MINOR PROJECT REPORT

ON
“A STUDY OF THE MARKETING MIX OF
NESTLE”

SUBMITTED IN PARTIAL FULLFILMENT FOR THE

AWARD OF THE
DEGREE OF BACHELOR OF BUSINESS
ADMINISTRATION 2010-13

UNDER THE GUIDANCE OF

MS. PRIYANKA GARG
FACULTY, MAIMS

SUBMITTED BY:
ABHISHREE MOR
30014701710
BBA 3rd SEM, A

Maharaja Agrasen Institute of Management Studies

Affiliated to Guru Gobind Singh Indraprastha University, Delhi PSP
Area, Plot No.1, Sector 22, Rohini, Delhi-110086
 TABLE OF CONTENT

CHAPTER NUMBER PAGE NO.

Student Declaration……………………………………………………..… i

Certificate from Guide…………………………………………………… .ii

Acknowledgement………………………………………………………… .iii

CHAPTER -1 INTRODUCTION 1

CHAPTER -2 OBJECTIVES OF THE STUDY 4

CHAPTER -3 RESEARCH METHODOLOGY 6

CHAPTER -4 SECONDARY DATA 8

CHAPTER -5 FINDINGS AND ANALYSIS 51

CHAPTER -6 SUGGESTIONS 57

CHAPTER -7 LIMITATIONS 59

CHAPTER- 8 CONCLUSION 61

BIBLIOGRAPHY 63

ii
 STUDENT UNDERTAKING

This is to certify that I have completed the Minor Project titled “To Study the Marketing mix of
NESTLE India” under the guidance of “Ms. Priyanka Garg” in partial fulfillment of the
requirement for the degree of Bachelor of Business Administration at Maharaja Agrasen Institute
of Management Studies, Delhi. This is an original piece of work and I have not submitted it
earlier elsewhere.

ABHISHREE MOR

i
 CERTIFICATE FROM THE GUIDE

This is to certify that the minor project titled “To Study the Marketing

mix of NESTLE India” is an academic work done by “Abhishree Mor” submitted in the partial
fulfillment of the requirement for the degree of Bachelor of Business Administration at Maharaja
Agrasen Institute of Management Studies, Delhi, under my guidance and direction. To the best
of my knowledge and belief the data and information presented by her in the project has not been
submitted earlier.

Ms. Priyanka Garg

Assistant Professor

ii
 ACKNOWLEDGEMENT

The satisfaction and euphoria that accompany the successful completion of any task is
incomplete without the mention of people who made it possible. So I take this as a great
opportunity to pen down a few lines about the people to whom my acknowledgement is due.
It is with the deepest sense of gratitude that I wish to place on record my sincere thanks to
Ms.Priyanka Garg , my project guide for providing me inspiration, encouragement, guidance,
help and valuable suggestions throughout the project.

I would also like to thank all my respondent for giving me their valuable time and information.

ABHISHREE MOR

iii
 CHAPTER-1
INTRODUCTION
The main aim of studying marketing strategies of nestle is to provide solid foundations
that are useful for explanation, prediction and control of the business activities. We are not an
expert in nestle but we have analysis the firm’s Indian marketing strategy in the
field of their brand awareness, products and system design, product positioning,
advertising, packaging, distribution and customer service.

My secondary data is the most of important for our research and I contributed in the area such
as group or segment those types of potential customers that are most likely to benefit
from their product line. It also includes business principles of the organization.

Nestle coat of arms, the bird’s nest, which refers to his name, has become a symbol
for the products being a safe care for their consumer product safety and quality. Research and
development based innovation capacity and strong brands are priority for Nestle.

Every organization needs to have clear marketing objectives and the major route to achieving
organizational goals will depend on strategy. Developing a strategy involves establishing clear
aims and objectives around which the framework for a policy is created. Having established its
strategy, an organization can then work out its day-to-day tools and tactics to meet the
objectives. The success of any business entity solely depends on how effectively it utilizes its
optimum resources. The company should always be ready to make necessary changes according
to the requirements, in order to attract more customers so as to maintain a substantial growth in
the market.

Nestle India is a subsidiary of Nestle S.A of Switzerland. With seven factories and a large
number of co-packers, brands of the company are grouped under four categories, Milk Products
& Nutrition, Prepared Dishes & Cooking Aids, Beverages and Chocolates & Confectionery.
Nestle has been a cohort in India's growth 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

2
and indirect employment and afforded livelihood to about one million people together with
farmers, suppliers of packaging materials, services and other goods.

Nestle India manufactures products of truly international quality under internationally famous
brand names and in recent years the company has also introduced products of daily consumption
and use such as NESTLE Milk, NESTLE SLIM Milk, NESTLE Fresh 'n' Natural Dahi and
NESTLE Jeera Raita. Beginning with its first investment in Moga in 1961, where the
Government wanted Nestle to develop the milk economy. Progress in Moga required the
introduction of Nestlé’s Agricultural Services to educate, advise and help the farmer in a variety
of aspects.

Nestlé’s regular and substantial investments established that it was here to stay. In 1967, Nestle
set up its next factory at Choladi (Tamil Nadu) as a pilot plant to process the tea grown in the
area into soluble tea. The Nanjangud factory (Karnataka) became operational in the year 1989. In
1990, the company entered into the chocolate business by introducing Nestle Premium
Chocolate.

3
 CHAPTER 2
OBJECTIVE OF THE
STUDY

4
 My main objective of the project is to study the marketing mix of Nestle India Ltd.

Other Objectives of the study are:

 To understand Nestlé’s share in Indian food market.

 To find out that what all strategies a company makes and follows for their products.

 To understand the Indian food market.

 The major steps taken by the company to enhance the sales.

 To analyze the strength of Nestle in the Baby food segment.

5
 CHAPTER 3
RESEARCH
METHODOLOGY

6
Secondary research can be described as the most widely used method for data collection. This
process involves accessing information that is already gathered from either the originator or a
distributor of primary research. Secondary research includes collecting information from third-
party sources such as company websites, sales and accounting records, magazine articles and
marketing research reports. It also includes any previously gathered information used by the
marketer from any internal or external source.

Achieving accuracy in any research requires in depth study regarding the subject. As the prime
objective of the project is to compare Cadbury with the existing competitors in the market and
the impact of Nestle on Cadbury, the research methodology adopted is basically based on
secondary data. Sources of secondary data used to obtain information on Cadbury and its
competitor history, current issues, policies, procedures etc, wherever required.
1)Internet
2)Magazines
3)Newspapers

7
 CHAPTER-4
SECONDARY DATA

8
 Henri Nestlé (1814 - 1890)

The key factor which drove the early history of the enterprise that would become the Nestlé
Company was Henri Nestlé's search for a healthy, economical alternative to breastfeeding for
mothers who could not feed their infants at the breast.
In the mid-1860s Nestlé, a trained pharmacist began experimenting with various combinations of
cow's milk, wheat flour and sugar in an attempt to develop an alternative source of infant
nutrition for mothers who were unable to breast feed. His ultimate goal was to help combat the
problem of infant mortality due to malnutrition.

He called the new product Farine Lactee Henri Nestlé. Nestlé's first customer was a premature
infant who could tolerate neither his mother's milk nor any of the conventional substitutes, and
had been given up for lost by local physicians. People quickly recognized the value of the new
product, after Nestlé's new formula saved the child's life and within a few years, Farine Lactee
Nestlé was being marketed in much of Europe.

Henri Nestlé also showed early understanding of the power of branding. He had adopted his own
coat of arms as a trademark; in his German dialect, Nestlé means 'little nest'. One of his agents
suggested that the nest could be exchanged for the white cross of the Swiss flag. His response
was firm: "I regret that I cannot allow you to change my nest for a Swiss cross .... I cannot have a
different trademark in every country; anyone can make use of a cross, but no-one else may use
my coat of arms."

9
Meanwhile, the Anglo-Swiss Condensed Milk Company, founded in 1866 by Americans Charles
and George Page, broadened its product line in the mid-1870s to include cheese and infant
formulas. The Nestlé Company, which had been purchased from Henri Nestlé by Jules Monnerat
in 1874, responded by launching a condensed milk product of its own. The two companies
remained fierce competitors until their merger in 1905.
Some other important firsts occurred during those years. In 1875 Vevey resident Daniel Peter
figured out how to combine milk and cocoa powder to create milk chocolate. Peter, a friend and
neighbor of Henri Nestlé, started a company that quickly became the world's leading maker of
chocolate and later merged with Nestlé. In 1882 Swiss miller Julius Maggi created a food
product utilizing legumes that was quick to prepare and easy to digest.
His instant pea and bean soups helped launch Maggi & Company. By the turn of the century, his
company was producing not only powdered soups, but also bouillon cubes, and sauces and
flavorings.

10
HISTORY OF NESTLE

1866 -1905
In the 1860s Henri Nestlé, a pharmacist, developed a food for babies who were unable to
breastfeed. His first success was a premature infant who could not tolerate his mother's milk or
any of the usual substitutes. People quickly recognized the value of the new product, after
Nestlé's new formula saved the child's life, and soon, Farine Lactée Henri Nestlé was being sold
in much of Europe.

1905-1918
In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. By the early 1900s, the
company was operating factories in the United States, Britain, Germany and Spain. World War I
created new demand for dairy products in the form of government contracts. By the end of the
war, Nestlé's production had more than doubled.

1918 -1938
After the war Government contracts dried up and consumers switched back to fresh milk.
However, Nestlé's management responded quickly, streamlining operations and reducing debt.
The 1920s saw Nestlé's first expansion into new products, with chocolate the Company's second
most important activity.

1938 -1944
Nestlé felt the effects of World War II immediately. Profits dropped from $20 million in 1938 to
$6 million in 1939.Factories were established in developing countries, particularly Latin
America. Ironically, the war helped with the introduction of the Company's newest product,
Nescafe, which was a staple drink of the US military. Nestlé's production and sales rose in the
wartime economy.

1944 -1975
The end of World War II was the beginning of a dynamic phase for Nestlé. Growth accelerated
and companies were acquired. In 1947 came the merger with Magi seasoning sand soups. Crosse
& Blackwell followed in 1950, as did Findus (1963), Libby's (1971) and Stouffer's
(1973).Diversification came with a shareholding in L’Oreal in 1974.

1975 -1981
Nestlé's growth in the developing world partially offset a slowdown in the Company's traditional
markets. Nestlé made its second venture outside the food industry by acquiring Alcon
Laboratories Inc...

11
1981 -1996
Nestlé divested a number of businesses1980 / 1984. In 1984, Nestlé's improved bottom line
allowed the Company to launch a new round of acquisitions, the most important being American
food giant Carnation.

1996+
The first half of the 1990s proved to be favorable for Nestlé trade barriers crumbled and world
markets developed into more or less integrated trading areas. Since 1996 there have been
acquisitions including San Pellegrino (1997), Spillers Pet foods (1998) and Ralston Purina
(2002). There were two major acquisitions in North America, both in 2002: in July, Nestlé
merged its U.S. ice cream business into Dreyer's, andin August, a USD 2.6bn acquisition was
announced of Chef America, Inc. On June 25 Neslte India launches new variant of Maggi Delists
securities from the Delhi Stock Exchange Association Ltd (DSE) w.e.f. July 15, 2005. Nestle's
starts Uttaranchal unit Nestle India Ltd has informed that the Board of Directors of the Company
at its meeting held on July 31, 2007.

12
COMPANY REPORT OF NESTLE INDIA

Company Snapshot
Nestle India, incorporated in the year 1959, is the largest dairy products company in India. The
company has a broad portfolio of milk products & nutritions, beverages, prepared dishes &
cooking aids and chocolates & confectionary. The company is a subsidiary of Nestle S.A. of
Switzerland and their history goes back to 1912 when it imported and sold products in India
under the name of ‘The Nestle Anglo Swiss Condensed Milk Company (Export) Ltd.

13
Nestle India Ltd. has reported excellent results for Q1FY09. The net sales surged from
Rs.10932.60 million in the same quarter last year to Rs.12707.80 million this quarter depicting
an increase of 16.24%. This also resulted in an increase in the operating profit to Rs.3041.00
million showing a growth of 25.97% from Q1FY08. The net profit of the company increased by
23.20% to Rs.1973.00 million. The net sales comprised of Net Domestic Sales of Rs.11919.7
million, up by 18.70% and Exports Sales of Rs.788.1 million. Both the margins increased
marginally. Operating profit margin rose from 22.08% to 23.93% in Q1FY09 and the Net Profit
Margin saw an increase from 14.65% to 15.53%. EPS of the company stood at Rs.20.46
increased from Rs.16.61 in the same quarter last year.

14
Business Details
Nestle India was established in India in the year 1961 with its first investment in Moga, Punjab.
Nestle India manufactures products of truly international quality under internationally famous
brand names such as Nescafe, Maggi, Milkybar, Milo, Kit Kat, Bar-one, Milkmaid and Nestea.
Nestle has been a partner in India’s growth for over nine decades now. It encompasses a wide
range of products from milk and skimmed milk to value added products like condensed milk,
curd, ghee, yoghurt and raita. All these products are sold under various brands such as Nestle
Everyday, Nestle Milkmaid, Nestle Milk, Nestle Fresh n Natural etc. Nestle India enjoys the
leadership position in infant milk foods business. The company has a capacity to produce 72,502
tonnes of milk products and nutritions per annum. They are spread over seven plants located
across India in the states of Punjab, Haryana, Uttarakhand, Goa, Karnataka and Tamil Nadu. It
processes over 3.3 lakh tonnes of milk and nearly 10,000 tonnes of milk powder per annum. The
company has tied up with Heritage Food in South, Bengal Nester in the East and Dynamix Dairy
in the West for sourcing, processing, packaging, and supplying milk. The company also has a
strong presence in the chocolates and confectionary business. It is the second largest
confectionary company in India. It is the largest coffee company in India sold under the brands
of Nestle Classic, Nescafe Sunrise and Nescafe 3 in 1. The company also exports its instant
coffee to various countries such as Russia and Japan.

Segmental Outlook
The food processing industry which is a sub-sector of the food industry includes milk and milk
products, fruits & vegetables processing, grain processing, fisheries, meat & poultry processing
and other consumer products such as packaged foods, confectionary, chocolates, beverages and
packaged drinking water. The Indian food market is estimated at over $182 billion and accounts
for about two-thirds of the total Indian retail market. According to McKinsey and co., the retail
food sector in India is likely to grow from around US$70 billion in 2008 to US$150 billion by
2025. According to Dairy India 2007 estimates, the current size of the Indian dairy sector is
US$62.67 billion and has been growing at a rate of 5% per year. the dairy exports in 2007-08
rose to US$210.5 million against US$113.57 last fiscal whereas the domestic dairy sector is
slated to cross US$108 billion in revenues by 2011. The Indian snack market holds enormous
growth potential for snack food, which is estimated to be worth US$3 billion. The market is
divided in to organized and unorganized sector. The organized sector of the snack food market is
growing at 15-20 % a year while the growth rate of the US$1.56 billion unorganized sector is 7-
8%. India has a target of doubling its processed food production by 2015 and will set up 10 food
technology parks during the next year with a view to achieving this.

Investment Rationale
Increased Sales Focus
The focus on continuous business excellence extends across the Company. The company has an
efficient distribution system and has consistently pushed itself over the recent years to further
improve its service levels and to help consumers with easier access to the Company’s products.

15
During the year, there was further improvement in the distribution network and availability of
fresh, high quality Nestlé products. The specialized teams for Key Account Management,
Channel and Category Sales Development, Route-to market and the existing trade channels
continued to improve availability and visibility of products. The quality and capabilities of the
people are key to this and, during the year, the company maintained focus on training and
development of the sales teams to reinforce skills and impart best practices and plan to continue
in the future.

Technological Advancement
Nestle’s commitment to product quality is supported by state-of the- art technology and a high
degree of automation. It is continuously working with local suppliers to help them develop
capabilities for supply of high quality raw materials increasing its technological edge. During the
year, the Company has made significant progress in developing suppliers at par with
international quality which will help it become less reliant on imports for these raw materials.
During the year, three more factories were awarded the internationally recognized external
certification ISO 14001 for adherence to environmental processes and OSHAS 18001 for Health
and Safety. With this, all the seven factories of the Company now have ISO 14001 and ISO
18001 certifications. The company’s factories not only create world class products delivering
Nutrition, Health and Wellness but also provide economic prosperity to farmers by processing
agricultural products in a sustainable manner.

Robust Financial Performance

Nestle reported great results for the CY 2008. The total revenue for the company rose from
Rs.35130.80 million in CY2007 to Rs.43351.10 million in this financial year resulting in a
growth rate of 23.40%. The operating profit of the company rose to Rs.8438.00 million from
Rs.6874.90 million showing a growth of 22.74%. The profit before tax during the year 2008 was
Rs.7728.20 million whereas in the CY07 it was Rs.6286.10 million. The bottom line of the
company increased by 29.06% from Rs.4138.10 million last year to Rs.5340.80 million this year.
The EPS of the company stood at Rs.55.39 which increased from last year’s Rs.42.92.

16
Consolidated Financial Matrix

Ratios

17
 Past Price movement of the stock

Valuation
We are positive on company’s long term prospects. The company has earned the trust and
respect of every strata of society that it comes in contact with and is acknowledged amongst
India's 'Most Respected Companies' and amongst the 'Top Wealth Creators of India'. The
Company continuously focuses its efforts to better understand the changing lifestyles of India
and anticipate consumer needs in order to provide Taste, Nutrition, Health and Wellness through
its product offerings. Presently the company is running at a P/E multiple of 35.47x to its CY09
EPS of Rs.55.39. Based on the positive financial performance reported by the company, we
recommend BUY on the stock with a medium term price target of Rs.2500.00.

18
NESTLE INDIA’S STORY

Nestlé’s relationship with India dates back to 1912, when it began trading as The Nestlé Anglo-
Swiss Condensed Milk Company (Export) Limited, importing and selling finished products in
the Indian market. After India’s independence in 1947, the economic policies of the Indian
Government emphasized the need for local production. Nestlé responded to India’s aspirations
by forming a company in India and set up its first factory in 1961 at Moga, Punjab, where the
Government wanted Nestlé to develop the milk economy. Progress in Moga required the
introduction of Nestlé’s Agricultural Services to educate advice 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. Nestlé set up milk collection centers 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.

Nestlé 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.
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Nestlé India is a responsible organization and facilitates initiatives that help to improve the
quality of life in the communities where it operates.
Date of Establishment 1959

Revenue 1417.18 ( USD in Millions )

Market Cap 433740.5607834 ( Rs. in Millions )

Corporate Address M- 5a, Connaught Circus, New Delhi-110001, Delhi

Chairperson Antonio Helio Waszyk

MD Antonio Helio Waszyk

Directors Antonio Helio Waszyk, Ashok Kumar Mahindra, B Murli,

Christian Schmid, Martial G Rolland, Michael W O Garrett,
Pradip Baijal, Rajendra S Pawar, Rakesh Mohan, Ravinder Narain,
Richard Sykes, Shobinder Duggal, Swati A Piramal

Business Operation Consumer Food

Background Nestle has its presence in India for around nine decades, making it one
of the oldest company in India. Nestlé India is a subsidiary of Nestlé SA

Financials
Total Income Rs. 62973.966 Million ( year ending Dec 2010)
Net Profit Rs. 8186.648 Million ( year ending Dec 2010)
Company Secretary B Murli
BankersAuditors AF Ferguson & Co.

The Samalkha factory (Haryana) was started its operation in 1993. Kitkat, the company's
worldwide legendary brand chocolate was launched in the year 1995. Nestle commissioned two
factories in Goa at Ponda and Bicholim in the year 1995 and 1997 respectively. Nestle Growing
Up Milk was launched nationally in the year 1999. In April 2000, the company forayed into the
Ultra Heat Treated (UHT) liquid milk market. Launched Nestle Pure Life bottled water in the
year 2001 by the company, within few months, again launched its second water brand-San
Pellegrino-- in the Indian market. The company also made its foray into the iced tea segment.
Iced tea has already been soft-launched in Mumbai in two flavours, one being peach. The
company commenced participation in this global Nestle initiative in the year 2003 to create and
adapt common business process, permitting adoption of best practices, standardization of internal
and external master data and standardization of the information systems infrastructure. During

20
the year 2004, a project has been initiated to upgrade the production technology for infant
nutrition products at the Samalkha factory. Nestle India Ltd recognised for its outstanding

NESTLE SUCCESS STORY

From the famous Nestlé's chocolate that gratifies the sweet tooth of millions, to Stouffer's frozen
family dinners served up by harried soccer moms, to Fancy Feast cat food for pampered felines
from coast to coast, Nestlé USA's basket of products caters to a wide range of consumer needs.
For many years, the operations of this US$6.6 billion subsidiary
"Anyone who simply lays the of Swiss food giant Nestlé SA reflected the diversity and
technology on top of existing individuality of its hundreds of brands. Created in 1991 to unify
business processes is disparate divisions, Nestlé USA's business units nevertheless
doomed. This is the time to remained largely autonomous, and that arrangement worked
unite far-flung parts of the well for a number of years. But, as competition heated up —
with massive industry consolidation and retailers' private label
business into a cohesive,
products eroding customer loyalty and squeezing margins —
smart, and efficient whole — Nestlé USA needed to wring out efficiencies to slash costs and
and that's done by boost bottom-line performance.
fundamentally reworking In response, the company crafted a vision it called One Nestlé
how the company operates." — a vision that would introduce common processes, standards,
— Jack Rinquist, Deloitte and systems across the enterprise, resulting in unprecedented
economies of scale and cost savings.
To make that vision a reality, Nestlé USA selected SAP software to automate and integrate all
operations, from procurement through production, distribution, and customer care. At the same
time, Nestlé USA was well aware that this was not simply a software implementation that would
automate existing processes, but rather an undertaking that would mean fundamental changes in
how it approached and ran its business.

From vision to reality

To that end, Nestlé USA first reworked, standardized, and integrated its operations, and then
implemented the technology to support its new and improved way of doing business. And all of
this was done while making certain that employees had the appropriate training for their new
jobs.
This was no easy task to be accomplished overnight, that's for sure.
"Nestlé USA did it right. A huge SAP implementation like this is so not about the software,"
says Jack Ringquist, a Deloitte Consulting partner helping to drive Nestlé USA's transformation
efforts. "Anyone who simply lays the technology on top of existing business processes is
doomed. This is the time to unite far-flung parts of the business into a cohesive, smart, and
efficient whole — and that's done by fundamentally reworking how the company operates."

21
 Nestlé's Corporate Business Principles

The Nestlé Corporate Business Principles are at the basis of our company’s culture, which has
developed over the span of 140 years.
Since Henri Nestlé first developed his successful infant cereal “Farine Lactée”, we have built our
business on the conviction that to have long-term success for our shareholders, we not only have
to comply with all applicable legal requirements and ensure that all our activities are sustainable,
but additionally we have to create significant value for society.

At Nestlé we call this Creating Shared Value.

The new version of our Corporate Business Principles, updated in June 2010, will be handed
over to each of our 280’000 employees by the end of 2010 and accompanied by basic learning
and training tools.

As of 2011, a modular training programme will be rolled out on the various components of the
Corporate Business Principles. The depth and focus of the trainings will be established in
accordance with the materiality for the different functions within the company. For example, the
training on the human rights components will focus on managers and employees in countries of
higher human rights risks as a priority, with the aim to having completed the first training cycle
by the end of the year.

Our Corporate Business Principles will continue to evolve and adapt to a changing world, our
basic foundation is unchanged from the time of the origins of our Company, and reflects the
basic ideas of fairness, honesty, and a general concern for people.
Nestlé is committed to the following Business Principles in all countries, taking into account
local legislation, cultural and religious practices:

 1. Nutrition, Health and Wellness

22
 Our core aim is to enhance the quality of consumer’s lives every day, everywhere by offering
tastier and healthier food and beverage choices and encouraging a healthy lifestyle. We express
this via our corporate proposition 'Good Food, Good Life'.
 2. Quality Assurance and product safety

Everywhere in the world, the Nestlé name represents a promise to the consumer that the product
is safe and of high standard.

 3. Consumer Communication

We are committed to responsible, reliable consumer communication that empowers consumers to

exercise their right to informed choice and promotes healthier diets. We respect consumer
privacy.

 4. Human rights in our business activities

We fully support the United Nations Global Compact’s (UNGC) guiding principles on human
rights and labour and aim to provide an example of good human rights’ and labour practices
throughout our business activities.

 5. Leadership and personal responsibility

Our success is based on our people. We treat each other with respect and dignity and expect
everyone to promote a sense of personal responsibility. We recruit competent and motivated
people who respect our values, provide equal opportunities for their development and
advancement protect their privacy and do not tolerate any form of harassment or discrimination.

 6. Safety and health at work

We are committed to preventing accidents, injuries and illness related to work, and to protect
employees, contractors and others involved along the value chain.

 7. Supplier and customer relations

We require our suppliers, agents, subcontractors and their employees to demonstrate honesty,
integrity and fairness, and to adhere to our non-negotiable standards. In the same way, we are
committed towards our own customers.

 8. Agriculture and rural development

We contribute to improvements in agricultural production, the social and economic status of

farmers, rural communities and in production systems to make them more environmentally
sustainable.

23
 9. Environmental sustainability

We commit ourselves to environmentally sustainable business practices. At all stages of the

product life cycle we strive to use natural resources efficiently, favour the use of sustainably-
managed renewable resources, and target zero waste.
 10. Water

We are committed to the sustainable use of water and continuous improvement in water
management. We recognise that the world faces a growing water challenge and that responsible
management of the world’s resources by all water users is an absolute necessity.
Nestlé continues to maintain its commitment to follow and respect all applicable local laws in
each of its markets.

24
MARKETING ENVIRONMENT

EXTERNAL ENVIRONMENT

Demographic External factor

 More the education more will be the awareness about brand and quality food.
 If the income level of people is high then purchasing power will be high so they will
purchase more.
 Nestle products are made for people belonging from all age groups.
 Both male/female are included equally in its target market.

Economic environment
 If the inflation rate is high then there will be decrease in purchasing power. so inflation
indirectly affects the company’s sale.
 Nation varies greatly in its level and distribution of income.
 Changes in major economic variables such as income, cost of living, interest rate and
savings have a large impact on the market place.

Political environment
 Government regulations to protect interest of society and from unfair business practices.
 Unstable political conditions.
 Law order situation getting worse.

25
Legal environment
 Registered in the stock exchanges of Pakistan.

Social/cultural environment
 Consumption behavior of Pakistani people is high so they consume more goods.
 As Pakistan is Muslim country so we cannot add any ingredient which is prohibited in
Islam or which is not “Halal”.
 As nestle water is the branded item so the people who are brand conscious will prefer to
use nestle water .so nestle is focusing more on the posh areas.

Technological environment
 Technological environment is changing rapidly.
 Most dramatic force shaping company’s offerings and the way product is marketed.
 Company’s must keep up with technological changes to match up with its environment.

Internal Environment

 In Nestle Internal environment ensures.

 Employees are on side with the goals of an organization.
 They have direct impact on product quality,dependability and overall productivity.
 They are internal market, which impact everydepartment within an organization; a
satisfied internalmarket will be better able to satisfy external market.
 Nestle under the supervision of top management runs thedepartments of finance,
operations, accounting, sales andmarketing, research and development to achieve the
goalsof organization.

Micro Environment

In Nestle microenvironment includes:

a)Suppliers:

Suppliers provide the resources like labor and material resources to produce goods and services.
They add to customer overall value delivery system. Labor supplies include handling of
 Quantity of labor
 Quality of labor
 Labor strikes
 Labor relations Material supplies deals with the:

 Quality of material
 Price of material
 Stability of material inputs

26
  Delivery delays

Nestle efficiently handles the quality, quantity, price and stability of both material and labor
supplies. Management maps out the strategies for labor strikes, supply short age sand delays to
avoid increasing the cost of production, which can badly affect sales in short run and customer
satisfaction in long run.

b) Marketing Intermediaries:
 It includes the firms that help the company to promote, sell and distribute its goods to
final buyers.
 The physical distribution firms determine the ways to store and ship goods to reach their
destination.
 Marketing service agencies including marketing research firms, advertising agencies and
media firmsare also hired to target and promote product to right market.
 Financial intermediaries like banks, insurance companies helps to finance transactions
and insureagainst risks associated with buying and selling of goods.
 Nestle works in coordination with marketing intermediaries to make its product Pure Life
Water available and visible to its valuable customers.
c) Customers:
Nestle deals with the reseller customers who buy the product Pure Life to resell at a reasonable
profit.

Macro Environment

Macro environment include political, cultural, economical factors but as for as Nestle Pure Life
Water is concern none of above factors affect on it. Because it is not at luxury item they are
selling necessities of life which can never be affected.

27
NESTLE’S DEFINATION OF MARKETING

Building customer relationship based on customer values and satisfaction is at the very heart of
modern marketing. The two fold goals of nestle marketing is to attract new customers by
providing superior value and to keep and grow the current customer by delivering satisfaction.
Nestle defines marketing as:

“A social and managerial process whereby individual and group obtains good food and
good life through creating and exchanging products and values”

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 MARKETING MIX

Elements of the marketing mix are often referred to as the "Four 'P's a phrase used since
the1960's

 Product - It is a tangible good or an intangible service that is mass produced or manufactured on

a large scale with a specific volume of units. Intangible products are service based like the
tourism industry & the hotel industry or codes-based products like cell phone load and credits.
Typical examples of a mass produced tangible object are the motor car and the disposable razor.
A less obvious but ubiquitous mass produced service is a computer operating system. Packaging
also needs to be taken into consideration. Every product is subject to a life-cycle including a
growth phase followed by an eventual period of decline as the product approaches market
saturation. To retain its competitiveness in the market, product differentiation is required and is
one of the strategies to differentiate a product from its competitors.

29
 Price – The price is the amount a customer pays for the product. The business may increase or
decrease the price of product if other stores have the same product.

 Promotion – It represents all of the communications that a marketer may use in the marketplace.
Promotion has four distinct elements: advertising, public relations, personal selling and sales
promotion. A certain amount of crossover occurs when promotion uses the four principal
elements together, which is common in film promotion. Advertising covers any communication
that is paid for, from cinema commercials, radio and Internet adverts through print media and
billboards. Public relations are where the communication is not directly paid for and includes
press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events.
Word of mouth is any apparently informal communication about the product by ordinary
individuals, satisfied customers or people specifically engaged to create word of mouth
momentum. Sales staff often plays an important role in word of mouth and Public Relations.

 Place – A way of getting the product to the consumer and/or how easily accessible it is to
consumers.

30
MARKETING MIX OF NESTLE

Nestle, a very well known brand that is now housing thousands of products was primarily formed
for helping the infants survival who could not feed on mothers lactation., its first product being
"Farine Lactee Henri Nestle". The brand was introduced by Henry Russel in 1866, which was
boosted up by its merger in 1905 with Anglo Swiss Milk Company, headquartered in Vevey,
Switzerland.

roduct

• Being the world’s largest food and nutrition company almost six thousand products are being
hosted under the brand named Nestle.
• Its products are very wide spread in range counting almost all daily use products as well as
occasionally used products. The products includes coffee, bottled water, cereals, pharmaceutical
products like lens care solutions, infant food, beverages, chocolates, candies, ice creams,
refrigerated foods, yogurt, milk cream a very unusual product that is pet food and the largest
selling brand milkman. All these categories are subdivided to the diverse choices of customers
including different sizes and flavors (Kowitt, 2010).
• Products that are introduced in the market are first screened through high profile research and
development sector including food processing, micro analytical research and proper delivery of
functionalities in the food products thus promising the healthy goods for consumers.
• Main raw material for its milk products are UHT treated and packed in tetra packaging,
moreover the packaging is long lasting as well as tempting.
• As hygiene is a basic ethical question for edible products, so Nestle has a full concern and
focus on this parameter.
• Nestle provides the product compliance to the customers including all legal supports.
• Nutrition quality is preferably determined and is provided on the packing of the product to
facilitate consumers to check their preferences along with the expiry dates.
• Complaints if any are timely responded and suggestions are always welcomed.

31
 rice

• Flexible prices are the key factor of success of Nestle in global markets for example Milkpak
being the largest selling brand is being sold out at the same price as that of other low quality
products while maintaining its quality.
• Their marketing strategy includes a wide range of pricing strategy, and by doing this they can
maintain their product rates at a sustainable position.
• Prices are affordable to almost all types of consumers as they have wide range of single product
as in the case of beverages, fruit juices are affordable to low economy class and expensive tin
packed beverages are also doing business in the market.
• Bulk purchase discount is also provided at the whole sale markets as well as at the market
stores.
• Seasonal price variations are also seen, especially in the case of chocolate products, either by
upsizing at the same price or reducing the sale price.

32
 lace

• Nestle products have their main business area in Europe from where they get almost 90 percent
of the sales and revenues.
• Nestle is running globally, its setup being run in 86 countries. So, the sales are also done
globally and are impulsive ones.
• The products are not directly thrown into the market, rather a full procedure is followed
including all the essentials from Manufacturer, Distributor, Wholesaler, Retailer and finally to
Consumer.
• Nestle products are available in all its variety at the maximum outlets, as the company is
always looking forward to expand its outlets

33
 romotion

• Promotion strategies of the company are very well planned and they always pay multiples of
the expected amounts.
• Advertising on electronic and print media along with sign boards having tempting figurations
of the brand always proves good for the brand
• Sometimes limited economy offers boost up the popularity of brand especially in the case when
new induction to the market is made.

34
Strategy - Nestlé Roadmap to Good Food, Good Life

Nestlé’s objectives are to be recognised as the world leader in Nutrition, Health and Wellness,
trusted by all its stakeholders, and to be the reference for financial performance in its industry.

We believe that leadership is not just about size; it is also about behaviour. Trust, too, is about
behaviour; and we recognise that trust is earned only over a long period of time by consistently
delivering on our promises. These objectives and behaviours are encapsulated in the simple
phrase, “Good Food, Good Life”, a phrase that sums up our corporate ambition.

The Nestlé Roadmap is intended to create alignment for our people behind a cohesive set of
strategic priorities that will accelerate the achievement of our objectives. These objectives
demand from our people a blend of long-term inspiration needed to build for the future and
short-term entrepreneurial actions, delivering the necessary level of performance.
We are seeking to achieve leadership and earn that trust by satisfying the expectations of
consumers, whose daily choices drive our performance, of shareholders, of the communities in
which we operate and of society as a whole. We believe that it is only possible to create long-
term sustainable value for our shareholders if our behaviour, strategies and operations are also
creating value for the communities where we operate, for our business partners and, of course,
for our consumers. We call this “Creating Shared Value”.

We are investing for the future to ensure the financial and environmental sustainability of our
actions and operations: in capacity, in technologies, in capabilities, in people, in brands, in R&D.
Our aim is to meet today’s needs without compromising the ability of future generations to meet
their needs, and to do so in a way which will ensure profitable growth year after year and a high
level of returns for our shareholders and society at large over the long term.

35
STRATEGY FOR LAUNCHING THE PRODUCT:

GOALS & OBJECTIVES:

Creating awareness about our product to at least 50% of the target market within three
months of launch
This objective will be achieved through intense promotional activities, developed to get to the
target market in the best possible manner.

Capturing 60 % of target market within 1 year.

Our promotional activities will develop interest for people thus compelling them to approach us.
We will make good relations with our customers so they create good word of mouth for us and
approach us again and refer others.

Launching the product in summers.

We will be launching the product in summers to capture most of the target consumers and as
well as market share.

Opening different outlets.

We will be opening different outlets initially in major two cities and after gaining primarily
success we will be available in all big and small cities of India.

MARKETING STRATEGY

Our product will include features that contain the combination of both health and hygiene
keeping in mind the individuals requirements in terms of taste. However the marketing will be
done considering the concept of mass personage.
Our product will be tailored to individual needs (desired taste) but promotion will attract all of
them collectively. Furthermore we will be following pull strategy and approach our end users
ourselves with the help of various promotional activities. In our case no intermediary (whole
sellers) is involved. Our distribution channel will be as follow.

PRICE FIXATION STRATIGIES

These are following objectives of nestle pure life regarding price fixation:

Profit Earning:

Profit earning is the main objective of every company but in case of nestle their profit margin is
low. Only a few amount of profit is collected from pure life water.

Customer satisfaction:

36
In nestle pure life price is not fixed by keeping in mind profit motive, only customer satisfaction
is kept in mind while fixing the prices.

STRATIGIES FOR FIXING THE PRICE:

In nestle prices are set on cost basis as given below:

Price = Cost + Profit

Break even or Target price:

Per Unit Price= variable cost + fixed cost / units of sale

DISTRIBUTION

According to the distribution, India is divided four geographical zones and then in further
Regional Sales Offices.

37
North Zone
Jammu and Kashmir
Himachal Pradesh
Punjab
Haryana
Uttaranchal
Delhi
Uttar Pradesh

38
South Zone
Andhra Pradesh
Karnataka
Tamil nadu
Kerala

39
Central Zone
Madhya Pradesh
Chhattisgarh

40
West Zone
Rajasthan
Gujarat
Maharashtra
Goa

41
East Zone
Assam
Manipur
Meghalaya
West Bengal
Orissa
Sikkim
Mizoram
Tripura

42
STRATEGIES FOR COMPETITIVE ADVANTAGES:
Every product on the shelf, every service and every customer contact helps to shape this image.
A Nestlé brand name on a product is a promise to the customer that it is safe to consume, that it
complies with all regulations and that it meets high standards of quality. Customers expect us to
keep this promise every time. Under no circumstances will we compromise on the safety of a
product and every effort must be made to avoid hazards to health. Likewise, compliance with all
relevant laws and regulations is a must and is not negotiable. People, equipment and instruments
are made available to ensure safety and conformity of Nestlé products at all times. The effort is
worth it. Companies with huge quality standards make fewer mistakes, waste less time and
money and are more productive. They also make higher profits. Quality is our most successful
product. It is the key to our success, today and tomorrow.

OTHER MARKETING STRATEGIES ADOPTED BY THE COMPANY

In future two competitors of Pure Life are going to launch their water in the market which is
Pepsi & Coca Cola. As their competitor will advertise their product at very high stage so people
will get awareness about drinking water and nestle pure life can achieve a great market share in
future because people can see that our water is getting rough day by day and there is a need for
pure drinking water to survive in the world.
For these opportunities company is going to launch another plant for drinking water next year
Firstly Nestle pure life was focusing on product and pricing strategy but recently it’s focusing on
marketing strategy to create customer awareness of the product in those areas which are far
away.

CHANEL OF DISTRIBUTION:
Nestle pure life is making full efforts to supply its product to ultimate consumers. For this
purpose the company uses the conventional marketing channels of distribution to supply the
product. In this method company supply the product to whole seller who responds it to retailers
who supply to ultimate user. The company also uses the vertical marketing system in which
retailers also take supply from directly company resources without contact with whole sellers, In
this way the margin of company decreases and going into the interest of the ultimate consumer.

PROMOTIONAL STRATEGY
Advertisement is a tool to introduce the product in the market. To increase sales and build an
image in the mind of consumer company advertise their product in different ways, as for as
Nestle pure life is concerned company use:
Television
Radio
News Paper
Bill Board
Hoarding etc.

43
Sometime company also makes free sampling, held stalls at different programs like Health Mela.
Pure Life's communication strategy is weak as they follow emotional black mailing. In
advertising they show emotional feelings to their customers.

SALES PROMOTION STRATEGY

Sales Promotion: Specific promotions of Nestle Pure Life were arranged in some of the key
outlets of Lahore. Elaborate shelf space was acquired for product display and specially designed
POS material was extensively used to promote sales. On a 12-bottle purchase of 1.5 ml, one 1.5
ml bottle was offered free to consumers. Similarly on a 6-bottle purchase of 1.5 ml, one 0.5 ml
bottle was offered free. Regarding trade promotion, the retailer was also given an additional
discount of 4 % during this sales promotion. Not only did the sales of Nestle Pure Life grow
tremendously during the promotion, these continued at a higher pace even after it was over.
Public Relations: As far as the public relations are concerned, the organization releases an
annual report which includes the company's financial statements along with the sales of all
product categories. The annual report is mainly aimed at the stockholders. However, another
very important form of public relations are the newsletters and bi-monthly magazines issued by
the organization. A huge amount of information is found in these regarding the products and
their promotion.

POSITIONING
We will position our product as a high quality product consumer focused. Messages like
“Who knows your taste better than us”,
“Nestle ice-cream now at your door step”;
“Add additional flavors’ to your life”
Will help us portray our picture clearly and distinctly. We will position our product against the
competitors and gain competitive advantage through our efficient promotional methods, using
innovations, and by reaching closer to our target market through the arrangement of events like
BASANT, VALENTINE DAY and etc. In short consumers will view us as a product providing
highly quality, in terms of taste, customer focused and, at the same time reasonably priced as
compared to others.

44
 PRODUCTS

COMPETITIVE ANALYSIS
Competitive analysis includes the comparison of one organization with its competitor. It
differentiate product and tells which product stands at which position. It tells about the
differentiation of characteristics and weaknesses of the product with its competitors.
As we know that more important competitor of Nestle is Aquafina.

SEGMENTS AND TARGET MARKETS SERVED

MARKET SEGMENTATION (PURE LIFE)

For getting the maximum market share and respect of the product in the minds of the consumer,
as per our observation and market survey we have concluded that Nestle Pure Life Water’s
segmentation is based on two points.
Geographic Segmentation
Demographic Segmentation

45
  Geographic Segmentation
The company has divided its geographic segmentation in several regions. First they have the
segmentation of a whole country and from each provincial capital, they divided its areas into
north, east, west, south. So that it could be easy for the company to work efficiently on its supply
chain management.

 Demographic Segmentation
Nestle Pure Life isn’t a supreme quality product that only the high class uses. There is no age,
sex, income and any other kind of limitation on use of the product. The product is for all.
Anyone can use the product as per need.
Nestle is a well-known company all over the world. The company basically deals in food
products as their logo says “Good Food, Good Life”. Their major products lines are:

MILK PRODUCTS

i. NESTLE EVERYDAY:
To meet the requirements of the tea-whitening segment, this product was launched in 1986. On
account of aggressive marketing, focused distribution, excellent consumer acceptance and
product quality, this brand has shown strong growth and holds good promise for the future.

46
ii. NESTLE MILKMAID:

It is a Partly Skimmed Sweetened Condensed Milk. NESTLÉ MILKMAID is a versatile product

and excellent as a dessert ingredient. Lip-smacking desserts can be whipped up in the shortest
possible time. 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.

iii. NESTLE DAHI:

is made from fresh, high quality pasteurised toned milk. It has all the goodness of natural
Calcium and the Cultures used in NESTLÉ Dahi help improve digestion. It comes available for
your convenience in 85g, 200g and 400g Tubs and 200g and 1kg Pouch packs.
The pouch packs are currently available only in Delhi NCR.

47
BEVERAGES

i. NESCAFÉ CLASSIC:
It is 100% Pure Instant Coffee. NESCAFÉ CLASSIC has the unmistakable taste of 100% pure
coffee and is made from carefully selected coffee beans picked from the finest plantations,
blended and roasted to perfection. 100% coffee…100% pleasure…

ii. NESTEA:
New NESTEA Iced Tea with Green Tea brings natural, healthy goodness of Green tea into your
glass. Green tea is a good source of NATURAL ANTIOXIDANTS which are known to protect
body cells from damage caused by free radicals. Feel good everyday with the refreshingly light
taste of NESTEA with Green Tea.

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iii. NESCAFÉ CAPPUCCINO:
The world's favourite instant coffee brand NESCAFÉ brings two delicious new Cappuccino
variants - NESCAFÉ Choco Mocha and NESCAFÉ Vanilla Latte. Treat yourself to its rich
coffee taste and delicious froth. Comforting, relaxing - a delicious cup of NESCAFÉ Cappuccino
is a great way to enjoy a true café experience at home.

CHOCOLATES

i. MILKYBAR CHOO:
MILKYBAR CHOO - the tasty chewy MILKYBAR - now has power of Calcium! Outdoor
champions, grab one now. Also available in yummy Strawberry and Choko flavours!!
mm, mm, mmmmmmmmm......

49
ii. MILKYBAR ECLAIRS:
Introducing a delicious new wave of strawberry flavour in your favourites MILKYBAR Éclairs.

iii. POLO

50
 CHAPTER-5
FINDINGS AND ANALYSIS

51
 Synonym for baby food.
 Brand name, quality and flavor are most important factors.
 All occasion items and targeted towards whole family.
 Aiming to set up their presence in food industry without compromising with quality.
 NESTLE is a flagship brand.

SWOT ANALYSIS

52
STRENGTHS
 Very long history (over 140 years)
 Operated factories in 77 countries (all six continents), a truly global company.
 Considered the innovation leader in the global food and nutrition sector(3500 scientist
in company R&D network)
 Low cost operators (beat the competition by producing low cost products, edging ahead
with low operating costs)
 Offering thousands of local products.
 Have a great CEO, Peter Brabeck.
 Socially Responsible Company.
 Products enjoy strong brand image and market pull.
 Innovative and constantly growing product line. NML launched 17 new products,
including variants of existing products in recent past.
 Sales force is the major resource strength in terms of physical resources of the Periodic
research carried out to judge market trends.
 Multinational.
 Growing Sales and profits.
 Major shareholder in the food industry of Pakistan.
 Aggressive Marketing.
 Efficient Distribution networks throughout the country.
 Quality product
 Solid Financial position
 Strong supply chain network
 Qualified work force and a very strong workforce.
 Commitment to High Quality Products
 Year Annual Production (million liters) Annual Consumption (million liters) 2008-09
=> 648.43 353.71 2009-10 => 753.89 372.05.

WEAKNESSES
 Not as successful as they thought they would be in some market (i.e. France)
 Some of their product were positioned as too scientific, and consumers didn’t quite
understand (i.e. LC-1 was a food and not a drug)
 Selective investment due to uncertain economic and political conditions.
 Feasibility of new products needs to be analyzed, e.g. Nestea was launched some years
back but it failed because no customer demand for it existed.
 There is weak marketing of some products as sometimes there is no advertisement.
 Lack of awareness among the target market.

53
  It Dependency on others (govt. & sponsors) for the arrangement of events. The target
market of some of the Nestle products like MilkPak is upper middle and high class
because lower middle and poor class cannot afford to buy UHT milk due to its premium
price.
 It is a main weakness of some of the products of Nestle that there are different
companies of same products but the name of nestle sometimes stand in the last because
of low advertising and marketing.

OPPORTUNITIES
 Well-known company and strong brand name.
 Health-based products are becoming more popular in the world, including in the
United States.
 Ranked first in nearly all the product segments in which it operated (market leader).
 Unaffected by current economic conditions (its share of the UK confectionery market
rise to 15.6 per cent with a 0.5 per cent growth this year).
 Pakistan is the seventh largest producer of milk in the world with annual output of over
22 billion liters.
 Nestlé MilkPak has expanded its product range by entering the cold dairy market
recently by launching Nestlé plain yogurt and now fruit yogurt is also added to it.
 Credit policy can be adopted to increase sales.

THREATS
 Some markets they are entering are already mature.
 Global competition is high.
 There are intense competitions in the United States, especially yogurt market (General
Mills).
 Price fluctuations due to rupee devaluation as raw material are imported.
 The present economic crisis in the world, led to the withdrawal of foreign
management from the company and the investment has come to a halt.
 Legal and ethical issues.
 Market segment growth could attract new entrants.
 Economic slowdown can reduce demand.
 Two main competitors Haleeb and Olpers are main threat for MilkPak especially the
Olpers is growing very fast.
 Inflation is getting higher and higher so the purchasing power of the people is
decreasing day by day.
 There is no entry barrier for new entrants as the Olpers has come in the market.
 Taste of consumers for some products has already developed which is hard to change.
54
 PEST ANALYSIS

This is my PEST analysis of Nestle:

Political factors

 Changes in tax- If the tax rate was to change it would have a direct affect on Nestle,
because every change happens that occurs in tax will also cause price of Nestle to do the
same. So if the tax rate increased this would mean that the price of confectionery goods
would also increase, this could cause Nestle to lose customers as a result of over pricing.

 Trade unions- Trade unions are put in place to look out for the best interests of the
worker. If Nestle had to lower wages for some reason, this would mean that the trade
union would file a complaint because of the wage reduction and if the wages were not
raised to an acceptable amount there is a danger of a staff strike. This would cause Nestle
to be late on deliveries and maybe even stop some production lines.

 Duties and levies- Are additional to the cost of shipping when importing and when
exporting products. This is what duty free is because there is no added cost for the

55
 import/export of the goods. So if the price of duties and levies was to increase the
company would have to pay extra for transport.

Economic factors

 Inflation- Inflation effects Nestle in much the same way as changes in tax would. So if
the changes in interest rates went down so may the prices.

 Unemployment- may affect sales because if the unemployment rate was to rise this would
mean that people would not be earning as much money and they might have to cut back
on luxuries such as chocolate and other things that are not needs.

 Energy prices- Energy prices rise as do interest rates and taxes, so if electricity costs were
to be rise this would mean that it would cost Nestle more to run their machinery and this
would lead to price increases. As a result again this could mean that Nestle lose out on
customers as a result of over pricing.

Social factors

 Consumer lifestyles-This is the feeling of the current trend what is considered to be in

style and popular. These trends run in cycles and this is a good way of predicting what
will become trendy and when this gives businesses a chance to prepare. Nestle can use
this to their advantage by anticipating the next trend and releasing a product meeting that
need.

Technological factors

 New technological progresses- This would more than likely have a positive knock on
affect to Nestle as new technologies means faster computers and things that make every
day jobs easier. Or it may be possible to get a new machine that could increase
production rate as it is more advanced that the older model.

 Energy saving techniques- If any new energy saving techniques are invented this would
mean that the price of the energy would go down which would mean there would be extra
money to invest in to the business or into a new product.

 New materials and substitutes for existing materials- New material could be useful to
nestle as they could be used to make new types of packaging and it may make chocolate
wrappers more environmentally friendly.

 Better equipment- This is just like new technological progresses. Better equipment means
that the production rate would increase as they would be more advanced and faster. This
would enable Kit Kat to meet popular demand.

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 CHAPTER-6
SUGGESTION &
RECOMMENDATION

57
Nestle is the best company all over the world but there are some recommendation and
suggestions.

 Their prices are bit higher so they should low their prices to increase their customers.
 About 70% people use their products while the rest don’t use them. They should conduct
survey and concentrate on those facts why people are nto using their products.
 They should also improve their advertising as their advertising doesn’t pay long-term
effects in the mind of customers.
 About 17% people are not satisfied from the taste of nestle so nestle has to improve its
taste.

Recommendation
 Keep the taste nice.
 Increase advertising and show your competitive edge.
 Increase loyalty of customer with brand through attractive packages.
 Keep the price low because the day when price of competitor will be very near to your
price your sales will boost up.
 Increase its distribution network.
 Try to get more & more party orders.
 Increase incentive and promotional activities, traning courses/workshops for team.
 Conduct weekly meetings with distributors and sales team in order to review weekly
target closing.

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 CHAPTER-7
LIMITATIONS

59
There are some disadvantages to using secondary research:

1) Quality of Research

The originators of the primary research are largely self-governed and controlled by the marketer.
Therefore, the secondary research used must be scrutinized closely since the origins of the
information may be questionable. Moreover, the researcher needs to take sufficient steps to
critically evaluate the validity and reliability of the information provided.

2) Not Specific to Researcher’s Needs

In many cases, secondary data is not presented in a form that exactly meets the researcher’s
needs. Therefore, the researcher needs to rely on secondary data that is presented and classified
in a way that is similar to their needs.

3) Incomplete Information

In many cases, researchers find information that appears valuable and promising. The researcher
may not get the full version of the research to gain the full value of the study. This is because
many research suppliers offer free portions of their research and then charge expensive fees for
their full reports.

4) Not Timely

When using secondary research, one must exercise caution when using dated information from
the past. With companies competing in fast changing industries, an out-of-date research reports
many have little or no relevance to the current market situation.

60
 CHAPTER-8
CONCLUSION

61
Nestle is a market leader due to different reasons:
 Its price is high against its competitors but it matches its quality with its competitors.
 Nestle is using its brand name to promote its products & it’s very popular as compared to
its competitors.
 Its packaging is good.
 We can easily find Nestle from any retailer shop.
 Due to its advertisement, Nestle attracts more customers & has very prosperous future if
it continues to promote its products and bring all the possible innovational aspects using
different product line strategies.
 It has always maintained the quality of its products.
 Despite of all the facts, there’s need to maintain the condition of office and enhance the
security.
 Behavior of employees is not professional and every department should treat equally.

From our report it is concluded that nestle has a good reputation as a strong consumer brand.
66% of the consumers use Nestlé’s products regularly. 60% of the consumer’s associate quality
with Nestle.57.3 % of the consumers prefers Nestle over other brands of pure water that are
available in the market. Nestle formulating a good strategy and they are trying to go for mass-
marketing.

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 BIBLOGRAPHY

Books:
• Kotler Philip (Eighth Edition) “Marketing Management”, Prentice Hall of India Ltd.
• T.N.Chhabra (Fourth Edition) “Marketing Management”, Dhanpat Rai & Co.(Pvt.) Ltd.

Magazines:
• Advertising and marketing Magazine
• The Economic Times – “Brand Equity”
• Company Literature
• Business World
• Business Today

Website:
• www.nestle.com
• www.moneycontrol.com
• www.iloveindia.com
• www.shine.com
• http://www.thetimes100.co.uk
• http://www.deloitte.com/view/en_GX/global/services/consulting/enterprise-
applications/08645de9542fb110VgnVCM100000ba42f00aRCRD.htm
• http://www.coursework.info/University/Business_and_Administrative_studies/Economics/
Microeconomics/PEST_Model_L61591.html
• http://www.scribd.com/doc/21544545/Introduction-Nestle-Was-Founded-in-1866-by-
HenriNestle-And
• http://kninn.blogspot.com/2010/06/recommendations-for-nestle.html

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