Distribution Development for Nestle RTD Products - Management Assignment Help

Assignment Task:

Task:

This is to certify that the project entitled “Distribution Development for Nestle RTD Products”, submitted to Universal Business School, Mumbai (Karjat) in the partial fulfilment of the requirements for the award of the Post Graduate Diploma in Management (PGDM) embodies the results of bonafide project work carried out by Aayush Mishra under the guidance and supervision of Prof. Guruprasad
To the best of my knowledge the results embodied in this project have not been submitted to any other university or institute for the award of Degree or Diploma. The assistance and help received during the course of this investigation has been duly acknowledged.
Faculty Guide Name:Program Director (PGDM): Prof. Vijay Tandon Prof. Guruprasad MuthuseshanDate: 24/07/2020 Place: Mumbai (Karjat)
Acknowledgement
It gives me immense pleasure to present this Concurrent Project Report. However, it would not have been possible without the help and support of all the team members of Nestle
I would like to thank my Company guide Rahul Madotiya and Faculty guide Prof. Guruprasad for guiding me in my tenure of internship on “Distribution Development for Nestle RTD Products”. Without their support and guidance, I wouldn’t have come so far to prepare this report.
I would like to express my thankfulness to Placement team of Universal Business School, who gave me this great opportunity to work on this Interesting project.
I am also grateful to my loving parents and my kind friends whose prayers, affection and support are always a source of encouragement. Their suggestions and supply of information were really very valuable and helpful to me. Their continuous encouragement and support helped me for completing this project successfully.
Name: Aayush Mishra.
Batch: PGDM/6
Roll No: 1904 Specialization: Marketing
Universal Business School, Mumbai (Karjat)
Table of Contents
Sr. no. Topic Page no.
1. EXECUTIVE SUMMARY 10
2. Part A: Industry Profile 12
3. Company Profile 16
4. Background and Inception of the company 17
5. Nature of business carried out 19
6. Vision and Mission Statement 19
7. Products 20
8 Competitor’s Landscape 27
9. Achievements and Awards 29
10. Part B 30
11. Work-Flow Model 31
12. PESTLE Analysis 32
13. SWOT Analysis 34
14. Industry Key Success factors 35
15. Challenges & Issues before the company / Product 36
16. Research 38
17. Literature Review 39
18. Recent News 40
19. Research and Analysis 41
20. Key Objectives 42
21. Sample Design 43
22. Data Analysis 45
23. Learning Experience 52
24. Questionnaire 54
25. Bibliography 58
EXECUTIVE SUMMARY
During the tenure of this internship, I was appointed as a sales representative for Nestle Ready to Drink (RTD) products and was responsible for Distribution Development of these products by creating new channel partners for the company. The product falls under Food and Beverage segment of the FMCG industry and summer season is the prime time for its sales and hence learning about consumer behavior and buying behavior was easy.
When appointed as a brand promoter I acquired many skills and abilities such as
Negotiation
Relationship management
Conflict management
Sales analysis
Consumer Analysis
Sales closer
Sales target
During the time of Internship, I have also collected data from the customer regarding their buying behavior, brand awareness etc. to know the consumer buying behavior and what are the attributes that affects consumer’s decision while purchasing this product.
The data was collected from 150 people and hence put in a statistical format to understand the consumer buying behavior and the brand awareness.
Nestle provides superior quality with competitive pricing strategy but still needs to improve its condition in terms of marketing, packaging and pricing to become the market leader in the RTD cold coffee/tea segment.
Part A: IndustryProfile
Fast-moving consumer goods (FMCG)
FMCG are nondurable goods, or goods that are consumed at a rapid pace and have a short lifespan. These products are consumed daily by every strata of the society irrespective of income group, social class, age group etc. The 3 main segments of FMCG are-
Food and Beverage (F&B) - This segment includes health beverages, bakery products, staples/cereals, snacks, ice cream, tea/coffee/soft drinks, chocolates, dairy products, processed fruits and vegetables, and branded flour.
Healthcare- This segment includes OTC products and ethicals.
Household and personal care- This includes hair care, oral care, cosmetics/deodorants, skin care, perfumes, feminine hygiene and paper products, fabric wash, and household cleaners.
The Fast Moving Consumer Goods (FMCG) sector is the fourth largest sector of Indian economy and a key contributor in Nation’s GDP. This sector is expected to grow at 9-10 per cent in 2020 and 2021. Accounting for 50 per cent of the overall market, household and personal care is the leading segment followed by healthcare (31 percent) and food and beverages (F&B) (19 per cent) of market share. (India Brand Equity Foundation, 2020).
The presence of domestic and multinational companies and unorganized sector in this industry makes it a highly competitive sector. Firms like ITC, Hindustan Unilever, Nestle and Marico are the major players in the industry.
Urban segment, contributing to a revenue share of around 55 per cent, is the largest contributor to the overall revenue generated by the FMCG sector in India. Also, growing at a rapid pace, Rural segment accounted for a revenue share of 45 per cent in the overall revenues in FMCG sector in India. FMCG products account for 50 per cent of total rural spending. (India Brand Equity Foundation, 2020)
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Since the product in consideration under this report in a Milk based Ready to Drink Cold Coffee by Nestle which comes under the subsection of Food and Beverage (F&B), the focus of this report is on the F&B section out of the entire FMCG space.
Food and Beverage Industry
Ready to Drink (RTD) beverages are processed drinks that are ready for consumption. With increasing awareness for health and hygiene, ease of use, demand for clean label and functionality are just some of the contributing factors pushing the rapid growth in the RTD category.
RTD beverages market is broadly bifurcated on the basis of Type and Packaging type.
By Type, RTD beverages are classified as-
Types of
Beverages
Alcoholic
beverages
Non-alcoholic
beverages

The later segment is further divided into-
Coffee & Tea
Nectars
Juices & smoothies
Carbonated
Soft drinks
Sports & energy drinks
Others
The major market share is dominated my non-alcoholic beverages & is expected to be the fastest growing in the global RTD beverages market.
Based on Packaging type, the global RTD Beverages market has been bifurcated in
Bottles,
Cans
Cartons
Others.
Based on packaging, the market is dominated by Bottles segment and growing with highest CAGR during the review period.
In India, Food and Beverage Industry is worth $400 billion and has been considered as a priority sector under “Make in India” initiative. The Indian food and beverage market is projected to display a robust growth represented by a CAGR of 7.2% during 2019 - 2024. (Azoth Analytics, 2019)
Growing youth population, rising income and convenience are the biggest growth drivers of the Ready to Drink beverage market. Millennials are preferring to socialize over a drink. The market is growing at 20-23% and is expected become three times the current size by 2020.
Under RTD market, there is a growing potential for milk based RTDs like milkshake, cold coffee, lassi, butter milk etc. as consumers are becoming health conscious and preferring to drink something healthy instead of carbonated beverages which contains a lot of sugar. Companies like Amul and Nestle has captured this segment of the market by dominating the market share completely.
CompanyProfile
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Nestlé SA, Switzerland is considered to be the world’s largest food and beverages conglomerate. NESTLÉ India is a subsidiary of NESTLÉ S.A. of Switzerland with headquartered in Gurgaon, Haryana and is one of the biggest players in FMCG segment. The company has evolved from a food and beverage company to a respected, trustworthy food, beverage, nutrition, health and wellness company. Company’s tagline “Good Food, Good Life” encapsulates this objective.
The food business of the company incorporates product lines such as milk products and nutrition, beverages, ready to eat food products and cooking aid, confectionery and chocolates. The most prominent brands of the company are Nescafe, Maggi, Kit Kat, Milky bar, Milo, Bar-One, Nestea and Milkmaid. It has presence in 86 countries around the world with 511 factories. The company employs a total of 335 000 employees globally and we market our product in over 150 countries.
In India the company has 8 manufacturing facilities and four branch offices which are spread according to the concerned region situated in Delhi, Mumbai, Chennai and Kolkata. The company is recognized among the ‘most respected company’ and one of the top wealth creater in Indian share market.
Background and Inception of the company
Henri Nestle
The company’s history goes back to 1866, when US brothers Charles and George Page establish Anglo-Swiss Condensed Milk Company. In 1867, Henri Nestlé developed infant food in 1867 which was a breakthrough and started marketing it under the name farine lactée (‘flour with milk’) in Vevey, Switzerland.
Fierce competition developed between Nestlé and Anglo-Swiss as both the companies were selling rival versions of the other’s original products: infant cereals & condensed milk. Later in 1905 the Nestle merged with Anglo-Swiss its fierce rivals in U.S. to form what is now known as the Nestlé Group.
During the world war in 1914, the demand for condensed milk and chocolate but limits on cross- border trade and a shortage of raw materials and hamper production for Nestlé & Anglo-Swiss. The company overcame this problem by expanding its production facilities in the US and Australia, and by the end of the war it has 40 factories.
These factories were established in developing countries, particularly Latin America. Ironically, the war helped with the introduction of the company's newest product, Nescafé, which was a staple drink of the US military. Nestlé's production and sales rose in the wartime economy. The company witnessed a tremendous growth and then began the new era of expansion and acquisition for the company. In 1947 came the merger with Maggi seasonings and soups. In the same year, Nestlé diversified beyond food and drink, and became a minority shareholder in global cosmetics company L’Oréal.
After independence, the emphasis of India’s economic policy was on local production. Identifying this opportunity, Nestle formed a company in India and started its first plant in Moga, Punjab, in 1961, where the company helped to regional farmers to leave their mark in the milk economy of their country by educating them on increasing milk yield, dairy farming, scientific crop management,
By setting up milk collection centers in this region, the company ensured prompt collection of milk with timely ang regular payment to the farmers which instilled a sense of confidence among the community and the company became a trusted brand in this region.
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Nestle Logo till 1970
Over the years, Nestle India became a major player in processed foods and built strong brands like MAGGI, NESCAFE, CERELAC, LACTOGEN, KITKAT and POLO. Nestle is the biggest shareholder in market in various segments of the FMCG sector such as noodles and sauces [MAGGI], instant coffee [NESCAFE] and weaning foods. Nestle products are not only sold across India but are also exported to USA, Japan, Russia, Hungary, and several other countries.
Among these, some prominent are products Nescafe and Lactogen, and select culinary products to meet the demand of the ethnic Indian population living abroad. For three continuous years [from 1999-2000 to 2001- 2002], Nestle India was recognized with the top Exporter Award for export of Instant Coffee, and for export of all coffees to Russia and CIS Countries.
The culture of continuous improvement, innovation and renovation, and the thrust on value-for- money and affordability have been the major growth driver and enabled the company to focus on adding value for the consumer. The company emphasized on improving product availability, operational efficiency and visibility and initiated efforts to make its products more relevant to the consumers. Supporting this was the distribution of smaller stock keeping units (SKUs).
In 1986 the company launched Nespresso with a simple idea: enable anyone to create a perfect cup of coffee, just like a skilled Barrista. Later in 1988, Nestlé bought UK confectionery company Rowntree Mackintosh, adding brands including KitKat, After Eight and Smarties to its portfolio.
In 2003, Nestle acquired Dreyer’s Grand Ice Cream expanding its ice cream business.
In 2016, the company launched Ready to Drink Cold Coffee in 3 different variants in tetra packs, later in 2018, these coffees were launched in Cans as well.
On 20 March 2017, Nestle India announced the launch of MILO Ready to Drink cocoa malt milk beverage targeting children. This product contains less than 10gm sugar per tetra pack.
Over the years, Nestle has expanded its business in Health care as well as skin care sector and growing strong.
Nature of business carried out
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 price
Nestlé India manufactures products under various product lines like Beverages, Breakfast cereals, Chocolates and confectionery, Dairy, Nutrition, Foods Vending food and services.
Vision and Mission Statement
Mission Statement
Nestle is the world's leading nutrition, health and wellness company. Their mission of "Good Food, Good Life" is to provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night. (Nestlé , 2019)
Vision Statement
To be a leading, competitive, Nutrition, Health and Wellness Company delivering improved shareholder value by being a preferred corporate citizen, preferred employer, preferred supplier selling preferred products. (Nestlé , 2019)
Products
Nestle’s product mix has one of the widest and deepest product lines among all the food and beverages companies across the word with some of the most trusted brands like Maggi, KitKat and Nescafe. Let’s take a deep dive into the companies most successful products and brands.
NESCAFÉ
914400199399
(Nestle, 2020)
It is one of the world’s most loved coffee brands and has made itself known to as many as six generations. This beverage product line consists of brands like-
Nestea
Latte
Sunrise
Gold.
Over the past 75 years, NESCAFÉ has grown on the commitment to a promise- to maximize the enjoyment and ease of preparing a cup of coffee. The success of this product line is based on breakthrough innovation and a strong commitment towards enhancing the coffee experience of the consumers.
922692-106299Breakfast Cereals
914400149686
(Nestle, 2020)
Nestlé Breakfast Cereals has been a part of mornings in over 130 countries around the globe. With a commitment to live by the company’s tag line “Good Food, Good Life” and provide its customers with healthy options for breakfast.
These products have star ingredient ‘Whole Grains’ that contains Fiber, Vitamin D, Calcium and B-Vitamins. Nutritious and delicious at the same time.
The company sells cereals under the brand names-
Nestle NesplusKoKo Crunchy
Chocolates and Confectionery
914400102461
(Nestle, 2020)
NESTLÉ has applied the concept of Multiple Branding in this product line and have different brands of chocolates in its portfolio. KITKAT is one of the most successful brands in the world and every year over 12 billion NESTLÉ KITKAT fingers are consumed around the globe. (Nestle, 2020). Other prominent brands under this product line are
Munch
MilkybarBar-one.
Eclairs
Polo
Foods
914400120588
(Nestle, 2020)
Nestle has successfully applied the concept of Brand Extension by extending its most successful brand name, Maggi to various product categories like-
Maggi 2 Noodles
Nutri-liciousFusion
Cappa Noodles
Maggi Ketchup
Maggi Cooking Aids
Maggi Pasta
This brand contributes highest in the overall sales of the company across the globe. Maggi noodles is the highest selling product of the company and has the lion’s share in the market.
Nutrition
914400152920
(Nestle, 2020)
The company applies the concept of Multiple Branding in this category. Nestlé India has a wide portfolio for Milk Products and Nutrition. In fact, this was the first product that was marketed by Henri Nestle which was considered as a break-through. This product category has brands like-
CeregrowNangrowLactogen
Dairy
914400149619
(Nestle, 2020)
Nestle has a wide rand of dairy products like Ready to Drink (RTD) Cold Coffee, Yogurt, Milkmaid, Milk, Buttermilk, Raita, Dahi. These products are sold under the brands like-
Nestle a+
Nescafe
Milkmaid
Products in focus
During the tenure of this internship, the objective was “Distribution Development of Nescafe Ready to Drink (RTD) Products” which is sold under Nescafe Brand. The Products is focus are Nescafe RTD Cold Coffee and Nestea.
Nescafe Cold Coffee- With the preposition of providing consumers ready to drink coffee with thick, velvety smoothness. This product was positioned as a perfect chill buddy on a hot, hectic day. The company applied Brand Extension and launched the product in 2016, in 3 variants in tetra pack-
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Nescafe Chilled LatteNescafe HazelnutNescafe Intense Café
Later in 2018, the company launched 2 variants in Cans-
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Nescafe Chilled LatteNescafe Intense Café
Price Point-
Variant Price
Tetra pack (180ml) Can (180ml)
Nescafe Chilled Latte Rs. 35 Rs. 50
Nescafe Intense Cafe Rs. 35 Rs. 50
Nescafe Hazelnut Rs. 35 -
The product has a shelf life of 180 days and is made from Robusta Beans which are grown in South India.
80% milk base that gives a thick consistency to the drink.
Sturdy Tetra pack and Can packaging prevent the product from pilferage.
Nestea (Iced Tea)- It infuses tea extracts with a tangy lemon and peach flavor.
21904031593894660087201859
Nestea PeachNestea Lemon
Variant Price
Nestea Peach Rs. 25
Nestea Lemon Rs. 25
Go to Market Strategy-
Cold beverages are an impulse purchase product among teens & youth and thus availability at key touchpoints is important. Thus, the strategy is to engage youth with Ready to Drink products at the point where the brand has spot for reaching out to the right mix of target audience. This target audience comprises of-
Teens & Youth
Age group: 16 to 28
Students & Young Professionals
Health Conscious people
Out of Home Consumers
Such target audience is majorly found at educational institutes, corporate offices, transportation touch points like bus stand, railway stations.
Hence, the focus area for the sale of this product were-
Colleges
Hospitals Canteens
Corporate Offices
Universities
Educational Institutes
Café &
Canteen

Hence, for distribution development of these products, the approach was to -
Create a data base of Different college & Universities along with Address.
Create Itinerary considering travelling time & Priority.
Approach the Retailor/ Vendor and presenting them the business model and create RTD channel partners for Nestle Ready to drink portfolio.
Path to Conversion
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Competitor’s Landscape
The global ready to drink (RTD) tea and coffee market size was estimated at USD 75.25 billion in 2016, growing at a CAGR of 5.6% from 2017 to 2024. (Grand View Research, 2018). The market is highly competitive in nature and is, therefore, likely to witness new product development as one of the most commonly adopted strategies. Currently, Nestle is directly competing in cold coffee segment with companies like Amul, Cevins, Starbucks and Cream Bell in the market.
Packaging Insights-
PET Bottle emerged as a dominant segment accounting for 31.7% of the total industry revenue. (Grand View Research, 2018). Ease of handling and low cost of manufacturing, reusability and recycling are the major growth drivers for this type of packaging. These can be moulded in different shapes and are available in may colours which prompts to a large number of manufacturers adopting this type of packing. Amul holds the edge over nestle in this segment with a lower price point.
Canned packaging was the second largest segment that accounted for 27.9% of the revenue share. (Grand View Research, 2018). Enhance product shelf-life and flavour preservation is the reason behind this growth. As it improves the brand image of the product in the minds of the consumers,

the manufacturers also prefer canned packaging. Nestle faces a tough competition from Amul in this packaging type.
Glass Bottle owing to its recyclability and reusability property, this segment is expected to witness the fastest growth rate over the projected period. This packaging type enables brands to create greater impact in terms of quality of the product in the minds on consumers and improve their brand identity. Amul is the only company that sells cold coffee in class bottles in regular price range.
Pricing Insight
The premium price segment emerged as a dominant segment accounting for 36.9% of the revenue share. (Grand View Research, 2018). As manufacturers are introduce new flavors and trying to capitalize on premium products comprising these flavors the demand is expected to grow.
The regular price segment was the second-largest segment that accounted for 36.2% of the total revenue share. (Grand View Research, 2018). This segment products enable the companies to cater to a large number of customers.
The demand for RTD tea and coffee is moderate and expected to grow gradually over the forecast period
Here is a side by side comparison of Nestle’s product with its competitors in terms of pricing, packaging type and quantity-
Nescafe AmulKool Café, Koko Cream Bell Cavin’s Starbucks
Price Rs. 35/ 50 Rs. 25/30 Rs. 30 Rs. 25 Rs. 300 and above
Packaging Tetrapack/ Can PET,Glass Bottle/ Can PET Bottle Tetra Pack Glass Bottle
Quantity 180 ml 200 ml 200 ml 180 ml 280 ml
Shelf Life 180 days 270 days 180 days 270 days 230 days
Since cold beverages are an impulse purchase product, Nestle’s RTD Cold Coffee has to indirectly compete with RTD milk shakes also. In this segment, Nestle is competing with brands like Hershey’s, Cavin’s, and Britannia.
Achievements and Awards-
2016 Recognized as ‘The Most Valuable Food Brand’ in India.
2016 KITKAT India won the first edition of the Twitter Aviator Awards in 2016
2014 MAGGI amongst the Top 5 in Brand Equity’s ‘Most Trusted Brands’
2014 Nanjangud factory receives Karnataka State Export Excellence Award for the FY 2013-14
2014 NESTLÉ KITKAT and NESTLÉ EVERYDAY win Gold and Bronze at Goa Fest 2014
2013 Maggi ranked amongst Top 10 Most Trusted Brands and No. 1 Food Brand at ET Brand Equity Survey
(India Brand Equity Foundation, 2019)
PartB
914400359651344729403607308Distributor Super Stockist

Work-Flow Model-
Manufacturing Unit


Carrying & Forwarding Agent


Retailor
Customer

The sales funnel starts from manufacturing unit where product was produced. From here, the product is passed on to carrying and forwarding agent, also known as regional depo. Till this point, there is no transfer of ownership involved and the ownership of the products lies with the company.
Depending upon the orders raised from the market, the distributor places the order at the depo from where product is transferred to distributor or super stockist. This is the point where the ownership of the product is transferred for the first time. Then onwards, the distributor transfers the products to actual point of sale i.e. retailor where the transfer of ownership takes place for the second time in the entire sales funnel.
At the bottom of the funnel, the product is sold to the end consumer
PESTLE Analysis-
A PESTEL analysis is an acronym for a tool used to identify the macro (external) forces an organization interacts with. The letters stand for Political, Economic, Social, Technological, Environmental and Legal. It is fundamental to conduct a situational analysis to identify changes in the macro-environment before any kind of strategy or tactical plan can be implemented. Organizations are able to differentiate from the competition and create a competitive advantage if they successfully monitor and respond to changes in the macro-environment before-hand.
Here is the PESTLE analysis of Nestle-
Political- Nestlé operates in more than 194 countries which makes it open to different kinds of political systems and makes it vulnerable at the same time. Interaction with diverse political environment can be challenging for multinational organizations because it can throw up political bottlenecks in the form of political instability or a tough regulatory environment that can hinder business development. Hence, Nestle faces the following political challenges-
Changing and unstandardized regulation on food standards and marketing actions.
Stability of government in new emerging economies.
Changing global regulations – standardized practice yet adaptation to different political forces.
Economic- for global multinational firms like Nestlé operating in lots of countries, one of the biggest economic issues is foreign exchange swings. Foreign-exchange swings in 2016, for instance, resulted in a foreign exchange impact of –1.6% on group revenues even though comparative revenue from the previous year increased by 0.8%. (Nestle, 2018). Nestle has to deal with the following economic factors-
Keeping up with changing inflation, economic growth rates and income levels.
Changing consumer’s expenditure patterns, rise of the price conscious consumer.
Increasing price of raw material which makes it important to source from sustainable suppliers.
Social- Changes in macro-social environment like people’s lifestyles, fashion, demographic trends and labour composition that have the potential to be threats or opportunities for businesses makes it important for companies like nestle to keep up with social trends in the market. The company has to face social challenges in the form of-
Increasing health conscious consumer attitude and move towards healthier products.
Changing lifestyle –increasing trend of home cooking and avoiding eating outside in times of a pandemic.
Adapting as per different cultural aspects like religious beliefs, language, and family settings.
Understanding consumer’s behavior to ensuring a personal approach to marketing.
Technological- Technology is evolving at such rapid pace that its almost impossible for companies to adapt it with the same as that of its evolution. These changes bring both opportunities as well as threats for the companies. When it comes to the technological factors affecting Nestlé in the macro environment, it is the digital revolution that affects the company most at global scale. For legacy firms such as Nestle, PepsiCo or Coca Cola, all these technologies are already disrupting the food and beverage industry and, the challenge is either risk being overtaken by new players or respond with new capabilities that can capitalize on the opportunities digital brings. Some other technological challenges are-
Innovation driven by technological developments.
E-commerce as a platform for development.
Legal environment- It is important for multinational companies to understand what is legal and allowed within the territories they operate in. Any change in legislation have the impact on business operations. Factors include employment legislation, health and safety, consumer law, international as well as trade regulation and restrictions. Nestle’s Maggi being banned in India due to higher lead content then permissible limit is a classic example as to what extent things can become complicated. Apart from these, other aspects are-
Changing nature of regulation.
Need to adhere to global regulations and changes across different international markets
Environmental- The transition to low carbon emission measures and sustainable development is underway affecting almost every sector of the global economy. This element is becoming more important with the rise in importance of CSR (Corporate Sustainability Responsibility. Factors include climate, recycling procedures, carbon footprint, waste disposal and sustainability.
Nestle’s SWOT Analysis-
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and hence, SWOT Analysis is a tool for assessing these four aspects of a business. It is used for giving an organization a competitive advantage and make the most of their resources. It reduces the chances of failure, by understanding where they are lacking, and eliminating hazards that would otherwise catch you unawares.
Here is a SWOT analysis of Nestle-

990600-102322World Renowned and trusted brand
Strong Distribution System.
Huge product mix that leaves no gap areas for the competitors.
Strong R & D.
Multiple controversies across the globe that are detrimental to brands image.
Adaptation to different cultural environments
International standards demand a need for standardization.
New ‘major breakthrough’ that allows Nestle to reduce the amount of sugar in its chocolate bars by 40%, with potential for increased sales.
Growth in RTD beverages segment like coffee, Tea and health drinks.
Expansion of distribution system.


1170420-87849Sugar regulatory environment getting tougher across core markets.
Rising price of raw material.
Variability in raw material prices influencing the firm’s ability to sustain prices

Industry Key Success factors-
Food and Beverage industry along with FMCG space is rapidly growing as the revenue of FMCG sector reached Rs 3.4 lakh crore (US$ 52.8 billion) in FY17 and are estimated to reach US$ 103.7 billion in 2020. (India Brand Equity Foundation, 2020). As per a report by India Brand Equity Foundation, this growth is largely driven by the following factors-
Shift to Organized Market-
As the share of unorganized market has seen a fall, organized sector is expected to grow with increased level of brand consciousness.
Modern retail’s growth will drive the growth of organized FMCG sector and consequently food and beverage industry.
Easy excess-
The accessibility of desired product to customers has become more convenient with the help of internet and different channels of sales. This has made the Availability of products has become way easier as at required time and place.
Online platforms like Gofers, Swiggi, Zomato, Food Panda and Big Basket has made F&B products more readily available.
Rural Consumption-
There is an increased demand for branded products in rural India led by a combination of increase in income and higher aspiration levels. This has resulted in increase in rural consumption.
There is huge potential in untapped rural market which is now being explored.
Natural and Healthy Choices-
Consumers have become well-educated and highly opinionated about their food. Rather than opting for fast food, consumers are inclining towards healthy F&B products which has some nutritional value. This is also backed by convenience of having ready to eat/drink products amidst the fast paced life.
Mindfulness of Social Issues-
Consumers are becoming highly aware of social issues and are willing to spend more for goods which support a certain cause or concept. Researching the path to the table and expect visibility and traceability of ingredients has also became a way of life for the health conscious millennials.
Food and Mood Connection-
Consumers are seeking ways to socialize, relax and escape from stressful lives. This has created a whole new industry which is backed by socializing over coffee. Also, fitness culture has evolved into a whole new segment which use probiotics and herbal adaptogens. These are now being integrated in beverage formulations, such as teas.
Challenges & Issues before the Company / Product-
Lack of product visibility due to lack of infrastructure (Visicooler) –
During the tenure of this internship and executing B2B sales, it was observed that majority of the visicoolers in the market that are available with the retailors are provided by either Pepsi or Coca Cola. These companies do not allow products from other companies to be kept in these coolers.
To some extent, this problem can be sorted out if the retailor and the sales representative have good repo and the retailors allow companies other than Pepsi and Coke to keep their products in these visicoolers. But during summer season, these two company have their peak season (which happens to be the peak season for Nestle RTD also) and consequently, push a lot of product in the market. If a retailor has availability of visicooler provided by any company, it gives company the power to push their products in the market.
During peak season, these company has these coolers stacked up to the brim with their products and doesn’t allow products from other companies to be kept in their assets. However, a retailor needs to keep assortment from other companies also and hence as a goodwill practice, one shelf is given to the retailor but normally, this shelf is at the lowest level in the cooler. The most desired spot for a product to be visible is at the eye level of the customer. At the same time this shelf is filled with products of many companies. This makes the visibility of the product in the market very difficult and since cold beverage is an impulse purchase product, it is important for the company to increase the visibility of the product at the point of sale.
Thus, the company needs to invest in building up the infrastructure or branding at these points of sale so that the visibility for these products can be improved.
Lower shelf life cumbersome process as compared to the competitors-
As shown in the side by side comparison in the table in pricing insight section of this repot, Nestle’s product has the lowest shelf life (180 days) in comparison to its competitors. And if the products expire with the retailor, the process of getting a reimbursement for the retailor is cumbersome. The company does have a policy of taking back expired units but the compensation of the same is not given to the retailor in cash but is settled against their next order.
If the retailor is not willing to give the next order then their amount gets stuck and during the tenure of this internship, many retailor expressed their distrust in this entire process and are unsatisfied with this system due to which they are unwilling to become Nestle’s channel partner.
Higher price-
As reflected in the pricing insights section of this report, the product has the highest price (Rs.35) and lowest quantity (180ml) in RTD cold coffee range in comparison to its competitors due to which retailors are of the opinion that customer do not prefer to buy such expensive product.
Packaging-
The product comes in tetra pack at Rs. 35 price point and in can at Rs. 50 price point. However, the competitor’s products are available in PET/Glass bottle or Cans at a lower price point. As packaging create greater impact in terms of quality of the product in the minds on consumers and
improve their brand identity, a PET/Glass Bottle or Can looks much more attractive than a tetra pack. This is one of the reason consumer’s prefer product with attractive packaging while showing impulsive purchasing behavior.
Lack of synergy between Marketing and Branding efforts-
Nestle has not done much branding for this product because of which even after the product being launched for 4 years, retailors as well as consumers have not yet interacted with this product. Due to this, the product is reliant on push selling rather than pulling the customer to buy.
Due to lack of demand, the retailors are hesitant to become the channel partner that to at a higher price range. This reduces the brand’s visibility in the market which in turn results in less sales as
the product is out of sight of the customers at point of sale and what is out of sight is out of mind. Due to this lack of demand, retailors who are already a channel partner do not buy the product.
This has created a vicious cycle of low visibility – low demand and low sales in the market.
Competitors adopting credit policy for payment by Retailors-
According to company policy, credit is not provided to the retailors whereas competitors are adopting practices like giving payment options to retailors sales of the product or providing outright credit. Because of these reasons, retailors prefer to buy product from other brands and the company has to struggle in the market because of such practices.
Competing with generic cold coffee-
The biggest challenge for the company is to compete with the generic cold coffee made is cafes which is preferred by the consumers as they get much more quantity and perceives that is provide more value for money. All these cafés where inhouse coffee is made are by default ruled out as a potential point of sale as vendors get higher margin on it.
Research
Literature Review-
(Albayrak & Aslan, 2001), “According to the report, with the exception of cleaning products, consumers' loyalty to private brand products was found to have increased for products in all categories. Despite the growing demand for private brand products, consumers have different reasons for their preferences that are sensitive to product type and price, and the socio-economic status of consumers”.
(Jack & Rose, 2000) “It would be difficult and almost impossible to create quantitative variables to describe the overall appearances of the main characters combining varying views (e.g., price, taste, quality, hygiene etc.) which may have a significant impact on consumers' preferences.”
(Jain, 2012) “Discussed about major players offering different types of tea, in different parts of the country, with special focus on quality perception under specific demographic region. Major players are offering different types of tea in different parts of the country with a focus on the quality perception of the particular demography”.
(Monirul & Han, 2012) states “the demand of coffee is more than tea and earning good amount of profit. It is assumed that about 20 billion cups of hot drinks are sold every year”.
(Dr.Shendge, 2012) “Preference (or "taste") is a concept, used in the social sciences, particularly economics. It assumes a real or imagined "choice" between alternatives and the possibility of rank ordering of these alternatives, based on happiness, satisfaction, gratification, enjoyment, utility they provide. More generally, it can be seen as a source of motivation. In cognitive sciences, individual preferences enable choice of objectives/goals”.
(Vakhariya S & Chopde, 2011) “Private labels in India are on the growth path. With the emerging private players, national brand manufacturers will have to compete with the competition within the sales promotion and distribution channel, which needed to change in marketing strategy, locally”.
(T., 2011) stated “the reasons for preference of the brands ranged from quality to availability. But it was quality that was ranked as the No. 1 parameter for brand preference. Most of the consumers reported that they do get carried away by advertisements sometimes but in the end, it is the quality of the product that is a decisive factor for purchase”.
Recent News-
Starbucks non-dairy coffee creamers to launch in the US, (Nestle, 2020)
“As customer interest in plant-based creamers continues to see rapid growth, Nestlé and Starbucks today announced Starbucks Non-Dairy Creamers, the latest innovation from their global coffee alliance.
Building on Starbucks entry into the creamer category in July 2019, it is now expanding its existing portfolio to include non-dairy options.
Starbucks Non-Dairy Creamers are available in two flavors – caramel and hazelnut – to bring customers exciting new ways to enjoy coffee at home. Crafted with a unique blend of almonds and oats, Starbucks Non-Dairy Creamers create a rich and smooth texture with delicious flavors inspired by customer-favorite handcrafted beverages.
Starbucks Non-Dairy Creamers will be available in the refrigerated dairy aisle nationwide in the United States beginning in August.
Nestlé and Starbucks continue to innovate and expand rapidly to deliver a premium experience to coffee lovers around the world”.
Nestlé India Ranked Joint FIRST in ATNI’s India Spotlight Index 2020 (Nestle, 2020)
“Nestlé India is ranked joint FIRST, in the second iteration of India Access to Nutrition Spotlight Index 2020, published by Access to Nutrition Index (ATNI) and hosted by Access to Nutrition Foundation, an international not for profit organization. The India Spotlight Index 2020 is an independent national assessment to measure the contribution of India’s largest foods and beverages manufactures towards meeting the health and nutrition needs of Indian consumers.
Some of Nestlé India’s strength include its overall nutrition governance and management systems that are comprehensive with a clear accountability structure, its pledge to reduce fat, salt and sugar in its products, its commitment to address the affordability of its nutritious products and its responsible marketing policies”.
Research and Analysis-
Objective of the Study
The Primary objective to conduct this research was to
Understand the consumer brand preference towards RTD Cold coffee/ tea
Consumer’s Buying behavior towards different brands of ready to drink cold coffee/tea available in the market.
To know that are the factors that affect customers buying decision while making the purchase.
To know the preferred packaging type by the consumers.
To know whether consumers prefer to consume these products outside home or at home.
Research Methodology
A questionnaire was prepared to conduct the survey
The questionnaire was floated as a google form to capture responses from the sample and collection of primary data.
Analysis of the responses received.
Conclusions had been arrived at using the response of the concerned persons and not on questionnaire alone.
The questionnaire made was divided into two parts. Part one consisted personal questions to capture the demographics of the participants. Part two asked questions regarding the study. The questionnaire was prepared in such a manner that all the participants can find the questions relevant and do not face any difficulty in understanding the question. The questionnaire was mainly consisting of the brand awareness and factors affecting customer’s buying behavior while making the purchase decision. We tried to know different aspect of purchases as compared to all the brands available. This was a very crisp and short survey form but almost contained all the details about the consumer buying habit and behavior.
Scope of the Study
The research was conducted in different states of India and was concentrated to know what the basic need of the consumer and what customer wants from the companies and to understand the consumer brand preference and buying behavior towards different brands of ready to drink cold coffee/tea available in the market and attributes that affects the buying behavior of the consumers. The study also analyzed the brand awareness and brand recall of different available brands in the market.
Research Design
Research design refers to the procedures and methods adopted for conducting a study. It allows researchers to hone in on research methods that are most appropriate for the subject matter and frame the research study accordingly. An impactful research design usually creates a minimum
bias in data and increases trust in the accuracy of collected data. It is broadly classified into three types as:
Causal Research Design
Descriptive Research Design
Exploratory Research Design
This research was conducted through Descriptive Research Design. In a descriptive design, a researcher is solely interested in describing the situation or case under their research study. It is a theory-based design method which is created by gathering, analyzing, and presenting collected data. This allows a researcher to provide insights into the why and how of research. Descriptive design helps others better understand the need for the research. If the problem statement is not clear, you can conduct exploratory research.
Source of Data
Primary Data: - This is the data that is collected firsthand by using different techniques like interview, questionnaire, etc. In this project, primary data has been collected by the means of questionnaire.
Secondary Data: - Secondary data refers to the data existing in the pre-existing domain i.e. it refers to the data which have already been collected and analyzed by someone else. The secondary data involved in this project has been gathered from the internet.
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Tool of data collection- Due to unforeseen circumstances and limitation during the times of covid outbreak, the data collection has been done through using Google Forms.
Sample Design-
Duration of the study- this study is conducted over a period of 15 days.
Sample Size- For this study, the sample size was 150 individuals.
Sampling method- Sampling method was random sampling to ensure that the data collected so that the population has an even chance and likelihood of being selected in the sample.
Area of Sample Work- Area of Sampling is Pan India.
METHODS & TECHNIQUES OF DATA ANALYSIS
Data Analysis Concept- Data analysis refers to the process in which raw collected data is organized and analyzed to that it can be represented in meaningful form of information that can be understood easily. There are many ways to approach data analysis and it is convenient and easy to manipulate data to emphasize or push prejudiced agenda or conclusion. Hence, it is necessary to be careful while presenting the analyzed data and keep the process free from any biases.
Raw data can be in different forms such as, measurements, survey responses, and observations. In such forms, it is difficult to understand and draw out any conclusion from it and is overwhelming. For data analysis, raw data is arranged in such a way that it becomes easy to understand. For example, survey results may be tallied, so that it can be easily understood how many people took part in a survey, and how people responded to specific questions.
In this process of organizing the data, there may emerge some trends and thus, modeling the data with the help of mathematics and other tools like Excel and SPSS can make it easier for the researcher to present complex data in a meaningful manner and representing it in the form of Charts, graphs, and textual write ups. These kind of representation of data help the audience to understand to outcome of the research at a glance.
Process of Data Analysis
Once the necessary data collected, the next step is to aggregate the data in a meaningful manner. Several. This includes:
Defining Objectives: The first step is to clearly defined objectives. The objectives should be crystal clear to get the best results out of the data, the.
Posing Questions: The next step is to present the questions to the participants in the study and collect their responses.
Data Collection: The next step is to collect data. Due to unforeseen circumstances and limitation during the times of covid outbreak, the data collection has been done through using Google Forms.
Data Scrubbing: Raw data may be collected in several different formats, with lots of junk values and clutter. The data is cleaned and converted so that data analysis tools can import it. It’s not a glamorous step but it’s very important.
Data Analysis: Import this new clean data into the data analysis tools. These tools allow you to explore the data, find patterns, and answer what-if questions. This is the pay-off, this is where you find results.
Drawing Conclusions and Making Predictions: Draw conclusions from your data. These conclusions may be summarized in a report, visual, or both to get the right results.
DATAANLYSIS AND INTERPRETATION
The survey was done for two segments. First part captured the information regarding the demographic personal information of the participants like name, age, gender, occupation, etc. for the users and another part consisted questions regarding the study.
The study is divided into two parts with the demographic segment of male and female to know buying behavior of both the genders separately -
Data Analysis of the collected data revealed to following findings-
Part 1
Male Participants 73
Age Group No. of participants
15-20 10
20-30 52
30-40 7
40 and above 4
Education level No. of participants
Graduate 40
Intermediate 6
Post-Graduate 22
Other 5
Occupation No. of participants
Students 36
Employees 16
Businesspersons 10
Govt. employees 3
Other category 8
Female Participants 73

Age Group No. of participants
15-20 8
20-30 59
30-40 4
40 and above 6
Education level No. of participants
Graduate 37
Intermediate 4
Post-Graduate 34
Other 5
Students 56
Employees 8
Businesspersons 5
Govt. employees 8
Other category 2
Part 2
Q. What type of coffee do you prefer to drink? *
Gender What type of coffee do prefer to drink? No. of Participants
Male Branded 45
Non-Branded 16
Female Branded 60
Non-Branded 17
62% of the male participants prefer to drink branded Tea/Cold Coffee whereas 78% of female participants prefer to drink branded Tea/Cold Coffee. This signifies that majority of the consumers are brand conscious.
Q. Do you prefer to drink Ready to Drink Cold Coffee/tea?
Gender Do you prefer to drink Ready to Drink Cold Coffee/tea No. of Participants
Male Yes 32
No 23
Maybe 6
Female Yes 43
No 22
Maybe 12
44% of the male participants prefer to drink RTD Tea/Cold Coffee whereas 56% of female participants prefer to drink RTD Tea/Cold Coffee. This supports the observation during the tenure of this internship that many customers still prefer to drink in house coffee made in cafes which is a better value for money for them.
Q. Does brand matters to you while buying RTD products in the market?
Gender Does brands preference matter to you while buying RTD products in the
market? No. of Participants
Male Yes 46
No 10
Maybe 5
Female Yes 52
No 17
Maybe 8
63% of the male participants and 68% of female participants said that brand affects their decision while buying RTD Tea/Cold Coffee. This shows that majority of the consumers are loyal to their preferred brands.
Q. Which brand’s RTD tea/coffee would you prefer to drink?
Gender Does brand matters to you while buying RTD products in the market? No. of Participants
Male Nescafe 28
Amul Kool 15
Cream Bell 11
Cavin’s 7
Other 0
Female Nescafe 41
Amul Kool 20
Cream Bell 5
Cavin’s 4
Other 7
38% of males preferred Nescafe whereas 21% preferred Amul. Among Females, a whopping 56% preferred Nescafe while 26% preferred Amul. This clearly signifies that Nescafe is the synonym of coffee in the minds of consumers.
Q. Does packaging of the product matters to you?
Gender Does packaging of the product matters to you? No. of Participants
Male Yes 35
No 16
Maybe 22
Female Yes 52
No 10
Maybe 15
48% of males and 68% of females said that packaging matters to them while buying RTD products. This shows that females are more concerned about packaging of the product in comparison to males while to the majority of the population, packaging matters.
Q. What type of Packaging do you prefer for RTD products?
Gender What type of Packaging do you prefer for RTD products? No. of Participants
Male Tetra Pack 5
PET Bottle 15
Glass Bottle 32
Can 20
Female Tetra Pack 4
PET Bottle 5
Glass Bottle 23
Can 45
Majority of males with 44% preferred Glass bottle packaging followed by 27% preferring Can. Among females, majority lies with Can with 58% followed by Glass Bottle with 30 %.
This shows that Glass Bottle and can are the most attractive packaging types improves the company’s brand equity in the minds of consumers.
Where do you prefer to consume RTD Tea/Coffee?
Gender Where do you prefer to consume RTD Tea/Coffee? No. of Participants
Male Out of Home 52
At Home 21
Female Out of Home 54
At Home 23
71% males and 70% females prefer to drink RTD tea/cold coffee out of home. This signifies that RTD products have little consumer base inside home.
Conclusion and Observation
From the findings of the research, it can be concluded that Packaging in an important attribute that affects consumers buying behaviour and thus Nestle needs to provide better packaging as the competitors are providing their products in PET Bottle and Can at lower price point where Nestle is selling RTD is tetra pack at a higher price which becomes a turn down for consumers. Also, packaging type enables brands to create greater impact in terms of quality of the product in the minds on consumers and improve their brand identity.
Also, Nestle is facing a tough competition from Amul in the market, who is able to provide their product at a considerably lower price which is enabled by its efficient distribution system.
It was observed that consumers are also become aware regarding reusability and recyclability of the products they are consuming, and this preposition can be used by the brands to attract the consumers.
Also, the biggest challenge that ready to drink tea/coffee products are facing in the market is not by a competitor in organized sector but from the in house tea/coffee that are made in cafes as consumers still considers it better value for money. Getting more quantity is what drives consumers to opt for these generic non branded tea/coffees. Thus, companies will have a hard time to compete this competitor just by giving a preposition of providing a branded product.
LEARNING EXPERIENCES
During the tenure of this internship, I got to perform B2B sales in the field which posed a new challenge every day and at every other outlet. The journey of internship at Nestle was a great learning phase for me where I was learning every minute. To make the sales and to achieve the target one needs to give hardcore dedication and efforts for which I travelled almost 20-25 km in a day to make sales for the organization. During the beginning of this internship, I was a complete novice to the area of sales and this internship gave me an opportunity to enhance my confidence, communication skills and improved my interpersonal skills. After outing my continuous efforts, I was able to learn many important things which I can apply it for lifetime.
 

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