Brand Positioning in Noodles Market

In a very pioneering move Nestle created instant noodles category in mid 1980s when they launched Maggi brand. Being the first mover the brand become category representative. To many people instant noodle is Maggi. It has become generic to the product category. Positioning is an important aspect of marketing strategy. Market segmentation is first step in strategy development. It is impossible for one marketing package to make sense to everybody. By dividing customer on the basis of their similarities, it becomes easier for a firm to decide where to direct its marketing efforts. This allows better allocation of finite marketing resources by maximizing efficiency and effectiveness.

Nestle also had a lot of options. The noodles market can be divided into different groups depending upon the choice of segmentation variable. For instance, there is domestic and professional segment for noodles. The market could be divided on the basis of age of consumer, r consumption quantity, geographic location and culinary treatment. Market segmentation is a matter of perception. There are people who look at the market the way everyone sees, whereas a limited few are able to uncover new customer groups who have not been uncovered by generally followed basis of segmentation. Nestle chose to target the children segment. Children frequently demand something to eat. Back then the market of snacks was not evolved. Therefore whenever mothers were pestered they were forced to provide home cooked snacks or light food like parantha, pulav, pakora, sandwich and vada

The next question was to decide upon its value proposition and positioning. How should the brand Maggi be placed in consumer’s mind? Essential to positioning was that Maggi must be perceived distinctively and of relevance to target market. Maggi was positioned as ‘fast to cook and good to eat’ 2 minutes noodles. It offered distinctive advantage to mothers in terms of ‘fast to cook’ proposition. The Maggi noodles unique formulation reduced the long grind involved in making traditional quick food. All that Maggi needed was two minutes boiling time and adding of a tasty masala called ‘taste maker’. For kids, the brand offered ‘good to eat’ proposition.

Maggi opened an entire new market for instant noodles. The next brand to arrive in the market was Top Ramen from Nissin. The challenge for the brand was how to position itself so that it could create a distinctive position. It tried to take at dig at Maggi by directly calling itself ‘ Smoodles’ or smooth noodles. It urged customers ‘Don’t be a noodle. Be a Smoodle’. The brand adopted product attribute based positioning and highlighted its smoothness.

Sensing the opportunity, HUL jumped the fray and entered the market with their Knorr brand. Knorr, originally a soups brand in HLL’s portfolio was extended to noodle category. Knorr Soupy Noodles also targeted the in home children market. It boasted of a unique product in instant category and aimed at combining the fund of noodles with the health and goodness of soups. The brand positioned itself as noodles with soup for children to satisfy the in between meals hunger pangs. The brand’s communication focuses on a situation where a child demands something to eat before dinner at about 7 o’ clock.

GSK the makers of Horlicks entered the instant noodles market with their Foodles brand. GSK continuing with health and nutrition platform created Foodles. The brand’s launch was based on research inputs that instant noodles were not considered healthy and serving them induced guilt in mothers. The key ingredient in instant noodles, maida or refined flour, was not as healthy as whole wheat. While the positions of convenience and taste were already occupied, Foodles sought to play the game on nutrition positioning. Foodles tried to break into the monopoly of Maggi with Foodles positioned as nutritious instant noodles. The company used its Horlicks brand as mother brand to support its noodles brand..

Homegrown cigarette giant studied the instant noodles market and discovered some ways to cut into Maggi’s dominance. Its studies found chinks in Maggi’s armour. Maggi came in rectangular shape. It needed to be broken into two pieces for placing it in the pot for boiling. Pots used in kitchens always come in round shape like frying pan and cookers. This broke noodles and rendered them small in length. Second, kids often do not eat the noodles immediately. Noodles are also taken to schools in tiffin. Maggi noodles if not eaten immediately tend to turn lumpy and soggy with time. They stick together which was not really a fun to eat. Maggi’s masala contributes major share to its sale.  ITC leveraged its skills and created two tasty variants to give customers a choice.  ITC extended its Sunfeast brand into instant noodles category by launching Yippee. Yippee was positioned as noodles for the curious kids as long noodles which can be played around with while eating. The brand communication very cleverly but subtly aimed to promote its unique points of differentiation as longer non sticky tasty noodles which are ‘play’ to eat.

A market is an evolving organic system. There are many other brands which wrestled for share in the instant noodle market. One of the innovative concepts was launched by Nissin Cup Noodles. The brand point of difference was its out of home access to noodles when kids are on a picnic or an adventure trek and need an escape from the cooking process however small.The other brands which operate at small scale are Ching’s Secret, Smith & Jones and Wai Wai noodles. Future Group competes with its Tasty Treat brand which is sold in its retail chains like Big Bazaar and Food Bazaar.  These brands are pushed through the retail and compete on price positioning.

The story of noodles shows positioning is not about product because instant noodle is an instant noodle. How it is converted into a consumer relevant and competitively different concept is the question.

Information overload, great escape and consumer perception

Like chaos and confusion on city streets and society in general, the information environment bears an almost similar reality. There is too much to accommodate and too conflicting to reconcile. Consider the following:

An customer on an average is bombarded with over 2000 messages every day; all our senses are perpetually intruded upon by marketing messages-it is virtually impossible to open eyes or ears to brand free environment; even friends carry endorsements on their bodies- they have become mobile ads; you touch a thing and a brand screams; the news papers have become bulkier over the time and it is difficult to isolate the news from the sponsored messages; and on television it is unending barrage of advertising which is interspersed with programs.  In such a situation how do people cope?

When the information exceeds the limit we can cope with, our perceptual system is automatically pressed into action. So before we get paralyzed by information overload and collapse, the mind gets into filtration mode.  The information a limited portion of the total is allowed to in the mind. Consider some facts: over 200 million Americans have joined ‘don’t call list’, 86% skip ads on television and 44% direct mailers are never opened. Getting customer’s attention is tough especially when the perceptual sensors are raised to escape from the information assault. Most of marketing communication is ‘filtered and thrown away’ by prospects.

When prospects do not give attention easily, the marketer’s job is to devise strategies to capture it. Consider the following:

• When Onida brand was launched in India, the television market was already crowded with over 20 brands. The obvious challenge for the company was how to get the customers to pay attention to another brand of television.
• When Maggi brand forayed into tomato ketchup market, the dominant brand was Kissan. In people perception nothing a sauce is a sauce. Therefore it is futile to pay attention to ketchup advertising.

Two newspapers ads caught my attention on Aug 12. Consider their headlines:

The first posed a question: ‘What’s your size?’ and second asserted ‘Best accessorized by a bowler hat, with a gentleman underneath’.

Now make a guess what products are these ads trying to promote?

• The first one is of ‘Euro’ inners. The ad displayed a masculine eight pack, young man standing against the background which shows the brand name in capital letters. His right arm is inside the letter ‘U’ linking the man and the brand. The model looks straight into the eyes of the reader and draws attention in its entirety to his brief. His questioning expression is bold, challenging and direct.
• The second ad is of ‘Woods’ which displays a stylish pair of ladies sandals, a pocket watch and a picture of two English gentlemen. The headline goes ‘Best accessorized by a bowler had, with a gentleman underneath’.  One wonders what gentle men have to do with sandals.

There are broadly three ways to capture attention: ambiguity (when communication does not make sense and challenges us into sense making), interest (things we like and prefer e.g. humor, music, sports) and relevance (things which are pertinent to us in a given situation).  Now consider the strategies used by the above brands:

Onida’s ‘Neighbor’s envy owner’s pride’ campaign with devil did not make sense and hence challenged people into resolving the apparent question ‘what the hell this devil is doing in this ad?’

Maggi’s campaign used Pankaj Kapoor and Javed Jaffery duo in comic situations and caught attention by ‘it’s different’ message. The ads used two actors arguing with each other in very comic situations.

The Euro and Woods ads also employ ambiguity and headline leaves it on the reader to ‘elaborate’ them in their own way and construct meaning: ‘What’s your size?’ and ‘Best accessorized by a bowler hat, with a gentleman underneath’.

Weber, JND/ Differential threshold level and ‘Honey, they’ve shrunk the kid’s chocolate bar’

The statement ‘Honey, they’ve shrunk the kid’s chocolate bar’ was the headline of a news item that appeared in TOI on Nov 20, 2011. This news item reported that many brands in so called fast moving consumer goods/ impulse category have reduced unit quantity/weight subtly without catching consumer attention. Consider the following cases:
Product Price (Rs) Weight then (gms) Weight now
Lays chips 20- 68- 61
Good Day 10- 100- 84.5
Dairy Milk 20- 40- 38
Britannia bread 12- 100 -80
Hadiram sancks 10- 52- 48
Lux soap 10- 75- 65

Maggi- 10-52-48

Brands operate in a dynamic environment. Currently most of the marketers have been facing pressures of inflation on demand/ revenue and supply/ cost side. On the demand side consumer purchasing power has been adversely affected because of inflation. And on the supply side the input costs have been moving north. The upward movements in input costs make a case for a price adjustment in order to maintain profitability. However if price is maintained in the wake of rising input costs the profitability comes under pressure. However if income is also on the rise, it may not be difficult to pass on burden to consumers by adjusting price upwards.
Tinkering with the price that consumers get used to is not an easy decision. In some cases customers tend to be sensitive to price and even a small price change can upset value equation. Price is often under consumer and media gaze. An insignificant price change can potentially upset the position of a brand on the value spectrum in consumer’s mind. For instance price points for low ticket items could be Rs 2, Rs 5, Rs10, Rs 15 and Rs 20. A minor price increase can create perception of price hike far more than what it actually has been. Price changes sought to offset input costs may also be resisted by trade partners because of currency denomination issues.
It is therefore makes more sense to pass on cost increases by those means that customers are likely to be less sensitive about. The product quantity or grammage in this context makes a right case for neutralizing cost escalation. Although consumers do develop notions about sizes or quantity as a result to repeat previous exposures in the form of reference sizes but these are likely to be vaguer than prices. Unless sizes are radically changed they are unlikely to be noticed by people. People are less likely to be sensitive to product quantity rather than price because price is a more involving issue (price is marked, discussed, displayed, compared and paid for).
The lack of concrete grammage/ quantity benchmarks along with less consumer involvement provides marketers with an option to offset cost escalation by quantity reduction. But the crucial issue here is to decide an appropriate quantity of shrinkage that it goes undetected by consumers. The idea is to not to execute a change which would upset/disrupt the ‘consumer routine’ and bring him or her back into ‘problem solving’ frame. So what is the maximum quantity reduction which is likely to go unnoticed?
Let us take a look at the grams by which the brands mentioned in the table have been shrunk: Lays chips (7 gms), Good Day (15.5 gms), Dairy Milk (12 gms), Britannia bread (25 gms), Haldiram snacks (4 gms) and Lux soap (10 gms). Can the quantity reduction decisions be taken randomly? The answer to this question is negative. Here one of the behavior concepts that comes to the rescue of brand managers is ‘differential threshold level’ or ‘justice noticeable difference’. It is the minimum difference between two stimuli (quantity before change and after change) which is noticeable by a prospect. Therefore safe strategy is to reduce grammage or product quantity by an amount which is below JND or differential threshold level. This ensures that consumer gets less quantity at a given price and this also goes unnoticed or unperceived. The quantity so saved can be utilized to compensate for increase input cost. Look at the quantity by which brands in question have shrunk. These are too insignificant (probably below JND) to be noticed by an average buyer.
How do we arrive at specific quantity of reduction? This would largely depend upon the initial level. Weber’s law states that stronger the initial stimulus, the greater the additional intensity needed for the second stimulus to be perceived as different. It is essential for marketers to determine the differential threshold level and then carry out negative changes (like quality or quantity reduction) by an amount that is likely to unperceived (below JND) and for positive changes (quality improvement) the improvement must be above differential threshold in order to be noticed by people.