sahil sharma,business at the base of pyramid

8/18/2019 Sahil Sharma,Business at the Base of Pyramid

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SUBMITTED TO-

SUBMITTED BY:-

PROF. KRITI SWARUP

SAHIL SHARMA

PROJECT ON

BUSINESS AT

THE BASE OFPYRAMIDMAGGI NOODLES


2/13

PGDM20160050

INTRODUCTION

Only three countries in the hole orl! re"resent # $#r%et o&

#l$ost to 'illion #t the loest se($ents) These $#r%ets h#*e

'een historic#lly ne(lecte! 'y $ulti+n#tion#l co$"#nies, ho

h#*e tr#!ition#lly t#r(ete! the u""er consu$er se($ents in

e$er(in( $#r%ets) But lo+inco$e consu$ers re"resent

enor$ous *olu$e #n! "ro-t "otenti#l &or se*er#l sectors,st#rtin( ith those ser*in( '#sic nee!s such #s &oo!, hy(iene

#n! other !#ily use consu$er "ro!ucts) Further$ore, the $ost

i$"ort#nt #s"ect o& this consu$er se($ent is not their

consu$"tion "otenti#l to!#y, 'ut the shi&t into 'eco$in( # lo

$i!!le+cl#ss ith hi(her s"en!in( "oer th#t ill intro!uce

the$ . in # /0 ye#r hori1on+ into the (lo'#l $#r%et #s ne

consu$ers !e$#n!in( (lo'#l 'r#n!s, "ro!ucts #n! ser*ices) To

ser*e these $#r%ets, to '#sic "re+con!itions nee! to 'e&ul-lle! 'y intern#tion#l co$"#nies2 /3 Cre#tin( the c#"#city to

consu$e, #n! 43 De*elo"in( "ro!ucts #n! ser*ices #!#"te! to

their "oc%ets #n! li&estyles) 5et6s loo% #t the 7M#r%et Pyr#$i!8

in so$e o& the $ost re"resent#ti*e countries)


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Other $#r%ets #lso "resent l#r(e "o"ul#tions o& 'otto$ o& the

"yr#$i! consu$ers, es"eci#lly in Asi# #n! 5#tin A$eric#) A&ric#

"resents &e e9#$"les yet #s "o*erty #lle*i#tion #n! '#sic

nee!s &ul-ll$ent is still #t *ery e#rly st#(es) In!onesi#,

Th#il#n!, the Phili""ines, :ene1uel#, Ecu#!or, Colo$'i# #re

only # s$#ll s#$"le o& (eo(r#"hic concentr#tions o& BOP

$#r%ets) O*er#ll, the -*e 'illion "oor "eo"le th#t t#%e "#rt in

this $#r%et, re"resent ;/< trillion in "urch#sin( "oer, $ore

th#n =er$#ny, the U>, It#ly, Fr#nce #n! J#"#n to(ether) A stu!y

con!ucte! 'y Deloitte #$on( (lo'#l $#nucturers #lso

con-r$s th#t e9ecuti*es see &uture (roth co$in( &ro$

e$er(in( $#r%ets)

MA==I

E*er since its l#unch in In!i# in /?@, this 'r#n! h#s 'eco$e

synony$ous ith noo!les) The 'ri(ht re! #n! yello colours o&

the "#c%et ith the 'rilli#nt 'lue 74+$inute Noo!les8 "rinte! on

it h#s &oun! # "l#ce on e*ery %itchen) O*er the ye#rs, M#((i

h#s (ron #s # 'r#n! #n! "ositione! itsel& #s # 7F#st to coo%=oo! to E#t 7&oo! "ro!uct)

The history o& this 'r#n! tr#ces '#c% to the /?th century hen

in!ustri#l re*olution in Sit1erl#n! cre#te! ctory o's &or

o$en, ho ere there&ore le&t ith *ery little ti$e to "re"#re

$e#ls) Due to this (roin( "ro'le$ Siss Pu'lic elre

Society #s%e! # $iller n#$e! Julius M#((i to cre#te # *e(et#'le

&oo! "ro!uct th#t oul! 'e uic% to "re"#re #n! e#sy to !i(est)

Julius, the son o& #n It#li#n i$$i(r#nt c#$e u" ith # &or$ul#to 'rin( #!!e! t#ste to $e#ls in /@) Soon #&ter he #s

co$$issione! 'y the Siss Pu'lic elre Society, he c#$e u"

ith to inst#nt "e# sou"s G # 'e#n sou"+ the -rst l#unch o&

M#((i 'r#n! o& inst#nt &oo!s in /@@4+@)To#r!s the en! o& the

century, M#((i co$"#ny #s "ro!ucin( not ust "o!ere!

sou"s, 'ut 'ouillon cu'es, s#uces #n! other #*ourin(s)


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Hoe*er in In!i# the l#r(est consu$er o& M#((i noo!les in the

orl!3 it #s l#unche! in /?@0 'y Nestle (rou" o& co$"#nies)

M#((ie h#! $er(e! ith Nestle $ily in /?


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The &or$ul# clic%e! ell #n! M#((i 'ec#$e # 'r#n! n#$e)

Nestl h#s ce! criticis$ o& its #!*ertisin( not #!herin( to

$#r%etin( re(ul#tions in !e*elo"e! countries, #n! $#%in(

$isle#!in( cl#i$s in !e*elo"in( countries) Also, in Octo'er400@ Nestl $ist#%enly #ire! # co$$erci#l $e#nt &or

B#n(l#!eshi tele*ision on British T:) The #!*ert $#!e lse

cl#i$s th#t the noo!les oul! hel" to 'uil! stron( $uscles,

'one, #n! h#ir) The British A!*ertisin( St#n!#r!s Authority

s#i! th#t the #!*ert !i! not #'i!e 'y the ne EU consu$er

"rotection le(isl#tion, 'y hich #!*ertisers h#*e to "ro*i!e

"roo& o& he#lth cl#i$s)

M#r%etin( Co$$unic#tions o&M#((i

M#((i is no t#r(etin( its "ro!ucts #t the entire $ily #n! not

only %i!s)

Adv!"#$%&" '(%)(#*&$:


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M#((i h#! l#unche! 7MAIN AUR MERI MA==I8 c#$"#i(n in

co$$ensur#tion o& 4 ye#rs o& M#((i in In!i#)

P!#&" Adv!"#$%&"$:

• M#((i !i! not &ocus he#*ily on "rint $e!i# !urin( its

l#unch since its initi#l t#r(et #u!ience #s $others #n!

%i!s)• So$e #!*ertise$ents in the "rint $e!i# ere use! to

hi(hli(ht the con*enience ctor o& M#((i)• M#((i intro!uce! this &or$ o& #!*ertise$ent in *#rious

$#(#1ines in 400 to cele'r#te 40 ye#rs o& its "ro!uct in

In!i#)• M#((i c#$e out ith #!*ertise$ents in so$e ee%ly

$#(#1ines &or its #tt# noo!les #n! rice noo!les *#ri#nts)

• M#((i6s e9"en!iture on "rint $e!i# is $uch loer

co$"#re! to other $e!i#)

S(+$ P!,%,"#,&:

• To in!uce tri#ls &or M#((i D#l Att# #n! Rice M#ni# noo!les

• M#((i #s !istri'ute! &ree in schools #n! oQces to"ro$ote tri#l)

• Return (i&ts on e$"ty "#c%s)

• M#((i &un 'oo% #n! stic%ers ith &un%y #ni$#l cts)

• Or(#ni1e! ret#ils S#les Pro$otion

!iscounts on "iece "#c% MRP3, ru"ee !iscount on @

"iece "#c% @ MRP3) These #re "ro$otion#l sche$es (i*en 'yret#iler itsel& not 'y NI5)Co$"#ny c#$e u" ith sche$es li%e

(i*in( one sou" "#c% ith @ "iece "#c%)In the "#st, the

co$"#ny h#! "ro$otion#l sche$es li%e < "iece "#c% &or Rs

inste#! o& Rs)


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Deli*er cre!i'ility $ess#(e #'out the "ro!uct 'ein( he#lthy to

'e consu$e! re"e#te!ly)

The M#((i Clu' + the chil!ren un!er /< ere in*ite! 'y "ress

#!*ertise$ents #n! !istri'ution o& le#ets to 'eco$e #$e$'er o& $#((i clu' 'y sen!in( lo(os cut &ro$ e$"ty

$#((i r#""ers) M#((i "roecte! it #s 7$#((i clu''ers #re &un

lo*ers8 #n! inten!e! to use it #s re&erence (rou")

Bene-ts oKere! to $#((i+clu''ers #re *#rious (#$es li%e Sn#"

s#ri (#$e, C#" #n! $#s% sets, tr#*el In!i# (#$e, Disney

to!#y co$ic) To o't#in e#ch (i&t the $e$'er h#s to sen!

r#""ers #s "urch#se "roo&)So$e s"eci#l "ri*ile(es ere (i*ento re(ul#r $e$'ers ti$e to ti$e li%e, !iscounte! tic%ets o&

the$e "#r%s)

I&"!(/"#v %(!"#&*:

7Inter#cti*e $#r%etin( is the #'ility to #!!ress the custo$er,

re$e$'er h#t the custo$er s#ys #n! #!!ress the custo$er

#(#in in # #y th#t illustr#tes th#t e re$e$'er h#t the

custo$er h#s tol! us)8 Dei(hton /??3)Inter#cti*e M#r%etin(re&ers to the e*ol*in( tren! in $#r%etin( here'y $#r%etin(

h#s $o*e! &ro$ # tr#ns#ction+'#se! eKort to #

con*ers#tion)The Consu$er inter#cts ith the online sellers,

e(, reuirin( $ore in&or$#tion, 'y sen!in( #n e+$#il or clic%in(

# lin% #n! #nserin( # uestionn#ire)

O"! ",,+$:

• S"onsorin( School S"orts e*ent hi(her secon!#rystu!ents3

• Or(#ni1in( M#((i "#intin( co$"etition, &or school chil!ren

till st#n!#r! th• Intro!ucin( M#((i nes letter &or teen#(ers e*ery $onth)

consists o& (ener#l %nole!(e, !iet essenti#ls, "u11les,

o%es, 'r#in (#$es #n! $#ny other interestin( thin(s3


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• Mo*in( :#n, "#inte! #'out $#((i, ne#r colle(es #n!

sho""in( "l#ces, hich oul! "ro*i!e coo%e! $#((i &or

Rs) • Or(#ni1in( M#((i H#""y He#lthy F#$ily !#y, #s # &re#%

out "l#ce ith "#rents ust li%e in irs, -lle! ith (#$es,

e#t#'les #n! ##reness #'out the he#th contents in

$#((i noo!les3

RURA5 DISTRIBUTION STRATE=Y2MA==I

The $ost truste! 'r#n! o& Nestle, M#((i &ro$ 4 ye#rs, no

(oin( to $#%e #n entry i the In!i#n rur#l $#r%et ith its l#test

intro!uction, M#((i M#s#l#+#e+M#ic) It is the che#"est noo!le o&

M#((i hich ill 'e #*#il#'le in the In!i#n rur#l $#r%et &or ust

Rs) 4)

hile M#s#l#+#e+M#(ic is # &orti-e! t#ste enh#ncer ith Iron,

Io!ine #n! :it#$in A, R#sile Cho is # lo+cost, t#sty li(ht $e#l

th#t is &orti-e! ith Iron)

Nestle In!i# Ch#ir$#n G M#n#(in( Director Antonio Helio

#s1y% s#ys the co$"#ny h#s le*er#(e! its nutrition#l

e9"ertise to inno*#te #n! !e*elo" rele*#nt "ro!ucts #t the

#""ro"ri#te ti$e ith, &or e9#$"le, incre#se! n#tur#l -'er, or

rein&orcin( the$ ith nutrients such #s c#lciu$ #n! "roteins to

'etter $#n#(e he#lth #n! ellness)

Pro!ucts &or the rur#l $#r%et ill #lso hel" the co$"#ny$#int#in # '#l#nce) In the l#st to ye#rs, hen the ur'#n

$#r%ets coole! !on, the rur#l $#r%ets continue! to re$#in

'uoy#nt) Hi(h su""ort "rices &or #ll l#r(e cro"s, the N#tion#l

Rur#l E$"loy$ent =u#r#ntee "ro(r#$$e, #n! the r$ lo#n

#i*er h#*e ensure! th#t there is (oo! "urch#sin( "oer in the

rur#l $#r%ets) This h#s 'e(un to !ri*e FMC= co$"#nies to

*ill#(es #n! s$#ll tons) Nestle is no e9ce"tion)


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It ill 'e consi!er #s # one o& the (re#t intro!uction &ro$ the

st#'le o& Nestle) 'ut its success is !e"en! u"on the custo$ers

"re&erence hich is #n un"re!ict#'le issue)

Pro!ucts &or the rur#l $#r%et ill #lso hel" the co$"#ny$#int#in # '#l#nce) In the l#st to ye#rs, hen the ur'#n

$#r%ets coole! !on, the rur#l $#r%ets continue! to re$#in

'uoy#nt) Hi(h su""ort "rices &or #ll l#r(e cro"s, the N#tion#l

Rur#l E$"loy$ent =u#r#ntee "ro(r#$$e, #n! the r$ lo#n

#i*er h#*e ensure! th#t there is (oo! "urch#sin( "oer in the

rur#l $#r%ets) This h#s 'e(un to !ri*e FMC= co$"#nies to

*ill#(es #n! s$#ll tons) Nestle is no e9ce"tion) There #re

other re#sons too) An#n! R#$#n#th#n, sector #n#lyst &ro$>PM=, s#ys l#unches #t lo "rice "oints in rur#l In!i# #n!

intro!uction o& ne "ro!ucts li%e P#11t# in the ur'#n $#r%ets

#re !esi(ne! to hel" M#((i to incre#se its rele*#nce in the

incre#sin(ly co$"etiti*e $#r%et #n! ret#in its c#te(ory

le#!ershi")

everaging Opportunities among BoP Consumers >>

FMCG >> Nestle Maggi

Nestle, hich h#s # renee! &ocus on BoP $#r%et no, h#s

intro!uce! s$#ller "#c%s o& their "ro!ucts .M#((i Noo!les #n!

>etchu"s) . This is hel"in( the$ to incre#se the "enetr#tion o&

their "ro!ucts) . They h#*e inno*#te! #n! cre#te! # t#ste

enh#ncer ith #!!e! iron #n! *it#$ins, s"eci-c#lly &or the BoP

#u!ience) . This #llos the$ to not only i$"ro*e the t#ste o&

e*ery!#y !ishes, 'ut #lso enh#nce the nutriti*e *#lue o& the

&oo!)


10/13

UNILUE PRICIN= STARTE=Y OFMA==I NOOD5ES

Pricin( str#te(y &or the e9istin( *#ri#nts o& M#((i Noo!les is'#se! on the o'ecti*e o& M#9i$isin( M#r%et Sh#re8) These

*#ri#nts #re co$"etiti*ely "rice!) As the se($ent is hi(hly

"rice sensiti*e, #ny "rice ch#n(e initi#tes #n inst#nt "rice

chec% re#ction &ro$ the co$"etitor)


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BRAND BUI5DIN=

In to!#y6s orl! o& citi1en ourn#lis$, nes (oes *ir#l in # #sh)

An! i& it is '#! nes, it #cuires # s"in #n! s"ee! th#t is*irtu#lly i$"ossi'le to sto") Br#n!s, there&ore, #re $ore

susce"ti'le to # t#rnishe! i$#(e to!#y, th#n in #ny other !#y

#n! #(e) The l#test 'r#n! to -n! itsel& in this u#($ire is

M#((i, the inst#nt noo!les 'r#n! &ro$ &oo! #n! 'e*er#(e

co$"#ny Nestle) One o& In!i#6s $ost truste! 'r#n!s #n!

"erh#"s the country6s $ost *oure! co$&ort &oo!, it h#s t#%en

# hu(e %noc% in ter$s o& 'r#n! *#lue #n! s#les e*er since the

recent contro*ersy 'ro%e o*er #lle(#tions th#t it h#! le#! #n!

$onoso!iu$ (lut#$#te MS=3 in e9cess o& "er$issi'le li$its

#n! #s, there&ore, uns#&e to consu$e)

Re(#inin( custo$er con-!ence isn6t e#sy once consu$ers h#*e

# ne(#ti*e "erce"tion o& # 'r#n!) innin( '#c% the trust o&

consu$ers #n! in*estors is %ey to re*i*in( the 'r#n! i$#(e)

The 'usiness "er&or$#nce o& the co$"#ny ori(in#tes &ro$ the

consu$er "er&or$#nce) Nestle cert#inly reco(ni1es this, #se*i!ence! 'y the e$"h#sis on re'uil!in( trust #n! consu$er


12/13

con-!ence #t Bulc%e6s "ress $eet) 7ith the consu$er I $in!,

e ill !o e*erythin( it t#%es, #re &ully en(#(e! ith the

#uthorities #n! h#*e cl#ri-e! the situ#tion,8 Bulc%e s#i!,

#!!in(2 7Our "riority no is to en(#(e #ll st#%ehol!ers to cle#r

the con&usion) M#((i ill 'e '#c% #t the s#$e "#ce soon)8

W(" ,!d 3,! M(**#:

/) First+$o*er #!*#nt#(e2 the intro!uction o& inst#nt noo!les #s

# &oo! se($ent

4) Ti$ely reco(nition o& their T= #n! correction o& the s#$e

) Continuous "ersu#sion throu(h #!!sc#$"#i(ns to their T=

chil!ren #n! their $others3


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o""ortunities o& #ll lie in 'uil!in( u" # country, #n!o""ortunities the si1e o& In!i# #n! Chin# co$e #lon( $#y'eonce e*ery 400 ye#rs, i& not less &reuently) I& entre"reneurs#re success&ul #t sc#le, they #re 'oun! to re"lic#te in In!i#,

A&ric# #n! elsehere, the re$#r%#'le run they6*e h#! in the40th century in E#st Asi#, $ost recently in Chin#, inclu!in('rin(in( !on the le*els o& #'solute "o*erty !r#$#tic#lly)

sahil sharma,business at the base of pyramid

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