CHAPTER-1 INTRODUCTION Nestle was founded in 1866 by Henri Nestle and is today the world’s biggest food and beverage company. Sales at the end of 2005 were CHF 91 bn, with a net profit of CHF 8 bn. Nestle employ around 250,000 people from more than 70 countries and have factories or operations in almost every country in the world.
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The history of Nestle began in Switzerland in 1867 when Henri Nestle, the pharmacist, launched his product Farine Lactee Nestle, a nutritious gruel for children. Henri used his surname, which means ’little nest’, in both the company name and the logotype.
The nest, which symbolizes security, family and nourishment, still plays a central role in Nestle’s profile. Since it began over 130 years ago, Nestle’s success with product innovations and business acquisitions has turned it into the largest Food Company in the world. As the years have passed, the Nestle family has grown to include chocolates, soups, coffee, cereals, frozen products, yoghurts, mineral water and other food products. Beginning in the 70s, Nestle has continued to expand its product portfolio to include pet foods, pharmaceutical products and cosmetics too.
Today, Nestle markets a great number of products, all with one thing in common: the high quality for which Nestle has become renowned throughout the world. The Company’s strategy is guided by several fundamental principles. Nestle’s existing products grow through innovation and renovation while maintaining a balance in geographic activities and product lines. Long-term potential is never sacrificed for short-term performance. The Company’s priority is to bring the best and most relevant productsto people, wherever they are, whatever their needs, throughout their lives.
Taste of Nestle in each of the countries where Nestle sell products. Nestle is based on the principle of decentralization, which means each country is responsible for the efficient running of its business – including the recruitment of its staff. That’s not to say that every operating company can do as it wishes. Headquarters in Vevey sets the overall strategy and ensures that it is carried out. It’s an approach that is best summed up as: ‘centralize what you must, decentralize what you can’. Nestle is a company which is present in all over the world but It has difference and unique motto to deal n all over the world. Nestle believes that they should think about their organizations globally but they deal with people by interacting with them locally MEANING OF NESTLE: • Henri Nestle endowed his company with the symbol derived from his name. His family coat of arms, the nest with a mother bird protecting her young, became the Company’s logo and a symbol of the company’s care and attitude to life-long nutrition. The Nestle nest represents the nourishment, security and sense of family that are so essential to life. CHAPTER-2 HISTORY 1866 -1905 In the 1860s Henri Nestle, a pharmacist, developed a food for babies who were unable to breastfeed. His first success was a premature infant who could not tolerate his mother’s milk or any of the usual substitutes. People quickly recognized the value of the new product, after Nestle’s new formula saved the child’s life, and soon, Farine Lactee HenriNestle was being sold in much of Europe. 1905-1918 • In 1905 Nestle merged with the Anglo-Swiss Condensed Milk Company. By the early 1900s, the company was operating factories in the United States, Britain, Germany and Spain.
World War I created new demand for dairy products in the form of government contracts. By the end of the war, Nestle’s production had more than doubled. 1918 -1938 • After the war Government contracts dried up and consumers switched back to fresh milk. However, Nestle’s management responded quickly, streamlining operations and reducing debt. The 1920s saw Nestle’s first expansion into new products, with chocolate the Company’s second most important activity 1938 -1944 • Nestle felt the effects of World War II immediately.
Profits dropped from $20 million in 1938 to $6 million in 1939. Factories were established in developing countries, particularly Latin America. Ironically, the war helped with the introduction of the Company’s newest product, Nescafe, which was a staple drink of the US military. Nestle’s production and sales rose in the wartime economy. 1944 -1975 • The end of World War II was the beginning of a dynamic phase for Nestle. Growth accelerated and companies were acquired. In 1947 came the merger with Magi seasonings and soups.
Crosse & Blackwell followed in 1950, as did Findus (1963), Libby’s (1971) and Stouffer’s (1973). Diversification came with a shareholding in L’Oreal in 1974. 1975 -1981 • Nestle’s growth in the developing world partially offset a slowdown in the Company’s traditional markets. Nestle made its second venture outside the food industry by acquiring Alcon Laboratories Inc… 1981 -1996 • Nestle divested a number of businesses1980 / 1984. In 1984,Nestle’s improved bottom line allowed the Company to launch a new round of acquisitions, the most important being American food giant Carnation. 996+ • The first half of the 1990s proved to be favorable for Nestle: trade barriers crumbled and world markets developed into more or less integrated trading areas. Since 1996 there have been acquisitions including San Pellegrino (1997), Spillers Pet foods (1998) and Ralston Purina (2002). There were two major acquisitions in North America, both in 2002: in July, Nestle merged its U. S. ice cream business into Dreyer’s, and in August, a USD 2. 6bn acquisition was announced of Chef America, Inc. CHAPTER- 3 RESEARCH METHODOLOGY 3. 1 Relevance of the Study This research is been conducted to survey the product performance and buying behavior of consumer in selection of chocolates. relevance of the study is to survey the product performance and buying behavior of two famous brands of chocolates – Nestle and Cadbury, which are consumed by people of all ages. During this research I have interacted with people of Junagadh City. This research is to know which particular brand of chocolate is most preferred by people of different age groups. 3. 2 Research Problem • Every research has their own problem and limitation but good researcher have to overcome that problem by their skill.
In this research problem I would like to understand and analyze about the chocolates products available at Junagadh and collect the feedback from group of people and I wanted to know the developments made in direction of chocolates industry. 3. 3 Objective of the study This project is based on the comparative study consumer behavior towards Nestle and Cadbury chocolates. Objectives of the study are: • The other objective is to know about the customer satisfaction level associated with the product and the customer preference level. To increase customer satisfaction and recapture the market share by fulfilling the customer needs. • To study the factors affecting the consumption pattern. 3. 4 Research Design For any researcher the research methodology is the most important criteria to decide before the actual research process starts. There are many methods for conducting the research some of them are as under; a) Descriptive vs. Analytical b) Applied vs. Fundamental c) Quantitative vs. Conceptual vs. Empirical e) Field setting or laboratory testing research
The design of search is a plan or a model that helps researcher to conduct a formal investigation . It is an application of methods and procedures for acquiring the information needs for getting a desire out come. It decides the sources of data and methods for gathering data. A good design insures that the information obtained is relevant to the research question and that it was collected by objectives. Since, research design is simply the frame work or plan for a study. It is a blue print that of a house devised by an architect. My approach to research is descriptive and quite specific.
Out of these all research methods the research method, which was most suitable to my research, was • descriptive research • because it provides me all the opportunities to cover the all the aspect that I require to conduct the research and get an appropriate out come. • Descriptive Research: • Descriptive research includes surveys and fact – finding enquires of different kinds. The major purpose of descriptive research isdescription of the state of affairs as it exits at present. In social scienceand business research we often use the term • Ex post facto research fordescriptive research studies. The main characteristic of this method isthat the researcher has no control over the variables; he can onlyreport what has happened or what is happening. 5. Scope of the Study: • As learning is a human activity and is as natural, as breathing. Despite of the fact that learning is all pervasive in our lives, psychologists do not agree on how learning takes place. How individuals learn is a matter of interest to marketers. They want to teachconsumers in their roles as their roles as consumers. They want consumers to learn their products, product attributes, potential consumers benefit, how to use, maintain or even dispose of the product and new ways of behaving that will satisfy not only theconsumer’s needs, but the marketer’s objectives. The scope of my study restricts itself to the analysis of consumer preferences, perceptionand consumption of Cadbury and Nestle Chocolates. There are many other brands of chocolates available but my study is limited to two major players of chocolates leaving behind the others. The scope of my study is also restricts itself to junagadh region only.
There are 2 sources of data i. e. • Primary Data • The data, which are collected for the first time, directly from the respondents to the baseof knowledge & belief of the research, are called primary data. The normal procedure is to interview some people individually or in a group to get asense of how people feel about the topic. So far as this research is concerned, primary data is the main source of information provided by the respondents. • Secondary Data • When the data is collected and compiled in the in a published nature it is calledSecondary data.
So far as this research is concerned internet, many brochures and magazines have beenreferred too. a) SAMPLING DESIGN • It is true that it is very difficult to do research with whole universe. As we know that it isnot feasible to go with population survey because of the numerous Doctors and their scattered location. So for this purpose sample size has to be determined well in advancedand selection of the sample also has to be scientific so that it represents the wholeuniverse. So far as this research is concerned, the sample size is 100. b) INSTRUMENT Taking into consideration research instrument selected by me is questionnaire because itgives more flexibility in terms of data and it has been asked to the responder personallyand have an idea of getting an important unknown data that can be collected through their behavior. c) MODE OF DATA COLLECTION • Data collection mode is personal visit and filling up of the questionnaire. • In attempt to make this project authentic and reliable, every possible aspect of the topicwas kept in mind. Nevertheless, despite of fact constraints were at play during theformulation of this project.
The main limitations are as follows: • Due to limitation of time only few people were selected for the study. So thesample of consumers was not enough to generalize the findings of the study. • The main source of data for the study was primary data with the help of self-administered questionnaires. Hence, the chances of unbiased information are less. • People were hesitant to disclose the true facts. • The chance of biased response can’t be eliminated though all necessary steps weretaken to avoid the same. • important. 8% says that they are mainly seeing the quality of the product if the productis qualitative than they are ready to pay any price for that product. • Que6. Which form of a chocolate do you like? FORM OF CHOCOLATE 472918601020304050HARD CRUNCHY NUTTIES CHEW Analysis & interpretation: Every person have there own taste and preferences towards the eatable product inchocolates there are four varieties available in the market among this 47% of theconsumer like hard chocolates, 29% of the consumer like crunchy chocolates, 18% of theconsumer like nutties chocolates & only 6% of the consumer like Chew chocolates.
Que7. What pack do you purchase? 731710020406080 PACK PREFERENCE SMALL BIG FAMILY PACK Analysis & Interpretation: The chocolates are available in the market in different packaging like small, big, & family pack, from the survey we can say that the consumption of the chocolates are more eaten by the teenage group so they more prefer the small packaging because of thereavailability in market is good and most important thing is its very much affordable. According to the survey 73% are using small pack, 17% are using big pack of thechocolates, 10% are consuming family pack because of there high price.
So we can easilysee that the consumption of small pack is having boom in the market compare to other packaging. Que8. Which promotional offers attract you most? PROMOTIONAL OFFERS 12%84%4%FREE GIFTS PRICE OFFER ANY OTHER Analysis & Interpretation: To sell out the product there are many promotions activity conducted by the company toface the competition the offer give by the company are like free gift, price offer, or anyother scheme. In this 12% are giving the free gift offer (scratch the card scheme), 84% aredirectly giving the price offer, and 4% giving the any other kind of scheme. Que9. Which of these factors affects your purchase? Analysis & Interpretation: There are many factors affecting at the time of purchase. So company is doing promotional activities to acquire the desired target of the product. Basically there are sixmain type of the promotional activities like 69% of the advertisement, 1% of thesuggestions, 2% of the attractive display, 0%of the doctors advice, 21% of the companiesare using Brand Ambassadors in there advertisement, 7% of the ingredients. So all thisfactors are affecting the purchase. CHAPTER 4 PRODUCT Coffee
Nescafe, Taster’s Choice, Ricore, Ricoffy, Nespress, Bonka, Zoegas, Loumidis. Nescafe • Nescafe is a brand of instant coffee made by Nestle. It comes in many different product forms. The name is a portmanteau of the words “Nestle” and “cafe”.  Nestle’s flagship powdered coffee product was introduced in Switzerland on April 1, 1938 after being developed for seven or eight years by Max Morgenthaler and Vernon Chapman. Nescafe, a brand introduced by the Nestle Company, can be traced back to the 1930s.  In the United States, the Nescafe name was used on its products until the 1960s.
Later, Nestle introduced a new brand in the US called “Taster’s Choice”, which supplanted Nescafe for many years. Taster’s Choice was also introduced into Canada at the same time, and continues to be sold as a separate product, branded as superior to Nescafe, and is higher priced. Taster choice • NESCAFE TASTER’S CHOICE Decaf House Blend is decaffeinated using a process recognized by the industry as safe and designed to be among the best to preserve the fine coffee flavor. The process is approved by the FDA and other agencies around the world. Ricore Ricoffy • Fresh percolated taste.
Soluble granules of the finest coffee and chicory. Nespresso • Nespresso is the brand name of Nestle Nespresso S. A. , an operating unit of the Nestle Group based in Lausanne, Switzerland. Nespresso machines brewespresso from coffee capsules, a type of pre-apportioned single-use container of ground coffee and flavorings. In 1976, Eric Favre, an employee of Nestle, invented, patented and introduced the Nespresso system to the business market in Switzerland without significant success. In 1988, due to the efforts of Jean-Paul Gaillard — a business man, the inventor of «Le Club» community —, the product became a market success.
In 1990, the firm signed a contract with Turmix, which started to sell Nespresso machines in Switzerland. Thereafter, other contracts were signed with Krups, Magimix, Alessi, Philips, Siemens and De’Longhi. Bonka Taste Natural – decaffeinated coffee beans Zoega |Coffee is the national drink of Sweden. Consuming more than 20 lbs. of coffee per person, per year, Swedes | |know great coffee and demand the best. Since 1886, four generations of Zoega coffee makers have been | |perfecting the art of coffee blending and roasting, making the Zoega name a hallmark. | | Loumidis • This is the decaffeinated version of the popular Papagalos – Loumidis Coffee. Makes great traditional Greek Coffee without the caffeine! Every cup of Greek Coffee contains 150mg of antioxidants which operate as a protection shield of your cells. Vacuum packed to retain its flavor and aroma for a long time. Packaging may vary. Water Nestle Pure Life, Nestle Aquarelle, Perrier, Vittel, Contrex, S. Pellegrino, Acqua Panna, Levissima, Arrowhead, Nestle Pure Life Pure Life was launched in 1998 to help meet the global need for a safe drinking water with a pleasant taste at an affordable price. Now present in more than 20 countries, Pure Life is the world’s most popular bottled water brand. Nestle Aquarelle • Present in 11 countries in Europe, this natural spring water offers fresh and light taste to the whole family Type: still or sparkling natural* springwater. Distribution channel: retail, out of home, home & office delivery Perrier, Vittel • Perrier mineral water is the ultimate refreshment and sensorial stimulation for intense pleasure moments.
The spring from which Perrier water is sourced has a unique balance of minerals and light effervescence – providing a distinctively fresh, clean taste. It is this blend of bubbles and minerals which have made the Perrier brand the world leader of sparkling mineral water. Vittel • Vittel is a French brand of bottled water sold in many countries. Since 1992 it has been owned by Nestle. • Mineral water from the source at Vittel has been bottled and made available for curative and, increasingly, for commercial purposes since 1854. • Vittel is the water provider for the London Marathon for the tenth consecutive year in 2008.
S. Pellegrino • San Pellegrino (also S. Pellegrino) is an Italian brand of mineral water with naturally occurring carbonation and additional carbonation added by the bottler, produced and bottled by Nestle at San Pellegrino Terme, in theProvince of Bergamo, Lombardy, Italy. The water contains carbon dioxide and at least the following chemical elements in amounts of 100 or more micrograms per liter: calcium, chloride, fluorine, lithium, magnesium,nitrogen, potassium, silicon, sodium, and strontium. The strontium is naturally occurring, not the radioactivestrontium-90.
In popular culture, San Pellegrino is portrayed as a luxury and expensive bottled water. Owned byNestle since 1997, San Pellegrino is exported to most countries in Europe, the Americas, the Middle East, andAustralasia, as well as to Japan, Taiwan, and Hong Kong. Contrex • Recognised as the ideal water for the weight conscious since 1954, Contrex is enjoyed in over 35 countries around the world. Type: still natural mineral water,plain or flavoured Distribution channel: Acqua Panna • Originating from the hills of Tuscany, Acqua Panna partners S. Pellegrino in top restaurants around the world.
Type: still natural mineral water Levissima • It’s the “green” brand for excellence in Italy! Levissima is a national role model in environmental sustainability in Italy, with the launch of its 1-litre bottle partly made of recycled PET and recycling message on all its bottles’ labels! Arrowhead • Arrowhead Water, also known as Arrowhead Mountain Spring Water, is a brand of drinking water that is popular in the western United States, particularly in Arizona, the Northwest, and in California, where it is sometimes produced. Other beverages Nestea, Nesquik Nestea Nestea is a brand of iced tea manufactured by Nestle and distributed by Nestle company’s beverage department in the United States and by Beverage Partners Worldwide (BPW), a joint venture between The Coca-Cola Company and Nestle, in the rest of the world. It competes with Unilever/PepsiCo’s Lipton Iced Tea. It provides a variety of “tea products”, in regular and diet forms, including liquid and powdered tea concentrates, refrigeratable teas, and ready-to-drink bottles dispensed by vendor or vending machine. The beverage comes in several flavors, depending on the country.
Nestea has become the subject of an investigation by PETA, which discovered cruel experimentation conducted on rodents, in an “attempt to discover possible health benefits Nesquik • Nesquik is a family of milk beverage products made by the Nestle corporation. It began as a chocolate powdered flavoring mix in the United States in 1948, as Nestle Quick. In the 1950s, it was launched in Europe as Nesquik. In countries with the Quick term (including the USA, Canada, Mexico, and Australia, where it was originally marketed under the name Nestle’s Quik), the name was changed to the worldwide brand Nesquik in 1999.
At the same time, General Mills introduced Nesquik cereal, a breakfast cereal that “turns milk into chocolate milk,” which is similar to Cocoa Puffs. Ice cream Ahus Glass • Ahus Glass was a Swedish ice cream producer, situated in the locality of Ahus in Kristianstad Municipality, Skane County. The Swedish word for ice cream is “glass”. It started its fabrication in 1950. In 2002 the company Ingman bought the factory and instead of using the name Ahus Glass, the ice cream became Ingman Glass AB. However, the factory still produces ice cream, and since 2007, produces ice cream under the original brand name of Ahus Glass.
The factory specializes in milk-free ice cream made with soya and lactose-free ice cream. Haagen-Dazs • Haagen-Dazs is a luxury ice cream brand, established by Reuben and Rose Mattus in the Bronx, New York, in 1961. Starting with only three flavors: vanilla, chocolate, andcoffee, the company opened its first retail store in Brooklyn, New York, on November 15, 1976.  The business grew, and created franchises throughout the United States and many other countries around the world.  Haagen-Dazs produces ice cream, ice cream bars, ice cream cakes, sorbet and frozen yogurt.
Infant food • Cerelac is a brand of instant cereal made by Nestle. The cereal is promoted for infants 6 months and older as a supplement to breast milk when it is no longer the sole item in an infant’s diet. It is currently sold in Belgium, Portugal, India, South Africa, Zimbabwe, Philippines, South East Asia, and the Middle East. • Gerber Products Company is a purveyor of baby food and baby products. A formerAmerican-owned company, Gerber is now a subsidiary of Nestle, and is currently located inFremont, Michigan, USA.
The company was founded in 1927 in Fremont, Michigan, by Daniel Frank Gerber, owner of theFremont Canning Company, which produced canned fruit and vegetables. At the suggestion of a pediatrician, Gerber’s wife Dorothy Gerber began making hand-strained food for their seven-month-old daughter, Sally. Recognising a business opportunity, Gerber began making baby food. By 1928, he had developed five products for the market: strained peas, prunes, carrots and spinach, and beef vegetable soup. Six months later, Gerber’s baby foods were distributed nationwide.
Health care nutrition • Boost is the brand name of a line of products first introduced in 1995 by Mead Johnson, which was purchased by Novartis along with all its other adult nutrition products by Mead Johnson in 2002, and has been sold to Nestle along with the Gerber brand on September 1, 2007. It was featured in popular news reports after a man filed suit claiming that Boost Plus had caused his priapism. The ingredients of Boost Plus are common food products or vitamins, present at 3 to 100% of their recommended daily values.
For example, the vanilla flavor contains water, corn syrup solids, sugar, milk protein concentrate, canola oil, high oleic sunflower oil, calcium caseinate, sodium caseinate, corn oil, and less than 1% potassium citrate, magnesium chloride, soy lecithin, calcium phosphate, salt, sodium ascorbate, beta carotene, biotin,niacinamide, calcium pantothenate, vitamin B12, vitamin B6 hydrochloride, riboflavin, thiamin hydrochloride, folic acid, potassium iodide,magnesium phosphate, artificial flavor, choline chloride, vitamin E acetate, vitamin A palmitate, vitamin D3, vitamin K1, carrageenan,potassium chloride, zinc sulfate, manganese sulfate, cupric sulfate, chromic chloride, sodium molybdate, sodium selenite, ferrous Seasonings
Maggi • Maggi (pronounced [? ma? i]) is a Nestle brand of instant soups, stocks, bouillon cubes, ketchups,sauces, seasonings and instant noodles. The original company came into existence in 1872 inSwitzerland, when Julius Maggi took over his father’s mill. He quickly became a pioneer of industrial food production, aiming to improve the nutritional intake of worker families. Maggi was the first to bring protein-rich legume meal to the market, and followed up with a ready-made soup based on legume meal in 1886. In 1897, Julius Maggi founded the company Maggi GmbH in the German town of Singen, where it is still based today. Chocolate 100 Grand Bar 100 Grand Bar (formerly known as $100,000 Bar) is a candy bar produced by Nestlein the United States. It weighs 1. 5 ounces (42 grams) and includes chocolate, carameland crisped rice. The bar contains 190 calories; it is low in cholesterol and sodium, but high in saturated fat and sugar.  Its slogan is “That’s Rich! ” Aero • Aero is a milk chocolate bar filled with bubbles of air, made by Nestle and primarily sold in the United Kingdom (where it originated), Ireland, Mainland Europe, Brazil, South Africa, Argentina, Australia, Middle East and Canada. The process of manufacture was patented in 1935 by Rowntree’s.  Registration of the trademark and manufacture to market started soon afte Petcare Alpois an American brand of dog food marketed and manufactured by the Nestle Purina Petcare subsidiary of Nestle. The brand is offered as a canned or packaged soft food, as well as in dry kibbles. CHAPTER 5 PROMOTION Nestle constitutes the bigger corporation in the field of research and technology of foods. Her annual investment in Research and Growth is the biggest of the branch while her personnel in this sector exceeds the 3. 000 people. The Nestle Research Centre in Lausanne, where is carried out the basic research, is recognized globally as one of the leading centres of researches in his type with above 300 publications in valid scientific publications each year.
The main activity of Group Nestle, which constitutes the bigger enterprise of foodstuffs worldwide, is focused in the sector the general and special human diet. Even if initially her work was based on the milk and the special products of diet for children, many still products were added in her activities with the byway of years, such as chocolates and (CRUNCH, CAILLER, KIT KAT, AFTER EIGHT, SMARTIES etc), coffee (NESCAFE, etc), drinks (NESTEA, NESQUIK etc), cooking products (soups, broths and mash MAGGI, pastas BUITONI, tins LI[B]BY’S etc), products of refrigerator (yoghurt CHAMBOURCY, ice-creams NESTLE, MOTTA and CAMY, desserts etc), natural metal water (PERRIER, VITTEL, SAN PELLEGRINO etc), frozen products (LEAN CUISINE) and products of cerials (FITNESS, CLUSTERS, CHEERIOS etc).
Also,in our days NESTLE is taken action in the sector of products of diet of small domestic animals (FRISKIES, GOURMET, FELIX etc), as in the sectors of ophthalmologic (ALCON, OPTI – FREE etc), dermatological pharmaceutical and cosmetic products (NUTRADERM, BENZAC etc). In Greece, Nestle has presence above 100 years and constitutes today one from the bigger industrial companies of foods and drinks. The group Nestle in Greece is today constituted by the companies NESTLE GREECE S. A, NESTLE GREECE ICE-CREAMS S. A, GROUP of CERIALS GREECE. and ALCON INTERNATIONAL GREECE LTD, has totally in 4 factories and occupies in total 1350. It consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade.
From marketing point of view, Promotion informs, persuades, and reminds prospective and current customers and other selected audiences about a company and its products. The most useful brand is failure if no one knows it is available. Promotional • A promotional mix is an organization’s combination of personal selling, advertising, sales promotion, and public relations. An effective promotional mix is a critical part of all marketing strategies. Promotion, in whatever form it takes, is an attempt to influence. Nestle is using following methods for promotion of NPL: Advertising • It is non-personal communication paid for by a clearly identified sponsor promoting ideas, organizations, or products.
The most familiar outlets for ads used for the advertisement of the NPL by Nestle are the broadcast (TV and Radio) and print media (news papers and magazines). The Nestle also uses other advertising vehicles like billboards, T-shirts and, more recently the Internet. Nestle has its own website which is giving the information about the different brand of the company. Nestle is doing the selective demand advertising that is intended to stimulate demand for individual brands. In the advertisement the message is given that, • There is one water, which gives you, hope, happiness and trust and that water is Nestle Pure Life. It is pure, safe, and healthy water. And in recent advertising campaign, their slogan is, • JIYO! Kay yehi hay zindagi.
On billboards the pictures of NPL advertisement seems so attractive, especially in summer season across the roads that it motivates the customer to purchase it immediately. Nestle has the internal advertising department as well as hire the services of the external Media manager assisted by it’s assistant to devise all campaigns…… Promotion • It is demand-stimulating activity designed to supplement advertising. It is paid for by the sponsor and frequently involved a temporary incentive to encourage a sale or purchase. Many sales promotions are directed at consumer. Nestle has designed it in away to encourage the company’s sales force or other members of the distribution channel to sell products more aggressively.
Nestle Pakistan limited arranges concerts, trade shows, event sponsorship, in-store displays, and discounts. In Nestle, a separate sales department is working. The function of this department is to taking the sales orders, visiting the market, collecting the customer’s complaints and transferring to the concerned department. They also make sure the availability of the NPL to the consumer at right time and at right place. Public relations • It encompasses a wide variety of communication efforts to contribute to generally favorable attitudes and opinions toward an organization and its products. Unlike most advertising and personal selling, it does not include specific sales message.
The targets may be customers, stockholders, a government agency, or a special-interest group. Public relations can take many forms, including newsletters, annual reports, lobbying, and support of charitable and civic events. Nestle is following all above mentioned public relations forms: • The company assists through donations such hospitals and organizations that provide services to the poor and responds to distress calls by the government and NGOs for assistance to victims of flood, earthquake, drought and other natural calamities. • The company arrange mil program for undernourished and sick children and mothers through several NGOs and charitable organizations. The company has initiated a tube well and hand pump installation scheme in selected rural areas. • It donates computers to schools for disadvantaged children run by NGOs and charitable organizations. • To support the spread of education in rural areas, it undertakes Refurbishment Program of Govt. operated primary and middle schools. • The Company regularly sponsors sports and cultural events, such as the International Polo Tournament and SAF Games in the recent past. • The company gives the extra gifts, calendars and diaries to the employees and customers for public relations. Publicity • Publicity is also a promotional method used by the Nestle.
Publicity is specific form of public relations that involves news stories about organization or its products. Like advertising, it consists of an impersonal message that reaches a mass audience through the media. But several features distinguish publicity from advertising. The company does not pay for it and it has little or no control over this and it appears as news and therefore has grater credibility than advertising. The company seeks for good publicity and frequently provides the material for it in the form of news releases, press conferences, and photographs. When a picture of a company’s CEO appears on the cover of business publication and it accompanied by a lattering article in the magazine, it is often attributable to the efforts of the firm’s public relations department. Integrated Marketing communication • Nestle is using the integrated marketing communication system. In this, company is trying to coordinate all promotional efforts make an effective impact on the customer mind and to deliver a consist message. The Nestle has incorporated several different promotional campaigns. Depending upon the objectives and available funds, it undertakes simultaneous local, regional, national, and international programs. Findings and Recommendations • This is competitive world and must never forget that customers have a choice.
If they are not satisfied with a Nestle Pure Life, they will switch to another brand. 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. Nestle must watch and learn from its competitors. If they do something better, Nestle must improve its own performance. Nestle can achieve competitive advantage through Quality. Progress is followed by listening to Nestle customers and by measuring its works performance.
Shortcomings and mistakes must be analyzed and corrected. Problems must be anticipated and prevented before they occur. Nestle also must identify and take advantage of opportunities. To stand still is to fall behind. So Nestle must strive for continuous improvement in every area. It is through many small improvements as well as through major breakthroughs that Nestle will achieve excellence. We have observed from our extensive hard-work to compile these pages and after visiting the organization that the company is eager to serve consumers at its every possible level, consumer services department is the evidence of such a pursuit from the organization point of view.
Presently the company is market leader in it’s category but it shouldn’t take it as a complacent attitude rather capitalize on its good brand equity and to improve its quality of product to reap not only more profits for the shareholder but also serve the humanity by providing them healthful water which in other way a noble & sacred job. The company can fulfill this job by having such a spirit following it religiously by incorporating it all the marketing strategies Product Strategy • Anything offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want. Product is set of tangible and intangible attributes, including packaging, color, price, manufacturing, prestige, retailing, services, etc. which the buyer may accept as offering want is satisfied. Nestle is offering the products, which comes under the category of fast moving consumer goods (FMCG).
Nestle is committed to offering consumers high-quality food products that are safe, tasty and affordable. The Nestle Seal of Guarantee is a symbol of this commitment. To be successful in marketing, producers must need carefully planned strategies for their products. Now the question is that how Nestle has planned the product strategies for NPL. Positioning the Product In relation to the attribute • Nestle is positioning its water as pure and safe water, which is essential to good health. They say that Trust Nestle Pure Life and also Nestle pure life is Happiness, Hope and Trust, this is the message which they are giving in their advertising campaign. Nestle also claims that NPL is Pakistan’s favorite water and currently their slogan is JIYO! kay yehi hay zindagi. On basis of these, it is said that Nestle is positioning in relation to the attribute and quality of the product. Its basic foundation is unchanged from the time of the origins of Company, and reflects the basic ideas of fairness, honesty, and a general concern for people. Product Line Expansion • Product line expansion is accomplished by increasing the depth (variety of sizes, colors, models) within the product line. Nestle is offering variety of sizes in NPL product line, which are as follows: Retail line: • 1. 5 liters • 0. 5 liters • 0. 2 liters (Recently launched) • Home and Office Line: It is also comes under Nestle Bulk category. • 3 Gallon • 5 Gallon The year 2005 saw the successful completion of yet another year of outstanding business for NESTLE PURE LIFE both in retail with 0. 5 and 1. 5liter bottles with the introduction of a new product i. e. 0. 2 liter bottle and direct home and office delivery with 19 liter bottles. The exceptional performance of the brand is the result of expanding national distribution and an increasingly loyal customer bases. The brand has revolutionized the Pakistani market by tapping the real consumer need for pure, safe and healthy water and has successfully dominated a key strategic business in Pakistan. Product Life Cycle Product life cycle consists of the aggregate demand over an extended period of time for all brands comprising a generic product category. Product life cycle is divided in four stages. Introduction: During introduction stage, sometimes called the pioneering stage, a product is launched into the market in a full-scale marketing program. Growth: • In the growth stage, or market-acceptance stage, sales and profits rise, frequently at a rapid rate. Competitors enter the market, often in large numbers if the profit outlook is particularly attractive. Maturity: • During first part of the maturity stage, sales continue to increase, but at a decreasing rate. When sales level off, profits of both producers and middlemen decline. The prime reason is intense competition. Decline: In this stage sales volume decreases and losses become grater than the profits. Small competitors normally quit from the market at this stage and only large and strong remain moderately successful in decline stage. NPL is at the growth stage of the product life cycle. Large and small both kinds of competitors are entering in the market. Sales volume and market share is increasing rapidly. Last year, the sales of water were 8000 tons and now this figure is raised up to 14000 tons. Branding • A brand is a name and/or mark intended to identify the product of one seller or group of sellers and differentiate the product from competing products. Branding reduces the price competition.
Nestle is using following branding strategies:The company name combined with a product name: A Nestle 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. Branding for Market Saturation: • NPL is categorized as NPL Home and Office (HOD) in bulk (in gallons) and NPL for retailers i. e. easily carrying bottles of small sizes. These multiple brands are necessary to penetrate separate target markets. Packaging, Design, Color • Packaging consists of all the activities of designing and producing the container or wrapper for a product. Packaging is intended to serve vital purposes Packaging connotes pleasure and attraction. By adding value to the product, the shape of the bottle contributes to building brand identity. NPL round bottle and the classic elegance of bottle are instantly recognizable.
Constant research into materials and styles generates innovative packaging in ever more attractive shapes, textures and colors. Renovation in design, graphic identity and labels helps set new standards and energize brands by anticipating trends in consumer tastes. By adopting a new dynamic design, a renovated and modernized square bottle is lunched by Nestle. Packaging practicality is a key factor for success. Beyond the basic requirements – strength, water tightness, etc. – ease of daily use is a subject of regular research. Innovation in this area can focus on transportation convenience, making the pack more comfortable to carry the bottle.
Packaging is an essential protection. It guarantees product safety and quality from manufacturing through warehousing and distribution up until the end consumer. It is particularly crucial in preserving water’s original purity over time. Several of Nestle Waters’ research programs aim to optimize material performance, while a battery of tests and ever more innovative capping techniques guarantee consumer safety on a daily basis. In addition to this primary role, packaging fulfils several complementary functions, including product identification and enhancement, practicality, consumer information, functionality to suit changing lifestyles, and so on.
Given greater diversity in packaging types and quality, along with the emergence of new consumption patterns, packaging must also meet new ecological challenges. In this context, Nestle Waters continue its efforts to develop more environmentally friendly bottles. This responsible corporate policy relies on a dual approach: reducing both packaging weight and energy requirements during the manufacturing process while considerably increasing the quantity of material recycled. Labeling • A grade label is used in case of NPL. Grade label identifies the product’s judged quality with a letter, number, or word. Nestle is using different phrases words to show the quality of the product. Like Trust, Happiness, Pure, Pakistan’s favorite water, safe, healthy and Premium drinking water. Quality There’s no agreement on a definition of product quality, even though it is universally recognized as significant. Quality is a relative term and it varies from person to person due to the personal interests; what one likes, another may dislike. But one thing is common that when an organization fulfills the expectations of the customers through its products then the image that organization is established as a quality-delivering organization. The same case is with NPL it is satisfying the needs and expectations of the customers through its standardized products. Everyday, millions of people all over the world show their confidence on Nestle by choosing Nestle Pure Life.
This confidence is based on quality image of Nestle and a reputation for high standards that has been built up over many years. Nestle commitment to product quality remains the corner stone of its business philosophy. In Pakistan too the Company has all along been committed to achieving the highest quality of its products. As a part of this effort, in 1993, the Company embarked upon the “farm to table” quality concept – the guarantee about the quality of Nestle products up to the time of consumption by the consumer. Nestle expect this concept to result in its product becoming the product of choice for its consumers. Quality is the cornerstone of NPL success: Every product on the shelf, every service and every customer contact helps to shape this image.
A Nestle brand name on a product is a promise to the customer that it is safe to consume, that it complies Quality is the cornerstone of success. Every product on the shelf, every service and every customer contact helps to shape this image. A Nestle 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. 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 Nestle NPL at all times. Nestle people says: Quality is our most successful product. It is the key to our success, today and tomorrow. Natural or treated, all of Nestle Waters’ bottled waters undergo the same strict quality controls and adhere to different local and international regulations linked to their specificities. Based at the Product Technology Centre (PTC) in Vittel in France, the Central Laboratory carries out over 200,000 chemical and microbiological analyses every year. Linking two regional laboratories, the Central Laboratory is not only a quality guarantee of the resource and the final product, but also a centre of expertise for the hundred Nestle Waters’ production sites. CHAPTER 6 PRICE
Price is the amount of money and/or other items with utility needed to acquire a product. and utility is an attribute with potential to satisfy the wants. A product price influences wages, rent, interests, and profits. Some prospective customers are interested in low prices, where as another segment is more concerned with other factors, such as service, quality, value, and brand image. Consumer’s perception of quality may be influenced not just by price but also by such factors as store reputation and advertising. Pricing objectives may be: • Profit- oriented: • To achieve a target return • To maximize profit • Sales-oriented • To stabilize prices To maintain or increase market share • Status quo-oriented: • To stabilize the prices • To meet competition In developing a marketing program, management has to decide whether to compete primarily on the basis of price or the non-price elements of the marketing mix. Nestle has adopted following for setting the pricing of NPL: Non-price Competition • Nestle is trying to maintain stable prices of NPL and attempt to improve its market positions by emphasizing other aspects of their marketing programs. Of course, competitors’ prices still must be taken into considerations, and price changes will occur over time. Nevertheless, the emphasis of Nestle is on something other than price.
To maintain this non-price competition Nestle is developing distinctive, hopefully unique, products and to create a novel, appealing promotional program. In addition, it emphasizes the variety and quality of the NPL, which they are offering to customers. Market Entry Strategies • The price of NPL is maintained constant over the period as the base for this is qualitative product which over the time period has reaped more market by keeping price constant. Discounts and Allowances • Discounts and allowances result in a deduction from the base (or list) price. The deduction may be in the form of reduced price or some other concession, such as free merchandise or advertising allowances.
Discounts and allowances are common in business dealings. Nestle (NPL) offers the Trade Discounts to it customers. Trade discounts sometimes called functional discounts are deductions from the list price offered to buyers in payments for marketing functions the buyer will perform. The examples of these functions are: storing, promoting, and selling the product. One-Price Strategy • NPL is using this special price strategy i. e. one-price strategy in which the company charges the same price to all similar customers who buy identical quantities of a product. But for different quantities the company is offering different price. Even prices are set for the NPL products. Resale Price Maintenance Some manufacturers want to control the prices at which middlemen resell their products; this is termed as resale price maintenance. Nestle is also following this strategy. It is doing so to protect the brand’s image. They say that their control of prices provide middleman with ample profit margins. Global pricing policies: • Apart from global coordination of prices on specific products and firms usually adoptone of the three alternative pricing policies that cut across their product lines. theseare • 1. Polycentric pricing 2. Geocentric pricing 3. Ethnocentric pricing Nestle use geocentric pricing policy. • Nestle Products price planning Nestle dairy products are priced keeping in view the buying power of middle-income and high-income social classes. The cost includes the cost of manufacturing, labor, raw materials etc. Theindustry sales growth is largely driven by population growth as well as theamount of advertising and product innovation taking place in the industry. Thecompany has resorted to pricing discrimination strategies to maximize the valueof consumer demand Being a multinational brand, the pricing objective of Nestle is mainly to increasesales as it has already penetrated the market. Their prices are not affected by pricechanges by competitors, and they don’t engage in price wars.
Competition is metthrough innovation. The prices of Nestle milk change as the product size ischanged of the Product Life Cycle. And Because of the contract between theseller companies, they offer same price. So there is no skim based or penetration based pricing by company. The retail prices are different according to there size and brand. However priceshave been standardized throughout Pakistan and there is no differentiation basedon geographical areas. There is no change in prices according to season. Itremains the same. They adopt same strategy in international marketing as in local marketing. But the prices are according to the international currency NESTLE PRICING STRATEGY Price In Price strategy, Nestle has adopted the strategy of non-price competition. It is offering one price for NPL to all. It also keeps the check on distributors to maintain single price of NPL. It offers trade discounts to its distributors. Price is the amount of money and/or other items with utility needed to acquire a product and utility is an attribute with potential to satisfy the wants. A product price influences wages, rent, interests, and profits. Some prospective customers are interested in low prices, where as another segment is more concerned with other factors, such as service, quality, value, and brand image.
Consumer’s perception of quality may be influenced not just by price but also by such factors as store reputation and advertising. Nestle estimated the cost by doing accumulated production because if they produced mass production so it reduced their labored cost and other cost for production process it’s a big advantages of the Nestle company who produce large quantity of units. With the help accumulated production Nestle Company has a low cost of production and high profit margin. Next, Nestle company selecting a price method of going rate price because their pricing near the competitor pricing. As an example, Nestle juices have a market leader in beverage industry.
Last, Nestle set the final pricing related to their market competitors so Nestle price do not have impact on the company policy , and other marketing activities. • Pricing Strategy Patterns The desire to smooth prices has been posited by coffee manufacturers as one explanation for not fully adjusting prices to changes in costs. In an investigation by the United Kingdom Competition Commission, Nestle commented:Starbucks spokeswoman Helen Chung stated, “We do not change our prices based on short-term fluctuations in the coffee market” (Seattle Times,December 7, 1999). P commented in conjunction with its 2004 priceincrease that P “increases product prices when it is apparent that commodity price increases will be sustained” (Associated Press, Dec. 10,2004).
Coffee manufacturers often cite movements in futures prices as moti-vation for price adjustments, further corroborating their stated desire tosmooth prices. Not evident from market-level averages is the fact that individual manufacturer prices often remain fixed for long periods of time. Figure 2 presents a typical manufacturer-price series for Folgers coffee. Historically, adjustments in prices have occurred primarily when coffee commodity prices are relatively volatile. Table 5 presents the standard deviation of weekly coffee commodity prices by year, as well as the average frequency of manufacturer price adjustments during the year FINAL STRATEGY OF NESTLE Nestle is one of the world’s number one food company since their beginning in 1866 when they started in Vevey Switzerland. They are also one of the largest food businesses comprising of almost 500 factories and more than 250,000 workers all over the world. Nestle has been accepted with their bestselling products including Milo, Nido, Bear Brand, Nestea, Neslac, Nestogen, Nescafe etc. these products has been passed on through generations. It has been a product of tradition that passed on until today; it is a product of hereditary choice. Their products are regarded as one of the most suitable food that is highly recommended for the whole family.
Nescafe has been a part of staple food among nations, The Milo tonic food drink and Bear brand carries their flagship products that even sports enthusiast will love. This has become an energy giving food that supplies a well rounded personality and nutritious value for children and adults alike. Undoubtedly their products have demonstrated unprecedented market dominance and successful strategic marketing practices that has been envied and imitated by other large corporation that has always been their competition. And this has been their open secret of success. The distribution strategy integration throughout the world has become their most sustainable marketing arm that caters entirely to its original market.
This distribution system covers the entire world that should be regulated and maximize to have an equal share or according to their market responses, that is why the distribution strategy has become very successful and accurately achieved, this means that no amount of products will be left in bad orders or expiration. . Chapter 7 Place Inn marketing strategy, Place means distribution of the products. It is a very important element of the marketing-mix. Ownership of a product has to be transferred some how from the individual or organization that makes it to the consumer who needs it and buy it. Goods also must be physically transported from where they are produced to where they are needed. For this purpose, middlemen are used.
Middleman is a business firm that renders services related directly to the sale and/or purchase of a product as it flows from producer to consumer. Due to these middlemen, activities such as creating assortments and storing products can be shifted from one party to another in an effort to improve efficiency. They are also able to carry out distribution activities better or more cheaply than either producers or consumers. A distribution channel consists of the set of people and firms involved in the transfer of title to a product as the product moves from producer to ultimate consumer or business user. Type of Distribution channel: • Diverse distribution channels exist today.
The distribution channel used for distribution of NPL by Nestle is: Producer[pic] Wholesaler [pic]Retailer[pic] Consumer This is an economically feasible choice. Nestle Pakistan Limited has a strong network of distribution and has a separate supply chain department. This comes under the term: Vertical Marketing System (VMS) • VMS is tightly coordinated distribution channel designed specifically to improve operating efficiency and marketing effectiveness. This is done by the Nestle. They have established an ownership relationship with the successive levels of the middlemen. Supply chain management (SCM) • It represents a total system perspective of distribution, combining distribution channels and physical distribution.
The core of supply chain management is coordinated logistics. Under supply chain management NPL is distributed through two main channels ie. 1. Consumer Retail Channel 2. Bulk Consumer a. Home b. Office 1. Consumer Retail Channel Company [pic]Wholesaler [pic]Retailer [pic]Consumer 2. Bulk Consumer Company [pic]Wholesaler[pic] Consumer Considerations in selecting the channels Nestle is adopting foolowing considerations while selecting the distribution channel. Market consideration • It is necessary to know about the current marketing trends and also about the competitors. Product consideration • It is necessary to give the good quality of NPL. Middleman Consideration Water is necessity of life so in time availability of NPL to the customer is very necessary. Company consideration • Nestle also has to take care of its objectives while selecting the channel i. e. quality service and at reasonable distribution cost to get maximum profit. Intensity of Distribution • There are many degrees of intensity__ ranging from intensive to selective to exclusive. The Nestle (NPL) uses Intensive Distribution. The company is trying to sell its products through every available outlet in a market, where a consumer might reasonably look for it. As water is a product of daily usage so its availability at right time and at right place is very important.
Ultimate consumers demand immediate satisfaction from convenience goods and will not defer to purchase a particular brand. That’s why Nestle is using this intensive distribution. By using this timely distribution many benefits the Nestle (NPL) is receiving, such as Improve customer service, which directly affects the demand. Effective physical distribution management opens many revenues for company. The strong and effective distribution channels has added value to product by both time utility and place utility. The Nestle brands are another strategic asset for Nestle Waters. They originated in the global need for a safe family drinking water with a pleasant taste, affordable price and tailored to local preferences.
This need gave rise to a new multi-site production process for bottled water based on a simple idea: a single brand of water produced at a variety of sites, thus reducing costly logistical, warehousing and transport constraints – which are particularly high in the bottled water sector – enabling consumers to enjoy the product at a more attractive price under a strong brand identity. Careful Management of distribution channels has resulted in helping for Nestle to keep the stable prices of the Nestle Pure Life. Marketing 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. Nestle Pakistan Limited is selected to study that how they have planned their marketing strategy for Nestle Pure Life (water). Nestle is a multinational food company and offering Fast Moving Consumer Goods (FMCG). The motto of Nestle is “Good Food, Good Life”, so delivering the qualitative products to the customer is their main objective. It is offering 75 brands of bottled waters worldwide.
Nestle Pure Life (NPL) is one of them that was first offered in Pakistan by Nestle Pakistan Limited in 1998. People felt need of Pure, safe and clean water because of impurities in water especially in the industrialized cities like Karachi, Lahore, Faisalabad etc. Nestle identified this opportunity and lunched NPL that satisfied the customer needs and Nestle become market leader in the water industry. The customers of NPL showed interest on NPL because of trust on Quality of Nestle, at the heart of which there are qualitative products and its long term commitment to deliver better products to consumers. Being the market leader, the market share of NPL is 78% that is much higher than its competitors.
NPL is passing through its Growth stage (of Product Life Cycle) i. e. its sales are increasing tremendously and competitors are entering in the market like Aqua Fina by Pepsi and Askari Waters. There are different SKU’s of NPL to cover a wide market needs like for Home and office delivery there are 3gallon and 5 gallon bottles (bulk usage) and for day to day usage easily carrying light weight like “1. 5, 0. 5, 0. 2 liters” bottles are available in the market. Still Nestle is working on bringing the changes and innovation in this field. For this it has close relationship with its suppliers and distributors to get their suggestion to improve the quality of NPL.
Nestle Pakistan also has the Customer Service Department with the logo “Talk to Nestle” in Lahore to receive the complaints and suggestions from the customers. In this way Nestle analyze its market and becomes aware of the new market trends. Marketing strategy incl