NESTLE INDIA LTD.

Project Report Project Report

OnOn

Submittd by :PRASHEET SINGH TOMAR

PIONEER INSTITUTE OF PROFESSNAL STUDIESPIONEER INSTITUTE OF PROFESSNAL STUDIESMADHYA PRADESHMADHYA PRADESH

NESTLE INDIA LTD.

NESTLE INDIA LTD.

NESTLE INDIA LTD.

TABLE OF CONTENTS

SYNOPSIS 1

INTRODUCTION 5

METHODOLOGY 103

FINDINGS 106

LIMITATION 143

CONCLUSION 153

APPENDICS 173

BIBLIOGRAPHY 177

NESTLE INDIA LTD.

ACKNOWLEDGEMENT

This project is dedicated to the institute of

marketing and Technolgoy the outset I express my

deep sense of gratitude to mr. , for providing me

an opportunity to understand and thus gave chance

to design the project. I would like to thank Mr.

Ravinder choudhary , assistant director and all

faculty members for guiding me while making this

project .

I also thank all those who helped me and all

respondents (retailers) for giving their precious time

and support.

Manik Duggal01-AII-227

NESTLE INDIA LTD.

UNDERTAKING

This is certify that this project report made by

MANIK DUGGAL (01-AII-227), a student of Institute

of Marketing and Technology, is original and

authentic and has been made as part of MBA

curriculum. There is no manipulation of the data. All

the facts and figures are true.

MANIK DUGGAL (01-AII-277)

NESTLE INDIA LTD.

ATTESTATION

I certify that Manik Duggal S/o Mr. Vijay Kumar

Duggal, a bonafide student of Institute of Marketing

and Technology (01-AII-277) has done this project

specializing in the fields marketing and advertising,

on the company "NESTLE INDIA LTD.." On his own.

The facts and figures provided in this report are

original and true.

NESTLE INDIA LTD.

SYNOPSIS

his report presents on in-depth analysis of

marketing and Advertising and public Relations of

Nestle India Ltd.-one of the well known and esteemed

organisations in the FMCG Sector in the country. Nestle

India

T

Ltd. is a company which is multinational company and

has its operations in many countries in the world. Carlos

Donati is the CEO & Managing Director of the N.I.L who

is from suitzerland. It is one of the big Companies in the

FMCG Sector. The Nestle India Ltd. deals in chocolates,

Milk products, Maggi, Soup, Sauce, Cofee, Tea, Milkmaid

and Mineral water etc. the Nestle I. Ltd. is working in

India for the last 40 years. Nestle I. Ltd has 51% holding

in Nestle. The Company has 6 factories and 6 sales

Branches. The company is emphasizing on building new

products to its customers & satisfying them.

NESTLE INDIA LTD.

The reports begin with Introduction, which deals with

the objective of the product, Introduction to marketing

and Advertising and Public Relations.

The Introduction to marketing comprises of the

definition of marketing, Marketing before and now, the

marketing system, the emergence of marketing as a

discipline, marketing management and marketing

Philosphies. It points out that the rules of the Past are no

longer applicable in marketing through the strategic

Paradigm of marketing and the Views of Philip Kotler.

The Introduction to Advertising and PR comprises of the

definition of advertising, the Need of Advertising, its

Benefits, its role, its limitation, the future of advertising

in India. It also deals with the definition of Public

Relations, the Need for PK, its limits, its scope & its

future in India.

The company profile in which Nestle India Limited

operates also form Part of the Introduction.

NESTLE INDIA LTD.

This section of the Report, provides an insight into the

Nestle India Limited, its statistical profile, its salient

features, its products, Target Customer and its market

size and growth.

This Sector of the report also discusses also deals with

the competitors of the N.T.L in the FMCG sector in India.

This is followed by the History of N.T.L., Board of

Directors, its Subdivision, network, its foreign

collabrations, and the social welfare activities

undertaken by it.

This is followed by the profile of the Carlos Donati, its

areas of operations, finanancial performance and future

plans.

The Introduction is followed by a detailed description of

the methodology used to conduct the research and

getting the information required for the project in which

the primary and secondary of data have been specified.

NESTLE INDIA LTD.

The methodology is followed by findings which entails

an in depth analysis of marketing and Advertising and

public Relations of N.I.L. This section also discusses the

4p’s of marketing, Marketing Strategy of N.I.L., Market

Segmentation. This section also includes the Advertising

strategy of N.I.L., and different advertisements that has

helped company in its growth.

The is followed by the limitations, condusions and

Recommendations respectively.

Bibliography and Appendics form the last two section of

the report.

NESTLE INDIA LTD.

Nestle India Ltd., is a part of the Nestle SA group,

which is one of the largest manufacturing

companies in the world. The company (with its

headquarters in Vevey, Switzerland) was founded by

Henri Nestle in 1867. Nestle has two major

divisions-Le Societe des Produits which looks

after the production and marketing and Nesstec Ltd.

which provides the technical assistance to the

group companies. Since its inception in 1867, the

company has diversified it product range from the

infant weaning formula (which was its first product)

to beverages, confectionery, ice creams and pet

foods among others. In a span of 130 years the

company has ranked 26th among the world's largest

corporations and boasts of a turnover of $48932.5

million and an employee strength of 221,144 people

spread over 75 countries worldwide (Annexure A).

NESTLE INDIA LTD.

Nestle has long been viewed as one of the most

multinational of the multinationals. This is because

today only 2% of its turnover comes from

Switzerland. Out of the remaining 98%, Europe

contributes 43.5%, North and South America

contribute 36.5% and 18% is contributed by Africa

and Asia Pacific Regions.

NESTLE INDIA LTD.

OVERVIEW

Although Nestle has been associated with India

since the beginning of the century through the

importing and trading of infant food and condensed

milk, manufacturing in India only began with the

setting up of the factory in Moga in 1962. The first

product to be manufactured was Milkmaid. In the

last 35 years the company has shown rapid

progress and has increased its product range to 80

products as of October 1997. Nestle India Ltd. now

rank 22nd amongst India's most valuable companies

(Annexure B). Its gross revenue has increased from

Rs. 1001.1 crores to Rs. 1213.8 crores in 1996. This

remarkable growth has been achieved through:

Rapidly creating greater manufacturing capacity,

both at factories as well as with copackers.

NESTLE INDIA LTD.

Taking measures to ensure availability and

improved quality of key raw materials-fresh milk

in particular.

Strengthening of the sales and distribution

network (particularly in smaller towns).

Ambitious and cohesive manpower training and

development programs for the personnel of the

company across all disciplines.

The company's exports also resulted in a very

successful year in this area as exports grew by 27%

to Rs. 250.8 crores in 1996. The main contributors

to this increase were the export of tea and coffee to

USA, Japan, Russia, Hungary and Taiwan.

Nestle India Ltd. wants to further increase its

operations in India and has started construction of

its sixth Factory at Bicholim, Goa for the

manufacture of culinary products (a key thrust area)

for this purpose.

NESTLE INDIA LTD.

INTRODUCTION TO MARKETING

1. Much of marketing concerned with the problem

of profitably disposing off that is produced.

2. Marketing is a Phenomen brought about by the

pressure of mass production and increased

spending Power.

3. Marketing is the performance of business

activities that direct the flow of goods and

services from the producer to the consumer.

Marketing was quite simple subject in

1967,Consumer marketing largely operated on mass

marketing principles, and business marketing

primarily concerned itself with how to build the best

sales force. All the time marketers has faced a

number of tough decisions. The marketers had to

determine product features and quality,

establishing accompanying sources, set the price,

NESTLE INDIA LTD.

determine the distribution channels, decide how

much to spend on marketing, & decide how to

divide these resources among advertising, sales

force & other promotional tools.

Today, the time has changed from the previous

years. Today, the market place is enormously more

complex. Domestic markets, at on time safe from

foreign invaders, are now the happy hunting

grounds of giant global coorporations as well as

global Niche specialists. New products are launched

at an astonishing placed & are available worldwide

in a short time. Communications media are

proliferating. New Distribution Channels and formats

keep apparition. Competitors are every there &

hungry.

The whole marketing system moves like this. In this

diagram I will trying to show how marketing system

moves between the seller & buyer. In this Diagram

there are buyers and sellers who transact over a

NESTLE INDIA LTD.

particular product or particular class. These buyers

and sellers are connected by four flows. The seller

send goods & services and communication to the

marketing, in return they receive money and

Infrastructure.

Evolution of marketing as a business discipline

The evolution of marketing as a business discipline

provides an insight into it emergence as one of the

most important functions of management in any

business. The evolution of marketing as a business

discipline comprises of following stages :-

a. The stage of barter

b. The stage of money economy

c.The stage of industrial evolution

d.The stage of competition

NESTLE INDIA LTD.

e.The emergence of marketing

Marketing Management

We will discuss the what exactly the marketing is in

the language of “Philip Kotler”.

“Marketing is a Social and Managerial process by

which individuals & groups obtain what they need &

want through creating, offering and exchanging

products of value with others”.

According to Philip Kotler, “A human activity

directed at satisfying needs & wants through

exchange process”.

Basically there are different concepts of marketing

which are very important for marketing. These

concepts are need, wants and Demand. The starting

point in the discipline of marketing is to identify the

needs of consumer. Every person has some need.

These needs are not created by marketers or

NESTLE INDIA LTD.

society, they exist in the very texture of human

biology and human conditions. Wants are the

desires for specific satisfaction of these deeper

needs people needs are few but there wants are

many.

Demands are wants for specific products that are

backed up by the ability & willingness to buy them.

In marketing we pass through three stages.

1. Entrepreneurial marketing

The entrepreneurial marketing is first stage of

marketing started by the entrepreneur who

start his business by Direct selling of goods &

Public relations. He starts his business from the

first stage of business & starts his business

individually. In this stage the company did not

advertise because he cannot afford to spend

NESTLE INDIA LTD.

money on advertising because he is in the

first stage of marketing.

2. Formulated marketing

When a company achieves success in business,

the company is in a stage of formulated

marketing i.e. the second stage of marketing.

In this stage the company can afford

advertising Budget because the company has

achieved success. Now the company is

adopting some of the tools used in

professionally run marketing companies.

3. Entrepreneurial Marketing

This is the third stage of marketing when

companies have to maintain success

throughout there life of business. This is the

last stage of marketing where company has a

success or it can fail. The companies main aim

NESTLE INDIA LTD.

in this stage is that there brand & product

managers need to get out of the office & start

living with their Customers & Visualize new

ways to add value to their customer lives.

MARKETING PHILOSPHIES

We Will be discussing about the five important

marketing concepts used in marketing:

1. PRODUCTION CONCEPT

The production concept is one of the oldest concept

guiding sellers. It holds that consumers will favour

those products that are widen available & low in

cost. Managers of production oriented organisations

concentrate on achieving high production efficiency

and wide distribution coverage.

2. The product concept

NESTLE INDIA LTD.

This hold that consumers will favour those products

that offer the most quality or performance.

Managers in these product oriented organisations

focus their energy on making good products &

improving there over time.

3. The selling concept

The selling concepts holds that consumers if left

alone will ordinarily not buy enough of the origin’s

products. The organisation must therefore

undertake an aggressive selling & promotion effort.

4. The marketing concept

The marketing concept holds that the key to

achieving organisational goals consists in

determining the needs & wants of Target markets &

delivering the desired satisfaction more efficiently

and effectively then the competitors.

5. The societal marketing concept

NESTLE INDIA LTD.

The societal marketing Concept holds that the

organisation task is to determine the needs, wants

& interest of target markets & to deliver the

satisfactions more effectively & efficiently then the

competitors in a way that preseures or enchances

the consumers & society’s well being.

NESTLE INDIA LTD.

INTRODUCTION TO ADVERTISINGINTRODUCTION TO ADVERTISING

“Doing business without advertising is like

working at a girl in the dark; you know what

you are doing but no body else does.”

Advertising is Multi-dimensional. It is a form of mass

Communication, a powerful marketing tool, a

component of the economic system, a means of

financing the mass media a Social institution, an

ART FORM, AN INSTRUMENT OF Business

management, a field of employment & a profession.

Advertising today is very necessary. Today we are

exposed to large number of commercial messages

that at any time in the past. Newspapers &

magazines are full of advertisements, today, from

not only the quantity increased even the quality of

advertising has improved considerably.

NESTLE INDIA LTD.

The means of advertising such as the radio,

television, the cinema & BillBoards etc., have also

amply contributed to the growth of this industry.

Advertising which has become a marketing force

helping mass selling & distribution.

Now, I will be discussing the definition of

advertising the simplest definition of advertising is

the “Public announcement”.

According to American Management Association,

“Advertising as any paid form of non personal

presentation of ideas Goods & Services by an

identified Sponsor”.

Advertising as a tool of Communication

Advertising is as old as man. There is Semblance of

advertising in the many activities of a human being

especially those activities, which influence other

either favourably or otherwise. A baby crying for its

NESTLE INDIA LTD.

feed want to communicate to persuade, to influence

& to lead to some action. All this has been a part of

human life almost from the time it took shape.

Advertising is the most visible marketing tool, which

seeks to transmit an effective message from the

marketer to a group of individuals. Though

marketers use advertising, basically it is a

communication process.

Benefits of advertising

1. Advertising establishes a link between the

manufacturer and the consumer. It is a form of

mass communication. Through advertising, the

advertiser reaches a Vast Number of

Consumers and makes his Product known to

them.

NESTLE INDIA LTD.

2. Advertising keeps the consumers well-informed

about the products & Services-styles, features,

sizes, colours, specifications, price etc.

3. Advertising expands markets, builds up

volume, gives a market share & profitability,

and reduces prices.

4. Advertising guides the consumers in his

product choice. It gives the information about

the product, the benefits it offers.

5. Advertising contributes to consumer welfare. It

helps consumers in a variety of ways. It tells

what to buy, how to buy & why to buy.

NESTLE INDIA LTD.

INTRODUCTION TO PUBLIC RELATIONINTRODUCTION TO PUBLIC RELATION

The ultimate aim of Public Relation is to develop a

favourable image in the eyes of public. It refers to a

company’s communication & relationships with

various sections of the public-customers, suppliers,

share-holders, employees, governments, media,

society at large.

According to the Institute of Public Relation, London

defines Public Relation as” the deliberate, Planned

& sustained effort to establish & maintain

understanding between an organisation & its public.

Public Relation is low cost compared to advertising

for the publicity obtained, say in the press, through

public relations is not directly paid for. Indirectly,

the expenses involves keeping in close close touch

with people in the media through press conferences,

press visits & press releases.

NESTLE INDIA LTD.

There are four element to the mechanics of Public

Relation:

1. The message to be transmitted.

2. An independent third party endorser to

transmit the message.

3. A target audience that it is hoped will be

motivated to buy whatever is being sold, and

4. A medium through which message is

transmitted.

NESTLE INDIA LTD.

THE SPIRIT OF NESTLE

"Organizational excellence is never achieved

through a one time efforts; It is always a process of

continuous improvement across a number of areas

of operation."

A key factor for Nestle's success has been its quest

for continuous improvement through ushering in

greater productivity and more efficiency in

everyday operations Despite the infrastructure

impediments in India, Nestle has set itself high

standards of business performance. This is reflected

through the essence of the company-its mission

statement.

Nestle's mission

"To be in every way the leading company in the

Indian food industry and a good corporate citizen by

providing our consumers with superior quality

NESTLE INDIA LTD.

products, our shareholders with rapid growth and

fair returns and our employees with a challenging

and satisfying work environment."

To translate this spirit into a planned and

measurable process, Nestle has set up key

objectives across all divisions.

NESTLE INDIA LTD.

KEY OBJECTIVES

Production

To optimize production costs while enhancing

product quality so as to make Nestle products

even more competitive in the market place.

Sales and Marketing

To reach a sales turnover of 3000 crores by the

year 2000.

To double the turnover every years.

People

To help employees to retain a long-term

perspective and integrate them fully with the

company's business goals.

NESTLE INDIA LTD.

To retain a broad perspective while addressing

individual needs

To view growth as a continuous process.

To concentrate on attitudinal changes by

developing leadership skills, an appreciation of

interdependence between units and the

enhancement of a sense of belonging to Nestle.

Finance

To maintain profit levels above the average for

the food industry in India.

NESTLE INDIA LTD.

KEY FACT

This section offers a quick and simple overview of

NESTLE, making it an excellent place to begin

learning more about the World’s Largest Food

Company. Here introduction is given with some key

facts and figures, including 2001 Financial

Information, Company Profile, Historical

Development and Main Brand.

Financial Information

In millions of CHF 2001

Sales 81 422

EBITDA (a) 12 516

       as % of sales 15.4%

EBITA (b) 9600

       as % of sales 11.8%

NESTLE INDIA LTD.

Trading Profit 9 186

       as % of sales 11.3%

Net Profit 5 763

       as % of sales 7.1%

Capital expenditure 3305

Equity 29 904

Total Assets 65 524

Research and development costs 1 038

Market Capitalization, end December 146 864

(a) Mainly Pharmaceutical products and Water,

managed on a worldwide basis.

(b) Mainly corporate expenses, research and

development costs, amortisation of goodwill

NESTLE INDIA LTD.

SALES ANALYSIS

By Geographic Area

In Million of CHF 2001

(%)

Europe 25/706 36.7

North and South America 22/262 31.8

Africa, Asia and Oceania 13/493 19.3

Other Activities 8/537 12.2

69/998

By Main Product Group

NESTLE INDIA LTD.

In Million of CHF 2001(%

)

Beverages 19/142 27.4

Milk Products, Nutrition and

Ice Cream

334 27.6

Prepared Dishes and Cooking

Aids

17/660 25.2

Chocolate and Confectionery 10/663 15.2

Pharmaceuticals 3/1999 4.6

NESTLE INDIA LTD.

Breakdown of 2001 Trading Expenses (in %)

Percentage

Raw Materials 26.2

Packaging 8.8

Salaries and Welfare Expenses 16.6

Depreciation 4.1

Other Trading Expenses 34.5

Total Trading Expenses 90.2

Trading Profit 9.8

Go to Financial Guide for additional facts and

figures.

NESTLE INDIA LTD.

Company Profile

Chairman of the Board: Helmut O. Maucher

Chief Executive Officer: Peter Brabeck-Letmathe

World’s leading food company

Switzerland’s largest industrial company

Worldwide operations

495 factories

Group’s total work force: 225, 808 people.

Historical Development

1866 Company’s foundation

1905 Merger between Nestle and Anglo-Swiss

Condensed Milk Company

1929 Merger with Peter-Cailler-Kohler Chocolates

NESTLE INDIA LTD.

Suisses. S. A.

1947 Merger with Alimentana S.A. (Maggi)

1971 Merger with Ursina-Franck (Switzerland)

1985 Acquisition of Carnation (USA)

1988 Acquisition of Buitoni-Perugina (Italy)

1988 Acquisition of Rowntree (GB)

1992 Acquisition of Perrier (France)

1998 Acquisition of Spillers (GB)

1999 Divestiture of Findus brand and parts of

Nestlé's frozen food business in Europe.

Divestiture of Hills Bros, MJB and Chase &

Sanborn roast and ground coffee brands

(USA).

2000 Acquisition of PowerBar.

NESTLE INDIA LTD.

Factories

Nestle has 6 factories in India. These are

1. Moga (punjab)

The Nestle factory in Moga has the pride of being

the first and most comprehensive factory of Nestle

India. Set up in 1962, it represents the core

competence of Nestle India in the manufacture of

milk products (Everyday, Milkmaid), beverages,

culinary products (Maggi sauces, noodles, soups

etc.), weaning cereals (Cerelac) and infant milk

formulae.

2. Choladi ( Tamil Nadu)

The factory in Choladi started production in 1967.

Situated about 60 miles from Calicut, the factory

today has 81 employees and produces 1.5% of the

total turnover of Nestle India. It is a 100 percent

NESTLE INDIA LTD.

export oriented unit which processes freshly picked

tea leaves into soluble instant tea.

3. Nanjagud (Karnataka)

Production in this factory began in 1989 with the

manufacture of Nestle instant coffee and Sunrise.

Today in addition to instant coffee the factory also

manufactures health beverages. The plant to

manufacture MILO was also commissioned at this

factory. This factory employs 145 people and is

cited as a model in terms of environment protection

for its installations to purify waste water as well as

for its provisions for recycling coffee wastes.

4.Samalakha (Haryana)

This factory was set up in 1993. Located 70

kilometres from Delhi , it manufactures weaning

cereals , culinary products ,health beverages and

milk products. Recently the expansion of

NESTLE INDIA LTD.

manufacturing capacity for Milkmaid Dessert Mixes

was undertaken at this factory as this new and

unique product category is viewed to have great

potential in the future.

5.Ponda (Goa)

This Kit-Kat factory was set up in Goa in 1995 at a

cost of Rs. 50 crores. It represented a major step by

Nestle towards becoming the Number 1 Chocolates

and Confectionery Company in India.

6.Bicholim (Goa )

The construction work at this new factory is

progressing with speed. This factory will soon

commence the manufacture of culinary products,

which is a key thrust area for the company and will

include latest technological improvements relating

to this category of products.

NESTLE INDIA LTD.

As a part of Nestles efforts towards continuous

improvement and excellence in Manufacturing

operation, a Moga Improvement team (MIT) was put

in place at the Moga factory. The team comprised of

international experts from Nestle Technical Services

(NESTEC) and the local staff. In 1996, it embarked

on a program with the single minded objective of

optimizing production costs while enhancing the

product quality so as to make Nestle products even

more competitive in the market place. Drawing

upon Nestle’s global experience and manufacturing

expertise in 75 countries the team identified the

following areas for detailed study -

Process improvement to ensure the optimal usage

of resources

Improvement of operational efficiency

Cost optimization

NESTLE INDIA LTD.

A series of small but critically important initiatives

ranging from redesigning laboratories to

palletisation of raw materials and packaging

material utilization, manufacturing and filling loses

and labour man hours resulting in substantial

savings and improved productivity and machine

utilization. In addition, several non tangible benefits

in the form of systems for sustainable improvement

in areas like factory maintenance planning tools ,

down time recording systems and performance

measurement tools were also realized .

This project was highly successful and the company

is now implementing its key learning’s of MIT in its

other factories.

In a country as vast and diverse as India, supply

chain management is absolutely critical to rapid

growth. Through BECA, Nestle has concentrated

heavily on streamlining and improving their supply

chain management in order to make it more

NESTLE INDIA LTD.

dependable, more cost effective and most

importantly, more responsive to market needs.

For better supply chain integration the planning of

key operations - purchase, production, distribution

and sales are synchronised to ensure that

everybody works towards a common business plan.

Monthly objectives are broken down into weekly and

(wherever necessary) into daily plans and

monitored regularly to ensure smooth

implementation and quick corrective action when

needed . Major benefits accrued thus far include

reduction in working capital through lower

inventories of finished goods and materials, better

stock availability and reduction in obsolescence of

materials.

In addition to traditional performance indicators,

quantifiable performance measures have been

identified and implemented in all functional areas

such as sales planning, production output, quality

NESTLE INDIA LTD.

assurance, material ordering transportation and

warehouse management. These measures are

monitored regularly to gauge the extent of

improvement and identify root problems for taking

corrective actions.

Teams have been put in place at all factories and

sales offices to ensure the implementation is

continuous and self-sustaining. Areas of

improvement are regularly identified and timebound

action plans established. For this purpose, standard

tools such a Total Quality Management(TQM),

Kaizen, 5S and Small Group improvement activity

(SGIA) are being extensively used.

The efficacy of this hierarchical structure is seen in

Nestle’s performance over past few years of various

products.

By 1989 the company had achieved a sales figure of

approximately Rs. 258 crores. 1989 was the year of

NESTLE INDIA LTD.

launches. Seven new product lines were launched in

this year. This was also the year in which the

Nanjagud factory was set up. By the year 1992, this

sales figure was touching Rs 500 crores. In the

1990’s the pace of launches quickened and since

the construction of the factory at Samalakha, 20

new products have been introduced. By 1996,

Nestle had about 76 different products in its

portfolio with various new products in the pipeline

as well. The sales figure now touched Rs. 1214

crores. Thus sales grew by 450% over a period of

one and a half decades.

NESTLE INDIA LTD.

Nestle’s Product Range is detailed below -

Product Year of inception

Milkmaid 1962

Nescafe 1964

Lactogen 1968

Ricori 1972

Cerelac 1974

Maggi Cubes 1974

Nestum 1978

Nespray 1982

Lactogen 1 1982

Sunrise 1983

Maggi Noodles 1983

Maggi Sauces 1985

Everyday 1986

Cerelac (wheat-apple, orange) 1987

Maggi Sauces(Chilli Garlic Masala Chilli)

1987

Everyday Ghee 1989

Maggi soups( tomato,chicken) 1989

Taster choice(leaf tea) 1989

Sunrise extra(originally Ricory) 1989

Nestogen 2 1989

Sunrise Premium 1989

NESTLE INDIA LTD.

Cerelac(Wheat-vegetable) 1989

Chocolates(Nestle Milky bar, crunch)

1990

Nestle eclairs 1991

Bar- one 1991

Maggi Soups( mixed vegetables, chicken noodles)

1991

Nestogen 1 1991

Everyday gold

(originally nespray)

1992

Maggi Super seasoning (originally Maggi cubes)

1993

Nestle Bonus 1993

POLO 1993

Nestle Bar one (roasted peanuts)

1993

Tasters choice (dust tea) 1993

Contadina Snack Dressing 1993

Cerelac (wheat-soya) 1994

Milkmaid Dessert Mixes (custard powder, gulab jamun , Kesar Kulfi, Shahi Rabri)

1994

Maggi Tonite’s special (Gravy sauces)

1994

Nescafe Premix 1994

Everyday premix 1994

Nestle Bonus(chocolate) 1995

NESTLE INDIA LTD.

Kit -Kat 1995

Toffo 1995

POLO (Paan) 1995

Nestle MILO 1996

Milkmaid Dessert mixes (Kalakand)

1996

Maggi Pickles( lime ,mango , mixed , mango punjabi, lime sweet.

1996

Maggi Dosa Mixes (masala, plain, sambhar)

1996

Maggi Soups (Chicken Sweet Corn, Hot and Sour, Rasam)

1996

POLO (Spearmint) 1996

Cerelac - Rice 1996

Taster’s Choice - Tea Bags 1996

Tea mate - Dairy Whitener 1996

Splash - Candy 1996

Maggi Macaroni 1996

Mithaimagic 1996

NESTLE INDIA LTD.

TODAY NESTLE IS PRESENT IN DIFFERENT

MARKETS WITH THE FOLLOWING MAIN BRANDS

Soluble coffee

Nescafe, Taster's Choice, Ricore, Ricoffy.

Roast and Ground Coffee

Hills Bros., MJB, Bonka, Zoegas, Loumidis

Mineral Water

Perrier, Contrex, Vittel, Valvert, Quezac, Arrowhead,

Poland Spring, Buxton, Vera, Blaue Quellen,

Calistoga, Santa Maria, San Pellegrino.

Other beverages

Nesquik, Nescau, Nestea, Milo, Carnation, Libby's

Caro.

NESTLE INDIA LTD.

Dairy Product

Nido, Nespray, Carnation, Milkmaid/ La

Lechera, Gloria, Neslac, Barenmarke.

Breakfast Cereals

Nestle

Coffee Creamers

Coffee-mate

Infant Foods and Dietetic Products

Nestle, Nan, Lactogen, Cerelac, Nestum, Guigoz

Culinary Products (Bouillons, soups,

seasonings, prepared dishes, canned food,

pasta, sauces)

NESTLE INDIA LTD.

Maggi, Crosse and Blackwell, Libby's, Thomy,

Builtoni, Contadina

Frozen Foods

Findus, Stouffer's Buitoni, Maggi

Ice Cream

Nestle, Frisco, Dairy Farm, Magnolia, Motta, Camy ,

ect.

Refrigerated Products (yogurts, desserts,

pasta sauces)

Nestle, Locatelli, Vismara, Buitoni, Contadina

Chocolate and Confectionery

Nestle, Crunch, Cailler, Frigor, Chokito, Sarotti,

Galak/Milkybar, Yes, Kit Kat, Quality Street,

NESTLE INDIA LTD.

Smarties, Baci, After Eight, Baby Ruth, Butterfinger,

Lion, Nuts, Rolo, Aero, Polo, etc.

NESTLE INDIA LTD.

Food Services and Professional Products

Chef, Davigel, Santa Rica

Pet Care

Friskies, Fancy Feast, Aplo, Mighty Dog, Gourmet.

Specialized products for the food industry

Food Ingredients Specialties (FIS)

Ophthalmological products

Alcon

Cosmetics

L'Oreal

NESTLE INDIA LTD.

NESTLE INDIA LTD.

NESTLE INDIA LTD.

NEW PRODUCT LAUNCHES

To put all the product launches into perspective,

Nestle now has 80 products including various

flavors and variants this awesome list of 80

products for most companies is an overfull palate.

Nestle India Ltd. still has a variety of new products

in the pipelines. It believes in slowly colonizing as

much territory as fast as it can, adapting to native

conditions and then work at 'Holding off the

advancing herds'. Nestle products can be broadly

classified into 5 main ranges:

Milk Product

Chocolate and Confectionery

Beverages

Culinary

NESTLE INDIA LTD.

Food Service.

Milk Products

This category which comprises of condensed milk,

baby milk foods, milk powders, acidified infant food,

and other milk products, showed a slump in 1996 as

sales of milk products fell from Rs. 31.4 crores in

1995 to Rs. 31.2 crores in the said year. Consumer

off take remained depressed throughout this year

as a consequence of high price increases

necessitated by substantial increases (+ 50%) in

the cost of basic raw materials (fresh milk), over the

past two year.

However Nestle retained its leadership in the infant

food market with Cerelac Lactogen and Nestum and

even introduced a new flavor of Cerelac-Cerelac

Rice in 1996.

NESTLE INDIA LTD.

Chocolates and Confectionery

Nestle pursues the objective of accounting for one

in every three rupees in its sales figures through

chocolates and confectionery. This has thus been

one of the thrust areas in Nestle. Nestle this year

widened its range of flavors in POLO, backed by its

tremendous success in the Indian Market by adding

POLO Spearmint to its Portfolio. This new flavor has

also received an encouraging response in the

market according to market analysts.

Milkybar also retained its position as the number

one white chocolate brand in India, however it did

not record a significant increase in sales, as a

majority of Indian tastes still do not accept this

flavor.

This year however, was a year of tremendous

success for Kit Kat. This internationally renowned

brand gained a large increase in the Market share in

NESTLE INDIA LTD.

the past year and Nestle officials are hopeful that

this will further increase in the coming years.

However this brand along with its success has

brought with it its share of Controversy as the Union

of India has launched a Litigation against the Kit Kat

family pack.

In 1997 Nestle added to its range of confectionery

by introducing SPLASH, "A soft hearted, hard boiled

sweet" this is being promoted as a sweet unique to

India and is positioned to a target audience in the

age group of 4 to 12 years and "anyone with a soft

heart" is a potential customer. Priced at Rs. 1 for a

7.5-gram candy Splash has been introduced

selectively in the South and has been speculated to

repeat Polo's performance. Nestle's officials claim

that this candy has the potential to grab a quarter

of the 700 crores confectionery market.

The most recent of Nestle affairs with the

confectionery market has been the introduction of

NESTLE INDIA LTD.

Mithai Magic, which is "a little Mithai, a little

magic." This new product was launched in

September 1997, in time for the Diwali purchases of

sweets. This brand has been positioned somewhere

between chocolates and traditional sweets and the

company is employing a push strategy to promote

this brand.

The latest launch of Nestle in the Chocolate and

confectionery division is Charge.

Beverages

This year has been very successful in the beverages

market for Nestle. The sales of beverage have

increased from Rs. 323.3 crores in 1995 to Rs.

398.8 crores in 1996.

Nestles Flagship Nescafe, which was pegged at

Rupees 1040 per kilogram before the launch of Tata

Cafe, met with stiff competition from Tata Cafe

NESTLE INDIA LTD.

priced at Rupees 550 per Kg., once it was

introduced. Tata cafe claimed to have garnered a

market share of 17% by December 1996. This

forced Nestle to cut prices of Nescafe to Rupees 840

per Kg. However Nescafe still retains 83% market

share in the Rs. 177 Crores market for pure instant

coffee.

Nestle Sunrise also showed an increase in sales and

captured 20% of the Rs. 253 crores market in Mixed

instant coffee.

This year Nestle also launched MILO, an

internationally renowned chocolate energy drink,

and the response for this has been encouraging.

Nestle has introduced Tasters Choice tea bag

pitched against Taj Mahal Tea bags.

Culinary Products

NESTLE INDIA LTD.

The market in culinary products had witnessed a

high growth consequent to aggressive pricing

decisions on existing products and the introduction

of a variety of new products to match the needs of

the Indian Housewife. Encouraged by this success

Nestle launched Maggi Macoroni Snack in three

flavors-Chicken, Masala and Tomato. Nestle

official’s say that this would consolidate Maggis

position as the number 1 culinary brand in India.

The product focuses on convenience and innovation

as its Unique Selling Proposition. This snack has

opened a new segment for the maggi brands. The

brand is positioned as Youthful and is represented

by the twists and curls of the macaronic snack. It is

speculated to be introduced in a phase manner

nationwide to be place in the 7.5-lakh outlets that

Maggi noodles sells in.

In the spirit of catering to Indian tastes Maggi

introduced maggi pickles in five variants

benchmarked to give the "ghar ka swad". Maggi

NESTLE INDIA LTD.

Dosa Mix was also introduced to offer superior

quality and added convenience. Apart from this

Milkmaid Kalakand Mix, a traditional north Indian

sweet of premium quality was added to the

milkmaid dessert mixes. Maggi soup also launched

three new variants. Maggi Rassam in particular was

noticeable as yet another attempt to make

traditional Indian cooking a little bit easier.

Food Services

Food service items basically deal with the out of

home segments, which would include vending

machines. Nestle's food service business is poised

for rapid expansion to meet the growing need for

such a reliable, time saving and cost effective

service in this modern age.

Nestle wants to sell 500 million cups of tea and

coffee through its vending machines in the year

2000. It currently has 3500 vending machines at

NESTLE INDIA LTD.

assorted locations (both public and private). In 1995

Nestle food service did well to vend 40 million cups

of Nescafe and Tasters Choice tea. Its 1996 sales

were placed at 59 million cups of Nescafe and 36

million cups of tea; this figure was however way

below the expected sales for the year.

In 2001 and 2002 nestle has come with a number of

new products like it has come with many of the

diary products like milk. The milk is avaliable in the

market in the full cream , toned and double toned

milk. The nestle has also come with the dahi, butter

which is available in the market but at very few

shops .

NESTLE has also come with the products which will

target the children like FRUITIPS,MILKYBAR

CHOO,NESTLE CHINESE MAGGI NOODLES.

NESTLE INDIA LTD.

NESTLÉ CORPORATE BUSINESS

PRINCIPLES

Nestlé is committed to the following business

principles in all countries, taking into account local

legislation, cultural and religious practice:

Nestlé's business objective and that of

management and employees at all levels, is to

manufacture and market the company's

products in such a way as to create value that

can be sustained over the long term for

consumers, shareholders, employees, business

partners and the large number of national

economies in which Nestlé operates.

Nestlé does not favour short-term profit and at

the expense of successful long term business

development, but recognises the need to

generate profit each year in order to maintain

NESTLE INDIA LTD.

the support of the financial markets, and to

finance investments.

Nestlé believes that, as a general rule,

legislation is the most effective safeguard of

ethical conduct, although in certain areas,

additional guidance to management and

employees in the form of voluntary business

principles, is beneficial in order to ensure that

the highest standards are met throughout the

organisation.

Nestlé is conscious of the fact that the success

of a corporation is a reflection of the

professionalism, conduct and ethical values of

its management and employees, therefore

recruitment of the right people, and ongoing

training and development are crucial.

Nestlé recognises that consumers have a

legitimate interest in the company behind the

NESTLE INDIA LTD.

Nestlé brands, and the way in which the Nestlé

Company operates.

Legislation and International

Recommendations

Nestlé:

complies with the laws applicable in the

countries in which it operates.

ensures that the highest standards of ethical

conduct are met throughout the organisation,

by complying in a responsible way with the

Business Principles, which guide company

activities and relationships world-wide in each

sector of business interest.

is aware that increasing globalisation is leading

to the development of more and more

international recommendations. Although, as a

general rule, these recommendations are

NESTLE INDIA LTD.

addressed to governments, they inevitably

impact on business practices; Nestlé has taken

such recommendations as the ILO Basic Rights,

and the International Code of Marketing of

Breast-milk Substitutes (WHO) into account in

its policies.

generally endorses commitments and

recommendations for voluntary self regulation

issued by competent sectoral organisations,

provided they have been developed in full

consultation with the parties concerned; these

include the ICC Business Charter for

Sustainable Development, and the OECD

Guidelines for Multinational Enterprises.

Consumers

Nestlé aims to create value for consumers that

can be sustained over the long term by offering

NESTLE INDIA LTD.

a wide variety of high quality, safe food

products, at affordable prices.

Nestlé believes that advertising and other

communications play an important role in

encouraging consumers to exercise their right

to informed choice. In order to fulfil this role in

a responsible way, the Company makes a

determined effort to ensure that Nestlé

advertising:

does not mislead as to the benefits derived

from use of the product

does not use gratuitous violence, sex or

profanity

does not depict discriminating or offensive

attitudes to religious, political, ethnic, cultural

or social groups

NESTLE INDIA LTD.

avoids demonstrations that encourage

dangerous, or inappropriate use of the product

does not portray competitors' products

inaccurately, nor denigrate competitors'

products

avoids the exploitation of media events which

could be in bad taste or conflict with the

corporate image.

In addition to the above principles, Nestlé does not

sponsor TV and radio programmes or magazines

whose strategy of attracting viewers or readers lies

clearly in the use of gratuitous violence, sex or

offensive attitudes to either majority or minority

groups.

NESTLE INDIA LTD.

Children as Consumers

Nestlé has developed the following principles for

advertising to children:

communications (including advertising, events,

sponsorships) to children should should not be

disguised as programming or editorial;

advertising to children should not attempt to

undermine the authority, responsibility or

judgement of parents or care providers;

advertising to children should not portray

children in unsafe situations nor encourage

them to accept invitations from people they do

not know;

food and beverage communication should not

demonstrate either unsafe or irresponsible

consumption.

NESTLE INDIA LTD.

Human Resources and the Workplace

Nestlé regards its management and employees as

its most valuable assets. Involvement at all levels

starts with open communication, whether on

specific aspects of the business, or about the

activities of the Company in general. Suggestions

for changes and proposals for improvements of

Nestlé's practices are encouraged.

The Company's business practices are designed to:

promote a sense of identification among all

employees all over the world, and apply a

number of common rules while at the same

time adapting the expression of these rules to

local customs and traditions;

encourage training, and the improvement of

professional skills;

NESTLE INDIA LTD.

offer opportunities for promotion based upon

merit, irrespective of race, religion, sex or

nationality. Professional skills, experience, and

the capacity and willingness to apply Nestlé

management principles are the criteria for

promotion.

offer competitive salaries and social benefits.

Working hours, wages and overtime pay

comply with applicable local laws and are in

line with conditions offered by similar

companies.

limit factory overtime to a reasonable level;

create a safe working environment for each

employee;

respect the right of employees to join legally

recognised labor unions;

NESTLE INDIA LTD.

treat every employee with respect and dignity,

and not tolerate any form of physical or sexual

harassment or abuse; preclude the use of

forced labor or involuntary prison labor.

NESTLE INDIA LTD.

CEO'S VISION

According to Mr. Carlo Mavia Donati Opportunities

(CEO) "New opportunities have opened up with the

emergence of a new middle class. Today the Indian

youth is much more open to international trends the

media and communication revolution has also

exposed the Indian people to new life styles. And in

the process, this has created new opportunities for

our products" and Donati is pretty clear-he will

ensure that Nestle grabs these opportunities.

THE NESTLÉ POLICY ON THE ENVIRONMENT

CEO's Statement

Over the past several decades, significant progress

has been achieved towards protecting the world's

environment. This objective remains a fundamental

duty and a collective responsibility that must be

NESTLE INDIA LTD.

shared between the public, governments and the

private sector.

As the World Food Company, Nestlé is dedicated to

providing consumers with the best food throughout

life. Our Company's primary function is the

transformation of perishable raw materials into

finished products that meet consumers'

expectations for safety, quality, convenience, and

value. From our earliest days, we have recognized

the need to protect the environment in our business

activities. Exercising this commitment, which is part

of our broader commitment towards the good of the

community, remains central to our business today

and tomorrow.

The Nestlé Policy on the Environment was published

in 1991 to define our world-wide strategy on

environmental issues and to state our long-standing

commitment to environmentally sound business

practices. It is communicated internally within the

NESTLE INDIA LTD.

Nestlé Group and externally to all interested parties

and institutions. Following its publication, the Nestlé

Environmental Management System (NEMS) was

established to consolidate all environmental

measures taken by the Nestlé Group. The NEMS is

being implemented across our entire business.

Today, preserving natural resources and minimizing

waste has become a part of day-to-day business for

our employees and is an integral part of our

strategy to achieve global competitiveness. The

1999 update of the Nestlé Policy on the

Environment reiterates our strong environmental

commitment and reflects our priorities as we move

into the new millennium. It also recognises

developments in the international environmental

arena.

The application of the Nestlé Policy on the

Environment at every level of our operation forms

an essential part of the Nestlé Corporate Business

NESTLE INDIA LTD.

Principles and enables us to contribute to

sustainable development — meeting the needs of

the present, without compromising the ability of

future generations to meet their own needs

Compliance

Nestlé is committed to the application of these

principles in all countries, and wherever they are

not in conflict with relevant local legislation where it

operates.

Nestlé compliance with its Corporate Business

Principles is regularly monitored by its internal

auditors on the basis of clear auditing instructions,

which are certified by the external auditing firm

KPMG.

Findings and recommendations are reported to the

Nestlé S.A. Board of Directors.

NESTLE INDIA LTD.

Nestlé's Environment Progress Report 2001, many

years of real work experience

Nestlé is committed to environmentally sound

business practices

Environmental Update

Message from the CEO

Nestlé was founded in 1867 by pharmacist Henri

Nestlé on the shores of Lake Geneva in Vevey,

Switzerland. One hundred and thirty-four years

later, our headquarters are still in Vevey,

surrounded by the Swiss Alps in one of the world’s

best-preserved environmental settings.

As they have grown from humble beginnings into

the world’s largest food company, we have

attempted to take the fundamental cultural values

NESTLE INDIA LTD.

of environmental preservation and cleanliness into

every country where we operate.

They spend a great deal of time travelling to these

countries and have personally visited many of the

479 Nestlé factories currently in operation. One of

the reasons for doing so is to see for myself that

our facilities reflect the environmental values basic

to our Company. Nestlé announces publication of

the Environment - Progress Report 2000.

The Nestlé Environment Progress Report 2000 has

been published and can be ordered from the Nestlé

Environmental Affairs Department. The

Environment Progress Report 2000 - Highlights was

distributed together with the Nestlé Management

Report 2000.

Moreover, the company follows environmental

performance, including the results of our

environmental performance indicators. The

NESTLE INDIA LTD.

Environmental Officer reports directly to General

Management to ensure there is on-going awareness

regarding environ mental affairs. Also, the Nestlé

Environmental Advisory Group (made up of

corporate experts from many functions) meets

regularly to review current environmental issues

and to anticipate potential concerns. This allows us

to maximise control over our activities and

contribute to sustainable development in the

countries where we operate.

The Nestlé Environment – Progress Report 2000

describes the results of continuous improvement in

our environmental practices. The progress in a

number of key areas, including a significant decline

in the amounts of water and energy used to bring

each kilo of Nestlé products into your home, and a

similar reduction in factors which potentially affect

global warming. However, however they were

never completely satisfied with their current

NESTLE INDIA LTD.

performance, and are committed to further

environmental improvements.

The try to remain sensitive to the environmental

concerns of our consumers and the public as a

whole. As a charter member of the World Business

Council for Sustainable Development, They attempt

to keep their policies at the forefront of industrial

companies. For this reason, they have pledged

their adherence to The Business Charter for

Sustainable Development of the International

Chamber of Commerce, and we are committed to

being a leader in environmental performance.

This leadership is only possible through the

collective commitment of the tens of thousands of

individual Nestlé employees who, on a daily basis,

work to make this a better planet on which to live.

This Report is dedicated to them.

NESTLE INDIA LTD.

Peter Brabeck-Letmathe

Chief Executive Officer

Nestlé Corporate Business Principles

Nestlé is committed to the following business

principles in all countries, taking into account local

legislation, cultural and religious practice:

Nestlé's business objective and that of

management and employees at all levels, is to

manufacture and market the company's

products in such a way as to create value that

can be sustained over the long term for

consumers, shareholders, employees, business

NESTLE INDIA LTD.

partners and the large number of national

economies in which Nestlé operates.

Nestlé does not favour short-term profit and at

the expense of successful long term business

development, but recognises the need to

generate profit each year in order to maintain

the support of the financial markets, and to

finance investments.

Nestlé believes that, as a general rule,

legislation is the most effective safeguard of

ethical conduct, although in certain areas,

additional guidance to management and

employees in the form of voluntary business

principles, is beneficial in order to ensure that

the highest standards are met throughout the

organisation.

Nestlé is conscious of the fact that the success

of a corporation is a reflection of the

NESTLE INDIA LTD.

professionalism, conduct and ethical values of

its management and employees, therefore

recruitment of the right people, and ongoing

training and development are crucial.

Nestlé recognises that consumers have a

legitimate interest in the company behind the

Nestlé brands, and the way in which the Nestlé

Company operates.

NESTLE INDIA LTD.

Vevey, October 23, 2001

Nestlé To Invest CHF 100 Million in New Swiss

Airline

Vevey, October 23, 2001 – Nestlé S.A. will take a

participation of up to CHF 100 million in the new

Swiss airline, fully expecting this investment to

yield a return to its shareholders after the initial

launch phase. The project appears to be based on a

reasoned, viable business plan, with a fair chance of

attaining its objectives. Nestlé will assume no

responsibility of any kind at management or board

level of the airline. Nestlé sees its limited

investment in the new venture in the following

NESTLE INDIA LTD.

context: · as all internationally active corporations

based in Switzerland, Nestlé needs frequent

intercontinental airline connections. · Nestlé is often

identified by authorities and consumers as a Swiss

corporation whose products stand for quality and

reliability. The company cannot be indifferent to the

quality of the image of Switzerland abroad, which

would have substantially suffered from the inability

to find a constructive solution. · Nestlé is an

international company with a substantial Swiss

shareholding and it is based in Switzerland. As such,

it does not operate in a vacuum and is well aware of

the social, political and economic environment in

which it functions. Participating in an effort that

encompasses all the major players in the Swiss

economy, is consistent with the position it occupies

in its country of origin as well as with its attitude of

responsible corporate citizenship. During the earlier

attempts to solve the difficulties resulting from the

impending failure of Swissair, Nestlé has

NESTLE INDIA LTD.

consistently signaled that, in view of its

responsibility vis-à-vis its own shareholders, it

would not commit shareholders' funds on a

gratuitous base, simply to "rescue" Swissair. Over

the past weeks, however, the Swiss government as

well as representatives of the Swiss economy,

discussed the creation of a new Swiss airline that

would ensure that Switzerland remains well served

with intercontinental flights and that the existing

infrastructures would continue to function. Nestlé's

small minority stake in the new venture corresponds

to about three percent of the Nestlé Group's yearly

investment volume in fixed assets.

NESTLE'S CORPORATE CULTURE

As we had discussed before, Nestle is one of the

most multinational of multinationals and is spread

over 75 countries worldwide. This implies that it has

employees from diverse cultural backgrounds.

Nestle respects the distinctive culture, mentality

NESTLE INDIA LTD.

and traditions of every employee in every country.

What Nestle aims at is to incorporate its own culture

into its employees without stifling the individual

employee's culture and identity. When we went to

Nestle we could feel the existence of a distinctive

work culture amongst the management-the staff

seemed highly motivated and cheerful and

everybody had pin up boards in front of their tables

with reminders, motivational messages and even

timelogs (the Nestle people seemed as if they

availed of the benefits of time management).

Nestle has a diverse product range and so it also

has diversified risks. Thus Management on

Information System plays a vital role in Nestle to provide information to the

Sales and marketing as well a finance department. The Electronic Data Processing Department

looks after Management Information Systems. The Hierarchy of this department is given below;

Controller Head of E.D.P. Controller

Apart from this, Nestle has a vast distribution

network. In order to support the BECA process,

NESTLE INDIA LTD.

an integrated computer system has been put in

place across the company to link all functional

areas and locations. This common linked

system will improve information availability,

aid quick decision-making and improve supply

chain integration.

NESTLE INDIA LTD.

GLOBAL OPERATION : COUNTRY WISE

Company Description : Nestle India

Nestle India. The principal activity of the company is

the manufacture of soluble beverage powder, milk

products, surplus fat and other food products.

Products of the company include soluble coffees,

coffee blends, tea, preparation of milk, cream and

cereals and milk concentrated/condensed. The

manufacturing plants are located at Moga,

Samalkha, Nanjangud, Choladi, Ponda and Bicholim.

The company exports it's products to Russia, Nepal

and Bhutan. Soluble beverage powder accounted for

29% of 2000 revenues; milk products, 26%; surplus

fat, 3% and other foods, 42%.

Competitor Analysis

Nestle India operates within the Dry, condensed,

evaporated products sector. This analysis compares

NESTLE INDIA LTD.

Nestle India with three other dairy companies in

Asia: Alaska Milk Corporation of Philippines (2000

sales of 3.79 billion Philippine Pesos [US$73.12

million] ), Smithkline Beecham Consumer

Healthcare (8.58 billion Indian Rupees [US$178.71

million] of which 95% was Malted Milkfood/Food),

and Pure Foods Corporation which is based in

Philippines (12.65 billion Philippine Pesos

[US$243.90 million] ).

Officers

Executive Chairman & Managing Director

Carlo M.V. Donati

Executive Director Finance

Jean Marc Waelti

Secretary

B. Murli

NESTLE INDIA LTD.

USA MARKET

Nestlé USA is named America's Most Admired Food

Company for the fourth consecutive year.

As many of its rivals seek growth through

consolidation, Nestlé instead looks within for ways

to boost sales...In the process, it has posted sales

growth of more than 4%, higher than the industry

average of 2.5%.

Together, Nestlé's disparate Internet ventures

present a mountain of opportunity...U.S. CEO

Weller's Net-savvy unit is leading the global

company in its e-enterprise

Their vision as part of the world's leading food

company is to provide families with the best food

and beverages throughout their lives. Our success is

based on the quality of our products and on

relationships we continually build with our

NESTLE INDIA LTD.

customers, our employees, our communities and our

suppliers - who continually look to our company to

be the very best. Our commitment to achieving this

vision is a source of Nestlé pride.

For well over a century, Nestlé has been making the

very best food and beverage products for families

around the world. We believe that food should

provide for the spirit as well as the body, and strive

to ensure that every product we prepare also

enriches the experience of life itself. We believe it is

our unique understanding of the integral role of

food in good living that's helped us to become a

part of the world's largest food company.

Corporate Governance Principles

Since its foundation in 1866, Nestlé has

built consumers' trust through the quality of its

products;

NESTLE INDIA LTD.

respected the social, political and cultural

tradition of all countries in which it operates;

taken a long-term approach to strategic

decision-making, which recognises the

interests of our shareholders, consumers,

employees, business partners as well as those

of all the national economies in which we

operate.

Nestlé's commitment to good Corporate Governance

goes back to its very early days. Today, as both

legislation and international recommendations

indicate growing public interest in the issue, we

take the opportunity to publish the Nestlé

"Corporate Governance Principles" that reflect and

highlight our ongoing commitment.

NESTLE INDIA LTD.

Legislation and International

Recommendations

Nestlé complies with the laws applicable in the

countries in which it operates;

ensures that the highest standards of conduct

are met throughout the organisation by

complying in a responsible way with the Nestlé

Corporate Business Principles, which guide

company activities and relationships world-

wide in each sector of business interest;

is aware that increasing globalisation is leading

to the development of more and more

international recommendations. Although, as a

general rule, these recommendations are

addressed to governments, they inevitably

have an impact on business practices. Nestlé

NESTLE INDIA LTD.

takes such recommendations into account in its

policies;

generally endorses commitments and

recommendations for voluntary self-regulation

issued by competent sectoral organisations,

provided they have been developed in full

consultation with the parties concerned; these

include the ICC Business Charter for

Sustainable Development (1991), the OECD

Guidelines for Multinational Enterprises (1976),

and the OECD Principles of Corporate

Governance (1999).

The Principles

They cover four areas:

I. The rights and responsibilities of shareholders

II. The equitable treatment of shareholders

NESTLE INDIA LTD.

III. The duties and responsibilities of the Board of

Directors

IV. Disclosure and transparency and are based on

Swiss legislation, since Nestlé S.A. has its

registered offices in Switzerland (Cham and

Vevey), as well as on Nestlé S.A.'s Articles of

Association.

The rights and responsibilities of shareholders

The shareholders' rights are protected by law, by

the Articles of Association, and by the Corporate

Governance Principles, which are also intended to

ensure the sustainable development of Nestlé S.A.

Nestlé S.A.'s basic shareholders' rights and

responsibilities include the right to:

secure methods of ownership registration;

NESTLE INDIA LTD.

obtain relevant information on Nestlé S.A. on a

regular and timely basis;

participate in and vote at General Meetings of

the Shareholders in person or in absentia (by

proxy), subject the Nestlé S.A.'s Articles of

Association;

approve the annual report and the annual

financial statements of Nestlé S.A.;

approve the consolidated financial statements

of the Group;

grant the discharge to the Board of Directors

(hereafter referred to as the "Board") and to

the Management;

decide on the appropriation of profits resulting

from the balance sheet of Nestlé S.A., in

particular determine the amount of the

dividend;

NESTLE INDIA LTD.

elect and remove the members of the Board

and the Auditors of the annual financial

statements, and of the consolidated financial

statements;

adopt and amend the Articles of Association;

take all decisions, which by law or under its

Articles of Association, are within the

jurisdiction of the General Meeting;

participate in the decisions in extraordinary

meetings;

be informed sufficiently ahead of time of the

date, location and agenda of General Meetings;

place items on the agenda and ask questions at

General Meetings in accordance with the

Articles of Association, and - for the questions -

subject to reasonable limitations inasmuch as

the topics are related to the business activities.

NESTLE INDIA LTD.

Any Nestlé S.A. shareholder has the right to

request effective redress of violation of his/her

rights in accordance with the Swiss law.

NESTLE INDIA LTD.

The duties and responsibilities of the Board

The Board ensures the strategic guidance of Nestlé

S.A. and the effective monitoring of its

management.

The Board is accountable to the shareholders. In

order to fulfil their duties and their responsibilities,

Board members receive and can request accurate,

relevant and timely information.

Board members act on a fully informed basis, in

good faith, with due diligence and care, and in the

best interest of Nestlé S.A.

Disclosure and transparency

Nestlé S.A. aims to ensure that shareholders

have access to relevant, up-to-date and

consistent information. This information should

allow shareholders as well as prospective

NESTLE INDIA LTD.

investors to make an informed judgement

about Nestlé S.A. shares.

Nestlé S.A. will pursue a policy of disclosure

and transparency. This policy will be modified

only when it is necessary to protect the

company's competitive, commercial or legal

position.

Nestlé S.A. complies with all legal and

regulatory requirements applicable where its

shares are listed. Nestlé S.A. will monitor all

changes and take part whenever possible in

the discussion preceding such changes in

legislation and listing regulations.

Nestlé S.A. is aware of its obligation to make

information that is relevant to the market

publicly available in simultaneous fashion. To

this effect, "quiet periods", during which no

NESTLE INDIA LTD.

relevant financial information will be provided

to third parties, have been introduced.

Independent auditors elected by the

shareholders conduct the annual audit in order

to provide an external and objective assurance

on the way in which financial statements have

been prepared and presented.

NESTLE INDIA LTD.

DISTRIBUTION NETWORK

THE DISTRIBUTION CHAIN NOW

FMCG Manufacture

Clearing and forwarding agents (1-3% margins)

Super stockists (3-6% margins)

Stockists (3-5%)

Distributor (4-7%)

Organized retailer (6-15%)

WHAT RETAIL CHAINS WANT

FMCG manufacturer

Organized retailer (current 6-15% margin + 11-21%

savings from disintermediation)

NESTLE INDIA LTD.

The retail demands

What FMCG

companies give

What retail

chains wants

6% to 15% Margins At least 20%

7-10 days Credit days 15-30 days

12 days Minimum stock

levels

7 days

20% to 25% Stock outs Less than 5%

NESTLE INDIA LTD.

NESTLE INDIA LTD.

Methodology

The nature of the project work has been exploratory

as no hypothesis, is taken to be tested. Though the

conclusions drawn could be taken as the hypothesis

and further tested by the research work undertaken

in the relevant field. The reason for choosing the

exploratory research design is the fact the project

report has been primarily based upon the secondary

sources of data and whose authenticity could be

assured of.

The reluctance of the company's personnel in

parting with much of information led the project

report to be based substantially on the secondary

source of data. The sources of data used in data

collection are the following:

NESTLE INDIA LTD.

Primary sources

In order to gather information about the various

products, I personally visited a number of retail

markets and collected data pertaining to the prices

of the products offered. The market visits were

useful in knowing the comparative prices and

quality of the offered brands vis-à-vis the

competitive brands. Detail regarding the packaging

of the products were collected were collected and I

also inquired about the various sales promotion

schemes followed by the three companies.

By interviewing these retailers valuable information

was collected. I inquired from them about their

marketing advertising and distribution strategies.

NESTLE INDIA LTD.

Secondary sources

Information was collected from secondary sources

such as public libraries, newspapers, business

magazines.

Beside these the use of Internet was also made in

collecting relevant information. The data collected

from the above mentioned sources has been

adequately structured and used at appropriate

places in the report. This particular way of data

collection was used because of its low cost (except

data collected through surfing the internet) and less

time consumption.

The information gathered included:

Their annual reports (Procter & Gamble and

Johnson and Johnson).

Pamphlets.

Posters.

Press clippings.

News releases.

Newsletters.

Pictures.

NESTLE INDIA LTD.

Mc Curtty has popularized a four factor

classification of these loots called the 4 p. These

are:

Once should note that the 4P’s represent the seller’s view of the

marketing tools available for influencing buyers. From a buyers

point of view, each marketing tool is designed to deliver a

custom benefit. The 4 P’s correspond to the customer’s 4 C’s as:

MARKETING MIX

PRODUCTProduct variety quality

design features brand

name packaging sizes

TARGET MARKET

PLACEChannels coverage

Assortments Locations

Inventory transport

PRICEList price discounts

allowances payment

period credit terms

PROMOTIONSales promotion

advertising sales force

PR direct marketing

NESTLE INDIA LTD.

4Ps 4Cs

Product Customer needs and

wants

Price Cost to the customers

Place Convenience

Promotion Communication

Product

In the product the companies started a spate of

freebies with their products e.g. Godrej offered a

cordless Rx 1234 off with its refrigerators. Peter

England gave Rs 100 off on for its sheets. One must

try to create new segments for people who want to

go to a higher segment but are not in a position to

do so.Nestle introduces milk and dahi for higher

segment people. Many companies are bringing in

NESTLE INDIA LTD.

cheaper ranges to the existing ranges so that once

the people have tried & tested their products they

can be made to upgrade to their premium ranges.

One must also target the others customers because

this is not exactly the right time to expand the

market but to make the existing customers buy

again. For grabbing others share one must try to

attack on the rivals achelles heal with high dose of

speed & surprise, catching him unawares e.g. LML

followed the same strategy in UP, MP & Rajasthan

where its competitors position was relatively weak.

Nestle again repositioned the chocolate bar one.

Nestle has been coming with the different

productsand trying to target the different segments.

Nestle is also trying to give the customer more

choice, so that they can choose the product which

they like. The company is also trying to bring a

variety of products in every segment.

NESTLE INDIA LTD.

The companies should also try to offer emotional

value to the customer a Pt. New customers can't be

attracted with the same benefits as in good tones.

For, the resistance to experiment, whether with a

new product or a brand is much higher unless that

is, the benefit can mow down the barrier. According

to Puris Lintas Mehra consumers look for safe

choices during a recession. This is not the time for

new brands to come in, unless their attributes are

very strong.

Price:

Is an important tool to break down barrier to a

product or brand acceptance. According to

Siddhartha 'Shunv' Sen,59, the CEO of Suadra

Advisory Services "Statinzg the price upfront can

lower the consumer's expectation from a brand".

But one can't be convinced of the value connotation

of year brand, the customer will still use the

expensive, but more trusted product although in

NESTLE INDIA LTD.

smaller quantities or a fewer occasions than before

to project her budget So what next ? The price

warriors must make their offer either qualitatively

different or quantitatively superior to the

competition. And then slip in the lower price to seal

the deal. This double differentiation will double your

impression in the customer's mind.

In consumer durables the demand for these goods

falls rapidly in a recession the consumer postponing

his buy as long as he can. The marketers in this

time must lure the customers with much more than

then their lower prices but by schemes such as

exchange offers.

Nestlae has been always pricing the products as

premium price. The strategy of the nestle is to set

the priceas premium. The price is always set as that

price that can be afforded by the customers .the

company should set the price for those also who

have low spending budgets, they can not only

NESTLE INDIA LTD.

service the old customers but also bring in new for

whom earlier price was the main barrier.

Price One can reach for the consumers purse on the

basis of price but to stay there on the basis of price

is pretty cough.az Because every one tries to

imitate the low prices if the players are new. To

ensure price as a sustained competitive advantage,

the differentiation should be continuos. Imitation

should be warded off, consumers kept interested &

build image around price rather than as a discount

player.

Promotion:-

In recession the marketers must find innovative

ways to promote its product because the promotion

must and from the clutter. The marketer has to

make the consumer try his product & in order to

make them try marketer's uses giving samples of

his product. If the product is worthy or the customer

NESTLE INDIA LTD.

finds the product satisfactorily then the product

gets listed on his list & it can be considered in the

next purchase. The marketer has also the use

different media to catch the attention of the buyers

apart from T.V. & the print media. He has to use

new methods of promotions in order to get the

consumers attention.

Nestle has also implemented many promotion

schemes . the company has also promoted there

products like giving free samples of the new

products. or giving the new product free wiyh old

popular and famous product.

Place:-

In recession times when the demand in urban

markets is not growing at a fast rate the marketer

must find new markets where he can sell his

products. For today's Urban-centric marketer, one

NESTLE INDIA LTD.

way to beat the recession is to tune into rural

markets.

Many companies have resorted to direct selling .

This is because companies can save on costs of

distribution channel. The company chose direct

marketing or what is presently called as mutti-level-

marketing where customer doubles as distributors.

The advantage the distributors in addition to being

a seller also doubles as a customer & his giving

away of experiences is genuine.

So one can finally say

PRODUC

T

PRICE PROMOTIO

N

PLACE PAYMENT PACKING

Consumer

Non-

durables

Create new

segments

within

earlier

segments

Use

sampling

and multiple

media

Go rural;

use

shops-in

– shops

Designs

small units

oat lower

prices

Consumer

Durables

Offer no-

frills

Use

exchange

Use

announceme

Use dired

selling

Offer

financing

Bundle

products

NESTLE INDIA LTD.

options offers nt

advertising

and

installment

s

into single

units

MARKETING

Sales and Marketing are amongst the main

strengths of Nestle

It is the hierarchy, which has strengthened the

foundation of Nestle’s marketing force, is as in fig 1:

Managing director

Vice President (Marketing)

The efficacy of this hierarchical structure is seen in

Nestle's performance over past few years of various

products.

NESTLE INDIA LTD.

By 1989 the company had achieved a sales figure of

approximately Rs. 258 crores. 1989 was the year of

launches. Seven new product lines were launched in

this year. This was also the year in which the

Nanjagud factory was set up. By the year 1992, this

sales figure was touching Rs. 500 crores. In the

1990's the pace of launches quickened and since

the construction of the factory at Samalakha, 20

new products have been introduced. By 1996,

Nestle had about 76 different products in its

portfolio with various new products in the pipeline

as well. The sales figure now touched Rs. 1214

crores. Thus sales grew by 450% over a period of

one and a half decades.

NESTLE INDIA LTD.

MARKETING STRATEGY

Nestle has adopted a four pronged growth strategy:

1. Gunning the market with new products and brand

extensions.

2. Expansion of the distribution network to small

towns for extensive availability

3. Reduce prices and introduce smaller packages for

products to make them more affordable (a tool to

enter price sensitive markets).

4. Focus on employ training and develop a positive

attitude through enhanced manpower

development.

5. By year 2000 it expects chocolate and

confectionery to account for one in every third

rupee in sale.

NESTLE INDIA LTD.

In the late 1996 fear of breading complacency by

not having a continuous improvement, gave birth to

an international sales and marketing improvement

teams (SMIT).

SMIT maps the latest in helping towards the target

of year 2000. The SMIT exercise is a major global

initiative of Nestle to enhance sales and marketing

productivity. Linked with the already existing BECA

project, which in turn emphasizes on excellence by

improving the distribution set up, this gave rise to

the following growth objectives for the year 2000:

Ensure direct coverage of all urban towns in

India.

Expand distribution to reach I million retail outlet

on a regular basis.

Work in partnership with the distributor for the

achievement of these objectives.

NESTLE INDIA LTD.

Provide sustainable solution to optimize our

secondary sales from distributor to retailer.

PRODUCTION

As a part of Nestles efforts towards continuous

improvement and excellence in Manufacturing

operation, a Maga Improvement Team (MIT) was put

in place at the Maga factory. The team comprised of

international experts from Nestle Technical Service

(NESTEC) and the local staff. In 1996, it embarked

on a program with the single-minded objective of

optimizing production costs while enhancing the

product quality so as to make Nestle products even

more competitive in the market place. Drawing

upon Nestle's global experience and manufacturing

expertise in 75 countries the team identified the

following areas for detailed study:

Process improvement to ensure the optimal

usage of resources

NESTLE INDIA LTD.

Improvement of operational efficiency

Cost optimization.

As series of small but critically important initiatives

ranging from redesigning laboratories to

palletisation of raw materials and packaging

material utilization, manufacturing and filling loses

and labor man-hours resulting in substantial savings

and improved productivity and machine utilization.

In addition, several non-tangible benefits in the

form of systems for sustainable improvement in

areas like factory maintenance planning tools, down

time recording systems and performance

measurement tools were also realized.

This project was highly successful and the company

is now implementing its key learning's of MIT in its

other factories.

NESTLE INDIA LTD.

In a country as vast and diverse as India, Supply

Chain Management is absolutely critical to rapid

growth. Through BECA, Nestle has concentrated

heavily on streamlining and improving their supply

chain management in order to make it more

dependable, more cost effective and most

importantly, more responsive to market needs.

For better supply chain integration the planning of

key operations-purchase, production, distribution

and sales are synchronized to ensure that every

body works towards a common business plan.

Monthly objectives are broken down into weekly and

9wherever necessary) into daily plans and

monitored regularly to ensure smooth

implementation and quick corrective action when

needed. Major benefits accrued thus far include

reduction in working capital through lower

inventories of finished goods and materials, better

stock availability and reduction in obsolescence of

materials.

NESTLE INDIA LTD.

In addition to traditional performance indicators,

quantifiable performance measures have been

identified and implemented in all functional areas

such as sales planning, production output, quality

assurance, material ordering transportation and

warehouse management. These measure are

monitored regularly to gauge the extent of

improvement and identify root problems for taking

corrective actions.

Teams have been put in place at all factories and

sales offices to ensure the implementation is

continuous and self-sustaining. Areas of

improvement are regularly identified and time

bound action plans established. For this purpose,

standard tools such a Total Quality Management

(TQM), Kaizen, 5S and Small Group improvement

activity (SGIA) are being extensively used.

NESTLE INDIA LTD.

ADVERTISING STRATEGY

Nestle, a cash rich company has plenty of marketing

prowess. This can be credited to a strong and sound

advertising strategy.

Nestle in the year 1995 had an advertisement

spending of Rs. 43.3 crores (net). Tracing Nestle

advertising responses the ad campaign by HTA of

'Hot and Sweet' was a runway success this ad was

actually meant to fend off a challenge from H.J.

Heinz. The Maggi range of sauces were introduced

in 1985 but sales didn't catch up until 1990. At this

point the popular and memorable campaign of Javed

Jaffrey and Pankaj Kapoor was launched by Producer

Pralad Kakkar. This commercial was an instant

success. The volume of sales kept rising from an

initial growth of 13% to 20% in the next year. Today

the sales figure for Maggi Sauces is growing at a

steady 6% per year.

NESTLE INDIA LTD.

Another noteworthy campaign was that of POLO (the

mint with a hole), devised by Mudra advertising

agency. This campaign was awarded 11 industry ad

awards.

In 1996 the advertisement budget has been

approximately Rs. 56 crores where again innovation

was the main focus. The new nationwide product

launch of Maggi Macaroni Snack and Mithai Magic

have been designed by Mudra. The macaroni ad

with its use of "Hinglish" and a catchy beat (which is

the latest trend amongst the Indian Advertisers)

appeals well to the target audience and the Mithai

Magic Commercial does keep the secret of the

contents in the box, intact.

NESTLE INDIA LTD.

WORKING OF THE EXCLUSIVE

DISTRIBUTION SYSTEM

What is an exclusive distribution system?

Exclusive distribution runs on a line similar to the

Trade Distribution System. It is when the goods

reach the cash distributors' godown that the

difference first shows up.

When a company is into a number of different

category products, with a wide range in each of the

categories, it becomes increasingly difficult for it’s

to pay attention to each and every product of each

and every category. In order to maintain its stress

on each category and monitor them in a more

organized manner it is necessary to create an

exclusive distribution for each of these categories

i.e., each category has a distribution network

exclusive to itself. There are separate units/vans,

NESTLE INDIA LTD.

with separate categories of products of the same

brand, plying to the same dealers. The dealer thus

can concentrate better on the variety of products in

each category. Similar categories can be clubbed

together e.g., chocolate and confectionery.

The exclusive distribution system developed by

Nestle has the following salient features:

The Chocolate and Confectionery division was

separated from the Instant drink and Culinary

divisions to start the Exclusive distribution for

the former, sometime during the end of the year

1997.

Four metros and around 37 semi metro towns

have been covered under the exclusive

distribution. Seventeen Cash Distributors were

appointed in Delhi itself to carry out this new

system.

NESTLE INDIA LTD.

The chocolate and confectionery are transferred

from the factories, where they are manufactured

to the Mother godown after they are quality

approved. From the Mother godown the products

are transferred to the respective cash

Distributors godown.

According to the company norms a cash

distributor holds the stock of two week and

therefore the stocks are replenished every

fortnight.

Sales Analysis

During the year ended December of 2000, sales at

Nestle India were 15.82 billion Indian Rupees

(US$329.38 million). This is an increase of 8.0%

versus 1999, when the company's sales were 14.65

billion Indian Rupees. Sales of Surplus Fat saw an

increase that was more than double the company's

growth rate: sales were up 1,174.6% in 2000, from

NESTLE INDIA LTD.

546.01 million Indian Rupees to 6.96 billion Indian

Rupees. Not all segments of Nestle India

experienced an increase in sales in 2000: sales of

Milk Products fell 86.3% to 569.45 million Indian

Rupees.

Recent Sales at Nestle India

9.5 11.5 13.7 15.3 14.6 15.8

1995 1996 1997 1998 1999 2000

(Figures in Billions of Indian Rupees)

NESTLE INDIA LTD.

Nestle India has changed its product mix within the

past five years. In 2000, the largest segment was

Surplus Fat, while in 1996, the largest segment was

Other Foods. During the past four years, sales of

Surplus Fat increased 1,374.2% (from 472.07 million

Indian Rupees to 6.96 billion Indian Rupees), while

during the same period, sales of Other Foods

experienced an increase of only 22.8% (from 3.99

billion Indian Rupees to 4.90 billion Indian Rupees).

Although sales at this company increased, they

increased at a slower rate than the three

comparable companies in 2000. The sales increase

of 8.0% was less than those at Alaska Milk

Corporation (up 14.7%), Smithkline Beecham

NESTLE INDIA LTD.

Consumer Healthcare (41.2%), and Pure Foods

Corporation (18.9%).

The company currently employs 2,963. With sales of

15.82 billion Indian Rupees (US$329.38 million) ,

this equates to sales of US$111,164 per employee.

Sales Comparisons (Fiscal Year ending 2000)

CompanySales(US$mlns)

SalesGrowth

Sales/Emp (US$)

Largest Region

Nestle India 329.379 8.0% 111,164India (100.0%)

Alaska Milk Corporation 73.122 14.7% 93,268 N/A

Smithkline Beecham Consumer Healthcare

178.707 41.2% N/A (100.0%)

Pure Foods Corporation 243.899 18.9% 64,729 N/A

NESTLE INDIA LTD.

Recent Stock Performance

For the 52 weeks ending 10/19/01, the stock of this

company was down 0.3% to 505.95 Indian

Rupees. During the past 13 weeks, the stock has

fallen 4.5%.

During the 12 months ending 12/31/00, earnings per

share totalled 12.30 Indian Rupees per share. Thus,

the Price / Earnings ratio is 41.13. Earnings per

NESTLE INDIA LTD.

share rose 20.4% in 2000 from 1999. Note that the

earnings number includes a $.35 pre-tax charge and

$.11 pre-tax credit in 2000.

This company is currently trading at 3.08 times

sales. This is at a higher ratio than all three

comparable companies, which are trading between

0.51 and 2.15 times sales. Nestle India is trading at

18.91 times book value. The company's price to

book ratio is significantly higher than that of all

three comparable companies, which are trading

between 0.81 and 4.94 times book value.

Summary of company valuations

CompanyDate P/E

Price/Book

Price/Sales

52 WkPr Chg

Nestle India 10/19/01 41.1 18.91 3.08 -0.30%

Alaska Milk Corporation 10/19/01 7.2 0.81 0.51 10.53%

Smithkline Beecham Consumer Healthcare

10/19/01 N/A 4.94 2.15 N/A

Pure Foods Corporation 10/9/01 7.9 1.83 0.60 35.00%

NESTLE INDIA LTD.

The market capitalization of this company is 48.78

billion Indian Rupees (US$1.02 billion) . The

capitalization of the floating stock (i.e., that which

is not closely held) is 34.89 billion Indian Rupees

(US$726.33 million) .

Dividend Analysis

During the 12 months ending 12/31/00, Nestle India

paid dividends totalling 14.00 Indian Rupees per

share. Since the stock is currently trading at 505.95

Indian Rupees, this implies a dividend yield of 2.8%.

Nestle India has increased its dividend during each

of the past 5 fiscal years (in 1995, the dividends

were 3.33 Indian Rupees per share).

During the same 12 month period ended 12/31/00,

the Company reported earnings of 12.30 Indian

Rupees per share. Thus, the company is paying out

dividends that are higher than the earnings.

NESTLE INDIA LTD.

Profitability Analysis

On the 15.82 billion Indian Rupees in sales reported

by the company in 2000, the cost of goods sold

totalled 12.61 billion Indian Rupees, or 79.7% of

sales (i.e., the gross profit was 20.3% of sales). This

gross profit margin is better than the company

achieved in 1999, when cost of goods sold totalled

81.2% of sales. In 2000, the gross margin was the

highest of the previous five years (and in 1996 was

as low as 13.9%).

Nestle India's 2000 gross profit margin of 20.3%

was lower than all three comparable companies

(which had gross profits in 2000 between 25.5% and

57.1% of sales).

The company's earnings before interest, taxes,

depreciation and amorization (EBITDA) were 2.47

billion Indian Rupees, or 15.6% of sales. This EBITDA

to sales ratio is roughly on par with what the

NESTLE INDIA LTD.

company achieved in 1999, when the EBITDA ratio

was 15.7% of sales. The three comparable

companies had EBITDA margins that were all fairly

close (between 13.2% and 17.0%) to that achieved

by Nestle India.

In 2000, earnings before extraordinary items at

Nestle India were 1.19 billion Indian Rupees, or

7.5% of sales. This profit margin is an improvement

over the level the company achieved in 1999, when

the profit margin was 6.7% of sales. Earnings before

extraordinary items have grown for each of the past

5 years (and since 1996, earnings before

extraordinary items have grown a total of 119%).

The company's return on equity in 2000 was 41.1%.

This was significantly better than the already high

35.7% return the company achieved in 1999.

(Extraordinary items have been excluded).

NESTLE INDIA LTD.

Profitability Comparison

Company YearGrossProfit

Margin

EBITDAMargin

Earnsbef.

extra

Nestle India 2000 20.3% 15.6% 7.5%

Nestle India 1999 18.8% 15.7% 6.7%

Alaska Milk Corporation

2000 31.4% 13.2% 10.2%

Smithkline Beecham Consumer Healthcare

2000 57.1% 17.0% 13.1%

Pure Foods Corporation

2000 25.5% 14.3% 7.0%

Inventory Analysis

As of December 2000, the value of the company's

inventory totalled 2.06 billion Indian Rupees. Since

the cost of goods sold was 12.61 billion Indian

Rupees for the year, the company had 60 days of

inventory on hand (another way to look at this is to

say that the company turned over its inventory 6.1

NESTLE INDIA LTD.

times per year). This is an increase in days in

inventory from December 1999, when the company

had 1.62 billion Indian Rupees, which was only 50

days of sales in inventory.

The 60 days in inventory is lower than the three

comparable companies, which had inventories

between 91 and 106 days at the end of 2000.

Financial Position

At the end of 2000, Nestle India had negative

working capital, as current liabilities were 3.73

billion Indian Rupees while total current assets were

only 3.35 billion Indian Rupees. The fact that the

company has negative working capital could

indicate that the company will have problems in

expanding. However, negative working capital in

and of itself is not necessarily bad, and could

indicate that the company is very efficient at

NESTLE INDIA LTD.

turning over inventory, or that the company has

large financial subsidiaries.

As of December 2000, the company's long term

debt was 790.06 million Indian Rupees and total

liabilities (i.e., all monies owed) were 4.94 billion

Indian Rupees. The long term debt to equity ratio of

the company is 0.31.

As of December 2000, the accounts receivable for

the company were 1.17 billion Indian Rupees, which

is equivalent to 27 days of sales. This is an

improvement over the end of 1999, when Nestle

India had 36 days of sales in accounts receivable.

The 27 days of accounts receivable at Nestle India

are lower than all three comparable companies:

Alaska Milk Corporation had 72 days, Smithkline

Beecham Consumer Healthcare had 46 days, while

Pure Foods Corporation had 62 days outstanding at

the end of the fiscal year 2000.

NESTLE INDIA LTD.

Financial Positions

Company YearLT Debt/Equity

DaysAR

DaysInv.

Nestle India 2000 0.31 27 60

Alaska Milk Corporation

2000 0.01 72 106

Smithkline Beecham Consumer Healthcare

2000 0.15 46 91

Pure Foods Corporation

2000 0.07 62 104

NESTLE INDIA LTD.

SWOT ANALYSIS

Strength

The basic Aim of Nestle is to become the leading

company in the Indian food industry. It was linked to

India from the starting of the century (1900).

Through exports, manufacturing in India only began

in 1962. In very short span it had established itself

as a major player in Indian food industry.

The remarkable growth has been achieved through.

a. Rapidly creating greater has manufacturing

capacity.

b. Taking steps to ensure availability of good quality

of products.

c. Strengthening of distribution and sales network

particularly in rural areas.

NESTLE INDIA LTD.

d. Sales and marketing are among the major

strength of the Nestle.

Weakness

a. Nestle aims only of capturing young market,

which is quiet clear from the advertisements in

India.

Opportunities

Threats

a. Cadbury In creasing popularity of Cadbury's

products in markets is a major threat to Nestle.

b. Introduction of foreign food product in India is

another threat to Nestle.

NESTLE INDIA LTD.

RESULTS OF MARKET SURVEY

PEOPLE LISTINGS

NESTLE INDIA LTD.

NESTLE INDIA LTD.

RECOMMENDATIONS AND

SUGGESTIONS

Recommendation and suggestions forms the most

critical part of the report. These are based on hard

nose feedback collected from the retailers and

distributors and my personal experiences in the

market.

1. It has been found for increasing the sales

Displays and Consumer offers have to be

given simultaneously this helps in two ways,

attracts the customer attention through product

display and prompts him to buy, the offer on the

product further strengthens this feeling to indulge

in buying. But both the tools should be used with

adequate planning and precision and only then

would they reap benefits. We can provide the

trade loads as the Displays. As has been found

retailers are more satisfied with the displays. It

NESTLE INDIA LTD.

would also improve the image of the company as

the one that cares for its channel members. But

whole process should be cautiously handled with

prompt payments. Delay in payments would lead

to bad reputation in the market.

2. Inspite of the best of the marketing

communication strategies adopted by us we are

not doing well. Possible reason could be lack of

motivation at the lowest possible but the most

important level that is the sales officer and the

RS salesman. We should organize a contest for

weeks or month time between the entire RS

salesman and the sales officers separately.

Whoever makes the maximum sales during the

week/month would be entitled for a vacation or

cash incentives by the company. He would have

to generate a list of retailers/wholesalers where

he has made the sales. This would act as a tool to

keep a check on the stock being dumped in the

wholesale market.

NESTLE INDIA LTD.

3. It has been found that the sales officers often fail

to carry the catalogs and samples with them. We

can design a sales promotion kit, which would

act as a handy tool for them in the market. It

would consist of advertisement proofs, product

samples, illustrations of POP displays, description

of special deal or contest featured in the

promotion. I feel that all the sales process revolve

around the following basic seven steps:

Get set to sell.

Spark the interest.

Dramatize the need.

Prepare the proposal

Capitalize on objections.

Cut the order

Follow through

4. Our department could print a dealers manual

which would elaborate on the above points.

NESTLE INDIA LTD.

For EG: Capitalize on objections would list all the

possible objections that that prospect may voice

and each of the corresponding well thought of

answer. These small efforts on our part would

help us overcome barriers and clear out the most

taken for granted things. This would also come in

handy for the managers when they feel like

building pressure on the channel members.

5. It has been my experience that there is an flaw in

the working of the sales officers. They are often

unclear about the targets and the schemes. They

have to be briefed more frequently and trained

accordingly. They should be provided a company

T-shirt that would distinguish them from other

salesman.

6. There is a dire need of the Institutional selling

unit which all major companies have. NESTLE in

Delhi has a lot of distributors specifically for this

purpose. They cater to demand from super

NESTLE INDIA LTD.

bazaars, kendriya bhandars, railway canteens and

other cooperative stores.

7. The display windows provided by us are not a

least bit attractive to draw attention of any

customer standing in the shop. We should have

really skilled team of workers (or single person)

doing up the windows. This would also act as a

safeguard for proper utilization of display budget.

If we are spending on displays then we must

capitalize on these things, which is not happening

now. Hence professional merchandisers should

be appointed.

8. Distributors image in a area plays a major role

in boosting sales. Company should take strict

action against those distributors with tarnished

image as they spoil the companies’ reputation

also. If the need be they should replace the

distributor. The company should in regular

NESTLE INDIA LTD.

interval take feedback from the retailers as

regards to the distributor.

9. There should be adequate supply of the POP

material. The sales officers and merchandizers

should properly put them on the outlets visited

during the day.

10. As found in the study that the displays are a

major motivating factor, the display claims should

be promptly cleared on time. This maintains the

companies’ image across the retail outlets and

keeps the retailers satisfied. It was a general

feeling across the Delhi metro.

11. At present the company does not have any

“Target based incentives” to the retailers. We

give trade loads at the time of purchase by the

retailer and then forget him for 15 days. It should

be other way round. On selling certain units the

retailers should be offered incentives in form of

NESTLE INDIA LTD.

gifts like Cameras, Walkman, Mobile phones etc.

This would motivate him to push the companies’

product as compared to the competitors. It would

also ensure actual consumption of the product

and control dumping at the retailers outlet.

12. The company can prepare Cardboard stands

on which the nivea products could be placed.

These stands should be placed at the front of

retailer’s desk. Recently FA has prepared such

stands. This ensures high visibility of the product

category and prompts the customer to take

impulse decisions. They are cost effective too.

13. HOME TO HOME SELLING

The success mantra of HLL is that it applies all

possible channels of selling emphasizing on

direct selling whereby company employed

people interact with the customer personally.

They sell the product and offer discount coupons

NESTLE INDIA LTD.

on next purchases. Our company must explore

this channel that ensures sales and builds

repeat purchases. Discount coupons should

be distributed across the household in Delhi

Metro. This would build awareness about

thechocolates products and would overcome its

major weakness of lack of awareness on part of

customer about the range of products. The retail

outlets in the areas where coupon are distributed

must be flooded with our range of products so

that there is no shortage of supply.

14. As revealed by the survey Spot Promotions

are a cheap and effective way of sales promotion.

For this purpose the company should make one

time investment in preparing maggi stalls,

chocolates stalls,new range of products

stalls (we know your skin better) and placing

them at prominent places at regular intervals. To

begin with 2 mobile stalls could be prepared

and the concept be tested across the Delhi metro.

NESTLE INDIA LTD.

Each stall would cost approx Rs 1200. The stall

would sell our range of items at Discounted

price (Minus the retailers and distributors

margin as the products would be directly sourced

from the C&F agents). Nestle representative

wearing nestle T-shirts and Blue colored caps

would counsel the public.

It would serve twin objective of increasing the

awareness of the product as well as boosting the

sales. The sales officers should be asked to

identify crowded market places in their areas

where such efforts could be made. Specially, On

festival occasions when the expenditure by public

increases we could cash on the opportunity.

15. The wholesalers are found to undercut

whatever extra margin he gets in form of

Schemes etc, So for proper channel balance we

need to keep strict control over our sales to the

NESTLE INDIA LTD.

wholesalers. This would also help the distributors

to maintain their ROI. .

NESTLE INDIA LTD.

LIMITATIONS

Sample size: The sample size chosen was 250 for

the whole Delhi metro where there are so many

people. This could have affected the results, which

may not hold true in all parts.

Concerned persons were not available despite

appointments at some times. It was difficult to tap

the distributors and the ASM of nestle.

The marketing and the advertising managers were

not ready to give any infomationabout the

company . They were not willing to tell about any

strategy of marketingand advertising . so very less

information can be gas\thered about the strategy

of marketing.

The distributors were reluctant to share

information regarding the trade insights.

NESTLE INDIA LTD.

CONCLUSIONS

Sales growth in 2001 led by a robust 20% growth in

volumes

Nestle’s domestic sales registered a 18.5% volume growth during the first 9 months of 2001.

Exports registered a 31% yoy volume growth. In value terms, domestic sales grew by 15.8% yoy to

Rs12.1bn, while Exports grew by 26.4% yoy to Rs2.4bn.

Jan-Sep Jan-Sep % yoy

Volume Growth (tons) 2001 2000

Domestic 105718 89176 18.5

Exports 13402 10216 31.2

Total 119120 99392 19.8

Value Growth (Rs mn)Domestic

12107 10454 15.8

Exports 2424 1918 26.4

Total 14531 12372 17.5

NESTLE INDIA LTD.

Beverages leading volume growth, value growth

being led by culinary segment

Beverage sales have grown at a fast pace of 42% in

the first 9 months of 2001 driven by rising exports

and revised pricing strategy in domestic market.

Growth in value terms is however lower due to a

sharp 15% decline in realizations. Culinary product

sales grew by 20% in volumes and 22% in value.

Volume growth in chocolate & confectionery

segment was 12%, which was higher then market

leader and average industry growth, signifying that

the company has been able to improve market

share in the category.

NESTLE INDIA LTD.

Turnover Contribution by

Turnover

contribution

Growth

Volum

e

Value Volume Value Realization

Milk & Nutrition

Products

47 43 15 13 -1.4

Beverages 18 29 42 21 -15.1

Culinary Products 24 14 20 22 1.9

Chocolates &

Confectionery

11 14 12 20 6.8

Milk products, which account for a significant 43%

of Nestle’s revenues have grown at steady 15% in

volume terms. Turnover contribution of beverages is

29%, while culinary products and chocolate &

NESTLE INDIA LTD.

confectionery each contribute 14% to Nestle

Rs14.5bn turnover in the first 9 months of 2001..

Profit Margin

Operating margins have improved from 18.1% to 18.5% in 2001 driven by lower material cost.

Raw material cost declined from 44.4% of sales in F12/00 to 43.1% of sales in F12/01.

Operating Margins 2001 2000

EBITDA 18.5 18.1

Adjusted EBITDA 18.5 17.7

Improved working capital and asset

management

The company has been able to improve working capital management. Operating cash flow has

registered a CAGR of 15% in the last 4 years. Fixed asset turnover has also gradually improved

over the last 3 years. Net indebtedness (total financial liabilities net of liquid assets) has declined

from a high 2.5x in 1998 to 0.3z currently.

1998 1999 2000 2001-Sep

Operating Cash Flow 1743 2391 2420 1966

NESTLE INDIA LTD.

Rotation of Operating Net Working Capital

7.1 9.6 14.7 18.1

Rotation of Fixed Assets 4.0 3.9 4.2 4.7

Net Indebtedness 2.5 1.0 0.9 0.3

1. Operations:

Domestic Sales grew by 7% in value and 15% in

volume terms, during the year. Export Sales grew

by 16% in value and 32% in volume. Profit After Tax

grew by 20% from Rs985mn to Rs1186mn.

During the year, the Company retired certain fixed

assets from active use at various locations and the

impairment loss on such fixed assets has been

charged to the Profit and Loss Account.

Out of business prudence, the Company

supplemented the Contingency Provision with

further amount in 2000 of Rs295mn (net) to provide

for various contingencies resulting from matters

NESTLE INDIA LTD.

mainly relating to issues under litigation, dispute

and management discretion.

The current year has commenced as per plan in the

domestic market and your Directors are hopeful of

continued good results. However, with the current

level of inflation and economic indicators pointing

towards a sluggish market, it would be difficult for

the Company to maintain the level of earnings

unless the Company takes price increase on finished

products which would depend on market conditions

and competitor activities.

NESTLE INDIA LTD.

2. Exports:

Export Sales for the year at Rs2655mn have grown

by 32% in volume terms, over the last year. This

has been mainly due to the higher exports of

NESCAFE to Russia, buoyant sales of Instant Tea

and good performance of the culinary products.

However, depressed green coffee prices in domestic

and international markets kept the export

realisations low. Measures taken for tapping new

market and product opportunities have also

contributed to this growth. The export

competitiveness of value added instant coffee

manufactured in India continues to be adversely

affected by the purchase tax levied on green coffee.

Efforts continue to tap new market and product

opportunities.

3. Dividends:

NESTLE INDIA LTD.

Interim dividend of Rs. 8.00 per equity share,

including Rs4.50 per equity share out of

undistributed profits of the previous financial years,

was paid during 2000.

4. Business Development:

In line with the Company's objective to provide

superior value in every product category and

market sector, efforts were focussed to provide

quality products to customers at attractive price

points. While the Company continued to generally

maintain price points across all the product

categories, the pricing of some products were also

reduced to meet consumer expectations.

MAGGI Noodles re launched in 1999 in response to

popular consumer taste preference, continued to

boost sales during 2000 in the culinary segment.

New flavour profiles were introduced in the bouillon

business.

NESTLE INDIA LTD.

The market continued to react positively to the

initiatives taken in the recent past to grow the

consumption of instant coffee in the domestic

market. The new NESCAFE pricing and bringing the

popular SUNRISE brand under NESCAFE umbrella to

benefit from its association continued to strengthen

the category. NESCAFE Frappe a blend of coffee,

mocha and vanilla, which makes a delicious frothy

cold coffee was launched in select metropolitan

cities in the third quarter. This was another

strategic launch and seeks to address consumer

with preference for cold drinks. NESCAFE Frappe has

received encouraging response.

In the area of Chocolate and Confectionery NESTLE

MUNCH Crisp wafer biscuit with chocolayer, which

was launched in select markets in1999, was rolled

out nationally during 2000 and had good growth.

Continuing with the efforts to meet consumer

expectation on price points, the pricing of KITKAT

was also reduced during the later half of the year.

NESTLE INDIA LTD.

Moulded Chocolates and Eclairs also showed

satisfactory growths. This has also helped in

improving the infrastructure and distribution reach

of the Company in the Chocolate and Confectionery

segment.

In the milk and cereal categories, EVERYDAY Dairy

Whitener and cereals had satisfactory growth.

NESTLE Growing up Milk, a new product offering

superior nutrition, launched in 1999 was rolled out

nationally during the year.

The Company has also entered the Chilled Dairy

business with the recent launch of NESTLE Dahi in

select cities of the North. The initial response has

been very encouraging and the Company is working

on plans to further leverage the international

expertise of Nestle Group, Switzerland in the area of

Chilled Dairy.

NESTLE INDIA LTD.

The performance of other products were generally

in line with expectations. A few products whose

performance was not considered satisfactory are

under constant review for corrective action.

The directors were pleased to report the

implementation of the two new projects undertaken

by the Company during 2000 packaged milk and

packaged drinking water. Both the projects seek to

leverage the worldwide experience and knowledge

of Nestle Group, Switzerland who are the leaders in

these product categories.

In line with its objective of long term growth and

entry in significant value added food segments, the

Company forayed into the Ultra Heat Treated (UHT)

liquid milk business in April 2000 by launch in

Mumbai. Packaged UHT milk seeks to address

growing consumer concerns on adulteration and

product safety and brings with it reliability,

complete hygiene and safety. It offers convenience

NESTLE INDIA LTD.

to the consumer, in terms of a shelf life without any

deterioration in the product quality and easy usage

without refrigeration or boiling. UHT Milk has

received encouraging response and has been rolled

out in select cities of the West, South and North.

The project for bottled water was implemented at

the Samalkha factory and water launched in

February, 2001 under the brand NESTLE PURE LIFE

and is available in select cities. NESTLE PURE LIFE

contains a balance of essential minerals and a light

pleasant taste and is manufactured under stringent

quality control. The packaging has been specially

designed to maximise safety for the consumer and

protect from possible tampering.

The new categories like bottled water and liquid

milk are lower margin categories and will require

considerable investments. The Company sees them

as strategic and as requiring support on a sustained

basis.

NESTLE INDIA LTD.

The two new Sales Branches at Bangalore and

Chandigarh set up in 1999 to further strengthen the

flexibility of the Sales organisation and for speedier

response to the market conditions, have started

showing positive results during the year. With a

view to expand distribution and increase

penetration in smaller towns, a concerted drive was

undertaken to make products affordable and

accessible to consumers. Initiatives taken include

more penetrative pricing and smaller packs

covering brands such as EVERYDAY Dairy Whitener,

MAGGI Noodles, MILO Chocolate Energy Drink and

NESCAFE Instant Coffee. The response has been

encouraging.

The Alternative Trade Channel unit created in 1999

undertook initiatives to tap the opportunities for out

of home consumption, particularly for instant coffee

and chocolate and confectionery and to extend

availability of product to nontraditional outlets. The

NESTLE INDIA LTD.

outcome of these initiatives has been encouraging

and is being consolidated.

Availability of NESCAFE has been enhanced through

an expansion of the vending machine network and

new consumption opportunities for Chocolates and

Confectionery were identified and developed in

areas like railway platforms, college canteens and

major events.

On the manpower development front, programmes

during the year continued to be focussed on the

operational front more particularly sales and

production.

To support the growth plans and distribution

strategy, and simultaneously improve the

operational efficiency, the thrust on strengthening

supply chain continued to receive attention during

the year. In addition to consolidating the

NESTLE INDIA LTD.

improvements made over the last two years,

significant progress was recorded in following areas:

a) Reduction in finished goods inventory pipeline to

improve freshness of stocks and reduce working

capital.

b) Control of distribution costs through innovative

measures, despite steep increases in cost of fuel.

c) Sustained improvement in customer service level

to improve product availability across all

geographies and channels.

d) Reduction in obsolescence of materials.

5. Technology from Nestle:

The Company benefits from its access to proprietary

technology, technical and non technical expertise

and the fruits of the extensive centralised Research

and Development. The diversified knowledge and

NESTLE INDIA LTD.

expertise have contributed significantly to the

operations of your Company over the years. Some

of the key areas, which have benefited are:

a) Manufacture of products of truly international

quality. Product quality, which encompasses taste,

appearance, convenience and overall value for

money, is a critical factor in consumer choice and in

a competitive market like India could determine the

very survival of the products. The high quality of

products of your Company is borne out by the

position and image the products enjoy in the market

and your Company continuing to be a leading

exporter of value added Instant Coffee in the

country.

b) Benchmarking of products against competition to

achieve an advantage in product quality, for

increasing competitiveness.

NESTLE INDIA LTD.

c) Access to latest technological developments,

such as Spearpoint Technology for Cocoa based

products implemented during 2000 which would

improve product quality and competitiveness and

the MUCH technology for instant coffee manufacture

implemented during 1999, which would enhance the

productivity by increased extraction of coffee solids

from coffee beans.

d) Implementation of project for bottled drinking

water.

e) Product innovation and renovation some

illustrations are MUNCH Crisp wafer biscuit with

chocolayer; Nestle Dahi; Nestle Milk (UHT); Junior

Foods; NESCAFE Frappe; KITKAT Milky; newand

improved flavours profiles of bouillons; and relaunch

of MAGGI Noodles.

f) Enhancement of skill and competence of

Company personnel due to the training received.

NESTLE INDIA LTD.

g) Implementation of environmentally sound

business practices.

h) Technical expertise in various forms including

Information Technology, which has enabled the

business of your Company to grow and sustain.

i) Providing assistance by way of improved technical

and quality standards to local manufacturers, who

have contract manufacturing arrangements with

your Company.

6. Information Technology:

The Company continued to make significant

investments in the Information Services of

Technology area to cope with the growing

information needs necessary to manage operations

more effectively in a complex supply chain

environment.

NESTLE INDIA LTD.

7. Community Health:

Recognising its responsibility to the community in

which it operates, the Company over the years has

been taking initiatives in the area of community

health at locations around its factories. Some of the

initiates taken in the recent past are:

a) Provide Government and village schools with

facilities for toilets and hygiene drinking water

including deep bore wells, where necessary.

b) Support to health officials in Pulse Polio

programmes.

c) Sponsorship of treatment of TB patients at clinic

run by NGO.

d) Healthcare Programmes with focus being on well

being of employees and their families covering

NESTLE INDIA LTD.

vaccination, awareness programmes and health

check up.

The company performance is much better in

comparison to its competitors.

NESTLE INDIA LTD.

Questionnaire

Tel.: Name :Personal: Age :

Class :School/ college :

Tel.:

1. How many Nestle Products Have your consumed

so far?

2. How do you like those products?

Good Bad

3. Which of these Nestle products do you like?

a) Chocolates b) Maggi

c) Milk product d) Mineral water

e) Coffee f) Infant products

g) Milkmaid h) Soups

NESTLE INDIA LTD.

4. Why do you like the nestle products? It is due to

its.

Colour Taste Packing /Pack Size

Advertisement

5. Which brand of Particular product do you like?

Specify the name_____________ Product _______

Brand

6. Do you like the advertisement of Nestle?

Yes No

7. Which advertisement do you like and why?

________________________________________________

________________________________________________

8. Do you think some brand ambassador Should

come in the advertisement of Nestle?

Yes No

9. Whom do you think should endorse the brand

Nestle?

NESTLE INDIA LTD.

1. ____________________________________________

2. ____________________________________________

10. What strikes to your mind, when you think

"Good Food Good Life"

________________________________________________

11. Will you switch over to some other brand, if

there is a gift/offer with the other brand

Yes No

12. Have you tried the new range of Products from

Nestle? If yes specify the name.

Yes No

13. How do you like the new range of products from

other competitors products which are same?

________________________________________________

14. Do you think Nestle should come with some new

products? If yes specify some name

NESTLE INDIA LTD.

________________________________________________

15. Are you satisfied from quality of Nestle

products?

Yes No

16. Where you rank Nestle from others?

Very Good Good Satisfactory

Bad

NESTLE INDIA LTD.

BIBLIOGRAPHY

MARKETING MANAGEMENT: PHILIP KOTTLER

BUSINESS INDIA BUSINESS TIMES

BUSINESS TODAY

Business world

NEWSPAPERS & JOURNALS (TIMES OF INDIA,

ECONOMICS TIMES)

IIM LIBRARY (DELHI)