The Maggi Noodle Safety Crisis in India - Case Study Example

The Maggi Noodle Safety Crisis in India Author’s Name Institutional Affiliation The Maggi Noodle Safety Crisis in India Why Nestlé’s Maggi noodles was a troublesome product The storm all began when the Food Safety and Standards Authority of India (FSSAI), which is the food safety regulator in India, claimed to have found Monosodium Glumate and traces of lead in the flagship product of Nestle, Maggi Noodles. This led to it being banned in Delhi, and the FSSAI considering a nationwide product recall of the successful fast food product. (Preetika, R., 2015, 19)Many factors would then escalate the situation into a nationwide fiasco that threatened the leading Nestle product in India. One major factor that the Nestle company cited was the regulator’s lack of proper testing equipment. Corruption in the government meant that the institution only received 40% of the budget it required, showing they were very broke and lacked the proper infrastructure to have good laboratories for food testing. In addition, the highly trained professionals who should have been heading this institutions activities prefer to seek for jobs elsewhere due to the poor salaries they would be paid. This meant that the people who worked here lacked the necessary skills to use some of the equipment in labs. These inconveniences affecting the FSSAI were observed when the various lab tests came with different results, showing their move to recall the product was a rash move with ambiguity surrounding the test results. (Asian Age, 2015, 20) Another major influence to the troubled product was the media coverage. In a country with one of the highest populations in the world, the Indian media was a major tool in the rise and fall of the Maggi noodles. The noodles were not a big hit with the Indian community at first, but the revamping of marketing strategies to suit the society’s preferences and a well-planned advertising campaign led to it becoming one of the biggest products in India. Not only did it sell a lot, it became a national symbol for the huge middle-class society found in India who were the main target of this product. (Avakian, A. V., & Haber, B., 2005, 23) However, once the FSSAI began their hunt down on the product, the very competitive media took it upon themselves to produce as many headlines as possible. Many of them would opinionate on the issue and claimed that the company had broken Indian’s hearts. The situation was also amplified more due to the long period in which it escalated, with Nestle having to endure long periods of time for test results. (Times of India on the Web, 2015, 28) The media preyed on the company’s influence on the society and social media made the situation worse since the society got involved in the Maggi discussion. The intensive debate on whether the iconic fast food was safe or not on media and social media affected its financial flow.( BBC News, 2015) Many major retailers in India recorded huge loses and the value of Nestle India plummeted. (Nestlé India, 2014 Annual Report, 32) To withdraw or not withdraw? With the media and society increasingly in unrest due to the ambiguity surrounding the Maggi noodles and the banning of the product in various states of India (Bindu S P 2015, 14) , Nestle had to come up with a solution for the problem, which all boiled down to two choices; to withdraw the iconic food stuffs from the market and recall the stock or to not withdraw and continue selling the product. Both of these choices had serious consequences, with withdrawal having the major effect of proving the FSSAI was right and spending a lot of money and time sourcing the product at grassroots level. Not withdrawing on the other hand meant that Nestle would have to do a lot of convincing to the society to prove they are a safe product while trying to control their losses. In the end, Nestle had to withdraw for a while after a number of states in India banned them. (Nestlé India, 2015, 16) They however maintained their strong view that Maggi was always safe and pointed to the fact that other countries had no problem with their product since there had never been any health issues concerning Maggi. Withdrawal was the best choice for many reasons, even if the product was safe. First, the product withdrawn provided a large sample size that could be used by many laboratories many times. This would have been an important move in ensuring Maggi got a fair trial once every possible test had been carried out to determine their safety concerns. This move also showed that the company considered its social value to the people of India who were emotionally attached to it. (Kapil, K. N., & Mukherjee, J. 2011, 32) Despite knowing the costs and problems associated with withdrawal, Maggi pulled off from the shelves and promised to be back once the whole saga with the FSSAI was put to rest. They would return with a completely new game plan to reacquire their lost market share by introducing new variations of the instant noodles. A factor that would hinder withdrawal would be the labour force. During the ban, the 1,500 workers did not have any work to do in the factories. As such, the company had to find a way to increase their value during the ban. They reassigned some, while others were taken for technical training and team building exercises. (Ratna B. 2015, 33) This meant that the workers were still a part of the Maggi group, and they were valued by the company since it did not resort to letting them go to save themselves. Such a move would also go well with the public who would realise that the company is not as ill willed as the regulator and media was portraying it, making a public statement to protect Nestlé’s image as a family friendly food company. The lack of publicity intervention would have led to more inquiries into their products and how safe they were, and probably led to even more losses in their other departments. As such, Nestle created a good example of how withdrawal of products from the market could be used without compromising the safety of the larger company while still serving the people that depend on it. Dealing with future problems Through all the vicissitudes that affected the Maggi brand, the Nestle company never made any rash decisions that jeopardised their image or sales flow. Every step was taken with a future goal in sight and even when the goal was not reached, they would quickly create a backup option that would help ease the crunch times. They involved every party concerned with the Maggi noodles, from the customers through publicity and product awareness to the FSSAI and their various flaws in ensuring food safety. Their demeanour throughout the ban and testing of Maggi products showed that they could plan for the present, but could they have avoided all this earlier? Knowing how incompetent the laboratories used for testing these food substances are, the company should have realised that they could have stepped in and controlled this. Thus, after coming back to the market, Nestle could have united with other major competitors and initiated a drive to improve the lab conditions used by the FSSAI. Compliment this with new standardised laws for the testing of food ingredients and foodstuffs across all the foodstuff companies and the industry would have had a better way of handling such cases as the Maggi one rather than wasting time and money on a wild goose chase. Also, Maggi should have found a way to reward the Indian community for believing in their quality product delivery. (Batra, S. K., & Kazmi 2008, 14) Even after stopping production for five months and incurring losses, the company still maintained that they were part of the Indian heritage and strived to deliver the best quality of food possible. They returned to the shelves and regained 57% of the market share in nine months, showing that the Indian community had some emotional ties to the product. (Forbes 2015, 14) To ensure the customer loyalty was not wavered like during the ban, the company should show some sort of good will to the company by introducing cheap offers and introducing new products that the customers would want to see. (Van, E. P. 2008, 24) Also, Nestle should begin focusing on consumer insight and its importance. (Panda, T. K. 2004, 37) The fact that there was glutamate in the Maggi noodles yet the pack showed it had no MCG at all made some of its customers ditch the product. They changed their package once they relaunched and added the sign “No Added MSG” to show that the traces found were not deliberately put but rather a consequence of the ingredients. This change in packaging shows that the consumer is paying more and more attention to the content of food to see its nutritional value and whether it is detrimental to one’s health. (Choudhury, P. 2001, 23) Overall, the Maggi row in India shows how big companies need to handle some situations with better planning and market strategy. Collecting a customer base should not be more important than maintaining one, and withdrawing from the market temporarily should not necessarily mean laying off workers or closing shop completely. Rather, big companies should be prepared to weather the storm when things do not go their way to ensure they are sustainable over a long period of time to foster their continuity. References Asian Age, 2015. Difference in Maggi Test Results Leave Authorities Baffled. June 7, 2015, http://www.asianage.com/mumbai/difference-maggi-test-results-leave-authorities-baffled-643, accessed July 2014. Avakian, A. V., & Haber, B., 2005. From Betty Crocker to feminist food studies: Critical perspectives on women and food. Massachusetts, Mass: University of Massachusetts Press. Batra, S. K., & Kazmi, S. H. H. 2008. Consumer behaviour: text and cases. New Delhi, Excel Books. BBC News, 2015. Memes Make Light of India Maggi Ban. June 4, 2015, http://www.bbc.com/news/world-asia-india-33003088, accessed July 2015. Bindu S P 2015. Delhi Bans Maggi Sales for 15 Days, The Hindu on the Web, June 3, 2015, http://www.thehindu.com/news/national/delhi-bans-maggi-sales-for-15-days-big-bazaar-outlets-pull-out-magginoodles/article7278687.ece, accessed December 2015. Choudhury, P. 2001. Successful branding. Hyderabad: Universities Press Forbes, 2015. The World’s Most Valuable Brands 2015. http://www.forbes.com/powerful-brands/list/#tab:rank, accessed July 2015. Kapil, K. N., & Mukherjee, J. 2011. Case studies in marketing. New Delhi: Dorling Kindersley. Nestlé India, 2014 Annual Report, pp. 9, 58 Nestlé India, 2015. Update on the Withdrawal of Maggi Noodles in India. press release, June 15, 2015, https://www.nestle.in/media/statements/update-withdrawal-maggi-noodles-india, accessed July 2015. Panda, T. K. 2004. Building brands in the Indian market. New Delhi, Excel Books. Preetika, R., 2015. Before the Maggi Noodles Scare: Look at What the U.S. FDA Found in Indian Snacks,” Wall Street Journal on the Web, June 11, 2015. http://blogs.wsj.com/indiarealtime/2015/06/11/before-the-maggi-noodles-scare-look-at-what-the-us-fda-found-in-indian-snacks/, accessed July 2015. Ratna B. 2015. Maggi Ban Hits 1,500 Nestlé Employees as Company to Move some of its Staff for Manufacturing Other Items. Economic Times on the Web, June 17, 2015, http://articles.economictimes.indiatimes.com/2015-06- 17/news/63540249_1_nestle-india-maggi-instant-noodles, accessed July 2015. Times of India on the Web, 2015. Maggi Sales Plummet Across India., June 2, 2015, http://timesofindia.indiatimes.com/city/mumbai/Maggi-sales-plummet-across-India/articleshow/47507699.cms, accessed July 2015. Van, E. P. 2008. Food culture in Southeast Asia. Westport, Conn: Greenwood Press. Read More