The Maggi Noodles controversy 2015

The Maggi Fiasco 2015

 Today the entire country is talking about how an MNC brand can break the trust of a nation by dishing out a product which isnt good for health. And the media played a pivotal role in blowing things out of proportion by writing on the issue again and again so that they have a variety of content in their mediums.

Yes today the world has become health conscious but most Indians, I believe try to blindly follow the western lifestyle. Our health ministry has just found out that a product as big as Maggi that generates 180 Cr every month from its sales has got excess lead in some reports and presence of MSG in some reports. The brand has been operational in India since donkeys years and every Indian would have eaten Maggi at some point in their life. And even today despite news of Maggi having harmful elements in the pack I saw a mother buying Maggi noodles for his kid at a nearby local store. This is despite an argment she was having with her kid that Maggi is bad for him and to that the son replied "Then why did you give me this bad Maggi for all these years?"

And to add to this, FDA has found an issue in one of the Maggi batch, have they monitored the other brands on the same scale during this testing and shown their results, it would have been really interesting to see other brands like Knorr, Top Ramen, Sunfeast, Nissin, etc also fared. Leave apart the branded players today we have so many local brands and semi branded (brands of hyper markets) available in the market at cheaper prices, I would definitely like to know their test results. Our countrymen have been eating all these local and branded products for ages and no testing results ever emerge. Just because its an MNC and everyone has jumped on it, imagine an Indian company doing this and the perception will be "Its expected".

Anyway by creating this massive event I am sure all the media will be extremely happy as now its expected that Nestle will not let its bread and butter brand go down. And soon there will be a mammoth media burst to clear their name with a brand new TVC with a extremely trusted celebrity, big print ads, hoardings all across and flooding the digital medium via blogs, videos showcasing how maggi is made and care about everyone health, etc will be showcased. So its cashing in time for all the media houses, hopefully this yr targets will also be upped for all of them.

Was googling about Maggi and it threw financial results for the yr for Maggi which is some 7% down from last yr and market cap falling by INR 10k Cr as per ET in a weeks time. We should also expect Maggi share to come down and competition enjoying the surge in their shares without spending a penny.

A couple of years back Cadbury also encountered a similar issue with worms found in their chocolates and they took a 30% decline in sales in that year but then they quickly recovered. They quickly release a report saying nothing wrong with manufacturing and it was a storage issue and diverted the problem and started project Vishwas (reassuring the consumer that Cadbury is still the best and does not have worms). And to cover up their storage they strengthened the packaging and restoring consumer confidence.

Similarly Nestle with Maggi will also have to adopt a strategy where yes first they accept that there was a lapse and they are willing to improve their age old product by adding some healthy ingredients and importantly strengthening their packaging to ensure the shelf life increases. Start a project which will help rebuild image of Maggi by getting a trusted face and burn millions in media. Apart from this hygiene what would work the best for them is to have live feed of their manufacturing facilities for a while and their testing protocols to be made more stringent. Create an AV showcasing the journey of Maggi since its started and how it won the customers over what people loved about Maggi by re-igniting their emotional passion for the brand.

So basically this fiasco means :
- More money for media companies
- Volatility in the stock market
- Increased market share for competition
- Brand revamp for Maggi (new Maggi would be a more modern and a healthy version)

Personally I am more keen on the last one as I look forward to a more modern Maggi in terms of imagery and an enhanced product portfolio.

Online v/s Offline Marketing

Online vs Offline Marketing

 

 
I know its a little too late for this discussion but still the I think both these mediums have their place in most markets especially developing countries, even in developed markets both these mediums are used but their role in marketing changes. For e.g. offline marketing is no longer the lead awareness medium but a support medium or a reminder medium in developed countries whereas in developing markets offline is still the lead awareness medium (in terms of reach).

In developing markets like even the BRIC countries offline spends are still much higher and it continues to be the lead awareness medium although spends on online have increased tremendously over the last few yrs. Online in these markets is more of a engagement and lead capturing source rather than awareness medium.

Today only 2 nations North America and West Europe have internet penetration of 80+% and South Asia has only 19% penetration which makes it extremely difficult to have one global marketing plan since mediums in both these nations vary significantly. But since the population in Asian region is much higher in absolute numbers it makes sense to explore the online side despite the penetration being low. The global average for internet penetration is 42% so countries with lower penetration the marketing strategy to use this medium will have a different role.
Source : InternetLiveStats Q1 2015, InternetWorldStats Q1 2015. Wikipedia for population data

That being said one can not ignore the potential of the new medium (online) as its the future and I guess the marketing gurus have given their stamp of it being the star in the future. But its taken decades for the developed markets to master it and take the best out of this medium and the developing counterparts see this as a replicate model and try everything that their developed allies have done. Not knowing that its taken them years to master and juice out of the maximum of this medium as there is a lot of learning's that come only out of experience.

There are so many options available to explore on the online platform and one is really spoilt for choice here especially if one is from the developing nations its a 7 course meal after being hungry for ages so one wouldn't know where to start so one hogs on everything and ends up not eating whats best for him. For e.g. first step is to ensure that the landing pages and all the material which is in the organizations control have to be made the best before doing any other online marketing but here typically organizations would start everything together a brand new HTML 5 website, SEO, SEM, Search, Display Networks, Banners, Mailers, Whatsapp, etc and then websites don't function or tracking is faulty and they end up messing up the entire medium. This is because the their core TG may not be ready for such kind of online marketing explosion. Recently in India there is again a online retailer dotcom bubble being formed but its not that they are spending million of dollars online they are spending major part of their budget offline to generate awareness of an online medium.. In developed nations this would seem like a silly and illogical idea where a manager will be asked the question of why should I spend dollars offline when the medium is online and high internet presence.

Just by taking an agency who is willing to give the best the world has to offer does not mean its the most intelligent piece of marketing one has ever done. Its really important to understand the dynamics of the country and its population and then dish out marketing strategies that will help deliver the desired results. For e.g. mobile as a medium has almost 75% + penetration in Indian markets but only 10% + mobile connections have a high speed 3G connection in India. So here if we had apps or content that is heavy on bandwidth then your definitely losing out on our TG unless your TG is premium kinds.

Hence its imperative for brands and organization to have accurate understanding of their markets and their TG before crafting out global best practices that may not be relevant for their markets. In most developing nations offline still is seen and will continue to be the lead awareness medium as of now I feel and probably in the next decade when these countries have better infra this medium will or may become the lead medium for awareness as well as engagement.

That being said a good marketing strategy will always have both these mediums as their must haves its just that the roles of both mediums will change depending on the geography and TG of the brand.