History of instant noodles
History of Instant Noodles Instant noodles are dried precooked noodles fused with oil, usually eaten after being cooked or soaked in boiling water for 3 to 5 minutes. A flavor packet is almost always included with a packet of instant noodles. The product may also be consumed raw from the packet, as the noodles are already cooked, usually by frying Instant noodles originate from instant versions of the Japanese dish ramen The idea of instant noodles can be traced back to the Chinese Qing Dynasty, when yimian noodles were deep-fried which allowed them to be stored for long periods and then prepared quickly.
Similarly, “Chicken Thread Noodles” (deep-fried thin noodles served with boiling water and optionally an egg) were available in China and Taiwan since Qing Dynasty. Modern instant noodles were invented in Japan by businessman Momofuku Ando (???? ), the founder of Nissin, one of the biggest manufacturers of instant noodles today. His noodles were boiled with flavouring, deep-fried with palm oil to remove moisture, and dried into a noodle cake. Other preservation methods have been tried, including preservation with salt and smoke, but Ando concluded that palm oil is the most efficient.
In 1958, Nissin launched the world’s first instant noodle product, Chikin Ramen (chicken-flavored instant ramen) in Osaka. Another milestone was reached in 1971 when Nissin introduced the Cup Noodle, instant noodles in a waterproof styrofoam container that could be used to cook the noodles. Further innovations include adding dried vegetables to the cup, creating a complete instant soup dish. According to a Japanese poll in the year 2000, instant noodles were the most important Japanese invention of the century. Karaoke came second, with the compact disc only coming in fifth.
As of 2002, approximately 65 billion servings of instant noodles are eaten worldwide every year. Instant noodles are not only popular with college students; they can also be an economic indicator. In 2005, the Mama Noodles Index was launched to reflect the sales of Mama noodles, the biggest manufacturer in Thailand. The index was steady since the recovery from the East Asian financial crisis, but sales jumped by around 15% in first seven months in 2005 on year-to-year basis, which was regarded as a sign of recession. People could not afford more expensive foods, hence the increase in the purchase of ramen, as ramen is seen as an inferior good in Thailand. In the Nepali context, instant noodle was introduced in Nepal in late 1980’s with very low levels of popularity which was effectively addressed with aggressive marketing strategies. The instant noodle industry is today among the major industries of the country with an annual income of more than four hundred core rupees. Himshree Noodles (manufacturers of RARA) and Chaudhary Group (WAI WAI) played the biggest role in the success of instant noodles in Nepal.
Currently, the instant noodles industry employs over 10,000 people. Present scenario of noodles industries in Nepal: Noodles have become a necessary item in the Nepali consumer’s shopping list. Although homemade noodles have long been there, it was only in 1984 that a major brand came into the picture. It was virtually a monopoly market for the noodle leader -Wai Wai, with an 80 per cent market share, while other brands formulated the rest of the noodle market until the year 2000 when two other brands from different companies were launched – RumPum and Mayos.
Ever since, there has been a mushrooming of various noodle brands. With more than 40 brands on the market hot plate, the industry is still growing. 1. Competition and price sensitivity: The intensity of the competition among the players can be gleaned from the fact that the price of the product has remained constant for a considerable period of time. Despite the heavy increase in costs – price of flour, machinery, maintenance, labour and packaging, the price remains the same. While the consistency in price works in favour of the consumer, the profit margin for the producer has declined.
The promotional campaigns of the noodle industry have further reduced the margin for the producer. The competition has now led the whole noodle industry to a sales volume generating market where only the big players can survive. No unique development has been made in the product quality so far, although it might me said that a few of the products come with unique differentiation – the addition of vegetable cubes, flavoured seasoning and different foil packaging. Each of the companies has a number of products to offer ? snack noodles, white noodles, instant noodles and some others with a different seasoning – to capture the market.
Every company is in the quest of producing a different noodle brand, but only a handful have succeeded. Each of the companies has a different approach to marketing. While Mayos positions itself as the family noodle, Wai Wai is a noodle for all, Shaka-laka-boom is for the kids and so on. Promotional activities are not restricted to advertisements and trade only: the driving factor here is the consumer scheme. From every noodle packet placed on the retail shelf, a consumer hopes to win something. This new millennium has brought consumers more value to whatever they are paying for.
Before this, only a couple of imported brands from India and Thailand offered bowls or spoons as an add-on value to the product. Domestic brands played the game with exchange offers – a collection of wrappers got you a free gift. The year 2000 saw Rumpum launch the first ever scheme “Bingo hungama” closely followed by the market leader Wai Wai with “mauka ma chauka”, with both the noodles drawing higher sales. Mayos also dove into the pool with “Say Ma Say Uphar”. Since then none of the companies has dared to take off the schemes from the noodles.
But the question is, can a scheme-driven brand build its image? Do activities generating sales contribute to the image-building process? Companies are investing heavily on consumer promotional activities whether it is at the distribution level or in their communication. If we evaluate the importance given to a brand name in any of the messages, we see how little attention is given to the brand name. The product’s scheme positioning differs from its brand positioning whereas it should have remained in alignment with any new promotional campaign.
For example, the Wai Wai tag line suggests that it is “Hami Sabai ko Wai Wai” (Our Wai Wai), but its latest scheme is gender-biased and says “Wai Wai Hero”. Thus, the main theme of the brand often gets diluted, brands are not being built, and the thrust is only on a time-bound campaign. Today the consumer is more concerned about the value addition of each brand, to the extent that packaging, color, nutritional values, date of manufacture and taste are sidelined. This means that the consumer cares less about the brand and is buying solely for the gifts offered. 2. Brand loyalty
What Wai Wai was able to achieve with its brand before the “offer war” is something that will be hard to achieve in the present scenario. For example, no matter what another soft drink offers, a Coca Cola consumer will only drink Coke. The brand loyalty is so strong that the consumer feels proud to be a Coke consumer. Brand managers in the Nepali noodle market must wear their thinking caps because today a noodle is just a noodle SWOT analysis of Noodles industry. SWOT analysis is the exercise in which the organization identifies its strength (S) and weakness (W), and environmental opportunity (O) and threat (T).
The firm identifies these through the process of environmental scanning. While scanning the external environment, the organizations try to identify both opportunities and threats confronting the firm. It obtains the data about economic, financial, political, legal, social, and competitive changes in the various markets that firm serves. External environmental scanning also yields data about external threats to the firm such as increasing competition, migration, policy of the government etc. In conducting the SWOT analysis, the organization internal environment i.e. , strength and weakness as well as the external environment i. e. , threat and opportunities should also be accessed which are discussed below: Strength: Strength is an inherent capacity, which an organization can use to gain strategic advantage. Organizational strength is skills, resources, and other advantages the firm possesses relative to its competitors. Potential strengths, which form the basis of a firm’s distinctive competence, might include managerial skills, efficient technology, well-known brand names, a good public image, and strong market shares.
An example of strength is superior research and development so that the company can gain a strategic advantage. The strengths of the Noodles industry are: Quality of output and distribution network Better packaging like metal wrappers, its life can be prolonged by another 2-3 months. Different taste, price and targeted for different groups Market leaders like Chaudhary Group and Asian Thai foods make a routine exercise to replace date expired noodles with fresh ones from the shelves for domestic as well as foreign markets. (difference is in pricing , packaging and variety.
Expired noodles are destroyed. Strict quality control is a priority with the market leaders. Effective supply chain management Weakness: A firm that is formulating strategic plan also needs to acknowledge its organizational weaknesses. A weakness is an inherent limitation or constraint, which creates strategic, disadvantages. These weaknesses reflect deficiencies or shortcomings in skills, resources, or other factors that hinder the firm’s competitiveness. They may include poor distribution networks, poor labor relations, lack of skilled managers, or lack of product development efforts.
An example of a weakness is over dependence on single product line, which is potentially risky for a company in times of crisis. The weaknesses of the Noodles industry are: Lack of self owned technical requirements Rising manufacturing/building cost Opportunities: An Opportunity is favorable condition in the organization’s environment, which enables it to consolidate and strengthen its position. An example of an opportunity is a growing demand for the product or services that a company provides. The opportunities of Noodles industry are: Brand awareness and quality consciousness among consumers
International markets Exporting noodles to various countries like India, Bhutan, Hongkong, Qatar and U. K Threats: A threat is an unfavorable condition in the organization’s environment, which creates a risk for the organization. An example of threat is the emergence of strong new competitors who are likely to offer stiff competition to existing companies in an industry. The Threats of the Noodles industry are: Government policies Political instability Unnecessary shortage of market Severe losses to the entrepreneur Misconception that the quality and the taste of almost all noodles are similar