INTEGRATED PROJECT MARKETING

COMPANY-NESTLE












SUBMITTED B SUBMITTED TO
SRIKANTH.B Dr SALIL S
S2 BATCH B ASST PROFESSOR
TKMIM TKMIM







Over view of the Industry

Fast Moving Consumer Goods (FMCG) industry

FMCG are products that have a quick shelf turnover, at relatively low cost and
don't require a lot of thought, time and financial investment to purchase. The
margin of profit on every individual FMCG product is less. However the huge
number of goods sold is what makes the difference. Hence profit in FMCG goods
always translates to number of goods sold.
Fast Moving Consumer Goods is a classification that refers to a wide range of
frequently purchased consumer products including: toiletries, soaps, cosmetics,
teeth cleaning products, shaving products, detergents, other non-durables such
as glassware, bulbs, batteries, paper products and plastic goods, such as
buckets.
Three of the largest and best known examples of Fast Moving Consumer Goods
companies are Nestle, Unilever and Procter & Gamble. Examples of FMCGs are
soft drinks, tissue paper, and chocolate bars. Examples of FMCG brands are
Coca-Cola, Kleenex, Pepsi and Believe.
The FMCG sector represents consumer goods required for daily or frequent use.
The main segments of this sector are personal care (oral care, hair care, soaps,
cosmetics, toiletries), household care (fabric wash and household cleaners),
branded and packaged food, beverages (health beverages, soft drinks, staples,
cereals, dairy products, chocolates, bakery products) and tobacco.
The Indian FMCG sector is an important contributor to the country's GDP. It is the
fourth largest sector in the economy and is responsible for 5% of the total factory
employment in India. The industry also creates employment for 3 m people in
downstream activities, much of which is disbursed in small towns and rural India.
This industry has witnessed strong growth in the past decade. This has been due
to liberalization, urbanization, increase in the disposable incomes and altered
lifestyle. Furthermore, the boom has also been fuelled by the reduction in excise
duties, de-reservation from the small-scale sector and the concerted efforts of
personal care companies to attract the burgeoning affluent segment in the
middle-class through product and packaging innovations.
Unlike the perception that the FMCG sector is a producer of luxury items targeted
at the elite, in reality, the sector meets the everyday needs of the masses. The
lower-middle income group accounts for over 60% of the sector's sales. Rural
markets account for 56% of the total domestic FMCG demand.
Many of the global FMCG majors have been present in the country for many
decades. But in the last ten years, many of the smaller rung Indian FMCG
companies have gained in scale. As a result, the unorganized and regional
players have witnessed erosion in market share.

History of FMCG in India

In India, companies like ITC, HLL, Colgate, Cadbury and Nestle have
been a dominant force in the FMCG sector well supported by relatively less
competition and high entry barriers (import duty was high). These companies
were, therefore, able to charge a premium for their products. In this context, the
margins were also on the higher side. With the gradual opening up of the
economy over the last decade, FMCG companies have been forced to fight for a
market share. In the process, margins have been compromised, more so in the
last six years (FMCG sector witnessed decline in demand).
NESTLE
Nestle is a Swiss multinational nutritional, snack food, and health-related consumer goods
company headquartered in Vevey, Switzerland. It is the largest food company in the world
measured by revenues.
Nestle's products include baby food, bottled water, breakfast cereals, coffee, confectionery, dairy
products, ice cream, pet foods and snacks. 29 of Nestl's brands have annual sales of over 1
billion Swiss francs (about $ 1.1 billion)including Nespresso, Nescafe, Kit Kat, Smarties,
Nesquik, Stouffer's, Vittel, and Maggi. Nestl has around 450 factories, operates in 86 countries,
and employs around 328,000 people. It is one of the main shareholders of L'Oral, the world's
largest cosmetics company.
Nestle was formed in 1905 by the merger of the Anglo-Swiss Milk Company, established in
1866 by brothers George Page and Charles Page, and Farine Lactee Henri Nestl, founded in
1866 by Henri Nestl. The company grew significantly during the First World War and again
following the Second World War, expanding its offerings beyond its early condensed milk and
infant formula products. The company has made a number of corporate acquisitions, including
Crosse & Blackwell in 1950, Findus in 1963, Libby's in 1971, Rowntree Mackintosh in 1988 and
Gerber in 2007.
Nestle has a primary listing on the SIX Swiss Exchange and is a constituent of the Swiss Market
Index. It has a secondary listing on Euro next. In 2011, Nestl was listed No. 1 in the Fortune
Global 500 as the world's most profitable corporation. With a market capitalization of $ 200
billion, Nestl ranked No. 13 in the FT Global 2011.


Competitive environment of Nestle Nescafe
Based on retail volume (in tonnes) we have identified two main competitors Owl and Super,
who are both under Super Coffeemix Mfg Pte Ltd. All three brands are in the instant coffee
category.


Marketing Environment of Nestle
SWOT Analysis
1: Strengths
The biggest strength of nestle is it includes team focused and good policy. Nestle looks on
collective and oriented employees to work hard. And second thing is Nestle has a big brand
name because of their high level of market share and the trust of the people from all over the
world. Nestle is trying all the time to achieve bigger volumes by renovating existing products
and innovating new products. Because of low cost operators by which Nestle not only compete
with others but also taking ahead.
Strengths are internal factors. For example, strength could be your marketing expertise.
2: Weaknesses
One of the major weaknesses of Nestle is Nestle Baby Milk because those babies who fed on
baby milk are become sick. And so many babies were died because of nestle baby milk and then
people boycott to buy nestle.
Weaknesses are internal factors. For example, a weakness could be the lake of new product.
3: Opportunities
Opportunities are external factors, for example developing a distribution channel such as
Internet; change in the lifestyle of consumer is possible to increase the demand for companys
products.
4: Threats
A threat could be a new competitor in an existing market or a technological change that makes
existing products possible out of date.
PEST Analysis:
The main theme of PEST analysis is to measure market potential and situation, by indicating
growth or decline. PEST analysis can be used for marketing and business development
assessment and decision-making, and the PEST analysis encourages proactive thinking, rather
than relying on habitual or instinctive reactions.
1: Political analysis:
Nestles baby milk can be affected by political change in several different ways i.e. political
change can influence public priorities and funding arrangements. Nestle has to operate within the
framework of laws set by Parliament, and thats why it depends on political considerations.
Government plays vital role by imposing the law and regulation on the companies. Government
set standard laws for companies that has to met otherwise they have to pay fines.
Nestle is trying to met all the standard laws which are set by the government. For example
Health and Safety Act, Disability Act but unfortunately Nestle break the law. Government laws
and regulation in accounting standards, taxation requirements, including tax rate changes, new
tax laws and revised tax law interpretations are highly influenced on Nestle business.
Nestle is also very keen about stability of government stability in countries where they are trying
to get in (especially in underdeveloped countries where political stability is at risk).They are also
subject to state, local, foreign environmental laws and regulations.
2: Economical Environment:
Nestle needs to have enough information about the country inflation rate, economic growth rate,
and national per person capital income, in which they are willing to start their business.
Economic condition varies from country to country. Before starting the baby milk has focus on
the above factors. These are the factors that Nestle has to consider before setting corporate
objectives. Global economic turmoil has major influence on Nestle business because customers
are spending less and they have to adopt different strategies in order to run business smoothly.
3: Social analysis
Social or cultural environment had great impact on Nestle. The main focus of social/ cultural
includes the Social change involves changing attitudes and lifestyles. The social and cultural
environment is constantly changing. Different countries had different culture (language, religious
beliefs, food, family, clothing and their lifestyle). Nestle has to developed strategies which are
according to belief and culture in multicultural country like India. Every country has different
consumer taste and lifestyle and Nestle has to develop effective strategies in order to met
different lifestyle consumer behaviour. Company is totally dependent on the consumer lifestyle
and their attitude. Product or services cannot be successful until company has enough
information about the consumer lifestyle. Nestle has to take social and cultural factors under
consideration in order to achieve their strategic objectives.
4: Technological:
Technological change has the most rapid, persistent and profound effect. It creates opportunities
for new products and product improvements and of course new marketing techniques- the
Internet, e-commerce. Technology creates opportunities for new product or product
improvements and new techniques of marketing such as internet and e-commerce. Technology
has great influence on business operations and overall decisions. Nestle uses technology by
taking orders via telephone and online by internet. Moreover, Nestle uses technology in various
business activities such as record of their customers and employees.

Product mix of nestle
Baby foods
Bottled water
Breakfast cereals
Coffee
Chocolate & confectionery
Dairy products
Drinks
Ice cream
Kitchen
Nutrition & health
Product life cycle of nestle Maggi


INTRODUCTORY STAGE
CHANNEL
Producer -- Distributor
Retailer -- Consumer The product launched keeping in mind the working women and
children.
No competition
It was the pioneer in the instant noodle market.
Distribution
PRICING
The initial pricing strategy was low pricing strategy to make product affordable.
PROMOTION
Promotion focuses on awareness and information
Promoted with the tag line
BAS 2 MINUTE.
Promotion done by
- Giving gifts on empty packets.

GROWTH STAGE
INCREASED NUMBER OF SALES.
ACCEPTED AS READY TO EAT FOOD.
ENJOYED 50% MARKET SHARE VALUED AT 250 CRORE.
PROFITS BEGIN TO RISE.
MAGGI BECOME THE NO. 1 BRAND IN INSTANT NOODLE MARKET.
PRICE- prices were kept normal.
PRODUCT- no any new changes.
PROMOTION- promoted with tag line
GOOD TO EAT FAST TO COOK.
MATURITY STAGE
Declining sales growth
Saturated market.
Extending product line.
Large promotional offers.
Entrance of new player
-DURING THE PERIOD OF 90S MAGGI FACES THE TOUGH
COMPETITION FROM TOP RAMEN.
PRODUCT
Maggi introduced wide variety of products like Dal atta
noodles, Chicken Maggi, Maggi cuppa mania.
PRICE
Maggi still comes in very affordable prices starting from Rs. 5,
they reduced the quantity instead of increasing price.
DISTRIBUTION
Distribution became more intensive. Adopted various intensive
programme for encouraging the product over their competitors in
the market.
DECLINE STAGE
Sales saw a decline in 1990s.
-Formulation changed from fried base to air dried base.
New product launched but failed.
-Dal atta noodles of sambur flavour.
Tough competition from TOP RAMEN.
Failure of other products like soups, cooking aids etc.
Reintroduction of MAGGI Noodles
Reintroduced in 1999
Increased Distribution
Focus on new segments of Society
New & Interesting TV Commercial


Segmentation & targets
Nestle products - Market Segmentation strategies :
Nestle products - Market Segmentation strategies MAGGI MILO KIT KAT / MUNCH
Maggi :
Maggi Demographics Age group 8 to 14 yrs. Social class- Working households Size of family-
Nuclear Psychographics Lifestyles- Fast Movers Personality- Ready to experiment Launched in
1982 Entirely new concept of ready to make noodles Targeted towards teenagers through
mothers
Health beverages:
Health beverages Malted beverages can be segmented as: White beverages (65%) Brown
beverages (35%) Initial focus on children as the target segment Gradually the positioning
extended to health drinks for the entire family. Targeted different consumer segments such as
Junior brands for infants Separate formulations for expecting mothers Complan -extra nutrients
Horlicks-extra calcium
Milo:
Milo Demographics Targeted at children, primarily boys in the 5-12 age bracket. Psychographics
Centered around the winning moment. Health conscious. Sportsmen as role model. Introduced
in 1996-97. Has about 3.3 per cent of the Indian HFD market. Baichung Bhutia / Leander Paes
are the brand ambassadors.
Kit Kat / Munch:
Kit Kat / Munch Both were launched around mid-nineties. Munch, a chocolate wafer product
like KitKat , has been launched to create a further segmentation in the 16,000-tonne per annum
chocolates market . Munch forges a whole new segment around a wafer.
Kit Kat / Munch:
Kit Kat / Munch Demographics Initially targeted to premium segment gradually moved to low
price segment Psychographics Consumer's desire for a good value for money . Light Low
dietary value









Price :methods, approaches, margin
In Price strategy, Nestle has adopted the strategy of non-price competition. It is offering one
price for NPL to all. It also keeps the check on distributors to maintain single price of NPL. It
offers trade discounts to its distributors.


Leading Brands of Nestle:

Kit Kat
Nescafe
Nestle Milo
Maggi
Nestle water
Nido
Nestle milk pack
Nestle cerelac
Friskies
Nestle yogurt
Nestle pudina raita
Nestle zeera raita
Nestle flavors cream
Nestle Frost
Nestle rice
Lactogen
Breakfast cereals
Polo
Milkpack desi ghee




Price:Method,Approaches,Margin

Price is the amount of money and/or other items with utility needed to acquire a product and
utility is an attribute with potential to satisfy the wants.

A product price influences wages, rent, interests, and profits. Some prospective customers are
interested in low prices, where as another segment is more concerned with other factors, such as
service, quality, value, and brand image. Consumers perception of quality may be influenced
not just by price but also by such factors as store reputation and advertising.

Nestl estimated the cost by doing accumulated production because if they produced mass
production so it reduced their labored cost and other cost for production process its a big
advantages of the Nestl company who produce large quantity of units. With the help
accumulated production Nestl Company has a low cost of production and high profit margin.
Next, Nestl company selecting a price method of going rate price because their pricing near the
competitor pricing. As an example, Nestle juices have a market leader in beverage industry. Last,
Nestl set the final pricing related to their market competitors so Nestl price do not have impact
on the company policy, and other marketing activities.

The Pricing objectives are separating into different oriented. The first is profit- oriented which
help to achieve a target return and maximize profit. The second is the sales-oriented which help
to stabilize prices and maintain or increase market share.

PRICE STRATEGY
In Price strategy, Nestle has adopted the strategy of non-price competition.
It is offering one price for NPL to all. It also keeps the check on distributors to maintain
single price of NPL .It offers trade discounts to its distributors
Nestle estimated the cost by doing accumulated production because if they produced
mass production so it reduced their labored cost and other cost for production process
With the help accumulated production Nestle Company has a low cost of production and
high profit margin.
Nestles trade incentive scheme for Maggi noodles is aimed at reviving its sales volumes,
which declined 2% year-on-year in April-June quarter as the company focused more on
pricing than volumes.
The Pricing objectives are.
The first is profit- oriented which help to achieve a target return and maximize profit.
The second is the sales-oriented which help to stabilize prices and maintain or increase
market share.
The last is status quo-oriented that help to stabilize the prices, to meet competition, to
standardize their quality such as in the recent research.




Distribution methods OF NESTLE
Distribution plays important role in success and failure of any organization. The organization
may fail, if its distribution networks are not efficient and unable to provide the
necessary items at required place and at reasonable time. Distribution system of Nestl is one of
major source of competitive edge over its existing rivals. Nestl has its own distribution
networks equipped with all necessary transportation facilities. They transport their products at
major regional sales offices, which are situated at different cities of
India.These sales offices (distribution centers) have their own vans with sales people who sell
and transport goods to the small retailers.
MANUFACTURER
CARRIAGE & FORWARD AGENT
DISTRIBUTOR
WHOLESALER
RETAILER
End customer
RETAILER in general Nestle follows the above sequence for distribution of its
products.In India this strategy is working very effectively and efficiently.By the above diagram,
we can understand that the products are sent tothe C&F Agents of the company from its
Manufacturing Unit. Then at later stage its been sent to Distributor and Super Stockiest. Here,
Distributor is the responsible person to manage the availability of products in his
area,whereas Super Stockist supplies the goods to Re-Distributor who isresponsible to manage
the availability of outside the region of Distributor.Then the Distributor and Re-
Distributor supply the products to Wholesaler and Retail in their respective region or area. There
will be a single C&F Agent for every state who supplies the goods to the Distributor. Now,
distributor will be appointed by the company for every urban city. That distributor will be to
maintain the proper flow of goods in his region. Whereas on the other hand there will be a Super
Stockiest in the same city who will supply the products to the Re-Distributor who will be there at
the nearby places of that city

PROMOTION
Extensive promotion through advertisements in TV
Nestle choose Amitab Bachan its brand ambassador for Maggi noodles.
Large scale promotions are also undertaken at school level
KG-Nursery Smiley Contests
Interschool Quiz contests
Nestle is offering aggressive discounts and incentives to retailers
Perhaps for the first time in a decade, to protect its market share against increasing
competition
MAGGI: Promotion
Sales Promotion
Exchange schemes
Price-off offer
Scratch n Win Offers
Money back offer
Sponsor school quiz
Awareness campaign

Advertisement of Nestle Maggi



OTHER MARKETING STRATEGIES USED BY NESTLE










Bibliography
Web sites:
www.scribd.com
www.slideshare.net
www.nestle.in
Book:
Vs Ramaswamy&S Namakumari(2010) MARKETING MANAGEMENT
Published By: Rajiv Beri for macmillan publishers India Ltd.
2/10,Ansari road,Daryaganj,New Delhi