A MARKETING

PROJECT REPORT
ON
NESTLÉ

BY

Members:
Nandini Gadekar
Suhaani Agarwal
Janhavi Bhavsar
Rohan Nair
Sharvari Gaikwad
Aarushi Vohra
Sakshi Agrawal

TY(BBA-CA) (2020 – 2021)

IN PARTIAL FULFILLMENT OF
Bachelor of Business Administration – Computer Applications
MIT WORLD PEACE UNIVERSITY

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 INDEX

SR.NO NAME ROLL TOPIC PAGE MARKS

NO NO.
1 Nandini Gadekar 53 Introduction & Product 3
Lifecycle
2 Suhaani Agarwal 80 Company Products 5

3 Janhavi Bhavsar 39 Product Lifecycle & Conclusion 15

4 Rohan Nair 52 Product Management 21

5 Sharvari Gaikwad 31 Price Management & 23

Summary
6 Aarushi Vohra 02 Promotional Activities& Swot 25
Analysis

7 Sakshi Agrawal 70 Place Management& Swot 27

Analysis

Suggestion & 30
Recommendation

Swot Analysis 32

Summary and Conclusion 37

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 INTRODUCTION

Nestlé was founded in 1866 by Henri Nestlé, the largest food and beverage
company in the world.
In 1866, the first condensed milk factory in Europe opened in Cham, Switzerland.
The company was called the Anglo-Swiss Condensed Milk Company. The factory
was owned by two American men, brothers Charles and George Page. The business
owners created their milk products in Switzerland, but it was always intended for the
English market. They opened a British factory in England in 1873.
Henri Nestlé, the company’s founder, worked as an assistant to a local pharmacist
early in his career. He was trained in science and chemistry. In 1867, Henri Nestlé
produced a nutritious combination of milk, wheat, and sugar. This cereal was so
nutritious that it saved the life of a child. He called it Farine lactee. The product took
off, and he began producing his baby food on a large scale. By 1875, only 8 years
after his initial launch, Nestlé products could be found across the globe in countries
like Indonesia, Argentina, Egypt and even the United States.

HISTORY
 First World War influences on Nestlé
The First World War brought serious disruption to economies and businesses all
across Europe. Switzerland remained neutral, though armed, during the First World
War. Switzerland suffered a severe economic crisis caused by a decrease in energy
consumption during the First World War. Even though Switzerland was not involved
in the hostilities, it was difficult for Nestlé to find the goods needed to continue
manufacturing as they had before. Distribution was also difficult because the entire
continent was at war. Nestlé, were able to survive this period of economic hardship
because of the large-scale fighting. Nestlé acquired several government contracts
that required them to expand rapidly. When the war came to an end in 1918, Nestlé
had 40 factories across the globe.

 Second World War influences on Nestlé

Although the global depression began in the 1930s, the period immediately after the
world was a time of severe economic hardship in Central Europe. Nestlé was only
one of hundreds of companies who felt the force of the economic crash in the 1920s.
Much of the 1920s and 1930s were spent trying to remain afloat during difficult
political and economic times. There was little growth or improvement until the year
1938 when Nestlé launched its first coffee product: Nescafé. The birth of Nescafé
actually dated back to eight years prior when the Brazilian government offered
Nestlé their surplus coffee in the hopes that they might preserve it. The Second
World War was looming, and this slowed the growth of what was to become one of
Nestlé ‘s most successful products. Ironically, it was the Allied soldiers who acted as
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the first brand ambassadors of Nescafé. Nestlé quickly reached a worldwide market
as they sent tons of their coffee to the frontlines at the behest of the United States
government.
Innovation did not stop during the second world war. Nestea was created by Nestlé
in the year 1940. Nestea was not introduced to America until 1948. For a time,
Nestea was a joint venture between Coca-Cola and Nestlé, two of the biggest food
and beverage manufacturers and distributors in the world.

 Recovery
The end of the war marked a period of substantial growth for Nestlé as they began to
acquire new companies and dozens of new products. One of the biggest acquisitions
made was with Maggi, another Swiss company. Maggi was founded around the
same time as Nestlé in 1872 by Julius Maggi. In 1947, Maggi went under several
changes in leadership and a number of instances of corporate restructuring.
Eventually, the holding company responsible for Maggi, Alimentana S.A., merged
with Nestlé. Nestlé began manufacturing Maggi products that were sold all over the
world.
In 1948, Nestlé introduced America to a product that would live on to become an
icon in American culture: Nesquik. Nesquik is a chocolate powder that is mixed with
milk to create an instant glass of chocolate milk. Today, Nesquik includes two flavors
and is available in both powdered form and syrup form.

 Transformation into a global player

Nestlé has come a long way from its 19th-century Swiss-German origins in nutritious
gruel to become one of the biggest production conglomerates in the world. Nestlé
has carried with them their spirit of innovation and nutrition from the 19th century into
the 21st century. Today, Nestlé owns more than 2,000 brands that are sold in more
than 197 countries around the world. They have a clear objective to be the leader in
health and wellness. The company has not limited itself to nutrition but moved into
the beauty and health categories in order to create a truly diverse company.
The Swiss company Nestlé S.A. was rated as the world’s largest fast-moving
consumer goods company, in terms of revenue amounting to a staggering 90.8
billion U.S. dollars in 2017. It is headquartered in Vevey, Switzerland and employed
approximately 323,000 people worldwide in 2017. The product portfolio is vast and
ranges from beverages such as powdered and liquid beverages or water (Nestlé
Waters), to baby and health foods (Nestlé Nutrition) and sweets and snacks (Nestlé
confectionery sector).

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 COMPANY PRODUCTS

Nestle India Ltd, one the biggest players in FMCG segment, has a presence in milk
& nutrition, beverages, prepared dishes & cooking aids & chocolate & confectionery
segments. The company is engaged in the food business. The food business
incorporates product groups, such as milk products and nutrition, beverages,
prepared dishes and cooking aids, chocolates, and confectionery. Nestle India
manufactures products under brand names, such as Nescafe, Maggi, Milkybar, Milo,
Kit Kat, Bar-One, Milkmaid and Nestea. The company has also introduced products
of daily consumption and use, such as Nestle Milk, Nestle Slim Milk, Nestle Fresh n
Natural Dahi and Nestle Jeera Raita. The company’s brands include milk products
and nutrition, prepared dishes and cooking aids, beverages, and chocolates
and confectionery. Their milk products and nutrition include Nestle Everyday Dairy
Whitener, Nestle Everyday Ghee, Nestle Milk, Nestle Slim Milk and Nestle Dahi.
Beverages Include Nescafe Classic, Nescafe Sunrise Premium, Nescafe Sunrise
Special and Nescafe Cappuccino.
It has focused on Taste, Nutrition, Health and Wellness and well-being of the
customers and its tagline ‘Good Food, Good life’ resonates with that. It aims to
create value to the customers by offering a wide variety of safe, high quality food
products at prices that are affordable. It constantly develops its product range so as
to meet the changing needs and demands of the customers. The company with its
product offerings has also given a major push to the dairy sector of the country and
has helped develop the milk economy. Nestle is the market leader in various
categories such as Infant Cereals (96.5%), Instant Pasta(65.2%), Instant Noodles
(59.5%), White Chocolates and wafers (62.6%).

Brands under Nestle (Varieties of Products)

 COFFEE
o Nescafe – It all starts with a Nescafe
One of the world’s most loved coffee brands – Nescafe has made itself
known to as many as six generations. Over the past 75 years, Nescafe
has grown on the commitment to a promise- to maximize the enjoyment
and ease of preparing a cup of coffee. Backed by a pipeline full of
breakthrough innovation and a strong commitment towards enhancing the
coffee experience of our consumers, Nescafe has become one of the most
popular global brands. Its longevity has been built on connecting with new
customers and on earning and retaining their trust.
o Nescafe Classic
100% pure natural coffee beans go into making every granule of Nescafe
Classic. With the new world class ERA technology, you get richer aroma.
Do not forget that the Coffee is 100% natural and contains antioxidants
which help to fight free radicals.
o Nescafé Gold Blend

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 One whiff of NESCAFÉ GOLD's intensely rich, captivating aroma and you
know its coffee all others will be measured against. Rising above all to the
highest standards set by coffee connoisseurs.
o Nescafé Sunrise
A Fine blend of coffee and chicory, expertly granulated to capture the rich
aroma inside every AROMA GRANULE to give a captivating coffee
experience that would leave you asking for more.
o NESTEA ICED TEA
A refreshing drink – perfect for when you just want to take it easy!
 Lemon Flavor
It infuses tea extracts with a tangy lemon flavor. Each
glass of NESTEA Iced Tea (150ml) meets 52% of your
daily requirement of Vitamin C. Available in 400g and 26g
(2x13g) packs.
 Peach Flavor
It infuses tea extracts with added tangy and sweet flavor
of peach. Each glass of NESTEA Iced Tea (150ml) meets
52% of your daily requirement of Vitamin C. Available in
400g and 26g (2x13g) packs.
o É by Nescafé
Revolutionize your daily coffee experience with É by NESCAFÉ - a
first of its kind, smart, app-enabled coffee maker. Easily controlled
through the NESCAFÉ É Connected Mug app, it perfectly prepares
a wide range of consistently high-quality coffee recipes every time.
A frothy hot cappuccino, a cool creamy iced coffee or an espresso
with an exotic twist, É makes it for you!
o Nescafé Latte
Made using high quality coffee beans and international processes.
The perfect blend of coffee, milk and sugar to give you a
consistently great cup of coffee every single time. All you need is
hot water.

 Breakfast Cereals
Nestlé Breakfast Cereals has been a part of mornings in over 130
countries around the globe. Nestle bring to you the range of Koko
KrunchTM and NesPlus®. The star ingredient ‘WholeGrains’ kick starts
your day with Fibre, Vitamin D, Calcium and B-Vitamins. Nutritious and
delicious at the same time.

o KOKO KRUNCH
Nestle Koko Krunch comes in exciting bear shape and remains
crunchy even in warm milk*. It is made with 4 grains: Wheat, Rice,
Jowar & Oats and source of Vitamins B & D, Calcium, Iron, Fibre.

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 o KOKO KRUNCH CHOCO BURST
Nestle Koko Krunch Choco Burst has a crunchy outside layer with a
yummy inside. It is made with 4 grains: Wheat, Rice, Jowar & Oats
and is the source of Vitamins B & D, Calcium, Iron, Fibre.

o KOKO KRUNCH STRAWBERRY FLAVOUR

Nestle Koko Krunch Strawberry flavor Burst is crunchy outside with
a yummy inside. It is made with 4 grains: Wheat, Rice, Jowar &
Oats and is the source of Vitamins B & D, Calcium, Iron, Fiber.

o NesPlus Crunchy Flakes

NesPlus Crunchy Flakes made with the combination of Corn and
Oats, is a nutritious and delicious choice for the family. The
combination of Vitamin D & Calcium helps maintain bone health. It
is also a source of Iron, Fibre and B-Vitamins.

o NesPlus Crunchy Granola

NesPlus Crunchy Granola made with 4 grains, almonds, raisins,
and honey is both nutritious and delicious. The combination of
Vitamin D & Calcium helps maintain bone health. It is also a
source of Fibre and Vitamins B2,B3,B5,B6,B9.
 Chocolates
o NESTLÉ BarOne
It comes with the perfect combination of smooth caramel and
malt infused nougat covered with thick choco-layer making it the
perfect partner full of non-stop masti and non-stop action.

o NESTLÉ KITKAT
It is one of the most successful brands in the world and every
year over 12 billion NESTLÉ KITKAT fingers are consumed
around the globe.
NESTLÉ KITKAT is crisp wafer fingers covered with chocolayer.
NESTLÉ KITKAT has a unique finger format with a ‘breaking'
ritual attached to it.

o NESTLÉ KITKAT Dessert Delight

The all new KITKAT Dessert Delight comes with a rich indulgent
taste inspired by desserts. It has a unique “finger-tablet” shape
with 12 shareable cubes and is available at an MRP of INR 55
(50g pack) in select regions.

o NESTLÉ MUNCH

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 NESTLÉ MUNCH is the country’s most loved ‘coated wafer’
range of products. Available throughout stores across the
country, every variant of NESTLÉ MUNCH is a delicious
crunchy treat for fans.
NESTLÉ MUNCH Khao, apneManch pe aao!

o NESTLÉ MUNCH NUTS

Presenting the all-new MUNCH NUTS which has crunchy wafer,
delicious peanut creme and roasted peanut bits.

o NESTLÉ MILKYBAR
New NESTLÉ MILKYBAR with 8% more milk in the recipe. Now,
even more creamy and yummier.
Play, Eat & Learn with the new NESTLÉ MILKYBAR.

 Dairy
o NESTLÉ a+
Over 140 years of international dairy expertise has taught us that
Good makes GOOD – to create something good, every small step
has to be perfect right from the start.

o NESTLÉ a+ GREKYO Yoghurt

What makes NESTLÉ a+ Grekyo Greek Yoghurts special is the
added fruit pieces, low fat, and extra milk Protein and Calcium
which gives it a deliciously thick and creamy texture.
NESTLÉ a+ Grekyo is available in Strawberry, Mango,
Blueberry, Orange, Pineapple and Plain variants.

o NESTLÉ a+ Nourish Milk

NESTLÉ a+ Nourish Milk is manufactured using ultra high
temperature (UHT) technology to ensure complete destruction of
bacteria and spillage enzymes. It is ascetically filled using 6-
layer tamper evident packaging material for retaining quality
throughout its shelf life.

o NESTLÉ a+ Nourish Dahi

NESTLÉ a+ Nourish Dahi is carefully selected cultures to ensure
rich, creamy and consistently tasty dahi. The cool chain is
maintained throughout the supply to ensure quality at its best.

o NESTLÉ a+ SLIM Milk & Curd

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 NESTLÉ a+ SLIM Milk has 90% less fat as compared to cow or
buffalo milk. It contains the same goodness as regular milk with
the fat reduced. It is a great every day solution to help reduce
your fat intake as it contains less than 0.2% fat.

o NESTLÉ a+ SLIM Dahi

It is made with all the goodness of natural Dahi, but is now even
healthier and better - it is low fat and every 200g serving
provides more than 40%^ of your daily Calcium needs. All this in
a Dahi that consistently matches consumer expectations in the
core product deliverables of thickness, consistency and
delicious taste.

o NESTLÉ Bhuna Jeera Raita

NESTLÉ Bhuna Jeera Raita is a unique proprietary product from
Nestlé, currently available in Delhi NCR. It offers all the innate
goodness of Dahi with real Jeera – a delicious meal
accompaniment which tastes exactly like home-made Raita. It
aids in digestion and is low in Fat (only 1.5% fat).

o NESTLÉ ACTIPLUS DahI

It is a deliciously thick ‘n’ tasty low fat DAHI enriched with the
goodness of more than 100 CRORE special PROBIOTICS in
every serving (100g), which work hard every day to ensure your
digestive system is strong and healthy.
What is Probiotic?
Probiotic means “for life”. PROBIOTICS are good bacteria which
unlike any other bacteria in ordinary DAHI are able to survive
digestive juices better, to reach your intestine and help improve
digestion.

o Nescafé Cold Coffee

Discover this exciting range of Ready-to-Drink coffees from one of

the world’s biggest coffee brands, NESCAFÉ. Sip and take a
moment to reboot, or share it with your friends on hot afternoons,
NESCAFÉ cold coffee does it all. It comes in a variety of flavors.

o NESTLÉ MILKMAID

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 NESTLÉ MILKMAID a name synonymous with delicious desserts
has been delighting generations of Indian consumers over the past
100 years. In fact, MILKMAID defined Nestlé’s ‘sweet’ entry into
India – It was the first brand to be traded by the company in India!

 Food
o MAGGI Masala Noodles
It’s the most-loved meal across all ages. Made from the choicest
roasted spices and quality ingredients, everyone has their own
style of cooking it. But what really brings its goodness, is the
love you make it with. It comes in a variety of options like No
Onion no Garlic, Special Masala Noodles, Chicken Noodles, etc.

o MAGGI Nutri-licious Atta Masala Noodles

An enjoyable combination of your favorite Masala taste and the
goodness of Atta. 

o MAGGI Nutri-licious Oats Masala Noodles

A delicious combination of your favourite Masala taste and the
goodness of Oat Grains.

o Maggi Fusian Hong Kong Spicy Garlic

Inspired from the streets of Hong Kong, an epicenter of cuisines
and flavors, comes a perfect fusion of rich Asian spices and mild
roasted garlic to create a new taste experience.

o Maggi Fusian Singapore Tangy Pepper

Tantalizing fusion of tangy spices with the warmth of black
pepper inspired by the hawker and food culture of Singapore,
the melting pot of Asian cuisines - a taste that will leave you
craving for more. 

o Maggi Fusian Bangkok Sweet Chili

Inspired from the street-style flavors of Bangkok, one of the
world’s most famous culinary destinations, comes a fusion of
spicy red chilies complimented by the sweet notes of ginger and
zesty lemongrass.

o MAGGI Masala-ae-Magic
This unique mélange of select aromatic roasted spices, makes
every day dishes simply irresistible. It is also the first ever
fortified taste enhancer which contains 15% of the RDA of Iron,
Iodine, and Vitamin A 

o MAGGI Magic Cubes Vegetarian Masala

Crumble a cube and make your rice, pulses, and vegetables
tastier than before! 

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 o MAGGI Masala-ae-Magic South Veg Masala
MAGGI Masala-ae-Magic South Veg Masala is a perfect blend
of spices, with the characteristic flavour of curry leaves, to make
your authentic South Indian veggie dishes taste even better!
Just sprinkle a sachet while cooking your meals and make them
tastier!

 
o MAGGI Bhuna Masala for Gravy Dishes, Dals & Vegetables
A mix of Onion, Tomato, Ginger and Garlic cooked in refined oil.
Cook tasty dishes like Rajma Masala, Matar Paneer and more
without the hassle of chopping and frying.
 
o MAGGI Bhuna Masala for Korma Dishes
Contains rich ingredients like Cashew, Cardamom, Cinnamon,
Nutmeg, Cloves etc. with less than 1tbsp of oil. Add your special
touch to this mixture of Rich Spices and make delicious
Chicken/Mutton Korma, Dum Aloo and more.
 
o MAGGI Bhuna Masala for Makhani Dishes
Made with ingredients like Cashew, Cinnamon, Bay Leaf,
Cardamom, etc. Make authentic Butter Chicken, Paneer
Khurchan and much more without going through the trouble of
starting it from scratch. 

o MAGGI Coconut Milk Powder

Brings the coastal touch right to your kitchen by retaining the
real flavor from Sri Lankan Coconuts in a powder form. Add
warm water to the powder and use it in curries, casseroles,
cookies, etc. for that authentic coconut milk flavor.

o MAGGI Rich Tomato Ketchup

Nestlé brings the scrumptious MAGGI Tomato Ketchup with it's
unique taste that adds a tang to your snacking need The hero to
your snacks and the best accompaniment to a boring meal,
Nestlé MAGGI Ketchup assure everything from samosas,
noodles, pakodas to plain chapatis is perfect and yummy.

o MAGGI Rich Tomato Sauce (No Onion No Garlic)

For all those who have a ‘no garlic - no onion’ diet, Nestlé brings
the scrumptious MAGGI No Onion No Garlic (NONG) Tomato
Sauce. It is specially made without the use of Onion or Garlic,
yet it is wonderful in taste, and can add a tang to your usual
food. The hero to your snacks and the best accompaniment to a
boring meal, Nestlé MAGGI® Tomato Sauces assure everything

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 from samosas, noodles, pakodas to plain chapatis is perfect and
yummy.

o MAGGI Hot & Sweet Tomato Chilli Sauce

MAGGI Hot & Sweet has been the flagship brand for Sauces
Category in India with its unique taste of tomato & chilli blend which
makes it clearly a 'Differentiated Product'. Combination of perfect &
balanced taste of tomatoes & chillies makes it a perfect
accompaniment for all your snacking needs

o MAGGI Pichkoo Rich Tomato Ketchup

A fun and convenient format of MAGGI Tomato Ketchup - the hero
to your snacks and the best accompaniment to a boring meal.

o MAGGI Pichkoo Hot & Sweet Tomato Chilli Sauce

A fun and convenient format of MAGGI Hot & Sweet which has
been the flagship brand for Sauces Category in India with it's
unique taste of tomato & chilli blend which makes it clearly a
Differentiated Product'. The combination of perfect & balanced taste
of tomatoes & chillies makes it a perfect accompaniment for all your
snacking needs.

o MAGGI PichkooImli Sauce

A tangy, flavoursome accompaniment that’s perfect for any meal,
any time

o MAGGI Pazzta Cheesy Tomato Twist

You simply cannot resist when a pasta offers you a flavoursome
dose of cheese with a tangy twist.

o MAGGI Pazzta Masala Penne

Delight yourself with the combination of your favourite Masala
flavour and Penne pasta. 

o MAGGI Pazzta Mushroom Penne

Don’t miss the yumminess of this pasta blending blissfully with the
saucy flavour of Mushrooms. 

o MAGGI Pazzta Cheese Macaroni

Indulge yourself in the joy of its creamy and cheesy flavours.

 NUTRITION
o Nestlé LACTOGROW

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 Nestlé LACTOGROW is a nutritious milk drink in a delicious
biscuity and vanilla flavour for growing children aged 3-6 years.
It contains probiotic L.Reuteri, nutrients for growth and immuno-
nutrients for a healthy and happy growth.

o Nestlé Ceregrow
It is a toddler cereal for 2-5-yearolds, packed with benefits of 17
vitamins & minerals including Iron. It's also free from
preservatives and added flavours.  #1 serve of Ceregrow
provides 37% of your daily child’s requirement & approx. 44% of
your child’s daily requirement of Vitamin A, Vitamin C, Vitamin D
and Calcium.

o Nestlé Nangrow 
Nestlé Nangrow is a nutritious milk drink in a delicious CREAMY
VANILLA flavour for growing children aged 2-5 years. It
contains ZERO ADDED SUGAR^ and nutrients to help support
your child’s growth & development.

How are nestle products different worldwide?

Nestlé encourages its markets to adapt products locally, in order to respect the local,
regional and national habits and the tastes, cultural and religious backgrounds of
consumers as well as their purchasing power. While all products must correspond to
our quality requirements, they vary extensively in composition, recipe, packaging and
branding.

Which product is of the highest value?

Milk products and nutrition is the largest of the four product categories that
Nestlé has in India, generating over 45 per cent of its annual sales.Primarily, it sells
baby food, packaged milk and value-added dairy products through some of the
market leading brands like Lactogen, Cerelac and Nan Pro.

If there is a decline in sales of the product or if it is been scrapped out?

Explain which product and why?

Nestle India has discontinued the production of its energy drink Milo because of
dropping sales. According to company sources sales have not picked up despite
heavy discounting and aggressive sales push. "We have tried Milo for a long period
with limited success in the crowded and competitive market and have decided to exit
this particular product from our current portfolio," according to a company
spokesperson. This is the first major brand after 'Pure Life' water that Nestle has
discontinued in India. The company had previously discontinued brands such as
Nescafe Choc Café and Milkmaid dessert mixes due to poor performance.
According to market watchers, Milo fell way behind in the 'brown beverage' market
category. The market leaders in the malted foods category overall are Horlicks,
Bournvita and Complan, in that order. Horlicks has a 56% value share in the Rs

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1,800-crore category. While Horlicks is marketed by GlaxoSmithkline (GSK),
Bournvita is from Cadbury's and Complan from Heinz. Milo has been steadily losing
market share to competition from Boost, also a GSK brand, and Bournvita. GSK and
Cadbury's have been pushing their brands aggressively.
In spite of heavy discounts in India and Heavy push marketing used by nestle
company for their brand in Milo. Nestle have to pull up their brand Milo in the year
2009. Dropping sales force of Milo have led nestle to stop production of milo in India.

The reason why Milo failed in India are as follows:

 The significant brand in the category is Cadbury's Bournvita. While Horlicks is
a white beverage, Milo directly competes with Bournvita and Boost -- both of
which are brown beverages. Nestle had launched Milo in India in
1996.According to FMCG analysts, Milo has been losing market share to
competition from Boost and Bournvita. "While the category itself is not
growing Milo has been lacking a distinct positioning. Bournvita and Horlicks
have been repositioned, and Cadbury and GSK are pushing their brands
aggressively," said an analyst. Nestle has withdrawn another product,
chocolate-coffee blend Nescafe Choc Cafe.2.

 The distribution strategy and the supply chain used by Nestle is not so wide
as compared to the major players used by Bournvita, Complan and Horlicks.

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 PRODUCT LIFE CYCLE

What Is Product Lifecycle Management?

Product lifecycle management refers to the handling of a good as it moves through
the typical stages of its product life: development and introduction, growth, maturity
and decline.
This handling involves both the manufacturing of the good and the marketing of it.
The concept of product life cycle helps inform business decision-making, from pricing
and promotion to expansion or cost-cutting.
Effective product life cycle management brings together the many companies,
departments, and employees involved with the product's production to streamline
their activities, with the ultimate goal of producing a product that outperforms its
competitors, is highly profitable, and lasts as long at consumer desire and
technology permit. It goes well beyond just setting up a bill of materials.
Product Life Cycle has many benefits, such as getting the product to market faster,
putting a higher quality product on the market, improving product safety, increasing
sales opportunities, and reducing errors and waste.
As mentioned earlier, Product Life Cycle further has 4 levels:
 Introduction
 Growth
 Maturity
 Decline

 Introduction:
 This stage of the cycle could be the most expensive for a company
launching a new product. The size of the market for the product is
small, which means sales are low, although they will be increasing. On
the other hand, the cost of things like research and development,
consumer testing, and the marketing needed to launch the product can
be very high, especially if it’s a competitive sector.
 Nestle has introduced many products in the market. Products like
Nestle chilled coffee, Nescafe, Milo cereals, KitKat, etc to name a few.
Each of Nestle’s factory is a centre of excellence that specializes in
developing new areas of food technology.

15
  A new product development involves a number of important stages and
at the same time, front labels are designed, product photography is
commissioned, recipe sheets are produced and sales presenters are
designed to ensure a successful product launch.
 A research is carried out prior to launching any new product in the
market. The same was done to Maggi, and ‘Maggi- a natural choice’
was created.
We would like to explain the levels of Product life cycle, by two Nestle brands-
Nescafe and Maggi.

NESCAFE:
 For Nescafe, a campaign of attracting customers by raising awareness of
creating interest in the product was launched.
 Product interest was created through advertising, public relation and publicity
efforts that connect the key product benefits to customer’s needs and wants.
 Nestle first made the official launch for Nescafe via press conference then
advertising their product through newspapers, radio and television.
 Apart from this, Nestle conducted free testing section, gave free samples to
customers at hypermarkets or supermarkets and offered their product in
cheaper price during the promotions.
 Furthermore, Nestle as always ensured the high-quality control. Maintained
the high availability and visibility of the product throughout the trade promotion
activities that encouraged channels to sell their product.

MAGGI:
 Launched in 1872, by Julius Maggi- Maggi was famous as a brand containing
various other food items under its name. It included a variety of noodles,
sauces, soups, ketchup, instant seasonings and more.
 Sooner, with the launch of Maggi noodles, Nestle India Ltd. Introduced a new
segment of “Instant Noodles” which became an instant hit in the market. The
2- minute noodles were the choice of every household.
 The brand is now Famous In countries like Philippines, Australia, New
Zealand, Singapore, Bangladesh etc.

 Growth:
 The growth stage is typically characterized by a strong growth in sales
and profits, and because the company can start to benefit from
economies of scale in production, the profit margins, as well as the
overall amount of profit, will increase. This makes it possible for
businesses to invest more money in the promotional activity to
maximize the potential of this growth stage.
 Nestle has many of his products in this level of the product life cycle.
Nescafe, Maggi, Milo, KitKat are the major brands in this category.

16
  The growth of a brand is subjected to the promotions, engagement and
also the response by the consumers.

NESCAFE:
 Nescafe has conducted various ad campaigns which include youngsters and
inspiring story. The tagline- “It all starts with a Nescafe” completely depicts the
start of everyday life with a cup of coffee. Hence, becoming a part of every
household and a growth factor for the company.
 After the current pandemic, this tagline was very creatively replaced as “It all
RESTARTS with a coffee” giving the belief in their customers to face the
coming situations and advertising their own brand.

MAGGI:
 Soon after the launch, the two-minute instant noodles became a favorite
snack of every age group. Saves time, and is filling too.
 After observing a growth in the brand, Nestle India Limited introduced various
healthier options like ‘Atta Maggi, Vegetable Maggi and Chicken Maggi’ to
name a few.

 Maturity:

 The maturity stage is when the sales begin to level off from the rapid
growth period. At this point, companies begin to reduce their prices so
they can stay competitive amongst growing competition.
 This is the phase where a company begins to become more efficient
and learns from the mistakes made in the introduction and growth
stages. Marketing campaigns are typically focused on differentiation
rather than awareness. This means that product features might be
enhanced, prices might be lowered, and distribution becomes more
intensive.
 During the maturity stage, products begin to enter the most profitable
stage. The cost of production declines while the sales are increasing.
 Nestlé is committed to margin expansion. They have set an underlying
trading operating profit margin target of 17.5% to 18.5% by 2020, up
from 16% in 2016.
 Their primary driver is to reduce structural costs in non-consumer
facing areas. Well-identified projects in manufacturing, procurement
and general administration are expected to deliver total savings of CHF
2.0 to 2.5 billion by 2020.

17
  They are optimizing manufacturing footprint and increasing efficiency
throughout operations. This will both increase the capacity utilisation
and reduce the conversion costs. Through global procurement, their
leverage Nestlé’s purchasing power worldwide. They are
supportingcentralized purchasing activities by establishing global
procurement hubs.

MAGGI:
 • Declining sales growth
 • Saturated markets
 • Extending product line
 • Stylistic product changes
 • Heavy promotions to dealers and consumers
 • Prices and profits fall
 • In 2003 Hindustan Lever Ltd was all set to take on Nestle's bestselling Maggi 2-
minute noodles by launching a new category of liquid snacks under its food brand,
Knorr Annapurna.
 • The new product, called Knorr Annapurna Soupy Snax, was priced aggressively at
Rs 5 and had four variants: two chicken options and two vegetarian.
 • Like Maggi, Soupy Snax will be an in-between-meals snack and will be targeted at
all age groups, particularly office-goers. Many consumer products are in Maturity
Stage.      

During the latter half of the 1990’s Maggi faced tough competition from Top Ramen.
Large promotional offers were made and many new players also entered the market.
Maggi currently is in its Maturity Stage.
During its maturity stage, Maggi’s sales were at peak, production costs were low and
profits were high.

NESCAFE:
For a brand maturity is that stage when the people are fully aware of the existence of
the brand. With this comes in its competitor brands. For Nescafe thankfully there
hasn’t been much competition in the Indian market except for Bru. Bru is under HUL
and entered the market shortly after Nescafe. It also claimed to offer high quality
coffee. Bru’s USP was that was India’s largest coffee brand. Bru targeted almost all
sectors of audience, even the younger generation. It’s ads and promotion were more
customer centric. It talked more about bonds and emotions therefore captured a lot
of attention. At such a stage Nescafe had to remind its customers of its presence.
Nescafe as a brand has already created awareness therefore what they did was tried
to connect with its audience.
There was no need to promote the product anymore as people were already aware
of it and liked it. So, what they did was got create campaigns where people could
relate with the brand. Nescafe indulged into below the line promotion like celebrity
endorsements and sponsorships. In their recent ads they have got popular actors
endorsing the brand and promoting the fact that they too drink a cup of Nescafe
everyday whether in between work or over a conversation. One of their latest
campaigns being “to know your neighbours”.

18
This campaign doesn’t really talk about the goodness of Nescafe or coffee. It
concentrates more on bonding, relationships and how coffee can be a conversation
starter. They had actors like Deepika Padukone endorse it therefore this also fulfilled
their aim at targeting the younger generation as well. They have also entered into
social marketing with such campaigns- through Facebook, Twitter and of course its
own website. Nescafe as also opened cafeterias and coffee lounges therefore giving
its customers a complete coffee experience. They have also cleverly targeted the
places in which these cafes will be opened. Places which are in close proximity to
colleges, offices and malls will attract maximum number of customers. Strategies like
these were used just to keep the brand alive and sustainable in the minds of its
customers.

 Decline:

 Eventually, the market for a product will start to shrink, and this is
what’s known as the decline stage. This shrinkage could be due to the
market becoming saturated (i.e. all the customers who will buy the
product have already purchased it), or because the consumers are
switching to a different type of product. While this decline may be
inevitable, it may still be possible for companies to make some profit by
switching to less-expensive production methods and cheaper markets.

 costs increase due to some loss of economies of scale

 sales volume declines
 prices and profitability diminish
 profit becomes more a challenge of production/distribution efficiency
than increased sales

MAGGI:
In May 2015, Food Safety Regulators from the state of Uttar Pradesh, India found
that samples of Nestlé India's noodles Maggi had up to 17 times beyond permissible
safe limits of lead in addition to monosodium glutamate. On 3 June 2015, New Delhi
Government banned the sale of Maggi in New Delhi stores for 15 days because it
found lead and monosodium glutamate in the eatable beyond permissible limit.
Some of India's biggest retailers like Future Group, Big Bazaar, Easyday, and Nilgiris
had imposed a nationwide ban on Maggi as of 3 June 2015. On 3 June 2015, Nestlé
India's shares fell down 11% due to the incident. The Gujarat FDA on 4 June 2015,
banned the noodles for 30 days after 27 out of 39 samples were detected with
objectionable levels of metallic lead, among other things. On 4 June 2015, Nestlé's
share fell down by 3% over concerns related to its safety standards. On 5 June
2015, Food Safety and Standards Authority of India (FSSAI) orders banned all nine
approved variants of Maggi instant noodles from India, terming them "unsafe and
hazardous" for human consumption. On 5 June 2015 Nepal indefinitely banned
Maggi over concerns about lead levels in the product. On 5 June 2015, the Food
Safety Agency, United Kingdom launched an investigation to find levels of lead in

19
Maggi. Maggi noodles has been withdrawn in five African nations - Kenya, Uganda,
Tanzania, Rwanda, and South Sudan by a super-market chain after a complaint by
the Consumer Federation of Kenya, as a reaction to the ban in India.

As of August 2015, India's government made public that it was seeking damages of
nearly $100 million from Nestlé India for "unfair trade practices" following the June
ban on Maggi noodles. The 6.4 billion-rupee (approximately US$93 million) suit was
filed with the National Consumer Disputes Redressal Commission (NCDRC),
regarded as the country's top consumer court, but was settled on 13 August 2015.
The court ruled that the government ban on the Nestlé product was both "arbitrary"
and had violated the "principles of natural justice." Although Nestlé was not ordered
to pay the fine sought in the government's suit, the court ruled that the Maggi noodle
producers must "send five samples from each batch of Maggi [noodles] for testing to
three labs and only if the lead is found to be lower than permitted will they start
manufacturing and sale again." Although the tests have yet to take place, Nestlé has
already destroyed 400 million packets of Maggi products.

In India, Maggi products were returned to the shelves in November 2015,

accompanied by a Nestlé advertising campaign to win back consumer trust, featuring
items such as the Maggi anthem by Vir Das and Alien Chutney.Nestlé resumed
production of Maggi at all five plants in India on 30 November 2015.

NESCAFE:
Nescafe has still not reached a declining. It is still the market leader and has a strong
presence in the minds of its customers. If at all it ever reaches a declining stage it
must recover by the following methods- When a brand reaches a declining stage it
means that it has lost out to other competitor brand on the basis of quality, taste,
variety, promotion etc. So, first stage is to identify the cause and then work upon it. If
its quality or taste they must improve upon it and relaunch it to let its customers know
that the new product is better, tastier, richer and so on. It can launch a variety of new
products- this will excite the customers and they will have something new to look for
to.

Tying up with other brands- Maybe Nescafe can tie up with other brands under
Nestle and promote itself with it. Maybe by giving its customers attractive offers.
Bundling the two products and selling it. Buyers are always economical and looking
for the best deals. So maybe the company can give discounts and other attractive
offers like buy one get one, 20% more, etc. Make fresh TVCs and emphasise on
brand heritage since it’s an old brand.

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 PRODUCTMANAGEMENT

Product Management is the practice of Planning, Developing, Marketing, and

Continuous improvement of a company’s product or products. The main objective of
product management is the development of new product. Its ultimate goal is making
sure that you are building the right product and building the product right.
Most notably, product management is linking the development team on the one side
and marketing, sales and customer success teams on the other side, while ensuring
the process is aligned with the business vision.
In other words, product management is supposed to translate business objectives
into engineering requirements and vice versa, explain the product functionalities and
limitations to the commercial teams who are responsible for marketing, sales, and
customer communication.
There are 2 categories of product management:
i) Inbound product management
ii) Outbound product management
Since product management is such a large concept, organizations usually split
responsibilities across departments so that each can focus on their areas. That’s
why we can differentiate between Inbound and Outbound product management.
Inbound Product Management:
Inbound Product Management involves Market Research, Industry Trends and
Competitive Analysis as well as the Overall Strategy and Product Roadmap.
Outbound Product Management:
Outbound Product Management, on the other hand, focuses on Product Marketing-
Branding, Messaging, Positioning, Product launches, PR, Advertising, etc.

Roles of Product Management:

In charge of product management, there can be one person or a whole team, as the
concept includes many different roles such as chief product officer, director of
product management, product manager, product owner and product marketing
manager, to name just a few.

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The number of people involved will largely depend on the size of the company. In
some cases (for example in growing startups) one person would take on all these
different roles - acting as a CEO, product manager and product marketing manager.

Case Study on Product Management - Maggi

Post the launch, the Maggi product had a smooth journey but the company's iconic
product Maggi faced an existential crisis in 2014 when a laboratory in Gorakhpur
proved that samples of Maggi contained lead and monosodium glutamate1 (MSG)
much beyond the permissible limit. Nestle India challenged this decision but the
results by Kolkata central laboratory in 2015 corroborated the previous results.
Consequently, several state governments began testing samples and banned the
product. Within a few days, Maggi was off the shelves.
From a high point of a 75% market share in the Rs.38 billion branded noodles
market, the Maggi crisis left the market open to competitors like ITC’s Yippee and
Nissin’s Top Ramen and allowed aggressive players like Patanjali to enter the space
with cheaper products in late 2015.
The whole Maggi fiasco and the subsequent measures taken to solve the crisis by
the company depict both the management and the operational pedigree of the
company in managing such a big hurdle. The stock prices have crossed the pre-
crisis level of Rs.7500/- by 33%, which shows the faith investors have reinstated in
the company. Commenting on market share of flagship brand Maggi which was
pulled off shelves three years back for a period of five months on allegations of
excessive use of lead and mislabeling of flavor enhancer monosodium glutamate,
the Management said the Maggi franchise was at currently at a share of over 60%,
almost back to the pre-crisis. He said the company was rolling out new products
such as Maggi dips and KitKat dark chocolate this quarter.
Nestle India reported a profit increase of 50% to Rs.395 Crores for the June 2018
quarter on higher margins and sales realizations.
Nestle reportedly launched more than 10 products under the brand Maggi to reach
out to more customers. Few of the products are as listed below:
• Maggi Rice Noodles (Lemon Masala, Chilly Chow and Shahi Pulao)
• Maggi Cuppa mania (Masala yo, Chilli chow yo)
• Teekha masala Sauce
• Tomotochatpat Sauce
• Imlikhatamitha Sauce
• Ginger, Garlic & Coriander Sauce

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 • Maggi Oriental Chilli Garlic
Nestle also changed the quantity (from 100 gms to 70 gms) and price (from Rs.10/-
to Rs.12/-) of Maggi to enable them to raise more profit.

PRICE MANAGEMENT

Price Management
Pricing is a process to determine what manufactures receive in exchange of the
product. Pricing depends on various factors like manufacturing cost, raw material
cost, profit margin etc.
Objectives of Pricing
The main objectives of pricing can be learnt from the following points −
 Maximum return on investment
 Decreasing sales turnover
 Fulfill sales target value
 Obtain target market share
 Penetration in market
 Introduction in new markets
 Tackle competition
 Recover investments faster
 Stable product price
 Affordable pricing to target larger consumer group
 Pricing product or services that simulate economic development

Pricing objective is to price the product such that maximum profit can be extracted
from it.
Nestle has used a varied pricing strategy. It has brought products in varying pricing
ranges from affordable to premium and super premium. While the main target market
of Nestle is the middle-class consumer, it has also brought several products to the
market targeted at the higher end. Its Natural Bliss Artisan Café creamer is targeted
at the super premium market segment while several more products are priced
affordably for the middle-class consumer. Pricing strategy of Nestle also varies
according to the geographical market as well as packaging and target market.
You could find in the market that the competitor products are less expensive as
compared to Nestle products belonging to same category. Take the example of
Maggi. It is priced some bit higher as compared to Yippee noodles. It is because the
quality of the product is much better, and customer can easily pay some extra money
to get a better quality. Very often you can see products with varied sizes along with
23
variation in cost. You can find Maggi packet of 16 pieces and also single packet
Maggie costing Rs 5. With this, you can cater large customer base. We can also see
they provide bulk discounts in various stores like big bazaar. In the segment of
chocolate, they follow competitive pricing strategy. Prices are almost similar to
Cadbury’s products. Thus, the pricing strategy in the marketing mix of Nestle is
dependent upon the competitor, product quality, geography being served etc.
There are different pricing strategies that Nestle uses for its products and its
variants.
 Competitive Pricing: Majority of the products offered by Nestle are provided at
competitive pricing. Nestle Maggi, Nestle KitKat, etc. are offered at
competitive prices in the market

 Skimming Pricing: Products like Nestle A+ Slim, Nestle A+ Toned, Nescafe

Coffee etc. are few products which are offered are a price higher than their
competitors. These products are targeted towards individuals who are health
conscious and fitness enthusiasts and for that reason are priced higher.

 Bundle: putting the products/services with one another item and bundling the
prices. Nestle combine multiple products together and sell a package. For
example, kit-Kat, Maggie, coffee, etc.

 Flexibility in pricing: they have flexibility in their pricing strategy but only for the
Institutional businesses, otherwise they stick on with same prices in market.
For example, Nescafe, as their competitors are not powerful and not in
position to dictate Nescafe.

 Geographical pricing: different prices for customers located in different part of

the world.

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Sr Products Sold by Nestle Sizes Price Rate
No.
70gm Rs 12
1 Maggie 140gm Rs 24
280gm Rs 45
840gm Rs 144
25g Rs 74
2 Coffee 100g Rs 290
200g Rs 490
500g Rs 998
25g Rs 10
3 Kit-kat 126g Rs 80
460.8g Rs 455
24 * 41g Rs 1,600
300g Rs 140
4 Breakfast Cereal 350g Rs 160
475g Rs 180
250g Rs 190
200gm Rs 60
5 Sauce 500gm Rs 110
1kg Rs 147
1L Rs 83
6 Nestle A+ Curd 2*1L Rs 166
6*1L Rs 468
12*1L Rs 978
20.1g Rs 10
7 Munch Chocolate 35.2g Rs 20
222g Rs 82
200g Rs 104
8 Nestle Milk Powder 400g Rs 200
1kg Rs 490

9 Nestle Nan Pro 3 400g Rs 590

3*400g Rs 1770

1L Rs 83
10 Nestle A+ Toned Milk 6*1L Rs 498
12*1L Rs 996
2*1L Rs 166
1L Rs 89
11 Nestle A+ Slim Milk 5*1L Rs 420

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 400g Rs 78
12 Nestle A+ Slim Curd 2*400g Rs 156

PROMOTIONAL ACTIVITIES

Promotion refers to raising customer awareness of a product or brand, generating

sales, and creating brand loyalty. It is one of the four basic elements of the marketing
mix. Nestle adopts a promotion mix with a perfect blend of several different
promotion tools to promote the value of its product and make the customers aware of
their different products.
Nestle company uses a proper mix of ATL, BTL and Digital channels for creating
awareness and promoting their products. It is the strong product portfolio that makes
it different from its competitors. Nestle, also has a strong social presence which allow
it to interact and engage with its customers and get better insights about their
products and other services.

Promotion of Nestle

1) Through personal selling-

It is defined as face to face communication with buyers in the aim of pursuing the
customers to purchase. It’s a one-to-one marketing. Tele-marketing, door drops
inserts, door-to-door selling are all the techniques used in personal selling.
Nestle has a team of vendors, who are dressed in branded t-shirts, caps and
jackets, sold chilled 0.5 litre bottles to travelling customers on all major
intersections. The brand got great mileage out of this innovative idea of personal
selling in terms of brand awareness, paid trial, image as well as real sales.

2) Through advertisement-
Advertisement is any paid form of non-personal presentation and promotion of
goods and services, or ideas by any identified sponsor. Promotion through
advertisement is mainly done when the market is geographically dispersed or
when the product is standardized.
Nestlé’s advertisement is well known in the market and they have made sure that
the advertisements are attractive through all possible media. Internet is one of the
latest media used by nestle to promote their products, where they have different

26
websites hosted for different products. Different strategies for each product like
online competitions and distributions. Nestle also uses attractive slogans in the
ads to attract customers’ like- Kit Kat- Have a break, have a kit Kat, Maggi takes
the health route and happiness is homemade, it all starts with Nescafe, and Pure
life begins now for advertisement of its water.

3) Through public relations-

As far as the public relations are concerned, the organization releases an annual
report which include the company’s financial statements along with the sales of
all product categories. The annual report is mainly aimed at the stockholders.
However, another very important form of public relations are the newsletters and
bi-monthly magazines issued by the organization. A huge amount of information
is found in these regarding the products and their promotion.
The company assists through donations to hospitals and organizations that
provide services to poor and responds to distress calls by the governments and
NGO’s for assistance to victims of floods, earthquake, drought and other natural
calamities. Nestle company also arrange milk programs for undernourished and
sick children and mothers through several NGO’s and charitable organizations.
Thus, for establishing public relations, Nestle distributes its newsletters, annual
reports, calendars and diaries, lobbying, donations for charitable and civic events.

4) Sales promotion-
Sales promotion represents non-media campaigns such as sampling displays,
shows, exhibitions and contests. Free samples, money off coupons, extra value
offers, buy one get one free, privilege points are all different methods used in
sales promotion.
Nestle also uses sales promotion as one of their promotion tools by offering
programmes like every day eating coupon codes and discounts and offers for
online shopping on Nestle products.
Example- As we all know that in summers there are large number of people who
visits the northern area especially Murree hills. Therefore, the road to Murree was
overprovided with billboards, shop boards, brand umbrellas, stands, wall
paintings, cross road signs, product sampling and sticker sampling.
This activity created a remarkable impact and the visitors were impressed. And in
this way Nestle is doing an effective promotion of his water.
5) By other ways-
Nestle invite housewives to send new innovative recipes made from Maggi.

27
 Organises contests, games, and industrial visits for school kids.The recent
contest was completely focused on your Maggi story, where people has to come
out with various innovative ways, they had their Maggi.

PERSONAL One to one

SELLING: marketing. Tele
marketing, door drops
inserts, Door to door
selling.

ADVERTISING: T.V., hoardings, print,

online ads, social
media, internet

SALES Sampling displays,

PROMOTION: shows, exhibitions,
contests, money off
coupons, extra value
offers, buy 1 get 1
free, privilege points.

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PUBLIC Distribution of
RELATIONS: newsletters, annual
reports, bi-monthly
magazines, calendars
and diaries, lobbying,
donations for
charitable and civic
events.

OTHER WAYS: Organizing contests,

games, competitions,
and industrial visits
for school kids

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 PLACE MANAGEMENT

The last element of the marketing mix is the place. Also called placement or

distribution, this is the process and methods used to bring the product or service to
the consumer.
In the marketing mix, the process of moving products from the producer to the
intended user is called place. In other words, it is how your product is bought and
where it is bought. This movement could be through a combination of intermediaries
such as distributors, wholesalers and retailers. In addition, a newer method is the
internet which itself is a marketplace now.

Through the use of the right place, a company can increase sales and maintain
these over a longer period of time. In turn, this would mean a greater share of the
market and increased revenues and profits.

Correct placement is a vital activity that is focused on reaching the right target
audience at the right time. It focuses on where the business is located, where the
target market is placed, how best to connect these two, how to store goods in the
interim and how to eventually transport them.

Place Mix consist of:

-Distribution channels

A distribution channel can be defined as the activities and processes required to

move a product from the producer to the consumer. Also included in the channel are
the intermediaries that are involved in this movement in any capacity. These
intermediaries are third party companies that act as

~Wholesalers

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 They purchase goods from a producer in bulk and store them in warehouses.
These goods are then resold in smaller amounts at a profit. 

~Retailers

Wholesalers will sell the products that they have acquired to the retailer at a profit.
Retailers will then stock the goods and sell them to the ultimate end user at a profit.

~Mercantile Agents

The agent is an independent entity who acts as an extension of the producer by

representing them to the user.

~Transport

~Warehousing

~Inventory

Nestle’s Distribution System

Nestlé has its own distribution networks equipped with all necessary transportation
facilities.

• They transport their products at major regional sales offices, which are situated at
different cities of India.

• These sales offices (distribution centres) have their own vans with sales people
who sell and transport goods to the small retailers.

Nestle’s Distribution Channel

 • Products are sent to the C&F Agents of the company from its Manufacturing Unit.

• Later it flows from the Manufacturing Unit to Distributor and Super Stockist.

• The Distributor is responsible to manage the availability of products in his area

• Super Stockist supplies the goods to the Re-Distributor who is in charge of

managing the availability outside the region of the Distributor.

• The Distributor and Re-Distributor, then supplies the products to Wholesaler and
Retail in their respective region or area.

Nestle’s Physical Distribution System

Seven Manufacturing Facilities

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1. Moga (Punjab)

2. Choladi (Tamil Nadu)

3. Nanjangud (Karnataka)

4. Samalkha (Haryana)

5. Ponda (Goa)

6. Bicholim (Goa)

7. Pantnagar (Uttarakhand)

Nestle’s Distribution Channel in Bhubhaneshwar

Sales products like Nestle tea, coffee machine, Maggi, sauce, coffee, milk made,
chocolate many more
Order delivery system they use is theyTake the order in morning and delivery takes
place in evening or next day morning by delivery boy they appoint 8 delivery boys to
deliver the products Having 6 delivery van which delivers products to Super Market,
Small Grocery Store Big Grocery Store ConvenienceStore Betel shop and Medicine
store

The sales force of distributor is divided into 3 heads

1. Milk Products-A
2. Chocolates-B
3. Other products-C
All the 3 teams visit the retailers once in a week on different Days
Sales executive of the company visit once in week to each distributor to train sales
man.
Idea behind this is to keep an eye in the distribution by wholesaler and in certain
specific cases to push extra stock in the market.

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 SWOT ANALYSIS OF NESTLE

Nestle’s Strengths
1) Reputed brand name – Nestle is the most renowned brand in the world. It has
developed a respected reputation in the food and beverages sector offering high-
quality products for everyday use across the globe.

2) Globally recognized brand – Through its effective advertising and branding

strategies, it has created significant awareness and developed a successful brand
image around the world. According to the Fortune Global 500, Nestle is among the
world’s largest corporations and is ranked at 69th position in 2018 list.

3) Highly diversified company – Nestle sells its products in 189 countries Instead of
relying on a few markets, it has captured the sizeable market in a lot of developed
and developing countries to earn most of its revenue. Its leading markets include the
US, China, France, and Brazil. In 2017, It generated CHF 26.7 billion from the US
market alone.

33
4) World’s most valuable brand – According to 2018 Forbes Global, Nestle is among
the top as the world’s most valuable company in regards to highest revenue, profits,
assets, and market value.

5) Extensive product portfolio – Nestle owns more than 2000 brands globally and
renovated over 8000 products for nutrition and health considerations, according to its
Annual Review 2017. It is one of the worlds’ biggest companies with the broadest
product portfolio.

6) Well-established relationships and popular brands– Nestle has some of the

world’s most recognized brands under its name such as Nescafe, Kit Kat, Gerber,
Milo, and Maggi. Besides, it has well-established relationships with other trusted and
powerful brands like Colgate Palmolive, Coca Cola, General Mills, and L’Oréal.

7) Efficient R&D system – Nestle has the world’s largest food and nutrition research
organization with 21 R&D centers Its research and development capability is one of
its key competitive advantages. There are more than 5000 employees involved in
R&D operations. It spent nearly 1.72 billion Swiss Franc on R&D in 2017.

8) Environmental sustainability practices – Nestle puts substantial efforts in

environmental sustainability practices and take innovative initiatives in improving its
quality of products. It optimizes advanced solutions to reduce waste, water usage,
non-renewable energy use, and packaging material usage. In 2017, 253 of Nestle
factories reached zero waste production. To communicate sustainability benefits with
its customers and keeping the environment clean, Nestle launched a free mobile app
that helps people to recycle waste packaging material correctly.

9) Large distribution system – Nestle owns an extensive and diversified distribution

system that is not only penetrated in urban areas but also rural regions. It has
adapted local distribution methods and decentralized approach to run the business
efficiently in respective countries. Nestle has strong relationships with suppliers,
retailers, vendors, and distributors.

Nestle’s Weaknesses
1) Price fluctuations by retail giants – Nestlé’s grocery sales are achieved majorly
through huge retail giants like Walmart, Tesco, and Kroger. Any reduction or
increase in prices by these retailers can affect Nestlé’s sales.

34
2) Span of control and organizational structure –Nestlé is organized in a matrix
structure. That means a large number of brands are under the same umbrella group
which makes it somewhat challenging to manage the large Administrating such a
large number of individual brands can often result in discord and conflict of interest.

3) Water controversy – Recently, Nestle was accused of illegally pumping millions of

liters of water in 6 nations where residents are deprived of drinking water.

4) Social criticisms –Nestle has become a target of media attention many times. The
claim to privatize water, misleading labeling, and a lawsuit for chocolate making
using child and slave labor are some of the examples that have to weaken its market
reputation.

5) Maggi Noodles controversy – In 2017, Nestle failed to clear a laboratory test in

India. This created a publicity hype as people boycotted Nestle, leading to the loss of
80% of market share in the country. Nestle claimed ‘No added MSG’ in the Noodles
packets. However, 1000 times more lead was found in the product after testing.

Nestle’s Opportunities
1) Venturing small food start-ups – Nestle has a fantastic opportunity to grow the
number of small food start-ups under its popular brand name. Nestle can also
collaborate with the new start-ups to promote its brand name.

2) Online shopping – Nestle has a remarkable opportunity to boost its e-commerce

sites and online shopping platform. A very few CPGs are offering online services to
make the shopping experience more comfortable and pleasant. Although Nestle has
its online stores in a few countries, expanding its online services to more areas will
prove a rewarding decision for the company.

3) Market penetration for breakfast cereals – Nestlé’s cereals and oats market have
shown fast growth in recent years. Thus, penetrating this market more would be
highly lucrative for the company.

4) Expanding ready-to-drink tea and coffee market – The demand for tea and coffee
is continuously on the rise, rendering a profitable opportunity for Nestle to groom this
market more.

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5) Partnerships – Strategic alliances with other food and beverage giants are also a
great opportunity for the company to increase its revenues and profits.

6) Authentic labelling – Nestle has already been criticized for giving misleading
nutritional information on its labels. So, there’s an opportunity to improve its practices
by giving trustworthy information and accurately labelling its products.

Nestle’s Threats
1) Illegal rainforest destruction controversy – In 2017, Nestle was alleged of
involvement in the destruction of Sumatra’s last tract of rainforest. It faced severe
criticisms from NGOs and environmentalists in this regard.

2) Water scarcity –Nestlé’s production is highly dependent on water usage.

Accessing the clean water through less costly sources has become difficult for the
company due to many reasons. These include increasing population, climate
change, growing demand for food and water, increasing pollution, water wastage,
and overexploitation of resources.

3) Rising competition – Many CPG companies like Mondelez and Unilever offer
similar food and beverage products. It is hard for Nestle to compete in such a
situation where the substitute products are easily accessible.

4) Government regulations and prices – Government regulations can affect the

business operations of Nestle. Additionally, the increasing prices of commodities
force the company to increase the prices of its products. It will lead to sales reduction
as consumers can switch to other brands which are available at low costs.

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 SUGGESTION & RECOMMENDATION

 Making a Nestle booth in supermarkets that displays all Nestle products, to

increase the brand awareness!
Making cerelac themed playgrounds in shopping malls, where they can
distribute cerelac food to the kids!-Aarushi Vohra

 I will like to recommend to Nestlé to produce more products that are suitable
for older people such as protein milk and cereal with necessary nutrition
where every older people can make it as their daily use and also they should
produce some organic product to whom are very health conscious so it can be
a healthy snack. Since children obesity is increasing, Nestlé can produce a
chocolate bar with less sugar so that obesity will not increase. Moreover,
Nestlé should produce more energy drink that is suitable for all ranges such
as students and people that is active in their daily life.-Sakshi Agrawal

 Nestlé has a great way of advertising and creating awareness of the product.
Although, in my opinion, Nestlé can come up with interactive ways of
promotion of new and existing products which can be a way in order to sales.
For example, creating digital campaigns or organizing competition promoting

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 their health drinks or protein products. Doing this can cause more customer
engagement and brand endorsements. -Janhavi Bhavsar

 Consumers are becoming more and more conscious of where the food came
from and how it was grown or made. Many young consumers are placing
sustainability as an important decision-making factor when buying their food.
Social responsibility of buying ethically grown, sustainable foods is often more
important that price.Nestlé could start sourcing all of its materials from
sustainably grown plantations and farms.-Suhaani Agarwal

 Joint Ventures
Nestle should carry on with their partnership activities that will increase their
competitive advantage more. However, they should not venture their business
with companies that can’t sustain the pressure of the market and in which
waver under the scrutiny of competitors.
They should choose qualified companies and companies that show promising
performance. This can help them grow more in market and maintain their
brand value.-Sharvari Gaikwad

 Invest on R&D
Even though there is no way that someone can know the future, but a good
management team should be able to extrapolate if a plan they have might
back fire such as the scandalous event resulting from their oil practices, for
cosmetics, activities mentioned earlier. They should’ve expected that dealing
with such activities might result in leakage and that they should’ve taken
precautions before head. -Nandini Gadekar

 Nestle is quite successful in the CPG market. However, there are still some
areas where it can improve to strengthen its market standing.
o Bringing innovation in the company’s offerings.
o Growing the number of start-ups in the food and beverage industry.
o Settling the media scandals and controversies to stand by with a
positive reputation.
-Rohan Nair

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 SUMMARY

Nestle is the largest food company in the world, in terms of revenue. It is a Swiss
Company established in 1866 by its founder Henri Nestle. While its main foray is
foods and drinks, it has hundreds of products, nearly 2000. Some of its most famous
products and brands include Maggi, Kit Kat, Nespresso, Nescafe, etc.

Nestle has a very simple and memorable mission – “Good Food, Good Life”. This
mission encapsulates it is an entire formula for such immense success – providing
the most delicious and nutritious food and beverages to its customers, in a wide
category of choices.

Nestle also is a leading researcher in the field of nutritional sciences. It invests nearly
1.5 billion Francs yearly on research and development.
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.

The company has seen various controversies, facing criticism and boycotts over its
marketing of baby formula as an alternative to breastfeeding in developing countries,

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its reliance on child labour in cocoa production, and its production and promotion of
bottled water.

In October 2018, Nestle announced the launch of the Nestlé Alumni Network,
through a strategic partnership with SAP & Enterprise Alumni, to engage with their
over 1 million Alumni globally.

In September 2018, Nestle announced to sell Gerber Life Insurance for $1.55 billion.

In 2020, Nestle wants to invest in plant-based food, starting with a "tuna salad" and
meat free products to engage and reach a vegan and younger target.

CONCLUSION

 Founded in 1866, by Henri Nestle, the brand now holds the top most positions
in the food sector in terms of revenue.

 As seen earlier, while its main foray is foods and drinks, it has hundreds of
products, nearly 2000. Some of its most famous products and brands include
Maggi, Kit Kat, Nespresso, Nescafe, etc.

 The overall turnover for Nestle was approx. 90 billion Swiss Franc in 2016. It
operates 418 factories in 86 countries, employing nearly 339,000 people
worldwide. Its products are available in 191 countries of the world.

 Nestle also is a leading researcher in the field of nutritional sciences. It invests

nearly 1.5 billion Francs yearly on research and development.

 Currently, Nestle has 17 R&D and Testing centers worldwide.

 Nestle has a very simple and memorable mission – “Good Food, Good Life”.
This mission encapsulates it’s an entire formula for such immense success –

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 providing the most delicious and nutritious food and beverages to its
customers, in a wide category of choices.

Apart from the ones mentioned above, Nestle has a large variety of different
products and brands in its portfolio. Let us just take a look at the few important ones,
 Nestle Waters: Nestle is one of the leading producers of bottled water. It has
nearly 100 plants for bottled water in 35 countries. Some of these famous
brands are Pure Life, Perrier, Vittel, etc.

 Cereal Partners Worldwide (CPW): This is Nestle’s joint venture with another
major food company – General Mills. They produce breakfast cereals and
baby food products like Cerelac, Cookie Crisp, Gerber, etc.

 Nestle Health Science: Nestle has been one of the pioneers in nutritional
sciences. They produce foods such as Meritene, Nutrin Junio, etc. to promote
pediatric care, brain health, etc.

 Nestle Nespresso: This sector was launched in 1986. It allows customers to

make their perfect cup of coffee. This includes Nescafe, Nescafe Gold,
Nescafe Classic, Nescafe Decaff, etc.

Emerging as a brand, Nestle pans various marketing strategies and has aced every
level of it. Production management, product life cycles, brand names, advertising,
you name it, they ace it. This is one of the biggest contributions to the success of the
brand- Consistency.Nestle has found the perfect marketing strategies and makes
sure to level it up each coming year.

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