You are on page 1of 51

A STUDY ON WHOLESALE MARKETING WITH REFERENCE TO NESTLE Submitted in partial fulfillment of the requirements for the award of the

degree of Bachelor of Business Administration (BBA) Semester-III (Paper Code-BBA 211) To

Guru Gobind Singh Indraprastha University, Delhi

Guide: Ms. Alka Sharma

Submitted by Name of Student: Ashish jain Roll No.: 10590301711

Institute of Innovation Technology & Management, New Delhi 110058 Batch (2011-2014)


I, Mr ASHISH JAIN, Roll No. 10590301711 certify that the Minor Project Report (Paper Code------) entitled A STUDY ON WHOLESALE MARKETING WITH REFERENCE TO NESTLE_ is completed by me by collecting the material from the referenced sources. The matter embodied in this has not been submitted earlier for the award of any degree or diploma to the best of my knowledge and belief. Signature of the Student Date: Certified that the Minor Project Report (Paper Code-------) entitled A STUDY ON WHOLESALE MARKETING WITH REFERENCE TO NESTLE done by Mr. ASHISH JAIN, Roll No. 10590301711, is completed under my guidance.

Signature of the Guide Name of the Guide: ALKA SHARMA Designation: Date:



I would like to express my special thanks of gratitude to my teacher Ms. ALKA SHARMA who gave me the golden opportunity to do this wonderful project on the topic A STUDY ON WHOLESALE MARKETING WITH REFERENCE TO NESTLE, which also helped me in doing a lot of Research and I came to know about so many new things so I am really thankful to them. Secondly I would also like to thank my friends who helped me a lot in finishing this project within the limited time.

FORMAT FOR CONTENTS & LIST OF TABLES/FIGURES/ SYMBOLS CONTENTS S No 1 2 3 4 5 6 List of Tables List of Figures Introduction to nestle Concept of FMCG INDUSTRIES MARKETING PHILOSPHY NESTLE ADOPTED 4 5 6 8 Certificate Acknowledgement Topic Page No 2 3

7 8

References/Bibliography Appendices

49 50




Page No 10






Figure No 1


Page No 28




Today, Nestle is the world leading Food Company. Nestle headquarters is in Switzerland. Its international R&D network supports the products made in more than 500 factories in 86 countries. The Nestle factories are operating in the region of Oceania. Being a company dedicated to food from the beginning, Nestle remains sensitive to culinary and eating habits, and responds to specific nutritional problems, whilst also setting and matching new trends such as growing out-of-home consumption and caring about the well being of its consumers. Nestle is not only Switzerland's largest industrial company, but it is also the World's Largest Food Company. The mission statement emphasizes on the fact that Nestle products are available in nearly every country around the world. Wherever one may live, only Nestle can provide the America, Asia, Europe and

best and most reliable food and beverage products to meet his/her needs throughout the day, throughout the life. Especially, people on the move want to be able to find good food wherever they are, whatever the time of day. They are often reassured that they will find well-known brands out of home. This statement also reflects the image of high quality products that Nestle offers. Nestle has the advantage that it offers caterers, fast food chains and other restaurants a complete range of high quality ingredients, base products and meal components, as well as leading consumer brands. Quality is the cornerstone of the success of the Nestle Company. Every day, millions of people all over the world show their trust in the company by choosing Nestle products. This trust comes from a quality image that has been built up for over a century. Although Nestle has been associated with India since the b e g i n n i n g o f t h e c e n t u r y t h r o u g h t h e i m p o r t i n g a n d t r a d i n g o f i n f a n t food and condensed milk, manufacturing in India only began with the s e t t i n g u p o f t h e f a c t o r y i n Moga in 1962. A k e y f a c t o r f o r N e s t l e s s u c c e s s h a s b e e n i t s q u e s t f o r conti nuous improvement through ushering in greater productivity and m o r e e f f i c i e n c y i n e v e r yd a y o p e r a t i o n s . D e s p i t e t h e i n f r a s t r u c t u r e impediments in India, Nestle has set itself high standards of business performance. This is reflected through the essence of the company - its mission statement.


FMCG companies have now realized that India lives in its rural villages. So much that rural marketing has become the latest marketing mantra of most FMCG majors. The lure of an untapped market has driven the marketers to chalk out bold new strategies for targeting the rural consumer in a big way. Nestle also piled primarily on the urban consumers. After understanding the great potentiality rural India possesses driven growth, in this severe competitive FMCG sector where the dispersion or market penetration plays a big role. The rationale behind Nestle going for the market penetration is to acquire new consumer base by making the products available to the every interior of the country and increase its sales, to sustain growth. It proves to be an expensive mistake? If they want to increase their penetration then how and where they should go for? These are the issues Nestle is facing today. This project is a market research and it touches every aspect of the current wholesale marketing and predicament associated with it. It explain that how penetration, can be possible through wholesale marketing ,what is the cost of doing it and maintaining it.

This project gives an insight into the every feasible aspect that is associated in Driving penetration through wholesale marketing, for Nestle. The objectives of the project report: - Profile of the wholesalers and their current level of penetration level, in the up country market. - Profile of the customers who are coming to the wholesalers. Fast Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG) are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks, toiletries, and grocery items. Though the absolute profit made on FMCG products is relatively small, they generally sell in large quantities, so the cumulative profit on such products can be substantial. ITC Limited, Procter & Gamble and Unilever are the three biggest consumer goods company that operates across the globe. The term FMCGs refers to those retail goods that are generally replaced or fully used up over a short period of days, weeks, or months, and within one year. This contrasts with durable goods or major appliances such as kitchen appliances, which are generally replaced over a period of several years. The following are the main characteristics of FMCGs:

From the consumers' perspective:

Frequent purchase Low involvement (little or no effort to choose the item products with strong brand loyalty are exceptions to this rule)

Low price

From the marketers' angle:

High volumes Low contribution margins Extensive distribution networks High stock turnover



Marketing is defined as the performance of business activities that direct the flow of goods and services to producer to consumer. The concept of wholesale marketing involves a chain of persons through which the goods will reach the target consumers. The consumption and production of marketed food are spatially separated. Production is primarily in rural areas whilst consumption is in urban areas. Food reaches the consumer by a complex network, involving production, assembly, sorting, packing, reassembly, distribution and retail stages. In developing countries the linkage between the producer and the retailer is still usually provided by assembly and wholesale markets, where wholesale marketing takes place using a variety of transaction methods. Wholesale marketing is important for the growth of a company. As it is important for a company to sell all the products they produce. Wholesale marketing is necessary for the company to fulfill the demand of a product and satisfying the customers. Wholesale marketing is the decision to mass produce and mass distribute one product and attempt to attract all kinds of customers. The consumption and production of marketed food are spatially separated. Production is primarily in rural areas whilst consumption is in urban areas. Agricultural marketing is the process that overcomes this separation, allowing produce to be moved from an area of surplus to one of need. Food reaches the consumer by a complex network, involving production, assembly, sorting, packing, reassembly, distribution and retail stages. European and former CIS countries. On the other hand, the growth of supermarkets in many regions has seen the development of direct marketing and a reduced role for wholesale systems




Nestle vision is to be the leading food & beverage company in the world providing customers with healthy food at affordable prices. Their logo is GOOD FOOD FOR GOOD LIFE; there all products are for society welfare. So according to their logo and mission statement it is very fair to say that they are following the Societal Marketing Concept & Wholesale Marketing Concept. Nestle business objective is to manufacture and marketed the companys product in such a way as to create value that can be sustained over the long term for shareholders, employees, consumers, and business partners. Nestl does not favor short-term profit at the expense of successful long-term business development. Nestl has been a partner in India's growth for over nine decades now and has built a very special relationship of trust and commitment with the people of India. The Company's activities in India have facilitated direct and indirect employment and provides livelihood to about one million people including farmers, suppliers of packaging materials, services and other goods. After Indias independence in 1947, the economic policies of the Indian Government emphazised the need for local production. Nestl responded to Indias aspirations by forming a company in India and set up its first factory in 1961 at Moga, Punjab, where the Government wanted Nestl to develop the milk economy. Progress in Moga required the introduction of Nestls Agricultural Services to educate, advise and help the farmer in a variety of aspects. From increasing the milk yield of their cows through improved dairy farming methods, to irrigation, scientific crop management practices and helping with the procurement of bank loans. Nestl set up milk

collection centres that would not only ensure prompt collection and pay fair prices, but also instill amongst the community, a confidence in the dairy business. Progress involved the creation of prosperity on an on-going and sustainable basis that has resulted in not just the transformation of Moga into a prosperous and vibrant milk district today, but a thriving hub of industrial activity, as well. For more on Nestl Agricultural Services.



The formulation of a well- conceived competitive strategy for an organization involves the identification of the key issues from the business environment to monitor the internal and external strengths of the organization. SWOT analysis is one of the most effective tools used for this purpose. SWOT is an acronym that stands for strengths, weaknesses, opportunities and threats to the organization. It involves the careful evaluation of the strengths and weaknesses of the organization as well as its opportunities and threats to the organization. "The SWOT matrix is an important matching tool that helps the managers to develop four types of strategies: SO (strengths- opportunities) strategies, WO (weaknesses- opportunities) strategies, ST (strengthsthreats) strategies and WT (weaknesses- threats) strategies". SWOT analysis can be used as a means for determining the future courses of action of the organization.


After identifying the internal and external strengths, weaknesses, threats and opportunities to the organization, they have to work on converting the weaknesses to strengths and the threats into opportunities

STRENGTHS: Strengths are the skills and capabilities possessed by the organization which has a positive impact on the successful implementation of a competitive strategy. The only brand in the area maintaining its quality and taste and having the same impact on its customer Economical Pure Drinking Water in market (Free of chemicals) Strong Brand Name

WEAKNESS: Weaknesses are the elements within the organization that hinder or have a negative impact on the successful implementation of a competitive strategy. Communication is weak Lack of Awareness

OPPORTUNTIES: Opportunities are the favorable conditions existing in the market environment which can be exploited by the organization to generate a better performance. Concentrating on these areas can increase sales


Increase in product line.

THREATS: A threat is a challenge posed by an unfavorable trend or development that would lead, in the absence of defensive marketing action, to lower the sales or profit of the organization Segments are being shared by competitors Uncertain conditions will affect the sales (diseases of animals)

Benefits of SWOT Analysis "The benefits of SWOT Analysis are as follows: 1. The planners gain a shared perspective on the state of the organization and the risks to be managed to achieve business or organizational continuity. 2. The major barriers to achieving the strategic objectives are identified and responses developed. 3. The present methods and means are audited to establish their effectiveness, and new solutions identified. 4. New methods and means are generated to achieve required results and overcome barriers and problems. 5. Hard and soft data are generated to assist planners in making reasoned decisions about strategies and tactics based on sound evidence. 6. The relationships between internal issues and external issues can be identified and proactively dealt with.


7. SWOT analysis helps to identify the major influences on behaviour and results in the organization". RECOMMENDATIONS

Nestle is one of the leading company in food industry. They have a variety of successful products that is segmented into food and beverage industry. The way of innovative thinking and quality of the products made them a market leader in particular sector. Nestle has drawn flak for its unethical marketing practices in the case of baby food in developing countries by advertising that the infant formula was superior than mother's milk which has diminished the brand image of the company. Hence it must be ensured that such acts are not repeated and measures must be taken to improve its brand image. They can utilize the social media as a catalyst for this change. Nestl's chilled dairy sector has been classified as unsatisfactory by the company itself. In order to resurrect it, they can opt for more acquisitions or joint ventures with the major players in the market.The cost of raw materials has been on a rise over the past few years which have caused an increase in the production costs. Acquiring local farms for their raw materials will reduce their production cost and hence they can improve their profit. Educating the consumers through campaigning is a possible way to grow their business. As Nestle is producing health conscious food products, they can use the packaging as a means to describe the nutrition benefits of their products. Currently, Nestle sells its products through wholesalers and retailers. Nestle can improve its profit margin further by establishing their own retail outlets.


Nestl's Competitive Strategy For every global business should have a well structured their own international strategies for competitive sustainability. For Nestle, their international business strategy plays a key role in the development of competitive advantage in their business. Direct foreign investment in the dairy and food sector are main contributors of nestles global competitive strategy. Nestle balances their sales between low risk area (developed worlds low growth nations) and high risk areas (Latin America and Africa) by identifying their possibilities in their market and taking high risk area as an opportunity of nestle to develop their profitable business in a very safe mode with ensuring their constant growth in that area and gives a good return to its shareholders. Direct investment in multinational company helped nestle to frame a good economy and to grow their operating market. They occupied licences for LC1 brand Muller (a Germen dairy product) in Austria and Germany. According to appropriate market condition and local customer demand, they produce ingredients or corresponding process technologies which supplies to the current needs. The main example of this is the Sveltesse, the European diary product which contain two or three times more fat contents than American dairy products. Nestles partnership with other large companies are also a biggest achievement in their international strategy. Their alliance with coca cola in ready to drink tea and coffee made them to gain a reasonable benefit. In Asia, Nestle is acquiring local companies so that they can form a group of regional managers who know very well about the local markets and culture than in European and American business. Their strategic advancement in these areas is due to their strong and well planned acquisitions. The Indonesia's largest noodle producer Indofood is a good example of this. They mainly aimed to expand their business to Indonesian market and also at the same time they exported Indonesian food products to several other nations


"Market growth has been closely associated with two issues: economic conditions and social change" (Nieuwenhuis and Wells, 2003).Nestle is a food, nutrition and health oriented company. Their key strategy behind their success is strengthening their leadership in marketing. All their market is based on quality products and customer satisfaction. The main factor that motivates a customer is to buy their goods is the nutritional content in their products. They also focused on creating a strong brand by creating brand equity. "A strategy based on strong brands is likely to be sustainable because it creates competitive barriers" . A well established communication between nestles R&D and their customers internally and externally holds their business to achieve a good stability in the potential market. Nestle designed a Corporate wellness unit to integrate nutritional value-added in their food and beverage businesses. This organisation controls all the health, nutrition, wellness of organisation across Nestl's beverage and food industries. Nestle put forward nestle nutrition as a business area within their organisation and hence they calculated their business and market in the areas of Infant Nutrition, HealthCare Nutrition, and Performance Nutrition. These all reinforces their competitive advantage in present market. They aimed to deliver a superior business to customers by offering trust, science based nutrition products, quality and services. Nestl has topped a list of global companies in efforts to disclose and cut carbon emissions. Stock Listing Industry Exchange Stock Code Group Food Processing The Bombay Stock Exchange Limited, Mumbai 500790 A



The Carbon Disclosure Project, an independent non-profit organisation, released its annual ranking based on data requested from the Global 500 companies. It measured companies on a range of factors including how they incorporated climate change into their business plans, how they monitored emissions, their transparency, and actions they were taking to mitigate their impact.

For the purpose of study, data from the inhouse surveyconducted by the marketing department (s econdary data) hasbeen used and also for coming out with the recommendation. itwas also felt that mere secondary data would not provide in-depth information for the analysis, hence it was decided that interactive discussions with the managers and the head of every department would help in an in-depth and true understanding of challenges faced by the department. the methodology adopted was to gather relevant information fromthe appropriate department, correlate the information obtainedand to present the information in a logical and systematic manner




Milk Products

Chocolate Drinks


Fruit Drinks

Culinary Products



Challenges Faced By Nestle

Here are some the common challenges which all the organizations face around the world and Nestle Bangladesh Ltd is also facing all of these challenges more or less.

Aging workforce and retirements

As most of the upper level positions are filled with aged personnel and each year some of them are going to retirement, Nestle has to go for continuous recruitment process to fill those positions when succession is not possible and finding the right person is also a challenge as well.

Less experienced and smaller younger generations

Our current job market is filled with new graduates who lack experience which Nestle seeks to maintain the standard in their workplace.

Lack of investment in training and education

Still most of the companies are reluctant to invest on training and development sectors to increase the efficiency of the employees. Even though Nestle is offering its own training and education program to its employees but to be competitive in the market and increase efficiency ,morefocus on this field is mandatory.

Mismatch between training and education outputs vs. business skill needs

There is not enough capacity at educational institutions to keep up with corporate and student demands, and this will only worsen as technology and innovation increase the rate at which knowledge and skills become obsolete.

Lack of appropriate succession planning

it is not always possible to fill up all the positions internally but when Nestle go for headhunting, they face challenge in finding qualified managerial talent and skilled workers.

Recruiting from a narrow pool of potential talent

Because of rigid job descriptions and hiring requirements, Nestle recruit talent from a narrow pool of potential talent. It may make it difficult to select the best talent from the market.

Factories Nestle has 6 factories in India. These are 1. Moga (Punjab) : The Nestle factory in Moga has the pride of being t h e f i r s t a n d m o s t comprehensive factory of Nestle India. Set up in1 9 6 2 , i t r e p r e s e n t s t h e c o r e c o m p e t e n c e o f N e s t l e I n d i a i n t h e manufacture of milk products (Everyday, Milkmaid), beverage


s , c u l i n a r y p r o d u c t s ( M a g g i s a u c e s , n o o d l e s , s o u p s e t c . ) , w e a n i n g ce reals (Cerelac) and infant milk formulae. 2. Choladi (Tamil Nadu): The factory in Choladi started production in 1967. Situated about 60 miles from Calicut, the factory today has 81employees and produces 1.5% of the total turnover of Nestle India. It is a 100 percent export oriented unit which processes freshly picked tealeaves into soluble instant tea. 3. Nanjagud (Karnataka): Production in this factory began in 1989with the manufacture of Nestle instant coffee and Sunrise. Today ina d d i t i o n t o i n s t a n t c o f f e e t h e f a c t o r y a l s o m a n u f a c t u r e s h e a l t h beverages. The plant to manufacture MILO was also commissioned at this factory. This factory employs 145 people and is cited as a model int e r m s o f e n v i r o n m e n t p r o t e c t i o n f o r i t s i n s t a l l a t i o n s t o p u r i f y w a s t e water as well as for its provisions for recycling coffee wastes. 4.Samalakha (Haryana): This factory was set up in 1993. Located 70 k i l o m e t r e s f r o m D e l h i , i t m a n u f a c t u r e s w e a n i n g c e r e a l s , c u l i n a r y products ,health beverages and milk products. Recently the expansionof manufacturing capacity for Milkmaid Dessert Mixes was undertaken a t t h i s f a c t o r y a s t h i s n e w a n d u n i q u e p r o d u c t c a t e g o r y i s v i e w e d t o have great potential in the future. 5.Ponda (Goa):


This Kit-Kat factory was set up in Goa in 1995 at cost of Rs. 50 crores. It represented a major step by Nestle towards becoming the Number 1 C h o c o l a t e s a n d C o n f e c t i o n e r y C o m p a n y i n India.

6.Bicholim (Goa) T h e c o n s t r u c t i o n w o r k a t t h i s n e w f a c t o r y i s p r o g r e s s i n g w i t h speed. This factory will 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 celebrates 100 years in India

On January 4, 2012 Nestl celebrates a century of deep engagement in a country which over that period has proven its potential to be one of Asias economic superpowers. Nestls first sales agents in India began work in Chennai and Kolkata in 1912.

Today, the company directly employs 6,000 people in India and more than half a million indirectly.

Its products are sold in more than 3.5 million outlets across the country.

Growth potential

Nestl recorded sales of CHF 1.4 billion in India in 2010. Nandu Nandkishore, the companys Executive Vice President and Zone Director for Asia, Oceania, Africa and the Middle East believes there is much potential for further growth. India is a success story in the making, he said. It has a large, progressive population. With our expertise and research and development strength in science based nutrition, we can contribute significantly and create value for consumers and the economy. Mr. Nandkishore thinks that the key to future success is Nestls intimate understanding of Indian culture and what consumers want.


Nestl is an integral part of India and many consumers trust our brands for their high quality, he continued. Opportunities here will continue to grow as more and more people want to buy nutritious, branded food and beverages.


Nestl has stepped up its investments in India over the last three years, both in its manufacturing operations and in research and development.

Nestl India invested CHF 70 million in a new factory in Nanjangud last year to produce Maggi products such as noodles.

Nestl S.A. is investing CHF 50 million in a new research and development centre in Manesar Haryana, which will become operational towards the end of 2012. The construction of the companys eighth factory in Tahliwal, Himachal Pradesh, is also progresssing rapidly.


Nestl India plans to invest in another factory in Gujarat to manufacture Maggi products and confectionery.

Leading brands Nestls most popular brands in India are Maggi, the countrys leader in instant noodles, and Nescaf instant coffee.


The company is helping to address micronutrient deficiency among lower income consumers in India and other emerging markets with its affordable, fortified 'Popularly Positioned Products'(PPPs). Nestls PPPs are smaller or daily-portion packs designed to be bought on a regular basis. They are manufactured locally, using local raw materials to minimise value chain costs.PPP products in India include the iron-, iodine- and vitamin A-fortified Maggi masala e magic spice mix and Maggi 2 minute noodles with added calcium and protein.

Rural development

Nestl built its first Indian factory in Moga in 1961. The company now has seven factories in the country.

Over the years, Nestl has helped to develop the area around its first factory in Moga, setting up milk collection points and training farmers to improve productivity and quality.


The companys agronomists provide farmers with technical support to improve sustainable water management, including help with irrigation and rainwater harvesting.

Nestl India has built more than 160 drinking water fountains in schools near its factory in Moga, providing about 65,000 students with access to clean water. The company has also improved the sanitation facilities in girls schools close to the factory to encourage young women to continue with their education.

These efforts are part of what Nestl calls Creating Shared Value, an approach to business that aims to create value for shareholders at the same time as for those communities where the company operates. World Cocoa Foundation In 2000, Nestl and other chocolate companies formed the World Cocoa Foundation. The WCF was set up specifically to deal with issues facing cocoa farmers; including ineffective farming techniques and poor environmental management (disease had wiped out much of the cocoa crop


in Brazil). The WCF focuses on boosting farmer income, encouraging sustainable farming techniques, and setting up environmental and social programmes. Sustainable Agriculture Initiative Together with Danone and Unilever, Nestl founded in 2002 the Sustainable Agriculture Initiative (SAI) to promote sustainable agriculture in a comprehensive way. Within the framework of SAI, Nestl has worked with farmers to elaborate best practices in the areas of milk production and coffee and cocoa growing. The main objectives for SAI are to manage: i) Quality and safety problems in the food supply chain that may affect consumer confidence in everyday food products; ii) The growing demand for quality food that will arise from population growth, increases in expendable income and expected changes in diet; iii) Possible adverse effects and pressure of agriculture on natural resources and environment that may affect agricultural productivity. The Spirit of Nestle Organisational excellence is never achieved through a one timee f f o r t ; I t i s a l w a y s a p r o c e s s o f c o n t i n u o u s i m p r o v e m e n t a c r o s s a number of areas of operation. A k e y f a c t o r f o r N e s t l e s s u c c e s s h a s b e e n i t s q u e s t f o r conti nuous improvement through ushering in greater productivity and m o r e e f f i c i e n c y i n e v e r yd a y o p e r a t i o n s . D e s p i t e t h e i n f r a s t r u c t u r e impediments in India, Nestle has set itself high standards of business performance. This is reflected through the essence of the company - its mission statement.


Nestles mission To be in every way the leading company in the Indian food industry and a good corporate citizen by providing our consumers with s u p e r i o r quality products, our shareholders with rapid growth & f a i r r e t u r n s a n d o u r e m p l o ye e s w i t h a c h a l l e n g i n g a n d s a t i s f yi n g w o r k environment.To translate this spirit into a planned and measurable process, Nestle has set up key objectives across all divisions.

Key Objectives Production To optimise production costs while enhancing product quality so ast o m a k e N e s t l e p r o d u c t s e v e n m o r e c o m p e t i t i v e i n t h e m a r k e t place Sales and marketing To reach a sales turnover of 3000 crores by the year 2003 To double the turnover every three years People To help employees to retain a long term perspective and integrate them fully with the companys business goals To retain a broad perspective while addressing individual needs To view growth as a continuous process To concentrate on attitudinal changes by developing leadershipskills, an a p p r e c i a t i o n o f i n t e r d e p e n d e n c e b e t w e e n u n i t s a n d t h e enhancement of a sense of belonging to Nestle

Finance To maintain profit levels above the average for the food industry in India.The Business Excellence and Common Application (BECA) initiativeessentially translates the spirit of the Journey towards excellence into an organized, systematic and measurable approach. The aim is to aid the achievements of the companys key objectives of rapid growth bye n s u r i n g t h a t a l l o p e r a t i o n s i n c o r p o r a t e t h e s p i r i t o f m e a n i n g f u l planning, effective cost control and efficient implementation. BECA is about Planned improvement in everything we do

Result of wholesale Marketing

The producer of Maggi noodles and Nescafe has continued to report double-digit growth in sales and profits during the quarter. The good news for investors is that this growth was stimulated by increased volumes. The demand for its key products has sustained and the company expects the momentum to rise in the next term. Net sales of the company grew by 21.3% year-on-year to Rs 1,466.7 while net profit increased by 20.3% to Rs 194.8. However, this impressive revenue growth could not close into a similar outcome in operating profit. At 16%, its operating profit before depreciation grew at a slower pace due to higher input costs Nestls exports have been growing faster as compared to its domestic business. The appreciating rupee, however, has partially offset the growth in exports. Another cause of worry is the growing competition in its most lucrative segment of instant noodles. Maggie Noodles is perhaps the companys most

popular brands in this category. So far, the brand has a market share of about 80% and has enjoyed a clear domination in this segment. But recently, high growth and higher profitability have attracted other players to the fast-growing instant noodles category. According to the company, it is currently growing at around 20% every year. Maggi is now facing opposition from HULs Knorr Soupy Noodles and GSK Consumers Foodles. Nestles reliance in this class has only increased in recent years. Today, Maggi contributes over 26% to total revenue, much higher than the 19% share four years ago. This has increased the companys exposure to the growing opposition in the noodles segment. Furthermore, in order to keep its market share the same, Nestle will have to boost its advertisements and promotional spends. But this could have a significant impact on its overall margins, taking into consideration the prominence of the segment in its business mix. However, there is still a lot of customer recall when it comes to Maggi this is what Nestls past experience in the noodles category suggests. Thanks to this, the company has been able to wade through competition productively for the past many years. But this time, only time will tell how Nestle fares this time - given that it would meet some of the FMCG giants head on. Due to increase in competition, Nestle has not only extended the Maggi brand and has also introduced new products in the market. But the trend in price rises would also play a major role in this. Nestles other businesses, which comprises of milk products, beverages and chocolates, contribute around 74% to its revenues. Major raw materials used are milk, sugar and wheat. Rising prices of these raw materials can be a concern However, better monsoon may soften food prices. This could offer some relief to Nestle. Expanding Business in Health Care Nutrition In September 2010, Nestl announced to invest more than $500 million between 2011 and 2020 to develop health and wellness products to help prevent and treat major ailments

like diabetes, obesity, cardiovascular disease and Alzheimers, which are placing an increasing burden on governments at a time when budgets are being squeezed. Nestl created a wholly owned subsidiary, Nestl Health Science, as well as a research body, the Nestl Institute of Health Sciences. Member of Fair Labour Association In 2011, Nestl started to work with the Fair Labor Association (FLA), a non-profit, multistakeholder association that works with major companies to improve working conditions in their supply chains. On 29 February 2012, Nestl became the first food company to join the FLA. Building on Nestl's efforts under the Cocoa Plan, the FLA will send independent experts to Cte dIvoire in 2012 and where evidence of child labour is found, the FLA will identify root causes and advise Nestl how to address them in sustainable and lasting ways

Nestle Marketing strategy The firm applied a progressive human resource and social policy; W i t h a management style that is based on management commitment and people involvement. Moreover, the firm had responsible corporate citizen, fulfilling obligation to Government, shareholders, customers, communities and consumers. Protest the environment by being committed to environmentally sound business practices and taking into account the need to preserve natural resource and save energy. For

example, guarantee that all products manufactured, imported and distributed by Nestle Malaysia are certified HALAL by authorized Islamic certification bodies. Perhaps, the firm delivered shareholder value through the achievement of sustainable and profitable Long-term growth. Its a wide area research the branding. Branding strategy is Corporate. Part of the branding strategy is the brand plan for each product. This is an integrated strategy. The brands of Nestle area key strength but the executive levels are very aware today that brands alone are not enough to win. From its beginning, Nestle developed its business internationally and became aware of the fact that food products have to be closely linked to local eating and social h a b i t . T h a t i s w h y N e s t l e f o r m t h e v e r y s t a r t h a s a l w a ys s h o w n r e s p e c t f o r d i v e r s e cultures and traditions. Nestle activities to integrate itself as much as possible into the cultures and traditions where it is present, adding also to the local environment its ownset of values. Therefore, Nestle embrace cultural and social diversity and does not d i s c r i m i n a t e o n t h e b a s i s o f o r i g i n , n a t i o n a l i t y , r e l i g i o n , r a c e , g e n d e r o r a g e . Furthermore, Nestle believes that is activities can only be of long term benefit to the company if they are the same time beneficial to the local community. Precisely,


the environment is changing very rapidly and in particular customers are looking for answer to their concerns. To our opinion, global thinking and strategies can best be expressed through l o c a l a c t i o n a n d c o m m i t m e n t a s s h o w e d a s N e s t l e M a l a ys i a . A n d o f c o u r s e , N e s t l e applied THINK GLOBALLY ACT LOCALLY as well as THINKING OUT OF THE BOX idea in their productand distribution with the help of strategic global marketing.


Food Service Food service items basically deal with the out of home s e g m e n t s , w h i c h w o u l d i n c l u d e v e n d i n g m a c h i n e s . N e s t l e s f o o d ser v i c e b u s i n e s s i s p o i s e d f o r r a p i d e x p a n s i o n t o m e e t t h e g r o w i n g need for such a reliable, time saving and cost effective service in this modern age .Nestle wants to sell 500 million cups of tea and coffee through its vending machines in the year 2003. It currently has 3500

vendingm a c h i n e s a t a s s o r t e d l o c a t i o n s ( b o t h p u b l i c a n d p r i v a t e ) . I n 1 9 9 5 Nestle food service did well to vend 40 million cups of Nescafe and tasters Choice tea. Its 2003 sales were placed at 59 million cups o f Nescafe and 36 million cups of tea, this figure was however way below the expected sales for the year. Distribution strategy I t i s a n i n d i s p u t a b l e f a c t t h a t f u n d a m e n t a l l y a l l c o n s u m e r s marketing must first assure availability of the product to the consumer.I n I n d i a , t h e u r b a n p o p u l a t i o n a l o n e i s o f a w h o o p i n g 2 5 0 m i l l i o n consumers -an unbelievable potential for any FMCG. The p o t e n t i a l being spread across more than 4000 towns have to be very effectively and efficiently tapped. Nestle till now was retailing in a limited number of towns with only 200 towns accounting for 70 % of their business. For Nestle to be a leader in the food industry, expanding the distribution network for more retail outlets was a must. To meet this challenge, Nestle is working towards an objective of increasing the retail base to 1,000,000 outlets by the year 2003. This network is feasible as Nestle has a triangular distribution structure thust h e s p a n o f c o n t r o l i s s t i l l r e t a i n e d . T h e D i s t r i b u t i o n N e t w o r k i s explained in figure 2.I n o r d e r t o a c h i e v e t h e s e d i s t r i b u t i o n o b j e c t i v e s N e s t l e h a s f o r m u l ated an international sales and marketing improvement team (SMIT). SMIT focuses on a single objective p r o v i d e s u s t a i n a b l e solutions to optimize the distributor and retailer sales through a step


by step approach starting with analysis of market followed by identification o f t h e p r o b a b l e r e t a i l o u t l e t s a n d f i n a l l y s e l e c t i o n o f t h e s a m e . T h e team also focuses on proper implementation of resources and timely follow ups for effective solutions. Advertising Strategy

Nestle, cash rich company has plenty of marketing prowess. This can be credited to a strong and sound advertising strategy. N e s t l e i n t h e ye a r 2 0 0 2 h a d a n advertisement spending of Rs4 3 . 3 c r o r e s ( n e t ) . T r a c i n g N e s t l e s a d v e r t i s i n g r e s p o n s e s t h e a d c ampaign by HTA of Hot and Sweet was a runway success this ad was actually meant to fend off a challenge from H.J Heinz. The Maggi r a n g e s o f s a u c e s w e r e i n t r o d u c e d i n 1 9 8 5 b u t s a l e s d i d n t c a t c h u p until 1990 but till 2003 it got considerable market share. At this point t h e p o p u l a r a n d m e m o r a b l e campaign of Javed Jaffrey and pankajkapoor was launched by Producer P r a l a d K a k k a r . T h i s c o m m e r c i a l was an instant success. The volume of sales kept rising from an initial g r o w t h o f 1 3 % t o 2 0 % i n t h e n e x t y e a r . T o d a y t h e s a l e s f i g u r e f o r Maggi Sauces is growing at a steady 6% per year.Another noteworthy campaign was that of POLO (the mint with ah o l e ) , d e v i s e d b y M u d r a a d v e r t i s i n g a g e n c y . T h i s c a m p a i g n w a s aw arded 11 industry ad awards. In 2002 the advertisement budget has been approximately Rs56 crores where again innovation was the main focus. The new nation-wide product launch of Maggi Macaroni Snack and Mithai Magic have b e e n d e s i g n e d b y M u d r a . T h e Macaroni ad with its use of English


and a catchy beat (which is the latest trend amongst the ind i a n advertisers) appeals well to the target audience and the Mithai Magic commercial does keep the secret of the contents in the box , intact.

Training is an integral and indispensable part of Nestle. I regard the i m p o r t a n c e of training a highly as research and development .It is am a j o r i n v e s t m e n t i n t h e F u t u r e o f t h e c o m p a n y a n d i m p e r a t i v e because it is an investment in people

- Mr. Helmut Maucher Chairman and CEO Nestle group N e s t l e I n d i a L t d . H a s a n e m p l o ye e b a s e o f 3 0 4 0 p e o p l e a n d a i m s t o b e i n t h e t o p q u a r t i l e o f t h e F M C G c o m p a n i e s . F o r t h i s purpose it follows a very stern and rigorous recruitment policy. Recruitment Policy Recruitment of fresh management trainees and sales officers is done every April-May. These graduates are generally selected from the best institutes in the country through a series of interviews. They are then put through a probation period of 12 -18 months. Although Nestle d o e s n o t o f f e r s o m e o f t h e h i g h e s t p a y p a c k e t s i n t h e i n d u s t r y, i t i s considered a growth oriented company. Training and Development Continuous development of skills and attitudes of employee s is critical to the achievement of excellence. At Nestle therefore training


And development of human resources is viewed as a long ter m investment. If you are planning for one year , Plant wheat; If you are planning for ten years, plant a tree; If you are planning for life, train people.- Old Chinese proverb This proverb goes with the organizations most enduring beli e f s worldwide That long term planning is the key to Nestles global success That Nestles most valuable assets are its people Nestles policy is to rely on a more decentralized form o f management by building in the habit to Think Nestle. A t N e s t l e I n d i a t r a i n i n g a n d d e v e l o p m e n t i s a n i n t e g r a l p a r t o f the business plan and strategy in line with the objectives for the year 2003 and aims to Help employees to retain long term perspective and integrate them fully with the companys business goals View the growth of both the personnel a n d t h e c o m p a n y a s c ontinuous process. Concentrate on attitudinal changes by developing leadership skills,a n a p p r e c i a t i o n o f i n t e r d e p e n d e n c e b e t w e e n u n i t s a n d t h e enhancement of a sense of belonging to Nestle .In 2003 Nestle India benefited greatly from the training programo f f e r e d a t t h e R i v e R e i n e I n t e r n a t i o n a l T r a i n i n g C e n t e r a t V e v e y , Switzerland. This training program helped facilitate the transfer o f common Knowledge (technical, marketing, and finance) across thenestle


G r o u p a n d e n s u r e i n t e r d i s c i p l i n a r y a p p r o a c h t o l e a r n i n g a n d uniform progress with a tailor-made approach for all. Company Training needs Analysis of training needs of Managers Self development programs for staff at HO Programs for company orientation and information sharing Programs aimed at computer training and computerization Establishment of contact with leading management institutes with view to use the same for meeting local training requirements

Nestles Corporate Culture

As we had discussed before, Nestle is one of the most multinational of multinationals and is spread over 75 countr i e s w o r l d w i d e . T h i s i m p l i e s t h a t i t h a s e m p l o ye e s f r o m d i v e r s e culturalbackgrounds. Nestle respects the distinctive culture, mentality and traditions of every employee in every country. What Nestle aims at is toi n c o r p o r a t e i t s o w n c u l t u r e i n t o i t s e m p l o y e e s w i t h o u t s t i f l i n g t h e individual employees culture and identity. When we went to Nestle we c o u l d feel the existence of a distinctive work culture amongst the m a n a g e m e n t - t h e s t a f f s e e m e d h i g h l y m o t i v a t e d & c h e e r f u l a n d e v e r yb o d y h a d p i n u p b o a r d s i n f r o n t o f t h e i r t a b l e s w i t h r e m i n d e r s , motivational messages and even time logs (the Nestle people seemed as if they availed of the benefits of time management) .Apart from this, Nestle has a vast distribution network. In order Nestle has a diverse product range and so it also has diversified risks thus Management on Information systems plays a vital role in


Nestlet o p r o v i d e i n f o r m a t i o n t o t h e S a l e s a n d M a r k e t i n g a s w e l l a t h e f i n a n c e d e p a r t m e n t . T h e E l e c t r o n i c D a t a P r o c e s s i n g D e p a r t m e n t looks after Management Information Systems Availability, aid quick decisionm a k i n g a n d i m p r o v e s u p p l y c h a i n integration.

Awards certificates n rankings

On 19 April 2012, The Great Place to Work Institute Canada mentioned Nestl Canada Inc. as one of the '50 Best Large and Multinational Workplaces' in Canada (with more than 1,000 employees working in Canada and/or worldwide).

In April 2012, Nestl obtained an A+ rating from the Global Reporting Initiative (GRI) for their global annual report on Creating Shared Value. To reach A+ the company provided new data in their annual report on a number of criteria such as human rights, diversity and gender, climate change, biodiversity and corruption. Nestl was the first food and Beverage Company to achieve an A+ rating from the GRI for a global sustainability report.

On 21 May 2012, Gartner published their annual Supply Chain Top 25, a list with global supply chain leaders. Nestl ranks 18th in the list.

On 25 May 2012, Nestl's CEO Paul Bulcke received the VMA Award from the Vlerick Leuven Gent Management School for his lifelong career, which has been distinguished by sustained integrity, exceptional management capacity and inspiring leadership.

In September 2011, Nestl occupied 19th position in the Universum's global ranking of Best Employers Worldwide.According to a survey by Universum Communications Nestl was in 2011 the best employer to work for in Switzerland.

Based on independent research by the Corporate Research Foundation Institute, Nestl (South Africa) has been certified in 2011 as a Best Employer in South Africa.

Nestl USA has been recognized by Business Week magazine as one of the "Best Places to Launch a Career." BusinessWeek ranked Nestle USA #25 on their annual list of the best companies for new college graduates to launch their careers.

For the twelfth consecutive year, Fortune Magazine included in 2011 Nestl in their list of The 10 Most Admired Companies in the World.

Nestl won in 2011 the Stockholm Industry Water Award for its leadership and performance to improve water management in its internal operations and throughout its supply chain.

The International Union of Food Science and Technology (IUFoST) honoured Nestl in 2010 with the Global Food Industry Award.

In May 2011, Nestl won the 27th World Environment Center (WEC) Gold Medal award for its commitment to environmental sustainability.



Nestle is a market leader due to different reasons: 1 Its price is high against its competitors but it matches its quality with its competitors. 2 Nestle is today the worlds largest food and beverage company with its mission to provide healthier lifestyle. 3 Nestle is using its brand name and its packaging is good to promote its products and its very popular compared to its competitors. 4 We can easily found nestle from any retailer shop. 5 Nestle makes strong efforts to cover a larger share of market through the concept of wholesale marketing. 6 Nestle is a growing company as its sales is increasing year after year.

7 Nestle adopted a progressive human resource and social policy.

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





2 http://


4 Book of Principles of marketing by Philip kotlar printed in 2010

5 Economic Times newspaper articles about Nestle company