Final Project on Nestle 2010

Acknowledgement

We are grateful to our teacher Mr. SHAHZAD ALAM for assisting us throughout the course of “Marketing”. We have been able to gain knowledge of unique Marketing concepts by the advanced teaching methodologies and versatile knowledge of Mr. SHAHZAD ALAM.
We are also highly obliged to Mr. Muhammad Sarfraz the Sales Promotional Executive for Lahore, Nestle Pakistan Ltd for his assistance and guidance to develop and compose this report and broaden our vision on the complex market of milk.



History of Nestle
Pakistan


Nestle have been serving Pakistani consumers since 1988 when the parent company’ Switzerland based’ on Nestle first acquired share in MilkPak.

Nestle acquires 40% share in MilkPak.

In 1990, Sheikhupura factory started the production of Nido Milk Powder cereals;

In 1992, Nestle took over the running of company (Kabirwala plant) and began to develop its Milk collection network.

In 1996 MilkPak was renamed to Nestle MilkPak Ltd.

In 1997, it becomes a fully owned unit of Nestle Pakistan.

In 1998, Nestle Milk collection system in Punjab matures and company is able to buy all its Milk from Farmers instead of relying on contractors.

In 2005, Nestle MilkPak Ltd. Is renamed again Nestle Pakistan.


VISION STATEMENT

“The Nestlé global vision is to be the leading
Health, wellness and Nutrition Company in the
World”.

MISSION STATEMENT

“Dedicated to providing the best food to the people,
throughout their day, throughout their lives, throughout
the world”


General Information


Head Office in Lahore.
Registered in both Lahore & Karachi Stock exchanges
One among top 25 companies of both exchanges.
Company has more than 37 brands.
Profit for 2010 3,096 million (PKR)
Earnings Per Share 68.28 (PKR)
Leader of consumer market currently

Production Process Of Nestle

Milk Pak



Comparison of Nestle
With Other Brands


Brands Nestle Olpers Haleeb
Brand Image Pure Strong Thick
Promotion TV, News TV, Radio, Billboards, Shows TV ,News
Taste Natural Good Creamy
Brand History 1981 2006 1986
Sub Brands Nesvita,Nido Olwell Dairy Queen
Differential Edge Purity, Iron, Vitamin C,
UHT All Purpose Good For Tea


 
Most Popular Nestle Brands

Quality is the essential ingredient in all the Nestle brands and also Nestle brands maintains the nutritional balance in a fast pace world, that is why people around the globe choose Nestle Brands. Following are the most popular Nestles Brand:
Nestle MilkPak




Introduction
Of
Nestle MilkPak


Nestle MilkPak is a trusted brand known throughout the country for its
nutritious wholesome, goodness & natural taste. To secure a happier &
healthier future, support of a strong partner like MilkPak is needed.


Competitors Of Nestle MilkPak

The Main Competitors of Nestle MilkPak are:

Olpers Milk

Haleeb Milk

Gourmet Milk

White & Gold Milk (Sapphire)
Competitive Advantage
Nestle MilkPak never compromises on quality.
Nestle Products are available in every City & Town.
It is using the latest technology in its production units.
Nestle makes milk powder of the surplus milk in winter & converts this milk powder into UHT milk in summer.





Marketing Mix of Nestle
MilkPak
PRODUCT

1. Product Quality

Nestle MilkPak has the largest market share due to its consistent quality.

1.1 Core Part:
The core parts of Nestle MilkPak are:
Taste
Energy
Growth

1.2 Features:
One glass of Nestle MilkPak contains:

Ingredients Quantity
Calcium 41%
Vitamin C 20%
Phosphorous 31-34%
Vitamin A 18%
Energy 160-165Kcal
Iron 20%

2. Product Packaging
Nestle is committed to reduce the environmental impact of packaging without jeopardizing the safety, quality & consumer acceptance of its products
Milk is a perishable item & requires a special packaging. To meet this objective Nestle MilkPak use Tetra Pack to deliver fresh milk to its customer without sacrificing in health measures.

3. Brand Name
“Settle Oneself Comfortably”
3.1 Qualities of Nestlé’s Brand Name:
o It is based on company name.

o It is very easy to remember.

o Company brand is directly suggesting its product.

4. Product Life Cycle:
The product life cycle of Nestle Milk Pak is very strong and it is on maturity stage and it has crossed its initial stages of introduction and growth.

Price

Pricing is very important regarding every product. We have to consider consumers buying power, competitor’s price and cost of production as well.

1. Price Analysis
No of Unit Nestle Price Olpers Price Haleeb Price
1000 Ml 70 70 70
500 Ml 38 38 38
250 Ml 20 20 20


2. Factors Affecting Price Strategies

Cost of Raw Material

Government Steps

Cost Of Raw Material :

The cost of milk which the company gets from the farmers is a very important factor which affects the prices; because in the months from October to February the shortage of cow milk occurs in the market and the suppliers supply the milk on high prices which affects the prices.

Government Interference :

The Government interference is the second important factor which affects the company in the matter of pricing strategy i.e. Increase in the prices of oil and other energy resources. These factors highly affect the supplier and they increase the prices which directly affects the cost.
Placement
MilkPak is not sold directly to consumers. A complete distribution process is followed. It uses indirect channels for distribution like:


v Distributors in Lahore

Saeed Brothers

Zakir & Sons

Deen Distributors

SMR Distributors

Distributor Ware Houses
Saeed Brothers
Model Town
Town Ship

Deen Distributors
Airport
Ghazi Road
Zakir & Sons Muslim Town More
SMR Fatah Garh
Promotion

The promotional strategies for anything is the most important factor in marketing, therefore a special attention is required to market the product. For this we use different tools
Advertisement:
About 60% of promotional budget is spent on advertisement.
Following are the different Advertisement Medias used by Nestle to promote its product:
• Television
• Bill Boards
• Shelf show
• Print Media
• Radio

Sale Promotion Activities :

§ Events:
The company conducts different sports event, fashion shows and school functions in which they sale their product on discount prices. They also give their product to participants as a gift or memorandum.
§ Free Sampling:
On different events free samples are given to the people to attract them towards their products.
Public Relations :
Nestle remains committed to Pakistan and is deeply engaged in the recent flood relief activities. By the end of September, 2010 the Company has so far committed around PKR 24 million to relief efforts in the shape of food to affected people, water tankers supplying clean drinking waters, veterinary and vaccination support to cattle and other related relief.
In addition Nestle SA has donated PKR 20 million and Nestle employees from Pakistan and other Nestle Markets have also donated additional PKR 7 million, bringing total contribution to PKR 51 million.

Swot Analysis Of Nestle Pakistan

Strengths:

Strong Brand Name:

Nestle has been serving the Pakistani consumers since 1988 & it has made a strong brand image due to its quality products. It is known for honesty, integrity, full compliance with all applicable laws, and fair dealing.

Product Innovation:

The company has been continuously introducing new products to expand its product offerings.

Research & Development:
One of the most important strengths of the Nestle is its strong culture. Every one give emphasis to its internal growth, have committed to achieve higher volumes with strong R&D by refurbishing existing brands and innovating new ones.

Solid Financial Position:

Nestle MilkPak annual turnover is Rs.30 Billion which provides it a financial edge over its competitors.

Weaknesses

Narrow Target Market:

The target market of Nestle MilkPak is only the upper and middle class. As poor class cannot afford to buy UHT milk because of its premium price

Low Advertisement:
There are different companies of milk but the name of Nestle MilkPak always stand in the last in term of low advertising and marketing.
Selective Investment:
Selective investment due to uncertain economic and political conditions.

Rivals:

Relatively a new company in comparison to its rivals e.g. Lever Brothers
Opportunities

Global Hub:

Since manufacturing of some products is cheaper in ASIA as compared to other continents, Nestle Pakistan could become the export hub for the certain product categories.
Health Conscious People:

Now a day’s consumers have become health-conscious. Therefore it is an important opportunity for nestle to come up with variety of health-based products.
Huge Market to Be Target:

Thirty percent of the countries are developed and 70% are developing and have higher GDP. Nestle must have to focus on them.

Threats

Increasing number of Competitors:

Three main competitors Haleeb, Olpers & Gourmet are the main threat for MilkPak especially the Olpers & Gourmet are growing very fast.

Devaluation of Local Currency:

Price fluctuations due to rupee devaluation as raw material are imported.
Uncertain Economic Conditions:

The uncertainty of economic conditions possesses a great threat, as the major funds invested in the country come from outside Pakistan


BCG Matrix of Nestle

STARS:


Pure Life Water

Confectioneries QUESTION MARK:


Maggie 2 Minute Noodles

CASH COWS:
Milk Products

Coffee

Infant Foods
DOGS:

Fruit Yogurts







Market Segmentation

For getting the maximum market share and respect of the product in the minds of the consumer, as per our observation and market survey we have concluded that Nestle MilkPak segmentation is based on two points.

• Demographic Segmentation
• In-Store Display Segmentation
Demographic Segmentation:

• Family, Age & Income

Milk Pack has made different sizes of Tetra packs which can match the needs of buyers, ranging from 0.25 liters to 1.5 liter. Buyers can buy according to their need between these quantities.

In-Store Display Segmentation
Nestle have also segmented Milk Pack on the bases of In-Store display segmentation.

In this type of segmentation the company have given different shelves in big stores and also given the chillers to some of the agent having the Milk Pack sticker upon them but in Pakistan unfortunately the shop keepers are not using the shelves properly and they have put other brand products on those shelves
Conclusions
Nestle is a market leader due to different reasons:
ü Its price is high against its competitors but it matches its quality with its competitors.

ü Nestle is today the world’s largest food and beverage company with its mission to provide healthier lifestyle.

ü Nestle is using its brand name and its packaging is good to promote its products.

ü We can easily find Nestle from any retailer shop
References

www.nestle.com.pk
Nestle Head Office : Mr.Wasim (Sales)