Marketing Analysis of Nestle

1. Principle of Marketing
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2. Final ASSIGNMENT
Subject Name:
Principle of Marketing
Project name:
Nestle company
Resource Person:
Prof. Umar Soud
Worked By:
Ashfaq Salamat 12155
Shaban Cheema 12169
Meamoona Javaid 12104
Nadia Izhar 12170
Program:
M.com 2nd
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3. Table of contents
Introduction ………………………………………………………………………… 5
Vision statement ……...………………………………………………………………… 5
Mission statement ………………………………………………………………………… 6
Goals & Objective ...…………………………………………………………………… 6
HISTORY ……………………………………………………………………… 7
Hierarchy ……………………………………………………………………… 8
SBU’S OF NESTLE ……………………………………………………………………… 9
1. Milk Products and Nutrition:
2. Beverages:
3. Prepared Dishes and Cooking Aids
4. Chocolates and Confectionary
Marketing analysis ……………………………………………………………………… 11
Market Positioning ……………………………………………………………………… 11
Questionnaire …………………………………………………………………… 12
Salient Features …………………………………………………………………… 12
Unique Selling Proposition of Nestle products ……………………………… 13
Products ……………………………………………………………… 13
Mineral water ……………………………………………………………… 14
 Competitor Analysis
 Total share
 Total share of competitors
 Positioning
 Price
 Promotion strategy
 Segmentation strategy
 Target marketing
 Market growth
 Market share
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4.  Marketing growth strategic
Milkpak …………………………………………………………………… 17
 Price
 Placement
 Promotion
 Market segmentation
 Market growth
 Market share
 Marketing growth strategic
Noodles ……………………………………………………………… 20
 Price
 Placement
 Promotion
 Market growth
 Market share
 Marketing growth strategic
Chocolates/ juices ………………………………………………………….…… 22
 Price
 Placement
 Promotion
 Target market
 Market growth
 Market share
 Marketing growth strategic
BCG Matrix of Nestle product …………………………………………………………. 24
Market growth compare with others …………………………………………………………. 27
Market share compare with others ………………………………………………………… 28
Conclusion and Recommendations …………………………………………………………… 29
References …………………………………………………………………………. 30
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5. In this work the company chosen by us is Nestle Pakistan limited. we
have tried to cover the brief history of the company, vision, mission and objectives of the company. This
brief history and other sub heading under company background is compulsory to be understood as they
form the basis for marketing plan of the company. We have also tried to cover the internal and external
micro and macro environments for the company and country for its future growth and further
marketing planning strategy. At the end we have proceeded to the 4 Ps of the marketing for Nestle.
Nestlé was founded in 1866 by Henri Nestlé and is today the world’s biggest food and beverage
company. Nestle employ around 250,000 people from more than 70 countries and have factories or
operations in almost every country in the world. The history of Nestle began in Switzerland in 1867
when Henri Nestlé, the pharmacist, launched his product Farina Lacteal Nestle a nutritious gruel for
children.
Vision Statement
Nestlé’s vision of making good food central to enjoying a good healthy life for consumers
everywhere. This implies gaining a deeper understanding in many areas of nutrition and food research
and transforming the scientific advances into applications for the company. Having a broad vision the
company is doing its best for their consumers to show the great sense of responsibility.
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6. Mission statement
To positively enhance the quality of life of the people of Pakistan and all over the world by all that we do
through our people, our brands and products and our CSV activities. Nestlé’s aim is to meet the various
needs of the consumer every day by marketing and selling food of a consistently high quality.
Goals & Objective of Nestle Pakistan is Simple & well designed with the core strategy to meet the
demand of the consumers & to fulfill the needs of the customers.
The goals & objectives are;
To be the best & quality brand in Pakistan
To meet the needs & requirements of the consumers
To capture the desired market share
To dwell in to the life of people & consumers
To be the number one nutritious company of Pakistan
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7. HISTORY
Nestlé Pakistan Ltd is a subsidiary of Nestlé S.A. - a company of Swiss origin headquartered in
Vevey, Switzerland. It is a food processing company, registered on the Karachi and Lahore stock
exchanges and operating in Pakistan since 1988 under a joint venture with Milk Pak ltd and took over
management in 1992. For ten years in a row, the company has won a place among the top 25 companies
of the Karachi Stock Exchange.
Headquartered in Lahore, the Company operates four production facilities. Two of its factories
in Sheikhupura and Kabirwala are multi product factories. One factory in Islamabad and one in Karachi
produce bottled water. Through its effective marketing and a vast sales and distribution network
throughout the country, it ensures that its products are made available to consumers whenever,
wherever and however.
Nestlé Pakistan operates in many ways but people, products and brands are the main flag
bearers of the Company’s image, and we continue to enhance the quality of life of people.
Nestlé Pakistan now operates the biggest milk collection operation in Pakistan, Currently; Nestlé
Pakistan collects milk from an estimated 190,000 farmers spread over 145,000 sq Km's in the province of
Punjab and Sindh.
Nestlé believes in creating shared value and is committed to the communities it works and lives
with. In Pakistan, the company is working closely with the communities in areas related to Nutrition,
Water and Rural Development, and continues to enhance the quality of life of people throughout its
value chain.
Nestlé Pakistan today is the leading Food & Beverages Company in Pakistan with key focus on
Nutrition, Health and Wellness and reaching the remotest of locations throughout Pakistan to serve the
consumers. Nestlé Pakistan also prides itself in being the leaders in Nutrition, Health & Wellness. Ever
since 1867, when Henri Nestlé invented the first infant food, nutrition has been in our DNA. Today more
and more consumers mirror our emphasis on nutrition, as they realize that food choices affect their
health and quality of life.
The company’s strategy is guided by Nestlé’s Corporate Business Principles which are in line
with internationally accepted best practices and ethical performance culture. Nestlé’s existing products
grow through innovation and renovation while maintaining a balance in geographic activities and
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8. product lines. Long-term potential is never sacrificed for short-term performance. The Company’s
priority is to bring the best and most relevant products to people, wherever they are, whatever their
needs are, and for all age group.
Hierarchy
There is a chain of command that extends from upper organization levels to the lowest levels
and clarifies who reports to whom. The orders move from upward to downward and
suggestions move downward to upward direction. The continuous improvement section is made
for this purpose. It encourages employees to give their suggestions and share the new ideas.
The jobs are formalized; there are explicit job descriptions, numerous organizational rules, and
clearly defined procedures covering work procedures. But in spite of formal rules and
regulations, Nestlé keeps on changing to keep a pace with the changing environment. So, it is
strict but not rigid organization. In effort to be more flexible and responsive, there has been
distinct trend in this organization toward decentralizing decision-making.
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9. SBU’S OF NESTLE
Main SBU’s of Nestle is describing here.
Milk Products and Nutrition:
 Nestle Everyday Diary Whitener
 Nestle Everyday Ghee
 Nestle Milk
 Nestle Slim Milk
 Nestle Dahi
 Nestle Neslac
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10. Beverages:
 Nescafe Classic
 Nescafe Sunrise Premium
 Nescafe Cappuccino
 Nescafe Ice Tea
 Nescafe Hot Tea Mixes
 Nestle Pure Life
Prepared Dishes and Cooking Aids
 Maggi 2 Minute Noodles
 Maggi Atta Noodles
 Maggi Cupa Mania
 Maggi Soups
 Maggi Suces
 Maggi Bhunda Masala
 Maggi Pazzta
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11. Chocolates and Juices
 Nestle Kitkat
 Nestle MikBar
 Nestle Bar-One
 Nestle Munch
 Nestle Juice in different flavor
Market Positioning
Product positioning refers to the place an offering occupies in the customers mind. To
understand your current market position, conduct a simple market research project to identify
which product-class attributes are most important, which brands are perceived to best deliver
each attribute, and where product improvements need to be made to improve customer
satisfaction?
 Newly Drinking Water and food With Safety and Security
 Pure products Pure Relationship
 Safe and Healthy Drinking and eating products
 Public awareness Message
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12. Nestle market positioning includes research and questionnaire which is as follows:
Questionnaire
1. Do you buy open milk or tetra pack?
2. If you buy tetra milk then do you prefer Nestle Milkpak?
3. Are you satisfied with Milkpak quality?
4. Are you satisfied with yoghurt quality?
5. Is the taste of Milkpak good as compared to other tetra pack milk?
6. Is the price of Milk Pak reasonable?
7. Is the price of other nestle product is reasonable as compared to others?
8. Is Milkpak nestle pure life is easily available to you?
9. Which tetra pack you will buy if MilkPak is not available to you ?
10. Which company's products you prefer is nestle is not there?
Explanation
From our research we draw the conclusion that overall Nestle products are doing quite
well in the market. It has a good image among the consumers. It is renowned for its quality and
being the pioneer of safe and good quality products. It is selling’s all products well. The
marketing of it is also being done quite well so there is no such need for Nestlé to do anything
else. They also should be careful and not underestimate by other threats /competitors.
Salient Features
Quality
Every day, millions of people all over the world shows their confidence in nestle by choosing
Nestlé products. This confidence is based on their quality image and a reputation for high standards that
has been built up over many years.
High performing design
Quality policy and principles, the mandatory standards and the recommended tools for
implementation are laid down in the Nestlé Quality System, which is applicable throughout the group.
Consistent quality
A Nestlé brand name on a product is a promise to the customer that it is safe to consume, that it
complies with all regulations and that it meets high standards of quality.
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13. Cost
Nestle provides high quality products to its customers at lower prices; prices Nestle provides
high quality products to its customers at lower prices; prices that are affordable by people in order to
get nutritious healthy products that are affordable by people in order to get nutritious healthy products.
Volume Flexibility
For Nestle volume flexibility is an important operating capability that supports the achievement
of their other competitive priorities.
Unique Selling Proposition of Nestle products
It states that such campaigns made unique propositions to the customer and that this
convinced them to switch brands. Before you can begin to sell your product or service to
anyone else, you have to sell yourself on it. This is especially important when your product or
service is similar to those around you. Whit out pinpoint what makes your business unique in a
world of homogeneous competitors, you cannot target your sales efforts successfully.
 It was the first fusion experiment on food in Pakistan by promoting magi noodles.
 In fact, the campaign designed by Nestlé for Magi’s silver jubilee hopes to work on the brand’s
strong consumer connect through television, the Internet and print.
 Nestle Milkpak has excellent quality with low price.
 Nestle juices have a lot of yummy flavors as compare to its competitors.
 Nestle kitkat has good quality, great crunch in itself and low price as compare to others.
 As nestle has more than 9000 brands all over the world it is also a great usp of Nestle Limited.
Products
We are taking these four products for marketing mix and for BCG matrix.
1. Mineral water (star)
2. Milkpak (cash cow)
3. Noodles (Question mark)
4. chocolates/ juices (dog)
In this section we briefly explain the target market for each product.
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14. Mineral water
In 1992, Nestlé was the first company to dare to launch a mineral water, Valvert. Today Nestlé Water is
established in 130 countries and markets about 70 different brands.
In 1998, for the first time in its history, Nestlé associated its name with bottled water “Nestlé Pure Life”.
The brand was launched in Pakistan and soon appeared in Brazil, followed by Argentina, Thailand, the
Philippines, China, and Mexico in 2000. In 2001, India, Jordan, and Lebanon followed, and in 2002,
Egypt, Uzbekistan and the United States.
Today the Nestle Pure Life brand is present in 20 countries around the world, across all continents - Asia,
Near East, South and North America and Europe.
Wherever it is to be found around the world, Nestle PURE LIFE answers some crucial consumer needs,
focused on three core pillars: Trust, Quality and Service.
Nestle PURE LIFE offers an ideal balance between a healthy supply of minerals and a pleasant, refreshing
taste, making it suitable for the whole family. It contains essential minerals such as:
Competitor Analysis
 NESTLE
 Aquafina
 Sufi
 Kinley
 Other
TOTAL SHARE
 9072000
TOTAL SHARE OF COMPETITORS
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15.  NESTLE 2903040
 AQUAFINA 1995849
 SUFI 453600
 KINLEY 1451520
 OTHER 2268000
POSITIONING
 Newly Drinking Water with Safety and Security
 Pure Water Pure Relationship
 Safe and Healthy Drinking Water
 Public Awareness Message
Price
Nestle is offering mineral water in three different sizes. Their prices depend upon sizes
in which they are offered. Large bottles have relatively low price as compared with small
bottles. E.g. 1.5-litre (40-Rs)
Promotion strategy
NESTLÉ Pure Life – PET Bottles
The year 2001 saw the successful completion of three years of outstanding business for NESTLÉ Pure Life
– PET Bottles of 0.5 and 1.5 liters. The exceptional brand success was the result of expanding national
distribution and an increasingly loyal customer base. The brand has revolutionized the Pakistani market
by tapping the real consumer need for pure, healthy, and safe water and has successfully dominated a
key strategic business
NESTLÉ Pure Life – Home & Office Service
In 2000, NESTLÉ Pure Life established a successful Home and Office (H&O) delivery service in Lahore,
which has substantially grown ever since and has come to dominate the 5- gallon market. Successful
marketing and sales strategies offer greater convenience and better value to the consumers. The brand
is poised for strong growth in future.
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16. AVA & FONTALIA
To expand its H&O water delivery business countrywide, Nestlé acquired major share holdings in both
these businesses in 2001. While AVA is an important national player in the branded bottled water
category, both in PET and H&O services
SEGMENTATION STRATEGY
 Psychographic Segmentation
 Demographic Segmentation
 Geographic Segmentation
 Behavioral segmentation
TARGET MARKET
 Targeting Strategy Of Nestle Pure Life Is Differentiated Marketing
 Nestle Pure Life Targets Both Genders
 Targets the Upper and Middle Class People Who Are Health Conscious
 Tourists Are Also the Target Market Of Nestle Pure Life
Market growth
Market growth of nestle water is 85%.
Market share
Market share of nestle water is 89%.
Marketing growth strategic
Nestle uses market development strategy for nestle water as it has a strong brand image.
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17. Milkpak
Price
Milkpak is the product of Nestle, which is available in liquid form. Nestle designed this
product because of greater demand of milk. Milkpak is more pure & hygienic milk, which says
fresh for quite longer time period. It is ideal for family use. e.g. 1-Litre (Rs. 95).
Placement
All Nestle products are not sold directly to consumers and the complete distribution
process is followed. It uses indirect channels for distribution like:
Manufacturer Distributor Wholesaler Retailer Consumer
The loyalty and association with the company of the entire channel player is so strong that
Nestle never face any problem in distribution network in any part of Pakistan.
Promotion
Khalis hi sab kuch ha was the slogan of nestle water. The brand and sales promotion
teams of the North Zone had put together an effective outdoor campaign. Murree Hills draw
enormous crowds from all over Pakistan in summers. Those who came to Murree this summer
were in for pleasant surprise. They were greeted by NESTLE PURE LIFE. The road to Murree was
awash with billboards, shops signs, shops boards, brand umbrellas, stands, shops paintings, wall
paintings, POS materials, regular merchandising, cross road signs, product sampling and sticker
sampling. The activity created a remarkable impact and the visitors were impressed.
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18. Khalis Hi Sub Kuch HAI” was burst used to outwit the competition and induced
consumer to switch over NESTLE Milkpak UHT milk. Its campaign directly involved consumers
and retailers and spanned over a period of six month.
The Re-launching of MILKPAK
The new marketing effort was based on a change in packaging design in order to
communicate the new positioning and the image of an old and trusted brand.
ATV campaign was developed to focus on key message e.g., Nestlé is behind MILKPAK,
assurance is purity through Nestle and Nestle being No.1 Food Company with 130 years of milk
experience. This message was further propagated through print media and outdoor
advertisement. The campaign was supported through flier, temporary hoarding, street banners,
and shop banners, posters, buntings and trade letters. The promotion targeted our core market
of young adults between 18-25 years, with prizes having been selected to appeal to this group.
Nestle also using the strategy of brand extension for attracting more customers because
every customer have different choices. Nestle also using various variants of the product for
increase the uses of the product. Nestle spend a huge amount of work for maintain the same
taste and nutrition of the product. For sustaining their image. Nestle Invite housewives to send
new innovative recipes made from maggi. Organizing contests, games industrial visit for school
kids. Using attractive advertising campaign for sustaining their image.
Nestle juices in modern marketing approaches relationship building is very important.
Now customers are not satisfies only with products but they are also concerned with many
other issues related with product production, consumption and dispose of. Hard selling means
to launch your product on a large scale with full range of resources. As we will introduce our
product in all Pakistan with full advertising on all Medias so we will be going for hard launch. it
also involve media, advertising and campaigns.
Market segmentation
Nestle has been segmented its product on demographics basis, specially on:
Demographic Segmentation
it calls for dividing the market in to different variables such as age, gender, family size and so on. For
instance: Nestle segment into the different of age. For baby, they have Nestle baby foods while young
people can drink Milo, Nescafe or eat ice cream, chocolate and cookies. Nestle health care Nutrition is
necessary for old people to overcome health concerns.
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19. Geographic Segmentation
We must understand the geographical different in needs and wants. For example: in Viet Nam,
Nestle has the Maggi brand with many kinds of Asia sauce, but Maggi do not exist in England
because of the different in the geographical taste so its target market is major populated cities
of Pakistan.
Psychographic Segmentation
Psychographic segmentation use the different in social class, life stage or personality
characteristics to segment. Nestle Breakfast Cereals is the best choice for busy people and
Nescafe also help them more alert in working. Besides, there are some people who love to eat
can eat every time and everywhere. Confectionery such as Smarties, Aero, Butterfinger, and
Orion can be called their best friends.
Behavioral Segmentation
Lastly, behavioral segmentation base on the different in knowledge, attitudes or responses to a
product.
Market growth
Market growth of nestle milkpak is 55%.
Market share
Market share of nestle milkpak is 65%.
Marketing growth strategic
For the purpose of milk-pack nestle uses market penetration strategy to gain market share as
company was successful in this strategy.
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20. Noodles
Price
Noodles are so tasty to eat with a low price of one packet is (Rs. 20).
Placement
All Nestle products are not sold directly to consumers and the complete distribution
process is followed. It uses indirect channels for distribution like:
Manufacturer Distributor Wholesaler Retailer Consumer
The loyalty and association with the company of the entire channel player is so strong that
Nestle never face any problem in distribution network in any part of Pakistan
Noodles target market is younger’s, children, and hostelries community. For example in
hostels most of the students use noodles where the fresh food is not available
Promotion
Extensive promotion through advertisements on TV. The ads have always featured kids and
never a celebrity since the people at Nestle believe that as long as the celebrity ad is on TV kids want the
product & thereafter it is gone. In ads the kids are shown come back from play or school asking for
Maggi: “
Badi gazab kibhookh lagi, Maggi chahiye mujhe abhi.
” In another advertisement, a kid jumps out of bed and gets ready for school as soon he knows there is
Maggi in Tiffin :
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21. Aaj Khane mein kya hai ?
Large scale promotions are also undertaken at school level:
KG-Nursery Smiley Contests
: Here, kids are judged on the basis of cleanliness, punctuality etc. The kid with maximum smiles at the
end of the stipulated period gets a Maggi Gift Hamper.
Maggi Quiz contests
Interschool Quiz contests are held and the winner’s get Maggi bags full of noodles. The audience gets
prizes of 1 or 2 100 gram packs of Maggi noodles. Also do wet sampling in small markets unaware of fast
food culture such as UP or remote North-East. Garlic flavor of Maggi was also launched in 1998 but did
not fair well in the market and was withdrawn and the old flavor was reintroduced with the phrase“
Sab kuchh pehle Jaisa
”Or “It’s back. Nestle choose PRIETY ZINTA as its brand ambassador for Maggi noodles, keeping her
bubbly and childish attitude in mind. She appeared in the T.V. commercial with some of kids promoting
Maggi noodle’s small pack.
Almost the entire advertising share (100%) is contributed by Top 5 brands Maggi Vegetable Atta
Noodles' grabs 50% of the advertising share in the 1st half of 2005.
Market growth
Market growth of nestle noodles is 75%.
Market share
Market share of nestle noodles is 43%.
Marketing growth strategic
Nestle uses market penetration and market development for Maggie as it gain high
share in no time.
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22. Chocolates / juices
Price
Nestle juice price of 1-Litre is (RS. 110).
Chocolates are available at different prices.
Placement
All Nestle products are not sold directly to consumers and the complete distribution
process is followed. It uses indirect channels for distribution like:
Manufacturer Distributor Wholesaler Retailer Consumer
The loyalty and association with the company of the entire channel player is so strong that
Nestle never face any problem in distribution network in any part of Pakistan
Promotion
Nestle juices In modern marketing approaches relationship building is very important.
Now customers are not satisfies only with products but they are also concerned with many
other issues related with product production, consumption and dispose of. Hard selling means
to launch your product on a large scale with full range of resources. As we will introduce our
product in all Pakistan with full advertising on all medias so we will be going for hard launch. It
also involve media, advertising and campaigns
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23. Target market
For juices all age groups are included
Market growth
Market growth of nestle juices is about 40%.
Market share
Market share of nestle juices is about 38%.
Marketing growth strategic
Nestle uses product development strategy for the juices and chocolate as it was good
enough for the company.
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24. BCG Matrix of Nestle product
According to Nestle, the relative market share and market growth rates of different products
are given below.
Product Name STBU Market Growth Relative
Rate Market
Share
Mineral water Star 85% 89%
Milkpak Cash cow 55% 65%
Noodles Question mark 75%. 43%.
chocolates/ juices Dog 40% 38%
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25. In BCG matrix Mineral water is at star with high share and high growth.
Milkpak is at cash cow with high growth and low share.
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26. Noodles are at Question mark with high share and low growth.
Chocolates/ juices are at dog low share and low growth.
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27. Market growth compare with others
Pakistan seems to be doing well in 2012. The Company’s financials for the first quarter ended
March 31, 2012 show that the foods giant posted a profit after tax of Rs1.664 billion. Nestlé’s
product portfolio in Pakistan is truly diverse, which includes dairy products such as Milk Pak,
Nido, Everyday and yogurts; beverages like Fruita Vitals, Milo and Nescafe; and food products
like Maggi noodles, Cerelac, breakfast cereals, and confectionaries.
(This growth rate is approximately.)
Market growth of nestle water is 85% whereas other company's water growth is 45%.
Market growth of nestle milkpak is 55%, good milk 35%, olpers 45%.
Market growth of nestle noodles is 75%.
Market growth of nestle juices is about 40% where sehzan juices 34%
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28. Market share compare with others
Nestle juices has a highest market share almost in every SBU’s line, such as in Milkpak & Nestle
pure life. High market share always enhance the quality of the firm & its strong management
decisions.
Market share of nestle water is 89% whereas other company's water share is 65%.
Market share of nestle milkpak is 65%, good milk 45%, Olpers 59%.
Market share of nestle noodles is 43%.
Market share of nestle juices is about 38% where Sehzan juices 40%.
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29. Nestle is international organization, being an multinational is always great because it is always
backed up by the parent company but however Nestle Pakistan is doing best in this region
because of the static demand .Nestle management is key success factor of the company they
are highly committed & they do not compromise on their tasks.
Recommendations are these, that NPL should diversify its product portfolio & introduce ice
cream & some other products which can cut the competition of the major players in Pakistan.
Dog items should be back up by the cash generated by cash cows & renovate them. Nestle
should increase the distribution Network & diversified their portfolio.
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30. http://www.nestle.pk/
http://www.nestle.com/brands/pages/brands.aspx
http://www.nestle.ca/en/Products/index
http://www.scribd.com/doc/15912171/Nestle-Marketing-Mix
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