Submitted ByYerramalli Raja TejasCentre For Management Studies,NALSAR University of Law

9/30/2014

ContentsI. Brand Profile........................................................................................................................................2

Established – When and Why? ...............................................................................................................2

Evolution of the Brand.............................................................................................................................3

Global Standing.......................................................................................................................................8

Financial Standing (Y-O-Y)........................................................................................................................9

Leadership Antecedents .......................................................................................................................10

Paul Bulcke Strategy for 2014:...........................................................................................................12

Partners.................................................................................................................................................13

1. Strategic Partners and Joint Ventures........................................................................................13

2. R&D Partner...............................................................................................................................14

3. Packaging Partner:.....................................................................................................................14

4. Corporate Social Responsibility:................................................................................................14

Strategic Direction - Nestlé Roadmap....................................................................................................15

Product Line...........................................................................................................................................17

Demographic – India..............................................................................................................................18

Potential................................................................................................................................................18

II. Brand Measurement..........................................................................................................................21

Competitors...........................................................................................................................................21

Jennifer Aarker’s Personality Model......................................................................................................21

Kapferer’s Brand Prism Model...............................................................................................................21

Brand Asset Valuator - Young and Rubicam..........................................................................................21

Competitors Unilever, Kraft, Danone and Mars................................................................................21

I. Brand Profile

Established – When and Why? 1

Nestlé [NASDAQ: NSRGY] is the world's leading Nutrition, Health and Wellness Company. The Company was founded in 1866 by Henri Nestlé in Vevey, Switzerland, where their headquarters are still located today. Nestle employ around 2,80,000 people and have factories or operations in almost every country in the world.

Nestlé sales for 2009 were CHF 108 bn. Nestle’s mission of "Good Food, Good Life" is to provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night.

Nestle Corporate Business principle2

1. Nutrition, Health and Wellness: The Company’s core aim is to enhance the quality of consumers’ lives every day, everywhere by offering tastier and healthier food and beverage choices and encouraging a healthy lifestyle. They express this via our corporate proposition Good Food, Good Life.

2. Quality assurance and product safety: Everywhere in the world, the Nestlé name represents a promise to the consumer that the product is safe and of high standard.

3. Consumer communication: Nestle and its brands are committed to responsible, reliable consumer communication that empowers consumers to exercise their right to informed choice and promotes healthier diets. The company respects consumer privacy.

4. Human rights in their business activities: Nestle fully supports the United Nations Global Compact’s (UNGC) guiding principles on human rights and labor and aim to provide an example of human rights and good labor practices throughout our business activities.

5. Leadership and personal responsibility: Their success is based on our people. They treat each other with respect and dignity and expect everyone to promote a sense of personal responsibility. The company recruits competent and motivated people who respect our values, provide equal opportunities for their development and advancement protect their privacy and do not tolerate any form of harassment or discrimination.

1 About Us, Nestle – Homepage: http://www.nestle.in/aboutus2 Corporate Business Principles, Nestle - Homepage: http://www.nestle.com/asset-library/Documents/Library/Documents/Corporate_Governance/Corporate-Business-Principles-EN.pdf

6. Safety and health at work: The team is committed to preventing accidents, injuries and illness related to work, and to protect employees, contractors and others involved along the value chain.

7. Supplier and customer relations: Nestle requires its suppliers, agents, subcontractors and their employees demonstrate honesty, integrity and fairness, and to adhere to our non-negotiable standards. In the same way, Nestle’s team, worldwide, is committed to our own customers.

8. Agriculture and rural development: Nestle contributes to improvements in agricultural production, the social and economic status of farmers, rural communities and in production systems to make them more environmentally sustainable

9. Environmental sustainability: Nestle commits itself to environmentally sustainable business practices. At all stages of the product life cycle, they strive to use natural resources efficiently, favor the use of sustainable-managed renewable resources, and target zero waste.

10. Water: Nestle is committed to the sustainable use of water and continuous improvement in water management. They recognize that the world faces a growing water challenge and that responsible management of the world’s resources by all water users is an absolute necessity.

Evolution of the Brand3

1866 - Foundation of Anglo-Swiss Condensed Milk Co.Nestle’s history begins back in 1866, when the first European condensed milk factory was opened in Cham, Switzerland, by the Anglo-Swiss Condensed Milk Company.

1867 - Henri Nestlé's Infant cereal developedIn Vevey, Switzerland, our founder Henri Nestlé, a German pharmacist, launched his foreign lactée, a combination of cow’s milk, wheat flour and sugar, saving the life of a neighbor’s child. Nutrition has been the cornerstone of our company ever since.

“Henri Nestlé, himself an immigrant from Germany, was instrumental in turning his Company towards international expansion from the very start. Nestle owes more than their name, their logo and their first infant-food product to our founder. Henri Nestlé embodied many of the key attitudes and values that form part and parcel of our corporate culture: pragmatism, flexibility, the willingness to learn an open mind and respect for other people and cultures.” Peter Brabeck-Letmathe, Nestlé Chairman

1905 - Nestlé and Anglo Swiss Condensed Milk Co. (New name after merger)The Anglo-Swiss Condensed Milk Company, founded by Americans Charles and George Page, merged with Nestlé after a couple of decades as fierce competitors to form the Nestlé and Anglo-Swiss Milk Company.

1925 - Merger with Peter, Cailler, Kohler Chocolates Suisses S.A. The 1920s were a time of deep economic hardship, and Nestlé suffered severe difficulties along with much of the world. Operations were partially streamlined, but the company was able to continue, and with the acquisition of Peter, Cailler, Kohler Swiss Chocolate Company, chocolate became an integral part of our business. This sparked further variety in the products they offered – including malted milk and a powdered drink called Milo.

3 History, Nestle - Homepage: http://www.nestle.com/aboutus/history/nestle-company-history#

1938 Nescafé coffee was launched. And in the early 1940s Nestea was launched.

1947 - Nestlé Alimentana S.A. (new name after merger with Maggi) The Maggi products, from seasoned to soups, become part of the Nestlé family following the merger with Alimentana S.A.

1948 - Launch of Nestea and NesquikNesquik, the instant chocolate drink, was developed in the United States. Its original name of Quik was a direct allusion to the speed and simplicity of its preparation.

1974 - LOrealFor the first time Nestle diversified outside the food industry when they became a major shareholder in L'Oréal, one of the world's leading makers of cosmetics

1977 - Nestlé S.A. (new company name); Alcon (disposed in August 2010)Rising oil prices and slow growth in industrialized countries meant that Nestle needed to respond to a radically changed marketplace. In 1977, Nestle made our second venture outside the food industry by acquiring Alcon Laboratories Inc., A U.S. manufacturer of pharmaceutical and ophthalmic products.

In the 1970s, declining rates of breastfeeding led a number of organizations to raise concerns about the marketing practices of breast milk substitute manufacturers - including Nestlé - in developing countries. This resulted in the Infant Formula Action Coalition launching a boycott of our products in 1977 in the United States. This boycott was dropped in 1984.

1981 - Galderma (joint venture with L'Oréal - full acquisition announced for 2014)In 1981 the World Health Assembly adopted the International Code for the Marketing of Breast-milk Substitutes (“WHO Code”) and recommended that its Member States implement it. Nestlé was the first company to develop policies based on the WHO Code and apply them across our entire operations in developing countries.

1984 - Carnation (with Coffee-mate and Friskies)An improved bottom line allowed us to make new acquisitions, including a public offer of USD 3 billion for the American food giant, Carnation. At the time, this was one of the largest acquisitions in the history of the food industry.

1986 - Creation of Nestlé Nespresso S.A. and Herta The Nespresso story began in 1986 with a simple idea: enable anyone to create the perfect cup of espresso coffee, just like a skilled barista.

1988 - Buitoni-Perugina, Rowntree (with KitKat)The Italian brand Buitoni, in Sansepolcro, became part of our portfolio in 1988. Nestled in the hills of Tuscany, Casa Buitoni is the symbol of the brand’s ongoing commitment to quality, creativity, and tradition.

1993 - Creation of Nestlé Sources Internationales (2002: Nestlé WatersThe first half of the 1990s were favorable for Nestlé with the opening up of Central and Eastern Europe, as well as China – good news for a company with such far-flung and diverse interests.

2001Nestle merged with the Ralston Purina Company, which had been founded in 1983, in 2001 to form a new pet food company, Nestlé Purina PetCare Company.

2002 - Schöller, Chef America; Two major acquisitions were made in North America in 2002: in July, the merger of our U.S. ice cream business with Dreyer’s; and in August, a USD 2.6 billion acquisition of Chef America Inc., a leading frozen food product business.

2003 - Mövenpick and Dreyer'sNestle acquired Mövenpick Ice Cream, enhancing our position as a market leader in the super premium category.

2005Our Chairman Peter Brabeck-Letmathe recognize that the eating habits of the world’s population were changing and Nestle began our own transformation. Nestle began to move away from being a processor of agricultural commodities towards becoming a producer of food with added benefits and ultimately a provider of a wide range of products and services in the areas of nutrition, health and wellness.

2006Nestle acquired Jenny Craig and Uncle Toby's

With the help of Harvard’s Michael Porter and Mark Kramer, Nestle articulated for the first time the concept of Creating Shared Value. Creating Shared Value expresses our conviction that Nestle can only be successful over the long term if Nestle created value, not just for our shareholders, but also for society.

2007 - Novartis Medical Nutrition, Gerber, HenniezNestle acquired Novartis Medical Nutrition, Gerber and Henniez.

2009The company held the first Creating Shared Value Forum in New York, with leading experts in the areas of nutrition, water and rural development coming together to discuss serious global challenges facing us in these three areas and the role of business in helping to solve them. The Creating Shared Value Forum has been held on an annual basis since then.

2010 - Kraft Food's frozen pizza, Waggin'Train, Malher, Technocom, VitafloNestle sold our remaining Alcon shares to Novartis and acquired Kraft Foods’ frozen pizza business.

The company faced a challenge from Greenpeace who wanted to be reassured about our commitment to sustainable Palm Oil. It was the first time Nestle saw social media being used in a substantial way to challenge us and ask questions. The company didn’t get the handling of our response to the campaign, it

quite right in social media, but on the issue at its heart – palm oil – the company took steps to both strengthen our position and to explain it more clearly.

Nestle launched the Nestlé Cocoa Plan, which supplies high quality, disease-resistant plantlets to farmers, helping them rejuvenate their farms and increase productivity. The Nescafé Plan was also launched – to address responsible farming, sourcing and consumption across our coffee supply chain.

Nestle announced the creation of Nestlé Health Science and the Nestlé Institute of Health Sciences, innovative ventures aimed at the prevention and eventual treatment of chronic medical conditions with science-based personalized nutrition solutions.

2011 - Creation of Nestlé Health Science and Nestlé Institute of Health SciencesNestle voluntarily submitted their policies and procedures to the FTSE4Good Policy Committee for independent review and became the first infant formula manufacturer to be included in the FTSE4Good Index. This is the London Stock Exchange’s responsible investment index and the only index that evaluates companies on their responsible marketing of breast-milk substitutes, alongside human rights and supply chain criteria.

China was at the forefront, as Nestle announced partnerships with the Chinese food companies Yinlu, a manufacturer of ready-to-drink peanut milk and canned rice porridge and with Hsu Fu Chi, a confectionery and snacks manufacturer.

Nestle became the first food company to partner with the Fair Labor Association. This partnership will help us investigate if children are working on cocoa farms that supply their factories, and where the company find problems, to solve them.

Nestlé Health Science S.A acquired Prometheus Laboratories Inc., A US-based company specialized in diagnostics and in-licensed specialty pharmaceuticals in gastroenterology and oncology. It also acquired a minority stake in Vital Foods, a New Zealand based company that specializes in the development of kiwifruit- based solutions for gastrointestinal conditions.

2012 - Wyeth NutritionNestle acquired Wyeth Nutrition (Pfizer Nutrition) in a strategic move to enhance their position in global infant nutrition.

2013 - PamlabNestlé Health Science acquired Pamlab, a US-based company with an innovative portfolio of medical food products for use under medical supervision in the nutritional management of patients with mild cognitive impairment, depression and diabetic peripheral neuropathy.

The company divested Jenny Craig businesses in North America and Oceania to North Castle Partners.

February 2014 - Nestle sold its PowerBar sports nutrition business, which makes energy bars gobbled up by gym enthusiasts around the U.S., to cereal giant Post Holdings Inc. POST -1.88% The deal included Musashi, a supplement business that caters to the same type of customers in Australia.4

July 2014- Nestle sold its Juicy Juice brand to buyout firm Brynwood Partners, the latest move in the Swiss food giant's push to simplify its sprawling U.S. business by shedding languishing brands.5

September 2014 – Sells Alete and Milasan Baby foods, Nestle Waters Direct Group - Nestle sells baby food brands Alete and Milasan to German investment group BWK GmbH6. Nestle is focusing its baby food business in Germany and Austria on the Beba brand.

Nestlé Waters announced the sale of its Home and Office Delivery (HOD) business in Europe (Nestlé Waters Direct Europe) to Eden Springs Group; these activities encompass 5 countries: Germany, the Netherlands, Poland, Portugal and Russia.

Indian Presence7

Nestlé's [NSE: NESTLEIND, BSE:500790] relationship with India dates back to 1912, when it began trading as The Nestlé Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished products in the Indian market.

After India's independence in 1947, the economic policies of the Indian Government emphasized the need for local production. Nestlé responded to India's aspirations by forming a company in India and set up its first factory in 1961 in Moga, Punjab, where the Government wanted Nestlé to develop the mill economy. Progress in Moga required the introduction of Nestlé's Agricultural Services to educate, advise and help the farmer in a variety of aspects. From increasing the milk yield of their cows through improved dairy farming methods, to irrigation, scientific crop management practices and helping with the procurement of bank loans.

Nestlé set up milk collection centers that would not only ensure prompt collection and pay fair prices, but also instill amongst the community, a confidence in the dairy business. Progress involved the creation of prosperity on an on-going and sustainable basis that has resulted in not just the transformation of Moga into a prosperous and vibrant milk district today, but a thriving hub of industrial activity, as well.

Nestlé has been a partner in India's growth for over nine decades now and has built a very special relationship of trust and commitment by the people of India. The Company's activities in India have facilitated direct and indirect employment and provides livelihood to about one million people, including farmers, suppliers of packaging materials, services and other goods.

4 Nestle sells PowerBar Brand – Wall Street Journal, Feb 3, 2014: http://online.wsj.com/news/articles/SB100014240527023039424045793605521648113525 Nestle sells Juicy juice brand to Buyout firm Brynwood Partners – Wall Street Journal, July 2, 2014: http://online.wsj.com/articles/nestle-sells-juicy-juice-brand-to-buyout-firm-brynwood-partners-14042736036 Nestle sell Alete and Milasan – Reuters, September 29, 2014: http://timesofindia.indiatimes.com/business/international-business/Nestle-sells-babyfood-brands-Alete-and-Milasan/articleshow/43816552.cms7 Nestle Homepage: http://www.nestle.in/aboutus/allaboutnestl%C3%A9

The Company continuously focuses its efforts to better understand the changing lifestyles of India and anticipate consumer needs in order to provide Taste, Nutrition, Health and Wellness through its product offerings. The culture of innovation and renovation within the Company and access to the Nestlé Group's proprietary technology/Brands expertise and the extensive centralized Research and Development facilities gives it a distinct advantage in these efforts. It helps the Company to create value that can be sustained over the long term by offering consumers a wide variety of high quality, safe food products at affordable prices.

Nestlé India manufactures products of truly international quality under internationally famous brand names such as NESCAFÉ, MAGGI, MILKYBAR, KIT KAT, BAR-ONE, MILKMAID and NESTEA and in recent years the Company has also introduced products of daily consumption and use such as NESTLÉ Milk, NESTLÉ SLIM Milk, NESTLÉ Delhi and NESTLÉ Jeera Raita.

Nestlé India is a responsible organization and facilitates initiatives that help to improve the quality of life in the communities where it operates.

Global StandingNestle, under the Food and Dairy sector, has a brand contribution ranked at 2nd position and ranks 16th

under the Millward Brown’s - BrandZTM, Top 50 most valuable Indian Brands 2014.

Nestlé is one of India’s leading food producers and marketers. It derives almost half of its revenue in India from a category it calls milk products and nutrition. The company also manufactures products in these other categories: prepared dishes and cooking aids, chocolate and confectionery, and leverages.

According to BrandZ™ ranking, the Nestlé valuation pertains to the dairy business alone. When the company Established Nestlé India Limited, in 1961, it was among the first companies to introduce

modern Dairy methods in rural areas, establishing a milk processing factory in Moga, Punjab. Today, Moga is a district known for producing high-quality milk.8

Nestle has bagged many laurels in 2014. Barron’s has ranked Nestle 17 th globally under ‘World’s Most Respected Companies’ in 2014.The company is World’s 13th Most Admired Company, according to Fortune. Corebrand has found Nestle to be under the top 50 most familiar brands in the world.Nestle has the 25th best supply chain, according to Gartner and is the Europe’s 11 th Most Attractive Employer by Universum in 2014.

Nestle slides from 14th rank in 2013 to the 18th rank for Best Global Green Brand in 2014, according to Interbrand 9, it has rated Nestle, the 3rd Best Swiss Brand for the year 2014.

Financial Standing (Y-O-Y)

Nestlé India Limited (NIL), the undisputed leader of instant noodles (~88% share by volume in FY11) and milk products segment in India, is largest food company in country. Its strong brands, ‘Maggi’, ‘Cerelac’, ‘Nescafe’ and ‘KitKat’ have become synonymous with the respective categories. Despite increasing competition in the segments (noodles, milk products and chocolate), NIL’s strong brand value has helped it to consistently maintain its volume growth (~12% CAGR FY04-11). Going ahead, with slew of new launches and aggressive promotion campaigns, we expect the sales growth by volumes to be at 13.1% CAGR and revenue growth to be 17.8% CAGR (CY11-13E). Growth in profitability would continue to be impressive at ~20.7% CAGR (CY11-13E), in spite of the huge capex undertaken by the company. We initiate coverage on the stock with BUY rating.

Volumes growth to remain robust Nestlé India’s revenues (gross) have grown at a CAGR of 18.3% from |2372.6 crore in CY04 to |7673.6 crore in CY1110. The growth was largely driven by volumes (11.8% CAGR CY 04-11) with the price led growth being moderate (5.8% CAGR CY04-11). Strong brand equity of its flagship brands (Maggi, Cerelac, Nescafe and KitKat), vast distribution network (4.1 million outlets) and the company’s immunity to cost hikes have helped it to consistently grow through volumes. Going ahead, we believe that sales growth would continue to be driven by volumes (13.1% CAGR CY11-13E) largely in the prepared dishes. chocolates segment.

Opportunity size big in foods With the country’s food consumption expected to reach 230 billion USD (CAGR of 5.6% CY08-13E according to BMI, Q12009 & CSO) by 2013, and NIL being the largest food company, we believe that there is a huge untapped opportunity for the company. Further, the increasing rural consumption growth in the categories such as instant snacks, milk products and

8 Top 50 Indian BrandZ: http://www.millwardbrown.com/BrandZ/2014/India/Docs/BrandZ_2014_India_Top50_Report.pdf9 Ranking per Brand – Nestle: http://www.rankingthebrands.com/Brand-detail.aspx?brandID=15610 ICICI Direct – Nestle India: http://content.icicidirect.com/mailimages/ICICIdirect_NestleIndia_InitiatingCoverage.pdf

chocolates and NIL’s dominant share in these categories, we believe the double digit growth in revenues to sustain.

Leadership Antecedents 11

Over recent years, Nestlé has consistently strengthened its nutrition, health and wellness strategy and expanded its boundaries with the creation of Nestlé Health Science and Nestlé Skin Health. At the same time, the company has continued its drive to take full benefit of its scale, and to position and organize itself effectively and efficiently for profitable growth.

11 Decisions of the Nestlé Board of Directors: Creation of a new Executive Board function and redefinition of Zones Europe and AOA, Nestle Website: http://www.nestle.com/media/pressreleases/allpressreleases/new-executive-board-function-redefinition-zones

Given this context, at its meeting on 26 September 2014, the Nestlé Board of Directors supported the proposal to create a new Executive Board function, Nestlé Business Excellence, and to redefine Zone Europe and Zone Asia, Oceania and Africa (AOA).

Paul Bulcke, Nestlé CEO: "While always privileging a decentralised structure to stay close to the local consumer and keep agility in execution, we are increasing our efforts to better leverage our scale. We are looking into how our company is organised and operates to keep an optimal balance between category and geographic focus. By taking these steps, we are building our company for continued growth and performance."

Creation of Nestlé Business ExcellenceNestlé Business Excellence will integrate Nestlé’s corporate support functions GLOBE and Nestlé Business Services as well as its corporate initiative Nestlé Continuous Excellence. By bringing these different functions together under one responsibility at Executive Board level, the company aims to better leverage its scale and skills, and serve its markets and businesses more effectively and cost efficiently. This will also allow the Nestlé markets to increase their focus on demand generation.

Chris Johnson, currently Executive Vice President in charge of Zone Americas, will assume this new responsibility as Executive Vice President, Nestlé Business Excellence. Chris Johnson is very well placed for this new role thanks to his former corporate and market experiences, and his deep understanding of the company.Laurent Freixe will succeed Chris Johnson as Executive Vice President in charge of Zone Americas. Over the last six years, Laurent Freixe has successfully led Zone Europe, which outperformed competition in difficult times.

Redefinition of Zone Europe, and Zone Asia, Oceania and AfricaStrong socio-economic and political developments have dramatically changed the face of many parts of the world, bringing very diverse growth prospects. As the Zones need to have the necessary balance between the emerging and developed market trends, as well as the different socio-economic consumer dynamics, the Board has decided to integrate the Maghreb, the Middle East, the North East Africa region, Turkey and Israel into Zone Europe. As a consequence, Zone Europe will be renamed Zone EMENA (Europe, Middle East and North Africa).

The redefined Zone AOA, under the continued leadership of Nandu Nandkishore, will get even more attention and focus to further develop Nestlé to its full potential in this complex but fast growing part of the world.

Luis Cantarell will take on the responsibility for the new Zone EMENA, a role for which he is ideally positioned considering his past experiences. Luis Cantarell will remain on the Board of Nestlé Health Science which, as President and CEO, he started and set up. Greg Behar will become CEO of Nestlé Health Science and report directly to the Nestlé Health Science Board. Greg Behar, a Swiss national,

joined Nestlé in July 2014 from Boehringer Ingelheim where he was President and CEO of Boehringer Ingelheim Pharmaceuticals Inc.

Luis Cantarell will hand over his other responsibility for Nestlé Nutrition to Heiko Schipper, currently Global Business Head of Infant Nutrition, who will be appointed, effective 1 October 2014, Deputy Executive Vice President in charge of Nestlé Nutrition and member of the Executive Board. A Dutch national, Heiko Schipper started with Nestlé in 1996 in Bangladesh.

Thereafter, he took on increasing responsibilities in Indonesia, Switzerland, the Philippines and China. In August 2013, Heiko Schipper was promoted to Global Business Head, Infant Nutrition. These decisions have been taken effective 1 October 2014, and the new structure will be fully operational by 1 January 2015.

Paul Grimwood took over Nestlé SA's beleaguered U.S. operations in January 2013 as Chairman of Nestlé’s operations in the U.S. and CEO of Nestlé USA, including selling its US frozen pasta business earlier this year.

Paul Bulcke Strategy for 2014:

"We delivered solid, broad-based organic growth, driven by real internal growth and pricing in what is still a very volatile trading environment." - Paul Bulcke on Aug 06, 2014

Paul Bulcke told analysts that Nestlé had identified a group of underperforming product lines it would look to sell after reviewing the food giant's sprawling portfolio.

Nestle shares fell on Thursday after the group announced lower-than-expected net profit for 2013 and guided for another "challenging year" in 2014. The rising sales, operating profit margins and dividends were not enough to please investors, and neither was the 4.6 percent organic growth number. That was in line with expectations, but the group's slowest growth rate in four years. Coming in at 10 billion Swiss francs, the food giant's 2013 net profit fell short of analysts' forecasts.

Paul Bulcke, CEO of Nestle told CNBC he was not disappointed with the results, saying "I see this as a solid set of figures in perspective of the environment."

Furthermore, price pressures from Europe and weak demand from emerging markets added to the group's woes. Nestle warned investors that the headwinds would continue through the current year.

Bulcke said 2014 would be "pretty much in line" with 2013 as consumer confidence in the U.S. and Europe remains subdued and growth in emerging markets slows. "The developing markets are developing further but on another pace, and I feel this is more sustainable", he continued. "We play on both", Bulcke added when asked whether Nestle should scale

back operations in some regions." That's why we've kept our focus on the developed world. We are growing in Europe."

Paul Bulcke defended the group's 23 percent stake in French cosmetic giant L'Oreal, arguing it didn't need to reduce its stake further for now. L'Oreal announced on Tuesday that it would buy back 8 percent of its capital from Nestle, thus reducing the Swiss's group stake to 23.29 percent from its previous 29.4 percent.

"What we did makes strategic sense", the Nestle CEO said, adding that it had remained loyal to L'Oreal for over four decades and that due to its "quite sizeable" stake, Nestle would remain "a constructive partner in the business."

Bulcke said Nestle's R&D budget is increasing with its expansion into dermatology products but he declined to say by how much. "It's more intensive ... It is definitely moving quite dramatically," he said.12

Partners

1. Strategic Partners and Joint Ventures

Nestle – Perre Marcolini: Nestle partners with Brussels-based luxury chocolate maker Pierre Marcolini. The partnership will allow Nestlé to benefit from the know-how and artistic talent of one of the world's leading luxury chocolate makers, while Pierre Marcolini will gain access to Nestlé's global experience.

Nestle – A*Star:Nestlé has entered into a strategic partnership with the Singapore government's Agency for Science, Technology and Research, A*STAR, with the goal of setting up global research programmes in food science and technology.

The agreement will focus on areas such as nutrition, packaging, data analytics and also biotransformation (the use of natural processes, such as fermentation, to transform raw materials into ingredients with nutritional or functional benefits).

In the early 1990s, Nestlé entered into an alliance with Coca Cola in ready-to-drink teas and coffees in order to benefit from Coca Cola’s worldwide bottling system and expertise in prepared beverages.13

12 Nestle's chief executive officer Paul Bulcke says size matters even as focus narrows , Economic Times June 19, 2014:

http://economictimes.indiatimes.com/articleshow/36838674.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

13 http://articles.castelarhost.com/nestle_competitive_strategy.htm

Nestle – Joint Ventures:The Laboratoires Inneov is a joint venture in nutritional cosmetics between Nestlé and L'Oréal, while Galderma is a joint venture in dermatology with L'Oréal. Other joint ventures include14:

Cereal Partners Worldwide with General Mills Beverage Partners Worldwide with The Coca-Cola Company Lactalis Nestlé Produits Frais with Lactalis (40%/60%) Nestlé Colgate-Palmolive with Colgate-Palmolive (50%/50%) Nestlé Indofood Citarasa Indonesia with Indofood (50%/50%) Dairy Partners Americas (DPA) with Fonterra (50%/50%) Nestlé Snow with Snow Brand Milk Products (50%/50%) Nestlé Modelo with Grupo Modelo

2. R&D Partner

R&D Singapore (formerly known as Eastreco (Pte) Ltd) was Nestlé’s first R&D Centre in Asia, responding to the fast economic growth in the region. Singapore was chosen due to its well-connected infrastructure, politically stable, open door policies, sound economic and with uniquely pleasant multi-cultural society.

R&D Singapore serves Nestlé’s fastest growing markets in the Asia-Pacific region, including Malaysia, Indonesia, India, and Australia. It is a partner in Nestlé’s global network of 29 Product Technology Centres and R&D Centres.

R&D Singapore has a deep understanding of Southeast Asian and South Asian Cuisine and Cooking techniques. With that, the Centre has strong partnerships with Economic Development Board, Agri-Food Veterinary Authority, Health Promotion Board, local and international Universities, Polytechnics, Flavour Houses, Chef Associations.

3. Packaging Partner:Google’s Android and Nestle’s Kitkat have partnered for like-to-like promotion of both their products.

4. Corporate Social Responsibility:

Creating Share Value Global Forum 201415:Changing role of business in society at the 'Creating Shared Value Forum', co-hosted with the United Nations Conference on Trade and Development (UNCTAD).

14 http://en.wikipedia.org/wiki/Nestl%C3%A915 Creating Share Value Global Forum, Nestle – Website:http://www.nestle.com/media/mediaeventscalendar/allevents/creating-shared-value-forum-2014

Nestle and Global Good, 2014:Nestlé and Global Good, a collaboration between Bill Gates and Intellectual Ventures, have announced Clinton Global Initiative Commitments to Action as part of a two-year partnership to improve the productivity and lives of smallholder dairy farmers in East Africa.

The two-fold commitments focus on evaluating and devising ways to increase agricultural productivity of smallholder dairy farmers through technology innovation and on expanding the use of a specially designed milk container, known as 'Mazzi', by smallholders to maximize the quality and quantity of milk they sell.

Nestle endorses Caring for Climate16:Nestlé has announced its endorsement of Caring for Climate, the world’s largest coalition on climate issues, as part of the company’s long standing efforts to further provide climate change leadership.

Nestle Alliance for YOUth17: With more than 200 companies from all over Europe, the Alliance for YOUth is the first pan-European business-driven movement pledging to help young people be better prepared to enter the professional world and improve their chances in a challenging job market

Strategic Direction - Nestlé Roadmap

Nestle believes that leadership is not just about size; it is also about behaviour. Trust, too, is about behaviour; and we recognise that trust is earned only over a long period of time by consistently delivering on our promises. These objectives and behaviours are encapsulated in the simple phrase, “Good Food, Good Life”, a phrase that sums up our corporate ambition.

The Nestlé Roadmap is intended to create alignment for our people behind a cohesive set of strategic priorities that will accelerate the achievement of our objectives. These objectives demand from our people a blend of long-term inspiration needed to build for the future and short-term entrepreneurial actions, delivering the necessary level of performance.

Competitive advantages

16 Nestle Endorese Caring for Climate at UN Summit, Nestle - Homepage:http://www.nestle.com/media/newsandfeatures/nestle-endorses-caring-for-climate-un-summit

17 Nestlé and partners to create 100,000+ opportunities in Europe, Nestle – Homepage: http://www.nestle.com/media/newsandfeatures/alliance-youth-employment-european-challenge

Unmatched product and brand portfolio

Unmatched R&D capability

Unmatched geographic presence

People, culture, values and attitude

True competitive advantage comes from a combination of hard-to-copy advantages throughout the value chain, built up over decades.There are inherent links between great products and strong R&D, between the broadest geographic presence and an entrepreneurial spirit, between great people and strong values.

Growth drivers

Nutrition, Health and Wellness

Emerging markets and PopularlyPositioned Products

Out-of-home

Premiumisation

These four areas provide particularly exciting prospects for growth. They are applicable across all the company’s categories and around the world.

Everything Nestle does is driven by their Nutrition, Health and Wellness agenda, Good Food, Good Life, which seeks to offer consumers products with the best nutritional profile in their categories

Operational pillars

Innovation & Renovation

Wherever, whenever, however

Consumer engagement

Operational efficiency

Nestlé must excel at each of these four inter-related core competences. They drive product development, renewal and quality, operational performance, interactive relationships with consumers and other stakeholders and differentiation from our competitors.

If Nestle excel in these areas we will be consumer-centric, we will accelerate our performance in all key areas and we will achieve excellence in execution.

The Nestle team are seeking to achieve leadership and earn that trust by satisfying the expectations of consumers, whose daily choices drive our performance, of shareholders, of the communities in which we operate and of society as a whole. Nestle believes that it is only possible to create long- term sustainable value for our shareholders if our behaviour, strategies and operations are also creating value for the communities where we operate, for our business partners and, of course, for our consumers. Nestle calls this “Creating Shared Value”.

Nestle is investing for the future to ensure the financial and environmental sustainability of our actions and operations: in capacity, in technologies, in capabilities, in people, in brands, in R&D. Nestle is aimed to meet today’s needs without compromising the ability of future generations to meet their needs, and to do so in a way which will ensure profitable growth year after year and a high level of returns for our shareholders and society at large over the long-term.

Product Line Baby Foods: Cerelac, Gerber, Graduates, NaturNes, Nestum Bottled Water: Pure Life, Perrier, Poland Spring, S.Pellegrino Cereals: Chocapic, Minis, Cookie Crisp, Estrelitas, Fitness, Nesquik Chocolates and Confectionery: Aero, Butterfinger, Cailler, Crunch, KitKat, Orion, Smarties, Toll

House, Wonkia Coffee: Nescafe, Nescafe – Original, Nescafe Gold Blend, Cappuccino, Dolce Gusto Culinary, Chilled and Frozen Food: Buitoni, Digiorno, Herta, Hot Pockets, Jacks, Lean Cuisine,

Maggi, Stouffer’s, Thomy, TombStone Dairy: Camation, Coffee-mate, Laitiere, Nidoa, Health Care Nutrition: Boost, Nutren Junior, Peptamen AF, Resource, Drinks: Milo, Nesquik, Nestea Food Service: Chef, Chef Michaels, Lean cuisine, Maggi, Milo, Minors, Nescafe, Nestes, Sjora,

Stouffer’s PetCare: Purina Alpo, Bakers, Beneful, Cat Chow, Chef Michaels, Dog Chow, Felix, Fancy Feast,

Gourmet, Friskies,

Weight Management: Optifast

Product Line – India:

Milk Product and Nutrition: Every Day, a+, Slim, Actiplus, Raita, Real Fruit, Milkmaid, NESLAC, Masala Buttermilk, Sweet lassi

Beverages: Nestes, Cappucino, Sunrise, Nescafe – Classic, Nescafe Gold Prepared Dishes and Cooking Aids: Oats, Maggi, Xtra-delicious Chicken, Veg Atta, Cuppa Mania,

Bhuna Masala, Coconut Milk Powder, Healthy Soups, Magic Cubes, Masala-a-magic, Pazzta, Sauces, Hungrooo

Chocolate and Confectionery: Alpino, Kitkat, BarOne, Munch, Nestle Classic, Milkybar, Eclairs, Polo

Vending and Food Services Exports

Demographic – IndiaAfter more than a century-old association with the country, today, Nestlé India has presence across India with 8 manufacturing facilities and 4 branch offices.

Nestlé India set up its first manufacturing facility at Moga (Punjab) in 1961 followed by its manufacturing facilities at Choladi (Tamil Nadu), in 1967; Nanjangud (Karnataka), in 1989; Samalkha (Haryana), in 1993; Ponda and Bicholim (Goa), in 1995 and 1997, respectively; and Pantnagar (Uttarakhand), in 2006. In 2012, Nestle India set up its 8th manufacturing facility at Tahliwal (Himachal Pradesh).

The 4 Branch Offices located at Delhi, Mumbai, Chennai and Kolkata help facilitate the sales and marketing activities. The Nestlé India’s Head Office is located in Gurgaon, Haryana.

Potential

Nestle plans on making bigger businesses rather than having a niche market. In its efforts to accelerate growth by product innovation and hastening marketing it has been pulled down as its management’s focus has been largely drained and dispersed among brands that are acceptable but not fast in catching up with the other flagship products.

Nestle, under Paul Bulcke’s direction, is making its product portfolio lighter and more focused towards brands / businesses which are rather lucrative. The company is setting right its product line. It has pushed brands such as Juicy Juice, PowerBar – energy bar and Alete and Milasan Baby foods off its deck. Under this motive, Nestle has agreed upon selling its under-performed brand Jenny Craig. The company has also sold its Australian ice cream brand, Peters Ice Cream and its bottled water brands Carola and Val Saint Lambert in France. It has also sold Musashi, which is in the same category of PowerBar. It its run towards getting stronger by staying smarter and smaller, Nestle has made many strategic moves to

vow its struggling portfolio which has not regained to its fullest potential after the financial crisis; moves such as selling its 10% stake in fragrance sector – Givaudan.

Nestle brand, is presently going under a revamp and is relooking at allocating its management towards bigger brands / business rather than the niche brands such as PowerBar. They plan on mapping its portfolio in line with its objectives of staying a leader in Nutrition and Heath Wellness in the industry. This could be substantiated by its move of selling away its 8% stake in LOreal, which would add up to 8.8 billion dollars to Nestle’s. It is in plans to release the other 22% to back to LOreal. Company is now 8.8 million more flexible in handling its investments. This would illustrate the company’s commitment to its capital discipline. Nestle, now plans to expand its operations by acquiring Galderma.

Nestle wants to drive its way back into the top brands and pioneer in its fields of nutrition and health by staying loyal to its acclaimed objective. Generating new ‘wellness and fitness’ products and amending existing chunks of its assortments to progress their credentials in this area is important for Nestlé. Fast pace adapting and to rapidly changing environments are the key features for sustenance. To enlarge view of strategic vision towards growing leadership in wellness and health, Nestle has created Nestle Skin Health and has boosted it by acquiring Galderma to venture into consumer skin heath care needs. Company has also acquired Valeant Pharmaceutical’s rights to skin products to treat wrinkles et al. This move towards scientific based solutions for dermatology heath care needs for customers is met with a holistic approach by focusing on product initiative and research.

With approximately 19% of its revenues ploughed back into research and product initiation, discovery and development, Galderma stands potential to handle and be strategized to deliver state-of-art treatment of heath care needs for skin. The company plans to advance its baby care branch Bubchen in-line with the research team of Galderma. Newer innovative technologies and rights acquired from Valeant Pharma would be instrumental in growing the baby care portfolio of the brand. Gladerma is the leading institute in dermatology R&D with its reach to upto 80 countries and 33 extensive - product line.

Galderma has enters into an agreement with Valeant to gain full rights over for use in aesthetic dermatology so as to commercialize Restylane, Perlane, Emervel, Sculptra and Dysport in the markets; predominantly US and Canada.

Prospects for skin treatments are much more promising. Demographics stats projects skin treatments to be much more promising; there is a 75% increase in people over the age of 60 by 2025. Thus there is a promising prospects to dermatology skin care industry. and have skin ailments that need addressing. All the more food maker Nestle is struggling to cope with a fast-paced dynamic environment. Higher incomes consumers are buying fresher foods leaving the food makers in crisis. According to BB&T Capital Markets, growth rate of food rates is hardly crossing the inflation rates in the next five years.To counter this scenario Nestle has ventured into aesthetics market dealing majorly with Botox and injectable skin fillers like Galderma’s Restylane. According to GlobalData Worldwide, the demand for Botox is expected to double to $4.7 billion by 2018 from $2.5 billion previous year. Consumer skin care market will grow with a CAGR of 6% through 2018 as per Euromonitor. Furthermore, Nestles strategic move towards purchasing rights on Valeant to gain full rights over for use in aesthetic dermatology so as

to commercialize Restylane, Perlane, Emervel, Sculptra and Dysport in the markets has catalyzed the growth factors. The company is expecting this venture to extract 19.5% profit margins – operating which is highest among their portfolio only after their beverages – coffee.

Galderma, is in the right hands as the duo would fire up the markets of dermatology solutions by 2018. The Valeant deal, proves Nestle has shifted away from an progressively commoditized food industry to realize their desire of suitable leading health, nutrition and wellness company.

It is overt to find that Nestle will have to boost Galderma’s R&D, higher that anay of its products in the portfolio as this is a big bet for both the companies. The likely expenditure on R&D is less than 2 percent of its $100 billion in sales on R&D. This trend to diversify is not restricted only to Nestle but is fast spreading across other food makers such as PepsiCo, Unilever as they are willing to diversify the short term risks in the industry.

Nestle sees itself evolving as a science-driven company preparing itself to fasten its seat beats for the next big thing in health trends – irrespective of that being novel food or skin product. The market is heavily booming and Nestle has been bold enough to accept the challenge to venture into skin-care and with the statistics at hand the moves it has made to advance are quite relevant and contributive towards reaching its goal of making itself leader in Health and Wellness.

II. Brand Measurement

Jennifer Aaker’s Personality Model

Company have their brand as an asset. An asset which defines and differentiates them from their peer competition. Higher a brand is positively and relevantly distinguished from its competitor, easier it is for the brand to carve out a market share for itself, own it and grow along with it. For this reason brands have to define how customers view their brands to be; for which Jennifer Aaker has come up with an instrument to distinguish brands in terms of personality. Brand personality, which is no different for the a human’s is a set of characteristics which are built and brewed over time by how consumer’s receive the brand projects and how they behave accordingly. Similar to the human traits, brands too have gender, age and socio-economic class and it is a rudimentary need for companies to assess theirs in terms of consumer’s perception. Eventually it all sums up to how well the customer has appreciated the experience with that brand which ends up in creating an overall impression of a brand and defines it as the brand progresses. Companies especially with similar categories in its delivery, have a pressing need to distinguish itself to prevent loosing on market share to its competitor. Factors such as user-imagery, symbol of the brand, age and sponsorships sum up to add into a brand personality's characteristics.

Aaker has identified five different facets in which a brand discriminate itself from its challengers in the same product category by defining its own personality. According to Aaker, brand personalities are categorized into 5 different facets namely Sincerity, Excitement, Competence, Sophistication and Ruggedness. There are certain traits for each personality to be fulfilled, they are as mentioned in the below table. Brand personalities are both durable and distinguishing and are the mention of the customer experiences of the brand. It can mathematically be defined as the weighted average of the previous experiences the brand had with its customer. The survey to identify the brand personality had both users and non-users in the response side; the results for brand strength for user were stronger than that of the non-users, hence it is and added inference that with experience brands grow stronger relations with customers which turn out to be thicker brand personality relationships.

Description of a brand involves the demographics, lifestyle or human personality traits. Under demographics factors such as age, gender, social class and race while lifestyle comprises of activities, interests and opinions. In case of human personality traits; extroversion, agreeableness and dependability defines human personality traits. Brand personality relates to everything and anything of the brand as it is an encapsulation of holistic feelings when the name of the brand is taken.

The brand personality scale was varied according to the culture and values of the demography. The validity of the personality test was done through cross-culture checks, which included addition or deletion of a factor for a respective country or demography. Japan had peacefulness added to the big-five dimensions leaving Japan with excitement, competence, sincerity and sophistication; while USA and Spain had ruggedness and passion, capturing the meaning. On the other hand, common dimensions had convergent and discriminant validity.

Companies have many variables to build their brand upon (user imagery, advertising, packaging as saigd by Batra, Lehmann and Singh 1993); yet the dependency of the variable upon the brand or the interdependency of variables amongst themselves are highly brand personality dependent and are still to be determined. The variables could be handled to determine the desired brand personality. Research states that brand personality upturns with consumer preference and usage while evoking emotions in the customer. Such acts would surge the levels of trust and loyalty. Tweaking the brand personality dimensions and analyzing their impact on the key dependent variables.

Sincerity Excitement Competence Sophistication RuggednessDown-to-Earth:Family-OrientedSmall- TownConventionalBlue collarAll American

Daring:Trendy,Exciting,Off-beat,Flashy,Provocative

Reliable:Secure,Hardworking,Efficiency,Trustworthy,Careful

Upper Class:Upper Class,Glamorous,Good Looking,Pretentious,Sophisticated

Outdoorsy:Outdoorsy,Masculine,Western,Active,Athletic

Honest:Sincere,Real,Ethical,Thoughtful,Caring

Spirited:Spirited,Cool,Young,Lively,Outgoing,Adventurous

Intelligent:Serious,Technical,Corporate

Charming:Sexy,Gentle,Feminine,Smooth

Tough:Strong,Rugged,No-nonsense

Wholesome:Original,Genuine,Ageless,Classic,Old- Fashioned

Imaginative:Unique,Humorous,Surprising,Artistic,Fun

Successful:Influential,Leader,Confident

Cheerful:Sentimental,Friendly,Warm and Happy

Up-to-Date:innovative,Aggressive,Independent,Contemporary

Customers are more likely to differentiate or assimilate themselves from their peers and hence use a brand which bridges the gap and define the culture for the individual. Similar to the consumer, brands are in high affinity towards creation of similar or same expressions of larger groups of relevant acceptance and hence in a continuous process to adapt to their target group or work towards how they want to be projected in the market.

Applications for Nestle:

Product attributes would often be brand personalities and hence would be drivers for brand personality. Now that Nestle is venturing into skin care it is mandatory for Nestle to create its product related characteristics as they often define the personality. The challenge for Nestle would be to manage with its pervious presence in Food and Drinks but now since it is diversifying its product line much more the company has to take a call whether the new product line should portray the same fame as that of the “Good Food, Good Life” or create a new identity without leveraging itself on its parent brand.

For Nestle health the brand prism model would start all along as it is ideal for the company to manage the product line separately as it is majorly venturing into skin care to diversify the perceived risk in packaged goods as seen by other competitors such an Unilever, General Mills etc.

Kapferer’s Brand Prism Model

Jean- Noel Kapferer has identified six aspects namely physique, personality, culture, relationship, reflection and self-image to define brand identity. A well-constructed source displayed through physique and personality are the mediums for presentation of a strongly-displayed brand. The brand has to be personified according to match with the user / consumer as he is the one who is a constructed receiver which are done through self-image and reflection of his own.

Figure: Brand Prism Model – Kapferer

Brand also has social aspects which define the external expression which is physique, relationship and reflection; all three add up to externalization. Yet there are few factors that are internal to the brand itself. They are personality, culture and self-image. These stated factors can be utilized if and only if it starts communicating with the consumer. All the six aspects are define elaborately, further.

Physique:

This component is a contributor for externalization. These are stimulated in the customers mind when the brand name is used as a hint for incite. The customer answers on how the brand looks like and how they define the same in terms of functionality. How they recollect the brand and how the experiences with design or the aesthetics or even the ergonomics are define the brand physique.

Many of the packing elements were showing identifiable consistency is differentiation and recollection while recognizing the brand against the market competitors. Furthermore, it is inferred that no brands will be able to draw attention using their material benefits.

Personality:

Brand character or brand personality is capable of communicating, in a certain way, with its customer. They are generally personified while communicating on brand related aspects and display feelings for the same. Colors, designs and writing are used for endorsing them for a particular communication.

Culture:

Basic principles and variables on which the brand has it basic principles relied upon. For either products or for any further communication, culture is the bridge between brand and organization. Such links are associations with respect to demographics and country of origin. Kapferer states that brands are bound by the fact that a product or a brand is imbibed by a nations and hence restrict its growth towards other sectors. The association binds the brand form further expansion. A master brand should be careful enough not the get trapped as mention above, so that its expansion is not restricted by any hurdles.

Relationship:

Brand managers are required for expressions and displaying the relationship of his/her brand. A brand is more often symbolized as a relationship between two people. A classic example would be depicted with that of a mother and her child. Services are in greater need to resonate in relationships than in brands as they define and measurement the image of the brands itself.

Reflection:

While assessing the strengths and weaknesses of a brand, the most prominent aspect is the reflection of the brand in terms of the customer. This creates stereotypical structures for the brand and becomes the source for identifying a particular brand. It may so happen that the reflection in terms of the consumer base is deviant of its actual group while the target group maybe much larger and different.

Self-Image:

This aspect is strict at displaying what the target group holds up to itself. Perceptions into fundamental intrinsic drivers of purchaser can give a brand a factual improvement. If these intuitions are extant, advertising can entice upon them.

Applications for Nestle:

Factors such as Packaging, Ergonomics and its functionality would add up for Nestle’s physique. While personality such as Deepika Padukone for Nescafe and Virat Kohli for its Munch who portray brands character across the table. Nestle is a Swiss brand but the brand was adaptive enough for itself not to stick to its country of origin’s culture rather has adapted itself to other cultures, hence such brands can resonate in many customer contacts as possible.

Brand Asset Valuator - Young and Rubicam:

Independent of their product category, brands develop in specific progression of consumer perception. When building a brand the utmost prior factor is differentiation. Then comes relevance, esteem and eventually knowledge. Real action takes place between these measures and correlated relationships.

Strength of the brands meaning can be determined using differentiation. Brand essence, customer choice are few driver for differentiation. While relevance is the appropriateness of utility of brand to a customer and how often this usage is used. Differentiation, Relevance, Esteem and Knowledge are four pillars for BAV analysis of a brand and cannot be isolated while analyzing. Brand strength, hence, is the result of combined effect from relevance backed by differentiation, thus forming the relevant differentiation. Formulating this is the orderly fashion is not a simple task and many companies fumble at projecting the same. Other combination of pillars is brand Stature, where it is formed by combining Esteem and Knowledge. Thus the four pillars and the two combinations are together used for evaluation and estimation of positioning of the brand in the power grid and watch its movement over as time passes.

The First Pillar – Differentiation:

It is found that over time, all distinguishing factors amongst brands are equalized. Without which there is not long term runs for organizations to sustain. It is inevitable for brands to move into maturity stage. Good brands can even then perpetuate its differentiation. Lower levels of brand differentiation implies brands are fading.

The Second Pillar – Relevance:

If the brand you are selling is not personally appropriate or relevant, although you have great audience and customer they would not stay for long. BAV shows a distinct correlation between relevance and increasing market penetration sizes.

The Third Pillar – Esteem:

It is how high your customer holds your brand in high regards; Popularity and perception are the two factors which drive brand esteem and are also different for each country.

The Fourth Pillar – Knowledge:

Awareness and understanding of values propositions of the brand are the weighted consequences of having better brand knowledge. Such attributes cannot be built over a day nor can be bought by spending money.

Learnings from Brand Asset Model contribute to the brand meaning. While brands globalize, the meaning are to be consistent and perform better in financials for better margins and returns on assets and stronger growth.

The following is a power grid and helps in contemplating the position and updates of the brand presence till date. The relationships depicted in brand asset valuator are directly proportional to brand health. The relationships are realized under better intrinsic values, greater margins and insulation against substitution. Thus through BAV model brand performance, brand health and brand potential are evaluated.

According to BAV listed are a few constructs in relation with consumer attitudes and behaviors while driving business successfully. Brand Strength explains 29% of variance in pricing power and explains 31% of variance in volume. It is highly predictive of usage and preference. Brands with healthy pillars sees 6 – 9% growth against 1 – 3% growth in companies which does not. Stronger brands have deeper advocacy rates and would not trade it for another brand.

Application towards Nestle:

Since Nestle Health’s foray into newer market; the product line’s D, R, E, K are low. Hence placing the product in the first quadrant. In case of the mother brand Nestle, the brand knowledge is high and the brand is highly relevant but the brand’s esteem and differentiation are to be evaluate as they are at stake as the company is old enough to fade away. An ideal place for Nestle would be between the leadership and erosion stage. Hence it is highly applicable for the company to strategize it’s portray towards a distinguished manner to stay different and prevent itself from erosion. Survey would be apt to examine the levels of the D, R, E and K as they are hard to estimate in a standalone fashion and without proper representation of the market. Through survey, brand’s four pillars could be rated in comparative basis and hence would ease the mechanism of placing the brand in one of the four quadrants.

Why I chose, what I chose:

The challenge for Nestle would be to manage with its pervious presence in Food and Drinks but now since it is diversifying its product line much more the company has to take a call whether the new product line should portray the same fame as that of the “Good Food, Good Life” or create a new identity without leveraging itself on its parent brand.

Since nestle is a global brand and has been seeing signs of fading due to slack in demand for processed foods, the company is diversifying itself into skin care or personal health care. Hence an ideal model to choose would be brand prism. Adding to the fact that the brand Nestle is a global brand as has to maintain consistency in terms of promise it is ideal for brand measurement in terms of brand prism. Nestle has to manage its wide portfolio of multiple products across, multiple countries. Hence it has to manage the product’s culture and then its promise would divulging into multivariate changes.

It may so happen that the reflection in terms of the consumer base is deviant of its actual group while the target group maybe much larger and different. Products such as Maggi are flagship products targeted for a group but this group does not only comprise of the whole target group. Hence the brand has to be evaluated across the globe for the reflection factor as in brand prism.

Nestle is a pioneer at maintaining relationships with its customers and managing relationships amongst themselves. The brand has many laurels in terms of revenue bases with its flagship products such as Cerelac which mantains the relationship between mother and the child. The brand was successful enough to reflect the preference for good food for a good life through its selling proposition. Hence managing reflection. Nestle claims to be leaders in health products as the customer himself delivers the same message when the product or brand is incited. Thus better self-imager measurement is needed for continuous changes in the product.

Nestle is a Swiss brand but the brand was adaptive enough for itself not to stick to its country of origin’s culture rather has adapted itself to other cultures, hence such brands can resonate in many customer contacts as possible.

Competitors:

According to Deloitte’s Top 250 Consumer Products Companies 2011, Nestle has been ranked first in the “Food, Drink and Tobacco” industry followed by Pepsico, Unilever Group, Kraft Foods Inc (now with Nestle), The Coca-Cola Company, JBS S.A and Mars Incorporated. Only two companies under this list for the above specified category are from India – Ruchi Soya Industries Ltd and ITC Limited. Since Nestle’s foray into skin care has been prominently seen after its disinvestment in LOreal and its acquisition of global leader – Galderma; it would be logical to keep watch on ‘Skin Care’ industry too. Hence its competitors would also include The Procter & Gamble Company and LOreal S.A.

Tejas’ Brander Fusion Model or Cycle Spoke Model:

In addition to the 6 dimensions of the brand prism; Differentiation, Knowledge and Relevance would be chosen from Brand Asset Valuator. Differentiation is chosen due to the wide varieties of the product lines and closer proximities of challengers in the individual product category. Since the brand is venturing into newer horizons, it is ideal for the firm to define its personality to stay consistent in its performance across culture. Nestle being a global brand has many indigenous players competing for the clustered market share; all the more the local players are well versed with the preferences and behaviors of their markets, hence to assess and advance Nestle’s marketing strategy has to take into consideration ‘Relevance’ and ‘Knowledge’ of their brand in that local region. Hence a better model to assess the current scenario of Nestle would be a fusion of brand prism, brand personality and brand asset valuator models.

The fusion model is the extension of the Aaker’s Brand Personality model followed by Brand Prism it is enough to estimate the brand's existence and predict the further sustenance of the company. Since Nestle is on a new journey in diversifying its portfolio; the model is expected to suffice its situation.

The Fusion model proposes two phases where the brand personality and brand prism are merged and estimated. The brand prism is added to the personality of the Aaker’s personality model with the

estimated Big Five Personalities. The estimation for the personalities are performed through a survey questionnaire amongst with in-depth interview.

Model: Flow chart of Brander Fusion Model or Cycle Spoke

The Aaker’s personality model has seen major changes (addition and subtraction) in the personality lists. Hence the list is not exhaustive for a given demographic in the picture. Since the brand is operating in multiple cultures, it is needed for the model to take into consideration of few other factors contributing

Brand Strength:

Brand Knowledge

Brand Relevance

Brand Culture Brand Physique

Brand PersonalityBrand

Differentiation

to the personality. BRANDZ model could be used for taking up the process for analyzing the personality in an even more precise manner. Its 10 brand archetype along with 20 personality characteristics provide the consistency of the brand worldwide and how unique the brand can become than how much it is right now. It basically defines the brand personality in a much more precise manner. The base, however are built by the 5 personalities of Aaker. The advantage with this technique provides a better analysis of brand equity in correlation with the strength of the brand’s character.

The constructed source is then analyzed with physique as how the customer sees the projected brand. Factors such as logo, slogan et al would be analyzed with in comparison of the brand personality generated. Many of the food products look the same and has very little physical differentiation. Despite such physical hindrance of product differentiation, Nestle has been successful in managing the physique through its packaging. Other intangible physiques of the product, such as slogan and signage, have to be updated and estimated to prevent obsolesce among the gamut of products. Since this is a continuous process, there should be a continuous overhead for evaluation of the same.

Another important characteristic factor for Nestle is to assess the sensitivity and complex factor which is brand culture. Since Nestle is operating across the various locations which have different cultures the same had to be calculated over time. The emotional decisions blocking factor which is rising in terms of choice for brands going global. Brands such as Starbucks found most of their customer’s choices being driven by emotions. Great brands are formed when there is a resonance between the beliefs of theirs and that of the customer’s. The reason for why they do what they do is famously translated for cultural contributions. As the background of the purchase behavior; culture is in the options while asking questions. Laddering may be applicable for culture.

Nestle has many products under its belt and it is utmost important for the brand’s physique to be strong. In this case product line too broad would imply fading through no differentiation. According to Brand Asset Valuator model the product is in its danger zone. The Fusion model is provided with a one-stop solution where it provides alerts for the company if it is in the red zone of in case of lesser differentiation. Brand Knowledge is needed as there are many products and should manage product cannibalization of one product into another, as it would imply self-destruction. Hence the product brand knowledge should be regularly evaluated.

Brand Knowledge and Brand Relevance in BAV are quite useful in mapping the situation of the company and better used the combined pillar – brand strength to strategize its further moves.

Advantages of the Fusion Model in consideration to other brands:

The model is developed with Nestle’s situation taken into consideration and hence more viable for brands in this position. The Nestle’s model is high at brand personality assessment and it is infused with that of the brand prism model. The model has taken many other factors for personality evaluation from Mill ward Brown’s and hence highly extensive when compared to the Aaker’s model. Factors taken form brand prism help in identifying the major proposed state of the brand in the minds of the customer. The model has also taken into consideration the differentiation, relevance and brand knowledge into

consideration to identify the presence and performance of the brand and strategize accordingly. As brands globalize the consistency in development plays a major role in the better financial performance like ROA and higher growths. Many opportunities opens up and analysis of the brands knowledge and relevance projects the health of the product in that frontier. Cross-category and cross-cultural performance are demanded.

Matching the questionnaire with culture:Interview Guide

Demographics

Free association task

1. What comes first to your mind when I say Brand X ? Why?

2.Brand a wareness History, symbols, sponsorships, country-of-origin etc.

3. Brand familiarity When was your first encounter with the brand? Stories?

4.User imagery: Age, gender, profession, hobbies etc.

5. Brand feelings Can you describe the experience of x ?

6.How do you think people around you perceive you while x?

7.Brand personality

X as a person

X as a celebrity

X as an occupation

X as an animal

X as an activity

Scales for measurement of the dimensions of fused model:

Questionnaires:

Brand Recall 1. How familiar are you with this product type?

How familiar are you with this product type? Extremely familiar

Very familiar

Moderately familiar

Slightly familiar

Not at all familiar

2. When you think of this product type, what brands come to mind?

Brand Recognition

3. Which of the following brands have you heard of? (Select all that apply)

Which of the following brands have you heard of? (Select all that apply) Competitor 3

Competitor 2

Competitor 4

Competitor 1

Your Brand

4. Which of the following brands do you currently use? (Select all that apply)

Which of the following brands do you currently use? (Select all that apply) Your Brand

Competitor 1

Competitor 4

Competitor 3

Competitor 2

5. Which of the following brands have you used in the past? (Select all that apply)

Which of the following brands have you used in the past? (Select all that apply) Competitor 3

Competitor 2

Competitor 4

Competitor 1

Your Brand

6. Have you heard of our brand?

Have you heard of our brand? Yes

No

7. How familiar are you with our brand?

How familiar are you with our brand? Extremely familiar

Very familiar

Moderately familiar

Slightly familiar

Not at all familiar

8. In the last year, how often have you heard other people talking about our brand?

In the last year, how often have you heard other people talking about our brand? Extremely often

Very often

Moderately often

Slightly often

Not at all often

9. In the last year, where have you seen advertisements for our brand? (Select all that apply)

In the last year, where have you seen advertisements for our brand? (Select all that apply) Billboards

Magazines

Newspapers

Online

Public transportation

Radio

TV

Yellow Pages

I've never seen any advertisements for this brand

Other (please specify)

10. How likely is it that you would recommend our brand to a friend or colleague?

Not at all likely - 0

1 2 3 4 5 6 7 8 9Extremely likely - 10

*How likely is it that you would

recommend our brand to a friend or colleague? Not at all likely - 0

1 2 3 4 5 6 7 8 9

Model (Flow Chart)

Describe why you have picked up the components you have picked up for the model in 1000 words.

How do you wish to use your model? (Questionnaire or Survey or Interview)

Why is your model preferred for the prevalent ones. Describe the evaluation (+ves of your models and –ves in the existing models / standard models)

Evaluation of Brand Stages Impact in Cycle Spoke ModelThe brand stages for cycle spoke model are as follows:

Brand Knowledge:It is used for an evaluation of the brand’s emotional and symbolic benefits. It is used to measure the accessibility of the brand in the mind of the consumer. It can be measured using brand recognition and brand recall. One could evaluate the brand knowledge using interviews and feature inciting by giving hints of the brand or product. Care has to be take that the categories and needs are largly distinguished.

Questions such as the following could be asked for evaluating the brand knowledge using questionnaire:

o Please name all the brands of hot beverages you can think of. o Please name all the brands of hot beverages you can think of that you would

bring to a student party.

Brand Relevance is done for an evaluation of the brand’s utilitarian benefits. o How would you use this product?

Brand Personality: The method consists of asking subjects to what extent each adjective describes the brand.Questionnaire is used as following.

o Overall, I think that Brand X is down-to-earth: Disagree 1 2 3 4 5 6 7 Agree

o Who is the typical user of brand X?

Another way to evaluate would be through projective techniques where the customer is given clues for the brand and the emotions or reactions are captured with a single word description of the lot provided to them. ZMET technique could also be used for evaluating the brand personality. This technique is also called as picture responsive technique.

Brand PhysiqueDisplay of the packaging and design are used as queues for the customer to realize the brand

Brand Culture

Questions such as the following are used for brand culture:

1. What comes first to your mind when I say Brand X ? Why?

2.Brand a wareness History, symbols, sponsorships, country-of-origin etc.

3. Brand familiarity When was your first encounter with the brand? Stories?

4.User imagery: Age, gender, profession, hobbies etc.

5. Brand feelings Can you describe the experience of x ?

6.How do you think people around you perceive you while x?

7.Brand personality

X as a person

X as a celebrity

X as an occupation

X as an animal

X as an activity

Brand Differentiation