NESTLE

GOOD FOOD, GOOD LIFE

INTERNSHIPS REPORT
(Session 2020-21)

THE BHOPAL SCHOOL OF SOCIAL SCIENCES

SUBMITTED BY
SIMRAN SAINI
M.COM 4TH SEMESTER
(FINAL YEAR)
COMMERCE DEPARTMENT
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COMPANY NAME= NESTLE

INTRODUCTION

Nestlé is a Swiss multinational food and drink processing conglomerate corporation headquartered
in, Switzerland. It is the largest food company in the world, measured by revenue and other metrics,
since 2014. It ranked No. 64 on the in 2017. Founded in 1866; 155 years ago as Anglo-Swiss
condensed milk Company. In 1867, 154 year ago as Farine Lactee Henri Nestle. In 1905; 116 year
ago as Nestle and Anglo-Swiss condensed Milk Company. Founder of this multinational company
Henri Nestle where Paul Bulcke (chairman) Ulf Mark Schneider (CEO) David McDaniel
(CEO).Nestle was formed in 1905 by the merger of the Anglo Swiss Milk Company, established
in 1866 by brothers George and Charles Page and Farine Lactee Henri Nestle founded in 1867 by
Henri Nestle.

This company has been associated with various controversies, facing criticism and over, it’s
marketing of baby formula as an alternative to breast feeding in developing in COCO production,
its production and promotion of bottled water.

In January 2018, Nestle USA announced it is selling its US confectionary Business to Ferrero an
Italian chocolate and candy maker. The company was sold for total an estimated $2.8 billion. In
may 2018 it was announced that Nestle and Starbucks struck a $7.15 billion distribution on deal
which allow Nestle to market, sell and distribute Starbucks Coffee globally and to incorporate the
brand coffee varieties into Nestlé’s proprietary single-serve system expanding the overseas market
for both companies.

In 2019, the company announced that it would publish Nutri-score on all of its products sold in the
European countries that supported the nutritional label.

In 2020 Nestle wants to invest in plant-based food starting with a “tuna & salad” and meat free
products to engage and reach younger and vegan consumers.

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Nestle India manufactures products under brand name such as Nescafe, Maggie, Milkybar, Milo,
Kit-Kat, Bar-One, Milkmaid and Nestea. The company has also introduced product of daily
consumption and use, such as Nestle Milk, Nestle slim milk, Nestle fresh n natural Dahi and Nestle
Jeera Raita.

The company has presence across India with 8 Manufacturing facilities and four branch office
spread across the region. The 4 branch office in the country helps facilitate the sales and marketing
of its products. They are in Delhi, Mumbai, Chennai and Kolkata. The company head office is
located in Gurgaon, Haryana. Nestle India Ltd. was incorporated in the year 1956. The company
set up their first production facility in the year 1961 at Moga in Punjab.

In the year 1967, they set up their second plant at Choladi in Tamil Nadu as a pilot plant to process
the tea grown in the area into soluble tea. In the year 1989 they set up a factory at Nanjangud in
Karnataka. In the year 1990 the company entered into the chocolate business by introducing Nestle
Premium Chocolate. In the year 1991 they entered in joint venture floated by parent in
collaboration with BM Khaitan group to set up facilities to manufacturing a range of soya based
products. In the year 1993 they set up a factory at Samalkha in Haryana. In the year 1995 the
company launched the company’s worldwide legendary brand chocolate, KitKat.

The company commissioned two factories in Goa at Ponda and Bicholim in the year 1995 and
1997 respectively. In the year 1999 the company launched the product, Nestle Growing Up Milk
nationally. In April 2000, they forayed into Ultra Heat Treated (UHT) liquid milk market. In the
year 2001, the company launched Nestle Pure Life bottle water. Within a few months they again
launched their second water brand –San Pellegrino – in the Indian market. The company also made
foray into the ice tea segment.

In the year 2004 a project has been initiated to upgrade the production technology for infant
nutrition products in Samalkha factory. Nestle India recognized for its outstanding performance in
Export by the Coffee Board of India in the Export Awards 2004-05 as the best Exporter of Instant
coffee, Best Exporter to Russia & CIS Countries (Coffee) and the best Exporter for Far East
Countries (coffee). The company bestowed the UDYOG RATNA award by the PHD Chamber of
Commerce and Industry to recognize Nestle’s significant contribution to the channels and
customers and improve the implementation of commercial plans in the market.

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In the year 2006 the company set up their seventh factory at Pantnagar in Uttarakhand. In the year
2007, CNBC Asia presented the company with the India innovator of the year award. The
company’s four factories were awarded the internationally recognized external certification ISO
14001 for adherence to environmental processes and OSHAS 18001 for Health and Safety. In the
year 2008 the company launched Nestle Nesvita Pro-Heart milk with Omega-3 in Mumbai. Nestle
Nesvita Pro-Heart is part of daily diet and has Omega-3 heart friendly nutrients scientifically know
to help manage cholesterol. As part of their ongoing commitment to offering best in class nutrition
products to Indian consumers, the company launched NESTLE NAN 3 a follow up formula for
older infants.

During MAGGI PICHKOO tomato Ketchup was launched in a unique easy to handle day pack to
drive affordability, taste and convenience for a foe a larger number of consumers. The company
also launched another pioneering product, MAGGI Bhuna Masala to cook tasty and healthy every
day meals, more conveniently. The company also launched Nestle KitKat mini and Nestle Bar One
Mini, at Rs.3 price to expand the repertoire of offerings. Similarly, they launched Nestle KitKat
Chunky at Rs.15 to strengthen the range of wellness oriented Nestle product that consumer can
choose from. The company’s three more factories were awarded the internationally recognized
external certification ISO 14001 for adherence to environmental processes and OSHAS 18001 foe
health and safety.

In the year 2009 the company input to the group R&D for development of an innovative product
Maggi Bhuna Masala. They launched Maggi Nutri-Licious Pazzta. During the year Maggi further
leveraged their strengths to drive affordable nutrition and launched two new products namely.
Maggi Rasile Chow and Maggi Masala-ae-Magic. They launched Nestle KitKat in a new unique
single finger format and Nestle Munch Guru pack at the higher price point.

The company acquired the Healthcare Nutrition business of Speciality Food India Pvt Ltd with
effect from January 1, 2010. In 2011, Nestle opens new plant in Karnataka, Investing Rs.360 Cr.
In 2013 the company also acquires 26% minority stake in indocon agro and allied activities pvt
ltd. The company commences export of noodles, sauces from New Mangalore Port.

On April 2016, Nestle India announced the launched NESCAFE SUNRISE INSTA-FILTER –
which provides the taste of filter coffee and yet does not require to filter. On 17 august 2016, Nestle

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India announced the launch of new variants of MAGGI Noodles MAGGI HOT HEADS’ and
MAGGI No Onion No Garlic Masala’. On 26 August 2016, Nestle India announced the launch of
NESTLE a+ PRO-GROW milk containing 20% higher milk protein.

On 20 March 2017, Nestle India announced the launch of MILO Ready to Drink, a cocoa-malt
milk beverage crafted specially for growing children. MILO RTD has lower sugar with less than
10 grams of added sugar per pack (180 ml). on 2 may 2017, Nestle India announced the launch of
new range of MAGGI noodle if four new flavor- Amritsari Achari, Mumbai Chatak, Super
Chennai and Bengali Jhaal.

On 9 may 2017, Nestle India announced the extension of its popular NESTLE a+ GREKYO range
with launch of Blueberry Greek Yoghurt and Greek Style Curd. On 29 August 2017, Nestle India
announced the launch of MAGGI NUTRI-LICIOUS noodles range in four flavors – Atta Masala,
Atta Mexicana, Oats Masala and Oats Herbs& spice.

On 8 March 2018, Nestle Indian’s food brand MAGGI completed 35 years of existence in Indi.
MAGGI began its journey in 1983, with the launch of MAGGI 2-minute noodles.

During the year 2018, all factory laboratories of the company have received accreditation from the
National Accreditation Board for Testing and Calibration Laboratories (NABL), which is aligned
with ISO 17025 Standard. Accredited of Laboratories is considered to be an important indicator
of technical competency to undertake the tests for which the laboratory is accredited and further
strengthen consumer trust in products.

In line with zero defect mindset, during 2019, a special focus was given towards upstream raw
material vendors for products such as wheat flour, tomato and chilly paste and sugar, as well as at
company’s factories ensuring right quality and compliant product. All the offices and factories of
the company are certified under Safety and Health Management system that complies with ISO
45001:2018.

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OBJECTIVE OF ANALYSIS

The objective of analysis is to verify the environmental study of market under which we collect
the detailed data on following points.

• Market need
• Age analysis
• Consumer behavior, etc.

Marketing need research is needed on a continual basis, if you want to keep up with the latest
market trends and gain a competitive edge in the business market. Understanding market needs
and using it to your advantage is vital in reaching out to your target audience and increasing your
sales.

Here is why need to NESTLES conduct business market needs research:

• Identify the problem areas in your business

• Understand the needs of existing customers and why they chose your service over
competitors

• Identify new business opportunities and changing market trends

• Recognize new areas for expansion, and increase your customer base

• Discover potential customers and their needs, which can be incorporated into your services

• Set achievable targets for business growth, sales, and latest product developments

• Make well-informed market decisions about your services and develop effective strategies

Research and Development (R&D) in India is part of NESTLÉ S.A.’s global R&D network
and supports all markets worldwide with new product development and manufacturing
excellence for Noodles. It is also a Centre of expertise for local Indian cuisine within the
NESTLÉ R&D network and offers assistance to Culinary, Confectionery, Nutrition and Dairy
products in the South Asia Region (SAR).

The market segmentation is the group of people who has the similar intension towards any
particular brand, the market segmentation is of different types like mass marketing, one to one

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marketing and nische marketing, in mass marketing all the customers are treated as same in which
the customer satisfaction is less, in one to one marketing it deals with an individual which is not
profitable and the nische markets focus on some small special manufacturing areas.

The nestle company chooses differentiated marketing , where they provide different products for
different segments on basis of age , occupation , seasons , climate , gender etc. For example
Nescafe 3 in 1 for people who are busy with theirs works, koko krunch for those who want to taste
real chocolate, and Nescafe ice which can be consumed on different climates.

BASIC OBJECTIVES

▪ Ensure that the broad competences and knowledge within Nestlé are fully leveraged in
India and the Region.
▪ Create scientific knowledge to enable the formulation of effective and implementable risk
reduction strategies.
▪ Engage with concerned stakeholders to share knowledge and information on emerging food
safety issues and support a science based policy framework.
▪ Support knowledge dissemination and conduct training programs NFSI India will be an
integral part of the global network (NQAC and R&D) of food safety experts within Nestlé.
NFSI India will serve as a local interface of Nestlé’s global food safety capabilities &
research, and as such, leverage our expertise in food safety science as an incentive for new
research collaboration & partnerships in the country. NFSI will partner with reputable
academics, government agencies and research institutes.

The research program / key activities will be comprised of two pillars

1) The Capacity building pillar focuses on:

1. (i) external contracts and collaborations/partnerships, and

2. (ii) training programs (e.g. adulteration toolkit, agricultural hygiene management),

2) The Analytical Services & Data Science pillar provides in-house research on analytical method
development and data trending and chemical surveillance by testing of materials for contaminants
(heavy metals, pesticides, mycotoxins, adulteration).

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Food Safety Institute of India

Food safety and hygiene is critically important for improving public health and consumer welfare
in India. A holistic approach including all stakeholders and covering the entire food chain can help
reduce the food-borne disease burden. Food safety, thus, is a shared responsibility.
Nestlé shares the commitment on food safety and the quality and safety of our products is a top
priority. To strengthen the food safety commitment in India Nestlé is establishing the Nestlé Food
Safety Institute, India (NFSI). NFSI India will adopt a holistic and collaborative approach towards
ensuring safe food for consumers that will help meet India's growing demand for healthy and safe
food. It is the local interface of Nestlé’s global food safety science capabilities, and leverages
Nestlé’s expertise in food safety for new scientific research partnerships in the country.

NESTLE MARKET OBJECTIVES TOWARDS CUSTOMER

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Objectives of Nestle: “Marketing objectives are compatible with the overall corporate objectives
of Nestle. Company’s objective is to be the world’s largest and best-branded food manufacturer
while ensuring that nestle name is synonymous with the products of the highest quality”.
Nestlé’s business objective is to manufacture and market the Company’s Products in such a way
as to create value that can be sustained over the long term for shareholders, employees, consumers,
and business partners.

Nestlé does not favor short-term profit at the expense of successful long-term business
development.

Nestlé recognizes that its consumers have a sincere and legitimate interest in the behavior, beliefs
and actions of the Company behind brands in which they place their trust and that without its
consumers the Company would not exist. So the needs & wants of consumers should be
considered.

Nestlé believes that, as a general rule, legislation is the most effective safeguard of responsible
conduct, although in certain areas, additional guidance to staff in the form of voluntary business
principles is beneficial in order to ensure that the highest standards are met throughout the
organization.

Nestlé is conscious of the fact that the success of a corporation is a reflection of the
professionalism, conduct and the responsible attitude of its management and employees. Therefore
recruitment of the right people and ongoing training and development are crucial.

Nestlé continues to maintain its commitment to follow and respect all applicable local laws in each
of its markets.

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HURDELS AND DUFFICULTIES
As we all know every branded or popular company have to face some or the other way challenges
and problems and to overcome from those problems they need to make plans and strategies.
The problem faced by NESTLE in INDIA on product MAGGIE
Maggi Two-Minute Noodles, a brand it built over three decades in India and loved by hikers,
hostellers and housewives alike, had crumbled. That June, the national food safety regulator had
banned the sale of Maggi noodles and directed Nestle to withdraw the product. As the flagship
product went up in flames—38,000 tonnes, literally—Maggi-branded jams, ketchups and
beverages too took the heat. From commanding 80% share of India’s noodles market, (as estimated
by Nomura Securities in May 2015) Maggi went down to zero in just a month.
In May 2015, Food Safety Regulators from the Uttar Pradesh, India found that samples of Nestle
leading noodles Maggi had up to 17 times beyond permissible safe limits of lead in addition to
monosodium glutamate. On 3 June 2015, New Delhi Government banned the sale of Maggi in
New Delhi stores for 15 days because it found lead and monosodium glutamate in the eatable
beyond permissible limit. The Gujarat FDA on 4 June 2015 banned the noodles for 30 days after
27 out of 39 samples were detected with objectionable levels of metallic lead, among other things.
Some Indian’s biggest retailer likes future Group, Big bazaar, Easyday and Nilgiris have imposed
a nationwide ban on Maggi. Thereafter multiple state authorities in India found unacceptable
amount of lead and it has been banned in more than 5 others state of India. On 5 June 2015, Food
Safety and Standard Authority if India (FSSAI) orders banned all nine approved variants of Maggi
instant noodles from India, terming them ‘unsafe and hazardous’ for human consumption. In June
2015 Nepal indefinitely banned Maggi over concerns about lead levels in the product. On the same
Food Safety Agency, United Kingdom has launched an Investigation to find levels of lead in
Maggi. Maggi Noodles has been withdrawn in five Africa Nations- Kenya, Uganda, Tanzania,
Rwanda and South Sudan by a Super-market chain after a complaint by the Consumer Federation
of Kenya, as a Reaction to ban in India.
On August 2015, Govt of India made public that it was seeking damage of nearly $100 million
from Nestle India for ‘unfair trade practice’ following the June ban on Maggi noodles. The 6,400
million rupee suit was filled with National Consumer Dispute Redressal Commission (NCDRC),
regarding as the country’s top consumer court, but was settled on 13 August 2015. The court ruled
that the government ban Nestle product was both ‘arbitrary’ and has violated the principles of

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natural justice.’ Although Nestle was not ordered to pay the fine requested in the government suit,
the court ruled that the Maggi noodle producers must ‘send five samples from each batch of Maggi
for testing to three labs and only if the lead is found to be lower than permitted will they start
manufacturing and sale again. The ban has been repealed by the government of India, with effect
from the end of 2015, after the company cleared court directed safety tests. The test results from
all laboratories mandated by Bombay High Court have validated Nestle Indian’s position that
Maggi Noodles are safe for consumption. The company resumes manufacturing at Pantnagar
(Uttarakhand) Factory and also resumes manufacturing of Maggi at Tahliwal, HP unit. On 9
November 2015, Nestle India announced reintroduction of MAGGI Noodles in market.

On April 2016, Nestle India announced that MAGGI Noodles has further strengthened its
leadership position with more than 50% market share in the Noodles category as per Nielsen report.

PROBLEM DURING COVID-19 & SOLUTION IN INDIA

Mark Schneider, the CEO of Nestlé, has admitted the world’s largest food maker has been unable
to hit its “normal” production levels during the Covid-19 pandemic.

Schneider said the KitKat and Maggi owner had faced issues along the supply chain.

From our supply chain, to our factories, and right through to your homes, we are working around
the clock to ensure that we continue to meet the nutritional needs of your families and pets during
this difficult time. The work-from-home policy adopted by Nestle India all through the pandemic
has pushed the food major to adopt a decentralised approach to its business. Unlike earlier, when
bulk of the decision-making about its marketing and sales strategies, distribution or manufacturing
happened at its headquarters in Gurgaon, the company decentralised a lot of its decision-making
to the factories and local sales areas. "Because of the pandemic we could not get to offices, sit in
teams and make decisions, so we decided to decentralise decision-making. By doing so, we have
been able to empower and enable right levels of decision making in this company,” Nestle India
during the peak of the lockdown refocused its portfolio and manufactured only the top 100 SKUs
that the consumers needed. "The Centre will have a say on the SKUs they would like to focus on,
depending on the deployment of the workforce, but the local teams are empowered to decide
whether they will produce more of 200 gm packs or less 500 gm packs,”

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Nestle's decentralization move syncs well with its cluster strategy. Last year the company had
announced that it had remapped the business into 15 clusters on the basis of geography,
psychographic and purchase habits. "Decentralisation will take the cluster strategy one step
further," We have invested a lot on analytics, empowered our business organisations with data and
insights using the power of analytics, we call it the MIDAS (multi-disciplinary analytic system).
This is helping us a lot in terms of granular data (market, geography, channel, as well as brand).
This is helping us sharpen our plans, both digital and in the market place and also in terms of
media. This will work only when we decentralise decision-making. It will not work if you are
sitting in Gurgaon and taking decisions for all parts of the country.

STRATEGIES & THREATS

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particular brand, the market segmentation is of different types like mass marketing, one to one
marketing and nische marketing, in mass marketing all the customers are treated as same in which
the customer satisfaction is less, in one to one marketing it deals with an individual which is not
profitable and the nische markets focus on some small special manufacturing areas. The marketing
segmentation is based on demographics which include age, gender, income, education. Geographic
which has cultures and countries. Psychological this includes attitudes, knowledge and awareness,
wants and needs. Behaviors of consumers.

In a bid to sharpen its focus on volume-led growth and increase penetration of its products, Nestle
India will be adopting a regional cluster-based approach to develop tailor-made brand, marketing
and distribution strategies to address the needs of consumer in specific geographies.
Suresh Narayanan, Chairman and Managing Director, said “One of the core strategies that we have
articulated in company is that there are Many Indias in India. So we are evolving our organisational
Structure to divide the country into 10-15 regional clusters”.
“We have set up virtual teams, who will be responsible for tailor-made strategies for brands,
distribution, channel strategy, marketing and promotion that will be relevant to these regions. The

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whole purpose is to empower the people at the appropriate level of the organization for quick
execution of plan”.

Mission – Good Food, Good Life Nestlé’s message slogan condensed in the expression
“Good Food, Good Life” which delivered the belief in the importance of food and promoting a
common value in wellness and environment awareness. The chart at below which is referred
to Nestlé’s Road Map to establish the driving forces of growth and development.

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 Nestle Logo symbolizes Mother feed to her
children. The original Nestlé trademark was based on his family's coat of arms, which featured a
single bird sitting on a nest. This was a reference to the family name, which means ‘nest’ in
German. Then the owner of company selected coat of arms by adding three young birds being fed
by a mother as the logo of company, to create a visual link between his name and his company’s
infant cereal products.
One of the key ideologies within Nestlé is “Creating Shared Value.” This too stems from
the Shared Purpose of nourishing the community and the future of the world.
As the company has grown, Nestlé has increasingly invested in the communities in which their
employees live and work. They make massive contributions to Feeding America, over 150 million
pounds of food donated over the course of the partnership, and also support related community
programs including Adopt-a-School and GirlSports. Volunteer and Community care programs
alike enable Nestlé employees to advance common goals and see the impact that they are making
on the world.
But Nestlé’s use of symbolism is also thoughtful and measured. It extends the idea of nourishment,
but it doesn’t stretch it as the company continues to evolve and extend into new products, lines of
business and philanthropic outreach. The symbol that once represented the literal feeding of infants
is now on the t-shirts of volunteers who are hard at work at food drives, and also on banners that
wave over classrooms where students are gaining vital skills and knowledge.

Competitive Strategies

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In support of an identification of growth strategies, there is a need to recognise the importance of
competitive strategies. Three core competitive strategies are identified within the literature: Cost
leadership, differentiation and focus. Despite a traditional view that different competitive strategies
couldn’t be mixed, recent literature has supported the use of a hybrid competitive strategy, which
combines cost leadership and differentiation to support a competitive strategy, which balances the
actions of each strategy. Cost leadership is a strategy, which places emphasis on lowest cost and
thus sees the firm seeking to compete with their competition on the basis of price. Cost leadership
strategies therefore require an efficient approach to the supply chain to ensure that raw material
costs are kept to a minimum. Emphasis within this strategy is placed on the need to focus upon
gaining economies of scale and thus low costs. Differentiation involves firms seeking to
distinguish themselves from their competitors (Armstrong and Cunningham).For this to be the
case, emphasis is placed on the development of a competitive advantage through.

Competition if healthy would bring huge success but if negative would destroy the whole industry
so it should be critically analyzed for better future of the company. Nestle has a very strong position
in the food processing industry but few major rivals do exist in the industry like Kraft Foods and
Groupe Danone. Above mentioned companies are fighting continuously to get on to each other
and avoid any sort of competition but I is still there. If we talk about marketing and advertising
these companies have spent hell of their expenditures for the purpose of effective marketing and
advertising and in competition they have always ut performed each other. Competition is violent
in the food processing industry, and this is a plus point for consumers. Provided that these
companies carry on in competing with each other, consumers will persistently enjoy improving
product qualities.

Product & Service Design

The product and service design of Nestle is highly based on adequate utilisation of the resources
and minimisation of the optimal level of wastes throughout the lifecycle of the product. Nestle is
known to be the largest fast-moving consumer goods company in the world. The sizeable part of
the company’s operational contributions is devoted to generating and maintain environmental
sustainability through the product development and designing process. The products offered by
Nestle aims to cover the segments of the food and beverage market in the world by developing full

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range of goods belonging to the different categories. Faster and Economic–in order to conduct the
in-depth analysis of the products and their impacts on the environment, life cycle assessments are
the widely used methodology for the company. However, the significant challenge within the
process is the higher involvement of costs and time, as the process takes several months to finish.
Therefore, the product designing process of the company should need to be conducted in more
economical ways of analysing and determining the environmental impacts. It is one of the specific
areas for Nestle, where it is facing the considerable amount of challenges, as the company is
continuously working hard to develop a more prompt and economic effort.

Planning & Control

Considering the definition of an organization, it is identified as an entity that utilises various inputs
like capital and resources to process them and develop the outputs in the form of products and
services. From the overall information, it can be proposed that the selection of appropriate planning
and control process influences the achievement of short or long-term goals requires the company
analyse and determine the consequences of the activities.

Innovation and Improvement

Continuous improvement is necessary for a company to hold the leading position within the
identified market and thrive to respond according to the needs of the market consumers. Improving
the products of the company through maintaining innovation within the processes is the vital
objective for Nestle, as the practices are the heart of the company’s operation for over 150 years.

Supply Chain

The supply chain aspect of Nestle is highly driven to establish the great platform supporting the
involvement of collaborative supply chain professionals. The company achieves the original
competitive edge through the effective contributions from the supply chain of the company.

Supply Chain Management of Nestle is the combination of art and science assisting the company
to achieve its corporate objectives in superiorly. With the help of the process, the company
identifies the particular need of raw components for producing the products or services. The key
supply chain management activities of Nestle is developed by the useful contributions of the

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important parties like suppliers, manufacturers, distributors, retailers, consumers, and producers.
The process can be highlighted effectively with a relevant diagram below.

Quality Management

The operations of Nestle is highly committed to maintaining quality and safety in the production
process for ensuring the safe and health usage is provided to the consumers. Over the years, quality
and safety for the consumers are the fundamental concerns for the formation of key strategies
designed by the company for managing quality. The same concept applies to the entire portfolio
of the company from food and beverage products to the systems and services.

Product Development

Moving away from a focus on the market, the third strategic option offered by Ansoff places
emphasis on the importance of product development. This strategic option would require the firm
to develop new competencies, which would appeal to existing markets. Under this strategic option,
Nestlé could focus on the development of a new extension of products in the baby market to offer
to the consumer base.

Threat of New Entrants

If the market is attractive the new entrants would always be a threat for the company but if the
market has been restricted to a limited resource and it has very few areas of improvement so it
becomes difficult for new entrants to get into the market and hence monopolies exist. Although
Nestle has accomplished a strong name in the market but as the food processing industry is very
huge and viable; so there are a lot of companies who already entered in this market and somehow
achieved a place in the market even though they could not cross Nestle in terms of market share.
Every year number of companies attempt to enter the market and strive for their share of profit and
productivity in the market but very few survive. Nestle has been the leader of market for a century
almost so now it has become a very big challenge for the new entrants to not only work over their
quality but they also have to cut the share of Nestle to survive which is quite equal to impossible.
Fundamentally, Nestlé is persistently on the board, and therefore the threat of new entrants is
temperate.

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Bargaining Power of Suppliers

Bargaining power of suppliers is very important factor to be considered in any industry as they
are the main strength of the company. Nestle is known for strong relations with the suppliers
around the globe due to its immense buying power and also because of the fact that in such dairy
and agricultural products quality is always important. Nestle as always focused over strong and
sturdy business relations to make the ongoing quality stronger. Additionally, Nestlé also presents
helpful guidance to its suppliers on how to work more proficiently to decrease redundant expenses.
And thus it cares of its suppliers which I return pays them off in the form of quality products.

Threat of Substitute

Goods Substitutes have always been in line whenever we talk about products market, every kind
of product has a substitute present which leads it to the heights of competition when taken
seriously. As the product is very common and daily use product so the threat of substitutes is very
high here. Like if we take the example of bottled water so the substitute of this is lean pockets that
serve as a competition. So Nestle has to innovate its products tremendously to stay in the market
and to work efficiently for removing the threat of substitutes. We can take the example of recent
innovation which is health consciousness and wellness factor that has been introduced in all
products of Nestle. Such initiatives would make it easier for Nestle to go beyond the substitutes.

Bargaining Power of Customers

The bargaining power of customers has always been an important factor in terms of company’s
performance so this should be given reasonable value while accessing the company’s position.
Customers carry huge quantity of bargaining power concerning their utilization of different Nestlé
products. Although a lot of substitute products and competitors Nestle customers have very
influential choices but still the quality that has been maintained by Nestle has made it very
successful among the users. It is very important to understand the power of the customers and also

30
their needs so that they can be better satisfied. This is what Nestle always cares about and that is
reflected in Nestle health and wellness programs that are being used wile creation of new products
as society has in progress of becoming more health conscious.

7p’s of marketing

A final consideration for Nestlé is an identification of the 7p‟s of marketing and in particular an
understanding of what their product offers to the market (Armstrong and Cunningham). The 7p‟s
of marketing is an important marketing tool outlining a focus on a clear understanding of each
factor:

Product: Baby formula, nutrients to enable a progression from breast milk to formula or formula
for those mothers choosing not to breastfeed.

Price: Price relatively low to competitors. It is important to balance the need here between low
cost and the influence this has on trust.

Place: Supermarkets, place of convincing.

Promotion: Relationship marketing principles used to engage the consumer. Nestlé will interact
with consumers during a shopping mall road show to showcase their product offerings and the
value of their products.

People: Employees within the firm used to support the growth strategy of particular products.
Company objectives and marketing objective translates into performance goals for teams within
the firm.

Process: Customer service is important and a key determinant of trust. As a result of this, emphasis
should be placed on the role of employees in educating the consumer and therefore translating the
core elements of the brand.

31
Physical evidence: Physical evidence in the form of packaging and promotional tools will be used
to support the development of the growth strategy employed.

Which growth strategy to follow?

Based on a discussion of the various growth options above, this report argues that Nestlé should
focus upon market penetration through the use of promotional activities and relationship marketing
activities. This strategy would see Nestlé focus upon an existing product and market yet achieve
growth through marketing campaigns and a greater utilisation of social media. Through the use of
social media and relationship marketing it would be hoped that Nestlé would be able to develop a
stronger connection with their consumers, which is fundamental when needing to gain the trust of
new mothers (Iglesias et al,). Strength in the baby market is underpinned by the potential for
growth due to this being a growing market.

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,Volumetrust
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relationships.
relationships
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Jannat,
Internship
P. N. good
sustainable
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nutrition
Quality
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determines
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an
and
of
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and
3
M.nutritional
din
and
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that
and
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our
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the
2020creation
known
Nestlé,
geographies,
at
of
to
suppliers
individuals
their
Nestlé
fundamental
of
value
eat
to
with
health,
fundamental
enduring
eat
that
looking
Nestlé
the
potentials
Issue
Qualitative
C.
J. with
employees,
and
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at
CONCLUSION

32
Nestle determines to improve the quality of consumer’s lives through nutrition, health and
wellness. Nestle Nutrition council develops science-base nutrition products and services that
increase the quality of life for people with specific nutrition need. Nestle produce food with
different culture, different geographies, different needs, taste, flavors and habits that all consumers
eat and drink.

Nestlé is one of the world's prominent food product organizations and intends to remain so. Its
commitment to high quality market research ensures that it continues to be fully aware of changes
in customer behaviour and consumer preferences. Its outstanding product research and
development network ensures that it is well placed to meet up with the challenge of lifestyle
improvements in consumer desires. The company's Wellness strategy is very carefully designed
to delivering to customers what they now clearly want in relation to the foods they eat; a high
nutritional value and a positive factor to their general well being. The problems faced the consumer
in Nestlé Company Product is mainly on their nutritional. From our internet research we realise
that many people complains about the nutrition.

The first problem is nutrition for elderly; we notice that it is a large extent by a person diet and
also their nutrition consumption. By taking an improper nutrition and unbalanced nutria diet can
increase the risks to have disease. Secondly, Children obesity caused mainly because their
consuming to much chocolate and confectionary, taking a lots of chocolate cause them to have
disease in early ages. Lastly, in our research we realise that Nestle is producing less energy drinks.

RECOMMENDATION

Based on our research, we will like to recommend to Nestlé to produce more products that are
suitable for older people such as protein milk and cereal with necessary nutrition where every older
people can make it as their daily use and also they should produce some organic product to whom
are very health conscious so it can be a healthy snack. Since children obesity is increasing, Nestlé
can produce a chocolate bar with less sugar so that obesity will not increase. Moreover, Nestlé
should produce more energy drink that is suitable for all ranges such as students and people that
is active in their daily life.

33
The respondents claimed it is easy to buy Nestlé products at any store. I suggested doing more
promotions to increase customer awareness and purchasing rate.

REFERANCE AND SOURCE

WEBSITE

NESTLE researchgate.net

Nestle.in research and development

MAGAZINE AND NEWSPAPER

Business Today

Times of India

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