ACKNOWLEDGEMENT

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ACKNOWLEDGEMENT

"Acknowledgement is an art ,one can write glib stanzas without meaning a word,and on

other hand one can make a simple expression of gratitude"

I am grateful to my teacher of the college who inspires me to do so. As in the absence of a

teacher the right of path of knowledge is impossible.So, I feel pleasure to be grateful

towards my guide Mr. Vaibhav Sharma who encouraged me ana provide the shape &

structure to this project.

Shreesh Mehrotra

BBA VI Semster

915671

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Content

1. ACKNOWLEDGEMENT 1-2

2. SYNOPSIS 4-9

3. OBJECTIVES 10-11

4. NESTLE INDIA 12-17

5. COMPANY PROFILE 18-43

6. SWOT ANALYSIS 44-53

7. RESEARCH METHODOLOGY 54-55

8. LIMITATIONS 56

9. FINDINGS 59-62

10. RECOMMENDATIONS 63-64

11. CONCLUSION 65

12. BIBILOGRAPHY 66-67

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SYNOPSIS

4

Profile of nestle

Nestlé’s 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

emphazised 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 at Moga, Punjab, where

the Government wanted Nestlé to develop the milk 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 centres that would not

only ensure prompt collection and pay fair prices, but also instil 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. For more on Nestlé Agricultural Services, click here.

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 with 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.

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

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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, MILO, 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 Fresh 'n' Natural Dahi 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.

Nestlé is the world's biggest food manufacturer, with around 450 factories spread across

the globe, and a portfolio that ranges from baby foods to pet care, from chocolate to

mineral water. Its world-famous brands include Nescafe, Kit Kat and Perrier, among

many others. The group also owns a large shareholding in cosmetics company L'Oreal.

As with other food companies, recent years have seen a greater concentration on a

focused food and beverage business. In particular Nestlé has leveraged its performance in

sectors such as ice cream and petfoods with an aggressive acquisition strategy. At the

same time, it has placed health and wellness at the forefront of its agenda, developing the

widest possible range of nutritionally balanced products under the overall umbrella

"Good Food, Good Life

BRANDS

Nescafe Gervais Extreme

L'Oreal Maggi

Nestlé Rowntree Maxibon

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Nestlé Purina / Friskies Galderma

Nestea Buitoni

Cereal Partners Herta

Dreyer's Ice Cream Gerber

Nestlé Waters Nespresso

Nestlé Baby Food Willy Wonka

Nesquik Jenny Craig

Baci Nestlé Professional

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Objectives

1. To determine the sales volume of the company.

2. To overcome the failures that are being faced by company.

3. To know the advertising strategy of the company.

4. To know the strategy of competitors.

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1. RESEARCH METHODOLOGY

I have carried out a research which is both qualitative and quantitative in its support. The

qualitative approach applies to both, descriptive and inductive forms of research. While

as in case of quantitative approach, an extensive use has been made of the literature

available to carry out a detail research on the nature of the problem. I have chosen Nestle

as the target company for my research study.

1.1 Method of data collection & analysis

The data, after collection, has to be processed and analyzed in accordance with the

outline laid down for the purpose at the time of developing the research plan. This is

essential for a scientific study and for ensuring that we have all relevant data for making

contemplated comparisons and analysis. I have conducted a graphical analysis based on

the responses received from the persons questioned and interviewed. Once the interview

was over, the responses received were be grouped together, and a graphical presentation

and analysis has been made for every set of questions.

I have made use of both, the primary sources and the secondary sources of data in

collecting information.

PRIMARY DATA

The primary source of data involves oral interviews and questionnaires. These sources are

inadvertently expected to yield more qualitative data and results.

SECONDARY DATA

The secondary source of data includes relevant literature including periodicals and

journal articles in the areas of Marketing, customer satisfaction. product. To have a

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good image in the eyes of retailers.

Objectives

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Objectives

1. To determine the sales volume of the company.

2. To overcome the failures that are being faced by company.

3. To know the advertising strategy of the company.

4. To know the strategy of competitors.

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Nestle India

Nestle India is a subsidiary of Nestle S.A. of Switzerland headed by Mr.

Martial G. Rolland, Chairman And Managing Director. With six factories and a large

number of co-packers, Nestle India is a vibrant company that provides consumers in India

with products of global standards and is committed to long term sustainable growth and

shareholder satisfaction. The Company employs over 4500 people and for the full year

2005 Nestle India recorded net sales of Rs. 20477 Mio.

Nestle has been a partner in India's growth for the past nine decades and

has built a very special relationship of trust and commitment with the people of India.

The culture of innovation and renovation within the company and access to the Nestle

Group's proprietary technology/ Brands, expertise and the extensive centralized Research

and Development facilities helps the company to create value that can be sustained over

the long term. Nestle India manufactures products of truly international quality under

internationally famous Brand names such as Nescafe, Cerelac, Maggi, Milky Bar, Milo,

BarOne, Nestea and Kit Kat and in the recent years the company has also introduced

products of daily consumption and use such as Nestle Milk, Nestle Dahi, Nestle Butter,

Nestle Fruit 'n milk ready to drink beverage and Nestle Pure Life bottled drinking water.

Nestle India Ltd, 51% subsidiary of Nestle SA, is among the leading

branded food player in the country. It has a broad based presence in the foods sector with

leading market shares in instant coffee, infant foods, milk products and noodles. It has

also strengthened its presence in chocolates, confectioneries and other semi processed

food products during the last few years. The company has launched Dairy Products like

UHT Milk, Butter and Curd and also ventured into the mineral water segment in 2001.

Nestle’s leading brands include Cerelac, Nestum, Nescafe, Maggie, Kitkat, Munch and

Pure Life.

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COMPETITION

Baby food and Instant coffee are categories where brand loyalties are

very strong and Nestle is the market leader. HUL is a significant competitor to Nestle in

instant coffee; while Heinz is the main competitor in the baby foods market. The market

for culinary products, semi-processed foods such as noodles, ready mixes for Indian

ethnic breakfast and sweets, is largely an urban market. HLL and Indo Nissin Foods are

the main competitors in these product segments. Nestle has also achieved a significant

25% share in the chocolate/confectionery market. The company has recently expanded its

dairy products portfolio to include, milk, curd and butter. The company also forayed into

the bottled water segment with the launch of its Perrier brand in the premium mineral

segment and Pure Life in the purified water segment.

SOME ACQUISITIONS & MERGERS

1866: Company Foundation.

1905: Merger Between Nestle' & Anglo-Swiss Condensed Milk Company.

1929: Merger with Peter Cailer-Kohler Chocolate Suisse S. A.

1947: Merger with Alimentana SA (Maggie).

1969: Vittel (equity interest)

1971: Acquisition of Ursina-Franck (Swiss).

1974: Acquisition of L’ Oreal (France).

1977: Acquisition of Alcon (2002: partial IPO).

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1985: Acquisition of Carnation (USA).

1988: Acquisition of Buitoni-0-Perugina (Italy).

1988: Acquisition of Rowntree

1992: Acquisition of Perrier (France)

1998: Acquisition of San Pellegrino and Spillers Petfoods

2000: Acquisition of PowerBar

2001: Acquisition of Ralston Purina

2002: Acquisition of Scholler and Chef America

2003: Acquisition of Movenpick, Powwow and Dreyer’s

2004: Acquisition of Valio (ice cream activities)

2005: Acquisition of Wagner, Proteika, Musashi

SOME STRATEGIC ALLIANCES

1981: Galderna

1989: With Clintec (USA).

1989: CPW (USA) (Cereal Partner World Wide).

1990: Nestle' – Walt Disney (USA).

1991: Cooperation with Coca Cola (USA).

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2002: Dairy Partners Americas and Laboratories

MAJOR PRODUCTS & YEAR OF INCEPTION

NIL is running with about 80 brands in India. Some major products under those brands

are till the year 2003 is as follows:

PRODUCTS YEAR OF INCEPTION

MILKMADE 1962

NESCAFE 1964

LACTOGEN 1968

MAGGI NOODLES 1983

MAGGI SAUCES 1985

SUNRISE 1983

EVERY DAY 1986

MAGGI SOUPS 1989

ECLAIRS 1991

BARONE 1993

NESTLE BONUS CHOCOLATE 1995

KIT-KAT 1995

POLO 1995

MILO 1996

NES TEA 1996

NESTLE SLIM MILK 2003

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. RECENTLY LAUNCHED PRODUCTS

* Set Dahi

* New Tomato and Curry Flavors in Maggie Noodles

* New Dal and Atta in Maggie Noodles

* A new confectionery – Nestle Choco Stick

* Soft Chewy fudge Milky bar Choo

* Nestle` recently launched products Tea Iced Tea

* Nestle slim milk

Error: Reference source not foundMARKETING STARTEGIES OF NESTLE

INDIA LIMITED

Marketing strategy is the complete and unbeatable plan designed specially for attaining

the marketing objective of the firm.

The marketing objectives indicate what the firm wants to achieve; the marketing strategy

that decides the success at the business unit level which in turn decides the total

corporation’s success. The link between marketing strategy and overall success is indeed

direct and vital. And in this linkage lies the significance of marketing strategy.

Nestle India ltd. has an aggressive marketing strategy which is very well understood

when one goes through the in-depth study of the 4-P’s of the marketing and price

strategies with respect to its products. One comes to the conclusion that NIL has a well

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defined roadmap to success i.e. to reach its ultimate objective of realizing customer

satisfaction through value for price products.

COMPANY PROFILE

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Nestle India

Nestle India is a subsidiary of Nestle S.A. of Switzerland. Nestle India manufactures a

variety of food products such as infant food, milk products, beverages, prepared dishes &

cooking aids, and chocolates & confectionary. Some of the famous brands of Nestle are

NESCAFE, MAGGI, MILKYBAR, MILO, KIT KAT, BAR-ONE, MILKMAID,

NESTEA, NESTLE Milk, NESTLE SLIM Milk, NESTLE Fresh 'n' Natural Dahi and

NESTLE Jeera Raita.

Nestle was founded in 1867 in Geneva, Switzerland by Henri Nestle. Nestle's first

product was "Farine Lactee Nestle", an infant cereal. In 1905, Nestle acquired the Anglo-

Swiss Condensed Milk Company. Nestle's relationship with India started 1912, when it

began trading as The Nestle Anglo-Swiss Condensed Milk Company (Export) Limited,

importing and selling finished products in the Indian market.

After independence, in response to the then economic policies, which emphasized local

production, Nestle formed a company in India, namely Nestle India Ltd, and set up its

first factory in 1961 at Moga, Punjab, where the Government wanted Nestle to develop

the milk economy. In Moga, Nestle educated and advised farmers regarding basic

farming and animal husbandry practices such as increasing the milk yield of the cows

through improved dairy farming methods, irrigation, scientific crop management

practices etc. Nestle set up milk collection centres that ensured prompt collection and

paid fair prices. Thus, Nestle transformed Moga into a prosperous and vibrant milk

district.

In 1967, Nestle set up its next factory at Choladi (Tamil Nadu) as a pilot plant to process

the tea grown in the area into soluble tea. Nestle opened its third factor in Nanjangud

(Karnataka) in 1989. Thereafter, Nestle India opened factories in Samalkha (Haryana), in

1993 and two in Goa at Ponda, and Bicholim in 1995 and 1997 respectively. Nestle India

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is now putting up the 7th factory at Pant Nagar in Uttarakhand.

Today, Nestle is the world's largest and most diversified food company. It has around

2,50,000 employees worldwide, operated 500 factories in approximately 100 countries

and offers over 8,000 products to millions of consumers universally.

History

Nestlé headquarters in Vevey.

The company dates to 1867, when two separate Swiss enterprises were founded that

would later form the core of Nestlé. In the succeeding decades the two competing

enterprises aggressively expanded their businesses throughout Europe and the United

States.

In August 1867 Charles A and George Page, two brothers from Lee County, Illinois, USA

established the Anglo-Swiss Condensed Milk Company in Cham. Their first British

operation was opened at Chippenham, Wiltshire in 1873.

In September 1867, in Vevey, Henri Nestlé developed a milk-based baby food and soon

began marketing it. The following year, 1868, saw Daniel Peter begin seven years of

work perfecting his invention, the milk chocolate manufacturing process; M. Nestlé's was

the crucial cooperation M. Peter needed to solve the problem of removing all the water

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from the milk added to his chocolate and thus preventing the product from developing

mildew. Henri Nestlé retired in 1875, but the company, under new ownership, retained his

name as Farine Lactée Henri Nestlé.

Henri Nestlé.

In 1877 Anglo-Swiss added milk-based baby foods to its products, and in the following

year the Nestlé Company added condensed milk, so that the firms became direct and

fierce rivals.

In 1905 the companies merged to become the Nestlé and Anglo-Swiss Condensed Milk

Company, retaining that name until 1947, when the name Nestlé Alimentana SA was

taken as a result of the acquisition of Fabrique de Produits Maggi SA (founded 1884) and

its holding company, Alimentana SA of Kempttal, Switzerland. Maggi was a major

manufacturer of soup mixes and related foodstuffs. The company’s current name was

adopted in 1977. By the early 1900s, the company was operating factories in the United

States, United Kingdom, Germany and Spain. World War I created new demand for dairy

products in the form of government contracts; by the end of the war, Nestlé's production

had more than doubled.

After the war, government contracts dried up and consumers switched back to fresh milk.

However, Nestlé's management responded quickly, streamlining operations and reducing

debt. The 1920s saw Nestlé's first expansion into new products, with chocolate the

company's second most important activity.

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The logo that Nestlé's used till the 1970s.

Nestlé felt the effects of World War II immediately. Profits dropped from US$20 million

in 1938 to US$6 million in 1939. Factories were established in developing countries,

particularly Latin America. Ironically, the war helped with the introduction of the

company's newest product, Nescafé ("Nestlé's Coffee"), which was a staple drink of the

US military. Nestlé's production and sales rose in the wartime economy.

The end of World War II was the beginning of a dynamic phase for Nestlé. Growth

accelerated and companies were acquired. In 1947 came the merger with Maggi

seasonings and soups. Crosse & Blackwell followed in 1950, as did Findus (1963),

Libby's (1971) and Stouffer's (1973). Diversification came with a shareholding in L'Oréal

in 1974. In 1977, Nestlé made its second venture outside the food industry by acquiring

Alcon Laboratories Inc.

In 1984, Nestlé's improved bottom line allowed the company to launch a new round of

acquisitions, notably American food giant Carnation and the British confectionery

company Rowntree Mackintosh in 1988, which brought the Willy Wonka Brand to

Nestlé.

The Brazilian president, Lula da Silva, inaugurates a factory in Feira de Santana (Bahia),

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in February of 2007.

The first half of the 1990s proved to be favorable for Nestlé: trade barriers crumbled and

world markets developed into more or less integrated trading areas. Since 1996 there

have been acquisitions including San Pellegrino (1997), Spillers Petfoods (1998), and

Ralston Purina (2002). There were two major acquisitions in North America, both in

2002: in June, Nestlé merged its U.S. ice cream business into Dreyer's, and in August a

US$2.6 billion acquisition was announced of Chef America, the creator of Hot Pockets.

In the same time frame, Nestlé came close to purchasing the iconic American company

Hershey's, one of its fiercest confectionery competitors, though the deal fell through. [3]

Another recent purchase included the Jenny Craig weight loss program for US$600

million.

In December of 2005, Nestlé bought the Greek company Delta Ice Cream for €240

million. In January of 2006, it took full ownership of Dreyer's, thus becoming the world's

biggest ice cream maker with a 17.5% market share.

In November of 2006, Nestlé purchased the Medical Nutrition division of Novartis

Pharmaceutical for $2.5B, also acquiring in 2007 the milk flavoring product known as

Ovaltine.

In April of 2007, returning to its roots, Nestlé bought baby-food manufacturer Gerber for

$5.5 billion.In December of 2007, Nestlé entered in a strategic partnership with a Belgian

chocolate maker Pierre Marcolini. Nestlé agreed to sell its controlling stake in Alcon to

Novartis on 4 January, 2010. The sale was to form part of a broader US $39.3 billion

offer, by Novartis, for full acquisition of the world’s largest eye-care company.

Products

Main article: List of Nestlé brands

Nestlé has 6,000 brands,[10] with a wide range of products across a number of markets

including coffee (Nescafé), bottled water, other beverages (including Aero (chocolate) &

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Skinny Cow), chocolate, ice cream, infant foods, performance and healthcare nutrition,

seasonings, frozen and refrigerated foods, confectionery and pet food.

BUSINESS

Japan headquarters

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The Nestlé Tower in Croydon. This serves as their headquarters in the United Kingdom.

Management

The executive board, a distinct entity from the board of directors, includes:

Peter Brabeck-Letmathe , Chairman of the Board of Directors, Nestlé S.A.

Paul Bulcke , Chief Executive Officer, Nestlé S.A.

Werner Bauer, Executive Vice President, Nestlé S.A., Chief Technology Officer,

Head of Innovation, Technology, Research & Development

Friz van Dijk, Executive Vice President, Nestlé S.A. Asia, Oceania, Africa,

Middle East

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Luis Cantarell, Executive Vice President, Nestlé S.A. United States of America,

Canada, Latin America, Caribbean

José Lopez, Executive Vice President, Nestlé S.A. Operations, GLOBE

John J. Harris, Executive Vice President, Nestlé S.A. Chairman & CEO of Nestlé

Waters

Nandu Nandkishore, Executive Vice President, Nestlé S.A. CEO of Nestlé

Nutrition

James Singh, Executive Vice President, Nestlé S.A. Finance and Control, Legal,

IP, Tax, Global Nestlé Business Services

Laurent Freixe, Executive Vice President, Nestlé S.A. Europe

Petraea Heynike, Executive Vice President, Nestlé S.A. Strategic Business Units,

Marketing, Sales and Nespresso

Marc Caira, Deputy Executive Vice President, Nestlé S.A. Head of Nestlé

Professional Strategic Business Division

Jean-Marc Duvoisin, Deputy Executive Vice President Nestlé S.A. Head of

Human Resources and Centre Administration

David P. Frick, Senior Vice President and ex officio Member of the Executive

Board

According to a 2006 global survey of online consumers by the Reputation Institute,

Nestlé has a reputation score of 70.4 on a scale of 1–100.

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Earnings

In 2009, consolidated sales were CHF 107.6 billion and net profit was CHF 10.43 billion.

Research and development investment was CHF 2.02 billion.

Sales by activity breakdown: 27% from drinks, 26% from dairy and food

products, 18% from ready-prepared dishes and ready-cooked dishes, 12% from

chocolate, 11% from pet products, 6% from pharmaceutical products and 2%

from baby milks.

Sales by geographic area breakdown: 32% from Europe, 31% from Americas

(26% from US), 16% from Asia, 21% from rest of the world.

Joint ventures

Nestlé holds 26.4% of the shares of L'Oréal, the world's largest company in cosmetics

and beauty. The Laboratoires Inneov is a joint venture in nutritional cosmetics between

Nestlé and L'Oréal, and Galderma a joint venture in dermatology with L'Oréal. Others

include Cereal Partners Worldwide with General Mills, Beverage Partners Worldwide

with Coca-Cola, and Dairy Partners Americas with Fonterra.

Ethical and sustainable efforts

In 2000 Nestlé and other chocolate companies formed the World Cocoa Foundation. The

WCF was set up specifically to deal with issues facing cocoa farmers (disease had wiped

out much of the cocoa crop in Brazil) including ineffective farming techniques and poor

environmental management. The WCF focuses on boosting farmer income, encouraging

sustainable farming techniques and environmental and social programmes.Nestlé is a

founding participant in the International Cocoa Initiative (ICI), an independent

foundation set up in 2002 and dedicated to ending child and forced labour in cocoa

growing, and eliminating child trafficking and abusive labour practices.

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In October 2009 Nestlé announced its Cocoa Plan. The company will invest CHF 110

million in the Plan over ten years to achieve a sustainable cocoa supply. On the 23rd

October 2009 Nestlé and CNRA, the Ivorian National Centre for Plant Science Research,

signed a frame agreement for cooperation in plant science and propagation, with a target

of producing 1 million high-quality, disease-resistant cocoa plantlets a year by 2012. The

aim is to replace old, less productive trees with healthier new ones.

Nestlé is launching a Fair Trade branded Kit Kat in the UK and Ireland from January

2010.

Controversy and criticism

Marketing of formula

Main articles: infant formula and Nestlé boycott

One of the most prominent controversies involving Nestlé concerns the promotion of the

use of infant formula to mothers across the world including developing countries, an

issue that attracted significant attention in 1977 as a result of the Nestlé boycott which is

still ongoing.[18] Nestle continues to draw criticism that it is in violation of a 1981 World

Health Organization code [19] that regulates the advertising of breast milk formulas.

Nestlé's policy,[20] however, states that breastmilk is the best food for infants; however,

women who cannot or choose not to breast feed for whatever reason do need an

alternative to ensure that their babies are getting the nutrition they need.

Melamine in Chinese milk

In late September 2008, the Hong Kong government claimed to have found melamine in

a Chinese-made Nestlé milk product. The Dairy Farm milk was made by Nestlé's division

in the Chinese coastal city Qingdao. Nestlé affirmed that all its products were safe and

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were not made from milk adulterated with melamine. On October 2, 2008 the Taiwan

Health ministry announced that six types of milk powders produced in China by Nestlé

contained traces of melamine. Nestlé has announced that it will begin a recall of milk

products produced in China.[22][23]

Greenwashing

A coalition of environmental groups filed a complaint against Nestlé to the Canadian

Code of Advertising Standards after Nestlé took out full page advertisements in October

2008 claiming that "Most water bottles avoid landfill sites and are recycled", "Nestlé Pure

Life is a healthy, eco-friendly choice" and that "Bottled water is the most environmentally

responsible consumer product in the world".[24][25][26] A spokesperson from one of the

environmental groups stated: "For Nestlé to claim that its bottled water product is

environmentally superior to any other consumer product in the world is not

supportable".In their 2008 Corporate Citizenship Report, Nestlé themselves stated that

many of their bottles end up in the solid waste-stream and that most of their bottles are

not recycled.The advertising campaign has been called greenwashing.

Zimbabwe farms

In late September 2009, it was brought to light that Nestlé was buying milk from

illegally-seized farms currently operated by Robert Mugabe's wife, Grace Mugabe.

Mugabe and his regime are currently subject to European Union sanctions. Nestlé later

stopped buying milk from the dairy farms in question.

Palm oil use

Rapid deforestation in Borneo and other regions to harvest hardwood and make way for

oil palm plantations sends massive amounts of carbon dioxide into the atmosphere.]In

particular, where peat swamp forests are cleared, destroying the habitat for many

threatened species of animals such as the orangutan, much public attention has been

given to the environmental impact of palm oil and the role of multi-nationals such as

29

Nestlé in this.There is ongoing concern by various NGOs including Greenpeace.Nestlé

were met with "a deluge of criticism from consumers, after a large number of Facebook

users posted negative comments about the company's business practises." Nestlé's attempt

to engage with the issue were met with criticism, including headlines stating: "Nestlé fails

at social media",]and "Nestlé Loses Face On Facebook". Nestlé Chairman, Peter Brabeck-

Letmathe, in answer to a question from Greenpeace, told the Company’s Annual General

Meeting in Lausanne on April 15, 2010 that in 2009 Nestlé used 320,000 tonnes of palm

oil worldwide, comparing this with the 500,000 tonnes of palm oil used for biodiesel in

Germany and Italy alone.

In May 2010 Nestlé said it was inviting The Forest Trust, a not-for-profit group, to audit

its supply chain and promised to cancel contracts with any firm found to be chopping

down rainforests to produce the palm oil which it uses in KitKat, Aero and Quality Street.

Greenpeace welcomed the agreement promising to monitor it closely.

E. Coli

In June 2009, an outbreak of E. Coli O157:H7 was linked to Nestlé's refrigerated cookie

dough originating in a plant in Danville, Virginia. In the USA, the caused sickness in at

least 69 people in 29 states, half of whom required hospitalization. Following the

outbreak, Nestlé voluntarily recalled 30,000 cases of the cookie dough. How the dough

became contaminated is unclear, because E. Coli is not known to live in any of its

constituent ingredients.

MARKET SEGMENTATION AND TARGET MARKET SELECTION

Market segmentation and target market selection have an intimate relationship with

market strategy formulation.

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The company may focus on the following factors while laying down the target market.

1. GEOGRAPHIC SEGMENTATION

Geographically the country can be broadly divided into 3 sub segments -Rural, Suburban

and Urban.

In the first phase (after the test launch), Urban parts of the country should be targeted.

The chosen segment is targeted because –

* Lack of infrastructure, like refrigeration-not to venture rural markets.

* The consumption pattern & behavior in Rural India does not fit with the product

attributes and perceived benefits.

* The limitation of disposable income is another factor that hampers entry in rural areas.

* Semi-Urban may be considered in the second phase. An year after the launch.

Within Urban India, the cities with 1 million + population i.e. top 23 metros will be

targeted. A soft launch of the brand should be undertaken before taking the brand to these

areas. This (test launch) will be undertaken in Bombay, since it (Bombay) is a high

consumption city for chocolates.( Source: Nestle (I) Ltd – infact Nestlé’s sales peaked out

in Bombay, during its initial launch).

2. DEMOGRAPHIC SEGMENTATION

The demographic variables have been separately addressed to arrive at the target

audience.

* Age: 12 years + segment of the population is recommended to be targeted. Small kids

may not be targeted, because of the nature of the perceived product benefit by consumers

in that age group, who are inclined towards sweeter and creamier snacks. Further, it may

31

not be easy to get youngsters off their tuck money. Also, children today already have an

array of cheap domestic and international confectionery (in the form of chewing-gums,

lollipops, rolls, lozenges and toffees).

* Income: The income segmentation may be all households with an annual income

exceeding Rs. one lakh. Targeted audience may be all households that can afford a

television or have access to satellite television.

3. PSYCHOGRAPHIC SEGMENTATION

Social Class: In terms of psychographic the social class targeted is the educated

upwardly mobile urban middle and upper class.

Personality Traits: This segment essentially consists of emulator’s i.e. upwardly

mobile, pioneers, freaky, fun loving type of people. These are the people who like to

enjoy life and believe in traveling and adventure.

Life Style: In terms of lifestyle, it may be aimed at those who favor buying

convenience products. They are also willing to experiment with alternate products in

place of conventional food items, as the universe of chocolate consumption is changing

from occasion led to more casual consumption.

4. BEHAVIORAL SEGMENTATION

The moulded segment of the market is perceived to be the growth engine of the market.

Hence, this segment is quite lucrative for a new brand launch. Also, chocolate purchases

have moved from being occasion-led to a casual snack. Hence, anytime anyplace snack

aspect needs to be established. This segment comprises of people who like to have

chances and want to try new things.

5. LEARNING-INVOLVEMENT

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The purchase of a chocolate is of a low-involvement category. It is an impulse

purchase and decision to buy is not pre-planned.

6. USAGE RATE

The market may be further segmented on usage rather than attitude-Anytime

Anyplace Snack. This is a group of consumers that find traditional snacks too heavy.

Even though a range of chocolates may be offered, a core brand (concentrated strategy

mentioned later) may be launched in the countline segment. Since this segment is tipped

to be the growth engine of the industry (according to industry sources – Mr. Sanjay

Verkey, Cadbury’s India and Mr. Bohidar) and this segment has a substantial share of the

market (33%).

TARGET AUDIENCE

Following from the above, it is recommended to target consumers who found traditional

snacks too heavy. Usage rather attitude is being used to segment. This is the segment that

tended to pick up biscuits instead-something they could munch while continuing with

their schedule.

There are 181 million urban individuals in India Our target segment is people living in

the top 23 metros (1 million +population), which implies 63 million people. Further, SEC

A-B in these 23 metros with Cable & Satellite at home are targeted (94.4 % of SEC A-B

have a cable & satellite connection) [All these are NRS -VI & IRS ’99 figures].

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ADVERTISING & SALES PROMOTION

When a marketer or a firm has developed a product to satisfy market demand

after thoroughly analyzing the market , there is a need for establishing contact

with the target market to eventually sell the product . Moreover, this has to be a

mass contact which means that the marketer is interested in reaching a large

number of people so that his product may receive optimum exposure . Naturally ,

the best way to reach this mass market is through mass communication and

advertising is one of the means of such mass communication along with such

other means as publicity, sales promotion and public relations .Advertising as a

means of mass communication has , therefore, made mass selling possible . It is

perhaps the best known mass communication channel. Marketers and firms engaged in

selling their products and services throughout the country and or in other nations

are fully aware of the necessity and importance of advertising .

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As a means of forceful communication , advertising promotes the sale of goods ,

services , images and ideas through information and persuasion .

Advertising is not a panacea that can restore a poor product or rejuvenate a

decline market . It only helps in selling through the art and business of persuasive

communication .

The American Marketing Association, Chicago, defines advertising as

“ ANY PAID FORM OF NON PERSONAL PRESENTATION OF IDEAS

GOODS AND SERVICES BY AN IDENTIFIED SPONSOR .”

Advertising aims at drawing attention to a product. It seeks to create an awareness

about the existence of advertised product . It passes on information about the

product in such a way that interest is created in the mind of the prospective

consumer about the product .

TYPES OF ADVERTISING:

On the basis of geographical spread we have the following types advertising : -

(1) National

(2) Local

(3) Global

On the basis of target group we have the following types :-

(1) Consumer

(2) Industrial

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(3) Trade

(4) Professional

Some more broad categories of advertising are:-

(1) Product

(a) Pioneering

(b) Competitive

(c) Preventative

(2) Service

(3) Institutional

(4) Public Relations

(5) Public Service

(6) Financial

(7) International

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PROMOTION

This involves communicating persuasively to the consumers, in order to arouse their

interest in the product. A detailed promotion plan involving advertisement, sales

promotion and public relations is proposed.

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POSITIONING

The positioning of the various brands in the market is listed below:

CADBURY’S

BRANDS

POSITIONING NESTLÉ’S

BRANDS

POSITIONING

Cadbury’s

Dairy Milk

“The Real Taste

of Life”

Classic Milk

Chocolate

Positioned as

an affordable,

enriched milk

chocolate

Fruit n Nut Positioned at

Creamy Bar adults as an

Roast Almond impulse anytime

Nut Milk purchase

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Crackle - self expression

Bournville values attached

5 Star / Perk Perk-Positioned as a Kit Kat Positioned as a

Snacking

Consumption.

Snacking

Consumption

Break/Krisp/

Double Decker

“Thodi Si Pet Pooja”

5 Star-Energy Bar

“Have a Break,

Have a Kit Kat”

Reach for the Stars Bar One Positioned as a

trendy, cool

anytime snack

Gems/Eclairs

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Positioned as

Butterscotch variety, gifting

Caramels/

Overtures

and taste

preference

Nutties/All Silk

Tiffins

Relish

The flagship brand may be positioned as a premium (see pricing) anyplace, anytime

snacks. Since, snacking proposition is the growth engine for the industry, positioning

should hence, be focused on that. The two drivers – Impulse purchase and need to snack.

ADVERTISEMENT PLAN

The Advertisement plan could be as under:

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CORPORATE OBJECTIVE: The corporate image should be built over a period of

time, so as to reinforce consumer confidence in the brands of the company. This is also

essential to counter competition, since over a period of time; names such as Cadbury’s,

Nestle have attained high levels of recognition and assurance.

ADVERTISEMENT OBJECTIVES

To position the product as a “high quality brand, with a wide range of offering,

providing, fun anytime, anyplace products”.

To create awareness about new flavors.

Induce consumer trials.

Build corporate image

To undertake competitive advertisement.

Media

Print Media: Will be the major magazines read by the target segment i.e.., India today,

society, femina, stardust etc.

* P.O.P.Material induce impulse purchase.

* Electronic Media: Since the whole of target segment watch Satellite TV during prime

time and advertisement will be featuring share for 3 or more time to leave an impact.

Apart from it company will be sponsoring the fun related programmers on DD and

Satellite TV.

PUBLIC RELATIONS

I. The company will hold a press conference announcing its arrival in India and will

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highlight its global achievements.

II. Company has planned to sponsor events like 2 viz., skiing river rafting, yachting etc.

III. Company will also sponsor fun based TV programs.

SALES PROMOTION ACTIVITIES: To induce consumers to try the new chocolate

and to get the product pushed in the market the sales promotion plan should include the

following:

Trade promotion: The Company will have to offer lucrative trade promotion schemes, in

order to push primary sale. These include incentives to stockiest for pushing the sale of

chocolates. At the retail level, the following trade promotion measures may be adopted:

Schemes such as, a certain percent off on the purchase of Rs 5000 or Rs 10,000 worth

of chocolates.

A box of chocolates free with every dozen purchased.

Shop Displays/Vizzy Coolers –linking them to sales

Apart from these, Window Shelf space may be purchased outright.

Consumer Promotion: Some of the consumer offers that could be introduced are:

1. Free gifts like pen, comics etc., on return chocolate wrapper.

2. Money Savers

3. Chocolates in a toy truck etc.

4. The Company can announce consumer “contests” (with proof of purchase) with

attractive prizes, supplemented by an advertisement campaign.

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POINT OF PURCHASE MATERIAL

POP is of extreme importance, to a product category like this. This is so, since sales are

impulse /casual driven. Hence, heavy point of purchase advertising in the form of

danglers, chocolate dispensers, etc. may be used.

DIRECT COMPETITION

NESTLE, CADBURY & AMUL

At present there are three major players Nestle, Cadbury’s and Amul in the Indian

Chocolate market. Campco initially tried to break into market but failed. Brief profile of

the same has been entailed below:

CADBURY’S INDIA LTD.

Cadbury’s India Ltd, has been in India since 1948. Its brands: Dairy Milk, 5 Star, Gems

and Chocolate Éclairs are the households names in India today. In all the segments i.e.

moulded chocolates, count chocolates and panned chocolates, it is undoubtedly the

market leader.

Cadbury’s has its manufacturing units at Thane (Mumbai), Malanpur, Indori(near Pune),

Mithuri and Kolapur. It has a strong distribution network with about 500 distributors in

North India and more than 3 lac retail outlets being serviced all over India.

In 1997, Cadbury planned to pump in Rs.80-crore to up production capacity at a couple

of Cadbury’s factories. This cash is exactly double of what’s been invested in 1996.

The Company launched Perk, a wafer enrobed chocolate in 1995. This was reactionary to

the launch of Kit Kat and has been able to counter competition.

CADBURY’S DAIRY MILK (CDM) - THE FLAGSHIP BRAND

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CDM, the oldest of Cadbury’s brands was launched in 1956. In the early 90s, a rise in the

prices of cocoa, increase in the excise duty and a fall in the demand inspired the idea of

repositioning. Two years in the process after relaunch Cadbury’s Dairy Milk’s market

share stood at 25 percent with sales rising by an average 40 percent per annum.

Besides CDM Cadbury’s has a number of endorser brands such as Fruit’n’Nut, Nut Milk

etc. Even though contribution of these brands to the company’s bottom-line is very small,

they are required in order to make a complete portfolio of offering.

The Company developed a concentration strategy on CDM, Five Star, Cadbury’ Gems,

Cadbury’s Éclairs, Perk and the latest of its offering Picnic (which has drawn a good

response in the market).

The Company has also identified sugar confectionery, as a growth sector. It’s first

offering Googly.

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SWOT ANALYSIS

The SWOT Analysis shows the relationship between critical variables of the company.

The SWOT matrix has a wider scope. The SWOT matrix is a conceptual framework for a

systematic analysis that facilitates the external threats and opportunities with the internal

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weaknesses and strengths of the organization.

It has been common to suggest that companies identify its strengths and weaknesses as

well as opportunities and threats in the external environment. But what is often

overlooked is that combining these factors may require distinct strategies choices. To

systematize these choices, the SWOT matrix has been proposed. ‘T’ stands for threats,

‘W’ stands for weaknesses, ‘O’ stands for opportunities and ‘S’ stands for strengths. A

marketing opportunity is aware of buyer need in which a company can perform

profitably. An environment that would lead, in the absence of defensive marketing action,

to deterioration in sales or profit. An ideal business is high in both major opportunities

and low in major threats.

A speculative business is high in both major opportunities and threats.

A mature business is low in opportunities and high in threats.

The SWOT matrix starts with the threats because in many situations a company

undertakes strategic planning as a result of a perceived crisis, problems or threats.

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STRENGTHS

High brand equity ……… consumer & dealer regarding Nestle' as company

delivery quality product.

Company processes an extensive powerful distribution network.

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Company processes a dedicated & experienced sales staff.

Strong base in monitoring & controlling market.

Distributions are highly dedicated towards performance & experience.

Nestle India Limited (NIL) has a very strong parent company Nestle S.A. support

with 51% of equity share holding, which is the world's largest food company.

NIL's milk products sold under Milkmaid and Everyday brands are market

leaders. NIL has strong brand value in other products like Kit-Kat, Polo, Milo, Maggi and

Nescafe.

NIL - State of the Art Technology and production systems ensuring high

technological/high value and optimum cost advantage to its product portfolio.

Idealization of products to suit local tastes are critical for success and NIL is

converting its international products into Indian tastes products.

Nestle has altogether 570000 outlets in more than 3000 towns. This is one of the

major strengths of the company.

NIL most of the products are being produced according to Indian tastes, priced

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within Rs. 25/- so that they are afforded by most of the people easily, advertised and promoted

according to regional culture and values and is available to most of the consumers easily, at

their nearby shops.

WEAKNESSES

Company takes time in handling return claims on authorized whole seller.

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Warehousing norms are not followed which account for increased breakage.

Restricted website minimizes marketing opportunities.

Yearly initiatives are not so motivating.

A high percentage of turnover and profits coming from a few products categories like

Coffee/Maggi.

NIL has been in India since last 39 years yet its growth has been very slow. After the

opening up of the economy, it has started growing but till then it did not launched much

products.

The profits of NIL are also reduced because of increased Royalty payments that NIL

is making to its parent Nestle, Switzerland. The higher royalty payments are made on account

of new international brands launched by NIL in India.

NIL factories are not to meet the demands of products with the supply.

NIL's products range is so large that it is not able to give proper attention to all the

products, their marketing strategies are not properly worked out as many of

its products are dieing. There was an embarrassing starter like Nestea an iced tea, Nesfit - a

glucose rich energy drink, Bonus, Milo is not given much of promotion.

Recently, there are difference between the Nestle S.A. parent company and Nestle

India Limited and because of this there are in the top management of the NIL. Even its M.D

Daravis E. Ardeshin has also resigned.

Proof financial distribution as the NIL is unnecessarily giving its shareholders high

dividend, which could be avoided and be used for investment in plants for capacity.

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OPPORTUNITIES

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Great quality.

Mass market is growing with established performances.

Growing middle class is increasing opportunities.

Great taste.

Low differentiation in market brands.

Credit facility given to dealers.

India being the second most populated country in the world, NIL has lot of opportunities

of launching and selling new products and earning a record profit from this country.

As NIL has been in India since last 39 years, it has understood the culture, values, tastes

and psychology of the Indian consumer and so it can easily develop Indianised products that

will be acceptable to the Indian consumer.

Food industry is the second highest growing industry in India and offers a lot of

opportunities for NIL in India.

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THREATS

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Tough competition especially in premium segment.

Characteristics of premium segment that it is never brand loyal.

Tough competition (indirect) with barista, café coffee day.

Mere availability of best sellers from the parent’s portfolio does not guarantee a winner.

Since most of these products would be fighting it out with their global competitors and then

Indian counterparts on the Indian turf.

It faces fierce competition in almost all the segments it participates in like. It duels with

Top Ramen in the instant noodle market, Kit-Kat vs. Perk, Polo vs. Minto, Milkmaid vs. Mithai

Mate (launched by Amul at a staggering 60% discount to the market leader), Milo vs. Horlicks,

Complan and Bournvita.

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RESEARCH METHODOLOGY

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1. RESEARCH METHODOLOGY

I have carried out a research which is both qualitative and quantitative in its support. The

qualitative approach applies to both, descriptive and inductive forms of research. While

as in case of quantitative approach, an extensive use has been made of the literature

available to carry out a detail research on the nature of the problem. I have chosen Nestle

as the target company for my research study.

1.1 Method of data collection & analysis

The data, after collection, has to be processed and analyzed in accordance with the

outline laid down for the purpose at the time of developing the research plan. This is

essential for a scientific study and for ensuring that we have all relevant data for making

contemplated comparisons and analysis. I have conducted a graphical analysis based on

the responses received from the persons questioned and interviewed. Once the interview

was over, the responses received were be grouped together, and a graphical presentation

and analysis has been made for every set of questions.

I have made use of both, the primary sources and the secondary sources of data in

collecting information.

SECONDARY DATA

The secondary source of data includes relevant literature including periodicals and

journal articles in the areas of Marketing, customer satisfaction. product. To have a

good image in the eyes of retailers.

LIMITATIONS

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(1) Research is conducted in Bareilly.

(2) Information given by researcher is not always right.

(3) It takes lot of time to research the data.

ANNUAL REPORT OF NESTLE

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Financial Results and Operations

(Rs In Millions)

2010 2009

Gross Revenue 62,974 51,672

Profit before Interest Impairment.

contingencies and taxation 11,646 9,610

Interest 11 14

Impairment Loans on Fixed Assets (Net) - 103

Provision for Contingencies (Net) 164 323

Provision for Tax 3,264 2,620

Net Profit 8,187 6,560

Profit Brought Forward 1,425 1,001

Balance Available for Appropriation 9,612 7,551

Interim Dividends 3,471 3,471

Final Dividend Proposed 1,205 1,205

Corporate Dividend Tax 772 795

Transfer to General Reserve 619 655

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Surplus carried in Profit and

Loss Account 3,345 1,425

Key Rates

Earnings per Share (Rs.) 84.91 67.94

Dividend per Share (Rs ) 48.50 48.50

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FINDINGS

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(1) REVENUE 2009 2010

51,672 62,974

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(2) PROFIT 2009 2010

6560 8187

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(3) LOSS 2009 2010

1425 3345

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RECOMMENDATIONS

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RECOMMENDATIONS

(1) Employees should be trained according to the changing standards of the organization.

(2) Company should conduct survey from time to time to according to which changes can

be introduced in the organization to stay updated in the market.

(3) They should introduce creativity into the work, so that the employees can do their

work active mindedly.

(4) Company should provide incentives to employees.

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CONCLUSION

During the project, I got an enriching experience about selling and how to convince the

customer to buy the product.Study on NESTLE gave me an practical experience about

nature of customers,market and how to deal customers in the market. Company like

NESTLE gave me an exposure about the nature of customers and market and how to deal

with customers.

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BIBILOGRAPHY

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INTERNET SITES

* www.nestle.in

* www.google.com

* www.moneycontrol.com

BOOKS

MARKETING MANAGEMEMT BY PHILIP KOTLER

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