Nestlé

COMPANY’S PROFILE

Nestlé with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestlé
and is today the world's biggest food and beverage company. The Company's strategy is
guided by several fundamental principles. Nestlé's existing products grow through
innovation and renovation while maintaining a balance in geographic activities and
product lines.
The company succeeded in achieving sustainable profitable growth during the year
under the view driven by successful marketing and sales strategies and focus on key
initiatives. Consumer confidence in the company’s brand has further strengthened and
the trade remains confident as ever in doing business with it. Innovation and renovation
remained the key to development of new products.
In the shed of Nestlé 247,000 people are working in almost every country in the world.
From which almost 8,000 employees are working in Pakistan.
Headquarters in Lahore, the company operates five production facilities. Two of its
factories in Sheikhupura and Kabirwala and multi product factories. One factory in
Islamabad and two in Karachi produce bottled water. Through its effective marketing
and a vast sales and distribution network thought out the country, it ensures that its
products are made available to consumers whenever, wherever and however.
Nestlé company is registered in Pakistan under the company ordinance 1984. As it’s a
public company but still not registered in any Stock Exchange in PAKISTAN
Over all company market share is 67%. Nestlé share as compared to nur pur,Haleeb and
other are moves around 20to 30%.Total turnover:- 13.5 Billion Rupees

-1-
Nestlé

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

VISION
The strategic priorities of Nestlé milkpak are focuses on delivering shareholder value
through the achievement of sustainable, capital efficient and profitable long term
growth.
Improvements in profitability will be achieved while respecting quality and safety
standards at all times.
In line with this objective, we envision Nestlé milkpak to grow in the shortest possible
time into the number one food company in Pakistan with unique ability to meet the needs
of consumers of every age group- from infancy to old age, for nutrition and pleasure,
through development of a large variety of food categories of the highest quality.
We envision the company to develop an extremely motivated and professionally trained
Innovation and renovation.
We aspire, as a respected corporate citizen, to continue playing a significant role in the
social and environmental sectors of the country.
Most innovative and fastest growing food company offering Products enjoyed in
“Every home every day”

GOALS
 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 does not favor short-term profit at the expense of successful long-term
business development.

-2-
Nestlé

 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 believes that, as a general rule, legislation is the most effective safeguard
of responsible conduct, although in certain areas, additional guidance to staff in
the form of voluntary business principles is beneficial in order to ensure that the
highest standards are met throughout the organization.
 Nestlé is conscious of the fact that the success of a corporation is a reflection of
the professionalism, conduct and the responsible attitude of its management and
employees. Therefore recruitment of the right people and ongoing training and
development are crucial.

-3-
Nestlé

PRODUCT LINE

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

 Nestlé products
 Juices
 1981 Nestlé milk pak
 1983 Nestlé butter
 1986 milkpak uht, cream desi ghee, frost
 1990 Nestlé nido, Nestlé cerelac
 1991 Nestlé rice, Nestlé lactogen1
 1992 Nestlé everyday, Gloria magi
 1994 Nestlé Milo, Nestlé neslac
 1996 Nestlé juices, polo mint, Nescafe classic
 1997 Nestlé kit Kat
 1998 Nestlé toffo , Nestlé soothers, Nestlé pure life
 2000 Nestlé plain yogurt
 2001 Nestlé fruit yogurt , Nestlé nan.1, Nestlé
nan.2
 2002 Nestlé everyday liquid
 2003 Nestlé buddy, Nestlé hi-calcium low fat yogurt
 2004 Nestlé raita, caution

-4-
Nestlé

-5-
Nestlé

KEY OBJECTIVES

“Build branded food improve quality of life by offering

tasty, hygienic and nutritional products.”

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

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

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

WANT
But now a days people are much more conscious about
there health and hygiene so regarding the need of milk a

-6-
Nestlé

want has come into being in shape of packed, pasteurized

and ultra heat treated healthy milk.

VALUES
 Enterprise
 Empowerment
 Accountability
 Team work

-7-
 COMPETITORS
As the Nestlé is market leader in milk producing so its keenly observe its competitor and
try to improve its quality and variety of products day by day by doing continuous
enhancement.
Some known competitors of Nestlé’ are;
 Haleeb
 Nurpur
 Engro foods

Competitive Analysis

Major competitors include NURPUR& HALEEB

Others are:-
ENGRO FOODS & raw & open milk sold by Dodhi (milkman)
Same prices of milk offered by them
Advertising:-
Media opted for: Television, Bill Boards and Print Media.
Slogan: “Good food, Good life”

Theme: MILK FOR EVERY ONE

Push VS Pull: At some stores there is push strategy for the product where as at
some stores its pull.
Promise & Support: BEST MILK FOR DRINKING & TEA.
Value Preposition: Best value for money.
Marketing Strategy Used:-
Penetration strategy supported by product differentiation
 MICRO ENVOIRMENT
Company in Nestlé the owner have no concern with the company operation all the
decisions are taken by the board of directors and pass on to the subordinates.

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

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

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

Key success factors:

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

Segmentation & Target Market

Demographically
Gender wise & Income classes.
Geographically
National and International market.
Media Graphically
Electronic & Print media
Customers Profile
Females House wives b/w the age of 25-35 SEC1& SEC2
 MARKET SHARE

Market Share
3%
7% 6%

17%

67%

Nestle Haleeb Nurpur Engro Foods Empty

Market Share
The total market share of Nestlé’ during the year 2005-06 is 67%; remaining portion is

covering by Haleeb, Nurpur & Engro Foods 17%, 7% and 3% respectively.

Sales
Daily sales: 400,000 liters
Monthly sales value: Rs. 30 crore
Annual sales value: Rs. 4.8 billion

Sales Growth rate 25%

This is changed 12% w.r.t last year.

Dividend:-
22.62% as per share.

Total Turnover:-
13.5 Billion Rupees.

Beside this fact almost 6% market share remains empty. Because of some crucial reasons

of infrastructure such as transportation problem and other duties to deliver their products

in far locations. Nestlé Pakistan is trying their best to meet this empty 6% portion, with

the help of their sales promotion department which is doing very effectively job for the

achievement of this object.

Nestlé Sales Turn Over

Sales Turnover of Nestle'

15 12.9 13.5
9.8 10.7
9.1
10

0
2001- 2002- 2003- 2004-
02 03 04 05
year Amount in (Billion Rs.)

2005
-06

In 2001-02 the sales turn over of Nestlé is 9.1 billions and it is increased by almost 0.7

billions more in the next year i.e. it reached to 9.8 billions in 2002-03.This booming

trend keeps on increasing continuously in the next three years 2003-04, 2004-05 and

2005-06 which is 10.7, 12.9, 13.5 billions respectively.

The sales turn over of last five years is showing the continuous increasing trend and

clearly representing the struggle of the management of Nestlé.

 Nestlé’ With Competitors

13.5
15

10
Billion
(Rs.) 2.7
5 1.2 0.5 0.3

Nestle Haleeb Nurpur Engro Foods Others

In 2005-06, because of the major portion of Nestlé the market share i.e. 67% reached

Rs.13.5 billion .Beside this contribution of other four companies combinely cannot

compete the overall sales revenue of Nestlé.

 S.W.O.T ANALYSIS

STRENGTHS
24 milk collection centers equipped with latest quality assurance laboratories.
The only Nestlé Company in Pakistan that undertakes 21 rigorous quality control tests.
The only Nestlé Company in Pakistan with the following Certificates:

• HACCP (in process safety controls) ISO 9001-2000

(better quality)
• ISO 14000 (environment friendly operations)
• Tubular indirect heat treatment system from Holland.

WEAKNESSES
• Un CONVINENT PACKING
• Unattractive and low media advertising

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

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

Market Share
High Low
High

Star Nestlé Question Marks

High growth & share High growth, low share
Profit potential Build into Stars or phase out
Require cash to hold
May need heavy market share
Anticipated investment to grow
Growth
 Market Share
High Low
High

Star Nestlé Question Marks

High growth & share High growth, low share
Profit potential Build into Stars or phase out
Require cash to hold
May need heavy market share
Anticipated investment to grow
Growth
Rate

Cash Cows
Low growth, high share Dog
Low growth & share
Established, successful
Low profit potential
Low

Produce cash

In the BGC matrix of Nestlé STARS (high growth & share) are their heavy profit

potentials and Nestlé can utilize these profits in grow of companies different investments.

In CASH COWS (low growth, high share) because of Nestlé proper establishment they

are successful to generate more revenues by selling their products continuously and

producing cash in huge. As QUESTION MARK (high growth, low share) is concerned

the company required cash to hold market share. And finally as far as DOG (low growth
& share) in BGC matrix of Nestlé are concerned if the company will not perform well

their higher potential profits can be changed into dog.

Conclusion

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

Recommendations

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