ACKNOWLEDGEMENT

ACKNOWLEDGEMENT
"Acknowledgement is an art ,one can write glib stanzas without meaning a word,and on other hand one can make a simple expression of gratitude" I am grateful to my teacher of the college who inspires me to do so. As in the absence of a teacher the right of path of knowledge is impossible.So, I feel pleasure to be grateful towards my guide Mr. Vaibhav Sharma who encouraged me ana provide the shape & structure to this project.

Shreesh Mehrotra BBA VI Semster 915671

Content

1.

ACKNOWLEDGEMENT SYNOPSIS OBJECTIVES NESTLE INDIA 4-9

1-2 10-11 12-17 18-43 44-53 54-55 56

2. 3. 4. 5. 6. 8. 9.

COMPANY PROFILE SWOT ANALYSIS LIMITATIONS FINDINGS

7. RESEARCH METHODOLOGY 59-62

10. RECOMMENDATIONS 11. CONCLUSION 12. BIBILOGRAPHY 65

63-64 66-67

SYNOPSIS

Profile of nestle
Nestls relationship with India dates back to 1912, when it began trading as The Nestl Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished products in the Indian market. After Indias independence in 1947, the economic policies of the Indian Government emphazised 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 milk 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 milk 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 milk collection centres that would not only ensure prompt collection and pay fair prices, but also instil 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 milk district today, but a thriving hub of industrial activity, as well. For more on Nestl Agricultural Services, click here. 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. Nestl India manufactures products of truly international quality under internationally famous brand names such as NESCAF, MAGGI, MILKYBAR, MILO, KIT KAT, BARONE, MILKMAID and NESTEA and in recent years the Company has also introduced products of daily consumption and use such as NESTL Milk, NESTL SLIM Milk, 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. Nestl is the world's biggest food manufacturer, with around 450 factories spread across the globe, and a portfolio that ranges from baby foods to pet care, from chocolate to mineral water. Its world-famous brands include Nescafe, Kit Kat and Perrier, among many others. The group also owns a large shareholding in cosmetics company L'Oreal. As with other food companies, recent years have seen a greater concentration on a focused food and beverage business. In particular Nestl has leveraged its performance in sectors such as ice cream and petfoods with an aggressive acquisition strategy. At the same time, it has placed health and wellness at the forefront of its agenda, developing the widest possible range of nutritionally balanced products under the overall umbrella "Good Food, Good Life BRANDS Nescafe L'Oreal Nestl Rowntree Nestl Purina / Friskies Gervais Extreme Maggi Maxibon Galderma

Nestea Cereal Partners Dreyer's Ice Cream Nestl Waters Nestl Baby Food Nesquik Baci

Buitoni Herta Gerber Nespresso Willy Wonka Jenny Craig Nestl Professional

Objectives

1. To determine the sales volume of the company. 2. To overcome the failures that are being faced by company. 3. To know the advertising strategy of the company. 4. To know the strategy of competitors.

1. RESEARCH METHODOLOGY

I have carried out a research which is both qualitative and quantitative in its support. The qualitative approach applies to both, descriptive and inductive forms of research. While as in case of quantitative approach, an extensive use has been made of the literature available to carry out a detail research on the nature of the problem. I have chosen Nestle as the target company for my research study. 1.1 Method of data collection & analysis The data, after collection, has to be processed and analyzed in accordance with the outline laid down for the purpose at the time of developing the research plan. This is essential for a scientific study and for ensuring that we have all relevant data for making contemplated comparisons and analysis. I have conducted a graphical analysis based on the responses received from the persons questioned and interviewed. Once the interview was over, the responses received were be grouped together, and a graphical presentation and analysis has been made for every set of questions. I have made use of both, the primary sources and the secondary sources of data in collecting information. PRIMARY DATA The primary source of data involves oral interviews and questionnaires. These sources are inadvertently expected to yield more qualitative data and results. SECONDARY DATA The secondary source of data includes relevant literature including periodicals and journal articles in the areas of Marketing, customer satisfaction. product. To have a good image in the eyes of retailers.

Objectives

Objectives

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1. To determine the sales volume of the company. 2. To overcome the failures that are being faced by company. 3. To know the advertising strategy of the company. 4. To know the strategy of competitors.

Nestle India

11

Nestle India is a subsidiary of Nestle S.A. of Switzerland headed by Mr. Martial G. Rolland, Chairman And Managing Director. 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 4500 people and for the full year 2005 Nestle India recorded net sales of Rs. 20477 Mio. Nestle has been a partner in India's growth for the past nine 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 Group's 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 manufactures products of truly international quality under internationally famous Brand names such as Nescafe, Cerelac, Maggi, Milky Bar, Milo, BarOne, Nestea and Kit Kat 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 Fruit 'n milk ready to drink beverage and Nestle Pure Life bottled drinking water. Nestle India Ltd, 51% subsidiary of Nestle SA, is among the leading branded food player in the country. It has a broad based presence in the foods sector with leading market shares in instant coffee, infant foods, milk products and noodles. It has also strengthened its 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 Curd and also ventured into the mineral water segment in 2001. Nestles leading brands include Cerelac, Nestum, Nescafe, Maggie, Kitkat, Munch and Pure Life.

COMPETITION
Baby food and Instant coffee are categories where brand loyalties are very strong and Nestle is the market leader. HUL is a significant competitor to Nestle in instant
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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.

SOME ACQUISITIONS & MERGERS

1866: Company Foundation. 1905: Merger Between Nestle' & Anglo-Swiss Condensed Milk Company. 1929: Merger with Peter Cailer-Kohler Chocolate Suisse S. A. 1947: Merger with Alimentana SA (Maggie). 1969: Vittel (equity interest) 1971: Acquisition of Ursina-Franck (Swiss). 1974: Acquisition of L Oreal (France). 1977: Acquisition of Alcon (2002: partial IPO). 1985: Acquisition of Carnation (USA). 1988: Acquisition of Buitoni-0-Perugina (Italy). 1988: Acquisition of Rowntree

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1992: Acquisition of Perrier (France) 1998: Acquisition of San Pellegrino and Spillers Petfoods 2000: Acquisition of PowerBar 2001: Acquisition of Ralston Purina 2002: Acquisition of Scholler and Chef America 2003: Acquisition of Movenpick, Powwow and Dreyers 2004: Acquisition of Valio (ice cream activities) 2005: Acquisition of Wagner, Proteika, Musashi

SOME STRATEGIC ALLIANCES

1981: Galderna 1989: With Clintec (USA). 1989: CPW (USA) (Cereal Partner World Wide). 1990: Nestle' Walt Disney (USA). 1991: Cooperation with Coca Cola (USA). 2002: Dairy Partners Americas and Laboratories

MAJOR PRODUCTS & YEAR OF INCEPTION

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NIL is running with about 80 brands in India. Some major products under those brands are till the year 2003 is as follows: PRODUCTS MILKMADE NESCAFE LACTOGEN MAGGI NOODLES MAGGI SAUCES SUNRISE EVERY DAY MAGGI SOUPS ECLAIRS BARONE NESTLE BONUS CHOCOLATE KIT-KAT POLO MILO NES TEA NESTLE SLIM MILK YEAR OF INCEPTION 1962 1964 1968 1983 1985 1983 1986 1989 1991 1993 1995 1995 1995 1996 1996 2003

15

. RECENTLY LAUNCHED PRODUCTS

16

* Set Dahi * New Tomato and Curry Flavors in Maggie Noodles * New Dal and Atta in Maggie Noodles * A new confectionery Nestle Choco Stick * Soft Chewy fudge Milky bar Choo * Nestle` recently launched products Tea Iced Tea * Nestle slim milk Error: Reference source not foundMARKETING STARTEGIES OF NESTLE INDIA LIMITED Marketing strategy is the complete and unbeatable plan designed specially for attaining the marketing objective of the firm. The marketing objectives indicate what the firm wants to achieve; the marketing strategy that decides the success at the business unit level which in turn decides the total corporations success. The link between marketing strategy and overall success is indeed direct and vital. And in this linkage lies the significance of marketing strategy. Nestle India ltd. has an aggressive marketing strategy which is very well understood when one goes through the in-depth study of the 4-Ps of the marketing and price strategies with respect to its products. One comes to the conclusion that NIL has a well defined roadmap to success i.e. to reach its ultimate objective of realizing customer satisfaction through value for price products.

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COMPANY PROFILE

Nestle India

18

Nestle India is a subsidiary of Nestle S.A. of Switzerland. Nestle India manufactures a variety of food products such as infant food, milk products, beverages, prepared dishes & cooking aids, and chocolates & confectionary. Some of the famous brands of Nestle are NESCAFE, MAGGI, MILKYBAR, MILO, KIT KAT, BAR-ONE, MILKMAID, NESTEA, NESTLE Milk, NESTLE SLIM Milk, NESTLE Fresh 'n' Natural Dahi and NESTLE Jeera Raita. Nestle was founded in 1867 in Geneva, Switzerland by Henri Nestle. Nestle's first product was "Farine Lactee Nestle", an infant cereal. In 1905, Nestle acquired the Anglo-Swiss Condensed Milk Company. Nestle's relationship with India started 1912, when it began trading as The Nestle Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished products in the Indian market. After independence, in response to the then economic policies, which emphasized local production, Nestle formed a company in India, namely Nestle India Ltd, and set up its first factory in 1961 at Moga, Punjab, where the Government wanted Nestle to develop the milk economy. In Moga, Nestle educated and advised farmers regarding basic farming and animal husbandry practices such as increasing the milk yield of the cows through improved dairy farming methods, irrigation, scientific crop management practices etc. Nestle set up milk collection centres that ensured prompt collection and paid fair prices. Thus, Nestle transformed Moga into a prosperous and vibrant milk district. In 1967, Nestle set up its next factory at Choladi (Tamil Nadu) as a pilot plant to process the tea grown in the area into soluble tea. Nestle opened its third factor in Nanjangud (Karnataka) in 1989. Thereafter, Nestle India opened factories in Samalkha (Haryana), in 1993 and two in Goa at Ponda, and Bicholim in 1995 and 1997 respectively. Nestle India is now putting up the 7th factory at Pant Nagar in Uttarakhand. Today, Nestle is the world's largest and most diversified food company. It has around 2,50,000 employees worldwide, operated 500 factories in approximately 100 countries and offers over 8,000 products to millions of consumers universally.

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History

Nestl headquarters in Vevey. The company dates to 1867, when two separate Swiss enterprises were founded that would later form the core of Nestl. In the succeeding decades the two competing enterprises aggressively expanded their businesses throughout Europe and the United States. In August 1867 Charles A and George Page, two brothers from Lee County, Illinois, USA established the Anglo-Swiss Condensed Milk Company in Cham. Their first British operation was opened at Chippenham, Wiltshire in 1873. In September 1867, in Vevey, Henri Nestl developed a milk-based baby food and soon began marketing it. The following year, 1868, saw Daniel Peter begin seven years of work perfecting his invention, the milk chocolate manufacturing process; M. Nestl's was the crucial cooperation M. Peter needed to solve the problem of removing all the water from the milk added to his chocolate and thus preventing the product from developing mildew. Henri Nestl retired in 1875, but the company, under new ownership, retained his name as Farine Lacte Henri Nestl.

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Henri Nestl. In 1877 Anglo-Swiss added milk-based baby foods to its products, and in the following year the Nestl Company added condensed milk, so that the firms became direct and fierce rivals. In 1905 the companies merged to become the Nestl and Anglo-Swiss Condensed Milk Company, retaining that name until 1947, when the name Nestl Alimentana SA was taken as a result of the acquisition of Fabrique de Produits Maggi SA (founded 1884) and its holding company, Alimentana SA of Kempttal, Switzerland. Maggi was a major manufacturer of soup mixes and related foodstuffs. The companys current name was adopted in 1977. By the early 1900s, the company was operating factories in the United States, United Kingdom, Germany and Spain. World War I created new demand for dairy products in the form of government contracts; by the end of the war, Nestl's production had more than doubled. After the war, government contracts dried up and consumers switched back to fresh milk. However, Nestl's management responded quickly, streamlining operations and reducing debt. The 1920s saw Nestl's first expansion into new products, with chocolate the company's second most important activity.

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The logo that Nestl's used till the 1970s. Nestl felt the effects of World War II immediately. Profits dropped from US$20 million in 1938 to US$6 million in 1939. Factories were established in developing countries, particularly Latin America. Ironically, the war helped with the introduction of the company's newest product, Nescaf ("Nestl's Coffee"), which was a staple drink of the US military. Nestl's production and sales rose in the wartime economy. The end of World War II was the beginning of a dynamic phase for Nestl. Growth accelerated and companies were acquired. In 1947 came the merger with Maggi seasonings and soups. Crosse & Blackwell followed in 1950, as did Findus (1963), Libby's (1971) and Stouffer's (1973). Diversification came with a shareholding in L'Oral in 1974. In 1977, Nestl made its second venture outside the food industry by acquiring Alcon Laboratories Inc. In 1984, Nestl's improved bottom line allowed the company to launch a new round of acquisitions, notably American food giant Carnation and the British confectionery company Rowntree Mackintosh in 1988, which brought the Willy Wonka Brand to Nestl.

The Brazilian president, Lula da Silva, inaugurates a factory in Feira de Santana (Bahia), in February of 2007. The first half of the 1990s proved to be favorable for Nestl: trade barriers crumbled and world markets developed into more or less integrated trading areas. Since 1996 there have been acquisitions including San Pellegrino (1997), Spillers Petfoods (1998), and Ralston

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Purina (2002). There were two major acquisitions in North America, both in 2002: in June, Nestl merged its U.S. ice cream business into Dreyer's, and in August a US$2.6 billion acquisition was announced of Chef America, the creator of Hot Pockets. In the same time frame, Nestl came close to purchasing the iconic American company Hershey's, one of its fiercest confectionery competitors, though the deal fell through.[3] Another recent purchase included the Jenny Craig weight loss program for US$600 million. In December of 2005, Nestl bought the Greek company Delta Ice Cream for 240 million. In January of 2006, it took full ownership of Dreyer's, thus becoming the world's biggest ice cream maker with a 17.5% market share. In November of 2006, Nestl purchased the Medical Nutrition division of Novartis Pharmaceutical for $2.5B, also acquiring in 2007 the milk flavoring product known as Ovaltine. In April of 2007, returning to its roots, Nestl bought baby-food manufacturer Gerber for $5.5 billion.In December of 2007, Nestl entered in a strategic partnership with a Belgian chocolate maker Pierre Marcolini. Nestl agreed to sell its controlling stake in Alcon to Novartis on 4 January, 2010. The sale was to form part of a broader US $39.3 billion offer, by Novartis, for full acquisition of the worlds largest eye-care company. Products Main article: List of Nestl brands Nestl has 6,000 brands,[10] with a wide range of products across a number of markets including coffee (Nescaf), bottled water, other beverages (including Aero (chocolate) & Skinny Cow), chocolate, ice cream, infant foods, performance and healthcare nutrition, seasonings, frozen and refrigerated foods, confectionery and pet food.

BUSINESS

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Japan headquarters

The Nestl Tower in Croydon. This serves as their headquarters in the United Kingdom.

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Management The executive board, a distinct entity from the board of directors, includes:

Peter Brabeck-Letmathe, Chairman of the Board of Directors, Nestl S.A. Paul Bulcke, Chief Executive Officer, Nestl S.A. Werner Bauer, Executive Vice President, Nestl S.A., Chief Technology Officer, Head of Innovation, Technology, Research & Development

Friz van Dijk, Executive Vice President, Nestl S.A. Asia, Oceania, Africa, Middle East

Luis Cantarell, Executive Vice President, Nestl S.A. United States of America, Canada, Latin America, Caribbean

Jos Lopez, Executive Vice President, Nestl S.A. Operations, GLOBE John J. Harris, Executive Vice President, Nestl S.A. Chairman & CEO of Nestl Waters

Nandu Nandkishore, Executive Vice President, Nestl S.A. CEO of Nestl Nutrition James Singh, Executive Vice President, Nestl S.A. Finance and Control, Legal, IP, Tax, Global Nestl Business Services

Laurent Freixe, Executive Vice President, Nestl S.A. Europe Petraea Heynike, Executive Vice President, Nestl S.A. Strategic Business Units, Marketing, Sales and Nespresso

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Marc Caira, Deputy Executive Vice President, Nestl S.A. Head of Nestl Professional Strategic Business Division

Jean-Marc Duvoisin, Deputy Executive Vice President Nestl S.A. Head of Human Resources and Centre Administration

David P. Frick, Senior Vice President and ex officio Member of the Executive Board

According to a 2006 global survey of online consumers by the Reputation Institute, Nestl has a reputation score of 70.4 on a scale of 1100. Earnings In 2009, consolidated sales were CHF 107.6 billion and net profit was CHF 10.43 billion. Research and development investment was CHF 2.02 billion.

Sales by activity breakdown: 27% from drinks, 26% from dairy and food products, 18% from ready-prepared dishes and ready-cooked dishes, 12% from chocolate, 11% from pet products, 6% from pharmaceutical products and 2% from baby milks.

Sales by geographic area breakdown: 32% from Europe, 31% from Americas (26% from US), 16% from Asia, 21% from rest of the world.

Joint ventures Nestl holds 26.4% of the shares of L'Oral, the world's largest company in cosmetics and beauty. The Laboratoires Inneov is a joint venture in nutritional cosmetics between Nestl and L'Oral, and Galderma a joint venture in dermatology with L'Oral. Others include Cereal Partners Worldwide with General Mills, Beverage Partners Worldwide with CocaCola, and Dairy Partners Americas with Fonterra.

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Ethical and sustainable efforts In 2000 Nestl and other chocolate companies formed the World Cocoa Foundation. The WCF was set up specifically to deal with issues facing cocoa farmers (disease had wiped out much of the cocoa crop in Brazil) including ineffective farming techniques and poor environmental management. The WCF focuses on boosting farmer income, encouraging sustainable farming techniques and environmental and social programmes.Nestl is a founding participant in the International Cocoa Initiative (ICI), an independent foundation set up in 2002 and dedicated to ending child and forced labour in cocoa growing, and eliminating child trafficking and abusive labour practices. In October 2009 Nestl announced its Cocoa Plan. The company will invest CHF 110 million in the Plan over ten years to achieve a sustainable cocoa supply. On the 23rd October 2009 Nestl and CNRA, the Ivorian National Centre for Plant Science Research, signed a frame agreement for cooperation in plant science and propagation, with a target of producing 1 million high-quality, disease-resistant cocoa plantlets a year by 2012. The aim is to replace old, less productive trees with healthier new ones. Nestl is launching a Fair Trade branded Kit Kat in the UK and Ireland from January 2010. Controversy and criticism Marketing of formula Main articles: infant formula and Nestl boycott One of the most prominent controversies involving Nestl concerns the promotion of the use of infant formula to mothers across the world including developing countries, an issue that attracted significant attention in 1977 as a result of the Nestl boycott which is still ongoing.[18] Nestle continues to draw criticism that it is in violation of a 1981 World Health Organization code [19] that regulates the advertising of breast milk formulas. Nestl's policy,
[20]

however, states that breastmilk is the best food for infants; however, women who cannot

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or choose not to breast feed for whatever reason do need an alternative to ensure that their babies are getting the nutrition they need. Melamine in Chinese milk

In late September 2008, the Hong Kong government claimed to have found melamine in a Chinese-made Nestl milk product. The Dairy Farm milk was made by Nestl's division in the Chinese coastal city Qingdao. Nestl affirmed that all its products were safe and were not made from milk adulterated with melamine. On October 2, 2008 the Taiwan Health ministry announced that six types of milk powders produced in China by Nestl contained traces of melamine. Nestl has announced that it will begin a recall of milk products produced in China.[22][23] Greenwashing A coalition of environmental groups filed a complaint against Nestl to the Canadian Code of Advertising Standards after Nestl took out full page advertisements in October 2008 claiming that "Most water bottles avoid landfill sites and are recycled", "Nestl Pure Life is a healthy, eco-friendly choice" and that "Bottled water is the most environmentally responsible consumer product in the world".[24][25][26] A spokesperson from one of the environmental groups stated: "For Nestl to claim that its bottled water product is environmentally superior to any other consumer product in the world is not supportable".In their 2008 Corporate Citizenship Report, Nestl themselves stated that many of their bottles end up in the solid waste-stream and that most of their bottles are not recycled.The advertising campaign has been called greenwashing. Zimbabwe farms In late September 2009, it was brought to light that Nestl was buying milk from illegallyseized farms currently operated by Robert Mugabe's wife, Grace Mugabe. Mugabe and his

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regime are currently subject to European Union sanctions. Nestl later stopped buying milk from the dairy farms in question. Palm oil use Rapid deforestation in Borneo and other regions to harvest hardwood and make way for oil palm plantations sends massive amounts of carbon dioxide into the atmosphere.]In particular, where peat swamp forests are cleared, destroying the habitat for many threatened species of animals such as the orangutan, much public attention has been given to the environmental impact of palm oil and the role of multi-nationals such as Nestl in this.There is ongoing concern by various NGOs including Greenpeace.Nestl were met with "a deluge of criticism from consumers, after a large number of Facebook users posted negative comments about the company's business practises." Nestl's attempt to engage with the issue were met with criticism, including headlines stating: "Nestl fails at social media",]and "Nestl Loses Face On Facebook". Nestl Chairman, Peter Brabeck-Letmathe, in answer to a question from Greenpeace, told the Companys Annual General Meeting in Lausanne on April 15, 2010 that in 2009 Nestl used 320,000 tonnes of palm oil worldwide, comparing this with the 500,000 tonnes of palm oil used for biodiesel in Germany and Italy alone. In May 2010 Nestl said it was inviting The Forest Trust, a not-for-profit group, to audit its supply chain and promised to cancel contracts with any firm found to be chopping down rainforests to produce the palm oil which it uses in KitKat, Aero and Quality Street. Greenpeace welcomed the agreement promising to monitor it closely. E. Coli In June 2009, an outbreak of E. Coli O157:H7 was linked to Nestl's refrigerated cookie dough originating in a plant in Danville, Virginia. In the USA, the caused sickness in at least 69 people in 29 states, half of whom required hospitalization. Following the outbreak, Nestl voluntarily recalled 30,000 cases of the cookie dough. How the dough became contaminated is unclear, because E. Coli is not known to live in any of its constituent

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ingredients. MARKET SEGMENTATION AND TARGET MARKET SELECTION

Market segmentation and target market selection have an intimate relationship with market strategy formulation. The company may focus on the following factors while laying down the target market. 1.GEOGRAPHIC SEGMENTATION Geographically the country can be broadly divided into 3 sub segments -Rural, Suburban and Urban. In the first phase (after the test launch), Urban parts of the country should be targeted. The chosen segment is targeted because *0 Lack of infrastructure, like refrigeration-not to venture rural markets. *1 The consumption pattern & behavior in Rural India does not fit with the product attributes and perceived benefits. *2 The limitation of disposable income is another factor that hampers entry in rural areas. *3 Semi-Urban may be considered in the second phase. An year after the launch. Within Urban India, the cities with 1 million + population i.e. top 23 metros will be targeted. A soft launch of the brand should be undertaken before taking the brand to these areas. This (test launch) will be undertaken in Bombay, since it (Bombay) is a high consumption city for chocolates.( Source: Nestle (I) Ltd infact Nestls sales peaked out

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in Bombay, during its initial launch). 2.DEMOGRAPHIC SEGMENTATION The demographic variables have been separately addressed to arrive at the target audience. *4 Age: 12 years + segment of the population is recommended to be targeted. Small kids may not be targeted, because of the nature of the perceived product benefit by consumers in that age group, who are inclined towards sweeter and creamier snacks. Further, it may not be easy to get youngsters off their tuck money. Also, children today already have an array of cheap domestic and international confectionery (in the form of chewing-gums, lollipops, rolls, lozenges and toffees). *5 Income: The income segmentation may be all households with an annual income exceeding Rs. one lakh. Targeted audience may be all households that can afford a television or have access to satellite television. 3.PSYCHOGRAPHIC SEGMENTATION Social Class: In terms of psychographic the social class targeted is the educated upwardly mobile urban middle and upper class. Personality Traits: This segment essentially consists of emulators i.e. upwardly mobile, pioneers, freaky, fun loving type of people. These are the people who like to enjoy life and believe in traveling and adventure. Life Style: In terms of lifestyle, it may be aimed at those who favor buying convenience products. They are also willing to experiment with alternate products in place of conventional food items, as the universe of chocolate consumption is changing from occasion led to more casual consumption. 4. BEHAVIORAL SEGMENTATION

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The moulded segment of the market is perceived to be the growth engine of the market. Hence, this segment is quite lucrative for a new brand launch. Also, chocolate purchases have moved from being occasion-led to a casual snack. Hence, anytime anyplace snack aspect needs to be established. This segment comprises of people who like to have chances and want to try new things. 5. LEARNING-INVOLVEMENT The purchase of a chocolate is of a low-involvement category. It is an impulse purchase and decision to buy is not pre-planned. 6. USAGE RATE The market may be further segmented on usage rather than attitude-Anytime Anyplace Snack. This is a group of consumers that find traditional snacks too heavy. Even though a range of chocolates may be offered, a core brand (concentrated strategy mentioned later) may be launched in the countline segment. Since this segment is tipped to be the growth engine of the industry (according to industry sources Mr. Sanjay Verkey, Cadburys India and Mr. Bohidar) and this segment has a substantial share of the market (33%). TARGET AUDIENCE Following from the above, it is recommended to target consumers who found traditional snacks too heavy. Usage rather attitude is being used to segment. This is the segment that tended to pick up biscuits instead-something they could munch while continuing with their schedule. There are 181 million urban individuals in India Our target segment is people living in the top 23 metros (1 million +population), which implies 63 million people. Further, SEC A-B in these 23 metros with Cable & Satellite at home are targeted (94.4 % of SEC A-B have a cable & satellite connection) [All these are NRS -VI & IRS 99 figures].

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ADVERTISING & SALES PROMOTION When a marketer or a firm has developed a product to satisfy market demand after thoroughly analyzing the market , there is a need for establishing contact with the target market to eventually sell the product . Moreover, this has to be a mass contact which means that the marketer is interested in reaching a large number of people so that his product may receive optimum exposure . Naturally , the best way

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to reach this mass market is through mass communication and advertising is one of the means of such mass communication along with such other means as publicity, sales promotion and public relations .Advertising as a means of mass communication has , therefore, made mass selling possible . It is perhaps the best known mass communication channel. Marketers and firms engaged in selling their products and services throughout the country and or in other nations are fully aware of the necessity and importance of advertising . As a means of forceful communication , advertising promotes the sale of goods , services , images and ideas through information and persuasion . Advertising is not a panacea that can restore a poor product or rejuvenate a decline market . It only helps in selling through the art and business of persuasive communication . The American Marketing Association, Chicago, defines advertising as ANY PAID FORM OF NON PERSONAL PRESENTATION OF IDEAS

GOODS AND SERVICES BY AN IDENTIFIED SPONSOR . Advertising aims at drawing attention to a product. It seeks to create an awareness about the existence of advertised product . It passes product in such a way that interest is created in the consumer about the product . TYPES OF ADVERTISING: On the basis of geographical spread we have the following types advertising : (1) National (2) Local on information about the mind of the prospective

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(3) Global On the basis of target group we have the following types :(1) (2) (3) Consumer Industrial Trade (4) Professional

Some more broad categories of advertising are:(1) Product (a) Pioneering (b) Competitive (c) Preventative (2) (3) (4) (5) Service Institutional Public Relations Public Service

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(6) (7)

Financial International

PROMOTION This involves communicating persuasively to the consumers, in order to arouse their interest in the product. A detailed promotion plan involving advertisement, sales promotion and public relations is proposed.

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POSITIONING The positioning of the various brands in the market is listed below:

CADBURYS BRANDS

POSITIONING

NESTLS BRANDS

POSITIONING

Cadburys Dairy Milk

The Real Taste of Life

Classic Milk Chocolate

Positioned as an affordable,

enriched milk chocolate

Fruit n Nut

Positioned at

Creamy Bar

adults as an

Roast Almond

impulse anytime

Nut Milk

purchase

Crackle

- self expression

Bournville

values attached

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5 Star / Perk

Perk-Positioned as a

Kit Kat

Positioned as a

Snacking Consumption.

Snacking Consumption

Break/Krisp/ Double Decker

Thodi Si Pet Pooja 5 Star-Energy Bar

Have a Break, Have a Kit Kat

Reach for the Stars

Bar One

Positioned as a

trendy, cool

anytime snack

Gems/Eclairs

Positioned as

Butterscotch

variety, gifting

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Caramels/ Overtures

and taste preference

Nutties/All Silk

Tiffins

Relish

The flagship brand may be positioned as a premium (see pricing) anyplace, anytime snacks. Since, snacking proposition is the growth engine for the industry, positioning should hence, be focused on that. The two drivers Impulse purchase and need to snack. ADVERTISEMENT PLAN The Advertisement plan could be as under: CORPORATE OBJECTIVE: The corporate image should be built over a period of time, so as to reinforce consumer confidence in the brands of the company. This is also essential to counter competition, since over a period of time; names such as Cadburys, Nestle have attained high levels of recognition and assurance. ADVERTISEMENT OBJECTIVES To position the product as a high quality brand, with a wide range of offering, providing, fun anytime, anyplace products.

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To create awareness about new flavors. Induce consumer trials. Build corporate image To undertake competitive advertisement.

Media Print Media: Will be the major magazines read by the target segment i.e.., India today, society, femina, stardust etc. *6 P.O.P.Material induce impulse purchase. *7 Electronic Media: Since the whole of target segment watch Satellite TV during prime time and advertisement will be featuring share for 3 or more time to leave an impact. Apart from it company will be sponsoring the fun related programmers on DD and Satellite TV. PUBLIC RELATIONS I. The company will hold a press conference announcing its arrival in India and will highlight its global achievements. II. Company has planned to sponsor events like 2 viz., skiing river rafting, yachting etc. III. Company will also sponsor fun based TV programs. SALES PROMOTION ACTIVITIES: To induce consumers to try the new chocolate and to get the product pushed in the market the sales promotion plan should include the following:

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Trade promotion: The Company will have to offer lucrative trade promotion schemes, in order to push primary sale. These include incentives to stockiest for pushing the sale of chocolates. At the retail level, the following trade promotion measures may be adopted: Schemes such as, a certain percent off on the purchase of Rs 5000 or Rs 10,000 worth of chocolates. A box of chocolates free with every dozen purchased. Shop Displays/Vizzy Coolers linking them to sales

Apart from these, Window Shelf space may be purchased outright. Consumer Promotion: Some of the consumer offers that could be introduced are: 1. Free gifts like pen, comics etc., on return chocolate wrapper. 2. Money Savers 3. Chocolates in a toy truck etc. 4. The Company can announce consumer contests (with proof of purchase) with attractive prizes, supplemented by an advertisement campaign. POINT OF PURCHASE MATERIAL POP is of extreme importance, to a product category like this. This is so, since sales are impulse /casual driven. Hence, heavy point of purchase advertising in the form of danglers, chocolate dispensers, etc. may be used.

DIRECT COMPETITION

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NESTLE, CADBURY & AMUL At present there are three major players Nestle, Cadburys and Amul in the Indian Chocolate market. Campco initially tried to break into market but failed. Brief profile of the same has been entailed below: CADBURYS INDIA LTD. Cadburys India Ltd, has been in India since 1948. Its brands: Dairy Milk, 5 Star, Gems and Chocolate clairs are the households names in India today. In all the segments i.e. moulded chocolates, count chocolates and panned chocolates, it is undoubtedly the market leader. Cadburys has its manufacturing units at Thane (Mumbai), Malanpur, Indori(near Pune), Mithuri and Kolapur. It has a strong distribution network with about 500 distributors in North India and more than 3 lac retail outlets being serviced all over India. In 1997, Cadbury planned to pump in Rs.80-crore to up production capacity at a couple of Cadburys factories. This cash is exactly double of whats been invested in 1996. The Company launched Perk, a wafer enrobed chocolate in 1995. This was reactionary to the launch of Kit Kat and has been able to counter competition. CADBURYS DAIRY MILK (CDM) - THE FLAGSHIP BRAND CDM, the oldest of Cadburys brands was launched in 1956. In the early 90s, a rise in the prices of cocoa, increase in the excise duty and a fall in the demand inspired the idea of repositioning. Two years in the process after relaunch Cadburys Dairy Milks market share stood at 25 percent with sales rising by an average 40 percent per annum. Besides CDM Cadburys has a number of endorser brands such as FruitnNut, Nut Milk etc. Even though contribution of these brands to the companys bottom-line is very small, they are required in order to make a complete portfolio of offering.

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The Company developed a concentration strategy on CDM, Five Star, Cadbury Gems, Cadburys clairs, Perk and the latest of its offering Picnic (which has drawn a good response in the market). The Company has also identified sugar confectionery, as a growth sector. Its first offering Googly.

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SWOT ANALYSIS

The SWOT Analysis shows the relationship between critical variables of the company. The SWOT matrix has a wider scope. The SWOT matrix is a conceptual framework for a systematic analysis that facilitates the external threats and opportunities with the internal weaknesses and strengths of the organization. It has been common to suggest that companies identify its strengths and weaknesses as well as opportunities and threats in the external environment. But what is often overlooked is that combining these factors may require distinct strategies choices. To systematize these choices, the SWOT matrix has been proposed. T stands for threats, W stands for weaknesses, O stands for opportunities and S stands for strengths. A marketing opportunity is aware of buyer need in which a company can perform profitably. An

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environment that would lead, in the absence of defensive marketing action, to deterioration in sales or profit. An ideal business is high in both major opportunities and low in major threats. A speculative business is high in both major opportunities and threats. A mature business is low in opportunities and high in threats. The SWOT matrix starts with the threats because in many situations a company undertakes strategic planning as a result of a perceived crisis, problems or threats.

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STRENGTHS

High brand equity consumer & dealer regarding Nestle' as company

delivery quality product. Company processes an extensive powerful distribution network. Company processes a dedicated & experienced sales staff. Strong base in monitoring & controlling market. Distributions are highly dedicated towards performance & experience.

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Nestle India Limited (NIL) has a very strong parent company Nestle S.A. support

with 51% of equity share holding, which is the world's largest food company. NIL's milk products sold under Milkmaid and Everyday brands are market leaders.

NIL has strong brand value in other products like Kit-Kat, Polo, Milo, Maggi and Nescafe. NIL - State of the Art Technology and production systems ensuring high

technological/high value and optimum cost advantage to its product portfolio. Idealization of products to suit local tastes are critical for success and NIL is

converting its international products into Indian tastes products. Nestle has altogether 570000 outlets in more than 3000 towns. This is one of the

major strengths of the company.

NIL most of the products are being produced according to Indian tastes, priced

within Rs. 25/- so that they are afforded by most of the people easily, advertised and promoted according to regional culture and values and is available to most of the consumers easily, at their nearby shops.

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WEAKNESSES

Company takes time in handling return claims on authorized whole seller. Warehousing norms are not followed which account for increased breakage. Restricted website minimizes marketing opportunities. Yearly initiatives are not so motivating.

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A high percentage of turnover and profits coming from a few products categories like

Coffee/Maggi. NIL has been in India since last 39 years yet its growth has been very slow. After the

opening up of the economy, it has started growing but till then it did not launched much products. The profits of NIL are also reduced because of increased Royalty payments that NIL is

making to its parent Nestle, Switzerland. The higher royalty payments are made on account of new international brands launched by NIL in India. NIL factories are not to meet the demands of products with the supply. NIL's products range is so large that it is not able to give proper attention to all the products, their marketing strategies are not properly worked out as many of its products are dieing. There was an embarrassing starter like Nestea an iced tea, Nesfit - a glucose rich energy drink, Bonus, Milo is not given much of promotion. Recently, there are difference between the Nestle S.A. parent company and Nestle India

Limited and because of this there are in the top management of the NIL. Even its M.D Daravis E. Ardeshin has also resigned. Proof financial distribution as the NIL is unnecessarily giving its shareholders high

dividend, which could be avoided and be used for investment in plants for capacity.

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OPPORTUNITIES

Great quality. Mass market is growing with established performances. Growing middle class is increasing opportunities.
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Great taste. Low differentiation in market brands. Credit facility given to dealers. India being the second most populated country in the world, NIL has lot of opportunities of

launching and selling new products and earning a record profit from this country. As NIL has been in India since last 39 years, it has understood the culture, values, tastes

and psychology of the Indian consumer and so it can easily develop Indianised products that will be acceptable to the Indian consumer.

Food industry is the second highest growing industry in India and offers a lot of

opportunities for NIL in India.

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THREATS

Tough competition especially in premium segment. Characteristics of premium segment that it is never brand loyal. Tough competition (indirect) with barista, caf coffee day.

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Mere availability of best sellers from the parents portfolio does not guarantee a winner.

Since most of these products would be fighting it out with their global competitors and then Indian counterparts on the Indian turf. It faces fierce competition in almost all the segments it participates in like. It duels with

Top Ramen in the instant noodle market, Kit-Kat vs. Perk, Polo vs. Minto, Milkmaid vs. Mithai Mate (launched by Amul at a staggering 60% discount to the market leader), Milo vs. Horlicks, Complan and Bournvita.

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RESEARCH METHODOLOGY

1. RESEARCH METHODOLOGY I have carried out a research which is both qualitative and quantitative in its support. The qualitative approach applies to both, descriptive and inductive forms of research. While as

54

in case of quantitative approach, an extensive use has been made of the literature available to carry out a detail research on the nature of the problem. I have chosen Nestle as the target company for my research study. 1.1 Method of data collection & analysis The data, after collection, has to be processed and analyzed in accordance with the outline laid down for the purpose at the time of developing the research plan. This is essential for a scientific study and for ensuring that we have all relevant data for making contemplated comparisons and analysis. I have conducted a graphical analysis based on the responses received from the persons questioned and interviewed. Once the interview was over, the responses received were be grouped together, and a graphical presentation and analysis has been made for every set of questions. I have made use of both, the primary sources and the secondary sources of data in collecting information. SECONDARY DATA The secondary source of data includes relevant literature including periodicals and journal articles in the areas of Marketing, customer satisfaction. product. To have a good image in the eyes of retailers.

LIMITATIONS
(1) Research is conducted in Bareilly. (2) Information given by researcher is not always right. (3) It takes lot of time to research the data.

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ANNUAL REPORT OF NESTLE

Financial Results and Operations (Rs In Millions) 2010 Gross Revenue 2009 62,974 51,672

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Profit before Interest Impairment. contingencies and taxation Interest 11 11,646 14 164 3,264 8,187 2,620 103 323 9,610

Impairment Loans on Fixed Assets (Net) Provision for Contingencies (Net) Provision for Tax Net Profit Profit Brought Forward Balance Available for Appropriation Interim Dividends Final Dividend Proposed Corporate Dividend Tax Transfer to General Reserve Surplus carried in Profit and Loss Account Key Rates Earnings per Share (Rs.) 84.91 3,345 3,471 1,205 772 619

6,560 1,425 1,001 7,551

9,612 3,471

1,205 795 655

1,425

67.94

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Dividend per Share (Rs )

48.50

48.50

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FINDINGS

(1) REVENUE 51,672

2009 62,974

2010

59

(2) PROFIT 6560

2009 8187

2010

60

(3) LOSS

2009 1425

2010 3345

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62

RECOMMENDATIONS

RECOMMENDATIONS
(1) Employees should be trained according to the changing standards of the organization. (2) Company should conduct survey from time to time to according to which changes can be introduced in the organization to stay updated in the market.

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(3) They should introduce creativity into the work, so that the employees can do their work active mindedly. (4) Company should provide incentives to employees.

CONCLUSION
During the project, I got an enriching experience about selling and how to convince the customer to buy the product.Study on NESTLE gave me an practical experience about nature of customers,market and how to deal customers in the market. Company like NESTLE gave me an exposure about the nature of customers and market and how to deal

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with customers.

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BIBILOGRAPHY

INTERNET SITES
* *
www.nestle.in

www.google.com

* www.moneycontrol.com

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BOOKS
MARKETING MANAGEMEMT BY PHILIP KOTLER

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