Maggi noodles swot analysis free essay sample

The SWOT analysis of Maggi brand clearly indicates the strengths of Maggi as a Brand in Indian market. The Brand was found to be a leader in its category of Noodles, with strong customer loyalty. Intensive distribution of Maggi as a Brand was seen in urban areas of the country. The major threats of the brand as shown in the figure below indicates that Maggi has made several attempts to revamp itself as a â€Å"Healthy Product† but till date its perseverance towards the tag line is low by the consumers. The brand is in the growth stage of product life cycle with a strong inclination towards the maturity stage. Strengths Maggi have now become the Market leader Brand loyalty is at the highest point of the consumers.. Innovative flavors for Indian taste buds are being introduced regularly. Advertising strategy is very effective. Market Leader in Their Segment. It enjoys Strong Brand Loyal Consumer Base. We will write a custom essay sample on Maggi noodles swot analysis or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Wide Range Of Distribution Channel Product is being launched According To the Need of Indian Consumer. The Product is also innovative in nature. Established Family Brand Strong Global Corporate Brand ( Nil ) Specialization In Food Processing Category Marketing And Distribution In Urban Market Presence Of Other Product Segments Of Food Category : Dairy Products, Chocolate, Infant Foods Pioneer and Leader So 1st Mover Advantage in Noodles, Sauce, Ketchups And Soup Market. Symbolization of Warm, Family Shelter. Weakness Generic Brand to Noodles in India  · Low rural market presence constraints  · Uniform Brand for all food category  · Brand Proliferation Product are dependent on each other Not so much presence in rural market Heavily dependent on one flavor Minor distribute problems Health related issues Opportunities Growing package and canned food market in India by 15% annually.  · High brand awareness of Indian consumer. other product category like Biscuits, Chips and Ready to Eat Market still unexplored.. Opportunity to be substitute to other snacks category of food products. Unexploited rural markets Increasing no. of working youth Affinity of Indians to Chinese food Increasing number of working youth Product has been acceptable in youth category Shift to rural market Changing preference of consumer towards Chinese food and fast food. Can foray into other food markets with its strong Brand name. Threats Competitors with long history in product category Internationally like, Heinz Sauce and ketchups of Heinz Indian, Top Ramen in Noodle and  · Knorr Soups.  · Single product focused competitors like Heinz sauce and Wai Wai Noodles.  · Less Entry Barriers in the Market segment for product category  · ITC‘s strong base in Indian Market.  · Substitute Product to Product Segment. Price war with competitors. Strong presence of regional competitors Consumers don‘t perceive it as a â€Å"Healthy Product†. So from the above SWOT analysis, we can come to conclusion that the Maggi has a many strength compared to its weaknesses and has many opportunities against the threats. 4. 2 PEST Analysis: ?Political Factors Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some examples include: tax policy employment laws environmental regulations trade restrictions and tariffs political stability Economic Factors Economic factors affect the purchasing power of potential customers and the firms cost of capital. The following are examples of factors in the macro economy: economic growth interest rates exchange rates inflation rate Social Factors Social factors include the demographic and cultural aspects of the external macro environment. These factors affect customer needs and the size of potential markets. Some social factors include: health consciousness population growth rate age distribution Technological Factors Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some technological factors include: RD activity automation technology incentives rate of technological change. 1. 3 STP ANALYSIS OF MAGGI BRAND: ?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. Maggi Brand has segmented the market on the basis of lifestyle and habits of URBAN FAMILIES. Segmentation-Based on 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 â€Å"convenience-savvy time misers† who would like to get something instant and be over with it quickly. Initially Maggi was targeted at the working woman and later the upper middle class kids. Maggi was a sponsor for Hum Log, a popular television show on Doordarshan, India‘s sole channel in 1984. Maggi is now targeting its products at the entire family and not only kids. Maggi has recently launched â€Å"MAIN AUR MERI MAGGI† campaign in commensuration of 25 years of Maggi in India. ?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 â€Å"2 minutes noodles† and â€Å"Easy to cook, good to eat†. 4. 4 Product Life Cycle: A new product progresses through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix. 1. Introductory stage: [Full-scale Launch of New products] Product branding and quality level is established and intellectual property protection such as patents and trademarks are obtained. Pricing may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs. Distribution is selective until consumers show acceptance of the product. Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate potential consumers about the product. High failure rates. No competition. Frequent product modification. Limited distribution. High marketing and production cost. Promotion focuses on awareness and information. Nestle India Limited (NIL), the Indian subsidiary of the global FMCG major, Nestle SA, introduced the Maggi brand in India in 1982, and with its launch of Maggi 2 minutes 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. Because of its first-mover advantage, NIL successfully managed to retain its leadership in the instant noodles category. 2. Growth stage: [Offered in more sizes and flavours] Product quality is maintained and additional features and support services may be added. Pricing is maintained as the firm enjoys increasing demand with little competition. Distribution channels are added as demand increases and customers accept the product. Promotion is aimed at a broader audience. Increasing rate of sales. Entrance of competitors. Initial healthy profits. Promotion emphasizes brand ads. Prices normally fall. Development costs are recovered. 10 yrs back it enjoyed around 50% market share in this segment which was valued at around 250 crores. During 1990s, the sales of Maggi noodles declined, due to growing popularity of Top Ramen and other instant noodles product. In order to improve sales, NIL changed the formulation of Maggi noodles in 1997. However, it proved to be a mistake, as consumer did not like the change of the noodles. In March 1999, NIL reintroduced the old formulation of noodles, after which the sales revived. Over the years, NIL also introduced the other products like soups and other cooking aids under the Maggi. 1. Maturity stage: [many consumer products are in Maturity Stage] Product features may be enhanced to differentiate the product from that of competitors. Pricing may be lower because of the new competition. Distribution becomes more intensive and incentives may be offered to encourage preference over competing products. Promotion emphasizes product differentiation. Declining sales growth. Saturated markets. Extending product line. Stylistic product changes. Heavy promotion to dealers and consumers. Prices and profits fall. In 2003 Hindustan Lever Ltd was all set to take on Nestle‘s best selling Maggi 2-minutes noodles by launching a new category of liquid snacks under its food brand, Knorr Annapurna. The new product, called Knorr Annapurna Soupy Snaxx, was priced aggressively at Rs 5 and had 4 variants: 2 chicken option and 2 vegetarian. Like Maggi, soupy snaxx will be an in-between-meals snack and will be targeted at all age groups, particularly office-goers. 2. Decline stage if no product innovation is brought: [Rate of decline depends on change in taste or adoption of substitute products] Maintain the product, possibly rejuvenating it by adding new features and finding new uses. Harvest the product reduce costs and continue to offer it, possibly to a loyal niche segment. Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product. Long run drop in sales. Large inventories of unsold items. Elimination of all non essential marketing expenses.