NESTLE INDIA

LTD.
GOOD FOOD, GOOD LIFE
COMPANY PROFILE
 Name of Company : Nestlé India Limited
 Head Office: Nestle House, Jacaranda Marg, "M"
Block, DLF City, Phase II Gurgaon - 122002
(Haryana)
 Registered office: M-5A,Connaught Circus, New
Delhi-110001
 CMD: Mr. Martial G. Rolland
 First factory set up in INDIA in 1961 at Moga,
Punjab.
OVERVIEW
 The company’s principal activities
are to manufacture & distribute food
products. Food products include milk
& nutrition, beverages, coffee,
blends, tea, cream, chocolate,
cereals & cooking aids. The
company’s plants are located at
Moga, Samalkha, Nanjangud,
Choladi, Ponda, Bicholim &
Pantnagar. The products of the
PRODUCTS
PRODUCTS
Maggi Tomato Ketchup
 MAGGI offers a wide
range of specialty Indian
Sauces which are relished
for their unique taste.
Available in the following
delightful variants:
Tomato Ketchup, Tomato
Sauce, Tomato Chilli,
Masala Chilli, Chilli Garlic,
Tamarina, Tomato
Chatpat, Tomato Pudina
and the all-time-favourite
MAGGI Hot & Sweet
Sauce.
Maggi
 Maggi was the upstad
newcorner who came in with a
loud aggressive national burst.
It did not come in with one, but
with a range of sauces in order
to increase market share and
axpand the market by offering
more usage occasions, bring
consumers with different needs
into the Maggi Sauces fold and
weaning away users of different
brands to Maggi. From a market
share of 14% in 1985, Maggi
Sauces now enjoys a share of
about 50% of the market.
 The success of Maggi can be
most importantly attributed to
year-round media activity, and
the humorous "it's different"
campaign on Maggi Hot and
Sweet sauce - this campaign
had such an impact that it
literally promoted the entire
range of Maggi Sauces.
Maggi Market Place
 There has always been a
presence of good additives
in the Indian household. The
traditional Indian main meal
has chutneys and pickles as
additives while the
quasimeals, where snacks or
ready to eat food is
consumed, use sauce as an
additive. Prior to Maggi
Sauces launch in 1985 the
scenario of the branded and
unbranded sauces market
was such that the Tomato
ketchup was most popular in
the market with 80% market
leaving the remaining 20%
for others.
 IMAGE : SAUCES
The Brand

 The Maggi Sauces brand

has reallY been built by
creating a new segment
in 1989-90 by focusing on
Hot and Sweet as a new
speciality sauce. The
most important aspects
of Hot and Sweet were
 (i) Brand Image : Young -
Teenager, Ever changing,
humorous, unpredictable
and "whacky"
(ii) Brand Positioning :
Hot and Sweet was a
tomato chilli sauce that
was different.
The Consumer
 Profile of users and non-users
 Sauce is a product that cuts across all age groups and regions and
therefore broadly the target group was All Adults with Rs. 2500/-+ MHI, in
Class I+ towns.
 Who buys the Product, How and When ?
 Sauces follow two purchase patterns, In regular sauce households, it is
purchased at the beginning of every purchase cycle when monthly non-
durable items are bought. The second group is of those households where
sauce has an occasional use, it is usually an impulse puchase, from the
local retailers and the main purchaser is the housewife with key
influencers being children.
 The users can be further subdivided between Tomato Ketchup and
specialty sauces such as Hot and Sweet. Tomato Ketchup is for all
members of the family (MHI : Rs. 2500+) with the larger part of the
consumption coming from children. The purchaser is however the
housewife. Hot and Sweet is targeted at the young adult, modern, with
MHI : Rs. 2500+. The purchaser could be the housewife or the male/female
'adult'.
 Users attitude to category/brand
 Tomato Ketchup is generally seen as fun to eat, adds flavor to all kinds of
food, and is convenient to use. Users show low involvement, low brand
loyalty, are very sensitive to price, appreciate 'premium' quality of Maggi,
but are unwilling to pay very large price premium. On the other hand for
Hot and Sweet, the frequency of consumption is lower with high band
Cost Accounting
 cost accounting is that part of
management accounting which
establishes budget and actual cost of
operations, processes, departments or
product and the analysis of variances,
profitability or social use of funds.
Cost Sheet
 It serves as a means of
accumulating the manufacturing
costs-direct materials, direct
labor, and overhead costs-
chargeable to the job or
department and as a means of
determining unit costs.
Methods Of Costing
 Job Costing - This is done, as the name suggests, on job
works which may differ from case to case basis. By
giving different job numbers and debiting the costs on
the jobs, cost of each job work can be ascertained.
 Contract or Terminal Costing - This is done for large
contracts. Such businesses need not maintain costs
separately as financial accounting will indicate the costs
and expenses. In such contracting firms, the cost sheets
are maintained for individual contracts. In the absence
of expense budgets, inefficiencies are often hidden in
such cost sheets.
 Process Costing - This is useful when a product passes
through various processes, yielding different by
products of commercial value. This is useful in industries
like refineries.
 Methods of Costing
 Standard Costing: Standard costing means assigning the
expected, budgeted costs to the goods manufactured, the
goods in inventory, and the goods sold. In other words,
the amounts assigned are the costs that should occur
when manufacturing products.

 Marginal Costing: It is a costing technique where only

variable cost or direct cost will be charged to the cost unit
produced. Marginal costing also shows the effect on profit
of changes in volume/type of output by differentiating
between fixed and variable costs.

 Activity Based Costing :Activity based costing (ABC)

assigns manufacturing overhead costs to products in a
more logical manner than the traditional approach of
simply allocating costs on the basis of machine hours.
Activity based costing first assigns costs to the activities
that are the real cause of the overhead. It then assigns
the cost of those activities only to the products that are
PARTICULARS Rs (In Rs (In
Thousands) Thousand
s)
DIRECT COST
Direct Raw materials:
Opening stock 760746
Add: Purchase 14391229
Less: Closing stock (1240513) 1391146
Packing material 2
2784775
consumed
Direct labour 2454121
Direct expense
PRIME COST 1915035
Add: FACTORY 8
OVERHEAD
Power & fuel 1239442
Maintenance & repairs:

Plant & machinery 49264

Building 30507
General 42338
Workers training expenses 17376
2
Consumption of store & 11268
spare parts 2
Depreciation 27114
Other expenses 96860 2643709
0
Works cost 21794067
Opening Stock (WIP) 384758
Less: Closing Stock 424279 (39521)
(WIP)
21754546
ADMINISTRATIVE
EXPENSES
Contribution to PF and 86660
other funds

Staff Welfare Expenses 153645

Rent 181615
Rate and Taxes 173762
Insurance 22344
Employees Welfare 348579 966605
COST OF PRODUCTION 22721151
Opening Stock (FG) 1406559
Less: Closing Stock (FG) 1977141 (570582)
COST OF GOODS SOLD 22150569

SELLING AND
DISTRIBUTION
Freight Transportation 1608368
and distribution
Advertisement 1722059 3330427
TOTAL COSTS 25480996
Profit 10990836
Total Sales 36471832
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