Project Report Neste

8/3/2019 Project Report Neste

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SUMMER TRAINING REPORT

REPLACING 50p ECLAIRS WITH Re 1 ECLAIRS IN CD

AND RD MARKET AND EFFECT OF CHANGING PRICE OF

NESTLE CHOCOLATES IN RURAL AND URBAN MARKET

A ProjectSubmitted in partial fulfilment of the

requirements

for the award of the degree of

MASTERS OF BUSINESS ADMINISTRATION

By

ANUBHAW BHARDWAJ(MBA/1016/10)

DEPARTMENT OF MANAGEMENTBIRLA INSTITUTE OF TECHNOLOGY


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MESRA, RANCHI-835215(2010-2012)

DECLARATION CERTIFICATE

This is to certify that the work presented in the project

entitled REPLACING 50p ECLAIRS WITH Re 1

ECLAIRS IN CD AND RD MARKET AND EFFECT OF

CHANGING PRICE OF NESTLE CHOCOLATES IN

RURAL AND URBAN MARKET in partial fulfilmentof the requirement for the award of Degree of

Masters of Business Administration of Birla

Institute of Technology Mesra, , Ranchi is an authentic

and original work carried out.

To the best of my knowledge, the content of this

thesis does not form a basis for the award of any

previous Degree to anyone else.

Anubhaw Bhardwaj

MBA/1016/2010


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CERTIFICATE OF APPROVAL

The foregoing project entitled REPLACING 50pECLAIRS WITH Re 1 ECLAIRS IN CD AND RDMARKET AND EFFECT OF CHANGING PRICE OFNESTLE CHOCOLATES IN RURAL AND URBANMARKET, is hereby approved as a creditable study ofresearch topic and has been presented in satisfactorymanner to warrant its acceptance as prerequisite to the

degree for which it has been submitted.

It is understood that by this approval, the undersigneddo not necessarily endorse any conclusion drawn oropinion expressed therein, but approve the thesis forthe purpose for which it is submitted.

(Internal Examiner) (ExternalExaminer)

Head of the Department


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ACKNOWLEDGEMENT

I consider myself fortunate to receive the encouragement & patronization of all

those who helped me in the completion of this project.

I am especially indebted to Mr Pankaj Bhattacharya, ASM, Nestle India ltd.

To give me opportunity to do training under his guidance & to take the initiative

to provide me with all the necessary help whenever required.

I am very grateful and thankful to my project guide, Mr Amit Sinha, Sales

officer, Nestle India ltd. for his valuable guidance. Without his efforts, thisproject wouldnt have been up to mark.

I am also thankful to Mr Rajeev Sharma (Super Stockist), Mr Binod kumar

(DS) and Mr Ravi Singh (Sting supervisor) to take the initiative to provide

me with all the necessary legal documents required.

I am especially indebted to my parents, friends and family for their wholehearted

support.

I would like to express my sincerest gratitude to all the respondents of this

study who painstakingly filled up the long questionnaire response sheet.

I would also like to extend my thanks to all the faculty members of Department

of Management for their encouragement, cooperation and timely suggestion

without which this project would not have been possible.

Thanking you

Anubhaw Bhardwaj


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CONTENTS

1. Introduction About the project

1. Objective of study2. Company Profile

About the company Distribution network

1. Research Problem2. Research Design

3. Product details4. Market Study5. SWOT Analysis6. Collection of data

Primary Secondary

1. Questionnaire2. Analysis of data

For Urban market

For Rural market1. Findings Urban Rural

1. Project in Progress(PIP) Sales at a glance Sales analysis

1. Conclusion2. Suggestions & Recommendations3. Limitations4. Bibliography


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INTRODUCTION

ABOUT THE PROJECT:

Project is about the replacing the PP clairs which is also called Price Point clairs

with value added clairs in Rural and Urban areas. The effect of closing the Jar of1, 3, 7 kg of PP clairs is now not available because of production of these Jarsare closed but to be present in market Nestle India makes available PP clairs inSachet packing which comes with 19% margin to retailers.

So, project is basically a market research to find the current market scenario ofconfectioneries in rural & urban market and to find the reason of massivedecrease in sales & work a plan for bridging the gap of value loss.

Nestle India launches 1 new clairs with very attractive Jar and with coffee tasteto cater or increase the market share of Nestle clairs. So now Nestle have 4kinds of clairs.

Chocolate Milky bar Cappuccino PP clairs

Now after the market research it comes that in urban market there is no problemin replacing. Pouch will satisfy or meet the current demand but in rural marketthere is still a question whether Rs 1 (VA clairs) will take that gap or not.

But when I worked in rural market it seems people are now buying Rs 1 clairsinstead of 50 P if something new comes with the good brand. As a result,Cadbury which are having 70% market share in chocolate has also launched 1new clairs Rich Brownie in confectionery segment.

As Prices of chocolates increased

Nestle increases the price of some chocolates from

Brand Product Earlier Now

Kit Kat 1 Finger Rs 5 Rs 6

2 Finger Rs 7 Rs 8

3 Finger Rs 10 Rs 12

4 Finger Rs 14 Rs 15

Munch Guru Munch Rs 10 Rs 12

Milky bar Milky bar Mould Rs 5 Rs 6

Rs 10 Rs 12


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As in now Rates are not in round figure, retailers are facing problem in giving

change to their customers. This problem is faced by 45% retailers in urbanmarket.

This project is done with the aim of market research and identifying the problemfaced by retailers in selling chocolates and How to increase the sale ofconfectionery in rural market.

O BJECTIVE OF STUDY

1. To find the problem in replacing PP clairs with value added clairs inurban & rural market.

2. To find the availability of different confectionery brands and margin whichthey give to retailers.3. To find out what it is in more demand 50P or Re 1.4. With the increase in price what problem retailers faces while selling

chocolates in urban & rural areas.5. To analyse the turnover of 2010 & 2011 and show the growth rate over

the previous year.6. To work on that area where the growth rate is not satisfactory and fills the

gap by placing more stock.7. To draft & action on a project so that the gap of turnover loss can be

bridged.


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COMPANY PROFILE

About the company:

Nestl was founded in 1867 on the shores of Lake Geneva in Vevey, Switzerlandand its first product was Farine Lacte Nestl, an infant cereal speciallyformulated by Henri Nestl to provide and improve infant nutrition. From its firsthistoric merger with the Anglo-Swiss Condensed Milk Company in 1905, Nestlhas grown to become the worlds largest and most diversified food Company,and is about twice the size of its nearest competitor in the food and beveragessector.

Nestls trademark of birds in a nest, derived from Henri Nestls personal coatof arms, evokes the values upon which he founded his Company. Namely, thevalues of security, maternity and affection, nature and nourishment, family andtradition. Today, it is not only the central element of Nestls corporate identitybut serves to define the Companys products, responsibilities, business practices.

In 2004, Nestl had around 247,000 employees worldwide, operated 500factories in approx. 100 countries and offered over 8,000 products to millions ofconsumers universally. The Companys transparent business practices,pioneering environment policy and respect for the fundamental values ofdifferent cultures have earned it an enviable place in the countries it operates in.Nestls activities contribute to and nurture the sustainable economic

development of people, communities and nations. Above all, Nestl is dedicatedto bringing the joy of Good Food, Good Life to people throughout their lives,throughout the world.

Nestl India is a subsidiary of Nestle S.A. of Switzerland. With seven factories anda large number of co-packers, Nestl India is a vibrant Company that providesconsumers 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 itsbusiness and expects the same in its relationships. This has earned it the trustand respect of every strata of society that it comes in contact with and isacknowledged amongst India's 'Most Respected Companies' and amongst the'Top Wealth Creators of India'.


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Nestls relationship with India dates back to 1912, when it began trading as TheNestl Anglo-Swiss Condensed Milk Company (Export) Limited, importing and

selling finished products in the Indian market.After Indias independence in 1947, the economic policies of the IndianGovernment emphasized the need for local production. Nestl responded toIndias aspirations by forming a company in India and set up its first factory in1961 at Moga, Punjab, where the Government wanted Nestl to develop the milkeconomy. Progress in Moga required the introduction of Nestls AgriculturalServices to educate advice and help the farmer in a variety of aspects. Fromincreasing the milk yield of their cows through improved dairy farming methods,to irrigation, scientific crop management practices and helping with theprocurement of bank loans. Nestl set up milk collection centres that would notonly ensure prompt collection and pay fair prices, but also instil amongst the

community, a confidence in the dairy business.

Nestl has been a partner in India's growth for over nine decades now and hasbuilt a very special relationship of trust and commitment with the people ofIndia. The Company's activities in India have facilitated direct and indirectemployment and provides livelihood to about one million people includingfarmers, suppliers of packaging materials, services and other goods.

The Company continuously focuses its efforts to better understand the changinglifestyles of India and anticipate consumer needs in order to provide Taste,Nutrition, Health and Wellness through its product offerings. The culture ofinnovation and renovation within the Company and access to the Nestl Group'sproprietary technology/Brands expertise and the extensive centralized Researchand Development facilities gives it a distinct advantage in these efforts. It helps


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the Company to create value that can be sustained over the long term byoffering consumers a wide variety of high quality, safe food products ataffordable prices.

Nestl India manufactures products of truly international quality underinternationally famous brand names such as NESCAF, MAGGI, MILKYBAR, MILO,KIT KAT, BAR-ONE, MILKMAID and NESTEA and in recent years the Company hasalso introduced products of daily consumption and use such as NESTL Milk,NESTL SLIM Milk, NESTL Fresh 'n' Natural Dahi and NESTL Jeera Raita.

Nestl India is a responsible organization and facilitates initiatives that help toimprove the quality of life in the communities where it operates.

After nearly a century-old association with the country, today, Nestl India haspresence across India with 7 manufacturing facilities and 4 branch offices spreadacross the region.

Plant Location State Set up in (year)

Moga Punjab 1961

Choladi Tamil Nadu 1967

Nanjangud Karnataka 1989Samalkha Haryana 1993

Ponda Goa 1995

Bicholim Goa 1997

Pantnagar Uttrakhand 2006

The 4 branch offices in the country help facilitate the sales and marketing of itsproducts. They are in Delhi, Mumbai, Chennai and Kolkata. The Nestl India head

office is located in Gurgaon, Haryana.

Nestle Brands:

Milk Products &NutritionFrom shelf-stablesolutionto chilled dairy.

Prepared Dishes &Cooking AidsPreparing well balancedmeals is a snap with Nestl.
http://www.nestle.in/PreparedDishes_CookingAids.aspx?OB=3&id=31http://www.nestle.in/MilkProduct.aspx?OB=1&id=65


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BeveragesDrink to an active lifewith NestlBeverages.

Chocolates &ConfectioneryDelighting the senses witha range of tastes andtextures.

Distribution Network:

Plant (Manufacturer)

(4-5 Region wise in India)Main Depot (MD)

(On state level) Distribution Channel (DC)

(3 Types) Cash Distributor (CD)

Retailers

Customers
http://www.nestle.in/ChocolatesConf.aspx?OB=4&id=6http://www.nestle.in/Beverages.aspx?OB=2&ID=21


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Cash Distributors:

Super stockist ---------> Re Distributor(RD)----> Ruralsector.

Wholesale distributor Retail distributor

Sales Force

Pilot sales man (PSM) Distributor salesman (DS) Sting Boy (SB)


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RESEARCH PROBLEM & RESEARCH DESIGN

Research Problem:

To study the change in selling pattern of retailers due to change in packaging of

PP clairs and try to replace the PP clairs with value added clairs in urban &Rural areas and also study the problem which retailers faces due to change inthe price of Nestle chocolates.

Research Design:

A research design is the arrangement of the conditions for collection andanalysis of data in a manner that aims to combine relevance to the researchpurpose with economy in procedure.

Sample design:

Population The retailers (Grocery Big & Grocery small) in Ranchi local marketand some RD market which are as follows: Khunti, Gumla, Nagri, Ratu.

Sample All those retailers who are selling confectionery of any brand availablein the market and selling nestle products too.

Sample size Sample size is 100

50 Retailers from urban market.

50 Retailers from rural market.

Sampling method used I have selected the samples by using stratifiedsampling. As I have taken those retail shops who sell nestle products.

Research Hypothesis:

As I am going to study the urban & rural market to see the current demand of PPclairs in these areas and will it be replaced with the Value added clairs. Iconducted Pilot interview with RR Store (Super stockist) & Harsh Enterprises(Cash distributor). And on that basis my hypothesis is that:

Retailers in urban & rural market are ready to accept Value added clairs inplace of PP clairs if company stop its production and Value added will fill thegap of turnover loss because of closed production of PP clairs Jar. In startingphase it might be difficult but Value added will surely take over the market of PPclairs.


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PRODUCT DETAILS

The Nestle are having these different product ranges under the brand name

Chocolates and confectionery

Nestle clairs:

1. PP clairs

2. Chocolate clairs

3. Milky bar clairs4. Cappuccino clairs

Nestle Chocolates:

1. Kit Kat 2. Munch

3. Munch Pop Choc 4. Milky Bar mould

1. Milky Bar Choo 6. Milky Bar Crispy


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7. Bar-One 8. Nestle Milk Chocolate

MARKET STUDY

Confectionery market in India:

The confectionery market in India has undergone major changes and growthsince the opening up of the economy and liberalization of the investment regimein 1991. India became an attractive. Place for foreign investment and severallarge multinational companies entered the market for confectionery products.

This resulted in its steady growth and gradual transformation from a commoditymarket to a branded products market dominated by multinational companies.


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This pie chart shows the segment wise share of confectionery market in India.

These are the figures shows thepurchasing behaviour of consumers of chocolates in India (Urban).

Greater than Rs.

20/-

5%

Between Rs. 10/-

& Rs. 14/-

52%

Between Rs. 14/-&

Rs. 20/-

29%

Below Rs. 10/- 14%

Nestle ranges of chocolates comes under Rs 20 and covering the largest consumer group that is 95%.

Marketing mix of Nestle chocolates.


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Product

The chocolates have a wide range to suit different targeted segments

Variety Classic, Munch, Milky bar, etc.

Design Plain bars, filled, chocolate covered wafers,

Large number of Brand names

Sizes and Packages wide range to suit key price points and occasions

Price

Pricing In line with Cadburys offerings

Incentive schemes E.g. Maha munch give more value for the same price

Priced at key price points like Rs.5

Place

General FMCG distribution structure.

Strong coverage in urban areas, developing in rural.

New Regional Sales Offices to increase width and penetration and focus in ruralareas.

Promotion

Brand ambassador- Rani Mukherjee for munch (targeting youth)

Advertising

Decreased dependence on childrens TV channels over recent years

33% of total industry spend but near equal spend on each brand with rival

offering from Cadbury.

Porters 5 point analysis: New entrants imported brands.

Substitutes As chocolates are viewed as an indulgence, low threat from snacks.

Buyer power Low buyer power since quantity purchased is small, threat in futurefrom organized retail.

Supplier power No threat of forward integration, but volatile prices of key inputs.

Competition intensity- Two players control 95%.


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Urban Market:

In urban market contribution of confection only is 3.25%. Ranchi local market is

distributed among 3 cash distributor (CD).

Harsh Enterprises (South Ranchi)

Raunak Sales (East & North east Ranchi)

Ragini Enterprises (West & south west Ranchi)

I was mainly working with Harsh enterprises. With average sales of 60 lakhs.The demand for confectionery in this area is good and retailers are ready to sellValue added clairs in place of PP clairs. The changing price of chocolates had

affected the local market as 45% retailers are facing problem of giving back


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change to customers. Which resulted in decrease in sales but slowly retailers areplacing orders even if price increased by seeing the demand in the market.

Each distributor have 2 sting boy who carry ready stock with them and sellschocolates and confectionery to those retailers who takes in less amount and

dont have much to order. Sting boy mainly focus on that shop where DS (Directsalesman) dont visit.

This way the whole market is covered. As in case of chocolate Cadbury have 70%of market share they have given cooling facility to retailers. Nestle is lacking onthat ground. Even some good retailers are not having Dispenser.

As some informally questions were asked to salesman about their job most ofthem are satisfied and giving their best and motivate enough to complete theirtargets.

But that case was not the same with the Sting boy. They feel they are gettingless for working hard. I talked to the sting supervisor who told me they areactually receiving less salary.

As a whole, urban market is in Good condition and Distributors are very muchefficient to do the given task. And there is no problem in selling Value addedchocolates in place of PP clairs.


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Rural market:

This portion which is under the red line comes under Ranchi rural market. Superstockist is appointed to see this rural market. The whole control over thesemarkets is done by RR Store.

The market is regularly viewed by 2 PSM (Pilot sales man). The areas are divided

and they work on their beat regularly and taking orders from the RD (ReDistributor). As Company is focuses on rural market with seeing the scope ofdemand there.

The demand of PP clairs was really good in rural market. As the production of PPclairs Jars are closed the sales was decreased. These are the RD markets whichare working under RR Store.

Bundu Nagri

Chandwa Patrahtu

Gumla Rahu


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Khalari Sesai

Khunti Silli

Kuru Simdega

Lohardaga Tamar

SWOT ANALYSIS

Strength:

1. Nestle has positioned themselves very well with all the variety of products.

2. Nestle is a company, which is reputed internationally as the topmost food

products provider in the world.

3. The brand is well known to people & they can easily identify it from others.

4. They are well known for providing topmost quality products.

5. It is well known for its distribution network in Indian market.

Weaknesses:

1.The major weakness is that Nestle does not aim equally at all products. Itsmain strength has only been coffee and not chocolates.

2. There is lack of penetration of chocolates in the rural market where peopletend to miss the chocolate. There is big scope for chocolate in rural market.

3. Even this brand has failed to provide pure vegetarian chocolates in India asper the culture.

Opportunities:

1.There is a lot of potential for growth and development as huge population stayin rural market where other companies are not targeting.

2. Aim their product as per Indian custom and can capture the non-consumers ofchocolates.

3. The chocolate market is at growth stage with very less competition so byintroducing new brand and advertising there can be a very good scope in future.

Threat:

1.There exist no brand loyalty in the chocolate market and consumers frequentlyshift their brands.

2. The competition is a great threat for the company in chocolate segment.


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3. New small companies entering Indian market may take away the marketshare.

COLLECTION OF DATA

In my research data are collected through Primary as well as secondary sources.

1. Methods of collection for Primary Data Through questionnaires- A set of questions were asked from the

retailers of urban & rural market with an objective of gaining data

regarding what confectionery brand is having maximum share and

what will be action when Nestle India closes its PP clairs and offer

only Value added clairs and what changes in buying happens

because of increasing price of nestle chocolates and also to find out

what are the problem retailers faces while selling chocolates in rural

& urban areas. Interview I used interviews, for collection of primary data, from

the RD (Re distributor) because RD is who responsible for

distributing nestle products in their respective markets.

1. Methods of collection for Secondary Data- The secondary data were

mainly collected by review of literature from various sources and from the

pilot sales man (PSM).

From the websites of Nestle India.

Through current & past sales record.

QUESTIONNAIRES

1. Questionnaires asked to retailers in urban & rural market.

2. Interview kind of questions asked to RD (Re distributor).


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Questionnaires asked to urban & rural retailers.

Size of the store

Big -

Small

Which confectionery Brand do you have?Cadbury ITC

Nestle Perfeti

Parle Wrigley

Lotte Local Players

Which confectionery do buyers demand more?50 P Re 1

What is the profit margin on different confectionery brands?Cadbury ITC

Nestle Perfeti

Parle Wrigley

Lotte Local Players

What if branded companies stop their 50 P clairs?

Can you tell the quantity which you sell of (Monthly). Total Quantity 50 P Re 1

Changing price of Nestle chocolates makes any difference in your buying?Positive -

Negative -

Even if price changed, demand for Kit Kat & Munch is still there in the

market. Will you buy?In same quantity -


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Less quantity -

No thanks will not buy -

Will decrease in start and increase on customers demand -

What Problem do you face in selling chocolates?Seasonality - Any other (Specify) -

Non Availability of product - Proper Display

Interview questions asked to RD (Re distributor)

Problem faced with retailers when placing Re 1 clairs (Value added)instead of 50 P clairs (PP clairs).

Fund Issue -

Demand Constraints -

Local Brands

How often confectionery included in your workshop?Never

Occasionally

Frequently

Very Frequently

Do you feel this area has enough confectionery shop?Disagree

No idea

Agree

Does your buying Change as the change in the price of chocolates?

YesNo

Are you having updated knowledge about the schemes going on ourproducts (Confectionery / Chocolates)?

Yes

No

Not regularly

Are you facing any problem while selling Confectionery / Chocolates?


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ANALYSIS OF DATA

For Urban market:

Data collected through Questionnaires

Types of store 1 Big 26%

Small 74%

Different Brands available in themarket

2 CadburyNestleParleLotteITC

PerfettiWrigleyLocal BrandsNutrineDabur

Demand 3 50 P 34%

Re 1 50%Both (50P Re1) 16%

Margin to Retailers 4 Cadbury 10%

Nestle 14%Parle 12-13%Lotte 13-14%ITC 13%Perfetti 14%Wrigley 13-14%Local Brands 30-50%Nutrine 14%


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Dabur 12-13%

What if company stops its 50PEclairs

5 Will sell Re 1 Eclairs 80%

No, Will not sell 20%

Quantity sold monthly (in KG) 6 50P Re 1

Grocery Big 5 - 16 kg 5 - 20 kgGrocery Small 2 - 28 kg 2 - 20 kg

Changing price makes anydifference in buying

7 Positive 62%Negative 38%

With seeing demand..What changes

in your buying happens 8 Same Quantity (Positive Change) 29%Less Quantity (Positive Change) 55%No Thanks will not buy 10%

Will Decrease in start and increase withcustomer demand 6%

Problem facing while sellingchocolates

9 No Problem 56%

Facing Problem 44%

What Problem they facing Seasonal 35%Proper display 20%Change issue 45%


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Representations of Data

Different Brands in the market:


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Findings and Interpretations:

Urban Market

1. 26% stores come under Grocery Big & 74% stores come under Grocerylarge.

2. Among various brands which are available in the market Nestle is

available in 98% stores. Whereas other close brands are Cadbury with86% and Parle with 82%.

3. 66% stores are there in Ranchi where Re 1/- Confectionery is demandedmore than 50P.

4. Profit margins to retailers Nestle gives 14% and available in 98% stores. Perfetti also gives 14% but available in 72% stores. Godrejs Nutrine gives 14% but available in only 10% stores.

1. 80% of retailers are ready to sell Re 1/- (Value added clairs) in place of50P (PP clairs).

2.

50p Re 1/-

Grocery Big 5 16 kg 5 20 kg

Grocery Small 2 28kg 2 20kg

By seeing these data, one strong point comes out that Grocery Small sell more

confectionery then Grocery Big and market share of grocery small is74%. So in urban market there is no problem in placing value added clairs inplace of PP clairs.

3. Changing price of Nestle chocolates makes difference in buying. 62%support it and 38% says doesnt matter.

4. As in Demand for Kit Kat and Munch is still there in market29% says they are buying in same quantity.

55% says they decreased the quantity.

10% says will not buy


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6% were those who say they decreased in start but increase with

customer demand.

5. 56% of retailers face no problem in selling chocolates but 44% still faces

problem in selling chocolates.Problem faced:

Seasonal 35% Proper display 20% Change

issue 45%

35% retailers facing problem in selling chocolates because in summer

they dont have cooling facility. 20% dont have proper display they keep

asking about Dispenser. 45% were those who face problem because of

changing price chocolates which are not in round figure for E.g. Rs 6, Rs

8, Rs 12, and Rs 18. They face problem in giving back change to

customer. This is the major problem retailers facing in these days in

selling chocolates. Which also result in decrease in sales.

For Rural Market

Data collected through Questionnaires

Types of store 1 Big 36%

Small 64%

Different Brands available in themarket

2 CadburyNestleParleLotteITCPerfettiWrigleyLocal BrandsNutrineDabur

Demand

3 50 P 50%Re 1 26%


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Both (50P Re1) 24%

Margin to Retailers 4 Cadbury 10%

Nestle 14%Parle 20%Lotte 13-14%ITC 13%Perfetti 14%Wrigley 13-14%Local Brands 35-40%Nutrine 15%Dabur 12-13%

What if company stops its 50PEclairs

5 Will sell Re 1 Eclairs 72%No, Will not sell 28%

Quantity sold monthly (in KG) 6 50P Re 1

Grocery Big 5 - 30 kg 2 - 20 kgGrocery Small 4- 20 kg 2 - 25 kg

Changing price makes anydifference in buying

7 Positive 70%Negative 30%

With seeing demand..What changesin your buying happens

8 Same Quantity (Positive Change) 17%Less Quantity (Positive Change) 69%No Thanks will not buy 14%

Will Decrease in start and increase withcustomer demand


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Problem facing while sellingchocolates

9 No Problem 62%Facing Problem 38%

What Problem they facing Seasonal 10%Proper display 34%Change issue 34%Non Availability of product 22%

Representation of data

Different Brands in the market:


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Findings and Interpretations:

Rural Market

1. 36% stores come under Grocery Big & 64% stores come under Grocerylarge.

2. Among various brands which are available in the market, availability of

Nestle is 88%. Compared to Cadbury with 92% and Perfetti with 86%.3. In Rural area, More than 50% stores demand more of Re 1/- Confectionery

than 50P.4. Profit margins to retailers

Nestle gives 14% and are available in 88% stores. Perfetti also gives 14% and are available in 86% stores. Parle gives 20% and available in only 74% stores. Local brands are also in competition giving 40% margin and are

available in 34% stores. Cadbury is leading market with 92% stores by giving only 10%

margin which is less than any other confectionery in market.


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1. 72% of retailers are ready to sell Re 1/- (Value added clairs) in place of50P (PP clairs).

2.50p Re 1/-

Grocery Big 5 30 kg 2 20 kg

Grocery Small 4 20kg 2 25kg

By seeing these data, one strong point comes out that Grocery Big sellmore confectionery then Grocery small and in rural market Grocery big arenormally wholesalers who again sells their product to small stores.

3. Changing price of Nestle chocolates makes difference in buying. 70%

support it and 30% says doesnt matter.4. As in Demand for Kit Kat and Munch is still there in market

17% says they are buying in same quantity.

69% says they decreased the quantity.

14% says will not buy

5. 38% of retailers face no problem in selling chocolates but 62% still faces

problem in selling chocolates.

Problem faced:

Seasonal 10% Proper display 34% Change issue 34%

Non availability 22%

In rural market, these 3 problem were found to be the major one that is

Proper display, Change issue (Giving them change in return) and in some

area product were not available even if demand is more for example Maha

munch (Rs 5) which is substitute of Perk (Rs 5) (Cadbury). The distribution

of dispenser in rural market is negligible. Even some big stores wereasking about dispenser.


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PROJECT IN PROGRESS (PIP)

Sales at a glance

These figures shows the cases sold in 2010 & 2011 of January to June in Ruralmarket.

2010

2011

Jan Feb

Mar Apr

May

Jun Total

Jan Feb

Mar

Apr

May

Jun Total

Growth (in%)

PP

clairs

79 46 207 17

7

17

2

16

7

848 408 69 23

4

27

1

14

7

85 121

4

VAclairs

13 7 17 23 25 21 106 37 22 26 48 33 44 210

Both 954 1424

149.26

Next two tables show the sales turnover of both (PP clairs, V A clairs) ofJan toJune in 2010 & 2011.

*Table1. Shows the turnover of those months (January to April) when jars of PPclairs was available in the market to find out the growth rate over the previousyear.

**Table2. Shows the sales turnover ofMay and June when jar of PP clairs wasnot available and effect of that on sales of different rural markets.


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Sales Analysis

This graph shows the Avg. sales comparison when Jar of PP clairs was availablein 2010 & when Jar was not available in 2011. The market was influenced as thesales drop down. In rural market some area are where Value added clairs are indemand like Patrahtu, Lohardaga. These areas are not much affected with theclosing of PP clairs jar.

Outcomes

I worked in 6 rural market where Ratu achieves 132% growth rateOLY. Then comes patrahatu with 119% and chandwa with 111%growth rates OLY.

New clairs (Cappuccino) market is not that good in rural market.Retailers demand more of chocolates clairs then cappuccino clairs.

PSM now started focusing on selling confectionery in rural market. Inurban market DS are still not concerning about placing confectioneryin market.

Schemes, to the great extent, help in replacing value added clairs inplace of PP clairs.


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LIMITATIONS

1. Study was confined only to Ranchi.

2. The total time to carry out the research work was insufficient.3. Due to different human psychology, some people were indifferent towards

filling up the questionnaire.4. In rural market, super stockists were having less stock as compared to the

quantity demanded of PP clairs. Thus facing much problem in placing thePP clairs.

5. My study constituted the period of replacing the old stocks of chocolateswith the new one. Thus retailers were not able to give their accurateopinion, during filling up questionnaire as they were having the stockwhere price was not changed. Resulting in the biasness of the opinion.

6. Due to ill filtration, the turnover of some area may vary.7. In June 2011, Billing of the products was done more than the quantity

demanded in order to compete the target, which resulted in decrease inthe sales turnover in month of July. Thus directly affecting my researchperiod.


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SUGGESTIONS & RECOMENDATIONS

1. PRODUCT

Product differentiation strategy can be adopted or re-launching of theproduct can be done with the title New Written on the pack.

Nestle can also increase their product range and variants especially underthe Brand Kit Kat, as Cadbury does the same for their Brand CDM(Cadbury dairy milk).

As compared to Cadbury Celebrations and Amul Rejoice, Nestle canalso offer gift packs in order to boost up the sales.

1. PRICE

Prices of the products should be in Round figures Like Rs 5, 10, 15.Increasing price is having direct impact on sales volume, making it todecrease on continuous basis. The only solution can be, to reduce thequantity rather decreasing quality of chocolates.

Some kind ofschemes should always be attached to Value added clairs,especially in rural market.

1. PLACE

In rural market, sale of confectionery is satisfactory and Re distributionshould be made by asking the retailers about their capacity to distributeNestle products in the respective areas.

S.O should regularly monitor the sales of RD market and also monitor thesalesman working pattern who is working under different RD in order to

have regular feedback for the same.

1. Promotion

One way to increase the sales of clairs in rural & urban market can beextensive advertisement with the help of television media. The themeshould focus only on the replacement of value added clairs in place of PPclairs.

Another way could be, distributing the free samples in schools on specialoccasions like Annual day, Independence Day, Republic day etc.


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Customers can be provided with some short term offer like buy 2chocolate or cappuccino clairs and get 1 milky bar clairs free. This willnot only help in increasing the sales but also in increasing brandawareness among consumers.

CONCLUSIONIn my research, I have compared the previous years and current years

Sales turnover from the month ofJanuary to June. The RD markets like

Chandwa, Khalari, Kuru, Nagri, Patrahtu, Ratu were massively affected by

the closing of the jars of PP clairs during the month of July, 2011. When

the jar was available in the market in 2010, the growth rate was 200.28%.

And with the non-availability of the jar in May & June 2011, there was

drastic reduction in the sales volume. We tried to replace the Value added

clairs in place of PP clairs on these markets with the help of PSM (Pilot

sales man). To some extent we succeeded by increasing the turnover.

In 2010, Nagri market was combined with that of Bero market. In 2011,

these two markets were separated; resulting in, decrease in the sales

turnover. Proper measures are being taken up by new RD of Nagri in order

to increase the sales turnover.

Closing of the Jar of PP clairs have affected most on the market like Kuru,

which were solely dependent on PP clairs. PSM are regularly visiting

these areas and also Sales officer monitors their activities on the regular

basis in order to meet the target.

The replacement process of PP clairs with value added will surely take

some time, in order to capture the market. Its not like a one shot game.

In coming months, 80% retailers of urban market and 72% retailers of

rural market agrees to sell Value added clairs in place of PP clair. Thus

PP clairs can be replaced by value added in coming months.


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BIBLIOGRAPHY

Books & Magazines:

Keller and Kotler, Marketing Management.

Kothari C R, Business research

4ps Business & marketing

Websites:

www.nestleindia.com

www.google.com

www.quickmba.com
http://www.nestleindia.com/http://www.google.com/http://www.quickmba.com/http://www.google.com/http://www.quickmba.com/http://www.nestleindia.com/

Documents

Project Report Neste