Our project was aimed at studying the marketing mix of products marketed by Nestlé India there by understanding the concept of 4P’s better. It details how Nestle has marketed its product in India. Nestlé India has divided its product portfolio into four different segments, namely-
- Milk Products and Nutrition,
- Chocolates and Confectionery,
- Beverages, and
- Maggi (noodles, soups and ketchups).
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Separate marketing mixes have been developed for these four different segments. The pricing, promotion techniques used and place of marketing and of course the product of one segment are very different from products of another segment. Therefore, we also decided to divide our project coverage into four different sections to cover the segments separately. Besides this Apart from the secondary research from newspapers, journals and the inter-net, we have interacted with some officials concerned with these things, present at Nestlé India, Gurgaon. All this has helped us in our extensive study of the marketing mix of various Nestlé India products.
We would like to put our thankfulness across to all those who have put in direct or indirect hard work towards the successful completion of this project. First & foremost, we would like to thank our teacher and mentor Prof. R. Kamble for his able direction and marketing proficiency devoid of which this project would have never concretised. We are also immensely grateful to the officials and product managers at Nestlé India, Gurgaon. Dr. S.N. BhatFood
- Ryan Fernandes Brand Franchise Manager
- Rohit DograManager, Milk And Nutrition
- Rashmi GuptaManager, Maggi
- Himanshu Manglik
A special thanks to Sudip Bandyopadhyay (Creative Consultant), who is handling the advertising for Milk Products and Nutrition division of Nestle India, on behalf of Ogilvy & Mather. As a final point, we would like to thank, “Institute of Management Technology, Nagpur” for providing us the pedestal to do this project.
- Neha Katyal2009132
- Karan Vyas2009159
- Nishant Sharma2009170
- Prachir Gupta2009185
History of Nestlé
Nestlé S.A. is a multinational packaged food company founded and headquartered in Vevey, Switzerland, and listed on the SWX Swiss Exchange with a turnover of over 87 billion Swiss francs. It originated in a 1905 merger of the Anglo-Swiss Milk Company for milk products established in 1866 by the Page Brothers in Cham, Switzerland, and the Farine Lactée Henri Nestlé Company set up in 1866 by Henri Nestlé to provide an infant food product. The two world wars both affected growth: during the first, dried milk was widely used but the second war caused profits to drop by around 70%. However, sales of the instant coffee Nescafé were boosted by the US military. After the wars, growth was stimulated by acquisitions expanding its range and taking control of several well known brands, so they now include Maggi, Thomy and Nescafé that are known globally. It is the world's largest food company, with Kraft Foods being second.
Nestlé India is a subsidiary of Nestlé S.A. Nestlé India manufactures products of truly international quality under internationally famous brand names such as Nescafé, Maggi, Rice Mania, Milkybar, Milo, Kit Kat, Munch, Bar-One, Milkmaid and Nestea.
Milk products and nutrition
Nestlé India has a wide portfolio for Milk Products and Nutrition. It includes-
Nestlé has a very clear Charter of ethics and responsible behaviour in selling infant nutrition products. Nestlé India follows this Charter and also complies with The Infant Milk Substitutes, Feeding Bottles and Infant Foods (Regulation of Production, Supply and Distribution) Act, 1992 that guides the sale of infant nutrition products in India. Nestlé India does not advertise its Infant Nutrition products.
- NESTLÉ CEREMEAL
It is for children over 2 years of age, to provide them with NUTRISHAKTI - a nutrient dense formula that has the right quality and quantity of key nutrients that meet at least 20% of your child's daily nutrient needs in every serve. It is easy to prepare and takes only 3 minutes to cook. NESTLÉ CEREMEAL with ‘Nutrishakti' benefits from the extensive Research and Development efforts and expertise of the Nestlé Group. NESTLÉ CEREMEAL Wheat Daliya contains the goodness of wheat with the added benefits of Vitamins and Minerals from ‘Nutrishakti'. NESTLÉ CEREMEAL Multi grain Daliya contains rice and ragi apart from wheat with the added benefits of Vitamins and Minerals from ‘Nutrishakti'. NESTLÉ CEREMEAL is available in select outlets in the markets in East and South India.
- NESTLÉ EVERYDAY DAIRY WHITENER
It is a creamy Dairy Whitener, which is specially made to add a rich, smooth taste to your tea. NESTLÉ EVERYDAY Dairy Whitener was launched in India in 1986 and this innovative product created a separate category of Dairy Whiteners in India NESTLE EVERYDAY PURE GHEE
It is 100% Shudh [pure] Ghee which is untouched by hand and hygienically packed. NESTLÉ CURDS
It is 100% fresh and natural, just like homemade. It is made from high quality pasteurised toned milk. The Cultures in NESTLÉ Curds are good for digestion and for a healthy, active life. NESTLÉ Curds is available in Chennai and Banglore.
- NESTLÉ MILKMAID
It is Partly Skimmed Sweetened Condensed Milk.
NESTLÉ MILKMAID is a versatile product and excellent as a dessert ingredient. Lip-smacking desserts can be whipped up in the shortest possible time.
NESTLÉ MILKMAID is a globally recognized and popular brand of Nestlé. It has been available in India ever since the Company first started importing and selling its products over 90 years ago.
- NESTLÉ SET DAHI
It is 100% Fresh and Natural and is made from fresh, high quality pasteurised toned milk. It has all the goodness of natural Calcium and the Cultures used in Nestlé Set Dahi help improve digestion. NESTLÉ Set Dahi is available in all the metros.
- NESTLÉ FRUIT 'N DAHI
It is a delicious innovation that combines the goodness of Dahi and the nutrition and taste of real fruits.
NESTLÉ Fruit 'N Dahi is available in all metros in Mango and Strawberry variants.
- NESTLÉ JEERA RAITA
It is delicious and has all the goodness of Dahi and Jeera. It is made from double toned milk and has a low fat content. NESTLÉ Jeera Raita is also extremely versatile. You can use it as the base to prepare your own favorite Raita, simply by adding vegetables, fruits or spices of your choice.NESTLÉ Jeera Raita is available in Delhi.
- NESTLÉ MILK
Nestlé has over 135 years of dairy expertise and NESTLÉ Milk ensures high quality and safety. NESTLÉ Milk goes through Ultra Heat Treatment to provide bacteria-free milk to its consumers. The product also goes through stringent quality checks and can be consumed straight from the pack as no boiling is required. The sealed pack of NESTLÉ Milk has a shelf life of 120 days without refrigeration. However, once opened, it must be refrigerated. The packaging is tamper-proof. NESTLÉ Milk is available in all metros.
- NESTLÉ SLIM MILK
Nestlé has over 135 years of dairy expertise and NESTLÉ Slim Milk ensures high quality and safety. NESTLÉ Slim Milk has a fat content of less than 0.5%. NESTLÉ Slim Milk goes through Ultra Heat Treatment to provide bacteria-free milk to its consumers. The product also goes through stringent quality checks and can be consumed straight from the pack as no boiling is required. The sealed pack of NESTLÉ Slim Milk has a shelf life of 120 days without refrigeration. However, once opened, it must be refrigerated. The packaging is tamper-evident. NESTLÉ Slim Milk is available in all metros.
Analysis of the 4Ps for this division
“The essence of all nestle milk products, particularly those targeted towards infants remain same, irrespective of all the cultural nuances. So, our strategy remains more or less consistent in India as compared to rest of the world”, remarks Rohit Dogra, Brand Manager, Milk and Nutrients, Nestle. Nestle is the world’s largest dairy, with an annual turnover of more than U.S. 8billion$. So they understand the dairy business better than anyone else. When they operate in India, the focus is to put to use their vast expertise and knowledge in the diversified domestic market. However, the task is not uphill because their products address all basic needs of human beings. “There is a lot of science that goes while we make our products”, explains Mr. Dogra. This is particularly because of the sensitivity of the matter involved in manufacturing and delivering perishable consumption products. Any margin of error could spell doom for the company’s fortunes. So there comes a lot of responsibility while dealing in such products. Another sensitive area of concern is that a major chunk of its products cater to infants and due to perceived risks involved (like unwarranted objections by certain segments of the public, risk of depreciation in quality due to storage problems or transportation problems, etc.), the challenge is enormous for the company. Nestle realizes the need to constantly add new products to its portfolios to cater to different market segments. This is in tune with a natural tendency to constantly innovate. Over a period of time, we have seen new products being added to its list.
While products like ceramel and milkmaid doing well, in recent times nestle has come up with products like Lassi, fruit n dahi, etc to cater unexplored segments of Indian market. The example of nestle slim milk is a classic, on how it was positioned and which set benchmarks for others to follow. The pack of Nestle Slim Milk is being positioned as drink for fitness and it is mentioned that it is 99.5 per cent fat free. Apart from conveying that calories are kept in check, the concluding message reinforces the packaged milk health proposition by saying: "So, don't think twice before making the switch to a healthier alternative." Breaking the myth of packaged milk (or for that matter milk on the whole) being only meant for being 'strong' or to put on weight, the agency specifically conveys the message of being slim and trim through milk. OM creative consultant, Sudip Bandyopadhyay said, "The brief was to creative awareness about the brand. There seems to be a tendency of ignoring milk for putting on weight and also milk in tetra-packs or packets is being considered as an artificial one. There is also emergence of low-calorie sweeteners and other products. So the whole idea is to reinforce milk as an option for providing a refreshing nourishing boost." Another interesting example is of variants like nestle Fruit n Milk The company worked on the 'Tasty bhi healthy bhi' proposition to gain acceptance among both kids and mothers.
A relatively new addition has been lassi, a classical case of adapting to the local Indian flavor. The company began the test marketing of sweet lassi in Delhi, Haryana and Punjab. "With changing lifestyles, there is a growing need for products that are convenient, tasty and of high quality. In order to cater to such emerging needs, Nestlé sweet lassi has been developed as a ready-to-drink product that provides refreshment, nutrition and wellness," the Chairman and Managing Director, Mr Carlo M. Donati, said in a statement here. He said the product has been developed after extensive testing for consumer preferences and traditional styles of preparation. It is available in 200-ml packs for Rs 12. With big players like Amul and Mother Diary still ruling the roosts, “tetra pack milk is a good way to have a major slice of market share and go for penetration”, suggests Mr. Dogra. Lectogen is priced h liye
igher but it has more value additions, the product has been quite a hit with those who realize that steep prices can justify quality and good health. This reflects a pricing strategy in which company is charging higher prices in return for claiming superior value-additions. Efforts are underway to penetrate products like Milkmaid and Whitener but people’s stereotype perceptions about them are still major obstacles. In the `Milk Products and Nutrition' category, the Company continues to focus on introducing products that leverage the Nestle Group's Know-how and Research and Development competence. During 2003, the This was a major breakthrough in infant feeding. During the third quarter of 2004, the Company has also launched NESTUM123, which is a rice based weaning food, to ensure the right eating experience at the right stage of development for the infant.
NESTUM 123 also incorporates Nestle Group's unique Z-line technology that makes the product easy for the infant to digest. Using its knowledge of infant nutrition and local needs, the Company introduced NESTUM Ragi in the Southern market and LACTOGEN 3 in select geographies, to provide proper nutrition at the appropriate stage. Also, since India has a high incidence of low birth weight infants', who require specialized nutrition, the Company utilized its access to the technology from the Nestle Group to introduce PRE-LACTOGEN. To sum up, Nestlé’s Product Mix in milk and nutrients category, the company has been continuing to add new products to its portfolio, which are in tune with the local flavour, and is likely to do so. And with its value additions and proven expertise, it continues in its endeavour to become the market leader in other categories. “About five years back, India was predominantly a seller’s market but now there has been a marked difference in the consumers, psychologically and behaviourally. This awakening of Indian consumers brings great challenges to us”, Mr. Dogra observes.
The high costs of raw materials and processing are a cause for concern. However, The Company feels that raw material cost inflation could soon be brought under control. The management is implementing programs to control key raw materials costs. The company recorded very low sales growth of 3.7 per cent last quarter as sales were by a non-recurring factor of insufficient availability of milk solids, which restricted production. Due to high prices of solid milk, the use of the milk was allocated to the most profitable business in its product. Also sales to canteen store departments (army sales) and ghee sales were stopped during the period, impacting sales growth. This shortage has now been resolved and is unlikely to recur in 2H, the company said. For the export market, there has been a decline in sales value as there is a movement from retail packs to bulk packs. Overall, in milks, curd and powders, the products are priced higher. But the top brass of the company justify high prices on account of “superior quality”.
In milk segment, nestle is relatively dearer than brands like Amul and Mother Diary but Mr. Dogra explains that the cooperatives generally operate on a no-profit margins so they can afford to lower the prices. He feels that high prices are more than compensated by greater value additions. He cites the example of Lactogen, which although expensive, is still a hit with rural market because of greater benefits attached. “Somehow, consumers have to make a trade-off between prices and quality.” Overall newcomers like Fruit Dahi and Slim Milk are fairly charged, consumers feel. Thus, Nestlé’s pricing strategy is little influenced by competitive moves but more by promising customers more value additions. Place Mix
With increasing market penetration and larger coverage of geographies, the Company has initiated efforts to ensure that the supply chain and distribution structure remains efficient. In order to strengthen these efforts to improve the distribution of Stock Keeping Units (SKU's) across retail outlets and to improve the quality of sales and consumer satisfaction, the Company has implemented web related processes to increase efficiencies in supply chain and order planning. During the year, the Company also initiated the rationalization of stocks in order to increase the freshness of stocks available to the consumer. These initiatives are necessary to maintain the high quality that Nestle Guarantees the consumer. In addition to these, there are efforts on to create more awareness among wholesalers and retailers to create storage value and minimize loss of quality or time. Promotion Mix
Overall, there has been a lot of emphasis on packaging, not only to safeguard products, but also to create a distinct brand entity. Nestle India bagged the Best Package Design Award and Portfolio Registering Highest Sales Growth Award at the second Annual Indian Dairy Awards presented at the National Milk Seminar 2003 held at Goa on 17 and 18 January. Hosted by Tetra Pak India, the fourth National Milk Seminar on Strategic Marketing, organized by the Ministry of Food Processing and Ministry of Agriculture was focused around Time to Act - Here & Now. Presentations and panel discussions were held to spotlight on business opportunities, perspectives of international and national speakers from within the dairy industry and outside highlighted the areas of successful government-industry cooperation, business strategy, innovating for category conversion and upgradation, premium branding, new channel development, and value branding. Using the health platform as a proposition for a milk brand is not an alien concept. But Ogilvy & Mather Delhi has used the same USP differently in its new ad campaign for Nestlé’s Fruit n Milk. The agency recently released two television commercials for the new brand. Mothers catching and correcting their children when they are up to mischief is quite common. Of course kids being kids love having fun even if it borders on what their mothers have forbidden them to do. Moms know this and have a habit of keeping tabs on their little ones.
Using this mother-child peculiarity as a key, the agency worked on the 'Tasty bhi healthy bhi' proposition to gain acceptance among both kids and mothers. Says O&M associate creative director Sudip Bandyopadhyay, “There are these do’s sand don’ts for kids. Mothers have their eyes on kids. We have taken situations, where kids normally get caught. But when mothers find children sheepishly having Nestle Fruit n Milk, they don’t find it to be a problem. Instead, they have an expression of acceptance for this.” The first commercial has two mothers looking for their children. They anticipate them to be on the terrace and up to - as you guessed right - some mischief. As their kids see them approaching, they hide something. After a fair deal of urging, they reveal to their mothers what they are concealing: a pack of Nestlé’s new ready to drink milk brand. And their mothers, with a sigh of relief, say this is allowed. The frame then cuts to Nestlé’s new product and positioning statement. The second commercial shows an in-charge of a boarding school catching students in a similar situation with a torch. And the kids face a similar outcome with their headmaster condoning their sipping on their Fruit n Milk. “The campaign is for the 8-15 age-group. We have tried not only a fresh angle from the taste and health proposition but also from the new product launch perspective. We came up with this, when mothers says 'yeh to allowed hai.' This has been conveyed through the surprise element. Not only to catch kids but also to empathise with mothers,” says Bandyopadhyay. The commercials have been directed by Red Ice’s Koushik Sarkar. The campaign has been extended to outdoor campaign has rolled out nationally.
One major issue is that Nestlé India does not advertise it’s Infant Nutrition products due to legal obligations. So,quality considerations drive sales volumes in these segments. Nestle India launched a new print campaign for its packaged milk brand Nestle Slim Milk. Created by Ogilvy & Mather, the campaign focused on propagating milk as a proposition for staying healthy and trim with a stylish presentation of the pack amidst a yellow background. The campaign, released mainly in magazines, primarily targeted the socio-economic class A. Breaking the myth of packaged milk (or for that matter milk on the whole) being only meant for being 'strong' or to put on weight, the agency specifically conveys the message of being slim and trim through milk. O&M creative consultant, Sudip Bandyopadhyay said, "The brief was to creative awareness about the brand. There seems to be a tendency of ignoring milk for putting on weight and also milk in tetra-packs or packets is being considered as an artificial one. There is also emergence of low-calorie sweeteners and other products. So the whole idea is to reinforce milk as an option for providing a refreshing nourishing boost." The pack of Nestle Slim Milk is being positioned as drink for fitness and it is mentioned that it is 99.5 per cent fat free. Apart from conveying that calories are kept in check, the concluding message reinforces the packaged milk health proposition by saying: "So, don't think twice before making the switch to a healthier alternative." "The whole presentation revolves around first glance, which should immediately strike the slim proposition. That's why the pack is shown to be curved (portraying a body with slim waist) in the centre.
Instead of using blue colour, we have deliberately chosen yellow colour in the background," adds Bandyopadhyay. Apart from the print campaign, the agency also worked on outdoor advertising.. Nestle, which had launched ready-to-drink milk market with its Fruit n Milk brand in mango and strawberry flavours earlier, is sourcing its Slim Milk and Fruit n Milk from Dynamix Dairy Industries. “In addition, other promotional tools like consumer contact programs, exchanges with medical personnel and a lot of ground work is involved”, informs Mr. Dogra. Earlier, Nestle only talked to kids but there is an 'inclusive audience' that is also being spoken to, these days and that is the mothers, as at the end of the day it is the mothers that are the buyers of the products. So the brand though specifically targeted at kids 'has' to speak to the mother too," says one industry analyst. Against Competition
Perhaps the greatest challenge to Nestle comes from cooperatives like Amul and Mother Diary. Unfortunately for Nestle, it has been unable to be at the top of the ladder, with these domestic players still ruling the roost. Mr. Dogra acknowledged this and admitted that both these cooperatives have extremely efficient operations and a very good marketing set-up. However he points out to the fact that since these cooperatives generally operate on low/no profit margins, they enjoy higher sales volumes due to price slashes. Another interesting point he raised was that these cooperatives have been clever enough to manipulate food laws in the country, which puts them in an advantageous position.
The portfolio of beverages segment of Nestlé is not so broad, still so strong as to make its presence important for Nestlé’s overall success. It includes some popular brands by Nestlé-It’s not the number of brands in beverages segment of Nestlé that makes it attractive, but the market share that they possess. Beverages account for 38% of the company's turnover and Nestlé is a market leader in instant coffee with its Nescafé and Sunrise brands. Nestlé Milo also has a strong presence in the market.
- NESCAFÉ CLASSIC
It is a 100% Pure Instant Coffee. It has the unmistakable taste of 100% pure coffee and is made from carefully selected coffee beans picked from the finest plantations, blended and roasted to perfection. 100% coffee…100% pleasure…. The beginnings of Nescafé can be traced all the way back to 1930, when the Brazilian government first approached Nestlé. In 1937, after eight years of work, scientists at Nestlé's research laboratory in Vevey perfected a powdered coffee product that was commercially introduced in Switzerland, on April 1st, 1938 under the brand name Nescafé. Nescafé - a combination of Nestlé and café. It became so popular during World War II that for one full year the entire output of the Nescafé plant in the United States (more than 1 million cases) was reserved for military use only. By the 1950s, coffee had become the beverage of choice for teenagers, who were flocking to coffee houses to hear the new rock 'n' roll music. Since then, Nescafé has become one of the world's best-known brands. With more than 3,000 cups consumed every second, Nescafé is by far the world's leading coffee brand. In India, Nescafé was introduced in 1964.
- NESCAFÉ SUNRISE
It is an Instant Coffee-Chicory mixture made from blends of Coffee and Chicory. Coffee 70% and Chicory 30%. The secret of great taste lies in the blend.
NESCAFÉ SUNRISE PREMIUM is a blend containing plantation beans to give you an incomparable experience. This unique blend of Coffee & Chicory was introduced in Indian market in 1980s with various variations- Nescafé Sunrise Premium, Sunrise Extra, etc. sunrise Extra has more Chicory in it (40%). Thus it tastes even stronger.
- NESTLÉ MILO
It is a contemporary, brown health beverage with a delicious chocolaty taste. 1 in 6 cups of chocolate beverage consumed in the world today is NESTLÉ MILO. In India Nestlé Milo was introduced in 1996. It’s a combination of health and taste. It has essentials vitamins also and it gives you extra winning energy. Now it is available in different tastes also. Latest in the series is the Badam Shakti flavour. Analysis of the 4Ps of this Division
“To be successful in this consumer era, a company needs to do anything and everything as per the wants of the consumers.” This much evident fact provides the basis for the success mantra of nestlé. What sets Nestlé apart from its competitors is its ability to reinvent and innovate. The beverages segment of nestlé has always followed the same strategy, i.e., innovation and renovation. It has conducted time-to-time surveys to find out what the potential consumers desire and expect from them and then, from adding those features to repositioning and reintroducing, it has left no stone unturned to satisfy its consumers.
The example of Nescafé
Science has always been a constant input for nestlé. Right from the invention of Nescafé to the regular improvements, research & development has been the basis of success. Before the invention of Nescafé in 1938, the need for a soluble coffee was felt among the consumers. This need was realized by nestlé & after eight years of research Nescafé was finally invented. This was not the end. Overtime, there have been so many innovations and improvements. From making Nescafé by using 100% pure roast coffee beans to the birth of the granule in1967 to capture more aroma and flavours from every single coffee bean, to the ’full aroma’ process which was invented to make the unique quality and character of Nescafé even better in 1994.
Talking particularly about India, from time-to-time, surveys have been done to judge the consumer wants. Introduction of new products, renovation, and repositioning- everything has been done accordingly. After introduction of Nescafé Classic in India in 1964, as the need was felt, company came out with a mixture of coffee & chicory, Nescafé Sunrise. Nestlé has come out with new variations of its products, Nescafé Sunrise Extra, Nescafé 3-in-1 readimix, to name a few. The new Nescafé 3-in-1 coffee readimix is actually a relaunch. Its previous attempt to instant coffee mix five years ago had come a cropper. Today Nescafé coffees are available to suit all tastes. In short, all its success is because of its strategy to make the product, as the consumers want it to be. It is easily one of Nestlé’s star performers.
The example of Nestlé Milo
In India Nestlé Milo was introduced in 1996. With its launch, nestlé was faced with the challenge of presenting Nestlé Milo as a worthy competitor in the Indian energy drink market that was dominated by Cadbury's Bournvita and SmithKline Beecham's Boost. So it was important to bring Milo as something different from others. A research campaign was launched to analyze consumer needs. The research following the campaign revealed the need for Milo to be perceived as a drink with 2 strong deliverables- Energy and Taste. This was just the beginning. Nestlé Milo was so many times repositioned, reintroduced in the market, which clearly reveals the Nestlé’s strategy for Milo, i.e., aggressive and alive. Milo was also relaunched in Dec 2001. On the other hand, the company has been offloading products too. Nestlé India was in the process of withdrawing its chocolate health drink brand Milo from southern markets. The brand did not stand up to the company's expectations during the last several years; there were indications that it might be phased out. In fact, Nestlé India had also begun rationalizing its product portfolio. Once again in the near future, Milo is being relaunched by re-energizing it with 'Badam Shakti'. Both examples clearly suggest the Nestlé’s product mix and the secret behind its success. The product mix started before the invention of the product and continued without any end. Even today the renovations are on.
The secret behind the price mix of Nestlé is the scale of production. In the
beginning, it may have been thought that the products are being priced higher, but as the market segments increased and economies of scale were reached, no one could complain about Nestlé’s prices at least in beverages. Nestlé has taken the Indian conditions in mind while deciding its price mix. Initially when Nescafé was launched, it was considered quite expensive. However, Nestlé has focused on expanding the domestic market share through price cuts and product repositioning. It is therefore no surprise that today Nestlé’s Nescafé dominates the premium instant coffee segment. Nestlé Milo also justifies its price. Its pack of 500-gms priced at Rs.96, which can in no way be dissatisfying and is comparable with other brands. Another example is of Nestlé 3-in-1 readimix, which is priced at Rs.5 per sachet, which is definitely justified keeping the benefits it gives in mind. Nestlé has so many outlets in India now to compete with Barista and Café Coffee Day. There is a clear difference between the prices of these coffee shops and Nestlé. Nestlé is a winner by a great margin. Where, these coffee shops are affordable to a very small section of market, Nestlé targets at a far greater market segment in term of its prices. To conclude, one cannot hold grudges about prices of Nestlé beverages. Nestlé has surely taken the spending capability of the domestic market in view.
As regards the place, they are available on almost all the outlets that are selling such products. Nescafé's USP is its easy availability. One could find it in any departmental store big or small. It is also available at all small shops in an area. Nestlé has been using its vast distribution network to push into the market its chocolate-and coffee formulation Choc Café and Frappe (both under the Nescafé umbrella). Easy availability is one of the factors for Nestlé having a 44% share in the coffee market. About Sunrise, Milo, or, Nescafé 3-in-1, all are easily available at the shops near you. With the opening of its own outlets to compete with coffee shops, the distribution of the beverage segment of Nestlé has become even stronger. The location of these outlets make then even more important. Distribution is definitely a strong point for Nestlé beverages.
The rise in competition has made the promotion mix even more important. A company needs to show how its products are different from what is being
provided by its competitors. Nestlé beverages have done well in this regard also. From TV advertisements to sponsoring TV programmes, events like MTV Youth Icon of the Year 2005and even movies like ‘Koi Mil Gaya’, it has done everything to woo the customers.
The Case of NESCAFÉ
Till a few years ago, life with Nescafé was exotic. You could enjoy the aroma of the dark coffee beans, feel the nip in the air, overcome hurdles, win acclaim, bond with friends and peers with laptops, as the catchy Western jingle played in your mind. Remember, “The taste that gets you started up...”? This was how the Nescafé was promoted in the beginning. While talking about the ads, lets look at an interesting fact: Let's watch out the Top 5 Coffee brands advertised on TV during the last three quarters of 2008. This table is a proof of the aggressive advertising adopted by Nestlé. One of the most memorable and popular campaigns of all times is the ‘Open Up’ advertisement of Nestlé. One thing, the world over, which helps people to take time out, to listen to each other and to open up is a cup of coffee. "Open Up" is the global campaign for Nescafé to celebrate the part that coffee plays in people’s lives. To capture the enormous diversity of experiences and emotions associated with coffee drinking the commercials were shot, over several months, all over the world. And they will also be seen worldwide. The noticeable difference between Nescafé's old campaigns and the latest arranged marriage advert (and also the earlier train ad, featuring VJ Gaurav) is the latter's bid to familiarise itself to the Indian middle class. This is evident from the subject of the story, which is spun around the most common of all cultural aspects of the Indian society – an arranged marriage. It's also apparent that Nestlé and McCann-Erickson's choice of protagonists – actors Kashish (Aamna Shariff) and Sujal (Rajeev Khandelwal) from STAR Plus' popular serial 'Kahin To Hoga' – was driven by the single objective of making the brand popular with the masses. The serial is among the top four serials on STAR and even after a run of one year, still enjoys a TVR above 10. Clearly, with this particular ad, Nescafé is making a very conscious effort to bond with the masses.
To conclude the project, following is the SWOT Analysis of Nestle:
- Access to the Nestle Group's proprietary technology/brands, expertise and the extensive centralised Research and Development facilities under the General Licence Agreement.
- High quality, safe food products at affordable prices, endorsed by the Nestle Seal of Guarantee.
- Strong and well differentiated brands with leading market shares.
- Ongoing product innovation and renovation, to convert consumer insights.
- Well-diversified product portfolio.
- Efficient supply chain.
- Distribution structure that allows wide reach and coverage in the target markets.
- Capable and committed human resources.
- Exports of coffee to Russia constitute substantial part of overall exports.
- Complex supply chain configuration.
- Indications of shift in consumer spending towards asset building and non-food related life style changes, diverting consumer demand for FMCG products.
- Rising prices of raw materials and fuels.
- Change in fiscal benefits.
- Potential for expansion in the smaller towns and other geographies.
- Potential for growth through increased penetration.
- Growing trend for `out of home' consumption.
- Leverage Nestle Technology to develop more products that provide Nutrition, Health and Wellness.
on Nestle project
Thus Nestlé people everywhere are involved in the many programs and projects we have designed to strengthen local communities and nations. Nestle is heavily involved in projects relating to its areas of expertise, such as nutrition, education & research, health projects, and agricultural assistance.
Nestlé is the first food and beverage company to join Project STOP, an initiative co-founded by Borealis and SYSTEMIQ that designs, implements, and scales circular economy solutions to prevent plastic pollution in Southeast Asia.
Outsourcing IT advantage The Nestlé Group is in the process of implementing the GLOBE project across its operations worldwide. GLOBE is a unique project and the largest of its kind and will enable the Nestlé Group to maintain its competitive advantage in the increasingly complex environments of the future.
• Product availability (“with in arms reach”): Nestlé strives to provide maximum availability at the right cost at all channels.
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