How did MAGGI’s Marketing Strategy help it to Dominate the Market?
How did Nestle turn Maggi into such an integral part of our lives?
Why couldn’t Competitors Compete with Nestle?
Conclusion: The lessons from Maggi’s genius marketing strategy
Introduction
Maggi is one of the most iconic brands in Indian business history. For our generation, it’s even more special because its been an integral part of our childhood.
But the most fascinating thing about Maggi is the way Nestle single-handedly created a Rs 937 crore market and has been a market leader in the domain for 38 years.
How did Nestle create a market for a seemingly alien dish in India? How did it almost establish a monopoly in the instant noodle market? And what are the lessons that we need to learn from Nestle’s genius marketing strategy?
This is a story that dates back to the 1950s, in Japan. Noodles were one of the most affordable foods on the market. A Japanese man named Momofuku Ando decided to make a type of noodle that could be prepared quickly and cheaply. And after hundreds of iterations, he was finally successful in making the revolutionary product that we all know today as instant Ramen noodles. It became a game-changing business during the economic boom in Japan. Even today, the parent company of ramen, Nissin, accounts for 50% of the billion-dollar instant noodle market in Japan.
Observations by Nestle
While all of this was happening, Nestle was carefully observing the market and realised that instant noodles were a goldmine product in Japan. But Nestle chose not to pursue the Japanese market. There are two seemingly logical reasons for that.
- Japan was not so liberal; hence, it would have been very difficult to operate as a foreign company in Japan.
- Why go to war against a monopoly when you can create your own monopoly?
Well, that is why Nestle started exploring every other market except Japan to create a market for instant noodles. One of the biggest markets was obviously India. That is how Nestle entered the Indian market in 1983. Both the concept of instant noodles and the Maggi brand were completely alien to us. We were still a closed country, with hardly any foreign companies in the market. The Western influence over us was relatively small.
How did Nestle turn Maggi into such an integral part of our lives?
Well, that is because Nestle very clearly understood both its customers and the consumers. It understood the fundamental marketing principle that if you try to sell to everyone, you will sell to no one.
That is when they carefully picked two categories: mothers and children. What was the thinking behind this? For the adoption of an alien product, it has to meaningfully cater to the pain and the interest of the audience. Now, in the case of Nestle, there were two primary stakeholders: the customer and the consumer. The consumer is the child who eats Maggi, and the customer is the mother who buys Maggi. In 1983, there were two categories of mothers: working mothers and homemakers.
Both of them had one major pain: giving their child something tasty and healthy when they come home hungry from school. The child had just eaten chapati-bhaji at school, so giving them the same for evening snacks would not be good enough. They needed to make something that was less tedious but at the same time was tasty enough for the child to eat.
This is where Maggi became an opportunist and positioned itself as the perfect solution for mothers as a super easy and tasty meal alternative for their children. This is how the tagline “2 minutes mein Maggi” was born.
Apart from that, Nestle reached out to school kids through sponsored quizzes and events and even gave them a free hamper of Maggi products. This was followed by a widespread sampling with over 4 million new contacts every year. And as time passed, Nestle even began advertising on TV channels during peak times.
Why couldn’t Competitors Compete with Nestle?
- Nestle had evolved its supply chain for 25 years, which was next to impossible to replicate. On top of that, it controls the supply chain end-to-end. But when Nissin, the parent company of ramen, tried to enter the market, it struggled to find national distribution partners, and its alliances with both Hindustan Unilever and Mariko to solve this problem completely failed.
- Nestle achieved an unmatched level of penetration even in Tier 3 and Tier 4 cities of India. More people knew the term Maggi than they knew about the actual product, which is instant noodles. So no one really asked for instant noodles; they just asked for a packet of Maggi.
- They saw that the real opportunity was in SEC classes C and D, which represented over 40% of the market. And after an extensive study, the first product to be launched was Chotu Maggi, which was priced at just Rs 5 and was aimed at penetrating the lower segment of the market.
- This is the reason why, when ITC and Unilever entered the market, they found it very difficult to achieve this level of penetration and brand recall value.
- It was the impeccable connection that Maggi had established with its customers. A classic demonstration of the same was seen in 2015.
Connection with Customers
In 2015, Nestle’s popular noodle brand, Maggi, faced a major controversy in India. The Food Safety and Standards Authority of India (FSSAI) found that some samples of Maggi noodles contained lead beyond permissible limits and high levels of monosodium glutamate (MSG), a flavour enhancer.
As a result of this, the FSSAI banned the sale of Maggi noodles in India, and Nestle had to recall millions of packets of the product from store shelves. The controversy led to a nationwide outrage, and Maggi became the centre of a heated debate about food safety in India.
Maggi disappeared from the stores for five long months, and their market share nosedived from 75% to 0% within no time. As soon as Maggi came back, they came up with something called the ‘#WeMissYouToo’ campaign, wherein the brand asked fans to share their stories about how much they missed Maggi on social media.
It turned out to be one of the most successful campaigns Nestle had ever executed, and fans from all across the country started pouring out their love for Maggi. In fact, Snapdeal sold out a whopping 60,000 Maggi welcome kits within five minutes of the Maggi flash sale. And hashtags such as ‘#DilKiDealWithMAGGI’ started trending on Twitter after the sale resumed. This was the extraordinary level of connection that Maggi had established with its audience.
By 2017, Maggi was back to the number one spot in the market with a whopping 60% market share in the instant noodle market.
Conclusion — The lessons from Maggi’s genius marketing strategy
Always remember that while most brands spend time and resources to find out how to penetrate a market, only a few brands spend time and money to find out which market to penetrate. And so the most revolutionary products on the market are more often than not the ones that have created a market for themselves.
If you’re selling a generic product, your first instinct would be to sell it to every single person in the market. But always remember, if you try to sell to everyone, you will end up selling to no one. So always try to find a specific target audience to sell your generic product.
The golden recipe for market penetration lies in identifying the pain points and interests of the audience. And your accuracy in spotting this pain and interest is directly proportional to the ease of adoption of your product.
While good brands sell you a product, great brands sell you an emotion. And even if you’re selling something as simple as a dry cake of noodles, if you connect with the audience on an emotional level, you will stand out from the rest of the crowd. Like a legend once said, “people might forget what you said, but they never ever forget how you made them feel”.
This was part of Kraftshala’s Content Writing and Social Media Marketing Course.
