With stiff competition keeping Nestle India on its toes, the company is expected to shell out ₹445 crore in the current calendar year (CY) towards advertising.
From an ad spend of ₹303 crore in CY-10, expenses jumped to ₹328 crore in CY-11, ₹356 crore in CY-12 and ₹395 crore in CY-13.
Despite the company’s established brands including Maggi, Nescafe, Kit Kat and Milkmaid, the competition has intensified, with rivals ITC and GSK Consumer ensuring the company’s volume growth slides to single digits. For first quarter of CY2014, Nestle India reported a weak performance on the operating front, registering a meagre 2.9 per cent year-on-year growth.
The company posted a 2.9 per cent year on year growth in net sales to ₹2,313 crore.
Domestic business, which constitutes 93 per cent of overall sales, posted a decade-low sales growth of 3.4 per cent year on year to ₹2,167 crore.
At the beginning of the year, the Head of Nestle’s business in Asia, Nandu Nandkishore, had admitted the company had made mistakes in the way it approached the Indian market, by ignoring its consumers over the last decade.
Plug the gapHe said the company was working to plug the gap and launched an initiative in April, to reach out to people with a message ‘Share your goodness’.
As Himanshu Manglik at Nestle India pointed out, the campaign originates from the belief that each person has goodness and “it comes from the values, beliefs, strengths, ideas, understanding and capabilities that have been learnt”.