INSTITUTE OF ADVANCED MANAGEMENT & RESEARCH

9thKM STONE, DELHI-MEERUT ROAD, DUHAI, GHAZIABAD

SALES PROMOTIONS OF NESTLE PRODUCT

PROJECT REPORT
2013-15

Submitted for the partial fulfillment of the requirement

for the award
Of
MASTER OF BUSINESS ADMINISTRATION

Affiliated to: UPTU University, (UP)

SUBMITTED TO:

SUBMITTED BY:

PROF. NEEL RAI

HASMUDDIN

ANSARI
Roll No.:
1379270012
MBA IIIrd SEM

DECLARATION
I, HASMUDDIN ANSARI, student of IAMR, Ghaziabad` hereby declare that the
Project work entitled Sales Promotion of Nestle Product is compiled and submitted to
UPTU University (UP). This is my original work.
Whatever information furnished in this project report is true to the best of my knowledge.

Date:
Place: 9911757389
HASMUDDIN ANSARI
Roll No. 1379270012
MBA, IIIrd Sem.

ACKNOWLEDGEMENT
I, Hasmuddin Ansari, the student of IAMR, Ghaziabad, was required to undergo a
marketing research program.
I am sincerely thankful to My institute who provided me this opportunity.
I am extremely grateful to all the Consumers who provided me with the relevant
information and spared out time for me.
I would like to thanks all other people, who directly or indirectly, were the part of
my marketing research program.

With regards
Hasmuddin Ansari

PREFACE

Marketing is the interest to everyone, whether they are marketing goods, services,
properties, places, events, information, ideas or organizations. So this project is dedicated
to the company, and even the individuals adapt their marketing strategies and
management to the new technological and global realities.
The project emphasizes:

Market channels

Universal applications

Study of market and various retail shops

Merchandising in the market place

New launches.

Power point files and graph charts.

SYNOPSIS
OBJECTIVE OF RESEARCH
Establish a suitable channel for distribution between the distributor and consumers by
eliminating the retailers from the distributor channel with the aim to promote nestle
products and to give better facilities and services to the consumers of Dwarka sub city.
AN INTODUCTION -TO FMCG INDUSTRY
The FMCG sector is a cornerstone of the Indian economy. This sector can drive growth,
enhance quality of life, create jobs, and support penetration of technology. A vibrant
FMCG sector can boost agricultural product and export. It contributed to the
exchequer significantly, disperse technology across the value chain and usher in the
product innovation. This innovation can improve Indian Health standards.
RESEARCH METHODOLOGY
DATA SOURCE
Data is generally of two types:
1. Primary data
2. Secondary data
Primary Data are those data specially collected for problem in hand. In this study data
were collected from primary sources in personal interview of retailers and interaction
with consumers by survey method. These methods of data collection are quite popular.
These are the major methods of data collection in the research study.
Secondary Data are those data, which are collected for some purpose other than helping
and solving the problem in hand.
Sources of secondary data are:

Old reports

Company records

Magazines

Company web site (http://www.Nestle.com)

TABLE OF CONTENTS

1.

OBJECTIVE OF THE STUDY

7

2.

SCOPE OF THE STUDY

8

3.

INTRODUCTION

4.

COMPANY PROFILE

9-23

24-58
5.

RESEARCH METHODOLOGY
59-64

6.

DATA ANALYSIS & INTERPRETATION

65-73

7.

FINDINGS

74

8.
9.
10.

SUGGESTIONS & RECOMMENDATIONS

CONCLUSION
LIMITATIONS

75-77
78
79

11.

QUESTIONNAIRE
80-85

12.

BIBLIOGRAPHY
86

OBJECTIVE OF RESEARCH
Establish a suitable channel for distribution between the distributor and consumers by
eliminating the retailers from the distributor channel with the aim to promote nestle
products and to give better facilities and services to the consumers of Dwarka sub city.

SCOPE OF THE STUDY

The American marketing association defines marketing research as follows:
Marketing Research is the functional links to the customers, consumers & public to
marketing through information. Information used to identify and define marketing
opportunities and problems; generate, define and evaluate marketing actions; monitor
marketing performance and improve understanding of marketing process.
Marketing Research specifies the information requires addressing these issues, designing
the method for collecting information, managing and implementing the data collecting
process, analyzing the result and communicating the findings and their implementations.

AN INTODUCTION -TO FMCG INDUSTRY

The FMCG sector is a cornerstone of the Indian economy. This sector can drive growth,
enhance quality of life, create jobs, and support penetration of technology. A vibrant
FMCG sector can boost agricultural product and export. It contributed to the
exchequer significantly, disperse technology across the value chain and usher in the
product innovation. This innovation can improve Indian Health standards.
Fast Moving Consumer Good (FMCG) industry has a long history. However, the
Indian FMCG began to take shape only during the last fifty-odd years Today, the Indian
FMCG industry continues to suffer from a definitional dilemma. In fact, the
industry is yet to crystallize in terms of definition and market, size, among others.
The definitional confusion that has marked the Indian FMCG industry is getting
confounded. Some others call it the CPG industry and some even call it the
PMCG industry. The Indian FMCG industry has suffered because of the confusion.
It is an industry which touches every aspect of human life from looks to hygiene to palate.
Perhaps defining as industry whose scope is so vast is not so easy.
The government is at crossroads not knowing how and where to slot the Indian FMCG
industry and unsurprisingly, the manner in which it has treated an industry which holds
tremendous promise as producer of goods that pervade everyday life has been only
callous. The facts that the FMCG industry is a noteworthy employer and a major tax payer
are being ignored.
The only thing that is cheering the industry are the reforms of the nineties. Post reforms,
the industries is excited about a burgeoning rural population whose income are rising and
which is a willing to spend on goods designed to improve lifestyle. What is needed now
is a change in the mindset of the mandarins, FMCG industry -friendly legislation are
the needs of the hour. It does not matter whether changes are being brought about by dawning
market realities or the ongoing economic reforms. One thing is certain here: The Indian
FMCG industry has a promising future to look forward to.

In terms of growth potential, the Indian market is a great horse to bet on. With a little
help and understanding from the government, the Indian FMCG can realize its
true potential.

So far, it has been a checked graph for the MNCs operating in the Indian
FMCG industry. Domestic companies are only beginning to make their presence felt
in the industry. It has taken tremendous consumer insight and market savings for the
FMCG players to reach where they are today. But, the journey has only begun.

10

FMCG SECTOR
The Indian FMCG sector is the fourth largest sector in the economy with a total market
size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterised by a
well established distribution network, intense competition between the organised and
unorganized segments and low operational cost. Availability of key raw materials,
cheaper labour costs and presence across the entire value chain gives India a competitive
advantage.
The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in
2015. Penetration level as well as per capita consumption in most product categories like
jams, toothpaste, skin care, hair wash etc in India is low indicating the untapped market
potential. Burgeoning Indian population, particularly the middle class and the rural
segments, presents an opportunity to makers of branded products to convert consumers to
branded products.
Growth is also likely to come from consumer 'upgrading' in the matured product
categories. With 200 million people expected to shift to processed and packaged by 2010,
India needs around US$ 28 billion of investment in the -processing industry.
Automatic investment approval (including foreign technology agreements within
specified norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas
Corporate Bodies (OCBs) investment, is allowed for most of the processing sector.

11

What are Fast Moving Consumer Goods (FMCG)?

Products which have a quick turnover, and relatively low cost are known as Fast Moving
Consumer Goods (FMCG). FMCG products are those that get replaced within a year.
Examples of FMCG generally include a wide range of frequently purchased consumer
products such as toiletries, oil, cosmetics, tooth cleaning products, shaving products and
detergents, as well as other non-durables such as glassware, bulbs, batteries, paper
products, and plastic goods. FMCG may also include pharmaceuticals, consumer
electronics, packaged products, soft drinks, tissue paper, and chocolate bars.
A subset of FMCGs is Fast Moving Consumer Electronics which include innovative
electronic products such as mobile phones, MP3 players, digital cameras, GPS Systems
and Laptops. These are replaced more frequently than other electronic products.
White goods in FMCG refer to household electronic items such as Refrigerators, T.Vs,
Music Systems, etc.
In 2005, the Rs. 48,000-crore FMCG segment was one of the fast growing industries in
India. According to the AC Nielsen India study, the industry grew 5.3% in value between
2004 and 2005.
FMCG industry, alternatively called as CPG (Consumer packaged goods) industry
primarily deals with the production, distribution and marketing of consumer packaged
goods. The Fast Moving Consumer Goods (FMCG) is those consumables which are
normally consumed by the consumers at a regular interval. Some of the prime activities of
FMCG industry are selling, marketing, financing, purchasing, etc. The industry also
engaged in operations, supply chain, production and general management.

12

FMCG INDUSTRY ECONOMY

FMCG industry provides a wide range of consumables and accordingly the amount of
money circulated against FMCG products is also very high. The competition among
FMCG manufacturers is also growing and as a result of this, investment in FMCG
industry is also increasing, specifically in India, where FMCG industry is regarded as the
fourth largest sector with total market size of US$13.1 billion. FMCG Sector in India is
estimated to grow 60% by 2010. FMCG industry is regarded as the largest sector in New
Zealand which accounts for 5% of Gross Domestic Product (GDP).
Common FMCG products
Some common FMCG product categories include and dairy products, glassware, paper
products, pharmaceuticals, consumer electronics, packaged

products, plastic goods,

printing and stationery, household products, photography, drinks etc. and some of the
examples of FMCG products are coffee, tea, dry cells, greeting cards, gifts, detergents,
tobacco and cigarettes, watches, oils etc.
Market potentiality of FMCG industry
Some of the merits of FMCG industry, which made this industry as a potential one, are
low operational cost, strong distribution networks, presence of renowned FMCG
companies. Population growth is another factor which is responsible behind the success
of this industry.
Leading FMCG companies
Some of the well known FMCG companies are Sara Lee, Nestl, Reckitt Benckiser,
Unilever, Procter & Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills, Pepsi and
Mars etc.
FMCG (fast moving consumer goods) is the fourth-largest sector in the Indian economy.
It is estimated to be Rs 1,13,000 crore for 2007.
The FMCG market has been exhibiting more than 10 per cent growth since 2005 and is
expected to grow at a CAGR of 10-12 per cent over the next few years.
The penetration of many product categories in the segment is still low, and thus, the
growth potential of the FMCG industry looks promising.
Toilet oil has the highest penetration at 91.5 per cent.Some of the key challenges for the
sector include complicated tax structure and GST implementation, fragmented and weak
agricultural supply chain, and bureaucratic regulatory processes.
13

NUGGETS
Selections from management journals
Many people believe that good ideas are rarer and more valuable than good people. Ed
Catmull, president of Pixar and Disney Animation Studios, couldnt disagree more. That
notion, he says, is rooted in a misguided view of creativity that exaggerates the
importance of the initial idea in developing an original product. And it reflects a profound
misunderstanding of how to manage the large risks inherent in producing breakthroughs.
In filmmaking and many other kinds of complex product development, creativity involves
a large number of people from different disciplines working effectively together to solve a
great many inherently unforeseeable problems. The trick to fostering collective creativity,
Catmull says, is threefold: place the creative authority for product development firmly in
the hands of the project leaders (as opposed to corporate executives); build a culture and
processes that encourage people to share their work-in-progress and support one another
as peers; and dismantle the natural barriers that divide disciplines.
Mindful of the rise and fall of so many tech companies, Catmull has also sought ways to
continually challenge Pixars assumptions and search for the flaws that could destroy its
culture. Clear values, constant communication, routine postmortems, and the regular
injection of outsiders who will challenge the status quo are necessary but not enough to
stay on the rails. Strong leadership is essential to make sure people dont pay lip service
to those standards.
While layoff decisions might be beyond your control, theres plenty you can do to make
sure you retain your job. In this article, Janet Banks, a former HR executive at Chase
Manhattan and FleetBoston Financial, and Diane Coutu, an HBR senior editor and former
affiliate scholar at the Boston Psychoanalytic Society and Institute, describe how to
improve your chances of survival.
Its mostly a matter of coolheaded planning, they observe. When cuts loom, the first thing
to do is act like a survivor. Be confident and cheerful. Research shows that congeniality
trumps competence when push comes to shove. Look to the future by focusing on
customers, for without them, no one will have work. Survivors also tend to be versatile;
tight budgets demand managers who can wear several hats, so start demonstrating what

14

other capabilities you can offer. If youre, say, a manager who once worked as a teacher,
take on a training role.
How can a company deliver continuous, exceptional growth, year after year? J C
Larreche, a professor of marketing at INSEAD, answers that question in his book, The
Momentum Effect: How to Ignite Exceptional Growth. According to the authors
research, momentum-powered firms delivered 80 per cent more shareholder value than
their slower rivals.
Momentum leaders are not lucky they are smart, he writes in this excerpt. They
have discovered the source of momentum and, with it, the beginnings of a smarter way to
exceptional growth. Managers often talk about riding the wave. Momentum leaders
arent that passive. They live by this motto: First build your wave, and then ride it.
INDUSTRY VIEW
FMCG SECTOR
FMCG is an acronym for Fast Moving Consumer Goods, which refer to things that we
buy from local supermarkets on daily basis, the things that have high turnover and are
relatively cheaper like butter, potato chips, toothpastes, razors, household care products,
packaged

and beverages, etc. FMCG may also include pharmaceuticals, consumer

electronics, packaged

products and drinks, although these are often categorized

separately.
FMCG Products and categories

Personal care, Oral care, Hair Care, skin Care, personal wash (Oils);

Cosmetics and toiletries, deodorants, perfumes, Feminine Hygienes, Pencil

Products;

Household care fabric wash including laundry oils and synthetic detergents,
household cleaners such as dish /utensils cleaners, floor cleaners, toilet cleaners,
air fresheners, Insecticides, mosquito repellents, metal polish, and furniture polish;

and health beverages, branded flour, branded sugarcane, bakery product such as
bread, biscuits etc. milk and dairy products, beverages such as tea, coffee, juices,
bottled water etc, snack , chocolate etc.

15

Frequently replaced electronics products such as audio equipments, digital

cameras, laptops, CTVs, other electronic items such as Refrigerator, washing
machine etc. coming under the categories of white goods in FMCG.

FMCG Sector Outlook

The Fast Moving Consumer Goods (FMCG) Sector is the fourth largest sector in the
Indian economy with a total market size of Rs.60,000 Crores. A well-established
distribution network, intense competition between the organized and unorganized
segments characterizes the sector. FMCG Sector is expected to grow by over 60% by
2010. That will translate into an annual growth of 10% over a 5-year period. It has been
estimated by HSBC Report that FMCG sector will rise from around Rs.56,500crores in
2005 to Rs.92,100crores in 2010. Hair care, household care, male grooming, female
hygiene, and the chocolates and confectionery categories are estimated to be the fastest
growing segments.
FMCG Sector generates 5% of the total factory employment in the country and is
creating employment for three million people, especially in small towns and rural India.
This industry essentially comprises Consumer Non Durable (CND) products and caters to
the everyday need of the population. The business is characterized by two pillars Strong
Brand Equity and a wide Distribution Network. Brand Equities are built over a period of
time by technological innovations, consistent high qualities, aggressive advertisements
and marketing. Another crucial success factor is the availability near the consumer
through a wide distribution network as the products involved are of lesser value but
bought as daily items.
Products belonging to the category of FMCG category have the following characteristics:
They are used at least once a month.
They are used directly by the end-consumer.
They are non durable.
They are sold in packaged form.

16

Growth
With the presence of 12.2% of the world population in the villages of India, the Indian
rural FMCG market is something no one can overlook. Increased focus on farm sector
will boost rural incomes, hence providing better growth prospects to the FMCG
companies. Better infrastructure facilities will improve their supply chain. FMCG sector
is also likely to benefit from growing demand in the market. Because of the low per
capita consumption for almost all the products in the country, FMCG companies have
immense possibilities for growth. And if the companies are able to change the mindset of
the consumers, i.e. if they are able to take the consumers to branded products and offer
new generation products, they would be able to generate higher growth in the near future.
It is expected that the rural income will rise, boosting purchasing power in the
countryside. However, the demand in urban areas would be the key growth driver over
the long term. Also, increase in the urban population, along with increase in income levels
and the availability of new categories, would help the urban areas maintain their position
in terms of consumption. At present, urban India accounts for 66% of total FMCG
consumption, with rural India accounting for the remaining 34%. However, rural India
accounts for more than 40% consumption in major FMCG categories such as personal
care, fabric care, and hot beverages. In urban areas, home and personal care category,
including skin care, household care and feminine hygiene, will keep growing at relatively
attractive rates. Within the s segment, it is estimated that processed s, bakery, and dairy
are long-term growth categories in both rural and urban areas.
Indian competitiveness and comparison with the world markets
The following factors make India a competitive player in FMCG sector:
Availability of raw material: Because of the diverse agro-climatic conditions in
India, there is a large raw material base suitable for processing industries. India is
the largest producer of livestock, milk, sugarcane, coconut, spices and cashew and
is the second largest producer of rice, wheat and fruits &vegetables. India also
produces caustic soda and soda ash, which are required for the production of oils
and detergents. The availability of these raw materials gives India the location
advantage.
Labour cost comparison: Low cost labor gives India a competitive advantage.
India's labor cost is amongst the lowest in the world, after China & Indonesia.

17

Low labor costs give the advantage of low cost of production. Many MNCs have
established their plants in India to outsource for domestic and export markets.

Presence across value chain: Indian companies have their presence across the
value chain of FMCG sector, right from the supply of raw materials to packaged
goods in the -processing sector. This brings India a more cost competitive
advantage.

Large Domestic Market: Increasing disposable income has resulted in a rise in

the domestic market size. Increasing income has translated into higher
consumption levels.

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TOP TEN PLAYERS IN FMCG SECTOR

S.No.

Companies

1.

Hindustan Unilever Ltd.

2.

ITC (Indian Tobacco Company)

3.

Nestle India

4.

Amul

5.

Dabur India

6.

Asian Paints (India)

7.

Cadbury India

8.

Britannia Industries

Procter & Gamble Hygiene and Health Care

10.

Nestle Industries

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COMPANY PROFILE
Nestls relationship with India dates back to 1912, when it began trading as The Nestl
Anglo-Swiss Condensed Nestle Company (Export) Limited, importing and selling
finished products in the Indian market.
After Indias independence in 1947, the economic policies of the Indian Government
emphasized the need for local production. Nestl responded to Indias aspirations by
forming a company in India and set up its first factory in 1961 at Moga, Punjab, where
the Government wanted Nestl to develop the Nestle economy. Progress in Moga
required the introduction of Nestls Agricultural Services to educate, advise and help the
farmer in a variety of aspects. From increasing the Nestle yield of their cows through
improved dairy farming methods, to irrigation, scientific crop management practices and
helping with the procurement of bank loans. Nestl set up Nestle collection centres that
would not only ensure prompt collection and pay fair prices, but also instill amongst the
community, a confidence in the dairy business. Progress involved the creation of
prosperity on an on-going and sustainable basis that has resulted in not just the
transformation of Moga into a prosperous and vibrant Nestle district today, but a thriving
hub of industrial activity, as well. For more on Nestl Agricultural Services.
Nestl has been a partner in India's growth for over nine decades now and has built a very
special relationship of trust and commitment with the people of India. The Company's
activities in India have facilitated direct and indirect employment and provides livelihood
to about one million people including farmers, suppliers of packaging materials, services
and other goods.
The Company continuously focuses its efforts to better understand the changing lifestyles
of India and anticipate consumer needs in order to provide Taste, Nutrition, Health and
Wellness through its product offerings. The culture of innovation and renovation within
the Company and access to the Nestl Group's proprietary technology/Brands expertise
and the extensive centralized Research and Development facilities gives it a distinct
advantage in these efforts. It helps the Company to create value that can be sustained over
the long term by offering consumers a wide variety of high quality, safe food products at
affordable prices.

20

Nestl India manufactures products of truly international quality under internationally

famous brand names such as NESCAF, MAGGI, NESTLEYBAR, MILO, KIT KAT,
BAR-ONE, NESTLEMAID and NESTEA and in recent years the Company has also
introduced products of daily consumption and use such as NESTL Nestle, NESTL
SLIM Nestle, NESTL Fresh 'n' Natural Dahi and NESTL Jeera Raita.
Nestl India is a responsible organization and facilitates initiatives that help to improve
the quality of life in the communities where it operates.
Beginning with its first investment in Moga in 1961, Nestls regular and substantial
investments established that it was here to stay. In 1967, Nestl set up its next factory at
Choladi (Tamil Nadu) as a pilot plant to process the tea grown in the area into soluble tea.
The Nanjangud factory (Karnataka), became operational in 1989, the Samalkha factory
(Haryana), in 1993 and in 1995 and 1997, Nestl commissioned two factories in Goa at
Ponda and Bicholim respectively. Nestl India has commissioned in 2006 its 7th factory
at Pant Nagar in Uttarakhand.

PLANT LOCATIONS
Nestle started its manufacturing operations with Milkmaid in 1962 at Moga factory.
Manufacturing of Nescafe started in 1964 at the same factory. The company set up
another factory at Cherambadi in Tamil Nadu, for manufacture of infant foods, coffee etc.
For almost two decades there were no new additions of manufacturing facilities due to
restrictive policy environment. The company set up its Nanjangad (Karnataka) factory in
1989 and the Samlakha (Haryana) factory in 1992. The Ponda (Goa) factory started
operations in 1995. The Company set up its sixth manufacturing unit in 1997 at Bicholim
in Goa
BUSINESS PRINCIPLES
Since Henri Nestl developed the first milk food for infants in 1867, and saved the life
of a neighbors child, the Nestl Company has aimed to build a business based on sound
human values and principles.

21

While our Nestl Corporate Business Principles will continue to evolve and adapt to a
changing world, our basic foundation is unchanged from the time of the origins of the
Company, and reflects the basic ideas of fairness, honesty, and a general concern for
people.
People first
Employees, people and products are more important at Nestl than systems. Systems and
methods, while necessary and valuable in running a complex organization, should remain
managerial and operational aids but should not become ends in themselves. It is a
question of priorities. A strong orientation toward human beings, employees and
executives is a decisive, if not the decisive, component of long-term success.
Quality products
Our focus is on products. The ultimate justification for a company is its ability to offer
products that are appealing because of their quality, convenience, variety and price -products that can stand their ground even in the face of fierce competition.

22

Long-term view
Nestl makes clear a distinction between strategy and tactics. It gives priority to the longrange view. Long-term thinking defuses many of the conflicts and contentions among
groups -- this applies to employment conditions and relations with employees as well as
to the conflicts and opposing interests of the trade and the industry. Of course, our ability
to focus on long-term considerations is only possible if the company is successful in the
struggle for short-term survival. This is why Nestl strives to maintain a satisfactory level
of profits every year.
Decentralization
Switzerland is home to Nestl's Swiss subsidiary, its international headquarters and the
registered office of Nestl's holding company, but Nestl does not regard its Swiss
headquarters as the center of the universe. Decentralization is a basic principle of Nestl.
Our policy is to adapt as much as possible to regional circumstances, mentalities and
situations. By decentralizing operational responsibility, we create strength and flexibility
and are able to make decisions that are better attuned to specific situations in a given
country. Policies and decisions concerning personnel, marketing and products are largely
determined locally. This policy creates stronger motivation for Nestl's executives and
employees and a greater sense of identification with Nestl's business. It is not Nestl's
policy to generate most of its sales in Switzerland, supplemented by a few satellite
subsidiaries abroad. Nestl strives to be an "insider" in every country in which it operates,
not an "outsider."
Uniformity
A very important concern at Nestl has to do with uniformity: how consistent Nestl's
principles, policies, rules of conduct and strategies should be, and to what extent they
should differ depending on the country, subsidiary, region, branch or group of products. In
general, Nestl tries to limit the uniformity of its policy to a requisite minimum. This
minimum is then systematically enforced, unless there are compelling reasons in a given
market that justify deviation from policy.
Diversification
Nestl does not want to become either a conglomerate or a portfolio manager. Nestl
wants to operate only those businesses about which it has some special knowledge and
expertise. Nestl is a global company, not a conglomerate hodgepodge. We regard

23

acquisitions and efforts at diversification as logical ways to supplement our business, but
only in the context of a carefully considered corporate marketing policy.
Nestl is committed to the following Business Principles in all countries, taking into
account local legislation, cultural and religious practices:

Nestl's business objective is to manufacture and market the Company's products

in such a way as to create value that can be sustained over the long term for
shareholders, employees, consumers, and business partners.

Nestl does not favor short-term profit at the expense of successful long-term
business development.

Nestl recognizes that its consumers have a sincere and legitimate interest in the
behavior, beliefs and actions of the Company behind brands in which they place
their trust and that without its consumers the Company would not exist.

Nestl believes that, as a general rule, legislation is the most effective safeguard of
responsible conduct, although in certain areas, additional guidance to staff in the
form of voluntary business principles is beneficial in order to ensure that the
highest standards are met throughout the organization.

Nestl is conscious of the fact that the success of a corporation is a reflection of

the professionalism, conduct and the responsible attitude of its management and
employees. Therefore recruitment of the right people and ongoing training and
development are crucial.

Nestl continues to maintain its commitment to follow and respect all applicable
local laws in each of its

Research and development

The Nestl research and development centers have two main tasks: to create new products
and manufacturing processes and to improve those that already exist. These centers play a
key role in product safety and quality and also have their role in conserving resources and
protecting the environment. Environmental concerns are an integral part of any
development process to ensure that our future commercial operations meet the desired
criteria.

24

The Nestl Research Center provides the scientific support needed to prevent and solve
environmental problems arising in the development groups as well as manufacturing. In
addition, studies are carried out to find new ways of using industrial residues to create
value-added byproducts. This will reduce total emissions and effluents.
The Nestl development centers prepare environmental impact studies for new products
and manufacturing processes. These cover all aspects, from raw materials, through
processing, to the final packed product. These analyses provide additional elements for
use in deciding whether to commercialize a new product, or to introduce a new or
modified process.
Foresight
At present, the world faces daunting questions about its ability to provide enough
wholesome food for everyone. Malnutrition and poor eating habits are still serious
problems in many developing countries. By 2100, the world's population will double.
Will it be possible to feed a world with so many inhabitants? At Nestl, the big picture is
all about feeding the world and providing food and nutrition for an ever-growing
population. Our response to this situation is to intensify research, strive for innovations
and improve quality.
Flexibility and simplicity
The public's sense of the power and size of a corporation is often inaccurate, for a
company's power is limited by a host of factors including legislation, competition,
regulatory bodies and publicity. From a business point of view, it is desirable for a firm to
achieve the size best suited to a specific industry or mode of production. To be
competitive internationally and make significant investments in research and technology,
a larger company has an advantage. From a strictly organizational point of view, flexible,
simple structures work best and excessively large units should be avoided whenever
possible. In both respects Nestl has a natural advantage: Although it is a big company, it
is spread out over many countries and each of Nestl's factories has its own management
and responsibility.
Handling of raw materials
The Nestl Group is in principle not directly involved in primary production of raw
materials and other food ingredients. In general we use locally available raw materials
and purchase them either directly from producers or through existing trade channels.
25

Raw materials have to meet clearly established quality criteria and are checked for
possible

contaminants

including

environmental

contaminants.

Our

purchasing

specifications comply not only with legal requirements but go further to ensure highest
safety and wholesomeness of our products.
Whenever possible we give preference to those goods for which environmental aspects
have been taken into consideration. In those cases where the required agricultural raw
materials are not available locally, but the natural production conditions exist, we
encourage local production and provide assistance for cultivation and dairy farm
management.
We support plant growing and livestock husbandry methods which:

preserve and improve natural soil productivity and economize and protect water
resources

allow the lowest, most appropriate and safe use of agro-chemicals

use the least energy.

Packaging
Manufacturing comprises all unit operations necessary to transform perishable raw
materials into finished products, with the aim to make them safe and convenient for the
consumers. The manufacturing activities of the Nestl Group:

respect natural resources by efficient use of raw materials and energy

minimize waste generation and emissions

ensure environmentally safe disposal of all waste which cannot be recycled.

Regular assessments of processing practices are carried out. These assessments include:

evaluation of individual plant performance with regard to operations which have

an impact on the environment

definition of targets for improvement

26

review of plant compliance with local government regulations, company

environmental standards, as well as results achieved in comparison with targets
for improvement

full investigation of incidents which may affect the environment.

Information on developments in environmental protection technology and practices is

disseminated as required to ensure that all plants are using the most effective
environmental practices for their type of processing. This applies also for co packers.
Marketing and distribution
Marketing is based on the principle of satisfying consumer needs. This is the foundation
also for the environmental marketing approach of Nestl.
Environmental product claims in advertising, promotional material and on packaging are
in accordance with legal requirements, based on solid scientific evidence and used in a
serious and reasonable manner.
Our aim is to minimize wastage in communication, publicity and promotional material, in
particular through more precise targeting of marketing activities.
Consumer promotions and merchandising material such as consumer offers, instore
promotions, display material, leaflets, printed matter, etc. take environmental aspects into
account.
This means due consideration of environmental impact in selecting both materials and
printing methods.
In distribution, energy efficient and pollution controlled methods are encouraged
wherever possible.
Information, communication and education
Nestl's policy is designed to provide correct and coherent information on the activities of
the Group.
Activities related to the environment benefit from the same treatment and their
communication is secured through all currently available means inside and outside the
Group.

27

It is furthermore Nestl's duty to create awareness, to train and motivate employees on

their personal responsibility with regard to the protection of the environment.
Legislation and regulations
It is the policy of the Nestl Group to strictly comply with all laws and regulations
relevant to our activities. We participate in discussions on food legislation and regulations
between international organizations, government representatives, industry, the scientific
world and consumer associations. We also apply this policy to environment related
matters.
In doing so, we cooperate with legislators through local industry associations in order to
promote laws and regulations in the field of environment which are reasonable, rational,
realistic, applicable and enforceable. We oppose unjustified bans and any other
discriminatory measures.
We favor the harmonization of food regulations in order to remove existing trade barriers
and to avoid the creation of new ones. This applies also to environmental issues. We favor
the exchange of information, of experience and of knowledge between the various
interested parties.
Thanks to all these synergies, we can contribute to valuable discussions and be
recognized as an active partner in helping authorities to formulate comprehensive
strategies in the field of the environment.
THE NESTL POLICY ON THE ENVIRONMENT
Nestl respects the environment and is committed to environmentally sound business
practices throughout the world, thus taking into account the need to preserve natural
resources and save energy.
This commitment is put into practice by considering local legal requirements as a
minimum standard. If these do not exist, our internal rules, adjusted to local conditions,
apply. Research and Development and new investments include an evaluation to ensure
environmentally appropriate products, packaging and processes.
Management and personnel within the Nestl organization worldwide are encouraged to
help resolve environmental problems within their own sphere of influence.

28

NESTLES BRANDS
Quality and nutritional value are the essential ingredients in all of the nestles brands.
Millions of people prefer Nestl products every day, happy with the addition to their
wellness that they bring. If you are looking for a specific brand our product, just use the
alphabetical index below to jump straight to a listing. Or you can explore by category.

Baby Foods
The production of infant food goes right back to the origins of the Nestl Company. Henri
Nestl's 'Farine Lacte' was the first product to bear the Nestl name.

In 1867 a physician persuaded Henri Nestl 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. Nestl's new food worked, and the boy survived. From the very
beginning, Nestl's 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."

29

The factors that made baby foods success in the early days of the Nestl company
quality and superior nutritional value are still as valid today for the wide range of
infant formula, cereals and baby food made by Nestl. The World Health Organization
(WHO) recognizes that there is a legitimate market for infant formula, when a mother
cannot or chooses not to breast feed her child. Nestl markets infant formula according to
the principles and aims of the WHO International Code of Marketing Breast Milk
Substitutes, and seeks dialogue and cooperation with the international health community
and in particular with the WHO and UNICEF, to identify problems and their solution.
Nestl's expertise as the world's leading infant food manufacturer, gained over more than
125 years, is put at the disposal of health authorities, the medical profession and mothers
and children everywhere.
Chocolate & Confectionery
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 food among the rich and noble of Europe.
Nestle forayed into chocolates & confectionery in 1990 and has cornered a fourth share of
the chocolate market in the country.. It has expanded its products range to all segments of
the market The Kitkat brand is the largest selling chocolate brand in the world. Other
brands include Milky Bar, Marbles, Crunch, Nestle Rich Dark, Bar-One, Munch etc. The
sugar confectionery portfolio consists of Polo, Soothers, Frootos and Milkybar Eclairs.
All sugar confectionery products are sold under the umbrella brand Allen's. Nestle has
also markets some of its imported brands like Quality Street, Lions and After Eight. New
launches such as Nestle Choco Stick and Milky Bar Choo at attractive price points to woo
new consumers. Chocolate confectionery sales registered a strong 21.5% yoy growth in
2001 aided by good volume growth in Munch, Kitkat and Classic sales. Nestle relaunched
Bar-One during the year.

30

From the beginning, turning raw, bitter cocoa beans into what one 17th century writer
called "the only true food of the gods" has been a fine art, a delicate mixture of alchemy
and science.
Ice Cream
There are many myths and stories as to the invention of ice cream: was it Marco Polo
who brought it back from China (along with pasta)? Probably not, considering he most
likely never visited China.
The story of its popularity is however connected with the invention of technology to make
it on an industrial scale, and to keep it cold once made. Before refrigeration techniques,
food was frozen with the aid of ice, mixed with salt, which was either stored in ice houses
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 have thought of and
yet they're commercially available:

Sorbets - Smoked Salmon, Tomato, Cucumber

Ice Creams - Garlic, Avocado, Sweet corn.

31

The ice cream cone is the most environmentally friendly form of packaging. A Syrian
from Damascus, Ernest E Hamwi is credited with its invention. Apparently, during the
1904 St Louis World's Fair, his waffle booth was next to an ice cream vendor who ran
short of dishes. Hamwi rolled a waffle to contain ice cream and the cone was born.
Prepared Foods
Convenience foods packaged soups, frozen meals, prepared sauces and flavorings
date back more than a century. With the Industrial Revolution came factory jobs for
women and less time to prepare meals.
The problem was so widespread that it became the object of intense study in 1882 by the
Swiss Public Welfare Society, which offered a series of recommendations, including an
increase in the consumption of vegetables.
The Society commissioned Julius Maggi, a miller with a reputation as an inventive and
capable businessman, to create a vegetable food product that would be quick to prepare
and easy to digest. The results two instant pea soups and an instant bean soup
helped launch one of the best known brands in the history of the food industry. By the
turn of the century, Maggi & Company was producing not only powdered soups, but
bouillon cubes, sauces and flavorings.

32

.Maggi merged with Nestl in 1947. Buitoni, the authentic Italian brand, which has been
producing pasta and sauces in Italy since 1827, became part of the Nestl Group in 1988.
Beverages
Beverages like coffee, tea and health drinks contribute to about 30% of Nestls turnover.
Beverage sales registered a 15% yoy growth during 2001. While about 14% of sales come
from domestic market, exports contribute to about 16% of sales.

Nestls Nescafe dominates the premium instant coffee segment. Nestls other coffee
brand Sunrise has also been relaunched under the Nescafe franchise 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. Milo, a brown-malted beverage was
launched in 1996. It has an estimated volume share of about 3% in the malted food drink
segment. Nestle has launched non-carbonated cold beverages such as Nestea Iced Tea and
Nescafe Frappe during 2001.
Nestle is one of the largest coffee exporter in the country. Key export market is Russia,
besides Hungary, Poland and Taiwan. Nestle has received an award for highest export of
instant coffee and highest export of coffee to Russia and CIS for FY00 and FY01.
Turnover contribution from exports registered a 17.5% volume growth in F12/01. Nescafe
sales to Russia accounts for 80% (Rs2.5bn) of Nestls Rs3bn export turnover.
QUALITY
Everyday, millions of people all over the world show their confidence in us by choosing
Nestl products. This confidence is based on our quality image and a reputation for high
standards that has been built up over many years.

33

Quality is the cornerstone of our success

Every product on the shelf, every service and every customer contact helps to shape this
image. A Nestl brand name on a product is a promise to the customer that it is safe to
consume, that it complies with all regulations and that it meets high standards of quality.
Customers expect us to keep this promise every time.
Under no circumstances will we compromise on the safety of a product and every effort
must be made to avoid hazards to health. Likewise, compliance with all relevant laws and
regulations is a must and is not negotiable. People, equipment and instruments are made
available to ensure safety and conformity of Nestl products at all times. The effort is
worth it. Companies with huge quality standards make fewer mistakes, waste less time
and money and are more productive. They also make higher profits. Quality is their most
successful product. It is the key to their success, today and tomorrow.
The customer comes first
Nestle want to win and keep customers: distributors, supermarkets, hotels, shopkeepers
and the final consumers. They have very different requirements. Trade customers expect
excellent service, correct information and timely delivery. Consumers consider taste,
appearance and price when they make their choice. Its task is to understand what
customers want and respond to their expectations rapidly and effectively. We serve
various groups of consumers and there is demand for products at different levels of
perceived quality and price. All customers, however, expect value for their money good
quality at a reasonable price.

When offering quality to customers we also mean environmental quality. Nestl shares
societys concern for the environment and is committed to environmentally sound
business practices throughout the world.
34

Customers are central to their business and they always respect their needs and
preferences.
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.
Quality is a competitive advantage
We live in a competitive world and must never forget that their customers have a choice.
If they are not satisfied with a Nestl product, they will switch to another brand. Their
goal, therefore, is to provide superior value in every product category and market sector
in which we compete. The pursuit of highest quality at any price is no guarantee for
success, nor is a single-minded cost-cutting approach. Lasting competitive advantage is
gained from a balanced search for optimal value to customers, by simultaneous
improvement of quality and reduction cost. Success can never be taken for granted. We
must watch and learn from our competitors. If they do something better, we must improve
our own performance. We can achieve competitive advantage through Quality.
Quality is a joint effort
Operating companies are fully responsible for maintaining agreed quality standards. Not
only Production units, but also Marketing, Purchasing, Distribution and Sales have a vital
role to play in providing quality to customers. This implies a thorough knowledge of the
products and services we offer.
Quality units at different levels of the organization provide specific support, promote
quality awareness, assume guardianship and audit the system. Quality departments
monitor operations against agreed standards and must intervene in case of non-

35

conformity. Quality policy and principles, the mandatory standards and the recommended
tools for implementation are laid down in the Nestl Quality System which is applicable
throughout the group. Further directions are given through instructions, norms and
guidelines, often specific to a product.
Our business products, such as raw material producers, packaging suppliers, contract
manufacturers and distributors are expected to share our concern for Quality. They too
must set up an adequate quality system, so as to meet our requirements consistently. The
quality efforts must be shared by every function and department in the company as well
as our business partners.
Quality is made by people
Adequate equipment, procedures and systems are needed to make Quality; so are
involved and dedicated people. Each and every Nestl employee must do his best to
provide quality products and services. Training and teamwork are crucial to the successful
implementation of high quality standards. Continuous training ensures that everyone
understands his tasks and has the necessary skills to carry them out. Teamwork allows us
to achieve results that are greater than the sum of individual efforts. We motivate
employees by demonstrating management commitment to Quality, by setting challenging
goals and by giving them responsibility and recognition. It is through employee
involvement that goals and targets can be achieved in the shortest time. Quality must be a
way of life for everyone in the company.
Quality is action
Quality is the result of deliberate action. It is the responsibility of senior managers to
communicate the quality objectives and to provide the resources necessary for their
implementation. It is then up to all employees to make Quality happen throughout the
company. Progress is followed by listening to our customers and by measuring our
performance. Shortcomings and mistakes must be analyzed and corrected. Problems must
be anticipated and prevented before they occur. We also must identify and take advantage
of opportunities. To stand still is to fall behind. So we must strive for continuous
improvement in every area. It is through many small improvements as well as through
major breakthroughs that we will achieve excellence. At Nestl, Quality is our first
priority. Let us practice it every day.

36

Consumer Services
At Nestl, we are committed to offering consumers high-quality food products that are
safe, tasty and affordable. The Nestl Seal of Guarantee is a symbol of this commitment.
We also believe in maintaining regular contact with our consumers. This applies both to
how we present our products and to how we address our consumers' questions and
concerns. When Henri Nestl prepared his first boxes of infant formula for sale, he put his
address on the packages so people would know where to go if they had questions. Today,
our Consumer Relationship Panel with the words "Talk to Nestl" expresses the same
commitment.

This is why we have a worldwide Nestl Consumer Services network devoted to caring
for our consumers. Our people have expertise in a wide range of areas such as nutrition,
food science, food safety and culinary expertise. They provide the prompt, efficient and
high quality service that consumers expect from Nestl.
In addition, we teach them talk with consumers and above all, to listen. Listening helps us
to understand what people want. Nestl uses the insights gained from relationships with
consumers to drive product development.
At Nestl, 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.

37

FUTURE PROSPECTS
Nestle is focused on product expansion and improvement of distribution efficiency. The
Dairy business is being expanded and is expected to drive growth in the long run,
although short-term profitability may be impacted in the investment stage. The companys
entry into the mineral water segment is a concern, as the segment is already overcrowded
and the company faces stiff competition especially from the Cola manufacturers.
Acquisition of an established brand could catapult Nestls position in the segment. In
categories like beverages, culinary products and chocolate confectionery, the company is
looking at driving growth through launch of smaller SKUs, thus enabling affordability to
a wide section of the population.

38

39

DISTRIBUTION PROCESS

Product flow

Factory

C&F Agent

Distributor

Retailers

Consumers

40

DISTRIBUTION PROCESS
There is a distributor for every Nestle in the sub city, his job is to ensure the distribution
of Nestle to each and every area and outlet in the sub city.
This distributor works as a representative of the company for the retailers. Further this
distributor ensures the supply of Nestle to the customers with the help of retailers.
Sometime distributor delivers the product directly to the customer.
So there are two main players in the distribution process:
1. Distributor
2. Retailers
The company delivers the product to the distributor with the help of C&F agent, and the
distributor further distributes the product to the customers with the help of retailers. For
this distribution distributor forms a team of sales agents. These sales agents go to every
market in the sub city and check for the demand and supply of Nestle for the retailers.
These sales agents work as a link between the retailers and the distributor. Supervisors are
appointed to check the working of these sales agents. The supervisor is responsible for the
working of his sales agents.

41

TRADE SCHEMES
The company gives schemes to the distributor when the quantity is large. The sole
purpose of scheme is to encourage the purchase. These schemes may be in the form of
discount or in the form of gifts.
Other types of schemes are launched for the retailers to encourage the purchase of Nestle.
These schemes may be issued by the company or by the distributor also.
Retailers normally prefer the reduction in the net rate of the Nestle as a scheme. They like
scheme on which Nestle is free on the purchase of Nestle rather than anything else is free
on the purchase of Nestle. This creates problem for the retailers, e.g. suppose on the
purchase of one crate of Nestle company was giving two pouch of curd free. Now this
will create inventory problem for the retailers. First he has to store curds in the store.
Secondly sometime retailer demands the free gift by purchasing only half crate of Nestle
and says that he will purchase the rest half crate next day and then the scheme will be
satisfied.
The biggest problem in such type of schemes is that customer demands for the reduction
in the net rate rather than anything else. So the retailers always prefer the reduction in the
net price rather than the scheme or they prefer the scheme in which Nestle is free on
Nestle. So that the net effect of the scheme is the reduction in price.

42

PRODUCT PROFILE
Nestl proudly adds yet another exciting innovation by launching - POLO XTRA
STRONG.

POLO XTRA STRONG with added menthol crystals provides that real longer lasting
freshness that many consumers now seek. It comes in a pocket friendly singles format
priced at 50p. It has clutter breaking & innovative black packaging.

The product is certain to evoke reactions like: Ghanti to Bajegi New POLO XTRA
STRONG a HOLE lot stronger.
is a luscious nougat and caramel with delicious chocolayer. NESTL BAR-ONE
constantly reminds you that it is Time for Action'.
Bar One - the great combination of luscious nougat, caramel and delicious chocolayer is
now available in a small pack as well
To begin with, this pack will be available to consumers in North and South only.

43

Are crisp wafer fingers covered with chocolayer. NESTL KITKAT has a unique finger
format with a breaking' ritual attached to it.
NESTL KITKAT is one of the most successful brands in the world and every year over
12 billion NESTL NESTL KITKAT fingers are consumed around the globe.
The second largest wafer brand in the chocolate and wafers category has launched the
smallest KITKAT in the world KITKAT MINI.
It will help new consumers enjoy the NESTL KITKAT break by making it more
accessible.
This pack will currently be available to consumers in the East and West.
Have a Break, Have a KITKAT MINI

MUNCH is wafer covered with delicious chocolayer and is the largest distributed brand
in its category. The new MUNCH campaign highlights the great crunchy taste that has
made MUNCH so popular. To know more view the new ad here. Mera MUNCH mahan!

44

Is a creamy Dairy Whitener which is specially made to add a rich, smooth taste to your
tea. Every time, every day.
NESTL EVERYDAY Dairy Whitener was launched in India in 1986 and this innovative
product created a separate category of Dairy Whiteners in India

45

Nestl has over 135 years of dairy expertise and NESTL Nestle ensures high quality and
safety. NESTL Nestle goes through Ultra Heat Treatment to provide bacteria-free Nestle
to its consumers. The product also goes through stringent quality checks and can be
consumed straight from the pack as no boiling is required. The sealed pack of NESTL
Nestle has a shelf life of 120 days without refrigeration. However, once opened, it must
be refrigerated. The packaging is tamper-evident.

46

RESEARCH METHODOLOGY
Research methodology is a way to systematically solve the research problem. It
may be understood as a science of studies how research is done scientifically. Research
methodology has many dimensions.
The purpose of methodology is to describe the process involved in the research
work. This includes the overall research design, the data collection process, the sampling
process, the field survey, and analysis procedure.

47

RESEARCH DESIGN
Research Design consists of three parts:
1. Exploratory Research
2. Descriptive Research
3. Causal Research
An exploratory research focuses on the discovery of idea and is generally based on
secondary data. It is preliminary investigation that does not have a rigid design. This is
because a researcher engaged in an exploratory study that may have to change his focus
as a result of new ideas and relationship among the variables.
A descriptive study is undertaken when the researcher wants to know the characteristics
of certain group such as age, sex, educational level, income, and occupation etc.
A casual research is undertaken when the researcher is interested in knowing the cause
and effect relationship between two or more variables. Such studies are based on
reasoning along well-tested lines.

48

DATA SOURCE
Data is generally of two types:
3. Primary data
4. Secondary data
Primary Data are those data specially collected for problem in hand. In this study data
were collected from primary sources in personal interview of retailers and interaction
with consumers by survey method.These methods of data collection are quite popular.
These are the major methods of data collection in the research study.
Secondary Data are those data, which are collected for some purpose other than helping
and solving the problem in hand.
Sources of secondary data are:

Old reports

Company records

Magazines

Company web site (http://www.Nestle.com)

Sample Procedure:
How should the respondents be chosen? To get the most feasible and accurate result,
simple random probability sampling method was adopted for direct interview of retailers
and cluster sampling was used to communicate the consumers from different apartments
of different sectors for the survey.
In simple random probability sampling, probability of being chosen as a sample unit for
each unit in the population is equal. Each sample unit from the population is chosen
randomly. Probability of being chosen as a sample unit depends upon the population size
and no. of sample units to be chosen.
While in cluster (area) sampling the population is divided into mutually exclusive groups
(such as city blocks, sectors etc.), and the researcher draws a sample of the groups using
random sampling. Sometimes researcher again draws sample units of respondents from
the selected groups, it is known as two step area sampling.
Sample Size:
Distributors

Retailers

25

Consumers

1244

49

Field Work:
During the survey sample packs of Nestle Nestle and curd have been distributed
among the selected consumers, and their feedbacks have been taken regarding those
samples.
I have covered the following societies for the survey and promotion of Nestle
Nestle:

Harmony Apartment

Shah Jahanabad Apartment

Himachal Apartment

Green Heaven Apartment

United Apartment

Shri Krishna Apartment

Kalyani Apartment

Brindawan Garden Apartment

Anant Apartment

Naveen Apartment

Katyayani Apartment

Vidyut Apartment

50

RESEARCH APPROACH
Primary data can be collected in various ways: through observation, focused group,
surveys, behavioral data, and experiments. During this research data have been collected
using survey method. Survey method is best suited for descriptive research. Companies
undertake surveys to learn about peoples knowledge, beliefs, preferences, and
satisfaction, and to measure these magnitudes in the general population.
Research Instrument:
Questionnaire is most common research instrument in collecting primary data during
marketing research. A questionnaire consists of a set of questions presented to
respondents. Because of its flexibility, the questionnaire is by far the most common
instrument used to collect primary data.

51

DATA ANALYSIS & INTERPRETATIONS

Total Nestle Consumption (per day)

Nestle has dominated Nestle industry in Meerut. Around 65% of total Nestle market in
meerut has been captured by Nestle. Other brands include Britannia and Priya gold etc.

52

Total Nestle

Only 8% of total packaged Nestle market is of local brands.

53

Nestle Market in Terms of Volume

(Before Promotion)

54

Nestle Market in Terms of Volume

(After Promotion)

After promotion, sale of Nestle in Dwarka sub city has been increased by 143% (i.e. from
2400 Ltrs. to 5832 Ltrs. Per day). Most of the customers, who have switched to Nestle,
were the customers of Priya gold.

55

Availability of Nestle on Retail Shops

56

Does Packing Play any Role in Promoting Sales?

Does Packing Play any Role in Promoting

Sales

24%

76%

Yes

No

Quality and Taste are basic factors, which affect sales.

57

Selling Price of Nestle

At M.R.P.

84%

More than M.R.P.

12%

Less than M.R.P.

4%

Selling Price of Milk

12%

4%

84%
At M.R.P.

More than M.R.P.

58

Less than M.R.P.

Improvement Possible with the Distributor

(Preference)

1.

Credit Period

2.

Replacement

3.

Collection of Payment

4.

Others

59

Customer Purchase Nestle Because of

Price

30%

Quality

50%

Packing

2%

Scheme

15%

Others

3%

60

FINDINGS

These products are mostly sold on the Promotional Schemes provided by the company. Such
as Nestle clairs Dino Pack worth Rs.25

These Promotional Schemes attract many customers which increases the sales of the product
offered by the company.

Only one part where the company is lacking is the schemes provided to the retailers. The
retailers are not satisfied with the schemes provided by the company as compared to the
competitors.

Somewhere and somehow in some of the jars the schemes provided by the company is
satisfactory for the retailers.

On the other hand retailers are happy to sell these products to the customers because of the
demand whereas the taste and different varieties of product offered by the company.

The company manufactures the product by understanding the customer needs and demands.

Whereas the Credibility of Nestle is extremely high in the eyes of the customers.

The quality of the product provided by the company is shown by the high sales of the goods
which we have already done and mentioned.

61

RECOMMENDATIONS AND SUGGESTIONS

This industry is most competitive industry. There are large numbers of competitors in
this field. In such condition a small loop may create a big problem. The condition is made
more though by Priya gold, which is dominating in this industry, so only a detained study
and full fledged effort can help in good sales to capture the market. Three things are
necessary to improve the sales in the sub city:
1. Advertisement
2. Quality of Nestle
3. Margin provided to the retailer and distributor
Advertisement is the most important step to improve sales. People are not loyal to any
brand; they purchase Nestle, which had an image in their minds. Before leaving their
home they already know for which Nestle they will ask the shopkeeper. And this image
comes from advertisement. In city distributing small pamphlets along with newspaper or
fixing posters or hoardings can do advertisement.
Of course quality of Nestle is another issue, which can improve sales. In long run if we
want to succeed then we have to create a value for our Nestle in the mind of the
customers and that can be done by quality. The first priority must be to ensure that the
Nestle lack in taste by Priya gold as it is the main competitor.
These two above mentioned factors are tough to implement. The easiest step to improve
the sales in the market is the margin provided to the retailers. The reason for this is simple
Priya gold is best Nestle in the market and retailers do not want to sale it. They are forced
to sale it because customer demand for it. The reason why retailers do not prefer to sale
Priya gold is its margin. Retailers always try to sale Nestle other than Priya gold because
they provide good margin to them. The Nestles, which are best in margin, are Paras and
Gopalji. Therefore retailers always try to sale Paras and Gopalji instead of Priya gold and
Nestle. Now if Nestle can provide good margin to the retailers then they will try to sale
Nestle instead of Priya gold. And once the Nestle becomes established then the rates can
be increased and the margin to the retailers can be decreased.

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The most important competitive advantage in this market is distribution. The ability to get
their product to as many outlets as possible and to ensure its availability on a continuous
basis is the biggest challenge for producer. This is so because Nestle is a basic necessity
(not a luxury) with little relationship to personal income that is the Nestle consumption
per person is not likely to vary significantly by income level.

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Critical success factors:

More frequency of visit of sales personnel

More timely delivery of stocks

Better replacements

More credit period

Relaxation in collection of payment

Initiative on display by distributor

More schemes provided to the smaller outlets

Aggressive sales promotion schemes are needed due to stiff competition

More emphasis should be given on services

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CONCLUSION
Nestle industry is very competitive industry and dominance of Priya gold makes it
tougher for other brands to establish in this field. So in order to compete in this market
everything should be perfect with main focus on distribution. The distribution must be
proper and retailers must be the main center of focus. They are the people who can make
difference.
Nestle advertisement is coming on TV and FM Radio in Meerut also. So there is a
possibility that sales will increase as more and more people come to know about Nestle
Nestle. Advertisement can bring the customers to the shops but after that the retailer is the
key person. If he wants he can sell any Nestle. Therefore it should be the combined effort
of company and retailers to improve the sales. Also people always prefer change so if we
provide them better substitute of Priya gold they will welcome this change.

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LIMITATIONS
Marketing research suffers from several limitations. A large number of problems which
are caused by financial constraints, insufficient sample size, and lack of personal contact
etc. marketing research only helps managers in decision making process. It provides data
and information to the managers but it can not be a substitute for marketing.
Limitations of Survey:

In this industry, it is very difficult to find the exact figures as the consumption is
very low.

There is not a particular trend followed in this industry to promote sales. Actions
are taken according to the situations and the situation changes very fast in this
industry.

Sales price vary from retailer to retailer, as the cost price is different for different
retailers due to schemes given.

The number of shops is very large in number and it is very difficult to cover all of
them.

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RETAILER SURVEY FORM

Name of the shop

___________________________

Address

___________________________

Tel.No.

___________________________

Q1) What are the Nestles you usually keep in your shop?
a) Priya gold
b) Nestle
c) Britannia
d) Others _______________
Q2) Rate these Nestles in terms of volume of sales from 1 to 3.
a) Priya gold
b) Nestle
c) Paras
d) Gopalji
e) Others
Q3) Does packing play any role in promoting sales?
a) Yes
b) No
Q4) How you sold the Nestle?
a) At M.R.P.
b) Less than M.R.P.
c) More than M.R.P.
Q5)How you get the delivery from the distributor?
a) Through rickshaw
b) Through tampo
c) Through mini truck
d) Others _______________

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Q6) How would you compare the services of Nestle and Priya gold on the following?
(Rank 1 to 5)
Nestle Priya gold
a) Frequency of visit of sales

____

____

b) Timely delivery

____

____

c) Display support

____

____

d) Any other

____

____

Personnel

Q7) Is there any improvement possible with distributor on the following parameter?
(Please tick)
Yes

No

a) Credit period

____

____

b) Collection of payment

____

____

c) Replacement

____

____

d) Any other

____

____

Q8) Customer purchase Nestle because of:

a) Price
b) Quality
c) Packing
d) Scheme
e) Others ______________

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CONSUMER SURVEY FORM

Name of consumer

___________________________

Address

___________________________

Tel.No.

___________________________

Q1) Which brand of Nestle do you consume?

a) Priya gold
b) Nestle
c) Paras
d) Gopalji
e) Other _____________
Q2) Which variant of Nestle do you use?
a) Full Cream
b) Standardized
c) Tonned
d) Double Tonned
Q3) How much Nestle you purchase daily?
a) Full Cream

_____ Ltrs.

b) Standardized

_____ Ltrs.

c) Tonned

_____ Ltrs.

d) Double Tonned

_____ Ltrs.

Q4) How do you get Nestle?

a) From retailers
b) From supplier
c) From other ______________
Q5) How much do you pay to the retailer/supplier for the Nestle?
a) FCM

Rs._____

b) STD

Rs._____

c) TonnedRs._____
d) DTM

Rs._____
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Q6) If you are getting home delivery, is supplier charging extra cost for the delivery?
a) Yes

Rs._____ per (Liter/Day)

b) No
(For those who are not currently using Nestle)
Q7) Have you ever used Nestle Nestle?
a) Yes
b) No
Q8) If no, then do you want to taste it at least once?
a) Yes
b) No
Q9) If you find it better than your current brand, then will you continue using it?
a) Yes
b) No

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BIBLIOGRAPHY
BOOK REFERRED:

Marketing Research : Measurement and Method, Donald S. Tull and Del

I.Hawkin,Prentice Hall India, Sixth Edition,Nov,2001

Beri,G.C., Market research, New Meerut, Tata McGraw Hill publishing co. LTD,
1980 IInd edition.

Boyd,W.Harper, Ralph Westfall Stanley f. stasch, Marketing Research text and

cases, All India Traveler book seller, Meerut, seventh edition.

Philip Kotlar , Marketing Management, New Meerut , Pearson education

(Singapore) pte LTD) eleventh edition

Kothari, C.R., Research methodology, New Meerut, Vikas publication house,

eleventh edition.

WEB SITE:
www.icicibank.com
www.statebankofindia.com
www.google.com
www.webindia123.com

www.indiainfoline.com

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