PROJECT REPORT

ON

“MARKETING MIX OF NESTLE INDIA LTD.”

PROJECT REPORT SUVMITTED IN PARTIAL FULFILLMENT
OF THE REQUIREMENT OF BACHELOR OF BUSINESS
ADMINISTRATION (BANKING AND INSURANCE)

TO

GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY

SUBMITTED BY:

HUNEET SINGH

00890201816

UNDER THE GUIDANCE OF

Mrs. HARLEEN KAUR BAGGA

SRI GURU TEGH BAHADUR INSTITUTE OF

MANAGEMENT AND INFORMATION TECHNOLOGY
(AFFILIATED TO GGSIPU UNIVERSITY, DELHI

(2016-2019)

1
 TABLE OF CONTENT

SNO. CONTENT PAGE NO.

1 CH – 1 (Introduction to Industry)

2 CH – 2 (Company Profile – Honda)

3 CH – 3 (Research Methodology)

4 CH – 4 (Findings and
Recommendations)

5 Ch – 5 (Conclusion)

6 CH – 6 (Bibliography)

2
 DECLARATION

I hereby declare that the project work entitled “MARKETING MIX OF

NESTLE INDIA LTD.. “ submitted to the Guru Gobind Singh
Indraprastha University is record of an original work done by me under the
guidance of Mrs. Harleen Kaur Bagga , faculty member , Sri Guru Tegh
Bahadur Institute Of Management And Informational Technology.

…………………………

(Signature of the scholar)

Place: Delhi Name :HUNEET SINGH

Date: Enrolment No. : 00890201816

3
 CERTIFICATE

This is to certify that HUNEET SINGH, student of Sri Guru TeghBahadur

Institute Of Management And Informational Technology of course BBA
B&I Batch (2017-2018) , has completed his research work title
“MARKETING MIX OF NESTLE INDIA LTD.“ under my guidance and
supervision . This work is genuine and authentic.

……………………………..

Signature of H.O.D.

Mrs. BIPASHA CHAUDHARY

……………………………..

Signature of guide

Mrs. HARLEEN KAUR BAGGA

……………………………..

Place: Delhi Signature of scholar

Date HUNEET SINGH

4
 ACKNOWLEDGEMENT

I offer my sincere thanks and humble regards to Sri Guru Tegh Bahadur
Institute of Management and Information Technology , Guru Gobind
Singh Indraprastha University, Delhi for imparting us very valuable
professional training in BBA (B&I). I pay my gratitude and sincere regards to
Mrs. Harleen Kaur Bagga , my project guide , for giving me the cream of her
knowledge. I am thankful to her as she gave her moral support and guided me in
different matters regarding the topic. I am also thankful to her as she has been a
constant source of advice, motivation and inspiration. She was very kind and
patient while suggesting the outlines of the project and correcting my doubts

……………………..

Signature of Scholar

Name: HUNEET SINGH

Enrolment No.: 02590201816

5
 CH 1 = INTRODUCTION TO INDUSTRY
Food processing is the transformation of raw ingredients, by physical or
chemical means into food, or of food into other forms. Food processing
combines raw food ingredients to produce marketable food products that can be
easily prepared and served by the consumer. Food processing typically involves
activities such as mincing and macerating, liquefaction, emulsification,
and cooking (such as boiling, broiling, frying, or
grilling); pickling, pasteurization, and many other kinds of preservation;
and canning or other packaging. (Primary-processing such as dicing, slicing,
freezing or drying when leading to secondary products are also included.)

Food processing dates back to the prehistoric ages when crude processing
incorporated fermenting, sun drying, preserving with salt, and various types
of cooking (such as roasting, smoking, steaming, and oven baking), Such basic
food processing involved chemical enzymatic changes to the basic structure of
food in its natural form, as well served to build a barrier against surface
microbial activity that caused rapid decay. Salt-preservation was especially
common for foods that constituted warrior and sailors' diets until the
introduction of canning methods. Evidence for the existence of these methods
can be found in the writings of the
ancient Greek, Chaldean, Egyptian and Roman civilizations as well as
archaeological evidence from Europe, North and South America and Asia.
These tried and tested processing techniques remained essentially the same until
the advent of the industrial revolution. Examples of ready-meals also date back
to before the preindustrial revolution, and include dishes such as Cornish
pasty and Haggis. Both during ancient times and today in modern society these
are considered processed foods.

6
Any processing of food can affect its nutritional density. The amount of
nutrients lost depends on the food and processing method. For example, heat
destroys vitamin C. Therefore, canned fruits possess less vitamin C than their
fresh alternatives. The USDA conducted a study in 2004, creating a nutrient
retention table for several foods

Benefits of food processing include toxin removal, preservation, easing

marketing and distribution tasks, and increasing food consistency. In addition, it
increases yearly availability of many foods, enables transportation of delicate
perishable foods across long distances and makes many kinds of foods safe to
eat by de-activating spoilage and pathogenic micro-organisms.
Modern supermarkets would not exist without modern food processing
techniques, and long voyages would not be possible

Performance parameters for food processing

Factory automation - robotics palletizing bread

When designing processes for the food industry the following performance
parameters may be taken into account:

7
 Hygiene, e.g. measured by number of micro-organisms per mL of finished
product
 Energy efficiency measured e.g. by “ton of steam per ton of sugar produced”
 Minimization of waste, measured e.g. by “percentage of peeling loss during
the peeling of potatoes”
 Labour used, measured e.g. by “number of working hours per ton of finished
product”
 Minimization of cleaning stops measured e.g. by “number of hours between
cleaning stops”

Food processing is typically a mechanical process that utilizes large mixing,

grinding, chopping and emulsifying equipment in the production process. These
processes inherently introduce a number of contamination risks. As a mixing
bowl or grinder is used over time the food contact parts will tend to fail and
fracture. This type of failure will introduce into the product stream small to
large metal contaminants.[ Further processing of these metal fragments will
result in downstream equipment failure and the risk of ingestion by the
consumer. Food manufacturers utilize industrial metal detectors to detect and
reject automatically any metal fragment. Large food processors will utilize
many metal detectors within the processing stream to reduce both damage to
processing machinery as well as risk to consumer health.

Modern Food Industries (India) Ltd (MFIL) was set up in 1965 as Modern
Bakeries (India) Limited situated at Kazhikundram, Taramani (Near Tidel
Park). It was set up under the Colombo plan. It got its present name in 1982.
MFIL had bread manufacturing units in 13 cities spread across India. MFIL had

8
also marketed fruit juice concentrate under brand name Rasika in Delhi. MFIL
also produced aerated soft drinks under the brand Double Seven MFIL was a
wholly owned Central Government-owned PSU. It was taken over by Hindustan
Lever Limited in January 2000. This was the first privatization of public sector
unit by the government of India. Modern Foods had over 40% of the bread
market in India.

HUL was the sole bidder was Modern Foods. It paid Rs 10.5 million, as per the
valuation exercise undertaken by its value ICICI , for 74% of the shares. Later
the government exercised its put option to sell the remaining 26% to HLL for
Rs 4.4 million in November 2002. In 2006, HUL merged MFIL with itself.
Senior HUL officials said the acquisition was a complete misfit with the HUL
culture and systems. The company had admitted that the acquisition was a
mistake on account of improper due diligence

In 2001, HUL referred MFIL to Board of Industrial and Financial

Reconstruction. Later HUL had plans to sell the company to Singapore based
Ever stone Capital. In April 2016, Modern changed hands again. This time to
Ever stone Capital. Today the company is called Modern Foods Enterprises Pvt.
Ltd. And is 100% owned by Ever stone Capital.

The Ministry of Food Processing Industries (MOFPI) is a ministry of

the Government of India responsible for formulation and administration of the
rules and regulations and laws relating to food processing in India. The ministry
was set up in the year 1988, with a view to develop a strong and vibrant food
processing industry, to create increased employment in rural sector and enable
farmers to reap the benefits of modern technology and to create a surplus for
exports and stimulating demand for processed food The ministry is currently
headed by Harsimrat Kaur Badal, a Cabinet Minister

9
The Indian food industry is poised for huge growth, increasing its contribution
to world food trade every year. In India, the food sector has emerged as a high-
growth and high-profit sector due to its immense potential for value addition,
particularly within the food processing industry.
Accounting for about 32 per cent of the country’s total food market, The
Government of India has been instrumental in the growth and development of
the food processing industry. The government through the Ministry of Food
Processing Industries (MoFPI) is making all efforts to encourage investments in
the business. It has approved proposals for joint ventures (JV), foreign
collaborations, industrial licenses, and 100 per cent export oriented units.

Market Size
The Indian food and grocery market is the world’s sixth largest, with retail
contributing 70 per cent of the sales. The Indian food processing industry
accounts for 32 per cent of the country’s total food market, one of the largest
industries in India and is ranked fifth in terms of production, consumption,
export and expected growth. It contributes around 8.80 and 8.39 per cent of
Gross Value Added (GVA) in Manufacturing and Agriculture respectively, 13
per cent of India’s exports and six per cent of total industrial investment. The
Indian gourmet food market is currently valued at US$ 1.3 billion and is
growing at a Compound Annual Growth Rate (CAGR) of 20 per cent. India's
organic food market is expected to increase by three times by 2020#.
The online food ordering business in India is in its nascent stage, but witnessing
exponential growth. With online food delivery players like Food Panda,
Zomato, Tiny Owl and Swiggy building scale through partnerships, the
organized food business has a huge potential and a promising future. The online

10
 food delivery industry grew at 150 per cent year-on-year with an estimated
Gross Merchandise Value (GMV) of US$ 300 million in 2016.

Nestle came to India when it set up its first factory in Moga, Punjab in 1961.
Presently, it has four offices and around eight manufacturing facilities across
India. Nestlé has been a partner in India's growth for over nine decades now and
has built a very special relationship of trust and commitment with the people of
India. The company's activities in India have facilitated direct and indirect
employment and provides livelihood to about one million people, including
farmers, suppliers of packaging materials, services and other goods.
Nestlé India manufactures products of truly international quality under
internationally famous brand names such as Nescafe, Maggie, Milky bar, Kit
Kat, Bar-One, Milkmaid and Nestea; and in recent years the company has also
introduced products of daily consumption and use such as Nestlé Milk, Nestlé
Slim Milk, Nestlé Dahl and Nestlé Jeera Raita.

 World's leading nutrition, health and wellness company

 Possesses over 140 years of expertise in the business

 Manufactures products of international quality

 Been a partner in India's growth for over nine decades

 Has eight manufacturing facilities in India

11
Nestle India: Leading Nutrition, Health and Wellness Company

2014 Sets up eighth manufacturing facility at Tahliwal, Himachal

Pradesh

2013 Announces Android Kit Kat in collaboration with Google

2010 Inaugurates new culinary plant at Nanjangud

2006 Sets up seventh manufacturing facility at Patnagar, Uttarakhand

1977 Sets up sixth manufacturing facility at Bicholim, Goa

"Know your customers' needs even before they do," is a time-honoured truism
in the hospitality industry. Nestlé, one of the largest food conglomerates in the
world, is applying this simple but effective rule in its own business strategies.

12
collate bars and instant coffee – to say nothing of hundreds of other popular
food products – has just announced the formation of "Nestlé Health Science
S.A. and the Nestlé Institute of Health Sciences to pioneer a new industry
between food and pharmacy," according to a company release.

The Swiss-based company plans to invest half-a-billion dollars into the venture,
an effort that should provide "an opportunity that is more in billions than
millions," according to the New York Times.

These exciting new ventures will "develop the innovative area of personalised
health science nutrition to prevent and treat health conditions such as diabetes,
obesity, cardiovascular disease and Alzheimer's disease," read the release,
"which are placing an unsustainable burden on the world's healthcare systems."

Whew. Aren't you glad someone is tackling these issues? There could be
problems, however.

Just as Nestlé is dipping its toe into the waters of functional foods (foods that
provide benefits in addition to basic nutrition) the Federal Trade Commission
has filed a lawsuit against POM Wonderful – the pomegranate juice in the
funny looking bottles - for making "'false and unsubstantiated claims' about
treating or preventing heart disease, prostate cancer and erectile dysfunction,"
according to the Wall Street Journal. In other words, it appears the feds may

13
finally be clamping down on claims by food companies that their products will
help alleviate or cure various maladies and other, assorted unpleasant ries.
Remember when Kellogg's tried to claim that Cocoa Krispies "now helps
support your child's immunity"

Of course, this just brings us back to Nestlé's forward thinking business

strategy. Finally, they're developing products that will help their customers deal
with the health issues – such as diabetes and heart disease – that have arisen as
more and more Americans rely upon convenience foods for much of their
sustenance.

Take, for example, Lean Pockets' turkey, broccoli, and cheese microwavable
sandwich. A single serving – one sandwich – contains 530 milligrams of
sodium and 3.5 grams of saturated fat. That's 22- and 8-percent of the
recommended daily allowance, respectively.

Not in the mood for a Lean Pocket? Try the Corner Bistro Chicken Broccoli
Cheddar Stromboli, with 3.5 grams of saturated fat, 25 grams of cholesterol, and
530 milligrams of sodium (18-, 8-, and 22-percent of the RDA, respectively).

Have we mentioned that both of these products are made by Nestlé? No worries.
They'll be there to help treat your heart disease when you need it because, well,
that's just good customer service.

Nestle coat of arms, the bird‘s nest, which for the products being a safe care for
their consumer product safety and quality. Research and development based
innovation capacity and strong brands are priority for Nestle .Every
organization needs to have clear marketing objectives and the major route to
achieving organizational goals will depend on strategy. Developing a strategy
involves establishing clear aims and objectives around which the framework for
a policy is created. Having established its strategy, an organization can then

14
work out its day-to-day tools and tactics to meet the objectives. The success of
any business entity solely depends on how effectively it utilizes its optimum
resources. The company should always be ready to make necessary changes
according to the requirements, in order to attract more customers so as to
maintain a substantial growth in the market. Nestle India is a subsidiary of
Nestle S.A of Switzerland. With seven factories and a large number of co-
packers, brands of the company are grouped under four categories, Milk
Products& Nutrition, Prepared Dishes & Cooking Aids, Beverages and
Chocolates & Confectionery. Nestle has been a cohort in India's growth and has
built a very special relationship of trust and commitment with the people of
India. The Company's activities in India have facilitated direct

Approved additives receive an E number (E for Europe), simplifying

communication about food additives included in the ingredients' list for all the
different languages spoken in the EU. As effects of chemical additives are
learnt, changes to laws and regulatory practices are made to make such
processed foods more safe.

15
 CH 2- COMPANY PROFILE

Nestlé S.A. is a Swiss transitional food and drink company headquartered

in Vevey Vaud Switzerland. It has been the largest food company in the world,
measured by revenues and other metrics, for 2014, 2015, and 2016. It ranked
No. 72 on the Fortune Global 500 in 2014 and No. 33 on the 2016 edition of the
Forbes Global 2000 list of largest public companies

It has presence in 194 countries having approximate 450 factories with a head
count of 339,000 people. It was founded in the year 1866 by Henry Nestle and
Nestle came into existence when it collaborated with Anglo- Swiss Milk
Company in the year 1905. Till now company has made many mergers and
acquisitions that have expanded its customer base and visibility in the market.
Nestle was ranked as No. 11 in the FT Global 500 2014 with the market
capitalisation of US$ 240 billion. This is why Nestle is considered as one of the
strong FMCG companies across the globe. One thing that differentiates it from
other FMCG company is that it has a strong product Line.

16
Nestlé's products include baby food, medical food bottled water, breakfast
cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food,
pet foods, and snacks. Twenty-nine of Nestlé's brands have annual sales of over
CHF 1 billion (about US $1.1 billion), including Nespresso. Nescafe kit
KAT Nesquik, Stouffer’s , Vittel , and Maggie Nestlé has 447 factories,
operates in 194 countries, and employs around 339,000 people. It is one of the
main shareholders of L’Oreal, the world's largest cosmetics company.

Nestlé was formed in 1905 by the merger of the Anglo-Swiss Milk Company,
established in 1866 by brothers George and Charles Page, and Farine Lactée
Henri Nestlé, founded in 1866 by Henri Nestlé (born Heinrich Nestle). The
company grew significantly during the First World War and again following the
Second World War, expanding its offerings beyond its early condensed
milk and infant formula products. The company has made a number of
corporate acquisitions, including Crosse & Blackwell in 1950, Findus in
1963, Libby's in 1971, Rowntree Mackintosh in 1988, and Gerber in 2007.

Nestlé has a primary listing on the SIX Swiss Exchange and is a constituent of
the Swiss Market Index. It has a secondary listing on Euro next.

. NESTLÉ India manufactures products of truly international quality under

internationally famous brand names such as NESCAFÉ, MAGGI,
MILKYBAR, KIT KAT, BAR-ONE, MILKMAID and NESTEA and in recent
years the Company has also introduced products of daily consumption and use
such as NESTLÉ Milk, NESTLÉ SLIM Milk, NESTLÉ Dahi

The Nestlé logo evolution. Henri Nestlé was one of the first Swiss
manufacturers to build up a brand with the help of a logo. The
original Nestlé trademark was based on his family's coat of arms, which
featured a single bird sitting on a nest. This was a reference to the family name,
which means ‘nest’ in German.

17
Every organization needs to have clear marketing objectives and the major route
to achieving organizational goals will depend on strategy. Developing a strategy
involves establishing clear aims and objectives around which the framework for
a policy is created. Having established its strategy, an organization can then
work out its day-to-day tools and tactics to meet the objectives. The success of
any business entity solely depends on how effectively it utilizes its optimum
resources. The company should always be ready to make necessary changes
according to the requirements, in order to attract more customers so as to
maintain a substantial growth in the market

Nestlé‘s objectives are to be recognised as the world leader in Nutrition, Health

and Wellness, trusted by all its stakeholders, and to be the reference for
financial performance in its industry. We believe that leadership is not just
about size; it is also about behaviour. Trust, too, is about behaviour; and we
recognise that trust is earned only over a long period of time by consistently
delivering on our promises. These objectives and behaviours are encapsulated in
the simple phrase, ―Good Food, Good Life , a phrase that sums up our
corporate ambition.

The Nestlé Roadmap is intended to create alignment for our people behind a
cohesive set of strategic priorities that will accelerate the achievement of our
objectives. These objectives demand from our people a blend of long-term
inspiration needed to build for the future and short-term entrepreneurial actions,
delivering the necessary level of performance .We are seeking to achieve
leadership and earn that trust by satisfying the expectations of consumers,
whose daily choices drive our performance, of shareholders, of the communities
in which we operate and of society as a whole. We believe that it is only
possible to create long-term sustainable value for our shareholders if our
behaviour, strategies and operations are also creating value for the communities

18
where we operate, for our business partners and, of course, for our consumers.
We call this

Creating Shared Value

We are investing for the future to ensure the financial and environmental
sustainability of our actions and operations: in capacity, in technologies, in
capabilities, in people, in brands, in R&D.

Our aim is to meet today‘s needs without compromising the ability of future
generations to meet

their needs, and to do so in a way which will ensure profitable growth year after
year and a high level of returns for our shareholders and society at large over
the long term.

19
HISTORY
1866–1900: Founding and early years[

Henri Nestlé, a Swiss confectioner, was the founder of Nestlé and one of the
main creators of condensed milk.

The logo that Nestlé used until 1966

Nestlé's origins date back to 1866 when two separate Swiss enterprises were
founded that would later form the core of Nestlé. In the succeeding decades, the
two competing enterprises aggressively expanded their businesses throughout
Europe and the United States.

In September 1866, in Vevey, Henri Nestlé developed milk-based baby food

and soon began marketing it. The following year saw Daniel Peter begin seven
years of work perfecting his invention, the milk chocolate manufacturing
process. Nestlé was the crucial co-operation that Peter needed to solve the
problem of removing all the water from the milk added to his chocolate and thus
preventing the product from developing mildew. Henri Nestlé retired in 1875

20
but the company, under new ownership, retained his name as Société Farine
Lactée Henri Nestlé.

In August 1867, Charles (US consul in Switzerland) and George Page, two
brothers from Lee County, Illinois, USA, established the Anglo-Swiss
Condensed Milk Company in Cham, Switzerland. Their first British operation
was opened at Chippenham, Wiltshire, in 1873.

In 1877, Anglo-Swiss added milk-based baby foods to their products; in the

following year, the Nestlé Company added condensed milk to their portfolio,
which made the firms direct and fierce rivals.

In 1879, Nestle merged with milk chocolate inventor Daniel Peter.

1901–1989: Mergers

Aleppo Nestle building Tilal street 1920s.

21
Certificate for 100 shares of the Nestlé and Anglo-Swiss Condensed Milk Co.,
issued 1. November 1918

In 1904, François-Louis Cailler, Charles Amédée Kohler, Daniel Peter, and

Henri Nestlé participated in the creation and development of Swiss chocolate,
marketing the first chocolate – milk Nestlé.

In 1905, the companies merged to become the Nestlé and Anglo-Swiss

Condensed Milk Company, retaining that name until 1947 when the name
'Nestlé Alimentana SA' was taken as a result of the acquisition of Fabrique de
Products Maggie SA (founded 1884) and its holding company, Alimentana SA, of
Kempttal, Switzerland. Maggie was a major manufacturer of soup mixes and
related foodstuffs. The company's current name was adopted in 1977. By the
early 1900s, the company was operating factories in the United States, the
United Kingdom, Germany, and Spain. The First World War created demand
for dairy products in the form of government contracts, and, by the end of the
war, Nestlé's production had more than doubled.

22
A 1915 advertisement for "Nestles Food", an early infant formula

In January 1919, Nestlé bought two condensed milk plants in Oregon from the
company Geibisch and Joplin for $250,000. One was in Bandon, and the other
was in Milwaukee. They expanded them considerably, processing 250,000
pounds of condensed milk daily in the Bandon plant.[

Nestlé felt the effects of the Second World War immediately. Profits dropped
from US$20 million in 1938 to US$6 million in 1939. Factories were
established in developing countries, particularly in Latin America. Ironically,
the war helped with the introduction of the company's newest product,
Nescafe ("Nestlé's Coffee"), which became a staple drink of the US military.
Nestlé's production and sales rose in the wartime economy.

After the war, government contracts dried up, and consumers switched back to
fresh milk. However, Nestlé's management responded quickly, streamlining
operations and reducing debt. The 1920s saw Nestlé's first expansion into new
products, with chocolate-manufacture becoming the company's second most
important activity. Louis Dapples was CEO till 1937 when succeeded
by Édouard Muller till his death in 1948.

The end of World War II was the beginning of a dynamic phase for Nestlé.
Growth accelerated and numerous companies were acquired. In 1947 Nestlé
merged with Maggie, a manufacturer of 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. In 1977, Nestlé made its second venture outside the food industry, by
acquiring Alcon Laboratories Inc.

In the 1980s, Nestlé's improved bottom line allowed the company to launch a
new round of acquisitions. Carnation was acquired for $3 billion in 1984 and
brought the evaporated milk brand, as well as Coffee-Mate and Friskies to

23
Nestlé. The confectionery company Rowntree Mackintosh was acquired in 1988
for $4.5 billion, which brought brands such as Kit Kat, and Aero.

1990–2011: Growth internationally

The first half of the 1990s proved to be favourable for Nestlé. Trade barriers
crumbled, and world markets developed into more or less integrated trading
areas. Since 1996, there have been various 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 June, Nestlé
merged its US ice cream business into Dreyer's, and in August,
a US$2.6 billion acquisition was announced of Chef America, the creator of Hot
Pockets. In the same time-frame, Nestlé entered in a joint bid with Cadbury and
came close to purchasing the iconic American company Hershey's, one of its
fiercest confectionery competitors, but the deal eventually fell through.

In December 2005, Nestlé bought the Greek company Delta Ice Cream for
€240 million. In January 2006, it took full ownership of Dreyer's, thus
becoming the world's largest ice cream maker, with a 17.5% market share. In
July 2007, completing a deal announced the year before, Nestlé acquired the
Medical Nutrition division of Novartis Pharmaceutical for US$2.5 billion, also
acquiring, the milk-flavouring product known as OVAL LINE , the "Boost" and
"Resource" lines of nutritional supplements, and Opt fast dieting products.[

24
The Brazilian president, Lula da Silva, inaugurates a factory in Feira de
Santana (Bahia), in February 2007

In April 2007, returning to its roots, Nestlé bought US baby-food

manufacturer Gerber for US$5.5 billion. In December 2007, Nestlé entered into
a strategic partnership with a Belgian chocolate maker, Pierre Marcolin

Nestlé agreed to sell its controlling stake in Alcon to Novartis on 4 January

2010. The sale was to form part of a broader US$39.3 billion offer, by Novartis,
for full acquisition of the world's largest eye-care company On 1 March 2010,
Nestlé concluded the purchase of food’s North American frozen pizza business
for US$3.7 billion.

Since 2010, Nestle has been working to transform itself into a nutrition, health
and wellness company in an effort to combat declining confectionery sales and
the threat of expanding government regulation of such foods. This effort is
being led through the Nestlé Institute of Health Sciences under the direction of
Ed Baetge. The Institute aims to develop "a new industry between food and
pharmaceuticals" by creating foodstuffs with preventative and corrective health
properties that would replace pharmaceutical drugs from pill bottles. The Health
Science branch has already produced several products, such as drinks and
protein shakes meant to combat malnutrition, diabetes, digestive health, obesity,
and other diseases

In July 2011, Nestlé SA agreed to buy 60 percent of Hsu Fu Chi International

Ltd. for about US$1.7 billion. On 23 April 2012, Nestlé agreed to acquire Pfizer
Inc.'s infant-nutrition, formerly Wyeth Nutrition, unit for US$11.9 billion,
topping a joint bid from Danone and Mead Johnson.

25
2012–2017: Recent developments

In recent years, Nestlé Health Science has made several acquisitions. It acquired
Vitaflo, which makes clinical nutritional products for people with genetic
disorders; CM&D Pharmacy Ltd., a company that specialises in the
development of products for patients with chronic conditions like kidney
disease; and Prometheus Laboratories, a firm specialising in treatments for
gastrointestinal diseases and cancer. It also holds a minority stake in Vital
Foods, a New Zealand-based company that develops kiwifruit-based solutions
for gastrointestinal conditions as of 2012.[

Another recent purchase included the Jenny Craig weight-loss program,

for US$600 million. Nestlé sold the Jenny Craig business unit to North Castle
Partners in 2013.[ In February 2013, Nestlé Health Science bought Pam lab,
which makes medical foods based on L-methyl foliate targeting depression,
diabetes, and memory loss. In February 2014, Nestlé sold its Power Bar sports
nutrition business to Post Holdings, Inc.] Later, in November 2014, Nestlé
announced that it was exploring strategic options for its frozen food subsidiary,
Davigel.

In December 2014, Nestlé announced that it was opening 10 skin care research
centres worldwide, deepening its investment in a faster-growing market for
healthcare products. That year, Nestlé spent about $350 million on dermatology
research and development. The first of the research hubs, Nestlé Skin Health
Investigation, Education and Longevity Development (SHIELD) centres, will
open mid 2015 in New York, followed by Hong Kong and São Paulo, and later
others in North America, Asia, and Europe. The initiative is being launched in
partnership with the Global Coalition on Aging (GCOA), a consortium that
includes companies such as Intel and Bank of America.[

Nestlé announced in January 2017 that it was relocating its U.S. headquarters
from Glendale, California, to Rosslyn, Virginia outside of Washington, DC

26
In March 2017, Nestlé announced that they will lower the sugar content in Kit
Kat, and Aero chocolate bars by 10% by 2018. In July followed a similar
announcement concerning the reduction of sugar content in its breakfast cereals
in the UK.

The company announced a $20.8 billion share buyback in June 2017, following
the publication of a letter written by Third Point founder Daniel Loeb, Nestlé's
fourth-largest stakeholder with a $3.5 billion stake explaining how the firm
should change its business structure.[ Consequently, the firm will reportedly
focus investment on sectors such as coffee and pet care and will seek
acquisitions in the consumer health-care industry.

In September 2017, Nestlé S.A. acquired a majority stake of Blue Bottle. While
the deal's financial details were not disclosed, the Financial Times reported
"Nestle is understood to be paying up to $500m for the 68 per cent stake in Blue
Bottle Blue Bottle expects to increase sales by 70% this year.

In September 2017, Nestlé USA has agreed to acquire Sweet Earth, a

California-based producer of plant-based foods, for an undisclosed sum.

Business Details
Nestle India was established in India in the year 1961 with its first investment in
Moga, Punjab. Nestle India manufactures products of truly international quality
under internationally famous brand names such as Nescafe, Maggie, Milky bar,
Milo, Kit Kat, Bar-one, Milkmaid and Nestea.

Nestle has been a partner in India‘s growth for over nine decades now. It
encompasses a wide range of products from milk and skimmed milk to value
added products like condensed milk ,curd, ghee, yoghurt and raita. All these
products are sold under various brands such as Nestle Every day, Nestle
Milkmaid, Nestle Milk, Nestle Fresh n Natural etc. Nestle India enjoys the
leadership position in infant milk foods business. The company has a capacity

27
to produce 72,502tonnes of milk products and nutrition per annum. They are
spread over seven plants locate d across India in the states of Punjab, Haryana,
Uttarakhand, Goa, Karnataka and Tamil Nadu. It processes over 3.3 lakh tonnes
of milk and nearly 10,000 tonnes of milk powder per annum. The company has
tied up with Heritage Food in South, Bengal Nester in the East and Dynamic
Dairy in the West for sourcing, processing, packaging, and supplying milk. The
company also has a strong presence in the chocolates and confectionary
business. It is the second largest confectionary company in India. It is the
largest coffee company in India sold under the brands of Nestle Classic,
Nescafe Sunrise and Nescafe 3 in 1. The company also exports its instant coffee
to various countries such as Russia and Japan.
Segmental Outlook
The food processing industry which is a sub-sector of the food industry includes
milk and milk products, fruits & vegetables processing, grain processing,
fisheries, meat & poultry processing and other consumer products such as
packaged foods, confectionary, chocolates, beverages and packaged drinking
water. The Indian food market is estimated at over $182 billion and accounts for
about two-thirds of the total Indian retail market. According to McKinsey and
co., the retail food sector in India is likely to grow from around US$70 billion in
2008 to US$150 billion by2025. According to Dairy India 2007 estimates, the
current size of the Indian dairy sector isUS$62.67 billion and has been growing
at a rate of 5% per year. the dairy exports in 2007-08rose to US$210.5 million
against US$113.57 last fiscal whereas the domestic dairy sector is slated to
cross US$108 billion in revenues by 2011. The Indian snack market holds
enormous growth potential for snack food, which is estimated to be worth US$3
billion. The market is divided in to organized and unorganized sector. The
organized sector of the snack food market is growing at 15-20 % a year while
the growth rate of the US$1.56 billion unorganized sector is 7-8%. India has a

28
target of doubling its processed food production by 2015 and will set up 10 food
technology parks during the next year with a view to achieving this.

Investment Rationale
1, Increased Sales Focus

The focus on continuous business excellence extends across the Company. The
company has an efficient distribution system and has consistently pushed itself
over the recent years to further improve its service levels and to help consumers

with easier access to the Company‘s products.

During the year, there was further improvement in the distribution network and
availability of fresh, high quality Nestlé products. The specialized teams for
Key Account Management, Channel and Category Sales Development, Route-to
market and the existing trade channels continued to improve availability and
visibility of products. The quality and capabilities of the people are key to this
and, during the year, the company maintained focus on training and
development of the sales teams to reinforce skills and impart best practices and
plan to continue in the future.

2. Technological Advancement
Nestlé’s commitment to product quality is supported by state -of the- art
technology and a high degree of automation. It is continuously working with
local suppliers to help them develop capabilities for supply of high quality raw
materials increasing its technological edge. During the year, the Company has
made significant progress in developing suppliers at par with international
quality which will help it become less reliant on imports for these raw materials
.During the year, three more factories were awarded the internationally
recognized external certification ISO 14001 for adherence to environmental
processes and OSHAS 18001 for Health and Safety. With this, all the seven

29
factories of the Company now have ISO 14001 and ISO 18001 certifications.
The company‘s factories not only create world class products delivering
Nutrition, Health and Wellness but also provide economic prosperity to farmers
by processing agricultural products in a sustainable manner.
3. Robust Financial Performance
Nestle reported great results for the CY 2008. The total revenue for the
company rose fromRs.35130.80 million in CY2007 to Rs.43351.10 million in
this financial year resulting in a growth rate of 23.40%. The operating profit of
the company rose to Rs.8438.00 million fromRs.6874.90 million showing a
growth of 22.74%. The profit before tax during the year 2008 wasRs.7728.20
million whereas in the CY07 it was Rs.6286.10 million. The bottom line of the
company increased by 29.06% from Rs.4138.10 million last year to Rs.5340.80
million this year.
The EPS of the company stood at Rs.55.39 which increased from last year‘s Rs.
42.92

4. Valuation

We are positive on company‘s long term prospects. The company has earned
the trust and respect of every strata of society that it comes in contact with and
is acknowledged amongst India's 'Most Respected Companies' and amongst the
'Top Wealth Creators of India'. The Company continuously focuses its efforts to
better understand the changing lifestyles of India and anticipate consumer needs
in order to provide Taste, Nutrition, Health and Wellness through its product
offerings. Presently the company is running at a P/E multiple of 35.47x to its
CY09EPS of Rs.55.39. Based on the positive financial performance reported by
the company, were commend BUY on the stock with a medium term price
target of Rs.2500.00

30
NESTLE INDIA’S STORY

Nestlé‘s relationship with India dates back to 1912, when it began trading as
The Nestlé Anglo -Swiss Condensed Milk Company (Export) Limited,
importing and selling finished products in the Indian market.
After India‘s independence in 1947, the economic policies of the Indian
Government emphasized the need for local production. Nestlé responded to
India‘s aspirations by forming a company in India and set up its first factory in
1961 at Moga, Punjab, where the Government wanted Nestlé to develop the
milk economy. Progress in Moga required the introduction of Nestlé‘s
Agricultural Services to educate advice and help the farmer in a variety of
aspects. From increasing the milk yield of their cows through improved dairy
farming methods, to irrigation, scientific crop management practices and
helping with the procurement of bank loans. Nestlé set up milk collection center
that would not only ensure prompt collection and pay fair prices, but also in still
amongst the community, a confidence in the dairy business. Progress involved
the creation of prosperity on an on-going and sustainable basis that has resulted
in not just the transformation of Moga into a prosperous and vibrant milk
district today, but a thriving hub of industrial activity, as well .Nestlé has been a
partner in India's growth for over nine decades now and has built a very special
relationship of trust and commitment with the people of India. The Company's

31
activities in India have facilitated direct and indirect employment and provides
livelihood to about one million people including farmers, suppliers of packaging
materials, services and other goods
Nestlé India is a responsible organization and facilitates initiatives that help to
improve the quality of life in the communities where it operates.

Date of Establishment 1959

Revenue 1417.18 ( USD in Millions )
Market Cap 433740.5607834 ( Rs. in Millions )
Corporate Address M- 5a, Connaught Circus, New Delhi-110001, Delhi
Chairperson Antonio Helio Waszyk
MD Antonio Helio Waszyk
Directors Antonio Helio Waszyk, Ashok Kumar Mahindra, B
Murli,Christian Schmid, Martial G Rolland, Michael W O Garrett,Pradip Baijal,
Rajendra S Pawar, Rakesh Mohan, Ravinder Narain,Richard Sykes, Shobinder
Duggal, Swati A Piramal
Business Operation Consumer Food
Background Nestle has its presence in India for around nine decades,
making it one of the oldest company in India. Nestlé India is a subsidiary of
Nestlé SA
Financials Total Income Rs. 62973.966 Million ( year ending Dec 2010)
Net Profit Rs. 8186.648 Million ( year ending Dec 2010)
Company Secretary B Murli

AF Ferguson & Co .The Samalkha factory (Haryana) was started its operation
in 1993. Kit kat, the company's worldwide legendary brand chocolate was
launched in the year 1995. Nestle commissioned two factories in Goa at Ponda
and Bicholim in the year 1995 and 1997 respectively. Nestle Growing Up Milk
was launched nationally in the year 1999. In April 2000, the company forayed

32
into the Ultra Heat Treated (UHT) liquid milk market. Launched Nestle Pure
Life bottled water in the year 2001 by the company, within few months, again
launched its second water brand-San Pellegrino-- in the Indian market. The
company also made its foray into the iced tea segment .Iced tea has already
been soft-launched in Mumbai in two flavours, one being peach. The company
commenced participation in this global Nestle initiative in the year 2003 to
create and adapt common business process, permitting adoption of best
practices, standardization of internal and external master data and
standardization of the information systems infrastructure.

NESTLE SUCCESS STORY

From the famous Nestlé's chocolate that gratifies the sweet tooth of millions, to
Stouffer's frozen family dinners served up by harried soccer moms, to Fancy
Feast cat food for pampered felines from coast to coast, Nestlé USA's basket of
products caters to a wide range of consumer needs. For many years, the
operations of this US$6.6 billion subsidiary of Swiss food giant Nestlé SA
reflected the diversity and individuality of its hundreds of brands. Created in
1991 to unify disparate divisions, Nestlé USA's business units nevertheless s
remained largely autonomous, and that arrangement worked well for a number
of years. But, as competition heated up with massive industry consolidation and
retailers' private label products eroding customer loyalty and squeezing margins
Nestlé USA needed to wring out efficiencies to slash costs and boost bottom-
line performance .In response, the company crafted a vision it called One Nestlé
a vision that would introduce common processes, standards ,and systems across
the enterprise, resulting in unprecedented economies of scale and cost savings
.To make that vision a reality, Nestlé USA selected SAP software to automate
and integrate all operations, from procurement through production, distribution,
and customer care. At the same time, Nestlé USA was well aware that this was
not simply a software implementation that would automate existing processes,

33
but rather an undertaking that would mean fundamental changes approached
and ran its business.
From vision to reality
To that end, Nestlé USA first reworked, standardized, and integrated its
operations, and then implemented the technology to support its new and
improved way of doing business. And all of this was done while making certain
that employees had the appropriate training for their new jobs. This was no easy
task to be accomplished overnight, that's for sure."Nestlé USA did it right. A
huge SAP implementation like this is so not about the software ,"says Jack
Rinquist, a Deloitte Consulting partner helping to drive Nestlé USA's
transformation efforts. "Anyone who simply lays the technology on top of
existing business processes is doomed. This is the time to unite far-flung parts
of the business into a cohesive, smart, and efficient whole
and that's done by fundamentally reworking how the company operates

Anyone who simply lays the technology on top of existing business processes
is doomed. This is the time to unite far-flung parts of the business into a
cohesive, smart, and efficient whole
and that's done by fundamentally reworking how the company operates."
Jack Rinquist, Deloitte

Recognition and awards

 In May 2006, Nestlé's executive board decided to adapt the existing Nestlé
management systems to full conformity with the international standards ISO
14001 (Environmental Management Systems) and OHSAS
18001 (Occupational Health and Safety Management Systems) and to certify
all Nestlé factories against these standards by 2010.[ In the meanwhile, a lot
of the Nestlé factories have obtained these certifications.

34
 Nestlé Purina received in 2010 the Malcolm Baldrige National Quality
Award for their excellence in the areas of leadership, customer and market
focus, strategic planning, process management, measurement, analysis and
knowledge management, workforce focus and results.
 In March 2011, Nestlé became the first infant formula company to meet the
FTSE4Good Index criteria in full.
 In September 2011, Nestlé occupied 19th position in the Universum's global
ranking of Best Employers Worldwide. According to a survey by Universe
um Communications, Nestlé was, in 2011, the best employer to work for in
Switzerland.
 The International Union of Food Science and Technology (IUFoST)
honoured Nestlé in 2010 with the Global Food Industry Award
 In May 2011, Nestlé won the 27th World Environment Centre (WEC) Gold
Medal award for its commitment to environmental sustainability.
 On 19 April 2012, The Great Place to Work® Institute Canada mentioned
Nestlé Canada Inc. as one of the '50 Best Large and Multinational
Workplaces' in Canada (with more than 1,000 employees working in Canada
and/or worldwide)
 On 21 May 2012, Gartner published their annual Supply Chain Top 25, a list
with global supply chain leaders. Nestlé ranks 18th in the list.
 In September 2012, Nestlé was among the top-scoring companies on the
Climate Disclosure Leadership Index (CDLI).[
 In 2013, Nestlé retained its number one position in charity Oxfam's
sustainability scorecard and improved its ratings on the issues of land,
workers, and climate
 In 2014, Nestlé received the Henry Spira Corporate Progress Awards for
altering its policies and practices to minimize adverse impacts on animals.

35
 In March 2015, Nestlé ranked second in Oxfam's Behind the Brands
scorecard, where the NGO ranks the world's 'Big 10' consumer food and
beverage companies on their policies and commitments to improve food
security and sustainability. Nestlé assumed the number one ranking for land
rights while the company also outperformed its peers on transparency and
water.

Nestlé's Corporate Business Principles-

Nestlé's Corporate Business Principles
The Nestlé Corporate Business Principles are at the basis of our company‘s
culture, which has developed over the span of 140 years.
Since Henri Nestlé first developed his successful infant cereal ―Farine Lactée‖,
we have built our
business on the conviction that to have long-term success for our shareholders,
we not only have to comply with all applicable legal requirements and ensure
that all our activities are sustainable ,but additionally we have to create
significant value for society
The new version of our Corporate Business Principles, updated in June 2010,
will be handed over to each of our 280‘000 employees by the end of 2010 and
accompanied by basic learning and training tools. As of 2011, a modular
training programme will be rolled out on the various components of the
Corporate Business Principles. The depth and focus of the trainings will be
established in accordance with the materiality for the different functions within
the company. For example, the training on the human rights components will
focus on managers and employees in countries of higher human rights risks as a
priority, with the aim to having completed the first training cycle by the end of
the year .Our Corporate Business Principles will continue to evolve and adapt to
a changing world, our basic foundation is unchanged from the time of the

36
origins of our Company, and reflects the basic ideas of fairness, honesty, and a
general concern for people. Nestlé is committed to the following Business
Principles in all countries, taking into account local legislation, cultural and
religious practices
1. Nutrition, Health and Wellness
Our core aim is to enhance the quality of consumer‘s lives every day,
everywhere by offering tastier and healthier food and beverage choices and
encouraging a healthy lifestyle. We express this via our corporate proposition
'Good Food, Good Life'.

2. Quality Assurance and product safety

Everywhere in the world, the Nestlé name represents a promise to the consumer
that the products safe and of high standard.
3. Consumer Communication
We are committed to responsible, reliable consumer communication that
empowers consumers to exercise their right to informed choice and promotes
healthier diets. We respect consumer privacy.
4. Human rights in our business activities
We fully support the United Nations Global Compact‘s (UNGC) guiding
principles on human rights and labour and aim to provide an example of good
human rights‘ and labour practices throughout business activities
5. Leadership and personal responsibility
Our success is based on our people. We treat each other with respect and dignity
and expect everyone to promote a sense of personal responsibility. We recruit
competent and motivated people who respect our values, provide equal
opportunities for their development and advancement protect their privacy and
do not tolerate any form of harassment or discrimination.

37
6. Safety and health at work
We are committed to preventing accidents, injuries and illness related to work,
and to protect employees, contractors and others involved along the value chain.

7. Supplier and customer relations

We require our suppliers, agents, subcontractors and their employees to
demonstrate honesty ,integrity and fairness, and to adhere to our non-negotiable
standards. In the same way, we are committed towards our own customers.

8. Agriculture and rural development

We contribute to improvements in agricultural production, the social and
economic status of farmers, rural communities and in production systems to
make them more environmentally sustainable.

9. Environmental sustainability
We commit ourselves to environmentally sustainable business practices. At all
stages of the product life cycle we strive to use natural resources efficiently,
favour the use of sustainably-managed renewable resources, and target zero
waste.

10. Water
We are committed to the sustainable use of water and continuous improvement
in water management. We recognise that the world faces a growing water
challenge and that responsible
management of the world‘s resources by all water users is an absolute necessity.
Nestlé continues to maintain its commitment to follow and respect all applicable
local laws in each of its markets

38
 MARKETING ENVIRONMENT
The business environment is a marketing term and refers to factors
and forces that affect a firm's ability to build and maintain successful
customer relationships. The three levels of the environment are:
Micro (internal) environment – small forces within the company that
affect its ability to serve its customers.

39
EXTERNAL ENVIRONMENT
Demographic External factor

1.More the education more will be the awareness about brand and quality food.
2. If the income level of people is high then purchasing power will be high so
they will purchase more.
3. Nestle products are made for people belonging from all age groups.
4.Both male/female are included equally in its target market.

Economic environment

1.If the inflation rate is high then there will be decrease in purchasing power. so
inflation indirectly affects the company‘s sale.
2.Nation varies greatly in its level and distribution of income.
3.Changes in major economic variables such as income, cost of living, interest
rate and savings have a large impact on the market place.

Political environment

1.Government regulations to protect interest of society and from unfair business

practices.
2,Unstable political conditions.
3,Law order situation getting worse.

Legal environment

1.Registered in the stock exchanges of India.

40
Social/cultural environment
1. Consumption behaviour of Indian people is high so they consume more
goods.
2. As India is majority of Hindu’s country so we cannot add any ingredient
which is prohibited in Hindu religion
3.As nestle water is the branded item so the people who are brand conscious
will prefer to use nestle water .so nestle is focusing more on the posh areas.

Technological environment
1.Technological environment is changing rapidly.
2,Most dramatic force shaping company‘s offerings and the way product is
marketed
3.Company‘s must keep up with technological changes to match up with its
environment.

Internal Environment
In Nestle Internal environment ensures.

1. Employees are on side with the goals of an organization.

2. They have direct impact on product quality dependability and overall
productivity.
3. They are internal market, which impact every department within an
organization; a satisfied internal market will be better able to satisfy external
market.
4. Nestle under the supervision of top management runs the departments of
finance, operations, accounting, sales and marketing, research and development
to achieve the goals of organization.

41
Micro Environment
In Nestle microenvironment includes
1. SUPPLIERS

Suppliers provide the resources like labour and material resources to produce
goods and services .They add to customer overall value delivery system. Labour
supplies include handling of
Quantity of labour
Quality of labour
Labour strikes

(a) Labour relations Material supplies deals with the

Quality of material
Price of material
Stability of material inputs
Delivery delays Nestle efficiently handles the quality, quantity, price and
stability of both material and labour supplies. Management maps out the
strategies for labour strikes, supply short age sand delays to avoid increasing the
cost of production, which can badly affect sales in short run and customer
satisfaction in long run.
b) Marketing Intermediaries
It includes the firms that help the company to promote, sell and distribute its
goods to final buyers.
The physical distribution firms determine the ways to store and ship goods to
reach their destination.
Marketing service agencies including marketing research firms, advertising
agencies and media firm s are also hired to target and promote product to right
market.

42
Financial intermediaries like banks, insurance companies helps to finance
transactions and insure against risks associated with buying and selling of
goods.
Nestle works in coordination with marketing intermediaries to make its product
Pure Life Water available and visible to its valuable customers.

2, CUSTOMER
Nestle deals with the reseller customers who buy the product Pure Life to resell
at a reasonable profit.

Macro Environment
Macro environment include political, cultural, economical factors but as for as
Nestle Pure Life Water is concern none of above factors affect on it. Because it
is not at luxury item they are selling necessities of life which can never be

43
 MARKETING MIX
The 'marketing mix (also known as the 4 Ps) is a foundation model
in marketing. The marketing mix has been defined as the "set of marketing tools
that the firm uses to pursue its marketing objectives in the target" .Thus the
marketing mix refers to four broad levels of marketing decision, namely:
product, price, promotion, and place Marketing practice has been occurring for
millennia, but marketing theory emerged in the early twentieth century. The
contemporary marketing mix, or the 4 Ps, which has become the dominant
framework for marketing management decisions, was first published in 1960 In
services marketing, an extended marketing mix is used, typically comprising 7
Ps, made up of the original 4 Ps extended by process, people, and physical
evidence

Product - It is a tangible good or an intangible service that is mass produced or

manufactured on a large scale with a specific volume of units. Intangible
products are service based like the tourism industry & the hotel industry or
codes-based products like cell phone load and credits .Typical examples of a
mass produced tangible object are the motor car and the disposable razor .A less
obvious but ubiquitous mass produced service is a computer operating system.
Packaging also needs to be taken into consideration. Every product is subject to
a life-cycle including a growth phase followed by an eventual period of decline

44
as the product approaches market saturation. To retain its competitiveness in the
market, product differentiation is required and in some of the strategies to
differentiate a product from its competitors.

Price
The price is the amount a customer pays for the product. The business may
increase order crease the price of product if other stores have the same product.

Promotion
It represents all of the communications that a marketer may use in the market
place. Promotion has four distinct elements: advertising, public relations,
personal selling and sales promotion. A certain amount of crossover occurs
when promotion uses the four principal elements together, which is common in
film promotion. Advertising covers any communication that is paid for, from
cinema commercials, radio and Internet adverts through print media and
billboards. Public relations are where the communication is not directly paid for
and includes press releases, sponsorship deals, exhibitions, conferences,
seminars or trade fairs and events .Word of mouth is any apparently informal
communication about the product by ordinary individuals, satisfied customers
or people specifically engaged to create word of mouth momentum. Sales staff
often plays an important role in word of mouth and Public Relations.

Place
A way of getting the product to the consumer and/or how easily accessible it is
to consumers.

45
 NESTLE’S DEFINATION OF MARKETING

Building customer relationship based on customer values and satisfaction is at

the very heart of modern marketing. The two fold goals of nestle marketing is to
attract new customers by providing superior value and to keep and grow the
current customer by delivering satisfaction .Nestle defines marketing as

“A social and managerial process whereby individual and group

obtains good food and good life through creating and exchanging
products and values”

MARKETING MIX OF NESTLE

Nestle, a very well known brand that is now housing thousands of products was
primarily formed for helping the infants survival who could not freedom
mothers lactation., its first product being "Farine Lactee Henri Nestle". The
brand was introduced by Henry Russel in 1866, which was boosted up by its
merger in 1905 with Anglo Swiss Milk Company, headquartered in Vevey
,Switzerland.

Product
• Being the world‘s largest food and nutrition company almost six thousand
products are being hosted under the brand named Nestle.

• Its products are very wide spread in range counting almost all daily use
products as well as occasionally used products. The products includes coffee,
bottled water, cereals, pharmaceutical products like lens care solutions, infant

46
food, beverages, chocolates, candies, ice creams, refrigerated foods, yogurt
,milk cream a very unusual product that is pet food and the largest selling brand
milkman. All these categories are subdivided to the diverse choices of
customers including different sizes and flavours (Kowitt, 2010).

• Products that are introduced in the market are first screened through high
Profile research and development sector including food processing, micro
analytical research and proper delivery of functionalities in the food products
thus promising the healthy goods for consumers.
• Main raw material for its milk products are UHT treated and packed in tetra
pack, moreover the packaging is long lasting as well as tempting.
• As hygiene is a basic ethical question for edible products, so Nestle has a full
concern and focus on this parameter.
• Nestle provides the product compliance to the customers including all legal
supports.
• Nutrition quality is preferably determined and is provided on the packing of
the product to facilitate consumers to check their preferences along with the
expiry dates.
Price
• Flexible prices are the key factor of success of Nestle in global markets for
example Milk being the largest selling brand is being sold out at the same price
as that of other low quality products while maintaining its quality.
• Their marketing strategy includes a wide range of pricing strategy, and by
doing this they can maintain their product rates at a sustainable position.
• Prices are affordable to almost all
Types of consumers as they have wide range of single product as in the case of
beverages, fruit juices are affordable to low economy class and expensive tin
packed beverages are also doing business in the market.

47
• Bulk purchase discount is also provided at the whole sale markets as well as at
the market stores.
• Seasonal price variations are also seen, especially in the case of chocolate
products, either by upsizing at the same price or reducing the sale price.
prices are the key factor of success of Nestle in global markets for example
Milk being the largest selling brand is being sold out at the same price as that of
other low quality products while maintaining its quality.
• Their marketing strategy includes a wide range of pricing strategy, and by
doing this they can
maintain their product rates at a sustainable position.
• Prices are affordable to almost all

Place

• Nestle products have their main business area in Europe from where they get
almost 90 percent
of the sales and revenues.
• Nestle is running globally, its setup being run in 86 countries. So, the
sales are also done globally and are impulsive ones.
• The products are not directly thrown into the market, rather a full procedure is
followed including all the essentials from Manufacturer, Distributor,
Wholesaler, Retailer and finally to Consumer.
• Nestle products are available in all its variety at the maximum outlets, as the
company is always looking forward to expand its outlets

48
Promotion
• Promotion strategies of the company are very well planned and they always
pay multiples of the expected amounts.
•Advertising on electronic and print media along with sign boards having
tempting figurations of the brand always proves good for the brand
• Sometimes limited economy offers boost up the popularity of brand especially
in the case when new induction to the market is made.

Creating awareness about our product to at least 50% of the target market
within three months of launch

This objective will be achieved through intense promotional activities,

developed to get to the target market in the best possible manner.

Capturing 60 % of target market within 1 year.

Our promotional activities will develop interest for people thus compelling them
to approach us. We will make good relations with our customers so they create
good word of mouth for us and approach us again and refer others.

Launching the product in summers.

We will be launching the product in summers to capture most of the target
consumers and as well as market share

49
SEGMENTS AND TARGET MARKETS SERVED MARKET
SEGMENTATION (PURE LIFE)

For getting the maximum market share and respect of the product in the minds
of the consumer,
as per our observation and market survey we have concluded that Nestle Pure
Life Water‘s
segmentation is based on two points. Geographic Segmentation Demographic
Segmentation

Geographic Segmentation
The company has divided its geographic segmentation in several regions. First
they have the segmentation of a whole country and from each provincial capital,
they divided its areas into north, east, west, south. So that it could be easy for
the company to work efficiently on its supply chain management.

Demographic Segmentation
Nestle Pure Life isn‘t a supreme quality product that only the high class uses. T
here is no age,
sex, income and any other kind of limitation on use of the product. The product
is for all. Anyone can use the product as per need. Nestle is a well-known
company all over the world. The company basically deals in food
products as their logo says ―Good Food, Good Life‖. Their major products
lines are

50
CHANEL OF DISTRIBUTION:
Nestle pure life is making full efforts to supply its product to ultimate
consumers. For this purpose the company uses the conventional marketing
channels of distribution to supply the product. In this method company supply
the product to whole seller who responds it to retailers who supply to ultimate
user. The company also uses the vertical marketing system in which retailers
also take supply from directly company resources without contact with whole
sellers, In this way the margin of company decreases and going into the interest
of the ultimate consumer.

PROMOTIONAL STRATEGY
Advertisement is a tool to introduce the product in the market. To increase sales
and build an image in the mind of consumer company advertise their product in
different ways, as for as Nestle pure life is concerned company use: Television
Radio News Paper Bill Board Hoarding etc

51
Sometime company also makes free sampling, held stalls at different programs
like Health Meal .Pure Life's communication strategy is weak as they follow
emotional black mailing. In advertising they show emotional feelings to their
customers.
SALES PROMOTION STRATEGY Sales Promotion:

Specific promotions of Nestle Pure Life were arranged in some of the key
outlets of Lahore. Elaborate shelf space was acquired for product display and
specially designed POS material was extensively used to promote sales. On a
12-bottle purchase of 1.5 ml, one 1.5ml bottle was offered free to consumers.
Similarly on a 6-bottle purchase of 1.5 ml, one 0.5 ml bottle was offered free.
Regarding trade promotion, the retailer was also given an additional discount of
4 % during this sales promotion. Not only did the sales of Nestle Pure Life grow
tremendously during the promotion, these continued at a higher pace even after
it was over.

Public Relations
: As far as the public relations are concerned, the organization releases an
annual report which includes the company's financial statements along with the
sales of all product categories. The annual report is mainly aimed at the
stockholders. However, another very important form of public relations are the
newsletters and bi-monthly magazines issued by the organization. A huge
amount of information is found in these regarding the products andtheir
promotion.

52
POSITIONING
We will position our product as a high quality product consumer focused.
Messages like
“Who knows your taste better than us”, “Nestle ice cream now at your door
step” Add additional flavour’s to your life”
Will help us portray our picture clearly and distinctly. We will position our
product against the competitors and gain competitive advantage through our
efficient promotional methods, using innovations, and by reaching closer to our
target market through the arrangement of events like BASANT, VALENTINE
DAY and etc. In short consumers will view us as a product providing highly
quality, in terms of taste, customer focused and, at the same time reasonably
priced as compared to others

Price plays a bigger role in Nestle India’s 2011 growth

Nestle had been holding back on price hikes, despite rising costs. Its
strategy has also been backed by its parent’s resolve—seen in other
multinational companies (MNCs), too—to grow faster in emerging markets.

Nestlé’s presentation shows that in January-September, in the domestic

market, sales rose 9.5% year-on-year (y-o-y) in volume terms, while value
rose 21.5%. In the exports market, sales declined 10.2% y-o-y, but it rose
8.9% in value terms. The immediate conclusion is that Nestle has been
hiking prices sharply, a strategy that runs the risk of hurting consumer
demand and even becoming uncompetitive.

A reason for this shift can be seen in Nestlé’s parent’s strategy—echoed by

other MNCs—of focusing on margin improvement. Nestlé’s growth also
suffered from its decision to weed out products it termed non-strategic.

While its reported volume growth was 8.7%, excluding discontinued

products, its restated volume growth was 12.8%. Changes in product prices
53
and mix have played a more significant role in 2011 as restated value sales
growth was 24.4%.

This trend is also visible in its key product categories. In milk and nutrition,
restated volume sales rose 11.7% and 26.4% in value terms. Rising milk
prices are the main reason for the increase, helped by pricing power in
some products with relatively low competition.

In chocolates, restated volume sales rose 15.1% and 22.9% in value terms.
Price and mix have not contributed that significantly here; perhaps, due to
strong competition.

However, in prepared dishes and cooking aids (noodles, ketchup and

instant soups), despite growing competition, Nestle has used price and mix
effectively as volume sales rose by 15.4%, but by 27.1% in value terms.

The decline in exports saw flat growth in the beverage segment’s volumes,
though price hikes led to a 17% growth. Again, coffee prices have jumped
sharply, explaining the increase.

Nestle is entering an interesting phase now. Pruning of products could

mean it can invest more in products which can contribute
disproportionately to sales growth and margins. But it could also limit its
ability to drive volume growth. Even now, volumes are playing a significant
role in its growth. The price hikes seem to be passing on cost hikes. As long
as that continues, its growth strategy appears sustainable.

Nestlé’s real test comes when input costs soften—as they have in some
cases—and whether it passes on the benefits to grow consumption, or
retains the savings to grow margins. A lot also depends on the competitive
scenario; and if everybody shifts focus to margins, then the incentive to
take a different path becomes lesser.

54
 PRODUCTS
NESTLE EVERYDAY:

To meet the requirements of the tea-whitening segment, this product was

launched in 1986. On account of aggressive marketing, focused distribution,
excellent consumer acceptance and product quality, this brand has shown strong
growth and holds good promise for the future.

NESTLE MILKMAID
It is a 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 product s over 90
years ago.

55
iii. NESTLE DAHI:
is made from fresh, high quality pasteurised toned milk. It has all the goodness
of natural Calcium and the Cultures used in NESTLÉ Dahi help improve
digestion. It comes available for your convenience in 85g, 200g and 400g Tubs
and 200g and 1kg Pouch packs. The pouch packs are currently available only in
Delhi NCR.

BEVERAGES

NESCAFÉ CLASSIC:

It is 100% Pure Instant Coffee. NESCAFÉ CLASSIC 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…

56
NESTEA:

New NESTEA Iced Tea with Green Tea brings natural, healthy goodness of
Green tea into your glass. Green tea is a good source of NATURAL
ANTIOXIDANTS which are known to protect body cells from damage caused
by free radicals. Feel good everyday with the refreshingly light taste of
NESTEA with Green Tea.

NESCAFÉ
CAPPUCCINO:
The world's favourite instant coffee brand NESCAFÉ brings two delicious new
Cappuccino variants - NESCAFÉ Choco Mocha and NESCAFÉ Vanilla Latte.
Treat yourself to its rich coffee taste and delicious froth. Comforting, relaxing -
a delicious cup of NESCAFÉ Cappuccino is a great way to enjoy a true café
experience at home

CHOCOLATES. MILKYBAR CHOO:

MILKYBAR CHOO - the tasty chewy MILKYBAR - now has power of
Calcium! Outdoor champions, grab one now. Also available in yummy
Strawberry and Choko flavours!!mm, mm, mmmmmmmmm.....

MILKYBAR ECLAIRS:
Introducing a delicious new wave of strawberry flavour in your favourites
MILKYBAR Éclairs

57
 SWOT ANALYSIS

STRENGTHS
1.Very long history (over 140 years)
2.Operated factories in 77 countries (all six continents), a truly global
company.
3.Considered the innovation leader in the global food and nutrition sector(3500
scientist in company R&D network)
4. Low cost operators (beat the competition by producing low cost products,
edging ahead with low operating costs)
5. Offering thousands of local products.
6. Have a great CEO, Peter Brabeck.
7. Socially Responsible Company.
8. Products enjoy strong brand image and market pull.
9. Innovative and constantly growing product line. NML launched 17 new
products , including variants of existing products in recent past.
10. Sales force is the major resource strength in terms of physical resources of
the Periodic research carried out to judge market trends.
11 . Major shareholder in the food industry of India
12. Aggressive Marketing.
13 . Efficient Distribution networks throughout the country.
14 . Quality product as follows-
. Solid Financial position
. Strong supply chain network
. Qualified work force and a very strong workforce.
. Commitment to High Quality Products
. Year Annual Production (million litters) Annual Consumption (million litters)
2008-09=> 648.43 353.71 2009-10 => 753.89 372.05.

58
WEAKNESSES
1. Not as successful as they thought they would be in some market (i.e. France)
2. Some of their product were positioned as too scientific, and consumers didn‘t
quite understand (i.e. LC-1 was a food and not a drug)
3. Selective investment due to uncertain economic and political conditions.
4. Feasibility of new products needs to be analyzed, e.g. Nestea was launched
some years back but it failed because no customer demand for it existed.
5. There is weak marketing of some products as sometimes there is no
advertisement.
6. Lack of awareness among the target market.
7. It Dependency on others (govt. & sponsors) for the arrangement of events.
The target market of some of the Nestle products like Milk is upper middle and
high class because lower middle and poor class cannot afford to buy UHT milk
due to its premium price.
8. It is a main weakness of some of the products of Nestle that there are
different companies of same products but the name of nestle sometimes stand in
the last because of low advertising and marketing.

OPPORTUNITIES
1. Well- known company and strong brand name.
2. Health-based products are becoming more popular in the world, including in
the United States.
3. Ranked first in nearly all the product segments in which it operated (market
leader).
4. Unaffected by current economic conditions (its share of the UK
confectionery market rise to 15.6 per cent with a 0.5 per cent growth this year).

59
5. Nestlé Milk has expanded its product range by entering the cold dairy market
recently by launching Nestlé plain yogurt and now fruit yogurt is also added to
it.
6. Credit policy can be adopted to increase sales.

THREATS
1. Some markets they are entering are already mature.
2. Global competition is high.
3. There are intense competitions in the United States, especially yogurt market
(General Mills).
4. Price fluctuations due to rupee devaluation as raw material are imported.
5. The present economic crisis in the world, led to the withdrawal of foreign
management from the company and the investment has come to a halt.
6. Legal and ethical issues.
7. Market segment growth could attract new entrants.
8. Economic slowdown can reduce demand.
9. Inflation is getting higher and higher so the purchasing power of the people is
decreasing day by day.
10. Taste of consumers for some products has already developed which is hard
to change.

60
 OBJECTIVES
My main objective of the project is to study the marketing mix of Nestle India
Ltd. Other Objectives of the study are:

1. To understand Nestlé‘s share in Indian food market.

2. To find out that what all strategies a company makes and follows for their
products.

3. To understand the Indian food market.

4. The major steps taken by the company to enhance the sales.

5. To analyze the strength of Nestle in the Baby food segment

61
 CH-3 RESEARCH METHODOLOGY
Secondary research can be described as the most widely used method for data
collection. This process involves accessing information that is already gathered
from either the originator or a distributor of primary research. Secondary
research includes collecting information from third-party sources such as
company websites, sales and accounting records, magazine articles and
marketing research reports. It also includes any previously gathered information
used by the marketer from any internal or external source.

Achieving accuracy in any research requires in depth study regarding the

subject. As the prime objective of the project is to knowing the marketing mix
of nestle research methodology adopted is basically based on secondary data.
Sources of secondary data used to obtain information on nestle history, current
issues, policies, procedures etc, wherever required.1)
Internet2)Magazines3)Newspapers

DATA COLLECTION

PRIMARY DATA

The primary data that I collected were the first hand information, which I
received through personal interviews with the consumers and through
questionnaires. This data gave the most vital information for making my
analysis of the prevailing banking behavior of the consumer

SECONDARY DATA:

Secondary data involved in my research were the information that I collected

through the various brochures and pamphlets of the company. And journals
and report of the company were also used in the research.

62
 CH-4 FINDINGS & RECOMMENDATION

1. Nestle is the best company all over the world but there are some
recommendation and suggestions.

2. Their prices are bit higher so they should low their prices to increase their
customers.

3. About 70% people use their products while the rest don‘t use them. They
should conduct survey and concentrate on those facts why people are nto
using their products.

4. They should also improve their advertising as their advertising doesn‘t pay
long-term effects in the mind of customers.

5. About 17% people are not satisfied from the taste of nestle so nestle has to
improve its taste .Recommendation

6. Keep the taste nice.

7. Increase advertising and show your competitive edge.

8. Increase loyalty of customer with brand through attractive packages.

9. Keep the price low because the day when price of competitor will be very
near to your price your sales will boost up.

10. Increase its distribution network.

11. Try to get more & more party orders.

63
12. Increase incentive and promotional activities, training courses/workshops
for team.

13. Conduct weekly meetings with distributors and sales team in order to
review weekly target closing.

64
 CH-5 CONCLUSION
Nestle is a market leader due to different reasons:

1. Its price is high against its competitors but it matches its quality with its
competitors.

2. Nestle is using its brand name to promote its products & it‘s very popular
as compared to its competitors.

3. Its packaging is good.

4. We can easily find Nestle from any retailer shop.

5. Due to its advertisement, Nestle attracts more customers & has very
prosperous future if it continues to promote its products and bring all the
possible innovational aspects using different product line strategies.

6. It has always maintained the quality of its products.

7. Despite of all the facts, there‘s need to maintain the condition of office
and enhance the security.

8. Behaviour of employees is not professional and every department should

treat equally .From our report it is concluded that nestle has a good
reputation as a strong consumer brand.

65
 9. 66% of the consumers use Nestlé‘s products regularly. 60% of the
consumer‘s associate quality

10. With Nestle 57.3 % of the consumers prefers Nestle over other brands of
pure water that are available in the market. Nestle formulating a good strategy
and they are trying to go for mass-marketing

66
 CH 6- BIBLIOGRAPHY
Books
Kotler Philip (Eighth Edition) ―Marketing Management‖, Prentice Hall of
India Ltd.
• T.N. Chhabra (Fourth Edition)―Marketing Management‖
, Dhanpat Rai & Co(Pvt.) Ltd.
Magazines:
• Advertising and marketing Magazine
• The Economic Times –
―Brand Equity‖
• Company Literature
• Business World
• Business Today
Website:
• www.nestle.com
• www.moneycontrol.com
• www.iloveindia.com
• www.shine.com
http://www.thetimes100.co.uk
• http://www.deloitte.com/view/en_GX/global/services/consulting/enterprise
-applications/08645de9542fb110VgnVCM100000ba42f00aRCRD.htm
• http://www.coursework.info/University/Business_and_Administrative_studies
/Economics/
Microeconomics/PEST_Model_L61591.html
• http://www.scribd.com/doc/21544545/Introduction
-Nestle-Was-Founded-in-1866-by-HenriNestle-And
• http://kninn.blogspot.com/2010/06/recommendations
-for-nestle.html

67
68