Tuesday, December 7, 2010

Building the Brand- Foodles

Sunil Mishra, IIM S



GlaxoSmithKline’s (GSK) newest product Foodles has hit the markets about a month back in the instant noodle category. GSK, which is world’s fourth largest pharmaceutical, research-based company with a wide portfolio[1] of pharmaceutical products covering anti-infectives, central nervous system, respiratory, gastro-intestinal/metabolic, oncology, and vaccines products and is known in India for its healthcare products and nutritional drinks, the most popular being Horlicks. The company generates a good revenue from the nutritional drinks division in India (in the range of Rs. 1,500 crore[2]) and now wishes to diversify its product range. But it remains to be seen if it can compete with Nestle’s Maggi, the most dominant product in the said category with an unbelievable market share of 91 % in an industry which is worth nearly Rs. 1200 crore and growing at 20 percent per annum [2].

History of the Instant Noodles Category

Maggi was launched by Nestle in 1984 and been the market leader ever since. Other major products which have come into this category over the past 25 years have been Top Ramen Smoodles and Cup Noodles manufactured by Indo-Nissin Ltd. Some other players in this market also include Capital Foods (Ching’s Secret and Smith & Jones), Future Group (Tasty Treat) and CG Foods (Wai Wai). But in all these years, no product has ever even come close to beating Maggi in its market share. All others that came into the market either suffered due to their product quality, marketing strategies or the brand loyalty of Maggi customers. Only Top Ramen’s Smoodles came close to competing with Maggi in the last 1990s with its varying flavours and curry noodles. Maggi during this time had also changed its taste which did not go well with its customers. But when Maggi switched back to its original Masala flavour again, Top Ramen was left far behind and had to be content with being second with a very small share in the market. But lately, the growth rate and the revenue being generated from the industry has attracted the attention of a lot of players and the giants of the consumer goods like HUL which previously have kept away from the category. With the launch of HUL’s Knorr noodles and GSK’s Foodles, we can hope for some competition in the market which may at the end of the day gain the maximum advantage to the consumers.

Foodles – The Brand

GSK launched Foodles under the name of Horlicks Foodles( 2 b chked) with two variants of noodles. - Regular and Multi-grain. It was first launched in south India which currently is the stronghold of GSK through the Horlicks brand. It is to go national within a span of 6 months. The company aims to gain a higher single digit market share within a year or two and establish itself as a player in the salty confectionary foods division.

Foodles- What has been done

The problem with instant noodles has always been the fact that it is not very healthy. Keeping that in mind, Maggi few years ago came out with the tag of –“taste bhi , health bhi” which has helped it in maintaining sales. Foodles has taken this one step ahead and tried to create an USP out of the health factor associated with noodles. It has made TV advertisements which highlight the fact that even though it is an instant noodle, it is healthy and thus should be the consumer’s choice. Foodles also provides an "Health Maker" sachet which comes along with the noodles pack which contains the essentials of 5 vitamins[3]. Foodles has tried to create a product category for itself by differentiating itself from instant noodles. Also, Foodles is currently trying to appeal to the upper middle class in the urban areas and placed the product at a premium price with Its multigrain variant costing Rs 15 for 80 gm compared to Maggi’s Rs 10 for 80 gm[2]. Also, to use the distribution channel of Horlicks, initially single packs of Foodles were given for free. So far, the start of Foodles marketing strategy has been good, but is it enough to take on the leader of the market of 25 years? The past is not in favor of Foodles and it has also got to compete with brand like HUL along with Maggi. Let us examine what more strategies can they can adopt to appeal to the market.

Foodles- What next?

For one, the name Foodles is a bit confusing because Disney already has a product named Foodles , although Disney’s Foodles is available only via Disney’s outlets and thus problem of same names wouldn’t arise. Looking at the strategies Foodles has adopted and some of the more successful marketing campaigns of the same kind, some of the strategies Foodles may adopt are:

· PRESENCE IN THE WEB WORLD: Web publicity doesn’t take much of an investment and has been proven to give great ROI. Even for FMCGs, it has been proved that internet advertising has great paybacks [4] [5].The target segment of Foodles is Indian women and kids and latest market research have proved that increasing number no. of Indian women are becoming internet savvy and relying on it for their household decisions [6]. A website specifically for Foodles like one which exists for Amul products should also be designed. It can include information regarding its nutrient constituent for the mothers to read and some games for kids to enjoy. The games may be designed to relate it to the product in a way that makes kids want to buy the product may serve as a key marketing strategy as more and more kids are now- a- days spending time on the web.

· POSITIVE BRANDING: The current advertisement which is on air by Foodles shows that generally instant noodles are bad for health and Horlicks Foodles is an exception. This is an aggressive form of marketing and puts it in direct competition with Maggi. Rather than adopting this form of advertising, Foodles should concentrate on its own USP without attacking other brands. Currently it is new to the market and this form of marketing may put negative thought in the minds of the customers.

· MORNING SNACK: To further promote itself as an healthy snack, Foodles should elevate itself from the 4 o’clock food category and establish itself as a non lunch non dinner food. This can bring in Foodles as a breakfast option too and thus increase probability of people buying it.

· BRAND AMBASSADORS : To promote its brand as a healthy food even more, Foodles can bring in well known cooks of the country like Sanjeev Gupta or Tarla Dalal who are known for their health conscious food recipes and promote the brand through them in their media advertisements. Indian women connect greatly to these cooks and thus this can increase the brand’s value in their minds.

· FOOD RECIPES: Only promoting itself as an healthy food may not get Foodles the market shares it aspires for as other of products like Maggi have already switched to Atta Noodles to get into the healthy food category. Foodles has to come up with some innovative recipes (maybe an alternative way of cooking Foodles) with it to appeal to both kids and their mothers to buy the product.

· GIFT ITEMS: Though gift items aren’t a permanent market strategy, Foodles can give them out to attract kids so as to penetrate the market at the beginning even with its premium price. This strategy has worked wonders for McDonalds and Foodles can tie up with some firms like Hot wheels to initially provide some gift items.

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