Marketing Strategy of Nestle

SUMMER TRAINING PROJECT REPORT ON

MARKETING AND ADVERTISING STRATEGIES OF NESTLE

Submitted in Partial Fulfillment of the Degree of BBA, Guru Gobind Singh Indraprastha University, Delhi

UNDER THE GUIDANCE OF PUJA SAREEN (INTERNAL GUIDE)

SUBMITTED BY:

VIKAS ENR NO. 10310601710 BBA (G) Ansal Institute of Technology Gurgaon

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EVALUATION CERTIFICATE

This is to certify that the project titled “Advertising and Marketing Strategies of Nestle”, Mr. Vikas, a student of BBA of Ansal Institute of Technology to GGSIP University, Delhi has been examined by the following

Internal Examiner

External Examiner

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ACKNOWLEDGEMENT

An individual alone cannot do project of this scale. I take this opportunity to express my acknowledgement and deep sense of gratitude to the individuals for rendering valuable assistance and gratitude to me. Their inputs have played a vital role in success of this project. I express my sincere thanks to my project guide Ms. Puja Sareen (Internal Guide) for their generous support, constant direction and mentoring at all stages of project. I take this opportunity to thank all dealers, customers who spared their precious time to provide me with valuable inputs for project without which it would have not been possible. I firmly believe that there is always a scope of improvement. I welcome any suggestions for further enriching the quality of this report.

VIKAS

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EXECUTIVE SUMMARY The main aim of studying marketing and advertising strategies of nestle is to provide solid foundations that are useful for explanation, prediction and control of the business activities. Every organization needs to have clear marketing objectives and the major route to achieving organizational goals will depend on strategy. Developing a strategy involves establishing clear aims and objectives around which the framework for a policy is created. Having established its strategy, an organization can then work out its day-to-day tools and tactics to meet the objectives. The success of any business entity solely depends on how effectively it utilizes its optimum resources. The company should always be ready to make necessary changes according to the requirements, in order to attract more customers so as to maintain a substantial growth in the market. This report also includes the market mix of the product. All the 4P’s of marketing mix for the product has been discussed and explained to reveal the significance of its pricing, product, placing and advertising strategies along with the strength and weaknesses of the organization. Secondary data is the most of important for our research and I contributed in the area such as group or segment those types of potential customers that are most likely to benefit from their product line. It also includes business principles of the organization.

Table of Contents 5

S.NO

PARTICULAR

PAGENO.

01

Introduction

6-7

02

Objective of the Study

8

03

Scope of the study

9

04

Literature Review

15-18

05

Company Profile and marketing strategy

19-42

06

Research Methodology

43-44

07

Data Analysis

45-57

08

Conclusion & Recommendation

58

09

Limitations

59

10

Bibliography

60

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ANNEXURE

61-63

INTRODUCTION 6

Nestle India Limited is one of the fastest growing FMCG Company with its strengths for ongoing product innovation & renovation. It performs very well. It still have a stiff competition in the market for its various products especially from HUL - Bru Coffee for Nestle's Nescafe Sunrise Premium Coffee. Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals. While strategy is the action plan to do something and hence, Marketing Strategy is the managerial process of developing and maintaining a viable fit between the organization’s objectives, skills and resources and its changing market opportunities. The aim of marketing strategy is to shape the company’s business and products so that they yield targeted profit growth. Promotion is the very important and crucial element of marketing strategy as through it the company establishes its image in the minds of the customers. Nestle India is promoted by using different ways of promotion. Advertisement of Nestle India is done through TV, radio, billboards, newspapers and magazines. Nestlé also conducts the tradeshows, concerts, events, sponsorships, and discounts for sales promotion. For establishing public relations, Nestlé distributes its newsletters, annual reports, calendars and diaries, lobbying, donation for charitable and civic events. The firm applied a progressive human resource and social policy; with a management style that is based on management commitment and people involvement. Moreover, the firm had responsible corporate citizen, fulfilling obligation to government, shareholders, customers, communities and consumers. Protest the environment by being committed to environmentally sound business practices and taking into account the need to preserve natural resource and save energy. For example, guarantee that all products manufactured, imported and distributed by Nestle Malaysia are certified HALAL by authorized Islamic certification bodies. Perhaps, the firm delivered shareholder value through the achievement of sustainable and profitable long-term growth. It’s a wide area research the branding. Branding strategy is corporate. Part of the branding strategy is the brand plan for each 7

product. This is an integrated strategy. The brands of Nestle are a key strength but the executive levels are very aware today that brands alone are not enough to win. From its beginning, Nestle developed its business internationally and became aware of the fact that food products have to be closely linked to local eating and social habit. That is why Nestle form the very start has always shown respect for diverse cultures and traditions. Nestle activities to integrate itself as much as possible into the cultures and traditions where it is present, adding also to the local environment its own set of values. Therefore, Nestle embrace cultural and social diversity and does not discriminate on the basis of origin, nationality, religion, race, gender or age. Furthermore, Nestle believes that is activities can only be of long term benefit to the company if they are the same time beneficial to the local community. Precisely, the environment is changing very rapidly and in particular customers are looking for answer to their concerns. To our opinion, global thinking and strategies can best be expressed through local action and commitment as showed as Nestle Malaysia. And of course, Nestle applied “think globally act locally” as well as thinking out of the box idea in their product and distribution with the help of strategic global marketing.

OBJECTIVE OF STUDY 8

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To study the current market condition, track the performance and lay down the strategies for successful marketing of Nestle.

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To examine the marking strategies of Nestle India to tackle the stiff competition

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To examine the effectiveness of advertising strategies of Nestle.

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SCOPE OF THE STUDY India is on the move and so are the markets in India. Apart from economic changes, India is also facing social changes like changes in life style, hobbies etc. New fashions, Adventures holidays, etc. are in today. Further, food habits of Indians are changing rapidly. Chocolates which were believed to be kid’s preference are now being consumed by kids, teenagers, and adults. Chocolate market in India is growing at a fast rate annually. To take advantage of the growing market, international confectionery companies are getting ready to woo the proverbial Indian Sweet tooth. An influx of worlds leading Chocolate players is expected. Further, since Confederation of Indian Industry (CII) is a representative body of the Indian Industry, it receives its inquiries for pertinent marketing information from various domestic and international players, who want to invest in India. In the above context, the prime objective of this report is to prepare a marketing plan for any brand that is planning to enter the Indian Market, based on the study conducted on Nestle.

LITERATURE REVIEW Marketing strategy A marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A marketing strategy should be centered around the key concept that customer satisfaction is the main goal.

TYPES OF MARKETING STRATEGY One of the most important concepts of the marketing planning process is the need to develop a cohesive marketing strategy that guides tactical programs for the marketing decision areas. In marketing there are two levels to strategy formulation: •

General Marketing Strategies

•

Decision Area Strategies

GENERAL MARKETING STRATEGIES These set the direction for all marketing efforts by describing, in general terms, how marketing will achieve its objectives. There are many different General Marketing Strategies, though most can be viewed as falling into one of the following categories: •

Market Expansion

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Market Share Growth

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Niche Market

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Status Quo

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Market Exit

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DECISION AREA STRATEGIES These are used to achieve the General Marketing Strategies by guiding the decisions within important marketing areas (product, pricing, distribution, promotion, target marketing). For example, a General Marketing Strategy that centres on entering a new market with new products may be supported by Decision Area Strategies that include: •

Target Market Strategy – employ segmenting techniques

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Product Strategy – develop new product line

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Pricing Strategy – create price programs that offer lower pricing versus competitors

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Distribution Strategy – use methods to gain access to important distribution partners that service the target market

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Promotion Strategy – create a plan that can quickly build awareness of the product

MARKETING STRATEGY OBJECTIVES •

Increase product awareness among the target audience by 30 percent in one year.

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Inform target audience about features and benefits of our product and its competitive advantage, leading to a 10 percent increase in sales in one year.

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Decrease or remove potential customers' resistance to buying our product, leading to a 20 percent increase in sales that are closed in six months or less.

If you have multiple objectives, make sure they are consistent and not in conflict with each other. Also, be sure that the remainder of your marketing plan components - the marketing strategy, budget, action programs, controls and measures - supports your marketing objectives.

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Setting your marketing objectives and finalizing the remaining components of your marketing plan may serve as a reality check: Do you have the resources necessary to accomplish your objectives? The marketing strategy section of your plan outlines your game plan to achieve your marketing objectives. It is, essentially, the heart of the marketing plan. The marketing strategy section should include information about: •

Product - your product(s)and services

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Price - what you will charge customers for products and services

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Promotion - how you will promote or create awareness of your product in the marketplace

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Place (distribution) - how you will bring your product(s) together with your customers.

LIMITATION OF MARKETING STRATGY •

leads to faulty marketing decisions based on improperly analyzed data

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creates unrealistic financial projections if information is interpreted incorrectly

PRICING STRATEGY Having defined the overall offering objective and selecting the generic strategy one must decide on a variety of closely related operational strategies. One of these is how one will price the offering. A pricing strategy is mostly influenced by the net income. There are three basic strategies one can consider.



A SKIMMING STRATEGY:

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Where the offering has enough differentiation to justify a high price and one desire quick cash and have minimal desires for significant market penetration and control, then one sets the prices very high. 

A MARKET PENETRATION STRATEGY: Where near term income is not so critical and rapid market penetration for eventual market control is desired, then one must set the prices very low.

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PROMOTION To sell an offering one must effectively promote and advertise it. There are two basic promotional strategies, PUSH and PULL. 

THE PUSH STRATEGY: It maximizes the use of all available channels of distribution to "push" the offering into the marketplace. This usually requires generous discounts to achieve the objective of giving the channels incentive to promote the offering, thus minimizing the need for advertising.

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THE PULL STRATEGY: It requires direct interface with the end user of the offering. Use of channels of distribution is minimized during the first stages of promotion and a major commitment to advertising is required. The objective is to "pull" the prospects into the various channel outlets creating a demand the channels cannot ignore.

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COMPANY PROFILE FMCG refers to consumer non-durable goods required for daily or frequent use. Typically, a consumer buys these goods at least once a month. The sector covers a wide gamut of products such as detergents, toilet soaps, toothpaste, shampoos, creams, powders, food products, confectioneries, beverages, and cigarettes Typical characteristics of FMCG products are: Individual items are of small value. But all FMCG products put together account for a significant part of the consumer's budget. The consumer keeps limited inventory of these products and prefers to purchase them frequently, as and when required. Many of these products are perishable. The consumer spends little time on the purchase decision. Rarely does he/she look for technical specifications (in contrast to industrial goods). Brand loyalties or recommendations of reliable retailer/ dealer drive purchase decisions. Trial of a new product i.e. brand switching is often induced by heavy advertisement, recommendation of the retailer or neighbours/ friends. These products cater to necessities, comforts as well as luxuries. They meet the demands of the entire cross section of population. Price and income elasticity of demand varies across products and consumers. The FMCG sector has been the cornerstone of the Indian economy. Though, the sector has been in existence for quite a long time, it began to take shape only during the last fifty-odd years. To date, the Indian FMCG industry continues to suffer from a definitional dilemma. In fact, the industry is yet to crystallize in terms of definition and

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market size, among others. The sector touches every aspect of human life, from looks to hygiene to palate. Perhaps, defining an industry whose scope is so vast is not easy. After witnessing booming sales and flooding markets with innumerable products, FMCG companies have had to abruptly apply the brakes and look for various ways to save costs. MORE THAN RS. 43,000 crore (listed companies) FMCG industry in India, which has been on a roll for many years, faces tough times ahead, although many segments still shows good growth.

Nestle India 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 copackers, 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.

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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. Nestle’s leading brands include Cerelac, Nestum, Nescafe, Maggie, Kitkat, Munch and Pure Life. PRODUCT Quality is the essential ingredients in all of our brands and the reason why millions of people choose Nestlé’s products every day. Our consumers have come to trust in Nestlé’s commitment to excellence and turn to Nestle brands to maintain nutritional balance in a fast paced world. BABY FOODS The production of infant food goes right back to the origins of the Nestle Company. Henri Nestlé’s `Farine Lace’s was the first product to bear the Nestle’ name. In 1867 a physician persuaded Henri Nestle’ to give his product to an infant who was very ill—he had been born prematurely and was refusing his mother’s milk and all other types of nourishment. Nestlé’s new food worked, and the boy survived from the very beginning, Nestle' product was never intended as a competitor for mother’s milk. In 1869, he wrote; “During the first months, the mother’s milk will always be the most natural nutrient, and every mother able to do so should herself suckle her children.” The factor that made baby foods success in the early days of the Nestle' company—quality and superior nutritional value—are still as valid today for the wide range of infant of infant formula, cereals and baby food made by Nestle'. The World Health Organization (WHO) recognizes that there is a legitimate market for infant formula, when a mother cannot or chooses not to breast feed her child. Nestle' markets infant formula according to the principles and aims of the

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WHO International Code of Marketing Breast Milk Substitutes, and seeks dialogue and cooperation with the international health community and in particular with the WHO and UNICEF, to identify problems and their solution. Nestlé’s expertise as the world’s leading food manufacturer. Gained over more than 125 years, is put the disposal of health authorities, the medical profession and mothers and children everywhere. Milk based products and baby food contributes to 34% of Nestlé’s 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 Nestum brands. Infant milk powder is sold under the Lactogen and Nestogen brands. Brand loyalties

are very high in categories

such as infant food and weaving cereals, enabling the company to command a price premium. DAIRY BRANDS Nestle has long been a major player in the dairy industry, originally with well known shelf stable brands such as Nido, Nespray, La Lechera and Carnation, then building a strong international presence in Chilled dairy and Ice cream under the Nestle' brand. Innovation and renovation play a major role in the development of milk based products as well as of breakfast cereals, managed as a joint venture with General Mills. The area of nutrition, with its benefits to health and wellbeing, is having a significant impact on the development of our business. A wide range of proven, science based solutions such as starter and follow-up formulas, growing-up milks, cereals, eternal diets, oral supplements and performance foods are actively developed and successfully brought to market under the Nestle' brand.

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BREAKFAST CEREALS Although cereals have been with mankind in form or another for millennia, it was not until the mid 19th century that scientific research, technological innovation and then influence of a group of American health reformers, gave rise to the currently foodstuff we know today as breakfast cereal. Nestle' has a joint venture with General Mills outside North America, Cereal Pardoners Worldwide, which is active in more than 80 countries. The joint venture began in 1990 and its rapid growth has been characterized by branding and lately the launching of breakfast cereal brands into the fast-growing cereal bar market. ICE CREAM There are many myths and stories as to the invention of ice cream: was it Macro Polo who brought it back from China (along with pasta)? Probably not, considering he most likely never visited China. The story of its popularity is however connected with the invention of technology to make it on an industrial scale and to keep it cold once made. Before refrigeration techniques, food was frozen with the aid of ice mixed with salt which was either stored in ice house or shipped from cold countries. But then at the end of the 19th century, both making and freezing it became easier and together with the invention of the ice cream cone made the product boom. Today the United States is the absolute leader in terms of volume consumed but the highest per head consumers are in New Zealand. Flavors you’d never thought of and yet they’re commercially available: Sorbets- Smoked Salmon, Tomato, Cucumber Ice-Creams – Garlic, Avocado, Sweet Corn. CHOCOLATE & CONFECTIONARY The story of chocolate began in the New World with the Mayans, who drank a dark brew called cacahuaquchtl. Later, the Aztecs consumed chacahoua and used the cocoa bean for currency. In 1523, they offered cocoa beans to Cortez, who introduced chocolate to the Old world, where it swiftly became a favorite food among the rich and noble of Europe.

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From the beginning, turning raw, bitter cocoa beans into what one 17 th century writer called “the only true food of the gods” has been a fine art, a delicate mixture of alchemy and science. Centuries ago it was discovered that by fermenting and roasting the beans, an almost otherworldly flavor could be created. In 1875, after years of trying, a 31-year old candy madder in Vevey named Daniel Peter figured out how to combine milk and cocoa powder. The result –milk chocolate. Peter, a friend and neighbor of Henri Nestlé’s started a company that would quickly become the world’s leading maker of chocolate. For three decades the company called Peter, Cailler, Kohler relied on Nestle for milk and marketing expertise. In 1929, the almost inevitable merger took place as Nestle’ acquired Peter, Cailler, and Kohler. Indian chocolate market is growing day by day. Premium segment is opening upon. The companies like Cadbury’s are launching indigenous product made to international standards of the 20,000 tonnes chocolates market worth about Rs 400 crore, Cadbury’s accounts for around 65% of market share followed by Nestlé’s around 23%. Amul has 5% of the share, with the minor players taking the Rest. 5 STARS: As energy bar, earlier targeted to teenager, before launch of perk 5 star energy bar positioning made it snacking chocolate with Nestle' pitching Bar-one in 1993 gaian it “For those in between times”. MUNCH: Munch is the market leader in the chocolates. It is the largest selling chocolate in India & is followed by Cadbury’s Dairy Milk. E’CLAIRS: competing in the chewable toffee segment, E’clairs was relaunched by Cadbury’s during the mid-90 with a new name milk-e’clairs. Its worth is 4000 tones now. Nestle' also presents here NESTLE' E’CLAIRS. Due to launch of multigrain’s Cadbury can not pay attention to brands like Mr. Pop Candy Lollypop. KIT-KAT: Kit- Kat which was launched in India in 1995, today leads the chocolate coated wafer bars category. It has 11.5% share of chocolate market. But Cadbury’s perk is with9%.

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PRODUCT KIT- KAT

PRICE Rs. 14

PERK

Rs. 10

WEIGHT 36 gm. 2x17.5 gm.

Nestle' forayed into chocolate & confectionary in 1990 and has cornered a fourth share of the chocolate market in the country. The category contributes 14% to Nestlé’s turnover. It has expanded its products range to all segments of the market the Kit-Kat brand is the largest selling chocolate brand in the world. Other brands include Milky Bar, Marbles, Crunch, Nestle Rich Dark, Bar-one, Munch etc. Amul is also competing in this category especially in western regions of India. But Nestle' still has its own position in the market. The sugar confectionary portfolio consists of Polo, Soothers and Frootos. All sugar confectionary products are sold under the umbrella brand Allen’s. Nestle' has also markeys some of its imported brands like Quality Street, Lions and After Eight. New launches such as Nestle’ Choco Stick and Milky Bar Choo at attractive price points to woo new consumers chocolate confectionary sales registered a strong 21.5% of growth in 2005 aided by good volume growth in Munch, Kit-Kat and Classic sales. Nestle' relaunched Bar-One during the year 1993. PREPARED FOODS Convenience foods—packaged soups, frozen meals, prepared souses and flavorings---date back more than a century. With the industrial revolution came factory jobs for women and less time to prepare meals. The problem was so widespread that it became the object of intense study in 1882 by the Swiss Public Welfare Society, which offered a series of recommendations, including an increase in the consumption of vegetables. The society commissioned Julius Maggi, a miller with a reputation as an invention and capable businessman, to create a vegetable food product that would be quick to prepare and easy to digest. The results –two instant pea soups and an instant bean soup --- helped launch one of the best known brands in the history of the food industry. By the turn of the 25

century, Maggi & Company was producing not only powdered soups, but bouillion cubes, sauces and flavorings. Maggi merged with Nestle' in 1947. Buitoni the authentic Italian brand, which has been producing pasta and sauces in Italy since 1827, became part of the Nestle' Group in 1988. Ready to cook food/ cooking aids are sold under the umbrella brand name Maggie. Culinary product account for about 14% of Nestlé’s turnover. Maggie is the market leader in the noodles (45% market share), the Ketchup (43% market share) and soups (41% 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 (dosa mixes). New taste variants are continuously launched to add variety to the product offerings. HLL, Heinz, Knor & Indo Nissin Foods are Major competitors in this category. Gits mixes, Top Raman, Hot serve, are some products that are in competition to products under Maggie brand. But Maggie has used Quick and Easy cooking as its Unique Selling Preposition that worked to distinguish the Nestle' to lie ahead than all brands. HLL as brand Wagon is the part of our daily life uses creative selling prepositions to maintain its position as the top FMCG firm in India. Its marketing strategies (including launch, pricing & distribution strategy are good enough to shatter the competition, so Nestle' is working as an early worker to remain and lead in the market. The distribution network of Indo Nissin food is strong enough & it has covered a large portion of market in very short time. Its distribution network is not very long & the prices are also low. The company had adopted a low budget promotional strategy and is very fine at merchandising. These all are working together for the good of the company. Nestle' has the advantage of great brand image & it is actually working for maintenance and growing it.

BEVERAGES

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In 1937, Nestle' scientists perfected a powered coffee product that was introduced in 1938 under the brand name Nescafe’- the world’s first commercially successful soluble coffee. It became so popular during World War II that for one full year the entire output of the Nescafe’ plant in the United States (more than one million cases) was reserved for military use only. Since then, Nescafe’ has become one of the world’s best-known brands. In addition, Nestle' is a major producer of chocolate-based and malted drinks. Its leading brands, Nesquik, Milo and Nescau are very popular with a growing number of young people around the world. Nestle' ready-to-drink beverages Nestea and Nescafe’ are sold in various forms (cans, bottles). These are distributed by Nestlé’s join-venture with the Coca-Cola Company, Beverages Partners Worldwide. Nestle' is also present in fruit juices (Libby’s) as well as espresso coffee in capsules (Nespresso). Beverages like coffee, tea and health drinks contribute to about 30% of Nestlé’s turnover. Beverages sales registered a 155 yoy growth during 2005. while about 14% of sales come from domestic market, exports contribute to about 16% of sales. Nestle' Nescafe’ dominates the premium instant coffee segment. Nestlé’s other coffee brand Sunrise has also been relaunched under the NESCAFE’ franchise to leverage on the existing equity of the brand. Nestle' has focused on expanding the domestic market through price cuts and product repositioning. However it has been losing share in the domestic market, where it has a 37% market share. The major competitors are Coca-Cola, which launched coffee & tea under brand name Georgia in 2002. Its tea in four flavors which are classic, Adark, Masal & Elaichi and coffee in three variants Classic, Cappuccino & Mochaccino to suit the taste of customer. They adopted the strategy to distribute vending machine to even small retailer so as to cover a large market. Tata coffee also Works against Nestle'. But n is still the market leader in terms of market share, Customer’s choice & quality. Milo, brown-malted beverages was launched in 1996. It has an estimated volumes share of about 35 in the malted food drink segment. Cadbury’s Bournvita & HLL with Boost are the major players in the market along with Milo. Bournvita is with largest market share of 35%. The promotional strategies of Nestle' for Milo are working fast for the good of

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Milo. Nestle' has launched non-carbonated cold beverages such as Nestea Iced Tea and Nescafe’ Frappe during 2002. BEVERAGES Nestle' Food Services provides food and beverages professionals with a wide selection of branded products. Our solutions meet the growing opportunities to service consumers in out-of-home channels. Beverages solutions featuring well known consumer brands such as Nescafe’, Nestea and Nesquik as well as host professional brands including Minor’s, Chief and Davigel are part of the diverse portfolio of Nestle' Food Services. Working to meet the need of Food Service operators across a wide spectrum of business channels such as quick service restaurants supports our commitment to giving consumers the brands and quality they come to expect and rely on in the home as well as out of the home. BOTTLED WATER Nestle' began its entry into the water business in 1969 with a 30% stake in the owners of the Soci’e’te’ Ge’ne’le Des Mine’rale’s De Vittal. It acquired a controlling interest in SGEMV in January 1992, and went on in May of the same year to buy the entire Perrier Group. In 1992, Nestle' was the first company to dare to launch a mineral water, Valvert, in five different countries at once. It’s originally lied in the use of an all-new plastic, P.E.T. (Polyethylene teraphthalate), which is stronger and more elastic than the PVC used since 1968. Besides P.E.T. is recyclable. By the end of 1997, the group was present on every continent, and the purchase of San Pellegrino gave it the leadership in the Italian market. In 1998 f or the first time in its history, Nestle' associated its name with bottled water: Nestle’ Pure Life. The brand was launched in Pakistan and soon appeared in Brazil, followed by Argentina, Thailand and Philippines, China and Mexico in 2000. in 2001 India, Jordan, and Lebanon followed and in 2002, Egypt, Uzbekistan and then United States.

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Nestle’ Pure Life is drinking water that has been treated and rematerialized using a standardized industrial process to ensure purity and quality and is marketed in emerging countries. A second product with the Nestle' name was launched in May 2000, this time in six European countries: Nestle’ Aquarelle. A natural spring water currently from nine different springs in France, Germany, Belgium, Hungry, Italy and Spain, Nestle' Aquarel also uses the multi-source concept to satisfy new consumer expectations, especially for water with a low mineral content that the whole family can drink. In April 2002, the group changed its name to Nestle' Water’s, a token of Nestle' decisive commitment to the bottled water market, which now represents 9% of its sales. Today, Nestle' Water’s is established in 130 countries and markets about 70 different brands. The group is able to offer top quality brands ad innovative packaging to meet the individual needs of the water consumer all over the world, whenever, wherever and however thanks to the wide variety of its offer in terms of distribution and product mix. PETCARE Nestle' entered the pet care business with the purchase of carnation in 1985, and we consolidated our position in Europe with acquisition of the spillers brand in 1998, and further with the acquisition of Ralston-Purina in 2001 creating Nestle' Purina Pet Care. Carnation for its part developed the Friskies brand in the United States in the 1930s and in selected markets in Europe and Asia since the 1960s. Today Nestle' is well-positioned with a balanced portfolio of internally developed and recently acquired brands. Technologies to develop and add value continually for pets and their owners are engineered into our current product range. These include state-of-the-art nutritional innovations, such as products which help maintain feline urinary tract health or innovations for the most discriminating of pets and their owners. Nestle' has already become an industry leader and we continue to develop our international presence. CONSUMER SERVICES

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At Nestle' we are committed to offering consumers high-quality food products that are safe, tasty and affordable. The Nestle' seal of guarantee is a symbol of this commitment. We also believe in maintaining regular contact with our consumers. This applies both to how we present our products and to how we address our consumer’s questions and concerns. When Henri Nestle' prepared his first boxes of infant formula for sale, he put his address on the packages so people would know where to go if they had questions. Today our consumer relationship panel with the words “Talk to Nestle'” expresses the same commitment. This is why we have a worldwide Nestle' consumer services network devoted to caring for our consumers. Our people have expertise in a wide range of areas such as nutrition, food science, food safety and culinary expertise. They provide the prompt, efficient and high quality service that consumers expect from Nestle'. In addition we teach them talk with consumers and above all, to listen. Listening helps us to understand what people want. Nestle' uses the insights gained from relationships with consumers to driver product development. At Nestle' we care for our consumers because our success depends on meeting their needs and expectations. Through listening and understanding we can make products that they will want to use all through their lives. PROMOTION Promotion is an attempt to influence customers. Its aim is inform & remind the prospective consumers of the company’s offer & to advocate the cause of its production in the minds of its audience. Thus informing, reminding & advocating about the company’s product are real purpose of the promotion component of the mix. NIL has rightly understood the production of a good product is not enough to ensure success in the market, unless target customers are aware of its existence, features and products. So company has framed a very strong and very wide communication plan. ADVERTISING

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NIL is associated with MUDRA advertising company in India. It has properly studied the market and developed the commercials in several languages. NIL has booked spot for the advertising in almost all the channels. EXHIBITIONS & TRADE SHOWS It also participates in trade shows & exhibitions. IN 1997, at Jawaharlal Nehru Stadium in an exhibition NIL displayed its all old and new products. This was the time when MILO was launched in India. AHARA 97, Here Nestle' India Ltd. presented its wonderful world of Nestlé’s recipes along with its products. It also exhibited the various to make Maggie tastier. This shows that Nestle' never leave its product even if it is market leader & is the good source of its revenue. FOOD EXPO 98, organized by CII & attended by over 100000 people. The Mumbai branch of NIL ensured high visibility for its products like products under Maggie brand, MILO & chocolates by setting the venue ablaze with Nestlé’s hues Vic banners, umbrellas posters & product displays. INTERNATIONAL FOOD CONFEDERATION 1998: IFCON provided opportunity for the leading, international food scientists, technologists & research institutes to reflect massive change sweeping across the food processing sector. FOOD EXPO 1999: In October in Chicago NIL participated there also. CHILDREN SPORT MEET 98: At DPS R. K. Puram children between age group of 4-13 years put their best foot & arm forward. Attired in colorful MILO T-Shirts & Caps they participated in 12 events. FREE GIFTS Like giving school Kit i.e., pen scale etc, with Maggie.noodles & chocolates, Free Cricket bag or a sport watch, badminton racket, bag etc on the payment of a very minimal amount of Rs. 10 with Milo. OTHERS

31

Some other examples of exhibition in which NIL participated are: India international trade fare (IITF).  Nestle' Hungama 1998.  Maggie Display Contest.  Splendor 1999.  Boarding School Development Campaign.  Moga Summer School Camp. The competitors of NIL are also very Active and they also participate in these events and sponsor some event in there own ways & methods. HLL participates in most of the regional trade shows through its retailers. It displays its new products at large. HLL is the 1st largest company of India in terms of advertising & promotional expenditure. It also invents largely on window display contests retail level. Amul promotes its products by using emotional appeal in order to use the emotional aspects if Indian citizen. It uses kiosks and hoardings to promote its product range. The promotional expenses of Amul are not so big as that of the MNC’s but still it is a respected firm in our eyes. Cadburys under its promotional campaign that are designed by Ogilvy & Mather the adv shows the power of positioning with emotional benefits and it really works for Cadburys & leaves it with dramatic increase in sales.

MILO 32

BACKGROUND Milk additive market in India in formally here for the last three to four decades. Over 2 decades, there have been only two large players in the beverage segment - Bournvita and Boost. Horlicks and Complan are traditionally more strong brands in the South. Mumbai, being the base for Cadbury India Limited, Bournvita has been the strong brand here. Cadbury's aggressive sales distribution in Western Region is largely responsible for this. On communication front, Bournvita has had changed in positioning twice, Milk additive brands are traditionally positioned on three benefits - Taste, Nutrition or Energy. Bournvita is positioned closer to taste and energy benefit while Horlicks, Complan are closer to nutrition associated with the needs of growing children. As per an article in A&M magazine published in October 1995, brown beverage market was nearly under saturation with diminishing growing rate, and the possibility of a new entrant in this field was minimal. MARKETING PLAN Objective: Launching of international brand 'Milo' in India. PRODUCT AND POSITIONING In August 1996, Nestle launched its internationally known Milo brand in India. Initially, launch was limited to Tamil Nadu. Estimated market of brown beverages in 1995 was 15,000 tons and market was growing with 6% per annum growth rate. Milo was launched with a pricing index of 100, 99 and 94 respectively of Milo. Boost and Bourn vita. With a slogan that said "Win with Milo" and its association with energy and sports, it was launched in an attractive pack of green color. 33

In February 1996, Milo was launched in the city of Mumbai. The launch was a rather simple one with lease media hype. Instead of this, sampling was done in schools and at the places where direct trial to the end user could be included. There are few sports competitions also organized in schools as a launching strategy for Milo. After the months of launch of Milo, it was necessary to understand how Milo in doing on the retailer front and what is the retailer's response on various issues associated with distribution of Milo. At the same time, it was necessary to understand the awareness of Milo in consumers and their purchase and consumption habits of milk additive brands. Milo being a relatively new brand in India, Nestle carried out a research on its own. Recall of different brands - All the brands had similar overall recall if the TOM spontaneous aided recalls are added. However, in total spontaneous recall (TOM and unaided added), Bournvita had a 100% recall, followed by Boost with 76%. 60% retailers had a spontaneous recall of Milo and no one recalls Maltova. PROMOTION Retailers most preferred option was of 'On pack Incentive'. This is followed by price-offs and extra quantity. Practically no retailer like redemption's discount coupons or contests kind of options. As consumers are not really concerned much if 4 to 5 rupees off is given or 20 to 50 gms is given extra, gifts turned out to be the best incentives. Bournvita and Maltiva are considered to be giving highest promotion and Milo had not offered any promotion since its launch. Milo should have been launched with a heavy promotion offer so as to induce trial, but it is not so. Milo had a biter taste, so it is not preferred as a

34

drink for children. Milo had offered trade promotion only during the time of its launch. This is in the form of Rs. 5/- against display for a week.

DISTRIBUTION STRAGEGY

The aim of Nestle India Ltd. is to cover & open the largest possible number of out lets in every nook & corner of the country. HOW IT IS PROCEEDING? Confectionary can be sold almost any where. In our regular outlets also. Some of the major and most approachable outlets are:  A school & college canteen.  Airport terminal.  Cinema hall.  Pan/cigarettes kiosks.  Railway station/train vendors. The company is looking to ensure that: Any where the people congregate the aim is the representation in all these outlets as their distribution objective. Exclusive retail coverage is to focus to on whole seller, where endless stock could be dumped and from where stock reaches almost all outlets in the country. The whole seller channel could give us representation in outlets especially pan shops where they are not present.

DISTRIBUTION NETWORK OF NIL 35

MANUFACTURER

C & F AGENTS (1%-3-% Margin)

SUPER STOCKIST (3%-6%)

STOCKIST (3%-5%)

DISTRIBUTOR (4%-7%)

ORGANISED RETAILER (6%18%)

36

ROLE OF MAJOR PRODUCTS IN MAKING NIL A GRAND SUCCESS Nestle' India Limited works a lot before launching a product. It does a lot of test marketing & other marketing efforts for making its product & thus a company a grand success. Nestle' believes in renting mind space by creating perception for the brand in the prospects mind so that it stands apart from the competing brand & approximates much more closely to what the customer wants. It covers that space in the customer’s mind as if they have won a long term lease and always keep out ‘squatters’. The market conditions before & after the launch of some major brands of Nestle' are given as under. MAGGIE NOODLES Maggie Noodles were launch in 1983, where there was a latent need for the Indian market to make foray into the fast food segment. Previous there was no trend of instant noodles in India, most of the people were aware of Chinese noodle only. In 1982 when Food Specialized Ltd. (associated with Nestle' considered launching Maggie instant noodles, the company had the option of choosing from several alternative positions. The product could have been launched, for the sake of argument, as the means of cooking tasty Chinese dishes at home, or as a “TV Dinner”, or as a ‘mini meal’. Through consumer research the company felt that the most profitable position would be as a tasty, instant snack, made at home & initially aimed at children. The target market was the inhome segment of the very substantial snack category. This positioning decision automatically determined the competition which included all snack products in general. These would range from ready to eat snacks-biscuits, wafers & peanuts-to ready prepared snacks such as samosas. All were bought out items. Maggie noodles were launched in Delhi in January 1983 and it became an overnight success. The annual target for that market was increased from 50 tones to 600 tones. The Indian market was tipped to became the second largest Nestle' market for this product worldwide, next only to Malaysia. Maggie Noodles, as market results show, found a

37

vacant, strong position and sat on it as “TASTE TO COOK, GOOD TO EAT” any time snack. RICH SOUPS (1989): traditionally at home the soup was made from Boiled vegetables & was used as filler. Maggie soups were convenient, healthy, tasty & notorious. In first half of the decade the soup market of Maggie grew up to 2500 tones, a large enough size to attract competition in a short time & in 1995 competition sets in. The company’s market research team gets the latest information regarding the changing taste and preferences, and suggested steps to improve the product. Aggressive consumer benefit strategy propelled the market, to touch the 500 tones in subsequent 2-3 years. MILK MAID Milkmaid was launched in 1962 by Nestle' as a creamer or whitener for tea and office. The most interesting thing about Milkmaid is that it has been repositioned 4 times without any considerable changed in packaging & product remained totally unchanged. But off course it is the illustration & headlines that really determines the position which the consumer will give the brand in her mind. This repositioning strategy proved to be a great success for Nestle' each time the volume of sales got an upward shift & that too by a large denomination. They believe that the perceived image of the product belongs not to the product but rather is the property of the consumer’s mental perception. So the strategy should be: “Looks beyond the Product at the Customer & Use Knowledge to Repositioning the Brand” Five important rules for a successful repositioning: Renovation Innovation Customer communication Product must be a low cost & highly efficient operator

38

Product availability: wherever, whenever & however. Some time later milkmaid was positioned as “Tastiest milk maid”. The concept was that you can get 1.6 liters of sweetened milk by adding water in that condensed milk. This positioned was visualized as it had relevance at a time when fresh milk was in short supply in some parts of India. Once again, we saw Milkmaid in yet another position as a topper on fruits, cakes, jelly etc. and then last time through a natural evolution-backed by consumer research & sound marketing judgment - we saw Milkmaid’s Present position: Milk maid for desert Recipes. In due course, the packaging was smartened up & changed to reflect the ‘recipe’ on culinary products; the label depicts a desert, gives the recipe on the reverse side & announces a ‘free recipe booklet’. From the time of the dessert recipe positioning (1982), milkmaid achieved a sales volume increase of 116% by 1988. Sales growth has been relatively steady tear after year (an average growth about of 20% annually), suggesting that more households are responding to this position. It is significant that even in traditional milk shortage areas, Milk maid usage now is largely in line with the culinary (dessert) positioning. This implies that housewives, who may have earlier perceived Milkmaid as a substitute for milk, have now given it a different place in their “frame of reference”. Recently Nestle Has Launched Milkmaid in a easy squeeze tubes which is attracting children also. Positioning above all, is a matter of the perception of your brand that we wish to do the product and more what we do to the product and more what we do to the consumer’s perception of the product. NESCAFE (1918-1938) After the end of world war 1st their were crises for Nestlé’s Government contracts dried up following the hostilities, and the civilian consumer, who had grown accustomed to condensed & powdered milk during the War switched back to fresh milk when it became available again. In 1921 company recorded its 1 st loss. Nestle management responded quickly and brought in Swiss Banking export, Louis Dapples to recognize the company. He streamlined the operations to bring production in line with sales and reduce the

39

company’s outstanding debt. The manufacturing of chocolates became the company’s second most important activity. New products appeared steadily: Malted milk Milo Powdered butter milk for infants Nescafe (1938) The Brazilian coffee institute approached Louis Dapples in 1930, seeking new product to reduce Brazil’s large coffee surplus. Eight years of research produced a soluble powder that revolutionized coffee drinking habits worldwide. The most interesting thing to talk about Nescafe is its Brand personality. It is the personality that marketer wishes to attach to his brand & which actually enters the targets customer’s mind. In March 1989, the students of IIMC, conducted a small scale survey on personality of some major brands & and Nescafe was one among them Nescafe was compared to gold café-both were 100% pure instant coffees, both heavily advertised & both premium priced. Gold café was a successful competitor of Nescafe. The respondents were asked to describe the personality of the brands in terms of ‘Mr. Nescafe’ & ‘Mr. Gold café’. The respondent in one group based there observation on the advertisements of two brands. While other group made observations on the basis of other factors such as ‘history of the company’, ‘marketing strategy’, etc. one might describe them as the first group’s findings better because those reflected the consumer’s point of view better.

40

RECENTLY LAUNCHED PRODUCTS Set Dahi New Tomato and Curry Flavors in Maggie Noodles

41

New Dal and Atta in Maggie Noodles A new confectionery – Nestle Choco Stick Soft Chewy fudge Milky bar Chocolate Nestle recently launched products Tea Iced Tea Nestle slim milk The company is also setting up ‘CAFÉ NESCAFE’ and ‘COFFEE CORNERS’ across metros and mini-metros in India. NESTLÉ: 4.6% ORGANIC GROWTH IN FIRST QUARTER Group-wide organic growth of 4.6% 6.3% sales increase at constant exchange rates Swiss franc sales down 7.5% as a result of a 13.8% negative foreign exchange impact The overall organic growth of 4.6% in a difficult quarter, aggravated by late Easter, is mainly due to our successful drive for innovation and our strong market positions. Our consolidated sales clearly took a hit from the strong Swiss franc, but we expect this effect to taper off in the course of the year. “We are confident that the rest of the year will bring an acceleration of growth and that we will therefore achieve our stated objective of improving the Group's performance in constant currencies for 2006." The Nestlé Group's consolidated sales for the first three months of 2006 amounted to CHF 19.7 billion. In constant currencies, sales increased by 6.3%, reflecting organic growth of 4.6% (real internal growth 2.5%, pricing and others 2.1%), as well as a small contribution from acquisitions, net of divestitures. As a result of the strong Swiss franc, the adverse foreign exchange effect was 13.8%. Foreign exchange factor held back consolidated sales, and real internal growth was impacted by the late Easter date and the competitive situation in Japan. Additionally, in keeping with the Group's policy of ensuring margin improvements, Nestlé raised prices in several product categories to reflect cost increases. Nevertheless, the Group expects its strong brands, its broad distribution network and its capacity for innovation to lead to an improvement in sales growth as the year goes on.

42

RESEARCH METHODOLOGY It is a systematic approach of identifying the problem, collecting the information, analyzing the information and providing alternate suggestions. Three type of project research can be distinguished. Some research is exploratory, i.e., to gather preliminary data to shed light on the real nature of the problem and suggest possible hypothesis on new ideas. Some are descriptive, to ascertain certain magnitudes. 1. Defining the problem and research objective The research objective state that what information is needed to solve the problem. Here the objective of the research is doing marketing and advertising strategies of Nestle and finding the shortcomings it. 2. Developing research plan Once the problem is defined, the next step is to prepare a plan for getting the information needed for the research. The present study will adopt exploratory approach where in there is a need to gather a large amount of information before making a conclusion if required. The descriptive and casual approaches may also be used. 3. Collection and Sources of Data To collect the data, relevant information is necessary as regards to the project; as a result data was collected by using two ways: •

Primary Data

•

Secondary Data

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Primary Data: In this the information is being possessed with first hand information, which is new and fresh. The tools used by me for the primary data are as follows: o Questionnaire o Face-to-Face Interview o Observation Secondary data: The information that is received with the help of Journals, Magazines, Financial reports or which is already present with the company. o References used from management books o Gathered information through World Wide Web (www). o Support and knowledge provided by Faculty and Company guide. o Financial reports of the company 4. Sampling Plan •

Sampling unit:: The respondents were mainly the retailers who were stratified in according to the monthly turnover

•

Sampling size: A survey was conducted for 100 hundred respondents at nestle India ltd. Gurgaon

5. Analyze the collected information: This involves converting raw material in to useful information. It involves tabulation of data and using statically measures on them for developing frequency distribution and calculating the averages and dispersions. 6. Report research finding: This phase will mark the culmination of the marketing research efforts. The report with the research finding is a formal written document.

44

DATA ANALYSIS AND INTERPRETATION Various age group customers targeting AGE GROUPS

0-10

10-20

20-30

ABOVE 30

CUSTOMERS

14

42

33

11

ABOVE 30 11%

0-10 14%

20-30 33% 10-20 42%

According to the above analysis it is concluded that I have surveyed 100 respondents out of which 14, 42, 33, 11 belongs to age group 0-10, 10-20, 20-30, above30 respectively.

PREFERENCE ACCORDING TO AGE GROUPS

45

AGE GROUPS

BRANDS

0-10

10-20

20-30

ABOVE 30

CADBURY

7

35

24

5

NESTLE

5

6

8

5

NO CONSUMTION

2

1

1

1

NUMBER OF CONSUMERS

PREFERENCE ACCORDING TO AGE GROUPS 45 40

1 6

35 30

1 8

25 20

35

15 10

2 5

5 0

7 0-10

10 to 20

24

1 5 5

20 to 30

Above 30

AGE GROUPS CADBURY

NESTLE

NONE

According to the above analysis it is concluded that people of different age groups prefer mostly Cadbury brand while Nestle brand is least preferred by the age group between 10-20. People of age group above 30 equally like to have both brands.

BRAND PREFERENCE BRANDS

PREFERENCE BY CONSUMERS

46

CADBURY

40

NESTLE

22

PARLE

30

OTHERS

08 others 8% Cadbury 40%

parle 30%

Nestle 22%

According to this diagram 22% people like nestle prduct and 40% Cadbury and 30% parle product is liked by people.

PRODUCT PRODUCE BY NESTLE NESTLE PRODUCT

47

BABY FOOD

22

CHOCOLATE

23

BEVERAGES

15

BOTTLED WATER

15

MILK

25 Nestle chocolates purchased by People

BABY FOODS 22%

MILK 25%

BOTTELLED WATER 15%

CHOCLATE 23% BEVERAGES 15%

From the above analysis of given sample of 23% people who eat Nestle chocolates it is concluded that mostly all other brands are purchased by people but top most is Milk followed by beverages and baby foods. While surveying we have found that many people are not aware of bottelled water.

Business or market affected by business cycles or seasons

48

100 80 60 3-DColumn 1

40 20 0

yes

no

According to this diagram we found that 5% people said yes and 95% people said no for this question.

Competitive price changes anticipated in the near future. 70 60 50 40

people

30 20 10 0 no

yes

can't say

According to this analysis 10% people said that price will not increase in near future. And 65% said yes and left can’t say.

49

INFLUENCING FACTORS DURING PURCHASE OVERALL INFLUENCE FACTORS

GRAND TOTAL

AVERAGE

RANK

FLAVOR/TASTE

435

4.58

1

PRICE

295

3.1

9

QUALITY

391

4.12

2

PACKAGING

344

3.62

4

FORM

301

3.17

7

BRAND

354

3.73

3

IMAGE

344

3.62

4

COLOR

297

3.13

8

SHAPE

268

2.82

10

QUANTITY

342

3.6

6

QUANTITY 10%

FLAVOR/ TASTE 12%

SHAPE 8%

PRICE 9%

COLOR 9%

FLAVOR/TASTE PRICE QUALITY PACKAGING FORM

QUALITY 12%

IMAGE 10% BRAND 11%

BRAND IMAGE COLOR SHAPE

FORM 9%

PACKAGING 10%

QUANTITY

According to the above analysis it is concluded that on an average mostly people are influenced by flavor/taste followed by quality, brand and image. It is surprised to know that very few people are influenced by price followed by shape.

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FACTORS GIVING MOST SATISFACTION TO CONSUMERS OVERALL FACTORS

GRAND TOTAL

AVERAGE

RANK

FLAVOR/TASTE

427

4.81

1

PRICE

337

3.6

4

QUALITY

367

3.86

2

PACKAGING

338

3.56

5

FORM

332

3.49

7

BRAND

358

3.77

3

IMAGE

328

3.45

9

COLOR

332

3.49

7

SHAPE

335

3.52

6

QUANTITY

328

3.45

9

QUANTITY 9%

FLAVOR/ TASTE 12%

SHAPE 10%

PRICE 10%

FLAVOR/TASTE PRICE QUALITY PACKAGING FORM

COLOR 10%

QUALITY 11%

IMAGE COLOR

IMAGE 9% BRAND 10%

BRAND

FORM 10%

PACKAGING 10%

SHAPE QUANTITY

According to the above analysis it is concluded that on an average people are most satisfied with the flavor/taste of a product followed by quality and brand. It is surprising to know that although people are satisfied with quality but unsatisfied with the quantity.

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Steps to reduce costs without affecting quality FORM OF STRATEGY

NUMBER OF RESONDENTS

Personal selling

33

utilization of resources

25

remove intermediaries

29

Others.

20

Others 20%

personal selling 33%

remove intermediari es 22% utilization of resourses 25% According to the above analysis it is concluded that most of the people said personal selling should be and should be remove intermediaries and some said that resources should be utilized properly and 20% said other action should be take.

52

PROMOTIONAL OFFERS PROMOTIONAL OFFERS

NUMBER OF RESPONDENTS

FREE GIFTS

35

DEMONSTRATION

20

DECREASE PRICE

25

ANY OTHER

20

Effect of Promotional Offers While Purchase

ANY OTHER 20% FREE GIFTS 35%

DECREASE PRICE 25% DEMONSTR ATION 20% According to the above analysis it is concluded that out of sample of 95 respondents that 52% peoples are attracted by free gifts, 23 by price offers while 20 were attracted by some other reasons.

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FACTORS AFFECTING PURCHASE FACTORS

NUMBER OF RESPONDENTS

ADVERTISEMENT

65

SUGGESTION FROM FRIENDS AND RELATIVES

16

ATTRACTIVE DISPLAY

11

DOCTORS ADVICE

15

BRAND AMBASSADORS

9

INGREDIENTS

25 Factors Affecting Purchase INGREDIENTS 18%

BRAND AMBASSADOR S 6%

ADVERTISEME NT 46%

DOCTORS ADVICE 11% ATTRACTIVE DISPLAY SUGGESTION 8% FROM FRIENDS AND RELATIVES 11%

According to the above analysis it is concluded that Advertisement is the best measure to attract customers to purchase more. Its impact is much more than other factors. While friends and relatives and brand ambassadors also play a significant role in this regard.

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MEDIA OF ADVERTISEMENT MEDIA OF ADVERTISEMENT

NUMBER OF RESPONDENTS

TELEVISION

82

NEWSPAPERS

7

BROCHURES

3

HOARDING

4

DISPLAY

15

Media of Advertisement influencing the Purchase

INGREDIENTS 18%

DISPLAY 11% TELEVISION 61%

HOARDING 3% BROCHURES 2% NEWSPAPERS 5%

According to the above analysis it is concluded that television emerges as the best media for advertisement that compel consumers to buy. It is much more than other ways as out of 95 respondents 82 are attracted to by through television media while brochures are the least attracting media.

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CONSUMER’S BRAND LOYALTY BRAND LOYALTY ACTIONS

NUMBER OF RESPONDENTS

POSTPONE YOUR PURCHASE

26

SWITCH OVER TO OTHER BRANDS

24

GO TO OTHER SHOP FOR SEARCH

45

OF PREFERED BRAND Brand Loyalty

POSTPONE YOUR PURCHASE 27% GO TO OTHER SHOP FOR SEARCH OF PREFERED BRAND 48%

SWITCH OVER TO OTHER BRANDS 25%

According to the above analysis it is concluded that mostly people are loyal to the brand as in the absence of availability of their preferred brand mostly people like to search for it or they are ready to postpone their purchase.

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REACTION OF CONSUMERS IF NEW BRAND IS INTRODUCED SHIFT TO NEW BRAND OF THE

NUMBER OF RESPONDENTS

PREFERED PRODUCT NO, NOT AT ALL

35

MAY CONSIDER

27

NO, SHALL NOT

4

CAN’T SAY

29

REACTION OF CONSUMERS IF NEW BRAND IS INTRODUCED

CAN’T SAY 31%

NO, NOT AT ALL 37%

NO, SHALL NOT 4%

MAY CONSIDER 28%

According to the above analysis it is concluded that mostly people are addicted to the same flavor or taste and they don’t want to change it as out of 95 respondents 35 are not ready to try new brand at any cost.

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CONCLUSION & RECOMMENDATIONS 1. Although product line is very good & has good width & depth, but NIL should try to make stronger brand equity in Dairy products, Amul is still leader. 2. It should work more on concept of CRM (Making new customers & retaining old ones. 3. Cash discounts must be given. 4. More competitive pricing to be done in the premium segment. 5. Increase their sales force to make more frequent visits to the sales person. 6. Should also look for rural markets. 7. Quick handling of problems of stockiest & dealers. 8. Online ordering facility & electronic payment through website can save a lot of time. 9. Due to sluggishness in a FMCG market, most of the companies are under pressure to maintain volume & market share. NIL should draw out an action plan to improve sales through new product launches. 10. Company should concentrate on all round cost saving & productivity gain, to neutralize the adverse impact of increased excise of confectionary. 11. The market strategy of the firm is a complete and unbeatable plan or an instrument designed specially for attaining the marketing objective of company. The formulation of the marketing strategy consists of two steps:12. Segmentation & target market selection. 13. Assembling the marketing mix.

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Limitations A Project that is undertaken, any research that is carried out or any venture that is to be accomplished is not without its share of limitations. Limitations are present irrespective of the scale of intensity of the research undertaken. I was no exception. I too came across limitation but was not discouraged. Nearly all the companies maintain a certain degree of secrecy. There were hesitations while providing an outsider with the information & feedback regarding the company’s strategies & even financial data. To overcome this shortcoming secondary sources were tapped for required information. These sources were checked for ensuring their Authenticity bias. Numbers of visits were made for procuring a single appointment. Though sample size is large enough it is cost so diversified to be called as exact. Inadequacy of time & other resources proved to be a strong limitation. The data collected from consumers may not be exactly what they think & use as they might have misinterpreted the objective of research. Throughout the study utmost care has been taken to avoid biases, errors so as to ensure authenticity and accuracy. But there is possibility for some discrepancies to come in between due to following limitations: Respondents may give their biased opinion, as they know the identity of interviewer. My study is based on responses of executives of mentioned company of concerned department only, which may not give a true picture. Last but not the least and the most deciding factor paucity of time. But I have put in my honest efforts to make this project a useful one for every one who reads it.

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BIBLIOGRAPHY Kotler Phillip,” Marketing Management”-2006 [12th edition] Singh Para pal, “Service Marketing”- 2008 [ 11th edition] Russell S. Winer &Donald R. Lehmann, “Analysis for Marketing Planning”-2009[ 7th edition] Lean G. Sehiffman and Leslic lazan Kanuk., “Consumer Behavior”-2006[6thEdition] INTERNET SITES www.nestle.com www.yahoosearch.com www.thehindubusinessline.com www.domain-b.com www.economictimes.indiatimes.com

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QUESTIONNAIRE Qns1) What are your business objectives over the next two years? Ans.

1.

Customer satisfaction

2. Increase profit

3.

Sales maximization

4.

Society welfare

5. All of above Qns2) What market segments are you targeting? Ans.

1. Geographical segmentation

2.

3. Psychographic segmentation Qns3) Ans.

4.

Demographic segmentation Behavioral segmentation

What kind (age group) of customer are you targeting? 1. 0-10 3.

20-30

2. 10-20 4. Above 30

Qns4) What is your customer’s primary reason for buying or wanting to use your product or service? Ans.

1. Brand value

2. Price

3. Quality

4. Easy to get

Qns5) Which competitors have the largest market share within your target market segments?

Ans.

1. Cadbury 3.

Parle

2. Sunfiest 4.

Others please mention

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Qns6) What improvements can you make to your offering to better meet customer needs?

Ans.

1.

Quality

2.

3.

Hygine

4.

Price Better services

Qns7) What is the process for selling your services or products? Ans.

1. Direct personal selling

2.

Indirect selling

3. Direct online selling

4.

Any others

Qns8) Which of the factor has higher impact on community that a potential customer become a customer ? Ans )

a) Advertisement

b) Suggestion from friend

c) Attractive display

d) Brand ambassadors

Qns9) Which advertising media is used to increase sale? Ans ) a) Television c) Newspaper

b) Display d) Hordings

d) All of above Qns10) Which factor influence the purchasing power of a customer? Ans) a) Price

b) Quality

c) Brand

d) Quantity

e) All of above

Qns 11) Is your business or market affected by business cycles or seasons?

Ans)

a) yes

b) No

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Qns13) Which promotional offer is used by you to increase sale? Ans

a) Free gifts

b) Demonstration

c) Decrease price

d) Any other

Qns14) What affects is provided by consumer brand loyalty on product? Ans)

a) Postpone your purchase

b) Switch over to other brands

c) Go to other shop for preferred brand

d) Any other

Qns 15) What can be done to reduce costs without affecting quality? Ans:

a) Remove intermediaries

b) Utilization of resources

c) Personal selling

d) Others.

Qns 16) Are competitive price changes anticipated in the near future? Ans:

a) yes

b) No

Qns 17) What is the single most important message that youe must communicate to all of your target audiences? Ans: ___________________________________________________________________ ___________________________________________________________________ ____________________________________________________________

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(Demographic Profile) Name: Address:

Contact No. …………………. Age

:

Occupation: Date: …………

Signature

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