NESTLE(BUILDING POWER BRANDS THROUGH

EFFECTIVE COMMUNICATIONS)

BUILDING POWER BRANDS THROUGH EFFECTIVE

COMMUNICATIONS

A CASE OF
NESTLE INDIA

SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENT OF
POST GRADUATE DIPLOMA IN BUSINESS MANAGEMENT
INTERNATIONAL SCHOOL OF BUSINESS AND MEDIA,
NOIDA
Certificate

This is to certify that the Dissertation work done on “Building Power

Brands Through Effective Communications” Submitted to
International School of Business & Media, Noida by ........................
in partial fulfillment of the requirement for the award of degree of PG
Diploma in Business Management, is a bonafide work carried out by
her under my supervision and guidance. This work has not been
submitted anywhere else for any other diploma.

Date

ACKNOWLEDGEMENT
I wish to extend my thanks to Mr. ............................, my Project guide
without whom I would have been unable to make this project
possible. His tremendous knowledge and practical suggestions helped
me to understand the various aspects and complexities of topic and at
the same time enhanced my practical knowledge to accomplish the
task that was assigned to me.

ABSTRACT
Nestlé has been a leading food manufacturer and major purchaser of
agricultural raw materials for over 130 years. Food and agriculture are
an integral part of the social cultural, economic and political context
of every community. Today, Nestlé is the world’s largest and most
diversified food company, with nearly 500 factories in 77 countries,
producing healthy, enjoyable food products for every stage of life.
The present study has been carried out with the objective of studying
the profile of Nestle, their brand exercises, the use of celebrity
endorsement as a tool of brand building by firms and the consumers
perception about the brand image of Nestle
The research was carried out with the help of primary as well as
secondary sources of data Primary Data has been collected through
consumer survey in Delhi, among the existing and potential
consumers of Nestle Products. However secondary dats has been
collected through Books, Periodicals and Journals in the field of
marketing, branding and Newspapers and the Internet. The only
limitation in this survey was that I could not conduct a survey on a big
scale, due to the time constraint.
After all the literature and market research, and analysis I wish to
conclude that the philosophy behind the branding strategy of Nestle
has been to develop the brand so as to attract and retain the
consumers. The branding strategies adopted have resulted in building
a sustainable and differential advantage over its competitors.

TABLE OF CONTENTS

1. INTRODUCTION
• About the company
2. RESEARCH METHODOLOGY
• Data sources
• Research objective
• Scope of the study
3. COMPANY PROFILE
• Market Presence
• Brand exercise in Nestle
• Range of products and services
• Celebrity Endorsements in Branding exercises
• SWOT Analysis
4. DATA ANALYSIS AND INTERPRETATION
5. CONCLUSIONS & IMPLICATION
6. RECOMMENDATIONS
7. ANNEXURE
8. BIBLIOGRAPHY / REFERENCES

INTRODUCTION
The business environment has changed dramatically in the last
decade. The Internet has empowered customers. Competition has
become global, and Indian companies have arrived as players on the
global stage. Companies now have to evolve from a ‘command and
control’ to a ‘connect and collaborate’ mindset that relies on customer
engagement, dialogue, and collaboration. The fundamental concepts
of, how brands are built and how marketers relate with customers are
being turned on their heads. A strong brand presence does more than
just resonate with consumers. It also creates an imperative inside the
company that connects employees, managers, and shareholders.
Today it's commonly accepted that strong brands accelerate business
performance, with the power to lift companies, their products and
services from obscurity or commodity status to positions of
preeminence in their marketplaces.

"A company's brand is the primary source of its competitive

advantage and a valuable strategic asset," said Aaker, who is
generally regarded as the world's leading academic authority on
branding strategy. "Yet, too often, the brand message to customers is
weak, confused, irrelevant, or, worst of all, indistinguishable from
competitor offerings.
"The challenge for all brands is that they have a distinct, clear image
that matters to customers and truly differentiates them from the rest."
A brand is a complex entity in the mind of a customer. Brand identity
is the fully expressed description of a brand and how it positioned in
the marketplace. Brand image, meanwhile, is a customer’s internal
emotional reaction to the expression of a brand identity. A good brand
communicates a clear message about what it stands for and how it
differs from competitors. It stems from the product positioning and
customers understand and internalize the brand through its consistent
use. Each touch point within a company’s customers’ experience
should seek to reinforce this same message.
The brand image is comprised of the products' attractiveness, ease of
use, functionality, popularity, and overall value (perceived or real)
When combined with a well-conceived brand positioning strategy,
advertising has the power to shape a company’s brand image in a way
that positively affects the company’s revenue, reputation and
customer loyalty over the long-term.
Nestlé India : Nestlé India is a subsidiary of Nestlé S.A. of
Switzerland. With six factories and a large number of co-packers,
Nestlé India is a vibrant Company that provides consumers in India
with products of global standards and is committed to long-term
sustainable growth and shareholder satisfaction.
The Company insists on honesty, integrity and fairness in all aspects
of its business and expects the same in its relationships. This has
earned it the trust and respect of every strata of society that it comes
in contact with and is acknowledged amongst India's 'Most Respected
Companies' and amongst the 'Top Wealth Creators of India'.

Beginning with its first investment in Moga in 1961, Nestlé’s regular

and substantial investments established that it was here to stay. In
1967, Nestlé set up its next factory at Choladi (Tamil Nadu) as a pilot
plant to process the tea grown in the area into soluble tea. The
Nanjangud factory (Karnataka), became operational in 1989, the
Samalkha factory (Haryana), in 1993 and in 1995 and 1997, Nestlé
commissioned two factories in Goa at Ponda and Bicholim
respectively. Nestlé India has commissioned in 2006 its 7th factory at
Pant Nagar in Uttarakhand.

*This pictorial representation does not purport to be the political map

of India.
BUSINESS STRATEGIES WHICH MAKE HUGE BRAND
VALUE OF NESTLE
• Nestlé has been a leading food manufacturer and major purchaser of
agricultural raw materials for over 130 years. Food and agriculture are
an integral part of the social cultural, economic and political context
of every community.
Respect different traditions
• Since Nestlé activities in Switzerland, its country of origin, account
for less than 2% of its global turnover, Nestlé learned very early to
respect the social, political and cultural traditions of all countries in
which the products are produced and sold, and to be a highly
decentralized "people and products" oriented company rather than a
systems centered organization.
The world’s biggest food company
• Today, Nestlé is the world’s largest and most diversified food
company, with nearly 500 factories in 77 countries, producing
healthy, enjoyable food products for every stage of life.
Quality - always and everywhere
• Quality is the cornerstone of the success of the Nestlé Company.
Every day, millions of people all over the world show their trust in the
company by choosing Nestlé products. This trust comes from a
quality image that has been built up for over a century.

Consumer focus
• Nestlé carries out its global social responsibility, firstly, by taking a
long term approach to strategic decision making which recognises the
interests of our consumers, shareholders, business partners, and the
world-wide economies in which we operate.
Business Principles translated into 40 different languages
• Secondly, our responsibilities and values are reflected by the
commitment of management and employees at all levels, to the
following specific Corporate Business Principles, which define
standards of behaviour for all companies in the Nestlé Group, and are
intended to complement applicable legislation and international
recommendations.
Quality - Everywhere and Always
• Quality in everything we do and constant improvements are key
elements for all of those who work at Nestlé.
• We have the confidence of our customers and consumers simply for
the reason that we work actively with quality issues at all levels in our
business, and quality has a high position of priority in everyone’s
daily work. Obviously, this applies first and foremost to the quality of
the products, but it also applies to the way in which we work, both
internally and externally with the rest of the world. The interests of
our consumers and customers always come first. That’s why product
safety takes top priority.
High standards
• Consumers should be able to safely enjoy our products, and our
products should always comply with current legislation and
regulations. In addition to this are our own standards and
requirements, which are often far more stringent than those of the
authorities. But we do not rest there. Our products, and the service we
provide, should satisfy the expectations that our customers and
consumers have of us. And preferably exceed those expectations too.
Quality by co-operation
• The Nestlé Quality System (NQS) affords an important ambit for
our quality work, which covers the entire chain of values ‘from the
earth to the table’. However, we do not rely on technology and
systems alone to guarantee our quality. Quality is regarded as a
common concern, something that can only be achieved when
everyone cooperates.
Quality agreements
• Quality embraces the entire chain from primary produce to the
finished product used by the consumer. We therefore carry out regular
reviews in our own factories and in those of our suppliers, and we
have established long-term quality agreements with many of our
partners. All this is part of our continuing work to make our company
even better.

The environment :
• One of Nestlé’s guiding principles is to procure and manufacture
local products in a manner that ensures sustainable development. This
covers the entire cycle from primary produce, packaging materials,
storage, manufacture, marketing and distribution to waste disposal.
The effect of the business on the environment with respect to
effluents, use of water, creation of waste and use of packaging
material is planned and monitored meticulously.
RESEARCH METHODOLOGY
RESEARCH METHODOLOGY
I have carried out a research which is both qualitative and quantitative
in its support. The qualitative approach applies to both, descriptive
and inductive forms of research. While as in case of quantitative
approach, an extensive use has been made of the literature available to
carry out a detail research on the nature of the problem. I have chosen
Nestle as the target company for my research study.
METHOD OF DATA COLLECTION & ANALYSIS

The data, after collection, has to be processed and analyzed in

accordance with the outline laid down for the purpose at the time of
developing the research plan. This is essential for a scientific study
and for ensuring that we have all relevant data for making
contemplated comparisons and analysis.
I have conducted a graphical analysis based on the responses received
from the persons questioned and interviewed. Once the interview was
over, the responses received were be grouped together, and a
graphical presentation and analysis has been made for every set of
questions.
NATURE OF DATA:
I have made use of both, the primary sources and the secondary
sources of data in eliciting information.

PRIMARY DATA:
The primary source of data involves oral interviews and
questionnaires. These sources are inadvertently expected to yield
more qualitative data and results.
SAMPLE SIZE: 30
SURVEY AREA: Aligarh
PRIMARY DATA COLLECTION METHODS
INTERVIEWS:
I have conducted oral interviews with customers of Nestle. In
considering an oral interview of such a nature, a follow up and step by
step approach was adopted in getting through the interviewees. The
oral interview involved a set of well thought out questions that were
asked and the responses there on noted as a basis for analysis.
Subsequently a graphical analysis has been made based on the
responses received from the persons questioned and interviewed.
SECONDARY DATA COLLECTION METHOD
The secondary source of data includes relevant literature including
periodicals and journal articles in the areas of Marketing, customer
satisfaction.

LIMITATIONS
The only limitation in this survey was that I could not conduct a
survey on a big scale, due to the time constraint.

RESEARCH OBJECTIVES

To study the profile of Nestle brandings & strategies

To study the brand exercises of Nestle, with particular emphasis on
Maggi
To study how firms use celebrity endorsement as a tool of brand
building
To study the consumers perception about the brand image of
Nestle
Branding strategies:
The formulation of branding strategies starts from the building a
sustainable brand for the company. This is so as the consumers buy
the brand not only for the intrinsic values associated with it but also
because of the promise that branding makes to the consumer….the
promise of delivering values beyond expectation. A framework is
suggested below for the formulation of a brand strategy:

Figure: framework for formulation of a brand strategy

1.Experiential marketing: the first component of branding strategy is

the experiential marketing. It is a well known fact that the customers
demand experiences instead of products or services. This creates a
challenge to the organizations to find new ways to involve the
customers in the value chain so that they themselves can decide the
product features and uniqueness that they expect from the brand. They
want to know more about the details of the brand. They remove the
shells and get into the core of the processes to understand the real
value of the brand. Hence such a strategy should be framed that
makes the consumers involvement higher.

2. Effective Branding
It is found that effective branding involves working on four important
dimensions, namely:

Figure : dimensions of effective branding

• The Functional Dimension

The functional dimension concerns the perception of benefit of the
product or service associated with the brand.
• The Social Dimension
The Social Dimension concern the ability to create identification with
the group.
• The Spiritual Dimension
The Spiritual Dimension is the perception of global or local
responsibility
• The Mental Dimension
The Mental Dimension is the ability to support the individual
mentally.

2. Novel Brand Strategies

• Customers Own the Brand

It should always be kept in mind that it is the consumers who own the
brand.

Figure : novel brand strategies

Product Service
• A sale should never be considered the ending of a transaction but the
beginning of a beautiful relationship. Customer service basically
creates a positive effect on the minds of the customer and this positive
influence on the mind of the consumer makes them more open to new
ideas and reduces their skeptism towards the brand.
• Buzz Marketing: the development in the technology used in the
country has lead to the increased importance paid to the concept of
buzz marketing. Branding increasingly nowadays is moving into
Internet-based applications.
• Religious Branding since it is considered that religion has the power
to bind people and unify them under one common ideal an effective
brand strategy must take into account this powerful force which plays
on the minds of the Indian consumers. This is so as in a country like
India, A brand that reveals authenticity, values and humanity's drive
toward conscientiousness, offers a powerful strategic advantage.
4. Feedback and Improvements
It is very crucial to have the consumer participation. In order to
succeed in the long run, it is crucial to allow the consumer
participation at an intermediary stage of developing the product. This
will lead to creation of a better relationship between the company and
its consumer.

PRODUCT BUNDLING: An Important Branding Strategy

Product Bundling is a marketing strategy that involves offering

several products for sale as one combined product. Product bundling
is most suitable for high volume and high margin products. It is most
successful under the following situations:

• There are economies of scale in production,

• There are economies of scope in distribution,
• Consumers appreciate the resulting simplification of the purchase
decision and benefit from the joint performance of the combined
product,
• When the marginal costs of bundling are low.
• When production set-up costs are high,
• When customer acquisition costs are high

BRAND EXERCICES IN NESTLE

Consumer Services

At Nestlé, the company is committed to offering consumers high-

quality food products that are safe, tasty and affordable. The Nestlé
Seal of Guarantee is a symbol of this commitment. It also believes in
maintaining regular contact with our consumers. When Henri Nestlé
prepared his first boxes of infant formula for sale, he put his address
on the packages so people would know where to go if they had
questions. Today, the Consumer Relationship Panel with the words
"Talk to Nestlé" expresses the same commitment.
Nestle has a worldwide Nestlé Consumer Services network devoted to
caring for consumers. The people have expertise in a wide range of
areas such as nutrition, food science, food safety and culinary
expertise. They provide the prompt, efficient and high quality service
that consumers expect from Nestlé.
.

BRANDS
Milk Products & Nutrition: From shelf-stable solution to chilled
dairy.

Beverages: Drink to an active life with Nestlé Beverages.

Prepared Dishes & Cooking Aids: Preparing well balanced meals is a
snap with Nestlé.

Chocolates & Confectionery: Delighting the senses with a range of

tastes and textures.
PREPARED FOODS
Convenience foods — packaged soups, frozen meals, prepared sauces
and flavorings —date back more than a century. With the Industrial
Revolution came factory jobs for women and less time to prepare
meals.
The problem was so widespread that it became the object of intense
study in 1882 by the Swiss Public Welfare Society, which offered a
series of recommendations, including an increase in the consumption
of vegetables.
The Society commissioned Julius Maggi, a miller with a reputation as
an inventive and capable businessman, to create a vegetable food
product that would be quick to prepare and easy to digest. The results
— two instant pea soups and an instant bean soup — helped launch
one of the best known brands in the history of the food industry. By
the turn of the century, Maggi & Company was producing not only
powdered soups, but bouillon cubes, sauces and flavorings.

.
BRAND MAGGI
Maggi merged with Nestlé in 1947. Buitoni, the authentic Italian
brand, which has been producing pasta and sauces in Italy since 1827,
became part of the Nestlé Group in 1988
Maggi
Known worldwide for innovation and quality, Maggi is a leading
culinary brand and part of the Nestlé family of fine foods and
beverages. Maggi offers a whole range of products, such as packaged
soups, frozen meals, prepared sauces and flavorings.
Julius Michael Johannes Maggi, the company’s founder, was born on
the October 9, 1846 in Frauenfeld, Switzerland. He was the oldest son
of an immigrant Italian and a Swiss national. In 1863 he developed a
formula for bring added taste to meals, which would later become
lead to the beginning of Maggi and convenience food products. In
1882, the Swiss Public Welfare Society commissioned Maggi to
create a vegetable food product that would be quick to prepare and
easy to digest to help with the problem of women having less time to
prepare meals as more women worked outside the home. The results
— two instant pea soups and an instant bean soup – were a huge
success. By the turn of the century, Maggi & Company was producing
not only powdered soups, but also bouillon cubes, sauces and
flavorings.
Maggi 2-Minute
With the launch of Maggi noodles, NIL created an entirely new food
category - instant noodles - in the Indian packaged food market.
Because of its first-mover advantage, NIL successfully managed to
retain its leadership in the instant noodles category even until the
early 2000s.
Over the years, NIL extended the Maggi brand to a variety of culinary
products like soups, sauces and ketchups, and cooking aids among
others. However, these product extensions were not as successful as
the instant noodles. In 2005, NIL started offering a range of new
'healthy' products under the Maggi brand, in a bid to attract health-
conscious consumers.
At that time, Indian consumers were rather conservative in their food
habits, preferring to eat traditional Indian dishes rather than canned or
packaged food. In fact, NIL was trying to create an entirely new food
category, instant noodles, in India. Initially, the company targeted
working women on the premise that Maggi noodles were fast to cook
and hence offered convenience.
However, this approach failed as was evident from the fact that the
sales of Maggi noodles were not picking up despite heavy media
advertising. To get to the root of the problem, NIL conducted a
research, which revealed that it was children who liked the taste of
Maggi noodles and who were the largest consumers of the product.
After this, NIL shifted its focus from working women and targeted
children and their mothers through its marketing. NIL's promotions
positioned the noodles as a 'convenience product', for mothers and as
a 'fun' product for children. The noodles' tagline, 'Fast to Cook Good
to Eat' was also in keeping with this positioning.
NIL aggressively promoted Maggi noodles through several schemes
like distributing free samples, giving gifts on the return of empty
packs, etc. NIL's advertising too played a great role in communicating
the benefits of the product to target consumers.

Through its ads, NIL positioned Maggi as a 'fun' food for kids which
mothers could prepare easily. Taglines like 'Mummy, bhookh lagi hai'
(Mom, I'm hungry), 'Bas 2-Minute,' (Only 2 minutes) and 'Fast to
Cook Good to Eat' effectively communicated the product's benefits to
target consumers.

These ads had become so popular that the tagline 'Bas 2-Minute'
immediately reminded Indian consumers of Maggi noodles even
several years after the ads were taken off the TV. Maggi's first
product extension was Maggi instant soups launched in 1988.

MAGGI 2-MINUTE Noodles is one of the largest snack food brands

in the country and defines the Instant Noodles category in the country.
MAGGI 2-MINUTE Noodles has been renovated to provide 20% of
the RDA of Calcium and Protein for the core target group. It is
available in 4 flavours: Masala, Chicken, Tomato and Curry Maggi
vegetable atta noodles

Is an innovative product and the first of its kind in India? Nestlé India
used the Group's extensive Research and Development expertise to
develop MAGGI Vegetable Atta Noodles which contain whole wheat
and real vegetables. A 100 gm pack of MAGGI Vegetable Atta
Noodles provides the goodness of 3 rotis* (energy, carbohydrates,
dietary fibre, protein and calcium). Taste Bhi, Health Bhi!
MAGGI SAUCES
Sauces and Ketchups are relished for their high quality and taste and
are considered ‘good value for money' by consumers. MAGGI offers
a wide range of products that appeal to various segments including
traditional ketchups, Indianized sauces and specialty sauces. There are
8 variants in the MAGGI Sauces range: Nestlé India has always
focused its efforts to understand the changing lifestyles of consumers
and their needs. Based on such insights, the Company continuously
innovates and renovates. Recent examples are that of MAGGI
Tomato Chatpat, a mix of Tomato, Ginger, Garlic & Coriander and
MAGGI Tomato Pudina mix of Tomato, Mint & Coriander.
MAGGI HEALTHY SOUPS
Nestlé pioneered the dehydrated soups market in India and was the
first to introduce tasty and convenient packaged soups.

MAGGI MAGIC CUBES

MAGGI MAGIC Cubes are taste enhancers - "Chutki bhar Jadoo!"
MAGGI MAGIC Cubes are available in two flavours - Vegetarian
Masala and Chicken

Consumers opinion about Maggi

October 2006, SAIL, Durgapur, West Bengal, The week
After reaching on Engineer’s hostel on the first day of our in SAIL at
10pm, we realized that the mess has closed and there is no other
chance to decent meal.(in Durgapur the nearest dhaba is 6km away
and we had no bikes.) suddenly a bulb glows on my head, mom had
packed 6 packs of wonder stuff and rushed to the kitchen. I payed 20
bugs and make that good Bangali cook these 3 packes of “wonder
stuff” and put in 6 plates and rush to my room, where everyone
sitting. Aah that day I got such words which itchak rabin.

December, 2007, Bangalore, Business Brands

When ever I ask wife “Is there any thing to eat” after 5 minutes I get a
bowl of Maggi soup+ noodles, this was invented by wife:
Maggie soup+ Maggie noodle= wonderful of evening snacks.

BRAND NESCAFE

The beginnings of Nescafé can be traced all the way back to 1930,
when the Brazilian government first approached NESTLÉ.

Their coffee guru, Max Morgenthaler and his team, set out
immediately to find a way of producing a quality cup of coffee that
could be made simply by adding water, yet would retain the coffee’s
natural flavour. After seven long years of research in the Swiss
laboratories, he found the answer.

Nescafe is taking wee baby steps towards mother-brand status with its
not such an old hat decision of bringing the Nescafe label onto the
hitherto aggressively and single-mindedly advertised South-India
centric brand of coffee-chicory soluble mix, Sunrise! It happened in
slow motion, but the moves are distinct and noticeable. In the
beginning came the Nescafe brand name on the top label of Sunrise.
And then it grew in size! There sure will come a time when the
Nescafe mother-brand on the pack will dwarf a Sunrise into a status
of sub-brand altogether.

The move by Nestle India to reduce the price of its flagship coffee
brand, Nescafe, by 15 per cent, and to introduce special low-priced
packs, is seen as an effort to increase focus on the domestic market
and enlarge the brand’s consumer base. Price and affordability are
critical factors to a large segment of coffee consumers in India.
Alongwith the price cut, the company has also launched a new ad
campaign
Nestle India underwent a dramatic repositioning for Nescafe. Faced
with stagnant sales and in an attempt to gather additional volume
growth, Nescafe's elitist, urban-centric positioning was traded for
mass-appeal advertising. Nescafe's upmarket 'taste that gets you
started up' jingle was replaced with the commonplace 'inhe jagao,
Nescafe pilao' positioning.

Consumer prices of Nescafe, which have been steadily falling

(currently at Re 1 for 1 gm sachets and at Rs 10 for 12-gm sachets),
coupled with a mass-appeal commercial in place of 3-year-old 'taste
that gets you started' campaign, has triggered sales significantly.

In fact, Nescafe clocked double digit growth soon after a prolonged

period of single-digit growth.

Adding that the class-to-mass communication for Nescafe is here to

stay, Carlos Donati, CMD, Nestle India maintains, "All along, we
have been selling Nescafe thinking the brand appeals only to a certain
type of consumer. But the younger generation is evolved now —
maybe we were late in realising this."

NESCAFE continues to be the largest brand of instant coffee in the

Indian market. During the year the Company re-launched NESCAFE
SUNRISE coffee-chicory blend after it was renovated with superior
grade of plantation beans to provide better coffee taste and aroma and
competitive advantage. During the year the Company continued to
innovate and renovate and in early 2006, launched New NESCAFE 3
in 1 with the right balance of coffee, dairy creamer and sugar and
especially formulated to suit the taste
profile of the youth who wish to move to the more trendier coffee
habit, especially in the tea drinking areas.

With rapidly increasing opportunities in the Out Of Home segment,

especially in coffees and beverages the Company continued to
increase its ‘NESCAFE Coffee Corners’, ‘NESTLE Consumption
Zones’ and vending machines in offices, colleges, and other locations
that experience high footfalls. The Company has by far the largest
number of vending machines installed in the market and sell close to
700 million cups of hot and cold beverages per annum.

Top 5 Coffee brands advertised on TV during the first three quarters

of 2005.

• 'Nestle India Ltd' & 'Brooke Bond Lipton' constitutes 98% share in
Coffee advertising
• 'Nescafe Classic' coffee gets hotter on TV

MARKET SHARE
THE stock of Nestle India Ltd has been under pressure for some time
now, on the back of a growing perception that the stock trades at the
higher end of the FMCG valuation spectrum.
The stock, which was trading at around Rs 655 levels on the bourses
as on April 4, has lost ground by 19.3 per cent to its current levels of
Rs 549. The counter has been range-bound over the last month since
when it has been trading in the range of Rs 549 to Rs 550. The
exception being June 10, when the stock hit Rs 573 on the BSE. An
illiquid counter, the stock is also being dogged by talk of it being a
potential delisting candidate.
A recent Merrill Lynch report on the company says that the stock is
no longer a safe haven. The report attributes structural and
competitive issues impacting growth prospects. About 40 per cent of
the company's business is said have either fallen or slowed down vis-
a-vis last year. The key among them being brand Maggie Noodles and
Cerelac. While the former contributes to 12 per cent of the turnover,
the latter contributes 11 per cent. While Maggie has 80 per cent
market share in the noodle category and no noteworthy competitor
there is a perception that the slowdown is probably due to brand
fatigue. On the other hand, Cerelac with 80 per cent market share and
one of Nestle's most profitable brands is expected to see a decline in
sales primarily due to the Government ban on print advertising and
doctor sampling. Hence, there is expectation that EPS would grow
merely 4.5 per cent in the current year vis-à-vis an average 23 per cent
growth over the last two years. This is led by slower sales growth — 5
per cent versus average 9 per cent in the last two years and higher cost
pressures.
However, according to analyst Mr Harrish Zaveri of Edelweiss
Capital, the long-term growth story is still on track, with the company
policy being growth via low penetration and not share gains. "The key
problem is milk prices and not the brand per se. The company has
stopped supplying tender parts to Canteen Stores Department (CSD)
as of this quarter largely on account of the fact that they are not able
to pass on cost to CSD. Had CSD sales continued like last year, milk
and milk products sales would have increased by 11 per cent to 15 per
cent," he said. Analysts maintain that milk — which contributes to 41
per cent of the total raw materials — prices are expected to be up by 5
per cent to 6 per cent this year. While the company may seem to be
going down in terms of pricing it is primarily on account of them
wanting to play the volume game. Though this quarter is likely to be
soft, the PE may or may not drop.

WHAT IS BRAND IDENTITY

Aaker’s Framework
Brand identity as defined by Aaker is the sum of the brand expressed
as a product, organization, person, and symbol. For instance, brand as
product deals with the acceptance of the brand as a product itself. For
its price, Nirma is seen as a good product. BMW or Benz are basically
seen as good products besides being good brands. Brand as
organization emphasizes that a brand is successful among other things
because of the organizational values it upholds. 3M abroad and
Marico in India have brought in a series of successful products
because of their commitment to innovation. Marico has innovative
and often successful offerings in a wide variety of products as hair oil
(parachute), edible oil (Saffola, Sweekar), starch (Revive), jam (Sil).
Brand as person deals with the question “ what happens to this brand
when it becomes a person?” by implication, Denim talc would be seen
as ‘masculine,’ Sunsilk shampoo as ‘feminine’, and Pepsi as young
and vibrant. Brand as symbol deals with heritage and what the brands
stand for. For instance, Coke symbolizes the American dream. Aaker
contends that brand identity is a function of these four dimensions.
The framework is reproduced on the next page.

Brand identity prism

BRAND PERSONALITY
Importance of Brand Personality
Brand personality is what distinguishes one brand from another or a
particular brand from a product. It is easier to intuitively understand
brand personality rather than define it. In a discussion on brand
personality of the brand Dabur, one of the participants said, “Dabur is
like my grandfather”. In a flash, this brought out what Dabur really
means. In one simple sentence this summarizes the components of
Dabur’s personality. These can be listed as:

• Strong heritage
• Herbal or ayurvedic benefit
• Healthy
• Nurturing
• Dependable

Definitions of Brand Personality

The definitions of brand personality available in literature can be
classified into three types:
a) Emotion-centered definitions
b) Human-centered definitions
c) Others

Self-expression can be seen as the motive behind the consumption of

certain products and services. For instance, young people prefer to
ride Yamaha bike in India because it is a power-bike and because he
is considered very masculine when he rides a power-bike. A
Mercedes-Benz car is owned as much for its status conferring nature
as to its utility. The need for self-expression is paramount in the
consumption of many lifestyle products like Close-up, Titan, Charms
and Classic.
Some people may never aspire to have the personality of a complete
leader but would like to have a relationship with one, especially if
they need a banker or a lawyer. A trustworthy, dependable,
conservative personality might be boring but nonetheless reflect
characteristic valued in a financial advisor, a lawn service, or even a
car---consider the Volvo brand personality. The concept of a
relationship between a brand and a person (analogous to that between
two people) provides a different perspective on how brand personality
might work.

To see how the relationship basis model works, consider the

personality types of people with whom we have relationship and the
nature of those relationships. Some of the types might be as follows:
• Down-to-earth, family oriented, genuine, old fashioned (sincerity).
This might describe brands like Hallmark, Kodak, and even Coke.
The relationship might be similar to one that exists with a well-liked
and respected member of the family.
• Spirited, young, up-to-date, outgoing (Excitement). In the soft drink
category, Pepsi fits this mold more than Coke. Especially on a
weekend evening, it might be enjoyable to have a friend who has
these personality characteristics.
• Accomplished, influential, competent (competence). Perhaps
Hewlett-Packard and the Wall Street Journal might fit this profile. For
example, a relationship with a person whom one respects for his
accomplishments, such as a teacher, minister or business leader;
perhaps that is what a relationship between a business computer and
its customer should be like.
• Pretentious, wealthy, condescending (sophistication). For some, this
would be BMW, Mercedes, or Lexus as opposed to the Mazda Miata
or the VW Golf. The relationship could be similar to one with a
powerful boss or a rich relative.
• Athletic and outdoorsy (ruggedness). Nike, Marlboro are examples.
When planning an outing, a friend with outdoorsy interest would be
welcome.
Two elements thus affect an individual’s relationship with a brand.
First, there is the relationship between the brand-as-person and the
customer, which is analogous to the relationship between two people.
Second, there is the brand personality—that is, the type of person the
brand represents. The brand personality provides depth, feeling and
liking to the relationship. A brand- customer relationship can also be
based on a functional benefit, just as two people can have a strictly
business relationship.

The Brand as a Friend

One important relationship for many brands is a friendship link
characterized by trust, dependability, understanding, and caring. A
friend is there for you, treats you with respect, is comfortable, is
someone you like, and is an enjoyable person with whom to spend
time. General Foods, in fact, defines brand equity as a “liking” or a
“friendship” relationship between the customer and the brand.
WordPerfect, a software company that has always been a leader in
customer service, would rate high on the friendship dimension.

A friend relationship can involve very different brand personalities.

Some friends are fun and irreverent. Others are serious and command
respect. Others are reliable and unpretentious. Still others are just
comfortable to be around. A focus on the friend relationship rather
than the brand personality can allow more scope and flexibility in the
implementation of the brand identity.

Fred Posner of Ayer Worldwide has observed that people live in a

world characterized by stress, alienation, and clutter. Noting that
people cope by developing escape mechanisms and meaningful
friendships, Posner suggested that brands could provide these roles by
being either an “aspirational” or a ”trusted” associate. Escape can take
the form of aspirational relationships, which provides a social lift or
trusting relationships, which provide some expertise or knowledge of
a subject in which a given person is interested. Posner believes that
either relationships can be the basis for real differentiation and
competitive advantage. He further suggests that the chosen
relationship should be the centerpiece of brand strategy and execution.

The functional benefit representation model is suitable for certain

product categories. For instance, the housewife currently looks at the
detergent powder market in India in a very functional manner. This is
why the low price can be a powerful vehicle for signaling
functionality. In fact most recent successes in the product category
used price very effectively (e.g. Nirma, Wheel, Ariel Supersoaker).
Similarly, attributes can be used to cue functionality. Brands like
Mahabar and Mahacola can signal to the consumers that the product
gives more value for money than the competing brands.

A brand can also give very strong cues on its functional usefulness by
the manner in which it is managed. For instance, the mascot Gattu has
made Asian Paints a popular and friendly brand. Ruffles chips from
their packaging to brand name send unmistakable signals about the
crispness of the chip. Genius machines from WIPRO also hint to us
the quality of the machines computing capabilities. Thus, brand
personality can derive mileage from- as well as hint at- functional
benefits.

Kapferer’s definition of brand personality is also similar. Brand

personality according to him, is the brand’s character. We can identify
it with a person. For instance, Peugeot is conservative, Citreon
idealistic. The easy way to bestow personality on a brand is to provide
it with a spokesman (Lalitaji-Surf), a star (Pataudi-Royale Paint) or an
animal (Rhino-Ceat)

David Arnold seems to treat essence to be synonymous with brand

personality. Essence is the basic idea behind the brand. When a brand
is configured, it is important to get its essence first. This essence
translates itself into benefits. These benefits should be converted to
specific attributes. Ultimately, it is these benefits and attributes that
form what Arnold calls brand anatomy.

For instance, essence of a brand like close-up is youth. This essence

translates into benefits like joy, fun, energy and modernity. These
benefits get reflected in the attributes of the product. The bright
packaging of Close-up signals modernity. But, bright colour and gel
reflect the youth. The endorsement of Close-up Antakshari is the
celebration, joy and the energy dimension of the brand. The anatomy
of close-up as it emerges from this approach is outlined in the figure
given on the next page.
LEMENTS OF BRAND PERSONALITY

Products Sensory Emotional Rational

An incense stick
A washing machine

A diesel engine Smell

Finish, looks

Noise level Brand name

Reliability leading to peace of mind

Rugged hence reassuring Raw material

Number of Kg of clothes it washes

Fuel efficiency
It is therefore proposed that all those components and elements that
are in some sense crucial to and inseparable from the brand, from its
personality. How the various elements of a brand could contribute to
its brand personality is shown in the above table.

BRAND EXTENSION

Brand extension refers to the use of the successful brand name to

launch a new or modified product in a same broad market. A
successful brand helps a company enter new product categories more
easily. For example: Fairy was extended from a washing up liquid
brand to become a washing powder brand too.

Effective brand extension strengthens the brand franchise

Brand extensions should be able to take the existing brand and make
it stronger. This could be through addressing additional consumer
opportunities or finding new uses. Bringing new users to the brand is
one of the benefits of brand extension but it is important that existing
consumers are not disenfranchised by the extension. It would be
supported by the following Unilever example.

Unilever’s decision to reposition its Lynx brand as a male grooming

range rather than just a deodorant has several advantages for the
company. Firstly, it enables Unilever to target the whole of the male
grooming regime, not just deodorants and not just toiletry products
but also the service area. The brand has also been used to market a
chain of modern barber shops. Secondly, it allows Unilever to look
for sources of higher profit. This comes at a time when the company
is experiencing pressure on its margins in the traditional retail
business. The development of added-value services is one way in
which this can be addressed. More recently, Unilever has extended its
my home domestic cleaning service into dry cleaning through a
London retail outlet.

Boots has been faced with greater competition in its core business of
selling health and beauty products by supermarkets. However, Boots
has a major advantage over its competitors through a high level of
consumer trust. This has allowed it to refocus its business from
retailing cosmetics, toiletries and pharmaceuticals to a provider of
healthcare and well-being services. This strengthens the brand
through building on the element of trust and authority within the
healthcare sector and enables it to address additional market segments
more effectively. However, if the brand were to be moved outside the
health and well-being sector, it may be seen to have lost focus and
relevancy.

The brand extension can be one way in which the brand is kept
modern and alive. Nestle is an example of a strong parent brand that
has used brand extension to develop a series of variants that are able
to target different choco-food occasions, consumer types and price
sectors. In turn these are able to strengthen the Nestle parent brand.
The addition of a service or experiential element such as Café Nestle
can also strengthen the brand by moving it beyond mere imagery to
the provision of genuine consumer engagement. Nestle can thus be
equally an established and modern, up-to-date brand.

One of the principal dangers of brand extension is that the parent

brand equity may be diluted. If there is a misunderstanding of
consumers’ perception of the brand, it could be moved into a sector
that consumers view as “inappropriate.” Quite often the parent brand
will have been available for some time, enabling it to build a level of
equity and trust with consumers. It will have strong credentials. Over
time, its marketing has sought to build and secure these credentials
within its target market. An irrelevant positioning has the ability to
undermine the parent’s credentials.

A different scenario is that the extension takes necessary marketing

funds from the parent. An example here could be moving a brand into
a different sector that requires substantial marketing investment to
become established. If this means that the parent brand receives less
support, then it may be undermined.

The extension should be into a sector or create a sector that is a

natural fit with the parent brand. The exception to this is where the
parent brand is able to span multiple categories as it is a brand based
on consumer values and imagery rather than being tied to a product or
service category. An example here is Virgin, which can be transferred
to new and seemingly unrelated sectors as it is not related directly to
one sector but has values that can transcend a number of different
categories. By the same token, Nestle is a strong brand as it is retained
within the overall dairy product & choco market but develops added-
value sectors.

Marketing promotion for the brand extension should not be too

removed from that of their parent brand. The extension needs to feed
off the parent and take in its equity rather than having a significantly
different positioning. British Airways product offers such as Club
World and Club Europe feed off the core brand and add to it. The
Financial Times’ development of the FT.Com and FT Mobile brands
allows the extensions to feed off its media strength.

Creating a category may be one of the ways in which brand extension

can be successful. A brand that is moved into an existing product or
service category may end up as a me-too unless it is able to achieve
significant differentiation from the competitors. The new variant must
be able to promise something different such as simplicity or sustained
added value compared with existing brands in the sector. Similarly
Nokia’s development of a fashion element within the mobile phone
sector moves the brand into a potentially lucrative area.

Brand extension has the ability to strengthen and update a brand

through addressing new consumer opportunities. However, it is not an
easy option that will add incremental sales to a brand. It has
considerable potential to undermine the brand’s equity if
mismanaged. Brand extension does represent a way in which a brand
can be kept up-to-date. It may also help to increase sales through
attracting new groups of consumers or addressing additional usage
occasions. A new line has to justify its place on the retailer’s shelf and
in the brand portfolio with a clear role. If this is unclear, there is a real
danger that the parent brand equity will be undermined.
One of the ways in which brand extension may be successful is
through viewing it from a consumer perspective. Do consumers view
the brand as being a specific product or service or is it a brand that
can travel, i.e. its values could be applied to a new sector? It is
through developing this consumer understanding that the true
meaning of the brand can be understood and appropriate line
extensions identified.

Benefits of Line Extension

Brand extensions let a marketer take a brand with well-known quality
perceptions and associations and put it on a brand in a new category.
Not only can marketers capitalize on brand awareness, they can also
leverage off of the associations consumers know about the parent
brand. If consumers know that Arm and Hammer Baking Soda is
deodorizing, they will immediately infer that Arm and Hammer kitty
litter will be deodorizing too. Second, consumers who favorably
evaluate a parent brand are more willing to try and adopt the brand
extension than an unfamiliar brand in the same category. They trust a
known brand name. For these reasons, brand extensions make new
product introduction less expensive.
Brand extensions can also help a firm’s stock prices. Some academic
research has found that Wall Street attend to brand extension
announcements and that whether they like them or not depends on
how much they like the parent band.
Brand extensions can also help consumers understand the core
meaning of the brand name. When Arm and Hammer extends its
name from baking soda to deodorant, kitty litter, shoe inserts, its core
"deodorizing" brand concept is enhanced. Arm and Hammer means
deodorizing—no matter what it is on. So, in this sense, brand
extensions truly help to build equity in the brand name itself.
CELEBRITY ENDORSEMENT AS A TOOL OF BRAND
BUILDING

The modern world of brand building and marketing communication

has become colorful and inundated with advertisements, and it is hard
to get noticed. It is an uphill task for the designer of an advertising
campaign to differentiate itself from others and attract viewers'
attention.
In this jet age, people tend to ignore all commercials and
advertisements while flipping through the magazines and newspapers
or viewing TV. But even then, the glamour of a celebrity seldom goes
unnoticed. Thus, celebrity endorsement in advertisement and its
impact on the overall brand is of great significance. In this process,
the companies hire celebrities from a particular field to feature in its
advertisement campaigns. The promotional features and images of the
product are matched with the celebrity image, which tends to
persuade a consumer to fix up his choice from a plethora of brands.
Although this sounds pretty simple, but the design of such campaigns
and the subsequent success in achieving the desired result calls for an
in-depth understanding of the product, the brand objective, choice of a
celebrity, associating the celebrity with the brand, and a framework
for measuring the effectiveness.

“Selecting Celebrity Endorsers: The Practitioner's Perspective.”

There are several reasons for such extensive use of celebrities.
Because of their high profile, celebrities may help advertisements
stand out from surrounding clutter, thus improving their
communicative ability (Atkin and Block, 1983; Sherman, 1985).
Celebrities may also generate extensive PR leverage for brands. For
example, when Revlon launched the "Won't kiss off test" for its
Colorstay lipsticks in 1994 with Cindy Crawford kissing reporters, the
campaign featured on almost every major news channel 1. Article:
“Selecting Celebrity Endorsers: The Practitioner's Perspective.” and
equally widely in the press. Although research findings are equivocal
about the ability of celebrities to generate actual purchase behavior,
positive impact on economic returns of sponsoring companies.
In India, star power can be gauged by the successful endorsements
done by Shahrukh Khan (Pepsi, Hyundai Santro, Sunfeast, and
Navratan etc.), Amitabh Bachchan, Sachin Tendulkar, Rahul Dravid,
Hrithik Roshan and the others. The inevitable question is, if and how
the lively interest of the public in the rich and famous can be
efficiently and effectively used by companies to promote their brands
and consequently to increase their sales revenues.
This fact can be brought out by using certain examples i.e. Mr.
Amitabh Bachchan promoting Cadbury chocolates after the fiasco of
infestation when the image of Cadbury India went very low in the
eyes of people. Soon the company found a perfect fit and a reliable
celebrity to transmit the correct message and help regenerating the
lost trust. The fit between the product and celebrity is evident as Mr.
Bachchan and Cadbury chocolates both have tested troubled times
and still they stand tall and the love and trust they both share with the
people all across India. This is a live example of how a celebrity
brought certain attributes to a product like chocolate.

“Celebrities Impact on Branding

Christina Schlecht
There is a popular method of marketing communication, the use of
celebrity spokesperson in advertising to endorse brand a brief
assessment of the current market situation indicates, the celebrity
endorsement advertising strategies can under the right circumstances
indeed justify the high cost associated with this form of advertising.
However as several failure show, it is essential for the advertiser to be
aware of the complex process underlying celebrity endorsement by
gaining an understanding of the described concept of source
credibility & attractiveness, match up hypothesis, meaning transfer
model, multiple products & celebrity endorsement while these
concepts can help to answer the questions if & when celebrity
advertisement investment pay-off, it has to be global of further
research efforts to develop an extensive, consistent & user friendly
tool to avoid arbitrary decision & enhance the strategic character of
celebrity sponsorship decision
“Celebrity Branding: not as glamorous as it looks”
Chris Grannell and Ruwan Jayawardena
Celebrities are brands. They are defined by what people think about
them, they have a competitive positioning relative to other celebrities.
Unlike the people behind them, celebrities exist in the minds of their
audience in precisely the same way that corporate or FMCG brands
do. Fans of celebrities get excited when they see them; they want their
endorsement; they often feel some kind of affinity to what a particular
celebrity “stands for.” When a celebrity becomes the face of a charity,
or lends his name to another product or service, customers of that
celebrity show rising levels of interest in the associated organization,
product or offer. Some of the image of the celebrity is “transferred” to
the third party. Conversely, a rising celebrity can align himself with
other celebrities by use of PR, association or photographic imagery;
and of course he can directly communicate values through use of
language or behavior. We know that – just like corporate brand-
owners, celebrity brand-owners employ image consultants and PR
agencies. Sometimes they indulge in brand extension and they can
even have brand architectures. In almost all respects, celebrities
function just like the brands of businesses and products that usually
grace the pages of this website.
“The wealth effects associated with a celebrity endorser: The Michael
Jordan Phenomenon”
Lynette Knowles Mathur, Ike Mathur, Nanda Rangan.
On March 9, 1995, rumors began to circulate on Wall Street that a
minor league baseball player was going to try his luck at shooting
hoops for the Chicago Bulls of the National Basketball Association
(NBA). Normally, rumors of this nature are of dubious significance
for the sports teams involved. They are even of less significance for
firms that seek to establish and maintain their presence in the
marketplace through the use of celebrity endorsements for their
products. In this particular instance, however, the enthusiasm
expressed by the Bulls' players at the prospects of having this minor
league baseball player on the court with them was outdone by the
investors in a select group of firms. This minor league baseball player
was none other than Michael Jordan, whom many would consider to
be among the most talented basketball players of all time.

Celebrity Endorsement

In the world of advertising and marketing communication, celebrity

endorsement has grown in gigantic leaps to reach a level where it has
spawned a separate industry in itself. Celebrity Endorsement is a
rapidly growing industry that is, by conservative estimates, worth
more than Rs. 150 Crore today.

Today, there is a regrettable shift in the emphasis of the advertisement

moving from highlighting the core promise of the brand to exhibiting
the charisma of the brand ambassador. Celebrity endorsement gives a
brand an instant value and personality package which otherwise
would have taken years and millions of dollars - to establish, with far
less guarantee of results. A celebrity does help in increasing brand
sales, but only if he/she is selected carefully and used effectively to
add value to a brand. There must be a relevant and recognizable
match of values of the celebrity and the brand as perceived by
consumers.

The four primary endorser’s types are:

• Celebrities
• Experts
• Typical satisfied customers
• Announcers.

Celebrity endorsements of brands

Brand- a brand is a name, a sign, or a symbol such as a trademark or

logo that identifies a product or service and differentiate it from
similar products or services. It is different from a product, in that the
product performs a task for the user while the brand adds value and
covers the source of the product protecting the customer, producer
from competitors who would attempt to provide products that seem to
be identical.
Marketers use a whole lot of tactics to draw the consumer’s attention
to their brand - one of these is getting celebrities to endorse the
products.

According to Friedman and Friedman, a "celebrity endorser is an

individual who is known by the public (...) for his or her achievements
in areas other than that of the product class endorsed". Compared to
other endorser types, famous people always attach a greater degree of
attention, recall and loyalty. Celebrities are people who enjoy specific
public recognition by a large number of certain groups of people.
They have some characteristic attributes like attractiveness,
extraordinary lifestyle or special skills that are not commonly
observed. Thus, it can be said that within a society, celebrities
generally differ from the common people and enjoy a high degree of
public awareness.
Popular personalities who enjoy public recognition amongst a huge
slice of a particular segment of the population or the entire population
are celebrities. Invariably, their very presence conveys the message
“I’m rich, famous, talented, beautiful, intelligent and you aspire to be
like me. I actually think this product is great. Why don’t you buy it
and become like me?”

The product is made attractive by the association with the person

whom customers want to be like and admire and it is this association
that caused the compulsive desire to purchase and use it.
A celebrity may be the embodiment of the company’s image. When
celebrities endorse a brand, customers become aware of the
product/service such that they totally believe and trust that the
purchases will meet their requirements and expectations but all this
provided there is a proper fit between the chosen celebrity and the
brand.
Celebrities give the perception of quality products and services. Once
quality branding is in place, brand extensions are possible i.e.
customers might easily be persuaded to try their other products and
services. Another factor that requires a thought is the media to be used
to advertise the product/service.

Celebrities have the advantage of publicity and the attention getting

power required for any successful advertising campaign. Most
celebrities also enjoy enormous goodwill. The associations made with
them also help the product they are endorsing. The mind as a defence
against the volume of today’s communications screens and rejects
much of the information offered to it. In general the mind accepts
only that which matches prior knowledge or experience.

In the midst of today’s cluttering, it becomes all the more important

for the advertiser to capture the attention of the consumer. Instinctive
changing of channels is prevented if the first few seconds of the
advertisement manage to grip the audience’s attention.
Celebrity endorsers is that s/he can provide testimony for a product or
service, particularly when the product has contributed to their
celebrity. The relationship can increase a consumer's belief and trust
in the product and its benefits. The more familiar an endorser, the
more likely consumers are to buy the endorsed product.

FORMS OF CELEBRITY ENDORSEMENT:

A celebrity can endorse brands in different ways based on the
purpose, the advertisement media and the appeal to be generated. The
product could be commercial ones or non-commercial ones (social
advertising). Following types of endorsement forms have been
identified to be heavily in use at present:
• As spokespersons, e.g., Amitabh Bachchan in KBC.
• In print and electronic advertisements, e.g., Shah Rukh Khan in
Omega and Pepsi
• In outdoor media like hoardings, e.g., Aishwarya Rai in Lux in some
parts of North India.
• As brand ambassadors, e.g., Fardeen Khan in Provogue, and finally
• The use of brands by celebrities in movies, e.g., Hero Cycles, Paas
Paas and Coke in Yaadein.
WHY CUSTOMERS ACCEPT THE CELEBRITIES

Messages delivered by well-known celebrities achieve a high degree

of attention and recall for consumers.
Celebrity Expertise perceived relevant – Expertise is the knowledge
that the communicator seems to possess to support the claims made in
the advertisements. A well-known face would obviously speak for
more expertise than an ordinary one.
Celebrities are perceived Trustworthy – Trustworthiness refers to the
customer’s confidence in the source for providing information in an
objective and honest manner. People are more likely to trust the
quality of a trustworthy celeb endorsed brand over a non-endorsed
one. An example to cite could be the pesticide controversy concerning
Pepsi and Coca-Cola, wherein Coca-Cola was succeessful in
rebuilding its brand image through its celebrity endorser Aamir Khan.
Ambitious psyche: People ape the celebrities in their day-to-day
activities and many even dream to become like a celebrity some day.
Some know they wouldn’t become as good as the celebrities but
sharing common belongings makes them feel better.
Physical Attraction: Consumers tend to perform positive stereotypes
about such people. Physically attractive people are more successful in
changing beliefs than non-attractive people.

USES OF CELEBRITY ENDORSEMENTS

• Establishes Credibility: Approval of a brand by a star fosters a sense

of trust for that brand among the target audience- this is especially
true in case of new products.

• Attracts Attention: Celebrities ensure attention of the target group by

breaking the clutter of advertisements and making the ad and the
brand more noticeable.

• Associative Benefit: A celebrity’s preference for a brand gives out a

persuasive message - because the celebrity is benefiting from the
brand, the consumer will also benefit.

• Psychographics Connect: Stars are loved and adored by their fans

and advertisers use stars to capitalise on these feelings to sway the
fans towards their brand.

• Demographic Connect: Different stars appeal differently to various

demographic segments (age, gender, class, geography etc.).

• Mass Appeal: Some stars have a universal appeal and therefore

prove to be a good bet to generate interest among the masses.

REASONS WHY CELEBRITY ENDORSEMENTS MAY NOT

WORK

Improper positioning:
Associating with a star, however big he or she may be, in itself does
not guarantee sales. The most it can do is generate interest in the
product or create a buzz around it.

Brand-celebrity disconnect:
If the celebrity used represents values that conflict with the brand
values and positioning, the advertising will create a conflict in the
minds of the target audience who may reject the proposition.

Clutter Flutter:
In recent times, there has been such a deluge of celebrity
endorsements that it has led to the very clutter that it aimed to break.
This over-exposure can be bad for the brand. “We seem to have just 2
½ celebrities in a country of 1 billion people which is a terrible
tragedy. Consequently, each celebrity is called upon to push maybe a
dozen brands or so. Which is great for the celebrity but I think it is
pretty daft for the brand because the impact of the celebrity reduces as
the number of brands he endorses increases.” Unfortunately in India,
we have too many brands chasing too few celebrities.

Dissatisfaction with product quality/performance

You cannot sell an ordinary product just by making a celebrity
endorse it. In fact, if anything, the product will fail faster because the
presence of the celebrity will create a buzz and more people will
know about the “ordinariness” of the product.
Unfortunately using a celebrity seems to be the easy way out of a
parity product situation.

Confusion/ Scepticism
The us e of celebrities can be confusing. Some viewers forget brand
that a celebrity is approving. Others are so spellbound by the
personality of the celebrity that they completely fail to notice the
product/brand being advertised. The brand is overshadowed in the
overwhelming presence of the star. In some cases, a celebrity can give
rise to scepticism because it might be a bit too much for the masses to
believe that the celebrities who are rich and can afford the best in the
world are actually using a mass product being advertised on television

BENEFITS OF CELEBRITY ADVERTISING -- THE FOUR QS:

Quick saliency:
It gets cut through because of the star and his attention getting value.
Dabur has ensured high saliency for its brand with the inclusion of
Amitabh Bachchan in its advertising.
Quick connect:
There needs to be no insight but the communication connects because
the star connects. Sachin, Shah Rukh and their likes ensure an easy
connect for Pepsi with the youth.
Quick shorthand for brand values:
The right star can actually telegraph a brand message fast without
elaborate story telling. Kapil Dev and Sachin Tendulkar seem to have
done that successfully for Boost in the early '90s. And helped to
differentiate it in the malted beverages market.
Quick means of brand differentiation:
In a category where no brand is using a celebrity, the first that picks
one up could use it to differentiate itself in the market. Boost did it in
the malted beverage category.

Nestle, however, does not really seem to go the celebrity endorsement

way when it comes to advertising and marketing communications. It
had roped in Rani Mukherjee to endorse its brand Munch, which was
priced at Rs 5 per SKU. Other celebrity endorser roped in was Sourav
Ganguly for Nestle Milo the young and sporty appeal.
In fact, the firm’s marketing straregy and popularity do not call for
celebrity endorsers.
SWOT ANALYSIS

DATA COLLECTION & ANALYSIS

1. What factors do you consider most important while purchasing

FMCG goods? Kindly rank your preferences.
Price
Availability
 Packaging
Natural Ingredients
Brand name

After analysing the above data it can be clearly seen that Price is the
most important factor which can be considerd while purchasing
FMCG goods.

2. Are you aware of the complete range of Nestle products?

Yes
 No

After analysing the above data it is clearly shown that 80% of the
pepole are aware of the complete range of Nestle Products.

3. Do you know of any celebrity endorsing any of the Nestle brands ?

Yes
 No

4. Are you aware of the taglines of Nestle products?

Yes
No
Not sure

5. How would you rate the players in the FMCG sectors in terms of
their most effective brand strategies in your view?
• Hindustan Lever Ltd. I T C Ltd.
• Nirma Ltd. Nestle India Ltd.
• Britannia Industries Ltd. Colgate-Palmolive (India) Ltd
• Godfrey Phillips India Ltd. Dabur India Ltd.
• Smithkline Beecham Healthcare Ltd Godrej Soaps Ltd.
• Marico Industries Ltd Cadbury India Ltd
• Procter & Gamble Ltd. Reckitt & Colman Of India Ltd

After analysing the above figure it can be seen that Nestle is the major
player in the FMCG sectors in terms of their most effective brand
strategies.

6. Are you satisfied with the overall product quality of Nestle

Strongly agree
Moderately agree
Moderately disagree
 Strongly disagree

After analysing the above figure it can be seen that most of the people
are moderately agree with the quality of their product.

7. Which product comes to your mind when the name Nestle is

mentioned?

Maggi
Nescafe
Munch
 Milo

Nescafe seems to be the most recalled brand of Nestle. An interesting

point to note would be that Maggi, having become a generalized name
for noodles, is also seen as an independent brand, and its association
with Nestle as a parent brand goes unnoticed.

CONCLUSION & IMPLICATIONS

The importance of the brand value and the strategies adopted to

enhance the brand value has been well understood. It is seen that the
philosophy behind the branding strategy of Nestle has been to develop
the brand so as to attract and retain the consumers. The branding
strategies adopted have resulted in building a sustainable and
differential advantage over its competitors for the brand. The branding
strategies act as a tool to develop and sustain the appeal of brands in
the eyes of the consumers.

Throughout the process of analysis of the thesis, it is observed that the

branding strategy of dairy sector has been focusing mainly on two
aspects:
• Focusing on the strong brands
• Product mix expansion
Nestle is supporting its aggressive brand expansion and strengthening
plan with various innovative marketing strategies.

This is done in the light of the fact that the marketing trends are
showing a change. It is shifting from generic products to packaged
brands. One important feature observed is that the FMCG sector has
adopted different branding strategies for each of the two i.e. organized
and unorganized market of the Indian FMCG sector.

BIBLIOGRAPHY
Books & Journals

Leahy, Terry. “Retail and the World Economy” images Retail,

April 2007, Vol. 6, No. 4, p. 44.
Faulkner, Kim. “Branding in South East Asia”, Brands and
Branding, The Economist, London, 2006, pp 203- 204.
 Bivani, Kishore. “The promised Land for Retailers” images Retail,
April 2007, vol.6, No. 4, p.37..
Thomas Grad (2001). “4D Branding”.Book Pearson Education.
Berry, L.L., Lefkowith, E., Clark, T. (1988), “In services, what’s in
a name”, Harvard Business review, 66, pp.28- 30.
Blackett, T. (1989), “The role of brand valuation in marketing
strategy”, Marketing and Research Today, 17
Kim, P. (1990), “A perspective on brand”, Journal of Consumer
Marketing, November, pp.62-7.
Berry, J. (1993a), “Brand value isn't about stocks, it's sales and