Demand

Analysis
Of
Maggi Noodles

Submitted to-

Submitted by-

Dr. Geeta Jaglan

Naman Shrivastava-A1802011033

Faculty, Economics

Asif Unia- A1802011365

AIBS

Satyaneesh Dubey- A1802011074

Nishith Simon- A1802011020

Maggi noodle is a brand of instant noodles manufactured by Nestl. The brand is popular
in Australia, India, SouthAfrica, Brazil, Nepal, NewZealand, Brunei, Malaysia, Singapore, Sr
i Lanka, Bangladesh, Pakistan, and Philippines. Maggi noodles are part of the Maggi family,
a Nestl brand of instant soups, stocks, and noodles.
Maggi noodles recently introduced a new variety of its noodles, to cater for the health
conscious like 'No MSG', 'Less Salt', and 'No Trans fat'. Whole-wheat flour based noodle
variation marketed by the name "Vegetable Atta Noodles" has been introduced in India (Atta
flour is used in preparing most forms of wheat based breads in India) and caters to health
conscious buyers wary of the refined flour used in the regular Maggi noodles. This move
helps the brand in India as suburban mothers, who feed the noodles to children as an
afterschool snack, are the primary customers of the brand. Recently, a line of rice
noodles and whole wheat with pulses, carrots, beans, and onions has also been introduced
in India. In fact, "Maggi" has become a well-known brand for instant noodles in India and
Malaysia. Over the years, Maggi noodles has become a popular snack food product in India.

Maggi noodles have availability even in the remotest locations of India like Kedarnath,
Ladakh, Amarnath. These are places where there is no proper supply of even electricity but
maggi is still available for the foodys appetite. The Economic Times has applauded maggi
with the following quote-

What Xerox is to photocopier, Colgate to toothpaste, Maggi is to Noodles in

India.

Fast to Cook, Good to Eat

Law Of DemandDemand for a commodity increases when its price decreases and falls when its
prices rises while the other things remaining constant.

Factors affecting Demand of MaggiPrice of CommodityQuantity

Price

100 g
` 10

200 g
` 20

400 g
` 40

600 g
` 59

700
600
500
400
300
200
100
0
1

Income of ConsumersIncome Group

Lower

Middle

Demand(packs/month
)

Upper
Middle
5

Higher
6

Pack/Month
7

5
Pack/Month

3
2
1
0

Lower

Middle Upper Middle Higher

As seen from the above graph the maggi demand goes up as the income level goes up. The
middle and the Upper middle have the same level of consumption.

Income Elasticity-

If the income rises by 20% then the demand will rise by 10% the curve is positively sloped
means that elasticity of Income is >0 and <1.

Demand
Graph of Income Elasticity

Price of Related Goods MaggiQuantity

Price

100 g
` 10

200 g
` 20

400 g
` 40

600 g
` 59

170 g
` 18

280 g
` 35

480 g
` 50

800 g
` 75

Top RamenQuantity
Price

1800
1600
1400
1200
1000

Price (Top Ramen)

Top Ramen Packet (g)

800

Price (Maggi)

600

Maggi Packet(g)

400
200
0
1

The graph here shows that price and quantity of Maggi were in much better range than Top
Ramen and thus the demand of maggi sustained in the market.

Price ElasticityMaggi is a brand loyal product. Even if the price is increased the customers are still ready to
purchase maggi. Thus the elasticity is positive.

Cross ElasticityIf there is an increase in the price of Top Ramen or Knorr by 20% to 25% then the demand
for maggi will increase by 8%.

o Cross Elasticity for Complementary Goods:

If the price of the Maggi Ketchup, Maggi Tastemaker and other complementary goods like
plastic packaging materials will increase constantly than the cost of the production will
increase and by this the price of the relevant product will also increase but the demand of the
dairy milk will remain constant because of it is a normal good.
o Short run and Long run impact in the elasticity of the demand
In the Short run period of time, the demand for the Maggi is less elastic because if the price
of maggi suddenly increases Rs.10 to Rs.15, than the demand of the product will also
decrease but in the long run the demand may not be much affected.
There are some criteria that also affects and they are like:
Our product should be in the monopolistic competitive market product.

 No change in the taste and quality.

In the Long run period of time, the demand for the maggi is more elastic because if the price
of the maggi in the 2007 was Rs.10 and in 2010 it is Rs.15 and, the quantity and the quality
remaining the same and the if other products dont change any of the things like price, quality
and quantity than it will greatly affect the demand of the maggi and it will started decreasing
day by day.
Assumptions:
I.
There are possibilities of change in technology & chances of Product innovation in
the long run.
II.
There are possibilities of increasing good quality chocolate manufacturing units.

Taste and Preferences

Economy Pack (Super Saver/Money Saver/Family Pack)
Change in Traditional Food Habits
Loved by Kids
Youth-Quick and Odd time Snack
Office People-Convenience
These factors make maggi a popular fast food snack that has ruled heart of millions for years
together.

Sales DataMaggiMonth of Sale

January
February
March
April
May

Number of Cartons Sold

15
12
16
14
15

Top RamenMonth of Sale

January
February
March
April
May

Number of Cartons Sold

10
8
9
6
12

18
16

16
15

15

14

14

12

12

12

10 10

Maggi Cartons Sold

9
8

Top Ramen Cartons Sold

4
2
0
January

February

March

April

May

Conclusion Maggi has achieved a great position in market and this position has little affect of its
competitors ( Top Ramen, Wai Wai, etc.)

Law of Demand Lower the price higher the quantity demanded and vice versa does
not totally work in the case of maggi. People are ready to purchase a bit costlier maggi
but they want the taste maggi has set in their minds.
Maggi for last 25 years had managed to remain unbeaten in the market because it has
always given more preference to the taste of people.

Thus Maggi happens to be the number one choice of Indian customers.

!!!!Maggi, Maggi-Maggi!!!!