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Consumer behavior is the study of how people buy, what they buy, when they
buy and why they buy. It blends elements from psychology, sociology,
sociopsychology, anthropology and economics. It attempts to understand the buyer
decision processes |buyer decision making process, both individually and in groups. It








psychographics, and behavioral variables in an attempt to understand people's wants.

It also tries to assess influences on the consumer from groups such as family, friends,
reference groups, and society in general.
Belch and Belch define consumer behavior as 'the process and activities people
engage in when searching for, selecting, purchasing, using, evaluating, and disposing
of products and services so as to satisfy their needs and desires'.
Basic model of consumer decision making also referred to as EKB model (Engel,
Kollat & Blackwell, 1969)
Problem recognition
Information search

Brief description
The consumer perceives a need and
becomes motivated to solve a problem.
The consumer searches for information


required to make a purchase decision
The consumer compares various brands and Attitude
The consumer decides which brand to
The consumer evaluates their purchase

"Consumer Behavior and Marketing Strategy"

The study of consumers helps firms and organizations improve their marketing
strategies by understanding issues such as how

The psychology of how consumers think, feel, reason, and select between
different alternatives (e.g., brands, products);

The psychology of how the consumer is influenced by his or her environment

(e.g., culture, family, signs, media);

The behavior of consumers while shopping or making other marketing decisions;

Limitations in consumer knowledge or information processing abilities influence

decisions and marketing outcome;

How consumer motivation and decision strategies differ between products that
differ in their level of importance or interest that they entail for the consumer; and

How marketers can adapt and improve their marketing campaigns and marketing
strategies to more effectively reach the consumer.
Understanding these issues helps us adapt our strategies by taking the

consumer into consideration. For example, by understanding that a number of

different messages compete for our potential customers attention, company learnt that
to be effective, advertisements must usually be repeated extensively. Company also
learn that consumers will sometimes be persuaded more by logical arguments, but at
other times will be persuaded more by emotional or symbolic appeals. By
understanding the consumer, Company will be able to make a more informed decision
as to which strategy to employ.
One "official" definition of consumer behavior is "The study of individuals, groups, or
organizations and the processes they use to select, secure, use, and dispose of
products, services, experiences, or ideas to satisfy needs and the impacts that these
processes have on the consumer and society." Although it is not necessary to
memorize this definition, it brings up some useful points:

Behavior occurs either for the individual, or in the context of a group (e.g., friends
influence what kinds of clothes a person wears) or an organization (people on the
job make decisions as to which products the firm should use).

Consumer behavior involves the use and disposal of products as well as the study
of how they are purchased. Product use is often of great interest to the marketer,
because this may influence how a product is best positioned or how company can
encourage increased consumption. Since many environmental problems result
from product disposal (e.g., motor oil being sent into sewage systems to save the
recycling fee, or garbage piling up at landfills) this is also an area of interest.

Consumer behavior involves services and ideas as well as tangible products.

The impact of consumer behavior on society is also of relevance. For example,

aggressive marketing of high fat foods, or aggressive marketing of easy credit,
may have serious repercussions for the national health and economy.

Services Marketing Triangle.









External Marketing is about setting the promise.
Internal Marketing is about enabling the employees to deliver the promise.
Interactive Marketing is about delivering the promise.
It has been emphasized that Indian Insurance Industry is growing and customers today
have more choices than before. And thus the need for improved Customer Service. To
have an edge in the competitive market, besides improving the customer base, it is
very important to retain the current customers. Most of the company profits are
derived from the existing customer base. This is so because, the more products a
company can sell to a given customer, the less apt he/she is to migrate to another
provider. Furthermore, as policyholders tend to stick to one company, the ratio of
premiums paid to the cost of claims increases in favor of the former. Lastly, statistics
show that the longer a policyholder remains a customer, the less frequently he/she
submits a claim. All of these factors contribute to improved profitability.
Thus, drawing from the significance of Relationship Marketing, every
organization has its own set of policies and strategies, which it formulates for
capitalizing on the customer service opportunity. While doing this, it takes into
consideration two parameters as mentioned before, i.e.,

Customer Satisfaction
Employee Satisfaction
What is Chocolate?
Chocolate or comprises a number of raw and processed foods produced from
the seed of the tropical cacao tree. Cacao has been cultivated for at least three
millennia in Mexico, Central and South America, with its earliest documented use
around 1100 BC. The majority of the Mesoamerican peoples made chocolate
beverages, including the Aztecs and the Maya, who made it into a beverage known
as xocoltl, a Nahuatl word meaning "bitter water". The seeds of the cacao tree have
an intense bitter taste, and must be fermented to develop the flavor.
After fermentation, the beans are dried, cleaned, and roasted, and the shell is
removed to produce cacao nibs. The nibs are then ground and liquified, resulting in
pure chocolate in fluid form: chocolate liquor. The liquor can be further processed
into two components: cocoa solids and cocoa butter. Pure, unsweetened chocolate
contains primarily cocoa solids and cocoa butter in varying proportions. Much of the
chocolate consumed today is in the form of sweet chocolate, combining chocolate
with sugar. Milk chocolate is sweet chocolate that additionally contains milk powder
or condensed milk. "White chocolate" contains cocoa butter, sugar, and milk but no
cocoa solids (and thus does not qualify to be considered true chocolate).
Chocolate contains alkaloids such as theobromine and phenethylamine, which
have physiological effects on the body. It has been linked to serotonin levels in the
brain. Scientists claim that chocolate, eaten in moderation, can lower blood pressure.
Dark chocolate has recently been promoted for its health benefits, including a
substantial amount of antioxidants that reduce the formation of free radicals, though
the presence of theobromine renders it toxic to some animals, such as dogs and cats.
Chocolate has become one of the most popular flavors in the world. Gifts of
chocolate molded into different shapes have become traditional on certain holidays:
chocolate bunnies and eggs are popular on Easter, chocolate coins on Hanukkah,
Santa Claus and other holiday symbols on Christmas, and hearts on Valentine's Day.
Chocolate is also used in cold and hot beverages, to produce chocolate milk and hot

The word "chocolate" entered the English language from Spanish. How the
word came into Spanish is less certain, and there are multiple competing explanations.
Perhaps the most cited explanation is that "chocolate" comes from Nahuatl, the
language of the Aztecs, from the word "chocolatl", which many sources derived from
the Nahuatl word "xocolatl" made up from the words "xococ" meaning sour or bitter,
and "atl" meaning water or drink. However, as William Bright noted the word
"chocolatl" doesn't occur in central Mexican colonial sources making this an unlikely
derivation. Santamaria gives a derivation from the Yucatec Maya word "chokol"
meaning hot, and the Nahuatl "atl" meaning water. More recently Dakin and
Wichmann derive it from another Nahuatl term, "chicolatl" from Eastern Nahuatl
meaning "beaten drink". They derive this term from the word for the frothing stick,

History of Chocolate
The origins of chocolate can be traced back to the ancient Maya and Aztec
civilisations in Central America, who first enjoyed 'chocolatl'; a much-prized spicy
drink made from roasted cocoa beans.
Throughout its history, whether as cocoa or drinking chocolate beverage or
confectionery treat, chocolate has been a much sought after food.
Because cocoa beans were valuable, they were given as gifts on occasions such as a
child coming of age and at religious ceremonies. Merchants often traded cocoa beans
for other commodities such as cloth, jade and ceremonial feathers.

Chocolate Across Europe

An Italian traveller, Francesco Carletti , was the first to break the Spanish monopoly.
He had visited Central America and seen how the Indians prepared the cocoa beans
and how they made the drink, and by 1606 chocolate was well established in Italy.

Drinking Chocolate
The secret of chocolate was taken to France in 1615, when Anne, daughter of Philip II
of Spain, married King Louis XIII of France.
The French court enthusiastically adopted this new exotic drink, which was
considered to have medicinal benefits as well as being a nourishing food. Gradually

the custom of drinking chocolate spread across Europe, reaching England in the

First Chocolate for Eating

Up until this point all chocolate recipes were based on plain chocolate. It was an
English doctor, Sir Hans Sloane, who - after travelling in South America - focused on
cocoa and food values, bringing a milk chocolate recipe back to England. The original
Cadbury Milk Chocolate was prepared to his recipe.


The chocolate market in India has a production volume of 30,800 tonnes. This
segment is characterized by high volumes, huge expenses on advertising, low
margins, and price sensitivity.
The major challenges faced by the players in chocolate industry are:

Perishable nature of the product

Poor distribution network

Scarcity of milk

Rising prices of milk

Major Players
The major players in the chocolate market are:

Cadbury India Ltd.

Nestle India Ltd.










Other players are:



Cadbury is a leading global confectionery company with an outstanding portfolio of
chocolate, gum and candy brands. Company employ around 50,000 people and have
direct operations in over 60 countries, selling our products in almost every country
around the world.

In India, Cadbury began its operations in 1948 by importing chocolates. After 60

years of existence, it today has five company-owned manufacturing facilities at
Thane, Induri (Pune) and Malanpur (Gwalior), Bangalore and Baddi (Himachal
Pradesh) and 4 sales offices (New Delhi, Mumbai, Kolkota and Chennai). The
corporate office is in Mumbai.
Our core purpose "creating brands people love" captures the spirit of what company is
trying to achieve as a business. Company collaborate and work as teams to convert
products into brands. Simply put and spread happiness!
Currently Cadbury India operates in four categories viz. Chocolate Confectionery,
Milk Food Drinks, Candy and Gum category. In the Chocolate Confectionery
business, Cadbury has maintained its undisputed leadership over the years. Some of
the key brands are Cadbury Dairy Milk, 5 Star, Perk, clairs and Celebrations.
Cadbury enjoys a value market share of over 70% - the highest Cadbury brand share
in the world! Our flagship brand Cadbury Dairy Milk is considered the "gold
standard" for chocolates in India. The pure taste of CDM defines the chocolate taste
for the Indian consumer.
In the Milk Food drinks segment our main product is Bournvita - the leading Malted
Food Drink (MFD) in the country. Similarly in the medicated candy category Halls is
the undisputed leader. Company recently entered the gums category with the launch
of our worldwide dominant bubble gum brand Bubbaloo. Bubbaloo is sold in 25
countries worldwide.

Since 1965 Cadbury has also pioneered the development of cocoa cultivation in India.
For over two decades, company has worked with the Kerala Agriculture University to
undertake cocoa research and released clones, hybrids that improve the cocoa yield.
Our Cocoa team visits farmers and advises them on the cultivation aspects from
planting to harvesting. company also conduct farmers meetings & seminars to educate
them on Cocoa cultivation aspects. Our efforts have increased cocoa productivity and
touched the lives of thousands of farmers. Hardly surprising then that the Cocoa tree
is called the Cadbury tree!
Today, company is poised in our leap towards quantum growth. Company is a part of
the Cadbury PLC, world's leading Confectionery Company. Yes, like company said it
will continue spread happiness!

Ever since the Cadbury Factory was set up in India in 1947, the term "Cadbury" has
become synonymous with chocolates. Any brand of Chocolate is called Cadbury and
Why Not? Considering the penchant Indians have for sweets, it's not surprising that
this sweet, smooth, milky and delicious brown bar is the best childhood gift any
Indian child could get. Thank God for young John- Cadbury who ventured into the
chocolate business over 150 years ago, way back in England in 1824.
John Cadbury believed that alcohol was one of the causes of poverty and d3eprivation
amongst the working class, and by providing tea, coffee, cocoa and chocolate as an
alternative, her felt that he was helping to relieve some of the misery.
By today's Standards, the Chocolate produced by Cadbury in the late 1880's was not
particularly palatable. Cocoa mass, cocoa butter, sugar and milk powder were mixed
together into a coarse dry mass. Competition from France and Switzerland force the
Cadbury experts to improve their recipe, leading to new formulas which incorporated
fresh milk, and the development of a new production process. Dairy Milk (then
known as Dairy Maid) was the result. Cadbury were ready to challenge the Swiss
domination of the milk chocolate market.
Dairy Milk gradually gained its status as the brand leader and has held the
number one spot ever since. Long gone is the dry chocolate supplied by John Cadbury
in his Birmingham grocery store. Today more than 250 million bars of Dairy Milk are
produced result. Cadbury were ready to challenge the Swiss domination of the rnilk
Chocolate market. Dairy Milk gradually gained its status as the brand leader, and has

held the number one spot ever since, long gone is the dry chocolate supplied by John
Cadbury in his Birmingham grocery store. Today more than 250 million bars of Dairy
Milk are produced and consumed every year.
Years of chocolate making expertise and a carefully controlled process have
given the Cadbury brands the special taste and smoothness for which chocolate lovers
are eternally grateful.

50 years after it was first launched, Amul's sale figures have jumped from
1000 tonnes a year in 1966 to over 25,000 tonnes a year in 1997. No other brand
comes even close to it. All because a thumb-sized girl climbed on to the hoardings and
put a spell on the masses.
Bombay: Summer of 1967. A Chami Road flat. Mrs. Sheela Mane, a 28year-old
housewife is out in the balcony drying clothes. From her second floor flat she can see
her neighbours on the road. There are other people too.
The crowd seems to be growing larger by the minute. Unable to curb her
curiosity Sheela Mane hurries down to see what all the commotion is about
She expects the worst but can see no signs of an accident. It is her four-year old who draws her attention to the hoarding that has come up overnight. "It was the
first Amul hoarding that was put up in Mumbai," recalls Sheela Mane. "People loved
it. I remember it was our favourite topic of discussion for the next one week!
Everywhere we went somehow or the other the campaign, always seemed to crop up
in our conversation. Call her the Friday to Friday star. Round eyed, chubby cheeked,
winking at you, strategically placed hoardings at many traffic lights. She is the Amul
moppet everyone loves to love (including prickly votaries of the Shiv Sena and BJP).
How often have we stopped, looked, chuckled at the Amul hoarding that casts her
sometime as the coy, shy Madhuri, a bold sensuous Urmila or simply as herself,
dressed in her little polka dotted dress and a red and white bow, holding out her
favourite packet of butter. For 30 odd years the Utterly Butterly girl has managed to
keep her fan following intact. So much so that the ads are now ready to enter the
Guinness Book of World Records for being the longest running campaign ever. The
ultimate compliment to the butter came when a British company launched butter and
called it Utterly Butterly, last year.


It all began in



Sylvester daCunha, then the managing director of the advertising agency, ASP,
clinched the account for Amul butter. The butter, which had been launched in 1945,
had a staid, boring image, primarily because the earlier advertising agency which was
in charge of the account preferred to stick to routine, corporate ads.
In India, food was something one couldn't afford to fool around with. It had
been taken too seriously, for too long. Sylvester dacunha decided it was time for a
change of image.
The year Sylvester daCunha took over the account, the country saw the birth
of a campaign whose charm has endured fickle public opinion, gimmickry and all
The Amul girl who lends herself so completely to Amul butter, created as a
rival to the Polson butter girl. This one was sexy, village belle, clothed in a tantalizing
choli all but covering her upper regions. "Eustace Fernandez (the art director) and
decided that we needed a girl who would worm herway into a housewife's heart. And
who better than a little girl?" says Sylvester dacunha. And so it came about that the
famous Amul Moppet was born. That October, lamp kiosks and the bus sites of the
city were splashed with the moppet on a horse. The baseline simply said, Thorough
bread, Utterly Butterly Delicious Amul,. It was a matter of just a few hours before the
daCunha office was ringing with calls. Not just adults, even children were calling up
to say how much they had liked the ads. "The response was phenomenal," recalls
Sylvester daCunha. "We knew our campaign was going to be successful."


For the first one year the ads made statements of some kind or the other but they had
not yet acquired the topical tone. In 1967, Sylvester decided that giving the ads a solid
concept would give them extra mileage, more dum, so to say. It was a decision that
would stand the daCunhas in good stead in the years to come.
In 1969, when the city first saw the beginning of the Hare Rama Hare Krishna
movement, Sylvester daCunha, Mohammad Khan and Usha Bandarkar, then the
creative team working on the Amul account came up with a clincher -- 'Hurry Amul,
Hurry Hurry'. Bombay reacted to the ad with a fervour that was almost as devout as
the Iskon fever.
That was the first of the many topical ads that were in the offing. From then on
Amul began playing the role of a social observer. Over the years the campaign
acquired that all important Amul touch. India looked forward to Amul's evocative
humour. If the Naxalite movement was the happening thing in Calcutta, Amul would
be up there on the hoardings saying, "Bread without Amul Butter, cholbe na cholbe na
(won't do, won't do). If there was an Indian Airlines strike Amul would be there again
saying, Indian Airlines Won't Fly Without Amul.
There are stories about the butter that people like to relate over cups of tea.
"For over 10 years I have been collecting Amul ads. I especially like the ads on the
backs of the butter packets, "says Mrs. Sumona Varma. What does she do with these
ads? "I have made an album of them to amuse my grandchildren," she laughs. "They
are almost part of our culture, aren't they? My grandchildren are already beginning to
realise that these ads are not just a source of amusement. They make them aware of
what is happening around
Despite some of the negative reactions that the ads have got, DaCunhas have
made it a policy not to play it safe. There are numerous ads that are risque in tone.
"Company had the option of being sweet and playing it safe, or making an impact. A
fine balance had to be struck. Company has a campaign that is strong enough to make
a statement. I didn't want the hoardings to be pleasant or tame. They have to say
something," says Rahul daCunha.
"Company ran a couple of ads that created quite a furore," says Sylvester daCunha.
"The Indian Airlines one really angered the authorities. They said if they didn't take
down the ads they would stop supplying Amul butter on the plane. So ultimately
company discontinued the ad," he says laughing. Then there was the time when the

Amul girl was shown wearing the Gandhi cap. The high command came down heavy
on that one. The Gandhi cap was a symbol of independence, they couldn't have
anyone not taking that seriously. So despite their reluctance the hoardings were wiped
clean. "Then there was an ad during the Ganpati festival which said, Ganpati Bappa
More Ghya ,
(Ganpati Bappa take more). The Shiv Sena people said that if company didn't do
something about removing the ad they would come and destroy our office. It is
surprising how vigilant the political forces are in this country. Even when the Enron
ads (Enr On Or Off) were running, Rebecca Mark wrote to us saying how much she
liked them."
Amul's point of view on the MR coffee controversy
There were other instances too. Heroine Addiction, Amul's little joke on
Hussain had the artist ringing the daCunhas up to request them for a blow up of the
ad. "He said that he had seen the hoarding while passing through a small district in
UP. He said he had asked his assistant to take a photograph of himself with the ad
because he had found it so funny," says Rahul daCunha in amused tones. Indians do
have a sense of humour, after all.
From the Sixties to the Nineties, the Amul ads have come a long way. While
most people agree that the Amul ads were at their peak in the Eighties they still
maintain that the Amul ads continue to tease a laughter out of them. Where does
Amul's magic actually lie? J\1any believe that the charm lies in the catchy lines. That
we laugh because the humour is what anybody would enjoy. They don't pander to
your nationality or certain sentiments. It is pure and simple, everyday fun.


HENRY NESTL (1814 1890)
Nestl India is a multinational company with its worldwide
operations in over 70 countries. The founder of Nestl S. A.
was Henry Nestle who from a modest beginning founded
the company in 1866 at Switzerland for manufacturing milk
powders for babies. At that time Switzerland faced one of
the highest infant mortality rate and the milk formula saved
the lives of many infants whose mothers were unable to
breast feed successfully.
At present Nestl is the worlds largest food company with its international
headquarters at Vevey, Switzerland. With almost 500 factories worldwide it employs
more than 2 Lac people.
Nestl is often quoted by most as multinational of multinationals. There is a good
reason, as less than 2% of the turnover comes from the domestic market in
Nestl is very decentralized in its operations and most of the markets are given
considerable autonomy in its operation. It is more of a people and products oriented
company rather than systems oriented company There are unwritten guidelines
which are to be followed, based on common senses and a strong set of moral
principals emphasizing a lot of respect for fellow beings.

When Henri Nestle introduced the first commercial infant formula in 1867, he also
created a symbol of the Birds nest, graphic translation of his name, which personifies
the companys business. The symbol, which is universally understood, evokes
security, motherhood and affection, nature and nourishment, family and tradition.
Today it is the central element of Nestls corporate identity and closely parallels the
companys corporate values and culture.



Its activities include manufacturing and marketing of: Condensed milk
Powdered milk
Ice creams
Other dairy products
Infant foods
Chocolates & Confectionery items
Culinary products
Frozen products
Fruit juices
Mineral water
Pet foods
Pharmaceuticals and Cosmetics



Nestl set up its operations in India, as a trading company in 1912 and began
manufacturing at the Moga factory in 1962. The production started with the
manufacture of Milkmaid and other product were gradually brought into the fold.
Nestl India Limited was formally incorporated in 1978 prior to which the
manufacturing license was issued in the name of the Food Specialties Limited. The
corporate office is located at Gurgaon and the registered office at M-5A, Cannaught
Circus, and New Delhi.
At present Nestl has 6 manufacturing units countrywide which are successfully
engaged in meeting the domestic as well as the exports demand. In addition there are
several co packing units.
The Moga factory is the largest and the oldest producing the widest range of food
The other factories are located at: Choladi (Tamilnadu)

-- Instant Tea Export 1969

Nanjangud (Karnatka) -- Coffee & Milo 1989

Samalkha (Haryana)

-- Cereals, Milkmaid Deserts 1992

Ponda (Goa)
Bicholim (Goa)

-- Chocolates & Confectionery 1995

-- Noodles and Cold Sauces 1997

Today, the company is manufacturing and Marketing the brands in the following
product categories: Milk and Dietetics
Instant Drinks
Chocolates and Confectionery
Investor Relations
Rupees in Millions
Gross Sales
Domestic Sales
Export Sales


















Net Profit
Share (Rs.)
Dividends per
Share (Rs.)





















Moga factory started production in 1962.Today;

Moga contributes almost 75% of Nestle Indias
total production volume, manufacturing 80,000
tons of food products. It employs 1600 people. The
entire range of milks, culinary products and cereals
are manufactured in Moga. Moga is located in the
state of Punjab about 400Kms.North of New
Delhi. Moga factory is the largest and oldest,
producing the widest range of food products.

The factory in Choladi started production in 1967.
Situated in south India, about 275 kms from
Bangalore, the factory today has 80 employees. It
processes about 500 tons of soluble instant tea,
which is all exported.
Production in Nanjangud factory started in 1989
with the manufacture of Nescafe and sunrise. Milo
manufacture at Nanjangud began in 1996. Situated
160 kms south of Bangalore, the factory has 245
employees. Coffee capacity currently is 12,000 tons
and Milo 1500 tons per annum.
Samalkha factory started production in 1993
situated 70kms from Delhi it has 203 employees
and manufactures about 11,000 tons of food

products comprising Cerelac, Nestum and ethnic deserts. Pure Life, treated water
and Nestl Dahi are also being produced here.

Ponda Factory began production of KitKat in
1995. It is located 40kms from Panji the capital
city of Goa .It is Being Expanded into other
confectionery products viz., Jellies Pastilles,
Kools and Chocolate based confectionery. Ponda
currently employees 140 people.

Bicholim Factory (Satellite factory of Ponda)
was set up 35 kms away from Ponda, Goa to
manufacture Culinary Products viz.. Sauces,
Noodles, Soups and other products Operational
in 1997 It has an installed capacity of around
8,000 tonnes approximately



Nestl Polo- Bakemans (Nagpur)


Chocolates-Campco (Puttur)


Tasters Choice-Williamson Major company (Silliguri)


Toffee-Nutrine (Surinder Nagar)


Pickles-Choride foods Ltd.(Puna)


Cold Sauce 200 gm Nijjer Agro Pvt. Ltd. Amritsar


Dosa & Samber mixIndian foods & fermentation Ltd. Nagpur

Nestle India is a subsidiary of Nestle S.A. of Switzerland. With six factories

and a large number of co packers, Nestle India is a vibrant company that provides
consumers in India with products of global standards and is committed to long term
sustainable growth and shareholder satisfaction. The company employs over 3500
people are for the full year 2002 Nestle India recorded net sales of Rs. 20477 Mio.


Nestle has been a partner in Indias growth for the past time decades and has
built a very special relationship of trust and commitment with the people of India. The
culture of innovation and renovation within the company and access to the Nestle
Groups proprietary technology / Brands, expertise and the extensive centralized
Research and Development facilities helps the company to create value that can be
sustained over the long term. Nestle India manufacturers products of truly
international quality under internationally famous Brand names such as Nescafe,
Cerelac, Maggi, Milky Bar, Milo, BarOne, Nestea and KitKat at and in the recent
years the company has also introduced products of daily consumption and use such as
Nestle Milk, Nestle Dahi, Nestle Butter, Nestle Fruitn milk ready to drink beverage
and Nestle Pure Life bottled drinking water.
Nestle Chocolates








NESTL Milk Chocolate


NESTL Eclairs


NESTL Selections


51% subsidiary of Nestle SA, is among the leading branded food player in the
country. It has a broad based presence in the foods sector with leading market shares
in instant coffee, infant foods, milk products and noodles. It has also strengthened the
presence in chocolates, confectioneries and other semi processed food products during
the last few years. The company has launched Dairy Products like UHT Milk, Butter
and Curt and also ventured into the mineral water segment in 2001. Nestles leading
brands include Cerelac, Nestum, Nescafe, Maggi, Kitkat, Munch and Pure Life.

The processed foods sector, which currently accounts for less than 2% of total
food consumption in the country, is slated to grow at a fast pace. The


Government has identified Food Processing as a high potential industry and has been
creating a policy environment conducive to its growth. Historically, the policy
framework favored small and unorganized players while the MNC players were
restricted from adding capacities. This led to the mushrooming of a vast unorganized
sector. Large players with strong marketing network and brand equity, were forced to
sour4ce from third party producers. During the last few years, however, several food
products have been deserved from small scale sector. MNCs as well as domestic
players have made aggressive investments in the sector. Quantitative restrictions on
import of several food products have been lifted, leading to greater availability of
imported products. MNCs are able to offer a wider product range, without the need to
establish a manufacturing base.

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.


On improving availability of its products and on initiatives to increase the
freshness of stocks available to consumers. New products are continuously launched
in all product segments. In the current year the company has launched mineral water.
UHT milk, butter, curd, new tomato and curry flavors in Maggi noodles, a new
confectionary Nestle Choco Stick at an affordable price point of Rs 2, a soft chewy
fudge Milkybar Choc and Nestea iced tea. The company is also setting up Care
Nescafe and Coffee Comers across metros and mini metros.


Milk based products and party baby food contributes to 43% of Nestles
turnover. For ensuring regular procurement of good quality milk, Nestle has
developed a network around its Moga factory for collection of fresh milk everyday
from the farmers. Nestle has a dominating 87% market share in the baby weaning
foods with its Cerelac and Neslum brands. Infant milk powder is sold under the
Lactogen and Nestogen brands. Brand loyalties are very high in categories such as
infant food and weaning cereals, enabling the company to command a price premium.
Other milk products include dairy whiteners (21% market share) and sold
under eh EveryDay and Tee Mate brands, sweetened condensed milk and ready to
cook mines for traditional Indian sweets sold under the Milkmaid brand. The
company also markets ghee (6% market share) under the EveryDay brand. Nestle has
expanded its milk product portfolio with the launch of new dairy products such as
UHT milk, Curd and Butter. Huge investments are being made in building a
diversified dairy business and the distribution infrastructure for the same. Milk
products sales registered a 10.6% yoy growth during 2001.


Nestle forayed into chocolates & confectionery in 1990 and has cornered a
fourth share of the chocolate market in the country. The category contributes 14% to
Nestles turnover. It has expanded its products range to al 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

confectionary portfolio consists of Polo. Soothers, Frootos and Milkybar clairs. All
sugar confectionery products are sold under the umbrella brand Allens. Nestle has
also markets some of its imported brands like Quality Street, Lions and After Eight.
New launches such as Nestle Choco Stiick and sales registered a strong 21.5% yoy
growth in 2001 aided by good vo9lume growth in Munch, Kitkat and Classic sales.
Nestle relaunched Bar One during the year.

Ready to cook food / cooking aides are sold under the umbrella branded name
Maggie. Culinary product account for about 14% of Nestles turnover. Maggie is the
leader in the noodles (45% market share) and the Ketchup (43% market share)
categories. Other products, sold under the umbrella brand Maggie, are ready to cook
gravy/ sauces, soups, seasonings as well as traditional Indian foods such as pickles
and instant snack mixes. New taste variants are continuously launched to add variety
to the product offerings. Culinary product sales registered a 20% yoy growth during

Nestle was promoted by Nestle Alimentana, Switzerland, a wholly owned
subsidiary of Nestle Holdings Ltd., Nassau, Bahama islands, Nestle is one of the
oldest food MNC operating in India, with a presence of over a century. For a long
time, Nestle Indias operations were restricted to importing and trading of condensed
milk and infant food. Over the years, the Company expanded its product range with
new products in instant coffee, noodles, sauces, pickles, culinary aids, chocolates and
confectionery, dairy products and mineral water.
Nestle was incorporated as a limited company in 1959. In 1978, the company
issued shares to the Indian public to reduce its foreign holding to 40%. Its name was
changed from Foods Specialties Ltd. to the current name in 1981. The parent held
51% stake in the company as at 2000 end. It has FIPB approval of hike stake by 10%
and has been gradually acquiring shares from the open market. Parent stake in the
company as at 2001 end stood at 53.88%. The parent plans to continue hiking stake
through open market purchases.


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 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 Nestles
position in the segment. In categories like beverages, culinary products and chocolate
confectionery, the company is locking at driving growth through launch of smaller
SKUs thus enabling affordability to a wide section of the population.


Success of new category launches (Milk and Mineral Water) which involves
considerable investment for promotional schemes and ad spend and yield returns
only after a few years.
Continued exports to Russia, Nestles main market for coffee exports.
Good monsoon ensures adequate availability or raw materials,which are mainly
agricultural in nature. Raw material prices have significant influence on margins.
Government policies in terms of licensing, duties, movement of agricultural
commodities etc.
Market growth driven by overall economic growth and urbanization.
Rupee depreciation improves export realizations.

Each company and offering must represent a distinctive big idea in the mind
of the target, and each company must dream up new features services and guarantees,
special rewards for loyal users and new conveniences and enjoyments.
Yet even when a company succeeds in distinguishing itself, the differences are
short lived. Competitors are quicker than ever in copying good ideas; therefore
companies constantly need to think up new value adding features are benefits to win
the attention and interest of choice rich, price prone consumers.
Companies normally reformulate their marketing strategies and offerings
several times. Economic conditions change, competitors launch new assaults, and the
product passes through new stages of buyer interest and requirements. Consequently,
strategies appropriate to each stage in the products life cycle must be developed. The
goal is to extend the products life and profitability, keeping in mind that the product

will not last forever. This chapter explores specific ways a company can effectively
position and differentiate its offerings is achieve competitive advantage throughout
the life cycle of a product or an offering.
All marketing strategy is built on STP Segmentation, Targeting, and
positioning. A company discovers different needs and groups in the market place,
targets those needs and groups that it can satisfy in the superior way, and then
positions its offering so that the target recognizes the companys distinctive offering
and image. If a company does a poor job of positioning, the market will be confused
as to what to expect. If a company does an excellent job of positioning, then it can
work out of the rest of its marketing planning and differentiation from its positioning
We define positioning as follows. Positioning is the act of designing the
companys offering and image to occupy a distinctive place in the mind of the target
market. The end result of positioning is the successful creation of customer focused
value proposition, a cogent reason why the target market should buy the product.


WEBSITES: www.nestle.com
MAGAZINES: Vartalap Magazine, Nestle India Limited
Sampark Magazine, Nestle India Limited.
Globe Magazine, Nestle India Limited.
Milwartan Magazine, Nestle India Limited.
Nestle employee information handbook, Nestle India Limited, Moga.
Marketing Management
Marketing-A Managerial Introduction



Lichtenstein, Netemeyer and Burton (1990) examined the impact of coupons on
consumers perception of acquisition utility and transaction utility. They found that a
coupon had greater impact on transaction utility than acquisition utility. This
happened because the lower price offered by the coupon was contrasted against the
internal reference price. Buyers compared the price at which they were getting the
product to an internal reference price that led to the associated pleasure with the
financial terms of the deal.
Grewal and Monroe (1988) examined the impact of price comparison advertising
(where a high advertised comparison price is compared to a lower advertised selling
e) on buyers perception of acquisition utility, transaction utility and behavioural
intention. They proposed that comparing a lower selling price to a higher advertised
referred price (e.g. Was Rs. 200, Now Rs.150) would enhance buyers psychological
satisfaction or transaction utility obtained from the deal. The result indicated that
comparing a lower selling price to a higher external referred price enhanced perceived
transaction utility which in turn enhanced buyers perception of acquisition utility and
willingness to buy the promoted product.
Monroe (1979) had proposed a theory called Adaptation level theory or internal
referred price theory which said that consumers carry with them an adoption level
price or internal reference pricefor a given product. The internal reference price
represents the price a consumer expects to pay for a product and is formed on the
basis of post prices paid /observed either for the same product or similar products.
The internal reference price is a standard against which market prices are compared
and judged as high, low or medium.
Thaler (1985) developed the Mental Accounting Theory, which states that people
practice a form of cognitive bookkeeping or mental accounting to keep track of
transactions. Mental accounting theory proposes that people set up mental accounts to
evaluate costs (losses) and benefits (gains) related to particular transactions.
Henderson and Peterson (1992) demonstrated that people tend to group and label
different sources of income. Researchers have shown that people assign income,
expenses and activities to specific mental accounts.


Thaler and Johnson (1990) have found that individuals perceive unexpected
monetaryinflows such as Sales Promotion as gains and have a higher marginal
propensity of consumption as expected income. Researchers have proposed that
consumers respond to a price promotion based on the comparison between the internal
reference price and the promotional price (Lattin and Buchlin, 1989; Kalwani and
Yim, 1992). Frequent price promotion has lead consumers to lower the reference
price for the promoted product. Consumers withlowered reference prices will be
unwilling to pay the full price of a product once the promotion is over.
Winer (1986) investigated the nature of reference price effects on branded choice
through a lower probability model whereby the probability of purchase for a brand
was a function of the observed price and the difference between the observed price
and reference price. He found that the model predicted probability of purchase better
than standard demand models that incorporated only brand prices.




Research is finding facts & establishing relationships by practical method. Properly

conducted & meticulous research can prove to be a valuable tool for top management
in making critical analysis & giving accurate results.
As the importance, scope, functions & costs of business decisions have
increased steadily & dramatically over the years, So has the need for accurate &
objective information increased. This is obtained only through extensive research
The present chapter has been subdivided in to two sections.

Scope of the study


Research Design.

Research design has been further classified into three subsections.


Sample selection & size


Sampling Procedure


Data Collection


Analytical Tools

And last thing which we need to discuss the limitations of the study.



The universe of the research was Consumers. The sample

Respondents have been selected from Sirsa City only.


A research design is the overall framework of plan used for collection and

analysis of data. The research design should incorporate a problem definition, a plan
for gathering and analysis of data, a time framework and a budget estimate. The
research design presents an organized, systematic approach to the formulation
implementation and control of research project. Infect a suitable research design
guards against collection of in-eleval1t data and achieving result in more economical
way. In the present study descriptive research approach has been adopted. The data
has been collected through survey method.



First step of research is sample selection, for which respondents were

consumers in Sirsa city. Total consumers covered were 100.


The Consumers are selected by the following methods:


Convenience Sampling:
The researcher selects the most accessible population members from which to

obtain information.

Exploratory Research was used.


After choosing the sample, the next step in the research program is data

collection to ensure the relevance of the data collected, care is taken to minimize the
errors in methods of the data collection.
Primary Data:
For the present study, the researcher used the questionnaire method for
collecting Primary data. A structured questionnaire was used for the purpose of
conducting the Interviews. The questionnaire included multiple choice questions.
Secondary Data :
Any data which is available prior to the commencement of a research study is
secondary data. It refers to the information that has been collected by someone else,
often this include printed or published data. The main source of secondary data for
this project has been" "Business Today's & Booklet of various companies of


The data thus collected was tabulated, interpreted & analyzed to make the

study meaningful.


The main object of the survey is to know about the liking for the Chocolates
deterrent people like kids, adults & parents which include students, teachers,
Housewives, businessmen, doctors etc.


Since the price war between various Companies manufacturing chocolates has
undergone a classic change, hence the various queries in this survey fulfill the under
mentioned objectives are :

To know the consumer perception regarding chocolates

To Study the price consideration

To Study the packaging effect

To Study the different recognition as reasons to Relish Chocolate

To Study the After effects of Chocolate Consumption

To Study the size of chocolate more demanded


A sample of 100 Respondents is so small to generalise the results for the entire
population. Thus, the results don't have much practical value.

Limited time available was not enough to do the survey without any error.

The resources at the disposal of the researcher were not adequate

Wide area of Sirsa was not possible to cover for the Research.



1. Do you eat chocolate?



Overruling perceptions of health hazardness of the chocolates, all the targeted

respondents echoed in one voice that they can't abstain from the magical taste of
the chocolates. All the 100 respondents use to eat chocolates time to time.


2. Which company's chocolate you prefer ?




Any other

Cadbury chocolates are dominating the chocolate industry as this fact has been
corroborated by 62 respondents out of 100 respondents followed by 22
respondents favouring Nestle, 14 respondents going with Amul. However there
were 2 respondents have their respective choice of brand.


Which product of chocolate you eat most ?


Nestle Kit Kat


Nestle Munch

Nestle Milky Bar



Out of the 22 respondents usually taking Nestle Chocolate 15 respondents like

Munch, 6 like Kit Kat and 1 like Nestle Milky Bar, none went with any other option.

4. If not Nestle, have you ever tried Nestle chocolates?




Out of the 78 respondents who don't preferred Nestle, 68 respondents ever

tried Nestle products and 10 respondents have not ever tried Nestle chocolates.

5. If Nestle, how would you rate the Nestle Chocolate taste?


Better than others


No difference

Worse than others


There were 22 respondents preferring Nestle chocolate and out of 22

respondents 18 respondents consider Nestle chocolates better than other, however
4 respondents found no difference of taste in comparison to other products.

6. Which flavor of chocolate do you like most?








Survey enunciated that its the taste of choco which has tempted the youth and
kids as corroborated by 58 respondents, however several other products have
made their place as 14-14 each respondents went with Crunchi and Milk, 12 went
with wafers, 2 like nuts.

7. Why do you eat chocolate?







There is no other factor than its taste behind the sale of chocolates as out of 10
respondents 89 admitted that they are slave of taste, however, 10 respondents have
habit of chocolates, only 1 respondent told that he use to eat chocolate at the time of

8. Which factor makes you to buy a particular brand of chocolate?




by friends



Any other





Various factors work for the any particular brand of chocolate, when the
respondents were asked to denote one which effect them to buy a particular brand 61
respondents admitted that its the taste for which they buy a particular brand, however
22 respondents are influenced by the advertisements, 14 respondents buy any
particular brand considering the price of the product.

9. How often you buy chocolates?




How often consumer buy chocolates, is a factor to be considered by the

concerned players as the results the study tells that 83 respondents buy occasionally,
however 17 respondents buy daily.

10. According to you what matters more price or quality ?





This issue has always been that which matters more price or quality, when the
respondents were asked to whom they will chose first 52 respondents went with
quality, 15 respondents chosen price, whereas, 33 respondents consider both factor
and after reconciliation between both they decide their product.


Which denomination chocolate you buy most?

Upto 10 Rs.

11-20 Rs.

More than 20 Rs


There are various denominations of which most of the respondents buy

chocolates, 65 respondents mostly buy chocolates upto 10 Rs. 21 respondents buy
more than 20 Rs. chocolates or family pack. Only 14 respondents buy upto 20 Rs.

12. Do you think chocolates are health hazard?




It has been a conception that chocolates are health hazard. There is a concept
that these are not good for teeth. However in the study only 57 respondents consider it
health hazard. 43 respondents ruled out any possibility of such concept.

13. Have you ever experienced any thing adverse about Nestle Chocolates?



Regarding the adverse experience with Nestle Chocolate, 71 respondents

declined such experience however 29 respondents faced such experience.

14. If yes, what was the problem

Regarding taste

Regarding price

Any other


Out of the 29 respondents having adverse experience 11 complained about its

price followed by 10 respondents having respective complaints and 8 complained
about its taste.

15. Would you recommend Nestle chocolates to other?




Out of the 100 respondents 58 respondents flatly refused to recommend Nestle

chocolate to others, however 42 respondents acceded to recommend others.



Nowadays, Chocolates have become much popular among Youngsters. Kids

die of chocolates. A study has been conducted to fumble out the consumer's
perception about the Nestle chocolate. Findings of survey are here as under :

Cadbury's chocolates are dominating the chocolate industry and is most

preferred Chocolate.

Nestle's chocolate is second largest preferred chocolate as the result of the

survey enunciates.

Though most of the respondents admit that this is health hazard but still the eat
and allow their kids too. However they consider that excuse use of chocolates
if health hazard.

Taste is the most considered factor at the time of buying.

Advertisement put a big impact over the consumers.

Choco is the most preferred product of chocolates among all the chocolate

Denomination of Rs. 10 is most preferred denomination. for purchasing


Only a number of people buy chocolate for their family.

Munch is not a popular chocolate of Nestles according to the survey.


Prices of chocolates should be reduced so that it may reach each & every


Different color & taste of chocolate should be introduced in market to attract a

large segment of customers.

Advertisements should be made more attractive with the presence of more &
more celebrities.

Upper age Group (above 40 years) should be targeted more & more as it is
still an untapped area by the chocolate industry.

Packaging should be made more attractive because packaging has significant

impact on the buying behavior of chocolate customers

Action should be taken against the retailers selling expiry dated products and
are not only putting the health of consumer in dange but also defaming the
name of the company.

There should be concessional pack on family pack chocolates.

Toll free number should be provided for the consumer for any information,
complaint or suggestion to the company at any moment.

Rural market is should also be targeted to expend the business.

Dear Sir/Madam


I am Tarun Mukhija, an MBA 4th Sem. student of Department of Busines

Administration, Ch. Devi La University, Sirsa. As a part of my Research Project, I am
conducting a survey on Consumer Perception about Nestle Chocolate in Sirsa City.
I assure you that all the information provided would be kept strictly confidential and
will be used only for research purposes only.

1. Age Group (in yrs):
40-49( )

Below 20( )

20-29( )


50 & above ( )

2. Gender (M/F): _________

3. Highest Education: ___________________
4. Occupation: ______________________

1. Do you eat chocolate?



2. Which company's chocolate you prefer ?


Any other

3. How would you rate the Nestle Chocolate taste?

Better than others

No difference

Worse than others

4. Which flavor of chocolate do you like most?





5. Why do you eat chocolate?




6. Which factor makes you to buy a particular brand of chocolate?
Advertisement Suggested by friends

Price Consideration

Any other

7. How often you buy chocolates?



8. Do you purchase chocolates for your own or for gift purpose?

For own

For gift purpose

9. According to you what matters more price or quality ?




10. Which denomination chocolate you buy most?

Upto 10 Rs.

11-20 Rs.

More than 20 Rs.

11. Do you think chocolates are health hazard?


12. Have you ever experienced any thing adverse about Nestle Chocolates?


13. If yes, what was the problem

Regarding taste

Regarding quality

Any other
14. Which product of chocolate you eat most ?
Nestle Kit Kat

Nestle Munch

Nestle Milky Bar

15. Would you recommend Nestle chocolates to other?




WEBSITES: www.nestle.com
MAGAZINES: Vartalap Magazine, Nestle India Limited
Sampark Magazine, Nestle India Limited.
Globe Magazine, Nestle India Limited.
Milwartan Magazine, Nestle India Limited.
Nestle employee information handbook, Nestle India Limited, Moga.
Marketing Management
Marketing-A Managerial Introduction