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Table of contents:
Introduction Of Nestle
Nestlé’s Vision
Mission Statement
Nestle Pure Life Water & Current Market Situation
Boston Contingency Matrix
SMART Analysis
Market Share
Hierarchy details of marketing and sales department
Market Segmentation and Targeting Strategy
Consumer Profiling Analysis
Product Strategy and FAB Analysis with Product line
The Pricing Strategy
Market Distribution and Channels Strategy
Market Positioning Strategy
Market Share
Competitive analysis
SWOT analysis
Acknowledgement
Praise is to Allah Almighty, the one testing us all at all times and
making decisions about what we don’t know and can’t know. Writing
this report appeared to be a great experience to us. It added a lot to
our knowledge while we were working on this report. If we say that this
report is one of our memorable experiences in student life, then it
would not be wrong.
We owe profound gratitude to Madam Saima Hassan for stimulating our
creative ab i l i t i e s by assigning this report to us. We are immensely
obliged to all our fellow students who guided us in making this report,
without whose considerate attention and interest, it would be difficult
for us to complete this report on time. Whatever we have learnt from
them and this project report has put indelible impression on our mind.
It is our conviction that this learning experience will always be a source
of help in our practical life and professional career.
Introduction Of Nestle:
Nestle is the leading FMCG company of Switzerland established by
Henri Nestle. Nestle is serving worldwide with its more than 500
factories in 86 countries comprising almost all continents. Nestlé’s
product portfolio is more than 500 products all over the world serving
best to their customers.
Henri Nestlé endowed his company with the symbol derived from his
name. His family coat of arms, the nest with a mother bird protecting
her young, became the Company's logo and a symbol of the
Company's care and attitude to life-long nutrition. The Nestlé nest
represents the nourishment, security and sense of family that are so
essential to life.
The first product made by Henri Nestlé, 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. Nestlé has been serving Pakistani
consumers since 1988, when the parent company, the Switzerland-
based Nestlé SA, first acquired a share in Milkpak Ltd.
Nestlé’s Vision:
The consumer's voice is the key to Nestlé Pakistan's vision and
working. Whether you live in the remotest village or the metropolis of
Karachi, Nestle consumer services team stands ready to listen to your
concerns and provide answers about our products and guidance on
matters of health and wellness.
Nestlé’s global vision is to be the leading health, wellness, and
Nutrition Company of the world. Nestle’ Pakistan subscribes fully to this
global vision. In addition to that, Nestle Pakistan also envisions to:
Lead a dynamic motivated and professional workforce that is
proud of its heritage and bullish about the future
Meet the nutritional needs of all age groups through a diversified
product range that contains an innovative portfolio of branded
food and beverages of the highest quality
Maintain long-term growth and deliver shareholder value
Establishing responsible communication with the consumer
which in turn can provide us a better look into what changes
need to be made to our products
Strengthen the position as the best career destination for
talented and motivated individuals
Empowering a system of self-management
Mission Statement:
Nestle is dedicated to providing the best foods to people throughout
their day, throughout their lives, throughout the world. With our
unique experience of anticipating consumers' needs and creating
solutions, Nestle contributes to your well-being and enhances your
quality of life.”
Nestle Pure Life Water & Current Market Situation:
The launch of Nestle Pure Life in December 1998 was a truly significant
episode in the history of Nestle Pakistan. Nestle Pure Life was going to
get the entry of Pakistan’s growing water market. At the same time
Pakistan became the first country where Nestle launched the
new brand. Nestle Pure Life is a premium drinking water, produced to
the highest standards of safety and purity as per the website suggests.
It is ideally balanced with essential minerals like vitamins, calcium
and many other useful items
“A social and managerial process where by individual & groups obtains
good food andrough creating and exchanging products and values.”
Launched on the North American market
in 2003, Nestlé PURE LIFE is destined to
become the world’s top and most widely
distributed brand by 2010. Nestle is also
willing and has goal to achieve the $1
Billion enterprise by 2014. Nestle Pure
Life is a premium drinking water, produced to the highest standard of
safety and purity. The company is seeking to provide customer with
pure drinking water on suitable prices make the product as convenient
as possible. According to their claim that they provide the best food
throughout the world.
Nestle is leading brand in water market and has left behind many local
brands which were working before the launching of Nestle Pure Life.
Now it has maximum market share in developed and major cities of
Pakistan like Lahore, Karachi, Islamabad, Multan, Hyderabad and many
others. As we have discussed earlier that Nestle is going to become the
fully market leader of water market in Pakistan, signs are clearly visible
to achieve the set point of Nestle. Nestle Pure Life is also the star
product of Nestle Pakistan and most probably all over the world where
Nestle Pure Life exist. Here you can see the market share chart for the
product and after that there is a Boston Consultancy Group Matrix is
shown which would describe the ranking of Nestle Pure Life in product
portfolio of Nestle Pakistan. BCG Matrix shows the company’s market
share over the growth of industry. This BCG matrix is the clear picture
of current market situation of Nestle Pure Life.
Boston Contingency Matrix
Market Share High Market Share LowHigh Industry
Growth
Stars:
Nestle Pure Life
Question Mark:
Culinary Products
Low Industry
Growth
Cash cows:
Coffee (Nescafe)
Dogs:
Chocolate Drinks and
Polo
Information and data pertinent to the market’s
current situation:
They keep the information of the other companies what they are
offering. Try to improve their strategies from others so that they can
promote their product more. like more companies are now coming in
the market so there is more completion in the market and they have to
be up to date from the current situations.
Company’s marketing goals and objectives:
Nestlé'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.
Nestlé 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.
Nestlé continues to maintain its commitment to follow and respect all
applicable local laws in each of its markets.
SMART Analysis:
SMART is an acronym which tells us that when ever we set any
companies objectives they should be,
S = Specific
M= Measurable
A = Actionable or Achievable
R = Realistic
T = Time Frame
Market Share:
Nestle is now a days willing to have more and more market share so
that it could achieve the goals that are set. The goal for market share
will be discussed below.Nestle occupied 85% of drinking water market in
all over the Pakistan.
Nestle Pure Life has 69%of total market, Sparklet has 13% and Cool
have 11% and remaining 7%are kept by other local companies. In
Karachi 50% of market is kept by Nestle and 25% by AVA and
remaining 25% is kept by other local companies. As for as Islamabad is
concern Nestle Pure Life has 65%of market Share.
They have certain goals and objectives
which they want to achieve. They want to
create and promote their products to
create value for their product. They
have the resources for increasing
their product’s quality and
compete it with the other
Is lam abad
Market Share
Karachi
Lahore
Lahore Karachi Is lam abad
companies. They conduct researches for that and try to get their
objective which they have decided. They are promoting their product by
creating customer awareness.
Nestlé believes that, as a general rule, legislation is the most effective
safeguard of responsible conduct,
although in certain areas, additionalThe Percentage Use of Nestle
Pure Life and its Competitors inIslamabad
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.
Nestlé is conscious of the fact that the
Others20% Sparkle
30%
Nestle Pure Life60%
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.
Marketing Plan For Nestle Pure Life Water PakistanUniversity Of Management and Technology
Page 10 of 30
Hierarchy details of marketing and sales department
Marketing Manager is an employee who is responsible for planning
and controlling its marketing activities and budgets .Marketing
manager take cares the promotional strategies of the products.
Manager try to use innovative ideas for the improvement of product in
market.
Finance manager The field of finance covers the economics of the
contingent claims. Financial economists study the valuation of these
claims, the markets in which they are traded, and their use by
individuals, corporations, and the society at large.
Finance manager and marketing manager are related with each
other to meet their marketing targets. It is
important because alone marketing manager can not
promote any marketing strategy without any budget.
Market Segmentation and TargetingStrategy and
Consumer Profile Analysis
Mar k e t Segm enta tio n:
For getting the maximum market share and respect of the product
in the minds of the consumer, as per our observation and market
survey we have concluded that Nestle Pure Life Water’s
segmentation is based on two points.
Geographic Segmentation
Demographic Segmentation
Geographic Segmentation:
The company has divided its geographic segmentation in several
regions. First they have the segmentation of a whole country and from
each provincial capital, they divided it’s areas into north, east, west,
south. So that it could be easy for the company to work efficiently on
it’s supply chain management.
Demographic Segmentation:
Nestle Pure Life isn’t a supreme quality product that only the high
class uses. The product is for all. Infant to seniors. There is no age,
sex, income and any other kind of limitation on use of the product.
The product is for all. Anyone can use the product as per need.
Targeting Strategy:
According to our observation and market survey, we have concluded
that as such there is not set demographic techniques to set the specific
target market. Because, water is something that everyone uses.
Everyone can use any size of bottle that Nestle is offering. There are
some variations that can be made throw OUR O B SE R V A T ION but not
from the company.
Nestle Pure Life comes in four different sizes. These four are targeting
different types of people and lifestyles.
This is the smallest size of Nestle Pure Life Water of
0.5L. This size is being heavily used by the consumers
in place of soft drink. University and Colleges are also
included in its target market of this size. But the
product is used by everyone in the society also. It is not
only specified people that have been discussed above.
This is the second size of the Nestle Pure Life Water
which is about 1.5L. This size is being used in mostly
meetings. You can say that any kind of organizational
meeting or any other social meeting, this product is
being used.
This is the third size of the Nestle Pure Life which is
used in mostly houses and offices in the waiting areas
(offices).
This is the fully household product and also using in
executive rooms in offices with the dispensers. This
Nestle Pure Life Water Bottle is also very helpful in
many dispensers available in the market with good
options.
Consumer Profiling Analysis:
The product is being used by many people of Pakistan and there is no
restriction in use of Nestle Pure Life as the is not that kind of product
with specific characteristics. Everyone is free to use Nestle Pure Life.
Requirement
ConsiderableBottle
Size Age Group
Related To People
Of / Use Sex Income Education
0.5L
infant - maximum
age All the people No No No1.5L 15years - 60years Household No No No12L 25years - 70years Household & Offices No Can be No19L 25years - 70years Household & Offices No Can be No
The above table shows that Nestle Pure Life is for
all. It is not necessary that Nestle Pure Life Water
Cans can only be used by higher income persons.
Because the data is linked with the regular use of
Nestle Pure Life Water Cans. Means income can be
considerable for the people who consume Nestle Pure Life on daily
basis. If we exclude the factor of daily basis the answer will be No.
there is not restriction to use Nestle Pure Life for Muslims and non
Muslims.
Product Strategy and FAB Analysis with Product Line:
The product was launched due to certain reasons and problems faced
by the government and other factors. There are many areas in Pakistan
where we will not find pure water but the infiltrated water. That could
harm your body and cause the major problem called Diaria. That is one
of the harmful diseases which can also lead to
death. To overcome this problem, Nestle
decided to launch its water product by
acquiring the water plant of AVA
Company. Now the plant is under control
of Nestle
Pakistan Ltd. Nestle launched it’s product by offering very useful
ingredients like vitamins, calcium and many other useful things which
gives the human body more than the water. Nestle is available in the
market in four good sizes according to the need and as per targeted
and segmented market. 0.5L, 1.5L, 12L and 19L. These sizes are
complete sized according to the need of the customers. To understand
the full ingredients of the water, we would like to show a FAB Analysis.
The above chart shows the ingredients and level of them in Nestle Pure
Life Water Bottle. The water is also tested on the basis of above
ingredients in the laboratory of USA, Pakistan, and Thailand etc…
Here is one more table which will clearly define the FAB Analysis of
Nestle Pure Life Water.
The Pricing Strategy:
We can easily observe that Nestle itself is
not taking active part in social welfare. And
on the other hand, we see the lower
prices of the product as compared
to the other FMCGs
Company’s products like Unilever,
Palmolive and Procter and Gamble. If we look at the prices, we can
observe that Nestle is also using its name for the promotional activities
and pricing strategies also. They have to maintain their level of
efficiency and always provide the best at best price. Nestle cares about
the customers. As the time is of inflation, nestle is trying to overcome
the pricing problems to the extent they can do. Nestlé’s point of view is
“Only by understanding their needs can we serve our consumers to
the fullest”.
Profit earning is the core aim of every company but in case of nestle
their profit margin is small just for the sake of customers trust and
happiness. Only a few amount of profit is collected from pure life water.
Nestle always strive to give superior product at low rates. Nestle is also
one of the leader of retaining their customers. This is one reason of
their success. They use the simple formula for the price that is Cost +
Profit.
Market Distribution and Channels Strategy:
Nestlé Pakistan's supply chain and
distribution makes sure that Nestlé
products are accessible, no matter where
consumers are in Pakistan. Nestle aims to
put together processes from the farm to
markets, and make sure products are
distributed to the consumers at the
correct time, the right cost and in the
accurate quantities. In the first quarter of 2006, Nestle proved it by delivering an amazing 136 million kg of
Nestlé products in Pakistan.
The mission of Nestle Supply Chain is to:
1. Optimize and consolidate resources and processes for a low-cost
but efficient
2. Develop and manage simplified and effective supply network to
achieve a high level of service
3. Create a continuous improvement culture driven by performance
measures and reward
To accomplish their tasks, the company chooses both marketing
channels method that is conventional and vertical. In conventional
channel, Nestle Pure Life is distributed among the wholesalers of
Pakistan and from wholesalers; the products are distributed to retailers
and from retailers, the products reaches to ultimate consumers. Nestle
Pure Life is also delivered directly to the consumers throw vertical
distribution channel. In this channel, the cost can be minimized.
Market Positioning Strategy, IMC Plan,Perceptual
Mapping and USP
There are certain points on which they occupy their customers and
those points are very helpful in retaining their customers. There are
number of water products available in Pakistani market including
Springley, Sprarklet, Aqua Fina, Kinley, Deja Blue and many others. But
Nestle Pure Life attracts its customers throw many reasons.
The main reason is Pure Water
which is the name of this product.
Rests of the water products are
using chemicals which can be
harmful for the human body but
Nestle Pure Life is the only water
product which is pure in nature.
That is also the unique selling
point of Nestle Pure Life. This is
the most powerful point that is in
the mind of the customers while
purchasing any water bottle in their routine life. The brand name is
also very important for the consumers. The slogan of Nestle is “Good
Food Good Life”. That is very attractive slogan people can attract from.
It puts the perception in the minds of people that they’re being offered
good products for their healthy lifestyle. If you look at the logo of
Nestle, you’ll get to know that a bird is feeding the children. Obviously
a mother can’t deceive the children. Nestle pure life is a brand of
nestle which explains a big symbol of quality to customers.
Nestle Pure Life shows in their ads about the purity of water and the
water need for your body. In its launching advertisement, the company
advertises Nestle Pure Life very successfully. In that advertisement,
a lady is drinking Nestle Pure Life Water and then it goes towards
inside the body to show the functions of pure water. That was the
awesome commercial that boosted the sale of Nestle Pure Life.
Nestle is also advertising on famous websites like you can observe
that whenever you will login to your facebook account, the ads of
Nestle will be there. There are number of sign boards and banners you
will see in the cities to aware people about the products of Nestle.
Thus, Nestle is using all
types of media to advertise their products in anyway. When Nestle Pure
Life was launched, they distributed the free samples of 0.5L bottles for
market testing and for their advertising purpose. Then a short walk
was also arranged for the sake of good health and seminars was also
conducted to make sure about the pure water needed your body.
To understand the depth of Positioning, we will divide into three steps.
Personal Selling:
A direct Vendor Selling Activity was coordinated and carried out during
the summer months of June, July, and August 1999 in Lahore. A team
of vendors, clad in branded T-shirts, caps and jackets, sold chilled 0.5
liter bottles to traveling customers on all major intersections. The
brand got great mileage out of this innovative idea of personal selling
in terms of brand awareness, paid trial, image as well as real sales.
Publicity:
Pure Life was launched on 14 December, 1998 in Karachi with a huge
amount of enthusiasm and positive response shown by the locals. The
successful story of its launch was printed in all the local newspapers
the next day. This greatly helped in creating awareness of the brand
and gave its introduction a good start.
Sales Promotion:
Specific promotions of Nestle Pure Life were arranged in some of the
key outlets of Lahore. Elaborate shelf space was acquired for product
display and specially designed POS material was extensively used to
promote sales. On a 12-bottle purchase of 1.5 ml, one 1.5 ml bottle
was offered free to consumers. Similarly on a 6-bottle purchase of 1.5
ml, one 0.5 ml bottle was offered free. Regarding trade promotion, the
retailer was also given an additional discount of 4 % during this sales
promotion. Not only did the sales of Nestle Pure Life grow
tremendously during the promotion, these continued at a higher pace
even after it was over.
The above map shows the ranking of different products in the eyes of
customers and retailers as per our survey. In this map, Coca Cola’s
Kinley and Pepsi’s Aqua Fina are the real time competitors of Nestle
Pure Life. Nestle Pure Life is on the top of the map having larger
market share. You can see the pie chart of market share in the diagram
shown here. There are other products available in the market like Deja
Blue, Dew Drops, and Springley etc…
Market Share
Market Share
Is lam abad Lahore
Karachi
Lahore Karachi Is lam abad
The above chart shows the market share of Nestle in three major cities
of Pakistan. Here are Lahore, Karachi and Islamabad. Lahore’s market
share is about 60%, Islamabad’s have 68% and in Karachi, the market
share is about 50%. (The data is not considered 100%. It is just
comparison.)
Competitive Position:
Competitive position of Nestle tells that how much it’s competing its
competitor and what it has unique from its competitors. It tells its
position in the market that where it stands in market. And also tells
us
that what its competitive position is in the market. So we would
analyze its position from two aspects
• SWOT Matrix Analysis of the company
• Core Competencies & Key Success Factors
SWOT Analysis of the Company:
SWOT analysis would tell us in better way about the competitive
position of the company. Following is SWOT analysis of the company.
Strength:
• Strong Brand name (NESTLE LOGO & FAMILY BRAND)
• Pure Drinking Water in market
• Mineral Product (Free of chemicals)
• Only brand in the area maintaining its quality and taste
• It has largest market share
• Ease of availability of their products all over Pakistan
• Immense product range and huge diversification leads to reduce
risk.
• High quality standards
Weakness:
• Communication is weak
• Lack of Awareness
• Weak Distribution Channels
These distributors, though observing the rapid increase in customer
demand refuse to hire new, more efficient and innovative staff that
would take the organizations to rise rather they stuck to their old
staff members.
Opportunities:
• Concentrating on these areas of weakness can increase sales
• It has opportunity to advertise its product in better way.
• It has strongest opportunity to increase its product line by
making segments in mineral water. Mineral water should be of different
taste E.g. like AQUA FINA in USA has introduced mineral water of
different taste. So it captured the market.
• By increasing product line it can also increase its sales.
Threat:
• Segments are being shared by competitors
• Under cutting by competitors.
• Uncertain conditions will affect the sales
Core Competencies & key success factors:
A) Innovative Product:
Nestle first of all introduced innovative product in Pakistan. Some of
core competencies of Nestle are given below
• Pure Water
• It’s free of Germs
• It is free of chemical
• It includes different vitamins in water which increase its purity
and make this mineral water unique from others
• Health Drinking Water. Because it includes vitamins which
prevent its users from different diseases.
• Nestle sponsors different events
• Continuous improvement
• Social responsibility
So core competency is basically the skill that a company has. As Nestle
Mineral Water has this core competency. If Nestle meet these
core competencies, it can grow it sales and revenue. Then it can
also differentiate its product from others. So these are key
factors to achieve success and meet goals.
Competitive Analysis
Competitive analysis includes the comparison of one organization
with its competitor. It differentiate product and tells which product
stands at which position. It tells about the differentiation of
characteristics and weaknesses of the product with its competitors.
As we know that more important competitor of Nestle is Aqua Fina.
Nestle Pure Life Aqua FinaLargest Market Share Low Market SharePure Water with Vitamins Mineral Water(chemicals)Availability of Nestle Water is
Easy
Availability of Product is
DifficultThere is only 1 segment in
Nestle Pure Water. It has only
one taste. So in sense of
segmentation, it’s weak
product. So company should
make Pure water of different
tastes.
It has different taste. It has
segmented. It has introduced
different segments in mineral
water of different tastes, so it
has a strong segmentation. So
due to segmentation it’s
increasing its sales.
STRATEGIES FOR COMPETITIVE ADVANTAGES:
Every product on the shelf, every service and every customer contact
helps to shape this image. A Nestlé brand name on a product is
a promise to the with all regulations and that it meets high
standards of quality.
Customers expect us to keep this promise every time. Under no
circumstances will we compromise on the safety of a product and
every effort must be made to avoid hazards to health. Likewise,
compliance with all relevant laws and regulations is a must and is not
negotiable. People, equipment and instruments are made available to
ensure safety and conformity of Nestlé products at all times. The effort
is worth it. Companies with huge quality standards make fewer
mistakes, waste less time and money and are more productive. They
also make higher profits. Quality is our most successful product. It is
the key to our success, today and tomorrow.
Marketing Financials:
In marketing financials of the Nestlé, advertisement budget is low
because their profit margins for nestle pure life is only 5%.They have
weak advertisement. For increasing their sales they have to increase
segmentation with more effective strategies. If they will increase their
product line then their sales would be automatically increased and
after that profit margin will increase. Then they can promote more their
product by advertising and tools like this.
Problems according to the company:
Nestle is very much afraid of current economic condition of Pakistan as
the company is willing to become the $1 Billion enterprise till 2014.
S olu tio n:
Nestle should contact to the main head quarter situated in Switzerland
for financial, economic, strategic support so that the goals of Nestle
Pakistan could be achieved. One more thing that is possible that
company should made some agreements about their business plans so
that the company could able to work with stability.
The group is willing to enhance its product line but due to some
internal and external reasons along with security, the company is
facing the shortage of producing certain products which have demand
in the market.
S olu tio n:
The company should buy the existing plants by any mean in Pakistan
to fulfill the demand of market. Because to setup a new plant can be
costly for the company. It is also possible that company should work
with other small companies to meet the demand. There should be very
low probability of loss on the goods as the brand image is so strong in
Pakistani market about Nestle.
Conclusion:
Nestle is the world leader in FMCG industry. People trust on the
products launched by the company even the product is facing some
problems.
Nestle was doing its good job in past but now it is facing some
problems of low quality of their products. Nestle is sued by someone
they claim that they are doing unethical business. They are mixing
unhygienic things which can cause damage to customer’s health. Its
example is that their water is not pure and good for health. You can see
dust partials in Nestle mineral water when you keep it in sunlight that
shows its product quality is down. Now they have to do more making
their strong position in market because when you lose your image in
customer’s eye then it is difficult to renew their image.