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Okay Listen there is no fixed strategies f llowed by nestle. It is a product driven company nd has
diff strategies for different products….so I ha ve put in some articles for some products….so I hope
this will come in handy for u

Nestle India Ltd.

Nestle India Ltd. has informed BSE that the 52nd Annual General Meeting (AGM) of the Company
will be held on April 19, 2011.
Nestlé India Ltd has announced the following results for the quarter & year ended December 31,
2010:
 The Unaudited results for the Quarter ended December 31, 2010
 The Company has posted a net profit of Rs 2034.00 million for the quarter ended December
31, 2010 as compared to Rs 1129.20 million for the quarter ended December 31, 2009. Total
Income has increased from Rs 13623.50 million for the quarter ended December 31, 2009 to
Rs 16848.60 million for the quarter ended December 31, 2010.
 The Audited results for the Year ended December 31, 2010
 The Company has posted a net profit of Rs 8186.60 million for the Year ended December 31,
2010 as compared to Rs 6550.00 million for the Year ended December 31, 2009. Total
Income has increased from Rs 51671.70 million for the Year ended December 31, 2009 to Rs
62974.00 million for the Year ended December 31, 2010.

Brands

Milk products and Beverages Prepared dishes and Chocolates and

Nutrition cooking aids confectionery

 NESTLÉ EVERYDAY  NESCAFÉ CLASSIC  MAGGI 2-MINUTE  NESTLÉ KIT KAT

Dairy Whitener  NESCAFÉ SUNRISE Noodles  NESTLÉ KIT KAT
 NESTLÉ EVERYDAY Premium  MAGGI Vegetable Atta CHUNKY
Ghee  NESCAFÉ SUNRISE Noodles  NESTLÉ MUNCH
 NESTLÉ Milk Special  MAGGI CUPPA MANIA  NESTLÉ MUNCH
 NESTLÉ Slim Milk  NESCAFÉ  MAGGI Healthy Soups POP CHOC
 NESTLÉ NESVITA CAPPUCCINO  MAGGI Masala-ae-  NESTLÉ MILKYBAR
PRO-HEART MILK  NESTEA ICED TEA Magic  NESTLÉ MILKYBAR
 NESTLÉ Fresh 'n' WITH GREEN TEA  MAGGI Sauces CHOO
Natural Dahi  NESTEA ICED TEA  MAGGI Pichkoo  NESTLÉ BAR-ONE
 NESTLÉ Fresh 'n'  NESTEA Instant  MAGGI Pizza Mazza  NESTLÉ Milk
Natural Slim Dahi Hot Tea Mixes  MAGGI MAGIC Cubes Chocolate
 NESTLÉ Jeera Raita  NESCAFÉ 3in1  MAGGI Vegetable  POLO
 NESTLÉ NESVITA Dahi Multigrainz Noodles  NESTLÉ Eclairs
 NESTLÉ MILKMAID  MAGGI Bhuna Masala  NESTLÉ MILKYBAR
Fruit yoghurt  MAGGI Coconut Milk Eclairs
 NESTLÉ MILKMAID Powder  NESTLÉ MILKYBAR
 NESTLÉ Dahi  MAGGI Pazzta Crispy Wafer
 NESTLÉ NESLAC  MAGGI Sanjeevni Cup
 NESTLÉ Soup
 Start Healthy
 Stay Healthy

Marketing tactics - the marketing mix – for Kit Kat

Product strategy
No matter how effective the promotion and packaging, a firm will find it very difficult to market a
product which fails to satisfy a consumer need. Kit Kat owes much of its success to a unique dual
appeal - as a four-finger chocolate bar, (known in the confectionery trade as a countline), sold at
corner shops and newsagents, but also as a two-finger biscuit sold in supermarkets. It is a product
that has endured because of its wide appeal across the age ranges and to both sexes.
Altering the actual product is potentially a very hazardous act for an established brand name as it
risks altering the consumer perceptions of quality built up over decades. Tampering with the
recognised core qualities could well damage the integrity of the brand. For Kit Kat, these intrinsic
elements of the brand, or unique selling points include the:
 chocolate fingers
 foil and band wrapping, unique in the countlines market and seen as an important feature
which encourages involvement and sharing by consumers
 well-known strapline - Have a Break, Have a Kit Kat.

In spite of the risks of altering the product, the two finger bar and multipacks were introduced in the
1960s to meet the increased needs of supermarket shopping and more recently, Orange, Mint and
Dark Chocolate Kit Kats have been available for limited periods. In the third week that Kit Kat Mint
was available, it more than doubled total Kit Kat Sales. The Orange Kit Kat proved particularly
popular with sales of 38 million bars in just three weeks. It provided very positive market research
results. While they are seen as novelties, they can also be used to provide reassurance and
reinforcement of the core attributes of the original established brand name.
Special editions are used primarily as promotional tools. Market research has shown that consumers
prefer special editions to be available for limited periods only and that consumers are likely to
purchase the original Kit Kat at the same time or shortly after. (They are, therefore, a good way of
injecting new life into the Kit Kat product life cycle). Depending on their popularity, some special
editions are introduced more than once. The Orange Kit Kat has proved so popular that the two-
finger multipacks are now permanently available.
Apart from these variants, the intrinsic characteristics of the Kit Kat product and packaging have
changed very little during the last sixty years. Although some minor, subtle changes have been made
in packaging, merchandising and sales promotions, a Kit Kat from the 1930s would be instantly
recognisable to modern consumers today.

Pricing strategy
A key advantage of maintaining a strong brand image in a competitive market is a degree of
flexibility in the pricing strategy. It is a common characteristic of imperfectly competitive markets for
producers to concentrate on non-price competition. When looking at the pricing strategy for Kit Kat,
it can be seen from the figures that the real price has remained remarkably stable over the last sixty
years.

Promotional strategy
Nestlé has used a wide range of promotional tactics with Kit Kat. Promotion offers have included
free bars in the multi-bar family packs and an instant win deal with Burger King in 1996. This
promotion, where over 75 million free burgers were on offer, increased sales of Kit Kat by an
estimated 30 In 1998, an on-pack promotion featuring 'The Simpsons,' with the chance to win
£20,000 cash and hundreds of other prizes, increased sales of Kit Kat by a staggering 41%
Advertising plays an extremely important part in the confectionery industry, with spend approaching
£114 million in 1996. The Have a Break, Have a Kit Kat theme appeared briefly in 1939, but has been
the on-going Kit Kat slogan, or strapline, since the mid 1950s. Kit Kat's advertising is concentrated in
two media:
 television commercials - which follow the well-known Have a Break tradition
 posters - where the powerful colours of the pack and product are used to dramatise the
message.
A particular challenge for the advertisers is to appeal to both the consumers and the purchasers.
Women account for two thirds of all confectionery sales, but a large proportion of these purchases
are subsequently consumed by children. Men eat as much as they purchase suggesting they are less
generous!

Distribution strategy
Nestlé has developed distribution channels which ensure the availability of Kit Kat to buy wherever
and whenever the consumer wishes to purchase it. Sales of confectionery depend heavily on its
availability, with market research showing that well over 60% of all purchases are made on impulse.
Consequently, Nestlé tries to supply as many outlets as possible - both wholesaler and retailer
channels.
Point of sale merchandising is also important when consumers are making instant, snap decisions
from a wide range of products on view. Instantly recognisable packaging also helps to tempt
customers. Shoe shops, for example, have recently been identified as having potential for
confectionery sales owing to the large number of families that visit them. It is also predicted that
confectionery, along with all foodstuffs, will become available through cable and interactive
television, videophones and the Internet.
Internationally, Kit Kat is now also manufactured in Canada, Germany, India, Malaysia, China, Japan,
Australia, South Africa and the United States. It is available in more than 100 countries throughout
the World

Factors for success

The culture of innovation and renovation, continuous improvement and the thrust on value-for-
money and affordability have helped the company to focus on adding value for the consumer. The
company has continuously focused on operational efficiency; improving product availability and
visibility and initiated efforts to make its products more relevant to the consumers. This has been
supported by the distribution of smaller stock-keeping units (SKUs).
There has been continuous focus on the seven value drivers, namely:
• Sales growth
• Profit margin
• Working capital intensity
• Fixed capital intensity
• Income tax rate
• Cost of capital
• Value growth duration

Promotion strategy for market expansion

The following are some of the strategies used by Nestle for market expansion:
• Availability of NESCAFE enhanced through an expansion of the vending machine network.
• New consumption opportunities for chocolates and confectionery were identified and developed
in areas like railway platforms, college canteens and major events.
• Nestle set up ‘Café Nescafe’ and ‘Coffee Corners’ across metros and mini-metros.

Thrust on supply chain

During the past few years, Nestle India has continuously focused on improving the supply chain to
reduce wastage, improve efficiencies and provide consumers with fresh stocks all the time.
• Reduction in the finished goods inventory pipeline to improve freshness of stocks and reduce
working capital
• Control on distribution costs through innovative measures
• Sustained improvement in customer service levels to improve product availability across all
geographies and channels
• Reduction in obsolescence of materials
• Competence in research and development
• The company has access to the Nestlé Group’s proprietary technology/brands, expertise and the
extensive centralised research and development facilities. The culture of innovation and
renovation and benchmarking of consumers’ tastes and products is facilitated in the company by
the unique “Experimental Kitchen” and “Sensory Laboratory” at the Head Office.

ONE-OFF factors, such as the phase-out of tax holiday on exports and inadequate milk availability,
may have had a hand in Nestle India's surprisingly bad numbers for the April-June 2004 quarter.
However, the company is also facing a slew of new challenges in its businesses, which could have a
bearing on its numbers.
Shareholders can, therefore, pare exposures in the Nestle India stock. At a price-earnings multiple of
23 times its trailing 12-month earnings, the stock trades at a significant premium to frontline FMCG
companies. The stiff valuation levels also make the stock susceptible to negative earnings surprises.
Nestle India has closed the April-June 2004 quarter with a 32.6 per cent drop in its net profits, even
as net sales remained unchanged.

Domestic sales, which crept up by 3.1 per cent this quarter, was impacted by inadequate availability
of milk fat and "rationalisation of stocks". The chocolate market also went through a temporary
hiatus due to the worm infestation controversy. These would no longer be an issue in the coming
months. Chocolate marketers have improved their packaging and reduced prices to pep up volume
growth, in the aftermath of the controversy and this may deliver results.
Competition for milk procurement has been quite high in the recent months and was aggravated by
the faltering monsoon. The recent revival in the monsoon rains in the northern belt, may help
alleviate the situation to some extent, by improving the availability of feed.

However, several challenges have also surfaced for Nestle's core businesses and these could
continue to impact its performance. For one, the sharp decline in Nestle's export sales for the
quarter is worrisome. Global coffee prices for the quarter ruled about 18 per cent higher than last
year , as several other producing countries suffered a drop in output.
Yet, with a 6.5 per cent volume growth and a 21.6 per cent decline sales value, Nestle India's coffee
export business does not appear to have capitalised on these opportunities. Nestle has attributed
the drop to a shift in product mix towards bulk coffee packs. But whether this shift is here to stay,
needs to be watched.
Second, Nestle's profit margins have contracted from 20.6 per cent to 15.4 per cent this quarter, on
the back of rising milk prices. Milk prices have climbed sharply over the past six months, as
intensifying competition for procurement impacted prices. The revival in monsoon could help
alleviate the situation to some extent.
However, the contraction in margins is also a sign that the company is unable to pass on spikes in
input costs through selling price increases.
Though businesses such as coffee, noodles and chocolates are not directly impacted by price wars,
Nestle India's growing dependence on low-priced packs, at price points of Rs 5, Rs 10 and so on, may
make price increases difficult.
This could mean that Nestle may now have to absorb some of the swings in commodity prices into
its profit margins. With commodities such as coffee, cocoa and milk solids making up its raw
materials basket, input prices for the company can be quite volatile, which could make for choppy
earnings.
Infant foods: Seeking new channels
Third, a wide-ranging ban on advertisement and promotion of infant foods and milk substitutes,
which took effect from January this year, has forced Nestle to look for alternate distribution
channels for the business — hitherto its key cash cow.
The company has embarked on a revamp of its distribution. But given the wide-ranging restrictions
on promotions and even point-of-sale displays, pushing sales growth in this category may prove a
challenging task. In the past, a steady mop-up of shares by the company by way of buyback and a
rising promoter's stake have kept valuation levels for the Nestle India stock high.
However, with the multiples for many frontline FMCG companies being corrected downwards, the
stock could be more susceptible to downside risks.

Reinventing Nestle – This is an old article but good info.

Topline growth, bottomline contribution, difficult market situations. Nestle India's trademark
`renovate and innovate' strategy is churning with action. Catalyst finds out more.

JUST how much can a housewife influence a Rs 1,688-crore company? Carlo M. Donati, the non-
conformist Chairman and Managing Director of foods giant Nestle India Ltd, doesn't disappoint.
"She's someone whose needs we anticipate," he exclaims. You've got to give that to him.
Take, for example, the exhaustive experimental kitchen and sensory laboratory at the plush
corporate headquarters of Nestle India at Gurgaon. It's obviously a first-of-its-kind facility and
research centre for any food company in India.

The objective? Consistent product development. Also, achieving a preference ratio of 60:40 for every
Nestle product as opposed to competition. The kitchen comprises a panel of application groups and
15 professional tasters checking out new products for consistency in quality and product evolution
on a regular basis.

The exercise, informs Donati, has resulted in the creation of two different flavours of Maggi noodles
(curry and tomato), Fruitips candy, besides new formulations of Nescafe and Bar One chocolate in
recent months. "And this research model isn't a substitute for consumer research, or regular test-
marketing with the real consumer," points out Donati.

Based on an international research and development model proprietary to Nestle SA, the kitchen is
just one component of the Rs 3,000 crore allocated for a centralised research and development cell
for the foods conglomerate worldwide, against Rs 2,500 crore spent on the same earlier. Another
component is the third in a series of multi-cuisine recipe collections cutting across all Nestle
products, in place of the two earlier ones which centered around Milkmaid and Maggi.

The Nestle `renovate and innovate' mantra, meanwhile, is on in full swing.

Four existing brands - Nescafe, Milo, Bar One chocolates and Maggi super seasonings - have been
relaunched in new tastes, packaging and pack sizes. And another variant of KitKat - white chocolate -
has just been rolled out.

On the launch block a month from now are 10 new product variants spread across the culinary and
confectionery segments. The restructuring exercise of Excelcia Foods Ltd - the joint venture company
in which Nestle acquired management control following Dabur India's decision to exit non-core
areas - has neared completion. Following that, Nestle proposes to enter fresh product categories
such as biscuits in the forthcoming months.

Beverage Partners Worldwide (BPW), the joint venture between Nestle SA and the Coca Cola
Company, too is looking to tap the Indian market for possible coffee and tea variants.

But it's the food major's most keenly awaited venture - ice-cream - that's got the FMCG industry
abuzz. While Donati doesn't divulge plans, he does concede that "we are very much interested in the
domestic ice-creams market". Of course, that requires putting in place a cold chain, besides
stabilising its milk and UHT businesses first. Meanwhile, though there's no confirmation from Nestle,
the industry grapevine suggests that Nestle has begun negotiations with Vadilal for manufacturing
and marketing ice-cream.

Another category where Nestle could give Hindustan Lever a run for its money is candy. The
company has recently rolled out a candy brand by the name of Fruitips.

On the beverage front, following the introduction of chocolate-and-coffee formulation Choc Cafe
and Frappe under the Nescafe umbrella, Nestle has been setting up slosh-type vending machines for
iced tea in two flavours - peach and lemon. In an economy that's in a downturn, Nestle's
performance has been impressive. Net sales for third quarter this year were Rs 533 crore against Rs
469 crore in the same period last year, recording a growth of 13.5 per cent. While domestic sales
grew at 11.4 per cent in value terms, export sales for the quarter increased by 24.6 per cent. Sales
during the first nine months of the year improved by 17.4 per cent, with a net profit increase of 28.6
per cent over the same period last year.

Donati, however, is playing the caution card. "Despite excellent topline and impressive bottomline
contribution, the uncertain and difficult domestic and international market environment, coupled
with seasonality factors, will affect our performance in the fourth quarter," he says. Market analysts
warn that incremental selling and advertising expenditure on new launches would dampen margins
and that it would take time before the new products begin contributions to turnover or profitability.

While the success of the new variants is yet to be gauged, Nestle's star performers remain Nescafe,
baby food Cerelac, Maggi and Everyday. Says Jagdeep Kapoor, Managing Director, Samsika
Marketing Consultants, "Nestle's biggest strength lies in creating brands with distinct positioning.
Hence, Nescafe is generic to coffee, just the way Maggi has become generic to instant noodles."
Maggi noodles faces no direct competition, with Top Ramen barely managing to hold ground in the
instant noodles category. Another winner has been Maggi ketchup, which, FMCG analysts say, has
been built from scratch to market leadership position, outperforming Kissan.

However, Kapoor adds that while Nestle has done exceptionally well in Western food categories
such as ketchup, condensed milk, noodles, coffee and weaning foods, the company hasn't been able
to handle Indian product categories such as pickles and tea too well. But, as a Dabur official points
out, "No one is really making money in pickles. Not only is the unorganised and made-at-home
sector too well-entrenched, even the consumer shows no brand loyalty towards pickles. What drives
her purchase pattern is new taste and not brand preference."

The market for ready-to-cook mixes and soups too has been largely fragmented with a distinct skew
towards the unorganised sector.

In chocolates, while Cadbury India continues its stranglehold of the market, Nestle's KitKat, Bar One,
Munch and Classic have been performing reasonably. Two recent entrants to this category have
been ChocoStick and Milkybar Choco, the latter a soft chewy fudge in stick format priced at Rs 5.

In the chilled dairy segment, Nestle dahi has recently been extended to Mumbai and Pune. While the
market for this continues to be very small with only Mother Dairy and Amul giving Nestle
competition in the organised sector, milk in cartons is a concept that's yet to go down well with the
Indian consumer. "Apart from being expensive, the Indian consumer is still not ready to consume
milk without boiling it. And research has proved that three-fourths of Indians prefer hot milk," says
an official at a leading FMCG company. On the pricing front, Nestle continues to target the premium
segment. As Donati says, "We will make inroads into markets which represent not only potential for
consumption, but also potential for bottomline." According to Kapoor, Nestle's premium pricing
strategy is a strength that's worked in most categories it operates in.

Fruitips, therefore, occupies price points of 50 paise and Re 1 per unit against HLL's Max which
attacks the unorganised sector with an extremely aggressive 25 paise per unit price.

According to Kapoor, it's the association with quality that works in Nestle's favour in most product
categories. That this hasn't really worked in case of Nestle's bottled water brand, Pure Life, is more
distribution-related, feel industry watchers. Pure Life, launched earlier this year at a price point of Rs
12, has been a lukewarm performer compared to Coca-Cola's Kinley and Pepsi Aquafina besides, of
course, market leader Bisleri. According to Donati, discounting at the trade level has been a problem
area with bottled water.
And while spends on advertising have been raised at a macro level, brand-wise spends have been re-
allocated accordingly.

According to the A&M Annual survey on India's top 200 ad and marketing spenders, Nestle was the
country's sixth largest advertising spender in 2000-01, recording an ad spend of Rs 128.46 crore
which amounts to a 13.6 per cent growth over the previous year.