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CHAPTER 1
ENTREPRENEURSHIP
The Concept Of Entrepreneurship
By definition, entrepreneurship is the practise of starting a new business/venture or
reviving an existing organisation. Entrepreneurial actions vary depending on the nature of
business. Entrepreneurs seek funding from venture capitalists and NGOs. Usually, such
investors expect higher returns on their investments. The very reason they invested in the
venture of a greenhorn is because they intend to make as much as possible out of the venture.
It is being increasingly recognized that entrepreneurship is the key to building and sustaining
the growth of any economy. The success of Silicon Valley is a case in point. It demonstrates the
success of start up ventures. Many entrepreneurs have chased their dreams and with innovative
ideas, succeeded in the face of adversities. The local economy and the national economy have
benefited from their ventures both in the short term and long term.
In the recent times, we have seen the emergence of entrepreneurs from developing countries
such as China, Ireland, Israel and India daring to pursue their innovative ideas and dreams to
logical conclusion. In many cases, they succeeded in their ventures. They have created business
opportunities for many others such as financiers, accountants, lawyers and restaurateurs, among
others.
ENTREPRENEURSHIP AND INDIA
Entrepreneurship is a critical element in the growth of an economy. It is estimated that there
are about 20 million entrepreneurs in the US. India ranked second in total Entrepreneurship
Activity (TEA) according to the Global Entrepreneurship Monitor Report for the year 2002.
Subsequently, India slipped in TEA rankings.
For its size India has lower number of start-up entrepreneurs. In spite of the shortcomings, it
ranked ninth in the survey of entrepreneurial countries by Global Entrepreneurship Monitor
(GEM). India ranks the highest among a group of countries in necessity-based entrepreneurship,
which is associated with developing countries. Conversely, it ranks fifth from bottom in
opportunity-based entrepreneurship.
Liberalization of economy started by the PV Narasimha Rao government in 1991 and the
Information Technology boom of the mid and late 90s have ushered in tremendous changes and
set for entrepreneurship is substantial. However, the society and government have not been
encouraging towards entrepreneurship in India.
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CHAPTER 2
CHOCOLATE PRODUCTION
The cocoa-bean -- the heart of the sweetest delicacy in the world -- is bitter! This is why, up
to the 18th century some native tribes ate only the sweetish flesh of the cocoa fruit. They
regarded the precious bean as waste or used it, as was the case among the Aztecs, as a form of
currency.
The Varieties
There are two quite different basic classifications of cocoa, under which practically all
varieties can be categorised: Criollo and Forastero cocoas. The pure variety of the Criollo tree
is found mainly in its native Equador and Venezuela. The seeds are of finer quality than those
of the Forastero variety.
They have a particularly fine, mild aroma and are, therefore, used only in the
production of high-quality chocolate and for blending. However, Criollo
cocoa accounts for only 10% of the world crop. The remaining 90% is harvested from trees
of the Forastero family, with its many hybrids and varieties. The main growing area is West
Africa. The cocoa tree can flourish only in the hottest regions of the world.
The Harvest
Immediately after harvesting, the fruit is treated to prevent it from rotting. At fermentation
sites either in the plantation or at, collecting points, the fruit is opened.
Fermentation
The fermentation process is decisive in the production of high quality raw cocoa. The
technique varies depending on the growing region.
Roasting
The subsequent roasting process is primarily designed to develop the aroma. The entire
roasting process, during which the air in the nearly 10 feet high furnaces reaches a
temperature of 130 C, is carried out automatically.
Blending
Before grinding, the crushed beans are weighed and blended according to special recipes. The
secret of every chocolate factory lies in the special mixing ratios, which it has developed for
different types of cocoa.
Grinding
The crushed cocoa beans, which are still fairly coarse are now pre-ground by special milling
equipment and then fed on to rollers where they are ground into a fine paste. The heat
generated by the resulting pressure and friction causes the cocoa butter (approximately 50%
of the bean) contained in the beans to melt, producing a thick, liquid mixture.
Cocoa Powder
After the cocoa butter has left the press; cocoa cakes are left which still contain a 10 to 20%
proportion of fat depending on the intensity of compression.
These cakes are crushed again, ground to powder and finely sifted in several stages and we
obtain a dark, strongly aromatic powder, which is excellent for the preparation of delicious
drinks - cocoa. Cocoa paste, cocoa butter, sugar and milk are the four basic ingredients for
making chocolate. By blending them in accordance with specific recipes the three types of
chocolate are obtained which form the basis of ever product assortment,
namely:
Kneading
In the case of milk chocolate for example, the cocoa paste, cocoa butter, powdered or
condensed milk, sugar and flavouring - maybe vanilla - go into the mixer, where they are
pulverized and kneaded.
Rolling
Depending on the design of the rolling mills, three or five vertically mounted steel rollers
rotate in opposite directions. Under heavy pressure they pulverise the tiny particles of cocoa
and sugar down to a size of approx. 30 microns. (One micron is a thousandth part of a
millimetre.)
Conches (from the Spanish word "conch a", meaning a shell) is the name given to the troughs
in which 100 to 1000 kilograms of chocolate paste at a time can be heated up to 80 C and,
while being constantly stirred, is given a velvet smoothness by the addition of certain
amounts of cocoa butter. A kind of aeration of the liquid chocolate paste then takes place in
the conches: its bitter taste gradually disappears and the flavor is fully developed. The
chocolate no longer seems sandy, but dissolves meltingly on the tongue. It has attained the
outstanding purity, which gives it its reputation.
Chocolate consumption in India is extremely low. Per capita consumption is around 160 gms
in the urban areas, compared to 8-10kg in the developed countries. In rural areas, it is even
lower. Chocolates in India are consumed as indulgence and not as a snack food. A strong
volume growth was witnessed in the early 90s when Cadbury repositioned chocolates from
children to adult consumption. The biggest opportunity is likely to stem from increasing the
CHAPTER 3
OVERVIEW OF ORGANIZATIONS
NESTLE
Nestle India
Nestle India is a subsidiary of Nestle S.A. of Switzerland. The company insists on honesty,
integrity and fairness in all aspects of its business and expects the same in its relationships.
Nestls trademark of birds in a nest, derived from Henri Nestls personal coat of
arms, evokes the values upon which he founded his Company. Namely, the values of security,
maternity and affection, nature and nourishment, family and tradition. Today, it is not only the
central element of Nestls corporate identity but serves to define the Companys products,
responsibilities, business practices, ethics and goals.
Mr. Dogra.
This is particularly because of the sensitivity of the matter involved in manufacturing and
delivering perishable consumption products. Any margin of error could spell doom for the
companys fortunes. So there comes a lot of responsibility while dealing in such products.
Another sensitive area of concern is that a major chunk of its products cater to infants
and due to perceived risks involved (like unwarranted objections by certain segments of the
public, risk of depreciation in quality due to storage problems or transportation problems,
etc.), the challenge is enormous for the company.
Nestle realizes the need to constantly add new products to its portfolios to cater to
different market segments. This is in tune with a natural tendency to constantly
innovate.
Over a period of time, we have seen new products being added to its list. While products like
ceramel and milkmaid doing well, in recent times nestle has come up with products like
Lassi, fruit n dahi, etc to cater unexplored segments of Indian market.
The example of nestle slim milk is a classic, on how it was positioned and which set
benchmarks for others to follow.
The pack of Nestle Slim Milk is being positioned as drink for fitness and it is mentioned that
it is 99.5 per cent fat free. Apart from conveying that calories are kept in check, the
concluding message reinforces the packaged milk health proposition by saying: "So, don't
think twice before making the switch to a healthier alternative."
Breaking the myth of packaged milk (or for that matter milk on the whole) being only meant
for being 'strong' or to put on weight, the agency specifically conveys the message of being
slim and trim through milk.
O&M creative consultant, Sudip Bandyopadhyay said, "The brief was to creative awareness
about the brand. There seems to be a tendency of ignoring milk for putting on weight and also
milk in tetra-packs or packets is being considered as an artificial one. There is also emergence
of low-calorie sweeteners and other products. So the whole idea is to reinforce milk as an
option for providing a refreshing nourishing boost."
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PRICE MIX
The high costs of raw materials and processing are a cause for concern. However, The
Company feels that raw material cost inflation could soon be brought under control.
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PROMOTION MIX
Overall, there has been a lot of emphasis on packaging, not only to safeguard products, but
also to create a distinct brand entity.
Nestle India bagged the Best Package Design Award and Portfolio Registering Highest
Sales Growth Award at the second Annual Indian Dairy Awards presented at the
National Milk Seminar 2003 held at Goa on 17 and 18 January.
Hosted by Tetra Pak India, the fourth National Milk Seminar on Strategic Marketing,
organized by the Ministry of Food Processing and Ministry of Agriculture was focused
around Time to Act - Here & Now. Presentations and panel discussions were held to spotlight
on business opportunities, perspectives of international and national speakers from within the
dairy industry and outside highlighted the areas of successful government-industry
cooperation, business strategy, innovating for category conversion and upgradation, premium
branding, new channel development, and value branding.
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CHAPTER 4
COMPANY INFORMATION
CADBURY
How Cadbury Chocolate is made
John Cadbury
Milk chocolate for eating was first made by Cadbury in 1897 by adding milk powder John
paste to the dark chocolate recipe of cocoa mass, cocoa butter and sugar. By today's standards
this chocolate was not particularly good: it was coarse and dry and not sweet or milky enough
for public tastes.
There was a great deal of competition from continental manufacturers, not only the French,
but
also
the
Swiss,
renowned
for
their
milk
chocolate.
Led by George Cadbury Junior, the Bournville experts set out to meet the challenge. A
considerable amount of time and money was spent on research and on new plant designed to
produce the chocolate in larger quantities.
A recipe was formulated incorporating fresh milk, and production processes were developed
to produce a milk chocolate 'not merely as good as, but better than' the imported milk
chocolate'.
Four years of hard work were invested in the project and in 1905 what was to be Cadbury's
top selling brand was launched.
Three names were considered: Jersey, Highland Milk and Dairy Maid.
Dairy Maid became Dairy Milk, and Cadbury's Dairy Milk, with its unique
flavour and smooth creamy texture, was ready to challenge the Swiss domination of the milk
chocolate market.
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Currently Cadbury India operates in three sectors viz. Chocolate Confectionery, Milk Food
Drinks and in the Candy category.
In the Chocolate Confectionery business, Cadbury has maintained its undisputed leadership
over the years. Some of the key brands are Cadbury Dairy Milk, 5 Star, Perk, clairs and
Celebrations. Cadbury enjoys a value market share of over 70% - the highest Cadbury brand
share in the world! Their flagship brand Cadbury Dairy Milk is considered the "gold
standard" for chocolates in India. The pure taste of CDM defines the chocolate taste for the
Indian consumer.
In the Milk Food drinks segment their main product is Bournvita - the leading Malted Food
Drink (MFD) in the country. Similarly in the medicated candy category Halls is the
undisputed leader.
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Oreo
Candy:
Halls
clairs
Gums:
Bubbaloo
Cadbury products
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PRICE:
Cadbury dairy milk has always adopted a competitive strategy for the basic product whereas
it has gone for premium prices on the other variants. Since Cadbury is positioned towards a
very large audience from ages 4- 50years, the pricing strategy is extremely affordable and
easily accessible to all categories. The price list is as follows:Product
Pack size
Rate
Dairy milk
Rs 5, Rs 10, Rs 22
18.6 grams
Rs10
42 grams
Rs 35
42 grams
Rs 35
42 grams
Rs 35
Rs 55, Rs 125
Rs 2, Rs 5, Rs 10
30 grams
Rs 12
45 grams
Rs 23
Rs 2, Rs 5, Rs 10
Perk
10 grams, 15 grams
Rs 2, Rs 5
Oreo
120 grams
Rs 27
bubbaloo
Rs 1
clairs
Rs 1
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India
Srilanka
Australia
Brazil
USA
UK
Rusia
All Confectionery
Chocolate
Gum
Candy
Cadbury
9.9
7.5
25.7
7.2
Mars
9.0
14.8
3.0
Nestle
7.8
12.6
0.1
3.2
Wrigley
5.8
35.9
2.7
Hershey
5.5
8.2
1.1
2.7
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CHAPTER 5
SWOT ANALYSIS
SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in any other situation requiring a decision.
Strengths and weaknesses are internal factors and opportunities and threats are external
factors.
WEAKNESS:
1. Poor technology in India as compared to other nations
2. Limited key products as it is depended only on chocolates and beverage market compared
to other competitors.
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Threats:
1. Due to highest brand equity and low cost, it is successful in India.
2. Globalization will bring in better brands for upper end of the market.
3. High fats and calories in the products of Cadbury may reduce the demand of the consumers
who are conscious of nutrition and healthier lifestyles.
4. Competitive pressure from other national and global suppliers
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Weakness:
1. Exports of coffee to Russia constitute substantial part of overall exports.
2.
OPPORTUNITIES
1. Nestle have opportunity to expand their product line like tea etc.
2. Company can open separate stores for eliminating retailers.
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CHAPTER 6
FINDINGS AND CONCLUSION
I found many things which are well executed by distributors. Here are some of the key
findings given by me are purely based on my research. It doesnt have any kind of bias from
my side.
They are given as under.
I have found that the consumption of the chocolates are more in children and teenage
group though having any occasion or not having any occasion.
The most selling product of both the company are in small size of chocolates and there
market is 73% because its not much costlier. And also easily available & affordable.
Nestl India has a very wide portfolio of products ranging from Maggi Hot n Sweet
Tomato Sauce to Nestle Fruit n Dahi. Although, Nestl does not advertise much about its
products in India, still it is the world market leader in the milk market and Maggi noodles is
the product we have all grown up eating.
On the whole, Nestl India focuses mainly on the areas where it is a potential leader.
They may not try to replace the leader but surely their product becomes the second best
product in the market. For example, they do agree that Cadburys is synonymous to chocolates
in India and therefore they did not necessarily try to replace their flagship brand Cadburys
Dairy Milk but have developed a product in the other chocolates segment and therefore
Nestl Munch is the second best chocolate in India today as showed by the sales figures.
They have tried to price their products at lesser than the price of the competitors, for
example, Nestl Bar-One was sold at Rs.5 whereas the same quantity of its competitor
chocolate Cadburys 5-Star was sold at Rs.6.
In some areas, Nestl has been able to outperform its competitors and rather, for
products like Maggi noodles, it has no substantial competitors. When magi noodles came into
the market, there were other players like Top Ramen, whose presence counted but now it
makes no difference to the leader-Maggi.
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