Nestl

COMPANYS PROFILE
Nestl with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestl and is today the world's biggest food and beverage company. The Company's strategy is guided by several fundamental principles. Nestl'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 companys 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. In the shed of Nestl 247,000 people are working in almost every country in the world. From which almost 8,000 employees are working 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. Nestl company is registered in Pakistan under the company ordinance 1984. As its a public company but still not registered in any Stock Exchange in PAKISTAN Over all company market share is 67%. Nestl share as compared to nur pur,Haleeb and other are moves around 20to 30%.Total turnover:- 13.5 Billion Rupees

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Nestl

MISSION
Build branded food business to improve quality of life by offering tasty, affordable and highly nutritional product to our consumer. While maximizing stakeholder value

VISION
The strategic priorities of Nestl milkpak are focuses on delivering shareholder value through the achievement of sustainable, capital efficient and profitable long term growth. Improvements in profitability will be achieved while respecting quality and safety standards at all times. In line with this objective, we envision Nestl 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 trained 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

GOALS
Nestl's business objective is to manufacture and market the Company's products in such a way as to create value that can be sustained over the long term for shareholders, employees, consumers, and business partners. Nestl does not favor short-term profit at the expense of successful long-term business development.

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Nestl Nestl recognizes that its consumers have a sincere and legitimate interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust and that without its consumers the Company would not exist. Nestl believes that, as a general rule, legislation is the most effective safeguard of responsible conduct, although in certain areas, additional guidance to staff in the form of voluntary business principles is beneficial in order to ensure that the highest standards are met throughout the organization. Nestl is conscious of the fact that the success of a corporation is a reflection of the professionalism, conduct and the responsible attitude of its management and employees. Therefore recruitment of the right people and ongoing training and development are crucial.

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Nestl

PRODUCT LINE
Build branded food improve quality of life by offering tasty, hygienic and nutritional products. Nestl products Juices 1981 Nestl milk pak 1983 Nestl butter 1986 milkpak uht, cream desi ghee, frost 1990 Nestl nido, Nestl cerelac 1991 Nestl rice, Nestl lactogen1 1992 Nestl everyday, Gloria magi 1994 Nestl Milo, Nestl neslac 1996 Nestl juices, polo mint, Nescafe classic 1997 Nestl kit Kat 1998 Nestl toffo , Nestl soothers, Nestl pure life 2000 Nestl plain yogurt 2001 Nestl fruit yogurt , Nestl nan.1, Nestl nan.2 2002 Nestl everyday liquid 2003 Nestl buddy, Nestl hi-calcium low fat yogurt 2004 Nestl raita, caution

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Nestl

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Nestl

KEY OBJECTIVES
Build branded food improve quality of life by offering tasty, hygienic and nutritional products.

Marketing Management Philosophy followed by the NESTL

Societal Orientation / Societal Marketing It is clear from the Haleeb Foods Ltd. mission statement that the organization is not only selling products to maximize its profit but also wants to provide a healthy and safe environment to the community. They want to improve the quality of life of the community by providing quality food products at affordable prices.

NEED
As the milk is been a basic need of every individual whether its an infant, a grown up or an old aged person, milk is a need of every one whether its in shape of plane milk or to be used in tea or coffee.

DEMAND
As the people buying power is raising this want of packed milk is converted into demand of the people and as far as Nestl is concerned it is a want of middle class and some time demand of the lower middle class.

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Nestl

WANT
But now a days people are much more conscious about there health and hygiene so regarding the need of milk a want has come into being in shape of packed, pasteurized and ultra heat treated healthy milk.

VALUES
Enterprise Empowerment Accountability Team work

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COMPETITORS
As the Nestl is market leader in milk producing so its keenly observe its competitor and try to improve its quality and variety of products day by day by doing continuous enhancement. Some known competitors of Nestl are; Haleeb Nurpur Engro foods

Competitive Analysis
Major competitors include NURPUR& HALEEB Others are:ENGRO FOODS & raw & open milk sold by Dodhi (milkman) Same prices of milk offered by them Advertising:Media opted for: Slogan: Theme: Push VS Pull: Television, Bill Boards and Print Media. Good food, Good life MILK FOR EVERY ONE At some stores there is push strategy for the product where as at some stores its pull. Promise & Support: BEST MILK FOR DRINKING & TEA. Value Preposition: Best value for money. Marketing Strategy Used:Penetration strategy supported by product differentiation

MICRO ENVOIRMENT
Company in Nestl the owner have no concern with the company operation all the decisions are taken by the board of directors and pass on to the subordinates.

Suppliers
Company having their own milk collection centers in different sectors which not only take the milk from the farmers but also tell them about the modern techniques to improve the quality and quantity of milk. Intermediaries Company hire the private distribution and whole seller to provide its product nation wide and internationally company keep a strict check on its distributors company had appoint an area manager on each distributor to keep an eye on its performance

Customer
Company keenly study the demand of the community as the poverty level of our country is high and most of the people are not in condition to afford the packed milk so company introduce a milk which is packed but price is almost same to the open or loose milk.

Public
As this one is a public company but not listed in the stock exchange yet Company is using both the printed and electronic media Company having keen interest in general public because they are the actual customer of the organization and try to design the product according to their expectations.

Differential Strategy
Provide hygienic and nutritional products to the nation in an affordable price

Key success factors:

Quality Continuous System Enhancement low and affordable price Competitive Advantage Thickest & Healthiest milk Differentiation Strategy Functional Selling Preposition Unique: Thickest milk with standard price.

Segmentation & Target Market

Demographically
Gender wise & Income classes.

Geographically
National and International market.

Media Graphically
Electronic & Print media

Customers Profile
Females House wives b/w the age of 25-35 SEC1& SEC2

MARKET SHARE

Market Share
3% 7% 17% 67% 6%

Nestle

Haleeb

Nurpur

Engro Foods

Empty

Market Share
The total market share of Nestl during the year 2005-06 is 67%; remaining portion is covering by Haleeb, Nurpur & Engro Foods 17%, 7% and 3% respectively.

Sales
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.

25%

Dividend:22.62% as per share.

Total Turnover:-

13.5 Billion Rupees. Beside this fact almost 6% market share remains empty. Because of some crucial reasons of infrastructure such as transportation problem and other duties to deliver their products in far locations. Nestl Pakistan is trying their best to meet this empty 6% portion, with the help of their sales promotion department which is doing very effectively job for the achievement of this object.

Nestl Sales Turn Over

Sales Turnover of Nestle' 15 10 5 0 2001- 2002- 2003- 200402 03 04 05
2005 -06

12.9 9.1 9.8 10.7

13.5

year Amount in (Billion Rs.)

In 2001-02 the sales turn over of Nestl is 9.1 billions and it is increased by almost 0.7 billions more in the next year i.e. it reached to 9.8 billions in 2002-03.This booming trend keeps on increasing continuously in the next three years 2003-04, 2004-05 and 2005-06 which is 10.7, 12.9, 13.5 billions respectively. The sales turn over of last five years is showing the continuous increasing trend and clearly representing the struggle of the management of Nestl.

Nestl With Competitors

15 10 5 0 Nestle

13.5

Billion (Rs.)

2.7

1.2

0.5

0.3

Haleeb

Nurpur

Engro Foods

Others

In 2005-06, because of the major portion of Nestl the market share i.e. 67% reached Rs.13.5 billion .Beside this contribution of other four companies combinely cannot compete the overall sales revenue of Nestl.

S.W.O.T ANALYSIS
STRENGTHS
24 milk collection centers equipped with latest quality assurance laboratories. The only Nestl Company in Pakistan that undertakes 21 rigorous quality control tests. The only Nestl Company in Pakistan with the following Certificates: HACCP (in process safety controls) (better quality) ISO 14000 (environment friendly operations) Tubular indirect heat treatment system from Holland. ISO 9001-2000

WEAKNESSES
Un CONVINENT PACKING Unattractive and low media advertising

OPPORTUNITIES
There are number of milk importing countries like: Bangladesh China Hong Kong Singapore Thailand. Etc

THREATS
Nestl MilkPak, which is one of the largest and most influential milk processing outfits in Pakistan Haleeb, NurPur, and raw milk Gawallas. The whole Indian Nestl industry because India is the largest producer of milk in the world. Rising exports of India.

The BCG Matrix-

Market Share
High High Low Question Marks
High growth, low share Build into Stars or phase out Require cash to hold market share

Star Nestl
High growth & share Profit potential May need heavy investment to grow

Anticipated Growth

Cash Cows
Low
Low growth, high share Established, successful Produce cash

Dog
Low growth & share Low profit potential

In the BGC matrix of Nestl STARS (high growth & share) are their heavy profit potentials and Nestl can utilize these profits in grow of companies different investments. In CASH COWS (low growth, high share) because of Nestl proper establishment they are successful to generate more revenues by selling their products continuously and producing cash in huge. As QUESTION MARK (high growth, low share) is concerned the company required cash to hold market share. And finally as far as DOG (low growth & share) in BGC matrix of Nestl are concerned if the company will not perform well their higher potential profits can be changed into dog.

Conclusion
To put the pre-going discussion into nut-shell. It can safely be ventured to opine that Nestl company has s much potential at that time but if Nestl use the always differential strategy in proper manner we easily conclude that Nestl will be able to lead the companies in the Pakistan and abroad.

Recommendations
Transform the formula of milk because it gives a taste of powder milk Lower the price and reduce the packaging costs Conduct more advertising and change the style of add campaigns. Sachet pack should be introduced so that a poor man too can afford it.