The case study discusses the entry of leading fast moving consumer goods company Nestlé India, into the `table butter' segment of the Indian dairy products market, in 2001. Besides providing a brief history of Nestlé India and its parent Unilever, the case examines the rationale behind the move to enter the butter segment, in the light of the fact that the company was already present in the dairy products market in the country. The marketing strategies adopted by the company to promote the brand are explored in detail. The case also discusses the initial response to the brand in the market and briefly comments on its future prospects, considering the virtual stranglehold of the leading table butter brand, Amul.
Consumption
of milk and milk products has been an integral part of
the eating habits of Indians. Till the phenomenon called
`urbanization' took place, milk and milk products were
not treated as saleable items. This was because almost
every household in rural/semi-urban India had its own
source for obtaining milk (cows/buffaloes/goats).
Besides consuming milk in liquid form, people process
milk to prepare homemade ghee1, butter and
curd. Amongst this vast variety of milk products, butter
is something that is relished by all age groups in
various forms. Homemade white butter is consumed with
vegetables, parathas, makai-ki-roti and sag
(Indian food preparations). After urbanization and with
changing eating habits in recent times, the table butter
market saw corporate interest like never before.
Butter
constitutes the fourth largest product category in
organized dairies in the country, consuming nearly 2
Lakh2 Liters Per Day (LLPD) of milk out of
the estimated 250 LLPD milk handled. The other major
sales categories are liquid milk (around 140 LLPD), ghee
(about 85 LLPD of milk equivalent) and milk powders
including infant foods and dairy whiteners (50 LLPD).
The entry of leading Fast Moving Consumer Goods (FMCG)
major, Nestlé India Ltd. into the Rs. 4 bn table butter
market was a logical progression for the company, since
it already had established a strong brand name in milk
products. |
