Consumers Want More Value For Money –Noodles Industry’s Report Shows

In an era when quality has become a deciding factor in product selection for clients, Customer Satisfaction (CS) surveys are essential tools enterprises can employ for listening to customers about their satisfaction levels, and for developing strategies for improvement. Knowing what customers think about your company’s products and services, as well as their opinions of competitors’ offerings, is crucial for business survival.

During such a period of high competition and expectations, enterprises must leverage on customer relationship through customer satisfaction surveys. A well-executed CS survey maximises the retention of current customers, and help enterprises to better position themselves among prospective clients. However, any CS survey that does not uncovers customer perceptions or needs, improve customer loyalty, or help the enterprise make improvements is not a useful tool.

Motivation For MarkMonitor’s Noodles Survey
MarkMonitor Nigeria Limited, publishers of FinIntell and a research and market intelligence provider, recently carried out a Customer Satisfaction survey on the noodles sector of the Fast Moving Consumer Goods (FMCG) industry to help players in the field gain competitive intelligence about customer loyalty and market leaders in order to develop strategies for improvement.

Prior to the entry of Instant noodles into the Nigeria culinary landscape, noodles was not seen to be a regular meal for Nigerians. It was perceived as an Asian diet and only eaten at Chinese Restaurants. But since 1988 when De United Foods Industries Limited (now Dufil Prima foods) first marketed its Indomie Noodles, imported from Indonesia, in Nigeria, noodles has become a major menu for millions of Nigerians and a brand in most homes.

By 2006, four noodles companies were already operational in the Nigerian market. Today, over 16 noodles companies are now competing for market share in the market. While some popular brands such as Indomie, Chikki, Mimee, Honeywell (formerly O! Noodles), Golden Penny, and Dangote are leaders in the high-growth market, some are dominant in the low-growth market. Some unpopular brands include: Sun yum, Tummy Tummy, Uno, Cherie, Star, Mc Chew, Niccus, Smoodles, and Chefmie.

However, in spite of the introduction of different brands and flavours in the highly competitive instant noodles market, the average Nigerian consumer that should be the biggest beneficiary of the ongoing competition in the market is far from being satisfied.

Consumers Want More Value For Their Money
MarkMonitor’s Noodles Customer Satisfaction survey, which was conducted for eight weeks and only covers six popular noodles brands, reveals that consumers want more value for their money. While the CS survey showed that a greater number of consumers desire improved noodles quality and quantity from manufacturers, some decry the unavailability of the product in some parts of the country. The survey, which cuts across 12 States in the six geopolitical zones (including Lagos, Ogun, Edo, Imo, Enugu, Anambra, Rivers, Kano, Katsina, Sokoto, Niger and Abuja), covers over 2,000 respondents’ opinions in six categories:

  • The Most Delicious Noodle
  • The Cheapest Noodle (price/grammage)
  • Best In Ad Innovation
  • The Best Packaged Noodle
  • High Quantity Noodle
  • The Most Available Noodle

Summary Of Report
Customers’ opinions were sampled on six popular noodle brands, namely: Chikki, Dangote, Golden Penny, Honeywell, Indomie, and Mimee. Out of the six categories surveyed, Indomie emerged overall best, claiming five out of six categories with wide margin.

  • The Most Delicious Noodle: Chikki (7.10%), Dangote (9.20%), Golden Penny (12.50%), Honeywell (14.80%), Indomie (52.30%), and Mimee (4.10%).
  • The Cheapest Noodle (price/grammage): Chikki (15.30%), Dangote (17.40%), Golden Penny (18.20%), Honeywell (20.10%), Indomie (14.70%), and Mimee (14.30%).
  • Best In Ad Innovation: Chikki (5.30%), Dangote (7.10%), Golden Penny (12.60%), Honeywell (19.30%), Indomie (49.59%), and Mimee (6.11%).
  • The Best Packaged Noodle: Chikki (10.72%), Dangote (6.55%), Golden Penny (5.46%), Honeywell (10.40%), Indomie (58.10%), and Mimee (8.77%).
  • High Quantity Noodle: Chikki (19.66%), Dangote (7.23%), Golden Penny (3.30%), Honeywell (4.45%), Indomie (57.30%), and Mimee (8.06%).
  • The Most Available Noodle: Chikki (11.43%), Dangote (10.57%), Golden Penny (4.45%), Honeywell (6.50%), Indomie (57.82%), and Mimee (9.23%).

The Noodles Industry
Nigeria is currently ranked the 12th largest consumer of instant noodles in the world with estimated annual demand of 1.79 billion packets of noodles, according to the World Instant Noodle Association (WINA), a body saddled with the responsibility of improving the noodle industry globally. This is far from the estimated market demand of 2.5 billion packets of noodles annually.

In spite of the estimated 14 million Nigerians that currently consume noodles, Nigeria may never claim the number one spot in the World’s instant noodles consumer nation because the Asians reverence noodles. However, the ever increasing buying power of a fraction of the 160 million population in Nigeria portends immense opportunities for current and potential players in the industry.

Many companies took advantage of the increasing popularity of noodles to launch new brands into the market since the market success of Indomie encouraged the proprietors of the company to start its local manufacturing in 1996. Although Maggi Two-Minutes noodles, a product of Nestle Nigeria Plc, which was expected to compete with Indomie faded out from the market within two years, brands such as Chikki Noodles, which was launched into the market by Chikki Foods Limited in 2005, is still performing well.

Similarly, Mimee Noodles and O!Noodles (now Honeywell Noodles), launched by May & Baker Nigeria and Honeywell Flour Mill Nigeria respectively in 2006, are still very strong in the market.

The People’s Brand
Owing largely to its monopolistic hold of the market for nearly 17 years, the success of Indomie noodles in the Nigerian FMCG market is understandable. Indubitably, Dufil Prima’s Indomie noodles, the first instant noodles manufactured in Nigeria, has become the generic name for noodles in the country, occupying a prime position in the hearts of many loyal consumers.

Since its entry into the Nigerian food industry 24 years ago, Indomie has consistently remained on the path to becoming a global brand enjoying high level of awareness amongst target audience. The brand has managed to transcend across all age groups, winning over the hearts and taste pallets of both the young and old.

The company’s marketing strategy, particularly the sing along Television Commercial and Radio campaign songs, has continually positioned Indomie at the top in brand awareness. In 2011, Indomie Noodles was nominated overall winner of the Most Trusted Brand Award in Nigeria.

Market data shows that Nigerians eat over one million packets of Indomie daily, an indication that the Indomie range of products commands a substantial degree of brand loyalty and an enviable "top of mind" status amongst its consumers who cut across all demographic segments in Nigeria. Indomie currently holds over 70% market share of the noodles market in Nigeria.

Players in the noodles industry should know that consumers are inundated by choice in a region heavily courted by global brands and local variants. So to gain a bigger market share, effective segmentation based on a sophisticated understanding of audience behaviours, values and attitudes, alongside demographic attributes, becomes key.

It is important to realise that customer satisfaction does not equate to customer loyalty. Merely satisfied customers will switch to a competitor that will exceed their expectations, especially in a highly competitive market. True competitive advantage therefore requires that customers are completely satisfied. In addition, it is important to inform customers that their opinions matter, and that their responses will instigate change within the organisation. It is wisdom if operators in the industry could investigate the issues customers raised through the CS survey to gain competitive intelligence about customer loyalty.

On the part of the Government, for food production and availability in the country to improve tremendously, it is essential that Government address the issue associated with high cost of production that manufacturers face. These can be achieved through reduction in the cost of power generation, availability of alternative source of power, reduction in high cost of raw materials, good road network which would reduce the rising cost of transportation, and provision of other infrastructural facilities.