The business environment is featured with complex and unpredictable elements and firms are often incapable of understanding the elements which create difficult situations for firms to cope with. FMCG market always passes through immense competition. This present discussion is based on a case study of Maggi which has once been considered a market leader in the particular products segment. Maggi noodles had market dominion and faced severe competition from many organizations in the market. The firm is known to have taken all out strategies for establishing products amid stiff competition. Maggi perhaps is the perfect example of a FMCG brand that has efficiently utilized the mechanism of advertising to transform societal behaviours of food consumption in the modern age. The brand’s potent advertising strategy hinged on creating a balance between the fundamental elements of health and taste in a consumable along with the striking feature of 2-minute preparation time which instantly served the need of consuming a nutritious product among the new age fast-paced working parents and their offspring. The strategic promotional aspect of combining taste, health, less preparation time, and constant product innovation suiting the changing preferences of the consumers catapulted the brand to be used as a reference to noodle in the modern age. However, the successful strategies of business in the noodle segment could not be replicated by NIL in the other product segments of the brand. The company has launched some health products such as vegetable atta noodles as most important among those. At the end of this discussion, some new product variants have been discussed and the products could be introduced by the firm to strengthen its healthy products segment.
Organizations resort to advertising strategies considering needs of advertisements to shoot up products’ saleability. Advertisements have several channels such as direct marketing, social media advertisements, print, and electronic media and many others. All these channels of advertisements do the basic things for a particular brand which is awareness development among people or target customers about the particular product. This is the stepping stone for the success of a brand. People often keep them busy in understanding a brand and its products as it is believed that products or a brand do all the talking when is presented through a channel of advertisements. Benefits of advertisements are manifold and the main factor is to select the most suitable strategy for products promotion among target customers. A brand with diminishing popularity could find acceptance afresh among customers if its advertisements have the capacity to catalyze existing and potential customers to make a purchase decision. Therefore, communication with target customers and present loyal consumers is the most vital attribute of advertisements and the greater utility of products finally justifies the advertisement. In several situations, advertisements help a brand to ensure survival in competition and a good but frail brand achieves new lease of life. On the other hand the popularity of an established brand goes up more. Through advertisements, brands often reposition their products which create the new possibility of sales and revival process amid competition could be ensured. This becomes possible when the popularity of products increase and this is only because of advertising in relation to products.
Advertising efficacy remains most crucial to business success since the business could notch a significant amount of profit from elevated sales triggered by promotion and advertisements. On the other hand, a business might slump to failure if advertising strategies are not worked upon better. The business of NIL based on its product Maggi has witnessed many roller coaster rides and this portion of the report has shed a knowledge-based discussion based on analysis of advertisement strategy taken by the company. Top Ramen was another company that started building up its brand name and posed huge competition for the products under the Maggi brand (Best, 2012).
Advertising strategy circling around Maggi products kicked off with a change in the formulation of products Maggi noodles for ensuring that sales are revived. Formulation of magi noodles was changed but this has not worked for the brand as customers refused it for not having the previous taste. Therefore this was a fallible effort for changing the sales fortune of the brand. Products promotion regarding this could not stand up to the expectation and could not be anyway blamed since the new formulation was the main factor which spoiled the sport. NIL introduced Maggi 2 minute noodles in the Indian market and was unable to understand the mood of the conservative people of the country as they are more interested to pick conventional dishes rather than packaged and canned food. This failure has not persuaded the firm to undertake a thorough research in the market before launching the product. Therefore, it is evident that the company did not take a logical strategy of advertising and promotion. Later on, NIL identified the brand with fun quotients that could be related to the moods of children (Hollensen, 2010). Accordingly, the tagline was changed to “fast to cook good to eat” and this was a fitting technique of promotion to maintain the pace of products and competition in the market. This speaks more of positioning by the company and is seemingly better than the previously failed one. However, the firm may not have adopted market research but knowledge gathering by the company regarding children’s fondness for the products is worth appreciating. NIL’s aggressive advertising strategy was a delayed application of core strengths to promote its products but the wait was worth it (Mullins et al 2010).
Some subsets of advertising strategies of the firm are distribution, communication with target customers and repositioning and the all paid off more or less for the firm. The tagline like ‘as 2 minutes’ was hugely emotive and customers would relate the products to their needs and demands amidst their tight schedules. Promotion of sauces and ketchup took the support of brand extension along communication with target customers about the products’ usefulness and time-saving and taste bud teasing elements (Anderson, Narus, and Narayandas, 2009). The first product extension of Maggi was instant soups that became successful in the Indian market. This sheds adequate light on knowledge development of promotional strategies of NIL which had focused on seizing on the market opportunities by depending on the brand name Maggi. Therefore, the initial hiccups from products failure were managed by NIL and the advertising strategy that garnered criticism became commendable which is attributable to the inclusion of some elements or techniques of advertising into the broad and simplified promotional views. NIL’s promotions were split into some categories. Aggressive advertising was preceded by a change in formulation accompanied by a minuscule volume of effort to adopt a reasonable level of advertising effort. Distribution, the offer of free samples, positioning, and repositioning, better communication with target customers are the existent elements of overall planning of advertisement.
NIL’s celebrity endorsement for promoting Maggi sauce was successful and was not essential since the brand started regaining its position in the market. However the tagline ‘it’s different’ was catchy and worth watching as two then most popular stars Pankaj Kapoor and Javed Jaffrey made the ad funny and attractive. But NIL had to count possibly a hefty price for the endorsement although product related success was of all justifying the celebrity endorsement as a strategy of advertisement for promoting Maggi sauce (Wilson and Gilligan, 2012). NIL got small packs of Maggi noodles endorsed by renowned actress Preity Zinta and it was expected by the company that leading position of the brand and the products will not be swayed by the recession hit market from the perspective of FMCG sector. However, the strategy of products promotion by the popular actress was supportive for the firm as small packs of Maggi noodles had played an influential role in strengthening the financial position of the overall brand and the company in the competitive market (Belz and Peattie, 2012).
Magi instant noodles had been the important product category under the brand Maggi. Initially, the market was not responsive to the new formulation of noodles but later on, sales were survived when NIL re-launched the old and preferred noodles in the market. At the initial phase the brand experienced hurdles in the noodles segment. Advertisements were not even supportive for causing an escalated sale. But gradually the product Maggi noodles started gaining its position in market and people started liking this item as easy to cook the product. Particularly for women and children, the product achieved huge popularity. There are some reasons for the brand to sustain the leading position in the market especially in the Maggi noodles segment (Beverland and Lindgreen, 2010). Old formulation of noodles was the cause the product achieved huge acceptance and preference among customers and the immediate result was the achievement of 80 percent share by NIL in Maggi noodles segment. During the FMCG recession in 2001and 2002, the sale of magi noodles was not affected much as NIL launched small packs that came less pricey. The distribution network of the firm was strengthened and availability of the small packs of noodles was ensured by the company. NIL took an aggressive approach to make products available through its distribution network. This is the reason Maggi noodles sold hugely and the position of leadership was sustained in the market even at the time of recession in the FMCG sector seeped in. The success of Maggi noodles was also due to the market penetration strategy was taken by the firm in the guise of small pack availability of Maggi noodles (Malhotra and Peterson, 2014). As markets slowly revived from the recession, more large sizes of packets started fetching extra sales for the brand. From the second quarter of 2002, the market was captured by Maggi noodles and Top ramen slackened its grip and sales were eaten up by Maggi noodles. The brand image of Maggi noodles became higher and competitive position was favorable for the brand and leadership like situation prevailed for the brand depending on Maggi noodles (Michaelidou, Siamagka, and Christodoulides, 2011).
The discussion above represents the market leadership of Maggi noodles in the market. This was supported by better pricing strategy and small packs of noodles to support penny wise customers at the time of prevalent recession. Therefore it was obvious for NIL to replicate the strategy for other products and the effort followed without any delay but success was not possible and varieties of reasons were behind this. Maggi soup in for-one serve pack was priced at Rs 3 but the competition from Knorr soups was high and the idea of the small pack at the small price was not successful for NIL in the soup segment as packages soup segment was dominated by Knorr soups (Lovelock, Wirtz and Chew, 2009). Maggi pickles performed badly in markets and from NIL’s side, there was forced discontinuation of Maggi pickles since customers were not loyal to branded pickles. Ready to cook a mix of the recipe was launched but the market was already flooded with products of competitors and NIL was unable to pervade the existing competition and the same strategy could not be successfully replicated. Competitors such as HLL and ITC posed a huge level of competition and their spices, as well as a paste of cooking, was in economic range unlike premium category of items of NIL. Top ramen launched cup noodles that competed with Maggi noodles and HLL’s soupy snacks were available in four types which were positioned against Maggi noodles (Hutt and Speh, 2012). The price was affordable as only Rs 5 for the product. Therefore the company had to undergo a lot of struggles to replicate the same strategy that worked for Maggi noodles but other product categories were not benefitted and the company was not able to successfully replicate the strategy. Additionally price competition was big with other players such as Heinz and Kissan and this is another reason NIL could not make it’s all products equally successful as Maggi noodles in the market. Nature of competition in the market was aggressive and presence of many brands together with price competition worsened the situation for NIL to taste success in each and every product category in the FMCG market in India (Moutinho, 2011).
Importance and success of healthy products are judged on several counts and these are health perspectives, acceptance among customers and sales as well as profit increment for the particular brand. The healthy products of NIL accounted for vegetable atta noodles rich in fiber, minerals, and vitamin. NIL dodged the question of whether Indian customers were conservative or not and focused on wellness and health of customers through its nutritional products (Gaddam, 2008). The repositioning of Maggi products as a healthy product by NIL was a fitting and justified as the concept became popular among customers who are always health conscious. Customers had changing preferences and highlighted aspects were taste and health factors. NIL got to be aware that customers were not as much conservative as were in the 1980s. Instant healthy products were accepted by them and NIL on basis of this knowledge captured the opportunities and market situation was brought in its favor. Maggi healthy soups were available in several types and were accepted by many customers. On basis of the discussion herein, it is not difficult to conclude that NIL has rightly repositioned Maggi as a healthy product and market was eventually dominated by the products and financial benefits were also availed by the company based on health products (Reid and Bojanic,2009).
NIL has been able to position Maggi as an established brand in every household in India although competition is prevalent. From this ground, the firm can think of introducing some healthy products which can be averse to competitions thinking on the font that competitors’ products do not include new products segment (Grönroos, 2011). The company must not forget that the price of the products and pricing strategy could be the important determinants for success even products are enriched with quality and health factors. With these aspects intact, NIL could think of launching three more products variants in health products segment to meet with growing needs among customers. These products could be vitamin water, fruit water, and healthy cooking oil to serve the requirements of customers who are most considerate on health-related aspects included in products (Sherlekar and Gordon, 2010).
Vitamin water, fruit water, and healthy cooking oil are important for the company. Firstly the products are not in the current product portfolio of NIL. Secondly, Competition could be less if the three types of products can be of actual quality without any kind of adulteration. Additionally, the company needs to focus on sourcing better and organic ingredients to produce the end products (Alvarez, Casielles and Martín, 2009). Vitamin water and fruit water can be accepted by the customers if the products could detoxify their physical system. Healthy cooking oil could pull in huge customers since maximum customers have a great amount of qualm regarding conventional cooking oil. Therefore genuinely prepared and purely produced healthy cooking oil can be a game-changing plan for the company and customers can be delighted if these products are of organic ingredients. It should be considered by the company that utmost level of care to be taken so that the makings of products stay away from any kind of adulteration (Bresler and Lubbe, 2014).
Conclusion:
Maggi noodles became a pioneer in the market and during the recession also, the brand was efficiently functional in the market. The advertising strategies included positioning and repositioning, communication, distribution, and products promotion through free offers. NIL also adopted celebrity endorsement to promote the products in competitive markets. Small packs of Maggi noodles helped the company to steer through a phase of recession but the same strategy was not equally successful for other products. However, the Maggi noodles maintained leadership in markets. The brand focused on health products and vegetable atta noodles were the most important product of the firm in this segment. The firm needs to take utmost care for launching its health products such as vitamin water, fruit water, and healthy cooking oil so that the products could be kept free from adulteration.
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