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In this report we take a peek into the organized and unorganized retail sector of India. I have
researched the product performance and buying behavior of Nestl chocolates- which are
consumed by people of all ages. During the research I have interacted with retailers of
Gurgaon region. After this research, I came to know how distribution pattern of Chocolates
varies with regard to type of channel, location, price, brand loyalty, taste etc. Also I came to
know which particular brand of chocolate is most preferred by people of different age groups.
I conducted exploratory research for finding out various issues faced by Indian retailers both
organized as well as unorganized. I visited stores individually to gain insight about their
distribution networks with Nestl India Pvt. Ltd. & to analyze problems faced by them in
selling Nestl chocolates.
In this research I have surveyed that how frequently & how much chocolate they consume,
whether they buy small, big or family pack. In this report I have tried to explain the entire
facts and figures product wise.

The Indian retail segment accounts for 22 per cent of the country's gross domestic product
(GDP) and contributes about 8 per cent to the total employment. India continues to be among
the most attractive investment propositions for global retailers.
India has emerged as the fifth most favorable destination for international retailers, outpacing
the UAE, Russia, Indonesia and Saudi Arabia, according to A T Kearney's Global Retail
Development Index (GRDI) 2012. "India remains a high potential market with accelerated
retail growth of 15-20 per cent expected over the next five years," highlighted the report.
1.1.1 Market Size
India's retail sector is worth US$ 350 billion and is growing at a compound annual growth rate
(CAGR) of 15 per cent to 20 per cent at present, as per a PricewaterhouseCoopers (PwC)
research report titled, 'Winning in India's retail sector: Factors for Success'.
Mass grocery and apparel are the two most favored segments for foreign direct investment
(FDI) in multi-brand retail in India, according to a study titled 'Indian Retail Market-Opening
More Doors' by Deloitte Touch Tohmatsu India.
The FDI inflows in single-brand retail trading during April 2000 to December 2012 stood at
US$ 42.70 million, as per the data released by Department of Industrial Policy and Promotion
1.1.2 Chocolate Industry in India
The Indian Chocolate Industry has come a long way since long years. Ever since 1947 the
Cadbury is in India, Cadbury chocolates have ruled the hearts of Indians with their fabulous
taste. Indian Chocolate Industry. The brand of Cadbury is known for its exceptional
capabilities in product innovation, distribution and marketing. With brands like Dairy Milk,

Gems, 5 Star, Bournvita, Perk, Celebrations, Bytes, Chocki, Delite and Temptations, there is a
Cadbury offering to suit all occasions and moods
Chocolate consumption is gaining popularity in India due to increasing prosperity coupled
with a shift in food habits, pushing up the country's cocoa imports. Firms across the country
have announced plans to step-up domestic production from 10,000 tons to 16,000 tons,
according to Reuters. To secure good quality raw material in the long term, private players
like Cadbury India are encouraging cocoa cultivation, the news agency said. Cocoa
requirement is growing around 15% annually and will reach about 30,000 tons in the next 5
The Indian candy market is currently valued at around $664 million, with about 70% share ($
461 million) in sugar confectionery and the remaining 30% ($ 203 million) in chocolate
confectionery. Indian Chocolate Industry is estimated at US$ 400 million and growing at 18%
per annum. Cadbury has over 70 % shares in this market, and recorded a turnover of over US$
37m in 2008.
The size of the market for chocolates in India was estimated at 30,000 tons in 2008. Bars of
molded chocolates like Amul, milk chocolate, dairy milk, truffle, nestle premium, and nestle
milky bar comprise the largest segment, accounting for 37% of the total market in terms of
volume. The chocolate market in India has a production volume of 30,800 tons. High
volumes, huge expenses on advertising, low margins, and price sensitivity, characterize the
chocolate segment. The count segment is the next biggest segment, accounting for 30% of the
total chocolate market. The count segment has been growing at a faster pace during the last
three years driven by growth in perk and kit Kat volumes. Wafer chocolates such as kit Kat
and perk also belong to this segment. Panned chocolates accounts for 10% of the total market.
Cadbury and Nestle, together accounting for 90% of the market, today primarily dominates
the chocolate market.

Nestl is a multinational packaged food company founded and headquartered in Switzerland.
It resulted from a merger in 1905 between the Anglo-Swiss Milk Company for milk products
established in 1866 and the Farine Lacte Henri Nestl Company set up in 1867.
Nestl's products include baby food, bottled water, breakfast cereals, coffee,
confectionery, dairy products, ice cream, pet foods and snacks. 29 of Nestl's brands have
annual sales of over 1 billion Swiss francs (about $ 1.1 billion), including Nespresso,
Smarties, Nesquik, Kit Kat, Stouffer's, Vittel, and Maggi.
Nestl has around 450 factories, operates in 86 countries, and employs around 328,000 people.
It is one of the main shareholders of LOreal, the world's largest cosmetics company.
1.2.1 Strategy
Nestls objectives are to be recognized as the world leader in Nutrition, Health and Wellness,
trusted by all its stakeholders, and to be the reference for financial performance in its
Nestl grew from a small company producing powdered milk and cereal products for infants
into a global food company feeding much of the worlds population Nutrition and Wellness
are at the core of Nestls products and manufacturing.
We believe that leadership is not just about size; it is also about behavior. Trust, too, is about
behavior; and we recognize that trust is earned only over a long period of time by consistently
delivering on our promises. These objectives and behaviors are encapsulated in the simple
phrase, Good Food, Good Life, a phrase that sums up our corporate ambition.
(Source: Nestle Global)
Competitive Advantage
Unmatched product and brand portfolio
Unmatched R&D capability
Unmatched geographic presence
People, culture, values and attitude

Growth Drivers
Nutrition, Health and wellness
Emerging markets and popularly positioned products
Out-of-Home (OOH)
Operational Pillars
Innovation & Renovation
Wherever whenever, however
Consumer engagement
Operational efficiency
1.2.2 Nestl India Vision
To rapidly build Nestl India as the Respected and Trustworthy leading Food, Nutrition,
Health and Wellness Company ensuring long term sustainable and profitable growth
(Source: Nov, 29, Financial Analysts Meet, Nestle India Ltd., 2006)
1.2.3 Processing across Indian
After nearly a century-old association with the country, today, Nestl India has presence
across India with 7 manufacturing facilities and 4 branch offices spread across the region.
Nestl Indias first production facility, set up in 1961 at Moga (Punjab), was followed soon
after by its second plant, set up at Choladi (Tamil Nadu), in 1967. Consequently, Nestl
India set up factories in Nanjangud (Karnataka), in 1989, and Samalkha (Haryana), in
1993. The commissioning of two more factories - at Ponda and Bicholim, Goa, in 1995 and
1997 respectively succeeded this. The seventh factory was set up at Pantnagar,
Uttarakhand, in 2006.
The 8
Factory was set up at Tahliwal, Himachal Pradesh, in 2012.
The 4 branch offices in the country help facilitate the sales and marketing of its products.
They are in Delhi, Mumbai, Chennai and Kolkata. The Nestl India head office is located in
Gurgaon, Haryana.

1.2.4 Product Mix
Milk Products

Nestl A+
Nestl Slim milk and dahi
Nestl ActiPlus probiotic dahi
Nestl Bhuna jeera raita
Nestl real fruit yoghurts
Nestl milkmaid
Nestl milkmaid creations
Nestl Neslac
Nestl Everyday dairy whitener
Nestl everyday Ghee


Nescaf Classic
Nescaf cappuccino
Nescaf SUNRISE Premium
Nescaf SUNRISE Strong
Nescaf Gold
Nestea Iced Tea
Prepared Dishes and Cooking Aids

Maggi 2-Minute Noodles
Maggi dumdaar Noodles
Maggi Xtra Delicious chicken
Maggi vegetable Atta Noodles
Maggi vegetable multigrainz
Maggi cuppa mania
Maggi Bhuna Masala
Maggi coconut milk powder
Maggi healthy soups
Maggi magic cubes
Maggi masala-ae-magic
Maggi nutri-licious PAZZTA
Maggi Pizza-Mazza
Maggi sauces


Chocolates and Confectionary

Nestl Dark Chocolate
Nestl Kit Kat
Nestl Bar one
Nestl Munch
Nestl Munch pop choc
Nestl Munch Rollz
Nestl Milk chocolate
Nestl Milky Bar
Nestl Milky Bar Choo
Nestl Milky Bar crispy wafer
Polo Hole new Fashion
Beverage Solution

Nescaf Nan u Vend
Nescaf table top (Double option)
Nescaf table top (tripe option)
Nescaf table top (six option)
Nescaf solutions 8/60-
Nescaf EZ care
Table 1: Product mix of Nestl India (Source: http://www.nestle.in/)

1.2.5 Organizational Structure
Figure 1: Organizational chart of Nestl global (Source: www.nestle.com)

1.2.6 Directors and Officers (Nestl India)
Board of Directors
Mr. Antonio Helio Waszyk Chairman and Managing Director
Mr. Shobinder Duggal Director - Finance & Control
Mr. Christian Schmid Director Technical
Mr. Michael W.O. Garrett Non-Executive Director
Mr. Ashok Kumar Mahindra Non-Executive Director
Mr. Ravinder Narain Non-Executive Director
Dr. Swati A. Piramal Non-Executive Director
Mr. Richard Sykes Alternate Director to Mr. Michael W.O Garrett


Audit Committee
Mr. Ashok Kumar Mahindra Chairman
Mr. Michael W.O. Garrett Member
Mr. Ravinder Narain Member

Shareholder / Investor Grievance Committee
Mr. Ravinder Narain Chairman
Mr. Antonio Helio Waszyk Member

Corporate Governance Committee
Mr. Antonio Helio Waszyk Chairman
Mr. Michael W.O. Garrett Member
Mr. Ravinder Narain Member
Dr. Swati A. Piramal Member

Company Secretary
Mr. B. Murli Senior Vice President - Legal & Company Secretary
Table 2: List of Companys Officers (Source: www.nestle.com)

Given Indias large population and rapidly expanding middle-class, there is robust and
growing demand and a rapidly expanding market. Table 2 shows the growth in private
consumption expenditures across categories to highlight this trend.

Category 2005-06 2006-07 2007-08 2008-09
Food & Beverages 11.7% 11.1% 13.0% 10.4%
Clothing & Footwear 18.0% 25.0% 7.7% 5.2%
Rent, fuel & power 10.5% 12.5% 14.2% 16.6%
Furniture & appliances 17.7% 22.2% 19.4% 9.4%
Medical Care 10.1% 10.1% 10.1% 10.1%
Transport & Communication 10.6% 14.1% 9.3% 16.5%
Recreation, Education & culture 12.3% 12.9% 18.3% 13.3%
Miscellaneous goods & services 12.9% 27.1% 29.7% 29.0%
Total consumption expenditure 12.0% 14.8% 14.1% 14.2%
Estimated retail trade sales 12.4% 14.9 15.1% 12.5%
Table 3: Growth Rates in Private Final Consumption Expenditure: 2005-2009 (%) in constant prices.
(Source: DIPP discussion paper, authors calculations. Retail trade sales exclude expenditures on rent, fuel
and power; transport and communication; recreation, education and cultural activities; and expenditures on
food in hotels and restaurants.)

The retail sector in India is organized into three categories. According to the Department of
Industrial Policy and Promotion (DIPP) of the Government of India, single-brand retail
comprises those retailers selling products of a single brand only, such that products should
be sold under the same brand internationally; and single-brand product retailing covers only
products which are branded during manufacturing. In this category, FDI is allowed to the
extent of 51 per cent.

From 2006 to March 2010, around 94 foreign firms applied to invest through the single-brand
route of which 57 were approved. Consequently, the percentage increase in FDI flows in the
retail sector between 2008 and 2010 was even higher than that in sectors such as the services
sector, trading and telecommunications, which have a much higher share in the country's
overall FDI (DIPP, 2010).
In contrast, no FDI is allowed in the multi-brand retail category. This includes all firms in
organized retail that seek to stock and sell multiple brands, such as large international retailers
like Wal-Mart and Carrefour. This is the sector that is most under dispute.

The third segment, called cash and carry, refers to wholesale retail. The government
defines this segment as the sale of goods and merchandise to retailers, industrial,
commercial, institutional or other professional business users or to other wholesalers and
related subordinated service providers. In India, FDI of 100 per cent is permitted in this

1.3.1 Indian Chocolate Industry: Overview

The Indian chocolate industry is extremely fragmented with a range of products catering
to a variety of consumers. We have the bars/slabs, jellies, lollipops, toffees and sugar
Given India's mammoth population, it comes as a surprise that per capita chocolate
consumption in the country is dismally low - a mere 20 Grams per Indian. Compare this to
over 7 Kg in most developed nations.
However, Indians swallowed 22,000 tons of chocolate last year and consumption is
growing at 10-12 percent annually.
Growth of other lifestyle foods such as malted beverages and milk food have actually declined
by 3.7 per cent and 11.7 per cent, however the CHOCOLATES continue to grow at the rate
of 12.6%.
Low priced unit packs, increased distribution reach and new product launches can be said
to have fuelled this growth.

The launch of lower-priced, smaller bars of chocolate in the last two years and positioning of
chocolate as a substitute to traditional sweets during festivals, have boosted consumption.
After economic liberalization in 1991, major changes have occurred in food habits, partly on
account of rise in gross domestic product (GDP) growth and higher purchasing power in the
hands of the middle-class representing a third of the total population. Availability of chocolate
products has also exploded.
A study had projected that sales of the Indian chocolate industry would rise from $125/$130
million in 1998 to $175/$180 million by the year 2000 and to $450 million by the year 2005
which ACTUALLY happened irrespective of various negative factors.

1.3.2 Problems & challenges of Indian Chocolate Industry
A peculiar problem that hinders the distribution to far-off places is the tendency of chocolates
to melt under even moderate heat. The temperatures can reach as high as 48 degrees in
summers, whereas chocolate starts melting at body temperature (about 37-38 degrees)
.Manufacturers have to take precautionary measures to ensure the preservation of chocolates
especially in summer.

India does not have controlled refrigerated distribution. Air-condition supermarkets are rare.
Cadbury loses 1.5 percent of annual sales of Rs. 6.8 billion to heat damage. Companies
revise ingredients to make chocolate withstand heat, and so Indian chocolates are more
resilient to heat than European chocolates by a factor of 2 degrees. Ironically, the chocolate
market has grown recently because smaller retailers have stuffed fridges and coolers supplied
by the cola companies Coke and Pepsi with chocolates.
Nestle and Cadbury have tried to provide loans for retailers to buy fridges, but to hold down
power costs the shopkeepers switch off the fridges at night. As a result the cocoa fat melts and
migrates to the main body of the chocolate bar. When the cooling is switched on in the
morning, the cocoa fat solidifies and turns white, presenting a bizarre, un-sellable white on

black form. Nestle tried to provide fridges with see-through doors, but was appalled to
see its chocolates sandwiched between dead chicken, butter and vegetables.
Small coolers were provided to retailers to keep the chocolate from melting, but that didn't
quite do the trick. Electricity costs money and is not provided in a uniform way, so on and
off the electricity goes and the product may suffer sometimes

Cocoa is the key raw material and accounts for around 35% of the total material cost
(including packaging) of chocolates. The price of cocoa has been hitting a new high of late.
Cocoa prices are at a near 20-year high at $2358 per ton, up from $900 a year back. India does
not produce cocoa to any noteworthy extent but is a large consumer of chocolates.
Consumption of chocolates and other cocoa-based products, especially among the middle
class, has been growing.

Chocolate needs to be distributed directly, unlike other FMCG products. 90% of our products
are sold directly to retailers. Building such a direct network in rural areas is a daunting task
since the infrastructure is poor in India in rural areas.

Free availability of imported brands bought through illegal routes pose a threat to the domestic
chocolate industry. Usually, these imported chocolates taste better than domestic chocolate
due to recipe difference. Hence consumers who are willing to spend a little more, prefer these
imported chocolates.
However, the premium brands, which come through official channels, do not pose a
threat to the market, as these cater to a small niche market. However there is a lot of
dumping from neighboring countries like Dubai, Nepal, etc. of inferior brand of imported
chocolates. These are not only of low quality, but are brought very near to their expiry dates.
Most of the cheap chocolate brands that are available do not meet Indian Food Regulations.

1.3.3 Growth Opportunities in Indian Chocolate Industry
!" #$%&''() +&,-(% . /010%() 23$451'%03$6
The fact that chocolate is not a tiauitional foou, high piices anu uomestic piouuction
pioblems will pioviue the main pioblems to maiket giowth. As these maikets uevelop,
piices will fall making these piouucts moie accessible to the wiuei population. Bowevei
the Inuian maiket is still untappeu anu pioviues immense scope foi giowth, both
geogiaphically as well as piouuct basket wise.
Chocolates iight now ieaches about 7umn to 7Smn consumeis. It is estimateu that
chocolates have a potential maiket of about 116mn consumeis.
!"#$#%&'( $#*+,-.'/#* /* 0*1/& /+ (2'3(-(%4 %#5. Pei capita consumption is aiounu
16ugms in the uiban aieas, compaieu to 8-1ukg in the uevelopeu countiies. The pei
capita chocolate consumption in Inuia is still much below the East Asian stanuaius.
Bence pei capita consumption has immense scope foi impiovement.
In iuial aieas, it is even lowei. Chocolates in Inuia aie consumeu as inuulgence anu not
as a snack foou. A stiong volume giowth was witnesseu in the eaily 9u's when Caubuiy
iepositioneu chocolates fiom chiluien to auult consumption. The biggest oppoitunity is
likely to stem fiom incieasing the consumei base. Leauing playeis like Caubuiy anu
Nestle have been attempting to uo this by value foi money offeiings, which aie
affoiuable to the masses.
0* '"( .&+' 6/7( 4(&3+8 '"( $"#$#%&'( 9,+/*(++ :3#5* 94 ;<=;>? #* &* &7(3&:( &*1
/+ (2.($'(1 '# :3#5 6,3'"(3 6#3 &' %(&+' *(2' 6/7( 4(&3+@

7" 28&$90$9 :%%0%5)(4 . 23$451'%03$ '&%%(,$
In the past, chocolate consumption hau been iestiicteu by low puichasing powei in the
Chocolates anu othei cocoa-baseu snack foous weie lookeu upon as foou suitable only
foi elitist consumption till iecently.
But with the launch of lowei-piiceu, smallei bais of chocolate in the last two yeais anu
positioning of chocolate as a substitute to tiauitional sweets uuiing festivals, have

boosteu consumption. Chocolates, which weie consiueieu to be an elitist foou, hit the
fancy of masses looking foi a change in life style at affoiuable cost.

;" <5,&= (>'&$403$
Ruial maiket anu small town maikets aie seen as the key to spuiiing uouble-uigit
Piouucts such as liquiu chocolate packs fiom the existing poitfolio aie expecteu to
enable iapiu acceptance.

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Inuia is being leveiageu foi expoit of finisheu goous, as a supeiioi uestination foi
manufactuiing best piactices, anu foi BP0 oppoitunities.
All the above points biing us to a conclusion that theie's an immense scope foi giowth of
chocolate inuustiy in Inuia not only in its offeiing pattein but also foi inciement in its
total consumption value anu size.

1.3.4 Nestl Distribution Pattern

Figure 2: Flow chart of distribution of Nestl Chocolates (Source: Company brochures)

1.3.5 Channel Of Distribution
Marketing channels are sets of interdependent organizations involved in the process of making
a product or services available for use or consumption.
Nestl has 10 channels of Distribution all over India, namely:
1. Supermarket
2. Grocery Large
3. Grocery Small
4. Convenience store
5. Pan shop
6. Chemist
7. Bakery
8. OOH (Out-Of-Home)
9. Re-distributors
10. Wholesalers

Primary Distributors
Mother Godown Distribution Centers

1.3.6 Scope of the Study

As learning is a human activity and is as natural, as breathing. Despite of the fact that learning
is all-pervasive in our lives, psychologists do not agree on how learning takes place. How
individuals learn is a matter of interest to marketers. They want to teach consumers in their
roles as consumers. They want consumers to learn about their products, product attributes,
potential consumers benefit, how to use, maintain or even dispose of the product and new
ways of behaving that will satisfy not only the consumers needs, but the marketers
The scope of my study restricts itself to the analysis of distribution pattern of
Nestl chocolates to its various marketing channels. There are many other brands of
chocolates available but my study is limited to Nestl, Cadbury, Amul & Mars. The scope of
my study is also restricts itself to Gurgaon (NCR) region only.

1.3.7 Objectives of the Study
! To identify the strongest brand of chocolates amongst various companies Nestl,
Cadbury, Amul, Mars.
! To analyze the problems faced by retailers in stocking Nestl chocolates.
! To identify key reasons for decline in the sale of Nestl chocolates.
! To identify various promotional schemes offered by other leading chocolate
companies & how it effects the sale of Nestl.
! To provide recommendations to the organization on various steps needed to
influence the retailers attitude towards the Nestl chocolates and increasing the
market share for the chocolates in Delhi/NCR region.

1.3.8 Limitations of the Study
In attempt to make this project authentic and reliable, every possible aspect of the topic is kept
in mind. Nevertheless, despite of fact constraints were at play during the Formulation of this
project. The main limitations are as follows:
! Due to limitation of time only few people would be selected for the study.
So the sample of consumers would not enough to generalize the findings of the study.
Retailers were reluctant to provide appropriate answer due to:
Lack of interest
Lack of awareness about the product information such as margin provided to
them, various retailer promotional schemes offered to them.

The objective of conducting any research is to find the answers to certain questions through
the application of scientific procedures.
I visited Nestl and interviewed Mr. Mohit Behl, to get the information regarding the
product in which company is currently facing problem. He told us about the declining sales of
Nestl Chocolates and asked me to provide the company the following information:
Study of specific areas which are the root cause of decline in sales
To identify the correct target market
What strategies competitors are using and how that can be tackled
To find if there is problem with advertisement and promotion.
Product quality
2.1.1 Research Questions
The research objectives will also include some questions through which we will try to solve
our research problem.
1. Why are retailers reluctant to stock Nestl Chocolates?
2. What is the awareness level of Nestl chocolates among customers?
3. What is margin offered to retailers by competitors?
4. How strong are competitors in creating loyalty among the target market?
5. How much the advertising campaign influences the purchase decision of the

2.1.2 Hypothesis
The hypothesis that was formulated based on our research questions are as follows:
i. Household income has significant impact on the consumption of chocolates
ii. A significant relationship exists between gender and degree of liking of Nestl
iii. A significant relationship exists between age and consumption of Nestl
iv. Significant relationship exists between the Taste of
Nestl Chocolate and consumption of Nestl
v. Significant relationship exists between the Price of
Nestl Chocolate and consumption of Nestl
vi. Significant relationship exists between the
Appealing Advertisement of Nestl Chocolate and consumption of Nestl
vii. A significant relationship exists between the degrees of satisfaction of consumers
with the packaging of the Nestl Chocolates.
viii. There is a significant relationship between sales and appealing advertisement of
Nestl Chocolate
ix. A significant relationship exists between the sales and the profit margin of Nestl
x. A significant relationship exists between the price of the chocolate and the profit
margin of Nestl Chocolate

C095,( ;6 D(4%=E 283F3=&%(

2.2 Research Design
Nestl Chocolates has provided us the basis of their research concern to identify reasons
behind the decline in the sales of Nestl Chocolates in particular. Exploratory research will
help us identify the research hypotheses. Hence, it is of our benefit to start off the research
process by conducting exploratory research.

Figure 4: Research Design

Exploratory Research
Focus uioups
Nestl Website &
Trade Literature
Company internal
Wholesalers &
distributors in Gurgaon
Retailers located in
various parts of cities

2.3 Methodology
This section describes the methodology of the study. This project is based on information
collected from primary sources as well as secondary sources. After the detailed study, an
attempt would be made to present comprehensive analysis of distribution pattern of Nestl
chocolates & finding the causes for decline in sale. The data would be used to cover various
aspects like type of channel employed by the company, market share per channel, consumers
preference effect of promotional schemes, effect of margin given by the distributors. In
collecting requisite data and information regarding the topic selected, I would go to the
retailers in Gurgaon City, and also few wholesalers dealing with Nestl products.

2.3.1 Survey Design
A related sample of population was selected on the basis of the overall population of Gurgaon
and questionnaires were made.

2.3.2 Sample Size & Design
A sample of 100 retailers was taken. The actual retailers would be contacted on the basis of
Cluster Sampling. The target retailers will be those who were reached by specific

2.3.3 Sampling Frame
All the retailers (Channel of Distribution) who stock Nestl Chocolates & other competitors

2.3.4 Research Instrument
This work is carried out through questionnaire. The questions included are multiple-choice

2.3.5 Data Collection
The data, which is collected for the purpose of study, is divided into 2 bases:
Primary Source:
The primary data comprises information survey of Comprehensive analysis of distribution
pattern of Nestl Chocolates. The data would be collected directly from respondent with the
help of questionnaires.
Secondary Source:
The secondary data would be collected from the Internet, References from Library.

2.3.6 Data Analysis
Data is analyzed on the basis of suitable tables using various mathematical techniques.
The technique that I will use is bar technique whereby I will use various charts and bars to
analyze the data collected and finding the root cause of the problem.


This section deals with analysis of questionnaire prepared for interview with 100 retailers.
It highlights the response given by the respondents and interpreting the results from the same.

1. How long have you been in retail business?
0-1 year 3
2-5 years 19
5-10 years 61
Above 10 years 17

Figure 5: Time period in retail business
Maximum retailers are in the business from 5-10 years. They have good knowledge about
market trends, customer preferences.

u-1 yeai 2-S yeais S-1u yeais
Above 1u
Seiies1 S 19 61 17

Time period in retail Business

2. Channel type
Supermarket 6
Grocery large 25
Grocery Small 38
Chemist 29
Wholesaler 2

Figure 6: Channel contribution in numbers

From the above data, it can be inferred that maximum channel employed by the company is
Grocery small followed by chemist. Supermarket constitute smaller part, company should
employ more supermarket to increase market share.

uioceiy laige
uioceiy Small

3. What brand of chocolates do you stock
Nestl 87
Cadbury 97
Amul 32
Mars 45
Others 24

Figure 7: Market share of Nestl Competitors
From the above data it can be inferred that Cadbury dominates chocolate market with 97%
market share followed by Nestl with 87% share. It can be said that Nestl is unable to reach
the target market.

Nestl Caubuiy Amul Nais 0theis

!#-.&*4 B&-(
Competitor Market Share

4. Which is the most popular brand of Chocolate product?
Nestl 19
Cadbury 63
Amul 4
Mars 12
Others 2

Figure 8: Most popular brand according to the retailers

According to the survey, 63 out of 100 retailers believe that Cadbury is most solid brand
among chocolates whereas only 19 out of 100 retailers say that Nestl is major competitor to
existing chocolates brands.

Popular Brand

5. Which is the most popular brand of Nestl chocolates product? Rank
Kit Kat 51
Bar One 21
Nestl Milk Chocolate 13
Milky bar 19
Munch 46
Milky bar Choo 32

Figure 9: Most popular Nestl Chocolates

From the above data it can be inferred that 51 retailers ranked Kit Kat as most solid
brand whereas 46 retailers ranked Munch as most solid brand. Nestl Milk
chocolate has been ranked as most solid brand by 7% of the retailers.

Kit Kat
Bai 0ne
Nestl Nilk
Nilky bai
Nilky bai
Nestl Chocolates' Popular Brand

6. Who are the main customers of Nestl Chocolate product?
Kids 16
Youngsters 32
Housewives 47
Others 5

Figure 10: Major customers of Nestl Chocolates

It can be said that major consuming class of Nestl Chocolate belong to Housewives
followed by Youngsters. Company should advertise their products keeping in mind
their consumers taste & preferences according to their age and role played by them in

Major Customer of Nestle Chocolates

7. According to you currently which Company is major competitor of Nestl Chocolate
Cadbury 84
Mars 13
Amul 0
Others 3

Figure 11: Nestl Competitors

According to retailers Cadbury is major competitor (84/100) whereas competition
from Amul and Mars is almost negligible. To tackle this competition company should
advertise their products more aggressively to reach the target market.

Amul 0theis
Nestl Competitors

8. Which brand is the major competitor of Nestl confectionary?
Cadbury 81
Perfetti 9
Parle 2

Figure 12: Nestl Confectionary Competitors

It can be analyzed that major competitor for Nestl confectionary (clairs) is Cadburys
clairs followed by Perfetti and ITC.

u 1u 2u Su 4u Su 6u 7u 8u 9u
Caubuiy ITC Peifetti Paile
Seiies1 81 8 9 2
Confectionary Competitors

9. Do you stock Nestl Polo?
Yes 81
No 19

Figure 13: Market share of Nestl polo

81% of the retailers stocked Nestl Polo, whereas 19% didnt which constituted 11
chemist shops and 8 grocery small.

Polo Market Share
Yes No

10. Who are the major competitors of Nestl polo?
Mentos 61
Tic Tac 6
ITC Mint O 32
Chlormint 1

Figure 14: Major Competitors of polo

According to the retailers surveyed, Mentos is the major competitor of Polo followed by
ITC Mint O. The major reason being availability of variety of flavors, attractive
packaging and better taste.

Nentos Tic Tac ITC Nint 0 Chloimint
Polo Competitors

11. Which size of Nestl Kit Kat sells the most?
Rs. 5 33
Rs. 10 41
Rs. 20 26

Figure 15: Popular price point of Kit Kat

Nestl Kit Kat of Rs. 10 sells the most followed by Rs.5. This is so because mostly
retailers are located in semi-urban areas and grocery small are more prominent than
other channels. The customers of this channel prefer mid-range price chocolates.

Popular Price point of Kit Kat
Rs. S
Rs. 1u
Rs. 2u

12. What price range of chocolate sells the most?
Rs. 5-10 7
Rs. 15-50 39
Rs. 50-100 31
Rs. 100 & above 23

Figure 16: Popular price range for all chocolates

It is found that when making purchase decision for chocolates price do not play major
role. Among the most selling price range for chocolates is Rs.15-50 followed by Rs.
50-100. Retailers informed me that people are not price sensitive while purchasing high
price point chocolates like that of Cadbury temptation, Cadbury silk.

Rs. S-1u Rs. 1S-Su Rs. Su-1uu Rs. 1uu &
Popular price range for all chocolates

13. Does your outlet have Nestl visi cooler?
Yes 0
No 100

If No, do you have visi cooler of any other company?
Cadbury 80
Snickers 4
Cadbury & snickers Both 30
Other 3
No cooler at all 13

C095,( !G6 H(,F($%&9( 3B I040 F33=(, :@&0=&J0=0%K 3B D(4%=E
Visi cooler availability
Yes No


Figure 18: Availability of competitors visi coolers

No outlet in Gurgaon region have visi cooler for storing Nestl chocolates. 80 out of
100 retailers have Cadbury visi coolers while 34 out of 100 have Snickers visi cooler.
30 retailers have both Cadbury as well as snickers. 13 retailers have no visi cooler at

Caubuiy Snickeis Caubuiy &
snickeis Both
0thei No coolei at
Retailers having visi coolers of other companies

14. Do the promotional schemes have any effect on the sale of Nestl chocolates?
Yes 37
No 63

Figure 19: Effect of Promotion on the sale of chocolates

According to the survey, 63% of the retailers believe that customers are not
influenced by promotional schemes whereas 37% believe that promotion have effect
on sale of Nestl chocolates.

Effect of Promotion

15. How much retail margin do you obtain on Cadbury chocolates?
5-10% 41
10-15% 57
Above 15% 2

Figure 20: Retailer Margin by Cadbury

Majority of the retailers obtain margin between 10-15% on Cadbury chocolates.
Different price point offer different margin to the retailers. For e.g. Chocolate
costing below Rs.50 will give margin between 5-10% whereas chocolate costing above
Rs.50 offers margin of 10-15%.

S-1u% 1u-1S% Above 1S%
Retail margin by cadbury

16. How much retail margin you obtain on Nestl Chocolates?
5-10% 81
10-15% 19
Above 15% 0

Figure 21: Retailer margin by Nestl

Majority of the retailers obtain margin between 5-10%. Only 19 retailers get margin of
10-15%. This indicates that since margin given is low than its competitors, retailers
are bound to lean towards competitors like Cadbury to obtain higher margin.
Company should increase it margin to attract retailers.

S-1u% 1u-1S% Above 1S%
Retail margin by Nestle

17. Do you receive any visibility package from Cadbury?
Yes 73
No 9
Dont Know 18

Figure 22: Visibility package from Cadbury

It is found that majority of the retailers obtain visibility package from Cadbury.
Mostly they get fix percentage for a quarter, some retailers also obtain on the basis of
sales target per month or per quarter. 9% of the retailers do not receive any such
package; they are covered under grocery small. 18% of the retailers are not aware about
whether they receive it or not.

Bon't Know
Visibility package from Cadbury

18. Do you receive any visibility package from Nestl?
Yes 5
No 77
Dont Know 18

Figure 23: Visibility package from Nestl

77% of the retailers do no obtain any package from the Nestl regarding visibility of
the chocolates. 5% of the retailers claimed to receive the package on the basis of sales
target whereas as 18% are not aware about any such package.

Visibility package from Nestle
Yes No Bon't Know

19. Are you reluctant to store Nestl Chocolates? Why?
Yes 61
No 39

Figure 24: Percentage of retailers reluctant to store Nestl chocolates

61% of the retailers are reluctant to store Nestl chocolates due to various reason like
less demand, no visi cooler, less storage space, less margin. Retailers said that varieties
of chocolates are less than that of competitor like Cadbury.

Reluctant to store Nestle Chocolates

For Chemist
20.Would you be willing to stock chocolates?
Yes 32
No 68

Figure 25: Chemists willingness to keep chocolates
68% of the chemists do not want to stock chocolates. Some of the few reasons for such
response is due to the fact that they believe that demand is less for chocolates, no storage
capacity. 32% of the chemist would like to stock chocolates. Company should tap this channel
to increase its market share.
Chemist's willingness to keep chocolates
Yes No

21.What is average sale of Polo per day?

>5 pieces per day 34
5-10 pieces per day 53
More than 10 pieces per day 13

Figure 26: Average sale of Polo

It can be said that average sale of polo per day is 5-10 pieces. Company should market
the product more aggressively to increase sale per day. Chemist shopkeeper should be
given more margins to encourage them to sell polo.

>S pieces pei
S-1u pieces pei
Noie than 1u
pieces pei uay
Average Sale of Polo


According to the analysis done above, following interpretations can be made about why sales
are declining for Nestl Chocolates?
1. Companys major share of chocolate sales comes from grocery small. This is due
to the fact that most of the stores are located in residential area and although the space
for retailers is small, but the consumer base is large due to ease of accessibility.
2. Market share of Cadbury is relatively more than that of Nestl due to various
reasons like availability of more flavors, different packaging, more retail space is given
to Cadbury in relation to the Nestl, established market & developed loyal customers.
3. Retailers believe that Cadbury is major competitor due to the ease of availability,
established brand name and various reasons as mentioned above.
4. Kit Kat is the most popular brand followed by Munch. Thus, the company should
focus on aggressive selling these brands.
5. Since the major customers for the chocolates are housewives, the promotional
activities and advertisements should be designed keeping in mind the target customers
(housewives) taste & preferences, as they are the decision maker of household.
6. Cadbury also dominates the market share in the confectionary segment. According to
retailers, people prefer clairs of Cadbury over Nestl due to taste and more
chocolaty nature of clairs (Cadbury)
7. Consumers are price insensitive and they are willing to pay a higher price for the
product, if the product satisfies their taste needs and status symbol. For example some
of the more expensive (Rs. 100 and above) Cadbury chocolates are popular because of
their size, quality, brand name, taste and packaging.
8. Retailers are reluctant to store Nestl chocolates and the major reason is non-
availability of visi coolers. Companies like Cadbury and Snickers are provides them visi
coolers, which makes it convenient for them to store chocolates.

9. Nestl gives much less margin than its competitors, which hinders the sales for
chocolates, as retailers prefer more margins.
10. Cadbury offers regular visibility package to the retailers while Nestl provides
irregular or no packages at all. This restricts retailers in providing FSS (Forward
Stock Share) and thereby reduces sales for chocolates.

The strategy for inducing growth in existing markets with current products involves little risk
since it utilizes resources and capabilities the company already has. Still, companies can
increase their market share by carefully putting together appealing advertising campaigns and
other types of marketing.
1. The company can reduce its price to pull customers from the competition, bringing
growth in the current market with current products. The offering of a quality product
along with a strong customer service can help keep the new piece of the market
share in the long term and thus keeping the customers from returning to the
2. Another growth strategy for companies is to increase the use of products they offer
in their current market. This can be done in many ways such as introducing new uses
for the product or by repackaging the product with a new and more appealing
look for the current market. For example, the company might increase the use of their
current product by changing the color and shape of the packaging while also making
the product easier to use.
3. The market share of a product can be modeled as:
Share of market = (Share of preference) x (share of voice) x (share of
- Modifying product and their pricing, and promotional changes can increase
share of preference.
- Share of voice is the firms proportion of total promotional expenditure in the
market. Thus, increasing the advertising expenditure can increase it.
- Share of distribution can be increased through more intensive distribution.

4. Incentives being given for frequent ordering by retailer such as discount on every
purchase made within a month.
5. Revitalize the brand name by
- Updating the brand's products and product attributes with better and improved
- Repackaging for a more contemporary brand image to appeal to new generations
of consumers.

From the study conducted it can be said that major reason for decline in sales is limited
distribution reach of the company in relation to the competitors (97% of the retailers
stock Cadbury while only 87% of the retailers stock Nestl) and no encouragement given
to the retailers. If the company takes steps to aggressively market its chocolates and provide
incentive to the retailer, then there can be increase in market share.
The margins given to the retailer should be significantly increased and new variants
should be added to the existing product line.
This research work is intended to help the organization to bring about changes in its
existing marketing practices & increase its market share. The analysis is limited to 100
retailers that are part of one of the prominent distributor Naveen Enterprises of Nestl
India in Delhi/ NCR Region.


1. Nestl Website & brochures
2. www.indiainfoline.com
3. www.ibef.com
4. Kotler, Philip (2009) Marketing Management, A south Asian Perspective, Dorling
Kindersley (India) pvt. Ltd.
5. Research papers on Nestl India.
6. www.moneycontrol.com

Appendix A:
I am student of SRM University, Chennai & I am conducting a survey on Nestle
Chocolates. The result will be entirely used for academic purposes. Your cooperation
will be appreciated.
Name: _____________
Location: _________________
Channel: __________________
Q1. How long have you been in retail business?
a) 0-1 year
b) 2-5 years
c) 5-10 years
d) 10 years and above

Q2. Do you stock Chocolates?
" Yes
" No

Q3. If yes, which brands of chocolates? (Tick all that apply)
" Nestle
" Cadbury
" Amul
" Mars

Q4. Which is the most popular brand of Chocolate? Rank
___ Nestle

Q5. Which is the most popular Nestl Chocolate product? Rank
___Kit Kat
___Nestle milk chocolate
___Milky bar
___Milky bar choo

Q6. Do you get regular supply of Nestle Chocolate product?
" Yes
" No

Q7. Who are the main customers of Nestle Chocolate product?
a) Kids (5-12 years)
b) Youngsters (13-25)
c) Housewives
d) Others _________ (Please Specify)

Q8. Currently, according to you which brand is the major competitor of Nestle Chocolate
product? Tick all that apply
" Cadbury
" Mars
" Amul
" Others _________ (Please Specify)

Q9. Which brand is the major competitor of Nestls Confectionary?
a) Cadbury
b) ITC
c) Parle
d) Perfetti

Q10. Do you stock Nestle polo?
" Yes " No

If yes, who are their major competitors?
a) Mentos
b) Tic-Tac
c) ITC Mint-O
d) Chlormint

Q11. Which size of Nestle Kit Kat sells the most?
a) Rs, 5
b) Rs. 10
c) Rs. 20

Q12. Which price range chocolates sell the most?
a) Rs. 5-10
b) Rs. 15-30
c) Rs. 50-100
d) Rs. 100 & above

Q13. Do price changes have any effect on the sale of Chocolates?
" Yes " No

Q14. Does your outlet have a Nestle visi cooler?
" Yes
" No
If no, then do you have visi cooler of any other brand? (Please specify)

Q15. Do the promotional schemes have any effect on the sale of Nestle chocolates?
" Yes
" No

Q16. How much retail margin do you obtain on Cadbury?
a) 5-10%
b) 10-15%
c) Above 15%

Q17. How much retail margin do you obtain on Nestle?
a) 5-10%
b) 10-15%
c) Above 15%

Q18. Do you receive any visibility packages from Cadbury?
" Yes " No
If yes, please specify the amount _____________________/-

Q19. Do you receive any visibility packages from Nestle?
" Yes " No

If Yes, Please specify the amount ____________________/-

Q20. Are you reluctant to store Nestle chocolates?
" Yes " No

If yes, state the reason for the same

Q21. Would you like to give suggestions for the Improvement of Nestle chocolates in terms
1. Distribution: ______________________________________________________________
2. Price point: _______________________________________________________________
3. Taste: ____________________________________________________________________
4. Packaging: ________________________________________________________________
5. Variants: _________________________________________________________________
6. Any other: ________________________________________________________________

For Chemists
(Additional questions for chemist)
Q1. If No chocolates are stocked,
Q2. Would you be willing to stock chocolates?
" Yes " No

Q3. What is the average sale of polo per day?
a) <5 pieces/ day
b) 5-10 pieces / day
c) More than 10 pieces / day

List of retailers margin on different Nestl chocolate product



Input Sheet- Delhi-NCR