Beruflich Dokumente
Kultur Dokumente
ON
CONSUMER PERCEPTION AND MARKET STRATEGY IN
NESTLE
At
“NESTLE INDIA LTD"
Introduction 3
Nestle India 17
Swot Analysis 73
Limitations 79
Bibliography 80
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Introduction
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opinion about the product. This perception becomes the reality
of that product to the consumer. It is possible that this truth
could change with exposure to competitive messages from a
wide variety of sources (other media, friends, advice columns
etc). If, however, the product is perceived, and therefore
assigned the truth, of being positive it is then evaluated as to
whether or not it fills the need or want. If it does indeed fit the
need, it is likely that the consumer will proceed to the purchase
stage of the model. In the purchase stage the consumer
decides to purchase or not to purchase the product. Again,
there are a number of variables surrounding this decision, as
surround each step and decision in the model.
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Marketing strategy
Basic theory:
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1) Target Audience
2) Proposition/Key Element
3) Implementation
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cohesive whole. Similarly, the various strands of the strategy ,
which might include advertising, channel marketing, internet
marketing, promotion and public relations can be orchestrated.
Many companies cascade a strategy throughout an
organization, by creating strategy tactics that then become
strategy goals for the next level or group. Each one group is
expected to take that strategy goal and develop a set of tactics
to achieve that goal. This is why it is important to make each
strategy goal measurable.
Marketing strategies are dynamic and interactive. They are
partially planned and partially unplanned. See strategy
dynamics.
Types of strategies
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Marketing strategies may differ depending on the unique
situation of the individual business. However there are a
number of ways of categorizing some generic strategies. A
brief description of the most common categorizing schemes is
presented below:
Strategies based on market dominance - In this scheme, firms
are classified based on their market share or dominance of an
industry. Typically there are three types of
market dominance strategies:
Leader
Challenger
Follower
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strategy on the dimensions of strategic scope and strategic
strength. Strategic scope refers to the market penetration while
strategic strength refers to the firm’s sustainable competitive
advantage.
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This scheme draws parallels between marketing strategies and
military strategies.
Strategic models
Marketing participants often employ strategic models and tools
to analyze marketing decisions. When beginning a strategic
analysis, the 3Cs can be employed to get a broad
understanding of the strategic environment. An Ansoff Matrix is
also often used to convey an organization's strategic
positioning of their marketing mix. The 4Ps can then be utilized
to form a marketing plan to pursue a defined strategy.
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For most small business owners, marketing is an overwhelming
concept. They need marketing solutions that ensure a smooth-
running, profitable business yet most don't know where to
begin or how to focus their efforts.
90% of small businesses don't even have a marketing plan. It's
difficult to reach your destination if you don't know where
you're going!
2. Who wants and needs what you have to offer? The only
wrong answer is "everyone." If you're a pediatrician, you
may see infants and children. Are they your target
audience? No! They are your patients, but it's the parents
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you need to connect with to get the kids in your door. And
it's not just any parents - it's a definite group of parents.
Objective of study
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1. Provide our customers with superior quality products.
2. Provide our shareholders with rapid growth & fair returns.
3. Provide our employees a challenging & satisfying work
environment.
4. To be a good corporate citizen & contribute positively to
the society in which we operate.
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Scope of the study
India is on the move and so are the markets in India. Apart from
economic changes, India is also facing social changes like changes in life style,
hobbies etc. New fashions, Adventures holidays, etc. are in today.
Further, food habits of Indians are changing rapidly. Chocolates which were
believed to be kid’s preference are now being consumed by kids, teenagers, and
adults. Chocolate market in India (Currently 20 000 tones) is growing at a fast
rate annually.
To take advantage of the growing market, international
confectionery companies are getting ready to woo the proverbial Indian Sweet
tooth. An influx of worlds leading Chocolate players is expected.
Further, since Confederation of Indian Industry (CII) is a
representative body of the Indian Industry, it receives its inquiries for pertinent
marketing information from various domestic and international players, who want
to invest in India.
In the above context, the prime objective of this report is to prepare a marketing
plan for any brand that is planning to enter the India Chocolate Market.
Therefore, this report is generic (broad-based) to the extent that it does not focus
on any single brand. However, this may prove to be a relevant marketing guide
for any brand launch in India.
Data analysis
Company profile
FMCG refers to consumer non-durable goods required for daily or frequent use.
Typically, a consumer buys these goods at least once a month. The sector
covers a wide gamut of products such as detergents, toilet soaps, toothpaste,
shampoos, creams, powders, food products, confectioneries, beverages, and
cigarettes
Typical characteristics of FMCG products are:
Individual items are of small value. But all FMCG products put together account
for a significant part of the consumer's budget.
The consumer keeps limited inventory of these products and prefers to purchase
them frequently, as and when required. Many of these products are perishable.
The consumer spends little time on the purchase decision. Rarely does he/she
look for technical specifications (in contrast to industrial goods). Brand loyalties
or recommendations of reliable retailer/ dealer drive purchase decisions.
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After witnessing booming sales and flooding markets with innumerable products,
FMCG companies have had to abruptly apply the brakes and look for various
ways to save costs. The MORE THAN RS. 43,000 crore (listed companies)
FMCG industry in India, which has been on a roll for many years, faces tough
times ahead, although many segments still shows good growth.
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Nestle India
has also introduced products of daily consumption and use such as Nestle Milk,
Nestle Dahi, Nestle Butter, Nestle Fruit 'n milk ready to drink beverage and
Nestle Pure Life bottled drinking water.
Nestle India Ltd, 51% subsidiary of Nestle SA, is among the leading branded
food player in the country. It has a broad based presence in the foods sector with
leading market shares in instant coffee, infant foods, milk products and noodles.
semi processed food products during the last few years. The company has
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launched Dairy Products like UHT Milk, Butter and Curd and also ventured into
the mineral water segment in 2001. Nestle’s leading brands include Cerelac,
Quality is the essential ingredients in all of our brands and the reason why
millions of people choose Nestlé’s products every day. Our consumers have
come to trust in Nestlé’s 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 Nestlé’s `Farine Lace’s was the first product to bear the Nestle’
name.
In 1867 a physician persuaded Henri Nestle’ to give his product to an infant who
was very ill—he had been born prematurely and was refusing his mother’s milk
and all other types of nourishment. Nestlé’s new food worked, and the boy
survived from the very beginning, Nestle' product was never intended as a
competitor for mother’s milk.
In 1869, he wrote; “During the first months, the mother’s 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 value—are still as valid today for the
wide range of infant of infant formula, cereals and baby food made by Nestle'.
market for infant formula, when a mother cannot or chooses not to breast feed
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her child. Nestle' markets infant formula according to the principles and aims of
the WHO International Code of Marketing Breast Milk Substitutes, and seeks
particular with the WHO and UNICEF, to identify problems and their solution.
Gained over more than 125 years, is put the disposal of health authorities, the
Milk based products and baby food contributes to 34% of Nestlé’s turnover. For
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. Brand loyalties are very high in categories
such as infant food and weaving cereals, enabling the company to command a
price premium.
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
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Innovation and renovation play a major role in the development of milk based
General Mills.
The area of nutrition, with its benefits to health and wellbeing, is having a
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
Nestle' has a joint venture with General Mills outside North America, Cereal
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
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,
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The story of its popularity is however connected with the invention of technology
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 you’d never
Sweet Corn.
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 chocolate to the Old world, where it swiftly became a favorite
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
created.
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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 Nestlé’s started a company that would
quickly become the world’s 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
upon. The companies like Cadbury’s are launching indigenous product made to
400 crore, Cadbury’s accounts for around 65% of market share followed by
Nestlé’s around 23%. Amul has 5% of the share, with the minor players taking
the Rest.
star energy bar positioning made it snacking chocolate with Nestle' pitching Bar-
MUNCH: Munch is the market leader in the chocolates. It is the largest selling
by Cadbury’s during the mid-90 with a new name milk-e’clairs. Its worth is 4000
tones now. Nestle' also presents here NESTLE' E’CLAIRS. Due to launch of
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multigrain’s Cadbury can not 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.
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
Nestlé’s turnover. It has expanded its products range to all segments of the
market the Kit-Kat 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
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under the umbrella brand Allen’s. 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
by good volume growth in Munch, Kit-Kat and Classic sales. Nestle' relaunched
PREPARED FOODS
flavorings----date back more than a century. With the industrial revolution came
The problem was so widespread that it became the object of intense study in
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 turn of the century, Maggi & Company was
producing not only powdered soups, but bouillion cubes, sauces and flavorings.
Buitoni the authentic Italian brand, which has been producing pasta and sauces
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Ready to cook food/ cooking aids are sold under the umbrella brand name
Maggie. Culinary product account for about 14% of Nestlé’s turnover. Maggie is
the market leader in the noodles (45% market share), the Ketchup (43% market
Other products sold under the umbrella brand Maggie, are ready-to-cook
pickles and instant snack mixes (dosa mixes). New taste variants are
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
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 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
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Nestle' has the advantage of great brand image & it is actually working for
BEVERAGES
introduced in 1938 under the brand name Nescafe’- the world’s first
It became so popular during World War II that for one full year the entire output of
the Nescafe’ plant in the United States (more than one million cases) was
reserved for military use only. Since then, Nescafe’ has become one of the
Its leading brands, Nesquik, Milo and Nescau are very popular with a growing
Nestea and Nescafe’ are sold in various forms (cans, bottles). These are
Beverages like coffee, tea and health drinks contribute to about 30% of Nestlé’s
turnover. Beverages sales registered a 155 yoy growth during 2005. while about
14% of sales come from domestic market, exports contribute to about 16% of
sales.
Nestle' Nescafe’ dominates the premium instant coffee segment. Nestlé’s other
coffee brand Sunrise has also been relaunched under the NESCAFE’ franchise
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to leverage on the existing equity of the brand. Nestle' has focused on expanding
the domestic market through price cuts and product repositioning. However it has
been losing share in the domestic market, where it has a 37% market share.
The major competitors are Coca-Cola, which launched coffee & tea under brand
name Georgia in 2002. Its tea in four flavors which are classic, Adark, Masal &
Elaichi and coffee in three variants Classic, Cappuccino & Mochaccino to suit the
even small retailer so as to cover a large market. Tata coffee also Works against
Nestle'. But n is still the market leader in terms of market share, Customer’s
Cadbury’s Bournvita & HLL with Boost are the major players in
the market along with Milo. Bournvita is with largest market share of 35%. The
promotional strategies of Nestle' for Milo are working fast for the good of Milo.
Nestle' has launched non-carbonated cold beverages such as Nestea Iced Tea
BEVERAGES
Nestle' Food Services provides food and beverages professionals with a wide
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Beverages solutions featuring well known consumer brands such as Nescafe’,
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
giving consumers the brands and quality they come to expect and rely on in the
BOTTLED WATER
Nestle' brgan its entry into the water business in 1969 with a 30% stake in the
controlling interest in SGEMV in January 1992, and went on in May of the same
In 1992, Nestle' was the first company to dare to launch a mineral water, Valvert,
in five different countries at once. It’s originally lied in the use of an all-new
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,
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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
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' Water’s, a token of Nestle'
decisive commitment to the bottled water market, which now represents 9% of its
sales. Today, Nestle' Water’s 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
PETCARE
Nestle' entered the pet care business with the purchase of carnation in 1985, and
1998, and further with the acquisition of Ralston-Purina in 2001 creating Nestle'
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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
Technologies to develop and add value continually for pets and their owners are
nutritional innovations, such as products which help maintain feline urinary tract
health or innovations for the most discriminating of pets and their owners. Nestle'
international presence.
CONSUMER SERVICES
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 consumer’s
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
caring for our consumers. Our people have expertise in a wide range of areas
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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
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 company’s offer & to advocate the cause of its
production in the minds of its audience. Thus informing, reminding & advocating
about the company’s 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
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ADVERTISING
studied the market and developed the commercials in several languages. NIL
has booked spot for the advertising in almost all the channels.
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 Nestlé’s
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
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 Nestlé’s hues
for the leading, international food scientists, technologists & research institutes to
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CHILDREN SPORT MEET 98:
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
OTHERS
Splendor 1999.
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 &
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promotional expenditure. It also invents largely on window display contests retail
level.
use the emotional aspects if Indian citizen. It uses kiosks and hoardings to
promote its product range. The promotional expenses of Amul are not so big as
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
A 50 country A.C. Nielsen survey finds out which brands have been successfully
exclusive cross-section of the findings with a slant on India. Nestlé’s the topper
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The brand value of Nestle is greater than $ 1 billion. In global Brand scoreboard
From chocolates to baby formula the Swiss food giant keeps the world pantry
stocked.
Nestle India is ranked 6th top ad spender of the year in 2002. It spended Rs.
BUSINESS TODAY
The 4th BT Stewart study reveals that NIL is the 9th largest wealth creating
company in India with Money value added (MVA) of 4681 & High positive
MVA is the difference between capital invested & its market valuation. EVA is the
economic profit after deducting the cost of all the capital employed (both Debt &
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A RESEARCH BY BUSINESS INDIA OF TOP 100 SUPPER BRANDS
IN TERMS OF SALES
Nestle' India is ranked 49th among super hundred companies for the year 2004 & 2005
in terms of sales.
CADBURYS & AMUL WERE NOT THERE IN THE LIST OF TOP 100
IN TERMS OF PROFIT
Profit is the major objects of every organization. In terms of profit sample list
Nestle' India is ranked 32nd in 2005 & 37th in 2004 with profit of 259.60 crores in
Cadbury was ranked 90th with 73.60 crores in 2003 & 59.70 crores in 2002.
PROFIT RANK
2005 (In crs.) 2004 (In crs.) 2005 2004 Change
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Market capitalization is an important barometer of Indian incorporation’s
capitalization & how it compares with that of its peers. Hence there is a growing
concern among promoters to see how they can reward their shareholders and
see that the stock prices reflect the performance. Nestle' was ranked as followed.
IN TERMS OF ASSETS
With the current management focus on efficiently, the asset to turn over ratio
restructuring exercise, resulting in trimmer balance sheet & improved sales &
NFA RANK
2008 (In crs.) 2007 (In crs.) 2008 2007 % Change
So, Nestle' India continues to deliver strong top line and bottom line growth
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with continues new launches should see the growth momentum continuing into
the foreseeable future. The parent company has been increasing its commitment
to the Indian subsidiary via launch of new products and is also increasing its
stake at progressively higher levels. Already in first half of 2006its holding has
increased by further 1% by more than 5% over the last12 months, all through
open market purchases. The high growth to NIL is coupled with High ROCE
……. What more can an investor want? Impressing percprmance of NIL in the
• Trends like nuclear families, working couples and general paucity of time
foods industry.
• The company has been gaining market share in certain categories lid
chocolate and malted beverage .this trend many well continue as Nestles
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company a my has been at the forefront launching new price points for existing
sachets.
PRODUCT PROFILE
“POLO”
Background
represents Nestlé’s first entry into the large 50,000 tonne p.a. (organized sector)
While mint leaves are widely used as a culinary ingredient, and the taste is well
liked and accepted, the mint confectionery habit is a very limited one. NINTO, the
only national brand, has a volume of 250 tons p.a. There are also a couple of
small regional brands: GOLD and ZERO. And of course, smuggled POLO sold
for between Rs. 8/- to Rs. 12/- for 26 g roll (samples available in your market as
well)
The underdeveloped state of this market is perhaps due to the almost complete
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POLO will therefore, have to pioneer the development of the market for mint
Marketing Plan
Standard case : 15 kg
2. A single piece flow pack containing one sweet. To be packed into polybasic
and shipping cartons. Sizes not yet finalized. This pack has been very successful
Each sweet will be white in color and round in shape with a hole in the middle,
and will carry "POLO" branding in raised letters on one side. The mint flavor will
POLO is small convenient enough to fit in almost any pocket or handbag and can
Once the tube is opened, it is easy to reseal to keep the product fresh. POLO is
enjoyable and social: to offer someone a POLO does not suggest they need a
breath freshener.
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Different people have different ways of eating POLO: some people crunch
POLO, others suck them until they disappear on the tongue. The tongue can play
games with POLO, and this, combined with the hole, provides a unique and very
personal eating experience. POLO should never be eaten in a hurry: its mild
While POLO is targeted at people of all ages (in metros/mini metros, A&B SEC)
the target for POLO advertising will be adults, 15-35 who are warm, sociable,
The advertising will seek to position POLO as "the mild, refreshing mint sweet
with the hole that's universally acceptable" and do this in a manner which is
appealing, attractive, and above all, liked by consumers, because consumers will
GENERATE IMPULSE
Purchases of confectionery (for self consumption as well as for gifts) are not in
general, pre-planned.
By having:
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1. A popular brand
3. Good advertising
GENERATE EXCITEMENT
1. Breaking away from our normal retailers' margin of 10% and 12.5%, they offer
2. To encourage faster movement and therefore greater profits for the retailers,
they have:
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• 'A Class - 2.5 grey boxes
For the first time they have a product, which is affordable by everybody at Rs. 3/-.
It is convenient to carry and eat; where no barriers are put on distribution. So,
supremacy. A recent survey by A&M Magazine rated Nestle as having the best
relations with the trade in India. Now use this strength for POLO
To recap:
- good advertising
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- a prominent display
Their objectives:
- Unconventional outlets
- Cycle boys
- Wholesalers
October -995
November - 755
December - 850
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ON TEAMMATE
It consists of an ORG synopsis, its analysis and a report on the various studies
present within the organization to come out with facts and hypotheses which may
1. Price index of 93. This should expand the market and corner a huge chunk of
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Factors working against Teammate:
7. People switch to milk powders after having used an IMF (Where does
EDW is the market leader (if Amulspray misuse is exlcuded) in Metors, class I, II,
III and IV towns (This implies great distribution strength). However, EDW is losing
market share in metros, class II and III towns. It is gaining in class I and IV towns.
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EDW is the leading brand outlet wise with highest sales through grocers, general
stores and chemists. However, it is losing market share in groceries and general
stores.
West Bengal, Kerala, UP and Madhya Pradesh register the highest sales in the 4
zones.
South and West zone are the fastest growing with North Zone declining
Andhra Pradesh, Maharasthra, West Bengal and Rajasthan are the fastest
growing states in the 4 zones. Madhya Pradesh, Punjab and Haryana are
declining.
Calcutta and Madras are the highest volume metros followed by Delhi, Bombay
Calcutta.
b) Sapan Dairy special & Amulya have registered the fastest growing overall in
the 5 metros.
EDW has registered declines in North, East and South Zones but has registered
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Before launching Teammate, a survey was conducted by Nestle India Limited so
that it could launch Teammate at the right target market at the right time at the
Two separate studies judged that size of market for tea whitening is 39% of total
milk powder sales and 65% of milk powder (non IMF) sales. Both are close
enough and the size of the market for tea whitening is 26000 p.a.
b) Non IMF market has been growing at 10% p.a. with the economy segment
c) Nestle has a 78% of the premium segment but only an 18% share of the
economy segment
d) Dairy Whiteners comprise the fastest growing segment. Thus, the time is ripe
economy segment.
2. As an additive/thickening agent
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Value for money perceptions of consumers (based on):
Vitamins/Proteins 59%
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• to save on excise, they do not enhance the product with vitamins
• 12% of consumers have found EDW to have an odd smell/taste. They shall
have to ensure that the taste is good and that there is no smell to ensure
possible that Teammate could be used to make soya milk or soya curd.
has a sweet taste so that consumers have to use less sugar thus enhancing
Competitors of Teammate
• EDW
• Amulya
• Anikspray
These brands are used mainly for tea whitening, are easy to dissolve and
Dangers of cannibalization
With EDW being the market leader in the tea whitening category, the danger of
50
whitening. However, this may lead to diffused positioning of EDW and depressed
sales of Teammate.
Sagar 97.5
Milkcare IF 158
Milkcare FP 158
Lactodex FP 158
Dexolac IF 164
51
NSTG tin 114
MILO
BACKGROUND
Milk additive market in India in formally here for the last three to four decades.
Over 2 decades, there have been only two large players in the beverage
segment - Bournvita and Boost. Horlicks and Complan are traditionally more
strong brands in the South. Mumbai, being the base for Cadbury India Limited,
Bournvita has been the strong brand here. Cadbury's aggressive sales
front, Bournvita has had changed in positioning twice, Milk additive brands are
Complan are closer to nutrition associated with the needs of growing children. As
market was nearly under saturation with diminishing growing rate, and the
MARKETING PLAN
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In August 1996, Nestle launched its internationally known Milo brand in India.
Initially, launch was limited to Tamil Nadu. Estimated market of brown beverages
in 1995 was 15,000 tons and market was growing with 6% per annum growth
rate. Milo was launched with a pricing index of 100, 99 and 94 respectively of
Milo. Boost and Bourn vita. With a slogan that said "Win with Milo" and its
association with energy and sports, it was launched in an attractive pack of green
color.
In February 1996, Milo was launched in the city of Mumbai. The launch was a
rather simple one with lease media hype. Instead of this, sampling was done in
schools and at the places where direct trial to the end user could be included.
After the months of launch of Milo, it was necessary to understand how Milo in
doing on the retailer front and what is the retailer's response on various issues
consumption habits of milk additive brands. Milo being a relatively new brand in
Recall of different brands - All the brands had similar overall recall if the TOM
spontaneous aided recalls are added. However, in total spontaneous recall (TOM
and unaided added), Bournvita had a 100% recall, followed by Boost with 76%.
60% retailers had a spontaneous recall of Milo and no one recalls Maltova.
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PROMOTION
Retailers most preferred option was of 'On pack Incentive'. This is followed by
much if 4 to 5 rupees off is given or 20 to 50 gms is given extra, gifts turned out
highest promotion and Milo had not offered any promotion since its launch. Milo
should have been launched with a heavy promotion offer so as to induce trial, but
it is not so. Milo had a biter taste, so it is not preferred as a drink for children. Milo
had offered trade promotion only during the time of its launch. This is in the form
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 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
54
sector. MNC’s 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. MNC’s 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.
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1985: Acquisition of Carnation (USA).
1988: Acquisition of Buitoni-0-Perugina (Italy).
1988: Acquisition of Rowntree
1992: Acquisition of Perrier (France)
1998: Acquisition of San Pellegrino and Spillers Petfoods
2000: Acquisition of PowerBar
2001: Acquisition of Ralston Purina
2002: Acquisition of Scholler and Chef America
2004: Acquisition of Movenpick , Powwow and Dreyer’s
2007: Acquisition of Valio (ice cream activities)
2008: Acquisition of Wagner, Proteika, Musashi
1981: Galderna
1989: With Clintec (USA).
1989: CPW (USA) (Cereal Partner World Wide).
1990: Nestle' – Walt Disney (USA).
1991: Cooperation with Coca Cola (USA).
LAUNCH STRATEGY
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Let us begin by recalling a few basic principles of Confectionary distribution.
• It tastes great.
All this is true. It is also a fact that 70% of confectionary is bought on impulse.
Therefore, whosoever taps the impulse takes the major part of the business.
DISTRIBUTION STRAGEGY
57
The aim of Nestle India Ltd. is to cover & open the largest possible number of out
HOW IT IS PROCEEDING?
Confectionary can be sold almost any where. In our regular outlets also. Some of
Airport terminal.
Cinema hall.
Pan/cigrates kiosks.
Any where the people congregate the aim is the representation in all these
whole seller, where endless stock could be dumped and from where stock
The whole seller channel could give us representation in outlets especially pan
MANUFACTURER
STOCKIST (3%-5%)
DISTRIBUTOR (4%-7%)
MARKETING STARTEGY
The marketing strategies of NIL are aggressive enough and are designed
keeping in mind.
The changing taste and preferences of consumers.
Attached cost structure.
Working capital management.
Broad based wide products offering is preparing NIL for paradigm shift from Low
Growth Premium Products to High Volume Based Growth Portfolio that will take it
to a strong double digit sales growth with improved profitability.
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CHANGED PRODUCT PORTFOLIO
According to Mr. Donati, MD of NIL, “The raising profits will not be zeroed down.
Sales growth is important but achieving higher profit is even more important. So
products that don’t make money would be axed out. Nestlé’s product portfolio
has been pruned (macaroni for instance was withdrawn) and it has revamped its
supply chain.”
TEST MARKETING
NIL tests marketed many of its products before launching them in the market, so
as to nullify the risk of failure and large sunk cost. Some of the products that
were test marketed are:
1. Maggie Chinese noodles.
2. Maggie imli sauce.
3. Nestle' Maxi munch.
4. Nestle' Kream-o-cook.
5. Nestle' Fruitips Pagtilles.
6. Nescafe’ Redimi
7. Nestle' Dairymaid.
8. Nestle' has developed special machine for Nestle' Iced tea.
Nestle' India Limited works a lot before launching a product. It does a lot of test
marketing & other marketing efforts for making its product & thus a company a
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grand success. Nestle' believes in renting mind space by creating perception for
the brand in the prospects mind so that it stands apart from the competing brand
& approximates much more closely to what the customer wants. It covers that
space in the customer’s mind as if they have won a long term lease and always
keep out ‘squatters’. The market conditions before & after the launch of some
major brands of Nestle' are given as under.
MAGGIE NOODLES
Maggie Noodles were launch in 1983, where their was a latent need for the
Indian market to make foray into the fast food segment. Previous there was no
trend of instant noodles in India, most of the people were aware of Chinese
noodle only.
In 1982 when Food Specialized Ltd. (associated with Nestle' considered
launching Maggie instant noodles, the company had the option of choosing from
several alternative positions. The product could have been launched, for the sake
of argument, as the means of cooking tasty Chinese dishes at home, or as a “TV
Dinner”, or as a ‘mini meal’.
Through consumer research the company felt that the most profitable position
would be as a tasty, instant snack, made at home & initially aimed at children.
The target market was the in-home segment of the very substantial snack
category. This positioning decision automatically determined the competition
which included all snack products in general. These would range from ready to
eat snacks-biscuits, wafers & peanuts-to ready prepared snacks such as
samosas. All were bought out items.
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tones to 600 tones. The Indian market was tipped to became the second largest
Nestle' market for this product worldwide, next only to Malaysia.
Maggie Noodles, as market results show, found a vacant, strong position and sat
on it as “TASTE TO COOK, GOOD TO EAT” any time snack.
RICH SOUPS (1989): traditionally at home the soup was made from Boiled
vegetables & was used as filler. Maggie soups were convenient, healthy, tasty &
notorious. In first half of the decade the soup market of Maggie grew up to 2500
tones, a large enough size to attract competition in a short time & in 1995
competition sets in.
The company’s market research team gets the latest information regarding the
changing taste and preferences, and suggested steps to improve the product.
Aggressive consumer benefit strategy propelled the market, to touch the 500
tones in subsequent 2-3 years.
MILK MAID
Milkmaid was launched in 1962 by Nestle' as a creamer or whitener for tea and
office. The most interesting thing about Milkmaid is that it has been repositioned
4 times without any considerable changed in packaging & product remained
totally unchanged. But off course it is the illustration & headlines that really
determines the position which the consumer will give the brand in her mind.
This repositioning strategy proved to be a great success for Nestle' each time the
volume of sales got an upward shift & that too by a large denomination. They
believe that the perceived image of the product belongs not to the product but
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rather is the property of the consumer’s mental perception. So the strategy
should be:
The concept was that you can get 1.6 liters of sweetened milk by adding water in
that condensed milk. This positioned was visualized as it had relevance at a time
when fresh milk was in short supply in some parts of India.
Once again, we saw Milkmaid in yet another position as a topper on fruits, cakes,
jelly etc. and then last time through a natural evolution-backed by consumer
research & sound marketing judgment - we saw Milkmaid’s Present position: Milk
maid for desert Recipes. In due course, the packaging was smartened up &
changed to reflect the ‘recipe’ on culinary products; the label depicts a desert,
gives the recipe on the reverse side & announces a ‘free recipe booklet’.
From the time of the dessert recipe positioning (1982), milkmaid achieved a sales
volume increase of 116% by 1988. Sales growth has been relatively steady tear
after year (an average growth about of 20% annually), suggesting that more
households are responding to this position. It is significant that even in traditional
milk shortage areas, Milk maid usage now is largely in line with the culinary
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(dessert) positioning. This implies that housewives, who may have earlier
perceived Milkmaid as a substitute for milk, have now given it a different place in
their “frame of reference”. Recently Nestle Has Launched Milkmaid in a easy
squeeze tubes which is attracting children also.
Positioning above all, is a matter of the perception of your brand that we wish to
do the product and more what we do to the product and more what we do to the
consumer’s perception of the product.
NESCAFE (1918-1938)
After the end of world war 1st their were crises for Nestlé’s Government contracts
dried up following the hostilities, and the civilian consumer, who had grown
accustomed to condensed & powdered milk during the War switched back to
fresh milk when it became available again. In 1921 company recorded its 1st loss.
Nestle management responded quickly and brought in Swiss Banking export,
Louis Dapples to recognize the company. He streamlined the operations to bring
production in line with sales and reduce the company’s outstanding debt. The
manufacturing of chocolates became the company’s second most important
activity.
New products appeared steadily:
Malted milk
Milo
Powdered butter milk for infants &
Nescafe (1938)
The Brazilian coffee institute approached Louis Dapples in 1930, seeking new
product to reduce Brazil’s large coffee surplus. Eight years of research produced
a soluble powder that revolutionized coffee drinking habits world wide.
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The most interesting thing to talk about Nescafe is its Brand personality. It is the
personality that marketer wishes to attach to his brand & which actually enters
the targets customer’s mind.
In March 1989, the students of IIMC, conducted a small scale survey on
personality of some major brands & and Nescafe was one among them Nescafe
was compared to gold café-both were 100% pure instant coffees, both heavily
advertised & both premium priced. Gold café was a successful competitor of
Nescafe. The respondents were asked to describe the personality of the brands
in terms of ‘Mr. Nescafe’ & ‘Mr. Gold café’. The respondent in one group based
there observation on the advertisements of two brands. While other group made
observations on the basis of other factors such as ‘history of the company’,
‘marketing strategy’, etc. one might describe them as the first group’s findings
better because those reflected the consumer’s point of view better.
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MAJOR PRODUCTS & YEAR OF INCEPTION
NIL is running with about 80 brands in India. Some major products under those
brands are till the year 2003 is as follows:
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RECENTLY LAUNCHED PRODUCTS
67
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 ‘CAFÉ NESCAFE’ and ‘COFFEE CORNERS’
across metros and mini-metros in India.
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Nestlé 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.
OBJECTIVES OF NIL
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MICHAEL PORTER’S MODEL FOR COMPETITIVE ADVANTAGE
Suppliers Buyers
THE CORPORATE
ENTITY
Substitutes
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POTENTIAL ENTRANTS
With the increase in growth rate of the market and wide spread acceptance of
chocolates in Indian Market, companies like Mars, Sara Lee etc. are eyeing
the chocolate market. American Hershey foods etc., also plans to enter in it.
Though these companies would facilitate further growth of the market, they
would also want a share of the pie further; a favorable duty structure would
facilitate import of international products than new manufacturing units being
set up.
SUPPLIERS
COCOA PRODUCTION-FUTURE
Since, Cocoa is an inter crop, it does not require additional land. Hence, with
proper policy measures, its production can be beefed up. The Government of
India has been taking keen interest in order to provide a boost to cocoa
production. The Budget ’97 had a provision of about Rs. 20 crores for cocoa
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production development. Measures adopted to give a fillip to cocoa
production include the following:
Cocoa Board merged with Cashew Board on the request of the
Confectionery’s Manufacturer’s Association. A 10 fold increase possible with
proper policy measures.
Other Measures- Village adoption programmes, training programmes for field
people in order to increase yields in the old cocoa gardens, better pest control
measures, etc.
BUYERS
SUBSTITUTE
Indian sweets and confectionery items are the nearest substitutes for
chocolates. However, there is a shift away from heavy sweets towards lighter
sweet offerings like chocolates. Proper segmentation and positioning can
make a brand distinctively different from other confectioneries available in the
market. (E.g. Kit Kat).
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SWOT ANALYSIS
The SWOT Analysis shows the relationship between critical variables of the
company. The SWOT matrix has a wider scope. The 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.
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.
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STRENGTHS
1. High brand equity ……… consumer & dealer regarding Nestle' as
company delivery quality product.
2. Company processes an extensive powerful distribution network.
3. Company processes a dedicated & experienced sales staff.
4. Strong base in monitoring & controlling market.
5. Distributions are highly dedicated towards performance & experience.
6. 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.
7. 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.
8. NIL - State of the Art Technology and production systems ensuring
high technological/high value and optimum cost advantage to its
product portfolio.
9. Idealization of products to suit local tastes are critical for success and
NIL is converting its international products into Indian tastes products.
10. Nestle has altogether 570000 outlets in more than 3000 towns. This is
one of the major strengths of the company.
11. 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.
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WEAKNESSES
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OPPORTUNITIES
1. Great quality.
2. Mass market is growing with established performances.
3. Growing middle class is increasing opportunities.
4. Great taste.
5. Low differentiation in market brands.
6. Credit facility given to dealers.
7. 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.
8. 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.
9. Food industry is the second highest growing industry in India and
offers a lot of opportunities for NIL in India.
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THREATS
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CONCLUSION & RECOMMENDATIONS
1. 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.
2. It should work more on concept of CRM (Making new customers &
retaining old ones.
3. Cash discounts must be given.
4. More competitive pricing to be done in the premium segment.
5. Increase their sales force to make more frequent visits to the sales
person.
6. Should also look for rural markets.
7. Quick handling of problems of stockiest & dealers.
8. Online ordering facility & electronic payment through website can save
a lot of time.
9. 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.
10. Company should concentrate on all round cost saving & productivity
gain, to neutralize the adverse impact of increased excise of
confectionary.
11. 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:-
12. Segmentation & target market selection.
13. Assembling the marketing mix.
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Limitations
A Project that is undertaken, any research that is carried out or any venture
that is to be accomplished is not without its share of limitations. Limitations
are present irrespective of the scale of intensity of the research undertaken. I
was no exception. I too came across limitation but was not discouraged.
Nearly all the companies maintain a certain degree of secrecy. There were
hesitations while providing an outsider with the information & feedback
regarding the company’s strategies & even financial data. To overcome this
shortcoming secondary sources were tapped for required information. These
sources were checked for ensuring their Authenticity bias. Numbers of visits
were made for procuring a single appointment.
Though sample size is large enough it is cost so diversified to be called as
exact.
Inadequacy of time & other resources proved to be a strong limitation. The
data collected from consumers may not be exactly what they think & use as
they might have misinterpreted the objective of research.
Throughout the study utmost care has been taken to avoid biases, errors so
as to ensure authenticity and accuracy. But there is possibility for some
discrepancies to come in between due to following limitations:
Respondents may give their biased opinion, as they know the identity of
interviewer.
My study is based on responses of executives of mentioned companies of
concerned department only, which may not give a true picture.
Last but not the least and the most deciding factor paucity of time.
But I have put in my honest efforts to make this project a useful one for every
one who reads it.
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BIBLIOGRAPHY
INTERNET SITES
www.nestle.com
www.google.com
www.yahoosearch.com
MAGAZINES
BUSINESS TODAY
BUSINESS WORLD
BUSINESS STANDARD
MARKETING MANAGEMENT BY PHILIP KOTLER
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