SCHOOL OF BUSINESS

BACHELOR OF BUSINESS ADMINISTRATION

PBL REPORT ON
BUSINESS PROCESS

SUBMITTED TO: SUBMITTED BY:

Prof. CHAND RASHID HARSH PANWAR
17GSOB101290
BBA, Batch 2, SEM 4

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 CERTIFICATE FROM FACULTY GUIDE

This is to certify that the PBL report entitled “BUSINESS PROCESS OF NESTLE” has been
prepared by HARSH PANWAR under my supervision and guidance. This research report is
submitted towards the partial fulfillment of two year full time Bachelor of Business
Administration.
Prof. Chand Rashid

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 ACKNOWLEDGEMENT
I am grateful to Prof. Chand Rashid, Faculty Guide, Galgotias University for his valuable
support at all time and provided me all necessary information through out of my research
report has been successfully completed

I am thankful to all those people who has supported and provided me all the necessary
information through out this research report completed.

Harsh Panwar
17GSOB101290
BBA Batch-2
SEM:- 4

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 INDEX

S.N CONTENT PAGE NO.

O
1. INTRODUCTION 5
2. VISION 6
3. MISSION 6
4. OBJECTIVES 7
5. BRAND 8
6. MARKET RESEARCH 9
7. RESERCH AND DEVELOPMENT 9
8. NEW PRODUCT DEVELOPMENT 10
9. PRODUCT LAUNCH 11
10. SWOT ANALYSIS 11
11. STRATEGIES ADOPTED 12
12. GLOBAL COMMITMENT 13
13. COMPANY SUCCESS 13
14. COMPETITIVE ADVANTAGE 14
15. DISTRIBUTION STRATIGIES 15
16. MARKET ANALYSIS 15
17. CONCLUSION 16

INTRODUCTION
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Nestlé was founded in 1867 by pharmacist Henri Nestlé on the shores of Lake Geneva in Vesey, Switzerland.
One hundred and thirty-four years later, our headquarters are still in Vesey, surrounded by the Swiss Alps in
one of the world’s best-preserved environmental settings. As they have grown from humble beginnings into
the world’s largest food company, they have attempted to take the fundamental cultural values of
environmental preservation and cleanliness into every country where they operate. Company has 468 Nestlé
factories currently in operation.
-Company’s facilities reflect the environmental values basic to Nestle Company.
-Top management follow the Company’s environmental performance
-Company’s Environmental Officer reports directly to General Management to ensure there is on-going
awareness regarding environmental affairs.
Nestlé Environmental Advisory Group meets regularly to review current environmental issues and to anticipate
potential concerns. This allows them to maximize control over their activities and contribute to sustainable
development in the countries where they operate. The Nestlé Environment – Progress Report 2000 describes
the results of continuous improvement in its environmental practices and being a leader in environmental
performance

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 “VISION”

Nestlé aim is to meet the various needs of the consumer every day by marketing and selling food of a
consistently high quality.
The confidences that consumers have in our brands is a result of our company’s many years of knowledge in
marketing, research and development, as well as continuity - consumers relate to this and feel they can trust
our products.
High quality and collaboration
Our objectives are to deliver the very best quality in everything we do, from primary produce, choice of
suppliers and transport, to recipes and packaging materials. Our operations and collaboration in the Nordic
countries gives us greater opportunities to be efficient and strategic and to function well as an organization,
both when it comes to the distribution chain and to concentrating on joint product launches and campaigns.
Vision Statement of Nestle Milkman:
The strategic priorities of Nestle Milkman are focused on delivering shareholder value through the
achievement of sustainable, capital efficient and profitable long term growth. Improvements in profitability
will be achieved while respecting quality and safety standards at all times. In line with this objective, Nestle
Milkman envisions to grow in the shortest possible time into the number one food company in Pakistan with
the unique ability to meet the needs of consumers of every age group - from infancy to old age, for nutrition
and pleasure, through development of a large variety of food categories of the highest quality. Nestle Milkman
envisions the company to develop an extremely motivated and professionally trained work force, which would
drive growth through innovation and renovation. It aspires, as a respected corporate citizen, to continue
playing a significant role in the social and environmental sectors of the country.

CORPORATE “MISSION”
Nestlé’s brands and products are the focus of continual innovation and renovation so that they meet and
exceed our consumers' expectations. We seek to ensure that our products are available whenever, wherever
and however our consumers want them.

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 OBJECTIVES

Nestlé’s purpose is to offer safe, tasty, convenient and nutritious foods to improve health and
well-being of consumers of all ages all over the world. To meet the needs and desires of
today’s and tomorrow’s consumers, Nestlé is strongly committed to Research and
Development (R&D) to improve existing products and develop new foods with specific health
benefits.

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 BRANDS

Today Nestlé is present in different markets with the following main brands:
Coffee
Nescafe, Nespresso, Taster’s Choice, Ricoré, Ricoffy, Bonka, Zoégas, Loumidis

Water
Poland Spring, Nestlé Pure Life, Arrowhead, Vittel, Deer Park, Levissima, Perrier, S.Pellegrino, Ozarka, Contrex,
Ice Mountain, Zephyrhills, Nestlé Aquarel, Hépar

Other beverages
Nestea, Nesquik, Nescau, Milo, Carnation, Libby’s, Caro, Nestomalt

Dairy - Shelf stable

Nestlé, Nido, Nespray, Ninho, Carnation, Milkmaid, La Lechera, Moça, Klim, Gloria, Svelty, Molico, Nestlé
Omega Plus, Bear Brand, Coffee-Mate

Ice cream

Nestlé, Antica Gelateria del Corso, Dreyer's/Edy's, Drumstick/Extrême, Maxibon/Tandem, Mega, Mövenpick,
Sin Parar/Sem Parar/Non Stop, Delta

HealthCare nutrition
Nutren, Clinutren, Peptamen, Modulen
Bouillons, soups, seasonings, pasta, magi

Frozen foods (prepared dishes, pizzas, small meals)

Refrigerated products (cold meat products, dough, pasta, pizzas, sauces, snacks)

Chocolate, confectionery and biscuits

Nestlé, Crunch, Cailler, Galak/Milkybar, Kit Kat, Smarties, Butterfinger, Aero, Polo

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 Market research

The Maggi brand experienced a decline in sales in the UK leading up to 2004. This was because the
product had come to be seen as uninteresting and old fashioned due to its dehydrated format and
flavour. The product failed to meet users' increasing requirements for fresh tasting culinary aids.

Maggi commissioned face-to-face qualitative research to get a deeper insight into chef and consumer
views. Chefs were asked to discuss their requirements.

The results showed that consumerswere saying 'fresh is best'. However, the chefs' view was slightly
different in terms of: 'My customers would like everything to be made from scratch (i.e. made from
basic raw ingredients), but I don't have the time and money to do this'. The research revealed that the
market was divided into a number of segments. A segment is a part of an overall market made up of
customers with similar characteristics. Chefs fitted into four main segments:

The research showed a sizeable demand for Segment 3 - a target for Maggi 'A Natural Choice'
products. Brand proposition - the research defined a proposition for developing the new brand. This
new proposition was to create a product with more natural qualities for 'chefs who aim to please' who
want their cooking to be as fresh tasting as possible. Natural qualities would be defined in terms of
taste, smell, look and texture. Target market-- Maggi 'A Natural Choice' target was to be 'chefs who
aim to please'. Their prime aim is to provide delicious, wholesome foods that customers enjoy. These
chefs enjoy their work and have a pride in the satisfaction they give customers. They are not in
business just to make money. Brand ambition - Maggi 'A Natural Choice' combines the goodness and
taste of real ingredients with time and cost saving.

 Research and development

Nestlé's strength in product research and development makes it possible to develop products to fit
market requirements. Maggi is committed to providing cutting edge products that chefs want, e.g.
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 products with a lower salt content. These products are high quality and easy to use. The new
products need a more natural taste while at the same time offering value for money.

The Maggi 'A Natural Choice' range is now lower in salt and made using sunflower oil. In addition,
where possible the range benefits from having no added MSG, is gluten free and contains no artificial
colours or flavours. The Maggi 'A Natural Choice' range has clear and easy to understand nutrition
and allergy information on all packaging to help chefs understand what is in the products so they in
turn can inform their customers. The range is aimed at a variety of chefs. For example, two Maggi 'A
Natural Choice' products widely used in school kitchens are:
1. multi-use tomato sauces - this saves time vs using chopped tomatoes. The product is pre-reduced
which means less wastage (the juice from chopped tomatoes makes up one third of a tin and is
usually poured away) and also less cooking time as the product can be used straight from the tin. It
contains sunflower and olive oil and is pre-seasoned with basil and oregano so it can be used straight
from the tin. The sauce is mainly used as a pizza topping or a pasta sauce as well as in soup and
casseroles, and one serving can contribute to one of the suggested five portions of fruit and
vegetables per day.

Maggi also uses easy to understand labels showing nutritional and other information. For example,
the multi-use tomato sauce label states:

 there are no added colours or artificial flavours

 there is a low fat content

 the salt and sugar content has been reduced by 25%

 the key nutrients contained e.g. energy, protein, carbohydrates, sugars, fat, saturated fats,
fibre and sodium, salt equivalent labelling (if used on brand)

 details of allergenic ingredients used.

2. bouillons (i.e. stock or broth for soup and sauces produced by cooking vegetables, poultry, meat or
fish in water, which is then strained) - using a paste or powder bouillon is quicker than preparing stock
from scratch and helps to provide a consistent, authentic flavour. They are easy to use, cost effective
and there is no waste. Chefs prefer paste bouillon because they believe it dissolves better when
added to water. Maggi paste bouillons are ideal for school catering because they are gluten free,
contain no added MSG, artificial colours or flavours, are made with sunflower oil and have less than
0.7g salt per 100ml when made up. Bouillons are mainly used as a base to soups and sauces, as
well as adding flavour to casseroles and stews.\

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  New product development (innovation and renovation)

Each of Nestlé's European factories is a centre of excellence that specialises in developing new
areas of food technology. New paste bouillon research and development is carried out at an Austrian
factory. The new Maggi 'A Natural Choice' paste bouillons are created and developed there. New
product development involves a number of important stages. To give an idea of timescale, the
development process for paste bouillons took 6 months.

At the same time front labels are designed, product photography commissioned, recipe sheets
produced and sales presenters are designed to ensure a successful product launch.

 Product launch

Launching to chefs is very different from the launch of a product for the retail environment. This is
because it is not easy to communicate directly with chefs, as this target market is made up of busy
people who work unsociable hours.

Publicity in the press started 6-8 weeks before the launch. Selected trade media such as Catering
Update and Caterer and Hotelkeeper carried advertising and promotional material. Eight page
supplements were produced to get the message across. These appeared in the April and May
editions of the magazines, along with ongoing features in the wider press. Direct mailing of
informative literature to chefs and other users supported this. Promotions including providing
opportunities at special events for chefs to sample new products were set up.

Maggi works closely with the main FoodServices wholesalers (3663 and Brakes) and Cash and Carry
operators (e.g Booker). This ensures that distribution of Maggi 'A Natural Choice' to caterers and
chefs is effective. These companies use a Product Listing Order Form (PLOF), which is updated by
negotiation in April and September only. It is imperative to ensure distribution takes place to meet
these critical timelines. Wholesalers, together with cash and carry operators, were therefore given
supporting promotional material about the new products to coincide with the launch.

SWOT ANALYSIS

“STRENGTH”

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 It’s a company that does not depend on personalities.
Leaders in Dairy Products.
Long term experience.
Innovative products.
Designative packaging.
Innovative planning and ideas.
Wide variety of brands.

 “WEAKNESSES”
Supply Chain
Exports

 “OPPORTUNITIES”
High credibility
Ability to secure more credit.
Available means for expansion.
Improving trends
Industry leadership.
Consumer preference.
Fewer competitors.

“THREATS”
Highly competitive market (multinational companies are very organized and financially strong).
Increasing prices of raw materials.
Competitors like Haled, Halla, Askari, Pure water, Nurpur dairies.

STRATEGIES ADOPTED BY NESTLE

Business principle:
Nestlé is committed to the following Business Principles in all countries, taking into account local legislation,
cultural and religious practices:
Nestlé'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.
Nestlé does not favor short-term profit at the expense of successful long-term business development.
Nestlé 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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Nestlé 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.
Nestlé 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.
Nestlé continues to maintain its commitment to follow and respect all applicable local laws in each of its
markets.
Consumer perceptions and the future needs of society: As a global food manufacturer and marketer, Nestlé
takes into consideration local needs, cultural differences and consumer preferences as well as attitudes
concerning the use of ingredients derived from genetically modified crops. Nestlé will continue to use
ingredients derived from genetically modified crops wherever appropriate.

Global commitment:
Nestlé firmly supports the principles of the United Nations Global Compact and is committed to reflecting
these in its business principles and practices. Search for trust:
Nestlé is the world's leading food and beverage company, with sales of about CHF 72 billion. It has 230,000
employees world-wide and operates 520 factories in 82 countries. Its products are available universally,
including such remote markets as North Korea, and they are sold under a number of brands such as Nestlé,
Nescafe, Nestea, Maggie, Buitoni, Perrier and Friskies. Company belongs to more than 200,000 shareholders,
today; Nestlé is about twice the size of its nearest competitor in the food and beverage sector. The company is
in business for over 130 years. Since the days of its founder, brands have been a mainstay of company’s
development and its management strongly believes that is one of the key elements of company success. A
basic reason company has grown to be the world's largest food company is that consumers have learned to
trust its brands. The Nestlé’s challenge was the establishment of a clear hierarchy of very few corporate
strategic global brands that now cover almost all products, as well as the parallel usage of regional and local
product brands and product denominations.
Additionally company introduced the Nestlé Seal of Guarantee and emphasized corporate logo. This Seal of
Guarantee is a visible sign of company’s corporate responsibility for the safety and quality of every product,
which leads to maintain consumer confidence and trust in this corporation. In order to be able to give this
quality and safety assurance, company developed a Nestlé Quality Management System, which collects the
experience of our Research & Development, on which we spend CHF 800 million a year. For a company such as
Nestlé, economic success depends on winning the public's approval every day in every country where our
products are sold.
They have always believed strongly that tobacco should never be marketed to youth. It should only be
marketed to adult smokers, in an appropriate way that takes account of the risks posed to health. They also
believe adults who have chosen to smoke should be able to receive information about what they buy, and
should be able to communicate responsibly with them about their brands.

Nestle company’s Success is built on quality:

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Quality is the cornerstone of company’s success. Everyday, millions of people all over the world show their
confidence in company by choosing Nestlé products. This confidence is based on our quality image and a
reputation for high standards that has been built up over many years.
Every product on the shelf, every service and every customer contact helps to shape this image. A Nestlé 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 company to keep this promise every time.

Under no circumstances company compromise on the safety of a product and every effort must be made to
avoid hazards to health. People, equipment and instruments are made available to ensure safety and
conformity of Nestlé products at all times.
The customer comes first:
Company does 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. Company’s task is to understand what customers want and respond to their expectations rapidly and
effectively.
Company serves various groups of consumers and there is demand for products at different levels of perceived
quality and price. All customers expect good quality at a reasonable price.
Customers are central to company’s business and company always respects their needs and preferences.

Quality is a competitive advantage-

Company lives in a competitive world and must never forget that their customers have a choice. If they are not
satisfied with a Nestlé product, they will switch to another brand. Company’s goal is to provide superior value
in every product category and market sector in which it competes.

Competitive advantage in the Marketing strategy of Nestle –

Being present in 190+ countries is helping the company in cross-cultural exposure and in understanding
the needs.

With such a broad brand portfolio company is leading in most of the markets worldwide. The broad
product portfolio is helping the company in maintaining a high share of wallet of customers.

Nestle have strong research & development network in FMCG and wellness industry with 5000+
Scientists and researchers across the world.

BCG Matrix in the Marketing strategy of Nestle –

Nestle have 7 business verticals offering health, nutrition and wellness products.

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Its dairy products, powdered & liquid beverages, bakeries& cookies and confectionary business
verticals are stars due to nestle having a strong hold in these businesses with large product length.

It’s pet care, Water business vertical is a question mark in the BCG matrix due to the presence of a
large number of local & national players in the segment.

Distribution strategy in the Marketing strategy of Nestle –

With it’s diversified and broad product portfolio, Nestle has been able to make its product available to
the end consumer through its extensive network of distribution. Developing nations have been the
biggest opportunity for a company like Nestle as there is challenges & opportunity in penetrating the
market. Nestle uses multi-channelstrategy to distribute its products.

Brand equity in the Marketing strategy of Nestle –

Nestle is Fortune 500 company and it does individual branding of their brands which help it in creating high visibility &
awareness.

Negative branding also worked in favour of the company when some of the countries banned Maggi Noodles due to the
presence of lead content which later on resolved and the banned was uplifted.

Competitive analysis in the Marketing strategy of Nestle –

The health, Nutrition & wellness market is highly competitive and is overcrowded with local
& international players. Also, nestle is facing competition from pharmaceuticals companies.
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Market analysis in the Marketing strategy of Nestle –
With a large number of players fighting in the same market, penetration to the untapped market is
what driving the industry to further growth. Nestle have few product categories which are not that
popular and are facing tough competition from the rivals.

Customer analysis in the Marketing strategy of Nestle –

With such a wide range of products in different categories, Nestle serves different pocket size too.
Being a global company it caters to the changing needs of the population of a particular nation aptly &
competitively.

Conclusion
The Maggi 'A Natural Choice' range is designed to combine chefs' requirements for tasty wholesome
food with consumers' requirements for more nutritionally balanced, healthier meals. Maggi 'A Natural
Choice' is a carefully researched and developed product designed to give customers more of what
they want.

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