MARKETING METRICS CIA – 3

BRAND VALUATION
of

Nestle
Submitted To: PROF. Binu.P.Paul

Submitted By:

Karthic 19121012

Madhan 19121013

Shreya 19121022

Haani 19121032
Introduction:

Mission : Nestlé is the world's leading nutrition, health and wellness company. Our mission
of "Good Food, Good Life" is to provide consumers with the best tasting, most nutritious
choices in a wide range of food and beverage categories and eating occasions, from morning
to night.

Vision : To be a leading, competitive, Nutrition, Health and Wellness Company delivering

improved shareholder value by being a preferred corporate citizen, preferred employer,
preferred supplier selling preferred products.

Nestle is a Swiss multinational food and drink processing conglomerate corporation

headquartered in Vevey, Vaud, Switzerland. It is the largest food company in the world,
measured by revenue and other metrics, since 2014. Nestle'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 Nestle's brands have annual
sales of over 1 billion CHF (about US$1.1 billion), including Nespresso, Nescafe, Kit Kat,
Smarties, Nesquik, 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’Oréal,
the world's largest cosmetics company. Nestle India manufactures products of truly
international quality under internationally famous brand names such as Nescafé, Maggi,
Milky bar, Kit kat, Bar-one, milkmaid, munch and Nestea and in recent years the Company
has also introduced products of daily consumption and use such as Nestlé milk, Nestlé slim
milk, Nestlé dahi and Nestlé jeera raita. Suresh Narayanan is the current CEO of Nestle India
from 2015.The company is headquartered in Gurgaon, Haryana. Nestle has employed around
291,000 people worldwide. Nestle reported steady sales growth during the year 2019, Nestle
India set up its first manufacturing facility at Moga (Punjab) in 1961 followed by its
manufacturing facilities at Choladi (Tamil Nadu), in 1967, Nanjangud (Karnataka), in 1989
Samalkha (Haryana), in 1992 Ponda and Bicholim (Goa), in 1995 and 1997, and Pantnagar
(Uttarakhand), in 2006. In 2012, Nestlé India set up its 8th manufacturing facility at Tahliwal
(Himachal Pradesh). The 4 Branch Offices located at Delhi, Mumbai, Chennai and Kolkata
help facilitate the sales and marketing activities. The NESTLÉ India’s Head Office is located
in Gurgaon, Haryana. Nestle India exports coffee powders and tea powders to the rest of the

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world under the name of Nescafe sunrise and Nestea. And they import KitKat crunch and
Fox’s candy to Indian market.

The above shown image shows the product line of the Nestle. Nestle has the leading market
share in Infant cereals, Infant formula, Tea creamer, Instant noodles, Instant pasta, Ketchup
and sauces, White and wafers, Instant coffee

 The first product sold by Nestle was Baby Food(infant cereal)

 Nestle owns more than 2,000 brands

 Nestle is It’s the world’s largest food company in terms of revenues

 The highest selling category is Powdered and Liquid Beverages and Milk Products
and Ice Creams come in second
 The company has over 400 factories in 86 countries and has operations in 197
countries world over
 Transition to mono material packaging which is designed for better recycling. Already
initiated for Maggi Noodles, munch

Logo of the company:

Nestle has modified its logo at least six times throughout its
more than 150-year history. Nestle Logo symbolizes Mother

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feed to her children. The original Nestlé trademark was based on his family's coat of
arms, which featured a single bird sitting on a nest. This was a reference to the family
name, which means
‘nest’ in German. Then the owner of company selected coat of arms by adding three
young birds being fed by a mother as the logo of company, to create a visual link
between his name and his company’s infant cereal products.

SWOT Analysis:

STRENGTH: WEAKNESS:

 Unmatched research and  Criticism over high water usage,

development capability
selling contaminated food, anti-
 Strong geographic presence, with
one of the best geographically unionism, forced child labour and
diversified revenue sources using other unethical practices
 Un rivalled product and brand  Contaminated food recalls
portfolio
 Environmental sustainability efforts
 Ownership of some of the most
recognizable brands in the world

OPPURTUNITY: THREATS:

 Clear and accurate labelling

indicating of any harmful products  Poor quality water and its scarcity
 Transparency in material sourcing  Increased competition in the
 Growing number of small Silicon beverage and food industries
Valley based food startups
 The price of coffee beans could
 Growing ready-to-drink (RTD) tea
and RTD coffee markets significantly rise due to major
weather disasters

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Brand Summary :

Nestle Milk Chocolate was created as

a competitor to the more-established,
and North American chocolate bar
segment-leader Hershey bar, and was
even created in a similar form as their
competitor. The closest Nestle product
to them is the Nestle Crunch, which is
very similar to Nestle Milk Chocolate,
the main difference being that Nestle
Crunch has puffed rice, while Nestle Milk Chocolate does not. A similar product, Yorkie
made by Nestle, is not to be confused with Nestle Milk Chocolate as it is a completely
different product, as the Yorkie bar was originally created by British firm Rowntree of York
to compete with Cadbury Dairy Milk. Nestle also produces many other brands of
chocolate/syrup.

NESTLÉ KITKAT and KITKAT Dessert Delight

Nestle KitKat is crisp wafer fingers covered with Choco layer.

Nestle KitKat has a unique finger format with a ‘breaking' ritual
attached to it. NESTLÉ The all new KITKAT Dessert Delight
comes with a rich indulgent taste inspired by desserts. It has a

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unique “finger-tablet” shape with 12 shareable cubes and is available at an MRP of INR 55
(50g pack) in select regions. Nestle KitKat is one of the most successful brands in the world
and every year over 12 billion Nestle KitKat fingers are consumed around the globe.
NESTLÉ MUNCH

Nestle munch is the country’s most loved ‘coated wafer’ range of

products. Available throughout stores across the country, every
variant of Nestle munch is a delicious crunchy treat for fans. A
first-of-its-kind product , one bite and You’ll go nuts about it!

NESTLÉ MILKYBAR

New Nestlé milky bar with 8% more milk in the recipe. Now,
even more creamy and more yummy. Play, Eat & Learn with
the new Nestlé milky bar.

Brand Valuation Approach :

 Cost based
 Income based
 Market based

Cost based
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  Book Value
 Replacement Value
 Liquidation Value
Income based method
 Earnings capitalization method
 Discounted cash flow method

BRAND VALUE :

PRICE

PRODUCT
SERVICE BRAND
BENEFITS
VALUE
CHANNEL
BENEFITS

BRAN EQUITY

BRAND ASSET VALUATOR :

Brand Asset Valuator measures the value of a brand where it is created: in people’s hearts
and
minds. It provides a diagnostic framework to help the company’s build, leverage, and
maintain
their brands. Brands - independent of their product category - develop in a very specific
progression of consumer perceptions. When building a brand, Differentiation comes first.
Then
Relevance. Then Esteem and, ultimately, Knowledge. But the real action takes place in the
relationships between these measures. Managing the relationships between the measures is
the
key to brand health. The relationships illustrate a brand's intrinsic value, its ability to generate
margin, and its ability to insulate against competitive substitution.
These measures are used in Brand Asset Valuator
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  To evaluate current brand performance
 To identify core issues for the brands
 To evaluate brand potential.

 Differentiation measures the strength of the brand's meaning Differentiation is how

brands are born. As a brand matures, Brand Asset Valuator finds that Differentiation
often declines. It doesn't have to happen. Even after reaching maturity, with good
management, a brand can perpetuate its
Differentiation. A low level of
Differentiation is a clear warning that a
brand is fading.
 Relevance measures the personal
appropriateness of a brand to consumers
and is strongly tied to household
penetration, It is the actual and perceived
importance of the brand to a large
consumer market segment
 Esteem is the perceived quality and
consumer perceptions about growing or declining popularity of a brand Esteem is itself
driven by two factors: perceptions of quality and popularity, and the proportions of these
factors differ by country and culture
 Knowledge is the extent of the consumer’s awareness of the brand and understanding of
its identity. The awareness levels about the brand and what it stands for shows the
intimacy that consumers share with the brand. True knowledge of the brand comes
through brand-building

BRAND STRENGTH = Relevance and Differentiation

BRAND STATURE = Esteem and Knowledge

BRAND EQUITY 10 :
David Aaker sees brand equity as a mixture of brand awareness, brand associations and brand
loyalty. And he highlights 10 attributes of a brand that can be used to assess its strength
These include Differentiation, Satisfaction or Loyalty, Perceived Quality, Leadership or
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Popularity, Perceived Value, Brand Personality, Organizational Associations, Brand
Awareness, Market Share, and Market Price and Distribution Coverage.

Differentiation

Satisfaction or
Loyalty

Perceived Quality

Leadership or
Popularity
BRAND EQUITY

Perceived Value

Brand Personality

Organizational
Associations

Brand Awareness

Market Share

Market Price and

Distribution Coverage

Brand Equity Index :

Brand equity is strategically crucial, but famously difficult to quantify. Many experts have
developed tools to analyse this asset, but there is no universally accepted way to measure it.
The purpose of brand equity metrics is to measure the value of a brand. A brand encompasses
the name, logo, image, and perceptions that identify a product, service, or provider in the
minds of customers. It takes shape in advertising, packaging, and other marketing
communications, and becomes a focus of the relationship with consumers. In time, a brand
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comes to embody a promise about the goods it identifies a promise about quality,
performance, or other dimensions of value, which can influence consumers’ choices among
competing products.

Brand Equity Index (I) = Effective Market Share (%) x Relative Price (I) x Durability (%)

 % Effective market share is calculated by weighting the share of a market segment by

the segment’s percentage of brand sales.
 $ Relative price is the brand’s price, divided by the average market price.
 % Durability is an estimation of how many of the brand’s consumers will purchase in
the following year.

Brand Finance :
Brand Finance calculates brand value using the Royalty Relief methodology which
determines the value a company would be willing to pay to license its brand as if it did not
own it. This approach involves estimating the future revenue attributable to a brand and
calculating a royalty rate that would be charged for the use of the brand

Brandz :
The BrandZ valuation methodology can be uniquely distinguished from its competitors by the
way we use consumer viewpoints to assess brand equity, as we strongly believe that how
consumers perceive and feel about a brand determines its success and failure. We conduct
worldwide, on-going, in-depth quantitative consumer research, and build up a global picture
of brands on a category-by-category and market-by-market basis. BrandZ uses the following
pillars to anchor its brand valuation: Meaningful, Different, and Salient.
 Meaningful: In any category, these brands appeal more, generate greater “love,” and
meet the individual’s expectations and needs
 Different: These brands are unique in a positive way and “set the trends,” staying
ahead of the curve for the benefit of the consumer
 Salient: They come spontaneously to mind as the brand of choice for key needs
The valuation process:

CALCULATING DETERMINING BRAND CALCULATING BRAND

FINANCIAL VALUE CONTRIBUTION VALUE
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Brand Valuation Model (Interbrand) :
Interbrand’s brand valuation methodology seeks to provide a rich and insightful analysis of
your brand, providing a clear picture of how your brand is contributing to business growth
today, together with a road map of activities to ensure that it is delivering even further growth
tomorrow. Through a similar methodology, Interbrand releases an annual ranking of the best
global brands called “Best Global Brands,” which evaluates each brand’s financial
performance, role, and strength
Three key components to brand valuation methodology:
 Financial Analysis
 Role of Brand
 Brand Strength

Questionnnaire:

How frequently do you consume chocolate in a month Rarely/ Sometimes/Often

Will you switch to another brand if your favourite chocolate is Yes/No
unavailable?
Which brand comes to your mind when you think of chocolate? *
Kitkat Bar One Munch Milky Bar

According to you as chocolate which brand offers you a uniqueness among other chocolate
brands? *
Kitkat Bar One Munch Milky Bar
As a chocolate brand, which is a very relevant product for you

Munch Kitkat Milkybar Barone

As a chocolate brand that I would always want to buy or prefer to buy

Munch Kitkat Milky Bar Bar one

Rate the following in terms of relevant unique features provided by the following brands

Kitkat 1 2 3 4 5
Bar one 1 2 3 4 5
Milky bar 1 2 3 4 5
Munch 1 2 3 4 5
Rate the following brands in terms of creating a connection with you (even via advertisements) 

KitKat 1 2 3 4 5
Bar one 1 2 3 4 5
Milkybar 1 2 3 4 5
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 Munch 1 2 3 4 5
Rate the following in terms of Brand loyalty and Brand Respect

Kitkat 1 2 3 4 5
Bar one 1 2 3 4 5
Milky Bar 1 2 3 4 5
Munch 1 2 3 4 5
How well do you recall the Brand and aware of the brand? Rate the following
Kitkat 1 2 3 4 5
Bar one 1 2 3 4 5
Milky Bar 1 2 3 4 5
Munch 1 2 3 4 5
When it comes to chocolate which brand will you recommend? (1-Not recommend 5-Strongly
recommend)
Kitkat 1 2 3 4 5
Bar One 1 2 3 4 5
Milky Bar 1 2 3 4 5
Munch 1 2 3 4 5
Select the attribute you like from the following brands
Taste Crispiness Aroma Texture Packing
Kitkat
Milky Bar
BarOne
Munch
How much do you care about while choosing your choice between chocolates
Not At all 1 2 3 4 5 A lot

Brand asset valuator

Differentiation :

Uniqueness keeps the product different from the rest of the product in the four brands of
chocolate KITKAT got the highest number of response with for a question regarding under
the variable differentiation, And it shows which brand provides uniqueness while consuming
and KITKAT was the top brand which provided uniqueness

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 50
45
40
35
30
25

20
15

10
5

0
Barone Kit Kat Milky Bar Munch

Relevance:
The graph below clearly shows the appropriateness of the brand KITKAT to the consumers
and its strongly tied to household penetration, And KITKAT has the highest number of
response which is related to relevance
60

50

40

30

20

10

0
Bar One KitKat Milky Bar Munch

Esteem:

Esteem is the perceived quality and consumer perceptions about growing or declining
popularity of a brand the below graph shows KITKAT has high consumer perceptions and
Bar one has very low consumer perception.

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 60

50

40

30

20

10

0
Bar One KitKat Milky Bar Munch

This graph shows about the loyalty and respect of the consumers towards a brand and
KITKAT has got the higher number of rating among the other brands this shows the
consumer perceive a high value from KITKAT that’s why they’re loyal or they have respect
towards the brand.

Knowledge:
Knowledge is the extent of the consumer’s awareness of the brand and understanding of its
identity. Consumers awareness of the brand and understanding of what it represents. And in
the given graph people are very aware about KITKAT and less aware about Barone.
60

50

40

30

20

10

0
Bar One KitKat Milky Bar Munch

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 60

50

40

30

20

10

0
Bar One KitKat Milky Bar Munch

Diffrenti ation Relevance Esteem Knowledge

Growth Brand Declining Brand

Milly bar is the growth brand, it KitKat is the declining brand, it

shows lesser count in terms of has many loyal customers and
brand knowledge and esteem, and there are many existing customers
thus has great potential for and not new , the brand didn’t
growth while delivering its said bring in ant new customers.
promises.

Weak Brand Weak Brand

Bar One is one of the weak Munch is one of the weak brand,
it shows lesser count in terms of
14 brand, it shows lesser count in
terms of brand differentiation, brand differentiation, relevance
relevance knowledge, esteem, knowledge, esteem, and
and customers know what the customers know what the brand
brand stands for, so they don't stands for, so they don't find it
find it attractive attractive
Brand Equity:
Formula: Brand Equity Index = Effective Market Share (%) *Relative Price (I) *Durability
(%)

  Effective Market Share:

 Market Share – Nestle has 18% of market share in chocolate and
confectionery
 Market Size of chocolate and confectionery is 30%
Thus, Effective Market Share of HUL is,
18%*30% = 5.4%
 Relative Price:
 Price of nestle chocolates (KitKat, munch, milky bar, bar one)– Rs 10 (20g)
 Price of Dairy milk (competing Brand) – Rs 20 (20g)
 Price of Amul (competing Brand) – Rs 15 (20g)
 Price of Snickers(competing Brand) – Rs 20 (22g)

Nestle charges 10 rupees less compared to its competitor brands and so the relative price is 10

Nestle has the second market share in chocolate industry, Taking this as an assumption we
assume that the durability rate of NESTLE to be at a rate of 40%

Calculation:
Effective Market Share – 0.314 Relative Price – 10
Durability – 0.40

 0.054 * 10 * 0.40 = 0.216

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Brand Equity 10

Popularity: This is to know whether the chocolate is popular and we used a prompted
awareness question to know about the popularity of nestle chocolates.

KitKat has the highest popularity among the four given chocolates.

Brand awareness: The question was asked to know how much people were aware about
each brand of nestle and in this the order of the awareness will ne KitKat, Milky bar, munch
and Bar One.

Perceived quality : The reason to buy the chocolate will be from the perceived quality of the
chocolate, and according to this graph crispness and taste are the major reason to buy the
chocolate.

Brand Loyalty: Brand loyalty is a very important factor for a brand and according to the
graph there are more loyal customers for KitKat followed by munch, milky bar, bar one.
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Differentiation: This question is to know how unique the brand is from other brands and
according to the graph KitKat got the highest rating in the aspect of uniqueness.

Purchase Intent :

Purchase intention is the preference of. consumer to buy the product or service. From the
below graph we are able to know how many people who have the intention to buy the
particular chocolate.

Interpretation and conclusion :

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