1. International
Marketing
Research
Top MNCs In India &
IMR with Nestle
Surabhi Agarwal ( FW/PF/ 10-12)
Section -A

2. International Marketing
International marketing has become more important to companies as the world
shifts from distinct national markets to global markets. Globalization brings
homogenization of consumer needs, liberalization of trade, and competitive
advantages of operating in international markets. Companies are now forced to think
and act globally in order to survive in such a dynamic environment. In today‟s global
market many companies are finding that there are great opportunities abroad.
Companies are challenged to design new marketing programs/strategies that will
work across many countries with different economic, political, social, and cultural
characteristics.
RACE OF MNC's in INDIA
MNC means MultiNational Companies which deals with private companies. By
private company we mean controlled and operated by private individuals i.e. not by
government employees. Multinational corporations have played an important role in
globalization.MNC offers jobs to the candidates who are fresher as well as
experienced holders. They provide with all allowances with a good salary package in
their hometown as well as in any part of the world. MNCs today have broken all the
records and employees have been satisfied with their placements
Though the American companies - the majority of the MNC in India, account for
about 37% of the turnover of the top 20 firms operating in India
Top ten MNC's in India
Microsoft, HP, IBM and Oracle battling it out with the Indian IT companies for top
slots in the rankings. The swelling domestic IT market is attracting many more global
tech firms to India and they are giving tough competition to the home companies on
their turf.

3. 1 . Hewlett-Packard (HP)
The first MNC in the list is HP India. Part of world's No. 1 PC maker, the company
today has one of the widest portfolio of products and services. Eyeing services
market, the global company recently made a $13.2 billion acquisition of technology
services provider Electronic Data Systems Corp
With the announcement of 3G policy, HP is planning to talk to Indian mobile
operators for a tie-up to offer 3G laptops. HP already has tie-ups with various service
providers in different countries. For instance, in the US it‟s AT&T, Sprint & Verizon,
in Australia HP has tied up with Vodafone, in UK its Orange, Vodafone and T-
Mobile.
2 . IBM
The company under went restructuring into four divisions Enterprise Systems,
Business Systems, Industry Systems and Volume Systems. Renewing its focus on the
SMB segment, the company is restructuring its focus from a product-centric one to a

4. client-centric business mode
In the year 2007 the revenues of the Indian arm of Big Blue grew maximum among
major markets including China (in dollar terms). The overall headcount saw a jump
of 20,000. The major clients included, Vodafone, Indian Railways and Ministry of
Social Welfare. The transformation will provide IBM customers with a single face of
IBM to deal with. The company also boosted its direct presence from 14 locations to
27. As part of the second phase of its Project Big Green (PBG 2.0) in India, IBM
introduced new products and services to help enterprises build „greener‟ technology
infrastructure.
3 . Ingram Micro
The world's largest technology distributor and a leading technology sales, marketing
and logistics company. Like HP India, the company gets a major part of its revenues
from the sale of computer systems and peripherals. The company which merged with
Tech pacific globally saw a strong growth in PC and enterprise business last year.
Through Ingram Micro Logistics, the company provides customisable services for
order management and fulfilment, contract manufacturing, contract warehousing,
product procurement, product pack out and cartonisation, reverse logistics,
transportation management, customer care, credit and collection management
services and other value chain services. The company also launched its own brand V7
focusing largely on accessories segment. The company also added Autodesk and
Adobe to its software portfolio and Asus to hardware. It also became direct
distributor of Toshiba laptops. It also added several vendors like Hitachi, NetApp,
Tandberg and Netgear.
4 . Cisco

5. The networking giant too is making rapid strides in the Indian market. It claims that
the company came to India not just because of cost arbitrage, but more for
innovation, growth and talent. The company which witnessed the exit of a series of
top managers in 2006-07, saw some stability at the top last year. The company's total
India sales stood at Rs 5370 crore, with 35 per cent coming from Switches.
The R&D operation of Cisco India currently has around 5,000 people including its
India technology partners like Wipro. It also formed joint go-to-market alliances
with Wipro and Satyam Computers with the potential generating substantial
revenues in the areas of networking and healthcare
The restructuring is also expected to create more jobs and create further leadership
positions. The company plans to take its headcount to 10,000 in the next five years.
Cisco's new globalisation centre east campus has largest campus data centre outside
US.
5 . Oracle
The IT MNC has been in India for over 15 years. In fact, it was among the first few
multinational software companies to set up operations in India.
Beginning with a distributorship through Tata Consultancy Services in 1987, the
company established direct operations with a liaison office in 1991, and in 1993

6. formed Oracle India Private Ltd, a wholly-owned subsidiary of Oracle Corp, focused
on the sales and marketing of Oracle software in India.
Last year saw Oracle India look beyond its conventional ERP, and focus more on
niche apps like CRM, logistics management and HCM. The company continues to
lead the database market with 63 per cent market share.
6 . SAP
The company overtook SAP in CRM and stood at no. 3, behind Avaya and ASPECT
software. The company has seven development centres including an Asian R&D
centre, a partner solution centre, an egov centre, a retail CCoE and three GDCs at
Bangalore, Hyderbad and Noida.
Last year, company saw attrition at top level, with several senior managers
joining completion like IBM, Microsoft and SAP.
7 . Intel and Accenture
The chip giant Intel earned over 60 per cent of its last year's revenues from the APAC
market, including Japan. The company seems to have benefited from the expanding
laptop market. It earned $160 per laptop versus $85 it made per desktop. The
"Centrino Atom" processor technology aimed specially at mobile Internet devices.

7. This was formerly code-named Menlow. Intel has also launched its low-cost, low-
power Atom processors and quad-core processors. Intel sees a huge market for
UMPCs and other small form factor Internet devices; calling its own version of such a
device as 'Netbook', a low-cost PC that would cost in the region of $250.
Eyeing the SMB segment, it introduced an online storefront and business solution
Web portal designed for small and medium-sized businesses (SMBs). The Intel
Business Exchange (Intel BX) brings together offerings such as bundled software
and hardware, standalone business applications and services.
Accenture is one tech MNC which has more employees in India than US. The
management consulting and IT services provider recently announced that it is
planning to add another 28,000 employees in the current financial year.
Globally, the company plans to make 60,000 gross additions to its workforce by
August and will be consistently investing in training manpower. The Bermuda-based
company was formerly a part of Andersen Consulting, till the company split off from
defunct accounting firm Arthur Andersen in 1989.

8. Formerly Andersen Consulting, the company split off from defunct accounting firm
Arthur Andersen in 1989. Accenture delivery centers for technology and business
process outsourcing in India were awarded the BSI BS 25999-2:2007 certification for
business continuity from British Standards Institute (BSI) recently.
The company operates 45 delivery centres across five continents with more than
75,000 people. Its India delivery centres are located in Bangalore, Chennai,
Hyderabad, Mumbai, Pune and Gurgaon in National Capital Region of Delhi.
It is currently servicing 350 clients, including many of the Fortune 100 companies
from India. The company's BPO unit recently said that it is witnessing pricing
pressure for certain deals, especially the low-end transactional work.
8 . Microsoft
The Indian subsidiary of software major Microsoft Corp recently announced the
appointment of ex-Dell chief Rajan Anandan as its MD. The company grew 26 per
cent claimed that launched largest Microsoft Office Sharepoint at TCS.
The company also announced changes in software licencing, which included option
of staggered payment for software purchases. The company partnered 14 states and
now boasts of over 300 e-gov apps running on Windows. The drop in piracy rates
also boosted company's revenue.
The company recently announced the Release to Manufacture (RTM) of SQL Server
2008, the latest version of its database management offering. Microsoft India has
also been in news for all the wrong reasons recently, the company which got a new
MD last week saw a series of senior-level resignations including its MD, Neelam
Dhawan, who quit Microsoft to join HP.

9. The company was also issued a show-cause notice for non-payment of service tax
worth Rs 127 crore. The notice has been issued for non-payment of service tax on
`marketing and user support services' carried out by Microsoft India for Microsoft
Singapore.
9 . SAP
SAP India was recently termed as 'Jewel in the Crown' of SAP worldwide. SAP India
posted 67 per cent growth in the software licence revenue in the first quarter of
2008. The company's small and mid-size revenue rose by 43 per cent, while
consulting grew by 34 per cent and education marked 100 per cent growth.
The rise was marked by software licence revenue and customer acquisitions that
made SAP India the fastest growing region within SAP. The growth came across
various verticals including utilities, Banking Financial Services and Insurance
(BFSI), automotive, and retail.
While SAP added Delphi TVS, Easun Reyrolle, and IFB Industries as its new
customers, companies such as Moser Baer, Sasken Communications, and Greaves
Cotton moved to SAP from legacy platform.
SAP success story also touched SAP Labs. SAP Lab started operations in the year
2000 with 100 people and has been growing by almost 50 per cent every year until
2007, when it grew about 30 per cent. Lab's present headcount stands at
approximately 3500 people.
On the down side, the lack of database applications continues to give its arch rival,
Oracle, lead in vertical specific offerings. Also, Oracle last year inched past SAP in the

10. CRM market.
10 . Dell
World's second largest computer maker made its India entry some eight years ago.
The company which is bullish on India market claims to be seeing rising demand
from consumer, small and medium business, government, financial services and
education sectors.
The Texas-based company, which has a plant in Tamil Nadu achieved a revenue of Rs
3,000 crore building on strong volume growth in 2007. The company's
Sriperumbudur plant has brought down the shipping time from three weeks to one
week.
The company is at third position in the market with a 7.6 per cent market share and
claims to be number one in large corporate segments. It recently launched low-cost
personal computers customised for the Indian market.

11. Dell has also announced plans to adopt channel sales model to enhance its presence
in the Indian market. The vendor plans to leverage the growing opportunities in the
SMB segment.
On the down side, the company still has to gain visibility on the consumer sales
front.;l‟l
Role of Marketing research in Global expansion of MNCs
Nestle
Nestle was found by Henri Nestle in 1867 had become the world‟s largest food
processing company that had revenues of more than $10 billion in 1977 and with
sales greater than Coco-Cola and Pepsi combined. One of these products that
generated so many sales for Nestle was its infant formula. These infant formulas
were in high demands by mothers; it gave them an alternative feeding method for
mothers who cannot, or choose not to breastfeed. But the idea behind the baby
formula is to acts as a supplement for babies experiencing a “nutrition gap”.
Nestle started marketing its infant formula in the 1970‟s to many underdeveloped
countries. They had imagined that profits would be greatly in countries such as
Africa, the Philippines, Mexico and other underdeveloped countries; due to the
infants who are missing that “nutritional gap” and for mother who chose not to or
cannot breastfeed. But its dreams of making such profit failed terribly when their
methods of marketing the products were criticized.
Nestle‟ s marketing techniques were later accused of bribing doctors, nurses, and
many other medical officials to help promote the infant formulas. “Milk nurses” who
were professional salespeople often dressed in white went from door to door selling
and “educating” the new mothers about the infant formula. In these underdeveloped
countries, professionals in uniforms are highly respected. For these “milk nurses” to
imitate as professionals, proves that Nestles‟ misleads and uses unethical marketing
techniques to promote its infant formula.
The real problem in these Third World countries was being nutritional. It became a
debate whether not to give infants breast milk or formula; how to supplement the
mothers‟ milk with adequate nutritional foods when needed. Although this is the
primary problem, the way Nestle approached a country and promoted its infant
formula to uneducated mothers, was what made this a horrid issue. As a result, the
misuse of the formula was said to be a contributing factor to the deaths of many
Third World infants whose mothers were incompetent of using them properly.
However, Nestle denied the accusations of their unethical and immoral behavior
after the company came under fire. One recommendation should have research the
target market in which its products will be introduced. They should not have just
transfer their marketing strategy in the United States to Third World countries but
adapted and focus their strategy to fit the targeted environment better. Since Nestle
was introducing a new product, they could be more considerate of the cultural factors

12. in countries where the practical or dysfunctional changes occurred as a result of the
new product introduction. Therefore, it was their responsibility to make more
ethical, thought-out decisions regarding the introduction and promotion.
In order to understand where Nestlé‟s strengths lie and how this can help them when
entering a new market, they should have used the Self Referencing Criteria (SRC)
process. This process can determine a decision whether or not to introduce a product
in a foreign market. It helps to establish a company‟s own cultural values,
experiences, and knowledge.
1. Define the business problem in the home country which includes cultural traits,
habits, and norms.
2. Define the business problem in foreign cultural traits, habits, and norms.
3. Isolate the SRC influence in the problem and examine it carefully to see how it
complicates the problem.
4. Redefine the problem without the SRC influence and solve for the optimum
business goal situation.
If Nestle had followed this process they would have understood that the United
States and the Third World countries need to use two different strategic plans. They
would have understood that Americans already established a habit of nursing with
formula and becoming a cultural norm. On the other hand, there were many red flags
that should indicate to Nestle that Third World cultures have no knowledge
background to read or write. It could then have been reasonably assumed that with a
low literacy rate in these countries that they would not use the product correctly.
Even if this process was followed, a company still has to make a conscious decision of
how and if to introduce their product. This creates an ethical dilemma for the
company. In Nestlé‟s case, there was a lack of government regulations, and the
company neglected to conduct thorough research about the environment. With
research of the environment and regulations, they could foresee some of the
consequences. In the end they took advantage of the situation and the innocent
people involved and decided to make a poor choice. Ultimately, it did not matter how
much money they made because their reputation was ruined as a result. With more
research, strategic thinking, SRC analysis, and organizational analysis, many of the
adverse effects could have been prevented.
To some extent the marketing problems was combining a highly-educated,
mechanized, free-enterprise western culture with cultures that are poor, less literate,
and less adjusted to the “Sakes Fifth Avenue” style of advertising techniques. When
infant formula companies were first informed of the risks created by their products,
they denied they were responsible and refused to change their practices. As the party
with greater awareness of the problem they had a responsibility to avoid creating
harm for those who were less able to fend for themselves. After numerous
unsuccessful efforts to persuade Nestlé and other companies to change their policies,
several religious groups boycott Nestlé products, in hopes that the loss of revenues
would persuade the company that it should change its promotional policies.

13. Marketing Strategy
In 1982, Nestle under immense pressure by the World Health Organization (WHO)
stated a new policy for their worldwide promotions of their infant baby formula.
Nestle guidelines, which was created specifically for developing countries states
publicly their support for breastfeeding as best start of life, cautions mothers of
consequences of incorrect use of their baby formula, and ensures infant formula
marketing practices would be ethically followed stated by the International Code. But
what Nestle doesn‟t admit publicly is that their change of their marketing strategy
had to do with heavy criticism of their mass media advertising, which unethically
persuaded new mothers to use bottle-feeding milk as best for new babies, which
consequently provoked the rejection of breast-feed and the dependence on baby
formula.
Nestles support of the WHO led to the initiation of the following practices: Nestle
was not to advertise to general public, no sampling to mothers, no incentives to its
staff for sales, no use of pictures on infant formula packs, no financial endorsements
to health professionals to promote product, no donations of infant formula to
physicians except in specific situations, and no educational material relating to the
use of infant formula to be displayed in hospitals and clinics. All these were frequent
marketing strategies used by Nestle and its competitors.
Even though overall profit margins were low for Nestle they stayed committed in the
production of their baby formula. Reason for this was that mothers in
underdeveloped countries (target market) stubbornly continued to breast-feed their
babies. That‟s why the turnover for Nestle was less than 10%, while other product
sales for the company were growing exponentially.
Nestle new international marketing strategy is of a decentralized system which
consists of specifically molded facilities which are made to fit in to that country‟s
culture, habits, and conditions. They now support all WHO code (mention
previously) in all the countries of Africa, Middle East, Asia, Latin America, the
Caribbean nations, and the Pacific nations except Japan, Republic of Korea,
Singapore, and Taiwan. The company also promotes an understanding of the proper
way on how to use the product, and educates consumers on considerations that need
to be made before using the product.
Environment
Nestle was discovered by Henri Nestle in 1867, it has become the world‟s largest food
processing company that had revenues of more than $10 billion in 1977 and with
sales greater than Coco-Cola and Pepsi combined. One of the products that generated
so many sales for Nestle was its infant formula. In the 1970‟s, Nestle decided to go
international to market its new infant formula, the baby formula was to acts as a
supplement for babies experiencing a “nutrition gap”. Its purpose was to save
millions of malnourished babies in underdeveloped countries and provide mothers
an alternative feeding method for those who cannot, or choose not to breastfeed.
Nestle‟ targeted its infant formulas in underdeveloped countries such as Mexico,
Philippines, Central America and Africa where the majority of its population are
illiterate, living conditions are terrible and the average salary is less than a dollar a
day. Nestle‟ intentions of going abroad was to gain a competitive advantage over its

14. competitors and to educate the illiterate mothers on how to use its new infant
formula products.
Cultural and social values of these Third World countries affected Nestle‟ ability to
market the infant formula successfully. Nestle‟ marketing techniques may have
worked to getting its product recognized, but it did not communicate efficiently,
users of the infant formula failed to understand that suitable water supply and
sanitary conditions must be used to prepare the formula properly. Demographics,
income and language barriers have caused major issues for Nestle‟ in the Third
World countries.
Nestle‟ sent sales people, often working on commissions to the homes of mothers of
newborns to advertise the most modernized product for babies. These sales people
wore white hospital uniforms and were commonly referred to as “milk nurses.” Free
samples of Nestle‟ infant formula was distributed in hospitals and doctors were
encouraged to give to new mothers using the argument that the formula has
nutritional benefits. Pamphlets were also distributed in hospitals and clinics it
described and discussed the proper way to bottle feed a baby. Other forms of
marketing techniques were also used to promote the infant formula. Advertising was
placed on television, radios, in magazines, on posters in hospitals, clinics and
billboards.
Nestle used these form of communication to advertise its infant formula, but didn‟t
realize that its communication was not effective. Eventually the bad connection cost
Nestle heavily in the Third World countries.
Industry
Among Nestle, there are two other companies who are large producers of infant
formulas who may become a threat to Nestle. Included in the production of infant
formula, Ross, a division of Abbott Laboratories produces a wide variety of Similac
Isomil formulas, PediaSure, and Pedialyte for infants with feeding problems such as
fussiness, gas, and spit-up. Abbott Laboratories has been working to advance health
care for people around the world. Founded by a Chicago physician, Dr. Wallace
Calvin Abbott, in 1888, Abbott Laboratories has evolved into a diversified health care
company that “discovers, develops, manufactures and markets innovative products
and services that span the continuum of care.” Headquartered in north suburban
Chicago, Abbott helps people around the world in the more than 130 countries. They
believe that their products will:
1. Promote overall growth in weight, length, and head circumference.
2. Nutritionally balanced carbohydrate, protein, and fat.
3. Well tolerated.
4. Specifically formulated to mix easily with human milk.
Abbott Laboratories has been developing products to meet the needs of children for
more than 40 years. Their research focuses on nutrients for growth and
development, and diagnostics that help detect dangerous childhood diseases.
The other major infant formula company that produces Enfamil formulas is Mead
Johnson it‟s a nutritional division of a two billion-dollar Bristol-Myers Squibb. In
recent years it has also been classified as a world leader in nutrition that
manufactures more than 60 brand name products and markets them in more than

15. 100 countries. In the United States and Taiwan, they are the infant formula market
leaders. Mead Johnson‟s “commitment to world leadership” in nutrition is confirmed
not merely by a geographic presence, “but by a set of ethics, standards and practices”
that they are proud to uphold. Their sale in 1997 was over $17 billion dollars, and has
54,000 employees worldwide. Its intent is to become a common household name by
families around the world.
Even though, Nestle is one of the world‟s leading manufactures of the infant formula,
its reputation has been smeared due to the infant formula incident in the Third
World countries. Nestle competitors used Nestle as a role model not to make the
same “unethical” marketing mistakes. Nestles‟ situation gave other companies such
as Abbott- Ross and Mead Johnson the opportunities to produce and market its
infant formula products in ways different from Nestle.
A threat to the company is the increased competition as other companies find ways
to catch up to Nestle. Because of its wide range of businesses Nestle is involved in,
these competitors include many of the world‟s top companies such as Proctor and
Gamble, Pepsi, Kellogg and Kraft Foods. Other large threats came from negative
public opinion regarding Nestlé‟s marketing techniques of their breast milk
substitutes in the past, which led to the inappropriate use of the product in Third
World countries.