馃攳
How MAGGI's GENIUS Marketing Strategy made it a Market Leader?: Nestle Business Case Study - YouTube
Channel: Think School
[0]
Hi everybody.
[1]
Maggi is one of the most iconic
[2]
brands in the Indian business history.
[5]
And for our generation, it's even more special
[7]
because it has been an integral part of our childhood.
[10]
But from the business standpoint, the most fascinating
[13]
thing about Maggi is that way back in 1983, both Maggi and
[17]
instant noodles were completely alien to the Indian culture.
[21]
And yet, Nestle single-handedly created a Rs 937 crore market
[26]
and has been a market leader in the domain for 38 years.
[30]
And in spite of giant rivals like ITC, Marico,
[32]
and Unilever, even today, Maggi has a whopping
[36]
60% market share in the instant noodle segment.
[39]
The question is, how did Nestle create a
[41]
market for a seemingly alien dish in India?
[44]
How did it almost establish a monopoly
[46]
in the instant noodles market?
[48]
And what are the lessons that we need to
[49]
learn from Nestle's genius marketing strategy?
[53]
This episode is brought to you buy NaVi health
[55]
insurance but more on this at the end of the video.
[57]
This is a story that dates back to the 1950s,
[59]
Japan.During that time, the country was still
[62]
recovering from the downfall of World War Two.
[64]
So noodles were one of the most affordable foods in the market.
[68]
But because the demand was too high, and
[70]
it took a lot of time to be prepared, it
[72]
resulted into long lines and long wait times.
[75]
This is when a curious Japanese man named
[77]
Momofuku Ando decided to make a type of noodles
[81]
that could be prepared quickly and cheaply.
[83]
And after hundreds of iteration, he was finally
[85]
successful in making a revolutionary product that
[88]
we all know today as the instant Ramen noodles.Now
[92]
although his newly invented instant ramen did not
[94]
debut until 1958, the instant ramen noodles became a
[98]
game-changing business during the economic boom in Japan.
[101]
And as the country started developing rapidly, the
[103]
instant ramen became such a big hit that in spite of
[106]
costing six times more than the conventional noodles, the
[109]
Japanese still bought instant ramen in large quantities.
[113]
And soon enough, the instant ramen products started
[115]
traveling abroad to the US to again become a massive hit.
[118]
And even today, the parent company of ramen Nissin accounts
[122]
for 50% of the billion-dollar instant noodle market in Japan.
[126]
And while all of this was happening, Nestle was
[128]
carefully observing the market and realized that
[131]
instant noodles are a goldmine product in Japan.
[134]
But very, very cleverly, Nestle chose not to
[137]
pursue the Japanese market, in spite of knowing
[139]
that there was a billion-dollar worth of market
[141]
share still left to be capitalized in Japan.
[144]
The question is when there was a clear market for
[147]
a scalable product that too in a booming economy,
[149]
why didn't Nestle enter the Japanese market?
[152]
Now there are two seemingly logical reasons for that.
[155]
Number one, Japan was not so liberal hence, it would have
[158]
been very difficult to operate as a foreign company in Japan.
[161]
And secondly, why go on war against a monopoly
[164]
when you can create your own monopoly?
[167]
Right?
[168]
Well, that is why Nestle started exploring every other
[171]
market except Japan to create a market for instant noodles.
[174]
And one of the biggest markets obviously was India.
[178]
And that is how ladies and gentlemen,
[179]
Nestle entered the Indian market in 1983.
[182]
And like I said before, both the concept of instant noodles
[186]
and the Maggi brand was completely alien to us.We were still a
[189]
closed country with hardly any foreign companies in the market.
[192]
And the western influence over us was relatively very less.
[195]
It's almost like asking our parents
[196]
to eat lasagna every single day.
[199]
Then the question is, how did Nestle turned
[201]
Maggi into such an integral part of our lives?
[204]
Well, that is because Nestle very clearly
[207]
understood both its customer and the consumers.
[209]
To tell you about it if you look at instant noodles as a
[213]
product, anyone and everyone could have noodles, right?
[216]
It really doesn't matter whether it
[218]
is a school kid or a 40-year-old man.
[219]
And noodles by default is one of the
[222]
most generic dishes in the market.
[223]
So had it been some ordinary brands, they would
[225]
have tried to capture the entire 740 million Indian
[228]
customer base, and they would have tried to sell
[231]
to every single Indian who could have had noodles.
[233]
And on the outset, it does seem like an obvious choice, right?
[236]
Well, Nestle was no ordinary brand.
[238]
And they understood the fundamental marketing principle that if
[242]
you try to sell to everyone, you will end up selling to no one.
[246]
So Nestle's marketing team started finding the best niche
[249]
profiles to see who could be their ideal target audience.
[253]
And that is when they carefully picked two
[255]
categories, and those were mothers and children.
[259]
Now, this begs the question, what was the thinking behind this?
[263]
Now listen to this very, very carefully.
[265]
For the adoption of an alien product, it
[267]
has to meaningfully cater to the pain of the
[269]
audience and the interest of the audience.
[272]
Now, in the case of Nestle, there were two primary
[275]
stakeholders, there is the customer and there is the consumer.
[278]
The consumer is the child who eats Maggi and the customer
[281]
is the mother who buys Maggi.And during 1983 there were
[284]
two categories of mothers, working mothers, and homemakers.
[288]
Both of them had one major pain that is to
[291]
give their child something tasty and healthy
[292]
when they come back hungry from school.
[295]
The problem with working parents was that they were not at home
[297]
and with homemakers, after running all morning, after sending
[300]
the kids and husbands to school and work, they needed some
[303]
time to rest before they could start working again for dinner.
[307]
On top of that, the child had just eaten
[309]
chapati-bhaji in school, so giving them the same
[311]
for evening snacks would not be good enough.
[314]
And at the same time, they needed to make
[316]
something that was less tedious, but at the
[318]
same time was tasty enough for the child to eat.
[321]
So the two pains over here are working mothers wanted
[324]
something that the children could make themselves and
[326]
homemakers wanted something less tiring to make for their kids.
[330]
And the interest was obviously a
[332]
tasty dish for their child to eat.
[334]
And this is where ladies and gentlemen, Maggi
[337]
became an opportunist and positioned itself as
[340]
the perfect solution for mothers as a super easy
[342]
and tasty meal alternative for their children.
[345]
This is how the tagline "2 minute mein Maggi" was born.
[349]
And as we've seen in the commercial it showcases
[351]
an act of a mother preparing Maggi for the kids
[353]
only to see them happy and delighted by the taste.
[356]
Apart from that, Nestle reached out to school
[358]
kids sponsored quizzes and events and even
[361]
gave them a free hamper of Maggi products.
[363]
This was followed by a widespread sampling
[366]
with over 4 million new contacts every year.
[368]
And as time passed, Nestle even began advertising on TV
[372]
channels during peak times when people like you and me were
[375]
watching Power Rangers, Dragonball Z, and Ninja Hatori.
[378]
This is how by positioning itself accurately to cater to
[381]
the pain and interest of both its consumers and customers,
[385]
Maggi established itself as an integral part of our lives.
[389]
Now the question is if Maggi could establish
[391]
a name in the market, so could others, right?
[394]
Because there were already other big
[395]
guns like ITC, Unilever, and Nissin.
[398]
Then the question is, why couldn't they compete with Maggi?
[401]
Well, there are three specific reasons for that.
[404]
Number one, Nestle had evolved its supply chain for 25
[407]
long years, which was next to impossible to replicate.
[411]
And on top of that, it controls the supply chain end to end.
[414]
But when Nissin the parent company of ramen tried to enter
[416]
the market, it struggled to find national distribution
[419]
partners, and its alliances with both Hindustan Unilever
[422]
and Mariko to solve this problem completely failed.
[425]
Secondly, Nestle achieved an unmatched level of penetration
[428]
even in tier three and tier four cities of India.
[431]
And more people knew the term Maggi than they knew
[434]
about the actual product that is instant noodles.
[437]
So no one really asked for instant noodles
[439]
they just asked for a packet of Maggi.
[441]
This was because, since 2005 onwards, the
[444]
marketers of Nestle conducted exclusive studies
[447]
and did everything in their capacity to make Maggi
[450]
accessible to the bottom of the pyramid of India.
[450]
And in technical terms, based on socio-economic status,
[456]
the Indian audience could be categorized into eight
[457]
categories, ranging from A-1 to E-2.The top segment
[465]
consisted of SEC classes as in socio-economic classes
[465]
of A-1, A-2, and B-1, the middle segment was B-2 and
[469]
C and the bottom segment was D, E-1 one, and E-2.
[473]
For those who do not understand these terminologies,
[475]
I'll attach study material for you in the description.
[478]
So coming back, the top and middle segment was already
[480]
captured by 2005 through Maggi's conventional marketing
[483]
efforts, and they saw that the real opportunity was in SEC
[487]
classes C and D that represented over 40% of the market.
[492]
And after an extensive study, the first product to be
[495]
launched was Chotu Maggi, which was priced at just Rs 5 and
[498]
was aimed at penetrating the lower segment of the market.
[501]
The communication was carefully designed in local vernacular
[504]
languages, and the distribution system was intricately
[507]
designed with strategic wholesalers and redistributors to
[510]
reach up to 2.2 million outlets all across the country.
[514]
And because of this extensive effort, the household
[517]
penetration numbers of Maggi shot from just 45% to
[521]
71% for the C class, and from 31% to 62% for SEC
[525]
classes D and E in just four years from 2006 to 2010.
[530]
This is the reason why when ITC and Unilever entered
[532]
the market, they found it very difficult to achieve
[535]
this level of penetration and brand recall value.
[538]
And lastly, it was the impeccable connect
[541]
that Maggi had established with its customers.
[543]
And this is something that does not need any
[545]
explanation, but a classic demonstration of the
[547]
same was seen in 2015 when this happened to Maggi.
[586]
As soon as this bad happened, Maggi disappeared from
[589]
the stores for five long months and their market
[592]
share nosedived from 75% to 0% within no time.
[597]
But you know what, guys?
[598]
As soon as Maggi came back they came up with something called
[601]
'#WeMissYouToo' campaign wherein the brand asked fans to share
[606]
their stories about how much they missed Maggi on social media.
[609]
Now you see, this is not some Michael Jordan's Nike
[611]
product or a revolutionary iPhone that we're talking about.
[614]
It is just an instant noodle brand
[616]
expecting fans to share their memories.
[619]
But as we all saw, it turned out to be one of the most
[622]
successful campaigns Nestle had ever executed, and fans from
[625]
all across the country started pouring their love for Maggi.
[629]
In fact, Snapdeal sold out a whopping 60,000 Maggi
[632]
welcome kits within five minutes of the Maggi flash sale.
[635]
And hashtags such as '#DilKiDealWithMAGGI' started
[638]
trending on Twitter after the sale resumed.
[641]
This was the extraordinary level of connection
[644]
that Maggi had established with its audience.
[646]
And not so surprisingly, it was very, very difficult
[649]
for Unilever or Nissin to achieve this level of
[652]
connection with a player like Maggi in the market.
[655]
And guess what?
[656]
By 2017, Maggi was back to the number one spot in the market
[660]
with a whopping 60% market share in the instant noodles market.
[664]
This is the iconic story of the Maggi brand.
[668]
Now, this brings me to the most important
[669]
part of the episode, and that are the lessons
[671]
from Maggi's genius marketing strategy.
[675]
Meanwhile, people I don't know if Maggi is dangerous for you or
[677]
not, but not having health insurance is definitely dangerous.
[681]
The most dreadful part of insurance is
[683]
the claim processing which only gets worse
[685]
after we meet with an unfortunate accident.
[688]
That's where NaVi health insurance comes in.
[690]
And their vision is to turn the entire claim process
[694]
into a seamless experience so that you can focus on
[697]
healing and not keep stressing over your insurance claim.
[700]
This is the reason why NaVi provides 100% cashless claims in
[704]
less than 20 minutes, which means you do not have to go through
[708]
the hassle of the claim reimbursement process, you will be
[710]
assigned a personalized claim relationship manager who will
[713]
act as a single point of contact between you and your insurer.
[716]
And the CRM assists the customers throughout the
[719]
claim process making it fast, easy, and hassle-free.
[722]
NaVi health insurance has a network of 10,000 plus
[725]
hospitals and a monthly health insurance premium starting
[728]
at just Rs 241.You will also get the unlimited automatic
[732]
sum insured refill and free doctor consultations.
[735]
The best part is that everything is
[737]
seamless, digital, and paperless.
[740]
So if you want to have a pain-free experience while claiming
[742]
your insurance, please go ahead and sign up at the NaVi health
[746]
app in less than two minutes using the link in the description.
[750]
Moving on, there are four lessons that we need to
[752]
learn from Nestle's incredible business strategy.
[755]
Lesson number one always remember while most
[758]
brands spend time and resources to find out how
[761]
to penetrate a market only a few brands spend time
[764]
and money to find out which market to penetrate.
[767]
And so the most revolutionary products in the
[769]
market are more often than not the products
[772]
that have created a market for themselves.
[774]
And it's not just Nestle.
[775]
Even Apple never tried to compete with Rolex to make mechanical
[778]
watches, they instead created a market for smartwatches.
[782]
And now they're way ahead of any
[784]
other watch company in the world.
[786]
Similarly, Henry Ford had the option to
[788]
compete with luxury cars, but he instead
[791]
created a market for the bottom of the pyramid.
[794]
And in our case, Maggi created a market for instant noodles
[797]
in India, instead of going head-on with Nissin in Japan.
[801]
Lesson number two, if you're selling a generic
[802]
product, your first instinct would be to
[805]
sell to every single person in the market.
[807]
But always remember, if you try to sell to
[809]
everyone, you will end up selling to no one.
[812]
So always try to find a specific target audience to sell your
[815]
generic product.And drop a comment about if you know any other
[818]
brand that sells a generic product to a specific audience.
[821]
And for the people who have done the communication
[823]
masterclass you already know which brand I'm talking about.
[826]
Lesson number three the golden recipe to market penetration
[829]
lies in identifying the pain and interest of the audience.
[833]
And your accuracy with spotting this pain and interest is
[836]
directly proportional to the ease of adoption of your product.
[839]
In this case, it was Nestle's intricate
[842]
understanding of the mother's pain of being too
[844]
tired to make an evening meal for the children.
[845]
And the interest was so beautifully captured through
[849]
Nestle's initiatives to interact with children by the
[851]
means of cartoon channels and school competitions.
[854]
And lastly, like I've said many times before, while good
[857]
brands sell you a product, great brands sell you an emotion.
[861]
And even if you're selling something as simple as a dry cake
[864]
of noodles, if you connect with the audience at an emotional
[866]
level, you will stand out from the rest of the crowd.
[869]
Like a legend once said, "people might forget what you
[872]
said but they never ever forget how you made them feel".
[875]
That's all from my side for today guys.If you learned something
[878]
valuable, please make sure to hit the like button so that the
[881]
YouTube algorithm knows that you learned something valuable.
[882]
And for more such free business and political
[885]
case studies please subscribe to our channel.
[887]
Thank you so much for watching.
[889]
I will see you in the next one.
[890]
Bye-bye.
[891]
[ Subtitles by: subit.in ]
Most Recent Videos:
You can go back to the homepage right here: Homepage