Abhishek randev

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Abhishek randev10902226


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My product nestle

(List of Nestle Products worldwide)Coffee Nescaf, Tasters Choice, Ricor, Ricoffy,Nespresso, Bonka,Zogas, LoumidisWaterNestl Pure Life, Nestl Aquarel, Perrier, Vittel,Contrex,S.Pellegrino, Acqua Panna, Levissima, Vera, Arrowhead,Poland Spring, Deer Park, Al Manhal, Ozarka, Hpar, IceMountain, Zephyrhills, San Bernardo, QuzacOther beverages Nestea, Nesquik, Nescau, Milo,Carnation, Libbys, CaroShelf stable Nestl, Nido, Nespray, Ninho, Carnation,

Milkmaid, LaLechera, Moa, Klim, Gloria, Svelty, Molico, Nestl OmegaPlus, Bear Brand, Coffee-MateChilled Nestl, Sveltesse, La Laitire, La Lechera, Ski,Yoco, Svelty,Molico, LC1, ChiquitinIce cream Nestl, Frisco, Motta, Camy, Savory, Peters,

Hagen-Dasz,Mvenpick, Schller, Dreyer'sInfant foods Nestl, Nan, Lactogen, Beba, Nestogen,Crlac, Neslac,Nestum, Guigoz, Good Start


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Performance nutrition PowerBar, Nesvita, NestonHealthCare nutrition Nutren, Peptamen, ModulenBouillons, soups,

seasonings, pasta,saucesMaggi, Buitoni, Thomy, WiniaryFrozen foods (prepareddishes, pizzas)Maggi, Buitoni, Stouffers, Lean Cuisine, Hot PocketsRefrigerated products(cold meat products,dough, pasta, pizzas,sauces)Nestl, Buitoni, Herta, Toll HouseChocolate,confectionery and

biscuitsNestl, Crunch, Cailler, Galak/Milkybar, Kit Kat, QualityStreet, Smarties, Baci, After Eight, Baby Ruth, Butterfinger,Lion, Aero, Polo, RoloFoodServices andprofessional productsChef, Davigel, Minors, Santa Rica

Petcare Friskies, Fancy Feast, Alpo, Mighty Dog,Gourmet, Mon Petit,Felix, Purina, Dog Chow, Pro Plan, ONE, Beneful, Tidy CatsPharmaceuticalcompany


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AlconPharmaceutical andcosmetic joint ventures

Galderma, Laboratoires

Nestle India and BCG MatrixWith headquarters at Vevey, Switzerland and established in1866, Nestle has growthtoday to be the worlds biggest food and beveragescompany. Established in the strong

(2) Cash Cows represent a high market share in a lowgrowth market. These tend to yieldsubstantial cash surplus over and above their investmentrequirements. Now cash cows are notvery attractive for long term investment but they are neededfor generating cash to meet theorganizational requirements. There is a furtherclassification in them as strong or weak cashcows. Strong cash cows are those who were stars in thenear past and generate substantialamount of cash surplus while weak cash cows are thosewho might have been stars in remote

past and whose cash generation capacity is not high. Such

weak cash cows should beconsidered for divestment.(3) Dogs represent those businesses which have a lowmarket share in low growth market. These


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businesses have a very low competitive position and havevery low profit potential as the marketitself has a low growth potential. Therefore they are not

attractive from a long term point of view.These businesses may be harvested or liquidated as theydo no generate enough cash tomaintain their position in the market, especially on accountof the highly competitive market.(4) Question Marks are those type of businesses which arecharacterized by the low market share ina growing market. These products are questionable as towhether profit potential associated withgrowth can realistically be captured. These question markshave two alternatives (i) either togrow them into stars if additional investment can bringthem into such position or (ii) to divest

them, if costs of strengthening them are quite high ascompared to returns

A STUDY OF THE CONSTRUCTION OF BCG MATRIX FOR NESTLE INDIA

Nestle has a wide range of products and is the marketleader in food business over the

world. However, it has a limited number of brands on India.The peculiarity of thesebrands is that those brands which are established ones arereally ones which dominate


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the market and make almost no room for any competitionwhile, the brands which arenot so well established are not so on account of any

qualitative deficiency but eitherbecause of a weak promotional campaign of the companyor on account of amisplacement of the product in the target segment.Nevertheless, we go ahead with ourstudy.The present chapter is devised in the manner that theoverall matrix comes first andthen each products placed on the matrix is explained as towhy it finds a place in thegrid it has been placed in the matrix, along with the relevantempirical data reproducedtherein.

Also, in the matrix itself, though the products have beenplaced in one of the categories,their projected placement i.e. where should be or can be

placed with a promotionalexercise, is also indicated by an arrow which shows theappropriate category in whichthe product is aimed to be placed. For example, Maggi

Noodles has been the pioneer ofthe Noodle industry in the Indian market. But as far asNestle is concerned, it is only acash cow. Therefore it is aimed to be placed in the Stars.This is indicated by an upward


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arrow which signifies that the product is aimed forrepositioning and the direction of thearrow shows the grid where it is heading to, in this case

upward arrow is indicating tothe stars.

Also, besides the intended placement of the products, thereare some products whichneed to be taken off the market. For example, Nestlsworld dominating brand of water,Nestle Pure Life, was taken off the Indian market on29.12.2003 when strategically itwas found unviable to continue with it. This shows theintention of Nestle not to play inthe Indian water market though it has a well establishedbase of the same brand abroadand it could have reaffirmed a market share had it decided

to introducePerrier

, anotherfamous water brand of Nestle.

Product: Nescafe

Position: StarReasons for present positioning:(1) Nescafe is one of the leading coffee brands in the Indianmarket.


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(2) It has find a dominance which is unparalleled by anyother brand in the country.(3) Not only does it have a high market share but it growth

rate is also significantlyhigh.(4) The name Nescafe has become generic with coffee.Intended Placement: Comments:(1) Nescafe has witnessed a substantial growth in the

present times and seems tocontinue dominating the market for some time.(2) Nestle India must look in for expanding the number ofconsumers in the North asit has in the South.(3) It kept on bringing new variants in order to hold on to its

position.

(4) The market share is firm and needs to majorrepositioning.Product: CeralacPosition: StarReasons for present positioning:(1) Ceralac has become one of the leading baby food

products

(2) It has witnesses quite a long hold in its market sharewith its sales increasing ona continuous basis for almost more than one and a halfdecade.


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(3) Its different variants have kept competitors at bay andits finds a place easily atalmost every general or provisional store in the Indian

market.(4) It is a major contributor for Nestle Indias revenues.Intended Placement: Comments:11(1) With the increase in population and the growth market inthe country Nestle Indiacan do much better in terms of registering more shares byan aggressive

promotional drive.(2) It needs to take aggressive steps to enter into thosehouseholds wheretraditionally followed methods of feeding new born infants

are followed. Themarket exists for Ceralac to expand and though it is alreadya star, it can domuch better in terms of expanding its shares by adoptingmarket developmentstrategies.Product: Maggi Noodles

Position: Cash CowReasons for present positioning:(1) It is surprising to note that Maggi Noodles, which hasfound more households of


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consumption in India that any other country in the worldand has become the first

preference of Indian children in terms of instant food, is

only a cash cow and nota star.(2) The reason essentially lies in the fact that though MaggiNoodles has asignificantly high market share in the Noodles market inIndia, the market growthrate of Noodle consumption is not very high.(3) Though the number of repeat purchasers is high in caseof Maggi, the rate ofincrease among the new purchasers is not too high.Intended Placement: StarComments:(1) Maggi Noodles is undoubtedly the leader in the Noodles

market and facesalmost no competition which might threaten its existence innear times, yet thetarget placement of Maggi Noodles seems to be at fault.(2) Instead of continuing to target the children, MaggiNoodles should now alsoconcentrate on placing the products for Office Executives,

Mid wives, Youngadults, and the elite wing of the society.(3) The need presently is to expand the market or in factcreate new markets forMaggi Noodles.


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12(4) Therefore, the task for Maggi Noodles lies ahead forMarket Development and

thus expanding the consumer base in the presentlyunexplored sections of thesociety.Product: MiloPosition: Question MarkReasons for present positioning:(1) Though Milo has not totally been removed off theshelves of the stores andcaters to the demand of the consumers arising on accountof absence of other

products in the same design (e.g. Bournvita, Complan,etc.), it has been unableto acquire a market in the basis of its brand name.

(2) The reason why it is not placed as a dog is that it hasthe potential to expandand also because the product lies in a market with highbusiness growth rate.(3) The retailers dont give much importance to Milo as anitem on the shelf but theyalso do not completely disregard it off their stores.

Intended Placement: StarComments:(1) Milo is a food drink with a bit subtle taste and not thatsweet as its competitors


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as a leader. But as far as Nestle is concerned, it is notturning up that size ofrevenues which every top brand contributes to Nestle.

(2) Maggi Sauce has been highlighted with top televisioncelebrities but there was aconsiderable time lag of more than five years in the twomajor promotionexercises Maggi Sauce has witnesses; once in the early1990s and the onewhich is going on presently.(3) Maggi Sauce, acknowledge the retailers, has thecapacity (both on account ofthe reasons of price and taste) to wipe out competitors(both the branded as wellas the local ones) and thus has huge potential to beconverted into a star.

Intended Placement: StarComments:(1) Though it has been kept as a question mark yet, MaggiSauce has the potentialof turning all odds in its way to become a dominatingbrand.(2) Competitors like Kissan, Tops (especially in north India)

etc. do not pose anybarrier in the growth of Maggi Sauce as the leader.(3) Extensive market development, followed by an extensive

promotion drive in all


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(1) Placing Maggi Pickles on the hearts and mind of thetypical taste centric andmoney conscious Indian consumer will require an

overhauling and hugeinvestment.(2) Extensive price cuts are required but the matchingreturns are doubtful.(3) Pickles being a non-durable product and their successessentially related to thetaste of the consumer, are not one of the corecompetencies of Nestle, which isbetter known to introduce standard taste in the country andget them approvedby the consumers.(4) Thus it is better advised to disinvest in the business andfocus on other brands.

Product: Maggi SoupPosition: Question MarkReasons for present positioning:(1) With the success of Knorr and other local packed soup,it is clear that packagedsoup market in India has a good future.(2) Maggi Soups have never been rejected by the consumer.

(3) According to the retailers, the demand for soup itself isunderdeveloped and thusthere is no indicator critically against the success of MaggiSoup.Intended Placement: Star


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Comments:(1) Maggi Soup needs to dominate the market but beforethat it has to develop the

market itself.(2) The demand for packages soup is underdeveloped andthus there is a need forextensive market development strategies.15(3) The advantage of Maggi Soup in going in for suchmarket developmentstrategies is that it will get the advantage of early start andthus like MaggiNoodles it can make a monopoly on packaged soup.(4) The development of the market is to be based on thetwin principles of thenutritive contents of the soup as well the convenience and

taste, which make it asuitable alternative for other fast food.Product: Kit KatPosition: Question MarkReasons for present positioning:(1) Owing to crispiness and superior quality, Kit Kat has anupper edge over its

competitors.(2) Had this survey been made a couple of years ago, maybe Kit Kat would havefound the position of a Cash Cow because of the marketshare it acquired in a


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fairly decent and yet to develop wafer-chocolates market.(3) However, on account of the rise of competitors,especially Perk, Kit Kat seems

to have loosened up its grip in the market and has lostsome of the prominentrecognition which it commanded earlier.(4) It is placed as a Question Mark as the brand has the

potential but lack asignificant market share as of now. Also, a mererepositioning in the marketsegment can lead to the success of the brandIntended Placement: StarComments:(1) Kit Kat is one of the major successful brands of Nestle,which has proclaimed itsdominance and success world over, ruthlessly dominating

the European and theSouth American markets. There is no reason why it cannotrepeat the story of itssuccess in the Indian markets as well.(2) Kit Kat needs to emphasize over its superiority in termsof quality as well as thesuperior taste over its competitors.

(3) Kit Kat needs to adopt a market penetration strategy andfor doing so it needs tostart on an aggressive promotional drive. Not confined onesegment, it needs to16


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target on the market executives, the University going folk,and house wives andthe elderly in specific quarters and all segments at a time.

(4) Kit Kat is already prominent as a brand name in thecountry. The onlyrequirement is to capitalize upon it.Product: Bar OnePosition: Question MarkReasons for present positioning:(1) Though was in prominence for quite long a couple ofyears back but its salesnever really clicked. The qualities which a leader exhibitswere never shown byNestle wherever Bar One was concerned.(2) In tight competition for the market leader spot with FiveStar, Bar One has

superiority as far as its ingredients are concerned. It alsosells well. Nonethelessthere seems to be some barrier for which the retailers seemto recognize it onlyas a market challenger with subtle features.(3) Bar One has a growing market but lacks a considerablemarket share. Thus it

finds the place as a question mark.Intended Placement: StarComments:(1) Market already exists for Bar One. The need is of market

penetration.


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(2) Bar One needs to focus on the adolescences who seemto be the major buyersof chocolates of this type.

(3) The Rs. 5/- which it has recently introduced is a classicexample of cashing inthe consumer psyche but it cannot be denied that it hasdone so following theexample of Five Star. It needs, therefore, to take moreinitiatives but more so ofits own accord and not as a follow up measure.(4) Bar One needs to pursue a strategy of market

penetration, as already stated, butit also needs to emphasis on the fact that it has to sell itselfin the market as achocolate. Though it is in the form of a bar but it still facescompetition from other

forms of chocolate wherein Cadbury is the toughestcompetitor to it. Thus it hasto go on an extensive promotional drive and also illustratethe superiority of bar17over the other forms of chocolate both in terms ofconvenience while

consumption as well as the price.Product: Nestle MilkPosition: Question MarkReasons for present positioning:


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(1) Packaged milk has not found much market till the laterhalf of the 1990s.However much market in this regard has been taken over

by the localmanufactures for example Mother Dairy in Delhi, Saras inRajasthan etc. Amul isone such competitor which gives competitor to Nestle on anational scale.However, Nestle Milk has not really find a place in themarket that it can be saidto be known at least to the typical Indian consumer, if notunanimously chosenby him.(2) The fact which tends to place Nestle Milk in the categoryof a Question Mark isthe sheer emergence of packaged milk market which is

finding gloss in India.More and more Indian are not favoring packaged milk andin fact in most of theurban households it is only packaged milk that is used.However, on account ofnon-capitalization of Nestle Milk of the growing share inthis market, is finds a

place in the Question Mark.Intended Placement: StarComments:(1) Once the fact that packaged milk in India has a huge

potential and the market


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(2) Considered as salt less, Nestle butter again is yet togrow from its pre-launch

position on account of the huge competition it faces from

Amul, the marketleader in this field.(3) Now, as the market growth rate is quite significant, yetas Nestle Butter has notacquired a better share in the market, it has been placed inthe category ofQuestion Mark.Intended Placement: DisinvestComments:(1) Facts do not favour Nestle to continue with its butter.(2) Instead of no response, a significant number of retailersare of the opinion thatNestle Butter seems to be rejected by the consumers for

the reason that its tastedoes not suit the Indian psyche.(3) Thus it is advisable for Nestle to discontinue with butter,as it did with its waterbrand, Pure Life. Also, it would be better to concentrate onother brand than togo in for a head on collision with Amul, the market leader,

which is inevitable onaccount of the same market which both the products caterto.Product: Nestle Fruit N MilkPosition: Question Mark


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Reasons for present positioning:19(1) Nestle itself seems to be unclear as to which market it

has been targeted to. Onown side it is a fruit drink with pleasant flavors, on theother head, it is a healthdrink with nutrients of milk as well as fruits.(2) Also, the placement of the brand is dubious. While itfinds a place with retailer ofsizeable capacity, it seems absent from other health and

juice shops. Thus therehas to be a definite decision of made by Nestle as to the

placement of NestleFruit N Milk.(3) The product however, on its own accord, has not been afailure totally. It seems

to find a place consistently in some of the firms but thereare no regularconsumers for the products the consumers are eitheroccasional users are thosewho have a flair to try new products.(4) The market for health drinks, however, is growing andthe health conscious

Indian consumer is now choosing a health drink like Realthan just going in forcold drinks and other junk food.Intended Placement: StarComments:


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(1) Despite the fact there has not been much promotion ofNestle Fruit N Milk byNestle itself but the fact that it has not been rejected by the

Indian consumer initself is a positive signal.(2) The present step, therefore, that needs to be taken byNestle is to promote it in a

pre-defined market, wherein placing it as a health drinkwould be mostfavourable to Nestle towards establishing it as a successfulbrand.(3) Thus, Nestle Fruit N Milk needs to be placed as acompetitor to Real fruit juiceand there is a certain prospect for this to succeed onaccount of the fact that itgives additional features than Real, which is only a fruit

juice but Nestlsproducts offers the nutrients of both fruits as well as milk.(4) Therefore the need for Nestle is to go in for MarketDevelopment Strategy andcapitalize on the growing concern of the Indian consumerof going in for healthdrinks.

(5) The aim is to place Nestle Fruit N Milk as the genericbrand for health drink to atypical middle class Indian consumer.20Product: Nestea


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Nestea but there are a multifarious reasons for whichdivestment of Nestea isrecommended.

(2) Firstly, even if the taste of Nestea is changed, it is veryhard to change themindset of the typical Indian consumer who are moreattached to taste than toany other consideration in case of tea.(3) Secondly, Nestea, as a foreign brand of tea shall have toface the xenophobicattitude of the consumer who prefer to consume localflavors or say variants oftea than any other foreign tea as illustrated by Ruby Dust inMaharashtra Circle.(4) Also, going into the local taste has never been theattitude of Nestle. Instead it

has always chosen to go in for making the foreign tasteaccepted to the localconsumers. The same story has been told by the successof Maggi Noodles,Nescafe, Kit Kat etc. and wherever it has beenunsuccessful, it has been21

advisable to disinvest the brand from the product line ashas been done forNestle brand of waters.Product: Milky BarPosition: Dogs


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Reasons for present positioning:(1) It become quite popular in and around the year 2000 butit never reached the

stage of a power brand.(2) Primary tried by the Indian consumer as a craze whichlaid in trying the first nonbrownchocolate, Nestle Milky bar was a sweet chocolate withcream color. Thusthe primary acceptance of Milky bar was not based on itscore qualities but onthe basis of certain peculiarities which it contained,differentiating it from other

products in the same line.(3) Milky Bar, as a chocolate, though has a growing market,yet it has been placedas a dog on account of the inherent lack of core quality

which makes it genericwith chocolates. This was the main reason why it was neverconsidered acompetitor by other chocolate manufactures and theconsumers also treated itso.Intended Placement: Disinvest

Comments:(1) Milky Bar has lost the primary battle which it had withmindset of the unawareIndian consumers who could never contemplate a non-brown chocolate.


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(2) The market positioning of Nestle Milky Bar has beenonly to children (as one cancontemplate from the advertisements which relate only to

children in the agegroup of 10 -15) and thus it has lost the adolescentconsumer, which is also amajor part of the entire consuming segment of chocolates.(3) The promotion style of Milky Bar has never beendominating. Theadvertisements have been too soft and not too impressive.Thus success ofMilky Bar requires rebuilding the image of Milky Bar.22(4) The cost benefit analysis also shows that continuingwith Milky Bar is expensiveas the amount required for its promotion and development

has not led to thesame amount of returns.Product: Nestle DahiPosition: DogsReasons for present positioning:(1) Majority of the consumers are unaware that Nestle offersa Dahi also.

(2) The launch of Nestle Dahi has been in select cities butthere too only selectoutlets retail it. (It is not offered in Jodhpur)(3) The concept of packaged Dahi is not being accepted bythe consumer who


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prefers to play it safe with the local manufacturerwherefrom he can keep acheck on the qualitative content of the product as well

before consuming it.(4) Thus, lack of a growing market makes Nestle Dahi to be

placed in as a Dog.Intended Placement: DisinvestComments:(1) Dahi is a product which is best if considered fresh. Thistraditional mentality ofthe Indian consumer is the biggest barrier in the success ofNestle Dahi.(2) The concept of packaged Dahi is yet to materialize inIndia. Therefore its launchby Nestle is premature.(3) It is advisable to leave the avenue then to go in for

market development in thiscase when there is big risk of the failure of the entireinvestment to doom onaccount of the psychic barrier of the consumers.Product: Crunch and Munch(Since both these chocolates of Nestle cater to the samemarket and are also similar in

composition and variety, they have been consideredtogether in this case)Position: Dogs


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