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ACKNOWLEDGEMENT
1
ACKNOWLEDGEMENT
"Acknowledgement is an art ,one can write glib stanzas without meaning a word,and on
other hand one can make a simple expression of gratitude"
I am grateful to my teacher of the college who inspires me to do so. As in the absence of a
teacher the right of path of knowledge is impossible.So, I feel pleasure to be grateful
towards my guide Mr. Vaibhav Sharma who encouraged me ana provide the shape &
structure to this project.
Shreesh Mehrotra
BBA VI Semster
915671
2
Content
1. ACKNOWLEDGEMENT 1-2
2. SYNOPSIS 4-9
3. OBJECTIVES 10-11
4. NESTLE INDIA 12-17
5. COMPANY PROFILE 18-43
6. SWOT ANALYSIS 44-53
7. RESEARCH METHODOLOGY 54-55
8. LIMITATIONS 56
9. FINDINGS 59-62
10. RECOMMENDATIONS 63-64
11. CONCLUSION 65
12. BIBILOGRAPHY 66-67
3
SYNOPSIS
4
Profile of nestle
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
emphazised 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, advise 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 centres that would not
only ensure prompt collection and pay fair prices, but also instil 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. For more on Nestlé Agricultural Services, click here.
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.
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. The culture of innovation and renovation within
the Company and access to the Nestlé Group's proprietary technology/Brands expertise
and the extensive centralized Research and Development facilities gives it a distinct
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advantage in these efforts. It helps the Company to create value that can be sustained over
the long term by offering consumers a wide variety of high quality, safe food products at
affordable prices.
Nestlé India manufactures products of truly international quality under internationally
famous brand names such as NESCAFÉ, MAGGI, MILKYBAR, MILO, 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 Fresh 'n' Natural Dahi and NESTLÉ Jeera Raita.
Nestlé India is a responsible organization and facilitates initiatives that help to improve
the quality of life in the communities where it operates.
Nestlé is the world's biggest food manufacturer, with around 450 factories spread across
the globe, and a portfolio that ranges from baby foods to pet care, from chocolate to
mineral water. Its world-famous brands include Nescafe, Kit Kat and Perrier, among
many others. The group also owns a large shareholding in cosmetics company L'Oreal.
As with other food companies, recent years have seen a greater concentration on a
focused food and beverage business. In particular Nestlé has leveraged its performance in
sectors such as ice cream and petfoods with an aggressive acquisition strategy. At the
same time, it has placed health and wellness at the forefront of its agenda, developing the
widest possible range of nutritionally balanced products under the overall umbrella
"Good Food, Good Life
BRANDS
Nescafe Gervais Extreme
L'Oreal Maggi
Nestlé Rowntree Maxibon
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Nestlé Purina / Friskies Galderma
Nestea Buitoni
Cereal Partners Herta
Dreyer's Ice Cream Gerber
Nestlé Waters Nespresso
Nestlé Baby Food Willy Wonka
Nesquik Jenny Craig
Baci Nestlé Professional
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Objectives
1. To determine the sales volume of the company.
2. To overcome the failures that are being faced by company.
3. To know the advertising strategy of the company.
4. To know the strategy of competitors.
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1. RESEARCH METHODOLOGY
I have carried out a research which is both qualitative and quantitative in its support. The
qualitative approach applies to both, descriptive and inductive forms of research. While
as in case of quantitative approach, an extensive use has been made of the literature
available to carry out a detail research on the nature of the problem. I have chosen Nestle
as the target company for my research study.
1.1 Method of data collection & analysis
The data, after collection, has to be processed and analyzed in accordance with the
outline laid down for the purpose at the time of developing the research plan. This is
essential for a scientific study and for ensuring that we have all relevant data for making
contemplated comparisons and analysis. I have conducted a graphical analysis based on
the responses received from the persons questioned and interviewed. Once the interview
was over, the responses received were be grouped together, and a graphical presentation
and analysis has been made for every set of questions.
I have made use of both, the primary sources and the secondary sources of data in
collecting information.
PRIMARY DATA
The primary source of data involves oral interviews and questionnaires. These sources are
inadvertently expected to yield more qualitative data and results.
SECONDARY DATA
The secondary source of data includes relevant literature including periodicals and
journal articles in the areas of Marketing, customer satisfaction. product. To have a
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good image in the eyes of retailers.
Objectives
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Objectives
1. To determine the sales volume of the company.
2. To overcome the failures that are being faced by company.
3. To know the advertising strategy of the company.
4. To know the strategy of competitors.
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Nestle India
Nestle India is a subsidiary of Nestle S.A. of Switzerland headed by Mr.
Martial G. Rolland, Chairman And Managing Director. With six factories and a large
number of co-packers, Nestle India is a vibrant company that provides consumers in India
with products of global standards and is committed to long term sustainable growth and
shareholder satisfaction. The Company employs over 4500 people and for the full year
2005 Nestle India recorded net sales of Rs. 20477 Mio.
Nestle has been a partner in India's growth for the past nine decades and
has built a very special relationship of trust and commitment with the people of India.
The culture of innovation and renovation within the company and access to the Nestle
Group's proprietary technology/ Brands, expertise and the extensive centralized Research
and Development facilities helps the company to create value that can be sustained over
the long term. Nestle India manufactures products of truly international quality under
internationally famous Brand names such as Nescafe, Cerelac, Maggi, Milky Bar, Milo,
BarOne, Nestea and Kit Kat and in the recent years the company has also introduced
products of daily consumption and use such as Nestle Milk, Nestle Dahi, Nestle Butter,
Nestle Fruit 'n milk ready to drink beverage and Nestle Pure Life bottled drinking water.
Nestle India Ltd, 51% subsidiary of Nestle SA, is among the leading
branded food player in the country. It has a broad based presence in the foods sector with
leading market shares in instant coffee, infant foods, milk products and noodles. It has
also strengthened its presence in chocolates, confectioneries and other semi processed
food products during the last few years. The company has launched Dairy Products like
UHT Milk, Butter and Curd and also ventured into the mineral water segment in 2001.
Nestle’s leading brands include Cerelac, Nestum, Nescafe, Maggie, Kitkat, Munch and
Pure Life.
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COMPETITION
Baby food and Instant coffee are categories where brand loyalties are
very strong and Nestle is the market leader. HUL is a significant competitor to Nestle in
instant coffee; while Heinz is the main competitor in the baby foods market. The market
for culinary products, semi-processed foods such as noodles, ready mixes for Indian
ethnic breakfast and sweets, is largely an urban market. HLL and Indo Nissin Foods are
the main competitors in these product segments. Nestle has also achieved a significant
25% share in the chocolate/confectionery market. The company has recently expanded its
dairy products portfolio to include, milk, curd and butter. The company also forayed into
the bottled water segment with the launch of its Perrier brand in the premium mineral
segment and Pure Life in the purified water segment.
SOME ACQUISITIONS & MERGERS
1866: Company Foundation.
1905: Merger Between Nestle' & Anglo-Swiss Condensed Milk Company.
1929: Merger with Peter Cailer-Kohler Chocolate Suisse S. A.
1947: Merger with Alimentana SA (Maggie).
1969: Vittel (equity interest)
1971: Acquisition of Ursina-Franck (Swiss).
1974: Acquisition of L’ Oreal (France).
1977: Acquisition of Alcon (2002: partial IPO).
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1985: Acquisition of Carnation (USA).
1988: Acquisition of Buitoni-0-Perugina (Italy).
1988: Acquisition of Rowntree
1992: Acquisition of Perrier (France)
1998: Acquisition of San Pellegrino and Spillers Petfoods
2000: Acquisition of PowerBar
2001: Acquisition of Ralston Purina
2002: Acquisition of Scholler and Chef America
2003: Acquisition of Movenpick, Powwow and Dreyer’s
2004: Acquisition of Valio (ice cream activities)
2005: Acquisition of Wagner, Proteika, Musashi
SOME STRATEGIC ALLIANCES
1981: Galderna
1989: With Clintec (USA).
1989: CPW (USA) (Cereal Partner World Wide).
1990: Nestle' – Walt Disney (USA).
1991: Cooperation with Coca Cola (USA).
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2002: Dairy Partners Americas and Laboratories
MAJOR PRODUCTS & YEAR OF INCEPTION
NIL is running with about 80 brands in India. Some major products under those brands
are till the year 2003 is as follows:
PRODUCTS YEAR OF INCEPTION
MILKMADE 1962
NESCAFE 1964
LACTOGEN 1968
MAGGI NOODLES 1983
MAGGI SAUCES 1985
SUNRISE 1983
EVERY DAY 1986
MAGGI SOUPS 1989
ECLAIRS 1991
BARONE 1993
NESTLE BONUS CHOCOLATE 1995
KIT-KAT 1995
POLO 1995
MILO 1996
NES TEA 1996
NESTLE SLIM MILK 2003
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. RECENTLY LAUNCHED PRODUCTS
* Set Dahi
* New Tomato and Curry Flavors in Maggie Noodles
* New Dal and Atta in Maggie Noodles
* A new confectionery – Nestle Choco Stick
* Soft Chewy fudge Milky bar Choo
* Nestle` recently launched products Tea Iced Tea
* Nestle slim milk
Error: Reference source not foundMARKETING STARTEGIES OF NESTLE
INDIA LIMITED
Marketing strategy is the complete and unbeatable plan designed specially for attaining
the marketing objective of the firm.
The marketing objectives indicate what the firm wants to achieve; the marketing strategy
that decides the success at the business unit level which in turn decides the total
corporation’s success. The link between marketing strategy and overall success is indeed
direct and vital. And in this linkage lies the significance of marketing strategy.
Nestle India ltd. has an aggressive marketing strategy which is very well understood
when one goes through the in-depth study of the 4-P’s of the marketing and price
strategies with respect to its products. One comes to the conclusion that NIL has a well
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defined roadmap to success i.e. to reach its ultimate objective of realizing customer
satisfaction through value for price products.
COMPANY PROFILE
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Nestle India
Nestle India is a subsidiary of Nestle S.A. of Switzerland. Nestle India manufactures a
variety of food products such as infant food, milk products, beverages, prepared dishes &
cooking aids, and chocolates & confectionary. Some of the famous brands of Nestle are
NESCAFE, MAGGI, MILKYBAR, MILO, KIT KAT, BAR-ONE, MILKMAID,
NESTEA, NESTLE Milk, NESTLE SLIM Milk, NESTLE Fresh 'n' Natural Dahi and
NESTLE Jeera Raita.
Nestle was founded in 1867 in Geneva, Switzerland by Henri Nestle. Nestle's first
product was "Farine Lactee Nestle", an infant cereal. In 1905, Nestle acquired the Anglo-
Swiss Condensed Milk Company. Nestle's relationship with India started 1912, when it
began trading as The Nestle Anglo-Swiss Condensed Milk Company (Export) Limited,
importing and selling finished products in the Indian market.
After independence, in response to the then economic policies, which emphasized local
production, Nestle formed a company in India, namely Nestle India Ltd, and set up its
first factory in 1961 at Moga, Punjab, where the Government wanted Nestle to develop
the milk economy. In Moga, Nestle educated and advised farmers regarding basic
farming and animal husbandry practices such as increasing the milk yield of the cows
through improved dairy farming methods, irrigation, scientific crop management
practices etc. Nestle set up milk collection centres that ensured prompt collection and
paid fair prices. Thus, Nestle transformed Moga into a prosperous and vibrant milk
district.
In 1967, Nestle set up its next factory at Choladi (Tamil Nadu) as a pilot plant to process
the tea grown in the area into soluble tea. Nestle opened its third factor in Nanjangud
(Karnataka) in 1989. Thereafter, Nestle India opened factories in Samalkha (Haryana), in
1993 and two in Goa at Ponda, and Bicholim in 1995 and 1997 respectively. Nestle India
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is now putting up the 7th factory at Pant Nagar in Uttarakhand.
Today, Nestle is the world's largest and most diversified food company. It has around
2,50,000 employees worldwide, operated 500 factories in approximately 100 countries
and offers over 8,000 products to millions of consumers universally.
History
Nestlé headquarters in Vevey.
The company dates to 1867, 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 August 1867 Charles A and George Page, two brothers from Lee County, Illinois, USA
established the Anglo-Swiss Condensed Milk Company in Cham. Their first British
operation was opened at Chippenham, Wiltshire in 1873.
In September 1867, in Vevey, Henri Nestlé developed a milk-based baby food and soon
began marketing it. The following year, 1868, saw Daniel Peter begin seven years of
work perfecting his invention, the milk chocolate manufacturing process; M. Nestlé's was
the crucial cooperation M. Peter needed to solve the problem of removing all the water
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from the milk added to his chocolate and thus preventing the product from developing
mildew. Henri Nestlé retired in 1875, but the company, under new ownership, retained his
name as Farine Lactée Henri Nestlé.
Henri Nestlé.
In 1877 Anglo-Swiss added milk-based baby foods to its products, and in the following
year the Nestlé Company added condensed milk, so that the firms became direct and
fierce rivals.
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 Produits Maggi SA (founded 1884) and
its holding company, Alimentana SA of Kempttal, Switzerland. Maggi 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, United Kingdom, Germany and Spain. World War I created new demand for dairy
products in the form of government contracts; by the end of the war, Nestlé's production
had more than doubled.
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 the
company's second most important activity.
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The logo that Nestlé's used till the 1970s.
Nestlé felt the effects of World War II immediately. Profits dropped from US$20 million
in 1938 to US$6 million in 1939. Factories were established in developing countries,
particularly Latin America. Ironically, the war helped with the introduction of the
company's newest product, Nescafé ("Nestlé's Coffee"), which was a staple drink of the
US military. Nestlé's production and sales rose in the wartime economy.
The end of World War II was the beginning of a dynamic phase for Nestlé. Growth
accelerated and companies were acquired. In 1947 came the merger with Maggi
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'Oréal
in 1974. In 1977, Nestlé made its second venture outside the food industry by acquiring
Alcon Laboratories Inc.
In 1984, Nestlé's improved bottom line allowed the company to launch a new round of
acquisitions, notably American food giant Carnation and the British confectionery
company Rowntree Mackintosh in 1988, which brought the Willy Wonka Brand to
Nestlé.
The Brazilian president, Lula da Silva, inaugurates a factory in Feira de Santana (Bahia),
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in February of 2007.
The first half of the 1990s proved to be favorable for Nestlé: trade barriers crumbled and
world markets developed into more or less integrated trading areas. Since 1996 there
have been acquisitions including San Pellegrino (1997), Spillers Petfoods (1998), and
Ralston Purina (2002). There were two major acquisitions in North America, both in
2002: in June, Nestlé merged its U.S. 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 came close to purchasing the iconic American company
Hershey's, one of its fiercest confectionery competitors, though the deal fell through. [3]
Another recent purchase included the Jenny Craig weight loss program for US$600
million.
In December of 2005, Nestlé bought the Greek company Delta Ice Cream for €240
million. In January of 2006, it took full ownership of Dreyer's, thus becoming the world's
biggest ice cream maker with a 17.5% market share.
In November of 2006, Nestlé purchased the Medical Nutrition division of Novartis
Pharmaceutical for $2.5B, also acquiring in 2007 the milk flavoring product known as
Ovaltine.
In April of 2007, returning to its roots, Nestlé bought baby-food manufacturer Gerber for
$5.5 billion.In December of 2007, Nestlé entered in a strategic partnership with a Belgian
chocolate maker Pierre Marcolini. 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.
Products
Main article: List of Nestlé brands
Nestlé has 6,000 brands,[10] with a wide range of products across a number of markets
including coffee (Nescafé), bottled water, other beverages (including Aero (chocolate) &
23
Skinny Cow), chocolate, ice cream, infant foods, performance and healthcare nutrition,
seasonings, frozen and refrigerated foods, confectionery and pet food.
BUSINESS
Japan headquarters
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The Nestlé Tower in Croydon. This serves as their headquarters in the United Kingdom.
Management
The executive board, a distinct entity from the board of directors, includes:
Peter Brabeck-Letmathe , Chairman of the Board of Directors, Nestlé S.A.
Paul Bulcke , Chief Executive Officer, Nestlé S.A.
Werner Bauer, Executive Vice President, Nestlé S.A., Chief Technology Officer,
Head of Innovation, Technology, Research & Development
Friz van Dijk, Executive Vice President, Nestlé S.A. Asia, Oceania, Africa,
Middle East
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Luis Cantarell, Executive Vice President, Nestlé S.A. United States of America,
Canada, Latin America, Caribbean
José Lopez, Executive Vice President, Nestlé S.A. Operations, GLOBE
John J. Harris, Executive Vice President, Nestlé S.A. Chairman & CEO of Nestlé
Waters
Nandu Nandkishore, Executive Vice President, Nestlé S.A. CEO of Nestlé
Nutrition
James Singh, Executive Vice President, Nestlé S.A. Finance and Control, Legal,
IP, Tax, Global Nestlé Business Services
Laurent Freixe, Executive Vice President, Nestlé S.A. Europe
Petraea Heynike, Executive Vice President, Nestlé S.A. Strategic Business Units,
Marketing, Sales and Nespresso
Marc Caira, Deputy Executive Vice President, Nestlé S.A. Head of Nestlé
Professional Strategic Business Division
Jean-Marc Duvoisin, Deputy Executive Vice President Nestlé S.A. Head of
Human Resources and Centre Administration
David P. Frick, Senior Vice President and ex officio Member of the Executive
Board
According to a 2006 global survey of online consumers by the Reputation Institute,
Nestlé has a reputation score of 70.4 on a scale of 1–100.
26
Earnings
In 2009, consolidated sales were CHF 107.6 billion and net profit was CHF 10.43 billion.
Research and development investment was CHF 2.02 billion.
Sales by activity breakdown: 27% from drinks, 26% from dairy and food
products, 18% from ready-prepared dishes and ready-cooked dishes, 12% from
chocolate, 11% from pet products, 6% from pharmaceutical products and 2%
from baby milks.
Sales by geographic area breakdown: 32% from Europe, 31% from Americas
(26% from US), 16% from Asia, 21% from rest of the world.
Joint ventures
Nestlé holds 26.4% of the shares of L'Oréal, the world's largest company in cosmetics
and beauty. The Laboratoires Inneov is a joint venture in nutritional cosmetics between
Nestlé and L'Oréal, and Galderma a joint venture in dermatology with L'Oréal. Others
include Cereal Partners Worldwide with General Mills, Beverage Partners Worldwide
with Coca-Cola, and Dairy Partners Americas with Fonterra.
Ethical and sustainable efforts
In 2000 Nestlé and other chocolate companies formed the World Cocoa Foundation. The
WCF was set up specifically to deal with issues facing cocoa farmers (disease had wiped
out much of the cocoa crop in Brazil) including ineffective farming techniques and poor
environmental management. The WCF focuses on boosting farmer income, encouraging
sustainable farming techniques and environmental and social programmes.Nestlé is a
founding participant in the International Cocoa Initiative (ICI), an independent
foundation set up in 2002 and dedicated to ending child and forced labour in cocoa
growing, and eliminating child trafficking and abusive labour practices.
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In October 2009 Nestlé announced its Cocoa Plan. The company will invest CHF 110
million in the Plan over ten years to achieve a sustainable cocoa supply. On the 23rd
October 2009 Nestlé and CNRA, the Ivorian National Centre for Plant Science Research,
signed a frame agreement for cooperation in plant science and propagation, with a target
of producing 1 million high-quality, disease-resistant cocoa plantlets a year by 2012. The
aim is to replace old, less productive trees with healthier new ones.
Nestlé is launching a Fair Trade branded Kit Kat in the UK and Ireland from January
2010.
Controversy and criticism
Marketing of formula
Main articles: infant formula and Nestlé boycott
One of the most prominent controversies involving Nestlé concerns the promotion of the
use of infant formula to mothers across the world including developing countries, an
issue that attracted significant attention in 1977 as a result of the Nestlé boycott which is
still ongoing.[18] Nestle continues to draw criticism that it is in violation of a 1981 World
Health Organization code [19] that regulates the advertising of breast milk formulas.
Nestlé's policy,[20] however, states that breastmilk is the best food for infants; however,
women who cannot or choose not to breast feed for whatever reason do need an
alternative to ensure that their babies are getting the nutrition they need.
Melamine in Chinese milk
In late September 2008, the Hong Kong government claimed to have found melamine in
a Chinese-made Nestlé milk product. The Dairy Farm milk was made by Nestlé's division
in the Chinese coastal city Qingdao. Nestlé affirmed that all its products were safe and
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were not made from milk adulterated with melamine. On October 2, 2008 the Taiwan
Health ministry announced that six types of milk powders produced in China by Nestlé
contained traces of melamine. Nestlé has announced that it will begin a recall of milk
products produced in China.[22][23]
Greenwashing
A coalition of environmental groups filed a complaint against Nestlé to the Canadian
Code of Advertising Standards after Nestlé took out full page advertisements in October
2008 claiming that "Most water bottles avoid landfill sites and are recycled", "Nestlé Pure
Life is a healthy, eco-friendly choice" and that "Bottled water is the most environmentally
responsible consumer product in the world".[24][25][26] A spokesperson from one of the
environmental groups stated: "For Nestlé to claim that its bottled water product is
environmentally superior to any other consumer product in the world is not
supportable".In their 2008 Corporate Citizenship Report, Nestlé themselves stated that
many of their bottles end up in the solid waste-stream and that most of their bottles are
not recycled.The advertising campaign has been called greenwashing.
Zimbabwe farms
In late September 2009, it was brought to light that Nestlé was buying milk from
illegally-seized farms currently operated by Robert Mugabe's wife, Grace Mugabe.
Mugabe and his regime are currently subject to European Union sanctions. Nestlé later
stopped buying milk from the dairy farms in question.
Palm oil use
Rapid deforestation in Borneo and other regions to harvest hardwood and make way for
oil palm plantations sends massive amounts of carbon dioxide into the atmosphere.]In
particular, where peat swamp forests are cleared, destroying the habitat for many
threatened species of animals such as the orangutan, much public attention has been
given to the environmental impact of palm oil and the role of multi-nationals such as
29
Nestlé in this.There is ongoing concern by various NGOs including Greenpeace.Nestlé
were met with "a deluge of criticism from consumers, after a large number of Facebook
users posted negative comments about the company's business practises." Nestlé's attempt
to engage with the issue were met with criticism, including headlines stating: "Nestlé fails
at social media",]and "Nestlé Loses Face On Facebook". Nestlé Chairman, Peter Brabeck-
Letmathe, in answer to a question from Greenpeace, told the Company’s Annual General
Meeting in Lausanne on April 15, 2010 that in 2009 Nestlé used 320,000 tonnes of palm
oil worldwide, comparing this with the 500,000 tonnes of palm oil used for biodiesel in
Germany and Italy alone.
In May 2010 Nestlé said it was inviting The Forest Trust, a not-for-profit group, to audit
its supply chain and promised to cancel contracts with any firm found to be chopping
down rainforests to produce the palm oil which it uses in KitKat, Aero and Quality Street.
Greenpeace welcomed the agreement promising to monitor it closely.
E. Coli
In June 2009, an outbreak of E. Coli O157:H7 was linked to Nestlé's refrigerated cookie
dough originating in a plant in Danville, Virginia. In the USA, the caused sickness in at
least 69 people in 29 states, half of whom required hospitalization. Following the
outbreak, Nestlé voluntarily recalled 30,000 cases of the cookie dough. How the dough
became contaminated is unclear, because E. Coli is not known to live in any of its
constituent ingredients.
MARKET SEGMENTATION AND TARGET MARKET SELECTION
Market segmentation and target market selection have an intimate relationship with
market strategy formulation.
30
The company may focus on the following factors while laying down the target market.
1. GEOGRAPHIC SEGMENTATION
Geographically the country can be broadly divided into 3 sub segments -Rural, Suburban
and Urban.
In the first phase (after the test launch), Urban parts of the country should be targeted.
The chosen segment is targeted because –
* Lack of infrastructure, like refrigeration-not to venture rural markets.
* The consumption pattern & behavior in Rural India does not fit with the product
attributes and perceived benefits.
* The limitation of disposable income is another factor that hampers entry in rural areas.
* Semi-Urban may be considered in the second phase. An year after the launch.
Within Urban India, the cities with 1 million + population i.e. top 23 metros will be
targeted. A soft launch of the brand should be undertaken before taking the brand to these
areas. This (test launch) will be undertaken in Bombay, since it (Bombay) is a high
consumption city for chocolates.( Source: Nestle (I) Ltd – infact Nestlé’s sales peaked out
in Bombay, during its initial launch).
2. DEMOGRAPHIC SEGMENTATION
The demographic variables have been separately addressed to arrive at the target
audience.
* Age: 12 years + segment of the population is recommended to be targeted. Small kids
may not be targeted, because of the nature of the perceived product benefit by consumers
in that age group, who are inclined towards sweeter and creamier snacks. Further, it may
31
not be easy to get youngsters off their tuck money. Also, children today already have an
array of cheap domestic and international confectionery (in the form of chewing-gums,
lollipops, rolls, lozenges and toffees).
* Income: The income segmentation may be all households with an annual income
exceeding Rs. one lakh. Targeted audience may be all households that can afford a
television or have access to satellite television.
3. PSYCHOGRAPHIC SEGMENTATION
Social Class: In terms of psychographic the social class targeted is the educated
upwardly mobile urban middle and upper class.
Personality Traits: This segment essentially consists of emulator’s i.e. upwardly
mobile, pioneers, freaky, fun loving type of people. These are the people who like to
enjoy life and believe in traveling and adventure.
Life Style: In terms of lifestyle, it may be aimed at those who favor buying
convenience products. They are also willing to experiment with alternate products in
place of conventional food items, as the universe of chocolate consumption is changing
from occasion led to more casual consumption.
4. BEHAVIORAL SEGMENTATION
The moulded segment of the market is perceived to be the growth engine of the market.
Hence, this segment is quite lucrative for a new brand launch. Also, chocolate purchases
have moved from being occasion-led to a casual snack. Hence, anytime anyplace snack
aspect needs to be established. This segment comprises of people who like to have
chances and want to try new things.
5. LEARNING-INVOLVEMENT
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The purchase of a chocolate is of a low-involvement category. It is an impulse
purchase and decision to buy is not pre-planned.
6. USAGE RATE
The market may be further segmented on usage rather than attitude-Anytime
Anyplace Snack. This is a group of consumers that find traditional snacks too heavy.
Even though a range of chocolates may be offered, a core brand (concentrated strategy
mentioned later) may be launched in the countline segment. Since this segment is tipped
to be the growth engine of the industry (according to industry sources – Mr. Sanjay
Verkey, Cadbury’s India and Mr. Bohidar) and this segment has a substantial share of the
market (33%).
TARGET AUDIENCE
Following from the above, it is recommended to target consumers who found traditional
snacks too heavy. Usage rather attitude is being used to segment. This is the segment that
tended to pick up biscuits instead-something they could munch while continuing with
their schedule.
There are 181 million urban individuals in India Our target segment is people living in
the top 23 metros (1 million +population), which implies 63 million people. Further, SEC
A-B in these 23 metros with Cable & Satellite at home are targeted (94.4 % of SEC A-B
have a cable & satellite connection) [All these are NRS -VI & IRS ’99 figures].
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ADVERTISING & SALES PROMOTION
When a marketer or a firm has developed a product to satisfy market demand
after thoroughly analyzing the market , there is a need for establishing contact
with the target market to eventually sell the product . Moreover, this has to be a
mass contact which means that the marketer is interested in reaching a large
number of people so that his product may receive optimum exposure . Naturally ,
the best way to reach this mass market is through mass communication and
advertising is one of the means of such mass communication along with such
other means as publicity, sales promotion and public relations .Advertising as a
means of mass communication has , therefore, made mass selling possible . It is
perhaps the best known mass communication channel. Marketers and firms engaged in
selling their products and services throughout the country and or in other nations
are fully aware of the necessity and importance of advertising .
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As a means of forceful communication , advertising promotes the sale of goods ,
services , images and ideas through information and persuasion .
Advertising is not a panacea that can restore a poor product or rejuvenate a
decline market . It only helps in selling through the art and business of persuasive
communication .
The American Marketing Association, Chicago, defines advertising as
“ ANY PAID FORM OF NON PERSONAL PRESENTATION OF IDEAS
GOODS AND SERVICES BY AN IDENTIFIED SPONSOR .”
Advertising aims at drawing attention to a product. It seeks to create an awareness
about the existence of advertised product . It passes on information about the
product in such a way that interest is created in the mind of the prospective
consumer about the product .
TYPES OF ADVERTISING:
On the basis of geographical spread we have the following types advertising : -
(1) National
(2) Local
(3) Global
On the basis of target group we have the following types :-
(1) Consumer
(2) Industrial
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(3) Trade
(4) Professional
Some more broad categories of advertising are:-
(1) Product
(a) Pioneering
(b) Competitive
(c) Preventative
(2) Service
(3) Institutional
(4) Public Relations
(5) Public Service
(6) Financial
(7) International
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PROMOTION
This involves communicating persuasively to the consumers, in order to arouse their
interest in the product. A detailed promotion plan involving advertisement, sales
promotion and public relations is proposed.
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POSITIONING
The positioning of the various brands in the market is listed below:
CADBURY’S
BRANDS
POSITIONING NESTLÉ’S
BRANDS
POSITIONING
Cadbury’s
Dairy Milk
“The Real Taste
of Life”
Classic Milk
Chocolate
Positioned as
an affordable,
enriched milk
chocolate
Fruit n Nut Positioned at
Creamy Bar adults as an
Roast Almond impulse anytime
Nut Milk purchase
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Crackle - self expression
Bournville values attached
5 Star / Perk Perk-Positioned as a Kit Kat Positioned as a
Snacking
Consumption.
Snacking
Consumption
Break/Krisp/
Double Decker
“Thodi Si Pet Pooja”
5 Star-Energy Bar
“Have a Break,
Have a Kit Kat”
Reach for the Stars Bar One Positioned as a
trendy, cool
anytime snack
Gems/Eclairs
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Positioned as
Butterscotch variety, gifting
Caramels/
Overtures
and taste
preference
Nutties/All Silk
Tiffins
Relish
The flagship brand may be positioned as a premium (see pricing) anyplace, anytime
snacks. Since, snacking proposition is the growth engine for the industry, positioning
should hence, be focused on that. The two drivers – Impulse purchase and need to snack.
ADVERTISEMENT PLAN
The Advertisement plan could be as under:
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CORPORATE OBJECTIVE: The corporate image should be built over a period of
time, so as to reinforce consumer confidence in the brands of the company. This is also
essential to counter competition, since over a period of time; names such as Cadbury’s,
Nestle have attained high levels of recognition and assurance.
ADVERTISEMENT OBJECTIVES
To position the product as a “high quality brand, with a wide range of offering,
providing, fun anytime, anyplace products”.
To create awareness about new flavors.
Induce consumer trials.
Build corporate image
To undertake competitive advertisement.
Media
Print Media: Will be the major magazines read by the target segment i.e.., India today,
society, femina, stardust etc.
* P.O.P.Material induce impulse purchase.
* Electronic Media: Since the whole of target segment watch Satellite TV during prime
time and advertisement will be featuring share for 3 or more time to leave an impact.
Apart from it company will be sponsoring the fun related programmers on DD and
Satellite TV.
PUBLIC RELATIONS
I. The company will hold a press conference announcing its arrival in India and will
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highlight its global achievements.
II. Company has planned to sponsor events like 2 viz., skiing river rafting, yachting etc.
III. Company will also sponsor fun based TV programs.
SALES PROMOTION ACTIVITIES: To induce consumers to try the new chocolate
and to get the product pushed in the market the sales promotion plan should include the
following:
Trade promotion: The Company will have to offer lucrative trade promotion schemes, in
order to push primary sale. These include incentives to stockiest for pushing the sale of
chocolates. At the retail level, the following trade promotion measures may be adopted:
Schemes such as, a certain percent off on the purchase of Rs 5000 or Rs 10,000 worth
of chocolates.
A box of chocolates free with every dozen purchased.
Shop Displays/Vizzy Coolers –linking them to sales
Apart from these, Window Shelf space may be purchased outright.
Consumer Promotion: Some of the consumer offers that could be introduced are:
1. Free gifts like pen, comics etc., on return chocolate wrapper.
2. Money Savers
3. Chocolates in a toy truck etc.
4. The Company can announce consumer “contests” (with proof of purchase) with
attractive prizes, supplemented by an advertisement campaign.
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POINT OF PURCHASE MATERIAL
POP is of extreme importance, to a product category like this. This is so, since sales are
impulse /casual driven. Hence, heavy point of purchase advertising in the form of
danglers, chocolate dispensers, etc. may be used.
DIRECT COMPETITION
NESTLE, CADBURY & AMUL
At present there are three major players Nestle, Cadbury’s and Amul in the Indian
Chocolate market. Campco initially tried to break into market but failed. Brief profile of
the same has been entailed below:
CADBURY’S INDIA LTD.
Cadbury’s India Ltd, has been in India since 1948. Its brands: Dairy Milk, 5 Star, Gems
and Chocolate Éclairs are the households names in India today. In all the segments i.e.
moulded chocolates, count chocolates and panned chocolates, it is undoubtedly the
market leader.
Cadbury’s has its manufacturing units at Thane (Mumbai), Malanpur, Indori(near Pune),
Mithuri and Kolapur. It has a strong distribution network with about 500 distributors in
North India and more than 3 lac retail outlets being serviced all over India.
In 1997, Cadbury planned to pump in Rs.80-crore to up production capacity at a couple
of Cadbury’s factories. This cash is exactly double of what’s been invested in 1996.
The Company launched Perk, a wafer enrobed chocolate in 1995. This was reactionary to
the launch of Kit Kat and has been able to counter competition.
CADBURY’S DAIRY MILK (CDM) - THE FLAGSHIP BRAND
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CDM, the oldest of Cadbury’s brands was launched in 1956. In the early 90s, a rise in the
prices of cocoa, increase in the excise duty and a fall in the demand inspired the idea of
repositioning. Two years in the process after relaunch Cadbury’s Dairy Milk’s market
share stood at 25 percent with sales rising by an average 40 percent per annum.
Besides CDM Cadbury’s has a number of endorser brands such as Fruit’n’Nut, Nut Milk
etc. Even though contribution of these brands to the company’s bottom-line is very small,
they are required in order to make a complete portfolio of offering.
The Company developed a concentration strategy on CDM, Five Star, Cadbury’ Gems,
Cadbury’s Éclairs, Perk and the latest of its offering Picnic (which has drawn a good
response in the market).
The Company has also identified sugar confectionery, as a growth sector. It’s first
offering Googly.
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SWOT ANALYSIS
The SWOT Analysis shows the relationship between critical variables of the company.
The SWOT matrix has a wider scope. The SWOT matrix is a conceptual framework for a
systematic analysis that facilitates the external threats and opportunities with the internal
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weaknesses and strengths of the organization.
It has been common to suggest that companies identify its strengths and weaknesses as
well as opportunities and threats in the external environment. But what is often
overlooked is that combining these factors may require distinct strategies choices. To
systematize these choices, the SWOT matrix has been proposed. ‘T’ stands for threats,
‘W’ stands for weaknesses, ‘O’ stands for opportunities and ‘S’ stands for strengths. A
marketing opportunity is aware of buyer need in which a company can perform
profitably. An environment that would lead, in the absence of defensive marketing action,
to deterioration in sales or profit. An ideal business is high in both major opportunities
and low in major threats.
A speculative business is high in both major opportunities and threats.
A mature business is low in opportunities and high in threats.
The SWOT matrix starts with the threats because in many situations a company
undertakes strategic planning as a result of a perceived crisis, problems or threats.
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STRENGTHS
High brand equity ……… consumer & dealer regarding Nestle' as company
delivery quality product.
Company processes an extensive powerful distribution network.
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Company processes a dedicated & experienced sales staff.
Strong base in monitoring & controlling market.
Distributions are highly dedicated towards performance & experience.
Nestle India Limited (NIL) has a very strong parent company Nestle S.A. support
with 51% of equity share holding, which is the world's largest food company.
NIL's milk products sold under Milkmaid and Everyday brands are market
leaders. NIL has strong brand value in other products like Kit-Kat, Polo, Milo, Maggi and
Nescafe.
NIL - State of the Art Technology and production systems ensuring high
technological/high value and optimum cost advantage to its product portfolio.
Idealization of products to suit local tastes are critical for success and NIL is
converting its international products into Indian tastes products.
Nestle has altogether 570000 outlets in more than 3000 towns. This is one of the
major strengths of the company.
NIL most of the products are being produced according to Indian tastes, priced
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within Rs. 25/- so that they are afforded by most of the people easily, advertised and promoted
according to regional culture and values and is available to most of the consumers easily, at
their nearby shops.
WEAKNESSES
Company takes time in handling return claims on authorized whole seller.
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Warehousing norms are not followed which account for increased breakage.
Restricted website minimizes marketing opportunities.
Yearly initiatives are not so motivating.
A high percentage of turnover and profits coming from a few products categories like
Coffee/Maggi.
NIL has been in India since last 39 years yet its growth has been very slow. After the
opening up of the economy, it has started growing but till then it did not launched much
products.
The profits of NIL are also reduced because of increased Royalty payments that NIL
is making to its parent Nestle, Switzerland. The higher royalty payments are made on account
of new international brands launched by NIL in India.
NIL factories are not to meet the demands of products with the supply.
NIL's products range is so large that it is not able to give proper attention to all the
products, their marketing strategies are not properly worked out as many of
its products are dieing. There was an embarrassing starter like Nestea an iced tea, Nesfit - a
glucose rich energy drink, Bonus, Milo is not given much of promotion.
Recently, there are difference between the Nestle S.A. parent company and Nestle
India Limited and because of this there are in the top management of the NIL. Even its M.D
Daravis E. Ardeshin has also resigned.
Proof financial distribution as the NIL is unnecessarily giving its shareholders high
dividend, which could be avoided and be used for investment in plants for capacity.
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OPPORTUNITIES
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Great quality.
Mass market is growing with established performances.
Growing middle class is increasing opportunities.
Great taste.
Low differentiation in market brands.
Credit facility given to dealers.
India being the second most populated country in the world, NIL has lot of opportunities
of launching and selling new products and earning a record profit from this country.
As NIL has been in India since last 39 years, it has understood the culture, values, tastes
and psychology of the Indian consumer and so it can easily develop Indianised products that
will be acceptable to the Indian consumer.
Food industry is the second highest growing industry in India and offers a lot of
opportunities for NIL in India.
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THREATS
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Tough competition especially in premium segment.
Characteristics of premium segment that it is never brand loyal.
Tough competition (indirect) with barista, café coffee day.
Mere availability of best sellers from the parent’s portfolio does not guarantee a winner.
Since most of these products would be fighting it out with their global competitors and then
Indian counterparts on the Indian turf.
It faces fierce competition in almost all the segments it participates in like. It duels with
Top Ramen in the instant noodle market, Kit-Kat vs. Perk, Polo vs. Minto, Milkmaid vs. Mithai
Mate (launched by Amul at a staggering 60% discount to the market leader), Milo vs. Horlicks,
Complan and Bournvita.
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RESEARCH METHODOLOGY
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1. RESEARCH METHODOLOGY
I have carried out a research which is both qualitative and quantitative in its support. The
qualitative approach applies to both, descriptive and inductive forms of research. While
as in case of quantitative approach, an extensive use has been made of the literature
available to carry out a detail research on the nature of the problem. I have chosen Nestle
as the target company for my research study.
1.1 Method of data collection & analysis
The data, after collection, has to be processed and analyzed in accordance with the
outline laid down for the purpose at the time of developing the research plan. This is
essential for a scientific study and for ensuring that we have all relevant data for making
contemplated comparisons and analysis. I have conducted a graphical analysis based on
the responses received from the persons questioned and interviewed. Once the interview
was over, the responses received were be grouped together, and a graphical presentation
and analysis has been made for every set of questions.
I have made use of both, the primary sources and the secondary sources of data in
collecting information.
SECONDARY DATA
The secondary source of data includes relevant literature including periodicals and
journal articles in the areas of Marketing, customer satisfaction. product. To have a
good image in the eyes of retailers.
LIMITATIONS
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(1) Research is conducted in Bareilly.
(2) Information given by researcher is not always right.
(3) It takes lot of time to research the data.
ANNUAL REPORT OF NESTLE
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Financial Results and Operations
(Rs In Millions)
2010 2009
Gross Revenue 62,974 51,672
Profit before Interest Impairment.
contingencies and taxation 11,646 9,610
Interest 11 14
Impairment Loans on Fixed Assets (Net) - 103
Provision for Contingencies (Net) 164 323
Provision for Tax 3,264 2,620
Net Profit 8,187 6,560
Profit Brought Forward 1,425 1,001
Balance Available for Appropriation 9,612 7,551
Interim Dividends 3,471 3,471
Final Dividend Proposed 1,205 1,205
Corporate Dividend Tax 772 795
Transfer to General Reserve 619 655
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Surplus carried in Profit and
Loss Account 3,345 1,425
Key Rates
Earnings per Share (Rs.) 84.91 67.94
Dividend per Share (Rs ) 48.50 48.50
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FINDINGS
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(1) REVENUE 2009 2010
51,672 62,974
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(2) PROFIT 2009 2010
6560 8187
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(3) LOSS 2009 2010
1425 3345
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RECOMMENDATIONS
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RECOMMENDATIONS
(1) Employees should be trained according to the changing standards of the organization.
(2) Company should conduct survey from time to time to according to which changes can
be introduced in the organization to stay updated in the market.
(3) They should introduce creativity into the work, so that the employees can do their
work active mindedly.
(4) Company should provide incentives to employees.
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CONCLUSION
During the project, I got an enriching experience about selling and how to convince the
customer to buy the product.Study on NESTLE gave me an practical experience about
nature of customers,market and how to deal customers in the market. Company like
NESTLE gave me an exposure about the nature of customers and market and how to deal
with customers.
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BIBILOGRAPHY
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INTERNET SITES
* www.nestle.in
* www.google.com
* www.moneycontrol.com
BOOKS
MARKETING MANAGEMEMT BY PHILIP KOTLER
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