Marketing Strategy - Nestle - Anantamoy Chakma

MARKETING STRATEGY IN NESTLE INDIA LIMITED
CHAPTER 1
INTRODUCTION
Marketing is the process of communicating the value of a product or service

to customers, for the purpose of selling the product or service. It is a critical business function for
attracting customers.
From a societal point of view, marketing is the link between a society’s material
requirements and its economic patterns of response. Marketing satisfies these needs and wants
through exchange processes and building long term relationships. It is the process of
communicating the value of a product or service through positioning to customers. Marketing
can be looked at as an organizational function and a set of processes for creating, delivering and
communicating value to customers, and managing customer relationships in ways that also
benefit the organization and its shareholders. Marketing is the science of choosing target
markets through market analysis and market segmentation, as well as
understanding consumer buying behavior and providing superior customer value.
There are five competing concepts under which organizations can choose to operate their
business; the production concept, the product concept, the selling concept, the marketing
concept, and the holistic marketing concept. The four components of holistic marketing are
relationship marketing, internal marketing, integrated marketing, and socially responsive
marketing. The set of engagements necessary for successful marketing management includes,
capturing marketing insights, connecting with customers, building strong brands, shaping the
market offerings, delivering and communicating value, creating long-term growth, and
developing marketing strategies and plans
Contemporary approaches
Recent approaches in marketing include relationship marketing with focus on the

customer, business marketing or industrial marketing with focus on an organization or institution
and social marketing with focus on benefits to society. New forms of marketing also use
the internet and are therefore called internet marketing or more generally e-marketing, online
ACHARYA INSTITUTE OF GRADUATE STUDIES Page 1

marketing, "digital marketing", search engine marketing, or desktop advertising. It attempts to

perfect the segmentation strategy used in traditional marketing.
It targets its audience more precisely, and is sometimes called personalized marketing or

one-to-one marketing. Internet marketing is sometimes considered to be broad in scope, because
it not only refers to marketing on the Internet, but also includes marketing done via e-mail,
wireless media as well as driving audience from traditional marketing methods like radio and
billboard to internet properties or landing page.
Customer orientation
A firm in the market economy survives by producing goods that persons are willing and

able to buy. Consequently, ascertaining consumer demand is vital for a firm's future viability and
even existence as a going concern. Many companies today have a customer focus (or market
orientation). This implies that the company focuses its activities and products on consumer
demands. Generally, there are three ways of doing this: the customer-driven approach, the
market change identification approach and the product innovation approach
In the consumer-driven approach, consumer wants are the drivers of all strategic
marketing decisions. No strategy is pursued until it passes the test of consumer research. Every
aspect of a market offering, including the nature of the product itself, is driven by the needs of
potential consumers. The starting point is always the consumer. The rationale for this approach is
that there is no reason to spend R&D (research and development) funds developing products that
people will not buy. History attests to many products that were commercial failures in spite of
being technological breakthroughs.
A formal approach to this customer-focused marketing is known as SIVA (Solution,

Information, Value, Access). This system is basically the four Ps renamed and reworded to
provide a customer focus. The SIVA Model provides a demand/customer-centric alternative to
the well-known 4Ps supply side model (product, price, placement, promotion) of marketing
management
At some point in the marketing process, the work has to change from research and
strategizing to actually going out and promoting a product or service to potential customers.

Marketing strategy is a long-term, forward-looking approach to planning with the

fundamental goal achieving a sustainable competitive advantage. Strategic planning involves an
analysis of the company's strategic initial situation prior to the formulation, evaluation and
selection of market-oriented competitive position that contributes to the company's goals and
marketing objectives.
Strategic marketing, as a disinct field of study emerged in the 1970s, and built on
strategic management that preceded it. Marketing strategy highlights the role of marketing as a
link between the organisation and its customers.
At its most basic level, strategic marketing addresses three deceptively simple questions:
(1) Where are we now?
(2) Where are we going? and
(3) How are we going to get there? In attempting to answer these questions, strategic
planners require sophisticated skills in both research and analysis.
Definitions of marketing strategy
Scholars continue to debate the precise meaning of marketing strategy. Consequently, the
literature offers many different definitions. On close examination, however, these definitions
appear to centre around the notion that strategy refers to a broad statement of what is to be
achieved.
Marketing Strategy is:
"The marketing strategy lays out target markets and the value proposition that will be
offered based on an analysis of the best market opportunities." (Philip Kotler & Kevin Keller,
Marketing Management, Pearson, 14th Edition)
“An over-riding directional concept that sets out the planned path.” (David Aaker and
Michael K. Mills, Strategic Market Management, 2001, p. 11)

"Essentially a formula for how a business is going to compete, what its goals should be
and what policies will be needed to carry out these goals." (Michael Porter, Competitive
Strategy: Techniques for Analyzing Industries and Competitors , NY, Free Press, 1980)
"The pattern of major objectives, purposes and goals and essential policies and plans for
achieving those goals, stated in such a way as to define what business the company is in or is to
be in. (S. Jain, Marketing Planning and Strategy, 1993)
"An explicit guide to future behaviour.” (Henry Mintzberg, “ Crafting Strategy,” Harvard

Business Review, July–August, 1987 pp. 66–74)
Strategy is "reserved for actions aimed directly at altering the strengths of the enterprise
relative to that of its competitors... Perfect strategies are not called for. What counts is...
performance relative to competitors.” (Kenichi Ohmae, The Mind of the Strategist, 1982,
p. 37)
Strategy formulation is built on "the match between organisational resources and skills and
environmental opportunities and risks it faces and the purposes it wishes to accomplish." (Dan
Schendel and Charles W. Hofer, Strategy Formulation: Analytical Concepts, South-Western,
1978, p. 11)
Marketing management versus marketing strategy
The distinction between “strategic” and “managerial” marketing is used to distinguish

"two phases having different goals and based on different conceptual tools. Strategic marketing
concerns the choice of policies aiming at improving the competitive position of the firm, taking
account of challenges and opportunities proposed by the competitive environment. On the other
hand, managerial marketing is focused on the implementation of specific targets." Marketing
strategy is about "lofty visions translated into less lofty and practical goals [while marketing
management] is where we start to get our hands dirty and make plans for things to
happen." Marketing strategy is sometimes called higher order planning because it sets out the
broad direction and provides guidance and structure for the marketing program.

Strategic marketing planning: An overview
Marketing strategy involves mapping out the company's direction for the forthcoming
planning period, whether that be three, five or ten years. It involves undertaking a 360° review of
the firm and its operating environment with a view to identifying new business opportunities that
the firm could potentially leverage for competitive advantage. Strategic planning may also reveal
market threats that the firm may need to consider for long-term sustainability. Strategic planning
makes no assumptions about the firm continuing to offer the same products to the same
customers into the future. Instead, it is concerned with identifying the business opportunities that
are likely to be successful and evaluates the firm's capacity to leverage such opportunities. It
seeks to identify the strategic gap; that is the difference between where a firm is currently
situated (the strategic reality or inadvertent strategy) and where it should be situated for
sustainable, long-term growth (the strategic intent or deliberate strategy).
Strategic planning seeks to address three deceptively simple questions, specifically:
 Where are we now? (Situation analysis)

 What business should we be in? (Vision and mission)
 How should we get there? (Strategies, plans, goals and objectives)
A fourth question may be added to the list, namely 'How do we know when we got
there?' Due to increasing need for accountability, many marketing organisations use a variety
of marketing metrics to track strategic performance, allowing for corrective action to be taken as
required. On the surface, strategic planning seeks to address three simple questions, however, the
research and analysis involved in strategic planning is very sophisticated and requires a great
deal of skill and judgement.
Strategic analysis: tools and techniques
Strategic analysis is designed to address the first strategic question, "Where are we
now?" Traditional market research is less useful for strategic marketing because the analyst is
not seeking insights about customer attitudes and preferences. Instead strategic analysts are
seeking insights about the firm's operating environment with a view to identifying possible future
scenarios, opportunities and threats.

Strategic planning focuses on the three 3C’s, namely:
 Customer,
 Corporation and
 Competitors.
A detailed analysis of each factor is key to the success of strategy formulation. The
'competitors' element refers to an analysis of the strengths of the business relative to close rivals,
and a consideration of competitive threats that might impinge on the business' ability to move in
certain directions. The 'customer' element refers to an analysis of any possible changes in
customer preferences that potentially give rise to new business opportunities. The 'corporation'
element refers to a detailed analysis of the company's internal capabilities and its readiness to
leverage market-based opportunities or its vulnerability to external threats.
Mintzberg suggests that the top planners spend most of their time engaged in analysis and
are concerned with industry or competitive analyses as well as internal studies, including the use
of computer models to analyze trends in the organization. Strategic planners use a variety of
research tools and analytical techniques, depending on the environment complexity and the
firm's goals.
Fleitcher and Bensoussan, for instance, have identified some 200 qualitative and
quantitative analytical techniques regularly used by strategic analystswhile a recent publication
suggests that 72 techniques are essential. No optimal technique can be identified as useful across
all situations or problems. Determining which technique to use in any given situation rests with
the skill of the analyst. The choice of tool depends on a variety of factors including: data
availability; the nature of the marketing problem; the objective or purpose, the analyst’s skill
level as well as other constraints such as time or motivation
Brief description of gap analysis
Gap analysis is a type of higher order analysis that seeks to identify the difference
between the organisation's current strategy and its desired strategy. This difference is sometimes

known as the strategic gap. Mintzberg identifies two types of strategy namely deliberate

strategy and inadvertent strategy. The deliberate strategy represents the firm's strategic intent or
its desired path while the inadvertent strategy represents the path that the firm may have
followed as it adjusted to environmental, competitive and market changes. Other scholars use the
terms realized strategy versus intended strategy to refer to the same concepts. This type of
analysis indicates whether an organisation has strayed from its desired path during the planning
period. The presence of a large gap may indicate the organisation has become stuck in the
middle; a recipe for strategic mediocrity and potential failure.
Brief description of Category/Brand Development Index
The category/brand development index is a method used to assess the sales potential for a
region or market and identify market segments that can be developed (i.e. high CDI and high
BDI). In addition, it may be used to identify markets where the category or brand is under-
performing and may signal underlying marketing problems such as poor distribution (i.e. high
CDI and low BDI).
BDI and CDI are calculated as follows:
BDI = (Brand Sales (%) in Market A/ Population (%) in Market A) X 100
CDI = (Category Sales (%) in Market/ Population (%) in Market A) X 100
Brief description of PEST analysis
Strategic planning typically begins with a scan of the business environment, both internal
and external, this includes understanding strategic constraints. An understanding of the external
operating environment, including political, economic, social and technological which includes
demographic and cultural aspects, is necessary for the identification of business opportunities
and threats. This analysis is called PEST; an acronym for Political, Economic, Social
and Technological. A number of variants of the PEST analysis can be identified in literature,
including: PESTLE analysis (Political, Economic, Social, Technological, Legal and
Environmental); STEEPLE (adds ethics); STEEPLED (adds demographics) and STEER (adds
regulatory).

The aim of the PEST analysis is to identify opportunities and threats in the wider
operating environment. Firms try to leverage opportunities while trying to buffer themselves
against potential threats. Basically, the PEST analysis guides strategic decision-making. The
main elements of the PEST analysis are:
Political: political interventions with the potential to disrupt or enhance trading

conditions e.g. government statutes, policies, funding or subsidies, support for specific
industries, trade agreements, tax rates and fiscal policy.
Economic: economic factors with the potential to affect profitability and the prices that
can be charged, such as, economic trends, inflation, exchange rates, seasonality and economic
cycles, consumer confidence, consumer purchasing power and discretionary incomes.
Social: social factors that affect demand for products and services, consumer attitudes,
tastes and preferences like demographics, social influencers, role models, shopping habits.
Technological: Innovation, technological developments or breakthroughs that create

opportunities for new products, improved production processes or new ways of transacting
business e.g. new materials, new ingredients, new machinery, new packaging solutions, new
software and new intermediaries.
When carrying out a PEST analysis, planners and analysts may consider the operating
environment at three levels, namely the supranational; the national and subnational or local level.
As businesses become more globalized, they may need to pay greater attention to the
supranational level
Developing the generic competitive strategy
The generic competitive strategy outlines the fundamental basis for obtaining a
sustainable competitive advantage within a category. Firms can normally trace their competitive
position to one of three factors:
 Superior skills (e.g. coordination of individual specialists, created through the

interplay of investment in training and professional development, work and learning)

 Superior resources (e.g. patents, trade-mark protection, specialized physical assets

and relationships with suppliers and distribution infrastructure.)
 Superior position (the products or services offered, the market segments served, and
the extent to which the product-market can be isolated from direct competition.)
It is essential that the internal analysis provide a frank and open evaluation of the firm's
superiority in terms of skills, resources or market position since this will provide the basis for
competing over the forthcoming planning period. For this reason, some companies engage
external consultants to provide an independent assessment of the firms capabilities and
resources.
Porter and the positioning school: approach to strategy formulation
In 1980, Michael Porter developed an approach to strategy formulation that proved to be

extremely popular with both scholars and practitioners. The approach became known as
the positioning school because of its emphasis on locating a defensible competitive position
within an industry or sector. In this approach, strategy formulation consists of three key
strands of thinking: analysis of the five forces to determine the sources of competitive
advantage; the selection of one of three possible positions which leverage the advantage and
the value chain to implement the strategy. In this approach, the strategic choices involve
decisions about whether to compete for a share of the total market or for a specific target
group (competitive scope) and whether to compete on costs or product differences
(competitive advantage). This type of thinking leads to three generic strategies:
 Cost leadership - the firm targets the mass market and attempts to be the lowest cost
producer in the market
 Differentiation - the firm targets the mass market and tries to maintain unique points
of product difference perceived as desirable by customers and for which they are
prepared to pay premium prices
 Focus - the firm does not compete head to head, but instead selects a narrow target
market and focuses its efforts on satisfying the needs of that segment

According to Porter, these strategies are mutually exclusive and the firm must select one
approach to the exclusion of all others. Firms that try to be all things to all people can present a
confused market position which ultimately leads to below average returns. Any ambiguity about
the firm's approach is a recipe for "strategic mediocrity" and any firm that tries to pursue two
approaches simultaneously is said to be "stuck in the middle" and destined for failure.
Porter's approach was the dominant paradigm throughout the 1980s. However, the
approach has attracted considerable criticism. One important criticism is that it is possible to
identify successful companies that pursue a hybrid strategy - such as low cost position and a
differentiated position simultaneously. Toyota is a classic example of this hybrid approach. Other
scholars point to the simplistic nature of the analysis and the overly prescriptive nature of the
strategic choices which limits strategies to just three options. Yet others point to research
showing that many practitioners find the approach to be overly theoretical and not applicable to
their business.
Resource-based view (RBV)
During the 1990s, the resource-based view (also known as the resource-advantage theory)

of the firm became the dominant paradigm. It is an inter-disciplinary approach that represents a
substantial shift in thinking. It focuses attention on an organisation's internal resources as a
means of organising processes and obtaining a competitive advantage. The resource-based view
suggests that organisations must develop unique, firm-specific core competencies that will allow
them to outperform competitors by doing things differently and in a superior manner.
Barney stated that for resources to hold potential as sources of sustainable competitive
advantage, they should be valuable, rare and imperfectly imitable. A key insight arising from the
resource-based view is that not all resources are of equal importance nor possess the potential to
become a source of sustainable competitive advantage. The sustainability of any competitive
advantage depends on the extent to which resources can be imitated or substituted. Barney and
others point out that understanding the causal relationship between the sources of advantage and
successful strategies can be very difficult in practice. Thus, a great deal of managerial effort must
be invested in identifying, understanding and classifying core competencies. In addition,

management must invest in organisational learning to develop and maintain key resources and
competencies.
Growth strategies
Growth of a business is critical for business success. A firm may grow by developing the
market or by developing new products. The Ansoff product market growth matrix illustrates the
two broad dimensions for achieving growth. The Ansoff matrix identifies four specific growth
strategies: market penetration, product development, market development and diversification.
Market penetration involves selling existing products to existing consumers. This is a

conservative, low risk approach since the product is already on the established market.
Product development is the introduction of a new product to existing customers. This can
include modifications to an already existing market which can create a product that has more
appeal.
Market development involves the selling of existing products to new customers in order

to identify and build a new clientele base. This can include new geographical markets, new
distribution channels, and different pricing policies that bring the product price within the
competence of new market segments.
Diversification is the riskiest area for a business. This is where a new product is sold to a
new market. There are two type of Diversification; horizontal and vertical. 'Horizontal
diversification focuses more on product(s) where the business is knowledgeable, whereas vertical
diversification focuses more on the introduction of new product into new markets, where the
business could have less knowledge of the new market.
Horizontal integration
A horizontal integration strategy may be indicated in fast changing work environments as

well as providing a broad knowledge base for the business and employees. A benefit of
horizontal diversification is that it is an open platform for a business to expand and build away
from the already existing market.

A disadvantage of using the horizontal integration strategy is that this limits and restricts
the field of interest that the business. Horizontal integration can affect a business's reputation,
especially after a merge has happened between two or more businesses. There are three main
benefits to a business's reputation after a merge. A larger business helps the reputation and
increases the severity of the punishment. As well as the merge of information after a merge has
happened, this increases the knowledge of the business and marketing area they are focused on.
The last benefit is more opportunities for deviation to occur in merged businesses rather than
independent businesses.
Vertical integration
Vertical integration is when business is expanded through the vertical production line on
one business. An example of a vertically integrated business could be Apple. Apple owns all
their own software, hardware, designs and operating systems instead of relying on other
businesses to supply these. By having a highly vertically integrated business this creates different
economies therefore creating a positive performance for the business.
Some competitive advantages could include; avoiding foreclosures, improving the

business marketing intelligence, and opens up opportunities to create different products for the
market. Some disadvantages of using a Vertical Integration Strategy include the internal costs for
the business and the need for overhead costs. Also if the business is not well organised and fully
equipped and prepared the business will struggle using this strategy. There are also competitive
disadvantages as well, which include; creates barriers for the business, and loses access to
information from suppliers and distributors

CHAPTER 2
RESEARCH DESIGN
TITLE OF THE STUDY
“ A study on Marketing strategy at Nestle India Limited”
OBJECTIVES OF THE STUDY :
1. To understand the marketing mix strategies used by Nestle India Pvt Ltd company within
India
2. To analyze the effectiveness of the marketing mix strategies being used by Nestle India
Pvt Ltd company
3. To study marketing mix related practices and strategies (with reference to 4 P’s i:e
product, price, place and promotion).
4. To know the product planning and positioning factors, price decision factors, factors
relating to distribution channels and features of media selection by small units in the
globalize era.
NEED FOR THE STUDY
"Marketing strategy" is a general phrase used to describe the different kinds of choices
organizations have to make in the whole process of bringing a product or service to market. The
4Ps is one way – probably the best-known way – of defining the marketing strategy, and was
first expressed in 1960 by E J McCarthy. The need for the current study is the fact that there is a
need for diversified marketing strategy at Nestle India pvt ltd and a comprehensive research
might help the purpose
STATEMENT OF PROBLEM
The problem statement, describes the content for the study and it also identifies the
general analysis of issues in the research necessitating the need for the study. The research is
expected to answer questions and provide reasons responsible for undertaking the particular

research. Nestle India Ltd has decided to create a new marketing strategy for the company and it
has to understand the concepts of Marketing strategy to carry out such a marketing plan. Hence
the current study becomes important for both myself and the company to understand the different
concepts of marketing mix and thereby helps to formulate a good marketing strategy for the
company.
SAMPLING
Sample data that has been used for the current study are the employees of Nestle India
Ltd company
SOURCES OF DATA
PRIMARY DATA
New data gathered to help solve the problem at hand. As compared to secondary data
which is previously gathered data. An example is information gathered by a questionnaire.
Qualitative or quantitative data that are newly collected in the course of research, Consists of
original information that comes from people and includes information gathered from surveys,
focus groups, independent observations and test results
SECONDARY DATA
Information that already exists somewhere, having been collected for another purpose.
Sources include census reports, trade publications, and subscription services. Data that have
already been collected and published for another research project (other than the one at hand)
TOOLS FOR DATA COLLECTION
The main tool used for collection of data for the current study is through primary data
source which contains a set of well organized questionnaire distributed to the officials of the
Nestle India ltd company.
DATA ANALYSIS

The data collected were analyzed on various parameters and presented with the help of
Pie charts and bar graphs
Limitations of the study
 All the research projects are hindered in their smooth flow by some unforeseen problems.
The problems arise in the form of constraints by budget, time and scope of the study. The
current project was also faced by certain problem. Some of the problems faced in the course
of the research are as follows:
 A strong unwillingness on the part of the company officials, to participate and aid the
research.
 The boredom and wavering concentration that set in among the respondents while answering
the long questionnaire: thus in turn led to the difficulty of preventing incomplete
questionnaires.
 Sampling error: the research include a sample size of 100 customers which is not enough to
determine the complete marketing mix of the company. Since its not a census survey there is
always a chance of error while extrapolating the results of a sample study over the population
especially in those researches where the qualitative aspects are concerned. So it’s always
doubtful to map the qualitative aspects using a quantitative measure.
 The study was limited to the geographical region of Bangalore
LITERATURE REVIEW
Rafiq and Ahmed (1995) stated that it was expected that there would be a great degree of
dissatisfaction with the 4Ps framework, meanwhile it was not expected that the Booms and
Bitner`s framework would be accepted as a general framework for marketing as this study
showed.
Meanwhile, there has not been any empirical research that has been conducted in this
area to validate this model or not. Harvey et al. (1996) had broadened the traditional marketing
mix elements by adding another 5Ps which are publics, performance, politics, probability and
planning. More recent perspectives on the traditional marketing mix theory have been proposed
by some Scandinavian scholars who joined this debate.

Hakansson and Waluszewski (2005) have reinterpreted the 4Ps by focussing on a more
customer oriented approach (product), interaction with customers (promotion), value creation
(place) and satisfaction (product and price).
More recently, Zineldin and Philipson (2007) have found that the traditional marketing
mix theory is an essential requirement for building and sustaining relationships with customers.
The Services Marketing Mix Contemporary Perspectives While there has been much criticism of
the traditional 4Ps of the marketing mix model, a number of recent views have joined this debate.
Gombeski (1998) criticised the marketing mix elements, as they are too restrictive, their
approach oversimplifies marketing while most organisations are facing a complex business
environment, and they are too narrow to develop a services marketing programme. As a
consequence, he suggested an alternative model, which included internal marketing, benefit
development, product development, targeting, channels, differentiation, selling and positioning.
O`Malley and Patterson (1998) extensively criticised the 4Ps marketing mix model.
Borden’s original model was criticised in terms that it was not a comprehensive or exhaustive
model, and McCarthy’s model was criticised since it became a simple formula for pedagogical
purposes.
Adding or finding out new alternative mixes cannot deal with the new changing business
environment, which requires integration, cooperation and flexibility between the organisation
and its environment. However, while some marketing scholars have extensively criticised the
traditional marketing mix model as well as sometimes criticising Marketing Mix model, Ennew
and Watkins (1998) argued that much of the empirical research on the Marketing Mix focused on
a specific problem or focused on problems which are related to the unique characteristics of
services, not on the real practice of marketing management.
As a consequence, studies of the Marketing Mix tended to concentrate attention on the

conceptual development of the mix as a response to service features rather than as a result of
extensive empirical observation of the practice of marketing management. On a more
complicated level, some perspectives said that the other 3Ps of the Marketing Mix could be
incorporated within the traditional marketing mix model and, within services industries, they

could be considered as special themes to deal with the unique characteristics of services (Cowell,
1984; Ennew and Watkins, 1992; Ennew and Watkins, 1998).
It is argued that recognising the importance of the unique characteristics of services and
the pivotal role of the other 3Ps of the Marketing Mix in the marketing strategy, they should be
represented as distinct and strategic elements (Booms and Bitner, 1981; Cowell, 1984; Judd,
1987; Collier, 1991; Smith and Saker, 1992; Rafiq and Ahmed, 1995; Lovelock, 2001).
In order to deliver the overall service offer to a target market, the marketing mix elements
should be coherent, co-ordinated, integrated and consistent with each other to produce the
synergistic effect of them.
Deshpande (1999) argued that most marketing problems are not local marketing
problems but are global. Marketing needs are to be understood in different cultures and contexts.
This view is totally supported by Day and Montgomery (1999) who commented that the
traditional 4Ps marketing mix model lacked recognition as an innovative and adaptive process,
and even more the traditional 4Ps elements were seen merely as a handy framework.
Goldsmith (1999) suggested another element to the 7Ps of the Marketing Mix concept,
which is personalisation. Yelkur (2000) developed a model that suggested the possible effect of
each element of the services marketing mix model on the customer’s perception of the service.
He argued that the customer experiences the service through the critical elements of the
Marketing Mix that influence customer expectations.
These elements, according to Yelkur, are place, physical evidence, participants, and
process. Yelkur (2000) argued that these elements alongside the product, price and distribution
elements have a potential to affect customer satisfaction. Although this model has adopted and
supported the 7Ps of the services marketing model, it did not present empirical evidence; it was
theoretical.
Furthermore, Baker (2000) argued that despite some criticisms of the 4Ps of the
marketing mix model, especially, by Van Waterschoot (1999), the model should be extended to
include a fifth P-people. He argued that adding the people element to this model may be

appropriate because putting people into marketing is essential for achieving a competitive
advantage.
Baker (2000) advocated that while the debate on the application of the marketing mix is
to be welcomed, one should be careful not to discard it prematurely because of perceived
weaknesses. He pointed out that marketing could be defined as `mutually satisfying exchange
relationships`, then, careful attention must be paid not to tip the balance too much in the favour
of the buyer. Indeed, Baker viewed the traditional 4Ps marketing model as a useful simplifying
tool that enables marketing managers to impose some structure and direction on the tasks which
they must perform.
Lovelock (2001) argued that the Marketing Mix should be eight Ps. The eighth P is productivity
and quality. More recently, McDonald (2002) argued that some reformulations of the four Ps
should take place to include other elements such as provision of customer service, people and
process. He argued that every aspect of customer interaction needs to be planned.

CHAPTER 3
INDUSTRY PROFILE
GROWING DEMAND FOR PREMIUM CHOCOLATE IN INDIA
Indians travelling to international destinations often bring home premium chocolate as

gifts for their friends and relatives, and this trend increased during the review period with the
increasing number of Indians travelling abroad. However, in India the availability of such
premium chocolates remains limited to only a few global brands in retailing despite growing
demand.
INNOVATION IN CHOCOLATE IS WELL RECEIVED BY INDIAN CONSUMERS
Flavour innovation is a new trend driving chocolate confectionery as manufacturers are

experimenting with different ingredients. Apart from fruit flavours such as strawberry and
orange peel, new flavours such as coffee, cinnamon and many others are performing well in
chocolate confectionery.
HEALTH BENEFITS ASSOCIATED WITH CHOCOLATE VARIETIES DRIVE

GROWTH
Chocolate is considered a healthy indulgence. Social media quotes research journals and
suggestions from dieticians, resulting in people choosing dark chocolate, which has lower sugar
content.
COMPETITIVE LANDSCAPE
MONDELEZ INDIA FOODS PVT LTD FOCUSES ON PREMIUM PRODUCTS IN

CHOCOLATE CONFECTIONERY
Mondelez International Inc considers its Indian business to be crucial in achieving its
global online sales target by 2020. The company, which retained its leading position in chocolate
confectionery, plans to launch more premium range products under its popular mid-priced brand
5 Star.

FERRERO INDIA PVT LTD AIMING TO CAPTURE MORE SHARE IN CHOCOLATE

CONFECTIONERY
Ferrero India Pvt Ltd is planning to invest INR2,000 crore in India over three years to
manufacture products suited to local needs. The company is developing innovative chocolate
confectionery products with higher melting points due to the hot climate conditions in India.
MANY LOCAL COMPANIES ENTER CHOCOLATE CONFECTIONERY
Given the strong growth of chocolate confectionery in economy, mid-priced and

premium ranges, many domestic companies showed an interest in entering. Britannia Industries
Ltd is planning to launch products by 2019.
PROSPECTS
BAD BREATH AND SMELL OF CIGARETTES SUPPORT GUM SALES
Professionals and employees in India spend an average of 45-50 hours per week in
offices with minimal breaks, which can lead to poor oral health. Many working people therefore
often resort to chewing gum and bubble gum to keep their mouths fresh.
PRODUCT LIFECYCLE OF GUM NORMALISES DUE TO MATURITY
Gum in India reached maturity during the review period as it is widely consumed across
all age groups despite lack of brand promotion by companies. No innovation or new product
launches were seen in 2018, signifying that consumer interest remains flat.
SHOPPING HABITS OF CONSUMERS HAS CHANGED FOR GUMS
Impulse purchases of gum by price conscious consumers changed drastically for several
reasons including refraining from consuming sugar-based snacks and artificial flavours. Sugar-
free gum is bought by consumers to maintain oral hygiene rather than as an impulse purchase.

INTERNATIONAL PLAYERS CONTINUE TO DOMINATE GUM IN INDIA
Perfetti Van Melle India Pvt Ltd continues to hold the leading position in gum with its
popular brands Happydent and Center Fresh, followed by Wrigley India Pvt Ltd with its popular
brand Orbit. These brands have a longstanding presence of more than a decade and have many
loyal consumers in India, which helped to maintain the current position.
REGIONAL COMPANIES OFFER STRONG COMPETITION TO INTERNATIONAL

PLAYERS
Bubble gum and chewing gum in the price ranges of INR0.5 and INR1 per unit by
regional companies are taking over tier II cities and other rural areas in India.
PROSPECTS
ACTIVE PROMOTIONS AND NEW FLAVOURS DRIVE GROWTH
Continuing the trend of product innovation, 2018 also witnessed excellent growth in
sugar confectionery. Highlights included the introduction of traditional Indian flavours, new
product launches and continuous promotion by companies.
HEALTHIER SUGAR CONFECTIONERY LAUNCHES PLANNED
With consumer interest in switching to low sugar products within packaged food, many
manufacturers are anticipating that demand for low sugar products will also be seen in sugar
confectionery. To maintain their lead, companies such as Parle Products Pvt Ltd, ITC Ltd and
many other domestic players are planning to launch healthier versions of sugar confectionery by
the end of 2018 and early 2019.
DEMOGRAPHICS AND DEMAND PLAY AN IMPORTANT ROLE IN DRIVING

SUGAR CONFECTIONERY GROWTH
Sugar confectionery, like chocolate confectionery, retains a wider audience as products

are popular with all age groups. Confectionery products such as boiled sweets are popular with
all age groups while toffees, caramel, and nougat and lollipops are most popular with children.

PERFETTI WITNESSES DECLINING SALES DURING THE REVIEW PERIOD AND

IN 2018
With competition intensifying, especially in boiled sweets, Perfetti Van Melle India Pvt
Ltd moved much of its portfolio from the INR0.50 price point to INR1 with added product value.
NEW PRODUCT LAUNCHES SEE SIGNIFICANT GROWTH IN SUGAR

CONFECTIONERY
Three domestic companies DS Group, Parle Products Pvt Ltd and ITC Ltd continued to
outperform every other player within boiled sweets in 2018. There is a unique factor for each
company’s success in India: Pulse candy by DS Group launched in 2015 was an instant hit with
consumers due to its unique traditional flavours; Mango Bite from Parle Products Pvt Ltd was
always popular due to its rich, sweet, raw mango taste; and ITC Ltd’s Candyman performed well
with its assortment of flavoured boiled sweets.
OTHERS SHARE RISES WITH IMITATION PRODUCTS FLOODING SUGAR

CONFECTIONERY
The ongoing success of several innovative sugar confectionery products that entered
during the review period created opportunities for several companies to offer imitation products.
These products are usually offered at lower price points compared to other products and are often
confused with the originals.
Indian candyland a market of riches
After the success of Pulse Kachcha Aam, wherein the DS Group captured the hard boiled
candy (HBC) market in the country by reaching Rs 100 crore within just eight months of its
launch in 2015, the company is steadily increasing its offerings with a collection of niche
flavours like guava and litchi and popular flavours like raw mango and orange and pineapple
over the course of time.

The confectionery market in India is valued at $1.5 billion, growing at a two-year CAGR
of 9%, as per Nielsen India. Various reports suggest that India is the fastest growing
confectionery market among the BRIC countries.
Indian consumers look for the most fun and enjoyable products. This means
manufacturers need to innovate with new and novel shapes, textures, flavours and packs. The
Indian candy market is divided into three main categories — sugar candy, chocolate candy and
gum candy — on the basis of type, region and competitors.
“Innovation in flavours was a key to our brand success. The in-house R&D team tried
many different formats and after extensive taste sampling, the final mandate was given to the
Kachcha Aam flavour with a tangy twist,” recalls DS Group’s new product development VP
Shashank Surana.
Similarly, Parle Products has kept innovation at the core of conceptualising and
manufacturing products. The company has created and manufactured iconic confectionery
brands such as Kismi and Melody. “A majority of confectionery brands, including Parle, are
dominated by the 50 paise price point. We are consciously moving towards the Rs 1 price point,”
says Krishna Rao, category head, Parle Products.
With flavour and pricing being the most important factors in the category, companies
have tried to capture audiences and play by their own rules. Over the last few years, many have
observed an increase in purchase of the wholesale confectionery bags priced at Rs 50 and Rs
100, which is a trend that is likely to continue.
The north region of India constitutes the largest share in the candy market followed by
the west region. According to a report by Research and Markets, metros such as Delhi/NCR,
Mumbai, Hyderabad, Bengaluru, Chandigarh, Chennai and Kolkata are amongst the leading
demand generators of candies in the country, while tier II cities have also been contributing.
What is worth noting is that today, most candy segments target not just children, but
youngsters as well. To expand their horizons, many have moved beyond advertising in children’s
books and traditional mediums too.

CHAPTER 4
COMPANY PROFILE
Nestlé S.A is a Swiss transnational food and drink company headquartered

in Vevey, Vaud, Switzerland. It has been the largest food company in the world, measured by
revenues and other metrics, for 2014, 2015, and 2016. It ranked No. 72 on the Fortune Global
500 in 2014 and No. 33 on the 2016 edition of the Forbes Global 2000 list of largest public
companies.
Nestlé's products include baby food, medical food, bottled water, breakfast cereals, coffee
and tea, confectionery, dairy products, ice cream, frozen food, pet foods, and snacks. Twenty-
nine of Nestlé's brands have annual sales of over CHF1 billion (about US$1.1 billion), including
Nespresso, Nescafé, Kit Kat, Smarties, Nesquik, Stouffer's, Vittel, and Maggi. Nestlé has 447
factories, operates in 194 countries, and employs around 339,000 people. It is one of the main
shareholders of L'Oreal, the world's largest cosmetics company.
Nestlé was formed in 1905 by the merger of the Anglo-Swiss Milk Company,

established in 1866 by brothers George and Charles Page, and Farine Lactée Henri Nestlé,
founded in 1866 by Henri Nestlé (born Heinrich Nestle). The company grew significantly during
the First World War and again following the Second World War, expanding its offerings beyond
its early condensed milk and infant formula products. The company has made a number of
corporate acquisitions, including Crosse & Blackwell in 1950, Findus in 1963, Libby's in
1971, Rowntree Mackintosh in 1988, and Gerber in 2007.
Nestlé has a primary listing on the SIX Swiss Exchange and is a constituent of the Swiss

Market Index. It has a secondary listing on Euronext. In 2011, Nestlé was listed No. 1 in
the Fortune Global 500 as the world's most profitable corporation. With a market capitalisation
of US$239.6 billion, Nestlé ranked No. 11 in the FT Global 500 2014

History
Founding and early years (1866–1900)
Nestlé's origins date back to 1866 when two separate Swiss enterprises were founded that
would later form the core of Nestlé. In the succeeding decades, the two competing enterprises
aggressively expanded their businesses throughout Europe and the United States.
In August 1867, Charles (US consul in Switzerland) and George Page, two brothers
from Lee County, Illinois, USA, established the Anglo-Swiss Condensed Milk Company
in Cham, Switzerland. Their first British operation was opened at Chippenham, Wiltshire, in
1873.
In September 1866, in Vevey, Henri Nestlé developed milk-based baby food and soon

began marketing it. The following year saw Daniel Peter begin seven years of work perfecting
his invention, the milk chocolate manufacturing process. Nestlé was the crucial co-operation that
Peter needed to solve the problem of removing all the water from the milk added to his chocolate
and thus preventing the product from developing mildew. Henri Nestlé retired in 1875 but the
company, under new ownership, retained his name as Société Farine Lactée Henri Nestlé.
In 1877, Anglo-Swiss added milk-based baby foods to their products; in the following
year, the Nestlé Company added condensed milk to their portfolio, which made the firms direct
and fierce rivals.
In 1879, Nestle merged with milk chocolate inventor Daniel Peter.
Mergers (1901–1989)
In 1904, François-Louis Cailler, Charles Amédée Kohler, Daniel Peter, and Henri Nestlé
participated in the creation and development of Swiss chocolate, marketing the first chocolate –
milk Nestlé.
In 1905, the companies merged to become the Nestlé and Anglo-Swiss Condensed Milk
Company, retaining that name until 1947 when the name 'Nestlé Alimentana SA' was taken as a

result of the acquisition of Fabrique de Produits Maggi SA (founded 1884) and its holding
company, Alimentana SA, of Kempttal, Switzerland. Maggi was a major manufacturer of soup
mixes and related foodstuffs. The company's current name was adopted in 1977. By the early
1900s, the company was operating factories in the United States, the United Kingdom, Germany,
and Spain. The First World War created demand for dairy products in the form of government
contracts, and, by the end of the war, Nestlé's production had more than doubled.
In January 1919, Nestlé bought two condensed milk plants in Oregon from the
company Geibisch and Joplin for $250,000. One was in Bandon, and the other was
in Milwaukee. They expanded them considerably, processing 250,000 pounds of condensed milk
daily in the Bandon plant.
Nestlé felt the effects of the Second World War immediately. Profits dropped from
US$20 million in 1938 to US$6 million in 1939. Factories were established in developing
countries, particularly in Latin America. Ironically, the war helped with the introduction of the
company's newest product, Nescafé ("Nestlé's Coffee"), which became a staple drink of the US
military. Nestlé's production and sales rose in the wartime economy.
After the war, government contracts dried up, and consumers switched back to fresh
milk. However, Nestlé's management responded quickly, streamlining operations and reducing
debt. The 1920s saw Nestlé's first expansion into new products, with chocolate-manufacture
becoming the company's second most important activity. Louis Dapples was CEO till 1937 when
succeeded by Édouard Muller till his death in 1948.
The end of World War II was the beginning of a dynamic phase for Nestlé. Growth
accelerated and numerous companies were acquired. In 1947 Nestlé merged with Maggi, a
manufacturer of seasonings and soups. Crosse & Blackwell followed in 1950, as
did Findus (1963), Libby's (1971), and Stouffer's (1973). Diversification came with a
shareholding in L'Oreal in 1974. In 1977, Nestlé made its second venture outside the food
industry, by acquiring Alcon Laboratories Inc.
In the 1980s, Nestlé's improved bottom line which allowed the company to launch a new
round of acquisitions. Carnation was acquired for $3 billion in 1984 and brought the evaporated

milk brand, as well as Coffee-Mate and Friskies to Nestlé. The confectionery company Rowntree

Mackintosh was acquired in 1988 for $4.5 billion, which brought brands such as Kit
Kat, Smarties, and Aero.
Growth internationally (1990–2011)[edit]
The first half of the 1990s proved to be favourable for Nestlé. Trade barriers crumbled,
and world markets developed into more or less integrated trading areas. Since 1996, there have
been various acquisitions, including San Pellegrino (1997), Spillers Petfoods (1998), and Ralston
Purina (2002). There were two major acquisitions in North America, both in 2002 – in June,
Nestlé merged its US ice cream business into Dreyer's, and in August,
a US$2.6 billion acquisition was announced of Chef America, the creator of Hot Pockets. In the
same time-frame, Nestlé entered in a joint bid with Cadbury and came close to purchasing the
iconic American company Hershey's, one of its fiercest confectionery competitors, but the deal
eventually fell through.
In December 2005, Nestlé bought the Greek company Delta Ice Cream for €240 million.
In January 2006, it took full ownership of Dreyer's, thus becoming the world's largest ice cream
maker, with a 17.5% market share. In July 2007, completing a deal announced the year before,
Nestlé acquired the Medical Nutrition division of Novartis Pharmaceutical for US$2.5 billion,
also acquiring, the milk-flavoring product known as Ovaltine, the "Boost" and "Resource" lines
of nutritional supplements, and Optifast dieting products.
In April 2007, returning to its roots, Nestlé bought US baby-food

manufacturer Gerber for US$5.5 billion. In December 2007, Nestlé entered into a strategic
partnership with a Belgian chocolate maker, Pierre Marcolini.
Nestlé agreed to sell its controlling stake in Alcon to Novartis on 4 January 2010. The
sale was to form part of a broader US$39.3 billion offer, by Novartis, for full acquisition of the
world's largest eye-care company. On 1 March 2010, Nestlé concluded the purchase of Kraft
Foods's North American frozen pizza business for US$3.7 billion.
Since 2010, Nestle has been working to transform itself into a nutrition, health and
wellness company in an effort to combat declining confectionery sales and the threat of

expanding government regulation of such foods. This effort is being led through the Nestlé
Institute of Health Sciences under the direction of Ed Baetge. The Institute aims to develop "a
new industry between food and pharmaceuticals" by creating foodstuffs with preventative and
corrective health properties that would replace pharmaceutical drugs from pill bottles. The
Health Science branch has already produced several products, such as drinks and protein shakes
meant to combat malnutrition, diabetes, digestive health, obesity, and other diseases.
In July 2011, Nestlé SA agreed to buy 60 percent of Hsu Fu Chi International Ltd. for
about US$1.7 billion. On 23 April 2012, Nestlé agreed to acquire Pfizer Inc.'s infant-nutrition,
formerly Wyeth Nutrition, unit for US$11.9 billion, topping a joint bid from Danone and Mead
Johnson.
Recent developments (2012–2017)
In recent years, Nestlé Health Science has made several acquisitions. It acquired Vitaflo,
which makes clinical nutritional products for people with genetic disorders; CM&D Pharma Ltd.,
a company that specialises in the development of products for patients with chronic conditions
like kidney disease; and Prometheus Laboratories, a firm specialising in treatments for
gastrointestinal diseases and cancer. It also holds a minority stake in Vital Foods, a New
Zealand-based company that develops kiwifruit-based solutions for gastrointestinal conditions as
of 2012.
Another recent purchase included the Jenny Craig weight-loss program,

for US$600 million. Nestlé sold the Jenny Craig business unit to North Castle Partners in 2013.
In February 2013, Nestlé Health Science bought Pamlab, which makes medical foods based on
L-methylfolate targeting depression, diabetes, and memory loss. In February 2014, Nestlé sold
its PowerBar sports nutrition business to Post Holdings, Inc. Later, in November 2014, Nestlé
announced that it was exploring strategic options for its frozen food subsidiary, Davigel.
In December 2014, Nestlé announced that it was opening 10 skin care research centres
worldwide, deepening its investment in a faster-growing market for healthcare products. That
year, Nestlé spend about $350 million on dermatology research and development. The first of the
research hubs, Nestlé Skin Health Investigation, Education and Longevity Development

(SHIELD) centres, will open mid 2015 in New York, followed by Hong Kong and São Paulo,
and later others in North America, Asia, and Europe. The initiative is being launched in
partnership with the Global Coalition on Aging (GCOA), a consortium that includes companies
such as Intel and Bank of America.
Nestlé announced in January 2017 that it was relocating its U.S. headquarters
from Glendale, California, to Rosslyn, Virginia outside of Washington, DC
NESTLÉ India is a subsidiary of NESTLÉ S.A. of Switzerland. With eight factories and
a large number of co-packers, Nestlé India is a vibrant Company that provides consumers in
India with products of global standards and is committed to long-term sustainable growth and
shareholder satisfaction.
The Company insists on honesty, integrity and fairness in all aspects of its business and
expects the same in its relationships. This has earned it the trust and respect of every strata of
society that it comes in contact with and is acknowledged amongst India's 'Most Respected
Companies' and amongst the 'Top Wealth Creators of India'.
The NESTLÉ Corporate Business Principles are at the basis of our Company’s culture,

developed over 140 years, which reflects the ideas of fairness, honesty and long-term thinking.
All About NESTLÉ
NESTLÉ's relationship with India dates back to 1912, when it began trading as The
NESTLÉ Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling
finished products in the Indian market.
After India's independence in 1947, the economic policies of the Indian Government
emphasised the need for local production. NESTLÉ responded to India's aspirations by forming a
company in India and set up its first factory in 1961 at Moga, Punjab, where the Government
wanted NESTLÉ to develop the milk economy. Progress in Moga required the introduction of
NESTLÉ's Agricultural Services to educate, advise and help the farmer in a variety of aspects.
From increasing the milk yield of their cows through improved dairy farming methods, to
irrigation, scientific crop management practices and helping with the procurement of bank loans.

NESTLÉ set up milk collection centres that would not only ensure prompt collection and pay fair
prices, but also instil amongst the community, a confidence in the dairy business. Progress
involved the creation of prosperity on an on-going and sustainable basis that has resulted in not
just the transformation of Moga into a prosperous and vibrant milk district today, but a thriving
hub of industrial activity, as well.
NESTLÉ has been a partner in India's growth for over a century now and has built a very
special relationship of trust and commitment with the people of India. The Company's activities
in India have facilitated direct and indirect employment and provides livelihood to about one
million people including farmers, suppliers of packaging materials, services and other goods.
The Company continuously focuses its efforts to better understand the changing lifestyles
of India and anticipate consumer needs in order to provide Taste, Nutrition, Health and Wellness
through its product offerings. The culture of innovation and renovation within the Company and
access to the NESTLÉ Group's proprietary technology/Brands expertise and the extensive
centralized Research and Development facilities gives it a distinct advantage in these efforts. It
helps the Company to create value that can be sustained over the long term by offering
consumers a wide variety of high quality, safe food products at affordable prices.
NESTLÉ India manufactures products of truly international quality under internationally

famous brand names such as NESCAFÉ, MAGGI, MILKYBAR, KIT KAT, BAR-ONE,
MILKMAID and NESTEA and in recent years the Company has also introduced products of
daily consumption and use such as NESTLÉ Milk, NESTLÉ SLIM Milk, NESTLÉ Dahi and
NESTLÉ Jeera Raita.
NESTLÉ India is a responsible organisation and facilitates initiatives that help to improve
the quality of life in the communities where it operates.

Presence Across India
NESTLÉ’s Presence In India
After more than a century-old association with the country, today, NESTLÉ India has
presence across India with 8 manufacturing facilities and 4 branch offices.
NESTLÉ India set up its first manufacturing facility at Moga (Punjab) in 1961 followed
by its manufacturing facilities at Choladi (Tamil Nadu), in 1967; Nanjangud (Karnataka), in
1989; Samalkha (Haryana), in 1992; Ponda and Bicholim (Goa), in 1995 and 1997, respectively;
and Pantnagar (Uttarakhand), in 2006. In 2012, Nestlé India set up its 8th manufacturing facility
at Tahliwal (Himachal Pradesh).
The 4 Branch Offices located at Delhi, Mumbai, Chennai and Kolkata help facilitate the
sales and marketing activities. The NESTLÉ India’s Head Office is located in Gurgaon, Haryana.
Research and Development Centre in India

Research and Development (R&D) in India is part of NESTLÉ S.A.’s global R&D
network and supports all markets worldwide with new product development and manufacturing
excellence for Noodles. It is also a Centre of expertise for local Indian cuisine within the
NESTLÉ R&D network and offers assistance to Culinary, Confectionery, Nutrition and Dairy
products in the South Asia Region (SAR).
Better nutrition in the region is a perpetual challenge. Its meaning changes with the stage
of development, the degree of social awareness, and scientific advancement. The new NESTLÉ
R&D facility in India will help develop great tasting food solutions that are relevant for
consumers in the South Asia Region, creating products that take the promise of taste and health
to a broader economic and social section than ever before. It will also strengthen NESTLÉ’s
position as the leader in Nutrition, Health and Wellness in the emerging markets.
NESTLÉ India has always had Research and Development support from the NESTLÉ
R&D network across the world. Now, with the new R&D Centre in Manesar, NESTLÉ South
Asia Region will benefit from a greater ‘regional consumer’ focus. Having an R&D Centre in
India also brings Research and Development closer to NESTLÉ India businesses, and reflects the
NESTLÉ spirit of R&D-Business partnership towards developing winning concepts, suited to the
local consumer. It will in turn help NESTLÉ R&D to bring out strong local concepts that are in
accordance with the NESTLÉ Group ambition to provide ‘affordable Nutrition, Health and
Wellness’.
Ultimately, these concepts will not just be relevant for emerging markets like India, but
could be transferred to NESTLÉ worldwide.
Directors and Officers
Board of Directors
Mr. Suresh Narayanan Chairman and Managing Director
Mr. Shobinder Duggal Director - Finance & Control and CFO

Mr. Aristides Protonotarios Director - Technical
Mr. R. V. Kanoria Non-Executive and Independent Director
TABLE.1.1
Recognition and awards
 In May 2006, Nestlé’s executive board decided to adapt the existing Nestlé management
systems to full conformity with the international standards ISO 14001 (Environmental
Management Systems) and OHSAS 18001 (Occupational Health and Safety Management
Systems) and to certify all Nestlé factories against these standards by 2010. In the
meanwhile, a lot of the Nestlé factories have obtained these certifications.
 Nestlé Purina received in 2010 the Malcolm Baldrige National Quality Award for their

excellence in the areas of leadership, customer and market focus, strategic planning, process
management, measurement, analysis and knowledge management, workforce focus and
results.
 In March 2011, Nestlé became the first infant formula company to meet the FTSE4Good
Index criteria in full.[
 In September 2011, Nestlé occupied 19th position in the Universum’s global ranking of
Best Employers Worldwide. According to a survey by Universum Communications, Nestlé
was, in 2011, the best employer to work for in Switzerland.
 The International Union of Food Science and Technology (IUFoST) honoured Nestlé in

2010 with the Global Food Industry Award.
 In May 2011, Nestlé won the 27th World Environment Center (WEC) Gold Medal award
for its commitment to environmental sustainability.

 On 19 April 2012, The Great Place to Work® Institute Canada mentioned Nestlé Canada

Inc. as one of the ‘50 Best Large and Multinational Workplaces’ in Canada (with more than
1,000 employees working in Canada and/or worldwide).
 On 21 May 2012, Gartner published their annual Supply Chain Top 25, a list with
global supply chain leaders. Nestlé ranks 18th in the list.
 In September 2012, Nestlé was among the top-scoring companies on the Climate
Disclosure Leadership Index (CDLI)
 In 2013, Nestlé retained its number one position in charity Oxfam’s sustainability

scorecard and improved its ratings on the issues of land, workers, and climate.
 In 2014, Nestlé received the Henry Spira Corporate Progress Awards for altering its
policies and practices to minimize adverse impacts on animals.
 In March 2015, Nestlé ranked second in Oxfam’s Behind the Brands scorecard, where the
NGO ranks the world’s ‘Big 10’ consumer food and beverage companies on their policies
and commitments to improve food security and sustainability. Nestlé assumed the number
one ranking for land rights while the company also outperformed its peers on transparency
and water.
Our Mission Statement
Nestlé is…
…the world’s leading nutrition, health and wellness company. Our mission of “Good
Food, Good Life” is to provide consumers with the best tasting, most nutritious choices in
a wide range of food and beverage categories and eating occasions, from morning to
night.
Our vision and values
To be a leading, competitive, Nutrition, Health and Wellness Company delivering

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

SWOT ANALYSIS
Nestle Ltd
Parent Company Nestle Ltd
Category Food Products
Sector Food and Beverages
Tagline/ Slogan Good Food, Good Life
USP Nestle is one of the biggest food processing, health and wellness
brand in the world
Nestle STP
Segment People looking for good quality, branded products like foods,
dairy products, baby food, pet food, confectioneries, etc.
Target Group Urban middle and upper middle class
Positioning Nestle is a world class company providing good quality, healthy

and tasty food and beverages
Product Portfolio
Brands 1. Nestle Milkybar
2. Nestle MilkMaid

3. Nestle Everyday Dairy Whitener
4. Nescafe
5. Maggi
6. Nestle Kitkat
7. Nestle Bar One
8. Nestle Polo
Nestle SWOT Analysis
Strengths 1. Nestle has an experience of more than 140 years in the

industry
2. Nestle is one the world's biggest brand and is consistently in
the Fortune 500 list
3. The company has a global reach with presence in over 86
countries
4. Employee strength of around 330,000 people worldwide
5. Nestle offers a wide product range including baby food, pet

food, dairy products, confectioneries, pharmaceuticals,
beverages, etc.
6. Popular brands owned like Maggi, Haagen-Dazs, Boost, Kit

Kat, Nescafe, etc.
7. Largest R&D network facilitating continuous innovation
8. Nestle has a very strong supply chain network and products are
available through groceries, supermarkets and even online
worldwide

9. C.S.R. activities for rural development, environment

protection, water conservation,, etc.
10. Mergers and acquisitions and joint ventures have

strengthened Nestle's market position
11. Strong marketing and advertising through TVCs, print media,

online ads, OOH and sponsoships
12. Brand loyalty and brand recall of Nestle is extremely high for
the brand
Weaknesses 1.Being a big global brand, numerous controversies in different

countries of operation cause issues
2.Strong competition by other brands means limited market share
growth for Nestle
Opportunities 1.Introduce more health based food products to tap the health
consciousness amongst consumers
2.Expanding focus on developing economies can boost business
for Nestle
3.Continue with acquisitions and joint ventures to increase its
market share
4.Try to capture the rural markets
5. Tie-ups with leading hotel chains, restaurants, schools,

government institutes etc can help Nestle maintain its market
dominance
Threats 1.Failure of the complex supply chain at low levels can affect the
business
2.Economic instability and recession in countries can adversely

affect Nestle because it is a global player

3.Events like Eurozone crisis, as most of its revenue comes from
Europe
4.Increase in cost of raw materials can affect profit margins
5.Stiff competition in all product segments
Competition
Competitors 1. Unilever
2. Kraft Foods
3. Sara Lee
4. Danone
5. Mars Incorporated
6. Hershey’s
7. Parle Products Ltd
TABLE.1.2

CHAPTER 5
DATA ANALYSIS AND INTERPRETATION
After segmenting the market, finding the target segment and positioning itself, each
company needs to come up with an offer. The 7 P’s used by Nestle India Ltd are:
What comes first in your mind when you hear the word confectionery?
TABLE.5.1
Chocolates 35
Fast food 10
Snacks 5
None of these 0
% of response
35
35
30
25
20
15
10
10
5
5
0
0
Chocolates Fast food Snacks None of these
CHART.5.1
Interpretation

Out of 100 around 35 agreed that when they hear the word confectionery first chocolates
comes in their mind & 10% said fast food & other said snacks.
2. How should the company design, manufacture the product so that it enhances the
customer experience?
TABLE.5.2
CONTENT % of response
Better packaging 32%
Quality guarantee 25%
Looks 30%
Others 23%
% of response
21%
29%
Better packaging
Quality guarantee
Looks
Others
27%
23%

CHART.5.2
Interpretation :
Product is the physical product or service offered to the consumer. Product includes
certain aspects such as packaging, guarantee, looks etc. This includes both the tangible and the
non tangible aspects of the product and service.
Nestle has intentionally kept its product depth and product width limited. Nestle India ltd
studied the behaviour of the Indian customer and provided a totally different menu as compared
to its International offering. India is the only country where Nestle India ltd serve vegetarian.
Even the sauces and cheese used in India are 100% vegetarian.
3. Where should be the product be available and the role of distribution channels?
TABLE.5.3
LOCATION % of response
Urban areas 35%
Every 2 Kms 30 %
Every 5 Kms 16%
Near All residential areas 19%

% of response
19%
35%
Urban areas
Every 2 Kms
16% Every 5 Kms
Near All residential areas
30%
CHART.5.3
5. What should be the pricing strategy?
TABLE.5.4
EXPECTATION PRICE % of response
According to market price 26%
A little less than market price 46%

Discount depending on purchase 24%
Others 4%
% of response
4%
26%
24%
According to market price
A little less than market price
Discount depending on
purchase
Others
46%
CHART.5.4
What is the suitable strategy and channels for promotion of the product?
TABLE.5.5
% of response

Depending on word of mouth 48%
Print media 21%
TV Ads 20%
Others 11%
% of response
11%
Depending on word of mouth

20% Print media
48%
TV Ads
Others
21%
CHART.5.5
6. How to converge the benefits of internal and external marketing?
TABLE.5.6

% of response
Customers 36%
Front line employees 27%
Middle level managers 24%
Front line managers 13%
% of response
13%
36%
Customers
Front line employees
24%
Middle level managers
Front line managers
27%
CHART.5.6

Questionnaire to Customers
Your Name ___________________________________________________
1. What is your age ?

TABLE.5.7
Percentage of Response
<20 years 21%
20 – 35 years 39%
35 – 50 years 26%
Above 50 years 14%
40%
35%
30%
25%
20%
15%
10%
5%
0%
<20 years 20 – 35 years 35 – 50 years Above 50 years
CHART.5.7

2. What is your profession ?

TABLE.5.8
Student 28%
Employee 46%
Housewife 19%
Others 6%
6%
28%
19%
Student
Employee
Housewife
Others
46%
CHART.5.8

Interpretation :
From the above graph we can see that out of 100 respondents about 46% of the
respondents are Employees, about 19% of the respondents are Housewives, about 28% of the
respondents are Students, about 6% of the respondents are Deputy directors.
3. What is your monthly Income ?

TABLE.5.9
<10000 14%
10000 – 20000 26%
20000 – 40000 32%
40000 – 50000 15%
Above 50000 13%

35%
30%
25%
20%
15%
10%
5%
0%
<10000 10000 – 20000 20000 – 40000 40000 – 50000 Above 50000
CHART.5.9
4. What is your gender ?

TABLE.5.10
Male 38%
Female 62%

70%
60%
50%
40%
30%
20%
10%
0%
Male Female
CHART.5.10
5. How did you get to know about our products and services?
TABLE.5.511
Newspapers advertisements 12%
Television commercials 16%
Internet 28%
Email 20%
Telemarketing 24%
CHART.5.11

12%
24%
Newspapers advertisements
16% Television commercials
Internet
Email
Telemarketing
20%
28%
Interpretation :
From The above graph we can see that the customers came to know about the company
through internet at the max. about 28% of the customers said they came to know about the
company through internet. About 24% of the customers said they came to know about the
company by telemarketing call they received. About 20% said they received an email about the
services of the company. About 16% said they saw a TV commercial and about 12% said they
came to know about the company and its products through newspaper advertisements.
6. How would you rate your experience of using our products?

TABLE.5.12

Excellent 42%
Good 32%
Average 16%
Bad 8%
Terrible 2%
CHART.5.12
8% 2%
16%
Excellent
42%
Good
Average
Bad
Terrible
32%
Interpretation :
From the above graph we can see that about 42% of the customers who used the products
provided by the company felt the products were excellent. About 32% of the respondents said
the products were good. About 16% of the respondents said the products are average. About 8%

did not like the products at all and 2 % said they felt terrible about the products provided by the
company.
7. What is the best thing that you like about our products?
TABLE.5.13
Percent of Response
Price 18%
Packaging 9%
Quality 32%
Easy Availability 20%
All of the Above 21%
CHART.5.13

Percent of Response
21% 18%
Price
9% Packaging
Quality
Easy Availability
All of the Above
20%
32%
8. Have you already tried any other company?
TABLE.5.14
Yes 42%
No 58%

42%
Yes
No
58%
CHART.5.14
9. How would you say was your experience with other company products?
TABLE.5.15
Good 36%
Same as our company 28%
Bad 36%

36% 36%
Good
Same as our company
Bad
28%
CHART.5.15
10. What exactly do you expect from us when you decide to join hands with us?
=HEALTHY PRODUCTS
10. Do you believe that this is the right place that is a confectionery solution for you?
Why?
TABLE.5.16
Yes 63%
No 25%
Not sure 12%

12%
Yes
25% No
Not sure
63%
CHART.5.16

CHAPTER 6
FINDINGS AND SUGGESTIONS
FINDINGS
1. The majority (60%) of the companies are using both in-house resources and outsourcing
to marketing agencies on a project basis Over the past 5 years, “5% of the overall budget
is invested in marketing” is most common response
2. With an increasing percentage spent on website development and online marketing (2008
through 2012)The greatest percentage of marketing budgets are spent on website
development, online marketing, tradeshows & events, direct marketing and advertising
3. The greatest source of leads and Return-On-Investment are referrals, online marketing,
tradeshows & events and email marketing
4. The most utilized social media tactics are social networking sites such as Facebook and
LinkedIn as well as Blogs with usage rates of 63% and 43% respectively.
5. Despite the economy, approximately half of companies plan to increase their 2015
marketing budget
SUGGESTIONS
1. Know your target market. Define geographic as well as demographic parameters. Many

marketing professionals focus on their "best customers" based on sales. This makes it
easier to track purchases and patterns. In order to cultivate new customer relationships,
others might also choose to study customers who have abandoned carts or lapsed in
activity altogether.
2. Calculate your net promoter score. Best customers are one thing; brand advocates
sweeten the deal. A powerful metric based on an 11-point scale, your net promoter score
will help you identify brand champions, measure loyalty, and drive change. Not only will
this score give you great insight into what your customers think about you, but it
quantifies the customer experience. Survey respondents should be grouped into three

categories: detractors, passives, and promoters. While a customer satisfaction survey will

give you more actionable data, it's a great customer-engagement health-checker.
3. Use a certified template. All marketing survey template questions are written by a team
of professional survey methodologists to help you get the most useful responses.
Customizable to fit your needs, online survey templates can be used as is, or tailored to
your company colors and themes. Brand your survey templates by adding your logo,
inserting images, and more.
4. Keep it short and simple. By limiting the number of questions you have, you increase
the likelihood that each survey taker will answer every question. Keeping language
simple, the questions comfortably short, and spread over many short pages (as opposed to
cramming them all into long one) will prevent drop-outs. Minding the length will also
help you focus on what's most important. Our market research product feedback survey
template packs a punch in ten powerful questions.
5. Sharing is caring. Be transparent with your customers, let them know what you learned,
and share your plans to take action based on the results you collected. Send out follow-up
market research surveys if you need more information. You might consider featuring
your results in promotional materials and pointing out what you've done to improve.
CONCLUSION
The company focuses on stocking the products its consumers want, as well as offering
distinctive or exclusive ranges that can only be bought at our company. This, combined with its
choice of strategies for placing and positioning the brand, has resulted in significant growth for
the business.
By uniquely understanding and valuing consumers, Our company continues to grow

within a difficult economic and competitive market. By constantly adapting and changing its
marketing mix through a focus on consumers, it has effectively managed to stay ahead of the
competition.

BIBLIOGRAPHY
1. Marketing Management “Philip Kotler” [PRENTICE HALL OF INDIA PVT,LTD NEW

DELHI-110001,2003.] 11th EDITION
2. Research Methodology “ C.R.Kothari”[NEW AGE INTERNATIONAL (P) LIMITED,
HYDERABAD] 2ND EDITION.
3. Marketing “Dr N. Rajan and sanjith.R.Nair”[SULTAN CHAND&SONS Daryaganj New
Delhi-110002,1987]6th EDITION.
4. Marketing Management S.A.Sherleker[PRENTICE HALL OF INDIA PVT,LTD NEW
DELHI-110001,2003.] 1stEDITION
5. Aldridge, A., Forcht, K. & Pierson, J. (1997). Get Linked or Get Lost: Marketing
Strategy for the Internet. Internet Research: Electronic Networking Applications and
Policy, 7(3), 161-169.
6. Andersen, J. C. & Narus J. A. (1999). Business Market Management, Understanding,
Creating and Delivering Value. New Jersey. Prentice Hall.
7. Boekema, J. J., Bueren Van, E. B, Lobstein, S., Oosterhuis, A. & Schweitzer, P. (1995).
Basisboek Marketing (Basic Book of Marketing), NL: Derde druk, Groningen, Wolters-
Noordhoff.
8. Borden, N. H. (1965). The concept of the marketing mix. In Schwartz, G. (Ed), Science
in marketing. New York: John Wiley & Sons, 386-397.
9. Brunner, G. C. (1989). The Marketing Mix: Time for Reconceptualization. Journal of
Marketing Education, 11, 72-77.
10. Cowell, D. W. (1984). The Marketing of Services, Institute of Marketing and the CAM
foundation. Heineman Professional Publishing.
11. Culliton, J.W. (1948). The Management of Marketing Costs. Division of Research,
Graduate School of Business Administration, Boston, MA: Harvard University.

BIBILOGRAPHY
BOOKS
 Philip Kotler (2001), Marketing Management.

 Research Methodology by Deepak Chawla, (2004).
 Advertising and promotion: an integrated marketing
communications perspective paperback – 18 Aug. 2009 by George
Belch (Author), Michael Belch (Author), Keyon Purina (Author)
 Rajeev Batra, John G. Myers and David A. Aaker (1996). Advertising
Management, 5th Edition, Pearson Education.
 Belch, G. E. & Belch, M. A. (2001). Advertising and Promotion, Tata
McGraw Hill
JOURNALS
o Ryans, Griffith, White in 2003 and Theodosius, Leonida, 2003

(Standardization and adaption of International Marketing Strategy)
o Samiee, Roth in 1992; Cavusgil, Zou in 1994; O’Donnell, Jeong, 2000;
Katsikeas, Samiee&Theodosiou, 2006, Solberg, Durrieu, 2008; Schilke,
Reimann, Thomas, 2009 (International Marketing Strategies)
o Jain, 1989 (Marketing Strategy)
o Katsikeas, Samiee&Theodosiou, 2006 (International Marketing Strategies)
o M. Berk Ataman, Harald J. Van Heerde, Carl F. Mela (2010) Journal of The
Long-Term Effect of Marketing Strategy

ANNEXURE
1. What comes first in your mind when you hear the word confectionery?
Chocolates
Fast food
Snacks
None of these
2. How should the company design, manufacture the product so that it enhances the
customer experience?
Better packaging
Quality guarantee
Looks
Others
3. Where should be the product be available and the role of distribution channels?
Urban areas
Every 2 Kms
Every 5 Kms
Near All residential areas

4. What should be the pricing strategy?
According to market price
A little less than market price
Discount depending on purchase
Others
What is the suitable strategy and channels for promotion of the product?
Depending on word of mouth
Print media
TV Ads
Others
6. How to converge the benefits of internal and external marketing?
Questionnaire to Customers
Your Name ___________________________________________________
1. What is your age ?
<20 years
20 – 35 years
35 – 50 years

Above 50 years
2. What is your profession ?
Student
Employee
Housewife
Others
3. What is your monthly Income ?
<10000
10000 – 20000
20000 – 40000
40000 – 50000
Above 50000
4. What is your gender ?
Male
Female
5. How did you get to know about our products and services?

Newspapers advertisements
Television commercials
Internet
Email
Telemarketing
6. How would you rate your experience of using our products?
Excellent
Good
Average
Bad
Terrible
7. What is the best thing that you like about our products?
Price
Packaging
Quality
Easy Availability

All of the Above
8. Have you already tried any other provider?
Yes
No
9. How would you say was your experience with other provider?
Good
Same as our company
Bad
10. What exactly do you expect from us when you decide to join hands with us?
_______________________________________________
11. Do you believe that this is the right place that is a confectionery solution for you? Why?
Yes
No
Not sure
12. Are there any specifications that you’d like us to take care of for you?

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MARKETING STRATEGY IN NESTLE INDIA LIMITED

Marketing is the process of communicating the value of a product or service

Recent approaches in marketing include relationship marketing with focus on the

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 1

marketing, "digital marketing", search engine marketing, or desktop advertising. It attempts to

It targets its audience more precisely, and is sometimes called personalized marketing or

A firm in the market economy survives by producing goods that persons are willing and

A formal approach to this customer-focused marketing is known as SIVA (Solution,

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 2

Marketing strategy is a long-term, forward-looking approach to planning with the

(1) Where are we now?

(2) Where are we going? and

Definitions of marketing strategy

Marketing Strategy is:

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 3

"An explicit guide to future behaviour.” (Henry Mintzberg, “ Crafting Strategy,” Harvard

Marketing management versus marketing strategy

The distinction between “strategic” and “managerial” marketing is used to distinguish

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 4

Strategic marketing planning: An overview

Strategic planning seeks to address three deceptively simple questions, specifically:

 Where are we now? (Situation analysis)

Strategic analysis: tools and techniques

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 5

Strategic planning focuses on the three 3C’s, namely:

Brief description of gap analysis

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 6

known as the strategic gap. Mintzberg identifies two types of strategy namely deliberate

Brief description of Category/Brand Development Index

BDI and CDI are calculated as follows:

BDI = (Brand Sales (%) in Market A/ Population (%) in Market A) X 100

CDI = (Category Sales (%) in Market/ Population (%) in Market A) X 100

Brief description of PEST analysis

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 7

Political: political interventions with the potential to disrupt or enhance trading

Technological: Innovation, technological developments or breakthroughs that create

Developing the generic competitive strategy

 Superior skills (e.g. coordination of individual specialists, created through the

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 8

 Superior resources (e.g. patents, trade-mark protection, specialized physical assets

Porter and the positioning school: approach to strategy formulation

In 1980, Michael Porter developed an approach to strategy formulation that proved to be

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 9

Resource-based view (RBV)

During the 1990s, the resource-based view (also known as the resource-advantage theory)

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 10

Market penetration involves selling existing products to existing consumers. This is a

Market development involves the selling of existing products to new customers in order

A horizontal integration strategy may be indicated in fast changing work environments as

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 11

Some competitive advantages could include; avoiding foreclosures, improving the

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 12

TITLE OF THE STUDY

“ A study on Marketing strategy at Nestle India Limited”

OBJECTIVES OF THE STUDY :

NEED FOR THE STUDY

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 13

TOOLS FOR DATA COLLECTION

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 14

Limitations of the study

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 15

As a consequence, studies of the Marketing Mix tended to concentrate attention on the

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 16