Project Report On

“To study the challenges and trends in FMCG industry with reference to kit kat chocolate’’

Submit in partial fulfillment of the requirement

For the award of the degree of

MASTER OF BUSINESS ADMINISTRATION.

DEPARTMENT OF BUSINESS ADMINISTRATION
SESSION (2021 – 2023)

Under the guidance of submitted by:

Miss. Jigisha Shrivastava Divya Devi
(Assistant Professor) Roll no. –2100480700037
Batch BBA 2021-2023

DAYANAND ACADEMY OF MANAGEMENT STUDIES, KANPUR

AFFILIATED TO:

A P J ABDUL KALAM TECHNICAL. UNIVERSITY, LUCKNOW

 PREFACE

A professional course in (Master of Business Administration) is incomplete unless the

theoretical knowledge acquired in the classroom is backed up by practical exposure, as

theories alone do not give perfection to any discipline. The gap between theory and practice

is bridged by gaining knowledge of the issues & challenge of the industry, which has been an

integral part of the syllabus.

This present Project report is an image of what I have done and observed during my research

To study the challenges and trends in FMCG industry with reference to kit kat chocolate

This report is the result of the work done during the research period.

I have tried my level best to be as systematic and to avoid any sort of biases.
ACKNOWLEDGEMENT

To make any project, essential requirement is able guidance and references without which

project is incomplete. I am very much thankful to my internal guide Miss Jigisha Shrivastava

and the department who has provided us an opportunity and motivation to gain knowledge

through this type of mini project. I will get practical knowledge from this project and this will

help me a lot in my career.

I escalate a heartfelt regards to our HOD Mrs. Evangelin Singh. for giving me the essential

hand in concluding this work.

I am also thankful to DAYANAND ACADEMY OF MANAGEMENT STUDIES for

providing facility of library and computer laboratory, which are proved as valuable input

resources for preparing my project.

I also use this space to offer my sincere love to my parents and all others who had been there,

helping me walk through this work.

Thank You

NAME: DIVYA DEVI

ROLL NO.: 2100480700037

BATCH: 2021-23
 DECLARATION

I undersigned, hereby declare that the project titled “MINI PROJECT REPORT ON

STUDY THE CHALLENGES AND TRENDS IN FMCG INDUSTRY WITH REFRENCE

TO KIT KAT CHOCOLATE” submitted in partial fulfillment for the award of Degree of

Master of Business Administration at Dayanand Academy of Management Studies, Kanpur is

a bonafide record of work done by me under the guidance of Ms. Jigisha Srivastava, assistant

professor.

This report has not previously formed the basis for the award of any degree, diploma, or

similar title of any University. Whatever information is furnished in this project report is true

to the best of my knowledge.

DIVYA DEVI

MBA 2ND SEMESTER

ROLL NO.: 2100480700037

DATE:
 COLLEGE CERTIFICATE

This is to certify that the report titled “TO STUDY THE CHALLENGES AND TRENDS IN

FMCG INDUSTRY WITH REFRENCE TO KIT KAT CHOCOLATE” being submitted by Ms.

DIVYA DEVI, Roll no. 2100480700037, in the partial fulfillment of the requirements for the

award of the Degree of Master of Business Administration, is a bonafide record of the project

work done by her, under the guidance & supervision of able faculty members of the department.

We wish her all the best and a successful and bright future.

Dr. Evangelin Singh

HOD- MBA DEPARTMENT

2
 TABLE OF CONTENTS

S NO. TOPIC PAGE NO.

1 INTRODUCTION 5-25

2 LITERATURE REVIEW 26-32

3 RESEARCH METHEDOLOGY 33-36

4 FINDINGS & ANALYSIS 37-42

5 CONCLUSIONS & RECOMMENDATIONS 43-52

6
ANNEXURE

 Reference
 Various sheets of secondary data
collected
 Tables & schedules collected

3
 CHAPTER :1

INTRODUCTION

4
To study the challenges and trends in FMCG industry
with reference to kit kat chocolate

Nestle` S.A is the world largest consumer-packed-goods company with its headquarters
founded in vevey, Switzerland. Nestle` was a company that was formed after merging two
companies i.e., Anglo-Swiss milk company which was owned by brothers George page and
Charles page was formed in 1866. During the First World War and the second world war the
company grew significantly, eventually expanding its offers and product beyond condensed milk
product and infant/baby formula product today nestle` has large variety of products to offer life
infant food, ice cream, chocolate and beverages like coffee and bottled water. The product of
nestle` that has been chosen to work on for this company project is kit Kat.

kit kat was launched in 1911 by the name of “kit cat” by a company named rowntree a
confectionary company which was based in York, United Kingdom. It was discontinued after
1930’s for a while as the company gave promotional importance to other products. It
eventually comes back in the market in 1939. It picked a global name by the 1950’s and was
later acquired by nestle` in June 1 as Rowntree Chocolate Crisp. Two years later,

the name was changed to KitKat. In 1988 KitKat became a part of the Nestle’s range
of confectionery products. It grew to be the No.1 chocolate brand in Malaysia, enjoyed by both
young and old as a light snack. Today, it is exported to more than 11 countries in Asia.

Kit Kat can be considered as a snack between a chocolate bar and a biscuit. It has around 3 layers
of water’ chocolate cream and a milk chocolate coating, it gives the consumer of the
chocolate a sense of satisfying crispness when broken or bitten into. Its form of fourfinger format
make the chocolate easily divided for eating, sharing and make it last longer.

This graph below illustrates the revenue of the leading snack size chocolate candy brands in the
United States in 2017. Reese's, which is owned by Hershey Company, ranked as the best in
terms of sales in United States with about 171.6 million USD worth of sales in 2017. kitkat has
ranked the 3rd with 114.8 million USD.

988 through the purchase of rowntree. The American region as the Hershey Company already
acquired the license to produce kit kat all over not America.

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Kit kat is a chocolate bar that consists of creame-filled wafer which is covered with smooth milk
chocolate. Each of the fingers of traditional four-fingered bar can be snapped of one at time.

KitKat was found in 1935, KitKat was first known as Rowntree Chocolate Crisp. Two years
later, the name was changed to KitKat. In 1988 KitKat became a part of the Nestle’s
range of confectionery products. It grew to be the No.1 chocolate brand in Malaysia, enjoyed
by both young and old as a light snack. Today, it is exported to more than 11 countries in Asia.

Kit Kat can be considered as a snack between a chocolate bar and a biscuit. It has around 3
layers of wafer’ chocolate cream and a milk chocolate coating, it gives the consumer of
the chocolate a sense of satisfying crispness when broken or bitten into. Its form of fourfinger
format make the chocolate easily divided for eating, sharing and make it last longer.

This graph below illustrates the revenue of the leading snack size chocolate candy brands in the
United States in 2017. Reese's, which is owned by Hershey Company, ranked as the best in
terms of sales in United States with about 171.6 million USD worth of sales in 2017. kitkat has
ranked the 3rd with 114.8 million USD

All the successes that have been achieved by the company, the company still has some
weakness and threats. Nestle had a history of confrontation over a range of issues from child
labor, slavery, rainforest destruction, water extraction, debt perpetuation, unethical promotion,
manipulating uneducated mothers, pollution, price fixing, obesity to mislabeling.

History of Nestle’s public relations issues began in the late 90’s, when Nestle targeting the poor
to replace mother’s milk with its breastfeeding formula which is highly unethical. In October
2008, Taiwan Health ministry announced that six types of milk powders produced by
Nestle contained melamine and were removed from market according to the reuters. To the most
recent issue of child laboring in Nestle’s cocoa supply chain.

Nestle is by far the largest food company in the world. Nestle’s goal is to redefine itself as “a
scientifically driven nutrition, health and wellness company.” However, what Nestle did
turned out to be the opposite. In Nestlé Healthy Kids programme 2014, Nestle highlighted Nestlé
KoKoKrunch and Cookie Crisp cereals which aimed to promote healthy breakfast for children
despite its high sugar content. This seems to be misleading. Not to add that 40% of Milo is made
up of pure sugar.

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Being boycott for 40 years, it is time for Nestle to take a step forward to build up its reputation.
Ranking number 3 in the U.S, number 1 in the U.K, KitKat generates one of the highest sales
among Nestle’s products. However, hydrogenated vegetable fats in KitKat makes it unhealthy.
Hydrogenated vegetable fats are a source of trans-fat which increase the likelihood of heart
disease, stroke, and cancer.

Kit-kat also famous for its high sugar content. The rise in popularity of healthy lifestyle have
changed the consumer trend on picking their foods. This year, the global market for healthy
foods is expected to reach $1 trillion and will be the year in which veganism goes mainstream.

Consumers are opting for healthier options and are willing to pay a premium. Many giant’s
industry is struggling to catch up, this is a good opportunity for Nestle to serve this niche
market by producing an “100% Organic Vegan KitKat”. Selling in over 70 countries, KitKat is a
great strategy to reach all the consumers around the world. This “100% Organic Vegan KitKat”
not only will able to build back Nestle’s reputation but also generates substantial revenues for
Nestle.

Nestle India faces backlash for using Lord Jagannath's picture on KitKat wrapper, issues
apology

Many people asserted that such wrappers with images featuring Lord Jagannath and his
siblings will later be found in dustbins and on roads as people will discard the wrappers after
eating the chocolate

Nestle India has apologised after it faced backlash for putting images of Lord Jagannath,
Balabhadra and Mata Subhadra on the wrapper of its product KitKat. Many social media
users slammed the company and stated that the controversial wrapper had hurt their
sentiments.
The issue began when some users recently posted photos of the new KitKat wrapper on
social media. Many people asserted that such wrappers with images featuring Lord
Jagannath and his siblings will later be found in dustbins and on roads as people will discard
the wrappers after eating the chocolate.
Many individuals were concerned over the design of the wrapper and even urged its
withdrawal.

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Objectives of the study

To know about the consumer satisfaction level associated with the product and theconsumer
preference level.

To study the factors affecting the consumption pattern

To identify the chocolate brand consumption by different age groups and gender.

To find out the factors which affect the consumer preference at the time of purchasingchocolates

Scope of the study

As learning is a human activity and is as natural, as breathing. Despite of the fact thatlearning is
all pervasive in our lives, psychologists do not agree on how learning takes place.How
individuals learn is a matter of interest to marketers. They want to teach consumers intheir roles
as their roles as consumers. They want consumers to learn about their
products, product attributes, potential consumers benefit, how to use, maintain
or even dispose of the product and new ways of behaving that will satisfy

not only the consumer’s needs, but themarketer’s objectives.

The scope of my study restricts itself to the analysis of consumer preferences, perception
andconsumption of Cadbury and Nestle Chocolates. There are many other brands of
chocolatesavailable but my study is limited to two major players of chocolates leaving behind
theothers

8
Nestle’s Kit Kat Chunky has issued the Kit Kat Chunky Challenge, a new contest asking
fans to pick which one of three new limited edition flavours (peanut butter, white
chocolate or hazelnut) will stay on as a permanent edition to the chocolate bar’s product
line.

With creative from One Method and media from ZenithOptimedia, the
primarily Facebook-based campaign features Toronto Raptor Amir Johnson for peanut
butter, Montreal Canadiens defenceman P.K. Subban promoting hazelnut and Toronto
Blue Jays catcher J.P. Arrencibia gathering votes for white chocolate competing in
various challenges (like karaoke and quizzes) for votes for their flavour. The flavour with
the most votes at the end of the contest in September will be added to the product
lineup for good, says Jan Fuller, marketing leader, confectionery, Nestle.
Keeping the choice theme going through the contest, when a consumer votes for one of
the flavours through the Facebook app they are entered to win one of three trips of their
choosing (a trip to Vegas, a music festival in California or a VIP sports weekend).

A larger media buy promoting the contest includes Facebook ads and buying closed
captioning around programs its core target of men in their 20s watches on TSN and
Comedy, says Fuller.

“The campaign is very digitally focused, which is very important with this target
consumer,” she says. “We also know when the target takes a break they are viewing
videos. The goal of the campaign is to come up with the permanent Kit Kat Chunky for
the lineup and then engaging the younger consumer.”

1.2 INDUSTRY PROFILE

Company working in the food processing industry deal with the transformation of raw
agricultural ingredients into finished product, enhancing the shelf life of products in accordance

9
with health and hygiene standards. Indian food processing industry cover food and vegetables;
meat and poultry; milk and product alcoholic beverages, fisheries, plantation, gain processing,
consumer products group like confectionery, chocolate and cocoa product, soya based product,
,mineral water, high protein foods, etc. The most promising sub-sectors consist of softdrink
bottling, grain-milling and gain-based products, meat and poultry processing, tomato paste,
fast-food, ready-to-eat breakfast cereals, food additives, flavors, etc.

India’s increased urbanization, improve standard of living and the convenient need of deal
income families point out to the major market potentialities in the food processing and
marketing sector. There is also evidence that from the presence of several global foods giants
and leading Indian industrial enterprises in the country’s food processing sector such as; nestle
Indian Ltd, Cadbury’s Indian Ltd, Kellogg Indian Hindustan lever Ltd, ITC-Agro, godrej foods and
MTR foods LTD. In the present world of globalized milieu, the surplus food production, as well
as the increasing preference for Indian foods needs to be leveraged to achieve foods needs to
be leveraged to achieve economics and strategic objectives through exports.

The Indian agriculture sector has come a long way since the time of independence. With the
emergence of green revolution, India agricultural Industries have transformed itself from a
country of shortages to a land of surpluses. With the rapid growth of the Indian economy, a
shift is also being seen in the consumption pattern of the country, from cereals to more varied
and nutritious diet of fruit and vegetables, milk, fish, meat and poultry products. All these
efforts have resulted in the development of a sunrise industry namely the Food Processing
Industries.

10
Companies working in the food processing industry deal with the transformation of raw
agricultural ingredients into finished product, enhancing the shelf life of products in accordance
with health and hygiene standards. Indian Food Processing Industry covers fruit and vegetables;
meat and poultry; milk and milk products, alcoholic beverages, fisheries, plantation, grain
processing, consumer products groups like confectionery, chocolates and cocoa products,
Soyabased products, mineral water, high protein foods, etc. The most promising sub-sectors
consists of Soft-drink bottling, Confectionery manufacture, Fishing, aquaculture, Grain-milling
and grain-based products, Meat and poultry processing, Tomato paste, Fast-food, Ready-to-eat
breakfast cereals, Food additives, flavors, etc.

India's increased urbanization, improved standard of living and the convenient need of dual
income families point out to the major market potentialities in the food processing and
marketing sectors. There is also evidence that from the presence of several global foods giants
and leading Indian industrial enterprises in the country's food processing sector such as: Nestle
India Ltd, Cadbury's India Ltd, Kellogg’s India, Hindustan Lever Ltd, ITC-Agro, Godrej Foods and
MTR Foods Ltd. In the present world of globalized milieu, the surplus food production, as well
as the increasing preference for Indian foods needs to be leveraged to achieve economic and
strategic objectives through exports.

Further there was an absolute revenue increase of Rs. 900 billion in food manufacturing
between 1993 and 2000 which is in contrast with Rs. 150 billion and Rs. 300 billion for the
pharmaceutical and IT industries, respectively. Overall, taking everything in accordance the
value of the Indian food industry has increased from Rs. 3.09 trillion in 1993-94 to Rs. 3.99
trillion in 2000-01. The segments which have the largest growth potential have been identified
as dairy, wheat, fruits and vegetables, and poultry. This report has also identified some of the
major challenges for the emerging food industry in India.

11
1.3 COMPANY PROFILE

Nestle is the largestfoodcompany in the world, in terms of revenue. It is a Swiss Company

established in 1866 by its founder Henri Nestle. While its main foray is foods and drinks, it has
hundreds of products, nearly 2000. Some of its most famousproductsand brands include Magi,
Kit Kat, Espressos, Nescafe, etc.

The overall turnover for Nestle was approx 90 billion Swiss Franc in 2016. It operates 418
factories in 86 countries, employing nearly 339,000 people worldwide. Its products are available
in 191 countries of the world.

Nestle also is a leading researcher in the field of nutritional sciences. It invests nearly 1.5 billion

12
Francs yearly on research anddevelopment. Nestle had 17 R&D and Testing centers worldwide
in October, 2018.

Philosophy:

Nestle has a very simple and memorable mission – “Good Food, Good Life”. This mission
encapsulates it’s an entire formula for such immense success – providing the most delicious and
nutritious food and beverages to its customers, in a wide category of choices.

Mission:

Positively influence the social environment in which we operate as responsible corporate

citizens, with due regards for those environmental standards and societal aspirations which
improve quality of life.

Vision:
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.

Portfolio
Nestle has a large variety of different products and brands in its portfolio. Let us just take a look
at the few important ones,

• This sector was launched in 1986. It allows customers to make their perfect cup of coffee.
This includes Nescafe, Nescafe Gold, Nescafe Classic, Nescafe Decaff, etc.

13
 • Nestle Waters: Nestle is one of the leading producers of bottledwater. It has nearly 100
plants for bottled water in 35 countries. Some of these famous brands are Pure Life,
Perrier, Vital, etc.

• CerealPartnersWorldwide (CPW): This is Nestlé’s joint venture with another major food
company – General Mills. They produce breakfast cereals and baby food products like
Cereal, Cookie Crisp, Gerber, etc.

• Nestle Health Science: Nestle has been one of the pioneers in nutritional sciences. They
produce foods such as Boost, Meritene, NutrinJunio, etc to promote pediatric care, brain
health, etc.

After more than a century-old association with the country, today NESTLÉ India has presence
across India with 8 manufacturing facilities and 4 branch offices.

NESTLÉ India set up its first manufacturing facility at Mega (Punjab) in 1961 followed by its
manufacturing facilities at Choladi (Tamil Nadu), in 1967; Nanjangud (Karnataka), in 1989;
Samalkha (Haryana), in 1992; Ponda and Bicholim (Goa), in 1995 and 1997; and Pantnagar
(Uttarakhand), in 2006. In 2012, NESTLÉ India set up its 8 th manufacturing facility at Tahliwal
(Himachal Pradesh).

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 prices.

NESTLÉ India manufactures products of truly international quality under internationally famous
brand names such as NESCAFÉ, MAGGI, MILKYBAR, KIT KAT, BAR-ONE, MILKMAID and NESTEA
and in recent years the Company has also introduced products of daily consumption and use
such as NESTLÉ Milk, NESTLÉ SLIM Milk, NESTLÉ Dahi and NESTLÉ Jeera Raita.
NESTLÉ India is a responsible organisation and facilitates initiatives that help to improve the
quality of life in the communities where it operates.

Nestle India is a secondary of Nestle S.A. The company has attendance across India with 7
manufacturing facilities and four branch offices extend across the region. The four branch

14
offices in the country help facilitate the sales and marketing of its products. They are in Delhi,
Mumbai, Chennai and Kolkata.
The company’s four factories were awarded the internationally predictable external
certification ISO 14001 for adherence to environmental processes and OSHAS 18001 for Health
and Safety. In the year 2008, the company launched Nestle Nesvita Pro-Heart Milk with Omega-
3 in Mumbai. Nestle Nesvita Pro-Heart is part of daily diet and has Omega-3 heart friendly
nutrients scientifically known to help manage cholestrol. As part of their ongoing dedication to
offering best in class nutrition products to Indian consumers, the company launched NESTLE
NAN 3, a follow-up formula for older infants. During the year, MAGGI PICHKOO Tomato
Ketchup was launched in a unique easy to handle day pack to drive affordability, taste and
convenience for a larger number of consumers.

Milestones achieved

CNBC Awaaz Consumer Awards has honoured Nescafe as the most preferred coffee brand.
Business India has rated Nestle India as No.1 on Return On Capital Employed amongst Super
100 companies.
In 2011-2012 Nestle India was awarded the ‘Best Exporter of Instant Coffee’, ‘Highest Exporter
to Russia and CIS”, ‘Highest Exporter to Far East Countries’.

Recent developments

The company has introduced products in milk segment for daily consumption and use such
as Nestle Milk, Nestle Slim Milk, Nestle Fresh ‘n’ Natural Dahl and Nestle Jeera Raita.

Growth of nestle

In 2008 profit growth are increase 29.06%, in 2009 profit growth are increase 22.64%, in 2010
profit growth are increase 24.99%, in 2011 profit growth are increase 17.45%, in 2011 profit
growth are increase 11.06%.

15
In 2008 sales are increase 23.40%, In 2009 sales are increase 18.62%, In 2010 sales are increase
21.94%, In 2011 sales are increase 19.76%, In 2011 sales are increase 10.83%.
Nestle company continues to maintain high operating margins at around 21%. We believe low
volume growth resulted from lower off-take by canteen store departments, which sustained to
result in slower growth across industry. Depreciation provisioning has increased by
approximately 86% due to aggressive capacity addition by the company in the last one year.
The lower net profit growth is also due to a reduction in the tax benefits enjoyed by the
company at its Pantnagar plant in the March 2012 quarter. net profits expanded just 9 per cent
in the March 2012 quarter; growth in the March 2011 quarter stood at 27 per cent.
The Nestle scrip closed at Rs 4,938.10 up by 0.92% while the Bombay Stock Exchange marginally
declined by 0.33% to close at 17,151.29.
In 2010 operating profit are 1015.39 crore, In 2011 operating profit are 1245.42 crore, In 2012
operating profit are 1537.96 crore. Nestle company every year increase the profit because of
the customer are purchased from the different product in the market. Customer are satisfied
for the all the products.

Swot analysis
Strengthsin thaswot analysis of nestle
 .World renowned brand
 extensive distribution system.
 broad product portfolio.

Weaknesses in the swot analysis of nestle

 .Maggi controversy
 .Brand structure
 .Legal and consumer issues

Opportunities in the swot analysis of nestle

 Healthy Breakfast
 Expanding market
 Increasing income levels Strategic alliances

16
 Threats in the marketing strategy of nestle
1. Competition in the marketPrice of commodities
2. Buyers power

100% Organic Vegan KitKat

The new product that we will introduce is “100% Organic Vegan KitKat” chocolate which will
be one of the new KitKat flavors. The chocolate will be made in such a healthy way to capture
not only the consumers with healthy lifestyle but also the vegans.

Behind every chocolate are two key agriculture products which is cocoa and sugar. Organic
chocolate. However, means that cocoa and sugar are produced without the use of harmful
chemical. Organic chocolate is made from cocoa and sugar that is grown without these synthetic
chemicals, In farms that use natural, organic and biodynamic tools to cultivate these crops.

Organic methods are good for biodiversity,ecosystems and the environment.

One of the main differences is that organic chocolate is created using cocoa beans which have
not been treated with synthetic fertilizers, herbicides or pesticides. This chemical has been linked
to numerous negative health effects, and most consumer lacks the kind of protective gear that
would help mitigate some risk of exposure. True organic chocolate should not stop at the cocoa
bean - any other ingredients included in the blend (sugar, milk, nuts, fruit, spices, etc.) should be
organic as well. If the label reads organic, it does not mean that it is totally organic, other
chocolate’s organic percentages could be anywhere from 70% to 90%. The organic vegan KitKat
is 100% chocolate’s organic. In choosing organic chocolate, you are choosing to eat a food that
is made without synthetic pesticides, fertilizers, herbicides and other chemicals.

The new nestle with 4 Finger Milk Chocolate Bar contains 4 wafer fingers covered with smooth
organic vegan chocolate.

Pricing strategy

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Nestle Kitkat has a very strong image of its brand name and in this competitive
market this image allows the company some flexibility in executing its pricing
policy. However, in order to increase the volume and maintain its loyal customers
Nestle Kitkat has resolved to maintain a
low and fair pricing policy.

The starting prices of the Kitkat product remain unchanged at INR5. Along with its
quality, even if the quantity has been reduced, the customers then do not feel very
unhappy with the company as they also realize the effects of rising economy. The
stability in the pricing policy has been a major factor in the maintenance of sales of
this brand. The company’s policy has proved to be a boon for them.

Psychology Pricing

By setting the price slightly lower than rounded numbers, in the believes that
customers do not round up the prices, and so will treat them as lower prices than
they really are. A normal price of kitkat is $1.99USD, but with a 100% of organic
chocolate included, the price will be $2.99USD rather than $3.00USD.

This strategy works well with a new brand, which place side by side with
similar quality but different prices, to make customers picks the more expensive
one which is the desired purchase and contains more healthy ingredients.

Penetration Pricing

To quickly gain a market share, we must set an initial low price to entice customers
to purchase from the company. It is common for a new entrant to use a
penetration pricing strategy to compete effectively in the marketplace. Price is
one of the easiest ways to differentiate new
entrants among existing market players.

18
For example, with a new brand of organic chocolate KitKat, it can be set the price
at $2.99USD same as a normal kitkat. After the new product has enter the
marketplace or has a nice position in the market, then only the price will be
increase slowly.

The situations where penetration pricing works effectively is when there is

little product differentiation, demand is price-elastic and where the product
suitable for a mass market (utilizing economies of scale).

Advertising strategy

Marketing has to be done for certain area or for certain class of people but
at times it is necessary for the business to address entire market because the image
of the brand has to be transformed. The segmentationof organic Kit Kat
productsmust be based on mix of demographics, behavioural and
psychographicfactors; like on the basis of income & occasions.

Productofferings should be mostly based on the production capacity, pricingof the

various packs, packaging designs, and storage facilities at the outlets,
occasional & situational demands, celebrity endorsementsand many other factors.
Although KitKat has targeted people from all age groups being a delicious
chocolate bar, this organic KitKat has to distinguish its product offerings to
specific class of consumer groups specifically higher-class people because of its
quality and price. KitKat has already a well-established market with the
position of 6th largest selling

rd
chocolate in worldwide and Nestle in 3 rank, so it has already a huge market
share, but organic KitKat is a new product so it will go through stage of product
development which might have risk of success. Because of which certain aspects
like attractive packaging, endorsement, social media marketing etc has to be done
in proper and accurate manner.

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For the promotion, tools for marketing campaign have evolved to electronic media
and digital sources. KitKat marketing campaign has been planned quite
comprehensively that is why several marketing tools have been used in the entire
process.

In Publicity marketing through new range of product gives a life tobusiness.

The aim of launching new products is to apply publicity, in addition to this
business will aim at generating more sale and to give something new to customers
and business of KitKat will generally get benefit of it.

In Sales Promotion the marketing campaign of the product will also present a
new refreshing touch to the product by giving a new face to its product. It is one of
the most common tools for marketing and it does help in increasing sales as well as
attraction of product, because colour of the packaging plays an important
role in increasing the sales. The packaging colour of the product all so
determines which gender group will be more attracted towards it because
psychologically colour choice are also determine the gender.

Social Media has been used as a base medium for marketing many kinds of
products. In this case with, social media advertisement we have to relate the snap
adds with benefits because of the change by creating an organic KitKat and address
the viewer of the add with the story behind it .

The Global organic chocolate market is segmented into North America, Europe,
Asia Pacific, and rest of the world. North America is dominating the organic
chocolate market followed by Europe. U.S. The North America region is
experiencing a high demand for organic chocolate owing to rising health concerns
associated with the consumption of chemical-containing food commodities, so we
can estimate that these countries can become our potential consumers as well as
customers for the sales of organic KitKat. In the whole campaign of marketing our
job will be to focus on” why Organic chocolate is better for you? Difference
between organic chocolates and conventional chocolates. How preservative

20
chemicals have been linked to numerous negative health effects. The chemicals
involved in the cacao and sugar production for conventional chocolate have a
negative effect on the environment. Likewise letting them to choose an organic
chocolate means giving the consumer the purchase power to a system that values
their health, the health of farmers and the environment.

Product innovation with special flavors available in

different markets get people interested in trying
and collecting them all

21
 CHAPTER 2
22
 LITERATURE REVIEW

23
According to Wheeler, “Advertising is any form of paid non-personal presentation of ideas,
goods or services for the purpose of inducing people to buy”.

According to William J. Stanton, “Advertising consists of all the activities involved in

presenting to a group a non-personal, oral or visual openly sponsored message regarding a
product service or idea. This message is called on advertisement is disseminated through one or
more media and is paid for by an identified sponsor.”

Verdon et al (1968),while studying the relationship between advertising and aggregate

demand found that advertising have a positive relation with aggregate demand.

Abraham and Lodish (1990) believe that advertising effectiveness has to be captured by
the additional sales of a product over and above those that would have happened in absence of
any advertising or promotion.

Erdem and Keane (1996) observed that “the higher the advertising frequency, the higher
the brand choice probability”.

24
Abhilasha Mehta (2000), in his research topic “Advertising attitudes and advertising
effectiveness” had analyzed that buying interest of the consumers are based on how much the
consumers are liking to look an advertisement, the value of the advertisement for the brands
advertised and how informative or truthful an advertisement is.

Apurva Ashok Patel (2003),The advertising of Nescafe in India is targeted at the

uppermiddle class, since Nescafe is a premium brand and known internationally through their
brand name image. The advertising here is an adaptation of the much awarded international
campaign “open up”. Part of Nescafe’s successful innovation has to do with the timing of their
Ads. Nescafe specifically telecasts its advertisement either immediately before or immediately
after popular soap operas, renowned serials, and other trendy programmers on television to
catch maximum attention of the viewers.

ED Keller, Brad Fray (2009) Around 20 percent of Word of mouth about brands involves
mentioning paid advertising as the source of the information. This suggests a conservative
estimate that at least 20 percent of Word of Mouth occurs because of advertising.

Dr. Naveen Kumar, Kirti Singh (2011 ) Consumers are highly influenced by advertising in
their preference for the brand. The mean value of the consumer’s preference for Nestle is 4.36
which is the highest in comparison to various brands. The major reasons for this preference are
its attractive advertising policies and rich quality. The survey reveals that TV advertisements of
Nestle influence the buying of consumers the most. The creative presentation and language of
TV advertisements of Nestle are successful to convey message, emotion, value system
regarding the product. The study clearly reveals that the advertisement has its impact on
buying behaviour of consumers.

25
Adekoya Olusola (2011 ), the role of advertising on the sales volume of a product is very
important because oftentimes consumers’ decisions as regards what to buy is motivated by
what has been seen heard of or practically used.

Mazzini Muda, Rosidah Musa, RozitaNaina Mohamed, and Halimahton

Borhan (2013 )the research hypothesizes that celebrity credibility (comprising of
attractiveness, trustworthiness and expertise) and advertisement credibility will positively affect
three traditional measures of advertising effectiveness – attitude toward the advertisement,
attitude toward the brand and purchase intention. The findings revealed that both, celebrity
credibility and advertisement credibility had positive impact on attitude toward the
advertisement and attitude toward the brand.

2.2.1 Factors Affecting Consumer preference

a) Advertising: Advertising plays an important role in consumer preference especially for non-
durable goods such as food or magazines advertising in forms consumers of available goods and
services and also shapes their impressions of 7 those products. Advertising can also create
demand for example: a consumer may not have wanted a new cell phone until he saw flashy
new phones on TV.

b) Social Institution: It includes parents, friends, schools, religion and television shows which
influence consumer preference.

26
 c) Cost: Consumers usually choose to purchase more of a good if the price falls. For example, a
sale or reduced prices may increase consumption of a good. On the other hand, an increase in
price may cause reduced consumption, especially if the good has available institutions.

d) Consumer income: Consumers often desire more expensive goods and services when their
income increases. If they suffer a decrease in income, they are more likely to choose less
expensive goods and services. For example, a business selling luxury goods, such as jewelry, will
probably be more successful in a highincome area than a low-income area.

e) Available Substitutes: If a product has several substitutes, consumers will be more sensitive
to changes in price. However, if consumers do not perceive similar products to be effective
substitutes, they will be less likely to switch to a substitutes based on price ( for example,
consumers who do not think Coke and Pepsi are equally delicious). This concept is called the
price elasticity off demand.

f) Navigation: Navigating and browsing your store should be a straight forward and simple
process. This includes providing users who know what they want with an effective keyword
search or filters but also integrating solutions that guide ensure shoppers to help them identify
suitable products quickly. A website that‟s difficult to navigate will only lead to customer
frustration and loss of potential customers.

g) Accessibility: You need to ensure that customers are able to find and acess your product and
services efficiently, without barriers and friction, on their preferred channel. Also make sure
they can reach your company and obtain good service whenever they have a question or need
assistance to make a purchase decision.

27
 h) Navigation: Navigating and browsing your store should be a straight forward and simple
process. This includes providing users who know what they want with an effective key word
search or filters but also integrating solutions that guide ensure 8 shoppers to help them
identify suitable products quickly. A website that‟s difficult to navigate will only lead to
customer frustration and loss of potential customers.

i) Language: Speaking to your customers in their preferred language is pivotal for your business
more than 50% of customers won‟t make a purchase if information about a product isn‟t
available in their language i.e. without great communication there can‟t be no great customer
experience.

j) Convenience: It is an essential element of a positive customer experience. It influences how

customers make decisions about what to buy, what services to use, where to go, and with
whom to engage.

k) Personalized:It‟s kind of shoppers want personalized experience in a sphere in which so

many business and personal interactions can be anonymous. By personalizing the experienced
sharing the right content, at the right time with the right people, you can make interactions
faster, easier and more efficient for your customers. This results in increased customer
satisfaction and the likelihood of repeat visits.

l) Real time: If you want to capture the attention of your audience think about how you can
take average of real-time experiences. It‟s about showing increasingly important to the modern
customer. They expect real time response and fastest resolutions.

28
 m) Logic: There is a difference between emotional customer satisfaction and logical customer
satisfaction. Emotionally satisfied customers are extremely satisfied with the product and
services the company provides and have a strong emotional attachment to the company.
Logically (or rationally) satisfied customers may be extremely satisfied with the company but
lack the strong emotional connection of customers who are emotionally satisfied. They have no
reason to remain loyal.

n) Choice: The more choices you can give your customers during the buying process, the more
likely they are to free in control of the experience that they have with your brand. However,
when offering choices make sure to support your customers and enable them to figure out the
optional choice that is right for them.

o) Community: Today customers do more and more research online before they make a
purchase. It‟s important to consider the community that exists around your 9 brand. Even if
you don‟t have an active part in building your community on social media, and review forms.

29
 CHAPTER -3

(Research Methodology )

30
3.1Research problem

Every research has their own problem and limitation but good researcher have to overcome
that problem by their skill. In this research problem we would like to understand and analyze
about the chocolates products available at Mumbai and collect the feedback from group of
people and we wanted to know the developments made in direction of chocolates industry.

3.2 Research Objective

This project is based on the comparative study consumer behavior towards Nestle
and Cadbury chocolates. Objectives of the study are:

The other objective is to know about the customer satisfaction level associated with
the product and the customer preference level.

To increase customer satisfaction and recapture the market share by fulfilling the
customer needs.
.To study the factors affecting the consumption pattern.

31
 3.3 Research Design

For any researcher the research methodology is the most important criteria to decide
before the actual research process starts. There are many methods for conducting
the research some of them are as under;

a) Descriptive vs. Analytical

b) Applied vs. Fundamental
c) Quantitative vs. Qualitative) Conceptual vs. Empirical

There are three types of case study research that can be used, they are descriptive,

explanatory and exploratory (Yin, 1984, as cited in Noor, 2008, p.2). This research aims

to describe and identify the most effective promotional tool that Nestle has in their

marketing plan. The qualitative method is used in this research to describe and analyze

the outcome. The qualitative method is the most suitable approach as this research

involves more on the description task rather than the measurement task. The qualitative

method is focusing on the process and meaning which are not really examinable and

measurable (Denzin and Lincoln, 1994, p.3-5). Marriam (1988) suggested that qualitative

is mostly interested in discovery, insight and interpretation compared to hypothesis

testing.

A questionnaire in the type of google form was designed by researchers in this research

to identify which was the most effective promotional tool used by Nestle in promoting

their products to markets. The questionnaire consists of two parts which the first part is

32
about the demographic while the second part is to identify which the most effective

promotional tools. The questionnaire is employed with a 3-point scale where the

respondents need to indicate 1 which is represented by strongly disagree, 2 which is

represented by neutral and 3 which is represented by strongly agree, the degree of their

disagreement or agreement with the statements on the questionnaire. There are 50 set

questionnaires distributed to our respondents.

The data collected through questionnaires is analyzed descriptively. In this research,

Likert scale used to create the questionnaire where the degree of agreement 1,2,3

(strongly disagree, neutral and strongly agree respectively). Microsoft Office Excel

Worksheet and Microsoft Office Word are used to present and analyze the data and

result collected in the form of tables.

33
 CHAPTER-4

FINDING AND ANALYSIS

34
Data Analysis The data is analysis on the basis of suitable table by using
mathematical technique. The technique that I have used is bar technique. Despite
the decrease in Nestlé‟s company shares in confectionary market since 2007, the
brand share of Kit Kat has increased from 2007, from 3.2% to 3.7%, it still lags
behind competitors such as Ferrero Rocher, Ricola, Fisherman‟s Friend and
Mentos in the confectionary market. However, through filterinQg out of products
such as Ricola, Fisherman‟s Friend and Mentos, which are not chocolate brands, it
can be seen that Kit Kat is second behind Ferrero Rocher.

LIMITITION OF THE STUDY

In attempt to make this project authentic and reliable, every possible aspect of
the topic was kept in mind. Nevertheless, despite of the fact constraints were at
play during the formulation of the project. The main limitations are as follows:

 Due to limitation of time only few people were selected for the study. So the
sample of the consumers was not enough to generalize the finding of the study.

 The main sources of the data for the study were primary data with the help of
self-administrated questionnaires. Hence, the changes of unbiased information
are less.

 People were hesitant to disclose the true fact.

 The chance of biased response can‟t be eliminated though all necessary steps
were taken to avoid the some.

35
Competitors analysis

Competitor analysis is an assessment the position of potential competitors. It is

common market research activity that is performed to identify opportunities and
risk associated with strategies such as new product. Competitor analysis is crucial
to the success of a company because it helps the company to quickly identify
industry trends and adapt to competitor campaigns or strategies in order to
maintain foothold or out-compete the entirely. Kitkat have 4 main
competitors, namely Lindt, Ferrero Rocher, Cadbury, and M&M.

consumer analysis

The 100% Organic Vegan KitKat can consume by all different age categories.
The healthy chocolate is prioritized to target all people regardless of their cultures
and ethnicities. Also, we will make sure that the chocolate has the halal
certificate to include the market in muslims
majority countries like middle east and Indonesia. However,those whom their ages
vary from 14 to 60 are mainly targeted more than other age categories.

Regarding Maslow’s triangle, the motivating force for consuming KitKat is only
for “Social Need”. this is frequently as a consequence of chocolate isn’t one
thing which may provide for one security and not one thing that is center needs
of life nor is it that furnish you with a standing picture in light of the fact that it
isn’t a different fragment item and thereupon the social would like is the thing that
drives it deal (Sharp, 2009).

Following the original Kit Kat product, the product distribution will not far
different. In cultural view, the 100% Organic Vegan Kit Kat will be widely
accepted by any nations, as the company need to adapt with the nation’s cultures.
We believe that the consumers will buy the chocolates by its taste which make
them as loyal consumers.

In Addition to the above, the chocolate target those with middle- and high-income
rate since it is more expensive than other chocolate and it is expected to not be
affordable to everyone

36
Recommendations and Results

The obesity levels in western societies is keep getting higher every year, the new
organic kit-kat is estimated to target not only the people who follow healthy
lifestyle, but also those who want to avoid sugar as much as possible. The organic
chocolate will be available all stores around the world. in recent years , there is a
high consumption of chocolate as snacks, this increasing demand for organic
chocolates between consumers, and the growing desire in the production of
healthy chocolate, will back up the growth of the organic chocolate market in this
world.Moreover, the increasing worry about the existence of artificial ingredients
in most of chocolates in the market has encouraged consumers to look for organic
chocolates. This will further push the markets growth in the world. Therefore,
nestle should be the initial company to start manufacturing the organic chocolates
to increase the market share before other companies start taking these steps.

Nestle is the biggest food and beverage company in the world, facing humongous
challenges is while operating at an international level is a must. Nestle has an
ethical responsibility to operate in a sustainable way by satisfying the needs of
today’s generations while maintaining and enhancing the potentials of future
generations.This thing cannot happen by modifying and manipulating with the
recipes of current products ,it will only happen when the company take serious
procedures to provide the new generations with food that has moderate
amounts of
sugar and fat.

Analysis

37
H0 : There is no significant relationship between gender and level of customer satisfaction
of Cadbury product

H1 : There is significant relationship between gender and level of customer satisfaction of

Cadbury product

Table showing relationship between gender & level of customer satisfaction

Response Male Female Total
Strongly Satisfied 5 5 10
Satisfied 9 11 20
Neutral 10 3 13
Dissatisfied 4 3 7
Total 28 22 50
Table value : 7.815
Level of significant : 5%
Degree of freedom : (c-1

5.1 Findings

 Most of the respondents are in the age group 25 – 3156% of the respondents are
male whereas 44% of the respondents arefemale.
 Majority of the respondents purchase Cadbury chocolate very oftenFruit and Nut is
the most preferred chocolate44% of the respondents says that Taste is the most
important factor
 affecting consumer‟s habit of purchase of Cadbury products60% of the respondents
purchase Cadbury product less than 5 times in aweek
 Dairy milk is the best Cadbury chocolate preferred by the respondents
 38% of the respondents chose Hershey‟s chocolate as the most preferred
 chocolate after Cadbury
 60% of people says that they become health conscious regarding their
 purchase and 40% said they are not health conscious regarding their
 purchase
 Most of the people are of the opinion that Cadbury can introduce more of
 sugar free chocolate for health conscious customers
 Television is the mode through which majority of the people comes to
 know about a new Cadbury product
 Majority of the respondents chose Television as the appealing mode for
 Cadbury advertisements

38
  50% of the respondents are of the opinion that increase in the product price
 can affect consumer‟s purchase decision
 The level of satisfaction of Cadbury chocolate is „satisfy‟ and is concluded
 to be the reason for buying more chocolates
 56% of the respondents are of the opinion that Cadbury is highly priced
 38
 46% of the respondents chose product as the most influenced marketing
 element in buying behaviour
 Cadbury advertising campaigns shown during the rest of the year are better
 than that shown during festival season
 Majority of the people are willing to continue their purchase in the future
 Respondents consider in recommending Cadbury products to their family
 and friends
 In Chi square analysis, it is concluded that there is no significant relation
 between gender and customer satisfaction

39
 (CHAPTER-5)

40
CONCLUSION AND
RECOMMENDATIONS
CONCLUSIONAND RECOMMENDATIONS

Chocolates products at Mumbai city are available in comparison to previous years, but still
there is requirement of development in Chocolate products. Due to increasing overall cost in
Chocolate Products everywhere, cost format should be made as such that it is affordable to
each and everyone in the society. In this we also found that if the demanded brand is not
available, so at that time the customers switch over the brand of the chocolate so, here the
company should build up the healthy distribution channel by which company can attract the
customers and company loose the fear from the market. Company should concentrate more on
television for advertisement, as mostly people get attracted through television only. For
promotional offers, company should go for free gifts rather than going for other ways. Nestle
company should concentrate on its packing as people are least satisfied with it while Cadbury
should concentrate on the shape of a chocolate. People are unsatisfied with the price and
quantity of chocolate so companies should concentrate in this regard also.

41
Conclusion

CONCLUSION
A survey of the people has been conducted to know the liking pattern of the two products
Cadbury and Nestle. It is observed that overall people like to eat Cadbury brand rather than
Nestle. It is concluded that mostly people preferred Dairy Milk of Cadbury due to its
flavor/taste, quality and image and due to its hard form. Some people often like to have
chocolate with good flavor, quality hard form. Some people often like to have a chocolate with
good flavor, quality taste and crunchiness. It is thus concluded from the facts collected that
mostly people refer to buy big pack of their favorite chocolate, and sometimes some of them go
for small and family Pac.

LIMITATION OF STUDY

In attempt to make this project authentic and reliable, every possible aspect of the topic was
kept in mind. Nevertheless, despite of fact constraints were at play during the formulation of
this project. The main limitations are as follows:

Due to limitation of time only few people were selected for the study. So the sample of
consumers was not enough to generalize the findings of the study.

The main source of data for the study was primary data with the help of self administered
questionnaires. Hence, the chances of unbiased information are less.

People were hesitant to disclose the true facts.

The chance of biased response can’t be eliminated though all necessary steps were taken to
avoid the same.

42
 REFERENCES (Bibliography)

43
REFERENCES (Bibliography)

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3) https://sg.theasianparent.com/is-milo-bad-for-you/

4) https://www.news.com.au/lifestyle/food/eat/nestle-drops-milos-45-health-star-rating-afte
rcriticism-from-health-experts/news-story/e7f5c81ce450b8843b1df1dd505baf2

5) https://en.wikipedia.org/wiki/Nestl%C3%A9

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