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Marketing Analysis of Nestle

Marketing Analysis of Nestle

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BCG Matrix of Nestle Document Transcript

  • 1. Principle of MarketingSuperior University Page 1
  • 2. Final ASSIGNMENTSubject Name: Principle of MarketingProject name: Nestle companyResource Person: Prof. Umar SoudWorked By: Ashfaq Salamat 12155 Shaban Cheema 12169 Meamoona Javaid 12104 Nadia Izhar 12170Program: M.com 2ndSuperior University Page 2
  • 3. Table of contentsIntroduction ………………………………………………………………………… 5Vision statement ……...………………………………………………………………… 5Mission statement ………………………………………………………………………… 6Goals & Objective ...…………………………………………………………………… 6HISTORY ……………………………………………………………………… 7Hierarchy ……………………………………………………………………… 8SBU’S OF NESTLE ……………………………………………………………………… 9 1. Milk Products and Nutrition: 2. Beverages: 3. Prepared Dishes and Cooking Aids 4. Chocolates and ConfectionaryMarketing analysis ……………………………………………………………………… 11Market Positioning ……………………………………………………………………… 11Questionnaire …………………………………………………………………… 12Salient Features …………………………………………………………………… 12Unique Selling Proposition of Nestle products ……………………………… 13Products ……………………………………………………………… 13Mineral water ……………………………………………………………… 14  Competitor Analysis  Total share  Total share of competitors  Positioning  Price  Promotion strategy  Segmentation strategy  Target marketing  Market growth  Market shareSuperior University Page 3
  • 4.  Marketing growth strategicMilkpak …………………………………………………………………… 17  Price  Placement  Promotion  Market segmentation  Market growth  Market share  Marketing growth strategicNoodles ……………………………………………………………… 20  Price  Placement  Promotion  Market growth  Market share  Marketing growth strategicChocolates/ juices ………………………………………………………….…… 22  Price  Placement  Promotion  Target market  Market growth  Market share  Marketing growth strategicBCG Matrix of Nestle product …………………………………………………………. 24Market growth compare with others …………………………………………………………. 27Market share compare with others ………………………………………………………… 28Conclusion and Recommendations …………………………………………………………… 29References …………………………………………………………………………. 30Superior University Page 4
  • 5. In this work the company chosen by us is Nestle Pakistan limited. wehave tried to cover the brief history of the company, vision, mission and objectives of the company. Thisbrief history and other sub heading under company background is compulsory to be understood as theyform the basis for marketing plan of the company. We have also tried to cover the internal and externalmicro and macro environments for the company and country for its future growth and furthermarketing 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 beveragecompany. Nestle employ around 250,000 people from more than 70 countries and have factories oroperations in almost every country in the world. The history of Nestle began in Switzerland in 1867when Henri Nestlé, the pharmacist, launched his product Farina Lacteal Nestle a nutritious gruel forchildren.Vision Statement Nestlé’s vision of making good food central to enjoying a good healthy life for consumerseverywhere. This implies gaining a deeper understanding in many areas of nutrition and food researchand transforming the scientific advances into applications for the company. Having a broad vision thecompany is doing its best for their consumers to show the great sense of responsibility.Superior University Page 5
  • 6. Mission statementTo positively enhance the quality of life of the people of Pakistan and all over the world by all that we dothrough our people, our brands and products and our CSV activities. Nestlé’s aim is to meet the variousneeds 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 thedemand 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 PakistanSuperior University Page 6
  • 7. HISTORY Nestlé Pakistan Ltd is a subsidiary of Nestlé S.A. - a company of Swiss origin headquartered inVevey, Switzerland. It is a food processing company, registered on the Karachi and Lahore stockexchanges and operating in Pakistan since 1988 under a joint venture with Milk Pak ltd and took overmanagement in 1992. For ten years in a row, the company has won a place among the top 25 companiesof the Karachi Stock Exchange. Headquartered in Lahore, the Company operates four production facilities. Two of its factoriesin Sheikhupura and Kabirwala are multi product factories. One factory in Islamabad and one in Karachiproduce bottled water. Through its effective marketing and a vast sales and distribution networkthroughout 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 flagbearers 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; NestléPakistan collects milk from an estimated 190,000 farmers spread over 145,000 sq Kms in the province ofPunjab and Sindh. Nestlé believes in creating shared value and is committed to the communities it works and liveswith. 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 itsvalue chain. Nestlé Pakistan today is the leading Food & Beverages Company in Pakistan with key focus onNutrition, Health and Wellness and reaching the remotest of locations throughout Pakistan to serve theconsumers. Nestlé Pakistan also prides itself in being the leaders in Nutrition, Health & Wellness. Eversince 1867, when Henri Nestlé invented the first infant food, nutrition has been in our DNA. Today moreand more consumers mirror our emphasis on nutrition, as they realize that food choices affect theirhealth and quality of life. The company’s strategy is guided by Nestlé’s Corporate Business Principles which are in linewith internationally accepted best practices and ethical performance culture. Nestlé’s existing productsgrow through innovation and renovation while maintaining a balance in geographic activities andSuperior University Page 7
  • 8. product lines. Long-term potential is never sacrificed for short-term performance. The Company’spriority is to bring the best and most relevant products to people, wherever they are, whatever theirneeds 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.Superior University Page 8
  • 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 NeslacSuperior University Page 9
  • 10. Beverages: Nescafe Classic Nescafe Sunrise Premium Nescafe Cappuccino Nescafe Ice Tea Nescafe Hot Tea Mixes Nestle Pure LifePrepared Dishes and Cooking Aids Maggi 2 Minute Noodles Maggi Atta Noodles Maggi Cupa Mania Maggi Soups Maggi Suces Maggi Bhunda Masala Maggi PazztaSuperior University Page 10
  • 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. Tounderstand your current market position, conduct a simple market research project to identifywhich product-class attributes are most important, which brands are perceived to best delivereach attribute, and where product improvements need to be made to improve customersatisfaction? Newly Drinking Water and food With Safety and Security Pure products Pure Relationship Safe and Healthy Drinking and eating products Public awareness MessageSuperior University Page 11
  • 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 companys products you prefer is nestle is not there? Explanation From our research we draw the conclusion that overall Nestle products are doing quitewell in the market. It has a good image among the consumers. It is renowned for its quality andbeing the pioneer of safe and good quality products. It is selling’s all products well. Themarketing of it is also being done quite well so there is no such need for Nestlé to do anythingelse. They also should be careful and not underestimate by other threats /competitors. Salient FeaturesQuality Every day, millions of people all over the world shows their confidence in nestle by choosingNestlé products. This confidence is based on their quality image and a reputation for high standards thathas been built up over many years.High performing design Quality policy and principles, the mandatory standards and the recommended tools forimplementation 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 itcomplies with all regulations and that it meets high standards of quality.Superior University Page 12
  • 13. Cost Nestle provides high quality products to its customers at lower prices; prices Nestle provideshigh quality products to its customers at lower prices; prices that are affordable by people in order toget 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 achievementof their other competitive priorities. Unique Selling Proposition of Nestle products It states that such campaigns made unique propositions to the customer and that thisconvinced them to switch brands. Before you can begin to sell your product or service toanyone else, you have to sell yourself on it. This is especially important when your product orservice is similar to those around you. Whit out pinpoint what makes your business unique in aworld 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.Superior University Page 13
  • 14. Mineral waterIn 1992, Nestlé was the first company to dare to launch a mineral water, Valvert. Today Nestlé Water isestablished 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, thePhilippines, 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, refreshingtaste, 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 COMPETITORSSuperior University Page 14
  • 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 sizesin which they are offered. Large bottles have relatively low price as compared with smallbottles. E.g. 1.5-litre (40-Rs) Promotion strategyNESTLÉ Pure Life – PET BottlesThe 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 nationaldistribution and an increasingly loyal customer base. The brand has revolutionized the Pakistani marketby tapping the real consumer need for pure, healthy, and safe water and has successfully dominated akey strategic businessNESTLÉ Pure Life – Home & Office ServiceIn 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. Successfulmarketing and sales strategies offer greater convenience and better value to the consumers. The brandis poised for strong growth in future.Superior University Page 15
  • 16. AVA & FONTALIATo expand its H&O water delivery business countrywide, Nestlé acquired major share holdings in boththese businesses in 2001. While AVA is an important national player in the branded bottled watercategory, both in PET and H&O servicesSEGMENTATION STRATEGY Psychographic Segmentation Demographic Segmentation Geographic Segmentation Behavioral segmentationTARGET 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 strategicNestle uses market development strategy for nestle water as it has a strong brand image.Superior University Page 16
  • 17. Milkpak Price Milkpak is the product of Nestle, which is available in liquid form. Nestle designed thisproduct because of greater demand of milk. Milkpak is more pure & hygienic milk, which saysfresh 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 distributionprocess 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 thatNestle 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 promotionteams of the North Zone had put together an effective outdoor campaign. Murree Hills drawenormous crowds from all over Pakistan in summers. Those who came to Murree this summerwere in for pleasant surprise. They were greeted by NESTLE PURE LIFE. The road to Murree wasawash with billboards, shops signs, shops boards, brand umbrellas, stands, shops paintings, wallpaintings, POS materials, regular merchandising, cross road signs, product sampling and stickersampling. The activity created a remarkable impact and the visitors were impressed.Superior University Page 17
  • 18. Khalis Hi Sub Kuch HAI” was burst used to outwit the competition and inducedconsumer to switch over NESTLE Milkpak UHT milk. Its campaign directly involved consumersand 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 tocommunicate 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 milkexperience. This message was further propagated through print media and outdooradvertisement. The campaign was supported through flier, temporary hoarding, street banners,and shop banners, posters, buntings and trade letters. The promotion targeted our core marketof 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 becauseevery customer have different choices. Nestle also using various variants of the product forincrease the uses of the product. Nestle spend a huge amount of work for maintain the sametaste and nutrition of the product. For sustaining their image. Nestle Invite housewives to sendnew innovative recipes made from maggi. Organizing contests, games industrial visit for schoolkids. 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 manyother issues related with product production, consumption and dispose of. Hard selling meansto launch your product on a large scale with full range of resources. As we will introduce ourproduct in all Pakistan with full advertising on all Medias so we will be going for hard launch. italso 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. Forinstance: Nestle segment into the different of age. For baby, they have Nestle baby foods while youngpeople can drink Milo, Nescafe or eat ice cream, chocolate and cookies. Nestle health care Nutrition isnecessary for old people to overcome health concerns.Superior University Page 18
  • 19. Geographic SegmentationWe 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 Englandbecause of the different in the geographical taste so its target market is major populated citiesof Pakistan. Psychographic Segmentation Psychographic segmentation use the different in social class, life stage or personalitycharacteristics to segment. Nestle Breakfast Cereals is the best choice for busy people andNescafe also help them more alert in working. Besides, there are some people who love to eatcan eat every time and everywhere. Confectionery such as Smarties, Aero, Butterfinger, andOrion can be called their best friends. Behavioral SegmentationLastly, behavioral segmentation base on the different in knowledge, attitudes or responses to aproduct. Market growth Market growth of nestle milkpak is 55%. Market share Market share of nestle milkpak is 65%. Marketing growth strategicFor the purpose of milk-pack nestle uses market penetration strategy to gain market share ascompany was successful in this strategy.Superior University Page 19
  • 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 distributionprocess 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 thatNestle never face any problem in distribution network in any part of Pakistan Noodles target market is younger’s, children, and hostelries community. For example inhostels 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 andnever a celebrity since the people at Nestle believe that as long as the celebrity ad is on TV kids want theproduct & thereafter it is gone. In ads the kids are shown come back from play or school asking forMaggi: “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 isMaggi in Tiffin :Superior University Page 20
  • 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 theend of the stipulated period gets a Maggi Gift Hamper.Maggi Quiz contestsInterschool Quiz contests are held and the winner’s get Maggi bags full of noodles. The audience getsprizes of 1 or 2 100 gram packs of Maggi noodles. Also do wet sampling in small markets unaware of fastfood culture such as UP or remote North-East. Garlic flavor of Maggi was also launched in 1998 but didnot 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 herbubbly and childish attitude in mind. She appeared in the T.V. commercial with some of kids promotingMaggi noodle’s small pack.Almost the entire advertising share (100%) is contributed by Top 5 brands Maggi Vegetable AttaNoodles grabs 50% of the advertising share in the 1st half of 2005. Market growthMarket growth of nestle noodles is 75%. Market shareMarket share of nestle noodles is 43%. Marketing growth strategic Nestle uses market penetration and market development for Maggie as it gain highshare in no time.Superior University Page 21
  • 22. Chocolates / juices PriceNestle 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 distributionprocess 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 thatNestle 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 manyother issues related with product production, consumption and dispose of. Hard selling meansto launch your product on a large scale with full range of resources. As we will introduce ourproduct in all Pakistan with full advertising on all medias so we will be going for hard launch. Italso involve media, advertising and campaignsSuperior University Page 22
  • 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 goodenough for the company.Superior University Page 23
  • 24. BCG Matrix of Nestle productAccording to Nestle, the relative market share and market growth rates of different productsare 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%Superior University Page 24
  • 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.Superior University Page 25
  • 26. Noodles are at Question mark with high share and low growth. Chocolates/ juices are at dog low share and low growth.Superior University Page 26
  • 27. Market growth compare with othersPakistan seems to be doing well in 2012. The Company’s financials for the first quarter endedMarch 31, 2012 show that the foods giant posted a profit after tax of Rs1.664 billion. Nestlé’sproduct 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 productslike Maggi noodles, Cerelac, breakfast cereals, and confectionaries.(This growth rate is approximately.) Market growth of nestle water is 85% whereas other companys 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%Superior University Page 27
  • 28. Market share compare with othersNestle juices has a highest market share almost in every SBU’s line, such as in Milkpak & Nestlepure life. High market share always enhance the quality of the firm & its strong managementdecisions. Market share of nestle water is 89% whereas other companys 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%.Superior University Page 28
  • 29. Nestle is international organization, being an multinational is always great because it is alwaysbacked up by the parent company but however Nestle Pakistan is doing best in this regionbecause of the static demand .Nestle management is key success factor of the company theyare highly committed & they do not compromise on their tasks.Recommendations are these, that NPL should diversify its product portfolio & introduce icecream & 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. Nestleshould increase the distribution Network & diversified their portfolio.Superior University Page 29
  • 30. http://www.nestle.pk/http://www.nestle.com/brands/pages/brands.aspxhttp://www.nestle.ca/en/Products/indexhttp://www.scribd.com/doc/15912171/Nestle-Marketing-MixSuperior University Page 30