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AcknowledgementThanks to Sir Aitzaz and all the other persons who provide us proper guidance,Under there dynamic guidance we are able to express ourselves. And we are now at the stage to evaluate about the performance of any organization as we have analyzed Nestle MilkPak in our following report. He is beyond our thoughts and much more than this acknowledgement. May GOD bless us with such kind of dedicated teachers in future? And finally we are thankful you that he cooperate us and appreciate as well. It is really very nice to study with you. All the research we have done is due to the skill we acquire form you. We have tried our best to provide you the actual facts and figures. We hope you will appreciate us.
Special Thanks To
1-Ch.Sikandar Ali RiaIn charge UHT PlantSheikhupura Factory.
2-Mr.Noman QureshiMarketing DepartmentNestle HeadquartersLahore.
3-Dr.Farhat Jameel KhanManager Administration
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(Brand Manager) Nestle pure Life
Nestlé with headquarters in Velvety, Switzerland was founded in 1866 by Henri Nestlé and is today the world's biggest food and beverage company. The Company's strategy is guided by several fundamental principles. Nestlé's existing products grow through innovation and renovation while maintaining a balance in geographic activities and product lines.
The company succeeded in achieving sustainable profitable growth during the year under the view driven by successful marketing and sales strategies and focus on key initiatives. Consumer confidence in the company’s brand has further strengthened and the trade remains confident as ever in doing business with it. Innovation and renovation remained the key to development of new products. Food services business unit is fast developing the required skill and competencies to meet specialized needs of out-of –home customers and hope that the organization structure will be more strengthened in the coming years. This is changed 12% w.r.t last year. 22.62% as per share. Over all company market share is 80%. Nestlé share as compared to nur pur,nirala and other are moves around 20to 30%.Total turnover:- 12.9 Billion Rupees
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In the 1860s Henri Nestlé, a pharmacist, developed a food for babies who were
unable to breastfeed. His first success was a premature infant who could not tolerate
his mother's milk or any of the usual substitutes. People quickly recognized the value
of the new product, after Nestlé's new formula saved the child's life, and soon, Farine
Lactée Henri Nestlé was being sold in much of Europe.
In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. By the
early 1900s, the company was operating factories in the United States, Britain,
Germany and Spain. World War I created new demand for dairy products in the
form of government contracts. By the end of the war, Nestlé's production had
more than doubled.
After the war Government contracts dried up and consumers switched back to
fresh milk. However, Nestlé's management responded quickly, streamlining
operations and reducing debt. The 1920s saw Nestlé's first expansion into new
products, with chocolate the Company's second most important activity
Nestlé felt the effects of World War II immediately. Profits dropped from $20
million in 1938 to $6 million in 1939. Factories were established in developing
countries, particularly Latin America. Ironically, the war helped with the introduction
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of the Company's newest product, Nescafe, which was a staple drink of the US
military. Nestlé's production and sales rose in the wartime economy.
The end of World War II was the beginning of a dynamic phase for Nestlé.
Growth accelerated and companies were acquired. In 1947 came the merger with
Magi seasonings and soups. Crosse & Blackwell followed in 1960, as did Findus
(1963), Libby's (1971) and Stouffer's (1973). Diversification came with a
shareholding in L’Oreal in 1974.
Nestlé's growth in the developing world partially offset a slowdown in the
Company's traditional markets. Nestlé made its second venture outside the food
industry by acquiring Alcona Laboratories Inc...
Nestlé divested a number of businesses1980 / 1984. In 1984, Nestlé's improved
bottom line allowed the Company to launch a new round of acquisitions, the most
important being American food giant Carnation.
The first half of the 1990s proved to be favorable for Nestlé: trade barriers
crumbled and world markets developed into more or less integrated trading areas.
Since 1996 there have been acquisitions including San Pellegrino (1997), Spillers
Pet foods (1998) and Ralston Purina (2002). There were two major acquisitions in
North America, both in 2002: in July, Nestlé merged its U.S. ice cream business
into Dreyer's, and in August, a USD 2.6bn acquisition was announced of Chef
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Build branded food business to improve quality of life by offering tasty,
affordable and highly nutritional product to our consumer. While maximizing
The strategic priorities of Nestlé milkpak are focuses on delivering shareholder
value through the achievement of sustainable, capital efficient and profitable long
Improvements in profitability will be achieved while respecting quality and safety
standards at all times.
In line with this objective, we envision Nestlé milkpak to grow in the shortest
possible time into the number one food company in Pakistan with unique ability
to meet the needs of consumers of every age group- from infancy to old age, for
nutrition and pleasure, through development of a large variety of food categories
of the highest quality.
We envision the company to develop an extremely motivated and professionally
Innovation and renovation.
We aspire, as a respected corporate citizen, to continue playing a significant role
in the social and environmental sectors of the country.
Most innovative and fastest growing food company offering Products enjoyed in
“Every home every day”
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Nestlé in Pakistan
Headquarters in Lahore, the company operates five production facilities. Two of
its factories in sheikhupura and kabirwala and multi product factories. One
factory in Islamabad and two in Karachi produce bottled water. Through its
effective marketing and a vast sales and distribution network thought out the
country, it ensures that its products are made available to consumers whenever,
wherever and however.
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SEGMENTATION & TARGET MARKET
Gender wise & Income classes.
National and International market.
Media Graphically: -
Electronic & Print media
Families, children, Females House wives between the ages of 25-35 who are
conscious about health of their children.
NESTLE is focusing People as a whole regardless of demographic,
psychographics and geographic. The main target of the firm is PEOPLE. Which
can be seen from their media and hoardings. Even on the packing design one can
see the FAMILY, which focuses all the age groups.
Market SegmentationMarket segmentation is dividing a market into disting groups that;1-Have common needs.2-Will respond similarly to a marketing action.
Segmentation Steps: _
1. People in areas under the coverage of Nestle supply chain i.e., northern & far-off areas.
2. Young mothers having children of age 5-10 years.3. Young children of age 10 years to youth of age up to 26 years.
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Basis for Segmentation
Geographic segmentation approach markets are divided into different units these units may include nations states, countries or even may neighborhood consumer often have different buying habits depending upon where thy reside Geographically Nestle has been very successful in targeting those areas where its competitors are not easily available. So Nestle Delight will have an advantage over its competitors in this case of all purpose milk. Nestle can use its current supply chain to deliver the milk to its target markets. A large segment belongs to the northern and rural areas of Pakistan will be covered by Nestle because of strong distribution network. There is a gap in the supply cycle of milk in some critical situations when shortage occurs due to short of raw material supply.
Dividing the market in the basis of demographic variables such as age sex, family size, education, income, and social classes are called demographics segmentationsNestle is currently targeting house wives, people of all ages especially growing children on basis of its purest form of milk. Young mother’s segment should be addressed for the better growth of their children because the purest form of milk. So, Nestle fulfill the need of complete healthy and nutritious food for everyone in family. Youth is to be addressed with respect to the energy they need to perform their daily tasks.
Dividing consumer into groups according to their uses loyalties or buying responses to a product is behaviorist segmentation for example product of brand usage degree of usage are combined with demographics and psychographic criteria to develop profiles of market segments Nestle has an advantage that they have already got a strong brand image. People are loyal to this brand, making use of which Nestle can specially target this segment & offer them this new product. By getting advantage of their current customer’s behaviors.
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Media opted for: Television, Bill Boards and Print Media.
Slogan: “Good food, Good life”
Theme: MILK FOR EVERY ONEPush VS Pull: At some stores there is push strategy for the product where
as at some stores its pull.
Promise & Support: BEST MILK FOR DRINKING
Value Preposition: Best value for money.
Marketing Strategy Used:-
Penetration strategy supported by product differentiation
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Incentives & Discounts
Buy one get one free
Over all company market share is 80%. Nestlé share as compared to nur pur,
Nirala and other are moves around 20to 30%.
Daily sales: 400,000 liters
Monthly sales value: Rs. 30 crore
Annual sales value: Rs. 4.8 billion
Sales Growth rate
This is changed 12% w.r.t last year.
22.62% as per share.
2.9 Billion Rupees.
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PRODUCT (Product Portfolio)
NAMENestle Milk Pack
SLOGANSlogan; “Good food, good life.”
Nestle is the world’s largest food company producing 10,000 food items which have captured a large part of market share and is growing big time. Nestle has a unique name in production of milk due to presence of large no of competitors the Nestle milk pack suffer from a decline how ever it was the strategy to defeat the competitors so Nestle re launched its product in market because it the requirement of the market and time to introduce a new trend in market.
SIZES1\4 Liter1\2 Liter1.0 Liter
VITAMIN A 6-9%
ENERGY 160-169 K CAL
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In the second ‘P’ pricing we have observed that Nestle is continuously increasing its prices as compared to its competitors mostly in other products like Lactogen, Cirilac, Cream and products which a number of customers use rarely so some times he feel uncomfortable when he compares the prices which were sometime before eg.Every Day Tea whiter is one of the major examples some items the customers claims that after every new supply of the product the prices increases. The different cost are used in managerial analysis in managerial analysis like AVC, ATC, FC, VC, MC are all the prices which are involved in production process of a product. So we wil l concentrate on these factors very much.
There are two main types of price set t ing: Penetration Approach Price Skimming Approach
PENETRATION APPROACH I t is an approach in which we set a price f i rs t ly low and then
as demand increases we increase the price of the product . This approach is used for competi t ion base pricing. In such a market posi t ion when product is at i ts peaky demand then some of customers become brand loyal they prefer to purchase prescribed brand products only .
SKIMMING APPROACHI t is an approach which is used for pure monopolist ic
product / service. In this approach f irs t ly we set the highest prices and then gradually decreases the price of the product / service as any subst i tute product / service come into the market Or demand of our product decrease. In countries l ike Pakistan public is not of the level that they can pay any price demanded by
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the f i rm so sometimes such kinds of pricing strategies cause fai lure of the product .
We are going to use the penetrat ion approach due to presence of our competi tors in a market due to this reason we can say that this is competi tor base pricing. However we can claim our standard that we are the best price takers (refers the si tuat ion in which producer claims that we are best price takers.)
REGIONAL SALES OFFICES
92, East 3 r d Floor, Raze Shari Plaza Fatal Has Road, Blue Area Islamabad.
210 Block B 2 n dFloor City Towers Jamrud, Road Peshawar.
Central zone covers major port ion of Punjab province in our country .Major Cities coverage are as follows
LAHORE FAISALABAD GUJRANWALA MULTAN SAHIWAL.
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South zone involves major port ion of Sindh province in which the avai labi l i ty of fresh milk is very tough so Nest le had establ ished i ts regional sales off ices in
Now we discuss some thing about placement at public sector for example super stores and convenience stores. Placement requires very attention because in the absence of improper placement the product will become out of market. Nestle prefers two channel marketing system more as compared to marketing systems such as zero channel and single channel. Structure of two channel market system is as fol lows.
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Promotion activities play an important role in re-launching any product. Increase in target market is possible by personal selling. It includes persons in retail stores telling the benefits to potential customers about importance of milk in standard packed form. Awareness plays the most important role. They should taste house wives on different places. Because thy are the main servers of such kind of nutritional diets to their family membersTV commercials and Bill Boards should be planned to advertise properly
Determining the Promotional Methods
There are various promotional methods like personal selling, advertising, sales promotions, public relations etc. but the method adopted by Nestlé for introducing Nestlé UHT Milk was advertising, outdoor printed media for advertising like hording boards, new papers, posters etc.Nestlé attracted the existing customer of the imported brands and potentials customers through its advertising campaign.
In their campaign, Nestlé mostly focus the small children who are the major portion of our society and milk and such kinds of Products are basic requirement of grooming children that the reason Nestle launched Nesvita Milk especially designed for growing children because introduction of calcium diets in daily diet chart is basic requirement.To remind the consumers about the product, Nestlé also made some special racks for retailers and put them on their outlets and as compared to other milk selling companies existing in the country Nestle shows always convincing messages to realize customers that always drink milk but only I pure form .
RE – LAUNCHING
After thoroughly analyzing the reasons of presence of large number of competitors Nestle decided to re-launch it product with new packing and new statement “DOOD KI KHALIS GAZAIAT”It was an opportunity for Nestle to capture the market in such a way that it will over come it’s all the discrepancies such as shortage, inflation based pricings which gave an opportunity to the competitors to capture the market.
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Nestle use 40% of their budget on the broadcast media. Television is the major medium used for the advertisement. Nestle has been playing commercials on the TV since they have launched the Nestle Milk pack. Their Ads cover all the lifestyles of the people. In their ads they have shown many situations….
Friends sitting together Child playing Swimmer Families in good modes Younger generation in smiling energy form.
In the entire above situation they have showed the importance of the pure milk, when it’s about athlete, he is health conscious, when friends sitting together and having fun what they need. The main thing the NESTLE wanted that people should trust on that Nestle is purest form of milk.
Nestle is not only advertising on Television but they are also advertising on radio. They play the vocal ads on Fm 100 and 101. Advertising on radio is basically for the people who are on roads.
In the print media Nestle is using the following mediums to advertise.
Magazines & Newspapers
Nestle advertise in both magazine and news paper on weekly and monthly basis.The following list of magazine and newspaper in which nestle advertise:
The News Nation Dawn Sunday Magazine
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The Economist MAG, Etc
BELOW THE LINE
Below the line includes following mediums of advertisement.
Direct mail Outdoor Transit Supplementary material
DIRECT MAIL ADVERTISING
It is any form of advertising issued directly to the prospect, whether through the mail, fax, online computer services, salesperson, dealers or other means rather than through traditional mass media.
Nestle send postcards to their home and office persons in the category of retailers and whole sellers. On different occasion nestle send them different post cards to build long term healthy relationships so that they can contribute in increasing the market share of there product.
Nestle has placed many types of leaflets, which contain information about Nestle Milk pack, at different outlets.
Folders / brochures
Nestle send brochures of their product to their customers through mail to make them aware of new innovations and products. This helps nestle in getting more customers.
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Nestle spend a big share of their advertisement budget on the outdoor advertisement, which includes
Painted Billboards MMT Vinyl Sheets Rotary Plan
Here is an example of their billboards and rotary plan
Nestle has placed more than 100 billboards across the roads. They have put on different skins of them, which are showing different situations in which people are using pure water. According to the NESTLE they use heavy outdoor advertisement to remind people about the availability of their product because it is a product for which people never pre plan to purchase it so to motivate them for the purchase of Nestle Milk Pack they have to place billboards. Beside this they rotate the skins of their billboards after few months the reason for this is that people loose interest in those skins when they see it for a long time so when they rotate them n place the new one that create the interest among the people.
TRANSIT ADVERTISINGTransit advertising is a category of out of home media that includes bus and taxicab advertising as well as posters on transit shelters, terminals, and airports.
Types of transit advertising
Inside cards Outside posters Terminal posters Taxi / bus exteriors
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Nestle has placed many attractive and attention getting poster on the terminals and stations in different cities.
Nestle is also advertising on scroll works, as we know scroll works advertise through mini vans in the city. These van moves throughout the city when people see the scroll work those ads remind them of Nestle Milk Pack during delivery towards the retail outlets and whole sellers.
Skins on Buses
Nestle has pasted their skins on Daewoo city buses, in this category they are advertising on certain buses.
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DIRECT MARKETING & SALES PROMOTION
NESTLE TAKES OVER MURREE HILLS
Murree Hills draw enormous crowds from all over Pakistan in the summers. In a bid to beat the heat in the lush and beautiful surroundings, men, women and children throng this big and most popular hill station. Those who came to Murree this summer were in for a pleasant surprise.
The brand and sales promotion teams of the North Zone had put together an effective outdoor campaign. The road to Murree was awash with billboards, shop signs, shop boards, branded umbrellas, stands, shop 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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SourceIt can be assumed that all communication has a source. The source provides the purpose for communication. This source should consist of ideas, needs intentions, information and purpose. Here in this billboard the source is:
Nestle (The Company)
Translating the source into a code requires encoding. Encoding develops the information from the source into a code. Here in this billboard they are encoding that:
The Milk they are providing is so pure that it led you live a long healthy life because it provides you the real energy and calcium’s.
They focus on the youngster who looks so fresh after having the Nestle Milk Pak drinking habit.
Nestle is the one who helps children to grow have purest form of energy and all the calcium, vitamin, phophours which are the basic requirement for growing children.
An encoded document would then express the purpose or message of the source, the message being that body of information necessary for sufficient graphic communication. Here in this billboard the message is:
“DOODH KI KHALIS GIZAIT”
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The medium or carrier of the message would be the channel. It is correct to say that messages can exist only in some channel; however, the choice of channels is often an important factor in the effectiveness of communication. Here the channel is billboard.
The receiver is the target of the communication. Mass Market is targeted as everyone milk in daily life in different needs. Youngsters are prominent in the ad but they are using as symbol of fitness by using Nestlé Milk.
The receiver must have a set of skills and abilities necessary to decode information into a usable format. Just as a source needs encoding to translate the purpose into a message, the receiver needs a decoder to understand the message. Here in this billboard the decoding is:
Natural Beauty Healthy & Attractive Skin Fresh Energetic Bright Faces
Unfortunately, this tidy package of communication tends to break-down when subjected to the nemesis of all communication environments, interference. Interference is the undesired outside influence that tends to prevent the completion of effective communication. It is capable of occurring at any level or stage in the process. The goal of any communication is to eliminate or minimize interference.
In case of billboard we can only consider the traffic signal as source of noise.
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The effectiveness of a communication is assessed when the source receives a response. The response can be in many forms. Hopefully, the response or feedback is premeditated and desirable. The feedback can be a tangible product of the communication and can lend itself to easy evaluation.
We like to buy Nestlé’s Milk because its purest form of milk.
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A subset of marketing research, advert ising research is the systematic gathering and analysis of information to help develop or evaluate advertising strategies, ads and commercials and media campaigns.
Following are the types of the advertising research
Quantitative Research Qualitative Research
Advertisers use quantitative research to measure market situation in hard number. 3 basic methods to collect quantitative data are
Observation Experiment Survey
Nestle use this research method to get the results about their advertisement research.
Qualitative research seeks in depth, open ended responses, not yes or no answers to get people to share their thoughts and feelings. This research is used more often to give advertisers a general impression of the market, the customer, or the product. The methods used in qualitative research are usually described as Projective Techniques
Nestle do both type of research. They do on going research whole year
and on the basis of the results they make their decision for the future.
FEEDBACK & EVALUATING RESULTS
At the end of every month there is a meeting for evaluation of results and to act on the feedback. The performance if not +, leads toward change in strategies.
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BUDGETNestle in terms of financial analysis how much amount it uses on its activities in the industrial sector and it also reflects how efficiently the organization is utilizing its resources.
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Cost of TV Ad
Prime Time: 6-11pmChannels: Top e.g., Geo, AAJ, PTVCost in Prime Time: Rs. 70,000/minCost in Off-peak time: Rs. 25,000-30,000/min
Cost of Billboard
Size: 2700 Sq. ftSkin: Rs. 54,000Rent for 1 month in Cat-A1 area: 600,000-1,000,000
Cost of Hanging Hoardings
Size: 5ft x 2 ftCost: Rs. 150/hoardingRent in Cat-A1: 1,350/week
Cost of Poster
Paper weight: 135 gramSize: 18inch x 23inchQuantity: 3000 @ Rs. 4.15/poster
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Application of Revenues During the Year
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To put the pre-going discussion in a nut-shell. It can be safely be ventured to opine that our company has much potential at that time but if we use the above strategy in proper manner we easily conclude that we will be able to lead the companies in the Pakistan and abroad. However there are some discrepancies in such sectors so we can realize that all the features that are involved directly or indirectly in the production are working properly at their positions. Nestle transparency in the Milk price and the marked increase in the fresh milk delivered to its factories is forcing the hands of competitors to progressively adapt to new imparitives.As for Pakistani customers but In all over the world. Speaking for Nestle Milk Pack is the evident that the company has benefited its regular customer on the basis of quality and originality. Thus the story of Nestle in Pakistan provides a good example of successful joint venture between local companies Milk Pack Ltd. And a foreign company Nestle. It is also an example of win win-partnership between a company Nestle Milkpak Ltd and all of its suppliers in raw material.
In addition Nestle transparency in the milk prices and the marked quality increase in the fresh milk deliver to its factories are forcing the hands of the competitors to progressively adapt to the new imparities.
Speaking for Nestle milkpak it is evident that the company has benefiting for the spectacular development of its factories in the milk district sales of finished products in UHT milks , yogurts ,milk powder ,infantformulas,milk base cereals reached in 2004 compare to sales.After taking an overview of the strategies of Nestle we can easily understand the successful journey of Nestle Milkpak in all factors of advertisement and proper awareness abut its products to the customers before launching and after launching. Also evaluates the response and feedback of customers on basis or its advertisement research.
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