Nestle fruit yogurt relaunch

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Contents
Acknowledgement:........................................................................................................3
Executive Summary: .....................................................................................................3
Overview of the Company ...........................................................................................4
Vision Statement of Nestlé: ....................................................................................................4
Background: ..............................................................................................................................4
Introduction to Nestlé Fruit Yogurt ...........................................................................5
Marketing Ethics and Social Responsibilities ......................................................................5
PESTEL Analysis ...........................................................................................................5
Political.......................................................................................................................................5
Economical................................................................................................................................6
Operations Restrictions .......................................................................................................6
Domestic Economic Problems ...........................................................................................6
Social..........................................................................................................................................7
Family.....................................................................................................................................7
Customs and Behaviors ......................................................................................................7
Technological............................................................................................................................8
Improved Packaging ............................................................................................................9
SWOT ANALYSIS OF NESTLE: ..................................................................................9
Strengths ...................................................................................................................................9
Weaknesses............................................................................................................................10
Opportunities...........................................................................................................................10
Threats .....................................................................................................................................10
Nestlé Fruit Yogurt’s Previous Marketing Mix .....................................................11
Product.....................................................................................................................................11
Branding...............................................................................................................................11
Advantages of Branding....................................................................................................11
Packaging............................................................................................................................12
Labeling ...............................................................................................................................13
Product quality and customer needs...............................................................................13
Product mix .........................................................................................................................13
Product Line: .......................................................................................................................14
Nutritional information........................................................................................................14
Ingredients...........................................................................................................................15
Product Life Cycle ..............................................................................................................15
Nestlé Fruit Yogurt: Introductory stage ...........................................................................15
Promotion ................................................................................................................................15
The message of Nestlé’s fruit yogurt...............................................................................16
The captivating fruit yogurt of Nestlé...............................................................................16

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Place.........................................................................................................................................17
Price..........................................................................................................................................17
Price Level Policies over Product Life Cycle .................................................................18
Nestlé Fruit Yogurt: Market-Skimming Pricing...............................................................18
Proposed Marketing Mix: ...........................................................................................18
Product Strategy.....................................................................................................................19
Flavors: ................................................................................................................................19
Nutritional information:.......................................................................................................20
Other Additions:..................................................................................................................20
Why this is good for you:...............................................................................................21
Target Market:.....................................................................................................................22
Price Strategy .........................................................................................................................22
Penetration pricing: ............................................................................................................22
Price Objective....................................................................................................................24
Promotion Strategy ................................................................................................................24
Promotion: ...............................................................................................................................25
Advertising...........................................................................................................................26
Published media.................................................................................................................26
Visual and aural media......................................................................................................27
Sales promotion..................................................................................................................27
Samples:..............................................................................................................................27
Sponsor:...............................................................................................................................28
Advertising specialties.......................................................................................................28
Suppliers..............................................................................................................................28
Place (Distribution) Strategy:................................................................................................28

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Acknowledgement:
First of all we would like to thank Allah mighty who has given us the strength to make this report and
thenour parentsbecause of whomwe are what we are at the presenttime.We wouldalsolike to thank
our Respectful TeacherProfessorAssadButtwhohas given us the opportunity and knowledge to make
thisreportand helpedusthroughoutoursemestergivingussome veryvaluablelessons that could help
us throughout our life.
Executive Summary:
This report contains the history and background of Nestle how it came into existence and how it grew
up to be such a big organization by giving its consumers innovative products. There are the strengths,
weaknesses, opportunities and threats of Nestle and the PESTLE analysis. This contains the previous
marketing mix and details about the product, price, promotion and placement and a set of new
proposed marketing mix. This report has a detail about the new products and how these products can
be beneficial to the consumers and why these strategies will work this time.

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Overview of the Company
VisionStatementof Nestlé:
Nestlé focuses on delivering its share holders value through the achievement of sustainable, capital
efficient and profitable long term growth. It always focuses of achieving more profit but never
compromises on quality and safety standards.
Nestlé envisions growinginthe shortest possible time into the number one food company in Pakistan.
Nestlé is the only food company which meets the need of every age group varying from infants to old
age fromnutrientstopleasure bydevelopingalarge varietyof foodproductsof every category with the
highest quality.
Nestlé envisions developing a highly trained and extremely motivated work force which would drive
growth through innovation and renovation.
It aspires, as a respected corporate citizen, to continue playing a significant role in the social and
environmental sectors of the company.
Background:
Nestlé isnamedafterapharmacistHenri Nestlé.In1860s Henri Nestlé developedafood for babies who
were unable to breastfeed. This was his first success to develop a product for premature infant who
couldnot tolerate the milkof his/hermother.Thisproductwas indeed of a great value and spread very
quicklythroughoutEurope bythe name of Farine Lactee Henri Nestlé savingthe lives of many children.
Nestlé grewvery quickly;bythe early1900s Nestlé wasoperatinginUnitedStates, Britain,Germanyand
Spain.InWorld War 1 the demand of dairy products increased and the government gave contracts and
the production almost went to a double by the end of the war.
Nestlé secondmostimportantproductwhichexpandeditwaschocolate whichwasintroducesin1920s.
Nestlé hada verybadimpact of WorldWar II andits profitdroppeddownfrom$20 milliontoin1938 to
$6 millionin1939. But somehowthiswarhelpedNestlé introducingitnew productNescafé whichwasa
staple drinkof US army. Nestle productionandsalesincreasedinthe wartime because peoplestarted
to prefermanufacturedhealthyproductwhichwere easytobuyandstore at thattime.Nestlé
headquarterislocatedinVevey,Switzerlandfoundedin1866 andis one of the world’sbiggestfoodand
beverage companybyhavingalmost250,000 employeesandfactoriesoperatinginalmosteverycountry
inthe world.

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Nestlé Pakistancurrentlyhas1958 employeesandhasa marketcapital of 41,268,136,000.
Introduction to Nestlé Fruit Yogurt
Nestlé is committed to offering consumers high-quality food products that are safe, tasty and
affordable. Nestlé is committed to give its customers quality products. Nestlé has so far given many
products to its customers that are healthy and useful in daily life.
Nestlé Fruit Yogurt, a value added product, is categorized as a chilled dairy product which has all the
goodnessof milk,yogurtandfruit.Suchproductsneedtobe refrigerated betweentemperaturesof 0 – 4
degrees from manufacturing till it reaches the consumers because they contain live bacteria (yogurt).
Nestlé Fruit Yogurt has a shelf life of 28 days.
MarketingEthics and SocialResponsibilities
Keeping in mind Pakistan’s social responsibilities and marketing ethics, Nestlé adopts the following
practices in its production of Nestlé Fruit Yogurt.
 Qualityof the productis maintainedbyforeignquality control supervisors on a random weekly
basis.
 The product is produced using all Halal foods.
 Product wastes are properly treated.
 Workers, especially those involved in the production process, are provided with specially
designed clothing/suits.
 The price of the product is kept low.
PESTEL Analysis
Political
Pakistan is politically instable at the moment and this has been going on for the past couple of years.
Wheneveranewgovernmentcomesintopoweritimposesitsownsetof rulesandregulationthat gives
benefitstothe governmentnotthe economyresultingin inflation and thus increasing the prices of the
products.Nestle canmake progressif the politician can make policies that are helpful for the food and
beverages companies.
Pakistan politics structure is very instable and is depressing economic activities and volatile business
environment in the state. Such instable environment may influence the performance of all industries

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operatinginstate andNestle mayalsobe influencedfromsuchtrendsof instability. FMCGorganizations
have to pay heavy taxes;changesinanytaxationsystem can badly affect Nestle productivity and sales.
Governmentpolicies,trade unionactivity, and productivity of the labor force that create either high or
lowcosts forbusinesses. Apart from this Nestlé Fruit Yogurt team discourages the use of child labor in
its plants. This comes at a cost. The labor expenses for the company raised more than forecasted.
Economical
The economic conditions prevalent in the country did affect the investment in the Nestlé Fruit Yogurt
industry.
Some common restrictions and barriers that prevented the investment of capital in this project
included:
Operations Restrictions
Restrictionsonprocurement,hiringforeignpersonnel,orlocating business activities, as well as the
efficiencyandhonestyof officialswithwhombusiness executives must deal and the effectiveness
and integrity of the judicial system. To deal with problems like this Nestlé Fruit Yogurt’s board of
directors lessened the use of the middle-man and did most of the sale by their own department.
Domestic Economic Problems
A country's ranking according to its most recent five-year performance record in per capita GDP,
GDP growth, inflation, unemployment, capital investment, and budget balance. During the year
2005-06 the country did experience inflation, a low GDP and unemployment all these factors
contributed in a low investment by the investors into this fruit yogurt project
Nestlé Fruit Yogurt used the process of strategic planning. Strategic planning involves identifying
future trendsandanalyzinghow the corporation can take advantage of those trends. Such analysis
traditionally concentrated heavily on economic trends, but since political decisions and events
substantially influence these trends, planners now incorporate political risk analysis. Current
planningactivitiesmade byNestléinvolveanattempttoassessthe impactof political andeconomic
trends, but strategic planners can find it difficult to incorporate political analysis into their
traditional economic and business research. Political analysis, by its nature, is qualitative, dealing
with more abrupt and sweeping factors. Many planners have found systematic risk ratings
particularlyuseful because theyallow forthe cross country comparisons that are an integral part of

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theiranalytical approach.Mostfirmsuse riskinformationformany reasons and in several different
offices.
Another important reason for the low investment of capital in the Nestlé Fruit Yogurt project was
the increased interest rates. Fewer investments were made which created a need for capital. This
affectedthe company’smarketingstrategyandthe numberof advertisementsmade wasdecreased.
Social
First of all, we have to define what society is. Society is all about people in general, living in
communities.Thenwe have toknowwhatculture is.Culture isbasicallythe customs,beliefs,wayof
life, and social organization of a particular country or group.
Nowwe have to see howand inwhat waysthe cultural and social forcesaffectthe marketing of our
chosenorganization,“Nestlé”inPakistan.The first aspect that will be brought under consideration
is:
Family
In a countrylike Pakistan,familyplaysavital role inthe everydaylifeof anindividual.Where there is
a family,there isfood,and where there isfoodthere are accessoriese.g.raita,pickles,salad,packed
or raw yogurt.Thisis a part of our culture.Nestléprovides the families with the dairy products like
packedsimple yogurt,raita,andfruityogurt.Besideshavingitasanaccessory of food,simple yogurt
isalso used as a raw material for cooking, which is again a part of our tradition, our culture. Nestlé
provides the Pakistani families with all that they require purity, taste, hygiene everything.
Customs and Behaviors
The normal custom isthat thisparticularproductis usuallyconsumedinthe summers.Aspreviously
mentioned, the country runs on traditions and culture, and it tells us that it gives the body a cool
effect; therefore, people prefer having yogurt in the summers.
Here in Pakistan,the majorityof the peopleare eitherilliterate orlive below the line of poverty, so
how this “edible” product is packaged does not really matter as it has to be consumed anyway.
The behavior of the customers changes at certain points in a year where the demand of this
particular product increases e.g. Moharram, Ramadan, Eid etc.

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Technological
Nestlé, the world's biggest food Group is also the global leader in the industry with regard to
ResearchandDevelopment(R&D),Nootherfood company dedicates so many human and financial
resources to R&D: an international staff of 3500 employees engaged in the search for innovative
newproductsand the renovationof existing ones. Year after year, Nestlé invests some 800 million
Swiss francs into R&D as a major driving force of its double strategy: to strengthen the Company’s
brands worldwide and to continue to support future long- term growth and competitiveness
throughinnovationandrenovation. At the threshold of this new millennium, Nestlé Fruit Yogurt’s
objective is to consolidate and strengthen its leading position at the cutting edge of innovation in
the foodarea, inorderto meetthe needsanddesiresof consumersaroundthe world, for pleasure,
convenience, health and well being.
Nestlé Fruit Yogurt-processing industry has special concerns about the health and safety of the
consumers.Thisisthe reasonwhyabundantand productive agricultural sources,climateconditions,
and modern technologies are all important factors for providing Nestlé Fruit Yogurt-processing
industry with ample and high quality raw materials. For the most part, Nestlé food-processing
facilities are located close to their agricultural source.
Nestlé usesthe term"cleantechnologies"todescribe itsworkingenvironment.This term is defined
as "manufacturingprocessesorproducttechnologiesthatreduce pollutionor waste, energy use, or
material use in comparison to the technologies that they replace."
Nestlé Fruit Yogurt is Mass-processed by heating concentrated milk, or milk fortified by skim milk
powder, to about 90 o
C (194 o
F) for a few minutes, then cooling it to about 44 o
C (111 o
F), at which
point a controlled culture of Lactobacillus bulgaricus and Streptococcus thermophilus is added.
These twolacticorganismsproduce the requiredacidityandthe delicate yogurt flavor. Souring and
thickeningtake place inabout 3 hours at 44 o
C (111 o
F),and stop when the mixture is cooled to 5 o
C
(40 o
F).Atthisstage chunksof fruitare addedtogive the yogurt the desired taste. Because the milk
has beenheatedandsoured,and due of its high acidity, pathogens cannot grow in yogurt, and it is
probablythe safestof all perishablefoods.Well-madeyogurtmade byNestlé industries of any type
should last for 28 days if kept at 5 o
C (41 o
F).

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Improved Packaging
Nestlé’s fruit yogurt’s main aim is the use of less excessive and more environmentally friendly
packaging products. It uses special packaging techniques that minimizes and eliminates loss by
leakage or evaporation and reduces spoilage and contamination by dirt, insects, bacteria, mold,
moisture or oxygen.
Another important technique used in the packaging of Nestlé Fruit Yogurt is that of Aseptic
packaging.Asepticpackagingsterilizesthe fruityogurtandthenpackagesitina sterilizedcontainer.
The typical aseptic containers include foil-lined cartons, plastic cups, and plastic bags. These
containerscostand weigh less than the metal cans or glass bottles traditionally used in packaging.
Anotheradvantage of asepticpackagingisbetterflavor.Cansorbottlesrequire muchlongerheating
time for sterilization. The longer foods are heated, the more the flavor changes. In the aseptic
process, foods can be heated rapidly outside of the container. Therefore, aseptically packaged
foods have a more natural flavor as well as more nutrients.
Above everything to keep up with the quality standards Nestlé used imported seals specially
designed for packaging dairy products. All this makes Nestlé Fruit Yogurt a flavored product with
only a few calories per serving and is popular for low calories diets.
SWOT ANALYSIS OF NESTLE:
Strengths
Nestle Pakistan is one of the largest companies in the world. Nestle is world recognized organization
which has a positive impact on its customers life due to better quality products and services.
Nestle hasstrongfinancial positionwhich enables it to attract more new investors and helps it to raise
funds from banks.
Nestle hasstrongcore competenciesi.e.highlyexperthumanresourceswhichenableitto produce new
high quality innovative products.
Nestle modern operation facilities are also important strength which enable it to produce high
standardized quality products.

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Nestle has its own distribution network which make it easy to provide Nestle products at all possible
places on time.
Weaknesses
Raw material is the basic input for every organization and milk is the core raw material of Nestle for
which it is dependent on the outside Milkmen.
Nestle has not even a single self own dairy form which provide high quality milk to the firm.
Another weakness of Nestle is that its total packaging depends upon Packages (Pvt.) limited.
Opportunities
Nestle shouldgoforInnovativepackagingforitsproducts like product and packaging which can survive
without light due to the mega short falls in electricity in Pakistan
Nestle can go for “Backward integration” and establish its own diary forms. Currently, Nestle is
dependent on the outside Milkmen which sometimes don’t supply high quality milk.
Nestle should open its own diary forms because Nestle has strong financial position and Pakistan is
agricultural state which support this backward integration.
Threats
Followings are the major threats for Nestle;
Purchasingpowerof people inPakistanisdecreasingday by day as the GDP is going down and prices of
Nestle products are comparatively high thus creating inflation.
Other Competitors in the market are coming with fierce advertising and innovative branding of their
products.
Nestle biggestcompetitioniswiththe OLPER'S whose innovative packaging is standing one step ahead
as compare to Nestle.

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CDL has also launched “N’rish” milk powder at lower price, it also has capability to decreased the
market share of “Nido”.
So inlongrun, if Nestle donotrespondtosuch competitors, they may create a lot of problems in other
products also.
Pakistan politics structure is very instable and is depressing economic activities and volatile business
environment in the state. Such instable environment may influence the performance of all industries
operating in state and Nestle may also be influenced from such trends of instability.
Nestlé Fruit Yogurt’s Previous Marketing Mix
The marketing mix comprises of the 4 Ps namely: Product, Place, Price and Promotion. Following is a
detailed study of the contents of Nestlé Fruit Yogurt’s marketing mix.
Product
Products are need-satisfying products of an organization. The idea of a product as potential customer
satisfaction or benefit is very important.
Nestlé Fruit Yogurt is a new product in Nestlé’s product line in Pakistan.
Branding
Branding is the use of a name, term, symbol or design or a combination of these to identify a product.
The fruitYogurt has well knownbrandname Nestlé whichhas gain popularity over years and is known
for offering healthy nutritious food items.
Advantages of Branding
a) Identification
Brandinghas helpedNestléFruitYogurt gain a distinctive identification and has presented an ease
of gainingcustomers.Mostpeople prefertryingfruityogurtof familiar trusted brand rather than of
the brands they haven’t heard of before. It has also helped reduce the costs for designing and
implementing programs for promoting the product.

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b) Brand Familiarity
Brand familiarity refers to how well customers recognize and accept a company’s brand.
Nestlé hasearnedbrandacceptance withhigh quality products and their regular promotion and its
high degree of brand familiarity affects the planning of the remainder of the marketing mix.
Therefore Nestlé Fruit Yogurt is placed in all super markets and general stores of Pakistani market
and doesn’t require extensive promotion because of its already built brand familiarity.
c) Brand equity
Since brand equity refers to the value of brand’s overall position in market we can safely say that
Nestlé hashigherbrandequityonthe basisof itssatisfiedcustomersandeagernessof customers to
have it in stock.
d) Manufacturer Brand
Nestlé is a manufacturer brand (national brand) i.e. it is created by producers and is promoted
throughout the Pakistani market in addition to markets of other countries.
Packaging
Packaging concerns with designing and producing the container or wrapper for a product. Nestlé
Fruit Yogurt comes in an attractive and convenient to use package and serves the following
purposes of packaging:
 Protects the contents on their way to consumer: Its package is well designed so as to protect it
during shipment and prevents tampering with it in the warehouse or retail stores.
 Protects the product after purchase: Nestlé Fruit Yogurt is convenient to use, cleaner and less
susceptible to losses from spilling and spoilage because of its good quality packaging.
 Packaging acceptable to middlemen: Packaging is acceptable to middlemen because it is
suitable for displaying and stacking in stores.
 Helps persuade the consumersto buy the product: Packaging is attractive and colorful with the
illustrations of fruits and creamy delicious yogurt which persuades the customers to taste it.

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Labeling
A label isa part of a productwhichcarriesinformationaboutthe product and the seller. A label may be
a part of the package or a separate tag attached to the product. Types of labels include:
 A brand label
 A descriptive label
 A grade label
Nestlé Fruit Yogurt employs descriptive labeling which is a part of its package. It carries information
about ingredients, nutritional contents, products weight, and the fruit flavor.
Product quality and customer needs
Qualityisthe abilityof aproduct to satisfyacustomer’sneedsorrequirements.Since consumersmainly
require satisfaction, marketing managers must be constantly concerned with product quality.
Therefore,Nestlé iscommittedtoofferingconsumershigh-qualityfoodproductsthatare safe,tasty and
affordable tocaterto the customersatisfactionaspect.The Nestlé Seal of Guarantee is a symbol of this
commitment.Keepingthisinmind,Nestlé developed a unique healthy product which is a substitute to
sugary junk food like carbonated drinks, ice-creams and desserts.
Product mix
The vast product mix of Nestlé among the dairy products consists of
 Nestlé Milkpak UHT milk
 Milkpak Butter
 Nestlé Plain Yogurt
 Nestlé Fruit Yogurt
 Milkpak UHT Cream
 Milkpak Desi Ghee
 Nestlé Everyday
 Nestlé Nido
 Nestlé Nesvita

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Product Line:
A group of products, intended essentially for similar uses and having similar physical characteristics,
constitute a product line. Product line under consideration mainly consists of Nestlé Plain Yogurt and
Nestlé Fruit Yogurt.
Nestlé Fruit Yogurt is a consumer product categorized as convenience product. Since people are not
willingtospendmuchmoneyandtime on such products, it is a low priced product and is clearly stated
as a chilled dairy product with all the goodness of milk, yogurt and fruit.
Nutritional information
Energy 118kcal-499kg
Protein 5.4g
Carbohydrates 19.6g
of whichsugars 19.0g
Fats 2.0g
of whichsaturates 1.3g
Fiber 0.1g
Sodium 0.1g
Calcium 208mg (%rda) (26.0g%)

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Ingredients
Standardized fresh milk (Fat 1.7%, SNF: 8.3 %), Fruit chunks (Strawberry, Peach or Mango), Sucrose,
stabilizer, preservatives, artificial flavor, permitted food color.
Product Life Cycle
A product life cycle has four categories
 Introduction
 Growth
 Maturity
 Decline
Management must be able recognize what stage of life cycle is the product in at any given time. The
competitive environment and marketing strategies that should be used ordinarily depend on the
particular life-cycle stage.
Nestlé Fruit Yogurt is in the introductory stage
Nestlé Fruit Yogurt: Introductory stage
Duringthe introductionstage a product is launched in a full-scale screening program. The product may
be entirely new or may come out with a novel feature in an already available product.
WhenNestlé FruitYogurtwas launchedinmarketit was not entirely new but it was well-known (plain
fruit yogurt) with a novel feature (i-e fruit flavored) which in effect created a new product category.
Like all otherproductsat thisstage,a lotof moneyisspentnotonlyforthe developmentof this product
but also to seek consumer acceptance of the offering. Nestlé Fruit Yogurt enjoys the benefit of brand
familiarity and its well-known product line of plain fruit yogurt and is readily accepted by a sufficient
number of customers.
Promotion
Promotionisone of the major toolsused in marketing and an essential part of the marketing mix of an
organization.Marketersusually use promotion to inform the public of their product and communicate
with customers with respect to product offerings. Promotion is also however used to influence the
marketers target market usually via:

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 Streamers
 Magazinesnewspapersandposters
 Publicrelationsetc
The message of Nestlé’s fruit yogurt
(Thismessage helpsremindingthe targetmarketof fruityogurt)
The captivating fruit yogurt of Nestlé
(Persuadesthe markettobuythisproduct)

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Place
Raw yogurt, which is one of the competitors of fruit yogurt, has been into market since long. It is not
onlycheap but also available in quantities of one’s choice (more or less). Management of Nestlé Fruit
Yogurt correctlyfiguredoutthatthe perception of raw yogurt of one particular class of Pakistan is hard
to change. They knew that introduction of fruit yogurt, which is of RS. 24, delicious, hygienic and
nutritious,amonglow-incomegroupandlow socio-economicstatus will not be a wise decision, as they
won’t readily accept it. They also correctly judged that less knowledgeable and illiterate people will
resistswitchingfromrawto fruityogurtbecause theyare eitherlessaware orindifferenttothe hygienic
factor and nutritive values of food. They willingly compromise on quality for price and some among
them,withoutstriving to get information, perceive the Nestlé’s fruit yogurt to be of high price and do
not buyit ultimately.Keepingthese attitudesandbehaviorsof differentclassesinmind, Nestlé decided
to start off from the safe side I-e they introduced their fruit yogurt in Islamabad, Lahore, Karachi and
Peshawar.These citiesof Pakistanare thicklypopulatedandhave relativelyhighawareness and literacy
rate. We can safely say that this product is targeting “A” class of our country and became popular
among them because of the following characteristics of this class:
 “A” class people are mostly literate, knowledgeable, have awareness and the resources to try
out every new food item that comes into the market.
 They are much aware of the nutritive values of food and know the advantage or edge of fruit
yogurt over the raw one.
 They don’t usually compromise on quality, hygiene and delicacy for price.
 This innovation of flavored yogurt with fruit chunks came as good news for fruit lovers.
 It became popularamongteenagersof thisclassbecause itisa healthyalternative junkfood etc
Price
The ultimate aim of any organization is to set a price that satisfies both the consumers and the
manufacturers.
Nestlé FruitYogurtcomesina small sizedpackof 24 Rupeeswhichisaffordabletoeverysocioeconomic
status. The competitors of Nestlé Fruit Yogurt include:
 Olpers
 Prime yogurt
 & Raw yogurt mainly

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In order to outweigh the competition of raw yogurt which is very cheap and a preference of price-
consciouspeople,Nestlé Fruit Yogurt comes in a small pack only which is reasonably priced keeping in
considerationitsfruit-contentswhichmake itnutritiousandtasty.Thishasbeenachievedbyworkingon
price strategy which starts by reducing the production costs so as to reduce the sales costs.
Low price feature of the producttargetsthe lowerandmiddle classestoo.Itisnow commonly used as a
substitute to mashed foods for kids and also to junk sugary foods and as a dessert, all because it
combines the benefits of taste, quality and low price and is gaining popularity due to these multiple
features.
Price Level Policies over Product Life Cycle
Price level policiesvaryaccordingtothe life cycle stage productisinat any giventime.Therefore pricing
policiesare differentinintroductory,growth,maturityand decline stage. Since Nestlé Fruit Yogurt is in
introductory stage we discuss the pricing policies of introductory stage as under:
Nestlé Fruit Yogurt: Market-Skimming Pricing
The pricing strategy adopted by Nestlé Fruit Yogurt is market-Skimming pricing since it is a consumer
productand has enteredmarket with price of Rs. 24 and also because it fulfills following conditions of
market-penetration pricing.
 A large market exists for the product.
 Demand is highly elastic.
 Economiesof scale are possible i.e. substantial reductions in the unit cost of the product can
be achieved through large-scale operations.
 Competition for this product already exists in market i.e. raw yogurt which presents a fierce
competition.
Proposed Marketing Mix:
On the basis of current sales and consumer response to Nestlé Fruit Yogurt, we feel that the current
product line needs change. Nestlé Fruit Yogurt is a product that was essentially made to target adult
malesandfemalesbutconsumerbehaviorsshow thatthe productisbeingconsumed more by children.
An addition to that is the fact that the targeted literate and health conscious segments of the market
aren’tconsumingthisproductas forecasteddue tothe fact that with the product’s high nutrition value
it has relatively high fat content.

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To face these issues,we propose thata new product should be introduced in the existing product line.
The new product will overcome the limitations of the current Fruit Yogurts and allow further
penetration into the market and increase market share.
The componentsof eachmarketingmix elementare combinedtoprovide acohesivemarketingprogram
which is explained as follows:
ProductStrategy
Nestlé YoguFruits isa newproductof Nestlé’s product line in Pakistan. Nestlé is rightly reputed to
offeringhigh-quality,tastyand healthy food items. Keeping that in consideration proposed Nestlé
Yogu Fruits has beenmade onsame linesandisa substitute tosugary junk food items. This product
has all the goodness of milk, fruit and yogurt and to add to it, the product has extremely low fat
content(99% Fat Free). The productisexpectedtogainpopularityandmomentuminmarket due to
the distinctive features of taste and health combined together along with following features:
Size and Package: Afterthe popularityof fruityogurtwithkids,the proposedproduct now comes in
a familysize package soas to be utilized equallybyfamilyasawhole.Therefore threedifferentsizes
will be introduced, ranging from small (100 g), medium (200 g) and large (400 g). Following are the
proposed small sized fruit yogurts and its different flavor:

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Flavors:
These are the prototypes of the new Nestle Yogu Fruits in the following flavors:
 Pineapple
 Punch
 Mango
 Strawberry
 Mixed Berry
Fat content: The fatcontentof the producthas been reduced to 99 percent which makes it 0.2 g on
fats as compared to 2.00 g of the old product in small size. Similarly all other products in this
product line are low fat attracting and capturing the health conscious consumers.
Nutritional information:
Energy 118kcal-499kg
Protein 5.4g
Carbohydrates 19.6g
Sugars 19.0g
Fats 0.2g
Saturates 1.3g
Fiber 0.1g
Sodium 0.1g
Calcium 208mg
Other Additions:
Nestle flavored yogurt will have an addition in its product line with a variety of yogurt drinks in
differentflavorsandtopupsyogurt.The prototype of drinkingyogurt, yogurt blends (that comes in
a pouch gable top packaging for infants and adults on bed rest), top up yogurt and Crunch are as
follow:

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Nestle Yogurt Blends Nestle Yogurt Drink
(Gable Top)
Nestle Yogurt Top Ups Nestle Crunch
Whythis isgood for you:

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 Low Cholesterol
 low SaturatedFat
 low Sodium
The young onesare more consciousabouttheirhealthanddietplansthatis whytheyare usingthat
productbecause itis fatfree However,the low fatcontentmakesitsuitable if they are ona low-fatdiet
plan.
The nutrientsinfruityogurtwe will tell differentbenefitsrelatedtoitsnutrientsandwhyyouenjoythe
yogurtthese wouldbe asfollow:
 Be fit(itcontainscalciumwhichhelpsinweightmanagement)
 Be vital(goodsource forproteinformuscles)
 Be comfortable(ithelpsmilkdigestion)
 Be strong(ithasessentialcalciumforstrongbones)
 Be nourished(importantnutrientsforchildren’sgrowth)
 Be proactive (bacteriafordigestive tract)
 Be happy(satisfactorypartof a healthy life)
Target Market:
Due to the above mentioned new features Nestlé Yogu Fruits now targets adults who are health
consciousonthe same basisas the existingproducttargets infants, kids as well as adults. Due to its
reduced fat-content it is now a best choice for health-conscious people. People can now use it
readily as a dessert without worrying about its fat content affecting their dietary plans.
Where the old fruityogurttargets onlyindividualswithitssmall sizedpack,itnow targetsthe whole
familywithitsnewpackagingandattracts a whole lot of new consumersincluding infants to adults.
Price Strategy
Setting price of a product is one of the most challenging decisions. Pricing is the only “P” in
marketingmix thatgeneratesrevenue for the organization. As this product is relatively new in the
market,due to the fact that there are fruityogurtsin the marketbut none with low-fat content and
no direct competitor; Nestlé can choose the following pricing strategy:
Penetration pricing:
This is a pricing strategy that is initially set low to attract customers at the introductory stage.
The price is likely to rise later as the product gains a market share. This pricing will be based
uponmarketorientedpricing i.e. the price will be set after a research of the markets demand.

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But before we decide onthe pricingstrategies,apricingobjective needstobe establishedtoachieve
required goals. For this to be useful, the pricing objective management selection must be
compatible with the overall goals set by the firm and the goals for this marketing program. Nestlé
could adopt the following pricing objectives:
 Profit Orientation
 Sales Orientation
 Status quo Orientation
For Nestlé YoguFruitstobe successful the companyfirst needs to capture a large market share and
to do so the salesvolumesneedtobe increased;thus,the objective is sales orientation. In order to
achieve these objectivesNestléneedsto commit time and money to this marketing program in the
form of a budget. The budgeting process starts with a sales forecast based on estimates of units
expectedtobe sold-bymonth,quarterandyear.Estimatedexpensesforthe marketingmix activities
comprising the marketing program are estimated and balanced against expected revenues to
estimate the programs’ profitability. This budget is really the “sales” document presented to top
management to gain approval for the budgeted resources to implement the marketing program.
Now that the pricing objectives are set, the pricing strategy needs to be decided on the following
grounds:
 Nestlé YoguFruitsisa lowfat contentwhichisa strongdesiredfeature bytargetcustomers.
 As the productis unique in its characteristics and it is a value added product, its demand is
fairly inelastic.
 A large market exists for the product.
 Substantial reductions in unit costs can be achieved through large scale production
(economies of scale).
 The product isprotected from competition through patents and high plant and equipment
costs.
Given the conditions neither a complete market-skimming pricing strategy nor a strict market-
penetratingpricingstrategywould best suit the pricing objectives of Nestlé Yogu Fruits. Instead, a
carefully selected price - neither too low nor too high – would allow us to harness all of the
product’smarketpotentials.The price wouldbe higherthanthe market-penetrating price level but
would still accomplish in penetrating the mass market immediately and, in doing so, generate

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substantial salesvolume andalarge marketshare.The price will notbe too high either so as to only
generate lump sums of profit, but will serve its purpose of profit generation. But for this Nestlé
needstoreduce its selling costs by minimizing its production costs which can be achieved through
economies of scale (limit pricing). We recommend the price to be:
Rs.95 for Large size (400 g)
Rs.50 for Medium size (200 g)
Rs.28 for Small size (100 g)
Price Objective
Everymarketingactivityincludingpricing should be directed towards a goal. Thus management should
decide on its pricing objective before determining the price itself. Nestlé like a few other firms has
consciouslyestablishedapricingobjective forfruityogurt.Followingare the commonpricingobjectives:
 Profit-oriented:
 To achieve a target return
 To maximize profit
 Sales-oriented:
 To increase sales volume
 To maintain or increase market share
 Status quo-oriented:
 To stabilize prices
To meet competition
Promotion Strategy
It wouldbe safe tosay that mostcompaniesengage insome formof promotional activity every day
of the year. Promotion is one of the four Ps of marketing—price, product, place, and promotion.
Promotion is generally thought of as a sequence of activities designed to inform, convince or to
persuade individuals to purchase a product or support a cause. All of the various tools available to
marketing managers for promotional activities constitute what is known as the promotional mix.
Launch of our new product into the market will be accompanied by an aggressive promotional
campaign.The objective istomake people aware of the new product, distinctive features. and want

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satisfying capability. It also aims at outshining the competition and forcing the customers of the
existing brands to switch to this new product.
AfterdesigningournewYoguFruits,we setoutwiththe task of promotingitsdistinctivefeatures.It
isan additiontothe Nestlé’sflavoredyogurtseriesbutisbetterthanthe earlierintroductionsin the
following ways:
 Pineapple flavor (a new one)
 Mixed Berry Flavor
 Punch Flavor
 99% fat free.
 Available in the packs of varying sizes (small Rs.28, medium Rs.50, and large Rs.95).
 Yogurt Top Pops
 Fruit Blends
 Crunch
 An attractive and convenient packaging.
 Reasonable prices of all yogurt packs.
Promotion:
Marketing managers use different components of the promotional mix as tools for achieving
companyobjectives—advertising,personal selling,publicrelations, free sampling on big stores and
salespromotion.Eachof these elements can be further divided into additional subcomponents or
strategies. The majority of a company's promotional resources are usually spent on these four
elementsfora simple reason: Companies perceive these methods as the most effective means to
promote their products. In the introductory stage of the life cycle of a product, the promotional
campaign should serve the following purposes:
 Informative
 Aggressive
To accomplish these goals, we have planned to utilize every possible and available media of
promotion because this will help ensure the success of our innovation.

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Advertising
An identifiedsponsoroftenthinksof advertising as the paid, non-personal communication used in
the promotionof a cause,idea,product,or service.The variousadvertisingdeliverymethodsinclude
bannersat sportingevents,billboards,Internet,websites,magazines,newspapers, radio spots, and
television commercials. Among the common forms of advertising are advocacy, comparative,
cooperative, informational, institutional, persuasive, product reminder, point-of-purchase, and
specialty.For the selection of an appropriate advertising media for our new product, we will carry
out a “media analysis” which is defined as:
"An investigation into the relative effectiveness and the relative costs of using the various
advertising media in an advertising campaign"
We believe that before committing an advertising budget it is necessary to carry out marketing
research on:
 Potential customers.
 Their reading habits, television-watching habits.
 How many times do we wish the potential customers to see an advertisement?
 How great a percentage of the market we wish to reach, etc.
These elements all need to be considered and balanced to plan a campaign that will effectively
reach itstarget audience ata reasonable cost.Afterthe analysis,we willresortto the following two
media.
Published media
Followingare the formsof publishedmediawe suggesttobe used for advertising the new product.
 National daily newspapers
 Sunday newspapers
 Local and regional newspapers
 Consumer magazines
 Specialist magazines
 Catalogs
 Trade and professional press

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 Internet
We will make sure thatour postersandadvertisementshave theirplace ineveryordinaryorfamous
magazine and catalog as we are targeting every age group and people belonging to every income-
level.Also, there is no active website of Nestlé Pakistan, we recommend that a website of Nestlé
Pakistan should be launched which includes the all product lines of Nestlé available in Pakistan.
Visual and aural media
Visual and aural media promotion will include:
 Television (terrestrial and digital)
 Radio
 Cinema
 Billboards
 Transport
 Direct mailing
Our message regarding Yogu Fruits:
Sales promotion
We will use sales promotion for a variety of reasons; (1) to attract new product users who will
hopefullyturnintoloyal consumerswhokeepbuyingthe product;(2) to reward existing consumers
with a price reduction, thereby maintaining their loyalty; and (3) to encourage repeat sales from
occasional consumers. We will use a variety of sales promotion tactics to increase sales, including
advertising specialties, point-of-purchase displays and samples.
Samples:
We have decided to distribute free samples of our innovation to the visitors in different
departmental storeslike Al-FatehandJalal Sons. The largest drawback of free samples is their high
cost. However, we expect that the associated sales will offset the initial cost of the free samples.

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Sponsor:
As already proposed we are going to launch our product in the holy month of Ramadan. Nestle is
goingto sponsora TV program thatwouldtake aboutfifteenminutes.InthisTV program the chef is
goingto make dessert that will use Nestle Yogu Fruits as a compulsory product which will give our
consumersawarenessaboutthe usage and health benefits of our product. This show will probably
be shown on HUMTV and the timings will be an hour before the iftari timings.
Advertising specialties
We will frequently create and give away everyday items with our printed name and logo such as
caps and coffee mugs in different departmental stores.
Suppliers
Positive publicrelationsare essentialforacompany's relationwithits suppliers. Suppliers are most
concerned about being paid for the product they are selling to a company. Since our suppliers are
generallynotpaiduntil tentotwentydaysafter delivery of the raw material or product, they don’t
make a fussbecause of theirfaithinour abilitytopaythe bills.Butanynegative news regarding our
financial position in the absence of a full and complete explanation from our public relations
departmentmayresultina damagedreputationwithsuppliers. Suppliers could stop shipping their
productsor demandthat paymentis made at the time of delivery. No option is appealing to us and
bothcouldcause critical delaysingettingourproductstomarket.In orderto avoidsuch trouble, we
do our best to maintain our positive position and goodwill in the eyes of public.
Place (Distribution)Strategy:
Thisis a strategyby whichwe will get our product in the range of our customers at a proper time and a
properplace. Presently,the distributionseems just fine and no proposal needs to be made to alter the
distribution channel in any way. But there is a problem with the retailers shelving ability. Like its
previous contemporary Fruit Yogurts, this product also has to be kept at a temperature between 0-4
degreesandhence requiresgoodchillers(refrigerators) forstorage atretail stores.Nestlé must provide
retailers with appropriate sized chillers having effective temperature maintenance.
Nestlé needstomake sure that noone leaves the factorywithoutasample whetheritsdeliverypersons,
meter readers etc. We need to be free with samples, give them to people walking past restaurants or
inside the departmental store because it is proven by an expert that whatever you give away comes
back to you manifold.

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We are proposing to introduce our products initially in Lahore, Karachi, Islamabad, Faisalabad,
Rawalpindi andMultan.We will be introducingourindepartmentalstore thathasgoodchillingfacilities.
Nestle will also provide some of its retailers with small chillers that will be placed near the point of
purchase that couldhelpattract more customersandincrease the sales. In Lahore we will be launching
our product in Al-Fateh, Jalal Sons, Metro, Macro, Hyper Star and Pet shops at Petrol Pumps.