Observational study of the Strategies used by nestle in 4 P's of Marketing and the Problems found with an Observation Based Case Study ]

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MARKETING STRATEGY OF
NESTLE
SUBMMITTED BY:
VINU ARPITHA KS [ 16DM020 ]
JYOTI BARIK [ 16DM041 ]
MAHTAB ALAM [ 16DM013 ]
AMBIKA PANDA [ 16DM004 ]
NIDA KHANAM [ 16DM027 ]
RIZWAN ALI [ 16DM032 ]
SUBMMITTED TO:
Dr. Prof D.D SWAIN
Feb-April 2017

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Contents
1. OVERVIEW 2
2. METHODOLOGY 3
3. ORGANIZATIONAL PROFILE 5
4. COMPETITORS 8
5. SWOT ANALYSIS 11
6. 4 P’s 12
7. STP 27
8. CASE STUDY 32
9. ISSUES & FINDINGS 35
10. RECOMMENDATION 36
11. CONCLUSION 37
EXHIBITS
QUESTIONNAIRE

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OVERVIEW OF CHOCOLATE INDUSTRY
The chocolate industry in India as it stands today is dominated by two companies,
both multinationals. The market leader is Cadbury with a lion's share of 41%. The
company's brands (Five Star, Gems, Eclairs, Perk, Dairy Milk) are the leaders in this
segments. Till the early 90s, Cadbury had a market share of over 80 percent, but its
party was spoiled when Nestle appeared on the scene. Nestle has introduced its
international brands in the country Kit Kat and now commands approximately 14
percent market share. The Gujarat Co-operative Milk Marketing
Federation (GCMMF) and Central Arecanut and Cocoa Manufactures and Processors
Co-operative (CAMPCO) are the other companies operating in this segment.
Competition in the segment has got keener as overseas chocolate giants Hershey's
and Mars have entered into the market.
The per capita consumption of chocolates in India has increased from 40gm per
person per year in 2005 to 120-160gm in 2015 compared to 8-10kg in the developed
countries. Chocolates in India are consumed as indulgence and not as a snack food.
A strong volume growth was witnessed in the early 90’s when Cadbury repositioned
chocolates from children to adult consumption. The biggest opportunity is likely to
stem from increasing the consumer base. Leading players like Cadbury and Nestle
have been attempting to do this by value for money offerings, which are affordable
to the masses.

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METHODOLOGY
1. OBJECTIVES
 Marketing strategy of Chocolates in Bhubaneswar by Nestle.
 Customer satisfaction level
 Customer preferences towards the chocolate segment of Nestle
2 .SCOPE
 This research is applicable to the customers segment available in urban and
rural areas of Bhubaneswar for nestle chocolate product line
3. SAMPLING
 Consumers of chocolate in the areas of Bhubaneswar
 Sample size – 75
 Sampling technique – probability sampling
4. DATA COLLECTION
 PRIMARY DATA: SURVEY ON 50 STORES LOCATED IN BHUBANESHWAR
SURVEY ON CONSUMERS USING QUESTIONNAIRES
 SECONDARY DATA: 1. Sales representative of the distributor Ajay Kumar and
Raul Kumar
2. Companies website
3. News reviews – Economic Times, Business Standard

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5. LIMITATION
 Time frame of the research Feb to April 2017
 Location - Bhubaneswar
 Retail outlets – 50

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Organization Profile
NESTLÉ India is a subsidiary of NESTLÉ S.A. of Switzerland. With eight factories and
a large number of co-packers, Nestlé 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 insists on honesty, integrity and fairness in all aspects of its business
and expects the same in its relationships. This has earned it 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'.
• Mr. Suresh Narayanan Chairman and Managing Director
• Net Sales Turnover (2016) ----- Rs. 9223.80crore
• Profit ---- Rs. 1202.75 crore
• Nestle 25% of market share.
• Brand Ambassador – Virat Kholi (Munch)

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HISTORY
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. Nestle India manufactures a variety of food products such as infant food, milk
products, beverages, prepared dishes & cooking aids, and chocolates &
confectionary.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. 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.

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PRESENCE ACROSS INDIA
After more than a century-old association with the country, today, NESTLÉ India has
presence across India with 8 manufacturing facilities and 4 branch offices. NESTLÉ
India set up its first manufacturing facility at Moga (Punjab) in 1961 followed by its
manufacturing facilities at Choladi (Tamil Nadu), in 1967; Nanjangud (Karnataka), in
1989; Samalkha(Haryana), in 1992; Ponda and Bicholim (Goa), in 1995 and 1997,
respectively; and Pantnagar (Uttarakhand), in 2006. In 2012, Nestlé India set up its
8th manufacturing facility at Tahliwal (Himachal Pradesh). The 4 Branch Offices
located at Delhi, Mumbai, Chennai and Kolkata help facilitate the sales and
marketing activities. The NESTLÉ India’s Head Office is located in Gurgaon, Haryana.

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MAJOR COMPETITORS IN THE CHOCOLATE PRODUCTS
1. CADBURY
Cadbury began its operations in 1948 by importing chocolates and then re-
packing them before distribution in the Indian market. after 59 years of existence
, it today has five company – owned manufacturing facilities at Thane , Induri s(
Pune ) and Malanpur ( Gwalior) , Banglore and Baddi ( Himachal Pradesh ) and 4
sales offices ( New Delhi , Mumbai , Kolkata and Chennai ).
Currently Cadbury India operates in three sectors viz. Chocolate Confectionery,
Milk Food Drinks and in the Candy category.
In the Chocolate Confectionery business, Cadbury has maintained its undisputed
leadership over the years. Some of the key brands are Cadbury Dairy Milk, 5 Star,
Perk, Éclairs and Celebrations. Cadbury enjoys a value market share of over 70%-
the highest Cadbury brand share in the world! Their flagship brand Cadbury Dairy
Milk is considered the "gold standard" for chocolates in India.
 Cadbury captures 41% of market share
 In Cadbury Dairy Milk accounts for maximum share
 Five star come at 2nd
place
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2. AMUL
 Formed in 1946, is a dairy cooperative movement in India. A brand name
managed by Gujarat Co-operative Milk Marketing Federation(GCMMF)
 Jointly owned by 2.79 million milk producers in Gujarat
 Spurred the White Revolution of India, which has made India the largest
producer of milk and milk products in the world.
 Amul followed a unique business model. "Anand pattern" cooperative system
 Every day Amul collects 8.4 million liters of milk from 2.79 million farmers
(many illiterate), converts the milk into branded, packaged products, and
delivers goods to over 500,000 retail outlets across the country.
Amul is India's indigenous dairy cooperative primarily dealing in dairy products.
It is also one of the biggest players involved in chocolate manufacturing industry
of India. The credit of making India the largest producer of milk and dairy
products by bringing about the 'White Revolution' goes to Amul. Milk chocolate
is Amul's most trusted brand amongst Indians. Accounting for 1.1% of India's
overall chocolate sales volume in 2014. Some of its variants are as follows:
Milk Chocolate, Dark Chocolate, Fruit & Nut Chocolate, Tropical Orange
Chocolate, Almond Bar
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3. Ferrero Rocher:
Ferrero India is part of the Ferrero Group which has a turnover of Euro 8
billion and is today the fourth largest manufacturer of chocolate and
confectionary products in the world.

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Ferrero started its commercial operations in India in 2004. In a short span of
9 years it has established itself as a strong player in the premium category of
chocolate and confectionary products in India.
The Ferrero product range in India comprises of Ferrero Rocher praline
chocolates; Kinder Joy “rich in milk” and loved by kids and the whole family;
Tic Tac, the mouth freshener brand with a basket of flavors and Nutella, a
delicious hazelnut chocolate spread.
The company has its corporate office in Pune and 4 regional offices at
Chennai, Delhi, Kolkata and Mumbai. Ferrero India has a presence in all
metros and mini-metros with a nationwide robust distribution network.
Ferrero India is the third largest after Italy and Germany in the number of
workforce it relies on within the Ferrero Group
Ferrero India is building 9000 sq. feet kindergarten for the children of its
employees and for the children from the nearby community around the
factory.
4. Others: Mars, ITC etc.

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SWOT ANALYSIS
Strength
 Good product distribution and
availability
 Affordable price
 Market leader for wafers chocolates
(kit Kat)
 Kit Kat and munch within the list of
India’s best-selling chocolates
 Strong R&D teams
Weakness
 Very sweet, not good for
diabetic(milky bar)
 Lack of innovative and designer
chocolates for festive season
 Bar one overshadowed by 5 Star
Opportunities
 Untapped rural markets
 Increasing consumption of chocolates
in India
 Preference of people for premium
chocolates
Threats
 High competition from Cadbury
 Increasing health concerns
 Price of raw materials is increasing
due to growth of economy which may
affect its competitive pricing

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4 P’S OF MARKETING
1. PRODUCT
MUNCH
 Nestle Munch is the country’s most loved ‘coated wafer’ range of products.
Available throughout stores across the country
 Munch is the second largest brand in the chocolate based confectionery
segment in India. It is also the largest selling SKU in the industry. Munch was
launched in 1999 by Nestle to counter the brand Picnic from Cadbury. But
now Munch survived and Picnic is dead.
 Munch is brand which has been innovating to keep the excitement going.
Munch earlier had come out with a Coconut variant. Another major
innovative variant was the Munch Pop Chocs. Pop Chocs are chocolaty
nibbles in the form of wafer cubes. Others are Maha Munch , Chota Munch,
Munch Nuts and Rolls.
 The New CRUNCHILICIOUS MUNCH is an indulgent combination of Crunchy
Wafer, Creamy Filling and a Delicious Coating which is available at a
competitive price point of Rs.10, both in-stores as well as on e-commerce
platforms.
 MUNCH includes - 480 calories ,5.9 gm protein,64.6 gm carbs (sugar 27.5
gms),21.5 gm,trans fatty acids: 0.1 gm,calcium 106 mg
 Ingredients: sugar, wheat flour, partially hydrogenated vegetable oils, milk
solids, cocoa solids
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KIT-KAT
 NESTLE KITKAT is crisp wafer fingers covered with chocolayer. NESTLE
KITKAT has a unique finger format with a ‘breaking' ritual attached to it.
 The KitKat chocolate bar in its familiar red and white packaging is a brand
known the world over. A silver wave shape separated this element from the
red of the package. This change made the package feel younger and more
contemporary.

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 KIT-KAT has other variants like KIT-KAT DUO, Dark Chocolate, White
chocolate, coffee.
 New NESTLÉ KITKAT DUO is the coolest and trendiest way to take a break!
Pack two breaks in every break as we offer you two flavors in every finger of
Kit Kat.
 KITKAT is considers as healthiest chocolates as it includes
o 86 calories, 6.5 gm protein, 60 gm carbohydrates, 24.5 gm fat, 23.5
gm saturated fat, 0.5 unsaturated fatty acids, 0.5 gm trans fatty
acids, 192 mg calcium
 Ingredients: sugar, partially hydrogenated vegetable oils, milk solids, wheat
flour, cocoa solids.
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ALPINO
 Nestle ALPINO is an international brand in Nestlé’s Confectionary portfolio
since the 1950’s.It now comes to India as Nestlé’s first premium brand.
 Two crunchy chocolaty bonbons with a delicious creamy mousse centre,
each wrapped with a message of love, ALPINO is designed and destined to
be shared with your loved one.
 It comes with two variant, one is milk chocolate and the other is dark
chocolate.
 Ingredients of Alpino are: Sugar, Hydrogenated vegetable fats, Cocoa solids,
wafer powder, milk solids and Choco layer.
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BAR-ONE
 Nestle Bar One is a delightful combination of luscious nougat and caramel
centre covered in delicious Choco layer. Its enjoyable taste and exciting
packaging will treat you with an indulgent snacking experience.
 Ingredients are: Sugar, Liquid glucose, Hydrogenated vegetable fat, Artificial
vanilla flavours

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MILKY BAR
 NESTLÉ MILKYBAR comes with the goodness of milk & the fun of puzzles on
every bar.
 It contains hydrogenated vegetable fat, milk solids, antioxidant, Soya
lecithin, Hydrogenated vegetable fats and more. Vanilla flavouring substance
is also added in this chocolate and it is Trans-fat free bar.
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MILKY BAR CHOO
 Milky Bar Choo is soft delicious chewy centre covered in a yummy milky
layer. It comes with three flavours, strawberry, chocolate and milk
chocolate.
 100g of Milky Bar provides: Energy 1965kJ/468kcal
Protein 4.1g
Carbohydrate 73.2
Fat 17.6g
 Ingredients: White chocolate, sugar, glucose syrup, Invert sugar syrup.

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2. PRICE
Promotional Pricing Strategy
It is pricing to promote a product is a very common application. There are many
examples of promotional pricing including approaches such as BOGOF (Buy One
Get One Free), money off vouchers and discounts. Promotional pricing is often the
subject of controversy. Many countries have laws which govern the amount of time
that a product should be sold at its original higher price before it can be discounted.
Nestle follows promotional pricing strategy for Kit Kat offers Rs.25 voucher for
shopping in Amazon. Even if the best-selling chocolate of Nestle is kit Kat, it is
following promotional strategy to capture more market share.
Competitive Pricing
Competitive pricing is setting the price of a product or service based on what the
competition is charging. This pricing method is used more often by businesses
selling similar products, since services can vary from business to business, while the
attributes of a product remain similar. This type of pricing strategy is generally used
once a price for a product or service has reached a level of equilibrium, which
occurs when a product has been on the market for a long time and there are many
substitutes for the product.
This pricing strategy is followed by Nestle for Nestle Bar1 to compete
Cadbury’s 5 star. In other products also like Nestle classic due to tough competition
from other companies like Cadbury, Nestle offers competitive pricing. You will find

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that nestle will be similar priced to many of Cadbury’s Products in the chocolate
segment.
For the premium chocolate segment which is Alpino, Nestle is charging
competitively less as compared to the Competitor Ferrero Rocher but it has been
unsuccessful.
Table-1
PRODUCT WEIGHT PRICE(Rs.) PRODUCT WEIGHT PRICE(Rs.)
CHOTU MUNCH 6gm 2
MUNCH 10.1gm 5 CADBURY'S PERK 15gm 5
MUNCH 23gm 10 CADBURY'S PERK 28gm 10
MUNCH TRIO 25gm 10
MUNCH NUTS 32gm 20
MUNCH HOME 72gm 50
MUNCH 202gm 100 CADBURY'S PERK HOME 200gm 100
KITKAT 6gm 5
KITKAT 2 FINGER 12.8gm 10
KITKAT 18gm 15
KITKAT 27.5gm 20
KITKAT 4 FINGER 37.3gm 25
KITKAT FAMILY PACK 76.8gm 60
KITKAT 128gm 100
Table-2
NESTLE BAR1 12gm 5 CADBURY 5 STAR 12gm 5
NESTLE BAR1 22gm 10 CADBURY 5 STAR 21.5gm 10
NESTLE BAR1 44gm 20 CADBURY 5 STAR 44gm 20
CADBURY 5 STAR
crunchy 33gm 25

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Table-3
NESTLE'S CLASSIC
CHOCOLATE 6.5gm 5 CADBURY'S DAIRY MILK 6gm 5
NESTLE'S CLASSIC
CHOCOLATE 18gm 10 CADBURY'S DAIRY MILK 13gm 10
NESTLE'S CLASSIC
CHOCOLATE 36gm 20 CADBURY'S DAIRY MILK 25gm 20
Table-4
NESTLE'S MILKYBAR 6.5gm 5
AMUL MILK
CHOCOLATE 150gm 100
NESTLE'S MILKYBAR 13gm 10 AMUL CHOCOLATE 250gm 150
NESTLE'S MILKYBAR 26gm 20
Table-5
NESTLE ALPINO 23gm 25 Ferrero Rocher 23gm 30
NESTLE ALPINO 57.5gm 100 Ferrero Rocher 65gm 150
NESTLE ALPINO 138gm 250 Ferrero Rocher 200gm 450

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3. PLACE
Nestle is based on the principle of Decentralization, which means each zone is
responsible for the efficient running of its business- including the recruitment of
its staff.
NESTLÉ India has presence across India with 8 manufacturing facilities and 4
branch offices. The 4 Branch Offices are located at Delhi, Mumbai, Chennai and
Kolkata help facilitate the sales and marketing activities. The NESTLÉ India’s Head
Office is located in Gurgaon, Haryana.
CARRIAGE & FORWARD AGENCY
DISTRIBUTOR
RETAILER WHOLE SALER
CUSTOMER
GODOWNS
RETURN POLICY

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DISTRIBUTION POINT IN BHUBANESWAR
DISTRIBUTOR COVERAGE AREA
(covered by us)
SKU’S
AJAY KUMAR RAUL
KUMAR
RAVI TALKIES,
KALPANA,BAPUJINAGAR
CUTTACK
HINDUSTAN AGENCY SAHID NAGAR Not known
COUNTER ANALYSIS:-
Types of counter
 Super Market
 Big Grocery Store
 Small Grocery Store
 Convenience Store
 Medicine Store
 Betel Shop
STOCK POLICY:-
 As per the company regulations the distributor is supposed maintain a
stock of 8-9 MONTHS.
 A distributor place an order before 8 days & they received conformation
after 2-3 days.
RETURN POLICY:-
 Company follows a policy of return when the product has past its expiry
date, damaged or has a defect.
 Replenishment is done with cash and happens at the end of every six
months.

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4. Promotions
One of the most widely known tunes is the Nescafe tune. It was one of the best
advertising campaigns and was launched at least 2 decades back. However, that
campaign brought Nescafe strongly in the market.
Promotions for other products too has been is done similarly. Nestle promotions
are being done through medias such as TVC’s and ATL marketing. It is also present
online in different ecommerce websites. Overall, Nestle is a brand which has
strong products as well as strong marketing, and hence the brand has a very high
brand recall value.
 KITKAT:
o Kit Kat focuses on “Take a break”. Kit-Kat’s website has innovative
ideas as they ask customers to take a break. Kit Kat was launched in
India in 1995. The brand was an instant hit because of smart
marketing as well as the novelty of the product i.e. Wafer covered
which chocolate.
o The brand used the world famous campaign "Have A Break, Have A
Kit Kat”. The brand targeted the young crowd and the ads were in
line with the TG. The segmentation is based on the Usage Occasion.
o Kit Kat Ritual!
 Remove the wrapper.
 Separate a finger bar using your finger
 Break the bar
 Eat it
o This campaign was a success in sustaining in the market as one of the
top most preferred chocolates. Later on Kit Kat came up with the tag
line “treat your senses”.
o The advertisements had no brand ambassadors but it was innovative
as it used dancing Babies and squirrels to Bollywood music.

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 MUNCH
o Munch is an anytime consumption product. The product is a wafer
layer covered with delicious Choco layer. The brand is positioned
based on its taste. Munch uses the tagline “Can’t Stop Munching" to
promote its taste as the USP.
o In 2004, the brand roped in the Bollywood actress Rani Mukharjee as
the brand ambassador. The brand is promoted heavily across the
visual media.
o Nestle Munch has come back with a new campaign, featuring its
popular endorser ‘Balakrishnan Vaali’ along with his ‘lookalike’, the
better known and more glamorous Virat Kohli. The new campaign
that has just been launched is an extension of the earlier campaign
with the proposition of ‘Mera Crunch Mahaan’. It revolves around
the explosive crunch that triggers excitement through a fresh
treatment.
o Nestlé Munch's new campaign MUNCHIfication with actor Sushant
Singh Rajput inspires consumers to celebrate their individuality along
with their flaws Youngsters in the country are a self-assured lot.
o Furthermore, it tends to appeal to folks from all layers of society with
its humorous mix of English and Hindi coupled with the catchy Mika
number. Partnering with a youth channel only pushes forth the
message to the relevant TG.
o Ever believe that the brand succeeded because of the commercials.

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 ALPINO
o Nestle Alpino is being positioned as a chocolate that should be
shared. There is a romance touch to this brand and this is highlighted
in the launch campaigns.
o Besides the product attributes like the chocolate bon-bon with
creamy inside, what makes Alpino different are the love messages
written inside the Alpino wrapper. There are more than 150 such
messages inside the wrappers. This makes the brand a very cute
affordable gift of love.
o Nestle has been investing heavily in boosting the distribution and
POP promotions for Alpino. The Alpino ad which showcases a
husband and a wife engaged in an conversation is emotionally
touching and also showcases the brilliant use of the phrase ‘sharing’
in the entire ad. The core idea being ‘To love is to share’.
o The story highlights the Nestle’s central idea for the ad ‘Ye bhi koi
share karne ki cheez hai’ in enchanting manner and it rightly
connects with the audience.
o It created a themed idea where the couples are engaged in the
conversation. It was a challenging task for JWT who were ideating the
ALPINO campaign because they had to make the ad interactive and
commercially appealing without sounding sluggish at the same time.

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 MILKYBAR
o Milky bar is the leader in the white chocolate market in India.
Launched in 1998, the brand is now making lot of noise in the media
as a part of its repositioning exercise. In a typical market challenger
strategy of bypass attack, Nestle always avoided fighting head on
with the market leader Cadbury's Dairy Milk.
o Milky bar was around in Indian market for a while, the brand came
into aggressive state during the re-launch in 2006. "Milky bar Gives
Me Power” was the brand's positioning platform.
o The brand launched a soft chewy fudge form of Milky bar branded as
Milky bar Choo. This was a big hit for the kids who loved the soft
fudge form of chocolate.
o Currently the brand is running a campaign with a new tagline " Dum
Hai To Bahar Nikal " ( if you have guts, get out and play ) . The brand
asks the youngsters to just get out and play.
o Milkybar is a nice example of a brand carving a place for itself in a
market which is dominated by an iconic brand. The new positioning
may broaden the consumer segment for this brand.

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 BARONE
o Bar One initially was well promoted by Nestle and had a market
share of around 5 %.But Nestlé’s attention soon shifted to non-
confectionery items and Bar One was pushed aside in terms of
strategy and investment.
 The old Bar One jingle-
 Nestle Bar One Ba Ba Bar One
 Later the brand had the tagline "Get More Out of Life”
o The brand was positioned as a high energy funky chocolate which is
essentially a small snack. The brand was well ahead of its time
especially in the Indian market with respect to positioning. Indian
consumers were not familiar with the concept of chocolates as a
snack when Bar One was launched.
o In 2010, the brand was re-launched with a new packaging and price.
The new packaging is bold and lot of golden color splashed across it.
After a long while, the brand had a reasonably attractive packaging.
o The re-launch also saw a new positioning for the brand. The brand
sadly messed up on the positioning in the re-launch also. The brand
came out with very poorly executed campaign positioning Bar One as
a chocolate that will attract girls!!!
o The brand now has the tagline "Kaafi Hai "

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Segmentation Target and positioning
KIT-KAT
Segmentation Targeting Positioning
 Geographic
Segmentation:
both urban and
rural areas
 Demographic
segmentation:
segmented for 5-
40 age groups
 Psychographic
segmentation: it is
a premium brand.
 The young crowd
especially corporate
people & different
flavors of Kit Kat
target for different
age groups and
relations (Kit Kat
duo-young couple,
Kit Kat coffee-
coffee lovers, Kit Kat
dark chocolate )
 Target young
customers with in
age group of 15-30
years.
 Its positioned itself
as anytime snack
“have a break have
a kit Kat”
 A good refreshing
chocolate snack.
 Positioned
themselves as
“crispy light
irresistible snack”.
 Repositioned as
alternative to
traditional gifts
and sweets.

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Munch
Segmentation Targeting Positioning
 Geographic
Segmentation:
both urban and
rural areas
 Demographic
segmentation:
segmented for 5-
40 age groups
 Psychographic
segmentation:
consumer’s desire
for a good value
for money, anyone
can afford.
 Light – low dietary
value.
 Impulse
segmentation.
 Target customers
below the age
group of 40 years
 Nutties is targeted
as a snack which
remove immediate
hunger.
 It is positioned as a
tasty brand as a
price warrior. At
Rs.5 the brand
became a block
buster success
cannibalizing kit
kat and forcing
perk to launch a
low priced variant.
 Uses tagline can’t
stop munching to
promote its taste
as the USP.

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Bar One
Segmentation Targeting Positioning
 Geographic
Segmentation:
both urban and
rural areas
 Demographic
segmentation:
segmented for 15-
30 age groups
 People looking to
have a chocolate
which is high in
quality and
moderately priced.
 Confident young
Indian, Comprising
young college-
going boys and
girls.
 Target age group
below 30 years
 All age groups
lower, middle &
upper class people.
 Positioned as an
energy/ snack bar-
something for
those in between
times.
 High energy funky
chocolate which is
essentially a small
snack
 Uses tagline “Kaafi
Hai”, dual aspect -
is enough to satisfy
your hunger and it
encourages
youngsters to be
themselves, as that
would be enough
to impress
opposite gender.
 It’s enough for one
to succeed.

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Milky bar
Segmentation Targeting Positioning
 Geographic
Segmentation:
both urban and
rural areas
 Demographic
segmentation:
segmented for age
groups below 30
years
 Impulse
segmentation.
 It address higher
age group
previously it
targeted audience
were kids of age 5-
10 years. But the
current ad is
targeting pre-teens
8-12 years.
 Positioned as
chocolate bar for
energy and
strength, and
goodness of milk
factor.
 Nestle re-launched
the brand on the
platform of healthy
chocolate
 It is available at
affordable price
variant at Rs.5 with
a tag line “Dum Hai
to bahar nikal”.
The brand asks
kids to just get out
and play.

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Alpino
Segmentation Targeting Positioning
 Psychographic
segmentation: it is a
premium brand.
 Geographic
Segmentation: available
across 100 towns in
India.
 New segment:
“affordable premium”
thereby maintaining its
core identity of being
affordable.
 Targeted to everybody in a
relationship whether they
are 16 or 80. Everyone who
wishes to communicate
his/her feelings/emotions
i.e. Nonverbal to other
person but is hesitant to
do.
 Positioned as a chocolate
that should be shared.
There is a romance touch
to this brand and this is
highlighted in the launch
campaigns.
 Alpino is different because
of love messages written
inside the wrapper which
makes brand a cute
affordable gift of love.
 Indian customers are
opting for premium
chocolate rather than
traditional mithai favors
product like Alpino.
 It is available at Rs.25 a
pack perception of being
an expensive product and
thus prevented many from
buying it frequently.
 Its tagline is “To Love is to
Share”. It is best shared
and offers a delightful
experience that brings one
back in the mood of love.

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CASE STUDY
Nestles premium chocolate brand (Alpino) on decline
In a bid to improve falling market share in the chocolates category, food and
Beverage Company Nestle India Ltd brought premium brands to the Indian
market, apart from increasing distribution of existing brands such as Kit-Kat and
Munch.
Keen to tap the rising affluent urban demographic and to increase spending
across consumer categories, Nestle introduced premium or higher priced
products into the market.
The food and beverage company launched chocolate brand Alpino as a premium
brand to take on Italian brand Ferrero Rocher and Cadbury's Toblerone in the
country, priced at Rs25 for a pack of two bite-sized chocolates, in metro cities
across India targeted at older consumers. It had launched Alpino in late 2013
amidst much fanfare and marketing spends to capture the premium-end of the
market. The trials did not translate into enough repeat purchases.
Nikhil Chand head of chocolate and confectionary portfolio of Nestle India said
“Alpino needed tweaking at multiple levels, which included flavor profile as well
as marketing-mix.” The consumer clearly wanted more than what he was getting
from an existing premium product. As Neeraj Bassi, chief strategy officer, Cheil
Communications points out, “launching a premium chocolate is not as difficult, as
the build-up of volumes post the launch.” To him the launch communication (for
Alpino) did a good job of generating initial trials but the brand failed to give
consumers a relevant cue for consumption and repeat purchase
ROADBLOCKS
According to the Euromonitor report, Premium chocolate confectionery brands
such as Ferrero Rochers, Mars and Toblerone outperformed overall chocolate
confectionery in terms of growth in 2011 and 2012,

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On Jul 12, 2013 in the economic times said “Nestlé’s new brand has a striking
resemblance with Ferrero in terms of packaging and shape,”
Nestle couldn’t tap the Product differentiation of Alpino as it was similar to Ferrero
hence it is not easy to beat an already established brand [exhibit no 5].
The price of the product has also decreased the sale of Nestle as the customers feel
it is overpriced [Exhibit no 4,5].Together with the pricing the availability of the
product in the stores are less indicating less shelf space in retail stores for Nestlé’s
Alpino [Exibit no 4,5]
Current Scenario
In the emerging chocolate category in the country, Nestle India has lost market
share to Ferrero Rocher due to failure to innovate its product portfolio at a time
when consumer’s tastes are constantly changing.
Nestlé’s market share in the chocolate category has drastically reduced from 29
percent in 2006 to 14 percent in 2017, according to data provided by Euro
monitor. Based on a report released by Nomura, Nestlé’s “Growth in the
chocolate and confectionery business for the company has been in decline since
calendar 2010, but revenue has declined from calendar 2013 onwards.”
Reasons for this decline are portfolio optimization in chocolates, as well as
seeking premiumisation at a time when demand was slowing. That apart, the
failure to innovate beyond the wafer segment when consumer tastes were
evolving is also blamed for the growth decline.

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SOLUTION
 BCG MATRIX
o The situation faced by Nestle is market share of 14% and low market
growth ( Dogs according to the BCG model ) – this is due to its
competitors increasing their share e.g. Mondelez, Ferrero
o Especially Ferrero taking over the market share of nestle
o At this situation it can lead to the only solution that is Divest
o But as the market is just leaning towards the dogs there can be
certain strategies through which they can improve the situation. They
are as follows
 Transformation in the product in terms of varieties of flavors
and contents
 Increase the availability in stores with some discounting offers
through Major retail players for Value for money i.e. Big Bazar,
Reliance Fresh.

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ISSUE
 Fall in the market share of Nestle
 Chocolates like Barone & Alpino are having low turnover and most of the
stocks stay till expiry in the retail stores
 Advertisement biasness of nestle for Kit Kat and Munch
FINDINGS
 Cadbury is more preferred over nestle – Retailers told us that they
experienced more sale of the Cadbury chocolates compared to Nestle in the
areas of Bhubaneswar [exhibit 1]
 Bar one was the least opted chocolate among the Nestle chocolates and the
sales of Bar one is slower and turnover to the retailers is low if chosen Bar
one [exhibit 1]
 Alpino was not found in most retail stores and Nestle lost its market share of
Alpino as it was not able to compete with Ferrero Rocher [exhibit 5]
 Munch is the most preferred chocolate of nestle and has created a huge
differentiation compared to perk of Cadbury , Availability of much is more
than Kit Kat in all stores the availability shows the Strength of the product
and its customer loyalty.[exhibit 1,2&3]
 Margin to the wholesaler is 5.8% and to the retailer from the distributor is
11.8%

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Recommendation
 Innovation: (terms of taste, packaging, promotion) According to the Euro
monitor report India is forecast to deliver CAGR of 8% over 2016-2021, to
reach INR162 billion. Increasing availability in rural India and an expanded
offer will contribute to chocolate confectionery growth during the forecast
period. Hence this is a good time for the renovation its products which are
at the low end of sales e.g. Nestle classic, Barone & Alpino.
 Repositioning strategy should be applied to get a wider target market to
improve the sales. As chocolates and fast food have become substitutes for
Indian authentic mitais and also substitutes for offerings in temples.
 Improve the packaging of few chocolates such as Nestle classic and Alpino.
Advertisements should be made aggressive especially for products on
decline as the competitors are at a rise it will be harder to sustain without
aggressive campaigns and advertisements.
 Lessen the sugar content to target the health conscious consumers as they
sought to improve their lifestyle, health and overall wellness, Food such as
olive oils, dairy products and sugar substitutes were among the fastest
growing categories.

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CONCLUSION
 Nestle is having a fall in its market share and they are entering into a
face where the only strategy is to divest. So it is important that before
entering this stage they have to improve their strategies and increase
their customer base
 Nestle as a brand is one of the most preferred brand in FMCG sector
and hence they are capable of taking the risk of transformation and
diversification. But the competition is on the rise hence sustainability
is a question.
 Consumers preferences and the Emotion towards brand is positive
and this can be a positive sign to invest in the market

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[EXHIBIT 1]
Which Brand Do You Prefer The Most?
Which Product Of Nestle Do You Prefer The Most?

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[Exhibit 2]
Survey on Kit Kat
Availability of Kit-Kat in Local Grocery stores
Does the packaging grab your attention?
What do you think of Kit-Kat pricing?
YES 89.5%
NO 10.5%
How often do you purchase Kit Kat?
Does the packaging allow for easy opening?

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[Exhibit 3]
Availability of Munch in Local grocery stores
[Exhibit 4]
Customers’ expectations from Alpino:
Price 17
Taste 13
Promotion 5
Packaging 3
Quantity 2
Availability 6
Innovation 5
 YES 97.4%
 NO 2.6%

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[Exhibit 5]
Customer views on Alphino
1. Repurchase of Alphino
3 Pricing
2. Does Packaging grab your attention?
4. Preference Of consumers

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[Exhibit 6]
INCOME STATEMENT OF NESTLE INDIA
Particulars 2012 2013 2014 2015 2016
Net Sales 83,022.6 90,619.0 98,062.7 81,232.7 91,592.8
Other Operating Income 322.7 391.5 485.7 520.4 645.2
Total revenue from operations 83,345.3 91,010.5 98,548.4 81,753.1 92,238.0
Total Expenses 67,944.9 74,068.7 80,622.9 68,415.6 76,519.3
Profit From Operations 15,400.4 16,941.8 17,925.5 13,337.5 15,718.7
Other income 310.3 830.9 873.2 1,100.9 1,493.9
Finance costs 266.0 365.1 142.3 32.9 35.1
Employee benefit expense due to passage
of time
* 558.1 648.3 753.2 874.0
Net provision for contingencies (others) -81.5 207.4 249.5 301.5 1,266.7
Profit Before Exceptional Items And
Taxation
15,526.2 16,642.1 17,758.6 13,350.8 15,036.8
Exceptional items - Charge/(Credit) - -138.1 -70.0 5,008.4 307.8
Corporate social responsibility expense - 0.0 85.1 206.1 313.6
Tax expense 4,846.9 5,608.9 5,896.6 2,503.6 5,150.0
Profit after taxation 10,679.3 11,171.3 11,846.9 5,632.7 9,265.4

44. Page | 43
Questionnaire 1
Consumer Satisfaction (Alpino)
What age group do you belong to ?
 10-20
 20-30
 30-40
 40 above
How often do you purchase Alpino ?
 Daily
 Weekly
 Monthly
 Never
Does the packaging grab your attention?
 Yes
 No
What do you think of the price of Alpino?
 Over-priced
 Affordable
 Under-priced
Is Alpino easy to find in your local grocery stores?
 Yes
 No

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How would you rate the taste of Alpino?
 Delicious
 Okay
 Bad
Which do you prefer the most?
 Ferrero Rocher
 Alpino
What would you do to improve Alpino?
 Taste
 Promotion
 Packaging
 Availability
 Price

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Questionnaire 2
Customer Satisfaction (Kit-Kat and Munch)
What Age group do you belong to?
 10-20
 20-30
 30-40
 40 above
Which Brand do you prefer the most?
 Cadbury
 Nestle
 Others
Which Nestle chocolate do you prefer the most?
 Kit-Kat
 Munch
 Bar one
 Milky bar
 Milky Chocolate
How often do you purchase Kit-Kat?
 Daily
 Weekly
 Monthly
 Never
Does the packaging grab your attention?
 Yes
 No

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Does the packaging allow for easy opening?
 Yes
 No
What do you think of the price of Kit-Kat?
 Over-priced
 Affordable
 Under-priced
Is Kit-Kat easy to find in your local grocery stores?
 Yes
 No
How would you rate the taste of Kit-Kat?
 Delicious
 Okay
 Bad
Which do you prefer the most?
 Munch
 Kit-Kat
Is Munch easy to find in your local grocery stores?
 Yes
 No
Is Kit-Kat your No.1 choice for chocolate when at the grocery store?
 Yes
 No

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