Is Nestle's marketing policy costing Maggi significant market share
I am confident that there aren’t many on this platform that prefer Yippee Noodles by ITC over Maggie by Nestle.
Yet, Yippee has had a consistent growth in Market Share which hovers at about 22% currently.
Why do you think that’s the case?
Option 1: ITC has better distribution ensuring better availability for Yippee. Lock-down period aside I’ve always found Maggi available, even in the remotest of corners. Even in the hills where it’s so fondly consumed by tourists in the cold weather
Option 2: Yippee is cheaper The MRP of the brands is very similar though Yippee does spend a little more on incentives to channel partners. Having said that, it can’t push the brand to take 1/4th of the market.
Option 3: There is genuine consumer demand
In the absence of the other factors this must be the case. If so, then how did Yippee build it?
The answer doesn’t lie in the product, price or packaging or proposition. It actually lies in the consumer segment.
The target group for Yippee noodles is Kids whereas that for Maggi is teens and adults. The question hence is why can’t Maggi advertise to kids as well, after all you and I loved the product as kids.
The answer lies in a small change to Nestlé’s marketing policies globally in about 2017. Nestle adopted a policy of responsible advertising to kids. This means that Nestle wouldn’t advertise products that can cause obesity to children below the age of 12.
They're serious about this commitment and here is a 2019 audit report to prove the same.
Voila! Opportunity for ITC! Hence, the clear TG for ITC is kids below 12 years of age whereas that for Nestle is teens and above.
Check out this ad by Yippee Noodles and it would be clear!
In comparison check out this 2019 ad by Maggi. Pay attention to the demonstrated age of the son in this communication.
At this stage one must remember that noodles in India is an acquired taste.There is no benchmark to the taste of noodles for child. If you grow up eating Maggie you’re likely to associate Maggi with those fond memories.
Hence there is a good likelihood that as time progresses and more on more kids-of-today grow up to be teens and adults of tomorrow, the share of Yippee noodles could keep on increasing.