the noodle wars ( path to chow king) - nair_snigdha

Noodle Wars

Rahul Nair

&

Snigdha Kishore

History&

Product Innovation Charter

Brief History of Maggi• Despite the unfavorable circumstances, Maggi launched

itself in 1982.• Appropriate realization of target segment, effective

positioning and effective promotion and sales made Maggi the most loved noodle in India

• Maggi stood as a survivor, a brand that created and dominated a category for the last 2 decades.

• Several Failed attempts to introduce the variants in flavor: Capsica, sweet noodles, vegetable atta and change in flavor of original masala.

• Lost market share from 90.7% in Dec 09 to 84.6% in Jun 2010.

Brief History of Maggi

• The Dal Atta variant was also not accepted due to the difference in taste

• Brand has successfully extend into sauces, soups & pasta

• Has taken help of a wide range of positioning lines & statements in its long history

o Fast to cook , Good to eat became a catchphraseo 2min gesture of the magi mom was widely imitatedo Mei aur Meri Maggi at its 25th anniversary

campaign to acknowledge the generation that grew with it and who will now introduce it to their children

Brief History of Maggi

• Target BOP (Bottom of Pyramid) - Launched chota magi for wider reach to combat competition

• Uneventful entry into Pasta - Has ventured into the pasta market following sunfeast, with Maggi Nutri-Licious Pazzta in two flavours “Masala Penne” and “Cheese Macaroni” to stop customers from moving to competing brand

• Arrows for the Rural Population - Also has products for rural and semi-urban markets: Maggi masal-ae-magic and Maggi Rasile Chow

2. Area of Focus – Dual drivers

• Market drivers – The target segment will entail all age groups who just

love a quick spicy meal.– The product should be quick to make/ ready to eat

and should merge with the fast paced life style of the current generation.

– It should also be aligned with the traditional brand image that Maggi holds – “fast to cook, good to eat”

– Should have a Chinese orientation to cater to the eastern and north eastern India where a large chunk of market share is lost.

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2. Area of Focus – Dual drivers

• Technology Drivers

– Packaging : The packaging should be attractive and at the same time,

easy to use. It should also maintain the freshness of the product.

– 10 months shelf life : air drying the noodles and adding anti-oxidants

to the taste maker.

– Maintain nutritional content and flavor. : State of the art

manufacturing process should be adopted to maintain the nutritional

content and flavor.

– Should get cooked in 2 minutes

– Low fat content : By using air drying technology as this process cuts

down on 60- 80% of fat content and 25% sodium content.

3. Goals & objectives

• Goals • Profit – To keep a profit margin of Rs. 4 and selling price

of Rs.15.• Growth rate – To grow at a rate of 10% in an industry

which is growing at 20% (CAGR).• Market share

– To increase the market share from 80 % to 90 % in the next financial year.

– To gain a market share of at least 70% in the east and north east where Wei-Wei currently holds a share of 90%.

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4. Special Guidelines

• The product should be “new to the firm” or “line extension”.

• The product needn’t be a first mover or a quick second.

• It should be an improvement over the existing products.

• The new product should be derived from the current product to attain economies of scale (Platform Commonality)

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Co-creation Experience and DART

Concept Generation

• Concept generation is the step 2 of the stage gate process for NPD.

• There are 3 strategies for concept generation:

1. Co-Opting Customer Competence

2. Problem Based Ideation

3. Perceptual Maps/Positioning Maps• All these strategies are stand alone strategies,

i.e. they can be used for both concept generation and enhancing consumer experience.

1. Co-opting Customer Competence

• In this strategy customers and their experience with the product is involved to generate a concept or enhance the current product experience.

• Companies can opt for customer groups/ Focus groups to get the new concept.

• Can be executed in 2 ways:

1. Using Experience Network

2. DART Framework

Customer Experience Network

Customer Co-creation Experience

• Retailers- Influence the customer experience with appropriate product placement on shelves. For e.g. on shelves where kids and elders can reach it easily.

• Advertisement – Ad’s improve the customer experience by showcasing mouth watering ads and tempting them.

• Online forums – provides a platform to share recipes and creative ideas to improve customer experience.

• Household demographics – The home ambience and openness also plays a part in customer experience.

• Maggi (feedback cell) – improves customer experience by providing a platform to express their comments to improve and duly catering to it.

• Face book fan page – encourages customers to comment, share stories and also lets the company to update about their favorite noodles.

• Other customers – customers exchange their experiences with each other and hence influence the experience.

DART FRAMEWORK

2. DART FRAMEWORK

• Stands for – Dialogue, Access Mode, Risk Assessment, Transparency.

• Each of these can be used individually to enhance the customer experience and can be a source of new concept generation.

• Following slides describes the way in which DART framework can be applied to Maggi.

‘D’ of DART Framework for Maggi

• Dialogue: Chat rooms and online forums provide a gateway which can be used to invite customers to join these platforms and discuss about the product.

• Since such forums are open to discussion for any one around the world, there are possibilities that people can misuse the platform or might not choose the “right” words to present their thoughts.

• For these reasons, the rules for engagement should be stipulated.

• A template for rules of engagement that can be opted by Maggi is given in the following slide.

Template for Rules

1. Do not spam or self-promote in the forums

2. Do not post "Free" threads

3. Do not cross post questions

4. Do not post "offensive" posts, links or images

5. Remain respectful of other users, moderators and brand at all times.

6. Participants not adhering to the rules will be warned and if the warning is ignored the participant will be permanently banned from contributing to the forum.

‘A’ of DART Framework for Maggi

• Access Mode: relates to ease of availability of product, variety of packages, and ease of use.

• The following access modes can help Maggi enhance its customer experience:

1. Maggi has a strong distribution system in urban areas; Maggi can work on its distribution system for semi-urban areas so that its standard Maggi is available in all “kiosks” that populate the semi-urban areas.

2. Maggi is available in single pack, double pack, family pack and Jumbo pack. It helps to serve different kind of customers with different needs. For e.g single pack and double pack can be more appealing to outstation students.

3. Its 2minute cook time, and instant cup noodles provide customers with excellent ease of use of product. Even kids can make it. Its that simple!

4. Maggi can also be made available in vending machines outside movie theatres or malls. Preferably cup noodles can be stored in these machines with availability of hot water.

‘R’ of DART Framework for Maggi

• Risk Assessment: Involves analyzing the pros & cons of having customer community.

• Following risk should be taken into consideration:

1. Competitors can closely monitor the online forum and can possibly adopt the ideas discussed in the forum.

2. Criticism about product can spread just like viral marketing which can damage the brand image and the sales of the product.

‘T’ of DART Framework for Maggi

• Transparency: refers to the extent to which the product information should be shared with the customer community.

• Following are the few product specifications on which transparency can be maintained to have a healthy customer community:

1. Nutritional Content of the product

2. Shelf life

3. Health Hazards/ warnings

4. Ingredients used• Transparency can also be maintained about the purpose

with which the company has opted for customer community.

Perceptual Mapping

Attribute Rating Map

• We surveyed 15 people to rate Maggi and 2 other major players (Top Ramen and Foodles) in instant noodle market in India.

• We asked them to rate the attributes on a scale of 1 to 5, where 1 being the lowest and 5 being the highest rating.

• The following attributes were taken into account:

- Taste

- Health

- Stickiness

- Consistency

- Cooking Time

- Shape of noodles

- Packaging

- Ease of Availability

Result of AR Perceptual Mapping

Factor Analysis

• We categorized the attributes under 2 factors: ‘additional benefits’ & ‘core benefits’.

• This helped us to plot the results obtained from AR maps on a 2 dimensional graph (with core benefit in the y axis and additional benefit in the x axis) .

• The attributes were grouped under the factors as shown below:

Additional Benefits Core Benefits

1. Cooking Time 1. Taste

2. Shape of Noodles 2. Health

3. Packaging 3. Stickiness

4. Ease of Availability 4. Consistency

Result of Factor AnalysisAfter calculating the (x,y) coordinates, the entities were plotted on the graph

New Product Idea

• It can be inferred from factor analysis plot that:– Even though Maggi has scored moderately well in

additional benefits (like cooking time, attractive packaging and ease of availability), it still has a long way to go in core benefits.

– The market has potential for a new Maggi product which has strengthened core benefits like taste, nutritional value, non stickiness and masala consistency. This product with the same/ slightly improved additional benefits can soar over its competitors thus capturing the lost market share in Indian soil.

Problem Based Ideation


• We conducted a survey among 15 customers to find the problems that they find in noodles.

• They were asked to weigh the problems and weights were allotted to each problem.

• From the survey we also obtained the frequency of problem occurrence.

• Then, we multiplied the weights with the frequency to rank the problems based on importance- performance analysis.


Fig. Problem Based Ideation Table


• From the table in the previous slide, we come to know that:o People find Maggi to be low on health benefits and also that it

lacks consistency (masala spread) when cooked.o Another major problem that they face is that noodles are too

thick and tend to form lumps when kept open for some time.• The team members then brainstormed to better understand the

problems faced by users and also find potential for a new product launch

• Hence the product that Maggi wants to release should ideally be healthy with proper Masala penetration. It should also be thinner and should not form lumps after a few minutes post cooking.

Concept Testing and QFD

Connecting the dots

• The results obtained from problem based ideation and AR perceptual maps indicated that maggi can do better on taste, health and consistency of noodles.

• Based on the above results, we designed the prototype* and narrative for concept testing.

• Presenting before you………………….

The

New Maggi

Chow King Noodles Flat Bole Toh Fun !!!!

Concept testing

• Narrative-For the narrative, we adopt a promotional tone and mention the price point.

• Diagram – A diagram will be included to tempt the customers and enhance their experience while tasting the prototype.

• Prototype – This forms an important part of testing as the surveyed candidates get to taste and give their feedback about the product which carries a lot of validity.

The New Maggi Chow-king

Narrative• “Presenting the New Maggi Chow-King noodles. The

2 minute healthy tasty Chinese noodles. It’s saucy melt-in-the mouth taste gets you asking for more, every time. It’s Flat structure gives you the most consistent and mouth water flavor throughout. Chow-King is so smooth and non-sticky that you can enjoy your chow-king even hours after cooking without any loss of taste. All these at an attractive price of Rs.15.

So, Hurry up and grab you chow-king NOW”

Concept Statement Research

• Who are the respondents?Respondents include people who eat/love noodles.

• What is the mode of reaching them?Face-to-Face interview; as the interview will involve prototype testing (tasting) before the survey.

• Individual or group response?Individual response is ideal in this case as opinion biasing may occur in group testing.

• Real-time response survey?The survey will involve real time response and can be conducted in malls and shopping complexes.

Questionnaire

• Age? Sex? Profession?• Do you think the price point is justified?• Will you buy the product when it is

launched?Definitely buyProbably buyProbably not buyDefinitely not buy

From ATAR model

Quality Function Deployment

Process Adopted

• We interviewed 15 customers, probing them on what they expect from Maggi.

• We brainstormed on what we can deliver to the customers.

• We related customer wants with what we can deliver.

• We identified relationships between the firm’s hows.

• We developed importance ratings.• Finally we evaluated competing products like

Top Ramen, Foodles and Yippee.

QFD Matrix

Conclusion

• From The QFD matrix we came to the conclusion that – what the customer wants, matches with what we can deliver.

• Hence, we expect the product “Chow-King Noodles to do well in the market”.

• Let operation ‘Flat-Attack’ Begin……..

Product Use Testing

Key Testing Dimensions

• User groups to contact – We will use external stakeholders (customers in particular) for the test.

• Mode of contact – We will use personal face-to-face interviewing in a centralized location like a shopping complex or a mall. The interviewer will go to each candidate, give the prototype for tasting and get their feedback. We are against using a group interview as this may cause biasing in the feedback given.

• Identity disclosure – We would use both branded and unbranded test as this would give us numerous insights and managerial implications.

• Degree of use explanation – We would not use any ‘use explanations’ as it’s a product of common usage.

• Degree of control over use – It would be a supervised test as the prototype will be taken to individual subjects and tested.

• Singularity – We propose to use a triangular comparison to get a comprehensive feedback about the product. We plan to give Maggi Chow king (prototype), Top Ramen smoodles and Horlicks Foodles for test.

Key Testing Dimensions

• Duration of use – The test will be single use test at first. After the test we would request the subjects to participate in a 5 week extended test (1 pack per week). This would indicate whether users prefer the noodles for repeat use and thus give an indication on repeat purchases in the future.

• Source of product – We will use batch products.• Product form- Single product.• Mode of recording reaction - We propose to use a combination of

preference and descriptive feedback for the test as it’s a triangular comparison.

• Source of norms (past experience, market research firms)- As Maggi is a company with 25 years of experience in noodles industry, we plan to use past experience for norms.

• Research service (internal vs. outside personnel). – We plan to use outside personnel for research service as the product is not complex.

Questionnaire

• Try the products and tell how much you like them:Product 1

Product 2

Product 3

Questionnaire

• Which one among the 3 products do you prefer? Why? Product 1 Product 2 Product 3

Because:________________________________________________________________________________________________________________________________________________

• Would you be interested in taking a 5 week extended test of our product? (product will be delivered home)

YesNo

Market Testing

Strategy for Maggi

• After successfully contemplating the results obtained from concept testing & product use testing the next step was to market test the prototype that we prepared.

• Market testing will help us to understand the product deficiencies better and also predict future sales.

• Market testing can also give us the opportunity to probe and learn more from the prototype so that the final corrections required in the product can be taken care of before the product is launched nationally.

• Following slide describes the ways in which we decided to market test the prototype we prepared.

Techniques to Market Test Maggi

A) Pseudo Sale: Simulated Test Marketing- Here we will organize false selling in a room by keeping several noodle

products in that room. - The subjects will then be shown numerous ad’s of noodles along with

Maggi Chow king advertisement. (gives an indication of ad effectiveness)- We will let the customers inside the room and issue false currency to buy

the products displayed in the room.- And after they are done, we will ask them to fill a questionnaire explaining

why did/did not they choose our product.- Following are the answers that we expect the simulated test marketing

will give us:

1) Are the customers happy with the package type? If not, why?

2) Are the customers convinced on the price point? If not, why?

3) Are the customers resistant to buy the new flavor from Maggi? If yes, why?


B) Controlled Sale – Mini-marketing- Here we will select a retail store in which we will display our product on

their shelves.- The prototype will be available for customers to buy and try at home.- The retail store will be selected on the basis of its location. We will see

how many near by housing localities can access this retail store.- The store should also have a loyalty card membership for better

understanding of customer buying behavior.- The more the customers that surround the retail store, the better will be

the results of testing.- Following are the answers that we expect mini marketing to provide:

1) The frequency with which the shelves are refilled and the amount refilled. (i.e. the total sales of Maggi Chow-king)

2) The team deployed in the stores will record what kind customers are buying the product.

3) By checking the sales data for customers who hold the loyalty cards for this retail store we can get accurate data on age, sex, and profession of customers who buy the product.


C) Full Sale – By Geography- Here we will test the prototype by making it available in

the 4 regions of Indian geography one after the other.- The results achieved from these regions can be

compared.- We propose to launch the product first in the south; see

how the market takes it then proceed to north, west and finally east where we have a tough competitor in the form of Wei-Wei.

- This is a tried and tested strategy by one of the competitors (Horlicks foodles) and has proved to be a good one to test the market; one step at a time.

The Result from Market Testing

• Will help us understand what is “good” and what is “bad” about the product.

• The “good” can be used for incorporating it in the advertisements for TV, posters, package etc. and promote the brand on those features.

• The “bad” can be corrected, so that the final product does well in the market.

Launch Strategy

Pre-Launch Control Plan for Maggi

A) Set of possible negative events:- Competitors release the same product before you.- FDA does not approve the product (if the approval was pending all throughout the

process).- Distributor refuses to shelve the product.- Assembly line breaks down.- There is a fire in the manufacturing plant.- Some other company sues for copying the product.- Natural Disaster/Terrorist Attack- NPD Manager Resigns/Some Sr. official is ransacked- R&D Team indicates that the product has some health hazard which was not

detected before.- The competitors slash the prices of their product.- People unaware of the product.- People not buying the product- People not going for repeat purchases.


B) Negative Events with enough impact to warrant investigation:

- Competitors release the same product before you.- FDA does not approve the product (if the approval was pending all

throughout the process).- Distributor refuses to shelve the product. - Some other company sues for copying the product.- R&D Team indicates that the product has some health hazard

which was not detected before.- The competitors slash the prices of their product.- People unaware of the product.- People not buying the product- People not going for repeat purchases.


C) Negative events with high probability & damage:

- Competitors release the same product before you.- FDA does not approve the product (if the approval was

pending all throughout the process).- Some other company sues for copying the product.- R&D Team indicates that the product has some health

hazard which was not detected before.- The competitors slash the prices of their product.- People unaware of the product.- People not buying the product- People not going for repeat purchases.


D) Events that cannot be contingency planned any better:

- FDA does not approve the product (if the approval was pending all throughout the process).

- Some other company sues for copying the product.


E) Events that can be given contingency planning:- Competitors release the same product before you.- R&D Team indicates that the product has some health hazard which was not

detected before.- The competitors slash the prices of their product.- People unaware of the product.- People not buying the product- People not going for repeat purchases.

F) Events that will not be tracked:- R&D Team indicates that the product has some health hazard which was not

detected before.

G) Events that will be tracked:- Competitors release the same product before you.- The competitors slash the prices of their product.- People unaware of the product.- People not buying the product- People not going for repeat purchases.

Post Launch Tracking Study for Maggi

Category Usage QuestionsIn the past six months, how many times have you bought instant noodles?What are the other brands of noodles that you have heard of?Have you ever heard of Yippiee, Foodles, Wai Wai, Knorr Soupy Noodles? Have you ever bought Yippiee, Foodles, Wai Wai, Knorr Soupy Noodles? About how many times have you bought these brands in the past six months?

Advertising Awareness QuestionsDo you recall seeing any advertising for Maggi? Can you describe the advertising for Maggi?Where did you see the advertising for Maggi?What are the other brands noodles that you recall seeing advertisement for?Can you describe the advertisement for these brands?Where did you see the advertisement for these brands?

Post Launch Tracking Study for Maggi

• Purchase Questions

Have you ever bought the new Maggi?

If “yes” –

How many time

If "Yes":

How many times have you bought it?How likely are you to buy this new Maggi again?What did you like/dislike about the new Maggi?What do you think about the price of new Maggi?

If "No":

Did you look for the new Maggi in the store?Why didn't you try the new Maggi?How likely are you to try the new Maggi in the future?

Tracking Variables

• Are the customers aware of the product?• If they are aware, have the customers tried

the product?• If they have tried the product, have they

repurchased it?• If they have not repurchased, did they not

like the product? If yes, why?• If they have repurchased, what did they like

about the product and why?

Our Final ProductThe result of our carefully followed ‘New Product Development’ Process –

The New Maggi Chow King NoodlesFlat bole to fun ……………..

the noodle wars ( path to chow king) - nair_snigdha

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