Nestle Chocolates

Indian Chocolate Market

Valued at Rs 750 Crore Growth stage in PLC Huge untapped market- penetration just 5% Chocolates still viewed as an indulgence Cadbury 70%, Nestle 24%, Amul 3%

Pune chocolate market

Valued at 1.5 Crore, 12,000 retail outlets Cadbury 85%, Nestle 8%, others 7% SKUs priced below Rs.5 account for 60% of sale Dairy milk 40%, Perk 10%, 5 star 10%, gems 5%

Nestle
Chocolate sales 346.51 Rs. Crore 24% market share Chocolates 13-15% of total revenue Product range includes Classic, kit Kat, Munch, Choco stik, Bar one

Nestle SWOT Analysis

Strengths Parent support Strong distribution network

Weakness
Raw material supply volatile prices Chocolates - comparatively small business unit

Opportunities
Low penetration, consumption; Launch of brands from international portfolio?

Threats
Foreign imports

Cadbury
Chocolate sales of Rs 514.03 Crore Market leader by far 70% share Dairy milk alone accounts for 30% of market Other power brands include Perk, 5 Star, Gems Targeting youth and adults through new products

Amul
Shifted focus in 1990s towards other milk products. Market share down to 2-3% Launched in recent years 6 new brands New brands centered on specific occasions/ festivals New brands are also targeting a specific age group each

Marketing Mix
- Nestle Chocolates

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 eg. Maha munch give more value for the same price Priced at key price points like Rs.5

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 offerings from Cadbury.

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 rural areas.

Types of competitionNestle chocolates

Brand competition - Cadbury, Amul, Industry sugar boiled (Parrys, Perfetti) Genre Ice creams, sweets, cream biscuits Form Greeting cards, Balloons, other snacks

Market segmentation
Demographic Age children, youth, adults Urban/rural Psychographic (Higher end segment) Usage rate (Family pack segments)

Perceptual Map

STRATEGY

BCG Matrix

GE MODEL

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 future from organized retail Supplier power No threat of forward integration, but volatile prices of key inputs Competition intensity- 2 players control 95%

Thank you
Nishant Betgeri (9860176449) nishant.betgeri07@sibm.net Priya Bhatnagar (9890860299) priya.bhatnagar07@sibm.net Writa Bhattacharjee (9860367205) writa.bhattacharjee07@sibm.net Yogesh Chandorkar (9860318261) yogesh.chandorkar07@sibm.net Shloke Churiwal (9860350892) shloke.churiwal07@sibm.net Farhan Farooq (9822416727) farhan.farooq07@sibm.net