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Reviving Maggi in India -‐ Presen0ng to: Suresh Narayanan, Head of Nestle India Ltd. (NIL)

Project Team Anja Kievelitz Sarah Daniel Peter Mandel Timon GoJschalk

Duesseldorf University Consul0ng

March 2014: •  Lab analysts found monosodium glutamate (MSG) in product samples

NIL ini1ated further tes1ng:

•  Illegal levels of lead were found in in-‐house tests June 2015:

•  600 batches à external lab tests showed levels within allowed limits •  1000 samples à in-‐house tes0ng showed levels within allowed limits

The crisis is threatening Maggi’s posi0on in India

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Controversial lab results paired with heated debates caused substan0al confusion for consumers

1.  Market strategy: How to regain market share

2.  Preven0on management: Learn your lessons

3.  AXer crisis management: How to avoid long term damage

Agenda

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The four pillars of the market strategy

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Pricing

Compe0tors Product

Communica0on


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Pricing

Compe0tors Product

Communica0on

Commu-‐ nica0on

Launch new website that informs about standards of quality and product ingredients and its sources

Use TwiJer feeds and other social media channels in order to support the websites message

Launch Nostalgia marke0ng campaign that connects to customer emo0ons and reminds them of why they like Maggi instant noodles


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Pricing

Compe0tors Product

Communica0on

Product

New labeled product with with free MSG, free lead

Ensure FSSAI approval. “Good product labeling”


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Pricing

Compe0tors Product

Communica0on

Pricing

Sunfeast Yippee Noodles

Smith and Jones

Top Ramen

Knorr Soupy Noodels

Patanjali AJa

Noodles Compe0tor

Reac0on to Maggi Ban

Undertook aggressive campaign and doubled produc0on to fill demand

Launched new product with No MSG and No Lad label

Maggis compe00ve reac0on

Start with penetra0on pricing and increase prices by incremental steps



Capture free market demand with new labeled product Imita0on strategy for lables

Compe00on

2. Preven0on management: Learn your lessons

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Fast. Pro-‐ac0ve. Transparent.


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Press release: 16 days aXer news broke out. NIL’s measures in the past:


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Press release: 16 days aXer news broke out. NIL’s measures in the past:

•  Same-‐day communica0on •  Con0nuous updates via social media such as

TwiJer and Facebook •  React fast to every new development

NIL’s measures in the future:


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•  NIL was confronted with heated debates •  Did liJle to calm the public

NIL’s measures in the past:


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•  NIL was confronted with heated debates •  Did liJle to calm the public

NIL’s measures in the past:

•  Implement Crisis Control Board. Execu0ve: Head of Public Affairs

•  Address the public and most important stakeholder directly

•  AJend talkshows in order to underline the high standards in the past

•  Offer help for inves0ga0on process



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•  Intransparent comunica0on NIL’s measures in the past:

•  Release external laboratory analysis •  Inform press about latest news and

developments directly


1. Regain customer’s trust in the brand

2. Invest in quality & safety management

3. Adapt short term produc0on to current demand

The three steps of aXer crisis management: How to avoid long-‐term damage?

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1. Regain customer’s trust in the brand

2. Invest in quality & safety management

3. Adapt short term produc0on to current demand

The three steps of aXer crisis management: How to avoid long term damage?

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AXer crisis management: 1. Regain customer’s trust in the brand

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Be transparent about the quality and safety of products by •  Ensuring correct and favorable labeling •  Showing whole produc0on process •  Offer guided tours through produc0on factories •  Videos educa0ng about produc0on process on website

• Cooperate with media and be open for dialogue •  Join public debates in talk shows •  Install communica0on plalorm

•  Joining interna0onal food ini0a0ves

Regain customer’s trust in the brand

Invest in quality & safety management

Adapt short term produc0on to current demand

AXer crisis management: How to avoid long term damage

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AXer crisis management: 2. Invest in quality & safety management

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Achieve process excellence by •  Internal benchmarking: Knowledge exchange with other countries •  Secure clean and safe working environment •  R&D for safe packaging materials Develop responsible tes0ng procedures by •  Regular tes0ng by external laboratories •  Stricter in-‐house quality control focusing on

•  Produc0on processes •  Quality of suppliers

Regain customer’s trust in the brand

Invest in quality & safety management

Adapt short term produc0on to current demand

AXer crisis management: How to avoid long term damage

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AXer crisis management: 3. Adapt short term produc0on to current demand

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•  Temporarily lower produc0on capaci0es to 60% for relaunch • Adjust number of FTEs by temporarily reducing working hours (flexible working solu0ons, e.g. shorter hours at lower wages) •  Incrementally increase produc0on capaci0es as communica0on and marke0ng measures are rolled out

Timeplan

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TimeMeasures

Develop labels

Conduct price study

Launch marketing campaign

Set up website

Install social media committee

R&D for packaging and safety

October November December

Reentry of market

100,000 USD

200,000 USD

5,000,000 USD

500,000 USD

500,000 USD

750,000 USD

7,050,000 USD

ü  Market strategy: How to regain market share

ü  Preven0on management: Learn your lessons

ü  AXer crisis management: How to avoid long term damage

Wrap-‐up

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