IMT HYDERABAD

BATCH 2019-21

Marketing Group Project

On
Nestle

Team Members:
1. Shivam Khare – 19A1HP049
2. Ayush Bhatia – 19A2HP407
3. Arushi Jain – 19A3HP665
4. Amol Gupta – 19A2HP418
5. Manik Bhatt – 19A1HP036
6. Aarushi Bhkshi – 19A1HP101

Guided By:
Prof. Rambalak Yadav
CONSUMER BEHAVIOUR

Consumer behavior is the study of when, why, how, and where people do or do not buy
product. It blends elements from psychology, sociology, social anthropology and economics. It attempts
to understand the buyer decision making process, both individually and in groups. It studies
characteristics of individual consumers such as demographics and behavioral variables in an attempt to
understand people's wants. It also tries to assess influences on the consumer from groups such as family,
friends, reference groups, and society in general.

Nestle has received a pivotal position in the market for their products. Quality is the main motivating
factor for the consumers to buy the products of Nestle. The introduction of new products in the market,
to satisfy all types of consumers is also one of the important reasons for Nestle to rank top in the
consumers market. To capture a major share in the consumer goods market, the manufacturer must
provide quality goods at reasonable price.
Every person plays multiple roles in their daily life, professional role or social role. Each of these roles
has a certain effect on consumers buying behaviour. Each role has a particular status in society and
consumer behaviour is considerably depended on the status factor. If the marketers easily understand
the factors that mainly influence in buying decision, the sales can be increased a lot. There are groups
whose buying behaviour changes with time while certain groups of people are loyal to a brand of
product.

MARKETING RESEARCH

Nestle India is a sub company of NESTLÉ S.A and is one of the largest companies in the world in the
drinks, food and snacks industry. The Swiss company has successfully transformed itself into a truly
global force in the food industry with expansion to other areas of the industry such as baby foods,
beverages and frozen foods. The company has seven verticals namely liquid and powdered beverages,
confectionary and cookies, ready prepared and cooked foods, dairy products, chocolate, drinking water
and pet care.

With eight factories and 4 branch offices, it provides consumers in India with products of global
standards and is committed to long-term sustainable growth.
Nescafe, Nestlè Everyday, Sunrise, Maggi, Kitkat, Milkybar, Milkmaid, Nestea, Munch, Bar one, Polo
and many more are some of the famous brands of Nestle. It has focused on Taste, Nutrition, Health and
Wellness and well-being of the customers and its tagline ‘Good Food, Good life’ matches with that. It
aims to create value to the customers by offering a wide variety of safe and high-quality food products
at affordable prices. The company develops its product range to meet the changing needs and demands
of the customers. Their product offering has also given a major push to the dairy sector of the country
which has further helped to develop the milk economy. Nestle is the market leader in various categories
such as Infant Cereals which holds 96.5% of the market, Instant Pasta accounts for 65.2%, Instant
Noodles holds 59.5%, White Chocolates and wafers holds for 62.6%.
While Nestle dominates some of the sectors of the powdered beverages with brands like Nescafe, Kraft
Heinz is the market leader in others with brands like Cadbury drinking chocolate. Nestle is facing a
good competition from Kraft Heinz especially in the cocoa/ chocolate and coffee market segment. While
at first glance Coca-Cola may appear as a direct competitor to Nestle compared to other companies, it
offers alternative products but its target market is cold beverages while Nestle product in the powdered
beverages market segment are in the hot beverages category, where Kraft Heinz offers directly
competing products.

Nestle, being a global company, essentially has a heterogeneous consumer market since people in
different regions and with varying demographics have difference needs, tastes and preferences. This is
also true for the powdered beverages segment since different people will have differences in their choice
of powdered beverages. Given these facts, the mixed marketing approach is the best one for Milo.
The primary target market for the Milo brand in particular and most of the products offered in the
powdered drinks category are the upper and middle upper classes. This enables brands like Milo to
leverage the prestige associated with their brand to sell their products at a premium compared with the
competition. The secondary target market for Milo is the lower middle class that is likely to shift to
more premium brands as disposable income rises

CUSTOMER RELATIONSHIP MANAGEMENT AT NESTLE

Customer relationship management (CRM) refers to building relationships with new and
existing customers to develop loyal customers. There are different channels adopted by Nestle
to develop their customer relationship which include:

1. Raise your concern (Customer Feedback)

Nestle attends to customer concerns on priority and this reflects their commitment to
compliance culture. Nestle has an active concern reporting helpline available 24*7, 365
days a year. All concerns are acknowledged with a unique case number which helps the
users track the status of their concerns.
2. Loyalty Scheme
Nestle adopted a loyalty scheme to reach closer to customers in the catering trade. This
royalty service provided the manufactures opportunity to collect data on businesses.
This helped Nestle reach out to many new manufacturers and customers.
3. Customer First
Nestle has incorporated nutritional panel or compass for all their products on their
respective packaging to convey the nutritional value to the consumers. This helped the
consumers choose their food choices wisely and promoted Nestle as a brand which
takes responsibility of their customers health.
4. Product reformulations
Nestle incorporated product reformulation like low fat, low sugar, lactose free products
etc. to cater to wide variety of customers. Also Nestle is also launched products with
scientifically proven formula to meet the changes in customer expectations.
MARKETING SEGMENTATION:

Different products of nestle have been categorized into geographical, demographic,

psychographic, behavioral segments.

Geographical segment -

1. Area: nestle has divided this segment into the rural, urban and semi-urban area. Nestle
supplies more of nestle milk to urban and semi-urban areas than rural areas.
2. Weather: Nescafe ice tea has segmented its market depending on the hot or cold
weather.
3. Nescafe: coffee is used as normal in cold weather conditions whereas in warm weather
is consumed with milk and ice.

Demographic

1. Age: nestle has segmented lactogen 1 and lactogen 3 is segmented for babies and
Nescafe to adults and milo to children.
2. Occupation: Nescafe classic has been segmented for people who work hard and are
busy with their work, require more caffeine and require freshness at intervals.
3. income: nestle offers large and small packs, Maggie, coffee as instant coffee which
saves money for limited-income people

Psychographic

1. Nestle KitKat is segmented for chocolate lovers.

2. Nescafe 3in1 is for customers who have very little time and are busy.

Behavioral Benefits: Nestle provides the best quality, taste and priced products that no other
company can offer. Cerelac is segmented as a product for babies with nutritional benefits like
vitamins minerals.

TARGETING:

Differentiated marketing: They offer various product for many segments based on different
ages, occupation, and climate of India.

1. Nescafe 3 in 1: coffee for customers who are busy or have very little time example
office, college-going people
2. Nescafe Ice: for the customer in hot and warm weather.
3. Nestle classic, milky bar: Chocolate milk who wants to get a taste of real chocolate.

Undifferentiated: Maggie is targeted for everyone

Concentrated: Nestlé has earned a strong market position due to its strong knowledge and
understanding of consumer requirement example-Nestlé specializes in producing baby foods.
Nestle has targeted lactogen 1 for babies less than 7 months and lactogen 3 for babies less than
12 months. Cerelac is for babies less than 1 year. Nestle offers Nescafe to adults and milo to
children.

POSITIONING:

Product differentiation: Nescafe brings a lot of products for its customers with each having
unique quality

25 types of minerals and vitamin D supplements are provided in Nido for children.

They provide Maggie i.e. Maggie and instant Maggie and also Maggie provides different types
of soups like corn, tomato at the same price

Channel differentiation: nestle delivers its products to customers through their transportation
and salesman so the products are always available to the respective consumers.

Image differentiation: nestle has developed its brand image as trustworthy, healthy and
reliable.

Nestlé’s logo is very different from its competitors which is hugely liked by consumers

People differentiation: nestle has a large number of educated and trained employees.

Service differentiation: they provide 24-hour hotline customer service.

Nestle and its competitors:

Some of the biggest competitors of nestle are :

1. Kellogg’s is one of the biggest competitors of nestle in the segment of cheez-it

cornflakes, cookies, crackers.
2. Mars gives a tough competition to nestle in the segment of chocolate bars that is milky
way bars m&m, snickers, Twix.
3. Hershey’s one of the leading chocolate manufacturer in the world offers products like
Hersheys kiss and Hersheys bar , Hersheys syrup.
4. Nestle has one-fifth of the global market, is the biggest supplier of baby milk dwarfing
Heinz and numico.
5. Hindustan liver’s BRU- in the segment of coffee bru gives a tough competition to
Nestle. Most FMCG companies use similar marketing strategies
 PERCEPTUAL MAP

HIGH QUALITY

NESTLE
LOW PRICE

HIGH PRICE
PATANJALI

NISSIN
WAI-WAI
CHING'S

LOW QUALITY

Figure 1: Perceptual map of nestle and its competitors

Perceptual maps are the diagrammatic representation of perceptions of the consumers. They provide
the information about the market situations and how the consumers are perceiving the brand against
its competitors.

Figure 1 shows the perceptual map of nestle and its competitors on two parameters that is quality
and price.

According to the consumers, Nestle as a brand is perceived as of high quality as compared to Patanjali,
Nissin, Ching’s, Wai-Wai. Also the prices of the products of Nestle is usually high as compared to its
competitors.
IMPLICATIONS OF MARKETING DECISIONS:

NESTLE’s success is built on its Nutrition, Health and Wellness strategy. Henri Nestle believed that
good nutrition was the key to healthy life. Their aim is to provide the healthiest and tastiest choices,
at all times of the day, for all stages of life. The key to Nestle’s long-term success continues to be
understanding and serving the consumer, by identifying the latest consumer trends and acting
quickly to capture them.

Since the Maggi ban in 2015, Nestle has reworked its strategy and plans to focus on new product
categories such as cereals, skincare and healthcare. They entered new categories to reduce
dependence on a single product, focusing on health and nutrition, increasing advertisement, and
communicating much more with consumers directly. Some of Nestle’s recent launches have already
started showing results- coffee and other beverages have returned to growth but nutrition is still
under stress. According to different studies, there are around 70M diabetics in the country. Nestle
intends to focus more in urban areas as consumers there, are becoming more health conscious. The
primary topic of the strategy was on how to restore Maggi noodles to its former glory in terms of
market share, volume and trust. The impact of Maggi issue had on the minds of people involved or
associated with it was immense. During this period, ITC Ltd’s Yippee noodles and Wai-Wai noodles
from Nepal’s CG Foods gained market share, filling a gap in a Rs3,182-crore noodles market. When
the ban was lifted, Nestle restarted from scratch. But, the company had bounced back from the
biggest existential threat in its 104-year history in India. As stated by the company’s annual report of
2017-18, the firm had managed to grow volumes in all four product categories for the first time since
2010- milk products & nutrition, prepared dishes & cooking aids, beverages, and chocolates. It’s
domestic growth was comparatively better than the growth reported by other large FMCG players.