Page 9 - DMGT508_PRODUCT_AND_BRAND_MANAGEMENT

Product and Brand Management

Notes
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Case Study Repositioning Maggi

estlé India Ltd. (NIL), the Indian subsidiary of the global FMCG major, Nestlé
SA, introduced the Maggi brand in India in 1982, with its launch of Maggi
N2 Minute Noodles, an instant noodles product.
With the launch of Maggi noodles, NIL created an entirely new food category – instant
noodles – in the Indian packaged food market. During the 1990s, the sales of Maggi
noodles declined, and this was attributed partly to the growing popularity of Top Ramen,
another instant noodles product. In order to improve sales and attract more consumers,
NIL changed the formulation of Maggi noodles in 1997. However, this proved to be a
mistake, as consumers did not like the taste of the new noodles. In March 1999, NIL
reintroduced the old formulation of the noodles, after which the sales revived.

Over the years, NIL also introduced several other products like soups and cooking aids
under the Maggi brand. However, these products were not as successful as the instant
noodles. In the early 2000s, Maggi was the leader in the branded instant noodles segment,
and the company faced little serious competition in this segment.
In the early 2000s, NIL started introducing new ‘healthy’ products in accordance with the
Nestlé Group’s global strategy to transform itself into a health and wellness company.
NIL also adopted the same strategy for the Maggi brand with the launch of the Maggi
Vegetable Atta Noodles (Vegetable Atta Noodles), a ‘healthy’ instant noodles product
made of whole wheat flour and vegetables (instead of refined flour), in 2005. The Dal Atta
Noodles were another variant of Maggi’s healthy instant noodles.
Because of its first-mover advantage, NIL successfully managed to retain its leadership.
Questions
1. Analyse three benefits that NIL derived by repositioning Maggi.

2. What do you learn from the case above?

Source: www.icmrindia.org
Firms can obtain new products internally or externally. External sourcing means the company
acquires the product or service, or obtains the rights to market the product or service, from
another organization. Internal development means the firm develops the new product itself.
This is riskier than external development because the company bears all of the costs associated
with new product development and implementation. Collaborations, which include strategic
partnerships, strategic alliances, joint ventures, and licensing agreements, occur when two or
more firms work together on developing new products.

1.2.3 Product Life Cycle

We have all heard about the product life cycle can be divided into four phases namely introduction,
growth, maturity and decline. On the basis of these stages, product planning is done. The life
cycle concepts on which a product planning team works are shown in Figure 1.2.

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