Economics Project Nissin Foods Company

ECONOMICS PROJECT NISSIN FOODS COMPANY History and Development Nissin Food Products Co. Ltd of Japan, which is established by Momofuku Ando on September 4 in 1948, is the first company sold instant noodles. The aim of this company is to let people eat more efficiency and healthy as our daily habits were being streamlined for speed. In 1989, one of its product “Cup Noodles” had already gained 70% of the cup type noodle market in US. This shows that the brand of Nissin Foods was quickly developed and its product was accepted by consumers successfully. Nissin Foods expanded its market share by explored the overseas market and create taste cater for different local markets. Nissin Foods has established offices and factories in various countries and the company will established 15 more factories in Thailand, the Philippines, India, China, Brazil and Hong Kong in the next thirty years. Also, as people take more care of their health in recent year, Nissin Foods gave a lot of resources to improve the nutritional value of its product to ensure their consumer eat more healthily. Ownership and Market Structure Nissin Foods is a public limited company which shares can be transacted at a stock market and have limited liability. Nissin Foods is oligopolistic. Except Nissin Foods, there are few sellers dominating the market, for example Toyo Suisan. In this oligopolistic market, both Nissin Foods and Toyo Suisan has great market power, they sell heterogeneous food. Both of them are price searcher. They use different market strategies to expand their market share, for example Nissin Foods improve the nutritional value of its product to attract some consumers who are more care about their health. Once Nissin Foods’ products have higher nutritional value than Toyo Suisan’s, it may affect Toyo Suisan. As they are in a competitive market, both price or non-price competitions are common. One changes its marketing strategies; the other may follow to maintain their market share and profits. What to produce? How to produce? For whom to produce? Nissin foods produce different kinds of instant food to satisfy humans wants which eat more efficiency and healthy. It set up manufactured plants all over the world to decrease the cost of production. It puts a lot of resources to create taste cater for different markets to attract more consumers to buy their products. For example, it creates the cheese-favoured noodles for Americans, spicy noodles for the one who loves peppery hot, increase noodles nutritional value for the one who take more care of health Facing the fierce competition, and focusing on each problem, Nissin Foods Company has a series of marketing process. Firstly, it understands the marketplace and a customer needs and wants. They make research on customers and the marketplace regularly. Then, they manage marketing information and customer data. Secondly, the company designs a customer-driven marketing strategy. It selects customers to serve: market segmentation and targeting. Then it decides on a value proposition. Thirdly, the company constructs a marketing program that delivers superior value: We are going to explain it by 4P marketing strategies----Product, Price, Place and Promotion. 1) Product The product can meet the taste and preference of most of the targeted customers. It provides convenient and cheap meals for them. It requires customers needs and it can satisfy customers. There are various types of instant noodle in the production of Nissin Foods Company, such as Demae Iccho, Cup Noodles, FUKU, Nupasta, Nissin Cup Type Rice Vermicelli, etc. It provides various choices for customers. Also, the branding and packaging attract customer to buy. The history of the branding is long and it let customer think that it is trustable since the branding reflects the product quality. It helps company has basis for product’s quality story. The eye-catching packaging makes people more willing to buy. For instance, the red packaging of Demae Iccho instant noodle becomes famous and familiar among the customers. It’s because it let customer identify the product more easily. The convenient packaging can ensure product and user safety. In short, it creates benefits such as protection, convenience and promotion. Suggestions: Product as what we have discussed, the products line of Nissin Foods is wide. However, as the modern people have more and more health-consciousness, they pay more attention on the nutrients of the food they intake, not only focusing on their favours. In the instant noodle, there is the possible presence of oxidation products resulting from poor maintenance of the oil. If the cooking oil is not maintained at the proper temperature or changed as often as necessary, these oxidation products, which are suspected to pose various health risks, can be present in the foods. Proper production standards reduce the risk. Another concern is that, it was suspected that harmful substances could seep into the soup as hot water was added to instant noodles in a polystyrene cup. After a series of studies were conducted, the suspicion was eradicated. For instance, the media confuse styrene monomer, which could be extracted from the expandable polystyrene cup in small quantity but does no harm, with styrene dimmer and styrene trimmer both of which were designated as environment hormone or endocrine disruptor. Neither styrene dimmer nor styrene trimmer is extracted from the polystyrene cup, nor therefore the charge was found to be groundless. Undouedly, the large and wide production line brings us a lot of choices and favours, but, they are all unhealthy instant noodles which are known as junk food. The data also shows that the wide variety of choices cannot keep their sales anymore. Nissin Foods Company released a data that the net sales decreased year on year on lower sales of open-price products. Therefore, we suggested the Nissin Foods to develop a production line which has the gimmick of “healthy” and “environmentally-friendly”. For example, making not-fried noodles which are with fewer seasoning and organic ingredient. Also, they can have a change on the packages like not packing it separately. 2) Price The cheap price can meet the pricing objectives: profit maximizing objective, market share leadership objective, competition objective, survival objective and produst quality leadership. Company sometimes lowers the price of product for promotion. Set lower prices to boost market share since it can gain profit for long-term. The company also analyzes competitors’ costs, prices and products. Nissin Foods Company sometimes cut their price because the company considers competitors’ price, which is lower, and responses to the price change. Suggestions: Nissin Foods Company can use the price-adjustment strategies more even. It can provide cash discount, seasonal discounts, promotional allowance and quantity discounts. Price In order to attract more customers, the company can have some “season sale”, to decreasing the price, but it is very difficult for them to set a suitable price which can balance their costs and revenues. Since in this big market, every individual firm is price-taker, they have to search for a price which can maximize their profit. We urge the company to do more research on the tastes and preferences of the public, and estimate their demand in order to set a suitable price. 3) Place The NISSIN FOODS Group aspires to create and develop market-leading brands in our chosen food product categories for markets around the world. The first overseas plant was set up in Los Angeles in 1970.Over the next thirty years, 15 other manufacturing plants were established in Thailand, the Philippines, India, China, Brazil and Hong Kong. The worldwide network helps them easily sell the instant noodle in the local market, such as easily transport to different kinds of convenient stores, supermarkets, etc. Suggestions: There may be horizontal conflict and vertical conflict when member cooperation. In this case I suggest that the company can set clear rules and regulations among the members and the various types of wholesalers. Although there are many overseas branch can increase the economics of scale, it is important that to control over quality of service and goods. Nissin Foods Company should also choose the well performance and suitable intermediaries. It can use intensive distribution in order to make the products available where and when customers want them. 4) Promotion The company are using the integrated marketing communication, it carefully integrated and coordinates its many communication channels to deliver a clear, consistent, and compelling message about organization and its brands. The promotion mix includes advertising such as television advertising and radio advertising, personal selling, public relations, direct marketing, and sales promotion. For advertising, it can reach masses of geographically dispersed buyers at a low cost per exposure. It can repeat a message many times. For personal selling, it is the most effective tool at building preferences, convictions and actions. For public relations, it is very believable and dramatizes the company. For sales promotion, it can attract consumer attention easily and offer strong incentives to buy. Suggestions: Promotion other than the advertisement on the television, the company can hold some drawings. Maybe putting the drawings labels on the packages, it can attract more people to buy their goods. Moreover, they can have some discounts like “buy 3 get 1 free” etc. or buying the Nissin products can have a limited edition Nissin doll keychain. These are the ways a firm can use to promote their products. We believe that our investigation on the 4P strategy can help the Nissin Food Company to increase their profit. Fourthly, the company builds profitable, strong relationships with chosen customers and creates customer delight. Fifthly, the company captures value from customers to create profits and customer equity. Nissin Foods Company has been successfully created satisfied, loyal customers for more than 50years.

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