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SUMMER TRAINING PROJECT REPORT ON

MARKETING AND ADVERTISING STRATEGIES OF NESTLE

Submitted in Partial Fulfillment of the Degree of BBA, Guru Gobind Singh Indraprastha University, Delhi

UNDER THE GUIDANCE OF PUJA SAREEN (INTERNAL GUIDE)

SUBMITTED BY:

VIKAS ENR NO. 10310601710 BBA (G) Ansal Institute of Technology Gurgaon

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EVALUATION CERTIFICATE

This is to certify that the project titled “Advertising and Marketing Strategies of Nestle ”, Mr. Vikas, a student of BBA of Ansal Institute of Technology to GGSIP University, Delhi has been examined by the following

Internal Examiner

External Examiner

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ACKNOWLEDGEMENT

An individual alone cannot do project of this scale. I take this opportunity to express my acknowledgement and deep sense of gratitude to the individuals for rendering valuable assistance and gratitude to me. Their inputs have played a vital role in success of this project. I express my sincere thanks to my project guide Ms. Puja Sareen (Internal Guide) for their generous support, constant direction and mentoring at all stages of project. I take this opportunity to thank all dealers, customers who spared their precious time to provide me with valuable inputs for project without which it would have not been possible. I firmly believe that there is always a scope of improvement. I welcome any suggestions for further enriching the quality of this report.

VIKAS

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EXECUTIVE SUMMARY The main aim of studying marketing and advertising strategies of nestle is to provide solid foundations that are useful for explanation, prediction and control of the business activities. Every organization needs to have clear marketing objectives and the major route to achieving organizational goals will depend on strategy. Developing a strategy involves establishing clear aims and objectives around which the framework for a policy is created. Having established its strategy, an organization can then work out its day-to-day tools and tactics to meet the objectives. The success of any business entity solely depends on how effectively it utilizes its optimum resources. The company should always be ready to make necessary changes according to the requirements, in order to attract more customers so as to maintain a substantial growth in the market. This report also includes the market mix of the product. All the 4P’s of marketing mix for the product has been discussed and explained to reveal the significance of its pricing, product, placing and advertising strategies along with the strength and weaknesses of the organization. Secondary data is the most of important for our research and I contributed in the area such as group or segment those types of potential customers that are most likely to benefit from their product line. It also includes business principles of the organization.

Table of Contents 5

S.NO

PARTICULAR

PAGENO.

01

Introduction

02

Objective of the Study

8

03

Scope of the study

9

04

Literature Review

15-18

05

Company Profile and marketing strategy

19-42

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Research Methodology

43-44

07

Data Analysis

45-57

08

Conclusion & Recommendation

58

09

Limitations

59

10

Bibliography

60

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ANNEXURE

61-63

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INTRODUCTION 6

Nestle India Limited is one of the fastest growing FMCG Company with its strengths for ongoing product innovation & renovation. It performs very well. It still have a stiff competition in the market for its various products especially from HUL - Bru Coffee for Nestle's Nescafe Sunrise Premium Coffee. Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals. While strategy is the action plan to do something and hence, Marketing Strategy is the managerial process of developing and maintaining a viable fit between the organization’s objectives, skills and resources and its changing market opportunities. The aim of marketing strategy is to shape the company’s business and products so that they yield targeted profit growth. Promotion is the very important and crucial element of marketing strategy as through it the company establishes its image in the minds of the customers. Nestle India is promoted by using different ways of promotion. Advertisement of Nestle India is done through TV, radio, billboards, newspapers and magazines. Nestlé also conducts the tradeshows, concerts, events, sponsorships, and discounts for sales promotion. For establishing public relations, Nestlé distributes its newsletters, annual reports, calendars and diaries, lobbying, donation for charitable and civic events. The firm applied a progressive human resource and social policy; with a management style that is based on management commitment and people involvement. Moreover, the firm had responsible corporate citizen, fulfilling obligation to government, shareholders, customers, communities and consumers. Protest the environment by being committed to environmentally sound business practices and taking into account the need to preserve natural resource and save energy. For example, guarantee that all products manufactured, imported and distributed by Nestle Malaysia are certified HALAL by authorized Islamic certification bodies. Perhaps, the firm delivered shareholder value through the achievement of sustainable and profitable long-term growth. It’s a wide area research the branding. Branding strategy is corporate. Part of the branding strategy is the brand plan for each 7

product. This is an integrated strategy. The brands of Nestle are a key strength but the executive levels are very aware today that brands alone are not enough to win. From its beginning, Nestle developed its business internationally and became aware of the fact that food products have to be closely linked to local eating and social habit. That is why Nestle form the very start has always shown respect for diverse cultures and traditions. Nestle activities to integrate itself as much as possible into the cultures and traditions where it is present, adding also to the local environment its own set of values. Therefore, Nestle embrace cultural and social diversity and does not discriminate on the basis of origin, nationality, religion, race, gender or age. Furthermore, Nestle believes that is activities can only be of long term benefit to the company if they are the same time beneficial to the local community. Precisely, the environment is changing very rapidly and in particular customers are looking for answer to their concerns. To our opinion, global thinking and strategies can best be expressed through local action and commitment as showed as Nestle Malaysia. And of course, Nestle applied “think globally act locally” as well as thinking out of the box idea in their product and distribution with the help of strategic global marketing.

OBJECTIVE OF STUDY 8

To study the current market condition, track the performance and lay down the strategies for successful marketing of Nestle. To examine the marking strategies of Nestle India to tackle the stiff competition To examine the effectiveness of advertising strategies of Nestle.

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SCOPE OF THE STUDY India is on the move and so are the markets in India. Apart from economic changes, India is also facing social changes like changes in life style, hobbies etc. New fashions, Adventures holidays, etc. are in today. Further, food habits of Indians are changing rapidly. Chocolates which were believed to be kid’s preference are now being consumed by kids, teenagers, and adults. Chocolate market in India is growing at a fast rate annually. To take advantage of the growing market, international confectionery companies are getting ready to woo the proverbial Indian Sweet tooth. An influx of worlds leading Chocolate players is expected. Further, since Confederation of Indian Industry (CII) is a representative body of the Indian Industry, it receives its inquiries for pertinent marketing information from various domestic and international players, who want to invest in India. In the above context, the prime objective of this report is to prepare a marketing plan for any brand that is planning to enter the Indian Market, based on the study conducted on Nestle.

LITERATURE REVIEW Marketing strategy A marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A marketing strategy should be centered around the key concept that customer satisfaction is the main goal.

TYPES OF MARKETING STRATEGY One of the most important concepts of the marketing planning process is the need to develop a cohesive marketing strategy that guides tactical programs for the marketing decision areas. In marketing there are two levels to strategy formulation: General Marketing Strategies Decision Area Strategies

GENERAL MARKETING STRATEGIES These set the direction for all marketing efforts by describing, in general terms, how marketing will achieve its objectives. There are many different General Marketing Strategies, though most can be viewed as falling into one of the following categories: Market Expansion Market Share Growth Niche Market Status Quo Market Exit

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DECISION AREA STRATEGIES These are used to achieve the General Marketing Strategies by guiding the decisions within important marketing areas (product, pricing, distribution, promotion, target marketing). For example, a General Marketing Strategy that centres on entering a new market with new products may be supported by Decision Area Strategies that include: Target Market Strategy – employ segmenting techniques Product Strategy – develop new product line Pricing Strategy – create price programs that offer lower pricing versus competitors Distribution Strategy – use methods to gain access to important distribution partners that service the target market Promotion Strategy – create a plan that can quickly build awareness of the product

MARKETING STRATEGY OBJECTIVES Increase product awareness among the target audience by 30 percent in one year. Inform target audience about features and benefits of our product and its competitive advantage, leading to a 10 percent increase in sales in one year. Decrease or remove potential customers' resistance to buying our product, leading to a 20 percent increase in sales that are closed in six months or less. If you have multiple objectives, make sure they are consistent and not in conflict with each other. Also, be sure that the remainder of your marketing plan components - the marketing strategy, budget, action programs, controls and measures - supports your marketing objectives.

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Setting your marketing objectives and finalizing the remaining components of your marketing plan may serve as a reality check: Do you have the resources necessary to accomplish your objectives? The marketing strategy section of your plan outlines your game plan to achieve your marketing objectives. It is, essentially, the heart of the marketing plan. The marketing strategy section should include information about: Product - your product(s)and services Price - what you will charge customers for products and services Promotion - how you will promote or create awareness of your product in the marketplace Place (distribution) - how you will bring your product(s) together with your customers.

LIMITATION OF MARKETING STRATGY leads to faulty marketing decisions based on improperly analyzed data creates unrealistic financial projections if information is interpreted incorrectly

PRICING STRATEGY Having defined the overall offering objective and selecting the generic strategy one must decide on a variety of closely related operational strategies. One of these is how one will price the offering. A pricing strategy is mostly influenced by the net income. There are three basic strategies one can consider.

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A SKIMMING STRATEGY: 17

Where the offering has enough differentiation to justify a high price and one desire quick cash and have minimal desires for significant market penetration and control, then one sets the prices very high. 

A MARKET PENETRATION STRATEGY: Where near term income is not so critical and rapid market penetration for eventual market control is desired, then one must set the prices very low.

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PROMOTION To sell an offering one must effectively promote and advertise it. There are two basic promotional strategies, PUSH and PULL. 

THE PUSH STRATEGY: It maximizes the use of all available channels of distribution to "push" the offering into the marketplace. This usually requires generous discounts to achieve the objective of giving the channels incentive to promote the offering, thus minimizing the need for advertising.

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THE PULL STRATEGY: It requires direct interface with the end user of the offering. Use of channels of distribution is minimized during the first stages of promotion and a major commitment to advertising is required. The objective is to "pull" the prospects into the various channel outlets creating a demand the channels cannot ignore.

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COMPANY PROFILE FMCG refers to consumer non-durable goods required for daily or frequent use. Typically, a consumer buys these goods at least once a month. The sector covers a wide gamut of products such as detergents, toilet soaps, toothpaste, shampoos, creams, powders, food products, confectioneries, beverages, and cigarettes Typical characteristics of FMCG products are: Individual items are of small value. But all FMCG products put together account for a significant part of the consumer's budget. The consumer keeps limited inventory of these products and prefers to purchase them frequently, as and when required. Many of these products are perishable. The consumer spends little time on the purchase decision. Rarely does he/she look for technical specifications (in contrast to industrial goods). Brand loyalties or recommendations of reliable retailer/ dealer drive purchase decisions. Trial of a new product i.e. brand switching is often induced by heavy advertisement, recommendation of the retailer or neighbours/ friends. These products cater to necessities, comforts as well as luxuries. They meet the demands of the entire cross section of population. Price and income elasticity of demand varies across products and consumers. The FMCG sector has been the cornerstone of the Indian economy. Though, the sector has been in existence for quite a long time, it began to take shape only during the last fifty-odd years. To date, the Indian FMCG industry continues to suffer from a definitional dilemma. In fact, the industry is yet to crystallize in terms of definition and

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market size, among others. The sector touches every aspect of human life, from looks to hygiene to palate. Perhaps, defining an industry whose scope is so vast is not easy. After witnessing booming sales and flooding markets with innumerable products, FMCG companies have had to abruptly apply the brakes and look for various ways to save costs. MORE THAN RS. 43,000 crore (listed companies) FMCG industry in India, which has been on a roll for many years, faces tough times ahead, although many segments still shows good growth.

Nestle India Nestle India is a subsidiary of Nestle S.A. of Switzerland headed by Mr. Martial G. Rolland, Chairman and Managing Director. With six factories and a large number of copackers, Nestle India is a vibrant company that provides consumers in India with products of global standards and is committed to long term sustainable growth and shareholder satisfaction. The Company employs over 4500 people and for the full year 2005 Nestle India recorded net sales of Rs. 20477 Mio. Nestle has been a partner in India's growth for the past nine decades and has built a very special relationship of trust and commitment with the people of India. The culture of innovation and renovation within the company and access to the Nestle Group's proprietary technology/ Brands, expertise and the extensive centralized Research and Development facilities helps the company to create value that can be sustained over the long term. Nestle India manufactures products of truly international quality under internationally famous Brand names such as Nescafe, Cerelac, Maggi, Milky Bar, Milo, BarOne, Nestea and Kit Kat and in the recent years the company has also introduced products of daily consumption and use such as Nestle Milk, Nestle Dahi, Nestle Butter, Nestle Fruit 'n milk ready to drink beverage and Nestle Pure Life bottled drinking water.

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Nestle India Ltd, 51% subsidiary of Nestle SA, is among the leading branded food player in the country. It has a broad based presence in the foods sector with leading market shares in instant coffee, infant foods, milk products and noodles. It has also strengthened its presence in chocolates, confectioneries and other semi processed food products during the last few years. The company has launched Dairy Products like UHT Milk, Butter and Curd and also ventured into the mineral water segment in 2001. Nestle’s leading brands include Cerelac, Nestum, Nescafe, Maggie, Kitkat, Munch and Pure Life. PRODUCT Quality is the essential ingredients in all of our brands and the reason why millions of people choose Nestlé’s products every day. Our consumers have come to trust in Nestlé’s commitment to excellence and turn to Nestle brands to maintain nutritional balance in a fast paced world. BABY FOODS The production of infant food goes right back to the origins of the Nestle Company. Henri Nestlé’s `Farine Lace’s was the first product to bear the Nestle’ name. In 1867 a physician persuaded Henri Nestle’ 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. Nestlé’s new food worked, and the boy survived from the very beginning, Nestle' 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 factor that made baby foods success in the early days of the Nestle' company—quality and superior nutritional value—are still as valid today for the wide range of infant of infant formula, cereals and baby food made by Nestle'. 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. Nestle' markets infant formula according to the principles and aims of the

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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. Nestlé’s expertise as the world’s leading food manufacturer. Gained over more than 125 years, is put the disposal of health authorities, the medical profession and mothers and children everywhere. Milk based products and baby food contributes to 34% of Nestlé’s turnover. For ensuring regular procurement of good quality milk, Nestle' has developed a network around its Moga factory for collection of fresh milk everyday from the farmers. Nestle' has a dominating 87%market share in the baby we...