Summer Internship Project Report

“Customer value analysis and Competitive Benchmarking of FMCG

Sector.”

Submitted in partial fulfilment of the requirement for the award

Of

Post Graduate Diploma in Management (Retail Management)

(Batch: 2019 – 2021)

Submitted By: Submitted To:

Saurabh Rai Prof. Masood Siddiqui

2019 – 2021

[JL19RM041]

18th June 2020

 CERTIFICATE

This is to certify that the dissertation entitled “Customer value analysis and Competitive
Benchmarking.” is the BONAFIDE research work carried out by Saurabh Rai student of
PGDM, at JAIPURIA Institute of Management, Lucknow batch 2019 – 2021, in partial fulfilment
of the requirement for the award of Post-Graduation Diploma in Management and that the
dissertation has not formed the basis for the award previously of any degree, diploma,
associateship, fellowship or any other similar title.

Prof. Kavita Pathak Prof. Masood Siddiqui

(Director) (Project Guide)

Date: 15th June 2020

Place: Lucknow
DECLARATION

I hereby declare that the dissertation entitled “Customer value analysis and Competitive
Benchmarking” is an authentic record of my work as a requirement of 08 weeks summer
training (work from home) during the period from 15th April 2020 to 15th June 2020 for the
award of Post-Graduation Diploma in Management from JAIPURIA Institute of Management,
Lucknow under the guidance of Prof. Masood Siddiqui.

The dissertation has not formed the basis for the award of any degree, diploma, associateship,
fellowship or any other similar titles.

Saurabh Rai

(Student, Batch 2019 – 2021)

Roll No. – JL19RM041

 ACKNOWLEDGEMENT

“I wish to express our sincere gratitude to Prof. Masood Siddiqui, faculty & project guide of
Summer Internship Program of JAIPURIA Institute of Management, Lucknow for providing me
with an opportunity to do project work on “Customer value analysis and Competitive
Benchmarking.”. This project bears an imprint of support of many peoples. Sincerely thanks to
my project guide, Prof. Masood Siddiqui, for his guidance and encouragement in carrying out
this project work.”

“I also wish to express my gratitude to the officials and other staff members of JAIPURIA
Institute of Management, Lucknow who rendered their help during the period of project work.
Last but not the least, I wish to avail myself of this opportunity, express a sense of gratitude and
love to our friends and our beloved parents for their manual support, strength, help and
everything.”

Saurabh Rai

(Student, Batch 2019 – 2021)

Roll No. – JL19RM041

 TABLE OF CONTENTS

S.NO. TITLE PAGE NO.

Executive summary
1  6

2 Introduction to the Firm 7 - 12

3 Problem statement  12

4 Description of the Study  13 - 16

5 Data Analysis  17-23

6 Result and Discussion  24- 26

7 Learnings from the Project  27- 28

8 Recommendation  28

9 Limitations of the study and future Scope  29

10 Bibliography  29
 EXECUTIVE SUMMARY

In partial fulfilment of the requirement of Post-Graduation Diploma in Management, a summer

internship of eight weeks is required to be undertaken at an organization. Because of this
requirement, I undertook a “Work from Home” internship on “Customer value analysis and
Competitive Benchmarking.” during April – June 2020.

Throughout the years, NESTLE has developed to turn into a multi-million US Dollar
organization. The objective was to spread happiness and cheer to youngsters and grown-ups the
same, everywhere throughout the nation with its desserts and confections.

The main objective of the project is to understand the marketing communication of NESTLE and
competitive benchmarking and its influence on the consumer’s decision-making process an
attempt has been made to get the insight into the coffee industry.

This project is carried out in multiple phases. In the first phase, knowing the objective of the
project and analyzing the coffee industry & NESTLE products on the various parameter, what all
other competitive brands are in the market. A large amount of qualitative information will be
gathering in this phase. In the second phase, gathering information from secondary sources about
marketing communication on various platform like an online and offline advertisement. Using
social media marketing, search engine marketing, TV ads, posters & banners, retail outlet and
analyzing how they impact on consumer’s decision making. In the third phase, a well-structured
questionnaire has been generated to know how much consumers are aware of brand
communication and how much consumers like that and get impacted by it.

The findings that emerged from the analysis were that NESTLE ranked first in the COFFEE
industry and have most of the market share for many of its brands and its advertisement are liked
by a large population of India. Every demographic (age, gender, class) segmentation of
customers like NESTLE products.
INTRODUCTION TO THE FIRM / INDUSTRY / INDUSTRY
ANALYSIS

VISION AND MISSION

 VISION: Being the best in everything we touch and handle “Respected, Trustworthy
food, Nutrition Health and Wellness company”.

 MISSION: “Nestle mission is to provide the best food to people throughout the world”.

ANALYSIS OF FMCG INDUSTRY:

“Fast moving consumer goods (FMCG) are the fourth largest sector in the Indian economy.
There are three main segments in the sector – food and beverages which accounts for 19 per cent
of the sector.  FMCG market is expected to grow at 9-10 per cent in 2020. Growing awareness,
easier access, and changing lifestyles are the key growth drivers for the consumer market.”

“The sector is expected to grow at a Compound Annual Growth Rate (CAGR) of 27.86 per cent
to reach Rs 7,24,759.3 crore (US$ 103.7 billion) by 2020.”

FMCG (Fast Moving Consumer Goods) Industry is called so because of the consumption of
goods produced is at higher rate than others. The products are non-durable, and sells rapidly, or
you buy them all the time since they are consumable, or its life is short.

TOP SELLE
PRODUCT RANGE –
Competitor analysis of Nescafe:

1. Nescafe: Nescafe is a product of nestle and launched in 1963.

Variants: nestle classic, nestle sunrise, nestle cappuccino.
Market share: 51% (approx).

2. BRU: BRU is a product of HUL and launched in 1968.

Variants: BRU gold, BRU select, BRU instant.
Market share: 49% (approx).

3. TATA coffee: It is launched in 1922.

Variants: Green coffee and instant coffee.
Market share: 0.43%.
Porter five model of Nestle:

External sources (E) Internal threats (I). 

1.) Bargaining power of supplier (I)-

Most firms in food and beverage industry have a medium to high bargaining power level.
Bargaining power of supplier is a really important matter for Nestlé as they are the main
strength of a company.  For example Nestlé will buy raw materials from the local farmers in
 China and almost 90% of the raw materials will be used to make product that will also be sold
in China. 

2.) Bargaining power of customer (I)-

The bargaining power of customer is an important factor of determining company’s

performance. Nestlé target is for people who want to experience a good food or beverage with
a high nutrition. They are more concern about health other than taste.

3.) Threat of new entrant (E)-

Nestlé now is in an attractive market which means many other people are trying to be in the
market. For Nestlé actually they are having a huge threat. Nestle still holding a good position in
terms market share.

4.) Threat of substitute product (E)-

Every product has substitute. Nestlé have a high threat of substitute product.  For example
Nestlé is making pure life water. From Pepsi, Sprite or even coffee products, all of them are
Nestlé’s mineral water substitute. They keep innovating and make a dependent product.

5.) Competitive rivalry within an industry (E)-

Every company has their own fierce competitor. Their competitors usually are those who are
equal in size and power. Nestlé for years has been in food processing industry.  Nestlé has already
has a good position in the industry, Nestle has a few major rivals such as Unilever and Britannia.

SWOT analysis of Nestle

STRENGTH:

Globally recognized brand – “Through its effective advertising and branding strategies, it has
created significant awareness and developed a successful brand image around the world.
According to the Fortune Global 500, Nestle is among the world’s largest corporations and is
ranked at 69th position in 2018 list.”
Large distribution system –Nestle owns an extensive and diversified distribution system that is
not only penetrated in urban areas but also rural regions. It has adapted local distribution
methods to run the business efficiently.

WEAKNESS:

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

Magi controversy – In 2017, Nestle failed to clear a laboratory test in India. This created
publicity hype as people boycotted Nestle, leading to the loss of 80% of market share in the
country.

OPPORTUNITIES:

Online shopping –Nestle has a remarkable opportunity to boost its e-commerce sites and online
shopping platform. Although Nestle has its online stores in a few countries, expanding its online
services will prove a rewarding decision for the company.”

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

THREATS:

Rising competition – Many CPG companies like Mondelez and Unilever offer similar food and

beverage products. It is hard for Nestle to compete in such a situation where the substitute
products are easily accessible.

Water scarcity –“Nestle production is highly dependent on water usage. Accessing the clean
water through less costly sources has become difficult for the company due to many reasons.
These include increasing population, climate change, increasing pollution, water wastage, and
overexploitation of resources.”

IMPACT OF COVID ON THE FUNCTIONING / FUTURE WORKING OF

THE FIRM / INDUSTRY
• Demand Side Impact – “Extended lockdown will lead to shift in consumption habit.
Consumption is getting impacted due to job losses and decline in income levels of people
particularly the daily wage earners due to slowing activity in several sector.”
 • Supply Side Impact – “On the supply side, shutdown of factories and the resulting delay
in supply of goods. Reduced manufacturing activity will have implications on
employment.”

PROBLEM STATEMENT

Recent Disruption

“They are facing production and supply chain challenges to make their product available at the
shelf. For example, most production units and warehouses are trying to deal with low labor
availability, which is as low as 30-40 per cent of normal levels in certain cases.”

Due to COVID 19, a complete lockdown has a shortage of manpower and cut down the
production levels.

Total sales decreased in 3 months in 2020 is 6.2% (20.8 billion) as compared to 3 months of
2019 (22.2 billion).

Policy Issue affecting the industry:

“The Goods and Services Tax (GST) is beneficial for the FMCG industry. FMCG products such
as Soap, Toothpaste and Hair oil now came under 18 per cent tax bracket, previously 23-24 per
cent rate. Also rates on food products and hygiene products have been reduced to 0-5 per cent
and 12-18 per cent respectively.”

QUESTIONNAIRE
Following questionnaire has been developed after understanding various variables and Key
success factors which customers evaluate while making a purchase decision of a coffee.
1. Gender

a. Male

b. Female

2. Age

a. 10-18

b. 19-28

c. 29-38

d. 39 and above

3. Occupation

a. Student

b. Working professional

c. Business man

d. House wife

4. Monthly income of family

a. 10k-20k

b. 20k-30k

c. 30k-40k

d. 50k plus

5. How much money do you spend weekly on coffee

a. 100-200

b. 200-300
c. 300-400

d. 500+

6. How often discounts and freebies influences your decision of buying coffee

a. Very often

b. Less often

c. Rarely

d. Never

7. What is your preferred brand for coffee

a. Nescafe

b. BRU

c. Tata coffee

8. How important is price for selecting a coffee

a. Very important

b. Somewhat important

c. Less important

d. Not at all important

9. While buying a coffee do you look for the nutritional value in it

a. Yes
b. No

10. How important is brand ambassador while making a purchase for a coffee

a. Very important

b. Somewhat important

c. Less important

d. Not at all important

11. In what occasions do you consume coffee

a. Feeling thirsty

b. Parties/celebrations

c. At Breakfast

d. No particular reason

12. What induces you to buy a particular brand of coffee

a. Price with quantity

b. Healthier

c. Taste

d. Lots of variants

e. Packaging
Through this questionnaire I have tried to understand how family income, consumption
pattern, freebies/discounts, brand image, person promoting it and various attributes of
drink itself affects the value the customer seeks from a coffee brand, how they evaluate
between competitors and other brands available

The method used for sampling was convenience sampling as a questionnaire was developed on
google form and floated to all age groups. I have received 210 responses out of them 102 are
male respondents and 108 are female respondents, so I can say it fairly covered both genders.
Most of the respondents (95.9%) are from age bracket of 16-30. Most of the respondents
belonged to Uttar Pradesh region and rest were from all across India.

DATA ANALYSIS
The survey is done for the finding of impact of marketing communication on consumers
purchasing decision of NESTLE products. The survey is done by the answering the twelve
questions. The survey was important to attain the project objective of collecting primary data.
Sampling unit were the students of JAIPURIA friends and family members.

Do you consume
any coffee on a
Gender Age Occupation daily basis
N Valid 210 210 210 210
Missing 0 0 0 0
Mean 1.51 2.10 1.25 1.27
Median 2.00 2.00 1.00 1.00
Mode 2 2 1 1
Std. Deviation .501 .425 .495 .446
Skewness -.038 2.895 1.870 1.035
Std. Error of Skewness .168 .168 .168 .168
Percentiles 25 1.00 2.00 1.00 1.00
50 2.00 2.00 1.00 1.00
75 2.00 2.00 1.00 2.00

 Gender: -
Mean: - 1.51
Median: - 2.00

Average Mean: - 2.00 because we are considering the data of 210 people is significant.

It is negatively skewed. the data is in left direction with the value of -.038

Coefficient Variance = Standard Deviation ÷ Mean

C.V. = .501÷ 2

= 25.05

 Age: -
Mean: - 2.10
Median: - 2.00

Average Mean: - 2.00 because we are considering the data of 210 people is significant.
It is positively skewed. the data is in right direction with the value of 2.895
Coefficient Variance = Standard Deviation ÷ Mean

C.V. = .425÷ 2

= 21.25

 Occupation: -
Mean: - 1.25
Median: - 1.00

Average Mean: - 1.25 because we are considering the data of 210 people is significant.
 It is positively skewed. The data is in right direction with the value of 1.870

Coefficient Variance = Standard Deviation ÷ Mean

C.V. = .495÷ 1.25

= 39.6

 Consumption of coffee on daily basis: -

Mean: - 1.27
Median: - 1.00

Average Mean: - 1.27 because we are considering the data of 210 people is significant.

It is positively skewed. The data is in right direction with the value of 1.035

Coefficient Variance = Standard Deviation ÷ Mean

C.V. = .446÷ 1.25

= 35.68

Perception 1: - Testing the data

One-Sample Kolmogorov-Smirnov Test

 Can you Can you
rate the Can you rate the Can you Can you
following Can you Can you rate the following rate the rate the
parameter rate the rate the following parameter following following
s/Attribut following following parameter s/Attribut parameter parameter
es of parameter parameter s/Attribut es of s/Attribut s/Attribut
coffee on s/Attribut s/Attribut es of coffee on es of es of
the basis es of es of coffee on the basis coffee on coffee on
of coffee on coffee on the basis of the basis the basis
expectati the basis the basis of expectati of of
on from of of expectati on from expectati expectati
any expectati expectati on from any on from on from
coffee on from on from any coffee any any
brand on any any coffee brand on coffee coffee
a scale of coffee coffee brand on a scale of brand on brand on
1 to 5 brand on brand on a scale of 1 to 5 a scale of a scale of
[Ingredie a scale of a scale of 1 to 5 [ Varietie 1 to 5 1 to 5
nts/fat 1 to 5 1 to 5 [Brand s [Certified [Advertis
content] [Taste] [Price] image] available] by] ement]
N 210 210 210 210 210 210 210
Normal Mean 3.38 3.90 3.52 3.83 3.63 3.84 3.74
Parameters Std. .962 .874 .939 .885 .946 .955 .843
Deviation
Most Extreme Absolute .202 .210 .222 .229 .229 .224 .236
Differences Positive .192 .185 .183 .180 .171 .161 .195
Negative -.202 -.210 -.222 -.229 -.229 -.224 -.236
Test Statistic .202 .210 .222 .229 .229 .224 .236
Asymp. Sig. (2-tailed) .000c .000c .000c .000c .000c .000c .000c
a. Test distribution is Normal.
b. Calculated from data.
c. Lilliefors Significance Correction.
Hypothesis: -

H0: - The test is normal.

H1: - The test is not normal

P value as in the table and α = 0.05 that means α> all the p value which means reject H0 that
means the test distribution is not normal and we will be using the non-parametric tests.
  Perception 2: - do males and females consume coffee on daily basis or not.

Mann-Whitney Test

Ranks
Sum of
Gender N Mean Rank Ranks
Do you consume any Male 103 113.70 11711.00
coffee on a daily basis Female 107 97.61 10444.00
Total 210

Test Statistics
Do you consume any coffee
on a daily basis
Mann-Whitney U 4666.000
Wilcoxon W 10444.000
Z -2.491
Asymp. Sig. (2-tailed) .013
a. Grouping Variable: Gender

Hypothesis: -
H0: - People consume coffee on daily basis.
H1: - People do not consume coffee on daily basis
P value is 0.013 and α = 0.05 that means α > p value which means reject H0 that means males
females do not consume coffee on daily basis.
  Perception 3: - On what factors the consumption of coffee is dependent.

Omnibus Tests of Model Coefficients

Chi-square df Sig.
Step 1 Step 6.038 7 .535
Block 6.038 7 .535
Model 6.038 7 .535

Step 1: Significance of model

H0: Regression Model is insignificant

H1: Regression Model is significant

p-Value = 0.535 (> α= 0.05)

Accept of H0.

If we accept H0 is there that means regression model is irrelevant model.

RESULT AND DISCUSSIONS
 LEARNINGS FROM PROJECT
By the end of the chapter, one should be able to know:

1. Stage of Consumer’s Purchasing Decision

The Consumer Buying Decision Process in the case of NESCAFE COFFEE is as follows:
1. Stage 1 – Need recognition: NESCAFE COFFEE is needed as a supplementary
beverage with Indian food like Tea, etc. (internal physiological stimuli) and hence we
require cookies for majorly coffee time. Hence, we will buy coffee. (Statement of need).
2. Stage 2 – Information search: At this stage you are a customer who is open to all the
brands ranging from NESTLE to HUL to purchase COFFEE (internal information). A
customer is more aware about the NESTLE brand due to its STP and awareness. Also, its
standard quality and affordability (external information from environment). Advertising
plays an important role at this point. NESCAFE COFFEE ads are very famous and easily
recognizable hence creating a brand imagery in your mind. (external information from
advertising).

3. Stage 3 – Alternative evaluation: A customer at this stage will consider the alternatives
based on a comparative analysis (inept set). The Nescafe coffee holds a family image,
thus both recommended by the people around you and happens to be a well-known brand
(positive perception – evoked set). It has been there for generations now maintaining the
same quality and values. (Positive perception – evoked set).

4. Stage 4 – Purchase decision: After evaluating the possibilities, a customer decides to

choose Nescafe coffee. At this point he is the customer but a potential consumer as well.

5. Stage 5 – Post-purchase behavior: This behavior depends completely on the consumer.

As the coffee provides a promising value and taste, the product was good (positive
review). But you know other brands might have better options. Again, this experience
will be considered for the next purchase of Nescafe coffee (next purchase behavior)!
2. Impact of Marketing Communication Tools

Marketing Communication Tools like sales promotion, advertising and personal selling helps
to change the perceptions of people about brand, create more brand awareness and image.
The imposed brand image and awareness can influence the level of customer satisfaction,
expectations, customer values and trust, which ultimately results in behavior and attitudinal
loyalty.

Public Relation helped NESTLE to grow its distribution network.

Large number of populations is aware of NESTLE communication how they are creating a
healthy public relation. Visit in a plant after applying on company’s website and watch
production of coffee in plant is part of public relation.

RECOMMENDATIONS:
i. Distributing free sample in rural area as to increase the reach.
ii. Visit in a plant after applying on company’s website and watch production of coffee in
plant is part of public relation.
 LIMITATIONS

By the end of the chapter, one should be able to know: Limitations of the Study and Future
Scope

The adequacy of project and customer analysis is estimated in remembering the limitations
written below:

 The limitations of sampling methods utilized in this project may impact the findings in
this project.
 Due to constraint of time, all the potential factors affecting the report couldn't be
considered.

BIBLIOGRAPHY

BOOKS-

Principles of Marketing - Philip Kotler

WEBSITE

www.google.com

https://medium.com/

https://www.researchandmarkets.com/

https://economictimes.indiatimes.com/