(1.

1)INTRODUCTION TO THE INDUSTRY

(1.1.1)FOOD INDUSTRY

The Food Industry has changed and developed over the decades in order to satisfy customer
needs and consumer behavior. This industry is characterized by a complex system activities
concerning supply, consumption and delivery of food products across the entire globe. The
focus on the history of the American food industry, concentrating on the development of the
market from World War II (WWII) until today. Before WW II, all over the world the people
used to eat in very simple ways using only local and seasonal products as they were
constrained to a geographical area. Another important change occurred in the role that
women played within their family: as the men left to fight in the war the female population
had to replace them working in industry. While their disposable income increased, the time
they could dedicate to housework decreased drastically, with a consequent rise in demand
for industries that could produce readymade food in their place.
After the war, the processed food that was initially developed for soldiers on the frontline
became produce for grocery stores and restaurants in towns and cities. This phenomenon
became even more evident when Richard and Maurice McDonald understood the
importance of making food quickly, selling it cheaply and spending less time and resources
in looking for the best quality food sources and in the final product. The two brothers
redesigned the food preparation sector, as in the automobile assembly line, in order to
achieve the product at a lower cost. McDonald’s was the first of a series of fast food
restaurants that, in a brief period, managed to compete in the market by offering reasonable
products at a low price.

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(1.1.2)“THE FOOD NATION”
Industrialization of the food industry and the birth of processed foods in North

The development of the food industry, through industrialization and processing started in
the early 1900s. It is necessary to look at history in order to understand the profound
changes that have affected this market through the years. Modernization, mechanization,
social progress, the increase in quality of life, feminine movements and the World Wars are
just some of the factors that have influenced this market. In the early 1900s, most
Americans were still farmers who lived in rural areas. With the urbanization and
industrialization of the country most of the population moved from agricultural
environments to cities in order to participate in the labor market. Industry was not yet fully
developed and people had low living standards with limited financial resources.

The profound political, social, scientific and economic changes at the beginning of the
century had a huge impact on how food is processed and marketed. In order to support the
new economy it was necessary to offer cheap basic everyday products. New technologies
were adopted to transport food from the countryside to the cities and to guarantee its
freshness. It is important to underline that most preservation techniques like drying, salting
and fermentation were adopted from ancient civilizations, for example, one of the most used
techniques was canning, and this technique had been experimented in the middle of the
eighteenth century by the Dutch navy. The aim of mechanization of the food system was to
increase the level of specialization, simplification and standardization the entire value chain.

The new concept of specialization was to be more efficient and reduce cost by maximizing
output by concentrating on a single product rather than producing different varieties.
Mechanization of the market also led to big changes in the workers’ jobs. The labor force
did not have to develop different skills in order to be able to perform different activities in
the production system and workers became more and more specialized, performing simple,
limited and routine tasks. The main goal of production was to be efficient and produce
outputs that were uniform. The concept of economies of scale developed soon in the

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economy: “the gain in efficiency that comes from doing something on a larger scale, such as
mass production or buying in bulk.

During these growth periods many smaller factories closed down, often because they could
not 9compete with larger, more efficient operations.” The main success of this development
was the ability to produce higher volumes of food with minimum effort and costs. The new
market managed to attract the consumers by adopting a strategy of cost leaders. Soon the
American food supply market was recognized as the most productive and success of the
world. However, this fast growth and concentration on the production rather than the
product, lead to hugely negative consequences that impacted the whole of society; health,
environment, animal welfare and social equity all began to suffer from the rapid
industrialization. The first 50 years of the 20th century were characterized by poverty, war
and agriculture communities.

The working class was very poor and often suffered from malnutrition, infant mortality was
also very high. Both during and after World War I, the situation did not improve: there was
a serious shortage of food and the economy suffered a stock market crash that heralded the
imminent Depression. In the1930s the economy was hit by a global recession; poverty and
malnutrition continued to persist. When World War II started in 1939: men had to go war,
while women had to substitute their husbands at work. These important social changes had
a big impact on the economic, technological and social situation in many countries. We can
conclude therefore that the turning point in the American economy came after World War
II. Following this dreadful historical event health, technology and nutrition greatly
improved. During the Second World War in order to make the conservation, storage and
the transportation of food to the front line easier, food started to be processed industrially.
The army was responsible for complex innovations in the food industry like the microwave
ovens and plastic containers.

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NEW TRENDS: EXPERIENCE, HEALTH, SUSTAINIBILITY &CONVENIENCE

Can these effects and changes in the channels of distribution seen also in restaurants?
As mentioned previously, the technological development of the last 100 years has
drastically improved and developed different levels of communication. These have helped
business, not only, to communicate and persuade consumers to purchase their products but
also to increase consumer awareness. Health, which is an intangible food quality, is
increasingly important for consumers. The increase in consumer’s awareness is due to the
availability of health information i.e. based on scientific research) and interactive health
communication on the Internet, which has helped consumers to understand the strong link
between health and food. Consumer attitudes towards health have changed impressively in
the last years. The greater knowledge and consciousness of nutrition have lead people to
look for healthier products in order to prevent diseases and maintain a healthy life style.
Health choices have often been the consequence of different interpretations of conflicting
signals and types of communication. Therefore, consumers have developed contrasting
theories about the healthiness of some food products. However, some theories, such as:
‘industrially produced food is less healthy than homemade’, ‘additives are unhealthy’, ‘fat
is bad and vegetables are good’ are common to them all. Increased health awareness has
been linked also to demographic changes that have occurred in society: today the
population of elderly people is much higher than in the past. Older people are more
interested than the younger ones in healthy food as they are more conscious and interested
in living longer in good health.

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Modern food businesses have a strong market orientation and therefore their main focus is on
consumers. Products have to be designed, developed and distributed in order to satisfy
consumers’ needs and guarantee their product loyalty long-term. Successful innovations in the
food market and production process have occurred in the last years in order to meet changes
in buyer’s demand. In the past, technology was employed to maximize the efficiency of the
production process and to reduce costs as much as possible. Currently, food manufacturers are
adopting innovational techniques to produce constantly more diverse, healthy, safe and
environmentally sustainable products Companies are continually researching consumer
behavior to be able to recognize and satisfy the clients’ emerging needs and desires. The food
products aimed at promoting ‘health living’ have been defined “functional foods”, these
products have been integrated with bioactive ingredients to improve the health benefits
derived from their consumption.

Clearly, the demand for these products is increasing because of improved awareness of the
link between good diet and good health. One of the sub-categories that has been most
successful is the reduced or low-fat sector. In recent years there have been several high profile
legal claims against fast food companies for their elevated level of saturated fat content,
‘functional foods’ can therefore offer an attractive alternative and play an important role in the
attempt to reduce the constantly increasing level of overweight and obese people. The main
disadvantage of ‘functional foods’ is that consumers are often skeptical about these modified
products, as they perceive them as “unnatural”.

Another important influence on consumer attitudes towards food is convenience. People in

time have consolidated the preconception that fast food is more convenient than the healthy
one. Subsequent to the American economic depression and cultural development, the
population was looking for increasingly convenient products. Studies how modern consumers
perceive the convenience attribute in the food market as important as other attributes like taste
and health. But what does ‘convenience’ actually mean?

With the passage from a traditional to a contemporary culture, people have much less time to
spend on domestic activities and also, as discussed above, the time and effort necessary for

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cooking meals are channeled into other activities considered more essential. The American
consumer is constantly looking for more accessible, portable, appropriate and utile products.

(1.1.4)Convenience in the context of food can be defined

Education in time and effort (mental and physical) spent buying, storing, preparing and
consuming food. ‘Convenience foods’ are defined as any fully or partially prepared food
in which significant preparation time, culinary skills or energy inputs have been 43
transferred from the homemaker’s kitchen to the food manufacturer and distribution. The
demand for these type of product is increasing because of several factors like the growth
in number of single-person households, ageing population, changes in roles within
families, female participation in the labor market, longer working hours, increasing
interest in healthy eating, a decline in cooking skills, a reduction in traditional mealtimes
and the desire to spend less time and effort on food-related activities. Differently from the
past, consumer interest is also in the quality of the product, consumers will no longer
accept to compromise the freshness and healthiness of food. This is not always easy to
achieve, companies find it difficult to produce ‘convenience foods’ that respect certain
standards and, at the same time, are profitable.

Studies have also shown how consumers often perceive that healthy eating does not
always correspond to ‘convenience’ eating, but this is not always true. In the last decade
awareness of health issues has increased and food manufacturers have perceived the new
needs of society. In the past, specialized health and organic stores already existed in the
food market, however, they were more costly and aimed at higher income consumers. We
can show how this continues to be a problem today as data of the United States
Department of Agriculture’s Economic Research Service and The Reinvestment Fund
have shown that about 9% of the total population live in areas that offer consumers no
access to healthy foods. People that live in this communities usually have lower incomes
and can not afford to buy higher quality products. Even though the authorities and policy
makers have recognized this situation, no solution has yet been found. However, it is
important to underline how, in recent years, leaders in the restaurant market have
differentiated their menus to offer healthier alternatives and have added nutritional and

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calorific information to food packaging in an attempt to reduce the problem and meet the
increasing concerns about health issues. Research has also shown how food manufacturers
have found a new slot in the market that has not been exploited in the past; as consumers
increase their awareness of the relationship between diet and health, numerous restaurants
concentrating on convenient, cheap, organic and appealing Grunert, Klaus; Tudoran,
Alina; Chrysochou, Polymeros; and Mingkou, Theodosia

(1.1.5)TRENDS IN THE NEW PRODUCT LAUNCHES IN THE FOOD INDUSTRY.

MAPP Center for Research on Customer Relation in the Food Sector, Aarhus: Aarhus
University, (2012) 44 products that, at the same time, are healthy, are now opening.
Businesses are constantly developing food product combinations that can meet the new
demand for convenient but healthy products, the main characteristics required are: short
preparation times, vegetable content, meals that are light, sustainable and for specific diets.
Consumer attitudes toward food have changed vastly over time: in the past it was simply
considered essential for survival. In today’s contemporary society, the consumer is looking
for a pleasure in food; a hedonic food experience. Therefore, companies had to adapt to this
change in consumer attitude by no longer producing just essential and basic products, but
by offering increasingly appealing and attractive goods. Quickly food manufacturers
understood the importance of offering not only a food product but also, a memorable
experience. Customer experience is the internal and subjective response customers have to
any direct or indirect contact with a company.

“An experience occurs when a company intentionally uses services as the stage, and goods
as props, to engage individual customers in a way that creates a memorable event”
Consumer experience is multidimensional and includes hedonic dimensions, such as
feelings, fantasies, and fun. Today, consumer attitudes and the retail food buying process is
completely different from in the past and it is possible to identify several factors that have
changed over time. Traditionally, companies believed that consumers were pushed mainly
by extrinsic motives to purchase products. Choice from among the products offered was
determined by exogenous influences and depended strictly on cognitive factors:

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preferences depended simply on the diverse attributes of the different products on offer.
Products were seen merely as an aggregate of different components.

Today, restaurants have understood how the overall experience before, during and after the
purchase is essential to guarantee long-term profitable relationships with consumers.
Companies have now understood that consumer purchases are mainly influenced by
intrinsic reasons and emotional factors. Consumers have a holistic concept of food
products: they are more concerned with the ‘whole’ rather that the analysis and Pine,
Joseph; and Gilmore, James; Welcome to the Experience Economy.

These changes in consumer behavior have lead to a change also in how consumers perceive
value in food products. Whilst in the past, a decent flavor was enough for businesses to be
success, in today’s market it is not. Restaurants and food retailers must study new business
models in order to meet the numerous new and different factors that that influence consumer
behavior. It is also important to highlight how companies must bare in mind how cultural and
subjective factors also deeply influence a person’s perceived values and preferences. Food
suppliers must have both the capacity to adapt to all these changes and the ability to
understand and seize opportunities by observing the market, thus developing together
production-related and market-related competencies. The former consists in developing the
ability to create a product, whilst the latter consists in being ‘market-oriented’, this is
considered one of the main sources of competitive advantage for businesses and defined as:
the organization wide generation of market intelligence, pertaining to current and future
customer needs, dissemination of the intelligence across departments, and organization-wide
responsiveness to it.”19 By developing market-related competences, businesses are able to
understand consumer demand and accordingly develop new products. Market orientation
plays an essential role, especially in situations where customer demand is unstable, complex
and heterogeneous. In situation where market orientation is very important, usually, also
higher flexibility skills in the production competences are required personalization,
healthiness, freshness and quality are the new sources of success:

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The analysis of one of the most famous new American food chain companies, that is, look
at its strategy and business model. CBS News has ranked Panera Bread as one of the most
successful and healthy fast food of America. The firm, founded in 1987, is much more
recent then A&W All American food. Initially the company was called Au Bon Pain Co.
and was located near St. Louis.
The founder Ron Shaich and Louis Kane created the company with the idea of changing
the eating habits of the American people. The entrepreneurs wanted to provide a healthy
fast food alternative. Until then fast food outlets only offered fried, processed meals and
did not consider the health of their clients. Shaich, instead, wanted to propose handmade,
artisan-like products, offered in a quality environment with friendly and well-trained staff
Thanks to its attention also to the quality of service the company, known today as Panera
Bread, was ranked fifth in the foodservice category in Fortune’s “World’s Most Admire
Companies”.

In 1993 the company expanded impressively and 20 new outlets were opened. Around
1997 the name of the food chain was changed from Au Bon Pain Co. to Panera Bread.
After this rapid expansion the company continued to increase exponentially thanks to its
franchising. By 2014 the company was present in 1800 location and today, the company
operates in more then 1926 outlets in 46 states. By exploiting the market potentials of the
cafeteria model and by opening company-owned and franchised outlets in rapid succession
the company embraced a growth strategy that made it hugely successful, As for A&W,
franchising was key to firm’s success and to its ability to establish itself within the food
industry. All franchises purchase directly from Panera Bread

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(1.2) INTRODUCTION TO THE COMPANY

type Society anonym

Traded as Six: nesn

isin Ch0038863350

Industry Food processing

Founded 1866; 153 years ago (as Anglo Swiss Condensed Milk
Company). 1867;152 years ago( as farine lactee henri
nestle 1905; 114 years ago ( as nestle and anglo- swiss
condensed milk company)
Founder Henri nestle

Headquarters Vevey, Vaud, Switzerland

Area served World wide

Key people Paul Bulcke (Chairman) Ulf Mark Schneider(CEO)

Products Baby Food, Coffee, Dairy Products, Breakfast Cereals,

Confectionary, Bottled Water, Ice Cream, Pet Foods.
Revenue CHF89.791 billion (2017)

Operating CHF10.112 billion (2017)

income
Net income CHF7.538 billion (2017)]

Total assets CHF130,380 million (2017)

Total equity CHF62,777 million (2017)

Number of 323,000 (2017)

employees

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Nestlé S.A. is a Swiss transnational food and drink company headquartered in Vevey, Vaud,
Switzerland. It is the largest food company in the world, measured by revenues and other
metrics, since 2014. It ranked No. 64 on the Fortune Global 500 in 2017 and No. 33 on the
2016 edition of the Forbes Global 2000 list of largest public companies.

Nestlé's products include baby food, medical food, bottled water, breakfast cereals, coffee
and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks.
Twenty-nine of nestles’ brands have annual sales of over CHF1 billion (about US$1.1
billion), including Espresso, Nescafe’, Kitkat, smarties, Stouffer’s Vittel, and Maggi. Nestlé
has 447 factories, operates in 189 countries, and employs around 339,000 people.

It is one of the main shareholders of L'Oreal, the world's largest cosmetics company.
Nestlé’s success with product innovations and business acquisitions has turned it into the
largest food company in the world. As the years have passed, the nestle’ family has grown to
include chocolates, soups, coffee, cereals, frozen products, yoghurts, mineral water and other
food products.

Beginning in the 70s, nestle’ has continued to expand its products portfolio to include pet
foods, pharmaceutical products and cosmetics too. Today, nestle markets a great number of
products, all with one thing in common; the high quality for which nestle has become
renowned throughout the world. The company’s strategy is guided by several fundamental
principles.

Nestlé’s existing products grow through innovation and renovation while maintaining a
balance in geographic activities and product lines. Nestle’ is based on the principle of
decentralization, which means each country is responsible for the efficient running of its
business- including the recruitment of its staff.

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(1.2.1)Product distribution channel of the nestle products:

Nestle is a global leader in health, nutrition and wellness. Customers around the world, from
village squares in Nigeria to the skyscrapers of New York and Chicago, are united by the
nestle promise of quality, taste, nutrition and convenience. Though headquartered in vevey,
Switzerland, we now have factories or operations in almost every country, employing around
280000 people. In 2008, our global sales reached CHF 108 billion.

12
Our operations are spread across three global zones covering Europe, the Americans, Asia,
Oceania and Africa. Recognizing that every region has its special needs, the three zones
operate locally, but are united by a common vision and priorities. The voices of even the
smallest local markets are heard at our headquarters in Vevey, Switzerland.

Our immense popularity comes from our efforts to develop products that give quality and
nutritional benefits at low prices, even in the most remote regions. We distribute using local
means; in Madagascar, for instance, backpacker salesman sold over 12 million MAGGI
tablets within six months, an approach that was duplicated in Pakistan and Mozambique. Our
customers know that they can rely on us to be there when we are needed.

(1.2.2) NESTLE PRODUCTS CATEGORIES :

(1.2.3) Nestle Brands

 Milk products and nutrition
 Beverages
 Prepared dishes and cooking aids
 Chocolates and confectionary

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(1.2.4) BRAND ASSOCIATION WITH NESTLE
 Josh : kitkat , Nesquik, chocolate, bad baby milk, Nescafé
 Claire: chocolate, Nesquik, red, large, cereals
 Tk: weak CSR, health, creative, dairy, engaging
 Shannon: childhood, chocolate, family, food, milkshake

(1.2.5) NESTLE BRAND EQUITY

The Nestle brand strategy is developing shared values in business through corporate
brand.They protect and enhance the business sustainability by delivering total quality
management in their food quality. There is a core concept of nestle brand is good food must
be for good life. Therefore nestle is shareholder friendly that depicts the welfare of society as
a whole.
It has proven researched that nestle has superb brands in the foods and beverage industry
That is why nestle develop the atmosphere that lead to honesty, purity and integrity in all
segments of food industry business.

(1.2.6) NESTLE BRAND VALUES:

 Integrity coupled with a strong work ethic.
 The desire to do quality work
 Friendly, open and honest communication.
 A spirit of co-operation and openness to other ideas and opinions.
 A realistic approach to business.
 An openness to future trends and new business opportunities.
 A passion for our products and brands.

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(1.2.7) MISSION AND VISION OF NESTLE FOOD INDUSTRY
 Mission statement:
Nestle is the largest food company in the world. But, more important to them is to be the
world’s leading Food Company”.

 Vision statement :
To become an inspiring growth partner that delivers creative, branded food and beverage
solutions enabling operators to innovate, and delight their consumers.

 Corporate social responsibility:

Our presence in the community is not restricted to the making nestle products available
to consumers; it brings with it a responsibility to those around us. In china and Pakistan,
we provide animal husbandry assistance to thousands of farmers.

 Good Food, Good Life

Henri nestle chose his own coat of arms to represent the company’s philosophy: a bird’s
nest with a mother feeding her young. The image represents the core values:
Care, family values, nutrition, healthy growth, safety and comfort. It is a guarantee of
quality and a commitment to our responsibilities as a food company and experts in
nutrition. Over the years we have reaffirmed our commitment to wellness, helping their
customers to live longer, healthier, and more productive lives, no matter their age, gender
or socioeconomic status.

 Good ingredients
Three vital ingredients lie at the heart of nestle and come together in their brands: our
people, our research and development, and our commitment to quality. The dedicated
people who make up the nestle family are our source of strength and energy. Realizing
this, we offer them constant professional development, and feel our cultural diversity is
one of or greatest assets. Today, we are one of the largest investors in food technology.
R&D is the cornerstone of the nestle dimensions

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  Good practices
As the world changes, nestle evolve and adapt to new circumstances and environments.
Nevertheless our business practices are founded on certain tenets that reflect the basic
ideas of fairness, honesty, and concern for people. We are committed to the following
business principles in all countries, taking into account local legislation, cultural and
religious practices:
Nestlé’s business objective is to manufacture and market the company’s products in such a
way as to create value that can be sustained over the long term for shareholders,
employees, consumers, and business partners Nestle set a new profit target in September
2017 and agreed to offload over 20 of its US candy brands in January 2018. However,
sales grew only 2.4% in 2017, and as of July 2018, share price declined more than 8%. In
October 2018, Nestlé announced the launch of the Nestlé Alumni Network through a
strategic partnership with SAP & enterprise alumni to engage their over 1 million alumni
globally. In September 2018, Nestlé announced to sell Gerber Life Insurance for $1.55
billion.

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(1.1.3) The Product Distribution Channel of Nestle
After the product has been manufactured in the factory, it goes to the warehouse from where
it is supplied to the distributers. The distributors supply the products to wholesalers and
retailers. From here the consumers are able to purchase the product.

 Natural is king

Consumer expectations are “holistic, multi-dimensional and intertwined”, Patrice Bulla, EVP
of strategic business units, marketing and sales, told analysts. What binds these divergent
consumer attitudes is an overwhelming trend towards “naturalness”.Being relevant to a “new
generation” of consumers means offering products that provide “clean recipes” made from
natural ingredients that are traceable and authentic, he suggested.

This is a massive opportunity, Bula stressed. Citing figures from Euromonitor International,
the executive noted that foods and beverages that are “naturally good for you” generate
annual sales of €170.4bn (CHF195bn) and are growing at a rate of 3% annually. Nestlé plans
to shift its entire portfolio to a more natural footing. “The core strategy is to bring this new
dimension in the… core of our core brands,” Bula explained.

“We believe our core brands – our billionaire brands, our local brands, our regional brands -
have the authority to deliver this natural dimension.” Where Nestlé wants to drill down into
a “very specific” trend or channel, the company will launch new brands – sometimes under
the umbrella of its existing core brands. Finally, where the company identifies an opportunity
to expand in the space it will look at M&A to take control of what it calls “born pure” brands,
such as its recent acquisition of Sweet Earth Foods in the US.

 Organic

“Organic is all about sourcing the right ingredient and the integrity of the supply chain,” Bula
observed. The organic market is valued at €16.6bn (CHF19bn) and is growing at a rate of
4% per annum, according to Euro monitor. Nestlé’s organic sales are growing at a
considerably faster pace. Currently, organic sales are worth about €175m (CHF200m) to the

17
Swiss group and it is witnessing a compound annual growth rate of approximately 13%. This
is being achieved by adding organic-certified SKUs to some of its largest brands, such as
Buitoni pasta and sauces or Gerber baby food. In this way, “integrating organic as part of our
brand offer”is driving the growth of Nestlé’s blockbuster brands, Bula added.

 Free-from

Nestlé believes that gluten-free is not only a trend on the up – it is also a trend that is “likely
to stay”. Euro monitor values the global gluten-free market at CHF3.6bn and the sector has a
growth rate of 12%. Nestlé’s gluten-free sales are reaching “close to” CHF 500m in sales and
growing at 9%. The company believes it can steal share from the pure-play gluten-free
players moving forward through a focus on product quality.

“With gluten-free the main issue for the consumer is taste. We have done a lot of work to win
60-40 in blind taste tests… We believe people. While there is no scientific evidence to show
gluten-free will make you feel better… We see no reason why we should not offer this in our
dough and pasta business and also in cereal.” Lactose-free is also experiencing a “revival”
and Nestlé is adding to its brands, such as Haagen-Dazs ice cream to reflect this. Nestlé’s
lactose-free sales are currently growing at 20%.

 Reduced Sugar

However, while some areas of the free-form category are witnessing stellar growth, overall
global free-from and ‘reduced’ sales are down 1%, Euro monitor data suggests. Bula
attributed this to contradictory consumer attitudes to sugar reduction. While people should be
eating less sugar – and Nestlé has committed to bringing down the level of sugar in its
products in line with WHO targets – they are less keen on artificial sweeteners, which fly in
the face of demand for natural ingredients.

Here, too, Nestlé believes it has the answer. The group is rolling out its “breakthrough”, “all-
natural” proprietary technology: a sugar that is structured differently so that it is faster
dissolving, essentially delivering more sweetness for less sugar content. This will offer a
30% sugar reduction and products should hit the market in the next 12- to 18-months. The

18
company is also introducing products that are less sweet, Bula said. “These products have a
lower sugar profile, a lower sweetness profile, than we have had before. This is what we
believe we have to do to help children develop less of a sweet [tooth].”

 High protein

Once the preserve of body builders, Nestlé has noted with interest that high protein has
gained mass appeal beyond its predominantly male target audience. Responding to this, in
Europe the company rolled out high protein Fitness granola in 2016. Other markets, such as
Australia, have seen the introduction of high protein Nesquik and Milo options, while the US
business has introduced high protein Fit Kitchen bowls.

The next frontier for high protein is ice cream, Bula predicted. “What we will do next year is
ice cream with high protein [content], we will be this ready next year.”

 Plant-based

According to Bula’s assessment, plant-based products appeal to three consumer groupings:

flexitarian, vegetarian and vegan. Nestlé is most interested in courting the former because it
represents the most people but, Bula noted, all of these consumer groups are on the rise. As
Nestlé works to extend its presence in this sphere, the company is leveraging innovation in its
core brands. It has introduced items such as Coffee mate made from almond milk and dairy
free ice cream. The company is in the process of rolling out the Garden Gourmet snack and
centre plate brand across Europe, while Herta is offering what Bula termed “meat analog”
products in the region. “We want to bring a vegetarian offer to consumers in Europe and the
western world and ride on this trend that we believe is here to stay and amplify.”

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(1.1.5) ESSENTIAL FACTORS THAT AFFECT GROWTH

Economically, Ghana was in the lower tier of developing countries and classified as a least
developed country (LCD) by international development agencies because its per capita
annual income was US$400. A positive outlook is forecast for consumer goods in Ghana.
One of the main contributory factors will be the country’s political and economic stability.
Higher disposable incomes and increasing company advertising are expected to boost value
growth. The average Ghanaian will spend more on packaged food, especially on items
previously regarded as luxuries. Value growth will also benefit from the increasing
sophistication of Ghanaian consumers and improving product quality. Food items that are
fast and convenient, such as pasta and noodles, will continue to post dynamic value growth.

The sector faces many challenges caused by the environment in Ghana such as poor
infrastructure, poor standards of education, and high levels of corruption and a generally low
level of disposable income of the population. There is little manufacturing for export, but a
significant activity exists in the manufacture of fast moving consumer goods aimed at the
domestic market. In recent years, multinational corporations have increased their investment
in physical plants, information technology and staff training with a view to improving their
operational performance.

The consumer goods sector is a major part of the manufacturing sector in Ghana. And like all
other manufacturers, the consumer goods industry is characterized by low valued added
production. What we see are processors who process imported raw materials into finished
products, with very little value added. Multinational companies operating in this industry
hardly add value because they import concentrates from their parent companies, which they
convert into finished products with minimal value added.

The industry is dominated by wholesalers and distributors. In fact, distributors and

wholesalers account for over 50% of total sales within the industry. Their dominance is as a
result of fragmentation nature at the retail end of the market. The retail end lacked adequate
supermarket and glossary stores. They mainly comprise of roadside kiosks, stores, and small

20
sized restaurants, whose sales volumes are generally low. Distribution to the retail market is
hampered by huge investments required for delivery trucks general bad road network.

Marketing Strategy
-What types of marketing strategies are prevalent within the industry?
-Determine current operational/management trend within the industry?
Nestlé Creating Shared Value (Source: Nestlé Creating Shared Value Report 2009.pdf)
i.e. care about the people and water treatment
Water treatment
Because good water quality in the areas surrounding our plants has direct benefits for our
business, society and the environment all our water is treated in wastewater treatment plants.
Our preference is to use municipal wastewater plants to ensure we return only cleaned water
back into the environment, but where these are insufficient, we invest in our own on-site
facilities (approximately 292 to date, including our latest in Tema, Ghana). We remove 97%
of the organic load of the water leaving our factories before it is returned to the
environment. In 2009, we discharged 91.34 million m3 of water, a decrease of more than
5% on 2008, with an average level of organic load of 91 mg COD/l (Chemical Oxygen
Demand per litre). During 2009, we have reviewed this KPI and have determined that
figures for previous years were underreported.

 Global food producer, located in over 100 countries. Consistently one of the world’s
largest producers of food products, Global sales in 2008 topped $101 billion.
 Nestlé provides quality brands and products and line extensions that are well-known,
top-selling brands.
 Successful due in part to their unquestionable ability to keep major brands
consistently in the forefront of consumer’s minds (and in their shopping carts) by
renovating existing product lines, keeping major brands from slipping into
saturation/decline and having superior access to distribution channels.
 Growth in their organic food sales division was flat in 2008, even though the industry
grew 8.9%.
 Nestle Ghana lack of rural market promotion

21
 Products are not affordable by common people
 In today’s health conscious societies, they can introduce more health-based products,
and because they are a market leader, they would likely be more successful.
 Provide allergen free food items, such as gluten free and peanut free.
 They launched a new premium line of higher cocoa content chocolates dubbed Nestlé
Treasures Gold, in order to cash in on the “recession economy” in which consumers
cut back on luxury goods, but regularly indulge in candy and chocolate.
 Opened Nestlé Café’s in major cities to feature Nestlé products.
 Nestle strategy in Ghana was to ensure high awareness of its brands, widespread
distribution and quality of its products which helps trounce its competitors in the
cocoa beverage market with its theme of good health, growing up and success as
closely related to its products.
 Expand to Institutional Market.
 Nestle (Ghana) needs to develop products that are affordable to the common people
because they are dealing with a developing country which has a low per capita
income of US$400.
 Any contamination of the food supply, especially e-coli.
 Raw chocolate ingredient prices are soaring; dairy costs alone rose 50% in 2008, this
cuts heavily into their profit margins and often gets passed on to consumers, by
shrinking the packaging in a way that is almost unnoticeable-therefore the consumer
is paying the same prices for less product.
 They have major competitors, like Cadbury Schweppes Ghana Ltd, NABB Brothers,
Cocoa Processing Company, Allied Cocoa Products Ltd and Kings Cocoa Processing
Company Ltd (KCPCL)

22
(1.3) INTRODUCTION TO THE TOPIC
(1.3.1) CONSUMER MEANING
Consumer makes decisions by allocating their scarce income across all possible goods in
order to obtain the greatest satisfaction. Formally, we say that consumers maximize their
utility subject to budget constraint. Utility is defined as the satisfaction that a consumer
derives from the consumption of a good. As noted above, utility’s determinants are deprived
by a host of noneconomic factors. All marketing starts with consumer .so consumer is a very
important person to a marketer. Consumer decides what to purchase, for whom to purchase,
why to purchase, from where to -purchase, and how much to purchase . in order to become a
successful marketer, he must know the liking or disliking of the customers.

He must also know the time and the quantity of the goods and services, a consumer may
purchase, so that he may store the goods or provide the services according to the likings of
the consumers. Gone are the days when the Consumers value is measured in terms of the
relative utilities between goods. These reflect the consumer’s preferences. In cognitive
sciences, individual preferences enable choice of the goods for its objectives/goals. The study
of the consumer preference not only focuses on how and why consumers make buying
decision, but also focuses on how and why consumers make choice of the goods they buy
and their evaluation of these goods after use. So for success of any company or product
promotion it is very necessary to depart its concentration towards consumer preference.

All marketing starts with the consumer. So consumer is a very important person to a
marketer. Consumer decides what to purchase, for whom to purchase ,why to purchase, and
how much to purchase. In order to become a successful marketer, he must know the liking or
disliking of the customers. Now the whole concept of consumer’s sovereignty prevails.
The manufacturers produce and the sellers sell whatever the consumer likes. In this sense
consumer is the supreme in the market. So the study conducted show customer preferences in
NESTLE. market frame strategy to it, this will help to analyze how customer perceive these
products on variables like price, quality, advertisement , taste , packaging, brand loyalty, etc.
the study shows which particular brand of chocolate is most preferred by the people of
different age group.

23
(1.3.2) THEORY OF CUSTOMER PERCEPTION

INTRODUCTION
All marketing starts with the consumer. So consumer is a very important person to a
marketer. Consumer decides what to purchase, for whom to purchase, why to purchase, from
where to purchase and how to purchase. In order to become a successful marketer one must
know the liking or disliking of the consumers. In today's world the whole concept of
consumer’s sovereignty prevails. The manufacturers produce and the seller sell whatever the
consumer likes. In This sense, consumer is supreme in the market". As consumers, we play a
very vital role in the health of economic) (local, national, and international). The decisions
we make concerning our consumption behavior affect the demand for the basic raw
materials, for the transportation, for the banking. For the production; they affect the
employment of workers and deployment of resources and success of some industries and
failures of others.

CUSTOMER PERCEPTION
The study is based on consumer buying behavior, with the customer playing the three distinct
roles of user, payer and buyer. Research has shown that consumer behavior is difficult to
predict, even for experts in the field. Relationship marketing is an influential asset for
customer behavior analysis as it has a keen interest in the red corner of the true meaning of
marketing through the re-affirmation of the importance of the customer or buyer. A greater
importance is also placed on censer retention, customer relationship management,
personalization, customization and one-to-one marketing.
Consumer satisfies their demands & needs by purchasing a wide variety of goods & services.
They have many reasons for buying and influenced by many forces in the market place at
home and in their everyday environment. Understanding buyer behave ion is essential for
marketing manager for marketing and planning. A marketing manager has to de elope know
ledge and insight for consumers' feeling which is called buying habit and buying motive.

24
This study is based on observing and analyzing all such behaviors shown by users of a
selected area towards the food products of Nestle. Buying habits are defined as the repeated
patterns of behavior followed by customer in the process of acquiring goods or services. The
buyers and their purchases can be categorized according to number of psychological
dimensions. Woods 1970 has established the following breakdown about customers.

 A habit determined group of brand loyal consumers who tend to be satisfied with the
last Purchased product on brand.
 A cognitive group of consumers, sensitive too rational claims and only conditionally
brand loyal.
 A price cognitive group of consumers who principally decide on the basis of price.
 Impulse consumers who buy on the basis of physical appeal relatively insensitive to
brand name.
 A group of emotional reactors who tend to be responsive to what product s. mobilize
and who are heavily swayed by image.
 A group of new consumers, not yet satisfied with respect to the psychological did men
consumer behavior.
 Products which people buy can also be categorized. Woods has divided project
according to six psychological product classes.
 A prestige product, which becomes symbol (car etc.)
 Maturity products, which are withheld by young people (liquor. cigarettes &
cosmetics).
 Status products, which impute class membership (big brand names of lllJll \ products).
 Anxiety products, which alleviate some, presumed or social threat (deodorant s).
 Hedonic products, which have an immediate and highly y situation appeal (clothing.
snacks).
 Functional products, which have little cultural or social meaning (staple food item ).

25
The manufacturers produce and the sellers sell whatever the consumer likes. In this sense,
“consumer is the supreme in the market”. As the consumers, we play a very vital role in the
health of the economy local, national or international. The decision we make concerning our
consumption behavior affect the demand for the basic raw materials, for the transportation,
for the banking, for the production; they effect the employment of workers and deployment
of resources and success of some industries and failures of others.
Preference(or taste) is a concept, used in the social sciences, particularly economics. it
assumes a real or imagined “choice” between alternatives and the possibility of rank ordering
of these alternatives, based on happiness, satisfaction, gratification, enjoyment, utility they
provide. more generally, it can be seen as a source of motivation. in cognitive sciences,
individual preferences enable choice of objective/ goals.

(1.3.3) CUSTOMER PREFERENCES

The underlying formula of demand is a model of how consumers behave. The individual
consumer has a set of preferences and values whose determinations are outside the realm of
economics. They are no doubt dependent upon whose culture, education, and individual
tastes, among a plethora of other factors. The measure of these values in this model for a
particular good is in terms of the real opportunity cost to the consumer who purchases and
consumes the good. If an individual purchases a particular good, then the opportunity cost of
that purchase is the forgone goods the consumer could have bought instead.

26
To develop a model in which we map or graphically derive consumer preferences. These are
measured in terms of the level of satisfaction of consumer obtains from consuming various
combinations or bundles of goods. The consumer’s objective is to choose bundles of goods
which provides the greatest level of satisfaction as they the consumer define it. But
consumers are very much constrained in their choices. These constraints are defined by the
consumer’s income, and the prices the consumer pays for the goods.

It will formally present the model of consumer choice. As it will go along, it will establish a
vocabulary in order to explain the model. Development of the model will be in three stages.
After a formal statement of the consumer’s objectives, it will map the consumer’s
preferences. Secondly, it will presents the consumer’s budget constraint; and lastly, combine
the two in order to examine the consumer’s choices of goods.

It not only focuses on how and why consumers make choice of the goods they buy and their
evaluation of these goods after use .so for success of any company or product promotion it is
very necessary to depart its concentration towards consumer preference.

(1.3.4) CONSUMPTION OF NESTLE PRODUCTS IN INDIA

The consumption of nestle is gaining popularity in India due to increasing prosperity coupled
with a shift in food habits, pushing up the country’s cocoa imports. The consumption of
chocolates and products in India is pegged at the rate of 18-20 percent per annum. The global
Cadbury market is thought to be worth some rest 1,500crore and has been hailed as offering
great potential for western manufacturers as the market is still in its early stages.

Over 70% of its consumption takes place in urban areas market. On the other hand
consumption in the rural areas is negligible in India. The chocolate market is a highly
concentrated market, with Cadbury having 70 percent and nestle around 20 percent. The two
giants have been instrumental in building up the chocolate market in India with huge
investments in product development, advertising and brand building. Modern trade
constitutes about 10percent of the overall chocolate category, roughly rs320 crore, according

27
to Nielsen. Of this, brand Cadbury dairy milk has a share of 35percent, while Bournville and
silk together account for 18percent.

(1.3.5) MARKET STRUCTURE:

There are almost ten large firms operating in the industry of confectionary apart from these
large industries there are several other small firms who are involved in the production of
confectionary and milky products observed market situation suggests that there is a
monopolistic competition going in the food products. There are a large numbers of buyers
but relatively limited number of sellers. It is easy to enter in the market of food production.
Each firm sale its product under their unique brand name. There are no limitations of entering
and exiting the market.

(1.3.6) NESTLE FOOD INDUSTRY

ADVERTISING STRATEGY:
CIL’s biggest competitor, nestle, often stresses the energy giving aspects of chocolate (for
example, in advertising for nestle charge), or on other attributes of the chocolate- taste in the
case of children in the advertising for Milky bar, its white chocolate, again emphasizing its
energy -giving properties. To counter Milky bar, CIL has the diary treat – where it targets the
mothers of children by trying to convey the message that its product is full of the goodness of
milk, and so equivalent to consuming milk itself.Nestle has four distinct elements for
promotion.
They are:
 Advertising
 Public relations
 Personal selling
 Sales promotion

28
Nestle uses the following strategies for product sales. They can be summarized as:
 Nestle uses the same symbol worldwide. They never change the symbol according to
places. Nestle follows the tagline: 'Think globally act locally'.
 The formulation of the products of Nestle varies to suite the cultural differences.
 To increase the sales of the product, they reduced prices and introduced smaller
packages for products to make them affordable has helped in more promotion of the
products.
 The company has also promoted their products like giving free samples of the new
products free with old, popular and famous product.
 The most famous advertisement by Nestle was for Kit Kat, which was an animated
advertisement with the tagline:
" KIT KAT BREAK BANTA HAI".
 It urges busy youngsters to take a break and notice the fun events in their surroundings.
Nestle focuses more on RURAL DEVELOPMENT.

It has projects like Clean Drinking Water Project and Water Education Program for
ChildrenThe project has benefited more than 17000 children and even the farmers were
made aware to make proper use of water during their farming activities.

MARKET ANALYSIS OF NESTLE

Nestlé, the world’s leading food company, produces nutritious food and is conscious of the
importance of informing the consumer about the link between nutrition and health. A healthy
diet contributes significantly to the overall quality of a good life.

Nestle Ghana limited is a private company operating in Ghana. Its activities include
condensed and evaporated dairy products, beverages, coffee, tea, and chocolate and
confectionary. The company employs four hundred and seventy two work forces. Nestle
started business in Ghana in 1957 under the trading name of Nestle products Ghana limited
with the importation of nestle products such as milk and chocolate. In 1968, it was
incorporated as Food Specialties (Ghana) limited to manufacture and market locally well

29
known Nestle brands. The company became nestle Ghana limited in 1987. In 1971 the
production of two products, Ideal Milk and Milo started at the factory in Tema, the port city.
The factory has since been further developed and now also produces carnation milk,
Chocomilo, Chocolim, Cerelac, Cerevita and Nescafe 3 in 1. These products are not only
produced for Ghana but also exported across West Africa. In 2003, Nestle Ghana limited
invested in a new warehouse named the Central Distribution Centre, located next to the
factory in Tema. The company runs sales offices with warehouse in Kumasi, Takoradi,
Koforidua and tamale, all in Ghana. The business activity of Nestle Ghana limited is a direct
contribution to the economy of Ghana. For all these and other endeavors, nestle Ghana
limited has been recognized by the Government of Ghana and other bodies as a responsible
corporate citizen.

Nestlé Ghana Limited started business in Ghana in 1957, with the importation of Nestlé
products such as milk and chocolates. The company built its factory at Tema in 1971 and
started the production of IDEAL Milk and MILO. In 1987 Food Specialties Ghana Limited
became Nestlé Ghana Limited. Since then, the product portfolio has increased with the
additional production of CARNATION, CARNATION TEA CREAMER, CHOCOLIM,
CHOCOMILO, CERELAC (Maize, Wheat, Wheat Bean, 3 Fruits, Honey, Rice and Banana),
NESCAFÄ’ Crème 3 in 1 and NESQUIK, which is produced for import. Other products like
NESCAFÄ’ and MAGGI are imported from Côte d’Iviore. Nestlé Ghana Limited continues
to thrive in business because great importance is placed on value creation for our
stakeholders and customers. Ensuring long term profitable growth and sustainability has been
achieved by building on the company’s strengths and balancing the portfolio on three (3)
sound pillars: milk, cocoa beverage, and culinary. As a member of the Central and West
Africa region (CWAR), Nestlé Ghana aims to be an efficient and competitive inter-company
supplier: using and contributing to CWAR synergies by becoming a sound manufacturing
base for Ghanaian exports like cocoa beverage; aiming to increase Nestlé Ghana exports
from ten countries

Nestlé has said that it wants to deliver “industry leading volume growth” by leveraging key
consumer trends. The company detailed exactly how it intends to achieve this at its investor
summit in London . Nestlé, the world’s largest food maker, has witnessed a dramatic drop in

30
its sales trajectory. In 2016, the company’s organic growth rate slowed to 3.2% - its lowest
level in two decades. Although Nestlé noted that this still compares favorably with many of
its peers, for time being at least, the Maggi-to-Kit Kat manufacturer was forced to abandon
its so-called ‘Nestlé model’, which calls for organic growth of at least 5%.

Nestle does not, however, want to accept this lower level of growth for long. The company
revealed yesterday that it wants to be delivering mid-single-digit underlying growth by 2020
with a strategic focus on food and beverages.

In order to improve its fortunes – particularly in stagnant markets like Europe – Nestlé
management shared some key consumer trends that it now hopes to capitalize on.

31
 REVIEW OF LITERATURE

SRINIVASAN AND ELANGOVAN (2006) conducted a research work under the title
"Consumer attitude towards processed fruit and vegetables in Pondicherry." The major
objective of the study was to analyze the consumer's attitude towards processed fruit and
vegetables products and to identify the factors that influence the purchase decision of
Pondicherry. The study revealed that majority of consumers of higher educational level
consumer processed products and higher income group consumers used these products in
large quantity.

GAUR AND WAHEED (2007) in their research work."A study of buying behavior of
customers towards branded fine rice in southern part of India ", made an attempt to
understand the buying behavior of customers towards branded fine rice. The Study was
geographically limited to the Southern part of the country. The objective of the study was
to understand those factors which are responsible for brand preference and satisfaction in
the purchase of branded fine rice.

RAMASWAMY (2007) studied the consumer perception towards instant food products.
In the study they found that consumer possess a positive approach towards instant food
products. Instant noodle was found to be the most consumed instant products by the
consumers.

RAMESH AND MURUGHAR (2008) analyzed the snack food in India a healthy eating
concluded that per capital consumption of snack food is increasing rapidly. Consensus
pertaining to health: eating has a big impact on snack food. Legal measures towards
labeling about the content of trans-fat will help for the awareness about healthy food and
it will help for emergence of nutritional snacks.

32
PAUL ROZIN (2010) in his article states that Chocolate is the most craved food among
females, and is craved by almost half of the female sample (in both age groups).
Although this craving is related to a sweet craving, it cannot be accounted for as a
craving for sweets. About half of the female cravers show a very well defined craving
peak for chocolate in the premenstrual period, Beginning from a few days before the
onset of menses and extending into the first few days of menses. There is not a significant
relation in chocolate craving or liking between parents and their children.

SARAH HAGGET (2011) says that a controversial, government endorsed campaign to

tackle obesity by encouraging children to exchange chocolate bar wrappers for sports
equipment. A company like Cadbury is capable of delivering 12 million messages into
the market place and engaging young people in positive dialogue. Under the scheme,
school-children get “free” equipment when they collect tokens from Cadbury chocolate
bars. It has been calculated that children need to collect tokens from 5440 chocolate bars
for a net and set of volleyball posts.

LIPP (2012) in his view states that his work reviews the literature on the compositional
data of vegetable fats used or proposed as alternatives to cocoa butter in chocolate and
confectionery products. Cocoa butter is the only continuous phase in chocolate, thus
responsible for the dispersion of all other constituents and for the physical behavior of
chocolate. Unique to cocoa butter is its brittleness at room temperature and its quick and
complete melting at body temperature. There were, and are, strong efforts to replace
cocoa butter in part for chocolate production for technological and economic.This work
reviews further on the literature on the available methodology for analysis, quantification,
isolation, purification, and structure elucidation of polyphenols in cocoa components and
other commodities. The characterization and quantification of the polyphenols
Composition is amongst the first steps to be done to evaluate a putative contribution of
chocolate to human health.

33
PHILIP K. WILSON (2014) from his view says that in1753, the noted nosologist, Carl
Linnaeus, named it the obroma cacao, food of the Gods. Two and a half centuries later,
Joanne Harris emphasized this exotic serotic sensation in her award winning fiction
debut, Chocolate. For millennia, healers have touted its myriad medicinal, yet mystical,
abilities. By the 1950s, chocolate, what had long been used as a drug, a food and as a
source of currency, was being marketed merely as a pleasure-filled snack. Over the next
half century, the craving to carve out chocolate’s healthy, medicinal qualities resurged.

JAN WOLLGAST (2014) feels that Cocoa beans are rich inpolyphenols in particular
catechins and Proanthocyanidins. However, a sharp decrease in quantity occurs during
fermentation and drying of cocoa beans and further retention has been reported during
roasting. Characterization and in particular quantification of polyphenols in chocolate has
only been developed relatively recently. This work reviews further on the literature on the
available methodology for analysis, quantification, isolation, purification, and structure
elucidation of polyphenols in cocoa components and other commodities. The
characterization and quantification of the polyphenols Composition is amongst the first
steps to be done to evaluate a putative contribution of chocolate to human health.

CHAKRABORTY (2015) in a study conducted in Hyderabad. In India he identified the

driving shopping, motives of Indian consumer. Factor analysis three shopping motives
two of which related to hedonic shopping motive and one of the utilitarian. The factors
were named as diversion, socialization and utilitarian. Other dimensions are store
attributes, shopping outcomes and shopping perceived cost. The identified factor could be
the key for discount stores for understanding the shoppers.

DR. SHENDGE (2016) on his study “A comparative study of consumer perception

towards nestle chocolates with special reference to NaviPeth Area in Sholapur city”
viewed that chocolate is liked and eaten by all age groups of people. It is also found that
women paid more attention about the details of the characters of an ad when asked to
analyze advertising messages.

34
DR. SHENDGE (2016) on his study “a comparative study of consumer preference
towards nestle ” viewed that chocolate from many sources, mainly from friends and
families, through advertisement and from their own experience. Whether a promotion and
advertising hurt or help a brand is under-researched (mela, gupta and lehman,2011). In
the long-run advertisement helps brand by making consumer less price sensitive and
more loyal. The purchase decision pertaining to particular brand and loyalty is a result of
various attributes o the product.

ROMARIUK AND SHARP 2017; suggested that marketers should focus more on how
many attributes the brand should be associated with and not what attributes. For low-
involvement products, consumers have more objective view of the nature of the attributes
because they are constantly being advertised and promoted. Price is another form of
attribute used by consumers to evaluate a product. Price can sometimes be an indicator
of quality; with a higher price indicating higher quality (mowen and minor, 1998; siu and
Wong, 2002). Some consumers are highly price sensitive (elastic demand), whereby a
high prices may shift consumers to competitive brands, (mowen and minor,
2008).Therefore price can have a positive or negative influence on customers.

LUTTON (2017); reported that chocolate is a caloric rich food with a high sugar and fat
content. So reducing the caloric Intake of other foods is required. Moreover, chocolate
contains a variety of substances, some of which have addictive properties e.g. sugar, the
obromine, and caffeine which are stimulating and mood elevating and phenethylamine
which can cause endorphine releases in the brain.

35
LLCSCOP JESWISSLION (2017); according to IFC and World Bank Macedonia in
2012 was on a very high 22nd place for ease of doing business, and 23rd in 2013 out of
185 economies in the world, which is better than most developed countries,

BRUNER ET AL. (2018); studied that emerging financial markets offer interesting
investment opportunities, particularly on a direct investment basis and therefore deserve
research attention in their own right. A recent research on also described food, beverages,
chocolates confectionary products: industry profile: Europe market line has indicated that
, with the purpose of starting operations within the chocolate confectionary market ,
relatively high levels of capital investments are needed especially for the establishment of
production facilities.
It is so regarding to the fact that a majority of nestle confectionary products are subject
to high volume production in order to be profitable. Nevertheless, there also exists an
opportunity for a small –scale entrance on the market, which can best be achieved
through implementing a production of high-value, low volume products in a craft
process. Consumers who may not be willing to switch their consumption away from their
preferred brand, there exists a somewhat weakened threat for entrance of new companies
on the Cadbury and nestle confectionary market.

RAJA RAM AND ZHILI (2018), studied that the confectionary company will have to
operate at a lower margin, owing to the presence of competitors in this industry in
Macedonia, among which the biggest ones are: “Kraskomerce and LLC Skopje”.
According to the state statistical office of Macedonia, the manufacture of food products
indicates that Macedonian’ food production industry has good prospects for growth and
development in the following years. According to “Research and Markets”, US chocolate
confectionary market had total revenues of $17,664.1 million in 2011.

36
M.D. Ranken, R.C.Kill ,C.Baker 2018; showed that in the three years which have
elapsed since the last edition of the food industries manual was published, little change
has occurred in the confectionary industry and there is little evidence that new products
are of much importance to the manufacturer or consumer. Sugar replacement and the so-
called ‘healthier’ products have had little impact on the main market in the UK and
traditional products have been made for 50 years, still dominate sales in the chocolate
sector shell moulding seems to be used for many sweets which used to be enrobed and in
assortments of brands’ products many more centres now truffles or truffle variant. It
remains to be seen if the current problem with BSE in the UK will affect sales of
products containing gelatin, or if the solution of that problem will result in difficulties
with the supply of some milk products.

Marija Anastasovska 2018; The aim of this paper is to construct a model for evaluation
of a new established company in the chocolate confectionary industry in emerging
countries such as Macedonia. We begin with distribution of a questionnaire to
participants of a different age and profile so that we get reliable data concerning the
business climate and opportunities for opening new outlets. Then, we use the one-year
projected income statement and cash flow statement to construct discounted free cash
flow model and calculate project’s net present value and internal Rate of Return. Based
on the forecasting variables and the financial projections, the project generates positive
NPV and high internal rate of return despite the large investment needed for establishing
chocolate factory.

37
3. RESEARCH METHODOLOGY

3.1)MEANING

Research is defined as a careful consideration of study regarding a particular concern or a

problem using scientific methods. According to the American sociologist Earl Robert
Babbie, “Research is a systematic inquiry to describe, explain, predict and control the
observed phenomenon. Research involves inductive and deductive methods.”

Research methodology is the specific procedures or techniques used to identify, select,

process, and analyze information about a topic. In a research paper, the
methodology section allows the reader to critically evaluate a study’s overall validity and
reliability. The methodology section answers two main questions: How was the data
collected or generated? How was it analyzed? Survey method was adopted for the study.
Survey work with a structured questionnaire was administered to collect secondary
data. This study is totally based on secondary data collected from the respondent. The
purpose of research methodology section is to describe the procedure for conducting the
study.
It includes Research design, Sample unit, Sample size, Sampling technique, Tools for
data collection, Statistical tools, sources of data & Procedure of analysis of research
instrument.

3.2)CONCEPTUALIZATION
This chapter describes the methodology of thee study. This project is based on information
collected from secondary sources. After the detailed study, an attempt has been made to
present comprehensive analysis of customer perception towards Cadbury and nestle industry.
The data has been used to cover various aspects like consumption, consumer’s preferences
and customer’s satisfaction regarding the different products introduced by the Cadbury and
nestle. In collecting requisite data and information regarding the topic selected, I have chosen
the consumers hailing in panipat city and collected data.

38
3.3)SIGNIFICANCE OF THE STUDY

Market research has its importance not only for consumers market but also its surveys
effectively to the producer of goods and services. The use of conducting the study from
consumers may be explained on the basis of following services rendered by it.

 It helps to point out how the company’s products have been consumed by the
consumers.
 it ascertains the positions of a company in specified industry
 it helps in development and introduction of new product

3.4)OBJECTIVES OF THE STUDY:

MAIN OBJECTIVE:

The Main objective of the study is:

 To analyze the customer perception towards Nestle.

SUB OBJECTIVES OF THE STUDY:

The other sub-specific objectives of the study are as follows:

 To study the consumption patterns with regard to Nestle food products in the sample
area.
 To study the motivating factors influencing the consumers behavior towards Nestle food
products.
 To evaluate the buying behaviors shown by consumers towards selected Nestle food
products.
 Analysis of the product pricing, availability , quality ,taste , advertising and packaging of
the different products
 To study the factors affecting the consumption pattern
 To be a relevant guide for any other product launch in the market area.

39
 3.5)SCOPE OF THE STUDY

In present day market context, when there are a number of FMCG brands competing in the
market and trying to influence the consumer and his I her buying habits, it is important to
study the factors which influence consumer behavior. Nestle has been a known name in
Indian FMCG sector and its products are quite popular. So a need was felt to study what are
the reasons that people prefer Nestle products over other brands.These all factors can be
analyzed along with different demographic variables and hence significant relationships
among them can be determined.

Marketers today want consumers to learn about their product. Product attributes potential
consumer benefit and new ways of behaving that will satisfy not only the consumers’ needs
but also the marketer's objective. So a marketer is needed to keep conducting various studies
and surveys in order to gain a deep insight towards the consumers.

The scope of the study is restricted to the food products of Nestle only. The study was being
conducted on the basis of demographics, which may help the researcher and manufacture to
segment the market and give suggestions regarding the product in order to meet the needs of
consumers.
.
3.6)RESEARCH DESIGN
The research design indicates a plan of action to be carried out in connection with a proposed
research work. It provides only a guideline for the research to enable him to keep that he is
moving in the right direction in order to enable his goals.

A detailed outline of how an investigation will take place. A research design will typically
include how data is to be collected, what instruments will be employed, how the
instruments will be used and the intended means for analyzing data collected.

Descriptive research study describes the characteristics of a particular individual, or of a

group. Descriptive research is used to obtain information concerning the current status of
the phenomena to describe, "What exists" with respect to variables or conditions in a
situation.
40
3.7) DATA COLLECTION

Data collection is most important part of research because the research is based on it. There
are several ways of collecting the data which differs considerably in terms of cost, time and
other resources at the disposal of the researchers..

3.8)SOURCES OF DATA COLLECTION

There are two sources of data collection techniques. Primary and Secondary data Collection
techniques. Primary data collection uses surveys, experiments or direct observations.
Secondary data collection may be conducted by collecting information from a diverse source
of documents or electronically stored information, census and market studies are examples of
a common sources of secondary data. This is also referred to as "data mining."

(3.8.1)PRIMARY DATA

Primary data means original data that has been collected specially for the purpose in mind. It
means someone collected the data from the original source first hand. Data collected this way
is called primary data. Primary data has not been published yet and is more reliable, authentic
and objective. Primary data has not been changed or altered by human beings; therefore, its
validity is greater than secondary data. For the study, the data has been collected directly
from respondents with the help of structured questionnaires

SOURCES OF COLLECTING PRIMARY DATA

 Survey: it is most commonly used method in social sciences, management, marketing
and psychology to some extent. Surveys can be conducted in different methods.

 Questionnaire: primary data were collected by structured questionnaire. Questionnaire

was designed in order to collect information about consumer demographic information,
awareness about Nestle food products, most popular products of Nestle, consumption
pattern and factors which influences the consumers to buy a specific Nestle product. The
questions asked were open ended, dichotomous and offered multiple choices

41
 Observations: It can be done while letting the observing person know that he is being
observed or without letting him know. Observations can also be made in natural settings
as well as in artificially created environment.

(3.8.2)SECONDARY DATA
Secondary data is the data that has been already collected by and readily available from other
sources. When we use Statistical Method with Primary Data from another purpose for our
purpose we refer to it as Secondary Data. These secondary data may be obtained from many
sources, including literature, industry surveys, compilations from computerized database
sand information systems, and computerized or mathematical models of environmental
processes. For this study :
The secondary data were collected from internet, books and records of Iibrary.

SOURCES OF COLLECTING SECONDARY DATA

 Published Printed Sources: There are varieties of published printed sources. Their
credibility depends on many factors. For example, on the writer, publishing company and
time and date when published. New sources are preferred, and old sources should be
avoided as new technology and researches bring new facts into light.
 Books: Books are available today on any topic that you want to research. The uses of
books start before even you have selected the topic. After selection of topics books
provide insight on how much work has already been done on the same topic and you can
prepare your literature review. Books are secondary source but most authentic one in
secondary sources.
 Journals/periodicals: Journals and periodicals are becoming more important as far as
data collection is concerned. The reason is that journals provide up-to-date information
which at times books cannot and secondly, journals can give information on the very
specific topic on which you are researching rather talking about more general topics.
 Magazines/Newspapers:
Magazines are also effective but not very reliable. Newspaper on the other hand is more
reliable and in some cases the information can only be obtained from newspapers as in the
case of some political studies.

42
 Published Electronic Sources: As internet is becoming more advance, fast and reachable
to the masses; it has been seen that much information that is not available in printed form
is available on internet. In the past the credibility of internet was questionable but today it
is not. The reason is that in the past journals and books were seldom published on internet
but today almost every journal and book is available online. Some are free and for others
you must pay the price.
 Sampling:
Sample of 100 respondents was selected from panipat city of Haryana . it was chosen for
the study because of the good income of people, high education, and availability of wide
range of FMCG brands. These respondents were selected on the basis of convenience.

3.9) SAMPLING TECHNIQUE

 Sampling Technique: Convenience Sampling was used to select the sample. Convenient
sampling is a non probability sampling technique that attempts to obtain a sample of
convenient elements .In case of convenience sampling, the selection of sample depends
upon the discretion of the interviewer. In this project, Questionnaire Method was used for
the collecting the data. With the help of this method of collecting data, a sample survey
was conducted.
 Sampling unit: The target population must be defined that has to be sampled. The
sampling unit of research included students and professionals residing in Panipat city of
100 units.
 Population: local consumers and inferential of panipat city.
 Sample size :The sample size is an important feature of any empirical study in which the
goal is to make inferences about a population from a sample. In practice, the sample size
used in a study is determined based on the expense of data collection, and the need to
have sufficient statistical power. The Sample Size for this study is 100.This refers to
number of respondents to be selected from the universe to constitute a sample.

43
 Universe: The Universe is most commonly defined as everything that physically exists
the entirety of space and time, all forms of matter, energy and momentum, and the
physical laws and constants that govern them. All those persons who makes purchases.

ANALYTICAL TOOLS:

To analyze the data obtained with the help of questionnaire, following tools were used:

 Likert scale: These consist of a number of statements which express either favorable or
unfavorable attitude towards the given object to which the respondents are asked to react.
The respondent responds to in terms of several degrees of satisfaction or dissatisfaction.

 Pie Charts A pie chart is a diagram in the form of a circle, with proportions of the circle
clearly marked.

 Bar graphs:-Bar charts show data in the form of bars that illustrate the relationship
between the items of information in terms of size: the bars get larger (generally taller) as
the amounts being shown increase.

 Histogram :- A histogram is a type of graph that has wide applications in statistics.

Histograms provide a visual interpretation of numerical data by indicating the number of
data points that lie within a range of values.

 Line graphs:- A graph with points connected by lines to show how something changes in
values.

44
3.10)LIMITATIONS OF THE STUDY : In an attempt to make this project

authentic and reliable, every possible aspect of the topic was kept in mind. Nevertheless,
despite of fact constraints were at play during the formulation of the project.

 Because of time constraint sample size was restricted to 100.

 The main source of data for the study was secondary data, hence the chances of biased
information are more.
 People were arrogant towards their response.
 Difficult to know whether willing respondents are truly representative.
 This method is likely to be slowest of all.
 The chances of biased response can’t be eliminated though all necessary steps were
taken to avid the same.
 The estimates are done on average basis.
 Some of the respondents did not respond due to lack of time.
 Sometimes even if the consumers were not using Cadbury and nestle products but he
used to say that the brand he is using is Pepsi because of low awareness level of other
brands.
 Some consumers were biased towards their brand, which might not be giving them
good service.

45
 4.) SWOT ANALYSIS

STRENGTHS
 Biggest food and beverage firm in the world ahead of PepsiCo and coca cola.
 Global and diversified food and drinks portfolio.
 Boasts 29 brands that each earns annual retail revenue in excess of US$1 billion.
 Strong R&D capabilities.

WEAKNESSES
 Unethical claims due to labour claims in cocoa farms in ivory coast and the hazelnut
supply chain in turkey as well as forced slaved labour in the Thai fishing industry.
 Reliance on a big portfolio of sugary drinks and salted snack foods.

OPPORTUNITIES
 New ‘major breakthrough that allows nestle to reduce the mount of sugar in its chocolate
bars by 40% leads the way in reformulation of its chocolate bar brands.
 Growth in lower- calorie beverages such as value-added bottled water and other high
growth healthy beverages.
 Resurgence in the uk for the foods and drinks that leverage the desire for comfort.

THREATS
 Sugar regulatory environment getting tougher across core markets such as the UK. This
includes the new sugar tax in the UK. This includes the new sugar tax in the UK as well
new rules in 2016 banning the advertising of high-fat, salt and sugar (HFSS) food or
drinks to children under 16.
 Brexit impact on labour mobility, nestle supply chain efficiency and the general UK
economy.
 Digital disruption.

46
4. DATA ANALYSIS AND INTERPRETATION

4.1: Gender

Sr. Gender Respondents

no. Number %
1 Male 45 45%
2 Female 55 55%
Total 100 100
Table no. 4.1

gender wise distribution

45%
55%
male
female

Figure no.4.1

INTERPRETATION

The above graph shows that the gender wise distribution of the respondents. It is cleared
that out of 100 consumers of Nestle food product majority of respondents consisting 45%
are male followed by 55% female respondents.

47
 4.2 ) Age Group distribution of consumers.

Sr. Age Group Respondents

no. Number %
1. Below 25 35 35%
2. 25-35 35 35%
3. 35-45 20 20%
4. Above 45 10 10%
Total 100 100
Table no. 4.2

age group distribution

below 25 25-35 35-45 above 45
10%

20% 35%

35%

Figure no. 4. 2

INTERPRETATION
The above graph shows that out of the 100 respondents 35% of them are below 25 years of
age, other 35% are of 25-35 years of age, next 20% are of 35-45 years, and remaining 10%
being above 45 years of age to purchase the nestle food products.

48
 4.3) Occupation

Sr. Gender Respondents

no. Number %
1 Student 35 35%
2 Business 20 20%
3. Housewife 10 10%
4. Job 25 25%
Total 100 100
Table no. 4.3

occupation

25%
35%

student
business
10% housewife
job
20%

Figure no.4.3

INTERPRETATION

From the above analysis it is shown that the 35% of consumers are students, 20% are having
their business, 10% are housewives and 25% are in their jobs from out of 100 respondents.

49
4.4) What is the residential status of consumers of nestle food products?

Sr. no. Residential Respondents

status Number %
1. urban 45 45%
2. Semi urban 35 35%
3. Rural 20 20%
Total 100 100
Table no. 4.4

Residential Status

60%

40%

20% 45%
35%
0% 20%
urban
semi urban
rural

Figure no. 4.4

INTERPRETATION:

The above graph shows that the residential status of 100 respondents and it is clear that most
of the respondents belong to urban area followed by semi urban and rural areas i.e. 45 % are
from urban area, 35% are from semi urban area and 20% are from rural area.

50
4.5) Are you aware about nestle food products.

Sr. no. Awareness Respondents

for nestle Number %
products
1. Yes 65 65%
2. No 35 35%
Total 100 100

Table no. 4.5

Educational qualification

35%
yes
65% no

Figure no. 4.5

INTERPRETATION :
From the above analysis it can be interpreted that out of 100 respondents 65% are aware of
the nestle food products are 35% are still required to be aware of the same.

51
4.6) If yes , which product you consumed.

Sr. no. Product Respondents

Number %

1. Nescafe 35 35%
2. Chocolates 35 35%
3. Milk products 17 17%
4. Beverages 13 13%
Total 100 100
Table 4.6

Products

40%

30%

20% 35%
35%
10%
0%
17%
nescafe 13%
chocolates
milk
products beverages

Figure no.4.6

INTERPRETATION :
From the above analysis it can be interpreted that 35% of the consumers like nescafe more ,
other 35% prefers chocolates , 17% of them go for milk products and remaining 13% likes
beverages more preferably as the nestle product.

52
4.7) From how many years/months consumers have been using the nestle food products.

Sr. no. Using time( years) Respondents

Number %

1. Less than a year 3 3%

2. 1-2 years 25 25%
3. 2-5 years 55 55%
4. More than 5 years 17 17%
Total 100 100

Table no. 4.7

using time (years)

60%

40%
55%
20% 25% 17%
3%
0%
lessthan a 1-2 years 2-5 years more than 5
year years

Figure no. 4.7

INTERPRETATION :
As per the above analysis it can be interpreted from out of 100 respondents that the
duration for which the respondents have been using Nestle products. It is seen that 55% of
respondents have been using Nestle products for less than 5 years while 17% for more than
5 years. 25% of the respondents for approx 1-2 years and the small proportions of 3% are
new users of the nestle products.

53
4.8 For whom it is being purchased.

Sr. no. Being purchased for Respondents

Number %
1. Buy for self 45 65%
2. For child 27 7%
3. For gifting 3 3%
4. By occasionally 10 10%
Total 100 100
Table no. 4.8

purchases for

45%

27%

10%
3%

buy for self for child for gifting by occasionally

Figure no. 8

INTERPRETATION :
As per the above analysis it can be interpreted from out of 100 respondents that the 45%
of consumers purchases for themselves, 27% for their child, 3% for gifting and 10%
occasionally purchases.

54
 4.9 The source of advertisement being used.

Sr. no. Source of Respondents

advertisement Number %
1. Television 65 65%
2. Newspapers 7 7%
3. Brochures 3 3%
4. Hoardings 10 10%
5. Display 15 15%
Total 100 100

Table no. 4.9

source of advertisements

15% television
10% newspapers
3%
7% 65% brochers
hoardings
display

Figure no. 4.9

INTERPRETATION:

From the above analysis of given sample 100 respondents it can be indicated that 65% of the
customers prefers television, 7% prefers the newspapers, 3% prefers brochures, 10% of
hoardings and rest 15% prefers the display media as the most convincible to make them
purchase the products

55
 4.10 How ads persuades consumers to purchase.

Sr.no. Ads persuades Respondents

consumers Number %
1. By Emotions 25 25%
2. By fun 27 27%
3. By knowledge 23 23%
4. By music jingle 25 25%
Total 100 100

Table no. 4.10

Availability in the market

by…

25% 25%

23% 27%

Figure no. 4.10

INTERPRETATION :
As per the above analysis it can be interpreted from out of 100 respondents 25% of consumers
being persuades to make purchases by emotions, 25% by fun , 23% by knowledge influences and
remaining by music jingle.

56
 4.11) Frequency of using nestle food products by the consumers.

Table no. 4.11

Sr. no. Frequency of using nestle food products. Respondents

Number %

1. Daily 53 53%
2. Once a week 21 21%
3. Twice a week 2 2%
4. Thrice a week 15 15%
5. Fortnightly 0 0%
6. Monthly 8 9%
7. Rarely 0 0%
8. Never 1 0%
Total 100 100

Figure no. 4.11

frequency of use

60%
50%
40%
30% 53%
20%
10% 21% 15%
2% 0% 8% 0 0
0%

INTERPRETATION :

As per the above analysis of 100 respondents it can be interpreted about the frequency of
consuming the nestle products ;21% of respondents consumes once in a week, 15% uses
nestle products thrice a week. % uses monthly, 2% use twice in a week while 53% consume
daily and only 1% does not consume at all.

57
 4.12. Consumers opinion about the prices of nestle food products that they usually
consume

Sr.no. Opinion about price Respondents

Number %
1. Fairly reasonable 60 60%
2. High 36 36%
3. Very high 4 4%
Total 100 100
Table no. 4.12

opinion about prices

80%

60%

40%
60%
20% 36%
0% 4%
fairly resonable high very high

Figure no. 4.12

INTERPRETATION :

The above analysis shows the opinion of the 100 respondents regarding the prices of the
Nestle food products. It is seen that 60% of the respondents think that prices of the Nestle
food products are fairly reasonable, 36% of them felt that the prices are high while 4% think
that the prices are very high.

58
4.13 What will be the effect of price change on your consumption of the product.
A) if price increases:

Table no. 4.13.(a)

Sr. no. Effect on consumption with price change Respondents

( increase in current price) Number %
1. Increased consumption 14 14%
2. Decreased consumption 49 49%
3. No effect 25 25%
4. Switch to other similar products 12 12
Total 100 100
Figure no. 4.13(a)

effect on consumption in case increase in price

50%
40%
30%
49%
20%
25%
10% 14% 12%
0%
increased decreased no effect switch to other
consumption consumption similar
products

INTERPRETATION:

The above analysis shows the opinion of the 100 respondents regarding the increased prices
of the Nestle food products. It is seen that 14% of the respondents increased their
consumption, 49% have decreased their intakes, 25% carries no effect, while 12% shift to
the other similar products.

59
 B) if price decreases:

Table 4.13(b)

Sr.no. Effect on consumption with price Respondents

change ( decrease in current Number %
price)
1. Increased consumption 49 49%
2. Decreased consumption 14 14%
3. No effect 25 25%
4. Switch to other similar products 12 12%
Total 100 100
Figure no. 4.13 (b)

effect on consumption in case decrease in price

50%

49%
25%
14% 12%
0%
increased decreased no effect switch to
consumption consumption other similar
products

INTERPRETATION:

The above analysis shows the opinion of the 100 respondents regarding the decreased
prices of the Nestle food products. It is seen that 49% of the respondents increased their
consumption, 14% have decreased their intakes, 25% carries no effect, while 12% shift to
the other similar products.

60
 4.14. what are the Reasons for not switching over to the other industry brands.

Sr.no. Reasons for not switching from nestle Respondents

Number %
1. Best quality 35 35%
2. Reasonable price 25 25%
3. Goodwill 10 10%
4. Easy availability 10 10%
5. Habitual consumption 20 20%
Total 100 100
Table no.4.14

Reasons for not switching over to the other industrys’ brand

35%
30%
25%
20% 35%
15% 25%
20%
10%
10% 10%
5%
0%
best quality reasonable goodwill easy habitual
price availability consumption

Figure no. 4.14

INTERPRETATION:

From the above analysis of given sample 100 respondents it can be indicated that 35% of the
consumers prefers nestle as of the best quality, 25% considers for reasonable price, 10% for
goodwill , 10 with easy availability, and 20 % with habitual consumption for not switching
over to the other industry’s brand.

61
4.15 The level of satisfaction of consumers regarding packaging?

Sr. no. Satisfaction of consumers regarding Respondents

packaging Number %
1. Highly satisfied 29 29%
2. Satisfied 28 28%
3. Neutral 40 40%
4. Dissatisfied 2 2%
5. Highly dissatisfied 1 1%
Total 100 100
Table no. 4.1

satisfaction of consumers regarding packaging

50%

40%

30%

20% 40%
30% 28%
10%

0% 2% 1%
highly satisfied satisfied neutral dissatisfied highly dissatisfied

Figure no. 4.15

INTERPRETATION:
The above analysis shows the opinion of the 100 respondents regarding their satisfaction
towards the packaging of the Nestle food products. It is seen that 30% of the respondents
are highly satisfied, 28% seems satisfied, 40% of them were neutral, while 2% of
respondents were dissatisfied and 1% highly dissatisfied with the packaging.

62
4.16 Level of satisfaction of consumers regarding hygiene.

Sr. no. Satisfaction of consumers Respondents

regarding hygiene Number %
1. Highly satisfied 25 25%
2. Satisfied 39 39%
3. Neutral 35 35%
4. Dissatisfied 1 1%
5. Highly dissatisfied 0 0%
Total 100 100
Table no. 4.16

Satisfaction of consumers regarding hygiene

1% 0%

25% highly satisfied

35%
satisfied
neutral
39% dissatisfied
highly dissatisfied

Figure no. 4.16

INTERPRETATION :

The above analysis shows that the satisfaction level of the respondents about the hygienic
condition of the Nestle food products. It can be seen that 25% are highly satisfied and 39%
% are satisfied, 35% of them were neutral, while 1% of respondents were dissatisfied with
0% highly dissatisfied respondents with the Hygienic condition of the Nestle food products.

63
4.17) Promotional offers that attracted customers the most, prior to purchasing.

Sr. no. Promotional offers that attracted the most Respondents

Number %
1. Free gifts 15 15%
2. Price offers 25 25%
3. Festival offers 55 55%
4. Any others 5 5%
Total 100 100
Table no. 4.17

promotional offers

15%
free gifts
42%
20% price offers
festival offers
any others
23%

Figure no. 4.17

INTERPRETATION:

From the above analysis of given sample of 100 respondents it can be indicated that with
the promotional offers for which consumers are mostly inspired consists ; 42% free gifts,
23% price offers, 20% of festival offers and 15% of prefers any other if being provided to
them .

64
 4.18 Do controversies involved with the brands would affect your purchases.

Table 4.18
Sr.no. Affect of Respondents
controversies Number %
1. Yes 54 54%
2. No 46 46%
100 100

Figure no. 4.18

Affect of controversies involved on purchases

no 42%
affect of controversies
involved
yes 48%

38% 40% 42% 44% 46% 48%

INTERPRETATION:

From the above analysis of given sample 100 respondents it can be indicated that 42% of the
consumers would be affected in case of any controversy involved with the brands and rest
48% of them remains unaffected.

65
 FINDINGS

 In the Data it is shown that 55% of the female purchases more nestle products as
compared to 45% of male respondents. This may imply that more females are involved in
buying of the Nestle food products as compared to males. Hence females of a family are
a major role player while making purchasing decision. The end consumer may be anyone
in the family but most of the buying is still done by females in study area.
 It is shown that major proportion of purchases being done by the age group of below 25
years i.e. 35% and 25-35 years of age groups i.e. 35% whereas minority goes to the age
group of 35-45 years and above with declination in their consumption.
 It is observed that mostly students are preferring the nestle products as compared to those
of business persons , housewife and job servicemen
 It is clear from the data that it is the urban areas where more people are aware of Nestle
food products as compared to semi urban and rural areas. It can be implied that as in
urban areas there is always a good distribution network and availability of the products
and hence people's awareness and consumption is also more.
 Educated people may have good knowledge about the features/specification and
competitive prices of the different products available in the market as compared to the
less educated and uneducated people and hence education makes a difference in purchase
behavior of the consumer.
 It is shown in the data that education plays a vital role in consumer's buying decisions.
Nestle products have been in use from a long time in the area.
 It is suggested by the data that new consumers are also being attracted towards these
products: which implies the company can further target the market by appropriate
marketing strategies
 Consumers are more persuaded with the advertisement media prior to make purchases of
the nestle products.
 It is shown that the availability of the Nestle products is very good in the market in the
sample area as Nestle has a very good distribution network all over India.
 It is on the regular basis that approx 53% of the consumers are frequently purchasing the
nestle products with that once in a week or monthly purchasing the products.

66
 The data shows that most of the respondents are satisfied with the prices of the Nestle
food products. This shows that most of the people think that Nestle products are priced
reasonably in the sample area though some people may have the opinion that prices are
high.
 Although price is something with which people hardly get satisfied. yet given the large
proportion of the respondents offering this view, it would be worthwhile for the company
to look into it.
 It is also observed that if current prices of the products increases then consumers either
decreases their consumption or go for other similar products and vice versa.
 It is also shown that consumers are sensitive when it comes to hygiene , packaging and
the pricing factor of the products.
 It is also shown that respondents doesn’t switch the consumption because of their
habitual behaviour.
 It is observed that only 42% of the respondents are affected with the controversies
involved with the brand name of the nestle products.
 It is also observed that 35% of the consumers doesn’t go gor other similar products
because of nestles’ best quality and goodwill.

67
 SUGGESTIONS

On the basis of main results of the study, the following suggestions are being made:

 Quality in FMCG products may be achieved through training in business development,

quality product development, and marketing external monitoring of quality. Education
has been found to make a difference in purchasing behavior of a consumer. Educated
people in the study area have been found to have good knowledge of thc features and
competitive prices of the products. People working in occupations with high income
generating potential have been found to include more of the Nestle products in their
consumption basket in the study area. Nestle products have been found to be in use for a
long time in the study area and new consumers are also being attracted towards these
products hence the customer base is increasing.
Nestle has been found to be the most preferred brand as compared to other FMCG
brands in the study area. This suggests the area of improvement for these brands.
Among the people of different age groups, adults have been found to have more liking
for Nestle food products, and thus the results suggests two target groups for the
company i.e. adults and children. Regularity of use have been found to be varying from
product to product. Thus. The results also suggest a scope for a product wise detailed
study.

 The availability of the Nestle products is noted to be very good in the market of the
sample area as Nestle has a very good distribution network. A good satisfaction level
has been found among the people of the study area regarding the factors like price,
hygienic condition, packaging and storage time of the Nestle food Products. For
improving effectiveness of the scheme the management should focus on proper timing
of launching scheme, communication and transparency regarding sales promotion
schemes.

 The company must keep a continuous watch on its direct and indirect competitors to
maintain its position and also to keep itself fully prepared to increase its market share

68
in untapped semi-urban and rural market for this purpose the company can use life
cycle analysis to select the best pricing policy for satisfying anticipated customer
trends and winning market approval and market share growth. Use scientific product
classification analysis to determine the optimal pricing strategy according to buyer
behavioral constants observed in specific product category types. The company can
increase the number of layers between the company and the customer and the number
of partners in the layer.

69
 CONCLUSIONS
 Although a clear majority of the respondents feel satisfied. Yet equally sizable proportion
is on the other side, not feeling satisfied . This suggests that either the company should
try to win over these people through aggressive marketing plans or it should research and
plan to incorporate the feelings of this segment of consumers into its marketing plans.

 This show that a good proportion of the people in the study area are satisfied with the
hygiene supported by the Nestle food products; which means they think these products
are good to cat and do not have any ill-effects on health.
 These products are easy to store and can be stored for a long time hence their extra
supplies can also be maintained.
 Most of the buying is still done by females in the study area and hence they play a major
role while making purchases.
 In urban area people might be exposed more to Nestle food products as compared to
urban and rural areas. So consumption of these products is more in the urban areas.

It is also concluded from this study that as FMCG sector is growing and will continues to
grow very fast and that the futures for the Nestle food products look extremely
encouraging. These products have established their need among the people and Nestle is all
set to emerge stronger in future. The study on the consumer behavior towards the products
of Nestle has received a pivotal position in the market for Maggie, Nescafe and Munch etc,
although there are many competitors in the market. Nestle has been found able to maintain
hold its top rank providing quality product at reasonable price to consumer. However for
some of the products the figures are not so much promising and there is a need to analyze
what strategies that the company should use to increase the number of its consumers.

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