Executive Summary of Nestle Maggi

Rachit Jain

170201095

Section-C

Executive Summary of Nestle Maggi

Introduction

In June 2015, Maggi was banned by FSAI in India after samples showed excess level of lead and MSG.The ban soon spread to Singapore and Nepal forcing Nestle to withdraw the entire stock worth Rs. 2.1 billion from the market in addition to Rs. 1.1 billion as the additional cost of materials.

The Maggi Crisis

In Uttar Pradesh, the sample Maggi was found to contain 17ppm of lead against the permissible limit of 0.01 ppm. Nestle refuted the claims stating that the actual lead content of maggi was 1% of the permissible limit.

Losses

Nestle India suffered 20% revenue loss and Nestle stock fell by 15% resulting in market capitalization loss of Rs. 100 billion. Also 1500 permanent employees were shifted to training activities and trade building exercises. Also, the spice suppliers to Maggi faced losses.

The Role of Pricing

In 2014, Nestle recorded its slowest sales growth on previous 5years. The Maggi Crisis further aggravated the situation.. Thus all competing brands such as TopRamen, Bambino etc had to be mapped. The situation largely benefitted Patanjali Ayurvedic Limited.They sold their atta noodles at Rs.15 as compared to equivalent size of Maggi.

The urgency for a comeback

Emerging economies contributed 43% of Nestle's overall revenue and was expected to further increase that share.Maggi controlled 63% of the noodles market.Indian manufactured Maggi products were directly exported to Canada,UK, Singapore and Kenya and sold through third parties in USA, Australia and New Zealand. Therefore, the current Maggi crisis was of extreme importance to Nestle.

The Existing Positioning

All previous promotional campaigns for Maggi had consistently communicated a sense of happiness .The 3 most successful Maggi's project in India were : Me and Meri Maggi; Meri Maggi : Two Minute mein Khushiyan; #HealthysEnjoyable

A New Positioning Strategy

Maggi's recent safety controversy required a complete overhaul of the value communication strategy in an attempt to regain the market position that Magggi had enjoyed for many years in India. Health and safety were the key values to be communicated to customers. The challenge was to reposition the brand

Gaurav Bishnoi     Section C   170201149   IMT DCP 2017-19     2nd Sem    08-Oct-2017

Marketing Program Design     Course Coordinator : Distinguished Prof.Dr. N Delener

Executive Summary of Nestle Maggi