Professional Documents
Culture Documents
BARNALI BERA
Roll No:511019429
Specialization :- Marketing
SMU
Sikkim Manipal University
Directorate of Distance Education
A PROJECT REPORT ON A STUDY ON
NESTLE
A PROJECT REPORT
MR.ROHIT KHEMKA
Submitted By
Barnali Bera
SMU
Sikkim Manipal University
Directorate of Distance Education
Acknowledgements
We would like to put our thankfulness across to all those who have put in direct or indirect
hard work towards the successful completion of this project.
for his able direction and marketing proficiency devoid of which this project would have never
concretised.
We are also immensely grateful to the officials and product managers at Nestlé India, Orissa
BARNALI BERA
Roll No:511019429
Specialization :- Marketing
CERTIFICATE
Signature External
Rohit Khemka
Contents
Executive Summary 1
History of Nestle 2
• Introduction
Beverages 19
• Introduction
• Introduction
• Introduction
Beverages, and
Separate marketing mixes have been developed for these four different
segments. The pricing, promotion techniques used and place of
marketing and of course the product of one segment are very different
from products of another segment. Therefore, we also decided to divide
our project coverage into four different sections to cover the segments
separately. Besides this
Apart from the secondary research from newspapers, journals and the
inter-net, we have interacted with some officials concerned with these
things, present at Nestlé India, Gurgaon. All this has helped us in our
extensive study of the marketing mix of various Nestlé India products.
History of Nestlé
Nestlé S.A. is a multinational packaged food company founded and
headquartered in Vevey, Switzerland, and listed on the SWX Swiss
Exchange with a turnover of over 87 billion Swiss francs. It originated
in a 1905 merger of the Anglo-Swiss Milk Company for milk products
established in 1866 by the Page Brothers in Cham, Switzerland, and the
Farine Lactée Henri Nestlé Company set up in 1866 by Henri Nestlé to
provide an infant food product. The two world wars both affected
growth: during the first, dried milk was widely used but the second war
caused profits to drop by around 70%. However, sales of the instant
coffee Nescafé were boosted by the US military. After the wars, growth
was stimulated by acquisitions expanding its range and taking control of
several well known brands, so they now include Maggi, Thomy and
Nescafé that are known globally. It is the world's largest food company,
with Kraft Foods being second.
2
3
Milk Products and Nutrition
Nestlé India has a wide portfolio for Milk Products and Nutrition. It
Whitener
Nestle Everyday Nestle B-Activ
Ghee Probiotic
Dahi
NESTLÉ CEREMEAL
4
NESTLÉ CEREMEAL Wheat Daliya contains the goodness of wheat
with the added benefits of Vitamins and Minerals from ‘Nutrishakti'.
NESTLÉ CEREMEAL Multi grain Daliya contains rice and ragi apart
from wheat with the added benefits of Vitamins and Minerals from
‘Nutrishakti'. NESTLÉ CEREMEAL is available in select outlets in the
markets in East and South India.
NESTLÉ CURDS
It is 100% fresh and natural, just like homemade. It is made from high
quality pasteurised toned milk. The Cultures in NESTLÉ Curds are good
for digestion and for a healthy, active life.
NESTLÉ MILKMAID
5
NESTLÉ MILKMAID is a globally recognized and popular brand of
Nestlé. It has been available in India ever since the Company first
started importing and selling its products over 90 years ago.
It is 100% Fresh and Natural and is made from fresh, high quality
pasteurised toned milk. It has all the goodness of natural Calcium and
the Cultures used in Nestlé Set Dahi help improve digestion. NESTLÉ
Set Dahi is available in all the metros.
It is delicious and has all the goodness of Dahi and Jeera. It is made
from double toned milk and has a low fat content. NESTLÉ Jeera Raita
is also extremely versatile. You can use it as the base to prepare your
own favorite Raita, simply by adding vegetables, fruits or spices of your
choice.NESTLÉ Jeera Raita is available in Delhi.
NESTLÉ MILK
Nestlé has over 135 years of dairy expertise and NESTLÉ Milk ensures
high quality and safety. NESTLÉ Milk goes through Ultra Heat
Treatment to provide bacteria-free milk to its consumers. The product
also goes through stringent quality checks and can be consumed straight
6
from the pack as no boiling is required. The sealed pack of NESTLÉ
Milk has a shelf life of 120 days without refrigeration. However, once
opened, it must be refrigerated. The packaging is tamper-proof.
NESTLÉ Milk is available in all metros.
Nestlé has over 135 years of dairy expertise and NESTLÉ Slim Milk
ensures high quality and safety. NESTLÉ Slim Milk has a fat content of
less than 0.5%. NESTLÉ Slim Milk goes through Ultra Heat Treatment
to provide bacteria-free milk to its consumers. The product also goes
through stringent quality checks and can be consumed straight from the
pack as no boiling is required. The sealed pack of NESTLÉ Slim Milk
has a shelf life of 120 days without refrigeration. However, once
opened, it must be refrigerated. The packaging is tamper-evident.
7
Analysis of the 4Ps for this
Division
Product Mix
Nestle is the world’s largest dairy, with an annual turnover of more than
U.S. 8billion$. So they understand the dairy business better than anyone
else. When they operate in India, the focus is to put to use their vast
expertise and knowledge in the diversified domestic market. However,
the task is not uphill because their products address all basic needs of
human beings.
8
Nestle realizes the need to constantly add new products to its
portfolios to cater to different market segments. This is in tune with
a natural tendency to constantly innovate.
Over a period of time, we have seen new products being added to its list.
While products like ceramel and milkmaid doing well, in recent times
nestle has come up with products like Lassi, fruit n dahi, etc to cater
unexplored segments of Indian market.
The pack of Nestle Slim Milk is being positioned as drink for fitness and
it is mentioned that it is 99.5 per cent fat free. Apart from conveying that
calories are kept in check, the concluding message reinforces the
packaged milk health proposition by saying: "So, don't think twice
before making the switch to a healthier alternative."
Breaking the myth of packaged milk (or for that matter milk on the
whole) being only meant for being 'strong' or to put on weight, the
agency specifically conveys the message of being slim and trim through
milk.
9
A relatively new addition has been lassi, a classical case of adapting to
the local Indian flavor.
The company began the test marketing of sweet lassi in Delhi, Haryana
and Punjab.
He said the product has been developed after extensive testing for
consumer preferences and traditional styles of preparation. It is available
in 200-ml packs for Rs 12.
With big players like Amul and Mother Diary still ruling the roosts,
“tetra pack milk is a good way to have a major slice of market share
and go for penetration”, suggests Mr. Dogra.
igher but it has more value additions, the product has been quite a hit
with those who realize that steep prices can justify quality and good
health. This reflects a pricing strategy in which company is charging
higher prices in return for claiming superior value-additions.
10
how and Research and Development competence. During 2003, the
Company had launched the NESTLE DEVELOPMENTAL
NUTRITION PLAN and CERELAC 123 wheat based weaning food,
which is backed by continuous and ongoing research at the worldwide
Research and Development facilities of the Nestle Group. This was a
major breakthrough in infant feeding. During the third quarter of 2004,
the Company has also launched NESTUM123, which is a rice based
weaning food, to ensure the right eating experience at the right stage of
development for the infant. NESTUM 123 also incorporates Nestle
Group's unique Z-line technology that makes the product easy for the
infant to digest.
Using its knowledge of infant nutrition and local needs, the Company
introduced NESTUM Ragi in the Southern market and LACTOGEN 3
in select geographies, to provide proper nutrition at the appropriate
stage. Also, since India has a high incidence of low birth weight infants',
who require specialized nutrition, the Company utilized its access to the
technology from the Nestle Group to introduce PRE-LACTOGEN.
To sum up, Nestlé’s Product Mix in milk and nutrients category, the
company has been continuing to add new products to its portfolio, which
are in tune with the local flavour, and is likely to do so.
And with its value additions and proven expertise, it continues in its
endeavour to become the market leader in other categories.
11
Price Mix
The high costs of raw materials and processing are a cause for concern.
However, The Company feels that raw material cost inflation could soon
be brought under control.
For the export market, there has been a decline in sales value as there is
a movement from retail packs to bulk packs. Overall, in milks, curd and
powders, the products are priced higher. But the top brass of the
company justify high prices on account of “superior quality”.
12
charged, consumers feel. Thus, Nestlé’s pricing strategy is little
influenced by competitive moves but more by promising customers
more value additions.
Place Mix
NESTLÉ Set Dahi, NESTLE MILK and SLIM MILK is available in all
the metros and NESTLÉ Jeera Raita is available in Delhi for similar
reasons.
Supply Chain
During the year, the Company also initiated the rationalization of stocks
in order to increase the freshness of stocks available to the consumer.
These initiatives are necessary to maintain the high quality that Nestle
13
Guarantees the consumer. In addition to these, there are efforts on to
create more awareness among wholesalers and retailers to create storage
value and minimize loss of quality or time.
Promotion Mix
Nestle India bagged the Best Package Design Award and Portfolio
Registering Highest Sales Growth Award at the second Annual
Indian Dairy Awards presented at the National Milk Seminar 2003
held at Goa on 17 and 18 January.
14
borders on what their mothers have forbidden them to do. Moms know
this and have a habit of keeping tabs on their little ones.
The first commercial has two mothers looking for their children. They
anticipate them to be on the terrace and up to - as you guessed right -
some mischief. As their kids see them approaching, they hide something.
After a fair deal of urging, they reveal to their mothers what they are
concealing: a pack of Nestlé’s new ready to drink milk brand.
And their mothers, with a sigh of relief, say this is allowed. The frame
then cuts to Nestlé’s new product and positioning statement.
“The campaign is for the 8-15 age-group. We have tried not only a fresh
angle from the taste and health proposition but also from the new
product launch perspective. We came up with this, when mothers says
'yeh to allowed hai.' This has been conveyed through the surprise
element. Not only to catch kids but also to empathise with mothers,”
says Bandyopadhyay.
15
The commercials have been directed by Red Ice’s Koushik Sarkar. The
campaign has been extended to outdoor campaign has rolled out
nationally.
One major issue is that Nestlé India does not advertise it’s Infant
Nutrition products due to legal obligations.
Nestle India launched a new print campaign for its packaged milk brand
Nestle Slim Milk. Created by Ogilvy & Mather, the campaign focused
on propagating milk as a proposition for staying healthy and trim with a
stylish presentation of the pack amidst a yellow background. The
campaign, released mainly in magazines, primarily targeted the socio-
economic class A. Breaking the myth of packaged milk (or for that
matter milk on the whole) being only meant for being 'strong' or to put
on weight, the agency specifically conveys the message of being slim
and trim through milk. O&M creative consultant, Sudip Bandyopadhyay
said, "The brief was to creative awareness about the brand. There seems
to be a tendency of ignoring milk for putting on weight and also milk in
tetra-packs or packets is being considered as an artificial one. There is
also emergence of low-calorie sweeteners and other products. So the
whole idea is to reinforce milk as an option for providing a refreshing
nourishing boost."
The pack of Nestle Slim Milk is being positioned as drink for fitness
and it is mentioned that it is 99.5 per cent fat free. Apart from
conveying that calories are kept in check, the concluding message
reinforces the packaged milk health proposition by saying: "So, don't
think twice before making the switch to a healthier alternative."
16
shown to be curved (portraying a body with slim waist) in the
centre. Instead of using blue colour, we have deliberately chosen
yellow colour in the background," adds Bandyopadhyay.
Apart from the print campaign, the agency also worked on outdoor
advertising.. Nestle, which had launched ready-to-drink milk market
with its Fruit n Milk brand in mango and strawberry flavours earlier, is
sourcing its Slim Milk and Fruit n Milk from Dynamix Dairy Industries.
“In addition, other promotional tools like consumer contact programs,
exchanges with medical personnel and a lot of ground work is
involved”, informs Mr. Dogra.
Against Competition
17
In this portfolio, Nestle faces stiff competition in Milk Powders due to
availability of competitive and economical substitutes as illustrated
below
MILK POWDER
18
19
Nestlé Beverages
Nescafé Classic
Nescafé Sunrise
It’s not the number of brands in beverages segment of Nestlé that makes
it attractive, but the market share that they possess. Beverages account
for 38% of the company's turnover and Nestlé is a market leader in
instant coffee with its Nescafé and Sunrise brands. Nestlé Milo also has
a strong presence in the market.
NESCAFÉ CLASSIC
The beginnings of Nescafé can be traced all the way back to 1930, when
the Brazilian government first approached Nestlé.
20
In 1937, after eight years of work, scientists at Nestlé's research
laboratory in Vevey perfected a powdered coffee product that was
commercially introduced in Switzerland, on April 1st, 1938 under the
brand name Nescafé. Nescafé - a combination of Nestlé and café.
It became so popular during World War II that for one full year the
entire output of the Nescafé plant in the United States (more than 1
million cases) was reserved for military use only. By the 1950s, coffee
had become the beverage of choice for teenagers, who were flocking to
coffee houses to hear the new rock 'n' roll music. Since then, Nescafé
has become one of the world's best-known brands. With more than
3,000 cups consumed every second, Nescafé is by far the world's
leading coffee brand. In India, Nescafé was introduced in 1964.
NESCAFÉ SUNRISE
This unique blend of Coffee & Chicory was introduced in Indian market
in 1980s with various variations- Nescafé Sunrise Premium, Sunrise
Extra, etc. sunrise Extra has more Chicory in it (40%). Thus it tastes
even stronger.
NESTLÉ MILO
21
1 in 6 cups of chocolate beverage consumed in the world today is
NESTLÉ MILO.
22
Analysis of the 4Ps of this
Division
Product Mix
What sets Nestlé apart from its competitors is its ability to reinvent and
innovate. The beverages segment of nestlé has always followed the
same strategy, i.e., innovation and renovation. It has conducted time-
to-time surveys to find out what the potential consumers desire and
expect from them and then, from adding those features to repositioning
and reintroducing, it has left no stone unturned to satisfy its consumers.
Science has always been a constant input for nestlé. Right from the
invention of Nescafé to the regular improvements, research &
development has been the basis of success.
Before the invention of Nescafé in 1938, the need for a soluble coffee
was felt among the consumers. This need was realized by nestlé & after
eight years of research Nescafé was finally invented. This was not the
end. Overtime, there have been so many innovations and improvements.
From making Nescafé by using 100% pure roast coffee beans to the
birth of the granule in1967 to capture more aroma and flavours from
every single coffee bean, to the ’full aroma’ process which was invented
to make the unique quality and character of Nescafé even better in 1994.
23
Talking particularly about India, from time-to-time, surveys have
been done to judge the consumer wants. Introduction of new products,
renovation, and repositioning- everything has been done accordingly.
After introduction of Nescafé Classic in India in 1964, as the need was
felt, company came out with a mixture of coffee & chicory, Nescafé
Sunrise. Nestlé has come out with new variations of its products,
Nescafé Sunrise Extra, Nescafé 3-in-1 readimix, to name a few.
In India Nestlé Milo was introduced in 1996. With its launch, nestlé
was faced with the challenge of presenting Nestlé Milo as a worthy
competitor in the Indian energy drink market that was dominated
by Cadbury's Bournvita and SmithKline Beecham's Boost. So it was
important to bring Milo as something different from others.
On the other hand, the company has been offloading products too.
Nestlé India was in the process of withdrawing its chocolate health drink
24
brand Milo from southern markets. The brand did not stand up to the
company's expectations during the last several years; there were
indications that it might be phased out.
In fact, Nestlé India had also begun rationalizing its product portfolio.
Once again in the near future, Milo is being relaunched by re-
energizing it with 'Badam Shakti'.
Both examples clearly suggest the Nestlé’s product mix and the secret
behind its success. The product mix started before the invention of the
product and continued without any end. Even today the renovations are
on.
Price Mix
The secret behind the price mix of Nestlé is the scale of production. In
the beginning, it may have been thought that the products are being
priced higher, but as the market segments increased and economies of
scale were reached, no one could complain about Nestlé’s prices at least
in beverages.
Nestlé has taken the Indian conditions in mind while deciding its price
mix. Initially when Nescafé was launched, it was considered quite
expensive. However, Nestlé has focused on expanding the domestic
market share through price cuts and product repositioning. It is
therefore no surprise that today Nestlé’s Nescafé dominates the
premium instant coffee segment. Nestlé Milo also justifies its price. Its
pack of 500-gms priced at Rs.96, which can in no way be dissatisfying
and is comparable with other brands.
25
and Café Coffee Day. There is a clear difference between the prices of
these coffee shops and Nestlé. Nestlé is a winner by a great margin.
Where, these coffee shops are affordable to a very small section of
market, Nestlé targets at a far greater market segment in term of its
prices.
Place Mix
As regards the place, they are available on almost all the outlets that are
selling such products.
About Sunrise, Milo, or, Nescafé 3-in-1, all are easily available at the
shops near you. With the opening of its own outlets to compete with
coffee shops, the distribution of the beverage segment of Nestlé has
become even stronger. The location of these outlets make then even
more important. Distribution is definitely a strong point for Nestlé
beverages.
Promotion Mix
The rise in competition has made the promotion mix even more
important. A company needs to show how its products are different from
26
what is being provided by its competitors. Nestlé beverages have done
well in this regard also. From TV advertisements to sponsoring TV
programmes, events like MTV Youth Icon of the Year 2005and even
movies like ‘Koi Mil Gaya’, it has done everything to woo the
customers.
Till a few years ago, life with Nescafé was exotic. You could enjoy the
aroma of the dark coffee beans, feel the nip in the air, overcome hurdles,
win acclaim, bond with friends and peers with laptops, as the catchy
Western jingle played in your mind. Remember, “The taste that gets
you started up...”? This was how the Nescafé was promoted in the
beginning. While talking about the ads, lets look at an interesting fact:
Let's watch out the Top 5 Coffee brands advertised on TV during the last
27
One of the most memorable and popular campaigns of all times is
the ‘Open Up’ advertisement of Nestlé.
One thing, the world over, which helps people to take time out, to listen
to each other and to open up is a cup of coffee. "Open Up" is the global
campaign for Nescafé to celebrate the part that coffee plays in people’s
lives.
28
familiar with each other, the boy and the girl step out into to garden.
Noticing that neither of the two is able to initiate a conversation, the
concerned parents wonder how to shake them up. “Arrey inhe jagao,”
(Wake them up) says the father of the girl. And, Nescafé is served to the
couple. With just a few sips, the initial awkwardness, quite surprisingly,
disappears. What follows is a chat with an allusion to movie titles. So
when the boy asks, “Toh Hum saath saath hain?” (So, are we together?),
the girl replies, “Qayamat se qayamat tak.” (From one apocalypse to
another.) The ad ends with the super “Jagao, Nescafé pilao.” (Arouse
them by serving Nescafé.)
The creative and the one before that were decided after Nestlé told
McCann-Erickson that the FMCG major was to expand the market. So,
it was time for a makeover. And, drinking Nescafé had to become a
relatable experience for the masses. If that literally meant repositioning
Nescafé, so be it.
With this advert and the one before (the train ad), the once-elitist
Nescafé has begun talking the language of the masses. In the train ad,
for example, the tag line, voice-over, the train attendant, and the model
all looked and sounded Indian. Except for the train and the location,
which definitely looked 'phoren'. Perhaps, the only traces of aspiration.
In words of Mr. Prasoon Joshi, regional CD, South & South East
Asia, McCann-Erickson, “While we are trying to make Nescafé a
regular feature in the lives of many, we are also giving a very specific
reason for that. Nescafé stimulates the mind, relieves mental fatigue; it
29
is a very invigorating experience. And that's what precisely
differentiates coffee drinking from tea.”
Talking about the packaging, Nescafé’s come a long way since 1938.
However their logo and packaging has changed little over the years.
They continue to use the coffee beans and a red coffee mug on their
packaging. The use of colours and the simple elegance of the package
appeal to all. Nescafé is also available in a variety of sizes with the
option of easy to store sachets and pouches to the airtight and reusable
jars.
With the launch of Milo, Nestlé was faced with the challenge of
presenting Milo as a worthy competitor in the Indian energy drink
market that was dominated by Cadbury's Bournvita and
SmithKline Beecham's Boost. This work was handed over to Mudra.
The agency had to begin from zilch, right from gaining customer
confidence to building its brand image. This is how Mudra and Nestlé
handled all this together.
30
Using the consumer insight that mothers are driven by a need to support
their sons' hard work and help them succeed when under pressure, the
agency launched an impressive ad campaign. The research following the
campaign revealed the need for Milo to be perceived as a drink with 2
strong deliverables- Energy and Taste. Thus a strategy was adopted
wherein the agency targeted children belonging to the age group of
7-12 years and through them their mothers. The strategy worked and
led to a 40% volume growth, with the market share growing to 8.8%.
After establishing Milo as the world's number one energy drink and its
taste benefits, the attention shifted to presenting its emotional benefits
too. The focus was now on revamping the brand image from being a
tasty energy drink to one that provided extra energy to 'win'.
31
This re-launch which took place in Dec 2001 proved beneficial as it
boost the drink's market share to 13% making it the leading brand in the
East, No. 2 brand in the north and west and No. 3 brand in the south..
32
is all set to get a new lease of life with a new packaging, formulation and a
distinct positioning. Currently, Milo is available in a SKU of 500gm priced
at Rs 96. By giving Milo a new distinct local positioning and
introducing the brand in convenient sachets at lower price point, it is
clearly moving away from being a very urban-focused player and
targeting newer markets and driving rural demand.
33
34
Prepared Dishes & Cooking
Aids
(Maggi)
35
Analysis of the 4Ps of this
Division
Product Mix
• Maggi noodles
• Maggi vegetable Atta noodles
• Maggi soups
• Maggi sauces and ketchups
• Maggi magic cubes
Maggi noodles were launched in 1983 in India. And today is one of the
largest snack food brands in the country and define the Instant Noodles
category in the country. Fast food and maggi are synonymous in India.
It’s a two minute preparation dish. The noodles are wheat flour based.
Other than that the basic ingredients of Maggie noodles are wheat gluten
and guar gum. The vegetable oil fried form of the noodles is available
extensively here in India as the air dried form available across the world
did not do well here in India.
A tastemaker pouch is present in all the packs to add spices etc. thus
adding to the taste of the noodles. The basic contents of a tastemaker are
sugar, mixed spices, onion powder, and edible starch.
36
Nestle revised the nutrition content of maggi noodles in 2004 keeping in
mind the R.D.A(RECOMMENDED DIETRY ALLOWANCE) of an
normal Indian child (7-9 YEARS). Another factor for this revised
content was the guidelines for nutritive value of Indian food by ICMR
(Indian Council For Medical Research).
-Tomato - Chicken
-Curry
Considering the changes being faced and the margin trends in the global
market nestle India launched another variation in its noodles category
known by vegetable atta noodle. The main constituent as suggested by
the name is atta in the making of these noodles. This variation was
introduced because in India many people believe Maida as a hinder to
good health and all the noodles made by Maggi before this was of
Maida.
37
successful project”, said Rashmi Gupta (Brand Manager, Maggi). This
brings home the point as how a successful company needs to
constantly monitor the changing consumer demands and come out
with new variants repeatedly.
Today there are above ten different variants available in the market, of
these soups such as
Tomato, Mixed Vegetable, Mushroom, Chicken, Sweet Corn
38
SAUCES AND KETCHUPS
Sauces and Ketchups are relished for their high quality and taste and are
considered ‘good value for money' by consumers. MAGGI offers a wide
range of products that appeal to various segments including traditional
ketchups, Indianized sauces and specialty sauces. There are 8 variants in
the MAGGI Sauces range:
Maggi magic cubes are taste enhancers. As the tag line "Chutki bhar
Jadoo!" Suggests these cubes just needed to be sprinkled over the food
items to get the taste. MAGGI MAGIC Cubes are available in two
flavors - Vegetarian Masala and Chicken. Currently these cubes
available in the southern part of India-which reflects the fact that the
company is aware of differences in tastes, preferences brought about by
geographical differentiation.
Price Mix
Noodles
A 50 gram pack is available for Rs. 5.The 100 gm priced at Rs.10. The
bigger packs- the 400 gm, 800 gm & the 7.2 kg pack, are available at a
proportionately lesser price at Rs. 36, 65 & Rs. 550 respectively. If we
take an insight into noodles market we will find that almost all the
products are priced more or less the same. Given below are the list of
products and their prices.
39
-Maggi atta noodles and Rice Mania- Rs - Maggi Masala -
15 Rs 10
Sauces and ketchups are priced on the basis of their flavours and
quantity. While all the standard size of the soups are priced at a same
price. The 56 gram pack of soup which serves 4 (each serving =150 ml
approx.) is priced at Rs. 20 (inclusive of taxes) now to gain advantage of
point pricing.
It was previously priced at Rs. 22. Maggi’s main competitor in the soup
category is I.T.C’s brand annapurna knorr soups which have been priced
at Rs.25
40
Promotion Mix
Noodles
Maggi Quiz contests: Interschool Quiz contests are held and the
winners get Maggi bags full of noodles. The audience gets prizes of 1 or
2 100 gram packs of Maggi noodles.
Garlic flavor of Maggi was also launched in 1998 but did not fair well in
the market and was withdrawn and the old flavor was reintroduced with
the phrase “Sab kuchh pehle Jaisa”or “It’s back.
41
Thus Nestle chooses its brand ambassadors carefully keeping in
mind the intended positioning and target market for the product.
With the introduction of Maggi vegetable atta noodles, nestle has done
every thing possible to promote this brand, as the company believes a lot
in this product. This is clearly visible from the following analysis.
Soups
42
Place Mix
The main pillar on which the palace of Nestle’s revenue stands is easy
and vast availability of its products. As regards the PLACE- Perfect
Location for A Customer Exchange, they are available on almost all
the outlets that are selling such products.
If you visit any departmental store, big or small one thing you can
always be sure of getting is Maggi noodles. It is also available at all
small shops in an area. The vast distribution channels of Nestle Maggi
noodles even acts as one of its successful marketing strategies. The vast
availability of this product to the consumers is one of the factors for
which nestle enjoys an undisputed market share in this category.
43
44
Chocolates & Confectionery
Nestlé forayed into chocolates & confectionery in 1990.At the time of
introduction, Nestlé marketed Milky bar and Kit-Kat chocolates in India. In
the confectionery range, it had products like Soothers and Polo. Today, it has
cornered a third share of the chocolate market in the country. The category
contributes 14% to Nestle ‘s turnover. It has expanded its products range to all
segments of the market.
14%
Chocolates and
Confectionery
Other Products
86%
MARKET SHARE
3%
34% Nestlé
Cadbury’s
63% Others
46
CHOCOLATES
MUNCH
47
From the interviews, we learnt that the people at Nestlé acknowledge the
fact that chocolates are an impulse buy. Accordingly, Nestlé India
markets chocolates at affordable prices for various age groups. Nestlé
chocolates are less heat-sensitive compared to the others in the market.
Nestlé has a very clear Charter of ethics and responsible behavior in
selling chocolates and confectionery. It has reinforced the guidelines for
market hygiene for its chocolate brands. The exercise is aimed at
ensuring that storage of its chocolate brands at retail outlets meet with
adequate hygiene standards.
TABLETS CATEGORY
MILK CHOCOLATE
This is the new name which ahs been given to the leading milk
chocolate of the country-Milky bar. This chocolate is targeted at
children below 12 years. Milky bar was the chocolate with which Nestlé
entered Indian markets. It has been in the running ever since the
beginning. Milky bar has a very big market in south India. This
chocolate has seen the decline of Cadbury’s Milk-Treat, which was
launched at a lower price but could not match the satisfaction, the taste
which eating a Milky bar gave.
COUNT-LINE CATEGORY
BAR-ONE
WAFERS CATEGORY
KIT-KAT
It is one of the most successful brands of the world. In India, it was the
second largest chocolate before the launch of Nestlé Munch. It is the
thin wafer chocolate coming with two fingers and four fingers and a
unique ‘breaking' ritual attached to it. It is targeted at young adults
ageing from 18-24 years. This good-flavoured chocolate always gives us
the message ’Happy ho ja’.
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MUNCH
Nestlé Munch is a wafer layer covered with delicious choc layer. This
chocolate was launched in India in the last quarter of 1999 and has
become the market leader in its category. It is second only to Cadbury’s
Dairy Milk in the Indian chocolates market. The chocolate is meant for
people aged above 13 years. This chocolate alone accounts for $1million
of Nestlé India’s total revenues. This chocolate gives larger value for
lesser money as ’Munch Maha hota jaaye’ and the product’s taste
assures that ’ab to MUNCHing ruk na paaye’. This is the chocolate
having the highest penetration in the Indian market. The popularity of
the Munch brand cuts across age, town, culture and socio-economic
classes as it says “Mera MUNCH mahaan”.
KID/PLAY CATEGORY
CHOCO-STICK
Apart from the above, Nestlé now also markets some of its imported
brands like Quality Street, Lions and After Eight.
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SUGAR CONFECTIONERY
POLO
ECLAIRS
ACTI-V
It is a herbal throat soother with a unique liquid center with Anticol that
provides effective relief. It is available in Honey Lemon and Menthol
Eucalyptus
SOOTHERS
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• Blackcurrant
• Honey & Lemon
• Lemon & Lime Liquid Centers
• Orange & Mango Liquid Centers
• Mixed Berry
• Tropical Mandarin
Product Mix
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After the worms controversy involving Cadbury India's chocolate brands
had impacted Nestlé’s sales as well, Mr. Carlos Donati, Chairman
and Managing Director, Nestlé India says, "Any controversy that
shakes the consumer's confidence is not good for the category."
The company having such beliefs ought to have the second highest
market share in the Indian as well as the world chocolates and
confectionery market. It is consistently bridging the gap between its
position and the leader’s position, with the help of its flagship brands
Nestlé Kit-Kat, Nestlé Munch and Nestlé Milk Chocolate (Nestlé Milky
bar).
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flavours may include saffron and passion fruit. These may be launched
soon in the Indian markets.
Price Mix
Recently, Nestlé has brought to the market, a Bada Nestlé Munch with
the quantity of four Munches and the price being Rs.19, which is an
economy pack for the consumers as they get more in lesser price than
buying four individual units of the chocolate.
Over the years it has also been analyzed that pricing the chocolates
at rounded figures is the best strategy. Nestlé chocolate Kit-Kat was
priced at Rs.12 for four fingers and at Rs.6 for two fingers. In 2004,
Nestlé decided to lower the prices of these to Rs.10 and Rs.5
respectively. The response was so tremendous that the increase in
sales volume after this price fall compensated for the fall.
When Polo was launched in 1994, it was priced at Rs.3 and over the
years, there has not been much hike in prices as now a slightly bigger
pack is sold for Rs.5 and a smaller pack of Rs.2 is available.
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Even today, the focus is on rounded prices such that the customer is just
taking out a coin out of his pocket and gets the chocolaty benefits being
Choco-Stick sold for only Rs.2. This can be managed out of the pocket
money of the child below 12 years of age also.
The focus is also to price the chocolate only a bit lesser than the
competitor because there cannot be a very aggressive price wars in case
of chocolates and confectionery. Bar-one was priced at Rs.5 whereas its
competitor Cadbury’s 5-Star was priced at Rs.6 for the same quantity. In
contrast, although Cadbury’s Milk-Treat, which was priced at Rs.10
whereas Nestlé Milky bar was marketed for Rs.12 for the same quantity,
could not match the latter’s quality and ultimately died out.
The product Nestlé Éclairs gives the consumer the taste of a chocolate at
the price of a toffee bar. In the words of Mr. Ryan Fernandes, Brand
Franchise Manager, Chocolates and Confectionery, Nestlé India,
"These surely offer a chocolate eating experience at a candy price
point."
Place Mix
Nestlé has its own distribution channels and does not use many
intermediaries. After being produced in the factory in Mogha (Punjab),
the chocolates are taken to the Nestlé C.N.S. Workhouse. After this, the
chocolates go to the distributors, who take them to the shops. At some
places in India, Nestlé workforce directly delivers the chocolates and
confectionery products to the shops.
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In addition to these, there are efforts on to create more awareness among
wholesalers and retailers to create storage value and minimize loss of
quality or time.
Although Nestlé, at some places, delivers the stock itself, still Nestlé
Munch is the highest penetrated brand in the Indian chocolates and
confectionery market. This chocolate alone, primarily because of its
deep penetration accounts for $1million of Nestlé India’s total revenues.
This brand has a nation wide presence.
Another one of the confectionery items, Nestlé Polo has a nation wide
presence and may be found having equal sales in the mountains as in the
plains.
When asked from MR. RYAN whether there are any plans to shorten
distribution chains, he replied in the negative.
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Promotion Mix
Even if the customer did not initially have any plan of buy the chocolate,
he may see the attractive packaging and get attracted and has the urge to
buy the chocolate. The small children going to a grocery shop or a
general store move around the shop and find the chocolates and the
Nestlé Éclairs and come back and tell their mothers who are busy
buying the ration, to buy them the chocolates and the other
confectionery items. This is surely targeted more at the children than the
adults. This kind of a display increases the sales of chocolates and other
confectionery items manifold.
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brands like Munch, Nestlé has been able to take it to the number 2
position.
Nestlé has been able to use its brand ambassadors successfully although
it does not advertise all of its products. Famous Bollywood actress Rani
Mukherjee is the brand ambassador of Nestlé India’s flagship chocolate
brand Munch. In advertisements made by J Walter Thompson, Rani is
spotted donning different characters just to eat more and more of the
irresistible Munch, saying "Ab to Munching Ruk Na Paaye!" Rani
Mukherjee for roped in for bringing the brand recall. The ad film airs
across television channels all over. The same advertisement showing
Rani Mukherjee driving an auto and telling everybody in the village that
the chocolate is getting bigger and bigger, can be seen in different
languages on different television channels. "I am happy that the brand
ambassador Rani Mukherjee complements the popularity of the Munch
brand. Like the brand, her star appeal cuts across age, town, class and
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SEC," the Former Chairman and Managing Director, Mr. Carlos
Donati, once said in a statement.
As seen above, Nestlé does not release television ads or print ads for all
its chocolates and confectionery items. This is how the total
advertisement expenditure on chocolates and confectionery items, made
by Nestlé India is shared among different products.
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When asked about the customizations needed in packaging the
chocolates for Indian markets, Mr. Ryan Fernandes, Brand Franchise
Manager, Chocolates and Confectionery, Nestlé India, that the Indian
market requires that chocolates have a smaller packaging of about 36
grams and even 20grams whereas the same chocolate may be sold
abroad in a packing of 5grams and even 100 grams.
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Conclusions
Nestlé India has a very wide portfolio of products ranging from Maggi
Hot n Sweet Tomato Sauce to Nestle Fruit n Dahi. Although, Nestlé
does not advertise much about its products in India, still it is the world
market leader in the milk market and Maggi noodles is the product we
have all grown up eating.
They have tried to price their products at lesser than the price of the
competitors, for example, Nestlé Bar-One was sold at Rs.5 whereas the
same quantity of its competitor chocolate Cadburys 5-Star was sold at
Rs.6.
In some areas, Nestlé has been able to outperform its competitors and
rather, for products like Maggi noodles, it has no substantial
competitors. When magi noodles came into the market, there were other
players like Top Ramen, whose presence counted but now it makes no
difference to the leader-Maggi.
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To conclude the project, following is the SWOT Analysis of Nestle:
Strengths:
* Distribution structure that allows wide reach and coverage in the target
markets.
Weakness:
Threat:
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* Indications of shift in consumer spending towards asset building and
non-food related life style changes, diverting consumer demand for
FMCG products.
Opportunities:
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References
www.nestle.com
www.nestle.in
www.indiantelevision.com
www.thehindubusinessline.com
www.business-standard.com
www.agencyfaqs.com
www.domain-b.com
www.brandreporter.com
www.5paisa.com
www.freedomindia.com
www.verybestbabies.com
www.nestle-nutrition.com
www.fnbnews.com
www.icicidirect.com
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