STUDENT DECLARATION

I, NISHANT GARG, student of MIT, Modinagar hereby declare that the Project work entitled Sales Promotion of Nestle Product is compiled and submitted to MTU, Noida . This is my original work. Whatever information furnished in this project report is true to the best of my knowledge.

NISHANT GARG Roll No. 1138070018 MBA III sem

CONTENTS
S. No. 1. Topics ACKNOWLEDGEMENT 3 2. 3. 4. 5. 6. AN INTODUCTION -TO FMCG INDUSTRY COMPANY PROFILE PRODUCT PROFILE OBJECTIVE OF RESEARCH RESEARCH METHODOLOGY 61 7. 8. SWOT ANALYSIS DATA ANALYSIS 73 9. 10. 11. 12. 13. RECOMMENDATIONS AND SUGGESTIONS LIMITATION CONCLUSION QUESTIONNAIRE BIBLIOGRAPHY 84 S8 90 92 99 69 4 23 53 59 Pg. No.

ACKNOWLEDGEMENT

I, NISHANT GARG, the student of MIT, Modinagar, was required to undergo a marketing research program. I am sincerely thankful to My institute and Mr. Amit Pandey (Head of Department) who provided me this opportunity. I am extremely grateful to all the Consumers who provided me with the relevant information and spared out time for me. I would like to thanks all other people, who directly or indirectly, were the part of my marketing research program.

With regards NISHANT GARG

AN INTODUCTION -TO FMCG INDUSTRY

The FMCG sector is a cornerstone of the Indian economy. This sector can drive growth, enhance quality of life, create jobs, and support penetration of technology. A vibrant FMCG sector can boost agricultural product and export. It contributed to the exchequer significantly, disperse technology across the value chain and usher in the product innovation. This innovation can improve Indian Health standards.

Fast Moving Consumer Good (FMCG) industry has a long history. However, the Indian FMCG began to take shape only during the last fifty-odd years Today, the Indian FMCG industry continues to suffer from a definitional dilemma. In fact, the industry is yet to crystallize in terms of definition and market, size, among others.

The definitional confusion that has marked the Indian FMCG industry is getting confounded. Some others call it the CPG industry and some even call it the PMCG industry. The Indian FMCG industry has suffered because of the confusion. It is an industry which touches every aspect of human life from looks to hygiene to palate. Perhaps defining as industry whose scope is so vast is not so easy.

The government is at crossroads not knowing how and where to slot the Indian FMCG industry and unsurprisingly, the manner in which it has treated an industry which holds tremendous promise as producer of goods that pervade everyday life has been only callous. The facts that the FMCG industry is a noteworthy employer and a major tax payer are being ignored.

The only thing that is cheering the industry are the reforms of the nineties. Post reforms, the industries is excited about a burgeoning rural population whose income are rising and which is a willing to spend on goods designed to improve lifestyle. What is needed now is a change in the mindset of the mandarins, FMCG industry -friendly legislation are the needs of the hour. It does not matter whether changes are being brought about by dawning market realities or the ongoing economic reforms. One thing is certain here: The Indian FMCG industry has a promising future to look forward to.

In terms of growth potential, the Indian market is a great horse to bet on. With a little help and understanding from the government, the Indian FMCG can realize its true potential.

So far, it has been a checked graph for the MNCs operating in the Indian FMCG industry. Domestic companies are only beginning to make their presence felt in the industry. It has taken tremendous consumer insight and market savings for the FMCG players to reach where they are today. But, the journey has only begun.

FMCG SECTOR
The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterised by a well established distribution network, intense competition between the organised and unorganized segments and low operational cost. Availability of key raw materials, cheaper labour costs and presence across the entire value chain gives India a competitive advantage.

The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration level as well as per capita consumption in most product categories like jams, toothpaste, skin care, hair wash etc in India is low indicating the untapped market potential. Burgeoning Indian population, particularly the middle class and the rural segments, presents an opportunity to makers of branded products to convert consumers to branded products.

Growth is also likely to come from consumer 'upgrading' in the matured product categories. With 200 million people expected to shift to processed and packaged by 2010, India needs around US$ 28 billion of investment in the -processing industry.

Automatic investment approval (including foreign technology agreements within specified norms), up to 100 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies (OCBs) investment, is allowed for most of the processing sector.

What are Fast Moving Consumer Goods (FMCG)? Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG). FMCG products are those that get replaced within a year. Examples of FMCG generally include a wide range of frequently purchased consumer products such as toiletries, oil, cosmetics, tooth cleaning products, shaving products and detergents, as well as other non-durables such as glassware, bulbs, batteries, paper products, and plastic goods. FMCG may also include pharmaceuticals, consumer electronics, packaged products, soft drinks, tissue paper, and chocolate bars.

A subset of FMCGs are Fast Moving Consumer Electronics which include innovative electronic products such as mobile phones, MP3 players, digital cameras, GPS Systems and Laptops. These are replaced more frequently than other electronic products. White goods in FMCG refer to household electronic items such as Refrigerators, T.Vs, Music Systems, etc.

In 2005, the Rs. 48,000-crore FMCG segment was one of the fast growing industries in India. According to the AC Nielsen India study, the industry grew 5.3% in value between 2004 and 2005.

FMCG industry, alternatively called as CPG (Consumer packaged goods) industry primarily deals with the production, distribution and marketing of consumer packaged goods. The Fast Moving Consumer Goods (FMCG) are those consumables which are normally consumed by the consumers at a regular interval. Some of the prime activities of FMCG industry are selling, marketing, financing, purchasing, etc. The industry also engaged in operations, supply chain, production and general management.

FMCG INDUSTRY ECONOMY

FMCG industry provides a wide range of consumables and accordingly the amount of money circulated against FMCG products is also very high. The competition among FMCG manufacturers is also growing and as a result of this, investment in FMCG industry is also increasing, specifically in India, where FMCG industry is regarded as the fourth largest sector with total market size of US$13.1 billion. FMCG Sector in India is estimated to grow 60% by 2010. FMCG industry is regarded as the largest sector in New Zealand which accounts for 5% of Gross Domestic Product (GDP). Common FMCG products Some common FMCG product categories include and dairy products, glassware, paper products, pharmaceuticals, consumer electronics, packaged products, plastic goods, printing and stationery, household products, photography, drinks etc. and some of the examples of FMCG products are coffee, tea, dry cells, greeting cards, gifts, detergents, tobacco and cigarettes, watches, oils etc. Market potentiality of FMCG industry Some of the merits of FMCG industry, which made this industry as a potential one are low operational cost, strong distribution networks, presence of renowned FMCG companies. Population growth is another factor which is responsible behind the success of this industry. Leading FMCG companies Some of the well known FMCG companies are Sara Lee, Nestl, Reckitt Benckiser, Unilever, Procter & Gamble, Coca-Cola, Carlsberg, Kleenex, General Mills, Pepsi and Mars etc.

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FMCG (fast moving consumer goods) is the fourth-largest sector in the Indian economy. It is estimated to be Rs 1,13,000 crore for 2007. The FMCG market has been exhibiting more than 10 per cent growth since 2005 and is expected to grow at a CAGR of 10-12 per cent over the next few years. The penetration of many product categories in the segment is still low, and thus, the growth potential of the FMCG industry looks promising. Toilet oil has the highest penetration at 91.5 per cent. Some of the key challenges for the sector include complicated tax structure and GST implementation, fragmented and weak agricultural supply chain, and bureaucratic regulatory processes.

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NUGGETS
Selections from management journals Many people believe that good ideas are rarer and more valuable than good people. Ed Catmull, president of Pixar and Disney Animation Studios, couldnt disagree more. That notion, he says, is rooted in a misguided view of creativity that exaggerates the importance of the initial idea in developing an original product. And it reflects a profound misunderstanding of how to manage the large risks inherent in producing breakthroughs. In filmmaking and many other kinds of complex product development, creativity involves a large number of people from different disciplines working effectively together to solve a great many inherently unforeseeable problems. The trick to fostering collective creativity, Catmull says, is threefold: place the creative authority for product development firmly in the hands of the project leaders (as opposed to corporate executives); build a culture and processes that encourage people to share their work-in-progress and support one another as peers; and dismantle the natural barriers that divide disciplines. Mindful of the rise and fall of so many tech companies, Catmull has also sought ways to continually challenge Pixars assumptions and search for the flaws that could destroy its culture. Clear values, constant communication, routine postmortems, and the regular injection of outsiders who will challenge the status quo are necessary but not enough to stay on the rails. Strong leadership is essential to make sure people dont pay lip service to those standards.

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While layoff decisions might be beyond your control, theres plenty you can do to make sure you retain your job. In this article, Janet Banks, a former HR executive at Chase Manhattan and FleetBoston Financial, and Diane Coutu, an HBR senior editor and former affiliate scholar at the Boston Psychoanalytic Society and Institute, describe how to improve your chances of survival. Its mostly a matter of coolheaded planning, they observe. When cuts loom, the first thing to do is act like a survivor. Be confident and cheerful. Research shows that congeniality trumps competence when push comes to shove. Look to the future by focusing on customers, for without them, no one will have work. Survivors also tend to be versatile; tight budgets demand managers who can wear several hats, so start demonstrating what other capabilities you can offer. If youre, say, a manager who once worked as a teacher, take on a training role. How can a company deliver continuous, exceptional growth, year after year? J C Larreche, a professor of marketing at INSEAD, answers that question in his book, The Momentum Effect: How to Ignite Exceptional Growth. According to the authors research, momentumpowered firms delivered 80 per cent more shareholder value than their slower rivals. Momentum leaders are not lucky they are smart, he writes in this excerpt. They have discovered the source of momentum and, with it, the beginnings of a smarter way to exceptional growth. Managers often talk about riding the wave. Momentum leaders arent that passive. They live by this motto: First build your wave, then ride it.

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INDUSTRY VIEW

FMCG SECTOR FMCG is an acronym for Fast Moving Consumer Goods, which refer to things that we buy from local supermarkets on daily basis, the things that have high turnover and are relatively cheaper like butter, potato chips, toothpastes, razors, household care products, packaged and beverages, etc. FMCG may also include pharmaceuticals, consumer electronics, packaged products and drinks, although these are often categorized separately.

FMCG Products and categories

Personal care, Oral care, Hair Care, skin Care, personal wash (Oils); Cosmetics and toiletries, deodorants, perfumes, Feminine Hygienes, Pencil Products; Household care fabric wash including laundry oils and synthetic detergents, household cleaners such as dish /utensils cleaners, floor cleaners, toilet cleaners, air fresheners, Insecticides, mosquito repellents, metal polish, and furniture polish;

and health beverages, branded flour, branded sugarcane, bakery product such as bread, biscuits etc. milk and dairy products, beverages such as tea, coffee, juices, bottled water etc, snack , chocolate etc.

Frequently replaced electronics products such as audio equipments, digital cameras, laptops, CTVs, other electronic items such as Refrigerator, washing machine etc. coming under the categories of white goods in FMCG.

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FMCG Sector Outlook The Fast Moving Consumer Goods (FMCG) Sector is the fourth largest sector in the Indian economy with a total market size of Rs.60,000 Crores. A well-established distribution network, intense competition between the organized and unorganized segments characterizes the sector. FMCG Sector is expected to grow by over 60% by 2010. That will translate into an annual growth of 10% over a 5-year period. It has been estimated by HSBC Report that FMCG sector will rise from around Rs.56,500crores in 2005 to Rs.92,100crores in 2010. Hair care, household care, male grooming, female hygiene, and the chocolates and confectionery categories are estimated to be the fastest growing segments.

FMCG Sector generates 5% of the total factory employment in the country and is creating employment for three million people, especially in small towns and rural India.

This industry essentially comprises Consumer Non Durable (CND) products and caters to the everyday need of the population. The business is characterized by two pillars Strong Brand Equity and a wide Distribution Network. Brand Equities are built over a period of time by technological innovations, consistent high qualities, aggressive advertisements and marketing. Another crucial success factor is the availability near the consumer through a wide distribution network as the products involved are of lesser value but bought as daily items.

Products belonging to the category of FMCG category have the following characteristics: They are used at least once a month.

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 They are used directly by the end-consumer. They are non durable. They are sold in packaged form.

Growth With the presence of 12.2% of the world population in the villages of India, the Indian rural FMCG market is something no one can overlook. Increased focus on farm sector will boost rural incomes, hence providing better growth prospects to the FMCG companies. Better infrastructure facilities will improve their supply chain. FMCG sector is also likely to benefit from growing demand in the market. Because of the low per capita consumption for almost all the products in the country, FMCG companies have immense possibilities for growth. And if the companies are able to change the mindset of the consumers, i.e. if they are able to take the consumers to branded products and offer new generation products, they would be able to generate higher growth in the near future. It is expected that the rural income will rise, boosting purchasing power in the countryside. However, the demand in urban areas would be the key growth driver over the long term. Also, increase in the urban population, along with increase in income levels and the availability of new categories, would help the urban areas maintain their position in terms of consumption. At present, urban India accounts for 66% of total FMCG consumption, with rural India accounting for the remaining 34%. However, rural India accounts for more than 40% consumption in major FMCG categories such as personal care, fabric care, and hot beverages. In urban areas, home and personal care category, including skin care, household care and feminine hygiene, will keep growing at relatively

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attractive rates. Within the s segment, it is estimated that processed s, bakery, and dairy are long-term growth categories in both rural and urban areas.

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Indian competitiveness and comparison with the world markets The following factors make India a competitive player in FMCG sector: Availability of raw material: Because of the diverse agro-climatic conditions in India, there is a large raw material base suitable for processing industries. India is the largest producer of livestock, milk, sugarcane, coconut, spices and cashew and is the second largest producer of rice, wheat and fruits &vegetables. India also produces caustic soda and soda ash, which are required for the production of oils and detergents. The availability of these raw materials gives India the location advantage. Labour cost comparison: Low cost labor gives India a competitive advantage. India's labor cost is amongst the lowest in the world, after China & Indonesia. Low labor costs give the advantage of low cost of production. Many MNCs have established their plants in India to outsource for domestic and export markets.

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 Presence across value chain: Indian companies have their presence across the value chain of FMCG sector, right from the supply of raw materials to packaged goods in the -processing sector. This brings India a more cost competitive advantage.

Large Domestic Market: Increasing disposable income has resulted in a rise in the domestic market size. Increasing income has translated into higher consumption levels.

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TOP TEN PLAYERS IN FMCG SECTOR S.No. 1. 2. 3. 4. 5. 6. 7. 8. 9 10. Companies Hindustan Unilever Ltd. ITC (Indian Tobacco Company) Nestle India Amul Dabur India Asian Paints (India) Cadbury India Britannia Industries Procter & Gamble Hygiene and Health Care Nestle Industries

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HISTORY
Nestl was founded in 1867 on the shores of Lake Geneva in Vevey, Switzerland and its first product was Farine Lacte Nestl, an infant cereal specially formulated by Henri Nestl to provide and improve infant nutrition. From its first historic merger with the Anglo-Swiss Condensed Nestle Company in 1905, Nestl has grown to become the worlds largest and most diversified food Company, and is about twice the size of its nearest competitor in the food and beverages sector. Nestls trademark of birds in a nest, derived from Henri Nestls personal coat of arms, evokes the values upon which he founded his Company. Namely, the values of security, maternity and affection, nature and nourishment, family and tradition. Today, it is not only the central element of Nestls corporate identity but serves to define the Companys products, responsibilities, business practices, ethics and goals. In 2004, Nestl had around 247,000 employees worldwide, operated 500 factories in approx. 100 countries and offered over 8,000 products to millions of consumers universally. The Companys transparent business practices, pioneering environment policy and respect for the fundamental values of different cultures have earned it an enviable place in the countries it operates in. Nestls activities contribute to and nurture the sustainable economic development of people, communities and nations. Above all, Nestl is dedicated to bringing the joy of Good Food, Good Life to people throughout their lives, throughout the world.

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COMPANY PROFILE
Nestls relationship with India dates back to 1912, when it began trading as The Nestl Anglo-Swiss Condensed Nestle Company (Export) Limited, importing and selling finished products in the Indian market. After Indias independence in 1947, the economic policies of the Indian Government emphazised the need for local production. Nestl responded to Indias aspirations by forming a company in India and set up its first factory in 1961 at Moga, Punjab, where the Government wanted Nestl to develop the Nestle economy. Progress in Moga required the introduction of Nestls Agricultural Services to educate, advise and help the farmer in a variety of aspects. From increasing the Nestle yield of their cows through improved dairy farming methods, to irrigation, scientific crop management practices and helping with the procurement of bank loans. Nestl set up Nestle 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 Nestle district today, but a thriving hub of industrial activity, as well. For more on Nestl Agricultural Services. Nestl has been a partner in India's growth for over nine decades 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.

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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 Nestl 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. Nestl India manufactures products of truly international quality under internationally famous brand names such as NESCAF, MAGGI, NESTLEYBAR, MILO, KIT KAT, BARONE, NESTLEMAID and NESTEA and in recent years the Company has also introduced products of daily consumption and use such as NESTL Nestle, NESTL SLIM Nestle, NESTL Fresh 'n' Natural Dahi and NESTL Jeera Raita. Nestl India is a responsible organization and facilitates initiatives that help to improve the quality of life in the communities where it operates. Beginning with its first investment in Moga in 1961, Nestls regular and substantial investments established that it was here to stay. In 1967, Nestl set up its next factory at Choladi (Tamil Nadu) as a pilot plant to process the tea grown in the area into soluble tea. The Nanjangud factory (Karnataka), became operational in 1989, the Samalkha factory (Haryana), in 1993 and in 1995 and 1997, Nestl commissioned two factories in Goa at Ponda and Bicholim respectively. Nestl India has commissioned in 2006 its 7th factory at Pant Nagar in Uttarakhand.

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PLANT LOCATIONS Nestle started its manufacturing operations with Milkmaid in 1962 at Moga factory. Manufacturing of Nescafe started in 1964 at the same factory. The company set up another factory at Cherambadi in Tamil Nadu, for manufacture of infant foods, coffee etc. For almost two decades there were no new additions of manufacturing facilities due to restrictive policy environment. The company set up its Nanjangad (Karnataka) factory in 1989 and the Samlakha (Haryana) factory in 1992. The Ponda (Goa) factory started operations in 1995. The Company set up its sixth manufacturing unit in 1997 at Bicholim in Goa BUSINESS PRINCIPLES Since Henri Nestl developed the first milk food for infants in 1867, and saved the life of a neighbors child, the Nestl Company has aimed to build a business based on sound human values and principles.

While our Nestl Corporate Business Principles will continue to evolve and adapt to a changing world, our basic foundation is unchanged from the time of the origins of the Company, and reflects the basic ideas of fairness, honesty, and a general concern for people.

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People first Employees, people and products are more important at Nestl than systems. Systems and methods, while necessary and valuable in running a complex organization, should remain managerial and operational aids but should not become ends in themselves. It is a question of priorities. A strong orientation toward human beings, employees and executives is a decisive, if not the decisive, component of long-term success. Quality products Our focus is on products. The ultimate justification for a company is its ability to offer products that are appealing because of their quality, convenience, variety and price -products that can stand their ground even in the face of fierce competition.

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Long-term view Nestl makes clear a distinction between strategy and tactics. It gives priority to the longrange view. Long-term thinking defuses many of the conflicts and contentions among groups -- this applies to employment conditions and relations with employees as well as to the conflicts and opposing interests of the trade and the industry. Of course, our ability to focus on long-term considerations is only possible if the company is successful in the struggle for short-term survival. This is why Nestl strives to maintain a satisfactory level of profits every year. Decentralization Switzerland is home to Nestl's Swiss subsidiary, its international headquarters and the registered office of Nestl's holding company, but Nestl does not regard its Swiss headquarters as the center of the universe. Decentralization is a basic principle of Nestl. Our policy is to adapt as much as possible to regional circumstances, mentalities and situations. By decentralizing operational responsibility, we create strength and flexibility and are able to make decisions that are better attuned to specific situations in a given country. Policies and decisions concerning personnel, marketing and products are largely determined locally. This policy creates stronger motivation for Nestl's executives and employees and a greater sense of identification with Nestl's business. It is not Nestl's policy to generate most of its sales in Switzerland, supplemented by a few satellite subsidiaries abroad. Nestl strives to be an "insider" in every country in which it operates, not an "outsider." Uniformity A very important concern at Nestl has to do with uniformity: how consistent Nestl's principles, policies, rules of conduct and strategies should be, and to what extent they should
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differ depending on the country, subsidiary, region, branch or group of products. In general, Nestl tries to limit the uniformity of its policy to a requisite minimum. This minimum is then systematically enforced, unless there are compelling reasons in a given market that justify deviation from policy. Diversification Nestl does not want to become either a conglomerate or a portfolio manager. Nestl wants to operate only those businesses about which it has some special knowledge and expertise. Nestl is a global company, not a conglomerate hodgepodge. We regard acquisitions and efforts at diversification as logical ways to supplement our business, but only in the context of a carefully considered corporate marketing policy. Nestl is committed to the following Business Principles in all countries, taking into account local legislation, cultural and religious practices:

Nestl's business objective is to manufacture and market the Company's products in such a way as to create value that can be sustained over the long term for shareholders, employees, consumers, and business partners.

Nestl does not favor short-term profit at the expense of successful long-term business development.

Nestl recognizes that its consumers have a sincere and legitimate interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust and that without its consumers the Company would not exist.

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Nestl believes that, as a general rule, legislation is the most effective safeguard of responsible conduct, although in certain areas, additional guidance to staff in the form of voluntary business principles is beneficial in order to ensure that the highest standards are met throughout the organization.

Nestl is conscious of the fact that the success of a corporation is a reflection of the professionalism, conduct and the responsible attitude of its management and employees. Therefore recruitment of the right people and ongoing training and development are crucial.

Nestl continues to maintain its commitment to follow and respect all applicable local laws in each of its

Research and development The Nestl research and development centers have two main tasks: to create new products and manufacturing processes and to improve those that already exist. These centers play a key role in product safety and quality and also have their role in conserving resources and protecting the environment. Environmental concerns are an integral part of any development process to ensure that our future commercial operations meet the desired criteria. The Nestl Research Center provides the scientific support needed to prevent and solve environmental problems arising in the development groups as well as manufacturing. In addition, studies are carried out to find new ways of using industrial residues to create valueadded byproducts. This will reduce total emissions and effluents. The Nestl development centers prepare environmental impact studies for new products and manufacturing processes. These cover all aspects, from raw materials, through processing, to
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the final packed product. These analyses provide additional elements for use in deciding whether to commercialize a new product, or to introduce a new or modified process. Foresight At present, the world faces daunting questions about its ability to provide enough wholesome food for everyone. Malnutrition and poor eating habits are still serious problems in many developing countries. By 2100, the world's population will double. Will it be possible to feed a world with so many inhabitants? At Nestl, the big picture is all about feeding the world and providing food and nutrition for an ever-growing population. Our response to this situation is to intensify research, strive for innovations and improve quality. Flexibility and simplicity The public's sense of the power and size of a corporation is often inaccurate, for a company's power is limited by a host of factors including legislation, competition, regulatory bodies and publicity. From a business point of view, it is desirable for a firm to achieve the size best suited to a specific industry or mode of production. To be competitive internationally and make significant investments in research and technology, a larger company has an advantage. From a strictly organizational point of view, flexible, simple structures work best and excessively large units should be avoided whenever possible. In both respects Nestl has a natural advantage: Although it is a big company, it is spread out over many countries and each of Nestl's factories has its own management and responsibility.

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Handling of raw materials The Nestl Group is in principle not directly involved in primary production of raw materials and other food ingredients. In general we use locally available raw materials and purchase them either directly from producers or through existing trade channels. Raw materials have to meet clearly established quality criteria and are checked for possible contaminants including environmental contaminants. Our purchasing specifications comply not only with legal requirements but go further to ensure highest safety and wholesomeness of our products. Whenever possible we give preference to those goods for which environmental aspects have been taken into consideration. In those cases where the required agricultural raw materials are not available locally, but the natural production conditions exist, we encourage local production and provide assistance for cultivation and dairy farm management. We support plant growing and livestock husbandry methods which:

preserve and improve natural soil productivity and economize and protect water resources

allow the lowest, most appropriate and safe use of agro-chemicals use the least energy.

Packaging Manufacturing comprises all unit operations necessary to transform perishable raw materials into finished products, with the aim to make them safe and convenient for the consumers. The manufacturing activities of the Nestl Group:

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respect natural resources by efficient use of raw materials and energy minimize waste generation and emissions ensure environmentally safe disposal of all waste which cannot be recycled.

Regular assessments of processing practices are carried out. These assessments include:

evaluation of individual plant performance with regard to operations which have an impact on the environment

definition of targets for improvement review of plant compliance with local government regulations, company environmental standards, as well as results achieved in comparison with targets for improvement

full investigation of incidents which may affect the environment.

Information on developments in environmental protection technology and practices is disseminated as required to ensure that all plants are using the most effective environmental practices for their type of processing. This applies also for co packers. Marketing and distribution Marketing is based on the principle of satisfying consumer needs. This is the foundation also for the environmental marketing approach of Nestl. Environmental product claims in advertising, promotional material and on packaging are in accordance with legal requirements, based on solid scientific evidence and used in a serious and reasonable manner.

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Our aim is to minimize wastage in communication, publicity and promotional material, in particular through more precise targeting of marketing activities. Consumer promotions and merchandising material such as consumer offers, instore promotions, display material, leaflets, printed matter, etc. take environmental aspects into account. This means due consideration of environmental impact in selecting both materials and printing methods. In distribution, energy efficient and pollution controlled methods are encouraged wherever possible. Information, communication and education Nestl's policy is designed to provide correct and coherent information on the activities of the Group. Activities related to the environment benefit from the same treatment and their communication is secured through all currently available means inside and outside the Group. It is furthermore Nestl's duty to create awareness, to train and motivate employees on their personal responsibility with regard to the protection of the environment. Legislation and regulations It is the policy of the Nestl Group to strictly comply with all laws and regulations relevant to our activities. We participate in discussions on food legislation and regulations between

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international organizations, government representatives, industry, the scientific world and consumer associations. We also apply this policy to environment related matters. In doing so, we cooperate with legislators through local industry associations in order to promote laws and regulations in the field of environment which are reasonable, rational, realistic, applicable and enforceable. We oppose unjustified bans and any other discriminatory measures. We favor the harmonization of food regulations in order to remove existing trade barriers and to avoid the creation of new ones. This applies also to environmental issues. We favor the exchange of information, of experience and of knowledge between the various interested parties. Thanks to all these synergies, we can contribute to valuable discussions and be recognized as an active partner in helping authorities to formulate comprehensive strategies in the field of the environment. THE NESTL POLICY ON THE ENVIRONMENT Nestl respects the environment and is committed to environmentally sound business practices throughout the world, thus taking into account the need to preserve natural resources and save energy. This commitment is put into practice by considering local legal requirements as a minimum standard. If these do not exist, our internal rules, adjusted to local conditions, apply. Research and Development and new investments include an evaluation to ensure environmentally appropriate products, packaging and processes.

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Management and personnel within the Nestl organization worldwide are encouraged to help resolve environmental problems within their own sphere of influence.

NESTLES BRANDS Quality and nutritional value are the essential ingredients in all of the nestles brands. Millions of people prefer Nestl products every day, happy with the addition to their wellness that they bring. If you are looking for a specific brand our product, just use the alphabetical index below to jump straight to a listing. Or you can explore by category.

Baby Foods The production of infant food goes right back to the origins of the Nestl Company. Henri Nestl's 'Farine Lacte' was the first product to bear the Nestl name.

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In 1867 a physician persuaded Henri Nestl to give his product to an infant who was very ill he had been born prematurely and was refusing his mother's milk and all other types of nourishment. Nestl's new food worked, and the boy survived. From the very beginning, Nestl's product was never intended as a competitor for mother's milk. In 1869, he wrote: "During the first months, the mother's milk will always be the most natural nutrient, and every mother able to do so should herself suckle her children." The factors that made baby foods success in the early days of the Nestl company quality and superior nutritional value are still as valid today for the wide range of infant formula, cereals and baby food made by Nestl. The World Health Organization (WHO) recognizes that there is a legitimate market for infant formula, when a mother cannot or chooses not to breast feed her child. Nestl markets infant formula according to the principles and aims of the WHO International Code of Marketing Breast Milk Substitutes, and seeks dialogue and cooperation with the international health community and in particular with the WHO and UNICEF, to identify problems and their solution. Nestl's expertise as the world's leading infant food manufacturer, gained over more than 125 years, is put at the disposal of health authorities, the medical profession and mothers and children everywhere.

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Chocolate & Confectionery The story of chocolate began in the New World with the Mayans, who drank a dark brew called cacahuaquchtl. Later, the Aztecs consumed chacahoua and used the cocoa bean for currency. In 1523, they offered cocoa beans to Cortez, who introduced chocolate to the Old World, where it swiftly became a favorite food among the rich and noble of Europe. Nestle forayed into chocolates & confectionery in 1990 and has cornered a fourth share of the chocolate market in the country.. It has expanded its products range to all segments of the market The Kitkat brand is the largest selling chocolate brand in the world. Other brands include Milky Bar, Marbles, Crunch, Nestle Rich Dark, Bar-One, Munch etc. The sugar confectionery portfolio consists of Polo, Soothers, Frootos and Milkybar Eclairs. All sugar confectionery products are sold under the umbrella brand Allen's. Nestle has also markets some of its imported brands like Quality Street, Lions and After Eight. New launches such as Nestle Choco Stick and Milky Bar Choo at attractive price points to woo new consumers. Chocolate confectionery sales registered a strong 21.5% yoy growth in 2001 aided by good volume growth in Munch, Kitkat and Classic sales. Nestle relaunched Bar-One during the year.

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From the beginning, turning raw, bitter cocoa beans into what one 17th century writer called "the only true food of the gods" has been a fine art, a delicate mixture of alchemy and science. Ice Cream There are many myths and stories as to the invention of ice cream: was it Marco Polo who brought it back from China (along with pasta)? Probably not, considering he most likely never visited China. The story of its popularity is however connected with the invention of technology to make it on an industrial scale, and to keep it cold once made. Before refrigeration techniques, food was frozen with the aid of ice, mixed with salt, which was either stored in ice houses or shipped from cold countries. But then at the end of the 19th century, both making and freezing it became easier, and together with the invention of the ice cream cone, made the product boom. Today, the United States is the absolute leader in terms of volume consumed, but the highest per head consumers are in New Zealand. Flavors you'd never have thought of and yet they're commercially available:

Sorbets - Smoked Salmon, Tomato, Cucumber Ice Creams - Garlic, Avocado, Sweet corn.

39

The ice cream cone is the most environmentally friendly form of packaging. A Syrian from Damascus, Ernest E Hamwi is credited with its invention. Apparently, during the 1904 St Louis World's Fair, his waffle booth was next to an ice cream vendor who ran short of dishes. Hamwi rolled a waffle to contain ice cream and the cone was born. Prepared Foods Convenience foods packaged soups, frozen meals, prepared sauces and flavorings date back more than a century. With the Industrial Revolution came factory jobs for women and less time to prepare meals. The problem was so widespread that it became the object of intense study in 1882 by the Swiss Public Welfare Society, which offered a series of recommendations, including an increase in the consumption of vegetables. The Society commissioned Julius Maggi, a miller with a reputation as an inventive and capable businessman, to create a vegetable food product that would be quick to prepare and easy to digest. The results two instant pea soups and an instant bean soup helped launch one of the best known brands in the history of the food industry. By the turn of the

40

century, Maggi & Company was producing not only powdered soups, but bouillon cubes, sauces and flavorings.

.Maggi merged with Nestl in 1947. Buitoni, the authentic Italian brand, which has been producing pasta and sauces in Italy since 1827, became part of the Nestl Group in 1988. Beverages Beverages like coffee, tea and health drinks contribute to about 30% of Nestles turnover. Beverage sales registered a 15% yoy growth during 2001. While about 14% of sales come from domestic market, exports contribute to about 16% of sales.

Nestle's Nescafe dominates the premium instant coffee segment. Nestles other coffee brand Sunrise has also been relaunched under the Nescafe franchise to leverage on the existing equity of the brand. Nestle has focused on expanding the domestic market through price cuts and product repositioning. However it has been losing share in the domestic market, where it

41

has a 37% market share. Milo, a brown-malted beverage was launched in 1996. It has an estimated volume share of about 3% in the malted food drink segment. Nestle has launched non-carbonated cold beverages such as Nestea Iced Tea and Nescafe Frappe during 2001. Nestle is one of the largest coffee exporter in the country. Key export market is Russia, besides Hungary, Poland and Taiwan. Nestle has received an award for highest export of instant coffee and highest export of coffee to Russia and CIS for FY00 and FY01. Turnover contribution from exports registered a 17.5% volume growth in F12/01. Nescafe sales to Russia accounts for 80% (Rs2.5bn) of Nestls Rs3bn export turnover. QUALITY Everyday, millions of people all over the world show their confidence in us by choosing Nestl products. This confidence is based on our quality image and a reputation for high standards that has been built up over many years. Quality is the cornerstone of our success Every product on the shelf, every service and every customer contact helps to shape this image. A Nestl brand name on a product is a promise to the customer that it is safe to consume, that it complies with all regulations and that it meets high standards of quality. Customers expect us to keep this promise every time. Under no circumstances will we compromise on the safety of a product and every effort must be made to avoid hazards to health. Likewise, compliance with all relevant laws and regulations is a must and is not negotiable. People, equipment and instruments are made available to ensure safety and conformity of Nestl products at all times. The effort is worth it. Companies with huge quality standards make fewer mistakes, waste less time and money

42

and are more productive. They also make higher profits. Quality is their most successful product. It is the key to their success, today and tomorrow. The customer comes first Nestle want to win and keep customers: distributors, supermarkets, hotels, shopkeepers and the final consumers. They have very different requirements. Trade customers expect excellent service, correct information and timely delivery. Consumers consider taste, appearance and price when they make their choice. Its task is to understand what customers want and respond to their expectations rapidly and effectively. We serve various groups of consumers and there is demand for products at different levels of perceived quality and price. All customers, however, expect value for their money good quality at a reasonable price.

When offering quality to customers we also mean environmental quality. Nestl shares societys concern for the environment and is committed to environmentally sound business practices throughout the world. Customers are central to their business and they always respect their needs and preferences.

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Competition Baby food and Instant coffee are categories where brand loyalties are very strong and Nestle is the market leader. HLL is a significant competitor to Nestle in instant coffee; while Heinz is the main competitor in the baby foods market. The market for culinary products, semiprocessed foods such as noodles, ready mixes for Indian ethnic breakfast and sweets, is largely an urban market. HLL and Indo Nissin Foods are the main competitors in these product segments. Nestle has also achieved a significant 25% share in the chocolate/confectionery market. The company has recently expanded its dairy products portfolio to include, milk, curd and butter. The company also forayed into the bottled water segment with the launch of its Perrier brand in the premium mineral segment and Pure Life in the purified water segment. Quality is a competitive advantage We live in a competitive world and must never forget that their customers have a choice. If they are not satisfied with a Nestl product, they will switch to another brand. Their goal, therefore, is to provide superior value in every product category and market sector in which we compete. The pursuit of highest quality at any price is no guarantee for success, nor is a single-minded cost-cutting approach. Lasting competitive advantage is gained from a balanced search for optimal value to customers, by simultaneous improvement of quality and reduction cost. Success can never be taken for granted. We must watch and learn from our competitors. If they do something better, we must improve our own performance. We can achieve competitive advantage through Quality.

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Quality is a joint effort Operating companies are fully responsible for maintaining agreed quality standards. Not only Production units, but also Marketing, Purchasing, Distribution and Sales have a vital role to play in providing quality to customers. This implies a thorough knowledge of the products and services we offer. Quality units at different levels of the organization provide specific support, promote quality awareness, assume guardianship and audit the system. Quality departments monitor operations against agreed standards and must intervene in case of non-conformity. Quality policy and principles, the mandatory standards and the recommended tools for implementation are laid down in the Nestl Quality System which is applicable throughout the group. Further directions are given through instructions, norms and guidelines, often specific to a product. Our business products, such as raw material producers, packaging suppliers, contract manufacturers and distributors are expected to share our concern for Quality. They too must set up an adequate quality system, so as to meet our requirements consistently. The quality efforts must be shared by every function and department in the company as well as our business partners. Quality is made by people Adequate equipment, procedures and systems are needed to make Quality; so are involved and dedicated people. Each and every Nestl employee must do his best to provide quality products and services. Training and teamwork are crucial to the successful implementation of high quality standards. Continuous training ensures that everyone understands his tasks and

45

has the necessary skills to carry them out. Teamwork allows us to achieve results that are greater than the sum of individual efforts. We motivate employees by demonstrating management commitment to Quality, by setting challenging goals and by giving them responsibility and recognition. It is through employee involvement that goals and targets can be achieved in the shortest time. Quality must be a way of life for everyone in the company. Quality is action Quality is the result of deliberate action. It is the responsibility of senior managers to communicate the quality objectives and to provide the resources necessary for their implementation. It is then up to all employees to make Quality happen throughout the company. Progress is followed by listening to our customers and by measuring our performance. Shortcomings and mistakes must be analyzed and corrected. Problems must be anticipated and prevented before they occur. We also must identify and take advantage of opportunities.To stand still is to fall behind. So we must strive for continuous improvement in every area. It is through many small improvements as well as through major breakthroughs that we will achieve excellence. At Nestl, Quality is our first priority. Let us practice it every day. Consumer Services At Nestl, we are committed to offering consumers high-quality food products that are safe, tasty and affordable. The Nestl Seal of Guarantee is a symbol of this commitment.

We also believe in maintaining regular contact with our consumers. This applies both to how we present our products and to how we address our consumers' questions and concerns. When Henri Nestl prepared his first boxes of infant formula for sale, he put his address on

46

the packages so people would know where to go if they had questions. Today, our Consumer Relationship Panel with the words "Talk to Nestl" expresses the same commitment.

This is why we have a worldwide Nestl Consumer Services network devoted to caring for our consumers. Our people have expertise in a wide range of areas such as nutrition, food science, food safety and culinary expertise. They provide the prompt, efficient and high quality service that consumers expect from Nestl. In addition, we teach them talk with consumers and above all, to listen. Listening helps us to understand what people want. Nestl uses the insights gained from relationships with consumers to drive product development. At Nestl, we care for our consumers because our success depends on meeting their needs and expectations. Through listening and understanding, we can make products that they will want to use all through their lives.

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FUTURE PROSPECTS Nestle is focused on product expansion and improvement of distribution efficiency. The Dairy business is being expanded and is expected to drive growth in the long run, although short-term profitability may be impacted in the investment stage. The companys entry into the mineral water segment is a concern, as the segment is already overcrowded and the company faces stiff competition especially from the Cola manufacturers. Acquisition of an established brand could catapult Nestls position in the segment. In categories like beverages, culinary products and chocolate confectionery, the company is looking at driving growth through launch of smaller SKUs, thus enabling affordability to a wide section of the population.

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DISTRIBUTION PROCESS

Product flow

Factory

C&F Agent

Distributor

Retailers

Consumers

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DISTRIBUTION PROCESS
There is a distributor for every Nestle in the sub city, his job is to ensure the distribution of Nestle to each and every area and outlet in the sub city.

This distributor works as a representative of the company for the retailers. Further this distributor ensures the supply of Nestle to the customers with the help of retailers. Sometime distributor delivers the product directly to the customer.

So there are two main players in the distribution process: 1. Distributor 2. Retailers

The company delivers the product to the distributor with the help of C&F agent, and the distributor further distributes the product to the customers with the help of retailers. For this distribution distributor forms a team of sales agents. These sales agents go to every market in the sub city and check for the demand and supply of Nestle for the retailers. These sales agents work as a link between the retailers and the distributor. Supervisors are appointed to check the working of these sales agents. The supervisor is responsible for the working of his sales agents.

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TRADE SCHEMES

The company gives schemes to the distributor when the quantity is large. The sole purpose of scheme is to encourage the purchase. These schemes may be in the form of discount or in the form of gifts. Other types of schemes are launched for the retailers to encourage the purchase of Nestle. These schemes may be issued by the company or by the distributor also. Retailers normally prefer the reduction in the net rate of the Nestle as a scheme. They like scheme on which Nestle is free on the purchase of Nestle rather than anything else is free on the purchase of Nestle. This creates problem for the retailers, e.g. suppose on the purchase of one crate of Nestle company was giving two pouch of curd free. Now this will create inventory problem for the retailers. First he has to store curds in the store. Secondly sometime retailer demands the free gift by purchasing only half crate of Nestle and says that he will purchase the rest half crate next day and then the scheme will be satisfied. The biggest problem in such type of schemes is that customer demands for the reduction in the net rate rather than anything else. So the retailers always prefer the reduction in the net price rather than the scheme or they prefer the scheme in which Nestle is free on Nestle. So that the net effect of the scheme is the reduction in price.

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PRODUCT PROFILE

Nestl proudly adds yet another exciting innovation by launching - POLO XTRA STRONG.

POLO XTRA STRONG with added menthol crystals provides that real longer lasting freshness that many consumers now seek. It comes in a pocket friendly singles format priced at 50p. It has clutter breaking & innovative black packaging.

The product is certain to evoke reactions like: Ghanti to Bajegi New POLO XTRA STRONG - a HOLE lot stronger.

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is a luscious nougat and caramel with delicious chocolayer. NESTL BAR-ONE constantly reminds you that it is Time for Action'.

Bar One - the great combination of luscious nougat, caramel and delicious chocolayer is now available in a small pack as well

To begin with, this pack will be available to consumers in North and South only.

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Are crisp wafer fingers covered with chocolayer. NESTL KITKAT has a unique finger format with a breaking' ritual attached to it. NESTL KITKAT is one of the most successful brands in the world and every year over 12 billion NESTL NESTL KITKAT fingers are consumed around the globe. The second largest wafer brand in the chocolate and wafers category has launched the smallest KITKAT in the world KITKAT MINI. It will help new consumers enjoy the NESTL KITKAT break by making it more accessible. This pack will currently be available to consumers in the East and West. Have a Break, Have a KITKAT MINI

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MUNCH is wafer covered with delicious chocolayer and is the largest distributed brand in its category. The new MUNCH campaign highlights the great crunchy taste that has made MUNCH so popular. To know more view the new ad here. Mera MUNCH mahan!

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Is a creamy Dairy Whitener which is specially made to add a rich, smooth taste to your tea. Every time, every day. NESTL EVERYDAY Dairy Whitener was launched in India in 1986 and this innovative product created a separate category of Dairy Whiteners in India

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Nestl has over 135 years of dairy expertise and NESTL Nestle ensures high quality and safety. NESTL Nestle goes through Ultra Heat Treatment to provide bacteria-free Nestle to its consumers. The product also goes through stringent quality checks and can be consumed straight from the pack as no boiling is required. The sealed pack of NESTL Nestle has a shelf life of 120 days without refrigeration. However, once opened, it must be refrigerated. The packaging is tamper-evident.

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MARKETING RESEARCH

The American marketing association defines marketing research as follows: Marketing Research is the functional links to the customers, consumers & public to marketing through information. Information used to identify and define marketing opportunities and problems; generate, define and evaluate marketing actions; monitor marketing performance and improve understanding of marketing process. Marketing Research specifies the information requires addressing these issues, designing the method for collecting information, managing and implementing the data collecting process, analyzing the result and communicating the findings and their implementations.

60

OBJECTIVE OF RESEARCH

Establish a suitable channel for distribution between the distributor and consumers by eliminating the retailers from the distributor channel with the aim to promote nestle products and to give better facilities and services to the consumers of Dwarka sub city.

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RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. It may be understood as a science of studies how research is done scientifically. Research methodology has many dimensions. The purpose of methodology is to describe the process involved in the research work. This includes the overall research design, the data collection process, the sampling process, the field survey, and analysis procedure.

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RESEARCH DESIGN Research Design consists of three parts: 1. Exploratory Research 2. Descriptive Research 3. Causal Research An exploratory research focuses on the discovery of idea and is generally based on secondary data. It is preliminary investigation that does not have a rigid design. This is because a researcher engaged in an exploratory study that may have to change his focus as a result of new ideas and relationship among the variables. A descriptive study is undertaken when the researcher wants to know the characteristics of certain group such as age, sex, educational level, income, and occupation etc. A casual research is undertaken when the researcher is interested in knowing the cause and effect relationship between two or more variables. Such studies are based on reasoning along well-tested lines.

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DATA SOURCE

Data is generally of two types: 1. Primary data 2. Secondary data Primary Data are those data specially collected for problem in hand. In this study data were collected from primary sources in personal interview of retailers and interaction with consumers by survey method. These methods of data collection are quite popular. These are the major methods of data collection in the research study. Secondary Data are those data, which are collected for some purpose other than helping and solving the problem in hand. Sources of secondary data are: Old reports Company records Magazines Company web site (http://www.Nestle.com)

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Sample Procedure: How should the respondents be chosen? To get the most feasible and accurate result, simple random probability sampling method was adopted for direct interview of retailers and cluster sampling was used to communicate the consumers from different apartments of different sectors for the survey. In simple random probability sampling, probability of being chosen as a sample unit for each unit in the population is equal. Each sample unit from the population is chosen randomly. Probability of being chosen as a sample unit depends upon the population size and no. of sample units to be chosen. While in cluster (area) sampling the population is divided into mutually exclusive groups (such as city blocks, sectors etc.), and the researcher draws a sample of the groups using random sampling. Sometimes researcher again draws sample units of respondents from the selected groups, it is known as two step area sampling.

Sample Size: Distributors Retailers Consumers 1 25 1244

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Field Work:

During the survey sample packs of Nestle Nestle and curd have been distributed among the selected consumers, and their feedbacks have been taken regarding those samples. I have covered the following societies for the survey and promotion of Nestle Nestle : Harmony Apartment Shah Jahanabad Apartment Himachal Apartment Green Heaven Apartment United Apartment Shri Krishna Apartment Kalyani Apartment Brindawan Garden Apartment Anant Apartment Naveen Apartment Katyayani Apartment Vidyut Apartment

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RESEARCH APPROACH

Primary data can be collected in various ways: through observation, focused group, surveys, behavioral data, and experiments. During this research data have been collected using survey method. Survey method is best suited for descriptive research. Companies undertake surveys to learn about peoples knowledge, beliefs, preferences, and satisfaction, and to measure these magnitudes in the general population.

Research Instrument: Questionnaire is most common research instrument in collecting primary data during marketing research. A questionnaire consists of a set of questions presented to respondents. Because of its flexibility, the questionnaire is by far the most common instrument used to collect primary data.

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SWOT ANALYSIS

STRENGTHS: Nestle is the oldest Nestle Marketing Federation in India. It has a large network of villages from where it collects Nestle. Nestle is a reputed and well known company in India, its products are easily recognized by the customers. Nestle has evolved from a single product company to Multi-product Corporation. Its products range is spread over a wide spectrum, from Nestle and curd to ice cream and chocolate. Customers will at least think of using the product once and check its quality, as it is the product of Nestle. Nestle has the oldest ad campaign in the country.

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WEAKNESSES: Nestle perceived old traditions. It is good in quality but not better than Priya gold. Advertisement is not frequent. Priya gold has the advantage of being the market leader of packaged Nestle in the market. Price is competitive as compared to other brands in the market, but margin to the distributor is less than that of other brands. Nestle Nestle has been launched just one and half year back in Meerut, so awareness among the people is low about the Nestle Nestle. It lacks in aggressive marketing approach, which is helping competitors.

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OPPORTUNITIES: There is a huge opportunity in Nestle market. Priya gold is available since last so many years in the market, and it has dominated this industry, so people need change. If Nestle provide a better taste and quality then it can swap most of the customers of Priya gold with least effort. Customers always believe that there is a chance of improvement. Nestle is basic necessity for daily use; everyone needs it daily for one or other reason. Average consumption of Nestle house. In Meerut about 72% of total Nestle market is packaged Nestle market and rest is of loose Nestle. So there remains a big area to be covered.

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THREATS: There is a very tough competition with other brands. Better image of competitor in particular segment. Priya gold is dominating Nestle in the market, quality wise and price wise. Market is too price sensitive. People are using Priya gold and other brands since so many years, so it is difficult for them to suddenly change the brand and taste that has already been developed. So it is really difficult to convince them.

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Total Nestle Consumption (per day)

21% 6% 9% 64%

Nestle

Priya gold

Britannia

Other

Nestle has dominated Nestle industry in Meerut. Around 65% of total Nestle market in meerut has been captured by Nestle. Other brands include Britannia and Priya gold etc.

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Total Nestle

8%

92%
Nestle & Priya gold Others

Only 8% of total packaged Nestle market is of local brands.

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Nestle Market in Terms of Volume (Before Promotion)

11%

8%

81%
Nestle Priya gold Others

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Nestle Market in Terms of Volume (After Promotion)

Total Packaged Milk (Volume)

8% 26%

66%

Nestle

Priya gold

Others

After promotion, sale of Nestle in Dwarka sub city has been increased by 143% (i.e. from 2400 Ltrs. to 5832 Ltrs. Per day). Most of the customers, who have switched to Nestle, were the customers of Priya gold.

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Availability of Nestle on Retail Shops

30%

50%

20%
Priya gold Others

Nestle

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Does Packing Play any Role in Promoting Sales

Does Packing Play any Role in Promoting Sales

24%

76%

Yes

No

Quality and Taste are basic factors, which affect sales.

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Selling Price of Nestle At M.R.P. More than M.R.P. Less than M.R.P. 12% 4% 84%

Selling Price of Milk

12%

4%

84%
At M.R.P. More than M.R.P. Less than M.R.P.

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Improvement Possible with the Distributor (Preference)

1.

Credit Period

2.

Replacement

3.

Collection of Payment

4.

Others

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Customer Purchase Nestle Because of

Price

30%

Quality

50%

Packing

2%

Scheme

15%

Others

3%

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RECOMMENDATIONS AND SUGGESTIONS

This industry is most competitive industry. There are large numbers of competitors in this field. In such condition a small loop may create a big problem. The condition is made more though by Priya gold, which is dominating in this industry, so only a detained study and full fledged effort can help in good sales to capture the market. Three things are necessary to improve the sales in the sub city: 1. Advertisement 2. Quality of Nestle 3. Margin provided to the retailer and distributor

Advertisement is the most important step to improve sales. People are not loyal to any brand; they purchase Nestle, which had an image in their minds. Before leaving their home they already know for which Nestle they will ask the shopkeeper. And this image comes from advertisement. In city distributing small pamphlets along with newspaper or fixing posters or hoardings can do advertisement.

Of course quality of Nestle is another issue, which can improve sales. In long run if we want to succeed then we have to create a value for our Nestle in the mind of the customers and that can be done by quality. The first priority must be to ensure that the Nestle lack in taste by Priya gold as it is the main competitor.

These two above mentioned factors are tough to implement. The easiest step to improve the sales in the market is the margin provided to the retailers. The reason for this is

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simple Priya gold is best Nestle in the market and retailers do not want to sale it. They are forced to sale it because customer demand for it. The reason why retailers do not prefer to sale Priya gold is its margin. Retailers always try to sale Nestle other than Priya gold because they provide good margin to them. The Nestles, which are best in margin, are Paras and Gopalji. Therefore retailers always try to sale Paras and Gopalji instead of Priya gold and Nestle. Now if Nestle can provide good margin to the retailers then they will try to sale Nestle instead of Priya gold. And once the Nestle becomes established then the rates can be increased and the margin to the retailers can be decreased.

The most important competitive advantage in this market is distribution. The ability to get their product to as many outlets as possible and to ensure its availability on a continuous basis is the biggest challenge for producer. This is so because Nestle is a basic necessity (not a luxury) with little relationship to personal income that is the Nestle consumption per person is not likely to vary significantly by income level.

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Critical success factors: More frequency of visit of sales personnel More timely delivery of stocks Better replacements More credit period Relaxation in collection of payment Initiative on display by distributor More schemes provided to the smaller outlets Aggressive sales promotion schemes are needed due to stiff competition More emphasis should be given on services

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LIMITATIONS
Marketing research suffers from several limitations. A large number of problems which are caused by financial constraints, insufficient sample size, and lack of personal contact etc. marketing research only helps managers in decision making process. It provides data and information to the managers but it can not be a substitute for marketing.

Limitations of Survey: In this industry, it is very difficult to find the exact figures as the consumption is very low. There is not a particular trend followed in this industry to promote sales. Actions are taken according to the situations and the situation changes very fast in this industry. Sales price vary from retailer to retailer, as the cost price is different for different retailers due to schemes given. The number of shops is very large in number and it is very difficult to cover all of them.

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CONCLUSION
Nestle industry is very competitive industry and dominance of Priya gold makes it tougher for other brands to establish in this field. So in order to compete in this market everything should be perfect with main focus on distribution. The distribution must be proper and retailers must be the main center of focus. They are the people who can make difference. Nestle advertisement is coming on TV and FM Radio in Meerut also. So there is a possibility that sales will increase as more and more people come to know about Nestle Nestle. Advertisement can bring the customers to the shops but after that the retailer is the key person. If he wants he can sell any Nestle. Therefore it should be the combined effort of company and retailers to improve the sales. Also people always prefer change so if we provide them better substitute of Priya gold they will welcome this change.

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RETAILER SURVEY FORM

Name of the shop Address Tel.No. ___________________________ ___________________________ ___________________________

Q1) What are the Nestles you usually keep in your shop? a) Priya gold b) Nestle c) Paras d) Gopalji e) Others _______________

Q2) Rate these Nestles in terms of volume of sales from 1 to 3. a) Priya gold b) Nestle c) Paras d) Gopalji e) Others Q3) Does packing play any role in promoting sales? a) Yes b) No

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Q4) How you sold the Nestle? a) At M.R.P. b) Less than M.R.P. c) More than M.R.P.

Q5)How you get the delivery from the distributor? a) Through rickshaw b) Through tampo c) Through mini truck d) Others _______________

Q6) How would you compare the services of Nestle and Priya gold on the following? (Rank 1 to 5) Nestle Priya gold a) Frequency of visit of sales personnel b) Timely delivery c) Display support d) Any other ____ ____ ____ ____ ____ ____ ____ ____

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Q7) Is there any improvement possible with distributor on the following parameter? (Please tick ) Yes a) Credit period b) Collection of payment c) Replacement d) Any other ____ ____ ____ ____ No ____ ____ ____ ____

Q8) Customer purchase Nestle because of: a) Price b) Quality c) Packing d) Scheme e) Others ______________

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CONSUMER SURVEY FORM Name of consumer Address Tel.No. ___________________________ ___________________________ ___________________________

Q1) Which brand of Nestle do you consume? a) Priya gold b) Nestle c) Paras d) Gopalji e) Other _____________

Q2) Which variant of Nestle do you use? a) Full Cream b) Standardized c) Tonned d) Double Tonned

Q3) How much Nestle you purchase daily? a) Full Cream b) Standardized c) Tonned d) Double Tonned _____ Ltrs. _____ Ltrs. _____ Ltrs. _____ Ltrs.

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Q4) How do you get Nestle? a) From retailers b) From supplier c) From other ______________

Q5) How much do you pay to the retailer/supplier for the Nestle? a) FCM b) STD c) Tonned d) DTM Rs._____ Rs._____ Rs._____ Rs._____

Q6) If you are getting home delivery, is supplier charging extra cost for the delivery?

a) Yes b) No

Rs._____ per (Liter/Day)

(For those who are not currently using Nestle) Q7) Have you ever used Nestle Nestle? a) Yes b) No

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Q8) If no, then do you want to taste it at least once? a) Yes b) No

Q9) If you find it better than your current brand, then will you continue using it? a) Yes b) No

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BIBLIOGRAPHY
BOOK REFERRED: Marketing Research : Measurement and Method, Donald S. Tull and Del I.Hawkin,Prentice Hall India,Sixth Edition,Nov,2001 Beri,G.C., Market research, New Meerut, Tata McGraw Hill publishing co. LTD, 1980 IInd edition. Boyd,W.Harper, Ralph Westfall Stanley f. stasch, Marketing Research text and cases, All India Traveller book seller, Meerut, seventh edition. Philip Kotlar , Marketing Management, New Meerut , Pearson education (Singapore) pte LTD) eleventh edition Kothari, C.R., Research methodology, New Meerut, Vikas publication house, eleventh edition.

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