Ice-Gurt by Bilal Jawed

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    Nestl Pakistan

    Marketing ManagementRe-launch

    Submitted to: Mr. Zeeshan Javed

    Submitted by

    Muhammad Bilal Jawed14136

    Waqas Shamim11356

    Shumaila Majeed Khan12229

    Karachi, Pakistan

    December 29, 2012

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    Letter of Transmittal

    Date: December 29, 2012

    Mr. Zeeshan Javed

    Iqra University,

    Defence View,

    Karachi, 75500

    Respected Sir,

    With reference to the topic discussed, this research report is being submitted to you on December

    29, 2012, as requested. It is based on Re- launch of the product Nestle Fruit Yogurt.

    We have tried our level best to gather all the information and the reasons of the failure and come

    up with the new strategy. Hope you will feel proud of our work and acknowledge our efforts.

    Thanking you in anticipation.

    Sincerely,

    M. Bilal Jawed (14136)

    Waqas Shamim (11356)

    Shumaila Majeed Khan (12229)

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    Acknowledgement

    We would like to express our heartfelt and most sincere gratitude to our instructor Mr. Zeeshan

    Javed, Iqra University for his kind and continuous cooperation and invaluable supervision during

    all the phases of the study. His invaluable knowledge and strong hold on the course enabled us to

    re-launch the product Nestle Ice-Gurt.

    We are highly obliged towards the administration of the Iqra University to provide students

    access to the computer lab and internet throughout the day and give special attention to

    researchers. The staff of the IT department has been extremely kind and supportive at all stages

    of the research by facilitating our needs.

    Our earnest thanks to all our Faculty Members, colleagues and fellow students who helped in

    completing the research. Special mentions are to be made of Mr. Atif Butt and Mr. Assam

    Ahmed Baghdadi who have made sure that our product launch was facilitated in the right

    direction.

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    Executive Summary

    Nestl with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestl and today

    is one of the worlds biggest food andbeverage Company. Nestle has been serving this world for

    over one hundred and thirty years. It has differentiated itself through its high quality product mix

    and positioned itself as health and Nutrition Company while targeting the health conscious

    people throughout the world. Nestle started its operations in Pakistan back in 1988, by acquiring

    a diary company MILKPAK LTD, when people of Pakistan actually needed it. Since Pakistan is

    the fifth worlds largest milk producing country therefore nestle deals mainly in dairy products.

    Moreover it also sells juices, chocolates, prepared food like noodles, baby food, infant formula

    milk and breakfast cereals in Pakistan.

    In 2001, Nestle launched nestle fruit yogurt in Lahore-Pakistan, which failed to be successful.Less profit in Nestle Fruit Yogurt ends up with low involvement in their marketing efforts. They

    believed in the product that with the passage of time sooner or later the nestle fruit yogurt will

    mark its acceptance in the consumers minds.

    This report is a hypothetical re-launch of the product. Our report begun with a research through

    online questionnaire and result of the survey conducted shows that the product is tasted and used

    by many people but it is not accepted by them because of less awareness and many other reasons

    so we have decided to re launch our product as a YOGURT ICE CREAM we have re-brandedit as Ice-Gurt. The current frozen yogurt market is relatively competitive. Every company is

    attempting to cut costs in order to maintain a good profit margin. However, not all companies

    will maintain high-quality products to achieve their goals. Within the frozen yogurt market we

    see ourselves as the future leaders in providing a healthy frozen yogurt. This will eventually help

    us to increase our market share.

    For the better understanding of our vision to capitalize the market of frozen yoghurt ice-creams

    we have divided our report in four sections namely:

    1. Section 1: Introduction and Research Analysis2. Section 2: Re-Launch of Nestle Fruit Yogurt to Nestle Ice-Gurt3. Section 3: Strategic Expansion of Ice-Gurt4. Section 4: Financial Analysis of Ice-Gurt

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    Section 1: Introduction and Research Analysis

    Company profile of Nestl:

    Henri Nestl 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 Nestl nest represents the

    nourishment, security and sense of family that are so essential to life.

    As nutrition, health and wellness company, Nestl, is committed to the enhancement of quality

    of life by helping communities in which it operates to meet basic and essential human needs.Over the years Nestl has used its resources, skills and technology to help find solutions to the

    many socio-economic challenges facing communities. Many of the communities are confronted

    by challenges such as poor sanitation, lack of clean water, poverty, diseases, malnutrition, food

    security and many others.

    Nestl with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestl and is

    today the worlds biggest food and beverage company. Sales for2006 were CHF 98.5 bn, with a

    net profit of CHF 9 bn. Nestle employ around 265,000 people and have factories or operations in

    almost every country in the world. Nestl is the largest food and beverage company in the world.

    It is also well on its way to becoming world leader in nutrition, health and wellness. The Nestl

    Company is built on the foundation of very strong brands. Some are global, others are regional,

    and many are local to a specific country.

    Nestl in Pakistan:

    Nestle Pakistan Limited Formerly known as Nestle Milkpak Limited. The Groups principal

    activities are to manufacture process and sell food products and ancillary equipment. The food

    products include diary, confectionery and culinary products, coffee and beverage and drinking

    water.

    The major brands include Milkpak UHT, Nestle Everyday, Lactogen and Nescafe.

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    Mission statement:

    Nestl's business mission 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. Motto of Nestl is:

    Good Food, Good Life.

    Vision statement:

    Nestl aim is to meet the various needs of the consumer every day by marketing and selling

    food of a consistently high quality.

    The confidence that consumers have in our brands is a result of our companys many years of

    knowledge in marketing, research and development, as well as continuityconsumers relate to

    this and feels they can trust our products. The mission and vision statement covers almost all

    perspectives.

    The nestle global vision is to be the leading health, wellness and nutrition company

    in the world. Nestle Pakistan subscribes fully to this vision.

    In particular, nestle envisions to:

    Lead a dynamic motivated and professional workforce Meet the nutritional need of customers of all age groups Availability across all sales channels Preferred choice in their categories Profitable and diversified high quality food products Fully integrated system (nestle Pakistan, customers, suppliers) ensure efficient business

    processes.

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    Products with Years of Launch:

    1981Nestl Milkpak

    1983Nestl Butter

    1986Pakistan UHT Cream, Pakistan Desighee, Frost

    1990NIDO, CERELAC

    1991Nestl Rice, LACTOGEN 1, LACTOGEN 2

    1992Nestle EveryDay, Gloria, Maggi noodles

    1994MILO powder, NESLAC

    1995MILO RTD

    1996Nestl juices, POLO Mint, NESCAFE Classic

    1997Nestl KitKat

    1998Nestl TOFFO, Nestl Soothers, Nestl Pure Life

    2000Nestl Plain Yogurt

    2001Nestl Fruit Yogurt, Nestl NAN 1, NAN 2

    2002EveryDay liquid,

    2003BUDDY juices, Nestl Hi-Calcium Low Fat Yogurt, Nestl Hi-Calcium Low Fat MILK

    2004Nestl Raita, NESCAFE (3 in 1)

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    Nestls Fruit Yogurt:

    Nestle has been serving its consumers since 1988.Nestl is a gigantic organization. Basically it is

    a food concern emphasizing on producing good food for good health. The seed Henri Nestl had

    planted in 1866 is now a tree which provides extremely qualitative food to billions of people allaround the world. Nestl's improved bottom line allowed the Company to launch few dairy

    products in Pakistan. Nestl introduced yogurt and butter in this time period. In 2001, nestle

    launched nestle fruit yogurt in Lahore, Pakistan .Every new dairy product takes time to make its

    place in the market and till then nothing could be said that in future whether it will be successful

    and head towards the maturity stage or will face failure and be eliminated from the product line.

    Nestle fruit yogurt due to weak marketing strategies didnt come up profitable and eventually

    failed in Pakistan.

    Primary Research and Analysis:

    The main objective of all the activities was to earn a profitable relationship with our customers

    and for that knowing their preference and perception regarding Nestle Fruit Yogurt was very

    important. The research was designed to extract the primary data. The research was carried,

    analyzed and interpreted by the Research and Development Department and the Manager of

    Chiller Dairy Department of Nestle Pakistan.

    Research Approach:

    The results were achieved from a Focus group. The people are asked about their perceptions,

    opinions, beliefs, and attitudes towards Nestle Fruit Yogurt, Frozen Yogurt, Ice Cream and Ice

    Cream Parlors.

    Sample Profile

    The respondents in this survey men and women of age 14 years and above spread across

    Karachi. They represent different age groups, education status and socio economic profile. The

    research sample consists of Students, Parents, Retailers and individuals from all the sector of life.

    Research Instrument

    Online Questionnaire

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    Q 1: Have you ever Tried Nestle Fruit Yogurt?

    Yes 24No 4

    The table above shows that more than 85% of respondents have tried nestle fruit selection yogurtand the rest 25% have not.

    Q2: If Yes, How did you find it?

    Tasty 20Healthy 3Watery 1

    The table above shows that 71% of the respondents have found it tasty, 13% think itshealthyand the rest 3% found it watery.

    0

    2

    4

    6

    8

    yes no

    0

    2

    4

    6

    8

    tasty healthy watery

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    Q3: If yes, would you prefer to have it in your routine?

    Yes 3No 7May be 18

    The table above estimates that more than 10% of respondents who have tried Nestle fruit yogurtwill like to have fruit yogurt in their routine and 64% may prefer and the rest 26% will not liketo.

    Q4: According to you What was the reason of Nestle Fruit Yogurt not making its Prominentspace in the market?

    Availability Constraints 5Lack of awareness 13Cost of Nestle Fruit Yogurt 3Taste of Nestle Fruit Yogurt 5Quality of Nestle Fruit Yogurt 2

    0

    5

    10

    15

    20

    yes no may be

    0

    5

    10

    15

    quality awareness cost taste/

    availability

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    The above table shows that from the sample audience, 46% audience identifies the reason offailure of nestle fruit yogurt because of Lack of awareness to audience, 17% say its because ofavailability constraints, 10% say itsdue to the cost, 17% identify reason as taste of yogurt andrest say itsdue to quality.

    Q5: Would you prefer eating Yogurt Ice cream?

    Yes 13No 3May be 12

    The table above tells that more than 46% audience is in favor of yogurt ice cream, 42% may try

    and rest will not like it.

    Q6: Would you like to visit an Ice-cream Parlor, if yes with whom?

    Friends 14Family 14Spouse -

    0

    5

    10

    15

    yes no may be

    0

    5

    10

    15

    friends family spouse

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    The table above explains that out of sample, 50 % will like to visit ice cream parlor with theirfamily and 50 % will like to go with their friends.

    Q7: Which Ice-cream Parlors do you visit often?

    Tutti fruiti 3Gellato affairs 7Kybees 5Hot spot 2Movenpick 3Dip shop 1Baskin robins 3

    Mehran 1Any 1None 3

    The table above shows that 25% of people often visit Gellato affairs, 17% love to visit Kybees,10% visit movenpick, baskin robins tutti fruiti and aprox 7% will visit any and rest dont visit

    ice cream parlor.

    0

    1

    2

    3

    4

    5

    6

    7

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    Q8: What attracts you the most in an Ice-cream Parlor?

    Flavors 23Toppings 5Ambiance -

    Offers/ deals -

    The table identifies that more than 80% of sample audience will be interested in eating ice creambecause of flavors being offered, and rest will love it because of toppings.

    0

    5

    10

    15

    20

    25

    flavors toppings ambiance offers/deals

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    Reasons to Failure:

    We have taken sample from different age groups. With reference to question number 4 from our

    survey results we found that the major reason behind the failure includes the cost of product as

    compare to its size. Another factor was the availability constraint, customers couldnt find it

    easily so they quit using it or some even never tasted it as customers always go for ease or

    convenience. Another factor was the taste factor, most people didnt like the fruit yogurt taste

    which also had negative effect on nestle fruit selection yogurts market value. Another and the

    major reason of failure was that for nestle fruit selection yogurt, nestle has not invested inpromotion as much as they do in other products so most of customers were unaware of the new

    brand or product of nestle and its nutritional benefits and presence in market. Due to this lack of

    awareness nestle fruit selection yogurt has lost its market share and failed in its introducing

    stage. Our main focus is to work on the promotions and to renovate the product to embrace

    customers attention and good response.

    10%

    17%

    10%

    17%

    46%

    Reasons to Failure

    availability quality cost taste awareness

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    Analysis of Research (Secondary Data):

    Environment and Industry Analysis:

    Pakistan is the sixth most populous country of the world. Total population of Pakistan exceeded

    the humongous mark of 180 M. Where people from different sub-cultures are part of one big

    culture, one thing remains constant in all these subcultures is their association with Dairy

    products. The culture of Pakistan promotes purity and healthy living which relates Nestle to it

    from the longest period of time. Nestle is a market leader in milk industry and has been serving

    Pakistani consumers since 1988.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 offer 2 types of dairy products. But focus only on milk

    products which are their ambient dairy products, specifically Nestle Milk Pack and Nesvita

    Ambient Dairy

    Nestle Milk Pack Nesvita Nido Everyday Milk Pack cream

    Consumer in the Pakistani Market trust Nestle in all which ways. From Cerelac to Mineral Water

    consumer have trusted all our products and embraced them. While we have been on a continues

    vogue to improve our quality and strengthening the relationship of trust we share with our

    customers.

    With high relevance of Ice-Gurt to the ambient dairy products offered by Nestle, it will not be

    difficult job for the product to grab its Market share in quick time. Entry Barriers & Competitors

    Rivalry are the key points of Industry Analysis discussed as follows:

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    Entry Barriers:

    Fresh Yogurt Ice-cream cannot be introduces, skilled full labor and advance equipment isrequired

    Cost of entering in the market is high No-barriers from government are lodged in this business Customer Service is an integral part of the business

    Competitors Rivalry:

    Less number of huge sellers are involved in the business There is a big quality difference between normal ice-cream and Yogurt Ice-cream Price Driven Customers might wont purchase our product

    Demographic Analysis:

    Population: 178,803,560 (July 2010 EST.) Age structure:

    1. 0-14 years: 35.4%2. 15-64 years: 60.4%3. 65 years and over: 4%4. Population growth rate: 2.09% (2011 EST.)

    Ethnic groups:1. Punjabi2. Sindhi3. Pashtun (Pathan)4. Baloch5. Muhajir

    Religions:1. Muslim 97% (Sunni 77%, Shia 20%)2. Christian, Hindu,and other 3%

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    Diet and Nutrition:

    1. In Pakistan, the nutritional status of children under five years of age is extremelypoor.

    2. At a national level almost 40% of these children are underweight.3. In the Pakistani diet cereals remain the main staple food providing 62% of total

    energy. The consumption of fruit and fresh vegetables, which are highly dependent on

    local seasonal availability, is also limited by the lack of organized marketing facilities

    throughout the country.

    4. A large number of infectious diseases such as respiratory and intestinal infectionsremain responsible for up to 50% of deaths of children under five, with malnutrition

    being an aggravating factor especially in the most populated areas

    Technological Analysis:

    AgricultureProducts: cotton, wheat, rice, sugarcane, fruits,vegetables; milk, beef,mutton, eggs

    Industries: Textiles and apparel, food processing, pharmaceuticals,construction materials,paper products, fertilizer, shrimp

    Industrial production growth rate: 3% (2011 EST.) Electricityproduction: 93.35 billion kWh (2010 EST.) Current account balance: $-3.94 billion (2010 EST.) Exports: $30.9 billion f.o.b. (2011 EST.)

    Economic Factors:

    GDP : USD 2800 per capita GDP growth: 3.7% Unemployment rate: 6.2% Inflation rate: 16.1% Consumer confidence Level in Nestle: High

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    Currency exchange rates: Pak Rupee 96 = 1 USD, Trade: USD 129 per capita or 33% of GDP Trading partners: United States, Japan, Kuwait, Denmark, Middle East, Great Britain,

    India, and Switzerland

    Balance of payments: deficit 3.3 Billion USDEcological Analysis:

    Climate: mostly hot, dry desert; temperate in northwest; arctic in north Natural hazards: frequent earthquakes, occasionally severe especially in north and west;

    flooding along the Indus after heavy rains (July and August)

    Environmentcurrent issues: water pollution from raw sewage, industrial wastes, andagricultural runoff; limited natural fresh water resources; a majority of the populationdoes not have access to potable water; deforestation; soil erosion; desertification

    Political and Legal Analysis: Government: Democratic system Government debt: 60.1% of GDP (2011 est.)

    Education System Literacy-definition: age 15 and over can read and write Total population: 58% Male: 69% Female: 45% (2009 EST.)

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    Section 2: Re-Launch of Nestle Fruit Yogurt

    Preamble:

    With the immerging situation of the market and induction fragmented markets due to new

    immerging FMCGs holding a customer to long lasting relation has been a difficult job. One

    wrong decision can make an organization bear heavy losses in the market. Nestle Fruit Yogurt

    was one product that had immense potential in it if it would have been produced by keeping the

    right customer in mind and would have been launched to its perfection. Nestle Pakistan carried a

    detailed research to find the reasons to failure of the product and came up with 3 major flaws

    which are as follows:

    1.

    Poor Advertisements2. Quality and the Taste of Product

    The large section potential customer of the product complaints that benefits of the product were

    not communicated well where other section of consumers were disappointed with the taste and

    quality of the product. Eventually the sales dropped and product failed to embark its significance

    in this competitive market.

    Nestle intends to Re-launch this product while countering both the pitfalls witnessed through

    research. Wed extend the product Nestle Fruit Yogurt while they are re-launching it. Nestle

    aims to launch this product extension by making it Nestls Ice-Gurt.

    Product Extension of Nestle Fruit Yogurt/Re Branding:

    Product Extension come Re-launch of Nestle Yogurt is Nestls Ice-Gurt, A frozen Yogurt ice-

    cream. It will be a new line of flavored yogurt ice cream by Nestle Pakistan. It will serve the

    emerging trends of flavored ice-cream with various toppings to be offered. This will not be a

    usual product by Nestle; therefore it will have a unique sense of Marketing Mix to it. No usualdistribution channels would be followed neither orthodox advertisements would be enrolled.

    Target Market of this product would be unique and pricing would be done as per market norms.

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    Launch of Nestle Ice-Gurt:

    Nestle Ice-Gurt is not normal Fruit

    Yogurt by an FMCG but a frozen

    yogurt Ice-cream which is 100%fresh and offers magnum amount

    of proteins and vitamins with

    extravagant taste to be offered

    through large variety of flavors

    adding value to it Nestle also

    offers 10 different delicious

    toppings. Ice-Gurt is one of its kind products to be offered from Nestle to be launched in recenttimes. The detailed description of the product is as follows.

    Deaprtment:

    In Nestl Pakistan departments are divided on the basis of the brands. Nestle Chilled dairy

    department is where the entire yogurt products are managed by Chilled dairy manager. Nestl

    Fruit yogurt has a separate functional department. Ice-Gurt is an extension to the usual products

    offered by the Nestle Chilled dairy department. Therefore the product will be an additional

    responsibility to the department and will be launched under the supervision of the same manager.

    All the finances, marketing, distribution, production and other departments come under the

    control of chilled dairy manager.

    Mission and Vision of Ice-Gurt:

    Our Vision:

    Nestle Ice-Gurt goal is to deliver the best customer experience and provide the highest quality

    products, and making good and healthy food for the customer to enjoy safe and healthy life.

    Our Mission:

    The mission is all about contributing to make a positive change in the world. To do that, Ice-Gurt

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    has three missions that the company strives to integrate into its daily business operations...

    Ice-Gurt Social Mission:

    To operate the Company in a way that actively recognizes the central role that business plays insociety by initiating innovative ways to improve the quality of life.

    Ice-Gurt Product Mission:

    To make, distribute and sell the finest quality yogurt ice cream and euphoric concoctions with a

    continued commitment to incorporating wholesome, natural ingredients and promoting business

    practices that respect the Earth and the Environment.

    Ice-Gurt Economic Mission

    To operate the Company on a sustainable financial basis of profitable growth, increasing value

    for our stakeholders and expanding opportunities for development and career growth for our

    employees.

    Recipe of Ice-Gurt

    Frozen yogurt is a popular, healthier alternative to ice cream. You might think that themanufacturing process involves simply putting some yogurt in a freezer, but actually the process

    is reversed. Instead of making yogurt and turning it into a frozen dessert, the bacterial cultures

    that make yogurt are added to ice cream mix. The resulting treat is lower in lactic acid than

    regular yogurt, which explains the milder taste.

    Frozen yogurt is made in much the same way as ice cream and, with the exception of yogurt

    culture, they are made from similar ingredients. Two of the most important elements in frozen

    yogurt are water and air. Air is incorporated into the mixture to add volume. Water exists in theliquid elements of the mix and is considered the continuous phase, which goes from liquid to a

    partially solid state. Frozen yogurt is never completely frozen; it simply contains ice crystals.

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    The primary ingredient in frozen yogurt is milk and milk products. Milk fat generally makes up

    between 0.5-6% of the ingredients depending on whether the frozen yogurt is non-fat, low-fat, or

    regular. Milk fat lends richness to the yogurt and is the synergist for other flavorings.

    "Milk solids, not fat" (MSNF) makes up between 8-14% of frozen yogurt. MSNF must be

    balanced in inverse proportion to fat for the best body of the product. MSNF consists of about

    55% milk sugar, or lactose, 37% protein, and the remaining 8% are various minerals. The protein

    element increases the smoothness, viscosity, and compactness of the frozen dessert and makes it

    more resistant to melting.

    Sugar makes up between 15-17% of the ingredients. Sucrose, in the form of cane or beet sugar, is

    generally the primary sweetener, though other sweeteners are often combined. Sugar not only

    adds sweetness to the yogurt but also improves the body and viscosity and increases the

    concentration of total solids (TS) in the product. Total solids add body and texture as well as

    food value, since solids take the place of water in the mixture. Egg solids may be used for solids

    with the added benefit of decreasing the amount of time necessary for freezing the mixture.

    Stabilizers, in the form of animal and vegetable gelatins, are added to the frozen yogurt so that it

    maintains a smooth consistency in retail outlets, where temperature changes can coarsen the

    texture. Stabilizers reduce crystallization, hinder melting, and improve the handling properties ofthe frozen yogurt. Emulsifiers are used to help blend liquids that are generally immiscible by

    creating smaller air cells throughout the mixture. Generally in the form of fatty acids, emulsifiers

    also add firmness to the body and reduce the time needed to whip the mix. Although stabilizers

    and emulsifiers occur naturally in milk products, small amounts are usually added, making up

    only 0.5-0.6% of the entire mixture.

    Other ingredients added in small quantities include egg solids, color, mineral salts, and caseinate

    derivative, such as citrates and phosphates. Additional flavors include fruit, fruit extracts, nuts,cocoa, vanilla, sugars, and spices, such as allspice, cinnamon, cloves, nutmeg, and ginger.

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    The Manufacturing Process

    Processing the mix

    1. The ingredients are selected for freshness and quality. They are measured in precisequantities according to the particular recipe. Liquid and dry ingredients are combined

    separately.

    2. The liquids are poured into a vat, mixed together, and heated. Next, the dry ingredientsare added to the liquids in a particular order. Meanwhile the batch is stiffed and the

    temperature gradually increased. Most ingredients must be incorporated before the mix is

    heated to 120F (49C) so that the mix does not become lumpy. The mixture must be

    heated to dissolve and blend the ingredients.

    Pasteurizing the mix

    3. Pasteurizing the batch is necessary to destroy pathogenic bacteria and to help preserve thefinished product. It is also required by law in most regions. Pasteurization is a simple

    process that involves quickly bringing the mix to a high temperature for a specified time

    and then quickly reducing the temperature to less than 40F (4C). The trend in the

    industry has been toward increasing the pasteurization temperature to about 175F (79C)

    for about 25-40 seconds. For greater results, batches can be pasteurized at temperatures

    as high as 210F (99C) to 220F (104C). These high temperatures also improve the

    flavor and help blend the ingredients more effectively.

    Homogenizing the mix

    4. Homogenizing the batch makes it smoother, primarily by decreasing the size of fatglobules to less than two micrometers.

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    Without homogenization fat could rise to the top of the mixture and create a layer of

    cream. Homogenization consists of pumping the batch through a small valve and against

    an impact ring. Three forces are at work. As the mix passes at a high velocity of about

    30,000 fpm (feet per minute) through the valve, shear forces begin to break up the fatparticles. The impact ring ruptures the fat further. Completing the process is cavitation, in

    which vapor bubbles are created by a sudden discharge of pressure. Within the bubbles

    the fat droplets crash against the vapor walls and disintegrate; thus, the more fat, the more

    homogenization required.

    Inoculating with Yogurt Culture

    5. While the temperature of the mix is 90F (32C), it is inoculated with 1% yogurt culture.The mix remains at this temperature until it sets and is ready for cooling.

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    Cooling and Aging

    6. After homogenization, the mixture must be cooled. If it is cooled slowly from about 90F(32C) to about 40F (4C), the mix will become more viscous. Once the temperature

    falls between 32F (0C) and 40F (4C), the batch is stored in aging tanks inside

    coolers. The mix is aged for up to four hours.

    Flavoring, Coloring, and Freezing

    7. The final ingredients are mixed together in a flavor vat. These include sweeteners,flavorings, and coloring. This mixture is then pumped into the freezer with the rest of the

    mixture which is about 20F (-6C) to 28F (-2C).

    8. While the mix is hardening, it is agitated to incorporate air and create over-run,

    Or excess volume. The addition of air also smoothes the consistency and creates a more

    palatable product. In about three minutes the mix begins to freeze and within a few more

    minutes, the desired overrun, about 50%, is achieved. Almost 1to, 2/3 of the water

    freezes during this stage of production.

    Quality Control

    All aspects of production, packaging, and distribution of the frozen yogurt should be performed

    with appropriate hygiene to minimize risk of contaminating the food. An automated CIP (clean-

    in-place) system quickly, easily, and efficiently cleans all the pumps and tanks for maximum

    protection against pathogenic bacteria.

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    Manufacturers must adhere to the pasteurization temperatures and minimum times required by

    the Public Health Service and other regulatory agencies. Tests are regularly conducted for

    standard plate count of bacteria and coliform and other microorganisms, such as molds and yeast,

    which could contaminate the product. Also care must be taken to avoid fermentation, which

    could damage the product by making it more acid, altering color, and curdling.

    Finally, frozen yogurt manufacturers must provide accurate information regarding the

    ingredients and the caloric composition of the product as prescribed by law.

    Machinery to be used:

    Machine which would be used in production of the Frozen Yogurt is ST-680 from TAIKE. Other

    specifications are as follows:

    Heads: 3 Pre cooling: Cylinder & hopper Origin: Guangdong China Warranty: 1 year CE Approved Compressor: France Automatically Blanking Function LCD Screen:1-16 indicator Flavors: 2+1(Mix)

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    Competitive Analysis:

    Nestle Ice-Gurt have few but large direct and indirect competitors. Some of the Major

    Competitors are as follows:

    Tutti Frutti Snog Gelato Affair Move n Pick Del Frio Walls& Omore Small Ice-Cream Parlors

    Tuttie Frutti:

    Tutti Frutti is an International brand for yogurt ice-cream and is the fastest growing chain of

    Yogurt ice-cream parlors in Pakistan. Within short span of time Tutti Frutti has managed to

    introduce 18 outlets all over Pakistan. They are the biggest competitor of Ice-Gurt to establish in

    the market.

    Snog

    Snog is again an international brand of yogurt ice-cream however it has not been able to explore

    the market in such a glorious fashion. However big brand name attached to it, can produce huge

    competition for Ice-Gurt.

    Geleto Affair:

    Geleto Affair is a big local chain of Italian Ice-cream. With more than 15 outlets all over

    Pakistan, they have been the rulers of Ice-cream parlor industry for long time. They are the big

    indirect competitors for the Ice-Gurt.

    Move n Pick & Del Frio:

    Both of these brands are globally recognized brands where Move n Pick has upper upper class as

    their target market. Del Frio deals in converters at the Malls and Food Courts.

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    Walls & Omore:

    Walls is owned by one of the most reputable FMCGs Unilever and has its consumer base

    very strong where Omore is recent launched ice-cream brand by Engro Foods. They again are

    not direct competitors however their customers are our potential clients.

    Small Ice-Cream Parlors:

    We have numerous small ice-cream parlour locally and some stores offering imported ice-creams

    as well. These are small fishes contributing around 8%-12% of Market share. These small brands

    include.

    Gourmet Mc-Flurry by Mc Donalds Dip Shop Baskin Robins Mini Mints Ice Berg Kay-bee Peshawri Chaman

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    SWOT Analysis:

    Strengths:

    Large Segments of Market un explored Reputation of Nestle Association with Health Size and financial power Vast experience in flavored yogurt Strong brand portfolio Wide range of products Operational efficiency Strong R&D Socially responsible company. Have developed an unmatched product and brand portfolio Strategy

    Weaknesses:

    Limited presence in organic foods market Unwillingness to divest weaker brands Fresh in retail presence Depend on external sources for raw materials Lower staff to be trained in order to retain customer People may consider it as a seasonal item People may dont prefer visiting an ice-cream parlor

    Opportunities:

    Growth in international & emerging markets To strengthen the tag of "nutrition and well-being" company To deliver directly to the customers

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    Motivating factor to make all the products available at own retail stores Ethical business activities and support in community

    Threats:

    Private label growth Reaction of Suppliers and Distributors Acceptance of product in winters FDA regulations

    Segmentation:

    Currently Pakistan is the 4th largest producer of milk, as consumption of dairy product is very

    high. Pakistan has livestock and agriculture has 10% contribution to the GDP, entire milk

    economy is 27.7% of the total agriculture sector

    Above statistics clearly suggests that market for dairy product is great and there is vast area of

    opportunity for Nestle to expand in the regard of Yogurt Ice cream Industry. However Yogurt

    industry is more fragile than the entire dairy industry. Yogurt industry in Pakistan is largely

    segmented into packed yogurt and open yogurt. Market for the processed yogurt is far smaller

    than the market for fresh yogurt, as in milk industry, total production of processed milk and

    distributed through formal channel is only 3%.

    Following is the segmentation that company will follow while marketing its product.

    Geographic segmentation:

    Ice-Gurt will be initially situated in all the elite areas of Lahore, Karachi and Islamabad. Later it

    will be targeted nationwide. Promotion strategy will not largely differ from one province to

    another.

    Demographic segmentation:

    Ice-Gurt is not bounded to any particular religion, ethnicity, and gender or lifecycle stage. The

    brand is meant for all the users in higher upper or middle class families. From youngsters to

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    teenagers, adults to elderly, all can enjoy from the scrumptiousness of Ice-Gurt. Even though the

    brand calls for a small percentage of an individuals income but lower class wouldnt want to

    buy the brand maybe because they are price sensitive. Therefore it can be said that Ice-Gurt has

    been positioned as a brand for high income earners. Due to the income factor involved it can be

    said that Ice-Gurt targets a specific social class who are health conscious and are from an

    educated background.

    Psychographic segmentation:

    Ice-Gurt marketing strategy will be done by keeping in mind the characteristics of the product

    itself i.e. fresh and healthy. Nestle has specifically designed Ice-Gurt keeping in mind the

    consumers who are extrovert, eager, ambitious, health conscious and gregarious in nature. This

    product will be portrayed in such a manner that people may perceive that product offers all suchcharacteristics.

    Behavioral segmentation:

    Ice-Gurt has been segmented on the basis of all the benefits that consumers seek in yogurt and

    ice-cream. In this case, people look for a brand that provide fresh and healthy ingredients, is

    good in taste and they can enjoy it in relax, upbeat and casual atmosphere with their friends and

    family.

    Target Market

    Nestle's Ice-Gurt intends to cater the needs of people from all the age groups. Children from the

    age of 5 onwards can benefit from the best quality frozen yogurt in a fresh, stylish and breezy

    atmosphere. They can enjoy it as a healthy alternative for ice-cream with more minerals and

    nutrients than regular, traditional ice cream. From a family style enjoyment concept to a casual

    dining environment, Ice-Gurt offers a huge range of ice Cream yogurt Items for its target market

    to enjoy. The product is targeted for upper middle, lower upper and upper upper class people.

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    Marketing Mix:

    It is the first time that Nestle is heading towards its consumers directly. Nestle intends to make

    the product available on their own outlets rather than ordinary grocery stores. The product is will

    add different dimensions to Nestls Marketing Strategies. The Marketing Mix of Ice-Gurt is asfollows:

    Product:

    Ice-Gurt is 100% fresh yogurt ice-cream which has been made by the accumulation of fresh

    fruits/flavors, fresh yogurt and ice-cream. It offers large numbers of flavors starting from usual

    fruit flavors to new exciting organic flavors. Adding to it the detailed variety of toppings are also

    available starting from imported jellies to delicious cocktail.

    Every week 2 special flavor would be introduced to hold customers excitement and provide them

    with the biggest range of flavor in town. At the induction of Ice-Gurt we intend to offer

    following flavors:

    Strawberry Ice-Gurt Blueberry Ice-Gurt Coconut Ice-Gurt Chocolate Ice-Gurt Death Chocolate Ice-Gurt Vanilla Ice-Gurt Eskimo Cameral Ice-Gurt Pina Colada Ice-Gurt Banana Ice-Gurt Lychee Ice-Gurt Diet Chocolate Diet

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    Toppings are also one of the most integral parts of our product as it complements our brand and

    enhance the taste of Ice-Gurt. Toppings for Ice-Gurt will be procured by Sweet Factory and other

    suppliers in the market. Following toppings are to be offered at the growing stage:

    Jelly Cubes Coconut (Cocktail) Jelly Strips Bounties Peach (Cocktail) Pineapple (Cocktail) Strawberry Syrup Blueberry Syrup Chocolate Syrup Nestls Condensed Milk Nestls Fresh Cream Crushed Oreo Caramel

    Some of the key benefits of the Ice-Gurt are as follows:

    Live and Active Culture:

    Proboiotics are an important part of yogurt. Probiotics are beneficial bacteria that can help you in

    many ways. Probiotics can help lower cholesterol, blood pressure and risk of colon cancer. It can

    not only manage lactose intolerance to a certain extent, but it can also aid in absorption of

    healthy minerals as well. Probiotics help improve your immune system and prevent harmful

    bacteria from growing.

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    Vitamin-C:

    Vitamin C, or ascorbic acid, is abundant in fruits. Vitamin c is an antioxidant that is used to

    protect our bodies against oxidative stress while also helping in many enzymatic reactions.

    Vitamin C is a necessary ingredient in the production of collagen. Lack of Vitamin C can lead to

    scurvy, while having enough Vitamin C will lead to great health. Vitamin C will lead to great

    health. Vitamin C will help maintain your immune system while revitalizing your skin and joints.

    It has countless benefits for everyone.

    Fruits:

    Fruits are extremely important when maintaining a healthy lifestyle. Fruits are high in fiber,water and vitamin C. Consumption of fruit is linked with lower risk of cancer, cardiovascular

    disease, stroke, Alzheimer disease and cataracts. Fruit have low calories and are a great

    alternative to unhealthy snacks. Fruits can also help reverse the aging process.

    Frozen yogurt:

    Frozen yogurt is a healthy alternative to ice cream or other frozen desserts. Yogurt is

    A nutrient filled cultured dairy product. Yogurt contains protein, calcium, vitamin B6 and

    vitamin B12. Yogurt can provide benefits that milk cannot match. Even people that are

    moderately lactose intolerant can enjoy frozen yogurt. People have been enjoying yogurt for over

    4,000 years. Frozen yogurt came around 1970s. Now, people have come to embrace the unique

    tart flavor in frozen yogurt.

    Product Differentiation:

    Ice-Gurt is a chain of Yogurt Ice-Cream Parlors offering healthy and delicious Yogurt Ice-Cream

    with exciting toppings by one of the most reputable FMCG in the most competitive rates in themarket.

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    Price:

    Price of Ice-Gurt is been set through combining 2 different pricing strategies. One is value

    pricing strategy as we are creating quality yogurt ice-cream for our target market which will hold

    sufficient value for our customers while keeping Competitive pricing strategy in mind which willhelp us to have a competitive price for our product.

    800 Rs. /1000 Gram

    Place:

    Ice-Gurt is a unique product Nestle has to offer. Therefore the distribution of the product is

    different from the usual strategies followed y Nestle or any other FMCG. In this yogurt ice-

    cream Nestle aims to open its own outlet and enter into the retail market by itself. The companyproposes to open its own chain of outlets named as Nestls Ice-Gurt. These ice-cream parlors

    would exclusively offer all the flavors of Ice-Gurt with proper casual dining facility.

    The ice-cream parlors are designed by keeping the freshness of the product in mind. Glowing

    colors have been used to create a feel good ambiance. The contract of designing was given to a

    fresh Architect by Indus Valley School, Mr. Dabeer Hemani considering his fresh approach and

    creative instinct towards approach towards Ice-Gurt. The contract for construction and interior

    decoration was given to Prompt Enterprises, a well know Construction Company.

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    Nestle would be introduced to Lahore first with 2 branches and then followed by 2 branches in

    Karachi a month after. Within one year of its launch Nestle would open 10 outlets of Ice-Gurt in

    Pakistan.

    Nestle's Ice-Gurt stalls will also be available in top malls of Lahore, Karachi and Islamabad. Toname few of them:

    Mall of Lahore Fortress Lahore Hot Spot, Islamabad Jinnah Super Market, Islamabad Dolmen City Mall, Karachi The Mall, Karachi

    Promotion:

    As discussed earlier the Ice-Gurt is not a usual product Nestle has to offer. Therefore themanager decides not to carry any TVC Ad or Radio Ad but to concentrate on the Social MediaMarketing and to devise new wayof promoting your brand. Billboards would be exhibited at theplaces where optimum views could be gathered. Our promotions mostly would be YouthCentered as we target them to play the role of influencer while visiting their Ice-Gurt with theirfamily and with friends.

    Promotion Plans to be executed by the Ice-Gurt team are as follows:

    Positioning:Through our focused advertisement we intend to embark our position in the consumer

    mind as:

    Billboards, Newspaper and Magazines:1. Print advertisement will be published in the young world; fashion, entertainment and

    sports section of widely circulated newspapers i.e are Dawn and The News Jang etc.

    However, after the product has sustained in the market, the advertisement will be

    relatively lowered.

    2. 10-15 Billboards will be on display in various porches areas in the country

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    3. Popular E-Magazines including Kachi Gloiyan, HUM TV Fashion Magazine,Synergy and various other magazines will be used for publishing advertisement in

    which the new exciting flavors from Ice-Gurt will be highlighted.

    Social Networking:Social networking websites of Facebook, Youtube and Twitter will be given a lot of

    focus for promotion. An official website will also be managed updating all the newflavors and latest offers at the Ice-Gurt Parlors. The Social Media Marketing would be

    managed by the promotions team at Nestle and supervised by the manager.

    Ice-Gurt Poster Competition:Ice-Gurt Poster Competition is one of its kind promotion activity introduced by Nestle

    Pakistan. In this competition the team of Brand Ambassadors would visit ten different

    Schools/Colleges per City and host a poster competition over there. Posters are to be

    manually made for the promotion of Ice-Gurt. Top 5 posters from each School/Collegewill be awarded discount coupons of Ice-Gurt Parlor. Top ten posters from all over

    Pakistan would be exhibited at the social media and the winners would be awarded

    surprise gifts. This promotional activity would be outsourced to Bulls Eye

    Communication.

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    Print Ad for Ice-Gurt Poster Competition:

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    Section 3: Strategic Expansion of Ice-Gurt

    Ice-Gurt demands huge amount of initial investments which cannot be recovered in the growing

    period of business. The cost incurred for the start up of the business will be recovered on the

    longer period of time. Section 3 of the report will be covering all the strategic plans of how to

    expand the business and increase the usage of Ice-Gurt.

    Introduction of new SBU:

    In longer run Nestle Pakistan would introduce new SBU (Small Business Unit) for all the brands

    in ice-cream section. Ice-Gurt would remain premier brand of this SBU. This will help the

    manager of newly introduced department to concentrate more on the expansion of Ice-Gurt.

    The expansion of new SBU would also create an opportunity to step into Ice-Cream industry of

    Pakistan, where there is one big fish Walls and plenty of small fishes.

    Strategic Marketing Mix:

    Its mandatory to have a strategic plan for long term growth of any product. Amendments in the

    strategic plan of Ice-Gurt may be witnessed with emerging competition and change in Macro

    Environment. The Strategic Marketing Mix for Ice-Gurt is as follows:

    Product:

    As per the results of our research, our sample affirmed that the thing which attracts them themost in an ice-cream parlor is the flavors offered. Therefore Ice-Gurt aims to regularly introduce

    new flavors. Flavors which will receive good customer response will be available for longer term

    else would be excluded out of the list.

    Such Variance in toping will also be introduced on regular basis.

    Our R&D Department is working on making condense Ice-Gurt so that we can make it available

    on the super stores and marts with the same freshness and exciting flavors.

    The future bodes well for frozen yogurt as it expands into new markets with new variations.

    People's interest in low-fat foods seems unabated and will, no doubt, continue to encourage the

    food industry to provide low-fat, tasty food. Technology will also continue to improve efficiency

    in manufacturing frozen yogurt as well the quality of the product.

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    Ice-Gurt parlors also intend to enlarge its la Carte by offering following products in future:

    Yogurt Smoothies Snow Yogurt Yogurt Parfait

    Price:

    Not much difference in the price of Ice-Gurt would be seen.

    Place:

    Ice-Gurt intends to open as many as 25 different outlets in Pakistan over 3 years from now. Then

    the expansion would be lower down and outlets would be opened in smaller cities. Locations of

    our targeted areas to open our Ice-Gurt Parlor all over Pakistan are as follows:

    Gulberg, Lahore Baharia Town, Lahore Dolmen City Mall, Karachi Zamzama, Karachi Bahadurabad, Karachi Mall of Lahore, Lahore Blue Area, Islamabad Dolmen Mall, Karachi Forum, Karachi Mall Road, Murree Sindhi Muslim Society, Karachi TF-Islamabad F-11 Cantonment Area, Hyderabad Hyderi, Karachi Gulshan-e-Iqbal, Block 13-D, Karachi Johar Town, Lahore Jinnah Super Market, Islamabad

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    Doburj Plaza, Faisalabad TF- Sialkot Daman-e-Koh, Islamabad DHA, Z-Block, Lahore DHA, Phase-8, Karachi

    Promotion:

    In longer Run Ice-Gurt would focus more towards linking its brand name to Social Activities

    hold by youth.

    Reputation and Positioning of Nestle in consumers mind is such that it relates to a blend of

    health and taste in food. We intend to procure same positioning for our brand in the future.

    Social Media Management would be outsourced in the longer run to Team Ants, so that the

    management may concentrate on the growth of Ice-Gurt.

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    Section 4: Financial Analysis of Ice-Gurt

    Annual Sales per Branch

    Cost of Ice-Gurt

    Sugar(KG) 45 15% 6.75MSNF 120 14% 16.8Fresh Cream 320 20% 64Milk 70 30% 21Nestle Flavors/serums 1000 6% 60Fruits Avg 100 8% 8

    Other Ingredients 100 7% 7

    1000 (g) Ice-Gurt 100% 183.55

    Ice-Gurt/(g) 0.18355

    Avg

    Quantity(g)/cup

    Avg

    Quantity(g)/cup

    Topping

    Avg Quantity(g)/cup

    Ice-Gurt

    Cups Sold

    Annually

    Cup Small 150 20 130 672

    Cup Large 250 30 220 336Total -

    Total Ice Gurt

    (g)

    Total Topping

    (g)

    Total Q

    (g) Price/(g)

    Total Annual

    Sales

    8736000 1344000 10080000-

    7392000 1008000 8400000

    16128000 2352000 18480000 0.8 14,784,000

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    Sales Growth: 12% Anually

    Total Revenues Generated by Ice Gurt/ Parlor

    Total Revenues for 1st year 14,784,000

    Total Revenues for 2nd year 16,558,080

    Total Revenues for 3rd year 18,545,050

    Total Revenues for 4th year 20,770,456

    Total Revenues for 5th year 23,262,910

    Total Revenues in 5 years 93,920,495

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    Expenses per Parlor:

    Starting Cost

    Per Machine with 3 headers 400000 3 1200000

    Architect per sft 200 1200 240000Interior Decorator 3000 1200 3600000Other Starting Cost 150000Annual Rent 200000 12 2400000

    Computer Systems 35000 2 70000

    Total - 7,660,000

    Cost of Goods & Operating Cost

    Misc/month 15000 12 180000

    Annual Rent 200000 12 2400000Wifi Facility/month 2000 12 24000Packaging/paper Cup Small 5 67200 336000Packaging/transparent Cup Large 8 33600 268800Toping/gram Avg 0.6 2352000 1411200Ice-Gurt/(g) 0.18355 16128000 2960294.4Staff on Average/year 192000 8 1536000

    Utility Bills/month 120000 12 1440000

    Total - 10,556,294

    Growth in Expenses 8% per year

    Total Expenses Incurred by Per Parlor each Year

    Total Expenses for 1st year 18,216,294

    Total Expenses for 2nd year 11,400,798

    Total Expenses for 3rd year 12,312,862

    Total Expenses for 4th year 13,297,891

    Total Expenses for 5th year 14,361,722

    Total Expenses in 5 years 69,589,567

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    Promotion Expenses:

    Print Advertisement

    Positioning Amount(Rs)Daily Dawn(Week Days) Front Page(20x5) 321750

    Daily Dawn(Sunday, Yong World) Front Page(20x5) 273000

    Jang(Week Days) Front Page(10x5) 11500

    University Gazettes Front Page(10x5) 50000

    HUM Fashion Magazine Front Page(20x5) 25000

    Mag Times(Online Magazine) 2 pages 10000

    Sponsorship to Kachy Golliyan 1 page 50000

    Jang(Sunday)

    Front Page(10x5)+100%extra 34500

    Total Print Advertisement 775,750

    Bill boards

    15 Bill boards all over Pakistan in a year(Avg) 150000 2250000

    Ice-Gurt Poster Competition

    Outsourced to Bulls Eye Communication 1,000,000Social Media Management (Twitter, Facebook and Website of Ice-Gurt) from 2nd Year

    Outsourced to TeamAnts 80000/month 960,000

    Total Promotional Expenses

    Promotional Expenses for 1st year 4,025,750

    Promotional Expenses for 2nd year 2,528,075

    Promotional Expenses for 3rd year 2,780,883

    Promotional Expenses for 4th year 3,058,971

    Promotional Expenses for 5th year 3,364,868

    Total Promotional Expenses 15,758,546

    This Expense will be shared by all 22 Ice-Gurt Parlors

    Promotional Expense for Single Branch 716,298

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    TPL-Parlor for 5 years:

    Trading Profit & Loss Account

    Sales for 5 years 93,920,495

    Less: Selling and Administrative Expenses for 5years 69,589,567

    Gross Profit 24,330,929

    Less: Promotion Expenses/Parlor for 5 years 716,298

    Net Profit Before Tax 23,614,631

    Less: Tax 20% 4,722,926

    Net Profit After Tax per Parlor 18,891,705

    NET PROFIT 18.89Million

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