Nestle

Nestle with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestle and is today the world's biggest food and beverage company. Nestls existing products grow through innovation and renovation while maintaining a balance in geographic activities and product lines. The Company's priority is to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives.

History
In the 1860s Henri Nestle, a pharmacist, developed a food for babies. People quickly recognized the value of the new product, after Nestls new formula saved the child's life, and soon, Farine Lacte Henri Nestle was being sold in much of Europe. The end of World War II was the beginning of a dynamic phase for Nestle. Growth accelerated and companies were acquired Nestle divested a number of businesses1980 / 1984. In 1984, Nestls 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 Nestle: 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, Nestle merged its U.S. ice cream business into Dreyer's, and in August, a USD 2.6bn acquisition was announced of Chef America, Inc.. In 2006, Jenny Craig and Uncle Toby's were added to the portfolio

Vision
Our vision is to be the Very Best food company all over the world.

Mission Statement
Nestle is dedicated to providing the best foods to people through out their day, through out their lives, through out the world.With our unique experience of anticipating consumers needs and creating solutions, Nestle contribute to your well being and enhance your quality of life

Nestl's Products
BOTTELED WATER: Today, Nestle is a thriving business with headquarters in Paris. In 2006, it sold its 72 brands of bottled water worldwide. The international brands of Nestle Waters are familiar on tables through out the world

BABY FOOD: The production of infant food goes right back to the origins of the Nestle Company. Henri Nestle's 'Farine Lacte' was the first product to bear the Nestle name. In 1867 a physician persuaded Henri Nestle to give his product to an infant who was very ill he had been born prematurely and was refusing his mother's milk and all other types of nourishment. Nestle's new food worked, and the boy survived. From the very beginning, DAIRY PRODUCTS: Nestle has long been a major player in the dairy industry, originally with well known shelf stable, i.e., dried milk powder brands such as Nido, Nespray, La Lechera and Carnation. We have been bringing life to milk since the very beginnings of our company. BREAKFAST CEREALS: Nestle has a joint venture with General Mills outside North America, Cereal Partners Worldwide, which is active in more than 80 countries. The joint venture began in 1990, and its rapid growth has been characterized by strong branding and lately the launching of breakfast cereal brands into the fast-growing cereal bar market. NUTRITIONS Nutrition has been a central theme for Nestle ever since 1867, when Henri Nestle first invented infant food to help save the life of a neighbors child Today, Nestle has progressed beyond these beginnings to become a world leader in key categories of Nutrition, Health and Wellness to offer our consumers the food choices they need to achieve the healthy lifestyles they want. BEVERAGES: In 1937, Nestle scientists perfected a powdered coffee product that was introduced in 1938 under the brand name Nescafe the world's first commercially successful soluble coffee Nestle is a major producer of chocolate-based and malted drinks. Its leading brands, Nesquik, Milo and Nescau are very popular with a growing number of young people around the world PREPAID FOODS: The Society commissioned Julius Maggi, a miller with a reputation as an inventive and capable businessman, to create a vegetable food product that would be quick to prepare and easy to digest. The results two instant pea soups and an instant bean soup helped launch one of the best known brands in the history of the food industry. By the turn of the century, Maggi & Company was producing not only powdered soups, but bouillon cubes, sauces and flavoringsMaggi merged with Nestle in 1947. Buitoni, the authentic Italian brand, which has been producing pasta and sauces in Italy since 1827, became part of the Nestle Group in 1988.

PETCARE: Nestle entered the petcare business with the purchase of Carnation in 1985, and we consolidated our position in Europe with the acquisition of the Spillers brand in 1998, and further with the acquisition of Ralston-Purina in 2001, creating Nestle Purina PetCare.

Nestle in Pakistan Nestle has been serving Pakistani consumers since 1988, when our parent company, the Switzerlandbased Nestle SA, first acquired a share in Milk pack Ltd. Today we are fully integrated in Pakistani life, and are recognized as producers of safe, nutritious and tasty food, and leaders in developing and uplifting the communities in which we operate.We at Nestle Pakistan ensure that our products are made available to consumers wherever in the country they might be. Convenience is at the heart of the Nestle philosophy, and our aim is to bring products to people's doorsteps.We have 4 factories in Pakistan .one is at Sheikhu pura, one is Islamabad and two factories are in Karachi. Marketing and Sales Nestle products are within reach for every single Pakistani. Yet nutritional value and quality remain the most essential ingredients in all our brands. All our key brands are equipped with the Nutritional Compass that ensures all the nutritional information about the product is accessible thanks to our user-friendly nutritional labeling and guidelines.Nestle Consumer Services is the main interface between you and the 3

company, and we make every effort to ensure that your voice is heard. After all, it's your satisfaction that really counts .Our communications to the consumer are relevant, cutting-edge, and adhere to the highest standards of responsible communication. Our company is seen as the No. 1 career destination for talented, motivated and ambitious professionals Our proactive innovation and renovation culture is the key to our success in the marketplace. Fully integrated systems (Nestle Pakistan, suppliers, customers) ensure efficient business processes. Milk pack

Company Vision Vision of Nestle Milkpak Company is to expand business according to the increasing demand of market.As per our company vision in 2020 production capacity of all plants working in Pakistan is being increased.So extension of Kabirwala Plant is the example of our company vision Introduction In 1990, sheikhupura factory starts the production of Nido Milk Powder cereals; a plant is acquired at Kabirwala.1n 1992, Nestle takes over the running of company and begins to develop its Milk collection network.In 1996 Milkpak is renamed to Nestle Milkpak Ltd.Launched in 1981, it has become synonymous with quality milk. Backed by a very strong brand name, aggressive marketing and distribution plans, consistent quality & availability through out the year, MILKPAK UHT has been extremely successful.In September 1999, MILKPAK UHT milk was launched as NESTLEMILKPAK UHT MILK.

Brand Image of and Consumers Attitude towards Milkpak

Segmentation Nestle Pakistan adopts differentiated marketing strategy to cover the market for its brand Milkpak.For different income level consumers nestle Milkpak offers a variety of products. It also offers various sizes of product for different classes. 1000 ml and 1500ml - for upper middle class and lower upper class 500 ml and 250 ml - for middle class and lower middle class 250 ml - for small town area And now they come up with new size 200ml

Pricing

Nestle Milkpak has been pursuing the competitive pricing strategy for its product. in price implementation nestle is using the mark up strategy it give approximately 10% margin to the retailers and 3% to 4% to the distributors. Milk pak Name Nestle Milkpak Size 200ml Price(rupee) 22

Nestle Milkpak

250ml

25(Nil)

Nestle Milkpak

500ml

50

Nestle Milkpak

1000ml

90

Nestle Milkpak

1500ml

46(Nil)

Olpers Name Size Price(rupee)

olpers olpers olpers

250ml 1000ml 1500ml

24 90 130

Sales Promotion The promotional strategy of Milkpak is seasonal as well as occasional. The schemes like price-offs, Ek lakh ka dabba, free gifts on return of empty bags are usually launched in winter in order to increase the consumption of milk.These schemes are also launched on and off in summer in order to increase the market share of the company in the milk market. Milkpak Pakka Aitebar Campaign The highlight of 2003 has been the Milkpak Pakka Aitebar campaign. Launched in may as an integrated marketing campaign through T.V, Outdoor, print and POS, the campaign was instrumental in increasing the sales and market share of Nestle Milkpak Point of purchase (pops) The Nestle Milkpak is given a notable placement on the shelves of different retail shops & departmental stores for its sales promotion. Usually the company goes for wide display in the stores where it potential for its product. Advertisements The message that the product reflects in its advertisements is the one that is usually narrated by the corporate itself. The message is based upon Purity, Quality & Natural. Selection of media There are number of Medias available for passing the product message. These are as follows; Outdoor (Billboards) Magazines Newspapers Brochures Internet Television Advertisements

Marketing Channel Flows

DISTRIBUTION STRATEGY EXCLUSIVE DISTRIBUTION Placing your products with only one retail outlet in a given area SELECTIVE DISTRIBUTION Placing your products with preferred retailers INTENSIVE DISTRIBUTION Placing your product in as many stores as possible Milk pak Distribution Strategy Fully integrated systems (Nestle Pakistan, suppliers, customers) ensure efficient business processes The distribution strategy pursued by the Nestle Milkpak is intensive. It means that the product distribution is covering wide market. Market channel of milk pak Nestle Milkpak goes for indirect channel of distribution.

Milk procurement milk is procured through two parallel systems 1. Suppliers 2. Self-Collection 1. Suppliers: A System in which an approved Sub-Contractor (Supplier) purchases raw milk on his own expenses/resources and delivers at Nestle Milkpak plant on agreed terms & conditions as per defined quality standards 2. Self-Collection: A system in which company purchases raw milk that meets Nestle Milkpak defined raw milk quality standards, through its staff members and delivers at PHE Center or factory. It further comprises of Village Milk Collection (VMC), Progressive Farmer, Mini-Contractor (MC), and Hi-Lux Contractor (HC). Supply chain of milk

Service outputs product bulk breaking Spatial convenience Waiting and delivery time High Assortments and variety Customer service

Milk pak

High

High

High

High

olpers

High

Medium

low

Medium

Medium

haleeb

High

high

high

low

low

Bulk breaking Enjoy Nestle Milkpak in four convenient sizes, depending on your family need.

200 ml pak.

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Spatial convenience Channel intermediaries reduce the number of transactions by providing a variety of products in one location Waiting and delivery time Providing products at the right time Assortments and variety Providing a variety of products in one location, so that customers can conveniently buy many different items from one seller at one time. Milkpak Butter Milkpak Uht Cream Milkpak DESI GHEE THE ROLE OF DISTRIBUTORS: ADDING VALUE (Utility)

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Form Utility: Time Utility:

Turning inputs into finished goods

Providing products at the right time

Place Utility:
Ownership Utility: Information Utility:

Offering products at the right place Providing credit, cashing checking, delivering products Offering helpful information Providing fast, friendly, personalized service

Service Utility:
Logistics Physical Distribution Inbound Materials handling Outbound Reverse Information

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Inbound logistics Nestle Milkpak Ltd. has a very large and integrated milk collection network. Milk collection centers, sub centers and village centers have been established for milk collection.At these centers the milk is stored in chillers and then transported to the factories through containers which has the temperature of 2oC to 3oC. Material handling At operations, Nestle Milkpak Ltd. has very sophisticated machinery. Quality checks practiced at every level of value addition. Packaging quality is also up to the standards, prescribed by WHO and Pakistan Standards Institute. Outbound Logistics Currently Nestle Milkpak Ltd. has 9 distribution centres all over the Pakistan. Nestle Milkpak Ltd. has well integrated distribution network and ware housing facilities. Reverse Logistics A complete supply chain dedicated to the reverse flow of products and materials for the purpose of returns, repair, remanufacture, and/or recycling. Returned Goods: quality demands by customers damage or defects out-of-date inventories

Information Quality control and information management are contributing a lot in making the infrastructure of Nestle Milkpak Ltd. very effective and efficient.

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Marketing channel power The influence one channel member has over other members behaviors Power of Buyers As far as, the power of buyers is concerned, they have an easy access to loose / fresh milk at cheaper prices as compared to prices of bricked packaged UHT milk. However, the hygiene and health conscious people have developed the taste for UHT milk and it is therefore, the buyers have the derived demand for consumers and they have to purchase the product in bulk. Power of Suppliers Suppliers power is also very important. In case of Nestle Milkpak Ltd., suppliers of raw material especially milk has the power to sell milk to its major competitors like engro and haleeb Foods Ltd. and open market. in order to tackle this power the company has developed strong relationship with the farmers not only on the basis of competitive purchase price of milk but the company is also providing consultancy in regard of better feed and breed of high yielding animals. Reward power Ability to offer an award (e.g. granting of exclusive distribution) The company is also providing financial assistance from Rs. 25,000 to Rs. 50,000 to the farmers through its own Lahore based bank. In case of suppliers of processing machinery, it has strong relations with these suppliers, being a world known organization. SWOT Analysis Strengths 1. Worldwide fame of Nestle. 2. Efficient milk collection system 3. Keeping high quality standards 4. Enjoying more flexible credit limits from Tetrapak 5. Integrated distribution and warehousing facilities 6. Successful related diversification 7. Generic brand name of Milkpak Weaknesses 1. Unable to compete in price sensitive segment of UHT milk market 2. Under-utilization of the capacity

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3. Unable to fulfill the demand of local powder milk market 4. Not yet ISO certified. Opportunities 1. Population growth rate 2. High urbanization rate 3. Flexible government policies for food industry 4. Brand image

Threats Launch of olpers milk in price sensitive UHT milk market. High inflation rate Low purchasing power Decrease in GDP growth rate high competition Decreasing investment Recessionary period in business cycle

Competitors Haleeb Nurpur Good milk Olpers Dairy omang Nesvita calcium plus PORTFOLIO ANALYSIS OF NESTLE (BCG MATRIX)

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STAR Juices, cereals

? Noodles, Nescafe

Cash cow Nestle pure water ,milk pak

Dog POLO (local manufactured)

Olpers vs. Milk pak One needs a lot of potential do get into competition war both of them, being equally well, are giving a hard time to each other. Comparison Milk pak: By 2006, the dairy milk category was growing at 20 percent annually, and Milk Pak was well-entrenched brand with distinctive colors and brand promises of providing high quality, natural and healthy milk. Milk Pak was identified by its green and white packagingthe colors of the countryand offered a brand backed with the strong equity of Nestle, coupled with its own traditional heritage Olpers Olpers, however, stepped into the foray by launching a massive campaign that started off with an introductory slice-of-life television commercial featuring some of the biggest stars in Pakistan.Billboards went up at key locations in the major cities, and soon the brand had become a voice above the media clutter, a voice that differentiated Olper's brand from the others. Brand name The name itself made it sound like a foreign brand, giving the perception of quality, and was unlike anything previously experienced by Pakistani consumers. Its color

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Olpers went with red as its color , a color far removed from the greens that had become synonymous with packaged milk.Picking red as the brand color was by far an inspired choice Tag line Its optimistic and vibrant tag line Good Morning LifeTag line along with the unique red color, became the soul of the Olpers brand identity across various media outlets All Purpose Milk Olpers became the "All Purpose Milk" and could be consumed with breakfast or blended with tea, and appreciated by all members of the family. Olpers is very strong in terms of consumer quality perception.Their monthly blind taste tests show that consumers rate Olpers significantly higher than Milk Pak and Haleeb. Current situation company now has a diverse portfolio of products ranging from different types of cream to premium low fat milk, and its future appears promising as long as Olper's continues to understand its consumers and follow through on that knowledge. Milk pak campaign Milk Pak responded with campaigns of its own to reaffirm the positive equity of its brand and has largely focused on a message of health, vitality, and strength through quality milk. Gap analysis The gap that Nestle Milkpak is facing is an ambiguity in positioning of itself in the consumers mind. Usually what people feel is that Milkpak is a valuable tea maker milk. On the other hand, Nestle has its another brand, the Everyday. Everyday is basically promoted and highlighted as a tea whitener. So in this case, the promotional image becomes vague regarding Milkpak.

Solution There are many people who seek buying incentives on products. For example, any consumer not such loyal to Nestle Milkpak, may prefer olpers milk due to extra quantity, price-offs offered by the product. Nestle may go for augmentation of the product by offering extra features apart from corporate image. The difference in the processing of milk should be highlighted to give advancement in its growth. They should be providing distributors a healthy package, so that the expiry related compensation should be availed. As the policies are on the national basis, it is more suitable to go for regional basis policies associated with promotion. Conclusion

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Nestle Milkpak has been successful in its marketing strategies in order develop a market of its consumers. The marketing mix of the product has been so far in the favor of the company in order to gain a healthy market share. Suggestions and Recommendations The company should explore the market potential in a way, so that it can utilize its full capacity in order to gain economies of scale in the production The company should also develop an integrated awareness plan in order to aware the people about the quality of the UHT milk as compared to other pasteurized or loose/fresh milk.

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