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DEOGIRI INSTITUTE OF ENGINEERING AND MANAGEMENT STUDIES Project Report On “TO STUDY THE MARKET DEMAND OF NESTLE PRODUCTS Submitted To Dr. Babasaheb Ambedkar Marathwada University, Aurangabad Submitted By Mr. Avishkar D. Swami (MBA - I SEMESTER) Guided By 6
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Page 1: nestle summer training project

DEOGIRI INSTITUTE OF ENGINEERING AND MANAGEMENT STUDIES

Project Report

On

“TO STUDY THE MARKET DEMAND OF NESTLE PRODUCTS”

Submitted To

Dr. Babasaheb Ambedkar Marathwada

University, Aurangabad

Submitted By

Mr. Avishkar D. Swami

(MBA - I SEMESTER)

Guided ByMr. Rupesh Rebba

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Submitted in practical fulfillment of the Requirement for Master of Business Administration for the Academic Year 2011-2012

DEOGIRI INSTITUTE OF ENGINEERING AND MANAGEMENT STUDIES

MBA. (1st Semester)

Academic Year 2011-12

Project Report

On

“TO STUDY THE MARKET DEMAND OF NESTLE PRODUCTS”

In the partial fulfillment of

Master of Business Administration

Submitted By

Mr. Avishkar D. Swami

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Guided ByMr. Rupesh Rebba

DEOGIRI INSTITUTE OF ENGINEERING AND MANAGEMENT STUDIES

CERTIFICATE

This is to certify that Mr. Avishkar D. Swami is the students of this college. They have successfully completed the project report on “TO STUDY THE MARKET OF NESTLE” as practical fulfillment of the course Master of Business Administration (F.Y.1st semester) affiliated to Dr. Babasaheb Ambedkar Marathwada University, Aurangabad during the academic year 2011-2012.

(Course coordinator Principle& Guide)

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Examiner

Declaration

I hereby declare that, the project report submitted by me in partial fulfillment of MBA Degree course is genuine work.

It has not been submitted either fully or partially to their or any other institute prior in any other connection I have done the project as per the guidelines of our respected guide.

Mr. Avishkar D. Swami

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ACKNOWLEDGEMENT

I am the Student of Master Business Administration (MBA 1st

semester), batch 2011-12. Take the opportunity to express my gratitude to Mr. Rupesh Rebba for her valuable guideline in my project.

I sincerely acknowledge that courtesy extended to me by director of

Deogiri Institute of and Manegment Studies, Aurangabad.

Mr. Avishkar D. Swami

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INDEX

Sr. No. Name Page No.

1 Introduction 12

2 VISION 14

3 MISSION 15

4 RESEARCH METHODOLOGY 16

5

MARKETING MIX PRODUCT PRICE PROMATION PLACE

1819222426

6 SWOT ANALYSIES 30

7 FINDING 34

8 SUGGESTIONS AND RECOMENDATIONS 37

9 CONCLUSION 38

10 BIBLOGRAPHY 40

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INTRODUCATION

Nestlé was founded in 1866 by Henri Nestlé and is today the

world's biggest food and beverage company. Sales at the end of

2005 were CHF 91 bn, with a net profit of CHF 8 bn. Nestlé employ

around 250,000 people from more than 70 countries and have

factories or operations in almost every country in the world. The

history of Nestlé began in Switzerland in 1867 when Henri Nestlé,

the pharmacist, launched his product Farine Lactée Nestlé, a

nutritious gruel for children. Henri used his surname, which means

’little nest’, in both the company name and the logotype. The nest,

which symbolizes security, family and nourishment, still plays a

central role in Nestlé’s profile. Since it began over 130 years ago,

Nestlé’s success with product innovations and business acquisitions

has turned it into the largest Food Company in the world. As the

years have passed, the Nestlé family has grown to include

chocolates, soups, coffee, cereals, frozen products, yoghurts, mineral

water and other food products. Beginning in the 70s, Nestlé has

continued to expand its product portfolio to include pet foods,

pharmaceutical products and cosmetics too. Today, Nestlé markets a

great number of products, all with one thing in common: the high

quality for which Nestlé has become renowned throughout the

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world The Company's strategy is guided by several fundamental

principles. Nestlé's existing products grow through innovation and

renovation while maintaining a balance in geographic activities and

product lines. Long-term potential is never sacrificed for short-term

performance. The Company's priority is to bring the best and most

relevant products to people, wherever they are, whatever their

needs, throughout their lives. Taste of Nestlé in each of the countries

where Nestlé sell products. Nestlé is based on the principle of

decentralization, which means each country is responsible for the

efficient running of its business - including the recruitment of its

staff.

That's not to say that every operating company can do as it

wishes. Headquarters involve sets the overall strategy and ensures

that it is carried out. It's an approach that is best summed up as:

'centralize what you must, decentralize what you can'. Nestlé is a

company which is present in all over the world but it has difference

and unique motto to deal in all over the world. Nestlé believes that

they should think about their organizations globally but they deal

with people by interacting with them locally.

“Thinking globally - acting locally”

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VISION

Nestlé's vision of making good food central to enjoying a good

healthy life for consumers everywhere. This implies gaining a

deeper understanding in many areas of nutrition and food research

and transforming the scientific advances into applications for the

company. Having a broad vision the company is doing its best for

their consumers to show the great sense of responsibility.

Nestlé’s aim is to meet the various needs of the consumer every day

by marketing and selling food of a consistently high quality.

The confidences that consumers have in our brands is a result of

our company’s many years of knowledge in marketing, research and

development, as well as continuity -consumers relate to this and feel

they can trust our product.

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MISSION

“AT NESTLE, WE BELIEVE THAT RESEARCH CAN HELP US

MAKE BETTER FOOD SO THAT PEOPLE LIVE A BETTER

LIFE.”

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RESEARCH METHODOLOGY

Research refers to search for knowledge. One can also

define research as a scientific and systematic search for pertinent

information on a specific topic. It is an art of scientific investigation.

Research Methodology:-

It is the way to systematically solve a problem. The

methodology adopted in this study is explained below:-

Research Design

Literature Survey :

I have used books, prospectus & websites.

Type of research:

The research is qualitative & descriptive in nature.

Qualitative research is that talk about the quality of the subject

to be researched and Descriptive research is one that describes

things as exists in present.

Data collection Design:

Sources of data

1. Primary Sources – I have used questionnaire as primary source

for collecting data for my study.

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2. Secondary sources – I had collected my secondary data from

websites & Prospectus.

Sampling

It represents whole population. It is the processes of choosing

a sample from whole population. I have choose a sample of high

class & middle class people who use Nestle product as a sample.

Tools

I have used some charts (Graphs, column chart)

Sampling Size

It represents that how many candidates you’ve chosen to be

filled up your questionnaire or candidates upon whom you can

study. I had chosen sample of 20 Consumers.

Sampling Techniques

1. Deliberate

2. Convenience Sampling.

Data Interpretation

Data interpretation is that in which we analysis the whole

collected data & tries to give it in simple words to be

understandable.

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MARKETING MIX

PRODUCT PLANNING

PRICE PLANNING

PROMATION PLANNING

PLACE(DISTRIBUTION) PLANNING

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PRODUCT PLANNING

• Nestle first launched its powder milk in the market in 2003

and then came the liquid powder.

• Nestle has introduced the milk powder which outshined others

because of its great taste, refrigeration, ready to drink, less

volume, more stable shelf life.

• At Nestle the Research and Development department is called

as the “APPLICATION GROUP”. No other company matches the

R&D presence of Nestle. No other company dedicates so many

human and financial resources to R&D as Nestle.

• The technology is imported and is latest.

• The factory mil powders spray drying capacity was doubled in

1999 with commissioning of new evaporator.

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• The actual target is a company’s secret that will not be

disclosed. But we received an overwhelming acceptance and

liking of the product.

• Over many years company’s primary concern has been to

improve the quality and volume of milk for UHT processing

and other milk based products.

• The target market of the product is definitely he tea drinkers

who have a choice and capacity for the best taste.

• There was a problem of segmentation but it was quickly taken

into notice and the problem was readily removed.

• It is designed to be used in general but it is popular mostly in

offices and cafés for tea purposes.

• Now the error rate has been reduced to zero.

2004 --------------------------- 3 complaints

2005 --------------------------- 6 complaints

2006 --------------------------- 4 complaints

2007 ---------------------------- 2 complaints

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• Well the product is matchless in quality and has no match. It

has a sufficient name and place in the market.

• On the basis of profit margin Nestle seldom make donations o

non- profit organizations and charitable institutions.

• Nestle has its own dairy farms from which we collect milk and

we have a special team of veterans who regularly inject animals

against epidemic diseases.

• The Nestle logo is a must, other than that the product is made

available in convenient sizes and attractive colors. The WHITE color

is the chief color to depict the color f milk.

• Competitors are:

PIA, MC-DONALDS and PEARL CONTINENTAL in India.

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PRICE PLANNING

Global pricing policies:

Apart from global coordination of prices on specific products and

firms usually adopt one of the three alternative pricing policies that

cut across their product lines. These are

1. Polycentric pricing

2. Geocentric pricing

3. Ethnocentric pricing

Nestle use geocentric pricing policy.

Nestle Products price planning

Nestle dairy products are priced keeping in view the buying

power of middle-income and high-income social classes.

The cost includes the cost of manufacturing, labor, raw

materials etc. The industry sales growth is largely driven by

population growth as well as the amount of advertising and

product innovation taking place in the industry. The company

has resorted to pricing discrimination strategies to maximize

the value of consumer demand

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Being a multinational brand, the pricing objective of Nestle is

mainly to increase sales as it has already penetrated the

market. Their prices are not affected by price changes by

competitors, and they don’t engage in price wars. Competition

is met through innovation. The prices of Nestle milk change as

the product size is changed of the Product Life Cycle. And

Because of the contract between the seller companies, they

offer same price. So there is no skim based or penetration

based pricing by company.

The retail prices are different according to their size and brand.

However prices have been standardized throughout Pakistan

and there is no differentiation based on geographical areas.

There is no change in prices according to season. It remains the

same.

They adopt same strategy in international marketing as in local

marketing. But the prices are according to the international

currency.

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PROMOTION PLANNING

The promotion of Nestle Dairy product are no doubt the best of

all. Its intense advertising has really captured the minds of all

categories of people besides media advertising; the company has

signed several agreements with different sports in order to

promote. For the Advertising, the company has a policy that the

commercial should best communicate its message toward its target

markets. The promotional planning of Nestle milk has taken the

emotions of youngsters quite successfully. Promotion is handled by

the marketing department but campaigns are launched through an

agency. Promotion is done through the electronic media, billboards

and print media (press).

Promotion Objectives

To project sales of Nestle Dairy Products

To create awareness among the masses about any new product

of Nestle

To achieve brand loyalty

Selection of Promotion Media

Selection of promotion media is done on the basis of whether the

company wants:

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Immediate sales uplift

- Achieved through television and other forms of electronic

media

Or

Gradual sales uplift

Promotion planning depends on marketing push or marketing

pull strategy. Nestle milk is not considered a seasonal product in

Pakistan, so they do not need to promote very much.

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PLACE (DISTRIBUTION) PLANNING

They distribute their products nationally and internationally

throughout the world. Nestle are distributed using an indirect

channel, that is, dealers. Nestle milk is sent to warehouses after

manufacture

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NESTLE

DEALER

RETAILER

FINAL CONSUMERS

They use intensive distribution for marketing coverage.

Because its goals are to have wide market coverage, channel

acceptance and high total sales and profits. Distribution is made

nationally and internationally through Motor. Carriers Waterways

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Airways Railroads Throughout the country in every city and village.

It includes suppliers and retailers

Supply chain:

There are various departments

Raw material department

Finished goods department

From the finished goods department the product goes to the

warehouses.

Export Expansion Strategy:

There are two types of export expansion strategies

1. Water fall

2. Sprinkler

Nestle use waterfall strategy. It moves gradually to different

countries.

Export Entry Mode:

JOINT VENTURES OF NESTLE

Shareholders

Nestlé has about 250 000 shareholders, none of whom

individually own more than 3% of the shares. As of December 31,

2003, Swiss investors held the major part of the stock (42%)

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followed by US citizens (22%) and British (10%), French (8%), and

German (5%) shareholders.

Unfortunately, shareholder identities are not made public

under Swiss law, but we do know that Liliane de Bettencourt,

heiress to the L'Oréal fortune and the richest woman in France, has

a holding in Nestlé. Nestlé and L'Oréal have a close relationship

dating back to a shareholder pact made in 1974. Nestlé holds a

26.4% stake in the world's largest cosmetics group and has right of

first refusal over the Bettencourt family's 27.5 percent stake for 10

years, but with no obligation to buy. Whilst it is unlikely that Nestlé

will take over L'Oréal in the immediate future, it could well do so in

a few years. It already has cosmeceutical joint ventures with L'Oreal

through Galderma and Innéov.

EU clears Coke Nestle deal - Coke-Nestle joint venture

European Union regulators have cleared plans by US firm

Coca-Cola and Swiss food giant Nestle to expand an international

joint venture focusing on iced teas and coffee. In a statement, the

European Commission said there were no competition concerns, as

the new operation would still face "strong competition brands" such

as Unilever's Lipton. The new enterprise, Beverage Partners

Worldwide, will be based in Zurich, Switzerland. Expanding on a

previous arrangement created in 1991 for the manufacture and

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distribution of Nestlé’s Nestea brand, the new venture will increase

the number of countries in which it operates to 40, from and initial

24.Coke will add its Tuan Yu Di and Yang Guang teas and Planet Java

coffees to the venture, while Nestle will contribute Belt tea, which is

sold in Italy. Analysts say both companies are looking to capitalize

on the growing worldwide appetite for iced teas and coffees, which

have shown better growth than soda in recent years.

Cereal Partners Worldwide

In November 1989, Nestlé S.A. and General Mills, the

Minneapolis-based maker of breakfast cereals, snacks and baking

aids, formed a joint venture to produce and market breakfast cereals

worldwide, with the exception of the United States and Canada.

Based in Morges, Switzerland, CPW officially began operations in

early 1991. GeneralMills’ expertise and technology, combined with

Nestlé’s worldwide presence and marketing experience, quickly led

to a breakthrough in Europe, which was CPW’s first target market.

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SWOT ANALYSIS OF NESTLE

TABLE OF CONTENTS:

STRENGTHS ----------------- TO BUILD ON

WEAKNESESS --------------------- TO COVER ON

OPPORTUNITIES ------------------------- TO CAPTURE

THREATS ----------------------- TO DEFEND ON

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STRENGHTS

The greatest strength of nestle is that it includes a culture that

is team focused and an open door policy. Nestle focus on

collectivism and performance orientation attitude which encourages

employees to work harder. Another thing is high level of market

share and that people all over the world trust and recognizes Nestle

as a big brand name. Strength is that people trust on Nestle. It looks

at achieving higher volumes by renovating existing products and

innovating new products. Strength is that they are low cost

operators which allow them to not only beat competition but also

edging ahead operating excellence, innovation, renovation, product

availability and communication are major strengths. IT is an

important aspect that people all around the world are becoming

more conscious about health, that’s why they prefer Nestle.

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WEAKNESESS

One major weakness of Nestle is that it is entering into

markets that are already mature and can give a tough competition to

new entrants. Nestle Plain Yogurt has proved to be a Nestle

weakness because it has been unable to make its market place in

USA. But Nestle by analyzing the sensitive areas can overcome its

weaknesses.

OPPOTUNITIES

Nestle in Pakistan has a great opportunity for expanding its

markets because in Pakistan there is a large ready market of food

and beverages due to trends of eating and the increasing .I t also has

opportunities largely in China and India as well. Through proper

marketing research Nestle can cash on to these opportunities.

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THREATS

Nestle is facing the threats by worldwide community due to its

violation of international marketing standards. Many conferences

and campaigns have been held against Nestle in this regard which

can damage the name and trust of its customers. Another threat is

due to the increasing popularity of its competitor OLPERS in local

and international markets.

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FINDINGS OF THE STUDY

Flow chart showing the responses on the option provided by me in my report

Chose of Brand

Findings: - From the above chart it is analyzed those majorities of the respondent do not stick or are loyal to particular One Brand. But they frequently change their brand.64% of responses are not loyal to any brand where as 36% of respondents are loyal and stick to only 1 brand. Those

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YES 36

NO 64

HIGH 9.

MODERATE 19

LOW 8

Because of Advertisement 8

Change In Price 15

Due to Fashion 7

New Product Design 22

Product Performance 12

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responses who said yes, out of them their buying frequency is mostly moderate in a month.

In my opinion, I think the current marketing mix which Nestle

Corporation has is satisfactory to customer needs. As it can be

Cleary seen that Nestle as a company has expanded its

products and services from Food, Qualitative like need of

everyday food. I.e. production and distribution.

In providing a wide range of products and services with high

quality, Nestle has by far influenced most of the customer’s

perception favorably towards its products.

From time the company was created till now, the quality of the

products that Nestle offers is improving day by day, although

there are some occurrence of defects like that of defect on Milk

Powder which were sold and got damaged packages and

Bangalore has caused the company a great loss as it had to

recall a million of those defected Packages, and also this issue

degraded the company’s reputation.

But the overall products offered by Nestle to my opinion will

still be of best quality.

Even though the prices imposed by Nestle seems to be fair with

consideration of the quality of the products and services

offered , The only problem is that, Nestle has priced its

products for a middle or lower class customer to afford to buy

those products.

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Apart from that Nestle has targeted its market mainly to urban

customers as are the only customers who can afford such

products.

In my opinion, I think Nestle has to create also some of low

end products with low prices which can be affordable to low

income users.

As I have mentioned above, In the case of place (distribution),

Nestle has targeted its markets in the urban areas, in big cities

like New Delhi, Pune, and Mumbai etc. In most of all this places,

Nestle has more different distributor.

So, for the customers in urban areas the supply seems to be

satisfactory, though the rural areas are left out.

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SUGGESTIONS AND RECOMENDATIONS

As Nestle is the best company all over the world but there is

some recommendations and suggestions.

1. Their prices are little bit higher so they should low their prices

to increase their customers.

2. About 70 % people use their products why the rest don’t use

them they should conduct survey and concentrate on those

facts why they are not using their products.

3. They should also improve their advertising. Their advertising

doesn’t pay long-term effect in the mind of customers.

4. About 17% people are not satisfied from the taste of Nestle so

nestle has to improve its taste.

5. Due to a great demand of nestle Milk pack now a days there is a

shortage of nestle milk in shops sometimes they have to

consider this aspect too.

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CONCLUSIONS

Nestle Brand enjoys market leadership position and it is also

prefer by the majority of the consumer for Product among

different brands OF Everyday product available in the market.

In different types of Coffee, Chocolate is preferred by most of

consumer’s and they have ranked Everyday product as No 1

among different Types of Product.

Nescafe is preferred by the consumer among different type of

coffee.

Majority of the Consumer prefer KITKAT, ECLAIRS they like

Crispy, Creamy and Sweet Chocolate.

Most of the consumers Buying Decision is not only influenced by

any specific single characteristics but it is influenced by either the

combination of more than

1. Thus majority buying decision is influenced by Performance of

Everyday Product in Total, Of course in different consumer

segments there are different characteristic impacting buying

Decision.

Occupation Wise Classification

o For Senior Person: The most influencing characteristic

impacting buying decision is Price.

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o For Young generation and Child: Price & Performance

have impact influence on buying decision. It signifies that

Service Person purchase Product not only considering price

but along with it some different features such as Quality,

Brand, Taste etc. are also impacting the Decision. But still

Price & Performance are dominating features for this

Consumer Segments.

TV Advertisement is having a significant impact on majority of

the Consumer; Influence of different Advertising Media is not

differing by Profession. Thus almost all media is having the

impact on buying decision of different consumer Segments.

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BIBLIOGRAPHY

A Complete Guide to Programming in Microsoft Office

2007

Advanced Programming Using Microsoft Word 2007

Marketing Management ---- Philip Kotler 12th Edition

Advanced MS Power Point

Company's Draft Prospectus.

Company’s 13th Annual Report

Business Research --- By Cooper

Www. nestlemilk.com

Www. economictimes.com

http://en.wikipedia.org/nestle milk

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