Business Proposal on Maggi Scandal

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2)Maggi vs Yipee Noodles

ITC’s Yipee Noodles gave a tough fight to Maggi Noodles when it was first introduced in the market as it entered the market with a new concept i.e the noodles do not stick. The Marketing Mix of Yipee is as follows:

- Product: It is a product that is different in terms of package( red and yellow), its contents( it is present as a round cake instead of rectangular in shape as used by the other brands).

- Price: It is available at a price of Rs. 10 to match the competitive prices that the other competitors are offering.

- Place: The distribution reach is the biggest asset that ITC has got and Yipee is also using this biggest advantage to penetrate the rural market at a rapid pace.

- Promotion: The company is focussing very heavily on the benefit positioning concept in their advertisements focusing on the benefits or the advantages it has over Maggi as a competitor.

Thus, we see that ITC’s Yipee can take a lot of advantage of Maggi debacle. The below pie chart shows the increase in the market share of Yipee after the controversy. It is expected that the market share will

increase once the ban is executed.

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The below bar chart shows the market share of Maggi and all the other competitors.

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- Maggi vs Patanjali Ataa Noodles

Patanjali launched its Ataa noodles in the midst of the Maggi controversy. It was the perfect time to do so since people were looking for new options and that too something healthy. It grabbed the perfect opportunity and had a good start but the real performance of the product is yet to be seen when the ban on Maggi will be lifted. Patanjali Ataa Noodles being a new entrant with aggressive promotion campaign can act as a threat to Maggi.

REVIVAL STRATEGIES

Communication/Transparency: As far as communication has been concerned, saying Nestle has been terrible would be a gross understatement at the very least. The global Nestle site doesn’t even acknowledge the controversy in India. On its Delhi ban, the company has this to say, “”On 3 June 2015 the Delhi authorities made a press announcement that a 15 day ban would be imposed on MAGGI Noodles and that Nestlé would be served with a notice to recall the product from retail outlets in the state. We are yet to receive an official notification of this from the authorities.” When the absolute and urgent need of the hour is that for Nestle to reach out to its customers, the company has been increasingly withdrawing into a cocoon. This has not only prevented damage control, but added flames to the already growing fire against the brand. Nestle needs to tell people that it is trying to solve matters. An increase in marketing budget, dedicated social media pages, frequent Q&A sessions, industry interviews and more press conferences are the need of the hour. Even if we assume that Nestle is working to set things right, such efforts would have little effect if they are not promptly conveyed to the customers. Nestle can’t just sit back and watch their Rome burn: their leadership needs to come out in the open and speak up.

A Fresh Start: Similar to what the cola companies did with Amir Khan and Amitabh Bachchan after the pesticide controversy, Nestle needs to associate a fresh face to its product line during its resurgence from this debacle. Preferably, it needs to be someone with a clean image and who enjoys nationwide trust. An interesting coterie of brand ambassadors could be Sachin Tendulkar, Kapil Sharma, Amir Khan and Vidya Balan among others. These are people whom the nation likes, trusts and would be willing to listen to. Associating new faces with the brand would also signal a new start, and this would implicitly communicate that the brand is now a changed one.

Commitment: Nestle should be ready to take corrective actions and take extra care when it comes to the quality of the product.

Moreover, it can get into more CSR activities to improve the goodwill of the company and that’s exactly what it did when it was trapped in the infant milk case.

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RECOMMENDATION

1) Revival Strategy

As the famous Carl Jung said, “you are what you do and not what you say you’ll do,” words without much action have little long-term impact. An interesting lesson can be taken from Cadbury, which invested in expensive machinery and revamped their entire product packaging after being caught up in the worms’ controversy. Similarly, Nestle can setup additional transparent systems in place to ensure that all its future products are 100 percent safe. An interesting initiative could be along the lines of a new web-domain “mysafenestle.com”, where they can get an independent testing body to continuously test their products round the year and publish this information publicly. Additionally, they can update their product packaging and labeling to change the way they convey how they ensure the safety of their products. This will send out a message to the consumers that Nestle has learnt its lessons and is ready to take on the safety concerns very seriously.

Hence, succinctly put, Nestle’s course of action should be to first acknowledge there were shortcomings, communicate that it is working to overcome them and support its words with tangible efforts such as a new brand campaign, updated product packaging and involvement of neutral testing agencies to ensure the future safety of their products, among others. Not only Nestle, even the consumers want their beloved Maggi back. Thirty years of serving their customers dutifully has reaped some serious brand loyalty, and the people will be willing to trust them again if they reach out to them.

2) Internal and External Communication

- Internal Communication:

The internal communication is the most important driver of employee commitment in any organization. The company should improve the morale of the employees by accusing no one and motivating them to work together to overcome the crisis. There should be a bond among the employees and they should act as the responsible representatives of the company. The employees should be motivated and told that the employees float with the company and