A SUMMER TRAINING PROJECT

REPORT
ON
MARKETING STRATEGIES OF NESTLE FOOD INDIA LTD. AND
ITS COMPARISON WITH ITS KEY COMPETITORS

Submitted to
U.P. Technical University, Lucknow
IN THE PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
2008-2010

Submitted by
AATIF TANVEER
MBA-3RD Semester
Roll No.0811470002

INSTITUTE OF PROFESSIONAL EXCELLANCE &

MANAGEMENT

GHAZIABAD

PREFACE

As a Part of M.B.A. Program, Student has to pursue a project duly approved by the
Faculty of Concerned area. I had the privilege of undertaking the project on
Marketing Strategies of Nestle Foods India Ltd. & its comparison with its key
competitors. Main aim of the Project is to study how to build a long term
relationship with the customer. And create awareness among the potential customer to
make them more efficient and knowledgeable about the FMCG market.

ii

ACKNOWLEDGEMENT

I would like to express my Acknowledgement to those people, without whose

contribution, Support and guidance this Report would not have seen the light of the day.
Notable among them are Mr.Purushottam Kumar (Area Sales Manager Laxmi Nagar),
Mr. Nesar Ahmed (Sales Manager, Ghaziabad), Mr. Vishnu Pradhan (Associate
relationship manager, Ghaziabad), who was my Project Guide and who helped me in a
lot.
I am also thankful to all other employees of NESTLE who guide me during my Project.
I am also thankful and would like to express my Gratitude to the Honorable Director
Coll. A.S.Malhotra, Mr. Abhay Mishra (Placement Officer) and the entire Institute for
giving me a Platform to have this wonderful opportunity and being able to get a
glimpse of the Corporate World.
I am also thankful to Dr. Chhaya Tyagi (Sr. Lecturer M.B.A.) for her constant Support
and valuable suggestion.
With Regards:

iii

MR. AATIF TANVEER

M.B.A.-0811470002

DECLARATION

I hereby declare that this project report entitled MARKETING STRATEGIES OF

NESTLE FOODS INDIA LTD. & ITS COMPARISON WITH ITS KEY
COMPETITORS. (Chocolate Segment) is written and submitted by me under the
kind guidance of External Guide Mr. Rishav Mukherjee .and Internal guide Dr. Chhaya
Tyagi ( Sr. Lecturer, IPEM, Ghaziabad ) . The findings and interpretations in the report
are based on both primary and secondary data collection. This project is not copied
from any source or other project submitted for similar purpose.

AATIF TANVEER

iv

TABLE OF CONTENTS

1. INTRODUCTION OF ORGANISATION

BRIEF HISTORY OF ORGANISATION.

ORGANISATIONAL STRUCTURE.

VISION, MISSION, PHILOSOPHY OF THE ORGANISATION.

PERFORMANCE.

PRODUCT/ SERVICES.

2. OBJECTIVE OF THE STUDY.

3. RESEARCH METHODOLOGY.
4. ANALYSIS (INCLUDING SWOT ANALYSIS)
5. FINDINGS AND EVOLUTION.
6. CONCLUSIONS.
7. LIMITATIONS.

8. SUGGESTION / RECOMMENDATION.
9. ANNEXURE.
10. BIBLIOGRAPHY

vi

BRIEF HISTORY

COMPANY PROFILE

NESTLE FOODS INDIA LTD.

Nestle Foods India is a Transnational company (TNC) with its worldwide operations in
over 70 countries. The founder of Nestle was Henry Nestle who from a modest
beginning founded the company in 1866 at Switzerland for manufacturing milk
powders for babies. At that time Switzerland faced one of the highest infant mortality
rates and the milk formula saved the lives of many infants whose mothers were unable
to breast feed successfully.
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 is often quoted by most as "multinational of multinationals." There is a good
reason, as less than 2% of the turnover comes from the domestic market in Switzerland
and rest from its other operations worldwide.

At present Nestle in the world's largest food company with its international
headquarters at Vevey, Switzerland. With almost 500 factories world wide it employs
many people directly or indirectly.
Nestle is under first 50 companies of Fortunes five hundred list. It is present over all
five continents of the globe in over 80 countries. It is having 200 operating companies,
one basic research center and 17 technological development centers and around
2,76,000 employees.
Organization History
In 1860s Henri Nestl, a Swiss pharmacist, established the world-renowned Nestl
brand amid a spirit of innovation and goodwill. In 1866 he developed a food for babies
whose mothers were unable to breastfeed. His first success was a premature infant who
could not tolerate his own mother's milk or any of the usual substitutes. The value of
the new product was quickly recognized when his new formula saved the child's life,
and soon, Farine Lacte Henri Nestl was being sold in much of Europe.
In 1905 Nestl merged with the Anglo-Swiss Condensed Milk Company. 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, Nestl's production more than doubled.
The first Nestl factory to begin production in the United States was opened in Fulton,
Oswego County, New York. The factory however was closed in 2001, after the
company decided that the cost of restoring, and updating the factory could not
financially be justified. Employees of the factory were furious, and raised the company
flag upside down the day the closing was announced.

After the war, government contracts dried up and consumers switched back to fresh
milk. However, Nestl's management responded quickly, streamlining operations and
reducing debt. The 1920s saw Nestl's first expansion into new products, with
chocolate the company's second most important activity.
Nestl 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, Nescaf, which was a staple drink of the US military.
Nestl's production and sales rose in the wartime economy.
The end of World War II was the beginning of a dynamic phase for Nestl. 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'Oral in 1974. In 1977, Nestl made its second venture outside the food industry by
acquiring Alcon Laboratories Inc.

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

(Bahia), February, 2007.
4

In 1984, Nestl'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
Nestl.
The first half of the 1990s proved to be favorable for Nestl: 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, Nestl merged its U.S. ice cream business into Dreyer's, and in August
a US$2.6 billion acquisition was announced of Chef America, Inc. In the same time
frame, Nestl came close to purchasing the iconic American company Hershey's,
though the deal fell through.[2] Another recent purchase includes the Jenny Craig fitness
firm for US$600 million.
In December 2005 Nestl bought the Greek company Delta Ice Cream for 240
million. In January 2006 it took full ownership of Dreyer's, thus becoming the world's
biggest ice cream maker with a 17.5% market share.[3]
In November 2006, Nestle purchased the Medical Nutrition division of Novartis
Pharmaceutical for $2.5B. In April 2007 Nestl bought baby food manufacturer Gerber
for $5.5 billion.

NESTLE OVER THE YEAR

Nestle was established because of Henris concern for his fellow citizens. Henri, who
had a passionate interest in pursuing his work ideals, hoped that his efforts would one
day benefit society. He produced the first milk cereal food for children, an achievement
that even today, is recognized as one of the major advances in public health throughout
the world.
While the original business was based on milk and dietetic foods for children,
numerous other food products have been added to the range over the years. These
include chocolate, instant beverages, culinary, refrigerated and frozen products, ice
cream, mineral water and pet food.
Nestls other products include numerous chocolate bars as well as Nescafe coffee and
Perrier water.

INDUSTRIAL SCENARIO
The processed foods sector, which currently accounts for less than 2% of total food
consumption in the country, is slated to grow at a fast pace. The Indian Government has
identified Food Processing as a high potential industry and has been creating a policy
environment conducive to its growth. Historically, the policy framework favoured small
6

and unorganized players while the MNC players were restricted from adding capacities.
This led to the mushrooming of a vast unorganized sector. Large players with strong
marketing network and brand equity were forced to source from third party producers.
During the last few years, however, several food products have been de-reserved from
small-scale sector. MNCs as well as domestic players have made aggressive
investments in the sector. Quantitative restrictions on import of several food products
have been lifted, leading to greater availability of imported products. MNCs are able to
offer a wider product range, without the need to establish a manufacturing base.
COMPETITION
Baby food and Instant coffee are categories where brand loyalties are very strong and
Nestle is the market leader. HLL 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.

OBJECTIVES OF NIL
7

 Be in every way the leading company in Indian food industry.

Ensure high quality standards in everything we undertake.
Provide our consumers with superior quality products.
Provide our shareholders with rapid growth & fair returns.
Provide our employees a challenging & satisfying work environment.
To be a good corporate citizen & contribute positively to the society in which
we operate.
DISTINGUISH CHARACTERISTICS OF THE INDUSTRY
FMCG companies sell their products directly to consumers. Major features which
distinguish this sector from the others are as follows:

LOW CAPITAL INTENSITY

Most product categories in FMCG require relatively minor investment in plant and
machinery and other fixed assets. Therefore shortage of product for want of capacity
would be a rare phenomenon. The turnover is typically five to eight times the
investment made in a Greenfield plant at full capacity. This is also due to the fact that
the business being marketing driven, players do not integrate backward. Also, the
business has low working capital intensity as bulk of sales from manufacturers takes
place on a cash basis.

HIGH INITIAL LAUNCH COST

Nonetheless, there is a large front-ended investment made in new products including

cost of product development, market research, test marketing and most importantly its

launch. To create awareness and develop franchise for a new brand requires enormous
initial expenditure is required on launch advertisements, free samples and product
promotions. Launch costs are as high as 50-100% of revenue in the first year and these
costs progressively reduce as the brand matures, gains consumer acceptance and
turnover rises. For established brands, advertisement expenditure varies from 5 - 12%
depending on the categories. It is common to give occasional push by re-launches,
which involves repositioning of brands with sizable marketing support.

TECHNOLOGY

Basic technology for manufacturing is easily available. Also, technology for most
products has been fairly stable. Modifications/ improvement rarely change the basic
process. Nonetheless, major global players spend enormous sums on R&D due to their
ability to spread cost over the wider base of their global operations. Their R&D efforts
are towards:

Cost effective manufacturing process without compromising on quality and

functional performance.

Research driven formulations, which give cutting edge.

High standards of hygiene/ purity for personal care and food products.

Standardized formulation, which can be used across countries.

MARKETING DRIVE

In relative terms, marketing function has greater importance in FMCG companies. The
players have to reach out to mass population and compete with several other brands

which essentially offer similar products. The perceived differences are greater than the
real differences in the product.

MARKET RESEARCH

Consumers' purchase decisions are based on perceptions about brands. They also keep
on changing with fashion, income and changes in lifestyle. Unlike industrial products,
it is difficult to differentiate products on technical or functional grounds. With
increasing competition, companies spend enormous sums on product launches. Market
research and test marketing become inevitable.

BALANCE SHEETS ARE MISLEADING

The most critical asset for FMCG companies is represented by its brands and
distribution network. Brands are bought and sold like any other assets. Typically, when
an FMCG business is sold, the value of the brand is several times of that of tangible
assets. However as per the current accounting practices in most countries, investment
made in building of brands are written off as revenue expenditure. This is due to high
risk involved with a new brand, subjectivity involved in its valuation, lack of
consistency and difficulty in separating a brand's value from that of tangible assets
employed in the business. While a successful brand will pay back the investment
several times, in case of brand failure, entire investment has to be written off. High
return on net worth of most established companies is also misleading due to the fact
that the assets sans brands are considerably understated in the balance sheet.

10

THIRD-PARTY MANUFACTURING

Manufacturing of products by third party vendors is quite common. Third party

manufacturing used to give fiscal advantages particularly of excise duties. These have
been considerably diluted in the past 7 years of reforms. In the last budget the
government proposed to change the basis of excise levy to MRP basis. A total of 43
product categories have been brought under the MRP net in the subsequent budgets.
Besides excise benefits, third party manufacturing also provides other benefits .
THE INDUSTRY CHRONOLOGY
YEARS

DEMAN

1990

DS
12

RUPEES

TERMS
000 350 crores

GROWTH
RATE
2%

tones
March

Excise Duty increased to 15

3%

-1995

percent
Excise duty further increases

Drops to 6-7

to 28.75 %

1998

Cocoa Prices Zoom

Excise duty reduced to 25 %,

further to 20 percent and finally to

18 %. Import Nestle launches

Kit-Kat-sets up a new unit.

Production

Arrangement with

CAMPCO continues.

Mars selects production site.

11

2005

Market zooms up due to greater

marketing

thrust

by

players

3%

(especially Cadbury's)

2006
2007

Chocolates-Selected

import

Item
Chocolates-Open General License

20

3%

Quantitative restriction lifted

tones
32000
tones

3.6 %

12

000

2
2

The Indian Chocolate market can be sliced into four parts.

1. MOLDED CHOCOLATE SEGMENT - comprising slab chocolates like Dairy milk
chocolates, etc. These are made by pouring the ingredients into moulds.
2. COUNT LINE SEGMENT - comprising bars like 5 star, Bar One, Perk, Kit Kat,
etc. These have ingredients other then chocolate and are usually Bar shaped, making for
chunky bites.
3. CHOCO-PANNED SEGMENT - comprising chocolate forms like Butterscotch,
Nutties, Tiffins, etc. Panned varieties have different cores/centers which are covered
with a layer of chocolate.
4. SUGAR-PANNED SEGMENT - comprising chocolate forms such as Gems,
Chocolate clairs, etc. These generally have a sugar coating on the outside. The
rejuvenation exercise of Cadburys, was one of the key reasons behind the churning up
of the countrys Rs.350-crore chocolate market to a growth rate of 32 percent in 2005,
from a mere a few years earlier .

13

Chocolate Market shares

AM ULOTHERS
1%
5%

CADBURY
NESTLE
20%

NESTLE
AMUL
OTHERS

CADBURY
74%

NESTLE FOODS INDIA LIMITED- HISTORIAL

HIGHLIGHTS

Incorporated in 1959 as Food specialties, Nest India (NIL) was promoted by Nestle
Alimantana, Switzerland, which presently holds 51% equity stake in the company.
Manufacturing in India began with the start up of the Moga Factory in 1962. Nestls
first unit at Moga, Punjab is manufacturing:

Milk products

Infant milk formulae

14

Weaning cereals

Culinary products

Beverages

It is the main manufacturing unit of Nestle India Limited. The second factory at
Choladi, Tamil Nadu to produce beverages i.e. 100% EOU for instant tea was set up in
1967.
The third plant in Nanjangud, Karnataka was set up in 1989 to produce

Instant Coffee

Health Beverages

The fourth plant at Samalkha, Haryana, was set up in 1993, to produce

Weaning cereals

Culinary products

Health beverages

Milk products

The fifth plant at Ponda, Goa was set up in 1994 to produce:

Wafers

Waffles

The sixth plant at Bicholine, Goa was set up in 1997 for manufacture of culinary
products. Nestle India is now putting up another factory at Pant Nagar in Uttaranchal.
Nestle India will invest over Rs 100 crores in the factory. This is the seventh plant of
15

Nestle India and like the other plants, this plant will also be of international standards.
This factory at Pant Nagar will initially manufacture culinary products including its
very popular MAGGI. The factory will benefit from and will be closely aligned with
the research and Development Facilities of Nestle Group and its proprietary, world
class technology.
Nestle India; the largest food company in the country is continuously looking at new
niches in the market place for its various products.
In milk products Nestle has made a considerable mark. For instance, the company was
the first to introduce a Dairy Whitener with its product 'Everyday'. And till today that
product is a brand leader despite the presence of a host of other brands in the field. IN
the case of Milkmaid condensed milk, Nestle relaunched the product as desert maker
and has seen the sales graph climbing since.
In baby foods, Nestle has made its strong hold with Lactones and Cerelac. Nestle is
also popular in pure ghee segment. Its Everyday pure ghee has gained a quite
satisfactory market share; Nestle has also entered into fitness food products. Nestle
today is a household name. Nestle extended the product line in coffee by bringing in
Dolco, and then Sunrie.
In 1990, NIL entered the chocolate business introducing Nestle Premium chocolate.
Nestls products are sold under brand names such as a Milkmaid, Everyday, Cerelac,
Nescafe, Maggi, Lactones, and clairs etc. It launched the world famous Kit Kat
chocolates in 1995. During the year 1996 Milo the world's largest selling chocolate
energy food drink was launched.

16

MARKETING 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 corporations 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-Ps of the marketing and price
strategies with respect to its products. One comes to the conclusion that NIL has a well
defined roadmap to success i.e. to reach its ultimate objective of realizing customer
satisfaction through value for price products.
PRODUCTS
Quality is the essential ingredients in all of our brands and the reason why millions of
people choose Nestls products every day. Our consumers have come to trust in
Nestls commitment to excellence and turn to Nestle brands to maintain nutritional
balance in a fast paced world.
BABY FOODS
The production of infant food goes right back to the origins of the Nestle Company.
Henri Nestls `Farine Laces was the first product to bear the Nestle name.

17

In 1867 a physician persuaded Henri Nestle to give his product to an infant who was
very illhe had been born prematurely and was refusing his mothers milk and all
other types of nourishment. Nestls new food worked, and the boy survived from the
very beginning, Nestle' product was never intended as a competitor for mothers milk.
In 1869, he wrote; During the first months, the mothers milk will always be the most
natural nutrient, and every mother able to do so should herself suckle her children.
The factor that made baby foods success in the early days of the Nestle' company
quality and superior nutritional valueare still as valid today for the wide range of
infant of infant formula, cereals and baby food made by Nestle'. The World Health
Organization (WHO) recognizes that there is a legitimate market for infant formula,
when a mother cannot or chooses not to breast feed her child. Nestle' markets infant
formula according to the principles and aims of the WHO International Code of
Marketing Breast Milk Substitutes, and seeks dialogue and cooperation with the
international health community and in particular with the WHO and UNICEF, to
identify problems and their solution. Nestls expertise as the worlds leading food
manufacturer
Gained over more than 125 years, is put the disposal of health authorities, the medical
profession and mothers and children everywhere.
Milk based products and baby food contributes to 34% of Nestls turnover. For
ensuring regular procurement of good quality milk, Nestle' has developed a network
around its Moga factory for collection of fresh milk everyday from the farmers. Nestle'
has a dominating 87%market share in the baby weaning foods with its Cerelac and
Nestum brands. Infant milk powder is sold under the Lactogen and Nestogen brands.

18

Brand loyalties

are very high in categories such as infant food and weaving cereals,

enabling the company to command a price premium.

Other milk products include dairy whiteners (21% market share ) sold under the Every
Day and Tea Make brands, sweetened condensed milk and ready to cook mixes for
traditional Indian sweets sold under the Milkmaid brands. The company also markets
ghee (6% market share) under the Every Day) brand. Nestle' has expanded its milk
product portfolio with the launch of new dairy products such as UHT milk, Curd and
Butter. Huge investments arte being made in building a diversified dairy business and
the distribution infrastructure for the same. Milk products sales registered a 10.6%
growth during 2006. The major competitors are HLL with Milkana , Amul with
Amulya , Britannia with Britannia Dairy Whitener, Kwality with Kream Kountry.
Britannia with 11% of market share, Amul with 19%, and HLL with 8%, Kwality with
4% of it, Rest of the market share lies with local players like Nova, Indiana etc. local
players are very active & some of them are operating under the small scale industries.
Nestle' is still the market leader in the long term & is continuously on the 4-Ps to grow
further.

19

DAIRY BRANDS
Nestle' has long been a major player in the dairy industry, originally with well known
shelf stable brands such as Nido, Nespray, La Lechera and Carnation, then building a
strong international presence in Chilled dairy and Ice cream under the Nestle' brand.
Innovation and renovation play a major role in the development of milk based products
as well as of breakfast cereals, managed as a joint venture with General Mills.
The area of nutrition, with its benefits to health and wellbeing, is having a significant
impact on the development of our business. A wide range of proven, science based
solutions such as starter and follow-up formulas, growing-up milks, cereals, eternal
diets, oral supplements and performance foods are actively developed and successfully
brought to market under the Nestle' brand.
BREAKFAST CERAELS
although cereals have been with mankind in form or another for millennia, it was not
until the mid 19th century that scientific research, technological innovation and then
influence of a group of American health reformers, gave rise to the currently foodstuff
we know today as breakfast cereal.
Nestle' has a joint venture with General Mills outside North America, Cereal Pardoners
Worldwide, which is active in more than 80 countries.
The joint venture began in 1990 and its rapid growth has been characterized by
branding and lately the launching of breakfast cereal brands into the fast-growing cereal
bar market.

20

ICE CREAM
There are many myths and stories as to the invention of ice cream: was it Macro Polo
who brought it back from China (along with pasta)? Probably not, considering he most
likely never visited China.
The story of its popularity is however connected with the invention of technology to
make it on an industrial scale and to keep it cold once made. Before refrigeration
techniques, food was frozen with the aid of ice mixed with salt which was either stored
in ice house or shipped from cold countries. But then at the end of the 19th century, both
making and freezing it became easier and together with the invention of the ice cream
cone made the product boom.
Today the United States is the absolute leader in terms of volume consumed but the
highest per head consumers are in New Zealand. Flavors youd never thought of and
yet theyre commercially available:
Sorbets- Smoked Salmon, Tomato, Cucumber Ice-Creams Garlic, Avocado, Sweet
Corn.
The ice cream cone is the most environmentally friendly form of packaging. A system
from Damascus, Ernest E Hamwi is credited with its invention. Apparently during the
1904 St Luis Worlds fair. His waffle booth was next to an ice cream vendor who ran
short of dishes. Hamwi rolled a waffle to contain ice cream and the cone was born.
CHOCOLATE & CONFECTIONARY
The story of chocolate began in the New World with the Mayans, who drank a dark
brew called cacahuaquchtl. Later, the Aztecs consumed chacahoua and used the cocoa
bean for currency. In 1523, they offered cocoa beans to Cortez, who introduced
21

chocolate to the Old world, where it swiftly became a favorite food among the rich and
noble of Europe.
From the beginning, turning raw, bitter cocoa beans into what one 17 th century writer
called the only true food of the gods has been a fine art, a delicate mixture of
alchemy and science. Centuries ago it was discovered that by fermenting and roasting
the beans, an almost otherworldly flavor could be created.
In 1875, after years of trying, a 31-year old candy madder in Vevey named Daniel Peter
figured out how to combine milk and cocoa powder. The result milk chocolate.
Peter, a friend and neighbor of Henri Nestls started a company that would quickly
become the worlds leading maker of chocolate. For three decades the company called
Peter, Cailler, Kohler relied on Nestle for milk and marketing expertise. In 1929, the
almost inevitable merger took place as Nestle acquired Peter, Cailler, and Kohler.
Indian chocolate market is growing day by day. Premium segment is opening upon. The
companies like Cadburys are launching indigenous product made to international
standards of the 20,000 tonnes chocolates market worth about Rs 400 crore, Cadburys
accounts for around 65% of market share followed by Nestls around 23%. Amul has
5% of the share, with the minor players taking the Rest.
Though with much smaller portfolios, Nestle is putting up a touch fight from the treat
for kids, chocolate are now being positioned as near- meal substitute. Thanks to the
initiative taken by Cadbury,s India. The market has become broad based in the sense
that adults are important target segments now. The repositioning of Cadbury,s dairy
milk in 1994 as real taste of life grew the entire category of milk chocolates by 20%.
If facilitated the repositioning of Cadbury brands in the basket.

22

5 STARS: As energy bar, earlier targeted to teenager, before launch of perk 5 star
energy bar positioning made it snacking chocolate with Nestle' pitching Bar-one in
1993 gaian it For those in between times.
MUNCH: Munch is the market leader in the chocolates. It is the largest selling
chocolate in India & is followed by Cadburys Dairy Milk.
ECLAIRS: competing in the chewable toffee segment, Eclairs was relaunched by
Cadburys during the mid-90 with a new name milk-eclairs. Its worth is 4000 tones
now. Nestle' also presents here NESTLE' ECLAIRS. Due to launch of multibrands
Cadbury can naot pay attention to brands like Mr. Pop Candy Lollypop.
KIT-KAT: Kit- Kat which was launched in India in 1995, today leads the chocolate
coated wafer bars category. It has 11.5% share of chocolate market. But Cadburys perk
is with9%.

PRODUCT

PRICE

WEIGHT

KIT- KAT

Rs. 14

36 gm.

PERK

Rs. 10

2x17.5 gm.

Nestle' forayed into chocolate & confectionary in 1990 and has cornered a fourth share
of the chocolate market in the country. The category contributes 14% to Nestls
turnover. It has expanded its products range to all segments of the market the Kit-Kat

23

brand is the largest selling chocolate brand in the world. Other brands include Milky
Bar, Marbles, Crunch, Nestle Rich Dark, Bar-one, Munch etc.
Amul is also competing in this category especially in western regions of India. But
Nestle' still has its own position in the market. The sugar confectionary portfolio
consists of Polo, Soothers and Frootos. All sugar confectionary products are sold under
the umbrella brand Allens. Nestle' has also markeys some of its imported brands like
Quality Street, Lions and After Eight. New launches such as Nestle Choco Stick and
Milky Bar Choo at attractive price points to woo new consumers chocolate
confectionary sales registered a strong 21.5% of growth in 2006 aided by good volume
growth in Munch, Kit-Kat and Classic sales. Nestle' relaunched Bar-One during the
year 1993.
PREPARED FOODS
Convenience foodspackaged soups, frozen meals, prepared souses and flavorings---date back more than a century. With the industrial revolution came factory jobs for
women and less time to prepare meals.
The problem was so widespread that it became the object of intense study in 1882 by
the Swiss Public Welfare Society, which offered a series of recommendations, including
an increase in the consumption of vegetables.
The society commissioned Julius Maggi, a miller with a reputation as an invention and
capable businessman, to create a vegetable food product that would be quick to prepare
and easy to digest. The results two instant pea soups and an instant bean soup --helped launch one of the best known brands in the history of the food industry. By the

24

turn of the century, Maggi & Company was producing not only powdered soups, but
bouillion cubes, sauces and flavorings.
Maggi merged with Nestle' in 1947.
Buitoni the authentic Italian brand, which has been producing pasta and sauces in Italy
since 1827, became part of the Nestle' Group in 1988.
Ready to cook food/ cooking aids are sold under the umbrella brand name Maggie.
Culinary product account for about 14% of Nestls turnover. Maggie is the market
leader in the noodles (45% market share), the Ketchup (43% market share) and soups
(41% market share) categories.
Other products sold under the umbrella brand Maggie, are ready-to-cook gravy/sauces,
soups, seasonings, as well as traditional Indian foods such as pickles and instant snack
mixes (dosa mixes). New taste variants are continuously launched to add variety to the
product offerings.
HLL, Heinz, Knor & Indo Nissin Foods are Major competitors in this category. Gits
mixes, Top Raman, Hot serve, are some products that are in competition to products
under Maggie brand. But Maggie has used Quick and Easy cooking as its Unique
Selling Preposition that worked to distinguish the Nestle' to lie ahead than all brands.
HLL as brand Wagon is the part of our daily life uses creative selling prepositions to
maintain its position as the top FMCG firm in India. Its marketing strategies (including
launch, pricing & distribution strategy are good enough to shatter the competition, so
Nestle' is working as an early worker to remain and lead in the market.
The distribution network of Indo Nissin food is strong enough & it has covered a large
portion of market in very short time. Its distribution network is not very long & the
25

prices are also low. The company had adopted a low budget promotional strategy and is
very fine at merchandising. These all are working together for the good of the company.
Nestle' has the advantage of great brand image & it is actually working for maintenance
and growing it.
BEVERAGES
Nestle' Food Services provides food and beverages professionals with a wide selection
of branded products. Our solutions meet the growing opportunities to service
consumers in out-of-home channels.
Beverages solutions featuring well known consumer brands such as Nescafe, Nestea
and Nesquik as well as host professional brands including Minors, Chief and Davigel
are part of the diverse portfolio of Nestle' Food Services.
Working to meet the need of Food Service operators across a wide spectrum of business
channels such as quick service restaurants supports our commitment to giving
consumers the brands and quality they come to expect and rely on in the home as well
as out of the home.
BOTTLED WATER
Nestle' brgan its entry into the water business in 1969 with a 30% stake in the owners
of the Societe Genele Des Minerales De Vittal. It acquired a controlling interest in
SGEMV in January 1992, and went on in May of the same year to buy the entire Perrier
Group.
In 1992, Nestle' was the first company to dare to launch a mineral water, Valvert, in five
different countries at once. Its originally lied in the use of an all-new plastic, P.E.T.

26

(Polyethylene teraphthalate), which is stronger and more elastic than the PVC used
since 1968. Besides P.E.T. is recyclable.
By the end of 1997, the group was present on every continent, and the purchase of San
Pellegrino gave it the leadership in the Italian market. In 1998 f or the first time in its
history, Nestle' associated its name with bottled water: Nestle Pure Life.
The brand was launched in Pakistan and soon appeared in Brazil, followed by
Argentina, Thailand and Philippines, China and Mexico in 2000. in 2001 India, Jordan,
and Lebanon followed and in 2002, Egypt, Uzbekistan and then United States.
Nestle Pure Life is drinking water that has been treated and rematerialized using a
standardized industrial process to ensure purity and quality and is marketed in emerging
countries.
A second product with the Nestle' name was launched in May 2000, this time in six
European countries: Nestle Aquarelle. A natural spring water currently from nine
different springs in France, Germany, Belgium, Hungry, Italy and Spain, Nestle'
Aquarel also uses the multi-source concept to satisfy new consumer expectations,
especially for water with a low mineral content that the whole family can drink.
In April 2002, the group changed its name to Nestle' Waters, a token of Nestle' decisive
commitment to the bottled water market, which now represents 9% of its sales. Today,
Nestle' Waters is established in 130 countries and markets about 70 different brands.
The group is able to offer top quality brands ad innovative packaging to meet the
individual needs of the water consumer all over the world, whenever, wherever and
however thanks to the wide variety of its offer in terms of distribution and product mix.
PETCARE
27

Nestle' entered the pet care business with the purchase of carnation in 1985, and we
consolidated our position in Europe with acquisition of the spillers brand in 1998, and
further with the acquisition of Ralston-Purina in 2001 creating Nestle' Purina Pet Care.
Carnation for its part developed the Friskies brand in the United States in the 1930s and
in selected markets in Europe and Asia since the 1960s. Today Nestle' is wellpositioned with a balanced portfolio of internally developed and recently acquired
brands.
Technologies to develop and add value continually for pets and their owners are
engineered into our current product range. These include state-of-the-art nutritional
innovations, such as products which help maintain feline urinary tract health or
innovations for the most discriminating of pets and their owners. Nestle' has already
become an industry leader and we continue to develop our international presence.
CONSUMER SERVICES
At Nestle' we are committed to offering consumers high-quality food products that are
safe, tasty and affordable. The Nestle' seal of guarantee is a symbol of this
commitment.
We also believe in maintaining regular contact with our consumers. This applies both to
how we present our products and to how we address our consumers questions and
concerns. When Henri Nestle' prepared his first boxes of infant formula for sale, he put
his address on the packages so people would know where to go if they had questions.
Today our consumer relationship panel with the words Talk to Nestle' expresses the
same commitment.

28

This is why we have a worldwide Nestle' consumer services network devoted to caring
for our consumers. Our people have expertise in a wide range of areas such as nutrition,
food science, food safety and culinary expertise. They provide the prompt, efficient and
high quality service that consumers expect from Nestle'.
In addition we teach them talk with consumers and above all, to listen. Listening helps
us to understand what people want. Nestle' uses the insights gained from relationships
with consumers to driver product development.
At Nestle' we care for our consumers because our success depends on meeting their
needs and expectations. Through listening and understanding we can make products
that they will want to use all through their lives.
PROMOTION
Promotion is an attempt to influence customers. Its aim is inform & remind the
prospective consumers of the companys offer & to advocate the cause of its production
in the minds of its audience. Thus informing, reminding & advocating about the
companys product are real purpose of the promotion component of the mix.
NIL has rightly understood the production of a good product is not enough to ensure
success in the market, unless target customers are aware of its existence, features and
products. So company has framed a very strong and very wide communication plan.

ADVERTISING

29

NIL is associated with MUDRA advertising company in India. It has properly studied
the market and developed the commercials in several languages. NIL has booked spot
for the advertising in almost all the channels.
EXHIBITIONS & TRADE SHOWS
It also participates in trade shows & exhibitions.
IN 1997, at Jawaharlal Nehru Stadium in an exhibition NIL displayed its all old and
new products. This was the time when MILO was launched in India.
AHARA 97, Here Nestle' India Ltd. presented its wonderful world of Nestls recipes
along with its products. It also exhibited the various to make Maggie tastier. This shows
that Nestle' never leave its product even if it is market leader & is the good source of its
revenue.
FOOD EXPO 98, organized by CII & attended by over 100000 people. The Mumbai
branch of NIL ensured high visibility for its products like products under Maggie
brand, MILO & chocolates by setting the venue ablaze with Nestls hues Vic banners,
umbrellas posters & product displays.
INTERNATIONAL FOOD CONFEDERATION 1998: IFCON provided opportunity
for the leading, international food scientists, technologists & research institutes to
reflect massive change sweeping across the food processing sector.
FOOD EXPO 1999:
In October in Chicago NIL participated there also.
CHILDREN SPORT MEET 98:

30

At DPS R. K. Puram children between age group of 4-13 years put their best foot &
arm forward. Attired in colorful MILO T-Shirts & Caps they participated in 12 events.
FREE GIFTS
Like giving school Kit i.e., pen scale etc, with Maggie.noodles & chocolates, Free
Cricket bag or a sport watch, badminton racket, bag etc on the payment of a very
minimal amount of Rs. 10 with Milo.
OTHERS
Some other examples of exhibition in which NIL participated are:
India international trade fare (IITF).

Nestle' Hungama 1998.

Maggie Display Contest.

Splendor 1999.

Boarding School Development Campaign.

Moga Summer School Camp.

The competitors of NIL are also very Active and they also participate in these events
and sponsor some event in there own ways & methods. HLL participates in most of the
regional trade shows through its retailers. It displays its new products at large. HLL is
the 1st largest company of India in terms of advertising & promotional expenditure. It
also invents largely on window display contests retail level.
Amul promotes its products by using emotional appeal in order to use the emotional
aspects if Indian citizen. It uses kiosks and hoardings to promote its product range. The
31

promotional expenses of Amul are not so big as that of the MNCs but still it is a
respected firm in our eyes.
Cadburys under its promotional campaign that are designed by Ogilvy & Mather the
adv shows the power of positioning with emotional benefits and it really works for
Cadburys & leaves it with dramatic increase in sales.
PLACE:
Physical distribution is also called as market logistics. It involves:
Planning Implementing
Controlling the physical flow of the materials and final goods from point of origin to
point of use to meet customers requirements at a profit. Over the last several years,
NIL has introduced a number of new products. These include: Kit-ka, Polo, Milo,
Cerelac, Maggie, Dosa Mixes, Bar-one etc.
The success of these products is in part based in Nestls nation wide distribution
system and its strong relation with channel members, which allow it to quickly place
new products in the market.
Channels of distribution tend to be traditional for a number of product categories. For
i.e. in the beverages and food industry, manufacturers normally sell through
wholesalers, who deal with retailers. But the distribution strategy of Nestle' is not a
traditional one. The products manufactured in various production units are passed on to
C&F agents. Practically each C&F agent covers just one state. The products are then
sent to various distributions, the company itself has defined the particular area to be
covered by each distributor. Salesman from the distributors office then approaches
various retailers of their area & book the order. The products are delivered to on the
32

next day as against the orders. For instance MILO is manufactured at Karnataka. C&F
agents located at various places collect the product from production unit. In Delhi C7F
is in Mandali Village, Trans Yamuna. The agent in turn send the products to distributor
and then to retailers.
The distribution channel includes 6, 00,000 outlets in 3000 towns throughout the
country, serviced by 39,000 distributors. Practically every shop dealing in consumer
goods is an outlet for Nestle'. This is formulating its marketing strategies.

33

DISTRIBUTION NETWORK OF NIL

MANUFACTURER

C & F AGENTS (1%-3-%

Margin)

SUPER STOCKIST (3%-6%)

STOCKIST (3%-5%)

DISTRIBUTOR (4%-7%)

ORGANISED RETAILER (6%18%)

34

NESTLES MOST LIKED PRODUCTS

PRODUCTS

PERCENTAGE

CHOCOLATE

10%

COFFEE

28%

MILKMADE

5%

MAGGIE

40%

MINERAL WATER

2%

INFANT FOODS

5%

SOUPS

4%

SAUCES

6%

35

10% people like chocolates as Nestls best product. Among chocolates the Kit-Kat &
Munch are the most liked ones. Munch is the largest selling chocolates in Indian
chocolate market followed by Cadburys Dairy milk. Coffee is considered as the best
product of Nestle' by 28% of respondents. They like the taste & aroma as it best quality.
Milkmaid is liked by 5% of people & this crowd involves women & surprisingly
children. Maggie noodle is the most loved product by 40% respondents especially
mothers & children as they consider it as the all time dish (Fast to cook, good to eat).
Infant products are liked by 9% of respondents, most of them were mothers but, it is
very interesting to quote that some mothers them & their elder children liked the taste
of cerelac & it increased the purchasing frequency of the product.

REASONS TO LIKE NESTLES PRODUCTS

36

FEATURES

PERCENTAGE

COLOR

2%

TASTE

64%

PACKAGING

4%

PRICE

20%

ADVERTISEMENT

10%

Most of the respondent (64%) liked the products because of the great taste of products
like Maggie, Munch , Kit-Kat, Coffee, Frappe, Slim Milk & sauces. 2% of the
respondents say that they like the color of the product most as it shows the freshness of
the product. 20% people are satisfied with the price.
BRAND LOYALTY FOR NESTLES
LOYALTY STATUS

CONTRIBUTORS

HARD CORE LOYALTY

53%

SHIFTING LOYALS

19%

SWITCHERS

28%

37

38

BRAND LOYALTY FOR NESTLE

Brand loyalty is very high for Nestle' as 53% of respondents denied to switch over to
other product, when any gift or scheme is offered by the competitors. Products that
have highly loyal customers are Maggie noodles, coffee, munch & everyday. People
also like & are loyal for sauces and it is showing an increasing trend (Heinz recently
started the Diwali offer to give 500 gm only for Rs. 39. people responded that the offer
wasnt so interesting to switch from Maggie & also it was a short-term offer. 19%
respondents said that they will some time switch over if they find a really attractive
offer. They also said that Nestle' is the company that uses least of the marketing
gimmicks to promote its products & people believe in quality of Nestle'. 20% people
said that they switch in most of the cases.
SHOULD NESTLE IMPROVE SOME OF ITS PRODUCTS
PRODUCTS

OPINION

CHOCOLATES

63%

SOUPS

21%

COFFEE

15%

MAGGIE

1%

39

63% of respondents want the company to work on the taste of Milky bar and Classic.
21% people want the soups to be offered in more flavors, at present
there are 12 flavors. They also want to make the soups creamier.
16% people say that Nescafe is the most powerful brand of Nestle', but they say that
prices are too high to afford, although Nescafe red mix is a big relief but it is not so
creamy.
QUALITY WISE POSITIONING
Quality wise Nestle' and Amul are the most admired companies. They blamed
Cadburys because of the recent issue of worms in the Cadburys chocolate. They say
that Nestls quality is trusted.
COMPANY

OPINION

NESTLE

37%

BRITANNIA

21%

CADBURAYS

12%

AMUL

30%

40

41

AVAILABILITY
Nestle' produces the products that are part of most of the peoples daily life. So
availability of fresh Nestle' product is smooth.
COMPANY

OPINION

NESTLE

26%

AMUL

11%

BRITANIA

28%

CADBURYS

35%

42

PRICE:
The pricing policies of Nestle' regarding products like Coffee, Dahi & Milk needs
revision.
PRICE WISE COMPARISON
COMPANY

OPINION

NESTLE

23%

AMUL

38%

BRITANIA

21%

CADBURYS

18%

43

MARKET SEGMENTATION AND TARGET MARKET SELECTION

Market segmentation and target market selection have an intimate relationship with
market strategy formulation.
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 Nestls sales
peaked out in Bombay, during its initial launch).

44

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 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 emulators 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.

45

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
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,
Cadburys 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.

46

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].
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 .
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 .

47

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 .

48

DIRECT COMPETITION

NESTLE, CADBURY & AMUL

At present there are three major players Nestle, Cadburys 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:
CADBURYS INDIA LTD.
Cadburys India Ltd, has been in India since 1948. Its brands: Dairy Milk, 5 Star, Gems
and Chocolate clairs 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.
Cadburys 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 Cadburys factories. This cash is exactly double of whats 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.
CADBURYS DAIRY MILK (CDM) - THE FLAGSHIP BRAND

49

CDM, the oldest of Cadburys 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 Cadburys Dairy Milks
market share stood at 25 percent with sales rising by an average 40 percent per annum.
Besides CDM Cadburys has a number of endorser brands such as FruitnNut, Nut
Milk etc. Even though contribution of these brands to the companys 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,
Cadburys clairs, 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. Its first
offering Googly.
NESTLE INDIA LTD.
Nestle India Ltd. has been in India for more than 35 years now. The worlds largest
marketer of chocolates (became world number one when it acquired Rowntree
Macintosh of the UK) - Nestle, made its foray in the Indian chocolate Industry in
November 1990. It launched three products - the milk chocolate, the bitter chocolate
and Crackle (a crunchy chocolate) - in the slabs category and Bar One in count lines.
Cadburys been quick to react, and launched a whole host of products in succession: All
Silk milk chocolate, Creamy Bar, and a new version of 5 Star.
Nestle, in the beginning did not have its own manufacturing facility. It had an alliance
with Campco to manufacture chocolates. Later, in 1995 a state-of-art manufacturing

50

plant was set up at Ponda, Goa at a cost of Rs. 50 crores. This unit took care of the
entire Kit Kat production. However, the production tie-up with Campco still continued.
LAUNCH OF KIT KAT
Kit Kat, one of worlds most popular chocolate, was launched in India in 1995. Within
months of its launch, it fulfilled every target Nestle had set. Its launch was
accompanied by the launch of Cadburys Perk in order to counter Kit Kat and safeguard
the flagship brand CDM. Kit Kat has been able to define a new segment in the
industry in the form of the wafer enrobed any time snack.
Kit Kat outsells Perk in the outlets where both are available. In the crucial markets of
Bombay and Delhi both are running neck-and-neck. It has even said to have threatened
the mother brand, Cadbury Dairy Milk.
NESTLS NEW LAUNCHES
BRAND

LAUNCH

Allen Splash(Sugar Candies)

Select Cities

After Eight Mints

Delhi & Mumbai

Lion Wafer Bars

Delhi & Mumbai

FUTURE OUTLOOK
Focus will be on chocolates and confectionery followed by culinary products which
include the Maggi range and coffee.

51

AMUL
Gujarat Cooperative Milk Marketing Federation(GCMMF) launched the Amul
Chocolate way back in 1974. With its milk chocolates, Badam Bar, Crunch and Fruit n
Nut has a market share of about 5 %.
Due to lack of focus and with multinationals spending huge amounts on advertisements
its market share has been falling.
GCMMF is involved in a large number of products, of which chocolates constitutes just
1-2 %. The company is not concentrating much on its chocolate business. As of now,
Amul chocolates are not on companys focus.
Interestingly, Kaira District Cooperative Milk Producers Ltd.(KDCMPL) - the
manufacturer of Amul chocolate - is selling whatever it produces. Limited capacity is
also a reason for the share it has.
However, Amuls memorable advertising campaign positioning it as a A Gift for
Someone You Love, saw the sales graph rising. Amuls sales grew by 39% then.
Eversince, Amul has maintained a low profile.
It can further be seen that Amul (SEE FINDINGS).
OTHER DOMESTIC PLAYERS
The only other organized player in the market is Campco, which has an insignificant
share of the market. It is supplying its production to Nestle. Apart from this Campco
did come up with its new brands like Treat. But crunch of resources grossly effected the
pace of the company and is hardly to be heard of today.

52

IMPORTED BRANDS
Considering the high growth potential, various multinationals wanted to set up facilities
in India (Mars being one of them). However, shortage of cocoa, seasonality in demand,
and the absence of a proper cold chain deterred them from investing in India. The
government also moved the import of chocolates from special item list to open general
license category. The duty structure was also reduced. This resulted in making import
of foreign brands easier and price competitive.
Due the above, Mars Inc.-the US giant, who had decided to set up facilities in 1995(the
site for which was also selected), decided to postpone its investment plans.
An alternate strategy was formulated to import Mars chocolate brands into India
through Sarura Business (I) Ltd. Sarura, which came into existence about an year ago,
imports Mars brands and sells through its own distribution network. Highlights of the
strategy being followed are mentioned below:

Imports Mars brands every 40 days, after careful demand analysis. Takes 20 to 22

days to reach India.

DUTY STRUCTURE
Customs Duty

40 %

Counter-vailing Duty( a form of excise)

2%

Special Duty(Surcharge)

3%

The import duty on finished product is expected to come down to 20-25 percent in a
phased manner.
OTHER FOREIGN BRANDS

53

Nestle has also recently launched its foreign brands by importing them into India.
These include Lion and After Eights.
FUTURE OF THE IMPORTED BRANDS
The future of this segment is highly dependent on extraneous factors like, government
policies regarding import of chocolates and the duties structure therein. Any movement
can make these players price competitive. In December 1997, a no. of products
reaching expiry are said to have been dumped into India due to favorable import policy
(this is when foreign brand imports like Saruras products came into the market).
INDIRECT COMPETITION
Since the target audience includes, consumers of not only chocolates but also of
biscuits and confectionery, it faces indirect competition from these product categories.
Also, other confectionery products like toffees, candies etc have proved to be indirect
competition (however would be limited since we are targeting small kids segment).

54

ORGANISATIONAL STRUCTURE

55

VISION, MISSION, PHILOSOPHY

Vision Statement
Your VISION defines your long-term dream. It should not be achievable. That may
sound ridiculous, but the objective is for your vision to always be just slightly out of
your reach. It's what you constantly strive to attain, and it becomes your reason for
being.

Mission Statement
At Nestl, our research makes it possible for everyone to enjoy better food for a better
life.
Good Food is the primary source of Good Health throughout life. We strive to bring
consumers foods that are safe, of high quality and provide optimal nutrition to meet
physiological needs. In addition to nutrition, health and wellness, Nestl products bring
consumers the vital ingredients of taste and pleasure.
As consumers continue to make choices regarding foods and beverages they consume,
Nestl helps provide selections for all individual taste and lifestyle preferences.
Research is a key part of our heritage at Nestl and an essential element our future. We
know there is still much to discover about health, wellness and the role of food in our
lives, and we continue to search for answers to bring consumers Good Food for Good
Life.

56

Promote awareness of the effect of our lifestyle both on ourselves and on our
environment.

Exist as a financially successful, non-hierarchical, democratic organization where

workers participate in the creation and running of their working Environment, as an
example to encourage others to do likewise.

Provide an environment that encourages and helps people to develop and achieve
their potential.

Actively support co-operatives, fair trade, environmental issues and community

activities.

Nestls Philosophy
When Henri Nestle introduced the first commercial infant formula in 1867, he also
created a symbol of the Bird's nest, graphic translation of his name, which personifies
the company's business. The symbol, which is universally understood, evokes security,
motherhood and affection, nature and nourishment, family and tradition. Today it is the
central element of Nestls corporate identity and closely parallels the company's
corporate values ad culture.

57

PERFORMANCE
Nestle India; the largest food company in the country is continuously looking at new
niches in the market place for its various products.
The Nestl Group's consolidated sales for the first three months of 2007 amounted to
CHF 19.7 billion. In constant currencies, sales increased by 6.3%, reflecting organic
growth of 4.6% (real internal growth 2.5%, pricing and others 2.1%), as well as a small
contribution from acquisitions, net of divestitures. As a result of the strong Swiss franc,
the adverse foreign exchange effect was 13.8%.

58

PRODUCTS

59

60

OUR BRANDS
Milk Products & Nutrition
NESTL EVERYDAY Dairy Whitener
NESTL EVERYDAY Slim
NESTL EVERYDAY Ghee
NESTL Milk
NESTL Slim Milk
NESTL Fresh 'n' Natural Slim Dahi
NESTL Jeera Raita
NESTL NESVITA
NESTL NIDO
NESTL MILKMAID
NESTL MILKMAID Fruit yoghurt
NESTL MILKMAID FUNSHAKES

Beverages
NESCAF CLASSIC
NESCAF SUNRISE

61

NESTL MILO
NESCAF Mild

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
The company is also setting up CAF NESCAFE and COFFEE CORNERS across metros
and mini-metros in India.
NESTL: 4.6% ORGANIC GROWTH IN FIRST QUARTER

Group-wide organic growth of 4.6%

6.3% sales increase at constant exchange rates

Swiss franc sales down 7.5% as a result of a 13.8% negative foreign exchange impact

The overall organic growth of 4.6% in a difficult quarter, aggravated by late Easter, is mainly
62

due to our successful drive for innovation and our strong market positions. Our consolidated
sales clearly took a hit from the strong Swiss franc, but we expect this effect to taper off in
the course of the year. We are confident that the rest of the year will bring an acceleration of
growth and that we will therefore achieve our stated objective of improving the Group's
performance in constant currencies for 2007."
The Nestl Group's consolidated sales for the first three months of 2007 amounted to CHF
19.7 billion. In constant currencies, sales increased by 6.3%, reflecting organic growth of
4.6% (real internal growth 2.5%, pricing and others 2.1%), as well as a small contribution
from acquisitions, net of divestitures. As a result of the strong Swiss franc, the adverse
foreign exchange effect was 13.8%.
Foreign exchange factor held back consolidated sales, and real internal growth was impacted
by the late Easter date and the competitive situation in Japan. Additionally, in keeping with
the Group's policy of ensuring margin improvements, Nestl raised prices in several product
categories to reflect cost increases. Nevertheless, the Group expects its strong brands, its
broad distribution network and its capacity for innovation to lead to an improvement in sales
growth as the year goes on.
SALES BY MANAGEMENT RESPONSIBILITIES AND GEOGRAPHIC AREA
Jan.Jan.-March
March
2007
2006
In CHF million
Zone Europe
6'778

RIG

Jan-March 2007
%

Jan-March 2007
%

+1.8

-0.4

+4.8

+1.9

'628

Zone Americas
5'978

Organic Growth

'154

63

Zone Asia, Oceania and

Africa

3'291

'633

1'719

'740

Nestl Waters
Other Activities *
Total

1'947

'156

9'713

1'311

+3.2

+1.9

+10.9

+10.7

+9.4

+8.4

+4.6

+2.5

The growth rate in Western Europe reflects the importance of chocolate and ice cream to that
Zone, both of which were impacted by the late Easter date. There should be some
improvement, therefore, in the first half. Canada and the US performed well, but there was
some slowness in Latin America. Importantly, however, the key markets of Brazil and
Mexico both achieved positive RIG and organic growth. Most Asian markets are growing at a
good rate, with Greater China outperforming its ambitious target of double-digit RIG. In
Japan measures were taken to improve the quality of sales in the ready-to-drink business. The
water business and Alcon again delivered good growth, capitalizing on their leadership
positions in their respective markets.
SALE

In CHF million

64

2006
2007

Among the product groups, beverages, especially soluble coffee and coffee mixes under the
Nescafe brand, and powdered beverages, under brands such as Milo and Mosque, did well, as
did the specialty roast & ground coffees. There was good progress also in the chilled and the
frozen culinary sector; the recently acquired Chef America achieved double-digit growth. The
performance of chocolate and confectionery was impacted by the late Easter, as well as by
price increases.

65

OBJECTIVES
For every problem there is a research, as all the researches are based on some
objectives and my study is also based upon some objectives and these are as follows:

To study the Marketing Strategies of Nestle in competitive market.

To find out the competitive activity of Nestle in Indian market.
To analyze the key competitors of Nestle Food India Ltd.

66

RESEARCH METHODOLOGY
As mentioned earlier, the objective of the study is to formulate a Marketing Strategy for
any new entrant in the Indian Chocolate Industry. While recommending the said
strategy detailed information from both primary and secondary sources was collected
and analyzed. This included:
PRIMARY SOURCES
Four level primary information collections were undertaken. These were:
1. In order to get relevant information regarding competition, executives of the
following chocolate players in the market were interviewed: To analyze buying
behavior and in order to gain an insight into the buyer need-satisfaction level, a
questionnaire was formulated. These included pan shops, grocery shops, bakeries,
departmental stores, etc.
SECONDARY SOURCES: A number of secondary sources of information were used.
These were:

Confederation of Indian Industries reports, PHDCCI & FICCI library.

Internet websites Of Cadburys, Nestle and indiainfoline.com, askjeeves.com

Extensive

use

of

secondary

information

in

the

form

of

magazines/journals/newspapers clippings, such as Business World, Business Today,

Business India, A&M, Economic Times, etc.

67

DATA TYPE
In this research the type of data collection is:
Primary data
DATA SOURCE
The sources of collection of Primary Data are:

Questionnaire

Observation

Face-to face interaction

SAMPLING PLAN
It is very difficult to collect information from every member of a population. As
time and costs are the major limitation that the researcher faces.
The sample size consisted of males/females between the age group 15-40 years.
The segment was selected from upper middle class, upper class and middle
class.
The sample was drawn on random basis from different areas covering gurgaon,
NCR
SAMPLE DESIGN

Convenience & stratified random sampling methods was used to collect the data
about the features, expectations, satisfaction, problems etc. the customers.

68

Size of sample:
A final sample of 50 prospective consumers is taken from gurgaon, NCR.

69

THE METHODOLOGY ADOPTED WAS AS FOLLOWS:

INDUSTRY SCENARIO SKETCH (UTILIZING SECONDARY INFORMATION)

EXTENSIVE INTERVIEWS HELD WITH PRIMARY/SECONDARY SOURCES

(COMPANIES/CHOCOLATE MANUFACTURERS ASSOCIATION)

INTERVIEW WITH EX-DISTRIBUTOR OF NESTLE INDIA LTD

EXTENSIVE RETAILER INTERVIEWS IN NARAINA INDL. AREA

FORMULATION AND ADMINISTRATION OF A QUESTIONNAIRE

FORMULATION OF THE RECOMMENDED STRATEGY ON THE BASIS OF THE

ABOVE MENTIONED PRIMARY AND SECONDARY INFORMATION

70

ANALYSIS

The Analysis shows the relationship between critical variables of the company. The
matrix has a wider scope. The TWOS matrix is a conceptual framework for a
systematic analysis that facilitates the external threats and opportunities with the
internal 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 TWOS 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.

71

The TWOS matrix starts with the threats because in many situations a company
undertakes strategic planning as a result of a perceived crisis, problems or threats.

SWOT ANALYSIS
STRENGTHS

High brand equity consumer & dealer regarding Nestle' as company

delivery quality product.

Company processes an extensive powerful distribution network.

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.

72

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
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.

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.
73

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
their capacity expansion.

OPPORTUNITIES

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.
74

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.

THREATS

Tough competition especially in premium segment.

Characteristics of premium segment that it is never brand loyal.

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

Mere availability of best sellers from the parents 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.

Recent turmoil and increased internal politics together with lack of apathy from
their parent company is going to affect the performance of the company in the
short to mid term.

Because of the present Swadesi prime and changing public opinion towards
MNCs will affect NIL's future

75

AWARENESS - PURCHASE PREFERENCE

TOP OF MIND AWARENESS

90
80
70
60
50
40
30
20
10

Nestle

Cadbury's

Crunch

Break

Bar One

5 Star

Amul

Perk

KitKat

Foreign brands

CDM

Fruit n' Nut

Picnic

Basically most of the customers influenced by the highly effective advertisement

impact of any particular brand. But sometime they prefer quality, taste and other
attributes. Here we can see that people aware about the kitkat and least about break.

76

PURCHASE PREFERENCE:

WHAT INFLUENCED YOU TO BUY THE

SELECTED BRAND

90
80
70
60
50
40
30
20
10
0
Advertising

Word of Mouth

Attractive
Packaging

Dealer

Shop Display

Family, friends,
relatives

Most of the custumers are influenced by the advertising, but sometimes they also
influenced by other means like attractive packaging, word of mouth, shop display and
information provided by the relatives and dealers.

77

PURCHASE BEHAVIOUR : WHAT ARE THE DIFFERENT REASONS

FOR PURCHASING ?

70

60

50

40

30

20

10

0
Occasion led

As a gift

Casual Purchase

Energy Snack

The highest number of purchase is done casually, sometimes it is done by the

customers as a gift, sometime occasionally basis, and few customers purchases it as
energy snack.

78

I OFTEN PICK UP CHOCOLATES WHILE I MAKE OTHER PURCHASES

REINFORCING IMPULSE PURCHASE

No
24%

Yes
76%

In the concept of purchasing a chocolate brand mostly people purchase it

when they purchase the other items, very less no. of people purchase it
specifically.

79

ON THE BASIS OF TASTE & PREFERENCE, SIZE USAGE WHAT SIZE OF A

CHOCOLATE YOU NORMALLY BUY----

70

60

50

40

30

20

10

0
15/25 gms

35/40 gms

80 gms

Super saver - 105

gms

200 gms

Normally customers purchase medium size chocolates which are available in 30 to 40

gms. Pack. In very rare cases customer like to purchase very small pack and very large
pack of chocolates.

80

SUITABLE PRICE FOR A 40 GMS CHOCOLATEPRICE PERCEPTION. THE

PRICE OF MOST PREFERRED BRAND IS----

Below Rs. 10/14%

Between Rs. 14/-&

Rs. 20/29%

Between Rs. 10/& Rs. 14/52%

Greater than Rs.

20/5%

Most of the customers approx 52% like to purchase 40 gms. Chocolate in Rs. 10 to 14,
and very least no. of customers like to purchase it below Rs. 10.

81

PRICE SENSITIVITY (ELASTICITY). IF PRICE OF YOUR FAVORITE BRAND IS

REDUCED, YOU WILL BUY MORE OF IT

There is a mixed response but majority of the customers prefered to purchase more
chocolates when its price had been reduced.

82

PRICE SENSITIVITY. IF THE FAVORITE BRAND IS FEW RS. EXPENSIVE

WOULD YOU TO GO FOR IT

Mostly customers purchase their favourite brand, if it becomes few rs expensive.They

dont want to change their brand because it had become expensive very few customers
think beside it.

83

MOST LIKE ADVERTISEMENTS

250

200

150

100

50

0
Perk

KitKat

CDM

Picnic

Amul

5 Star

Mostly customers like the advertisement of kitkat & cadbury dairy milk.very few
customers like the advertisement of amul & 5 star.

84

WHETHER, SALES PROMOTION WOULD AFFECT YOUR PURCHASE

DECISION

Sales promotion technique hepls in increasing the sales of the product & it definitely
influences the purchase decision of the customers.

85

BRAND LOYALTY IF A PARTICULAR BRAND IS NOT AVAILABLE, YOU WILL :

If particular brand of a particular product is not available then most customer shift to
another brand , some customer o to another dealer for that brand & some drop the idea
to purchase that product.

86

IF YOU WANT TO BUY A WAFER CHOCOLATE, SAY KITKAT AND IF IT IS

NOT AVAILABLE, YOU WOULD SETTLE FOR A
BAR/MOULDED CHOCOLATE SAY 5 STAR OR CDM

Most people purchase the bar/moulded chocolate if their favourite brand of their wafer
chocolate is not available.

87

PLACE RELATED----OUTLET PREFERENCE

600

500

400

300

200

100

0
P an shop

Sweet Shops

Gift shops

Stationary
shops

Ice-cream
parlours

Fast Food
joints

Milk booths Restaurants

Exclusive
chocolate
parlours

Road-side
Kiosks

Mostly customers prefer to purchase chocolates from exclusive chocolates parlour &
then the no. came of those customers who would like to purchase from ice cream
parlours & fast food joints & very few customers wants to purchase from milk booths.

88

DEMOGRAPHIC PROFILE OF THE RESPONDENTS

AGE

Between 25 yrs &

35 yrs
19%

Between 35 yrs &

45 yrs
19%

Between 2 yrs &

17 yrs
29%

Between 18 yrs &

25 yrs
33%

According to demoraphic profile, the highest no. of customers is from the age group of
18 to 25 years i.e.33% & least from the age group of 25 to 35 yrs & 35 to 45 yrs i.e.
19%.

89

According to sex

MALE
FEMALE

According to gender, females consume more chocolates than males.

90

MARITAL STATUS

As we can see acc. to marital status unmarried peoples consumes more chocolates
i.e.67% in comparision to married people i.e. 33%.

91

OCCUPATION

According to the occupation, highest no. of people who consumes chocolates are
students & then the professionals .

92

MONTHLY INCOME

Less than Rs.

5000/10%

More than 12000/52%

Between Rs. 5000/& Rs. 8000/14%

Between Rs. 8000/& Rs. 12000/24%

According to monthly income, 52% people are those who have salary more than rs
12000 & 10% people comes from who have salary less than rs 5000.

93

FINDINGS

Nestle wants to go rural as many FMCG companies are doing so, including its
competitors.

Management decision problem is whether to take step to carry out the

penetration through wholesalers or not?

Management is unaware of the current level of penetration in the up-country

market?

If Penetration through wholesalers is possible then how to go about it?

The customers can be tapped directly through the distribution channel or not or
penetration en-route wholesalers would be the optimum solution?

What is the profile of the customers to have the knowledge regarding the
consumer behavior and their buying behavior?

In line with the Company's objective to provide superior value in every product
category and market sector, efforts were focused to provide quality products to
customers at attractive price points. While the Company continued to generally
maintain price points across all the product categories, the pricing of some products
were also reduced to meet consumer expectations.
Nestles domestic sales registered a 18.5% volume growth during the first 9 months of
2006. Exports registered a 31% yoy volume growth. In value terms, domestic sales
grew by 15.8% yoy to Rs12.1bn, while Exports grew by 26.4% yoy to Rs2.4bn

94

.RECOMMENDATION

Although product line is very good & has good width & depth, but NIL should try
to make stronger brand equity in Dairy products, Amul is still leader.

It should work more on concept of CRM (Making new customers & retaining old
ones.

Cash discounts must be given.

More competitive pricing to be done in the premium segment.

Increase their sales force to make more frequent visits to the sales person.

Should also look for rural markets.

Quick handling of problems of stockiest & dealers.

Online ordering facility & electronic payment through website can save a lot of
time.

Due to sluggishness in a FMCG market, most of the companies are under pressure
to maintain volume & market share. NIL should draw out an action plan to improve
sales through new product launches.

Company should concentrate on all round cost saving & productivity gain, to
neutralize the adverse impact of increased excise of confectionary.

95

The market strategy of the firm is a complete and unbeatable plan or an instrument
designed specially for attaining the marketing objective of company. The formulation
of the marketing strategy consists of two steps:1. Segmentation & target market selection.
2. Assembling the marketing mix.

96

LIMITATIONS

1. The study was limited in its scope because of the relatively short time available
(Two months ) for completing the whole study including literature survey, collection of
data, analysis of data. Due to constraints of time and opportunity, the sample for the
study had been collected from few selected areas. For the sake of simplicity few
variable were taken into account.
2. The Data which has been collected from Consumer might not be very correct to take
strategic decision as they may hide a lot of information.
3. Lack of interest in giving responses by Consumer.
4. The sample size which was taken is too small to make a universal statement.
5. The conclusion can be affected by some of the extraneous variables like
Promotional offer and new launch of product.
6.Lack of sufficient information about the company because we cannot access
confidential data of company.
7. Lack of the instruments to find out the reasonable outcome.
8. Lack of proper experience.

97

ANNEXURES

QUESTIONNAIRE

1.

Do you consume chocolates?

YES / NO

2.

If yes, what all brands do you normally buy?

3.

How often do you buy chocolates?

(No.) chocolates per day / week / month (please tick)

4.

What brands of chocolates are you aware of?

5.

Please rank the following attributes in a chocolate on a scale of 1-7 according to

their importance to you? (1-most important, 7-least important)
Taste

98

 Quality
Packaging
Price
Flavor
Add-ons (Wafers, nuts, etc.)
Brand Image

6.

I often pick up a chocolate while I make other purchases.

YES / NO

7.

What influenced you to buy the above stated brand(s)?

Advertising
Word of mouth
Attractive Packaging
Dealer
Shop Display
Family/Friend/Relatives
Any Other (Pls. Specify)

99

8.

How do you rate the idea of chocolates being made available at the following
outlets.(Please rate on a scale of 1-5, where 1 is most preferred and 5 is
least

preferred).

Pan Shops
Sweet Shops
Gift Shops
Stationary Shops
Ice-cream Parlors
Fast Food Joints
Milk Booths
Restaurants
Exclusive Chocolate Parlors
Road-side Kiosks

9.

If a particular brand is not available with the retailer, you will Drop the idea of buying a chocolate
Go to another retail outlet
Try another (competitors) brand

10

From where you mostly want to purchase chocolate ?

100

11

General stores

Retail outlets

Shoping mall

How much you want to spend to purchase the chocolates?

510

1025

35--50

101

BIBLIOGRAPHY
Books
Kotler Philip (2004); Marketing Management ;Pearson Education Pvt. Ltd.
Ramaswamy V.S. and Namakumari S. (2002); Marketing Management Planning
Implementation and Control; McMillan India Pvt. Ltd.
Al Ries (1996), FOCUS, Harper Collins Publishers Ltd.
David A. Aaker (1991), Managing Brand Equity, The Free Press.
David A. Aaker (1996), Building Strong Brands, The Free Press.
Jean-Noel Kapferer (1994), Strategic Brand management, Macmillan Publishing
Co.
Internet Sites

Www.Nestle.Com

Www.Google.Com

Www.Yahoosearch.Com

Magazines

Business Today

Business World

Business Standard

102

103