Macro Factors That Influence Maggi's Instant Noodles
- July 15, 2018
In an average Indian household today, the terms ' instant noodles ' and ' Maggi ' are synonymous.
This phenomenon certainly did not take place over night. The history of the now nestle-owned Maggi noodles is testimony to its own success as a product. The company that originated in Switzerland in 1884, under the directorship of Julius Maggi soon grew to become a pioneer in food production with its seasonings, bouillon cubes and instant noodles. In 1947, another Swiss transnational food company Nestle, took over Maggi and piloted the brand to new heights of success.
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| the bouillon cubes manufactured by Maggi that act as meat substitutes |
It is crucial to assimilate the meaning of ' macro factors ' before understanding their influence on Maggi noodles. Macro factors are uncontrollable factors that are beyond the direct influence and control of a company. These factors come into contact with a company in the course of its functions and need to all work in favor of the company for its success. These macro factors and their influence on Maggi noodles are explained below:
1. Demographic Factors:
Demographics are traits that are used to determine consumer behavior and target consumers. Determining these factors will help maximize a company's profits. Maggi in India for example was launched in 1982, when the idea of instant food was non-existent. Its captivating two-minute tagline, and its 'Taste Bhi Health Bhi' campaign helped establish it as a convenient fast food. Maggi first targeted working women through their campaigns. This strategy did not work and after conducting surveys and studies, the company targeted children as its primary consumers. These strategies and the lack of competition contributed to its enormous success.
2. Economic Factors:
Regardless of the success of a company's strategy, it cannot afford to overlook economic circumstances such as inflation, demand, supply, recession and so on.These factors directly influence the profit margins of a company. Maggi noodles are extremely popular in countries such as India, Pakistan, Malaysia and Singapore and is directly impacted by the economic circumstances in these countries. Maggi has managed to price its noodles in accordance with the income of its target consumers and this has led to its success as a product. Maggi also managed to overcome the decline in its sales that took place in 1990 by changing its formula from fried base to oil-dried base for a better taste experience.
3. Natural Factors:
There are various natural factors that influence the success of a product such as natural disasters, climate change, lack of raw materials, access to waterways and other environmental concerns.
Maggi noodles for example, has a 32% market share in Malaysia and will directly be affected by any natural calamity that takes place in the country and this could hinder the production of the product.
4.Technological Factors:
Technological developments have played a key role in the way products have been marketed and sold to consumers. Maggi has effectively used different forms of media to promote its noodles and also delivers it to its consumers using both online platforms as well as retail markets. From being a sponsor for 'Hum Log', a popular serial on Doordarshan in 1984 to launching a wide spread campaign called 'Main Aur Meri Maggi" to celebrate 25 years of success, Maggi has come a long way in India
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5. Political Factors:
Political factors such as government regulations play a very important role in the success of a product. It is crucial for a product to adhere to the rules of food regulatory bodies of a country. In May 2015, Food Safety Regulators in Barabanki, Uttar Pradesh found Maggi noodles to contain MSG as well as a high quantity of lead. This led to the subsequent ban of Maggi noodles in various Indian states such as Gujarat, Andhra Pradesh, Assam, New Delhi and so on. This ban caused Nestle to recall stock that was approximately worth 320 crores in Indian Rupee. The ban was later struck down by the Mumbai High Court on 13th of July, 2015. Following this, Maggi launched aggressive campaigns such as the ' We Miss You Too" campaign to make a comeback into the market.
6. Cultural Factors:
The culture of every country is different and a product should reflect the culture of the targeted region in order to be successful. Maggi noodles has successfully imbibed the culture of India. Its many variants such as Masala Maggi, Atta Noodles and so on reflect the food culture of India. The noodles sold in India are purely vegetarian, unlike the Maggi noodles sold in other countries. This also shows the affect of culture on the product itself.
All these macro factors collectively affect the success of a product or a brand and Maggi noodles certainly still has most of these factors working in its favor.
Reference Links:
https://www.slideshare.net/probikersagar/brand-study-maggi
https://en.wikipedia.org/wiki/Maggi#cite_note-34
http://marketingdawn.com/pestle-analysis-of-maggi/
https://www.maggime.com/en/about-us
http://merofact.blogspot.com/2015/05/doubts-over-msg-and-lead-content-in.html
https://www.patrika.com/news/miscellenous-india/supreme-court-denies-to-give-clean-chit-to-maggie-orders-to-re-test-1159819/
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