MaggiNoodlesin India:TheRevival Challenge€¦ · Analysis. OurCustomer ... Price*and* Product •...
Transcript of MaggiNoodlesin India:TheRevival Challenge€¦ · Analysis. OurCustomer ... Price*and* Product •...
Maggi Noodles in India: The Revival Challenge MOORE SCHOOL OF BUS INESS
BRETT BURNS , ASHL ING GR IFF IN , ELL IE GARDNER , ROSS HOGAN
JANUARY 5 , 2016
MeeHng ObjecHves I. Analyze Maggi’s current posi6on in the market
II. Evaluate alterna6ves to resolve crisis
III. Determine ac6onable steps in moving forward to regain market share, restore consumer confidence, and restore our brand
CriHcal Success Factors
Consumer Confidence
Market Share
Brand Reputa6on
BoGom Line
Key Performance Indicators
Measuring Success:
Posi6ve Press Recep6on
Quality Control
Achievements Restore Sales Posi6ve Net
Income Response Time
Ideal Crisis CommunicaHon Strategy
Establish Single Point of Contact
Hire Legal support
Hire PR firm with specialty in crisis management
Set up blog, website, twiGer, facebook page to communicate ac6ons
Ideal Crisis CommunicaHon Strategy Internal Communica6on • Employees should not comment to media
External communica6on • Fast response 6mes • Keep media abreast as much as possible
Fix the Problem • Internal & external inves6ga6on
Ensure it does not happen again
Analysis
Our Customer Students Kids Bachelors Moms
Commuters Major Purchaser
Affordable Easy Snacks vs. Meals Safe
Our customer hasn’t changed – we just need to reassure them Maggi is safe
Indian Market
Popula6on: 1.2 billion
GDP 1.88 trillion
Median age 27
IMF predicts 7% growth through 2024
Large rural markets largely
untapped
Fast-‐Moving Consumer Goods Market
One of India’s fastest-‐growing markets
Includes ready-‐to-‐eat foods, soaps, shampoo
products, etc.
Only reaches about 1/3 of the popula6on via urban
markets
Market Analysis
Maggi Noodles, 24%
Other Products, 76%
Nestle India Ltd. Revenue
Maggi Noodles, 90%
Other Brands, 10%
Noodle Market Share
$40 B Rs Market
Financial Performance
77.0
86.1 91.0
98.5
2011-‐12 2012-‐13 2013-‐14 2014-‐15
NIL REVENUE IN RS BILLIONS
Net Profit Margins
-‐2
0
2
4
6
8
10
12
14
Net Profit M
argin (%
)
Profit Margins
Jun-‐14 Mar-‐14 Dec-‐14 15-‐Mar Jun-‐15
Stable Profit Margin
un6l crisis
CompeHHon
AlternaHves
AlternaHves • Put crisis behind us • Move on to regain share “Fresh Start”
• Overhaul systems • Delay product launch Wait it Out
• QA & Crisis Control • Implement changes • Move on to regain market share
Address, Fix, and Move On
AlternaHves • Put crisis behind us • Move on to regain share “Fresh Start”
• Overhaul systems • Delay product launch Wait it Out
• QA & Crisis Control • Implement changes • Move on to regain market share
Address, Fix, and Move On
ImplementaHon Plan
Quality Assurance Chief Quality Control Officer
External Quality Reviews
Revamp Quality and Safety Standards • Implement/6ghten scorecard systems among suppliers • Tie compensa6on to QC and safety objec6ves • Training for employees and managers around safety and quality
Supply Chain Audit • Review against new quality standards • Consider switching if standards not met
CommunicaHon: Internal Communicate policy changes quickly and effec6vely
Establish a crisis response/communica6on team
Circulate current food safety data
Open communica6on and feedback to catch problems early
Develop a crisis response strategy
MarkeHng Plan Price and Product
• Same SAFE product
• Lower prices • Core Noodle Products
Place
• TV • Internet • Print • Social Media • Word of Mouth
• Supermarkets • Streetside Kiosks • Schools • Sta6ons
Promo6on
• Bollywood Product Placement
• Maggi Returns Party
• TV and Internet Ads
MarkeHng: Transparency
Remind customers of the long legacy of safe consump6on within India
Nostalgic ads showing areas noodles were made
Video ads demonstra6ng how noodles were made
Transparency in: Current safety standards and
metrics Transparency in supply chain Highlight new leadership
Sponsorships • Scenes showing lead characters enjoying Maggi Noodles • Reaches over 1 billion people • Leaves impression in movie watchers’ minds
Bollywood movies
• Cricket matches • Children, bachelors & students Events
• Bollywood star with reputability Influencers
Maggi Returns Launch Party Who: All customers and poten6al customers in India
What: Product sample giveaways • Celebratory Atmosphere and Balloons • Coupons • Noodle-‐ea6ng compe66on among C-‐Suite Leaders
When: November 2015
Where: • Supermarkets and Kiosks • Central Loca6on within India
Why: Promote as the return of a beloved product
Rural Areas
FMCG currently servicing 2/3 of popula6on
Customers want inexpensive & quick fare
Contract distribu6on to local companies • Smaller vendors, more scaGered • Informal markets
Is a longer term strategy, with tremendous upside
Timeframe & Budget
Immediate Need Future Investment
Increased Marke6ng Expenditures
9,000 2,500
Bollywood 1,625 325
Quality Control Ini6a6ves
5,500 3,250
In thousands of INR
Ø Assumed increased marke6ng expenditures at 0.5% of revenue Ø 5 Bollywood movies at a cost of 325,000 INR per film Ø QC Control objec6ves as a percentage of revenues
Risks & MiHgaHons Risks
• Social Media problem persists
• Sales lag in tradi6onal market(s)
• Price Wars
Mi6ga6ons
• External PR firm handles response
• Expand to more rural areas
• Not a long term strategy, but have deep pockets
Thank You
Q&A
Appendix Our Customer
Mee6ng Objec6ves
Cri6cal Success Factors Ideal Crisis Communica6on Strategy
Indian Market
Alterna6ves
Implementa6on Plan
Quality Assurance
Communica6on: Internal
Marke6ng Plan
Sponsorships Maggi Returns Launch Party
Rural Areas
Risks & Mi6ga6ons
Budget
Compe6tor Reac6on
Timeline of Events
Timeline of Events
1947: Nestle acquires Maggi
1983: NIL enters India
March 2014: Lab Analyst first finds MSG in Maggi Noodles
June 2015: Maggi product
pulled from the market
August 2015: NIL India appoints Narayanan and issues video ads
CompeHtor ReacHon
If we lower costs, so can Sunfeast & Patanjali • They’ve recently doubled produc6on and just launched • Won’t be keen on matching and can’t compete long term
• Not a long term solu6on