SUCCESS STORY OF NESTLÉ MILKMAID

Submitted by:

MD SADIQUE SULEMAN

DM16D19

CM 2

NESTLÉ MILKMAID

FMCG Industry

The fast moving consumer goods (FMCG) segment is the fourth

largest sector in the Indian economy

FMCG market is expected to increase at (CAGR) of 14.7 per cent

to touch US$ 110.4 billion during 2012-2020

Expected to increase at compound annual growth rate (CAGR) of

14.7 per cent

MARKET SHARE

43

22

12

8

4

42 5

food product personal care fabric care hair care households otc products baby care others

NESTLÉ MILKMAID

‘Food products’ is the leading segment, accounting for 43.0 per

cent of the overall market

Personal care (22.0 per cent) and fabric care (12.0 per cent) are the

other leading segments

The rural FMCG market expected to increase at a CAGR of 16.3

per cent to USD100 billion during 2011–25

The FMCG sector has grown at an annual average of about 11 per

cent over the last decade

THE FMCG MARKEG HAS FOUR SEGMENT

FMCG

HOUSEHOLD

CARE PERSONAL

CARE FOOD &

BEVERAGE HEALTH CARE

Health beverages,

staples/cereals, bakery

products, snacks,

chocolates, ice cream,

tea/coffee/soft drinks,

processed fruits and

vegetables, dairy products,

and branded flour

Fabric wash,

Household

cleaners

Oral care, hair care,

skin care,

cosmetics/deodorant

s, perfumes, feminine

hygiene and paper

products

OTC products and

ethicals

NESTLÉ MILKMAID

FMCG REVENUES OVER THE YEARS (USD billion)

THE URBAN SEGMENT IS THE LARGEST CONTRIBUTOR

1 2 3 4 5 6 7

Series2 15.7 17.8 21.3 24.2 30.2 34.8 36.8

Series1 2006 2007 2008 2009 2010 2011 2012

66.5

33.5

urban rural

NESTLÉ MILKMAID

FMCG GROWTH DRIVERS

Rising incomes

Driving purchase

Desire to experiment with brands

Evolving consumer lifestyle

New product launches

Growth of modern trade

Availability of online channel to shop

Increasing consumer demand

Greater awareness of products, brands

MARKET SHARE

36.4

30

8.2

6

4.3

15.1

HUL ITC NESTLE BRITANIA DABUR OTHERS

NESTLÉ MILKMAID

COMPANY INFORMATION:: NESTLE

Founded 1866; 150 years ago (as Anglo-Swiss Condensed

Milk Company)

1867 (as Farine Lactée Henri Nestlé)

1905 (as Nestlé and Anglo-Swiss Condensed Milk

Company)

Founder Henri Nestlé, Charles Page, George Page

Nestlé S.A. is a Swiss transnational food and drink company

headquartered in Vevey, Vaud, Switzerland. It has been the

largest food company in the world

NESTLÉ MILKMAID

On 28th March 1959, the Company was incorporated at New

Delhi. The Company was promoted by Nestle Alimentana

S.A. through a wholly owned subsidiary, Nestle Holdings Ltd

Parent Company Nestle Ltd

Category Food Products

Sector Food and Beverages

Tagline/ Slogan Good Food, Good Life

USP

The biggest health and wellness brand in the world, top

brand in Fortune 500 list

STP

Segment

People looking for premium quality, and branded

products like foods, dairy products, baby food, pet food,

confectioneries, etc.

Target Group Urban middle and upper middle class

Positioning

A world class brand providing good quality, healthy and

tasty food and beverages

PRODUCT PORTFOLIO

Brands Milky bar

MilkMaid

NESTLÉ MILKMAID

Everyday Dairy Whitener

Nescafe

Maggi Noodles

Kit kat

Bar One

8. Polo

SWOT ANALYSIS

Strengths

More than 140 years in the industry

World biggest brand, top brand in Fortune 500 list

Global reach with presence in over 86 countries

An employee strength of around 328,000 people

worldwide

Wide product range including baby food, pet food,

dairy products, confectioneries, pharmaceuticals,

beverages, etc.

Popular brands owned like Maggi, Haagen-Dazs,

Boost, Kit Kat, Nescafe, etc.

Largest R&D network facilitating continuous

innovation

Strong supply chain network

C.S.R. activities for rural development, environment

protection, water conservation,, etc.

Mergers and acquisitions and joint ventures to

increase market share

Strong marketing and advertising power

Strong brand loyalty and brand recall

Weaknesses

Being a big global brand, Numerous controversies

in different countries of operation can cause issues

Strong competition by other brands

NESTLÉ MILKMAID

Opportunities

Introduce more health based food products to tap

the health consciousness amongst consumers

Expand with focus on developing economies

Continue with acquisitions and joint ventures to

increase its market share

Try to capture the rural markets

Threats

Failure of the complex supply chain

Economic instability and inflation in most countries

EURO zone crisis, as most of its revenue comes

from Europe

Increase in cost of raw materials

Stiff competition in all product segment

SHARE HOLDING PATTERN

Holder's Name No of Shares % Share Holding

Foreign Institutions 13660675 14.17%

Foreign Promoter 60515079 62.76%

General Public 13567332 14.07%

Financial Institutions 4430835 4.6%

Others 2931451 3.04%

N Banks Mutual Funds 1257767 1.3%

NESTLÉ MILKMAID

Central Govt 52577 0.05%

COMPETITORS

Name Market Cap.

(Rs. cr.)

Sales

Turnover

Net Profit Total Assets

Nestle 58,960.14 8,175.31 563.27 2,835.57

Britannia 34,743.84 7,955.72 764.98 1,703.51

GlaxoSmith Con 21,440.54 4,308.73 686.91 2,445.65

KRBL 6,992.26 3,358.85 371.37 2,677.65

14

63

14

53 1

0

ForeignInstitutions ForeignPromoter GeneralPublic FinancialInstitutions Others NBanksMutualFunds CentralGovt

NESTLÉ MILKMAID

Hatsun Agro 5,325.89 3,444.59 60.50 749.90

Coffee Day 4,116.94 48.72 -110.52 2,405.37

Manpasand Bever 3,234.43 556.71 50.56 601.57

Kwality 3,031.53 5,724.23 144.25 2,059.29

Parag Milk Food 2,226.09 1,622.95 52.51 737.79

Heritage Foods 1,985.83 2,380.58 55.43 345.10

Prabhat Dairy 966.02 999.70 9.39 616.85

MARKET SHARE

36.4

30

8.2

6

4.3

15.1

HUL ITC NESTLE BRITANIA DABUR OTHERS

NESTLÉ MILKMAID

PRODUCTS

TAG LINE

Argentina: “Change the day start within”

Germany: Give yourself a break”

United States: “The smart choice”

India: “good food good life”

STORY OF MILKMAID

NESTLÉ MILKMAID

MilkMaid

Parent Company Nestle

Category Food product

Sector Food Products

Tagline/ Slogan Doodh badla mood badla ;Good Food Good Life

USP Condensed milk sweet dish ingredient

STP

Segment Homemakers who prepare sweet dishes

Target Group

All People especially housewives between 25-50 middle

and upper class

Positioning Sweetened milk for making sweets

SWOT Analysis

Strengths

1. Strong Nestle brand name

2.Excellent advertising and visibility

3.Good product distribution and availability

4. Recipes help in brand promotion

Weaknesses 1. Not good for diabetic patients

NESTLÉ MILKMAID

2.Food products have a limited shelf life

Opportunities 1.Low sugar version

Threats

1.Threat from pure milk

2.Substitute milk sweeteners

Competition

Competitors 1.Amul Mithaimate

NESTLÉ MILKMAID a name synonymous with delicious

desserts has been delighting generations of Indian consumers over

the past 100 years

MILKMAID defined Nestlé’s ‘sweet’ entry into India – It was the

first brand to be traded by the company in India

Its convenient format and versatile nature allows you to prepare a

plethora of traditional as well as contemporary desserts

CONTRIBUTION

NESTLÉ MILKMAID

The American brothers and Nestlé forefathers who built Europe’s first

condensed milk factory in 1866

NESTLÉ MILKMAID

Nowadays when we pour pasteurized fresh milk onto our breakfast

cereal, or sweetened condensed milk onto our dessert, we take it for

granted that such staple foods are safe.

This wasn’t always the case. Until the nineteenth century, pure, fresh

milk was a prized commodity in towns and cities across Europe. Milk

was often a major carrier of disease, as refrigeration was uncommon and

it quickly spoiled. Milk adulteration was also rife and could kill. Chalk,

water and other substances were often added.

This was the situation that Charles found when he arrived in Zurich in

1865, as a young US Vice Consul of Trade. Yet in the Swiss countryside

he saw cows grazing on fresh, green meadows. This made him think of a

popular new American foodstuff that, as a journalist covering the

country’s Civil War, he had seen issued to Union troops.

Europe’s first condensed milk factory

Invented by Gail Borden in the early 1850s, canned condensed milk

proved invaluable as a military ration in the 1860s. While fresh milk had

spoiled due to long supply chains, canned milk was nutritious, portable,

long-lasting and, crucially, safe. Little surprise then, that sales exploded

in US towns and cities after the war.

Hoping for similar success in Europe, Charles Page founded the Anglo-

Swiss Condensed Milk Company in Cham, Switzerland, in 1866. At this

time George was in the US learning Gail Borden’s pioneering process

for producing condensed milk. This involved heating milk to evaporate

some of the water, then adding sugar as a preservative.

NESTLÉ MILKMAID

Left to right: George Page, Charles Page

A year later, the Pages opened Europe’s first condensed milk factory in

Cham, and their Milkmaid Brand began to roll off the production line.

High standards of quality and safety, a modern factory, efficient

distribution and savvy marketing ensured the product was a success. The

brand that began Nestlé’s 150-year history is still sold today as Nestlé

Milkmaid.

As early as 1868, Anglo-Swiss sold over 374,000 cartons of condensed

milk. Demand was led by Great Britain and its colonies, whose appetite

for condensed milk had inspired the brothers to choose their company

name. Charles died in in 1873, and by 1891 George was managing a

business with 12 factories across Europe and the US that exported

worldwide.

‘The General’ proves an enlightened leader

George Page, or ‘The General’ was the driving force behind Anglo-

Swiss. An enlightened man, he understood that long-term business

success meant behaving responsibly: towards suppliers, employees and

NESTLÉ MILKMAID

society. In this respect Anglo-Swiss foreshadowed Nestlé’s approach to

Creating Shared Value.

Anglo-Swiss used only fresh milk from local cows, and farmers were

guaranteed payment for daily supplies at an agreed price. Milk was

delivered to the factory in steam-cleaned churns, and tested in a

laboratory for its fat content and purity.

Farmers were given technical help to increase milk quality and quantity,

and George Page encouraged advanced methods for keeping and feeding

cattle. Such a scientific approach to dairy farming was extremely rare in

the 1860s, and served as the early model for Nestlé’s modern-day ‘milk

district’ model.

Page’s treatment of his workforce was similarly advanced for the era.

Anglo-Swiss staff who fell ill were given pay when they were sick or

suffered workplace accidents, rather than simply sacked. They could

also join a voluntary health insurance scheme. George Page built

housing for staff in Cham and a kindergarten for their children.

Sharing Nestlé’s passion for nutrition

NESTLÉ MILKMAID

As a progressive employer, Page had a lot in common with another

recent immigrant to Switzerland, the German Henri Nestlé. A similar

passion for nutrition and social purpose inspired Nestlé to invent

his Farine Lactée infant food, which he sold from 1867 in Vevey.

After 1878, Henri Nestlé’s company and Anglo-Swiss became direct

rivals, as the two firms each began producing versions of the other’s

core product, which their customers liked to buy together.

Despite this rivalry, the two companies thrived while other competitors

failed. This is because they won trust through unstinting quality

standards. Both used the same ingredient, milk, to provide essential

science-based nutrition.

A merger of equals made sense. George Page, who had opposed a deal

on these terms, died in 1899. In 1905 the agreement was signed, and the

Nestlé and Anglo-Swiss Condensed Milk Company was born.

NESTLÉ MILKMAID

Nestle Milkmaid is the market leader in the Rs 150 Crore condensed

milk market in India. Milkmaid is a heritage brand which

was imported to India from the time Nestle started its operations 90

years ago. It was in the year 1969 that Nestle started manufacturing this

brand in India.

Milkmaid is partly Skimmed sweetened condensed milk. This is a

popular ingredient in sweets and delicacies and desserts prepared at

homes. Milkmaid has more than 55 % share in the organized condensed

milk market in India.

Milkmaid is positioned as a premium brand and is promoted with the

tagline "Bana De Everything Tempting" ( Makes everything tempting).

The brand is positioned as the inevitable ingredient in all home-made

delicacies.

Milkmaid although was a market leader, the brand faced issue of product

usage. There were certain factors that inhibited the product usage: price

and convenience. Milkmaid was a premium brand and the

shelf life of the product was limited, hence the affordability of this brand

was limited. Another factor was that many households were unaware of

the use of Milkmaid other than as an ingredient in sweets and desserts.

The brand tried lot of promotional activities to increase the usage of the

brand. The brand was promoted heavily through visual media and

through cookery shows, the brand tried to educate the customers on the

various recipes with Milkmaid.

The brand also came out with a package innovation. The brand created a

variant Milkmaid Squeezy which was the tube form of Milkmaid. The

purpose was to use Milkmaid as a topping for biscuits and breads.

NESTLÉ MILKMAID

Milkmaid faced intense heat of competition when Amul launched

Mithaimate brand in the market. Mithaimate was priced much lower to

Milkmaid and this forced Milkmaid to reduce the price to match the

Amul brand. With the lower price, Amul was giving Milkmaid a tough

fight for the market share.

This year saw a unique move by this brand. Milkmaid has come out with

a brand extension. Milkmaid has recently launched Milkmaid Funshake:

a fruit flavored milk targeting kids. The marketers predict a huge growth

in the ' Alternate Milk Category “in the coming years. I think that Nestle

had earlier tried out a Milkshake version of Nescafe but with little

success. It was little surprising to find a brand like Milkmaid extending

itself to a milk shake category. The ads are already on air. Funshake is

available in Mango, banana and Chocolate flavor and comes in a tetra

pack. The message is similar to Nido. The ad shows kids crying when

their mothers try to give them ordinary milk and then seen enjoying

taking Funshake. Old message and nothing new in execution.

In my personal opinion, Nestle needn't have sought the extension of

Milkmaid for this product. Funshake could succeed as a standalone

brand. By associating with Milkmaid, Funshake is not going to gain any

positive association.

NESTLÉ MILKMAID

DIVERSITY

Why it’s important

Nestle already a highly diverse organization in terms of

geographical spread and employee profile. Diversity and gender

balance must stay at the top agenda – enabling to draw from an

ever broader, larger talent pool; make better-informed decisions;

and deliver more robust consumer insights

Diversifying talent at Nestlé will focus on attracting, engaging and

developing people to ensure the right mix of talent to meet current

and future business needs

CONSUMER PREFERENCE

All marketing starts with the consumer. So consumer is a very

important person to a marketer. Consumer decides what to

purchase, for whom to purchase, why to purchase, from where to

purchase, and how much to purchase. In order to become a

successful marketer, he must know the liking or disliking of the

customers. He must also know the time and the quantity of goods

and services, a consumer may purchase, so that he may store the

goods or provide the services according to the likings of the

consumers. Gone are the days when the concept of market

was let the buyer’s beware or when the market was mainly the

seller’s market . Now the whole concept of consumer’s

sovereignty prevails. The manufacturers produce and the sellers sell

whatever the consumer likes. In this sense, “consumer is the supreme in

the market”. As consumers, we play a very vital role in the health

NESTLÉ MILKMAID

of the economy local, national or international. The decision we

make concerning our consumption behavior affect the demand

for the basic raw materials , for the transportat ion, for the

banking, for the production; they effect the employment of

workers and deployment of resources and success of some

industries and failures of others. Thus marketer must understand this.

Consumer buying process starts from recognition of the need for a

product, searching information about available alternatives,

evaluating these alternatives, deciding which product should be

purchased, actual purchase and analysis of behavior of buyer after

the purchase

Consumer buying behavior can be impulse buying,

routine/everyday decision making, limited decision making to

extensive decision making

Cultural, social, personal and psychological factors influence

consumer’s buying behavior

To design effective strategy, it is essential to understand how

consumers take buying decisions

Marketers need to categorize who influences the purchase, who

decides, who purchases and who finally uses the product

NESTLÉ MILKMAID

Target marketing includes market segmentation, targeting and

positioning

Segmentation can be done on the basis of geography, demography,

behavior or psychographics

It is effective and viable only if segments are measurable,

substantial, accessible, differentiable and actionable