptive thought that a person has

about something. Anna Flores may believe that a Nikon camera takes great pictures,

stands up well under hard use, and costs $450. These beliefs may be based on real

knowledge, opinion, or faith, and may or may not carry an emotional charge. For

example, Anna Flores's belief that a Nikon camera is heavy may or may not matter to

her decision.

Marketers are interested in the beliefs that people formulate about specific products

and services, because these beliefs make up product and brand images that affect

buying behavior. If some of the beliefs are wrong and prevent purchase, the marketer

will want to launch a campaign to correct them.

People have attitudes regarding religion, politics, clothes, music, food, and almost

everything else. Attitude describes a person's relatively consistent evaluations,

feelings, and tendencies toward an object or idea. Attitudes put people into a frame

of mind of liking or disliking things, of moving toward or away from them. Thus,

Anna Flores may hold attitudes such as "Buy the best," "The Japanese make the best

products in the world," and "Creativity and self-expression are among the most

important things in life." If so, the Nikon camera would fit well into Anna's existing

attitudes.

Attitudes are difficult to change. A person's attitudes fit into a pattern, and to change

one attitude may require difficult adjustments in many others. Thus, a company

should usually try to fit its products into existing attitudes rather than attempt to

change attitudes

Noodles History:

Noodles can be regarded as the second staple after rice in Asian countries. The great

thing about noodles is that they can be prepared in various combinations; with

sauces, in soup, fried, with all kinds of meat, seafood and vegetables. When

compared to rice, noodle meals are cheaper and more convenient. A great deal of

time can be saved in the preparing, consuming and dish washing processes.

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Therefore, despite its ancient origins, it is highly suited to the fast beat of modern

society.

The traditional Chinese noodle stalls in Hong Kong has changed little over half a

century. Like many traditional Chinese businesses, these were usually run by a

family, (typically the father acts as the cook and master, the mother the cashier, and

their children as waiters/ waitresses). Although the management of these stalls can

be very flexible, they lack of control on the quality of food and customer service.

Moreover, they do little to promote their shop image. The staffs seldom wear

uniform, and little attention is paid to food hygiene and the shop interior. Some stalls

have pets strolling around and some don't even have air conditioning. Usually the

menu is only in Chinese language, which is placed either under the greasy table glass

top or pasted along the walls.

The target customers are usually people in their neighbourhood and the business

relied mainly on the low price strategies, or by word of mouth. The way in which the

noodle is cooked is the crucial factor on getting return business. However, since the

current generations of young people nowadays are able to receive higher education,

they will not be eager to inherit their father's business. Given that running a noodle

stall is not considered as a particular prestigious and well-paid job. Therefore when

the master retires, he must pass on his technique to someone outside the family. It is

a customary practice though for Chinese chefs not to pass on everything. Therefore,

there is bound to be changes to the quality of the food once the business has changed

hands.

The Japanese noodle shops on the other hand are better organized. In the shop front,

there is usually a display window showing wax models of different set meals. The wax

models can imitate the food so successfully that it provides a mouth-watering image

to the passerby. When one walks into the shop, he will be greeted politely by trained

waitresses either wearing apron or some sort of uniform. The shop interior is

carefully design to reflect Japanese culture and is always clean and hygienic. The

menu is supplemented by some very attractive photographs. So that customer can be

assured what they order will match their expectations, even if they cannot read the

menu correctly.

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As the living standard of people in Hong Kong improves, their requirement on food is

no longer just to fill the stomach. The target customers of Japanese noodles are

usually the young generation and office workers. They are less price conscious and

are willing to pay more for better food quality, service and eating environment.

Although a bowl of noodle sold in a Japanese noodle shop could be at least three

times higher than those sold in a Chinese noodle stall, many people still think that it

is worth the money.

MAGGI

INTRODUCTION

Ever since its launch in India in 1983, this brand has become synonymous with

noodles. The bright red and yellow colours of the packet with the brilliant blue ―2-

minute Noodles‖ printed on it has found a place on every kitchen. Over the years,

Maggi has grown as a brand and positioned itself as a ―Fast to cook! Good to Eat!

―Food product. The history of this brand traces back to the 19th century when

industrial revolution in Switzerland created factory jobs for women, who were

therefore left with very little time to prepare meals. Due to this growing problem

Swiss Public Welfare Society asked a miller named Julius Maggi to create a vegetable

food product that would be quick to prepare and easy to digest. Julius, the son of an

Italian immigrant came up with a formula to bring added taste to meals in 1863.

Soon after he was commissioned by the Swiss Public Welfare Society, he came up

with two instant pea soups & a bean soup- the first launch of Maggi 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.

However in India (the largest consumer of Maggi noodles in the world!) it was

launched in 1980 by Nestle group of companies. Maggie had merged with Nestle

family in 1947. When launched it had to face a stiff competition from the ready to eat

snack segments like biscuits, wafers etc. Also it had other competitor the so called

home made snacks which are till today considered healthy and hygienic. Hence to

capture the market it was positioned as a hygienic homemade snack, a smart move.

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But still this didn‘t work, as it was targeted towards the wrong target group, the

working women. After conducting an extensive research, the firm found that the

children were the biggest consumers of Maggi noodles. Quickly a strategy was

developed to capture the kids segment with various tools of sales promotion like

pencils, fun books, Maggi clubs which worked wonders for it. No doubt the ads of

Maggi have shown a hungry kid saying ―Mummy bhookh lagi hai‖ to which his mom

replies ―Bas do minute!‖ and soon he is happily eating Maggie noodles. Further the

MAGGI 2-MINUTE Noodles has been renovated to provide 20% of the RDA1 of

Calcium and Protein for the core target group building on the nutrition proposition

―Taste bhi health bhi‖. The company could have easily positioned the product as a

meal, but did not, as a study had shown that Indian mentality did not accept

anything other than rice or roti as meal. They made it an easy to cook snack that

could be prepared in just two minutes. The formula clicked well and Maggi became a

brand name

Nestlé‘s Maggie noodles are the leading brand in the instant noodles segment in

India, enjoying a market share of 79.3%. The brand has grown to an estimated Rs

200 crores & contributes to around 10% of Nestle India‘s top line. Being the pioneer

in the noodles market has given it a first mover‘s advantage over other brands. Maggi

has regularly come up with new flavours and has recently launched two variants-

Vegetable Atta and Dal Atta noodles, catering to the increasing demand for healthy

snacks.

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COMPANY PROFILE

NESTLE’ Nestle India

Nestle‘ India is a subsidiary of Nestle‘ S.A. of Switzerland. The company insists on

honesty, integrity and fairness in all aspects of its business and expects the same in

its relationships.

Nestle India- Presence across India

Beginning with its first investment in Moga in 1961, Nestlé‘s regular and substantial

investments established that it was here to stay. In 1967, Nestlé set up its next factory

at Choladi (Tamil Nadu) as a pilot plant to process the tea grown in the area into

soluble tea. The Nanjangud factory (Karnataka), became operational in 1989, the

Samalkha factory (Haryana), in 1993 and in 1995 and 1997, Nestlé commissioned

two factories in Goa at Ponda and Bicholim respectively. Nestlé India is now putting

up the 7th factory at Pant Nagar in Uttaranchal.

Nestle’ Story

Nestlé was founded in 1867 on the shores of Lake Geneva in Vevey, Switzerland and

its first product was ―Farine Lactée Nestlé‖, an infant cereal specially formulated by

Henri Nestlé to provide and improve infant nutrition. From its first historic merger

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with the Anglo-Swiss Condensed Milk Company in 1905, Nestlé has grown to become

the world‘s largest and most diversified food Company, and is about twice the size of

its nearest competitor in the food and beverage sector.

Nestlé‘s trademark of birds in a nest, derived from Henri Nestlé‘s personal coat of

arms, evokes the values upon which he founded his Company. Namely, the values of

security, maternity and affection, nature and nourishment, family and tradition.

Today, it is not only the central element of Nestlé‘s corporate identity but serves to

define the Company‘s products, responsibilities, business practices, ethics and goals.

In 2004, Nestlé had around 247,000 employees worldwide, operated 500 factories in

approx. 100 countries and offered over 8,000 products to millions of consumers

universally. The Company‘s transparent business practices, pioneering environment

policy and respect for the fundamental values of different cultures have earned it an

enviable place in the countries it operates in. Nestlé‘s activities contribute to and

nurture the sustainable economic development of people, communities and nations.

Above all, Nestlé is dedicated to bringing the joy of ‗Good Food, Good Life‘ to people

throughout their lives, throughout the world.

Nestle’ Brands

Milk Products & Nutrition

Beverages

Prepared Dishes and Cooking Aids

Chocolates & Confectionary

A Maggi noodle is a brand of instant noodles manufactured by Nestlé. The brand

is popular in Australia, India, South Africa, Brazil, Nepal, New Zealand, Malaysia,

Singapore, Sri Lanka, Bangladesh, Pakistan, and the Philippines. In several

countries, it is also known as "Maggi mee" (mee is Indonesian/Malay for noodles).

Maggi noodles are part of the Maggi family, a Nestlé brand of instant soups, stocks,

and noodles. In Malaysia, there are fried noodles made from Maggi noodles known

as Maggi goreng. Maggi noodles recently introduced a new variety of its noodles, to

cater for the health conscious like 'No MSG', 'Less Salt', and 'No Trans fat'. Whole-

wheat flour based noodle variation marketed by the name "Vegetable Atta Noodles"

has been introduced in India (Atta flour is used in preparing most forms of wheat

based breads in India) and caters to health conscious buyers wary of the refined flour

35 | P a g e

used in the regular Maggi noodles. This move helps the brand in India as suburban

mothers, who feed the noodles to children as an afterschool snack, are the primary

customers of the brand. Recently, a line of rice noodles and whole wheat with pulses,

carrots, beans, and onions has also been introduced in India. In fact, "Maggi" has

become a well-known brand for instant noodles in India and Malaysia.

Nestlé India Ltd (NIL) offered a variety of culinary products such as instant noodles,

soups, sauces and ketchups, cooking aids (seasonings), etc., under the Maggi brand

(Refer to Exhibit II for Maggi's product portfolio as of mid-2006). Of these, instant

noodles had been NIL's main product category in the culinary segment since the

launch of Maggi 2 Minute Noodles (Maggi noodles) in 1982. Over the years, Maggi

noodles became a popular snack food product in India.

In mid 2008, New Zealand supermarkets introduced replacement formulations for

its Beef, Oriental, and Curry flavours. A new feature is an extra sachet containing

dehydrated vegetables. Maggi claims the new range contains 88% less total fat and

86% less saturated fat than the average of top-three (unnamed) 2-minute-noodle

competitors. The new Maggi range also has considerably lower fat than its own

previous formulation. However, the salt content has been increased by 31 percent.

Consumers have not reacted well to the new formulations, complaining that they

want the original chicken flavour back Claimed to be "2 minute noodles", The Maggi

noodle cake and seasoning is added into boiling water for two minutes and it is ready

for consumption. Egg, seaweed, boiled vegetables or lemon can also be added to the

noodles for a better flavour.

Market Summary

TARGET MARKETS

Primary target: Children (<16)

Nestle plans to widen its target audience by launching new variants Vegetable and

Dal atta, Multi grain noodles for health conscious people.

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MARKET DEMOGRAPHICS

Demographics:

Region: urban, semi-urban, rural (recent)

Occupation: Housewives, working professionals, self-employed

Sex: Unisex

Income: 1, 20,000 p.a. upwards

Social class: Middle and upwards

Family life cycle: Young, single, married with children.

Behavioural:

Occasions: Regular, Everyday user-urban, rural-depends on the temporal aspects of

the consumer‘s life (varied usage in terms of time of time of day, week, month, year)

User status: first time user-rural, potential users-semi-urban, heavy users-urban

Usage rate: Heavy user-urban, light-rural, medium-semi-urban

Loyalty status: hard core and shifting loyal

Buyer-Readiness Stage: rural-some are aware, semi-urban: some intend to buy

(aware, informed), urban: informed (some desire, some intend to buy)

Attitude toward product: Enthusiastic, positive.

Psychographics:

Lifestyle: Hard pressed for time

CHILDREN

Children as an age group are a marketer‘s delight. With ―pester power‖ children play

a significant role in decision making and purchase choices of just about anything

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ranging from food items to beverages to chocolates. As consumers, children know

exactly what they want and do not experiment too much with flavour or colour.

Children rule

Indian families consider children to precious gifts of God, and parents in all income

groups do all they can for their offspring. Indian parents are still not completely

comfortable with paid baby sitters or day care help and use the larger extended

family or friends to help with care and supervision of children.

Rush for pre-school admissions

Throughout urban India, parents of nursery age children are looking to send them in

the best private school they can afford. Pre-schools for toddlers in the 2-3 age group

are mushrooming all over the country, as anxious parents recognise the perceived

benefits these can bring.

TEENAGERS

The teenager‘s age group consists of children on the threshold of adolescence and as

a segment are a difficult lot. Though they are not sure about their choices on an

emotional plane, they are a trendy new group that is extremely savvy and self assured

when it comes to taking decisions regarding consumer goods and wants. Urban

children in this age group would have some amount of pocket money with an upper

limit of Rs100 per month. Though allowances have gone up, parental control still

exists over this market segment. Impulse foods rule the preference scale as far as the

buying behaviour of teenagers in India is concerned.

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In fact, the top six expense items for teenagers seem to be impulse foods: 17% of the

total pocket money spent on ice creams, 12% on chocolates and 10% each on soft

drinks and fast food according to a newspaper report in the ―The Times of India‖.

A key role to play in decision making

With increased awareness through television and advertising, teenagers are an

important influence on family decision-making in urban India. They have also

mastered the art of nagging their parents into making purchases of gadgets or

products that they want. Among the areas where they make their influence felt are

the purchase of such items as a newly launched chocolate bar, instant noodles and

breakfast cereal.

With a penchant for hi-tech and an ease with new technology far superior to their

parents, these teenagers are more familiar with operating mobile phones, the TV

remote, DVD player and computer programmes, as well as the product features.

Cricket-crazy boys

Cricket is the obsession and passion of boy teenagers in India. This interest cuts

across income and socio-economic groups. Low income boys will play on the streets

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with makeshift bats and stumps, middle-income children can be seen playing in

gardens and at school, while boys from more well-to-do families go and play in

organised coaching camps. With their education demanding less time at this age,

parents are generally quite happy to see their boys spending so much time on cricket

STUDYING AGE

A rise in the number of colleges and institutions of higher learning both government

owned and privately financed has enabled a larger number of youth to graduate from

their portals.

This population grew since 2000 but is set to stagnate in the forecast period with

couples actually postponing the child bearing decision and some even rejecting the

idea of having one at all. This age group has taken up to snacking as a way of life as

they keep missing regular meals due to erratic schedules. They have longer waking

hours and due to this the traditional three meals does not suffice with the need for

filling snacks.

Rising financial freedom

With growing aspirations on the academic front and shrinking global boundaries this

age group has an unquenchable thirst for information whether through their PCs or

cell phones.

With a rise in employment opportunities in the Business Process Outsourcing (BPO)

sector, more and more consumers in this age group are juggling jobs along with their

studies for the sake of the financial freedom it gives them.

Summer jobs

Until the 1990s, summer vacations were a time to relax, read and catch up with

friends. This is no longer the case. Now, teenagers either find a summer job, or

undertake activities such as a trek in the mountains, river rafting or rock climbing.

Summer jobs may cover a range of activities from delivering newspapers to working

in a restaurant

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YOUNG ADULTS

Young adults (15-29 years old) represent the largest spending segment in the

country. Youngsters are part of a middle-class boom in India. Of the US$30 billion

spent by Indians on themselves in 2003, young adults spent close to US$10.5 billion

with their spending levels.

Need for convenience

Many single working professionals have to live away rising 12% each year at twice the

pace of the economy‘s growth according to various trade press publications. Young

adults grew 8% in numbers over the 1999-2004 periods and are likely to grow at

approximately the same pace.

Rising disposable incomes

College graduates and students still studying are landing well-paying jobs in a host of

Emerging industries that barely existed at the start of the new millennium – retail

chains, fast food restaurants, mobile phone companies, call centres and data

processing firms. Many have access to disposable incomes of Rs8, 000-10,000 per

month thanks to the BPO boom in India.

This age group still does not have responsibilities of running a household, marriage

or worry about their children‘s education. Thus, this income is almost entirely spent

on non-essential items. Most purchases made by this age group are on impulse.

There are 16 million urban consumers in the 20-25 age groups. From their parents

due to the demand of the jobs. This yuppies (young upwardly mobile professionals)

class has a hard time preparing food and for them convenience is major issue. They

are ready to pay a premium for quality and convenience. Also always being on the

move they have a need for food item that can be easily consumed and disposed of

MIDDLE-AGED ADULTS

These middle aged men have strict preferences over food and they generally stick to

their choices. They experiment less and go for products that will enhance their social

status. The women in this age group are ones who the primarily buy food items for

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the entire household though their choices are shaped by the preferences of the

household members. The women in this segment play an important role as most of

the choices of food items have to pass their scrutiny before it is consumed in the

household.

Responsibilities

Between the ages of 45 and 55, men find themselves with children who are able to

leave school or facing crucial board examinations. Some may also have wives with

settled careers. These factors make them reluctant to leave or move from their city of

residence and they would rather resign and move to another job rather than displace

the family. Others find themselves redundant in the new hire and fire labour

environment. There is a trend for such people to enter the BPO sector as well

Mid-life career change

In urban India, among the middle class, there are a significant number of men who

are making career switches, some out of choice and others out of necessity. Tired of

their current salaried jobs, some are taking the entrepreneurial plunge, setting up

businesses such as small IT- service firms, adventure tourism companies or

leadership training consultancies.

PENSIONERS

In the 1950s and 1960s, government jobs were among the few acceptable job

occupations for people from respectable households. Changing technology and

globalisation have changed that with unconventional income opportunities now

presenting themselves to Indians. Some pensioners have sought and enjoyed success

in information technology-related endeavours whilst others have put their

considerable English language skills to good use in service industries. Pensioners

have been the hardest hit section of the population. With declining interest rates,

they have had to play a more active role in financial management. Some of them are

even trying to keep abreast of current happenings and learning how to use a

computer or access the Internet.

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There food preferences are shaped by their health conditions and they stick to their

preferred food items.

Independent living on the rise

From the 1980s onwards, there has been a steady migration of young adults and

students to the US, in search of better opportunities. Most have chosen to settle and

make their lives in that country. Therefore, their ageing parents have had to learn to

continue to live independently.

Retirement communities viewed as an option

Retirement homes were previously viewed negatively in India. If the elderly went

there, it meant they had no one to care for them, and were in a sense for the destitute

elderly. In the new urban India, however, well-appointed retirement communities

are mushrooming, and couples in their 60s are going there of their own volition.

While the numbers are not yet significant, a trend is likely to increase in line with

growth in the numbers of India‘s elderly. It is also now an option for the middle-

income and salaried classes. In families where there is a proprietary business, or a

family practice, two-to-three generations will continue to live together.

MARKET NEEDS

The urban Indian is used to having his dinner late from around 8:30 pm to as late as

11 pm.

Hence a convenient snack between lunch and dinner is an often exercised option. In

rural areas, smaller priced packs stimulate demand.

Maggi is a fun and convenience brand which sits strongly in its position as a "good to

eat, fast to cook" anytime snack and is popular across different age groups.

Opportunities in practically all consumption categories arise in terms of "reach" and

"medium of consumption". Hence the onus is on the company to make it easily

available and affordable and in different sizes, catering to different categories of

users like the new Maggi chota pack conveniently priced at Rs 5 for 50gms. The

Indian palate is not too adventurous in terms of trying out new flavours. In fact

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today, Maggi have settled at standard flavours such as curry, masala, tomato and

chicken and not much experimentation is necessarily required in the noodles market.

People prefer to have it easily available and affordable.

MARKET TRENDS

The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion

in 2015. Penetration level is only 30% for Maggi Noodles in urban areas as well as

per capita consumption for the Instant noodles and pasta segment is low indicating

the untapped market potential

The BRICs report indicates that India's per capita disposable income, currently at

US$ 556 per annum will raise to US$ 1150 by 2015 -another demand driver. Spurt in

The industrial and services sector growth is also likely to boost the urban

consumption demand.

Only about 8-10 per cent of output is processed and consumed in packaged form,

thus highlighting the huge potential for expansion of this industry. Currently, the

semi processed and ready to eat packaged food segment has a size of over US$ 70

billion and is growing at 15 per cent per annum.

FICCI Federation of Indian Chambers of Commerce and Industry has predicted an

overall growth of culinary products/snack food (10%).

MARKET GROWTH

General growth of the Indian Noodles sector FY 2005-2006

FICCI states that the culinary products and snack category, under which Maggi

noodles is classified, has had a robust growth of 8%.

Growing by a more than robust 21% in current value and 16% in volume, growth in

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noodles will be among the fastest in the various packaged food products in India.

(Refer Appendix A: Indian Instant Noodle Market Growth Graphs)

Current value sales of noodles in stood at slightly over Rs 9 billion, with pouch

instant noodles accounting for more than 66% of the total value sales.

Growth of Maggi Noodles FY 2005-2006

For the FY 2005-2006, the growth of Maggi noodles was an impressive 15%, with

sales at Rs 6.75 billion and profit at Rs 2 billion.

Maggi –PRODUCT LENGTH

1. Noodles

Maggi 2-Minute Noodle ( Masala , Chicken, Curry

and Tomato)

Maggi Dal Atta Noodles ( Sambhar taste)

Vegetable Atta Maggi Noodles

Maggi Rice Noodles (Lemon Masala, Chilly Chow

and Shahi Pulao)

Maggi Cuppa mania (Masala yo, Chilli chow yo)

2. Sauces

Teekha masala

Tomoto chatpat

Imli khata mitha

Tomato ketchup

Hot and sweet

Tomato pudina

Ginger, Garlic & Coriander

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Maggi Oriental Chilli Garlic

Ginger, Garlic & Coriander

3. Maggi Pichko

4. Soups Healthy

Chef Style

- Cream Mushroom

- Sweet Sour Tomato Noodles

- Tangy Tomato Vegetables

Home Style

- Creamy Chicken

- Mixed Vegetable

- Rich Tomato

Chinese Style

- Chinese Hot Sour Chicken

- Chinese Sweet Corn Chicken

- Chinese Sweet Corn Vegetables

- Chinese Hot & Sour Vegetables

5. Maggi soup sanjivni

Amla

Badam

Spinach

Dal

Tomato

6. Maggi bhuna masala

46 | P a g e

Bhuna masala for gravy dishes

Bhuna masala for vegetable dal

7.Maggi magic cubes

Chicken

Vegetarian masala

FOUR P’S OF MARKETING FOR MAGGI

PRICE

Considering the price points in the market for Maggi, it should continue to position

itself in the "snacks" category itself, since few would be willing to accept it as a meal

(Indian Consumption Habits - Noodles still aren‘t taken as proper food item).

Affordable by all income groups.

PLACE:

• The distribution network is well spread

• Easily available in all kirana stores, retail store etc.

• Market share

PROMOTION:

Changed their advertising campaign- focus on health and nutrition.

Celebrity endorsements. E.g . . . . Javed Jafferi Sales promotion in schools and

offices, as the exercise of brand call.

Market research exercise-regards of taste and health issues. This helped maggi to

think about the customer. Distributed free samples-period of new launches.

47 | P a g e

Invited housewives to send new innovative recipes.

Maggi's first product extension was Maggi instant soups launched in 1988. With the

launch of Maggi soups, NIL had become a pioneer in the organized packaged soup

market in India...

Taglines like 'Mummy, bhookh lagi hai' (Mom, I'm hungry), 'Bas 2-Minute,' (Only 2

minutes) and 'Fast to Cook Good to Eat' effectively communicated the product's

benefits to target consumers.

Michael Porter’s Five Forces Model

New entrants

1. Top Ramen

2. Horliks foodles

3. Sunfeast Pasta

Industrial Rivalry

1. Top Ramen

2. Horliks foodles

3. Chowmeen etc.

Suppliers

1. Distributers

2. Raw material

3. Packaging

Buyers

1. Customer‘s mind

set

2. Brand Image

Substitutes

1. Fast Food

2. Soups

3. Pasta

48 | P a g e

SWOT ANYLYSIS

Strengths

Strong brand recall and the product is almost eponymous to the brand.

Market leader with 79.3% market share in terms of value.

Highest advertising share (72% (TV AdEx 2004-05)).

Emotional relationship with the consumer.

A strong distribution network of the parent company

Weakness

Tagged as a product having no health value.

It has tried to bring in innovation but has

failed. (Dal Atta Noodles refer survey noodles).

The product features have remained almost constant since inception in 1983 with

any trial of innovation misfiring.

Market share has fallen from the 80% in

1998-99 to 79.3% in 2005-06

Opportunities

The instant noodles segment is projected to grow at a tremendous rate with the

market size doubling by 2010.

Increase in the potential consumer base i.e. single working professionals and student

population .

49 | P a g e

Rapid economic growth and rising disposable incomes make a strong case for a

premium brand like Maggi.

Upward trend of convenience food consumption.

Huge untapped serviceable upward class rural base

Threats

Competition is increasing with established competitors in other segments are

foraying into the noodles segment seeing the capacity of growth.

Top ramen the prime competitor has come up with new exciting instant noodle

Offerings like cup noodles and mug noodles which threaten to eat into Maggi‘s

market share.

Foreign players like Wai Wai and Rum Pum have forayed into the noodles market

and have made their brand presence in eastern markets while indigenous

Parle is threatening to offer their distribution network to international noodle

brands wishing to make an entry.

Top Ramen has repositioned itself on a health platform with a new baseline ―Get on

Top‖ fortifying its product with calcium and vitamins.

The product as priced higher than its main rival Top Ramen

Horlicks come up with new Horliks foodles.

50 | P a g e

Horlicks

Company profile

GlaxoSmithKline Consumer Healthcare Ltd is one of the largest players in the Health

Food Drinks industry in India. The company is an Indian associate of

GlaxoSmithKline plc, UK. The company's principal activities are to manufacture and

distribute a wide range of healthcare foods, drugs, pharmaceuticals and dairy

products. The products include malted milk food, malted foods, biscuits, energy and

protein foods, milk powders, ghee, milk fluid and milk cream. The company has their

manufacturing facilities located at Nabha in Punjab, Rajahmundry in Andhra

Pradesh and Sonepat in Haryana. The products of GSK Consumer are categorized as

Nutritional and Over the Counter (OTC) products. The Nutritional division includes

health food drinks like Horlicks, which includes Junior Horlicks, Mother's Horlicks,

Women's Horlicks, Horlicks Lite, and Horlicks biscuits, Boost, Viva and Maltova.

The OTC division promotes and distributes a number of products in diverse

categories, including prominent brands such as, Crocin, Eno and Iodex.

GlaxoSmithKline Consumer Healthcare Ltd was incorporated in the year 1958 as

Hindustan Milkfood Manufacturers Pvt Ltd and was promoted by Horlicks Ltd. The

company became public in the year 1961. In the year 1969, Beecham plc acquired

Horlicks Ltd and became the majority shareholder in Hindustan Milkfood

Manufactures Ltd and in the year 1979, Beecham India Pvt Ltd merged with the

company. In the year 1991, the name of the company was changed to HMM Ltd. In

the year 1989, Beecham plc, UK and SmithKline, USA merged to form SmithKline

Beecham plc. The company became part of SmithKline Beecham and the name was

changed to SmithKline Beecham Brands Ltd. Again, in March 1994, the company

name was changed to SmithKline Beecham Consumer Healthcare Ltd, reasserting

their promise of providing healthcare to consumers. In the financial year 2000, the

company acquired two new brands Viva and Maltova along with their patents and

trademarks from Jagatjit Industries Ltd. The company also tied up the

manufacturing capacity of Jagatjit Industries Ltd for the manufacture of Viva and

Maltova on a long term contract. Glao Wellcom plc and SmithKline Beecham plc

51 | P a g e

merged and form a global organization GlaxoSmithKline plc. As the company is an

associate company of GlaxoSmithKline plc, the name of the company was changed

from SmithKline Beecham Consumer Healthcare Ltd to GlaxoSmithKline Consumer

Healthcare Ltd with effect from April 23, 2002. In the year 2002, the company

commissioned their new Spray Drier plant at Sonepat and the commercial

production was started form July 1, 2002. Also, Gussetted Pouch packing operations

were relocated from Nabha factory to a 'State of Art' greenfield facility set up by a

contracted third party at Mangaldoi, Assam. As a result of restructuring process, the

company's packing facility at Kolkata was closed with effect from September 2002.

The company is a consignment sales agent for marketing, selling & distribution of the

brand Iodex with effect form January 1, 2002. In the year 2004, the company has

launched Junior and Mother's Horlicks, Ready-to-Drink Horlicks & Boost and Hot

Vending Machines. In July 2004, they launched Boost Energy Shake, a new chilled

ready-to-drink variant of Boost in Tamil Nadu. Boost Energy Shake will be available

in a 200 ml tetra pack In the year 2005, the company opened a new secondary

manufacturing site (Legacy Foods) at Baddi in Himachal Pradesh. In February 2005,

they launched Horlicks in a new Toffee flavour. Toffee Horlicks is the sixth flavour in

the Horlicks portfolio. The other flavours are Chocolate, Vanilla, Honey Buzz,

Standard and Elaichi. In the year 2006, the company increased their installed

capacity of Malt Based Foods/Malted Foods and Ghee by 3260 MT and 924 MT

respectively. With this expansion the total installed capacity of Malt Based

Foods/Malted Foods and Ghee increased to 94060 MT and 4000 MT respectively. In

the year 2007, the company increased their installed capacity of Malt Based Foods

and Milkrose Baby Foods by 340 MT and 760 MT respectively. With this expansion,

the total installed capacity of Malt Based Foods and Milkrose Baby Foods increased

to 94400 MT and 2200 MT respectively. In the year 2008, the company launched

Women's Horlicks, which is specially formulated for women. New Women's Horlicks

is scientifically designed with a unique combination of Hemocaltm nutrients which

provides 100% of the daily requirement of iron, calcium, Vitamins B2, B6, B12 & C

for healthy blood and its normal function. New Women's Horlicks has no added

sugar and is low-fat. It is available in two exciting flavors- Chocolate and Caramel in

a jar with a unique flip top cap. Also, they launched Active Base and Boost White

during the year. In January 2009, the company launched 'Activ Grow', which is a

52 | P a g e

nutritious product launched for infant population. The product will be sold through

prescription only.

Foodles

GlaxoSmithKline‘s (GSK) newest product Foodles has hit the markets about a month

back in the instant noodle category. GSK, which is world‘s fourth largest

pharmaceutical, research-based company with a wide portfolio[1] of pharmaceutical

products covering anti-infectives, central nervous system, respiratory, gastro-

intestinal/metabolic, oncology, and vaccines products and is known in India for its

healthcare products and nutritional drinks, the most popular being Horlicks. The

company generates a good revenue from the nutritional drinks division in India (in

the range of Rs. 1,500 crore[2]) and now wishes to diversify its product range. But it

remains to be seen if it can compete with Nestle‘s Maggi, the most dominant product

in the said category with an unbelievable market share of 91 % in an industry which

is worth nearly Rs. 1200 crore and growing at 20 percent per annum.

Foodles – The Brand

GSK launched Foodles under the name of Horlicks Foodles with two variants of

noodles. - Regular and Multi-grain. It was first launched in south India which

currently is the stronghold of GSK through the Horlicks brand. It is to go national

within a span of 6 months. The company aims to gain a higher single digit market

53 | P a g e

share within a year or two and establish itself as a player in the salty confectionary

foods division.

Foodles- What has been done

The problem with instant noodles has always been the fact that it is not very healthy.

Keeping that in mind, Maggi few years ago came out with the tag of –―taste bhi ,

health bhi‖ which has helped it in maintaining sales. Foodles has taken this one step

ahead and tried to create an USP out of the health factor associated with noodles. It

has made TV advertisements which highlight the fact that even though it is an instant

noodle, it is healthy and thus should be the consumer‘s choice. Foodles also provides

an "Health Maker" sachet which comes along with the noodles pack which contains

the essentials of 5 vitamins[3]. Foodles has tried to create a product category for itself

by differentiating itself from instant noodles. Also, Foodles is currently trying to

appeal to the upper middle class in the urban areas and placed the product at a

premium price with Its multigrain variant costing Rs 15 for 80 gm compared to

Maggi‘s Rs 10 for 80 gm[2]. Also, to use the distribution channel of Horlicks, initially

single packs of Foodles were given for free. So far, the start of Foodles marketing

strategy has been good, but is it enough to take on the leader of the market of 25

years? The past is not in favour of Foodles and it has also got to compete with brand

like HUL along with Maggi. Let us examine what more strategies can they can adopt

to appeal to the market.

Interesting Facts:-

Horlicks was first invented to substitute milk as baby food

The brand has been endorsed by Amitabh Bachchan on the radio(1960-70), Moon

Moon Sen and her daughters Raima and Riya (1980s) and Vishwanathan Anand

In India, over 2 billion cups of Horlicks are drunk every year!

Biggest market is India

54 | P a g e

6th most trusted brand in India (AC Nelson)

Most trusted health drink brand (Economic Times 04)

More than 50% market share in health drink market.

Evolution

The company believed in Growth through innovation. Previously Horlicks was

imported but as the demands exceeded they set up 2 production units in India to

fulfill the demands of the Indian population. This came as a solution to Indian

market as a health drink.

Then Horlicks entered the biscuit market and later in 1995 they came up with

Junior Horlicks as a baby food supplement. Viva and Maltova were acquired by

the company in 200 and 2001 that increased the product range.

Women‗s Horlicks came into picture initially nursing mothers and then to catering

specific needs of women. Horlicks adopted certain strategies to deal with

competitors and came up with attractive packaging and various flavours.

Horlicks conducted clinical trials and campaigned ―Taller Stronger Sharper‖.

Horlicks segmented the market to increase its market share. It focused on children

to encash their increasing population.

Then it launched Horlicks Lite which is specially formulated keeping in mind

nutritional needs of adults and also for use by people with diabetes.

Horlicks also entered the instant noodle market with Foodles and Nutribar came as

a energy bar focused on the young generation, these two products were focused as

a healthy solution to the existing fad market (plain maggi and energy bars

Recently Chill Dood is launched in the instant milk shake focused on children.

Horlicks is also involved in several campaigns one being the ASHA project

catering exclusively to the needs to the rural markets.

55 | P a g e

variant segment communication

medium

usededium

Junior Horlicks (1995)

People who

are

conscious

about their

kids

nutrition

and better

health.

Pre

schoolers

ad highlighted-

The key message

is need

creation for

nutrition in

preschool

children.

The handwritten

font style

created a sense of

innocence.

A-Z nutrition

along with

DHA for brain

development

Horlicks Ninja (1997)

Children

between 7-

15 years

Organized

nationwide events

like- Wiz kid &

Dream

Team.

Badlo Apne

Bachpan Ka

Size-Clinically

proven in

India that it makes

kids

Taller, Stronger,

Sharper

Introduced in

chocolate,

elaichi & vanilla

flavour to

attract children Mother‘s Horlicks (1997) Pregnant

women

Breast

feeding

women

Ads promoted :-

All round

development of

the baby.

Improvement in

the birth

weight of the

baby.

Improvement in

56 | P a g e

the quality

and quantity of

breast milk

during lactation

Horlicks Biscuits (1992)

Parents

Children

Solid‘

Nourishment

containing 100%

RDA of

calcium.

Available in

standard &

elaichi flavour to

highlight

‗great taste‘ &

‗nourishment‘

factor

Horlicks Nutribar (2009)

Children

Adults

Multi cereal bar

with vital

nutrients, fibre

and honey.

Best suited for

your apetite

anywhere anytime

Horlicks Foodles (2010)

Growing

children

Whole wheat and

nutrients.

Rich in Vitamin

A, Vitamin

C and calcium.

Health maker with

power

vitamins

57 | P a g e

MARKET SUMMARY

FOUR P’S OF MARKETING FOR FOODLES

Product:

Horlicks is a widely regarded and highly respected 130-year-old brand. GSK has four

brands in the health food drinks segment. Apart from Horlicks, which contributes Rs

600 crores in revenue to the consumer healthcare division, it has Boost, Maltova and

Viva – the last three are much smaller brands than Horlicks. Faced with stagnating

sales in the health food drinks segment, the company has chalked out an aggressive

brand push strategy and a revamp for its flagship brand, Horlicks. The relaunch aims

to focus on children as Horlicks was previously considered as a nourishment drink

for old people. The company expects Horlicks contribution to the total turnover to be

around Rs 800 crore which amounts to a major chunk of the company‘s turnover.

Horlicks is a nourishing malted food drink which combines the wholesome goodness

of malted barley, wheat and dairy ingredients. For more nourishment, Glaxo

SmithKline Consumer Healthcare India Ltd (GSKCH) has relaunched its flagship

brand Horlicks. To enable consumers choose different flavours, Horlicks is now

available in Regular, Chocolate, Creamy Vanilla and Honey Buzz varieties in a new

package. Horlicks drinks provide the following essential nutrients: Proteins,

Carbohydrate, Fat, Vitamin A, Niacin, Vitamin B1, VitaminB12, Vitamin E, Vitamin

B6, and Iron & Calcium

58 | P a g e

Price:

HORLICKS

Flavors (Rs)

Elaichi Chocolate Honey Buzz Vanilla

Weight(gm) Jar Refill Pack Jar Refill Pack Jar Jar 200 57 - 57 - - - 500 108 103 108 103 108 108 1000 199 189 - - - - HORLICKS JUNIOR Weight(gm) Jar Refill Pack 200 58 - 500 114 105

Target market:

Earlier Horlicks believed, white drinks are for the entire family in contrast to the

browns, whose prime target audience is children. This is probably because whites–

whose growth rate is faster than the browns–have the added advantage of being

perceived as food which enhances the healthy image of those who are recovering. But

gradually they realized that they have to focus on one segment of market that is

children. Horlicks is now positioned as a pleasurable nourishment drink aimed at

children between the age group of 8 -14. Nowadays children have tremendous

influence on the things purchased for the family and therefore we want children to

prefer Horlicks as a pleasurable nourishment drink. While all the action will be in the

general Horlicks segment, the focus of Junior Horlicks (target segment: kids between

one and three) will continue to remain the same.

Promotion:

The company has earmarked around Rs 10 crores for brand promotion throughout

2003, and 70% of this will be spent in next six months. Sixty-five per cent of the ad-

spend (around Rs 10 crores) will be for the visual medium and the balance for the

print and others. Apart from the high-decibel media campaign, the company also

plans to conduct an inter-school competition called ―Activity 2003‖ in which around

1.5 million students are expected to take part. Unlike its other drink (the Rs 170-

crore Boost, promoted by Sachin Tendulkar); the new Horlicks does not have a brand

ambassador. While all the action will be in the general Horlicks segment, the focus of

Junior Horlicks (target segment: kids between one and three) will continue to remain

59 | P a g e

the same. The brand will continue to talk to the mother since the purchase decision

rests with her.‘

The health drink brand from GSKCH – Horlicks – which has been traditionally

targeted as a ‗great family nourisher,‘ has entered into the highly competitive

segment of instant noodles through its newly introduced Horlicks Foodles, aimed

to explore the category of salty snack food market.

Thus, Horlicks kick-off the Foodles offerings in two healthy variants: Regular and 4

Grain. Both variants come with a trademarked Healthmaker sachet which has 9

Power Vitamins. Besides, the 4 Grain variant is made with nutritious grains like Rice,

Ragi, Wheat and Corn. As a sub-variant, each of the two varieties comes in three

different flavours

The snack food in Noodles as such has no nutrition value (In fact, it is often criticized

as a junk food) but when it is combined with veggies – it tastes better (Probably

better than the plain maida variant!) and could also form a healthy snack for kids.

POSITIONING:

It was initially introduced both a substitute & an additive to milk and it was initially

positioned itself as ―food for convalescing‖ & a nutrient supplement for kids only.

PROMOTION:

Organized nationwide events like- Wiz kid & Dream Team.

Epang Opang Japang .

Say ―No‖ to noodles.

The word noodles replaced with ―Foodles‖.

CAMPAIGN:

―Badlo Apne Bachpan Ka Size‖, takes the thought to the next level by

communicating how Horlicks enables kids to have a bigger, better, childhood while

growing Taller, Stronger, Sharper.

60 | P a g e

Place:

It has a strong marketing network in India comprising over 1800 wholesalers and

direct coverage of over 4,00,000 retail outlets. Horlicks sales have been strong in the

south and eastern markets which contributes about 46 per cent and 47 per cent of

the total sales. Milk-deficient South and East preferred white liquid powders

(Horlicks, Viva, and Complan) as the drink could be prepared with hot water.

Market Share of the Horliks

61 | P a g e

Michel Porters model for Horliks foodles

Industrial Rivalry

1. Maggi

2.Top Ramen

3. Chowmeen etc.

New entrants

1. Top Ramen

2. Sunfeast Pasta

Buyers

1. Customer‘s mind

set

2. Brand Image

Suppliers

1. Distributers

2. Raw material

3. Packaging

Substitutes

1. Fast Food

2. Soups

3. Pasta

62 | P a g e

RESEARCH METHODOLOGY

STAGES IN RESEARCH :

63 | P a g e

Problem Defination

To identify the consumer characteristics of the fast food industry.

To understand the influence on purchasing consumers mind set.

To know about customer acceptance of the product.

To see the perception of consumers between any two fast food region of

Vadodara.

To understand why customer buy a particular product.

To help the company to know what consumer want in the product.

To understand Brand Imagery, Brand Quality perceived by customers, Brand

credibility, consideration, superiority and feelings.

RESEARCH DESIGN:

Research Design:

The research will be carried out in the form of a survey which will be done in

Vadodara. The population has been segmented on the basis of Age Group

Sample Design:

The target population for our study is households. The sample will be selected by a

simple random sampling method .

Sample Size:

The sampling unit is 150 which are divided as follows:

Number of

respondents

150

Age-group 10 – 45

Survey Locations Pune

Age Group 10 - 25 25 - 35 35 – 45

Number of Respondents 50 50 50

64 | P a g e

DATA COLLECTION PLAN

Data Gathering: This study involves data collection (primary research) from different households in

four different areas of PUNE

SURVEY RESULTS:

1. Do you consume ready to eat food like noodles and pasta?

Many people eat now days ready to eat food. Here maximum no is 82%.in this

segment working women are there so they preferred ready to eat food such as

noodles, pasta, etc.

2. Which of the following food item would you consume?

0

10

20

30

40

50

60

Maggi Top Ramen foodles pasta

Chart Title

100

45

Yes No

0

20

40

60

80

100

120

Chart Title

65 | P a g e

Most of people eat Maggi such as (55% ) and top ramen. Foodles has gained the

market share of Maggi .Better advertisement campaign of foodles has been created

awareness of foodles. But still Maggi has more demand than the Foodles.

3. What is the frequency of consumption?

The frequency of Maggi consumption is more than any other products.

Maggi is still market leader in this segment.

4. What is the brand that comes to your mind when we say the word noodles?

62

33 27

18

0

10

20

30

40

50

60

70

Everday more then a week once amonth No particular pattern

Chart Title

Maggi , 61

Top Ramen, 33 Horliks Foodles , 26 Sunfeast pasta,

20

0

10

20

30

40

50

60

70

Maggi Top RamenHorliks Foodles Sunfeast pasta

Chart Title

66 | P a g e

Brand Associations:

Sources of Brand equity like brand association of Maggi as a Brand was found

highest with the age group of 10-25 and the product category associated with it was

the noodles category 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 .The

implications from the findings discussed above seem that Maggi has good brand

association in terms of noodles. Consumers presume Maggi as Noodles and the

company‘s philosophy of projecting the brand as noodles brand seem to be viable in

this regard.

5. Are you aware of Horlicks foodles ?

There are total number of 84 respondents who said that they are aware of horlicks

but there are only 56 respondents who not aware of the same..

84

56

0

20

40

60

80

100

YES NO

Chart Title

67 | P a g e

6. Would you like to try Horlicks Foodles?

As Foodles has Brand name Horlicks has been associated with it so many people said

to try it. Also the impact of advertisement has been created the curiosity regarding

the foodles. So people are ready to try it.

Horliks come with a trademarked Health maker sachet which has 9 Power Vitamins.

Besides, the 4 Grain variant is made with nutritious grains like Rice, Ragi, Wheat and

Corn. As a sub-variant, each of the two varieties comes in three different flavors.

7. How do you aware of Horlicks?

The awareness through advertisement has shown by more than any other medium of

media. Then newspapers have also shown the positive impact regarding to foodles. It

is suggested that foodles has to concentrate on TV advertisement. Horliks

83

57

0

10

20

30

40

50

60

70

80

90

Yes No

23

31

17

44

12 13

0

5

10

15

20

25

30

35

40

45

50

Friends Newspaper Hording T.V ads Radio Family

68 | P a g e

advertisement ―SAY No TO NOODLES‖ which is gaining popularity and attracting

customer also giving an impact on the minds of customers who are health conscious

specially mother who are very worried about their growing child‘s health. Already

Horliks has gained named in the segment of health drink so they are saying that our

noodles are healthy to you and your family through various advertisements.

8. On a scale of 1 to 5 rate Maggi on the following parameters

(1 very good, 2good, 3medium, 4 bad, 5very bad)

9. on a scale of 1 to 5 rate Horlicks foodles on the following parameters

(1 very good, 2good, 3medium, 4 bad, 5very bad)

98 87 89

99

78

56 45

86

0

20

40

60

80

100

120

98

87 89 99

78

56 45

86

0

20

40

60

80

100

120

69 | P a g e

10. According to you which age group prefer Maggi most?

11. According to you which age group prefer foodles most?

63

32 26

19

0

10

20

30

40

50

60

70

4– 12 13– 26 27- 40 41– above

58

41

25

16

0

10

20

30

40

50

60

70

4– 12 13– 26 27- 40 41– above

70 | P a g e

12 .Which of the following do you think healthier product?

13. Which feature out of the following instigates you to buy the product of your

choice?

38

51

23

28

0

10

20

30

40

50

60

. Maggi Horliks Foodles Top Ramen Sunfeast Pasta

Series1

48

34

45

Family Individual Decision Promotional/advertisement instigated

decision

0

10

20

30

40

50

60

71 | P a g e

14. Do you keep switching on products?

15. Demographic Information

Age:

Gender: M-------- F---------

Education: --------------------------

Occupation: ----------------------------

Income: -----------------------------

Children‘s: -----------------------------

48

92

0

20

40

60

80

100

Yes No

72 | P a g e

RECOMMENDATIONS

After the conducted study following recommendations could be sited for Maggi

Brand.

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 attributes related to Health

like Nutrition values, % of Vitamins, Proteins etc.This would help in customers

perceiving the product as Healthy

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.

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.

Maggi Today The year 2010 saw India leading in worldwide Maggi sales. The brand

has grown to an estimated value of Rs 160-170 crores and contributes at least 8–9%

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 Rs 300 crores. But yes, the

parent company, Nestle India Limited has certainly encouraged the brand to enter

into other culinary products

73 | P a g e

STPD ANALYSIS OF MAGGI BRAND

Segmentation: Market Segmentation divides the heterogeneous market into

homogenous groups of customers who share a similar set of needs/wants and could

be satisfied by specific products. Maggi Brand have segmented the market on the

basis of lifestyle and habits of URBAN FAMILIES.

Target: Market Targeting refers to evaluating and deciding from amongst the

various alternatives, which segment can be satisfied best by the company. The Maggi

Brand have mainly targeted the Kids, Youth, Office Goers & Working Woman which

falls into the category of ―convenience-savvy time misers‖ who would like to get

something instant and be over with it quickly.

Positioning: Market Positioning is the act of designing the company‘s offerings and

image to occupy a distinctive place in the minds of the target market. The goal of

positioning is to locate the brand in the minds of consumers to maximise the

potential benefit to the firm. Maggi has positioned itself in the SNACKS category and

not in the meal category since Indians do not consider noodles as a proper food item.

Therefore Maggi have developed its brand image of instant food products with

positioning statements such as ―2 minutes noodles‖ and ―Easy to cook, good to eat‖.

Differentiations: Points-of-difference (PODs) are attributes or benefits

consumers strongly associate with a brand, positively evaluate and believe they could

not find to the same extent with a competitive brand. The Maggi Brand have also

differentiated its brand image from its competitors in terms of taste, flavours and

packaging. Maggi have launched wide varieties of products in different flavours

which can attract larger set of customers. Maggi products are also available in

different sizes catering to different customer needs.

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STPD Analysis of Horliks

Segmentation: Market Segmentation divides the heterogenous market into

homogenous groups of customers who share a similar set of needs/wants and could

be satisfied by specific products. Horlicks have segmented the market on the basis of

lifestyle and habits of URBAN FAMILIES.

Target: Market Targeting refers to evaluating and deciding from amongst the

various alternatives, which segment can be satisfied best by the company. The

Horlicks Brand have mainly targeted the Kids, Youth, Office Goers & Working

Woman which falls into the category of ―Health-savvy ‖ who would like to get

something instant and be over with it quickly and it will be healthy.

Positioning: Market Positioning is the act of designing the company‘s offerings and

image to occupy a distinctive place in the minds of the target market. The goal of

positioning is to locate the brand in the minds of consumers to maximise the

potential benefit to the firm. Foodles has positioned itself in the SNACKS category

and not in the meal category since Indians do not consider noodles as a proper food

item. Therefore Foodles have developed its brand image of instant food products

with positioning statements such as ―No to noodles‖.

Differentiations: Points-of-difference (PODs) are attributes or benefits

consumers strongly associate with a brand, positively evaluate and believe they could

not find to the same extent with a competitive brand. The Foodles Brand has also

differentiated its brand image from its competitors in terms of taste, flavours and

packaging. Foodles have launched wide varieties of products in different flavours

which can attract larger set of customers. Foodles products are also available in

different sizes catering to different customer needs.

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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 Pune 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.

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Bibliography

Books and Readings

Marketing – Philip Kotlar

Consumer behaviour-Michel R Solomon.

Websites

www.Google.com

www.Yahoo.com

www.gsk-ch.in

www.nestle.in/

http://trak.in/tags/business/2010/08/05/horlick-foodles-maggi-noodles/

en.wikipedia.org/wiki/Maggi

bestadreviews.blogspot.com

www.consumerpsychologist.com/

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Annexure

Questionnaire

1Do you consume ready to eat food like noodles and pasta?

2Which of the following food item would you consume?

3What is the frequency of consumption?

4 What is the brand that comes to your mind when we say the word noodles?

5 Are you aware of Horliks foodles

6 How do you aware of Horliks?

7 Would you like to try Horliks Foodles?

8 On a scale of 1 to 5 rate Maggi on the following parameters

(1 very good, 2good, 3medium, 4 bad, 5very bad)

9 on a scale of 1 to 5 rate Horliks foodles on the following parameters

(1 very good, 2good, 3medium, 4 bad, 5very bad)

10 According to you which age group prefer Maggi most?

11. According to you which age group prefer foodles most?

12 .Which of the following do you think healthier product?

13. Which feature out of the following instigates you to buy the product of your

choice?

14. Do you keep switching on products?

15. Demographic Information

Age:

Gender: M-------- F---------

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Education: --------------------------

Occupation: ----------------------------

Income: -----------------------------

Children‘s: -----------------------------