Marketing Management

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Name- Alpeshkumar Parekh
Roll No- 201
Course- EDP Marketing, 2018-19

Consumer Product Companies

Two Consumer Product Companies- ITC Vs Nestle

Selection behind section of these two companies is one is world market leader (MNC) in the in food and
confectionery industry and another is Indian MNC with diversified into food industry from tobacco
industry successfully and leading Indian market. Nestle is having more than 2000 brands world over and
having presence in 191 countries. ITC is having business in FMCG, Hotel and Services, IT, Agri-Business,
Paperboard and packaging. ITC entered into food industry in 2001 with branded and packaged food
business. Nelste is having one the instant food (pre coocked food) like maggi where as ITC is having
Sunfeast…. Both are enjoying a huge market share.

Company Profile :

ITC
ITC Limited is popularly known as ITC and is a public company of Indian origins. It is a conglomerate and
is associated with several industries like FMCG, Hotel and Services, Information and Technology, Agri-
Business, Paperboards and Packaging. ITC was founded in the year 1910 as Imperial Tobacco Company of
India Limited but was renamed ITC limited in the year 1974.

ITC's diversified status originates from its corporate strategy aimed at creating multiple drivers of growth
anchored on its time-tested core competencies: unmatched distribution reach, superior brand-building
capabilities, effective supply chain management and acknowledged service skills in hotelier. Over time, the
strategic forays into new businesses are expected to garner a significant share of these emerging high-growth
markets in India.

ITC's
Agri-Business is one of India's largest exporters of agricultural products. ITC is one of the country's biggest
foreign exchange earners (US $ 2.8 billion in the last decade). The Company's 'e-Choupal' initiative is
enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through
the power of the Internet. This transformational strategy, which has already become the subject matter of
acase study at Harvard Business School, is expected to progressively create for ITC a hugerural distribution
infrastructure, significantly enhancing the Company's marketing reach.
ITC's
Wholly owned Information Technology subsidiary, ITC InfoTech India Limited, is aggressively pursuing
emerging opportunities in providing end-to-end IT solutions, including e-enabled services and business
process outsourcing.
ITC's

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Production facilities and hotels have won numerous national and international awards for quality,
productivity, safety and environment management systems. ITC was the first company in India to
voluntarily seek a corporate governance rating.
ITC’s employs over 21,000 people at more than 60 locations across India. The Company continuously
endeavours to enhance its wealth generating capabilities in a globalizing environment to consistently reward
more than 3,95,000 shareholders, fulfil the aspirations of its stakeholders and meet societal expectations.
This over-arching vision of the company is expressively captured in its corporate positioning statement:
Objective
The primary objective of this study is to systematically explore the determinants responsible for the
competitive advantage of ITC Limited and how ITC developed new product lines in its foods business
drawing on its competencies in brand-building, R&D, packaging, and distribution. However, market
analysts were not sure whether ITC would achieve success in all the food categories that it had entered.
• Why people are buying the products.
• What all the things which influences them to buy
• To understand how
ITC
has diversified themselves to a multi-product corporationfrom a single product company
Foods
ITC made its entry into the branded & packaged Foods business in August 2001 with the launch of the
Kitchens of India brand. A more broad-based entry has been made since June 2002 with brand launches in
the Confectionery, Staples and Snack Foods segments. The Foods business is today represented in 4
categories in the market. These are:
 Ready To Eat Foods
 Staples
 Confectionery
 Snack Foods
Product in the Marketing Mix Of ITC :
ITC has a diversified business portfolio and it includes-

 TC occupies 81% of market share in terms of selling Cigarettes in India and some of its
main brands are Gold Flake Kings, Wills Navy Cut, Golds Flake Super Star and India Kings

In order to assure consumers of the highest standards of food safety and hygiene, ITC is
engaged in assisting outsourced manufacturers in implementing world-class hygiene standards
through HACCP certification. The
unwavering commitment to
internationally benchmarked quality
standards enabled ITC to rapidly gain
market standing in all its 6 brands:
 Kitchens of India
 Aashirvaad
 Sunfeast
 mint-o
 Candyman
 Bingo!

Out of these six brands, ITC is ranked at first position in terms of branded foods and some of its
food brands are Bingo, Sunfeast, Aashirvaad and Yippee. Its food business is related to
confectionery, juice, ready-to-eats, snack foods and staples
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  The company sells lifestyle apparel under John Players and Wills Lifestyle brands.
 Products related to personal care include skincare, hair care and perfumes
 It is involved in stationary business and its brands include Classmate and Colour Crew
 ITC manufactures and sells agar battles and safety matches with brands like Ship and
Mangaldeep
 The company is involved in Hotel and service business and occupies the second position as
largest chain of hotels in India with more than ninety hotels to its name.
 ITC is involved in Paperboard business and sells graphic, speciality paper and other papers
under its own brand name
 Company offers services like printing and packaging to international and domestic market
 ITC operates Information Technology business sector via its subsidiary ITC Infotech India
Limited

Place in the Marketing Mix Of ITC :

ITC has been ranked as one of the best companies in the world with an experienced and strong
management and distribution network. It is served by an efficient workforce that includes services
of more than 25,000 employees by the end of the year 2013. ITC has spread its network to nearly
sixty locations in most part of India. Its headquarters base is at Kolkata in West Bengal.

Its products are available in many global countries. The company has set up tobacco business in
Nepal via a joint venture. Manufacturing plants of its printing and packaging division are in
Chennai and Haridwar. In order to move with changing times, it started online sales from the year
2014. ITC has taken a very strong initiative titled e-Choupal model that has tackled several

Its products are available in many global countries. The company has set up tobacco business in
Nepal via a joint venture. Manufacturing plants of its printing and packaging division are in
Chennai and Haridwar. In order to move with changing times, it started online sales from the year
2014. ITC has taken a very strong initiative titled e-Choupal model that has tackled several
challenges faced by farmers quite successfully.

Price in the Marketing Mix Of ITC :

ITC has an operating income of estimated rupees 15,037 crore at the end of the fiscal year 2015
and revenues worth rupees 53,748 crore at the end of the financial year 2015-16. It has several
business interests and faces lots of competition from rival companies. Moreover, it has decided to
market its products in every nook and corner of India and hence has maintained both competitive
and penetration pricing policies to deal with competitors and to successfully spread its product
reach to remotest parts in India.

ITC for its luxurious products like hotel business has adopted a premium pricing policy but for
consumer products, it has adopted a reasonable pricing policy as it recognises that most Indians
belong to middle-class section of society and if the product prices are pocket friendly and
affordable, it will help in creating sales and ultimately will lead to better revenue figures.

Promotions in the Marketing Mix Of ITC :

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ITC has a well-built brand presence because of the diversified and extended product portfolio. It
has taken help of several promotional activities to market its products and create positive brand
awareness. ITC has adopted an aggressive marketing strategy and taken help of every
promotional tool like electronic, print and social media at its disposal to market its products. It has
launched several ad campaigns which are shown via popular television channels, aired on radio
and displayed via hoardings. It has also roped in famous personalities for better visibility like
Kareena Kapoor and Shahrukh Khan.

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Company Profile :

Nestle :
NESTLÉ India is a subsidiary of NESTLÉ S.A. of Switzerland. With eight factories and a large
number of co-packers, Nestlé India is a vibrant Company that provides consumers in India with
products of global standards and is committed to long-term sustainable growth and shareholder
satisfaction.

The Company insists on honesty, integrity and fairness in all aspects of its business and expects
the same in its relationships. This has earned it the trust and respect of every strata of society that
it comes in contact with and is acknowledged amongst India's 'Most Respected Companies' and
amongst the 'Top Wealth Creators of India'.

The NESTLÉ Corporate Business Principles are at the basis of the Company’s culture, developed
over 150 years, which reflects the ideas of fairness, honesty and long-term thinking.

Nestlé is the world’s largest food and beverage company. We have more than 2000 brands
ranging from global icons to local favourites, and we are present in 191 countries around the
world.

Nestle is having presence Across India with a plant in Samalkha, Haryana.

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

Product in the Marketing Mix Of Nestle:

Beverages – One of the most known coffee brands Nescafe, belongs to the house of Nestle and is
one of the cash cows for Nestle. However, it is not the biggest cash cow. Nestle has a worldwide
distribution and has many different variants. Looking at India, Nestle has also launched Nestea.

Milk and Milk products – Nestle everyday, Nestle slim and Nestle Milk maid are some of the milk
and milk based products from the house of Nestle.

Prepared dishes and cooking aides – Nestle has a third category of products which comes into
prepared dishes and cooking aides. The major cash cow of Nestle lies in this segment, which is
Maggi Noodles. Probably one of the most widely sold ready to cook noodle brands is Maggi.
Maggi has a fantastic taste and quality. Thus, it was not a surprise, that Nestle expanded the
Maggi brand to create an umbrella of different products like Maggi pasta, Maggi sauce, Maggi
cubes etc. The maggi range contributes vastly to the bottom line of Nestle.

Chocolates – Nestle has some popular chocolate products, most popular being Nestle Kitkat,
Munch, Milky bar, Eclairs and Polo. The newly introduced Alpino is targeting the gifting segment in
response to various chocolates like Dairy milk and Bournville by Cadbury. The chocolates

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segment of Nestle is a star, where the competition is high and the expense is high but at the same
time the market size is huge as well.

As we can see, two major brands of Nestle are a very high contributor to its Brand equity –
Nescafe and Maggi. These are two brands sold across India in small as well as big shops and
super markets. There have been many competitors for these products, like Bru for Nescafe and
Top ramen and Sunfeast Yippie against maggi.

The appreciable factor in Nestle is that quality maintenance of products is upto mark and there are
hardly any complaints about Nestles products in the market. This is a major achievement for a
company which relies majorly on food products.

Place in the Marketing Mix Of Nestle :

Nestle
follows
the
FMCG
strategy
of

distribution which involves breaking the bulk. The typical distribution strategy of Nestle is as
follows.

Manufacturing >> C & F agent >> Distributors >> Retailers >> Consumer
Manufacturing >> Bulk buyers >> Consumer
These are the two different forms of distribution which Nestle has. It is typical of any FMCG
company. However, the Nestle channel is known to be strong with a good marketing and sales
network for channel distribution.

On top of it, Nestle regularly introduces trade discounts and various tactics to keep the channel
motivated. The major challenge is in the distribution of Maggi which is the most in-demand product
along with Nescafe. Due to these two products, Nestle is able to drive other products in the market
as well. Thus, on purchase of one weak product, the distributor might get a discount on the
stronger product or vice versa.

The challenge for Nestle is in the chocolate segment where it faces stiff
competition from Cadbury and hence selling
the chocolates becomes difficult. Kitkat might
have its own brand positioning, but it is not
better than Dairy milk. Thus, converting
retailers to sell Nestle instead of Cadbury is
the toughest task for Nestle. This is
converted mainly through promotions.
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Price in the Marketing Mix Of Nestle :
The price is dependent on the market of each individual products. For example, Nescafe and
Maggi being the clear leaders are priced with higher margins for the company as compared to
competition. This is because the product quality is good enough and a bit of skimming price will
not cause the customer to switch brands.

The strength of pricing for Nestle comes from its packaging or consumption based pricing. For
Nescafe as well as Maggi, Nestle offers a lot of sizes and package options. In supermarkets, you
can even find a 16 packet maggi whereas in small retail shops, you can find 5 rs maggi.

Thus, with the variety available, customer can make his own choice based on his consumption. In
other products like Kitkat and Munch, due to tough competition from other companies, Nestle
offers competitive pricing. You will find that nestle will be similar priced to many of Cadbury’s
Products in the chocolate segment.

Promotions in the Marketing Mix Of ITC :

One of the most widely known tunes is the Nescafe tune. It was one of the best advertising
campaigns and was launched at least 2 decades back. However, that campaign brought Nescafe
strongly in the market.

On the other hand, Nestle’s brand was pushed by the excellent product quality of Maggi and the
witty and innovative campaigns of Maggi. Where Nescafe focuses on value and the good things in
life, Maggi focuses on moments you had with your Maggi. The recent campaign was completely
focused on your maggi story, where people had to come out with various innovative ways that they
had their maggi.

Promotions for other products too is done smartly. Kitkat focuses on “Take a break” and has done
some good marketing for the same. Kitkats website too is very innoative and shows nothing but
asks the visitor to take a break and have a Kitkat. The major push expected of a FMCG company
is in sales promotions at the ground level. This is where Nestle really rocks. Nestle focuses on its
strength which is Maggi, Nescafe and Kitkat which are the most promoted brands in the market on
ground level.

Besides this, Nestle regularly uses TVC’s and ATL marketing. It is also present online through
some smart creative. Overall, Nestle is a brand which has strong products as well as strong
marketing, and hence the brand has a very high brand recall value.

Marketing Mix Strategy Table

The ITC is at its growth stage in food industry, and it is the preferred type of instant foods and buiscuits / cookies in
the indian market. However, it is facing aggressive competition from other products marketed by Nestle and other
MNCs in the market including Cadbury’s and Patanjali with the same product range with pure veg and organic punch
lines..

Marketing mix strategy Growth stage

Pricing strategy Competition pressure results in declining prices
Promotion strategy Triggers selective demand and the brand is aggressively advertised
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Distribution strategy Aggressive efforts to create permanent relationship with retailers and
wholesalers
-Increased number of distributors to reach to the end of population
Production strategy -Introduction of new flavoured instant food at regular intervals to meet
consumers
requirements
-Numerous models
Conclusion
Conclusively, the recommended marketing mix effectively outlines the company’s brand positioning strategy and is
internally consistent. The variants of the product will be introduced with high-quality food products. “Sunfeast Yeppi
Noodles” will be distributed on all platforms including e-commerce retailers such as Amazon. Both ITC and Nestle is
trying to establish more manufacturing facilities, to distribute products with the aim to reduce transportation cost. The
report has recommended that the company makes use of all the marketing platforms including sponsorship of cricket
match, IPL team,, advertising, and public relations to market the product. Likewise, the paper recommends that the
company makes use of a competitive pricing model because of the aggressive competition that defines the industry.
Apart from focusing on the 4ps, it is important for the company to take into consideration corporate social
responsibility. The company’s marketing strategy focuses on sustainability and producing healthy products. However,
the company should create a compliance program to ensure that all its activities adhere to the environment
standards.

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Dear Participants,

Pl. find below the instructions and scope of your discussion in the Individual Assignment in our Course -
Marketing Management:

1. Select TWO consumer product marketing companies (who are close competitor to each other)
and TWO business product marketing companies (who are close competitor to each other).

2. Why did you prefer to select these companies? Explain in brief.

3. Describe the profile of these companies.

4. Describe the target market segments of these companies.

5. Critically evaluate each company's Marketing-Mix strategies. Does the marketing mix build on the
organization's culture and tangible strengths? Does the marketing mix create a distinctive personality in the
competitive marketplace and protect the company from the most obvious competitive threats? Discuss.

Assignment Submission Date: 02/09/2018 in the scheduled class of MM (Hard and Soft copy).

Regards,
Subrat Sahu.

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