Why is this relevant to you - the MBA student?
This is a question of business strategy and decision-making. No matter what specialisation you’re into - consulting, finance, marketing, or supply chain, this is an interesting case to know about. So let’s dive in. Why does Marico think a noodle brand will be a good offering?
Let’s look at the pandemic first. Thanks to the pandemic, people are spending more and more time indoors. This means they’re actively looking for varieties of options they can cook at home. All this has resulted in food companies expanding their portfolios and creating interesting variants of their offerings. In fact, in the third quarter, benefiting from in-home consumption Marico's foods portfolio, comprising honey and oats, reported a value growth of 74% year-on-year (y-o-y). Meanwhile, Saffola edible oils posted 17% y-o-y) volume growth, slightly lower than what it reported in the second quarter of the current financial year.
Nestle’s Maggi noodles is the market leader in this category, while ITC’s Yippee follows a close second. So what gives Marico the confidence to launch this product you ask? Mostly, it’s Marico’s focus on strengthening their position in the ready-to-eat, healthy, instant foods category. Saffola Masala Oats is a famous brand already. Now, choosing to get into the instant noodles segment shows an aggressive mindset, with the company ready to take on the big-wigs like Maggi and Yippee. This strategy is derived from Marico’s own trajectory with food.
Last year, Marico Ltd. did something slightly below Rs. 200 crore (in foods). They are extremely confident of getting to Rs. 300 crore plus this year and then getting to Rs. 450 crore and to a Rs. 500 crore number in the following years so that becomes a critical mass. This shows that the company is bullish on its food portfolio. The big USP for Marico is banking on their Saffola brand - which is known as a healthy alternative by consumers.
What do you think? Do you think Saffola Noodles will be a hit? Do you think Marico’s launch in teh noodle segment is right at this time? Share your thoughts and opinions in the comments section below.
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