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Project Report On
Submittd by : PRASHEET SINGH TOMAR
PI ONEER INSTITUTE OF PROFESSNAL STUDIES MADHYA PRADESH
NESTLE INDIA LTD.
NESTLE INDIA LTD.
TABLE OF CONTENTS • PSIS SYNO 1 • ODUCTION INTR 5 • HODOLOGY MET 103 • NGS FINDI 106 • ATION LIMIT 143 • CLUSION CON 153 .NESTLE INDIA LTD.
• NDICS APPE 173 • OGRAPHY BIBLI 177 .NESTLE INDIA LTD.
assistant director and all faculty members for guiding me while project . for providing me an opportunity to understand and thus gave chance to design the project. I would like to thank Mr. making this I also thank all those who helped me and all respondents (retailers) for giving their precious time and support. Manik Duggal 01-AII-227 . . Ravinder choudhary . ACKNOWLEDGEMENT This project is dedicated to the institute of marketing and Technolgoy the outset I express my deep sense of gratitude to mr.NESTLE INDIA LTD.
and a made by student of is Marketing Technology. All the facts and figures are true. UNDERTAKING This is certify that this project report MANIK Institute DUGGAL of (01-AII-227).NESTLE INDIA LTD. There is no manipulation of the data. original and authentic and has been made as part of MBA curriculum. MANIK DUGGAL (01-AII-277) .
. ATTESTATION I certify that Manik Duggal S/o Mr. . a bonafide student of Institute of Marketing and Technology (01-AII-277) has done this project specializing in the fields marketing and advertising. Vijay Kumar Duggal. on the company "NESTLE INDIA LTD. The facts and figures provided in this report are original and true.NESTLE INDIA LTD." On his own.
deals in chocolates. is working in India for the last 40 years. Maggi. Nestle I. Nestle Ltd. SYNOPSIS T India his report presents on in-depth analysis of marketing and Advertising and public Relations of Nestle India Ltd. Ltd has 51% holding in Nestle.L who is from suitzerland. Sauce. The Company has 6 factories and 6 sales Branches. Soup.NESTLE INDIA LTD. Milk products.-one of the well known and esteemed organisations in the FMCG Sector in the country. Tea. is a company which is multinational company and has its operations in many countries in the world.I. . Milkmaid and Mineral water etc. Cofee. the Nestle I. The company is emphasizing on building new products to its customers & satisfying them. The Nestle India Ltd. It is one of the big Companies in the FMCG Sector. Ltd. Carlos Donati is the CEO & Managing Director of the N.
Introduction to marketing and Advertising and Public Relations. It points out that the rules of the Past are no longer applicable in marketing through the strategic Paradigm of marketing and the Views of Philip Kotler. The Introduction to Advertising and PR comprises of the definition of advertising. marketing management and marketing Philosphies.NESTLE INDIA LTD. its scope & its future in India. Marketing before and now. the marketing system. the emergence of marketing as a discipline. the future of advertising in India. its role. It also deals with the definition of Public Relations. . The reports begin with Introduction. which deals with the objective of the product. The company profile in which Nestle India Limited operates also form Part of the Introduction. the Need for PK. the Need of Advertising. its limitation. The Introduction to marketing comprises of the definition of marketing. its limits. its Benefits.
.. provides an insight into the Nestle India Limited. This Sector of the report also discusses also deals with the competitors of the N.NESTLE INDIA LTD. Board of Directors. Target Customer and its market size and growth. social welfare undertaken by it. finanancial performance and future plans. its statistical profile.L. its areas of operations. This is followed by the History of N. its foreign activities collabrations. its products. and the network.T. The Introduction is followed by a detailed description of the methodology used to conduct the research and getting the information required for the project in which the primary and secondary of data have been specified. This is followed by the profile of the Carlos Donati. its salient features. This section of the Report.L in the FMCG sector in India. its Subdivision.T.
. .NESTLE INDIA LTD. The is followed by the limitations.L.I. Marketing Strategy of N. This section also includes the Advertising strategy of N..L.I. This section also discusses the 4p’s of marketing. The methodology is followed by findings which entails an in depth analysis of marketing and Advertising and public Relations of N.L.I. Market Segmentation. condusions and Recommendations respectively. and different advertisements that has helped company in its growth. Bibliography and Appendics form the last two section of the report.
confectionery. Switzerland) was founded by Henri Nestle in 1867. Since its inception in 1867.NESTLE INDIA LTD. the company has diversified it product range from the infant weaning formula (which was its first product) to beverages. The company (with its headquarters in Vevey. Nestle India Ltd.5 million and an employee strength of 221. . Nestle has two major divisions-Le Societe des Produits which looks after the production and marketing and Nesstec Ltd. which provides the technical assistance to the group companies. In a span of 130 years the company has ranked 26 th among the world's largest corporations and boasts of a turnover of $48932. is a part of the Nestle SA group. which is one of the largest manufacturing companies in the world. ice creams and pet foods among others..144 people spread over 75 countries worldwide (Annexure A).
This is because today only 2% of its turnover comes from Switzerland. .NESTLE INDIA LTD. Out of the remaining 98%. North and South America contribute 36.5% and 18% is contributed by Africa and Asia Pacific Regions. Nestle has long been viewed as one of the most multinational of the multinationals. Europe contributes 43.5%.
1213. 1001. This remarkable growth has been achieved through: • Rapidly creating greater manufacturing capacity. now rank 22 nd amongst India's most valuable companies (Annexure B). In the last 35 years the company has shown rapid progress and has increased its product range to 80 products as of October 1997. Nestle India Ltd.NESTLE INDIA LTD. manufacturing in India only began with the setting up of the factory in Moga in 1962. The first product to be manufactured was Milkmaid.1 crores to Rs. Its gross revenue has increased from Rs. both at factories as well as with copackers.8 crores in 1996. OVERVIEW Although Nestle has been associated with India since the beginning of the century through the importing and trading of infant food and condensed milk. .
Nestle India Ltd. wants to further increase its operations in India and has started construction of its sixth Factory at Bicholim. • Strengthening of the sales and distribution network (particularly in smaller towns). Japan. 250. The main contributors to this increase were the export of tea and coffee to USA.NESTLE INDIA LTD. • Ambitious and cohesive manpower training and development programs for the personnel of the company across all disciplines. Russia. The company's exports also resulted in a very successful year in this area as exports grew by 27% to Rs. Goa for the manufacture of culinary products (a key thrust area) for this purpose. • Taking measures to ensure availability and improved quality of key raw materials-fresh milk in particular.8 crores in 1996. . Hungary and Taiwan.
INTRODUCTION TO MARKETING 1. establishing accompanying sources. Marketing is a Phenomen brought about by the pressure of mass production and increased spending Power. 2. 3. The marketers had to determine product features and quality. Much of marketing concerned with the problem of profitably disposing off that is produced. . Marketing is the performance of business activities that direct the flow of goods and services from the producer to the consumer. and business marketing primarily concerned itself with how to build the best sales force. Marketing was quite simple subject in 1967. All the time marketers has faced a number of tough decisions. set the price.Consumer marketing largely operated on mass marketing principles.NESTLE INDIA LTD.
determine the distribution channels.NESTLE INDIA LTD. & decide how to divide these resources among advertising. the market place is enormously more complex. Competitors are every there & hungry. New products are launched at an astonishing placed & are available worldwide in a short time. Today. the time has changed from the previous years. decide how much to spend on marketing. In this diagram I will trying to show how marketing system moves between the seller & buyer. New Communications Distribution media are and proliferating. at on time safe from foreign invaders. Today. The whole marketing system moves like this. are now the happy hunting grounds of giant global coorporations as well as global Niche specialists. sales force & other promotional tools. In this Diagram there are buyers and sellers who transact over a . Channels formats keep apparition. Domestic markets.
The stage of barter b. The stage of money economy c. particular product or particular class. in return they receive money and Infrastructure. The seller send goods & services and communication to the marketing. Evolution of marketing as a business discipline The evolution of marketing as a business discipline provides an insight into it emergence as one of the most important functions of management in any business.NESTLE INDIA LTD. The evolution of marketing as a business discipline comprises of following stages :- a. These buyers and sellers are connected by four flows.The stage of industrial evolution d.The stage of competition .
needs “A & human wants activity through satisfying exchange process”. Basically there are different concepts of marketing which are very important for marketing. wants and Demand. These needs are not created by marketers or . According directed to at Philip Kotler. The starting point in the discipline of marketing is to identify the needs of consumer. offering and exchanging products of value with others”. These concepts are need. e.The emergence of marketing Marketing Management We will discuss the what exactly the marketing is in the language of “Philip Kotler”. “Marketing is a Social and Managerial process by which individuals & groups obtain what they need & want through creating.NESTLE INDIA LTD. Every person has some need.
they exist in the very texture of human biology and human conditions. He starts his business from the first stage of business & starts his business individually. Demands are wants for specific products that are backed up by the ability & willingness to buy them. In marketing we pass through three stages. Wants are the desires for specific satisfaction of these deeper needs people needs are few but there wants are many.NESTLE INDIA LTD. In this stage the company did not advertise because he cannot afford to spend . 1. society. Entrepreneurial marketing The entrepreneurial marketing is first stage of marketing started by the entrepreneur who start his business by Direct selling of goods & Public relations.
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money on advertising because he is in the first stage of marketing.
When a company achieves success in business, the company is in a stage of formulated
marketing i.e. the second stage of marketing. In this stage the company can afford
advertising Budget because the company has achieved adopting success. some of Now the the company used is in
professionally run marketing companies.
This is the third stage of marketing when companies have to maintain success
throughout there life of business. This is the last stage of marketing where company has a success or it can fail. The companies main aim
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in this stage is that there brand & product managers need to get out of the office & start living with their Customers & Visualize new ways to add value to their customer lives.
We Will be discussing about the five important marketing concepts used in marketing:
The production concept is one of the oldest concept guiding sellers. It holds that consumers will favour those products that are widen available & low in
cost. Managers of production oriented organisations concentrate on achieving high production efficiency and wide distribution coverage.
The product concept
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This hold that consumers will favour those products that offer the most quality or performance.
Managers in these product oriented organisations focus their energy on making good products & improving there over time.
The selling concept
The selling concepts holds that consumers if left alone will ordinarily not buy enough of the origin’s products. The organisation must therefore
undertake an aggressive selling & promotion effort.
The marketing concept
determining the needs & wants of Target markets & delivering the desired satisfaction more efficiently and effectively then the competitors.
The societal marketing concept
NESTLE INDIA LTD. . wants & interest of target markets & to deliver the satisfactions more effectively & efficiently then the competitors in a way that preseures or enchances the consumers & society’s well being. The societal marketing Concept holds that the organisation task is to determine the needs.
today.” Advertising is Multi-dimensional.NESTLE INDIA LTD. AN a INSTRUMENT field of OF Business & a management. a component of the economic system. Today we are exposed to large number of commercial messages that at any time in the past. you know what you are doing but no body else does. from . It is a form of mass Communication. Newspapers & magazines are full of advertisements. profession. a powerful marketing tool. INTRODUCTION TO ADVERTISING “Doing business without advertising is like working at a girl in the dark. an ART FORM. employment Advertising today is very necessary. a means of financing the mass media a Social institution.
I will be discussing the definition of advertising the simplest definition of advertising is the “Public announcement”. “Advertising as any paid form of non personal presentation of ideas Goods & Services by an identified Sponsor”.. television. According to American Management Association. not only the quantity increased even the quality of advertising has improved considerably. There is Semblance of advertising in the many activities of a human being . Now. have also amply contributed to the growth of this industry. Advertising which has become a marketing force helping mass selling & distribution. Advertising as a tool of Communication Advertising is as old as man. The means of advertising such as the radio. the cinema & BillBoards etc.NESTLE INDIA LTD.
Benefits of advertising 1. which seeks to transmit an effective message from the marketer marketers to a group of individuals. Advertising is the most visible marketing tool. communication process. . Advertising establishes a link between the manufacturer and the consumer. It is a form of mass communication. Through advertising. to influence & to lead to some action. especially those activities. All this has been a part of human life almost from the time it took shape. the advertiser reaches a Vast Number of Consumers and makes his Product known to them. A baby crying for its feed want to communicate to persuade. basically it Though is a use advertising. which influence other either favourably or otherwise.NESTLE INDIA LTD.
specifications. Advertising keeps the consumers well-informed about the products & Services-styles. how to buy & why to buy. . It helps consumers in a variety of ways. gives a market share & profitability. features. Advertising contributes to consumer welfare. builds up volume. and reduces prices. the benefits it offers. Advertising expands markets. sizes.NESTLE INDIA LTD. price etc. 5. Advertising guides the consumers in his product choice. colours. 3. It tells what to buy. It gives the information about the product. 2. 4.
Planned & sustained effort to establish & maintain understanding between an organisation & its public. London defines Public Relation as” the deliberate. employees.NESTLE INDIA LTD. share-holders. It refers to a company’s communication & relationships with various sections of the public-customers. . the expenses involves keeping in close close touch with people in the media through press conferences. INTRODUCTION TO PUBLIC RELATION The ultimate aim of Public Relation is to develop a favourable image in the eyes of public. According to the Institute of Public Relation. media. suppliers. governments. through public relations is not directly paid for. press visits & press releases. society at large. Indirectly. say in the press. Public Relation is low cost compared to advertising for the publicity obtained.
An independent third party endorser to transmit the message. 2. There are four element to the mechanics of Public Relation: 1.NESTLE INDIA LTD. A target audience that it is hoped will be motivated to buy whatever is being sold. and 4. . 3. A medium through which message is transmitted. The message to be transmitted.
This is reflected through the essence of the company-its mission statement. THE SPIRIT OF NESTLE "Organizational excellence is never achieved through a one time efforts.NESTLE INDIA LTD. It is always a process of continuous improvement across a number of areas of operation. Nestle's mission "To be in every way the leading company in the Indian food industry and a good corporate citizen by providing our consumers with superior quality . Nestle has set itself high standards of business performance." A key factor for Nestle's success has been its quest for continuous improvement through ushering in greater everyday productivity operations and more the efficiency in Despite infrastructure impediments in India.
NESTLE INDIA LTD. our shareholders with rapid growth and fair returns and our employees with a challenging and satisfying work environment." To translate this spirit into a has planned set up and key measurable process. products. . Nestle objectives across all divisions.
NESTLE INDIA LTD. . KEY OBJECTIVES Production • To optimize production costs while enhancing product quality so as to make Nestle products even more competitive in the market place. People • To help employees to retain a long-term perspective and integrate them fully with the company's business goals. Sales and Marketing • To reach a sales turnover of 3000 crores by the year 2000. • To double the turnover every years.
an appreciation of interdependence between units and the enhancement of a sense of belonging to Nestle. Finance • To maintain profit levels above the average for the food industry in India. • To retain a broad perspective while addressing individual needs • To view growth as a continuous process.NESTLE INDIA LTD. . • To concentrate on attitudinal changes by developing leadership skills.
including 2001 Financial Historical Information. Development and Main Brand.4% 9600 11. Company Profile.8% 9 186 . Here introduction is given with some key facts and figures.NESTLE INDIA LTD. Financial Information In millions of CHF Sales EBITDA (a) as % of sales EBITA (b) as % of sales Trading Profit 2001 81 422 12 516 15. making it an excellent place to begin learning more about the World’s Largest Food Company. KEY FACT This section offers a quick and simple overview of NESTLE.
NESTLE INDIA LTD. amortisation of goodwill .3% 5 763 7. managed on a worldwide basis.1% 3305 29 904 65 524 1 038 146 864 and Water. end December (a) Mainly Pharmaceutical products 11. (b) Mainly corporate expenses. research and development costs. as % of sales Net Profit as % of sales Capital expenditure Equity Total Assets Research and development costs Market Capitalization.
7% North and South Am erica 31. Asia and Oceania 19. Asia and Oceania Other Activities 25/706 22/262 13/493 8/537 69/998 36.3% Europe 36.NESTLE INDIA LTD.8% BY MAIN PRODUCT GROUP . SALES ANALYSIS By Geographic Area In Million of CHF 2001 (%) Europe North and South America Africa.2% Africa.7 31.2 Other Activities 12.3 12.8 19.
6% .2 Chocolate and Cofectionary 15.2 4.2% Pharm aceutic als 4.2% Milk Products. In Million of CHF 2001(% ) Beverages Milk Products.6 Ice Cream Prepared Dishes and Cooking 17/660 Aids Chocolate and Confectionery Pharmaceuticals 10/663 3/1999 15.4% Prepared Dishes and Cooking Aids 25.4 27. Nutrition and Ice Cream 27.6% Beverages 27. Nutrition 19/142 and 334 27.NESTLE INDIA LTD.6 25.
6% Salaries and Welfare Expenses 8.NESTLE INDIA LTD.2 9.7% Depreciation 2.1% Company Profile .5 90.6 4.2% Total Trading Expenses 47. Breakdown of 2001 Trading Expenses (in %) Percentage Raw Materials Packaging Salaries and Welfare Expenses Depreciation Other Trading Expenses Total Trading Expenses Trading Profit 26.4% Other Trading Expenses 18.1 34. Trading Profit 5.8 16.8% Packaging 4.2% Raw Materials 13.2 8.8 Go to Financial Guide for additional facts and figures.
808 people.A. Historical Development 1866 1905 Company’s foundation Merger between Nestle and Anglo-Swiss Condensed Milk Company 1929 Merger with Peter-Cailler-Kohler Chocolates Suisses.NESTLE INDIA LTD. • Chairman of the Board: Helmut O. A. S. (Maggi) . 1947 Merger with Alimentana S. Maucher • Chief Executive Officer: Peter Brabeck-Letmathe • World’s leading food company • Switzerland’s largest industrial company • Worldwide operations • 495 factories • Group’s total work force: 225.
Moga (punjab) The Nestle factory in Moga has the pride of being the first and most comprehensive factory of Nestle India.NESTLE INDIA LTD. Factories Nestle has 6 factories in India. MJB and Chase & Sanborn roast and ground coffee brands (USA). Divestiture of Hills Bros. These are 1. 2000 Acquisition of PowerBar. Set up in 1962. it represents the core . 1971 1985 1988 1988 1992 1998 1999 Merger with Ursina-Franck (Switzerland) Acquisition of Carnation (USA) Acquisition of Buitoni-Perugina (Italy) Acquisition of Rowntree (GB) Acquisition of Perrier (France) Acquisition of Spillers (GB) Divestiture of Findus brand and parts of Nestlé's frozen food business in Europe.
beverages. Situated about 60 miles from Calicut. 3. competence of Nestle India in the manufacture of milk products (Everyday.). the factory today has 81 employees and produces 1.5% of the total turnover of Nestle India. Choladi ( Tamil Nadu) The factory in Choladi started production in 1967. It is a 100 percent export oriented unit which processes freshly picked tea leaves into soluble instant tea. 2. Milkmaid). culinary products (Maggi sauces. The plant to . Today in addition to instant coffee the factory also manufactures health beverages. weaning cereals (Cerelac) and infant milk formulae. soups etc. Nanjagud (Karnataka) Production in this factory began in 1989 with the manufacture of Nestle instant coffee and Sunrise. noodles.NESTLE INDIA LTD.
health beverages and milk products. culinary products . it manufactures weaning cereals . 5. This factory employs 145 people and is cited as a model in terms of environment protection for its installations to purify waste water as well as for its provisions for recycling coffee wastes. Recently the expansion of manufacturing capacity for Milkmaid Dessert Mixes was undertaken at this factory as this new and unique product category is viewed to have great potential in the future. It represented a major step by . Located 70 kilometres from Delhi .Ponda (Goa) This Kit-Kat factory was set up in Goa in 1995 at a cost of Rs.Samalakha (Haryana) This factory was set up in 1993. 4.NESTLE INDIA LTD. manufacture MILO was also commissioned at this factory. 50 crores.
In 1996. The team comprised of international experts from Nestle Technical Services (NESTEC) and the local staff. Nestle towards becoming the Number 1 Chocolates and Confectionery Company in India.Bicholim (Goa ) The construction with work speed. 6. As a part of Nestles efforts towards continuous improvement and excellence in Manufacturing operation. at this new factory will is progressing This factory soon commence the manufacture of culinary products. which is a key thrust area for the company and will include latest technological improvements relating to this category of products.NESTLE INDIA LTD. a Moga Improvement team (MIT) was put in place at the Moga factory. it embarked on a program with the single minded objective of optimizing production costs while enhancing the product quality so as to make Nestle products even .
more competitive in the market place.NESTLE INDIA LTD. Drawing upon Nestle’s global experience and manufacturing expertise in 75 countries the team identified the following areas for detailed study - • Process improvement to ensure the optimal usage of resources • Improvement of operational efficiency • Cost optimization A series of small but critically important initiatives ranging from of redesigning raw materials laboratories and to palletisation packaging material utilization. In addition. manufacturing and filling loses and labour man hours resulting in substantial savings and improved productivity and machine utilization. . several non tangible benefits in the form of systems for sustainable improvement in areas like factory maintenance planning tools .
NESTLE INDIA LTD. down time recording systems and performance measurement tools were also realized . Monthly objectives are broken down into weekly and (wherever necessary) into daily plans and . Through BECA. This project was highly successful and the company is now implementing its key learning’s of MIT in its other factories.purchase. Nestle has concentrated heavily on streamlining and improving their supply chain management more in order to make it more most dependable. For better supply chain integration the planning of key operations . cost effective and importantly. distribution and sales are synchronised to ensure that everybody works towards a common business plan. In a country as vast and diverse as India. production. supply chain management is absolutely critical to rapid growth. more responsive to market needs.
regularly to These gauge improvement and identify root problems for taking corrective actions.NESTLE INDIA LTD. Teams have been put in place at all factories and sales offices to and ensure the implementation Areas is of continuous self-sustaining. quality assurance. Major benefits accrued thus far include reduction in working capital through lower inventories of finished goods and materials. . In addition to traditional performance indicators. production output. better stock availability and reduction in obsolescence of materials. monitored regularly to ensure smooth implementation and quick corrective action when needed . warehouse monitored material ordering transportation measures the extent and are of management. quantifiable performance measures have been identified and implemented in all functional areas such as sales planning.
258 crores. 1989 was the year of launches. 5S and Small Group improvement activity (SGIA) are being extensively used. this sales figure was touching Rs 500 crores. in its Nestle about different products portfolio with various new products in the pipeline . By 1989 the company had achieved a sales figure of approximately Rs. improvement are regularly identified and timebound action plans established. The efficacy of this hierarchical structure is seen in Nestle’s performance over past few years of various products. By 1996.NESTLE INDIA LTD. For this purpose. Kaizen. Seven new product lines were launched in this year. This was also the year in which the Nanjagud factory was set up. 20 new products had have been 76 introduced. By the year 1992. In the 1990’s the pace of launches quickened and since the construction of the factory at Samalakha. standard tools such a Total Quality Management(TQM).
NESTLE INDIA LTD. . as well. Thus sales grew by 450% over a period of one and a half decades. The sales figure now touched Rs. 1214 crores.
chicken) Taster choice(leaf tea) Sunrise extra(originally Ricory) Nestogen 2 Sunrise Premium Year of inception 1962 1964 1968 1972 1974 1974 1978 1982 1982 1983 1983 1985 1986 1987 Garlic 1987 1989 1989 1989 1989 1989 1989 . Nestle’s Product Range is detailed below Product Milkmaid Nescafe Lactogen Ricori Cerelac Maggi Cubes Nestum Nespray Lactogen 1 Sunrise Maggi Noodles Maggi Sauces Everyday Cerelac (wheat-apple. orange) Maggi Sauces(Chilli Masala Chilli) Everyday Ghee Maggi soups( tomato.NESTLE INDIA LTD.
1991 chicken noodles) Nestogen 1 Everyday gold (originally nespray) Maggi Super seasoning 1993 (originally Maggi cubes) Nestle Bonus POLO Nestle Bar peanuts) one 1993 1993 (roasted 1993 1993 1993 1994 1991 1992 Tasters choice (dust tea) Contadina Snack Dressing Cerelac (wheat-soya) Milkmaid Dessert Mixes (custard 1994 powder. gulab jamun . Cerelac(Wheat-vegetable) Chocolates(Nestle crunch) Nestle eclairs Bar. Shahi Rabri) Maggi Tonite’s special sauces) Nescafe Premix Everyday premix (Gravy 1994 1994 1994 . Kesar Kulfi.NESTLE INDIA LTD. 1990 1991 1991 Maggi Soups( mixed vegetables.one Milky 1989 bar.
NESTLE INDIA LTD. Nestle Bonus(chocolate) Kit -Kat Toffo POLO (Paan) Nestle MILO Milkmaid (Kalakand) Dessert 1995 1995 1995 1995 1996 mixes 1996 Maggi Pickles( lime .Dairy Whitener Splash .mango . 1996 Maggi Soups (Chicken Sweet 1996 Corn. sambhar) (masala.Tea Bags Tea mate . Hot and Sour. Maggi Dosa Mixes plain.Candy Maggi Macaroni Mithaimagic 1996 1996 1996 1996 1996 1996 . 1996 mixed . lime sweet. mango punjabi. Rasam) POLO (Spearmint) 1996 Cerelac .Rice Taster’s Choice .
Quezac. Milo. Ricoffy. Taster's Choice. Buxton. Arrowhead. TODAY NESTLE IS PRESENT IN DIFFERENT MARKETS WITH THE FOLLOWING MAIN BRANDS Soluble coffee Nescafe. Calistoga.. Bonka.NESTLE INDIA LTD. Nescau. Zoegas. Contrex. Nestea. Blaue Quellen. Ricore. . Other beverages Nesquik. Vera. Santa Maria. Poland Spring. Valvert. Loumidis Mineral Water Perrier. San Pellegrino. Libby's Caro. Carnation. Roast and Ground Coffee Hills Bros. MJB. Vittel.
Nan. Nestum. Neslac. Carnation. canned soups. Products prepared (Bouillons. Gloria. Nespray. Barenmarke. Lactogen. sauces) .NESTLE INDIA LTD. dishes. Guigoz Culinary seasonings. Breakfast Cereals Nestle Coffee Creamers Coffee-mate Infant Foods and Dietetic Products Nestle. Cerelac. pasta. Dairy Product Nido. Milkmaid/ La Lechera. food.
desserts. Maggi. Refrigerated pasta sauces) Products (yogurts. Street. Frigor. Cailler. Buitoni. Libby's. Contadina Frozen Foods Findus. Maggi Ice Cream Nestle. Vismara. Chokito. Crunch. Quality Sarotti. Yes. Frisco. Stouffer's Buitoni. Crosse and Blackwell. Kat. Motta. Camy . Magnolia. Galak/Milkybar. ect. Contadina Chocolate and Confectionery Nestle. Kit . Builtoni. Thomy. Dairy Farm. Nestle. Locatelli.NESTLE INDIA LTD.
. Baci.NESTLE INDIA LTD. Lion. Baby Ruth. Butterfinger. After Eight. Aero. Rolo. Smarties. etc. Polo. Nuts.
Specialized products for the food industry Food Ingredients Specialties (FIS) Ophthalmological products Alcon Cosmetics L'Oreal . Davigel. Santa Rica Pet Care Friskies. Gourmet. Aplo. Fancy Feast. Mighty Dog.NESTLE INDIA LTD. Food Services and Professional Products Chef.
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NEW PRODUCT LAUNCHES To put all the product launches into perspective. still has a variety of new products in the pipelines. Nestle products can be broadly classified into 5 main ranges: • Milk Product • Chocolate and Confectionery • Beverages • Culinary . It believes in slowly colonizing as much territory as fast as it can. adapting to native conditions and then work at 'Holding off the advancing herds'. Nestle flavors now and has 80 products this including list various of 80 variants awesome products for most companies is an overfull palate. Nestle India Ltd.NESTLE INDIA LTD.
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• Food Service.
This category which comprises of condensed milk, baby milk foods, milk powders, acidified infant food, and other milk products, showed a slump in 1996 as sales of milk products fell from Rs. 31.4 crores in 1995 to Rs. 31.2 crores in the said year. Consumer off take remained depressed throughout this year as a consequence of high price increases
necessitated by substantial increases (+ 50%) in the cost of basic raw materials (fresh milk), over the past two year.
However Nestle retained its leadership in the infant food market with Cerelac Lactogen and Nestum and even introduced a new flavor of Cerelac-Cerelac Rice in 1996.
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Chocolates and Confectionery
Nestle pursues the objective of accounting for one in every three rupees in its sales figures through chocolates and confectionery. This has thus been one of the thrust areas in Nestle. Nestle this year widened its range of flavors in POLO, backed by its tremendous success in the Indian Market by adding POLO Spearmint to its Portfolio. This new flavor has also received an encouraging response in the
market according to market analysts.
Milkybar also retained its position as the number one white chocolate brand in India, however it did not record a significant increase in sales, as a majority of Indian tastes still do not accept this flavor.
This year however, was a year of tremendous success for Kit Kat. This internationally renowned brand gained a large increase in the Market share in
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the past year and Nestle officials are hopeful that this will further increase in the coming years. However this brand along with its success has brought with it its share of Controversy as the Union of India has launched a Litigation against the Kit Kat family pack.
In 1997 Nestle added to its range of confectionery by introducing SPLASH, "A soft hearted, hard boiled sweet" this is being promoted as a sweet unique to India and is positioned to a target audience in the age group of 4 to 12 years and "anyone with a soft heart" is a potential customer. Priced at Rs. 1 for a 7.5-gram candy Splash has been introduced
selectively in the South and has been speculated to repeat Polo's performance. Nestle's officials claim that this candy has the potential to grab a quarter of the 700 crores confectionery market.
confectionery market has been the introduction of
The latest launch of Nestle in the Chocolate and confectionery division is Charge." This new product was launched in September 1997. This brand has been positioned somewhere between chocolates and traditional sweets and the company is employing a push strategy to promote this brand. 323. Mithai Magic. The sales of beverage have increased from Rs. Beverages This year has been very successful in the beverages market for Nestle.NESTLE INDIA LTD.8 crores in 1996. a little magic. met with stiff competition from Tata Cafe .3 crores in 1995 to Rs. which is "a little Mithai. which was pegged at Rupees 1040 per kilogram before the launch of Tata Cafe. in time for the Diwali purchases of sweets. Nestles Flagship Nescafe. 398.
177 Crores market for pure instant coffee. once it was introduced. priced at Rupees 550 per Kg.NESTLE INDIA LTD.. 253 crores market in Mixed instant coffee. This forced Nestle to cut prices of Nescafe to Rupees 840 per Kg. However Nescafe still retains 83% market share in the Rs. Culinary Products . and the response for this has been encouraging. Tata cafe claimed to have garnered a market share of 17% by December 1996. an internationally renowned chocolate energy drink. This year Nestle also launched MILO. Nestle Sunrise also showed an increase in sales and captured 20% of the Rs. Nestle has introduced Tasters Choice tea bag pitched against Taj Mahal Tea bags.
This snack has opened a new segment for the maggi brands.5-lakh outlets that Maggi noodles sells in.NESTLE INDIA LTD. In the spirit of catering to Indian tastes Maggi introduced maggi pickles in five variants benchmarked to give the "ghar ka swad". The product focuses on convenience and innovation as its Unique Selling Proposition. Nestle official’s say that this would consolidate Maggis position as the number 1 culinary brand in India. Encouraged by this success Nestle launched Maggi Macoroni Snack in three flavors-Chicken. It is speculated to be introduced in a phase manner nationwide to be place in the 7. The brand is positioned as Youthful and is represented by the twists and curls of the macaronic snack. The market in culinary products had witnessed a high growth consequent to aggressive pricing decisions on existing products and the introduction of a variety of new products to match the needs of the Indian Housewife. Masala and Tomato. Maggi .
which would include vending machines. Dosa Mix was also introduced to offer superior quality and added convenience.NESTLE INDIA LTD. Maggi soup also launched three new variants. a traditional north Indian sweet of premium quality was added to the milkmaid dessert mixes. Food Services Food service items basically deal with the out of home segments. Nestle's food service business is poised for rapid expansion to meet the growing need for such a reliable. Nestle wants to sell 500 million cups of tea and coffee through its vending machines in the year 2000. time saving and cost effective service in this modern age. It currently has 3500 vending machines at . Apart from this Milkmaid Kalakand Mix. Maggi Rassam in particular was noticeable as yet another attempt to make traditional Indian cooking a little bit easier.
NESTLE INDIA LTD.
assorted locations (both public and private). In 1995 Nestle food service did well to vend 40 million cups of Nescafe and Tasters Choice tea. Its 1996 sales were placed at 59 million cups of Nescafe and 36 million cups of tea; this figure was however way below the expected sales for the year.
In 2001 and 2002 nestle has come with a number of new products like it has come with many of the diary products like milk. The milk is avaliable in the market in the full cream , toned and double toned milk. The nestle has also come with the dahi, butter which is available in the market but at very few shops .
NESTLE has also come with the products which will target the children like FRUITIPS,MILKYBAR CHOO,NESTLE CHINESE MAGGI NOODLES.
NESTLE INDIA LTD.
NESTLÉ CORPORATE BUSINESS PRINCIPLES
Nestlé is committed to the following business
principles in all countries, taking into account local legislation, cultural and religious practice:
management and employees at all levels, is to manufacture and market the company's
products in such a way as to create value that can be sustained over the long term for
consumers, shareholders, employees, business partners and the large number of national economies in which Nestlé operates.
• Nestlé does not favour short-term profit and at the expense of successful long term business development, but recognises the need to
generate profit each year in order to maintain
NESTLE INDIA LTD.
the support of the financial markets, and to finance investments.
legislation is the most effective safeguard of ethical conduct, although to in certain areas, and
employees in the form of voluntary business principles, is beneficial in order to ensure that the highest standards are met throughout the organisation.
• Nestlé is conscious of the fact that the success of a corporation is a reflection of the
professionalism, conduct and ethical values of its management and employees, therefore
recruitment of the right people, and ongoing training and development are crucial.
legitimate interest in the company behind the
Although. which guide company activities and relationships world-wide in each sector of business interest. Nestlé brands.NESTLE INDIA LTD. as a . • ensures that the highest standards of ethical conduct are met throughout the organisation. • is aware that increasing globalisation is leading to the development of more and more international recommendations. by complying in a responsible way with the Business Principles. Legislation and International Recommendations Nestlé: • complies with the laws applicable in the countries in which it operates. and the way in which the Nestlé Company operates.
provided they have been developed in full consultation with the parties concerned. inevitably impact on business practices. Guidelines for Multinational Enterprises. Nestlé has taken such recommendations as the ILO Basic Rights. these include the ICC Business and Charter the for OECD Sustainable Development. Consumers • Nestlé aims to create value for consumers that can be sustained over the long term by offering . to these recommendations they are addressed governments. • generally endorses commitments and recommendations for voluntary self regulation issued by competent sectoral organisations. general rule. and the International Code of Marketing of Breast-milk Substitutes (WHO) into account in its policies.NESTLE INDIA LTD.
cultural or social groups . sex or profanity • does not depict discriminating or offensive attitudes to religious. the Company makes determined advertising: effort to ensure that a Nestlé • does not mislead as to the benefits derived from use of the product • does not use gratuitous violence. safe food products. a wide variety of high quality. • Nestlé believes that play advertising an and other in communications important role encouraging consumers to exercise their right to informed choice. at affordable prices.NESTLE INDIA LTD. In order to fulfil this role in a responsible way. ethnic. political.
products competitors' • avoids the exploitation of media events which could be in bad taste or conflict with the corporate image. sex or offensive attitudes to either majority or minority groups.NESTLE INDIA LTD. or inappropriate use of the product • does not portray nor competitors' denigrate products inaccurately. In addition to the above principles. • avoids demonstrations that encourage dangerous. Nestlé does not sponsor TV and radio programmes or magazines whose strategy of attracting viewers or readers lies clearly in the use of gratuitous violence. .
either unsafe or irresponsible . • food and beverage communication should not demonstrate consumption. responsibility or judgement of parents or care providers. • advertising to children should not attempt to undermine the authority. sponsorships) to children should should not be disguised as programming or editorial. Children as Consumers Nestlé has developed the following principles for advertising to children: • communications (including advertising.NESTLE INDIA LTD. • advertising to children should not portray children in unsafe situations nor encourage them to accept invitations from people they do not know. events.
The Company's business practices are designed to: • promote a sense of identification among all employees all over the world. Involvement at all levels starts with open communication. . Human Resources and the Workplace Nestlé regards its management and employees as its most valuable assets. Suggestions for changes and proposals for improvements of Nestlé's practices are encouraged. whether on specific aspects of the business.NESTLE INDIA LTD. • encourage training. or about the activities of the Company in general. and the improvement of professional skills. and apply a number of common rules while at the same time adapting the expression of these rules to local customs and traditions.
• create a safe working environment for each employee. Working hours. religion. • limit factory overtime to a reasonable level.NESTLE INDIA LTD. experience. sex or nationality. • offer opportunities for promotion based upon merit. principles are the criteria for • offer competitive salaries and social benefits. irrespective of race. . • respect the right of employees to join legally recognised labor unions. Professional skills. and the capacity and willingness to apply Nestlé management promotion. wages and overtime pay comply with applicable local laws and are in line with conditions offered by similar companies.
• treat every employee with respect and dignity. . and not tolerate any form of physical or sexual harassment or abuse. preclude the use of forced labor or involuntary prison labor.NESTLE INDIA LTD.
CEO'S VISION According to Mr.NESTLE INDIA LTD. THE NESTLÉ POLICY ON THE ENVIRONMENT CEO's Statement Over the past several decades. Today the Indian youth is much more open to international trends the media and communication revolution has also exposed the Indian people to new life styles. this has created new opportunities for our products" and Donati is pretty clear-he will ensure that Nestle grabs these opportunities. Carlo Mavia Donati Opportunities (CEO) "New opportunities have opened up with the emergence of a new middle class. significant progress has been achieved towards protecting the world's environment. This objective remains a fundamental duty and a collective responsibility that must be . And in the process.
From our earliest days. It is communicated internally within the . which is part of our broader commitment towards the good of the community. shared between the public. Exercising this commitment. Our Company's primary function is the transformation finished of perishable raw materials into that meet consumers' products expectations for safety. governments and the private sector. and value. quality. remains central to our business today and tomorrow. convenience. The Nestlé Policy on the Environment was published in 1991 to define our world-wide strategy on environmental issues and to state our long-standing commitment to environmentally sound business practices.NESTLE INDIA LTD. As the World Food Company. Nestlé is dedicated to providing consumers with the best food throughout life. we have recognized the need to protect the environment in our business activities.
The 1999 update of the Nestlé Policy on the Environment reiterates our strong environmental commitment and reflects our priorities as we move into the new millennium. Following its publication. preserving natural resources and minimizing waste has become a part of day-to-day business for our employees and is an integral part of our strategy to achieve global competitiveness. Today. The application of the Nestlé Policy on the Environment at every level of our operation forms an essential part of the Nestlé Corporate Business . It also recognises developments in the international environmental arena. The NEMS is being implemented across our entire business. Nestlé Group and externally to all interested parties and institutions.NESTLE INDIA LTD. the Nestlé Environmental established to Management consolidate System (NEMS) all was environmental measures taken by the Nestlé Group.
Nestlé compliance with its Corporate Business Principles is regularly monitored by its internal auditors on the basis of clear auditing instructions. which are certified by the external auditing firm KPMG. Findings and recommendations are reported to the Nestlé S.A. Board of Directors. Principles and enables us to contribute to sustainable development — meeting the needs of the present. without compromising the ability of future generations to meet their own needs Compliance Nestlé is committed to the application of these principles in all countries. . and wherever they are not in conflict with relevant local legislation where it operates.NESTLE INDIA LTD.
we have attempted to take the fundamental cultural values . our headquarters are still in Vevey. As they have grown from humble beginnings into the world’s largest food company. many years of real work experience Nestlé is committed to environmentally sound business practices Environmental Update Message from the CEO Nestlé was founded in 1867 by pharmacist Henri Nestlé on the shores of Lake Geneva in Vevey.NESTLE INDIA LTD. surrounded by the Swiss Alps in one of the world’s best-preserved environmental settings. Nestlé's Environment Progress Report 2001. Switzerland. One hundred and thirty-four years later.
Moreover.Progress Report 2000. of environmental preservation and cleanliness into every country where we operate.NESTLE INDIA LTD. the company including follows the environmental of our The performance. The Environment Progress Report 2000 . One of the reasons for doing so is to see for myself that our facilities reflect the environmental values basic to our Company. Nestlé announces publication of the Environment . .Highlights was distributed together with the Nestlé Management Report 2000. environmental results performance indicators. They spend a great deal of time travelling to these countries and have personally visited many of the 479 Nestlé factories currently in operation. The Nestlé Environment Progress Report 2000 has been published and can be ordered from the Nestlé Environmental Affairs Department.
and a similar reduction in factors which potentially affect global never warming. The Nestlé Environment – Progress Report 2000 describes the results of continuous improvement in our environmental practices. the Nestlé Environmental Advisory Group (made up of corporate experts from many functions) meets regularly to review current environmental issues and to anticipate potential concerns. satisfied however with they were their current . The progress in a number of key areas. Also. This allows us to maximise to control over our activities in and the contribute sustainable development countries where we operate.NESTLE INDIA LTD. including a significant decline in the amounts of water and energy used to bring each kilo of Nestlé products into your home. completely However. Environmental Officer reports directly to General Management to ensure there is on-going awareness regarding environ mental affairs.
. As a charter member of the World Business Council for Sustainable Development.NESTLE INDIA LTD. on a daily basis. and we are committed to being a leader in environmental performance. For this reason. The try to remain sensitive to the environmental concerns of our consumers and the public as a whole. This Report is dedicated to them. This leadership is only possible through the collective commitment of the tens of thousands of individual Nestlé employees who. they have pledged their adherence to The Business of the Charter for Sustainable Development International Chamber of Commerce. work to make this a better planet on which to live. and are committed to further environmental improvements. They attempt to keep their policies at the forefront of industrial companies. performance.
business . shareholders. cultural and religious practice: • Nestlé's business objective and that of management and employees at all levels. employees.NESTLE INDIA LTD. taking into account local legislation. Peter Brabeck-Letmathe Chief Executive Officer Nestlé Corporate Business Principles Nestlé is committed to the following business principles in all countries. is to manufacture and market the company's products in such a way as to create value that can be sustained over the long term for consumers.
and to finance investments. • Nestlé does not favour short-term profit and at the expense of successful long term business development. partners and the large number of national economies in which Nestlé operates. legislation is the most effective safeguard of ethical conduct. although to in certain areas. and additional guidance management employees in the form of voluntary business principles. but recognises the need to generate profit each year in order to maintain the support of the financial markets. as a general rule. is beneficial in order to ensure that the highest standards are met throughout the organisation.NESTLE INDIA LTD. • Nestlé is conscious of the fact that the success of a corporation is a reflection of the . • Nestlé believes that.
and ongoing training and development are crucial. therefore recruitment of the right people. conduct and ethical values of its management and employees. . professionalism. and the way in which the Nestlé Company operates.NESTLE INDIA LTD. • Nestlé recognises that consumers have a legitimate interest in the company behind the Nestlé brands.
Nestlé sees its limited investment in the new venture in the following . fully expecting this investment to yield a return to its shareholders after the initial launch phase.NESTLE INDIA LTD. will take a participation of up to CHF 100 million in the new Swiss airline. 2001 – Nestlé S. 2001 Nestlé To Invest CHF 100 Million in New Swiss Airline Vevey. October 23. The project appears to be based on a reasoned. viable business plan. with a fair chance of attaining its objectives.A. October 23. Nestlé will assume no responsibility of any kind at management or board level of the airline. Vevey.
Participating in an effort that encompasses all the major players in the Swiss economy. · Nestlé is often identified by authorities and consumers as a Swiss corporation whose products stand for quality and reliability. context: · as all internationally active corporations based in Switzerland. it does not operate in a vacuum and is well aware of the social. political and economic environment in which it functions. Nestlé has . As such.NESTLE INDIA LTD. which would have substantially suffered from the inability to find a constructive solution. During the earlier attempts to solve the difficulties resulting from the impending failure of Swissair. · Nestlé is an international company with a substantial Swiss shareholding and it is based in Switzerland. The company cannot be indifferent to the quality of the image of Switzerland abroad. Nestlé needs frequent intercontinental airline connections. is consistent with the position it occupies in its country of origin as well as with its attitude of responsible corporate citizenship.
its in view of its it a own shareholders. consistently responsibility would not signaled vis-à-vis commit that. simply to "rescue" Swissair. discussed the creation of a new Swiss airline that would ensure that Switzerland remains well served with intercontinental flights and that the existing infrastructures would continue to function. Nestle is one of the most multinational of multinationals and is spread over 75 countries worldwide. Nestle respects the distinctive culture. funds on shareholders' gratuitous base.NESTLE INDIA LTD. This implies that it has employees from diverse cultural backgrounds. NESTLE'S CORPORATE CULTURE As we had discussed before. however. mentality . Over the past weeks. the Swiss government as well as representatives of the Swiss economy. Nestlé's small minority stake in the new venture corresponds to about three percent of the Nestlé Group's yearly investment volume in fixed assets.
When we went to Nestle we could feel the existence of a distinctive work culture amongst the management-the staff seemed highly motivated and cheerful and everybody had pin up boards in front of their tables with reminders. What Nestle aims at is to incorporate its own culture into its employees without stifling the individual employee's culture and identity. Thus Management on Information System plays a vital role in Nestle to provide information to the Sales and marketing as well a finance department. motivational messages and even timelogs (the Nestle people seemed as if they availed of the benefits of time management). Nestle has a diverse product range and so it also has diversified risks. The Electronic Data Processing Information Department Systems. looks The after Management of this Hierarchy department is given below. .NESTLE INDIA LTD. and traditions of every employee in every country.
D.NESTLE INDIA LTD. . This common linked system will improve information availability. Nestle has a vast distribution network.P. Controller Apart from this. aid quick decision-making and improve supply chain integration. Controller Head of E. an integrated computer system has been put in place across the company to link all functional areas and locations. In order to support the BECA process.
condensed. preparation of milk. surplus fat. Ponda and Bicholim. Nepal and Bhutan. cream and cereals and milk concentrated/condensed. The company exports it's products to Russia. Samalkha. GLOBAL OPERATION : COUNTRY WISE Company Description : Nestle India Nestle India. evaporated products sector. Nanjangud. milk products. tea. This analysis compares . Products of the company include soluble coffees. are located at The manufacturing plants Moga. Soluble beverage powder accounted for 29% of 2000 revenues. 26%. milk products. The principal activity of the company is the manufacture of soluble beverage powder. Competitor Analysis Nestle India operates within the Dry. Choladi. surplus fat and other food products. 3% and other foods. 42%.NESTLE INDIA LTD. coffee blends.
V.65 billion Philippine Pesos [US$243. Officers Executive Chairman & Managing Director Carlo M.58 billion Indian Rupees [US$178. Donati Executive Director Finance Jean Marc Waelti Secretary B.NESTLE INDIA LTD.79 billion Philippine Pesos [US$73. Murli .90 million] ). Nestle India with three other dairy companies in Asia: Alaska Milk Corporation of Philippines (2000 sales of 3. and Pure Foods Corporation which is based in Philippines (12.12 million] ). Smithkline Beecham Consumer Healthcare (8.71 million] of which 95% was Malted Milkfood/Food).
USA MARKET Nestlé USA is named America's Most Admired Food Company for the fourth consecutive year.. Together.5%. higher than the industry average of 2. it has posted sales growth of more than 4%.U. As many of its rivals seek growth through consolidation..In the process. present Weller's a Nestlé's disparate of Internet ventures CEO global mountain opportunity. Our success is based on the quality we of our products build and on our relationships continually with . Nestlé instead looks within for ways to boost sales. is leading the Net-savvy unit company in its e-enterprise Their vision as part of the world's leading food company is to provide families with the best food and beverages throughout their lives.NESTLE INDIA LTD..S..
customers. .NESTLE INDIA LTD. Nestlé has • built consumers' trust through the quality of its products. We believe that food should provide for the spirit as well as the body. We believe it is our unique understanding of the integral role of food in good living that's helped us to become a part of the world's largest food company. our employees. and strive to ensure that every product we prepare also enriches the experience of life itself. Our commitment to achieving this vision is a source of Nestlé pride. our communities and our suppliers . Nestlé has been making the very best food and beverage products for families around the world. Corporate Governance Principles Since its foundation in 1866.who continually look to our company to be the very best. For well over a century.
political and cultural tradition of all countries in which it operates. consumers. as both legislation and international recommendations indicate growing public interest in the issue. employees. Nestlé's commitment to good Corporate Governance goes back to its very early days. we take the opportunity to publish the Nestlé "Corporate Governance Principles" that reflect and highlight our ongoing commitment. business partners as well as those of all the national economies in which we operate. interests of our which recognises shareholders. .NESTLE INDIA LTD. Today. • respected the social. • taken a long-term approach to strategic the decision-making.
and which guide world- relationships wide in each sector of business interest. to these recommendations they are addressed governments. • ensures that the highest standards of conduct are met throughout the organisation by complying in a responsible way with the Nestlé Corporate company Business activities Principles. Legislation and International Recommendations Nestlé complies with the laws applicable in the countries in which it operates.NESTLE INDIA LTD. Although. as a general rule. Nestlé . inevitably have an impact on business practices. • is aware that increasing globalisation is leading to the development of more and more international recommendations.
The Principles They cover four areas: I. The rights and responsibilities of shareholders II.NESTLE INDIA LTD. • generally endorses commitments and recommendations for voluntary self-regulation issued by competent sectoral organisations. takes such recommendations into account in its policies. and the OECD Principles of Corporate Governance (1999). provided they have been developed in full consultation with the parties concerned. these include the ICC Business Charter for Sustainable Development (1991). the OECD Guidelines for Multinational Enterprises (1976). The equitable treatment of shareholders .
NESTLE INDIA LTD.'s Articles of Association. has its registered offices in Switzerland (Cham and Vevey).A.A. The duties and responsibilities of the Board of Directors IV. by the Articles of Association. . The rights and responsibilities of shareholders The shareholders' rights are protected by law. III.A.A. as well as on Nestlé S. which are also intended to ensure the sustainable development of Nestlé S. since Nestlé S. Disclosure and transparency and are based on Swiss legislation. Nestlé S. and by the Corporate Governance Principles.'s basic shareholders' rights and responsibilities include the right to: • secure methods of ownership registration.
determine the amount of the .. • obtain relevant information on Nestlé S. on a regular and timely basis. in particular dividend.A.'s Articles of Association. • approve the consolidated financial statements of the Group. subject the Nestlé S. grant the discharge to the Board of Directors (hereafter referred to as the "Board") and to the Management.A.A. • approve the annual report and the annual financial statements of Nestlé S..NESTLE INDIA LTD.A. decide on the appropriation of profits resulting from the balance sheet of Nestlé S. • participate in and vote at General Meetings of the Shareholders in person or in absentia (by proxy).
• elect and remove the members of the Board and the Auditors of the annual financial statements. which by law or under its Articles of Association.NESTLE INDIA LTD. • be informed sufficiently ahead of time of the date. • take all decisions. • place items on the agenda and ask questions at General Meetings in accordance with the Articles of Association. and of the consolidated financial statements. • participate in the decisions in extraordinary meetings.for the questions - . location and agenda of General Meetings. and . are within the jurisdiction of the General Meeting. • adopt and amend the Articles of Association.
. • Any Nestlé S.A. subject to reasonable limitations inasmuch as the topics are related to the business activities.NESTLE INDIA LTD. shareholder has the right to request effective redress of violation of his/her rights in accordance with the Swiss law.
aims to ensure that shareholders have access to relevant. Board members act on a fully informed basis. with due diligence and care. This information should allow shareholders as well as prospective . Board members receive and can request accurate. up-to-date and consistent information. Disclosure and transparency • Nestlé S.A.A.NESTLE INDIA LTD.A. and the effective monitoring of its management. and in the best interest of Nestlé S. The Board is accountable to the shareholders. In order to fulfil their duties and their responsibilities. in good faith. The duties and responsibilities of the Board The Board ensures the strategic guidance of Nestlé S. relevant and timely information.
"quiet periods".A.NESTLE INDIA LTD. will monitor all changes and take part whenever possible in the discussion preceding listing such changes in legislation and regulations. complies with all legal and regulatory requirements applicable where its shares are listed. shares. during which no . is aware of its obligation to make information that is relevant to the market publicly available in simultaneous fashion. To this effect. This policy will be modified only when it is necessary to protect the company's competitive.A. investors to make an informed judgement about Nestlé S.A.A. • Nestlé S. • Nestlé S.A. Nestlé S. will pursue a policy of disclosure and transparency. commercial or legal position. • Nestlé S.
• Independent auditors elected by the shareholders conduct the annual audit in order to provide an external and objective assurance on the way in which financial statements have been prepared and presented. have been introduced. relevant financial information will be provided to third parties. .NESTLE INDIA LTD.
NESTLE INDIA LTD. DISTRIBUTION NETWORK THE DISTRIBUTION CHAIN NOW FMCG Manufacture Clearing and forwarding agents (1-3% margins) Super stockists (3-6% margins) Stockists (3-5%) Distributor (4-7%) Organized retailer (6-15%) WHAT RETAIL CHAINS WANT FMCG manufacturer Organized retailer (current 6-15% margin + 11-21% savings from disintermediation) .
THE RETAIL DEMANDS What FMCG companies give 6% to 15% 7-10 days 12 days Margins Credit days Minimum levels 20% to 25% Stock outs What retail chains wants At least 20% 15-30 days stock 7 days Less than 5% .NESTLE INDIA LTD.
NESTLE INDIA LTD. .
The reluctance of the company's personnel in parting with much of information led the project report to be based substantially on the secondary source of data. The reason for choosing the exploratory research design is the fact the project report has been primarily based upon the secondary sources of data and whose authenticity could be assured of. is taken to be tested.NESTLE INDIA LTD. Though the conclusions drawn could be taken as the hypothesis and further tested by the research work undertaken in the relevant field. Methodology The nature of the project work has been exploratory as no hypothesis. The sources of data used in data collection are the following: .
I inquired from them about their marketing advertising and distribution strategies. By interviewing these retailers valuable information was collected. The market visits were useful quality in of knowing the the comparative brands prices and the offered vis-à-vis competitive brands.NESTLE INDIA LTD. I personally visited a number of retail markets and collected data pertaining to the prices of the products offered. Detail regarding the packaging of the products were collected were collected and I also inquired about the various sales promotion schemes followed by the three companies. Primary sources In order to gather information about the various products. .
. News releases. The information gathered included: • Their annual reports (Procter & Gamble and Johnson and Johnson). business magazines. Beside these the use of Internet was also made in collecting relevant information. Posters. The data collected from the above mentioned and sources used at has been adequately structured appropriate places in the report. Press clippings. Newsletters.NESTLE INDIA LTD. • • • • • • Pamphlets. This particular way of data collection was used because of its low cost (except data collected through surfing the internet) and less time consumption. Pictures. Secondary sources Information was collected from secondary sources such as public libraries. newspapers.
Mc Curtty has popularized a four factor classification of these loots called the 4 p. From a buyers point of view.NESTLE INDIA LTD. each marketing tool is designed to deliver a custom . These are: MARKETING MIX PRODUCT Product variety quality design features brand name packaging sizes TARGET MARKET PLACE Channels coverage Assortments Locations Inventory transport PRICE List price discounts allowances payment period credit terms PROMOTION Sales promotion advertising sales force PR direct marketing Once should note that the 4P’s represent the seller’s view of the marketing tools available for influencing buyers.
Godrej offered a cordless Rx 1234 off with its refrigerators.Nestle introduces milk and dahi for higher segment people. benefit. Many companies are bringing in cheaper ranges to the existing ranges so that once .g.NESTLE INDIA LTD. Peter England gave Rs 100 off on for its sheets. One must try to create new segments for people who want to go to a higher segment but are not in a position to do so. The 4 P’s correspond to the customer’s 4 C’s as: 4Ps Product 4Cs Customer wants needs and Price Place Promotion Product Cost to the customers Convenience Communication In the product the companies started a spate of freebies with their products e.
MP & Rajasthan where its competitors position was relatively weak. catching him unawares e. so that they can choose the product which they like. . the people have tried & tested their products they can be made to upgrade to their premium ranges.g. For grabbing others share one must try to attack on the rivals achelles heal with high dose of speed & surprise.NESTLE INDIA LTD. LML followed the same strategy in UP. The company is also trying to bring a variety of products in every segment. Nestle has been coming with the different productsand trying to target the different segments. Nestle again repositioned the chocolate bar one. One must also target the others customers because this is not exactly the right time to expand the market but to make the existing customers buy again. Nestle is also trying to give the customer more choice.
According to Puris Lintas Mehra consumers look for safe choices during a recession. the benefit can mow down the barrier. The companies should also try to offer emotional value to the customer a Pt. Price: Is an important tool to break down barrier to a product or brand 'Shunv' acceptance.59. but more trusted product although in . For. Sen. the According CEO of to Siddhartha Suadra Advisory Services "Statinzg the price upfront can lower the consumer's expectation from a brand". unless their attributes are very strong. New customers can't be attracted with the same benefits as in good tones. the resistance to experiment. the customer will still use the expensive.NESTLE INDIA LTD. whether with a new product or a brand is much higher unless that is. But one can't be convinced of the value connotation of year brand. This is not the time for new brands to come in.
The price is always set as that price that can be afforded by the customers . The strategy of the nestle is to set the priceas premium.the company should set the price for those also who have low spending budgets. This double differentiation will double your impression in the customer's mind. In consumer durables the demand for these goods falls rapidly in a recession the consumer postponing his buy as long as he can. Nestlae has been always pricing the products as premium price. they can not only . smaller quantities or a fewer occasions than before to project her budget So what next ? The price warriors must make their offer either qualitatively different or quantitatively superior to the competition. And then slip in the lower price to seal the deal.NESTLE INDIA LTD. The marketers in this time must lure the customers with much more than then their lower prices but by schemes such as exchange offers.
Price One can reach for the consumers purse on the basis of price but to stay there on the basis of price is pretty cough. consumers kept interested & build image around price rather than as a discount player. Imitation should be warded off. the differentiation should be continuos. Promotion:- In recession the marketers must find innovative ways to promote its product because the promotion must and from the clutter. To ensure price as a sustained competitive advantage.NESTLE INDIA LTD.az Because every one tries to imitate the low prices if the players are new. If the product is worthy or the customer . service the old customers but also bring in new for whom earlier price was the main barrier. The marketer has to make the consumer try his product & in order to make them try marketer's uses giving samples of his product.
& the print media. Place:- In recession times when the demand in urban markets is not growing at a fast rate the marketer must find new markets where he can sell his products.V. He has to use new methods of promotions in order to get the consumers attention. The marketer has also the use different media to catch the attention of the buyers apart from T. For today's Urban-centric marketer. or giving the new product free wiyh old popular and famous product. Nestle has also implemented many promotion schemes . the company has also promoted there products like giving free samples of the new products. finds the product satisfactorily then the product gets listed on his list & it can be considered in the next purchase.NESTLE INDIA LTD. one .
NESTLE INDIA LTD.
way to beat the recession is to tune into rural markets.
Many companies have resorted to direct selling . This is because companies can save on costs of distribution channel. The company chose direct
marketing or what is presently called as mutti-levelmarketing where customer doubles as distributors. The advantage the distributors in addition to being a seller also doubles as a customer & his giving away of experiences is genuine.
So one can finally say
Use sampling and multiple media
Go rural; use shops-in – shops
Designs small oat prices units lower
segments within earlier segments
Use exchange offers
Use announceme nt
Use dired selling
Offer financing and
Bundle products into single
NESTLE INDIA LTD.
Sales and Marketing are amongst the main strengths of Nestle
It is the hierarchy, which has strengthened the foundation of Nestle’s marketing force, is as in fig 1:
Vice President (Marketing)
The efficacy of this hierarchical structure is seen in Nestle's performance over past few years of various products.
NESTLE INDIA LTD.
By 1989 the company had achieved a sales figure of approximately Rs. 258 crores. 1989 was the year of launches. Seven new product lines were launched in this year. This was also the year in which the Nanjagud factory was set up. By the year 1992, this sales figure was touching Rs. 500 crores. In the 1990's the pace of launches quickened and since the construction of the factory at Samalakha, 20 new products had have been 76 introduced. By 1996, in its
portfolio with various new products in the pipeline as well. The sales figure now touched Rs. 1214 crores. Thus sales grew by 450% over a period of one and a half decades.
2. Expansion of the distribution network to small towns for extensive availability 3. Focus on employ training and develop a positive attitude through enhanced manpower development. . By year 2000 it expects chocolate and confectionery to account for one in every third rupee in sale. 4. Gunning the market with new products and brand extensions.NESTLE INDIA LTD. 5. Reduce prices and introduce smaller packages for products to make them more affordable (a tool to enter price sensitive markets). MARKETING STRATEGY Nestle has adopted a four pronged growth strategy: 1.
In the late 1996 fear of breading complacency by not having a continuous improvement. this gave rise to the following growth objectives for the year 2000: • Ensure direct coverage of all urban towns in India. which in turn emphasizes on excellence by improving the distribution set up.NESTLE INDIA LTD. • Work in partnership with the distributor for the achievement of these objectives. . gave birth to an international sales and marketing improvement teams (SMIT). The SMIT exercise is a major global initiative of Nestle to enhance sales and marketing productivity. Linked with the already existing BECA project. SMIT maps the latest in helping towards the target of year 2000. • Expand distribution to reach I million retail outlet on a regular basis.
PRODUCTION As a part of Nestles efforts towards continuous improvement and excellence in Manufacturing operation. Drawing upon Nestle's global experience and manufacturing expertise in 75 countries the team identified the following areas for detailed study: • Process improvement to ensure the optimal usage of resources . • Provide sustainable solution to optimize our secondary sales from distributor to retailer. a Maga Improvement Team (MIT) was put in place at the Maga factory. The team comprised of international experts from Nestle Technical Service (NESTEC) and the local staff. In 1996. it embarked on a program with the single-minded objective of optimizing production costs while enhancing the product quality so as to make Nestle products even more competitive in the market place.NESTLE INDIA LTD.
down time recording systems and performance measurement tools were also realized. In addition. • Improvement of operational efficiency • Cost optimization. several non-tangible benefits in the form of systems for sustainable improvement in areas like factory maintenance planning tools. As series of small but critically important initiatives ranging from of redesigning raw materials laboratories and to palletisation packaging material utilization. This project was highly successful and the company is now implementing its key learning's of MIT in its other factories. manufacturing and filling loses and labor man-hours resulting in substantial savings and improved productivity and machine utilization.NESTLE INDIA LTD. .
In a country as vast and diverse as India. distribution and sales are synchronized to ensure that every body works towards a common business plan. Major benefits accrued thus far include reduction in working capital through lower inventories of finished goods and materials. Monthly objectives are broken down into weekly and 9wherever monitored necessary) regularly into to daily ensure plans and smooth implementation and quick corrective action when needed. Through BECA. cost effective and importantly. .NESTLE INDIA LTD. better stock availability and reduction in obsolescence of materials. production. For better supply chain integration the planning of key operations-purchase. more responsive to market needs. Supply Chain Management is absolutely critical to rapid growth. Nestle has concentrated heavily on streamlining and improving their supply chain management more in order to make it more most dependable.
NESTLE INDIA LTD. In addition to traditional performance indicators. quality assurance. For this purpose. Kaizen. quantifiable performance measures have been identified and implemented in all functional areas such as sales planning. standard tools such a Total Quality Management (TQM). regularly to These gauge improvement and identify root problems for taking corrective actions. regularly identified bound action plans established. . 5S and Small Group improvement activity (SGIA) are being extensively used. production output. Teams have been put in place at all factories and sales offices to and are ensure the implementation Areas and is of time continuous improvement self-sustaining. warehouse monitored material ordering transportation measure the extent and are of management.
J. Heinz.NESTLE INDIA LTD. Nestle in the year 1995 had an advertisement spending of Rs. ADVERTISING STRATEGY Nestle. This can be credited to a strong and sound advertising strategy. 43.3 crores (net). The volume of sales kept rising from an initial growth of 13% to 20% in the next year. Tracing Nestle advertising responses the ad campaign by HTA of 'Hot and Sweet' was a runway success this ad was actually meant to fend off a challenge from H. This commercial was an instant success. At this point the popular and memorable campaign of Javed Jaffrey and Pankaj Kapoor was launched by Producer Pralad Kakkar. . The Maggi range of sauces were introduced in 1985 but sales didn't catch up until 1990. a cash rich company has plenty of marketing prowess. Today the sales figure for Maggi Sauces is growing at a steady 6% per year.
NESTLE INDIA LTD. devised by Mudra advertising agency. intact. 56 crores where again innovation was the main focus. The new nationwide product launch of Maggi Macaroni Snack and Mithai Magic have been designed by Mudra. This campaign was awarded 11 industry ad awards. In 1996 the advertisement budget has been approximately Rs. . The macaroni ad with its use of "Hinglish" and a catchy beat (which is the latest trend amongst the Indian Advertisers) appeals well to the target audience and the Mithai Magic Commercial does keep the secret of the contents in the box. Another noteworthy campaign was that of POLO (the mint with a hole).
. In order to maintain its stress on each category and monitor them in a more organized manner it is necessary to create an exclusive distribution for each of these categories i. WORKING OF THE EXCLUSIVE DISTRIBUTION SYSTEM What is an exclusive distribution system? Exclusive distribution runs on a line similar to the Trade Distribution System. When a company is into a number of different category products.NESTLE INDIA LTD. with a wide range in each of the categories. There are separate units/vans. It is when the goods reach the cash distributors' godown that the difference first shows up.e. . each category has a distribution network exclusive to itself. it becomes increasingly difficult for it’s to pay attention to each and every product of each and every category.
g.NESTLE INDIA LTD. sometime during the end of the year 1997. • Four metros and around 37 semi metro towns have been covered under the exclusive distribution. . The dealer thus can concentrate better on the variety of products in each category. with separate categories of products of the same brand.. chocolate and confectionery. Similar categories can be clubbed together e. Seventeen Cash Distributors were appointed in Delhi itself to carry out this new system. plying to the same dealers. The exclusive distribution system developed by Nestle has the following salient features: • The Chocolate and Confectionery division was separated from the Instant drink and Culinary divisions to start the Exclusive distribution for the former.
65 billion Indian Rupees. • The chocolate and confectionery are transferred from the factories. sales at Nestle India were 15. where they are manufactured to the Mother godown after they are quality approved.0% versus 1999.38 million). This is an increase of 8. from .6% in 2000. • According to the company norms a cash distributor holds the stock of two week and therefore fortnight.174. when the company's sales were 14. From the Mother godown the products are transferred to the respective cash Distributors godown. the stocks are replenished every Sales Analysis During the year ended December of 2000.82 billion Indian Rupees (US$329.NESTLE INDIA LTD. Sales of Surplus Fat saw an increase that was more than double the company's growth rate: sales were up 1.
6 15.8 1995 1996 1997 1998 1999 2000 (Figures in Billions of Indian Rupees) . 546.01 million Indian Rupees to 6. Not all segments of Nestle India experienced an increase in sales in 2000: sales of Milk Products fell 86.96 billion Indian Rupees.5 13.45 million Indian Rupees.3% to 569.3 14.7 15. Recent Sales at Nestle India 9.NESTLE INDIA LTD.5 11.
the largest segment was Surplus Fat.374. while during the same period.96 billion Indian Rupees). 1 1 1 1 1 1 00 0 0 0 0 0 00 00 Figures in Billion 11 11 000 0 11 11 11 11 11 11 Nestle India has changed its product mix within the past five years. In 2000. The sales increase of 8.90 billion Indian Rupees).99 billion Indian Rupees to 4. while in 1996.07 million Indian Rupees to 6.0% was less than those at Alaska Milk Corporation (up 14. Although sales at this company increased.7%). sales of Surplus Fat increased 1. they increased at a slower rate than the three comparable companies in 2000.2% (from 472. the largest segment was Other Foods. Smithkline Beecham .8% (from 3. sales of Other Foods experienced an increase of only 22.NESTLE INDIA LTD. During the past four years.
122 Smithkline Beecham 178. The company currently employs 2.NESTLE INDIA LTD.0% 111.82 billion Indian Rupees (US$329.164 per employee.164 Alaska Milk Corporation 73.2% N/A (100.707 Consumer Healthcare Pure Foods Corporation 243. Consumer Healthcare (41.0%) 18.9%).963.0%) N/A Nestle India 329.38 million) .379 8. Sales Comparisons (Fiscal Year ending 2000) Company Sales Sales (US$mlns) Growth Sales/ Largest Emp (US$)Region India (100.7% 93. this equates to sales of US$111.899 14.268 41.729 N/A . With sales of 15. and Pure Foods Corporation (18.9% 64.2%).
Earnings per .5%.3% to 505. Recent Stock Performance For the 52 weeks ending 10/19/01.NESTLE INDIA LTD. the stock of this company was down 0. During the past 13 weeks. Thus. the stock has fallen 4. earnings per share totalled 12.30 Indian Rupees per share.95 Indian Rupees.13. the Price / Earnings ratio is 41. During the 12 months ending 12/31/00.
94 times book value.4% in 2000 from 1999. share rose 20.00% .2 Smithkline Beecham 10/19/01 N/A Consumer Healthcare Pure Foods Corporation 10/9/01 7. This company is currently trading at 3.15 N/A 1.53% 10/19/01 41. Summary of company valuations Company Nestle India Alaska Milk Corporation Date P/E Price/ Book 18. The company's price to book ratio is significantly higher than that of all three comparable companies.81 and 4. Nestle India is trading at 18.11 pre-tax credit in 2000.1 10/19/01 7. which are trading between 0.94 2.81 Price/ Sales 3.91 times book value. Note that the earnings number includes a $.83 0.35 pre-tax charge and $.NESTLE INDIA LTD. This is at a higher ratio than all three comparable companies.91 0.60 35.08 0.51 and 2. which are trading between 0.15 times sales.9 4.08 times sales.51 52 Wk Pr Chg -0.30% 10.
Since the stock is currently trading at 505.00 Indian Rupees per share.33 Indian Rupees per share). The market capitalization of this company is 48.e. Nestle India has increased its dividend during each of the past 5 fiscal years (in 1995. . The capitalization of the floating stock (i.02 billion) . that which is not closely held) is 34.78 billion Indian Rupees (US$1.33 million) .30 Indian Rupees per share. the company is paying out dividends that are higher than the earnings. the Company reported earnings of 12. Dividend Analysis During the 12 months ending 12/31/00.95 Indian Rupees.. the dividends were 3.8%. this implies a dividend yield of 2.89 billion Indian Rupees (US$726.NESTLE INDIA LTD. During the same 12 month period ended 12/31/00. Thus. Nestle India paid dividends totalling 14.
when cost of goods sold totalled 81. the gross profit was 20.1% of sales). the gross margin was the highest of the previous five years (and in 1996 was as low as 13. This gross profit margin is better than the company achieved in 1999.47 billion Indian Rupees.2% of sales.3% was lower than all three comparable companies (which had gross profits in 2000 between 25. Profitability Analysis On the 15. taxes.e. the cost of goods sold totalled 12. The company's earnings before interest.NESTLE INDIA LTD. depreciation and amorization (EBITDA) were 2.61 billion Indian Rupees.7% of sales (i.5% and 57.82 billion Indian Rupees in sales reported by the company in 2000. In 2000. Nestle India's 2000 gross profit margin of 20. or 79. This EBITDA to sales ratio is roughly on par with what . or 15.9%).3% of sales).6% of sales..
NESTLE INDIA LTD.7% of sales. The three comparable companies had EBITDA margins that were all fairly close (between 13. earnings before extraordinary items have grown a total of 119%). when the EBITDA ratio was 15. the company achieved in 1999. (Extraordinary items have been excluded). The company's return on equity in 2000 was 41.7% of sales. when the profit margin was 6.0%) to that achieved by Nestle India. This profit margin is an improvement over the level the company achieved in 1999. or 7.1%. .5% of sales.19 billion Indian Rupees. In 2000.2% and 17. Earnings before extraordinary items have grown for each of the past 5 years (and since 1996.7% return the company achieved in 1999. This was significantly better than the already high 35. earnings before extraordinary items at Nestle India were 1.
5% 6.61 billion Indian Rupees for the year. extra 7. the company had 60 days of inventory on hand (another way to look at this is to say that the company turned over its inventory 6. Since the cost of goods sold was 12.0% 13.5% 14.06 billion Indian Rupees.3% 18.6% 15.1% 2000 25.7% Alaska Corporation Milk 2000 31.1 .3% 7.2% Smithkline Beecham Consumer Healthcare Pure Corporation Foods 2000 57.4% 13.7% Nestle India Nestle India 2000 1999 15.2% 10.1% 17. the value of the company's inventory totalled 2.0% Inventory Analysis As of December 2000. Profitability Comparison Company Year Gross Profit Margin 20.NESTLE INDIA LTD.8% EBITDA Margin Earns bef.
35 billion Indian Rupees. negative working capital in and of itself is not necessarily bad. which had inventories between 91 and 106 days at the end of 2000. as current liabilities were 3. The fact that the company has negative working capital could indicate that the company will have problems in expanding. times per year). and could indicate that the company is very efficient at . However. Financial Position At the end of 2000. This is an increase in days in inventory from December 1999. which was only 50 days of sales in inventory. Nestle India had negative working capital.62 billion Indian Rupees.NESTLE INDIA LTD.73 billion Indian Rupees while total current assets were only 3. The 60 days in inventory is lower than the three comparable companies. when the company had 1.
the accounts receivable for the company were 1.17 billion Indian Rupees. the company's long term debt was 790.94 billion Indian Rupees. turning over inventory. The long term debt to equity ratio of the company is 0.06 million Indian Rupees and total liabilities (i. This is an improvement over the end of 1999. or that the company has large financial subsidiaries.e. which is equivalent to 27 days of sales. As of December 2000. . when Nestle India had 36 days of sales in accounts receivable. while Pure Foods Corporation had 62 days outstanding at the end of the fiscal year 2000.. all monies owed) were 4. Smithkline Beecham Consumer Healthcare had 46 days. As of December 2000.NESTLE INDIA LTD. The 27 days of accounts receivable at Nestle India are lower than all three comparable companies: Alaska Milk Corporation had 72 days.31.
NESTLE INDIA LTD.07 62 104 . Financial Positions Company Year LT Debt/ Equity 0.01 72 106 2000 0. 60 Nestle India Alaska Milk Corporation Smithkline Beecham Consumer Healthcare Pure Foods Corporation 2000 2000 0.31 Days AR 27 Days Inv.15 46 91 2000 0.
It was linked to India from the starting of the century (1900). SWOT ANALYSIS Strength The basic Aim of Nestle is to become the leading company in the Indian food industry.NESTLE INDIA LTD. . creating greater has manufacturing b. c. Taking steps to ensure availability of good quality of products. a. manufacturing in India only began in 1962. In very short span it had established itself as a major player in Indian food industry. The remarkable growth has been achieved through. Rapidly capacity. Strengthening of distribution and sales network particularly in rural areas. Through exports.
. which is quiet clear from the advertisements in India. d. Introduction of foreign food product in India is another threat to Nestle. Weakness a. Cadbury In creasing popularity of Cadbury's products in markets is a major threat to Nestle. Nestle aims only of capturing young market. b. Opportunities Threats a. Sales and marketing are among the major strength of the Nestle.NESTLE INDIA LTD.
NESTLE INDIA LTD. RESULTS OF MARKET SURVEY PEOPLE LISTINGS 40 35 30 25 20 15 10 5 0 Nestle HLL Amul 40 35 30 25 20 15 10 5 0 Chocolates Maggi Milkmaid Coffee .
NESTLE INDIA LTD. Milky bar 22% Munch 23% Bar One 22% Kit Kat 22% Classic 11% 80 70 60 50 40 30 20 10 0 Yes No .
As has been found retailers are more satisfied with the . It has been found for increasing the sales Displays and Consumer offers have to be given simultaneously this helps in two ways. But both the tools should be used with adequate planning and precision and only then would they reap benefits. the offer on the product further strengthens this feeling to indulge in buying. We can provide the trade loads as the Displays. attracts the customer attention through product display and prompts him to buy. These are based on hard nose feedback collected from the retailers and distributors and my personal experiences in the market.NESTLE INDIA LTD. RECOMMENDATIONS AND SUGGESTIONS Recommendation and suggestions forms the most critical part of the report. 1.
But whole process should be cautiously handled with prompt payments. It would also improve the image of the company as the one that cares for its channel members. Possible reason could be lack of motivation at the lowest possible but the most important level that is the sales officer and the RS salesman.NESTLE INDIA LTD. displays. We should organize a contest for weeks or month time between the entire RS salesman and the sales officers separately. He would have to generate a list of retailers/wholesalers where he has made the sales. This would act as a tool to . Whoever makes the maximum sales during the week/month would be entitled for a vacation or cash incentives by the company. Delay in payments would lead to bad reputation in the market. 2. Inspite of the best of the marketing communication strategies adopted by us we are not doing well.
It would consist of advertisement proofs. Prepare the proposal Capitalize on objections.NESTLE INDIA LTD. description of special deal or contest featured in the promotion. It has been found that the sales officers often fail to carry the catalogs and samples with them. Cut the order . product samples. 3. Dramatize the need. I feel that all the sales process revolve around the following basic seven steps: Get set to sell. Spark the interest. which would act as a handy tool for them in the market. We can design a sales promotion kit. illustrations of POP displays. keep a check on the stock being dumped in the wholesale market.
5.NESTLE INDIA LTD. . For EG: Capitalize on objections would list all the possible objections that that prospect may voice and each of the corresponding well thought of answer. These small efforts on our part would help us overcome barriers and clear out the most taken for granted things. They are often unclear about the targets and the schemes. Our department could print a dealers manual which would elaborate on the above points. This would also come in handy for the managers when they feel like building pressure on the channel members. They have to be briefed more frequently and trained accordingly. It has been my experience that there is an flaw in the working of the sales officers. Follow through 4. They should be provided a company T-shirt that would distinguish them from other salesman.
NESTLE in Delhi has a lot of distributors specifically for this purpose. Company should take strict action against those distributors with tarnished .NESTLE INDIA LTD. 6. Hence professional merchandisers should be appointed. If we are spending on displays then we must capitalize on these things. They cater to demand from super bazaars. kendriya bhandars. railway canteens and other cooperative stores. Distributors image in a area plays a major role in boosting sales. This would also act as a safeguard for proper utilization of display budget. The display windows provided by us are not a least bit attractive to draw attention of any customer standing in the shop. 8. which is not happening now. There is a dire need of the Institutional selling unit which all major companies have. 7. We should have really skilled team of workers (or single person) doing up the windows.
This maintains the companies’ image across the retail outlets and keeps the retailers satisfied. image as they spoil the companies’ reputation also. If the need be they should replace the distributor.NESTLE INDIA LTD.As found in the study that the displays are a major motivating factor. 11.At present the company does not have any “Target based incentives” to the retailers. the display claims should be promptly cleared on time. 10. It was a general feeling across the Delhi metro. interval The company should the in regular as take feedback from retailers regards to the distributor. We give trade loads at the time of purchase by the . There should be adequate supply of the POP material. The sales officers and merchandizers should properly put them on the outlets visited during the day. 9.
It should be other way round. On selling certain units the retailers should be offered incentives in form of gifts like Cameras. It would also ensure actual consumption of the product and control dumping at the retailers outlet. 13. They are cost effective too. retailer and then forget him for 15 days. These stands should be placed at the front of retailer’s desk.NESTLE INDIA LTD. This would motivate him to push the companies’ product as compared to the competitors. Recently FA has prepared such stands. HOME TO HOME SELLING The success mantra of HLL is that it applies all possible channels of selling emphasizing on . 12. This ensures high visibility of the product category and prompts the customer to take impulse decisions. Walkman.The company can prepare Cardboard stands on which the nivea products could be placed. Mobile phones etc.
For this purpose the company should make one time investment chocolates in preparing maggi of stalls.As revealed by the survey Spot Promotions are a cheap and effective way of sales promotion. 14. direct selling whereby company employed people interact with the customer personally. They sell the product and offer discount coupons on next purchases.NESTLE INDIA LTD.new range stalls (we know your skin better) and placing . The retail outlets in the areas where coupon are distributed must be flooded with our range of products so that there is no shortage of supply. Discount coupons should be distributed across the household in Delhi Metro. products stalls. Our company must explore this channel that ensures sales and builds repeat purchases. This would build awareness about thechocolates products and would overcome its major weakness of lack of awareness on part of customer about the range of products.
It would serve twin objective of increasing the awareness of the product as well as boosting the sales. The stall would sell our range of items at Discounted price (Minus the retailers and distributors margin as the products would be directly sourced from the C&F agents). Specially.The wholesalers are found to undercut whatever extra margin he gets in form of Schemes etc. The sales officers should be asked to identify crowded market places in their areas where such efforts could be made. On festival occasions when the expenditure by public increases we could cash on the opportunity. Each stall would cost approx Rs 1200. 15. Nestle representative wearing nestle T-shirts and Blue colored caps would counsel the public. To begin with 2 mobile stalls could be prepared and the concept be tested across the Delhi metro. So . them at prominent places at regular intervals.NESTLE INDIA LTD.
This would also help the distributors to maintain their ROI. .NESTLE INDIA LTD. . for proper channel balance we need to keep strict control over our sales to the wholesalers.
. Concerned persons were not available despite appointments at some times. It was difficult to tap the distributors and the ASM of nestle. which may not hold true in all parts. LIMITATIONS Sample size: The sample size chosen was 250 for the whole Delhi metro where there are so many people. The marketing and the advertising managers were not ready to give any infomationabout the company . The distributors were reluctant to share information regarding the trade insights. This could have affected the results.NESTLE INDIA LTD. They were not willing to tell about any strategy of marketingand advertising . so very less information can be gas\thered about the strategy of marketing.
5 31. Jan-Sep Volume Growth (tons) Domestic Exports Total 2001 105718 13402 119120 Jan-Sep 2000 89176 10216 99392 % yoy 18. CONCLUSIONS Sales growth in 2001 led by a robust 20% growth in volumes Nestle’s domestic sales registered a 18.NESTLE INDIA LTD. Exports registered a 31% yoy volume growth.5% volume growth during the first 9 months of 2001.1bn.4bn.4% yoy to Rs2. while Exports grew by 26.2 19.8 .8% yoy to Rs12. In value terms. domestic sales grew by 15.
8 2424 14531 1918 12372 26.NESTLE INDIA LTD. Volume growth in chocolate & confectionery segment was 12%. Value Growth mn)Domestic Exports Total (Rs 12107 10454 15. value growth being led by culinary segment Beverage sales have grown at a fast pace of 42% in the first 9 months of 2001 driven by rising exports and revised pricing strategy in domestic market.5 Beverages leading volume growth.4 17. which was higher then market leader and average industry growth. signifying that the company has been able to improve market share in the category. Growth in value terms is however lower due to a sharp 15% decline in realizations. Culinary product sales grew by 20% in volumes and 22% in value. .
5bn turnover in the first 9 months of 2001.4 21 22 20 -15. Turnover contribution of beverages is 29%.NESTLE INDIA LTD..1 1. .9 6.8 Milk products. while culinary each products contribute and chocolate to & confectionery 14% Nestle Rs14. which account for a significant 43% of Nestle’s revenues have grown at steady 15% in volume terms. Turnover Contribution by Turnover contribution Volum e Milk & Nutrition Products Beverages Culinary Products Chocolates Confectionery & 18 24 11 29 14 14 42 20 12 47 43 15 Value Volume Growth Value Realization 13 -1.
5 capital and 2000 18. Operating Margins EBITDA Adjusted EBITDA Improved management working 2001 18. Net indebtedness (total financial liabilities net of liquid assets) has declined from a high 2.5 18. .4% of sales in F12/00 to 43. Operating cash flow has registered a CAGR of 15% in the last 4 years.3z currently.NESTLE INDIA LTD.7 asset The company has been able to improve working capital management.1% of sales in F12/01. Fixed asset turnover has also gradually improved over the last 3 years.5x in 1998 to 0.5% in 2001 driven by lower material cost.1 17.1% to 18. Profit Margin Operating margins have improved from 18. Raw material cost declined from 44.
Operations: Domestic Sales grew by 7% in value and 15% in volume terms. During the year.7 4. Profit After Tax grew by 20% from Rs985mn to Rs1186mn. Contingency the Company with supplemented Provision .0 2.9 1.2 0.3 1.5 3. Out of business the prudence.6 2420 14. 1998 1999 2000 2001Sep 1966 18.1 2391 9.9 4.0 4. Export Sales grew by 16% in value and 32% in volume. the Company retired certain fixed assets from active use at various locations and the impairment loss on such fixed assets has been charged to the Profit and Loss Account. during the year.7 0.1 Operating Cash Flow Rotation of Operating Net Working Capital Rotation of Fixed Assets Net Indebtedness 1743 7.NESTLE INDIA LTD.
with the current level of inflation and economic indicators pointing towards a sluggish market. However. . The current year has commenced as per plan in the domestic market and your Directors are hopeful of continued good results. it would be difficult for the Company to maintain the level of earnings unless the Company takes price increase on finished products which would depend on market conditions and competitor activities. dispute and management discretion.NESTLE INDIA LTD. further amount in 2000 of Rs295mn (net) to provide for various contingencies resulting from matters mainly relating to issues under litigation.
Efforts continue to tap new market and product opportunities. depressed green coffee prices in domestic and international markets kept the export realisations low. added have The instant also export coffee contributed competitiveness manufactured in India continues to be adversely affected by the purchase tax levied on green coffee.NESTLE INDIA LTD. Dividends: . 3. Measures taken for tapping new market and product to of this value opportunities growth. However. 2. Exports: Export Sales for the year at Rs2655mn have grown by 32% in volume terms. over the last year. buoyant sales of Instant Tea and good performance of the culinary products. This has been mainly due to the higher exports of NESCAFE to Russia.
MAGGI Noodles re launched in 1999 in response to popular consumer taste preference. continued to boost sales during 2000 in the culinary segment.00 per equity share. 4. was paid during 2000. Interim dividend of Rs.NESTLE INDIA LTD. including Rs4. Business Development: In line with the Company's objective to provide superior value in every product category and market sector. the pricing of some products were also reduced to meet consumer expectations. 8.50 per equity share out of undistributed profits of the previous financial years. New flavour profiles were introduced in the bouillon business. While the Company continued to generally maintain price points across all the product categories. . efforts were focussed to provide quality products to customers at attractive price points.
which makes a delicious frothy cold coffee was launched in select metropolitan cities in the third quarter. Continuing with the efforts to meet consumer expectation on price points. The market continued to react positively to the initiatives taken in the recent past to grow the consumption of instant coffee in the domestic market. The new NESCAFE pricing and bringing the popular SUNRISE brand under NESCAFE umbrella to benefit from its association continued to strengthen the category. NESCAFE Frappe a blend of coffee. the pricing of KITKAT was also reduced during the later half of the year. NESCAFE Frappe has received encouraging response. . In the area of Chocolate and Confectionery NESTLE MUNCH Crisp wafer biscuit with chocolayer. This was another strategic launch and seeks to address consumer with preference for cold drinks. which was launched in select markets in1999.NESTLE INDIA LTD. was rolled out nationally during 2000 and had good growth. mocha and vanilla.
EVERYDAY Dairy Whitener and cereals had satisfactory growth. and This Eclairs has also showed in satisfactory also helped improving the infrastructure and distribution reach of the Company in the Chocolate and Confectionery segment. Switzerland in the area of Chilled Dairy. In the milk and cereal categories. Moulded Chocolates growths. The initial response has been very encouraging and the Company is working on plans to further leverage the international expertise of Nestle Group. The Company has also entered the Chilled Dairy business with the recent launch of NESTLE Dahi in select cities of the North. NESTLE Growing up Milk. a new product offering superior nutrition. launched in 1999 was rolled out nationally during the year.NESTLE INDIA LTD. .
Both the projects seek to leverage the worldwide experience and knowledge of Nestle Group. Packaged UHT milk seeks to address growing consumer concerns on adulteration and product safety and brings with it reliability. the Company forayed into the Ultra Heat Treated (UHT) liquid milk business in April 2000 by launch in Mumbai. The directors were pleased to report the implementation of the two new projects undertaken by the Company during 2000 packaged milk and packaged drinking water. In line with its objective of long term growth and entry in significant value added food segments.NESTLE INDIA LTD. complete hygiene and safety. It offers convenience . A few products whose performance was not considered satisfactory are under constant review for corrective action. The performance of other products were generally in line with expectations. Switzerland who are the leaders in these product categories.
in terms of a shelf life without any deterioration in the product quality and easy usage without refrigeration or boiling.NESTLE INDIA LTD. 2001 under the brand NESTLE PURE LIFE and is available in select cities. The packaging has been specially designed to maximise safety for the consumer and protect from possible tampering. The project for bottled water was implemented at the Samalkha factory and water launched in February. The new categories like bottled water and liquid milk are lower margin categories and will require considerable investments. . UHT Milk has received encouraging response and has been rolled out in select cities of the West. NESTLE PURE LIFE contains a balance of essential minerals and a light pleasant taste and is manufactured under stringent quality control. South and North. to the consumer. The Company sees them as strategic and as requiring support on a sustained basis.
The . a concerted drive was undertaken to make products affordable and accessible to consumers. The Alternative Trade Channel unit created in 1999 undertook initiatives to tap the opportunities for out of home consumption. With a view to expand distribution and increase penetration in smaller towns. The response has been encouraging.NESTLE INDIA LTD. MAGGI Noodles. MILO Chocolate Energy Drink and NESCAFE Instant Coffee. The two new Sales Branches at Bangalore and Chandigarh set up in 1999 to further strengthen the flexibility of the Sales organisation and for speedier response to the market conditions. Initiatives taken include more penetrative pricing and smaller packs covering brands such as EVERYDAY Dairy Whitener. particularly for instant coffee and chocolate and confectionery and to extend availability of product to nontraditional outlets. have started showing positive results during the year.
college canteens and major events. On the manpower development front. outcome of these initiatives has been encouraging and is being consolidated. the thrust on strengthening supply chain continued to receive attention during the year. In addition to consolidating the .NESTLE INDIA LTD. programmes during the year continued to be focussed on the operational production. Availability of NESCAFE has been enhanced through an expansion of the vending machine network and new consumption opportunities for Chocolates and Confectionery were identified and developed in areas like railway platforms. front more particularly sales and To support the and growth plans and distribution the strategy. simultaneously improve operational efficiency.
technical and non technical expertise and the fruits of the extensive centralised Research and Development. b) Control of distribution costs through innovative measures. Technology from Nestle: The Company benefits from its access to proprietary technology.NESTLE INDIA LTD. d) Reduction in obsolescence of materials. improvements made over the last two years. 5. The diversified knowledge and . significant progress was recorded in following areas: a) Reduction in finished goods inventory pipeline to improve freshness of stocks and reduce working capital. c) Sustained improvement in customer service level to improve product availability across all geographies and channels. despite steep increases in cost of fuel.
which encompasses taste. convenience and overall value for money. Product quality. expertise have contributed significantly to the operations of your Company over the years. for increasing competitiveness. is a critical factor in consumer choice and in a competitive market like India could determine the very survival of the products.NESTLE INDIA LTD. The high quality of products of your Company is borne out by the position and image the products enjoy in the market and your Company continuing to be a leading exporter of value added Instant Coffee in the country. appearance. which have benefited are: a) Manufacture of products of truly international quality. Some of the key areas. b) Benchmarking of products against competition to achieve an advantage in product quality. .
Nestle Dahi.NESTLE INDIA LTD. . d) Implementation of project for bottled drinking water. KITKAT of Milky. e) Product innovation and renovation some illustrations are MUNCH Crisp wafer biscuit with chocolayer. newand and improved flavours profiles bouillons. f) Enhancement of skill and competence of Company personnel due to the training received. such as Spearpoint Technology for Cocoa based products implemented during 2000 which would improve product quality and competitiveness and the MUCH technology for instant coffee manufacture implemented during 1999. Junior Foods. Nestle Milk (UHT). NESCAFE Frappe. c) Access to latest technological developments. relaunch of MAGGI Noodles. which would enhance the productivity by increased extraction of coffee solids from coffee beans.
who have contract manufacturing arrangements with your Company. g) Implementation of environmentally sound business practices. Information Technology: The Company in continued the to to make significant of investments Technology Information cope with Services the area growing information needs necessary to manage operations more effectively in a complex supply chain environment. which has enabled the business of your Company to grow and sustain. 6. h) Technical expertise in various forms including Information Technology.NESTLE INDIA LTD. i) Providing assistance by way of improved technical and quality standards to local manufacturers. .
where necessary. d) Healthcare Programmes with focus being on well being of employees and their families covering . c) Sponsorship of treatment of TB patients at clinic run by NGO. Community Health: Recognising its responsibility to the community in which it operates. 7. the Company over the years has been taking initiatives in the area of community health at locations around its factories. b) Support to health officials in Pulse Polio programmes.NESTLE INDIA LTD. Some of the initiates taken in the recent past are: a) Provide Government and village schools with facilities for toilets and hygiene drinking water including deep bore wells.
check up. awareness programmes and health The company performance is much better in comparison to its competitors.NESTLE INDIA LTD. vaccination. .
: 1. How many Nestle Products Have your consumed so far? 2.: Personal: Name : Age : Class : School/ college : Tel. Which of these Nestle products do you like? a) Chocolates c) Milk product e) Coffee g) Milkmaid b) Maggi d) Mineral water f) Infant products h) Soups 4. Why do you like the nestle products? It is due to its. How do you like those products? Good Bad 3.NESTLE INDIA LTD. . QUESTIONNAIRE Tel.
NESTLE INDIA LTD. Which advertisement do you like and why? ________________________________________________ ________________________________________________ 8. Do you think some brand ambassador Should come in the advertisement of Nestle? Yes No 9. Colour Taste Packing /Pack Size Advertisement 5. Whom do you think should endorse the brand Nestle? . Do you like the advertisement of Nestle? Yes No the name_____________ Product _______ 7. Which brand of Particular product do you like? Specify Brand 6.
if there is a gift/offer with the other brand Yes No 12.NESTLE INDIA LTD. How do you like the new range of products from other competitors products which are same? ________________________________________________ . when you think "Good Food Good Life" ________________________________________________ 11. _ 2. Yes No 13. 1. Have you tried the new range of Products from Nestle? If yes specify the name. What strikes to your mind. Will you switch over to some other brand. _ ___________________________________________ ___________________________________________ 10.
Are you satisfied from quality of Nestle products? Yes No 16. Where you rank Nestle from others? Very Good Bad Good Satisfactory . Do you think Nestle should come with some new products? If yes specify some name ________________________________________________ 15. 14.NESTLE INDIA LTD.
ECONOMICS TIMES) IIM LIBRARY (DELHI) . BIBLIOGRAPHY MARKETING MANAGEMENT: PHILIP KOTTLER BUSINESS INDIA BUSINESS TIMES BUSINESS TODAY Business world NEWSPAPERS & JOURNALS (TIMES OF INDIA.NESTLE INDIA LTD.
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