Abhishek Randev

Abhishek randev
10902226
My product nestle
(List of Nestle Products worldwide)

Coffee Nescafé, Taster’s Choice, Ricoré, Ricoffy,
Nespresso, Bonka,
Zoégas, Loumidis
Water Nestlé Pure Life, Nestlé Aquarel, Perrier,
Vittel, Contrex,
S.Pellegrino, Acqua Panna, Levissima, Vera,
Arrowhead,
Poland Spring, Deer Park, Al Manhal, Ozarka,
Hépar, Ice
Mountain, Zephyrhills, San Bernardo, Quézac
Other beverages Nestea, Nesquik, Nescau, Milo,
Carnation, Libby’s, Caro
Shelf stable Nestlé, Nido, Nespray, Ninho, Carnation,
Milkmaid, La
Lechera, Moça, Klim, Gloria, Svelty, Molico, Nestlé
Omega
Plus, Bear Brand, Coffee-Mate
Chilled Nestlé, Sveltesse, La Laitière, La Lechera,
Ski, Yoco, Svelty,
Molico, LC1, Chiquitin
Ice cream Nestlé, Frisco, Motta, Camy, Savory,
Peters, Häagen-Dasz,
Mövenpick, Schöller, Dreyer's
Infant foods Nestlé, Nan, Lactogen, Beba, Nestogen,
Cérélac, Neslac,
Nestum, Guigoz, Good Start
Performance nutrition PowerBar, Nesvita, Neston
HealthCare nutrition Nutren, Peptamen, Modulen
Bouillons, soups,
seasonings, pasta,
sauces
Maggi, Buitoni, Thomy, Winiary
Frozen foods (prepared
dishes, pizzas)
Maggi, Buitoni, Stouffer’s, Lean Cuisine, Hot
Pockets
Refrigerated products
(cold meat products,
dough, pasta, pizzas,
sauces)
Nestlé, Buitoni, Herta, Toll House
Chocolate,
confectionery and
biscuits
Nestlé, Crunch, Cailler, Galak/Milkybar, Kit Kat,
Quality
Street, Smarties, Baci, After Eight, Baby Ruth,
Butterfinger,
Lion, Aero, Polo, Rolo
FoodServices and
professional products
Chef, Davigel, Minor’s, Santa Rica
Petcare Friskies, Fancy Feast, Alpo, Mighty Dog,
Gourmet, Mon Petit,
Felix, Purina, Dog Chow, Pro Plan, ONE, Beneful,
Tidy Cats
Pharmaceutical
company
Alcon
Pharmaceutical and
cosmetic joint ventures
Galderma, Laboratoires
Nestle India and BCG Matrix

With headquarters at Vevey, Switzerland and
established in 1866, Nestle has growth
today to be the world’s biggest food and beverages
company. Established in the strong
(2) Cash Cows represent a high market share in a
low growth market. These tend to yield
substantial cash surplus over and above their
investment requirements. Now cash cows are not
very attractive for long term investment but they are
needed for generating cash to meet the
organizational requirements. There is a further
classification in them as strong or weak cash
cows. Strong cash cows are those who were stars in
the near past and generate substantial
amount of cash surplus while weak cash cows are
those who might have been stars in remote
past and whose cash generation capacity is not
high. Such weak cash cows should be
considered for divestment.
(3) Dogs represent those businesses which have a
low market share in low growth market. These
businesses have a very low competitive position and
have very low profit potential as the market
itself has a low growth potential. Therefore they are
not attractive from a long term point of view.
These businesses may be harvested or liquidated as
they do no generate enough cash to
maintain their position in the market, especially on
account of the highly competitive market.
(4) Question Marks are those type of businesses
which are characterized by the low market share in
a growing market. These products are questionable
as to whether profit potential associated with
growth can realistically be captured. These question
marks have two alternatives (i) either to
grow them into stars if additional investment can
bring them into such position or (ii) to divest
them, if costs of strengthening them are quite high
as compared to returns
A STUDY OF THE CONSTRUCTION OF BCG MATRIX FOR NESTLE INDIA

Nestle has a wide range of products and is the
market leader in food business over the
world. However, it has a limited number of brands on
India. The peculiarity of these
brands is that those brands which are established
ones are really ones which dominate
the market and make almost no room for any
competition while, the brands which are
not so well established are not so on account of any
qualitative deficiency but either
because of a weak promotional campaign of the
company or on account of a
misplacement of the product in the target segment.
Nevertheless, we go ahead with our
study.
The present chapter is devised in the manner that
the overall matrix comes first and
then each products placed on the matrix is explained
as to why it finds a place in the
grid it has been placed in the matrix, along with the
relevant empirical data reproduced
therein.
Also, in the matrix itself, though the products have
been placed in one of the categories,
their projected placement i.e. where should be or
can be placed with a promotional
exercise, is also indicated by an arrow which shows
the appropriate category in which
the product is aimed to be placed. For example,
Maggi Noodles has been the pioneer of
the Noodle industry in the Indian market. But as far
as Nestle is concerned, it is only a
cash cow. Therefore it is aimed to be placed in the
Stars. This is indicated by an upward
arrow which signifies that the product is aimed for
repositioning and the direction of the
arrow shows the grid where it is heading to, in this
case upward arrow is indicating to
the stars.
Also, besides the intended placement of the
products, there are some products which
need to be taken off the market. For example,
Nestlé’s world dominating brand of water,
Nestle Pure Life, was taken off the Indian market on
29.12.2003 when strategically it
was found unviable to continue with it. This shows
the intention of Nestle not to play in
the Indian water market though it has a well
established base of the same brand abroad
and it could have reaffirmed a market share had it
decided to introduce Perrier, another
famous water brand of Nestle.
Product: Nescafe
Position: Star
Reasons for present positioning:
(1) Nescafe is one of the leading coffee brands in
the Indian market.
(2) It has find a dominance which is unparalleled by
any other brand in the country.
(3) Not only does it have a high market share but it
growth rate is also significantly
high.
(4) The name Nescafe has become generic with
coffee.
Intended Placement: <None>
Comments:
(1) Nescafe has witnessed a substantial growth in
the present times and seems to
continue dominating the market for some time.
(2) Nestle India must look in for expanding the
number of consumers in the North as
it has in the South.
(3) It kept on bringing new variants in order to hold
on to its position.
(4) The market share is firm and needs to major
repositioning.
Product: Ceralac
Position: Star
(1) Ceralac has become one of the leading baby
food products
(2) It has witnesses quite a long hold in its market
share with its sales increasing on
a continuous basis for almost more than one and a
half decade.
(3) Its different variants have kept competitors at bay
and its finds a place easily at
almost every general or provisional store in the
Indian market.
(4) It is a major contributor for Nestle India’s
revenues.
Intended Placement: <none>
Comments:
11
(1) With the increase in population and the growth
market in the country Nestle India
can do much better in terms of registering more
shares by an aggressive
promotional drive.
(2) It needs to take aggressive steps to enter into
those households where
traditionally followed methods of feeding new born
infants are followed. The
market exists for Ceralac to expand and though it is
already a star, it can do
much better in terms of expanding its shares by
adopting market development
strategies.
Product: Maggi Noodles
Position: Cash Cow
(1) It is surprising to note that Maggi Noodles, which
has found more households of
consumption in India that any other country in the
world and has become the first
preference of Indian children in terms of instant food,
is only a cash cow and not
a star.
(2) The reason essentially lies in the fact that though
Maggi Noodles has a
significantly high market share in the Noodles
market in India, the market growth
rate of Noodle consumption is not very high.
(3) Though the number of repeat purchasers is high
in case of Maggi, the rate of
increase among the new purchasers is not too high.
Intended Placement: Star
Comments:
(1) Maggi Noodles is undoubtedly the leader in the
Noodles market and faces
almost no competition which might threaten its
existence in near times, yet the
target placement of Maggi Noodles seems to be at
fault.
(2) Instead of continuing to target the children,
Maggi Noodles should now also
concentrate on placing the products for Office
Executives, Mid wives, Young
adults, and the elite wing of the society.
(3) The need presently is to expand the market or in
fact create new markets for
Maggi Noodles.
12
(4) Therefore, the task for Maggi Noodles lies ahead
for Market Development and
thus expanding the consumer base in the presently
unexplored sections of the
society.
Product: Milo
Position: Question Mark
(1) Though Milo has not totally been removed off the
shelves of the stores and
caters to the demand of the consumers arising on
account of absence of other
products in the same design (e.g. Bournvita,
Complan, etc.), it has been unable
to acquire a market in the basis of its brand name.
(2) The reason why it is not placed as a dog is that it
has the potential to expand
and also because the product lies in a market with
high business growth rate.
(3) The retailers don’t give much importance to Milo
as an item on the shelf but they
also do not completely disregard it off their stores.
Comments:
(1) Milo is a food drink with a bit subtle taste and not
that sweet as its competitors’
offer, Bournvita being the primary one. Thus it needs
to develop upon that.
(2) Milo has never witnesses a seriously taken
promotional drive. The main chunk of
advertisements it saw was during the world cup or
the Olympics. This has not
given an impressive and long lasting image of Milo
on the Indian consumers.
(3) Milo has not been promoted as a health drink as
Boost or Complan and to some
extent Bournvita has been done. Milo needs to
improve in this regard.
(4) Thus, in essence, Milo is not weak in terms of its
qualitative deficiencies but on
account of lack of an extensive promotional exercise
meant to place it in the
mindset of the Indian psyche.
(5) It has huge avenues for growth especially
analyzing the extending Indian market
for health and milk drink and Nestle can convert this
question mark into a star by
aggressively placing it in the top shelves.
13
Product: Maggi Sauce
(1) India has a growing Ketchup market and Maggi
has been a significant contender
as a leader. But as far as Nestle is concerned, it is
not turning up that size of
revenues which every top brand contributes to
Nestle.
(2) Maggi Sauce has been highlighted with top
television celebrities but there was a
considerable time lag of more than five years in the
two major promotion
exercises Maggi Sauce has witnesses; once in the
early 1990s and the one
which is going on presently.
(3) Maggi Sauce, acknowledge the retailers, has the
capacity (both on account of
the reasons of price and taste) to wipe out
competitors (both the branded as well
as the local ones) and thus has huge potential to be
converted into a star.
Comments:
(1) Though it has been kept as a question mark yet,
Maggi Sauce has the potential
of turning all odds in its way to become a dominating
brand.
(2) Competitors like Kissan, Tops (especially in north
India) etc. do not pose any
barrier in the growth of Maggi Sauce as the leader.
(3) Extensive market development, followed by an
extensive promotion drive in all
nooks and corners of the country is the key to
turning Maggi Sauce into a
success as a brand leader for Nestle
Product: Maggi Pickles
(1) Maggi Pickles, on account of its limited variety
(especially in this taste crazy
country) and comparatively higher prices, has been
unable to acquire a market
necessary for its bare minimum existence.
(2) The sales of Maggi Pickles has never really
trigged since its launch.
(3) The placement of Maggi Pickles is doubted for
the twin reasons of its high price
and packing, which seems to target it to the upper
substrata while the lack of a
14
significant number of variants poses it a challenge to
maintain itself in such
households.
(4) It is not a dog because it is not the market which
has low growth rate. In fact the
market of packaged pickle is growing but it is Maggi
Pickles which is unable to
gather a substantial share in this growing market.
Intended Placement: Disinvest
Comments:
(1) Placing Maggi Pickles on the hearts and mind of
the typical taste centric and
money conscious Indian consumer will require an
overhauling and huge
investment.
(2) Extensive price cuts are required but the
matching returns are doubtful.
(3) Pickles being a non-durable product and their
success essentially related to the
taste of the consumer, are not one of the core
competencies of Nestle, which is
better known to introduce standard taste in the
country and get them approved
by the consumers.
(4) Thus it is better advised to disinvest in the
business and focus on other brands.
Product: Maggi Soup
(1) With the success of Knorr and other local packed
soup, it is clear that packaged
soup market in India has a good future.
(2) Maggi Soups have never been rejected by the
consumer.
(3) According to the retailers, the demand for soup
itself is underdeveloped and thus
there is no indicator critically against the success of
Maggi Soup.
Comments:
(1) Maggi Soup needs to dominate the market but
before that it has to develop the
market itself.
(2) The demand for packages soup is
underdeveloped and thus there is a need for
extensive market development strategies.
15
(3) The advantage of Maggi Soup in going in for
such market development
strategies is that it will get the advantage of early
start and thus like Maggi
Noodles it can make a monopoly on packaged soup.
(4) The development of the market is to be based on
the twin principles of the
nutritive contents of the soup as well the
convenience and taste, which make it a
suitable alternative for other fast food.
Product: Kit Kat
(1) Owing to crispiness and superior quality, Kit Kat
has an upper edge over its
competitors.
(2) Had this survey been made a couple of years
ago, may be Kit Kat would have
found the position of a Cash Cow because of the
market share it acquired in a
fairly decent and yet to develop wafer-chocolates
market.
(3) However, on account of the rise of competitors,
especially Perk, Kit Kat seems
to have loosened up its grip in the market and has
lost some of the prominent
recognition which it commanded earlier.
(4) It is placed as a Question Mark as the brand has
the potential but lack a
significant market share as of now. Also, a mere
repositioning in the market
segment can lead to the success of the brand
Comments:
(1) Kit Kat is one of the major successful brands of
Nestle, which has proclaimed its
dominance and success world over, ruthlessly
dominating the European and the
South American markets. There is no reason why it
cannot repeat the story of its
success in the Indian markets as well.
(2) Kit Kat needs to emphasize over its superiority in
terms of quality as well as the
superior taste over its competitors.
(3) Kit Kat needs to adopt a market penetration
strategy and for doing so it needs to
start on an aggressive promotional drive. Not
confined one segment, it needs to
16
target on the market executives, the University going
folk, and house wives and
the elderly in specific quarters and all segments at a
time.
(4) Kit Kat is already prominent as a brand name in
the country. The only
requirement is to capitalize upon it.
Product: Bar One
(1) Though was in prominence for quite long a
couple of years back but its sales
never really clicked. The qualities which a leader
exhibits were never shown by
Nestle wherever Bar One was concerned.
(2) In tight competition for the market leader spot
with Five Star, Bar One has
superiority as far as its ingredients are concerned. It
also sells well. Nonetheless
there seems to be some barrier for which the
retailers seem to recognize it only
as a market challenger with subtle features.
(3) Bar One has a growing market but lacks a
considerable market share. Thus it
finds the place as a question mark.
Comments:
(1) Market already exists for Bar One. The need is of
market penetration.
(2) Bar One needs to focus on the adolescences
who seem to be the major buyers
of chocolates of this type.
(3) The Rs. 5/- which it has recently introduced is a
classic example of cashing in
the consumer psyche but it cannot be denied that it
has done so following the
example of Five Star. It needs, therefore, to take
more initiatives but more so of
its own accord and not as a follow up measure.
(4) Bar One needs to pursue a strategy of market
penetration, as already stated, but
it also needs to emphasis on the fact that it has to
sell itself in the market as a
chocolate. Though it is in the form of a bar but it still
faces competition from other
forms of chocolate wherein Cadbury is the toughest
competitor to it. Thus it has
to go on an extensive promotional drive and also
illustrate the superiority of bar
17
over the other forms of chocolate both in terms of
convenience while
consumption as well as the price.
Product: Nestle Milk
(1) Packaged milk has not found much market till the
later half of the 1990s.
However much market in this regard has been taken
over by the local
manufactures for example Mother Dairy in Delhi,
Saras in Rajasthan etc. Amul is
one such competitor which gives competitor to
Nestle on a national scale.
However, Nestle Milk has not really find a place in
the market that it can be said
to be known at least to the typical Indian consumer,
if not unanimously chosen
by him.
(2) The fact which tends to place Nestle Milk in the
category of a Question Mark is
the sheer emergence of packaged milk market
which is finding gloss in India.
More and more Indian are not favoring packaged
milk and in fact in most of the
urban households it is only packaged milk that is
used. However, on account of
non-capitalization of Nestle Milk of the growing
share in this market, is finds a
place in the Question Mark.
Comments:
(1) Once the fact that packaged milk in India has a
huge potential and the market
will grow at a significant future, it is but imperative
for Nestle to go for Market
Development i.e. not only create a flourishing market
for packaged milk but also
reposition Nestle Milk as a market leader which at
present seems to be
dominated by Amul.
(2) The conversion of Nestle Milk from Question
Mark to star is primarily based upon
a strategic decision of Nestle whether to go ahead
with the Market development
of packaged milk or not, which again is based upon
a cost benefit analysis for
Nestle upon the decision whether to invest such a
huge amount in developing
18
the market would yield such desired returns, both in
terms of revenue as well as
all round growth.
Product: Nestle Butter
(1) Nestle Butter, though available in the market for
some time now, has not found
much support from the consumers primarily on
account of the dislike of the taste
of Nestle Butter.
(2) Considered as salt less, Nestle butter again is
yet to grow from its pre-launch
position on account of the huge competition it faces
from Amul, the market
leader in this field.
(3) Now, as the market growth rate is quite
significant, yet as Nestle Butter has not
acquired a better share in the market, it has been
placed in the category of
Question Mark.
Comments:
(1) Facts do not favour Nestle to continue with its
butter.
(2) Instead of no response, a significant number of
retailers are of the opinion that
Nestle Butter seems to be rejected by the
consumers for the reason that its taste
does not suit the Indian psyche.
(3) Thus it is advisable for Nestle to discontinue with
butter, as it did with its water
brand, Pure Life. Also, it would be better to
concentrate on other brand than to
go in for a head on collision with Amul, the market
leader, which is inevitable on
account of the same market which both the products
cater to.
Product: Nestle Fruit N’ Milk
19
(1) Nestle itself seems to be unclear as to which
market it has been targeted to. On
own side it is a fruit drink with pleasant flavors, on
the other head, it is a health
drink with nutrients of milk as well as fruits.
(2) Also, the placement of the brand is dubious.
While it finds a place with retailer of
sizeable capacity, it seems absent from other health
and juice shops. Thus there
has to be a definite decision of made by Nestle as to
the placement of Nestle
Fruit N’ Milk.
(3) The product however, on its own accord, has not
been a failure totally. It seems
to find a place consistently in some of the firms but
there are no regular
consumers for the products the consumers are
either occasional users are those
who have a flair to try new products.
(4) The market for health drinks, however, is growing
and the health conscious
Indian consumer is now choosing a health drink like
Real than just going in for
cold drinks and other junk food.
Comments:
(1) Despite the fact there has not been much
promotion of Nestle Fruit N’ Milk by
Nestle itself but the fact that it has not been rejected
by the Indian consumer in
itself is a positive signal.
(2) The present step, therefore, that needs to be
taken by Nestle is to promote it in a
pre-defined market, wherein placing it as a health
drink would be most
favourable to Nestle towards establishing it as a
successful brand.
(3) Thus, Nestle Fruit N’ Milk needs to be placed as
a competitor to Real fruit juice
and there is a certain prospect for this to succeed on
account of the fact that it
gives additional features than Real, which is only a
fruit juice but Nestlé’s
products offers the nutrients of both fruits as well as
milk.
(4) Therefore the need for Nestle is to go in for
Market Development Strategy and
capitalize on the growing concern of the Indian
consumer of going in for health
drinks.
(5) The aim is to place Nestle Fruit N’ Milk as the
generic brand for health drink to a
typical middle class Indian consumer.
20
Product: Nestea
Position: Dogs
(1) With taste conscious Indian consumer, typically a
middle class one, the morning
has to essentially begin with a cup of tea which suits
the tongue and also gives a
fresh start. But the peculiarly lies in the diverse local
flavors of tea, which
essentially has to be perfect in order to favour that
brand.
(2) There lies the problem with Nestea. Though
Nestle has been successful in the
beverages section world over, the diverse and
typical taste tendered to by the
Indian consumers is not in favour of going in with
‘one product suits all’. It is for
this reason that Nestea has not found acceptance
with the Indian consumer.
(3) But facts are not totally against Nestea. Tata Tea
has been successful though it
has also one flavor and serves on a National basis.
However the taste of Nestea
has simply not been accepted by the Indian
consumer.
Comments:
(1) Though there is a possibility for Nestea to find
acceptable from the consumers if
some amount of research and development is
diverted towards the taste of
Nestea but there are a multifarious reasons for
which divestment of Nestea is
recommended.
(2) Firstly, even if the taste of Nestea is changed, it
is very hard to change the
mindset of the typical Indian consumer who are
more attached to taste than to
any other consideration in case of tea.
(3) Secondly, Nestea, as a foreign brand of tea shall
have to face the xenophobic
attitude of the consumer who prefer to consume
local flavors or say variants of
tea than any other foreign tea as illustrated by Ruby
Dust in Maharashtra Circle.
(4) Also, going into the local taste has never been
the attitude of Nestle. Instead it
has always chosen to go in for making the foreign
taste accepted to the local
consumers. The same story has been told by the
success of Maggi Noodles,
Nescafe, Kit Kat etc. and wherever it has been
unsuccessful, it has been
21
advisable to disinvest the brand from the product
line as has been done for
Nestle brand of waters.
Product: Milky Bar
Position: Dogs
(1) It become quite popular in and around the year
2000 but it never reached the
stage of a power brand.
(2) Primary tried by the Indian consumer as a craze
which laid in trying the first nonbrown
chocolate, Nestle Milky bar was a sweet chocolate
with cream color. Thus
the primary acceptance of Milky bar was not based
on its core qualities but on
the basis of certain peculiarities which it contained,
differentiating it from other
products in the same line.
(3) Milky Bar, as a chocolate, though has a growing
market, yet it has been placed
as a dog on account of the inherent lack of core
quality which makes it generic
with chocolates. This was the main reason why it
was never considered a
competitor by other chocolate manufactures and the
consumers also treated it
so.
Comments:
(1) Milky Bar has lost the primary battle which it had
with mindset of the unaware
Indian consumers who could never contemplate a
non-brown chocolate.
(2) The market positioning of Nestle Milky Bar has
been only to children (as one can
contemplate from the advertisements which relate
only to children in the age
group of 10 -15) and thus it has lost the adolescent
consumer, which is also a
major part of the entire consuming segment of
chocolates.
(3) The promotion style of Milky Bar has never been
dominating. The
advertisements have been too soft and not too
impressive. Thus success of
Milky Bar requires rebuilding the image of Milky Bar.
22
(4) The cost benefit analysis also shows that
continuing with Milky Bar is expensive
as the amount required for its promotion and
development has not led to the
same amount of returns.
Product: Nestle Dahi
Position: Dogs
(1) Majority of the consumers are unaware that
Nestle offers a Dahi also.
(2) The launch of Nestle Dahi has been in select
cities but there too only select
outlets retail it. (It is not offered in Jodhpur)
(3) The concept of packaged Dahi is not being
accepted by the consumer who
prefers to play it safe with the local manufacturer
wherefrom he can keep a
check on the qualitative content of the product as
well before consuming it.
(4) Thus, lack of a growing market makes Nestle
Dahi to be placed in as a Dog.
Comments:
(1) Dahi is a product which is best if considered
fresh. This traditional mentality of
the Indian consumer is the biggest barrier in the
success of Nestle Dahi.
(2) The concept of packaged Dahi is yet to
materialize in India. Therefore its launch
by Nestle is premature.
(3) It is advisable to leave the avenue then to go in
for market development in this
case when there is big risk of the failure of the entire
investment to doom on
account of the psychic barrier of the consumers.
Product: Crunch and Munch
(Since both these chocolates of Nestle cater to the
same market and are also similar in
composition and variety, they have been considered
together in this case)
Position: Dogs

Abhishek Randev

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(List of Nestle Products worldwide)

Nestle India and BCG Matrix

A STUDY OF THE CONSTRUCTION OF BCG MATRIX FOR NESTLE INDIA

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