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Summer Project ReportOn
Potential of Nestle Dahi in
Ludhiana
Prepared By:
Vikesh Bansal
Acknowledgement
I avail this opportunity to acknowledge my deep sense of gratitude and indebtedness to Mr. Sabir Mohammed (Area Sales Manager, Nestle India), under whose able guidance, I have completed this project. I would also like to thank Mr. Gurpreet Singh (Senior Sales Officer) and Mr. Raman Gosain (Sales Officer) who rendered me their invaluable help, suggestions and encouragement with monumental patience and constant guidance. I would also like to thank the salesmen of Nestle India in Ludhaina for their kindness and valuable guidance and assistance, which helped me in the completion of my summer training.
I would also like to thank my project guide Prof. J.J Maini, whose valuable suggestions, throughout the training session, helped me a lot to understand the real meaning of such internship.
Introduction:
India is said to be the country of diversity in which people of different religion,
cultures, traditions, cast and creed are living. Since people have different religion,
cultures and traditions, their eating habits are also different from each other. In Northern
India, wheat is considered to be main food ingredient whereas rice is considered to be
main food ingredient in south India.
In spite of the diversities found in eating habits of Indian people, there are certain
items which are equally consumed as part of the food in every part of the country in one
form or the other. Dahi or Curd can be considered as such type of item. It is not only a
nutritious item but tasty also.
Introduction about project:
As it has already been mentioned that Dahi is consumed all over the country,
hence there is huge demand of Dahi. Generally the demand for Dahi is being met by
unorganized sector. This sector includes the curd supplied by Halwaii or by household
sector. In order to meet the demand and to tap the business opportunity, many private
sector players have entered in this market In Punjab, the major player in this market are
“Verka” and “Nestle”.
Hence this project has been undertaken to explore the potential of Nestle Dahi in
Ludhiana city.
Research Methodology:
The data has been collected from the distributors and dealers of Nestle. For that,
sample survey has been conducted using the questionnaire and personal interview
techniques. The sample size is 3 distributors and 500 dealers based at Ludhiana.
Limitations of the project:
The survey has been conducted by gathering the data from Nestle dealers based in
Ludhiana. The reasons may be different for different places based on the cultures of that
particular place.
Introduction about Nestle:
Nestle was founded in 1867 on the shores of Lake Geneva in Vevey, Switzerland and its
first product was “Farine Lactée Nestlé”, an infant cereal specially formulated by Henri
Nestlé to provide and improve infant nutrition. From its first historic merger with the
Anglo-Swiss Condensed Milk Company in 1905, Nestlé has grown to become the
world’s largest and most diversified food Company, and is about twice the size of its
nearest competitor in the food and beverages sector.
Nestlé’s trademark of birds in a nest, derived from Henri Nestlé’s personal coat of arms,
evokes the values upon which he founded his Company, Namely, the values of security,
maternity and affection, nature and nourishment, family and tradition. Today, it is not
only the central element of Nestlé’s corporate identity but serves to define the Company’s
products, responsibilities, business practices, ethics and goals.
In 2004, Nestlé had around 247,000 employees worldwide, operated 500 factories in
approx. 100 countries and offered over 8,000 products to millions of consumers
universally. The Company’s transparent business practices, pioneering environment
policy and respect for the fundamental values of different cultures have earned it an
enviable place in the countries it operates in. Nestlé’s activities contribute to and nurture
the sustainable economic development of people, communities and nations. Above all,
Nestlé is dedicated to bringing the joy of ‘Good Food, Good Life’ to people throughout
their lives, throughout the world.
Introduction about Nestle (India):
Nestlé India is a subsidiary of Nestlé S.A. of Switzerland. With seven 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'.
Nestlé’s relationship with India dates back to 1912, when it began trading as The Nestlé
Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished
products in the Indian market.
After India’s independence in 1947, the economic policies of the Indian Government
emphazised the need for local production. Nestlé responded to India’s aspirations by
forming a company in India and set up its first factory in 1961 at Moga, Punjab, where
the Government wanted Nestlé to develop the milk economy. Progress in Moga required
the introduction of Nestlé’s Agricultural Services to educate, advise and help the farmer
in a variety of aspects. From increasing the milk yield of their cows through improved
dairy farming methods, to irrigation, scientific crop management practices and helping
with the procurement of bank loans. Nestlé set up milk collection centres that would not
only ensure prompt collection and pay fair prices, but also instil amongst the community,
a confidence in the dairy business. Progress involved the creation of prosperity on an on-
going and sustainable basis that has resulted in not just the transformation of Moga into a
prosperous and vibrant milk district today, but a thriving hub of industrial activity, as
well.
Beginning with its first investment in Moga in 1961, Nestlé’s regular and substantial
investments established that it was here to stay. In 1967, Nestlé set up its next factory at
Choladi (Tamil Nadu) as a pilot plant to process the tea grown in the area into soluble tea.
The Nanjangud factory (Karnataka), became operational in 1989, the Samalkha factory
(Haryana), in 1993 and in 1995 and 1997, Nestlé commissioned two factories in Goa at
Ponda and Bicholim respectively. Nestlé India has commissioned in 2006 its 7th factory
at Pant Nagar in Uttarakhand.
Nestlé has been a partner in India's growth for over nine decades now and has built a very
special relationship of trust and commitment with the people of India. The Company's
activities in India have facilitated direct and indirect employment and provides livelihood
to about one million people including farmers, suppliers of packaging materials, services
and other goods.
The Company continuously focuses its efforts to better understand the changing lifestyles
of India and anticipate consumer needs in order to provide Taste, Nutrition, Health and
Wellness through its product offerings. The culture of innovation and renovation within
the Company and access to the Nestlé Group's proprietary technology/Brands expertise
and the extensive centralized Research and Development facilities gives it a distinct
advantage in these efforts. It helps the Company to create value that can be sustained over
the long term by offering consumers a wide variety of high quality, safe food products at
affordable prices.
Introduction about Products:
Nestlé India manufactures products of truly international quality under internationally
famous brand names such as NESCAFÉ, MAGGI, MILKYBAR, MILO, KIT KAT,
BAR-ONE, MILKMAID and NESTEA and in recent years the Company has also
introduced products of daily consumption and use such as NESTLÉ Milk, NESTLÉ
SLIM Milk, NESTLÉ Fresh 'n' Natural Dahi and NESTLÉ Jeera Raita.
Nestlé India is a responsible organization and facilitates initiatives that help to improve
the quality of life in the communities where it operates.
Introduction about Curd Market:
Curd is considered as one of the most important part of Indian food. Generally the
demand for curd is met with home made curd or by the curd supplied by unorganized
sector. Considering the huge business opportunity in curd market, various companies
launched their products in the market. The two prominent players in curd market in
Punjab are “Verka” and “Nestle”. Since the entrance of organized sector in curd market,
still the major chunk is being controlled by the unorganized sector. According to one
estimate, unorganized sector has (app.) 65% of the total market share, Verka has 30%
market share and rest is controlled by Nestle.
Information about Nestle Dahi:
Nestle entered the curd market in Punjab with following two variants.
1. Nestle Fresh ‘N’ Natural Dahi.
2. Nestle Fresh ‘N’ Natural Slim Dahi.
Product Details:
1. Nestle Fresh ‘N’ Natural Slim Dahi:
Nestle Fresh ‘N’ Natural Slim Dahi is the first low fat product in the category in India. It
is made from high quality pasteurized double toned milk and contains maximum 2% fat.
It not only tastes delicious but is also a good source of milk protein and calcium. This
product is completely natural and does not contain any preservatives. Following are the
features of this product.
First low fat Dahi in India.
It is 98% fat free.
It is Rich source of Calcium – Every 100g serving of Fresh n Natural Slim Dahi
gives 35% RDA of calcium (as per ICMR, 2004).
It does not contain added preservatives.
It is hygienically prepared, untouched by hand.
Consistent quality and taste.
It can be used to prepare all the traditional Indian dishes like Lassi, Raita, Curries,
Kadhi or eaten in the same format.
Being packaged Dahi, it is safer and healthier compared to Halwaii Dahi.
Safe for children.
Product Weight & Pricing:
Pack Size Units Price per Unit (Rs.) Shelf Life
200g 24 15.00 15 days
400g 12 25.00 15 days
2. Nestle Fresh ‘N’ Natural Dahi:
The other variant launched by Nestle is Nestle Fresh ‘N’ Natural Dahi. It is 100% Fresh
and Natural and is made from fresh, high quality pasteurized toned milk. It has all the
goodness of natural Calcium and it is nutritious also. It comes in two different packs as
per the varying needs of the consumers.
Pack Size Units Price per Unit (Rs.)
200g 24 12.00
400g 12 22.00
Introduction about Ludhiana Market:
At present, in Ludhiana curd market has been Verka brand has 30% market share. The
unorganized sector has 65% market share whereas Nestle has 5% market share. Verka
has a strong network of its milk distribution booths & dealers. Any retailer can become
Verka’s dealer by giving Rs.10000 as security deposit. These dealers are in every locality
of Ludhiana & sell only Verka milk products.
Nestle’s Distribution Network in Ludhiana:
Presently, Nestle has 3 distributors in Ludhiana. These distributors supply nestle’s
products to retailers who in turn cater to entire Ludhiana market. Following are the
distributors of Nestle in Ludhiana.
1. M/s Inder Trading Company:
M/s Inder Trading Company is located at Shyam Nagar, Near Bus Stand,
Ludhiana. This distributor supplies Nestle’s products to around 450
retailers. Most of the retailers of this distributor are based at prime areas of
Ludhiana which include Dugri Road, B.R.S. Nagar, Aggar Nagar, Sarabha
Nagar, Model Town, Pakhowal Road, Radha Swami Road, Chet Singh
Nagar, Gill Road, Shimla Puri etc. The mentioned areas have the
population of rich people or the upper middle class people. M/s Inder
Trading Company has 3 salesmen who cater to the needs of 450 retailers.
The monthly turnover of this distributor is app. Rs. 70 lacs.
2. M/s B.M. Traders:
M/s B.M. Traders is located at Fieldgunj, Nimwala Chowk, Ludhiana.
This distributors supplies Nestle’s products to 450 retailers. The retailers of this
distributor have scattered from prime areas to backward areas like Habbowal, College
Road, Moti Nagar, Jamalpur, Chotti Habbowal, Dandi Swai Road, CMC Road,
Maligunj, Shivaji Nagar, Islam Gunj and fieldgunj etc. The mentioned areas have the
population mix of people having middle middle class and lower class. In this case, the
quantity of curd sold is lesser than the quantity sold by M/s Inder Trading Company
but the sales turnover of both distributors is same. The difference is covered up by
extra selling of other Nestle products like Maggi etc.
3. M/s Mirchi Traders:
M/s Mirchi Traders is located at Vaitgunj, Ludhiana. This distributor
supplies products to 300 retailers. The retailers of this distributor have located in
lower income class areas like Bajwa Nagar, Wasti Nagar, Sunder Nagar, Madhav
puri, Samrala Road, Division III, Chotti Sadak and Shiv puri etc. Since this
distributor has the retailers in lower income class areas, he does not stock the entire
range of products offered by Nestle like Dahi. In case he receives the order for such
type of products, then the same is being supplied by M/s B.M. Traders.
Nestle Curd Sale Analysis vis-a vis Competitor:
As it has already been mentioned that Nestle has 3 distributors in Ludhiana
who take care of entire Dahi sale through its retailer channel. Out of these 3
distributors, Dahi is being sold by only two distributors i.e. M/s Inder Trading
Company and M/s B.M. Traders. M/s Mirchi Traders does not have the stock of curd
but he meets the order through M/s B.M. Traders. Following are the sales figures of
Nestle for the last four months.
(In cases)Month Inder Trading Co. B.M.Traders TotalApril 487 49 536May 485 47 532June 620 45 665July 478 84 562
Following is the graphical presentation of the sales figures of Nestle Curd.
Sales Figures of Nestle Curd
487 485
620
478
49 47
45
84
0
100
200
300
400
500
600
700
April May June July
Month
No
. of
Cas
es s
old
B.M.Traders
Inder Trading Co.
It is evident from the graph that the major chunk of Nestle Dahi Sale in
Ludhiana comes from M/s Inder Trading Company. It is because of the fact that the
retailers of M/s Inder Trading Company are based in areas having population of rich
people and upper middle class people. As compared to that, the retailers of M/s B.M.
Traders are based at areas having population of poor people and middle middle class
people.
Nestle Sale analysis vis-à-vis competitor Sale:
Since there is huge business opportunity in Dahi market, hence Nestle is not the
only player available in this field. The major competition for Nestle comes from
unorganized sector & Verka.
As far as organized sector is concerned, the competition is from Milkfed Dahi
under the brand name “Verka”. Apart from that, one more Dahi under the Brand name
“Uttam” has been launched in Ludhiana.
In Ludhiana, Verka has captured around 30% of total market share where as
unorganized sector has around 65% market share. Nestle has the market share of around
5% of the Dahi market in Ludhiana.
Following is the tabular presentation of Dahi Sale of various brands in Ludhiana.
(In Cases)Month/Brands Nestle Verka
April 536 3000May 532 3200June 665 3500July 562 3100
Following is the graphical presentation of the sales data.
Competitor Dahi Sale
536 532 665 562
3000 32003500
3100
0
500
1000
1500
2000
2500
3000
3500
4000
4500
April May June July
Months
No
. of
Ca
ses
Verka
Nestle
Reasons for less market share:
It is evident from the above graphical presentation that Nestle Dahi sale in
Ludhiana is far less than the dahi sale of Verka. We have conducted a dealer survey to
find out the reasons for the same. Following reasons have been found out for Nestle’s less
market share as compared to Verka’s market share.
1. High Price:
The first and foremost reason for less market share is that there is huge
difference between the prices of Nestle Dahi and Verka Dahi. It is evident from the
following table.
Weight/Brand Nestle Price (Rs.) Verka Price (Rs.)
200Gm 12.00 7.50
400Gm 22.00 14.00
The price difference between the products of two brands is clear from the
above table. The prices of Nestle product is almost 60%-80% more than the prices of
Verka Products. Since the demand for curd is highly price elastic, consumers find more
value for money in Verka Dahi.
2. Lack of awareness regarding Nestle Dahi:
The other important reason for small market share is that retailers do not
have awareness regarding the availability of Nestle Dahi. Due to this reason, they are
concentrating on selling Verka Dahi, which is reducing Nestle market share. It is clear
from the fact that by creating the awareness regarding Nestle Dahi, the sale of M/s Inder
Trading Company has increased from 485 cases to 620 cases in the month of June. In the
month of July, the sale of M/s B.M. Traders has increased from 45 cases to 84 cases.
3. Lack of infrastructure:
Dahi is a perishable item with shelf life of not more than 1-2 days. Hence
proper storage of Dahi is must especially in summer season. But in case of Nestle Dahi,
many retailers do not have the fridge to store Dahi. Earlier they used to store Dahi in
fridges provided by cola companies but now, cola companies are insisting them to store
only their company’s products in the fridge. Due to lack of refrigeration facility, many
dealers are not able to store Nestle Dahi which reduces its sale.
4. Supply:
The other area of concern is supply of Dahi to retailers. Nestle Dahi is
supplied to distributors on bi weekly basis. Verka is giving daily supplies to its outlets.
Verka has around 25 booths & 250 dealers at every half km. Most of them do not stock
Nestle Dahi.
5. Unaffordable:
Since the demand for Dahi is highly price elastic, high price of Nestle
Dahi as compared to the prices of competitor Dahi has made the same unaffordable and
uncompetitive in the market. The lower middle class and middle middle class is finding it
cheaper to use either the competitor brand like “Verka” or use the home made Dahi as
compared to Nestle Dahi.
6. Mentality of consumer:
Dahi is an important part of Indian meal. Hence it is the mentality of the
consumers to have fresh Dahi in his meal. But in case of Nestle Dahi, the shelf life is 15
days. Although it can be used with in the period of 15 days, the consumer prefers to have
fresh Dahi. Due to this reason, either he prefers to purchase “Verka” dahi which is
supplied daily or purchases Halwaii Dahi which results in reduction of market share of
Nestle Dahi.
7. High Storage Cost :
Dahi is a perishable item which becomes sour if it is not properly stored.
The importance of proper storage of Dahi increases in summer season. Hence proper
refrigeration is required in order to keep it in edible condition. There is space constraint
in retailers visicoolers. In summers there are prolonged power cuts & retailers do not
have back up generators.
8. Lack of interest:
Due to the above mentioned reasons and low volumes of Nestle Dahi
business, distributors are generally not interested in selling Dahi. Hence they are not
placing the order for Dahi as per market potential which in turn reduces the sale and
market share of Nestle Dahi.
SWOT ANALYSIS
Before formulating strategy to increase sale and market share of Nestle Dahi in
Ludhiana, we need to go for the SWOT analysis of the company and its products. SWOT
anaysis is nothing but the analysis of Strengths, Weaknesses, Opportunities and Threats
of a company. By SWOT analysis, appropriate positioning of the product can be done.
Following is the SWOT analysis for Nestle Dahi.
Strengths:
1) Reputed Brand Name:
The main strength of Nestle Dahi is the Nestle Brand name itself. Nestle
company is known for its quality milk made products all over the world. All over the
world, people have trust in Brand name “Nestle”. Even the trademark of the company
“Birds in a nest” represents the values namely the values of security, maternity and
affection, nature and nourishment, family and tradition.
2) Household Item: Dahi is considered to be a household item which is used all over the
country by one way or another. Hence there is huge demand for Dahi all over the
country. Nestle has the opportunity to tap the market. The other advantage for Nestle
is that it has expertise in supplying household consumable items which are considered
to be of good quality all over the world.
3) Strong Distribution Network:
The other strength of Nestle is its strong distribution network. Nestle has
appointed distributors who supply its products through their own channel of retailers.
In Ludhiana alone, Nestle has 3 distributors who cater the needs of around 1100
retailers. Due to this strong distribution network, the targeted segment of people can
easily be penetrated but due to cool chain requirements they have to bear additional
cost.
4) Hygienic Products: Dahi prepared by Nestle is hygienic in nature. It is prepared in automated
plants. In comparison to that, Dahi prepared by unorganized sector is prepared in
traditional way and it is not as hygienic because it is touched by hands. Hence Nestle
Dahi is more nutritious and safer for health.
Weaknesses:
1) High Prices:
The first and foremost weakness of Nestle Dahi is that it has been priced at
higher end as compared to its competitors. Its prices are 60% - 70% more as
compared to its nearest competitor. Since the demand for Dahi is highly price elastic,
people prefer to use other brands available in the market or dahi from unorganized
sector rather to use Nestle Dahi. Hence high prices hamper the growth of Nestle Dahi
sale.
2) Not easily available:
Although Nestle has the strong distribution channel, still it is not able to
reach at every place. Hence Dahi is not easily available at every place. Even in
Ludhiana, where Nestle has strong distribution network, Dahi is not available at all
localities which hampers its growth.
3) Untapped Market:
Nestle has targeted rich, upper and middle middle income group class for
its Dahi which is available in urban areas. With the growth of Indian economy, this
class is also available in rural and semi-urban cities. Bur Nestle is still not able to tap
the market of rural and semi-urban cities. It has also hampered the growth of Nestle
Dahi.
Opportunities:
1) Untapped Market:
The future prospectus of Nestle Dahi is quite bright. Dahi is considered to
be a household item and it is being used all over the country by one way or another.
Hence there is huge demand for Dahi. It gives the ample opportunity to big
companies like Nestle to enter in the market with branded products, which are not
only hygienic but nutritious also.
2) Tapping new avenues:
Nestle has the opportunity to find out new avenues and tap them. It has
successfully tapped and entered the Institutional Market like Hospitals, colleges for
Dahi sale. These can create huge demand for Dahi and hence can boost sale and
market share.
Threats:
1) High Prices:
The first and foremost threat for Nestle Dahi is its high prices than the
prices of the competitor Dahi. Nestle has to compete with unorganized sector and
with organized sector like “Verka”. They are selling Dahi at the prices which are far
less than the prices of Nestle Dahi. Since the demand for Dahi is highly price elastic,
it reduces the interest of the customer in Nestle Dahi which results in reduction of
sale of Nestle Dahi.
2) Stiff Competition:
Nestle has to compete with Branded products as offered by Verka as well
as with the unorganized sector. Both these sectors are giving stiff competition to
Nestle in Dahi market in terms of prices and quality of Dahi. The prices of dahi of
both these sectors are far less than the prices of Nestle Dahi, which distracts the
customer from Nestle Dahi.
3) Insufficient distribution channel:
Although Nestle distribution channel is quite strong in Ludhiana but still it
is not as sufficient as it should have been. It is clear from the fact that Dahi is not
available at all places in Ludhiana.
4) Loss of interest of Distributor:
Dahi is a perishable item which needs to be properly stored in a cool
place. Hence proper storage facility is required for storage and preservation of Dahi.
Most of the retailers of Nestle do not have storage facility. In case, they have the
storage facility, then they have to spend huge amount on its overheads like electricity
bill. Apart from that, the margin in Dahi is not sufficient which can cover the cost
incurred on Dahi. Apart from that, the supply of Dahi is on bi weekly basis, which
customer is not ready to accept. All this results in decrease in demand for Nestle
Dahi.
SUGGESTIONS
Based on the above mentioned reasons for less sale and market share of Nestle
Dahi in Ludhiana, I am giving the following suggestions.
1. The distribution channel should be broadened. More retailers have to be
brought under coverage so that each and every area of Ludhiana should be
covered.
2. The customers as well as the retailers do not have awareness regarding the
availability and benefits of Nestle Dahi. It is advised that advertisement
campaign should be there in Ludhiana to create the awareness of Nestle Dahi.
The mode of advertisement may be newspapers, cable T.V, posters in retailers
shop or free samples to retailers.
3. In order to prompt the sale of Nestle Dahi, there may be a promotional scheme
in Ludhaina. This promotional scheme may be free gift on purchasing the
stipulated quantity or discount in prices.
4. Since consumers prefer to use fresh Dahi, it is advised that Dahi should be
supplied on daily basis. Once awareness is created that the shelf life of Nestle
Dahi is 15 days, then supply may be resorted back to weekly basis depending
upon the demand for Dahi.
5. Some of the retailers of Nestle Dahi does not have fridge in the shop. Hence
either company should provide them fridge for proper storage of Dahi and
other Nestle Products.
6. The price of Nestle Dahi is quite high than the prices of dahi of competitors.
Hence it is advised that the cost components of Nestle Dahi should be
analyzed and prices should be reduced.
Conclusion
Nestle is known as one of the most reputed companies in the world. The
products of Nestle are considered to be of high quality all over the world. Due to
goodwill and reputation earned by Nestle, all the products are doing fairly well.
It is true to say that Nestle has launched a very nutritious product in Indian
market in the form of Dahi. The taste and quality of Nestle Dahi is unbeatable, which
can create wonders in Indian Dahi market. But consumer awareness is required in
order to make this product a success in the market. Since the demand for Dahi is
highly price elastic and consumers do not have awareness regarding the benefits of
Nestle Dahi, they find more value for money in competitor’s Dahi.
Once awareness is created among the consumers regarding the benefits of
Nestle Dahi for them and their family, I am sure that there will be no looking back for
this product.
Dealer FeedDbeack Form1. Name of the Dealer:
2. Address of the Dealer:
3. Contact Person:4. Nestle Products Stored:
5. Whether it includes Curd: Yes [ ] No [ ]
6. If yes, No. of cases sold per month:
200Gm [ ]400Gm [ ]
7. Response in the market:Good in taste [ ]Overpriced [ ]Any Other _________________________________________
8. Complaints: _________ ___________________________________________________________________________________________________
9. If No, whether you want to deal in curd: Yes [ ] No [ ]
10. If Yes, Order for curd (in cases)
200Gm [ ]400Gm [ ]
11. If No, Please specify the reason Not Interested [ ]
High Price [ ]Less Margin [ ]Improper Supply [ ]No Infrastructure [ ]Unaffordable [ ]Lack of Knowledge [ ]Others_________________________________________________
12. What is the duration of Dahi supply? Daily [ ] After 2 days [ ] Any other________
13. Are you satisfied with the supply of Nestle Dahi? Yes [ ] No [ ]