CHAPTER -ONE

INTRODUCTION

1.1 Background of the Study

Nepal is an agricultural country where 80% of total population is engaged in agriculture
for their livelihood. However, the productivity of this sector falls to be very low.
Agriculture land is limited but population is increasing day by day. The increasing
population of country has constantly put the pressure on land and as such need is being
felt to absorb the increasing population to some other sector.

The surplus labors from agricultural sector should be employed in some other economic
sectors. Industry is one of the most important sectors to absorb the surplus labor
herein .Thus more and more industries should be established. The industry does not only
provide the employment to excess labor from agriculture but also creates the market
agriculture product as raw materials. Industrialization plays a vital role in boosting up the
economy of the country, not forgetting the increase in per capita income of the people.

In Nepal, the economy is dominated by agriculture. In the late 1980’s it was the livelihood
for more than 90 percent of the total population, although only approximately 20 percent
of the total land was cultivable, it is accounted for, on average, about 60 percent of the
GDP and approximately 75 percent of exports. Since the formulation of the Fifth Five-
Year plan (1975-1980), agriculture has been the highest priority because economic growth
was dependent on both increasing the productivity of existing crops and diversifying the
agricultural base for use as industrial inputs.

According to the World Bank, agriculture is the main source of food, income, and
employment for the majority. In trying to increase agricultural production and diversify the
agricultural base, the government, focused on irrigation, the use of fertilizers and
insecticides, the introduction of new seeds of high-yield varieties, and the provision of
credit. The lack of distribution of these inputs, as well as problems in obtaining supplies,
however, inhibited progress. Although land reclamation and settlement was occurring in
the Terai Region, environmental degradation and ecological imbalance resulting from
deforestation also prevented progress.

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Although new agricultural technologies helped increase food production, there still was
room for further growth. Past experience indicated bottlenecks, however, in using modern
technology to achieve a healthy growth. The conflicting goals of producing cash crops
both for food and for industrial inputs also were problematic.

The production of crops fluctuated widely as a result of these factors as well as weather
conditions. Although agricultural production grew at an average annual rate of 2.4 percent
from 1974 to 1989, it did not keep pace with population growth, which increased at an
average annual rate of 2.6 percent over the same period. Further, the annual average
growth rate of food grain production was only 1.2 percent during the same period.

There were some successes. Fertile lands in the Terai Region and hardworking peasants in
the Hill Region provided greater supplies of food staples (mostly rice and corn), increasing
the daily caloric intake of the population locally to over 2,000 calories per capita in 1988
from about 1,900 per capita in 1965. Moreover, areas with access to irrigation facilities
increased from approximately 6,200 hectares in 1956 to nearly 583,000 hectares by 1990.

1.1.1 Biscuit and its History

Biscuit is small thin cake which is made from the dough of flour and far mixed with some
other ingredients and is backed. The other ingredients may be eggs, sugar, chocolate
spices etc. as per the flavour and different types of biscuit. The biscuit were originally
developed to meet the longer life of Bakery products. The biscuit factory was established
in England in 1815 A.D. The biscuits were manufactured at that time to meet the
requirement of European travelers. However it substituted the food for patients or sick
people. At present biscuits are popularly used as snacks, breakfast, tiffin etc.

1.1.2 Introduction of Nebico Private Ltd

Until 2023 B.S. the biscuits and confectionery requirement of the country were used to be
meet through import from India and abroad. Nebico Private Limited, initially under the
name "National Biscuit and Confectionary Pvt. Ltd."Which was incorporated in 1964
A.D. with the objective of manufacturing quality biscuits and confectioneries in Nepal
and also to substitute their imports?

The company is situated at Balaju Industrial Estate, Balaju, Kathmandu occupying 73,000
Sq.ft. /one bigha of land. It came into operation as the pioneer biscuit and confectionary
manufacturer of Nepal in 1967, with an installed capacity of 2 M.T. per day on 8-hours

2
per day shift basis. In 1968 A.D. the name of the company was changed to Nebico Pvt. ltd.
along with the capacity expansion to 5 M.T. per day/shift. It has technical collaboration
with Britannia Biscuit Company of India since 1980. It is the first biscuit factory to be
authorized to use Nepal Standard mark since 1984. Presently, the Company is operating
on two shifts of 8 hours.

Annual production capacity of the biscuits of the company at present is around 2200 M.T.
and that of confectioneries is around 120 M.T. The company has been certified for ISO
9001:2000 and has voluntarily adopted ISO 14001:1996. Besides, Nebico pvt.Ltd. has
subscribed to the "Global Compact" company.

The main Shareholders of the company are Mr. Mahanta Lal Shrestha, Late Mr. Basanta
Lal Shrestha, Mr. Rabindra Shrestha, Mr. Shashindra Shrestha.There are many minor
shareholders but their names could not be obtained from the company. During the
construction period the long term for fixed capital investment were provided by Nepal
Industrial Development Corporation. The long term loan has already been repaid.
Currently the financers of Nebico Pvt Ltd. Are Nepal bank ltd, Lumbini bank limited,
Himalayan bank limited.

Its Board of directors is as follows:

Board of Directors Status

1. Mr. Mahanta Lal Shrestha Chairman

2. Mr. Rabindra Shrestha Managing Director

3. Mr.Shashindra Shrestha Director Cum secretary of the board

The board takes up all the major and policy decisions. The board meets regularly almost
once or twice a month as per the requirement. Nebico Pvt Ltd. Situated in Balaju
Industrial District is one of the cleanest industries. It has maintained good environment not
only in production area but also within its compound.

The strict quality control is also maintained. Due to all this, Nebico Pvt Ltd. was awarded
first prize for same title in 2037, 2040, 2045,2049 and 3 rd prize in 2034, 2036 B.S. Due to
its good and effective management it was awarded manager of the year by management of
Association of Nepal in 1988 A.D.

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1.1.2.1 Objectives of Nebico Private Ltd.

The company is established with an objective of manufacturing quality biscuit and

confectionary in the country. Besides, it's another major objective is to minimize the
import of biscuits in the country. Its strategy is to provide quality product to satisfy
customers so that it can get support from all the consumers. A part from production of
Quality biscuits its overall objectives it to facilitate the consumer to buy Nebico Biscuits
at any retail shop near their local market at reasonable price by creating effective
distribution network.

1.1. 2.2 Human resources in Nebico Pvt Ltd.

The company is providing employment to 260 employees out of which 77 are in
administration side and 183 in production side. They are all involved not only in
increasing the production of the biscuits but also in controlling its quality and marketing
of biscuits. The various levels of manpower involved in administration and production
side are shown in table 1.1

Table 1.1
Manpower of NPL
Level Administration Level Production

Manager 3 Shift manager 1

Officer 17 Foreman 1

Assistants 29 Supervisor 3

Safeguards 19 In-charges 9

Peons 5 Skilled 19

Drivers 4 Semi-skilled 7

Sweepers 5 Un-skilled 113

Total 82 Total 153

Source: NPL

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1.1.3 Achievements of Nebico Pvt Ltd
Table 1.2
Achievements of NPL
S.N Title of Status
Prize/Award Awarded Year(s)
1 1978,1980
BESTINDUSTRY FOR Third B.I.D./HMG, NEPAL (two times )
THE YEAR
2 -Do- -Do- Second -Do- -Do- 1982,1984,1989,19
93
(four times)
3 -Do- -Do- First -Do- -Do- 1985
4 NEPAL STANDARD First time Nepal bureau of Standards 1994
MARK and Metrology, HMG/N
5 MANAGER OF THE Mmgt. Association of Nepal 2004
YEAR
6 QUALITY AWARD Second NBSM, HMG/N 2005
7 OCUPATIONAL Second Occupational safety &Health 2006
SAFETY &HEALTH Committee, HMG/N
AWARD
8 ISO 9001:2000 The TUV CERT
Certified Certification body of TUV
Anlagentechnik Gmbh,
Rhieinland Berlin
9 THE GLOBAL Enlisted U.N. Secretary General 2007
COMPACT vision about Globalization
10 QUALITY AWARD Second NBSM, HMG/N 2008

11 FOOD PROCESSING First Third world Food Day 2009

Committee
12 "NS" QUALITY AWARD First NBSM/HMG/N 2010

1.2 Statement of the Problem

A problem statement is a concise description of the issues that need to be addressed by a

problem solving team and should be presented to them (or created by them) before they try
to solve the problem, the problems that are discuses in this study are: How far the Nebico
Pvt Ltd has been able to provide services to satisfy the need of its Consumer. How does
Nebico Pvt Ltd face the competition from its competitors? What is the provision for
supervising the work of employees in Nebico Pvt Ltd? What sort of current captivities it
has running in its market. How is the product portfolio and analyze the sales of product.
The management regarding marketing necessities

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1.3 Literature Review
1.3.1 Sales and Marketing Function

1.3.1.1 What is sales and marketing?

The sales denote exchange of services and products in terms of money, which include cost
plus profit. Market is set of actual and potential buyers of a product. These buyers show a
particular need, and want which can be satisfied only when they get these things. The size
market depends on the number of people who exhibit the need have resources to buy and
are willing to pay for the thing they want.

Marketing activities are part of everyday life. All types of organizations need marketing to
achieve their goals. Marketing is demand management. It stimulates demand for products.
Marketing is the process of choosing markets to be in, products to offer, and prices to
charge, distributors to use and message to send. Therefore the marketing is the process of
selling goods and services to its customer to satisfy their needs and wants in exchange of
monetary value in the market. There are mainly four elements of marketing. Marketing
includes products, price, promotion, and place which create value for customers. It aims to
develop long term relationships with the customers.

1.3.1.2 Roles of the sales and Marketing

Sales and marketing is one of the key functions of any manufacturing company.
Manufactures Company has to concentrate in sales and marketing which is their core
business in the market. On the other hand, market guides the production. The media lunch
new product to its. The production alone cannot survive the company without selling their
product. Thus the potential customers are also marketing. Marketing is demand
management. It stimulates demand for products. Marketing is only the way of promoting
the product and services. The products can take its market only if its marketing strategies
and methods are efficient and effective. The marketing activities involve exchange
transaction.

The importance of marketing would be clear with the following example. "The world
famous sports company NIKE builds good relation between its customer athletes and
NIKE". There is simplicity in NIKE but it has powerful personal approach to marketing.
They simply know the truth of customers. Marketing of NIKE company just add, "Just do
it" on their product but simply, indirectly encourage anyone who wears NIKE products.

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Taking care of customers has paid off handsomely for NIKE. Their revenue increased by
36%. NIKE dominates the world's athlete wear. Successes are on their way because Nike
heavily committed to marketing.

1.3.2 Marketing of Nebico Products

 Product

Product is an important element of marketing mix. A product is anything that satisfies

need and want of customers. Products can be goods, services, ideas, experiences etc. but
main target of Nebico Private limited is Biscuits. Biscuits manufactured by NPL are of
different varieties of taste. That is sweet, premium sweet, Semi sweet, Sweet Salt and Salt.

Table no 1.3
Product mix of NPL
Biscuits Mix
Thin Arrowroot Orange
Marie Chocolate
Glucose Custard
Malt Glucose Nectars
Nice
Milkose Digestive
Coconut Crunchies Chaja
Khaja One 2 One
Temple cream Cream Cracker
Trekers choice
Source: NPL

Out of biscuits (table1.3), the consumers did not like the taste of some brands of biscuits.
So, Nebico has dropped the production of Milkose, Khaja, and one 2 one, Chaja. Instead,
of those brands, company has introduced Cream Cracker Biscuits. Nebico strictly controls
the quality of products. The 5% reject rate of past has come down to 1.5%. It uses good
quality packing materials to preserve freshness and crispness of the product. Due to this
doctor recommend "Nebico thin Arrowroot" and "Digestive" biscuits for patient.

 Price
Price has an important role in marketing. It is the value of what is exchanged. Nebico
products commend a premium price in the market. The company uses markup pricing
strategy in which a desired profit margin is added to the unit cost of a product. Once price
policy is pursued throughout the country. The current price list is shown in Annex 1.

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  Place

Nebico uses long channel of distribution. It consist of

Company Distributor Wholesaler Retailer Consumer

s

Presently Nebico is marketing its product throughout Nepal, dividing the entire domestic
markets into following seven territories through 27 distributors and 1 sales depot at
Balaju, Kathmandu to handle all the sales. The company is planning to open three sales
depots this year. One at Narayanghat, others at Ithari and Kohalpur. The company has
itself transports the product from sales depot to distributors. For this purpose it uses its
own fleet of transport plus private carriers. The company has divided the total market into
seven territories for effective distribution of product.
1. Kathmandu
2. Sub-Kathmandu
3. Central Region
4. Western Region
5. Mid Western Region
6. Far western Region
7. Eastern Region

 Promotion
Promotion is persuasive communication. In Modern marketing, promotion is must. A
good product, an attractive price and accessible distribution must be supported by an
effective promotion to satisfy customer needs. But the company does not give attention to
promotion. Advertisement is done through newspaper and radio sometimes. The company
has never launched sales promotion campaign. Publicity of Nebico product is poor. The
sales force consists of 11 persons for personal selling.

1.3.3 Staff and Job Description

 Sales and Marketing manager:

Sales and Marketing manager is the head of sales and marketing Department. His main
function is to make marketing decisions, formulate plans and policies, give necessary
commands to subordinates, attend meeting and conferences, prepare report on sales and

8
marketing provide feedback information to production department. The distributors and
wholesalers are appointed on the basic report from sales and marketing manager.

 Sales Officer:
Sales officer prepare sales voucher and also make ledger posting. He receives and dispatch
orders. He controls sales assistant. He observes the market and prepares all the documents
required to make sales and marketing reports.

 Sales Assistant:
Sale assistant assist sales man. They visit various market places alone with salesman. The
collect orders, make sales, fill and collect cash from distributors, wholesalers and retailers.
They also likes and dislike, their complains.

 Sales-men:
Sales men directly deal with retailers. They carry goods and deliver to wholesalers and
retailers. Sometimes he goes from door to door for selling goods. They not only provide
information about products but also receive feedback from customers.

Figure 1.2
Sales and Marketing Department Chart

Sales and Marketing Department

Sales and Marketing Manager

Sales Officer

Sales Assistants

Sales-Men

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1.4 Objective of the Study
 To analyze the production and sales of Nebico products.
 To carryout consumers survey on Nebico Products.

1.5 Significance of study

Since Nebico Pvt Ltd. is the first biscuit company of Nepal. It is very essential to know the
market situation of its product. Hence the study aims to define the market position of its
product as well as its production and consumption. This study will be more beneficial for
the company in order to meet future demand and to prepare production schedule.
Ultimately it will minimize the inventory cost which will also help to manage cash flows.

1.6 Limitation of study

The study faces the following limitations:
 Nebico manufactures both biscuits and confectionery. Its major product is
biscuits. Thus this study is concentrated entirely on production, sales and
marketing of biscuits only.
 As the data of sales and production in Rupees is not available the analysis is
done only in quantity basis.
 As time is very short, it concentrates only in production, sales and marketing of
Nebico biscuits only. It was not possible to compare it sales with that of its
competitors.

1.7 Research Methodology

1.7.1 Research Design

For any type of investigation the data must be collected first, whether that is primary and
secondary. The result of analysis and interpretation depends upon the nature of the data
collected. Data is a very reliable and effective source for a field report. Data is the
foundation of all field work project. Data may be obtained from different sources. Data
also depends on the objectives and necessity of field report. Since the basic objective of
the study is analysis of sales & production of Nebico Pvt Ltd appropriate methodology has
been followed.

10
The first step is to collect necessary information and data concerning the study of NPL.
The task will be fulfilled by the collection of secondary data various published and
unpublished information, which will be used for clearing the situation on the basis of
presented data and facts. Further, a questionnaire was developed in order to know the
consumers perception regarding Nebico biscuits. The data is carefully studied and
analyzed systematically under the specific major headings so as meet the objectives of the
study. On the other hand, the accumulated data is explored and tabulated systematically.

1.7.2 Source of Data

Both primary and secondary data is essential for our fieldwork. Questionnaire, Interviews,
observation & discussions were general source of primary data. And different publications
about the organization and by the organization were secondary data.

1.7.2.1 Primary Data:

Primary data are the original data, which are gathered for research project in hand. These
data are collected for meeting the specific objectives of the study. It can be collected
through observation, Interviews and Questionnaire about the views regarding its products.
The organizations itself provide many information needed for the study.

1.7.2.2 Secondary Data:

Secondary data is the data, which has already been collected for the other purpose than the
one being pursued. The secondary data that has been presented here was taken from the
official record of organization. This study is mainly based on secondary data. Data which
are originally collected but obtained from some published and unpublished sources are
often termed as secondary data.

1.7.3 Data Collection Methods

1.7.3.1 Interview:
Interviewing was especially conducted with the concerned person of sales and marketing
department to get more information, which was not published. Both structured and
unstructured interview techniques were used. Interviews conducted in the field were face
to face.

1.7.3.2 Observation:
It is the first primary data in the department. Observation was made to know the response
of customers. Various market places were visited with the assistance of sales officer.
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1.7.3.3 Questionnaire:
It is also the primary data of the organization. A set of questions are presented to
respondents for their answers.

1.7.4 Data Processing Techniques

After collecting all the required data from various sources, the data and information are
properly synthesized, arranged and tabulated to accordance with the requirement of the
study.

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 CHAPTER- TWO
DATA PRESENTATION AND ANALYSIS

2.1 Presentation of data

Presentation of data is the process of visually transferring data through handouts, slides or
using a projector. This technique is mainly applied when presenting reports, proposals or
when making demonstration during a crucial meeting. The most valuable and crucial tool
to show the true position of any organization is its past data. By analyzing the data we can
find out many problems or limitations of the organization. So this chapter focuses on the
actual sales and production of the Nebico Pvt Ltd.

2.1.1 Sales of Nebico Pvt Ltd.

Table 2.1
Sales of Nebico Pvt Ltd
Sales in tones
Fiscal Year Sales Decrease in sales % decrease in sales

2065/66 1609 (77) (4.56)

2066/67 1700 91 5.66

2067/68 1649 (51) (3)

2068/69 1384 (265) (19.15)

2069/70 1262 (122) (9.67)

2070/71 1518 256 16.86

Source: Annual report of NPL 2071

Above table represents the sales trend of Nebico Pvt Ltd for the period of 6 years. The
sales trend of Nebico is not satisfactory. In 2065/66, the sales were 1609 tones but in
2066/67 the sales increase to 1700 tones .That means sales percent was increase by 5.66.
In 2067/68, sales decrease by 3% and again decrease by high percent that is 19.15 in
2068/69 .In 2069/70, sales is again decreased by 9.67%but in 2070/71, sales was increased
by 16.86% respectively.

13
There are twenty seven other biscuits industries registered in Department of industry up to
FY 2060 B.S. (Refer Annex 3). One of the main reasons for decrease in sales in due to
cutthroat competition. The Nebico biscuit has to compete not only with indigenous
biscuits produced in the country but also with many brands of Indian biscuits.

Figure 2.1
Bar diagram showing total sales of NPL

Total sales of NPL

1800
1600
Values In Tonnes

1400
1200
1000
Sales
800
600
400
200
0
2065/66 2066/67 2067/68 2068/69 2069/70 2070/71
Fiscal Year

2.1.2 Production in Nebico Pvt Ltd

Table2.2
Production of Nebico Pvt Ltd
Production in Tones

Fiscal Year Production Decrease in production % Decrease in production

2065/66 1589 (97) 5.75%
2066/67 1761 172 10.82%
2067/68 1578 (183) 10.39%
2068/69 1395 (183) 11.59%
2069/70 1257 (138) 9.89%
2070/71 1520 263 20.92%
Source: Annual report of NPL 2071

14
The Above table shows that the trend of production of Nebico Pvt Ltd over its previous
year is continuously decreasing. In the year 2065/66, the percentage decrease in the
production over its previous year is 5.75% and in the year 2066/67, the percentage
increase in production was 10.82% but again decrease by 10.39%, 11.59%, 9.89% in the
year 2067/68, 2068/69, 2069/70 respectively. But in the year 2070/71, the production of
Nebico private limited is increased by 20.92%.

The above table shows that situation of decreasing trend of sales, the company is
compelled to reduce the production. Otherwise there will be a problem of storage on one
hand and on the other hand cost of inventory of finished products will increase.
Previously, the company was operation on three shifts but now the production is operating
only on two shifts.
Figure 2.2

Total sales of NPL

2000
1800
Values In Tonnes

1600
1400
1200
1000 Production
800
600
400
200
0
2065/66 2066/67 2067/68 2068/69 2069/70 2070/71
Fiscal Year

2.2 Analysis of the Data

Analysis of data is a process of inspecting, cleaning, transforming, and modeling data with
the goal of discovering useful information, suggesting conclusions, and supporting
decision making. Data analysis has multiple facets and approaches, encompassing diverse
techniques under a variety of names, in different business, science, and social science
domains.

15
2.2.1 There correlation between production and sales of Nebico

Table 2.3
Calculation of correlation between production and sales
Production Sales U= V= U² V² UV
(X) (Y) X – 1578 Y - 1518

1589 1609 11 91 22 8281 1001

1761 1700 183 182 33489 33124 33306
1578 1644 0 126 0 15876 0
1395 1380 (183) (138) 33489 19044 25254
1257 1262 (321) (256) 103041 65536 82176
1520 1518 (58) 0 3364 0 0
ΣU=(368) ΣV=5 ΣU²=173405 ΣV²=14186 ΣUV=141737

Source: Annual report of NPL 2071

Correlation (r) = [nΣUV – ΣU.ΣV]

{[n ΣU² - (ΣU) ² ] [nΣV² - (ΣV)² ]} ½

Where,

X = Production

Y = Sales

n = No of year

a = assumed mean of production =1578

U = deviation from assumed mean of production

V= deviation from assumed mean of sales

r= [6 X 141737 – {(-368) X5}]

16
 {[6 X 173405 – (-368)²] X [6 X 141861 – (5)²]} ½
= 852262

877659.29

= 0.9711

There is positive correlation between production and sales of Nebico (Pvt) Ltd i.e. 0.9711
which shows whatever it produces are generally sold. So there will be minimum closing
stock in hand.

2.2.2 Field Survey regarding Consumers perception about Nebico products

It is not possible to collect data from the organization to find out the consumer perception
about Nebico Product. So, we should survey on different markets to find the consumers
responses from Nebico Products. Firstly a questionnaire for field survey was developed
which is attached in the annex 2. Out of sixty questionnaires distributed to various
consumers only fifty had responded. The result of survey is shown in table 2.4.

Most of the consumers know about the Nebico Product. But some of the Consumer does
not use the Nebico product. Thin arrowroot, Coconut Crunchies, Glucose are the favourite
biscuits among Nebico Product. Due to reasonable price poor consumers can also
consume a Nebico biscuits.
Table 2.4
Consumers Responses of Nebico
Place Response

Kathmandu 50%

Sub Kathmandu 20%

Central 10%

Western(Mid, Far) 15%

Eastern 5%

Source: Annual report of NPL 2071

17
 FIGURE NO:2.3

Pie chart showing consumer

Responses

Kathmandu
Sub Kathmandu
Central
Western(Mid,Far)
Eastern

Figure No. 2.4

Trend of Consumer Response of Nebico

60
50
40
30
Trend of Consumer Response
20 of Nebico
10
0
l r) rn
du du tra Fa te
an an n , s
m m Ce id Ea
ath th (M
K Ka rn
b ste
Su e
W

In above figure (2.3 and 2.4), 50% of consumer responded in Kathmandu. 20%of the
consumer responded in Sub-Kathmandu. 10% of the consumer responded in central.
15%of the consumer responded in western (Far, Mid) and 5%consumer responded in
eastern. Most of the consumers uses Nebico product. But some of the consumers use other
brand of biscuits due to the best quality, packaging, and good advertisement.

2.3 Major Findings

The main findings of study are described below.
 Nebico Pvt Ltd at present is operating in oligopoly market condition.

18
 A sale is in decreasing trend. The sales trend of Nebico is not satisfactory. In
2065/66, the sales were 1609 tones but in 2066/67 the sales increase to 1700
tones.
 It has limited number of sales depot. Situation of decreasing trend of sales, the
company is compelled to reduce the production. Otherwise there will be a
problem of storage on one hand and on the other hand cost of inventory of
finished products will increase.
 Its promotional activities are weak. The things are that there is a major challenge
for Nebico. Nebico has a traditional way of approaches to things and situations.
With its traditional approach Nebico is losing many of its opportunities as
traditional approach resists change. So to bring about a change and accept the
opportunities is a major challenge for Nebico and its management.

19
 CHAPTER- THREE
SUMMARY, CONCLUSION, RECOMMENDATION

3.1 Summary
Nebico Pvt Ltd is the pioneer Biscuits Company of Nepal located in Balaju Industrial
District. It has technical collaboration with Britannia biscuit company of India. It uses
semi automatic machine for production of biscuit. It operates on two shifts of 8 hours/days
with capacity of 5mt. It has 235 staff members out of which 82 are in administration side
and 153 in production side.

Nebico manufacture different varieties of biscuits. The biscuits manufactures by it are

sweet, premium sweet, semi sweet, salty etc. The most popular brand is 'Thin Arrowroot'
and 'Glucose'. Nebico strictly controls quality of its products. It uses goods quality
packing materials to preserve freshness and crispness of its products. Nebico products
command premium price in the market. The company uses mark up pricing strategy. It
uses long channel of distribution. It has 27 distributors, 96 dealers nationwide. Nebico has
separate sales and marketing department. Sales and Marketing manager heads this
department. Under him there are sales officer, sales assistants and salesman. The main
objective of this department is to sell the product in the market, collect necessary
information from market, guideline to the production department and to capture the wider
market.

Nebico's target market is middle income groups and higher income groups in urban areas
where as its target market is lower income groups and middle income groups in the rural
areas. More than 50%of its products are sold in Kathmandu Valley alone. The company
has not been able to tap the whole rural market. It could be because of difficulty of
transportation in those areas.

3.3 Conclusion
In Nepal No of biscuit manufacturing company is increasing but production of quality
biscuits are declining. Since there is heavy competition, Nebico needs to focus its
objectives to produce higher quality biscuits than its producing at present. In the present
context, Nebico is also facing competition with the Indian biscuits which are superior in
quality, and the prices are also reasonable. Although Nebico is found to be the most

20
popular biscuits in Nepal, it still as to face a tough competition with both internal and
external brands of various biscuits.

Nebico has ignored the sales promotional activities, which is very essential to enhance its
sales. It has segregated only 0.5% of its total budget for sales promotional activities, which
is very nominal comparison to Indian biscuit manufacturing companies. It is introducing
new brands in the market every year, which can be very beneficial for the company if they
generate revenue by new brands. Also, there should be proper planning before
introduction of new products in the market such as market survey should be conducted to
know whether the new product is desired by the consumer or not. Products should be
distinctively positioned. Otherwise time, effort and money invested in introduction on new
product will be wasted.

Currently sales and Production of Nebico are in decreasing trend. If the same trend
continues for next period, it might have to face the serious financial crisis. The sales were
high five year before that at present. At that period had monopoly in market but now it
operates in oligopoly market condition. Nebico should do proper planning for future,
improve its quality, introduce new products to capture the untapped market especially the
rural market, initiate massive promotional activities, maintain the price level by increasing
the productivity etc.

3.3 Recommendations
 On the basis of study, following suggestions may be recommended for the
consideration to improve the existing situation.
 It should introduce new brands of high quality biscuits so as to substitute Indian
and foreign brands. Such biscuits can be targeted to consumers of high income
level.
 It should improve its distribution network by increasing the number of sales depot.
 It should capture the untapped market by introducing appropriate brands.
 The new trade and transit treaty with Indian market without nay duty. 'Pashupati'
and 'Hulas" biscuits are exporting biscuits to India. Hence, it should also export
its products to India. Hence, it should export its products to India market.
 It should also explore the possibility of exporting product to Tibet.

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 It should promote its products by advertising in various media like newspaper,
radio, Fm television, cable network etc.
 Consumer's promotional activities like distribution of sample, coupons, rebate etc.
should be initiated especially to capture untapped market.
 Channel promotional like free goods discounts, prices, credit facilities etc. should
be given to distributors and dealers.
 Retailers also should be encouraged to sell more by giving them incentives, 'Best
Display Award', Highest Seller's Prize' etc.

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