1
Nestle juices
TABLE OF CONTENTS
No.
Particulars
Page
1
Executive summary
3
2
History and Introduction
4
3
Mission and vision
10
4
Value chain Analysis
12
5
Pest analysis
19
6
Market analysis
22
7
Competitor analysis
24
8
Swot analysis of nestle juice
27
9
Porter five model
30
10
Analysis of buying behavior
33
11
Hierarchy of goals
35
12
Marketing segmentation
35
13
Positioning
36
14
Product strategy
37
15
Communication strategy
38
16
Budget
40
17
Distribution strategy
41
18
Price strategy
42
19
Sale forecast
47
2
Nestle juices
Executive summary
Nestle foods was established in 1866. Since then it has continued to
provide quality products to its customers with products and packaging
innovations. Nestle juices is Pakistan’s number one and fastest growing
food company. The company is trying their level best to differentiate
themselves from other local companies and trying to win the competition
in juice industry by adopting the modern trends and technologies in both
operational fields as well as in marketing of their products.
In this detailed project we covered all most all the topics related to the
marketing plan. First of all we presented the companies’ history and
introduction which included the year of formation and certain steps the
resulted in the today’s form of Nestle. We describes value chain analysis
PEST analysis about nestle juices and our brand competitor .And the
next step we do experiment about SWOT analysis who its effect on our
brand .so we described MARKET
analysis, competitor analysis,
analysis buyer behavior , hierarchy of organization goals and the next
step to STP of nestle company ,so we explain product strategy , price
strategy and distribution strategy ,communication strategy and other
things related to a marketing plan such as marketing budget and last of
our project sale forecast for last 5 year..
Innovative technology, ,
Globalization, Matrices, , Financial Review, Porter’s five model,
Industrial analysis, Five Ws and Future Plans Of Company.
3
Nestle juices
4
Nestle juices
INTRODUCTION AND HISTORY OF COMPANY
History
In the 1860s Henri Nestlé, a pharmacist, developed 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.
1905-1918
In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. By the
early 1900s, the company was operating factories in the United States, Britain,
Germany and Spain. World War I created new demand for dairy products in the form
of government contracts. By the end of the war, Nestlé's production had more than
doubled.
1918 -1938
After the war Government contracts dried up and consumers switched back to fresh
milk. However, Nestlé's management responded quickly, streamlining operations and
reducing debt. The 1920s saw Nestlé's first expansion into new products, with
chocolate the Company's second most important activity
1938 -1944
Nestlé felt the effects of World War II immediately. Profits dropped from $20
million in 1938 to $6 million in 1939. Factories were established in developing
countries, particularly Latin America. Ironically, the war helped with the
5
Nestle juices
introduction of the Company's newest product, Nescafé, which was a staple drink of
the US military. Nestlé's production and sales rose in the wartime economy.
1944 -1975
The end of World War II was the beginning of a dynamic phase for Nestlé. Growth
accelerated and companies were acquired. In 1947 came the merger with Maggi
seasonings and soups. Crosse & Blackwell followed in 1960, as did Findus (1963),
Libby's (1971) and Stouffer's (1973). Diversification came with a shareholding in
L'Oréal in 1974.
1975 -1981
Nestlé's growth in the developing world partially offset a slowdown in the
Company's traditional markets. Nestlé made its second venture outside the food
industry by acquiring Alcon Laboratories Inc..
1981 -1996
Nestlé divested a number of businesses1980 / 1984. In 1984, Nestlé's improved
bottom line allowed the Company to launch a new round of acquisitions, the most
important being American food giant Carn tion.
1996+
The first half of the 1990s proved to be favorable for Nestlé: trade barriers crumbled
and world markets developed into more or less integrated trading areas. Since 1996
there have been acquisitions including San Pellegrino (1997), Spillers Petfoods
(1998) and Ralston Purina (2002). There were two major acquisitions in North
America, both in 2002: in July, Nestlé merged its U.S. ice cream business into
Dreyer's, and in August, a USD 2.6bn acquisition was announced of Chef America,
Inc.
6
Nestle juices
Nestle Today:
Today, after 142 years it was first used, the nest continues to be the corporate
Identity of Nestle as the worlds leading Food Company and remains the symbol of
quality. Nestle, the symbol of quality and commitment in the field of food products.
Nestle is the world No.1 food company. It is the 5th largest company in the world
according to its turnover. It is present on all five continents, has an annual turn-over
of 70 billion Swiss francs, runs 522 factories in 81 countries, 200 operating
companies, 1 basic re- search center and 20 technological development groups and
more than 231,000 employees the world over.
The Company owes its current status to the pioneering spirit inherited from its
founders which continues to inspire it, to its concern with quality and to its constant
search for new ways of satisfying man's nutritional needs. Wherever possible, it sets
up factories locally, employs personnel from the country concerned and relies on
indigenous raw materials.
Its agricultural services provide assistance to improve the quality and yield of the
raw materials it uses. Much attention is de- voted to professional training and to the
integration of the company in its economic and social environment.
History of Nestle juices
A well-known brand, FROST was introduced in 1986 and has the largest share of the
countrywide market. Positioned as a cold drink and alternate to cola drinks, its
strength lies in the convenience attached to its usage.
NESTLE JUICES
Encouraged by the consumer response to NESTLE ORANGE JUICE that was
launched in 1996, the category of NESTLE juices was expanded with the
introduction of Mango-Orange and Mango flavors in the year 2000. This has further
strengthened the position of Nestle as leader in the value added/premium drinks
market. Consumer response to these new flavors has been very upbeat and is
7
Nestle juices
expected to gain further. Now nestle company have launch following juice brand in
Pakistan.
Indulge in the pure pleasures of a healthy life!
Nestlé brings you a range of juices that will scintillate your taste-buds and add
variety to suit every moment.
NESTLÉ Pure Orange Juice
Oranges are in demand not only for their divine juicy flavor but
equally celebrated for their health benefits. They are naturally
low in calories, and an excellent source of Fiber and Vitamin C.
Squeezed from the finest handpicked oranges, 100% pure
NESTLE® Pure Orange Juice has no added sugar and is a good source of Vitamin C.
Having Orange juice everyday is a great way of strengthening the body resistance
against infections and diseases and maintaining a healthy lifestyle.
NESTLÉ Clear Apple Nectar
Apples have no fat and are cholesterol free. NESTLE® Clear
Apple Nectar is made from the finest Apples and is 100% clear.
As irresistible as sin itself – give in to the amber kick of
NESTLE® Clear Apple Nectar.
NESTLÉ Red Grape Nectar
Grapes also called the ‘queen of fruits’ are known for their
great internal body cleansing properties. They are a good source
of Vitamin C and Potassium that plays an important role in
proper heart functioning by regulating blood pressure and heart
beat.
Relish the full-bodied, smooth flavor of NESTLÉ® Red Grapes Nectar and let your
taste buds soak in the sensuous richness of Red Grapes.
8
Nestle juices
NESTLÉ Pineapple Nectar
Pineapples are good source of Vitamin C, an antioxidant that helps
fight against free radicals, one of the main reasons for aging.
Made from premium pineapples, NESTLÉ® Pineapple Nectar
brings you the exotic taste of pineapples with a refreshing tropical flavor and is a
good source of Vitamin C.
NESTLÉ Mango Orange
Sink into Fruity Refreshment
Feel the burst of fruity fun and discover the flavors of
NESTLÉ® Mango & NESTLÉ® Mango Orange fruit
drink made with the juiciest, sweetest Mangos and
racy, sharp Oranges to sass up your taste buds.
NESTLÉ Chaunsa Nectar
Nestle Chaunsa Nectar is prepared from the finest quality Chaunsa mangoes that are
procured from the best fruit farms. The 100% rich mango nectar is nutritious,
refreshing and wonderfully delicious. It helps to replenish the lost vigor during
workouts and enhances your fitness by providing fortified energy endowed with
dietary fiber, Vitamin A, C & E.
NESTLÉ Guava Nectar
A chilled glass of pink Nestle Guava Nectar is not only great tasting but is also
wholesome in antioxidants making it very nutritious.
9
Nestle juices
Nestle Guava Nectar is rich in Vitamin A, Vitamin B, Vitamin C and Niacin and due
to excessive fiber content it is an effective fat burner.
NESTLÉ Mango
Feel the burst of fruity fun and discover Nestle Mango fruit drink made with the
juiciest, sweetest mangos to sass up your taste buds.
Now that is a sweet deal!
Mission statement
“Good food good life”
Build Branded food business to improve quality of life by offering tasty, affordable
and highly nutritional products to our consumers while maximizing stake holders'
value”
10
juices
Nestle
VISION
Explore all over the worlds-from baker to babies, parents to pet owners
single servings to catering: providing for all their needs always with the
assurance of
outstanding quality.
VALU CHAIN ANALYSIS
Resources
Management
Responsibility
Consumer
Demand
Documentation
New Product
Development & Introduction
Ensuring Supply
Consumer
Services
Consumer
Satisfaction
Maintaining
&
Measurement
Continuous
Improvement
Audit
Management
Review Quality
11
juices
Sales
&
Product Use
Corrective
Action
Nestle
Our selected brand is nestle orange juice, to analyze the specific activities through
which firms can create a competitive advantage; it is useful to model the firm as a
chain of value creating activities. Michael porter identified a set of interrelated
generic activities common to a wide range of firms. The resulting model is known as
the value chain and is depicted below.
Primary activities
Inbound
logistics
Operation
Outbound
logistics
Marketing
& Sales
Service
Inbound logistics
Major raw materials of nestle orange juices are different pulps of orange such from
Germany and France. Nestle company is being getting there raw material from local
market in the Pakistan. Nestle juices included their ingredient such as fresh fruit
nectar of mango, apple, pineapple, orange, included their fresh juices.
Nestle imported all machinery and formulas who is the advantage of nestle company.
Operation
PRODUCTION PROCESS
Fruit juice production procedures involved in fruit juice manufacturing depending on
What type of the juice the unit is going to make. For the purpose of this -feasibility,
we propose the 4% token juice drink of Citrus fruit (Orange), Mango and pineapple.
Fruit Juice - Production Process Flow
Production of fruit juices is a standardized process and initial preparatory processes
for all fruits will be similar, as will be the last stages of juice/pasteurization section
and packaging, although differences in handling juice composition arise in certain
cases due to the nature of the fruit and percentage of vitamin involved. Basically,
preparation process of juices involves the following steps:-
12
juices
Nestle

Boiling of fruit

Storage in Tank

Ingredients mixing

Syrup Storage in Tank

Juice Preparation

Juice Storage Tank

Filling and Packaging

Cooling and Storage
In the following pages the process flowchart and brief description of the various
Processes involved in fruit juice production are outlined.
Fruit Juice Production Process
Fruits boiler where it is cooked and shifted to the plate heat exchanger. Then stored
in the storage tank. Then supplied to the mixing tank in the desired quantity while in
mixing tanks; any additives to the are made at this stage before it is pumped to syrup
storage tanks. Blended juice is then pumped through pasteurizer; where it is heated
to 90oC to inactivate enzymes and living organism. After pasteurization the juice
passes through final filtration, before loading it into a juice storage tank. Juice from
the tank is ready for packaging
Packing and labeling then storage.
The juice will be then packed in the quantities demanded by the market. Consumer
packs as like 200ml and 1000ml tetra pack and then label the nestle juices. Product
will be in cool dry store.
13
juices
Nestle
14
juices
Nestle
Out bound logistic
In Nestle Company the activities that include in outbound logistics are, they establish
their sale and distributive offices in big cities like Karachi, Lahore, Islamabad, Faisal
bad, Gujranwala etc. and also hire suitable distributors on agreed profit margins.
Who bought from nestle office of the city and try to distribute to the each retailers
and shop keeper in the city.
Services
Company established the customer center in each office in a city. And also given toll
free number as a help line number which means that if customers feel any problem
then they can contact through our help line.
Marketing and sale
Nestle company launch their sale promotion scheme after six months and their last
sale promotion was “
‘’. This was for a retail shop who put the nestle juices
billboard on their shop or sale reception table then they can win attractive prizes. By
this operation they can save all the advertisement expenses which they have to pay to
the retailer or owner of the shop.
Nestle company use advertisement channels when company have to launch new
brand or improvement in previous brand. So company prefer to use Jeo, ARY one
world, PTV home, I vision and news papers. They contract with the advertisement
channels for 1 to 2 months and repeat 2 or 3 time in a day.
They hire suitable distributors in a country at agreed profit margins who bought
juices in bulk form from the distributive channels and then sell to the retailer who
final sale to the end consumers.
Nestle company has efficient market management who’s main objectives for
marketing their product are
15
juices
Nestle

Strong customer relationship

Identify need of customer like new taste new fruit item

Maintain market leadership by maintaining the pure quality

Provide juices which are fit for human body

Stop brand selling don’t reduce quality

Quality is our grantee

Supportive activities
The primary value chain activities described above are facilitated by support
activates. Porter identified four generic categories of support activities, the details of
which are industry specific.
COMPANY STRUCTURE
Nestlé head-office in Pakistan is in Lahore. It also has its registered office in Lahore.
Nestlé has divided the whole Pakistan in to three zones.

Northern Zone

Central Zone

Southern Zone
Nestlé has 8 regional offices in all over the Pakistan. These offices work under their
respective zonal offices.
FACTORIES
Nestlé has two factories in Pakistan for the production of Juices items.
One in Sheikhupura near Lahore.
LOCATION OF FACTORIES
Now we give some information about the company’s factories of the company.
16
juices
Nestle
Technology
They used Tetra Recart restorable carton in juice packing. The easy-open carton was
more convenient and positioned the tetra packing juices as a premium product.
High tech ½ fat juices, France. Technology used to increase flavor and decrease the
fat in juices.
Plant capacity – About 75000 kg per day fruit juice concentrate of orange and
passion fruit.
Plant equipment- Infeed fruit conveyor, fruit washer, fruit mill, screw pre heater,
hydraulic press, press filter, aerator, tubular/ plate sterilized/ pasteurizer, jacketed
storage tank and filling machine.
Plant and Equipment
The main plant and equipment will be for following activities
Fruit handling &
Inspection/ washing
Juice extraction
Juice processing
Juice finishing
Centrifugation
Homogenization
Membrane filtration
Pasteurization
Concentration
Essence recovery
Reception
De-aeration
Concentrate post-
Aseptic or non-
treatment
aseptic packaging
17
juices
Nestle
PEST Analysis
Political or legal forces
Taxation Law
If government imposes heavy taxes on the industry then it badly effects the industry
growth. The taxes impose is from government side and it varies from industry to
industry. Juices have no tax except sales tax. But nestle’s some product has like
butter and cream which has more taxes
Labor Laws
Labor is being privileged here having all the laws. Nestle company also follow these
law like government announce minimum salaries of a employ Rs 7000.
Laws on hiring & promotions
Hiring & promotion is followed by law. People with better capabilities are privileged
because they deserve it, for the betterment of the organization. As well as a well
educated & skilled experienced person is a precious asset for the company suit
should be hired on better term & conditions and be promoted on the basis of it
capabilities.
Environmental protection Laws
They do concern for environment and contribute more and more for the betterment
of environment.
Foreign trade Regulations
Foreign trade regulation does not effect the over all policy and the working of the
“Nestle juices” because they operate nationally not internationally.
18
juices
Nestle
Attitudes towards foreign companies
They have no any agreement with any foreign company but if any company will
offer the business to them related / unrelated they would think about it according to
terms and conditions.
Political instability
The government stability also plays a great role for any industry. In Pakistan government
face lot of difficulty from the side of terrorism and also its activity that badly effect
environment of the country which is totally very upset. Recently in Punjab instability of
government creates lot of problem for the industry like shortage of electricity that badly
affects the industry operational process. Nestle juices have not much affect this condition but
in future it may be face some difficulty for operating.
Economic forces
Inflation Rate:
Now in Pakistan inflation rate is almost 22.3% so if increase in inflation rate then
increase in prices of Nestle JUICES but if in Pakistan economy.
Economic growth rate
Economy growth rate accelerate is 7+
Social factor
Health consciousness
Today people are more health conscious so Nestle juices by identifying this need of
the people they are also producing health conscious juices with more vitamins.
Demographic trend
In Pakistan the population growth rate is 1.828% in 2008 and total population is
167,762,040 (July 2008 est)
19
juices
Nestle
Age structure

0-14 years:
40% (male 33,293,428; female 31,434,314)

15-64 years:
56.9% (male 48,214,298; female 46,062,933)

65 years and over
4.1% (male 3,256,065; female 3,542,522)
Key Indicators


Population:
Growth rate:
164,741,942 (July 2007 est.)
1.828% (2007 est.)

Birth rate:
27.74 births/1,000 population (2007 est.)

Death rate:
8 deaths/1,000 population (2007 est.)
Environmental concerns:
About the environmental concerns of Nestle juices is good health.
Work life quality:
Quality of work life is very safer & environment friendly
Lifestyle changes:
They consider quality life changes and take advantages of accordingly so that
customer can convinced as well as it plays a vital role to attain & retain the customer.
Consumer adopts the trend of changing environment because of modern facility as
well as globalization they are aware about each and every thing happening all around
them.
Technological forces
New Products
Nestle juices focusing concentric and conglomerate diversification because in
present era it is not possible for any organization to exist in market for long run by
providing just one product. So Nestle juices are diversifying according to changing
demand of customers and trends.
Product innovation
Product innovation is becoming more necessary for the organization because of
globalization people are becoming aware about the changes being taken place around
20
juices
Nestle
them so in order tactical the situation nestle juices is focusing on product innovation
by introducing new flavor of juices with the passage of time NESTLE JUICES use
new tetra packing like easy open cork of pack.
Productivity improvement through automation
Automation don’t matter a lot but to some extent it contribute towards productivity
and improvement. Imported pulp is filled in machines for processing after the final
form of juice it is packed in 250 and 1 liter packing.
Total spending on R&D
Spending on R&D is long term investment for any organization. Nestle has R&D
department and head of R&D department is Mr Arshad Bhati. Nestle total spending
on R&D 70 millions.
New communication technology
All the modern as well as traditional ways of communication are being adopted by
Nestle juices including own emails, letters, faxes and monthly visit in different
offices of Nestle juices for better communication among supplier, distributor and
customers.
Nestle juices has also established own web site which can be visited any one for
most recent news innovation and activities being taken in the organization.
Market analysis
Currently in Pakistan, there are 24 fruit juice/pulp processing units and a number of
small units in the informal sector are working. The present installed capacity is
estimated around 400,000 metric tons per annum with a demand for juices growing
at a combined annual growth rate of 27%. The fruit juice industry reported sales of
9.526 billion Rupees in year 2011
21
juices
Nestle
250
200
East
Column 2
Column 3
150
100
50
0
2001 2002 2003 2004 2005 2006 2007 2008

The outlook for the canned food industry - which can exploit rising demand
for convenience and consumer fears over food origin and hygiene - and the
soft drinks and beverages industry - which can capitalize on the asp rational
demands of Pakistan's young population - have both been moderately
accelerated. Forecast canned food sales growth to 2012 now stands at 46.7%,
while soft drinks sales growth to 2012 is forecast to stand at 36.4%. Both
have contributed to a per capita food consumption growth forecast
amendment to 15.4%. It is also expected that the average consumption of the
single person will be 85.5 hundred litters per years in 2012.

2500,000 liters juices approx drink by Pakistani people in a month. And per
day there is 83330 liters approx juices drink by people.

The market of juices is growing because the consumption of juices
increases every year and expected it increase continually due people change
the life style and more health conscious. They prefer juices on other soft
drink.
22
juices
Nestle

The market share of the nestle juices is 60%. Which mean 1500,000 litters
in a month and 50,000 litters in a day.

Nestle is name of pure life so quality is their guarantee. So if they lose their
quality then they lose their sale because these don’t operate on the given
image. And increase in rates of raw materials also influence the level of
demand because due to increase in cost the sale price also increase and due to
price war in a market of Pakistan demand level is effected. Or increase in tax
there will be increased cost price which also effect in decreased in demand.
Increase in inflation rate in Pakistan then this also effect in decrease in
demand level.

The nestle juices are at growing stage of product life cycle.
Competitor’s analysis
Competitor analysis in marketing and strategically management is an assessment of
the strengths and weaknesses of current and potential competitors. This analysis
provides both an offensive and defensive strategic context through which to identify
opportunities and threats. Competitor profiling coalesces all of the relevant sources
of competitor analysis into one framework in the support of efficient and effective
strategy formulation, implementation, monitoring and adjustment
23
juices
Nestle
In order to evaluate the competitive position we have to take a look on the
competitors of “Nestle juices” in JUICE CATEGORY.
Competitors in market

Shezan

Haleeb

Country
Shezan is the main competitor of “Nestle juices” nestle juices compete their
customer on quality basis because In Pakistan their in no big name in pure fruit
juices. nestle provide their customer pure fruit juices.
Shezan
Short introduction of Shezan
The Shezan International Limited was incorporated on May 30, 1964 as a Private
Limited Company. Shezan International Limited was conceived as a joint venture by
the Shahnawaz Group, Pakistan and Alliance Industrial Development Corporation,
U.S.A. in 1964. Shezan is the largest food processing unit having developed and
installed the capacity to meet the country's local as well as export needs. In 1971,
Shahnawaz group purchased all the shares of Alliance Industrial Development
Corporation with the permission of the Government of Pakistan. In 1980-81 a
separate unit was installed in Karachi which now caters for Karachi, Sind and export
demand. A bottle filling plant was set in 1983 in Lahore, Punjab. An independent
Tetra Brik plant was commissioned in 1987.In the year 1990 it was decided to install
a juice factory at the Hattar in North West Frontier Province of Pakistan. Shezan
International's Head Office Located in Lahore, Pakistan. In Canada, Target Foods, is
the authorized distributor for all Shezan Products. They carry all the export quility
Juices, James, Pickles, Chutneys, Sauces, Syrups and Squashes.
The products of the Company include tetra pack juice, mango juice, pickles,
custards, vegetables, jellies and jams. The Company distributes the products under
the Shezan brand name.

Strong local name in the juice and drinks range
24
juices
Nestle
–
Launched Shezan Orange
–
Launched Twist (nectars) 2003
•
Aggressive marketing campaign print, electronic
–
Shezan All Pure 2004
–
No trial generation activities
•
No consumer reward/loyalty CPs
•
Available packaging options
–
Shezan All Pure
–
Nectars
•
Twist
•
Shezan nectars
1 Ltr
1 Ltr
Swot analysis of shezan juices
Strengths:
1. Shezan has it own fruit forms.
2. Shezan juices operate in market earlier than nestle juices.
3. Better knowing the culture of country.
4. Shezan juices have best distribution channel in all over the Pakistan.
5. Offer good quality products especially nectars juices in market.
6. Shezan juices have good positioning in customer mind.
Weakness
1. Less product awareness in customer mind.
2. Rising manufacture cost
3. Inadequate human resource
25
juices
Nestle
Opportunities
1. Shezan juices have great perception value in minds of customers while as Pakistan
organization.
2. Increase juices market very fast.
3. The concentric diversification in different juices products.
4. Backward integration can use in juice products of Company.
5. Decreasing economy condition.
Threats
1. There is strong competition in juices market.
2. Different strategies adopted by competitors Nestle in juices products
3. New product advancement by different competitors.
4. Increase inflation rate (23.3% 2008)
5. Rising labors coast.
Swot analysis of nestle juices
Strengths
1. Company Image
Nestle company has a great image in the mind of people. Nestle company has
worldwide reputation.
2. Quality Conscious
Nestle produce a good quality products. It can not compromise on quality.
26
juices
Nestle
3. Well-developed strategy
Nestle has recognizes there is a right time and place for their product; therefore, their
strategy makes room for adjustments
4. Market Share
Nestle juices has a highest market share i.e. 60% in juices market.
5. Good marketing skills and services
Nestle is now a days working on this concept because they want to increase their
market share. They are providing quality products to the customers that include their
services and products.
6. Brand strength - In Pakistan Nestle has some very strong brands like Nescafe,
Maggie, Cerelac, nestle water and these brands are almost generic to their product
categories.
7. Research &Development
Research and development department keeps Nestlé in continuous knowledge about
itself and competitors. it has a competitor advantage because many local juices have
no research & development department.
8. Product innovation - The Company has been continuously introducing new
products, thus expanding its product offerings.
9. HR department
Nestle company has a strong HR department.
27
juices
Nestle
Weaknesses
1. Storage ability
Nestle juices not store able for long time.
Opportunities
1. Support foreign investors
Government support foreign investors to invest in Pakistan.
2. Scientifically gas
This is great opportunity for nestle company. Because in coming future nestle take
the benefits of uses the scientifically gas.
3. Changing Social Trend
Consumers in urban areas drink functional drinks on a regular basis as they
increasingly adopt Western lifestyles, especially the younger generation which is
hugely influenced by the Western media. Younger consumers tend to follow Western
eating and drinking habits. There was an increase in demand for functional drinks
over the review period.
4. Health conscious
Increasing health and hygiene awareness among Pakistanis has greatly increased
sales of fruit/vegetable juice products. Both the government and the media have
started health awareness campaigns to make Pakistanis realizes that consumption of
fruit/ juices is as essential as eating food. Fruit/ juices are doing very well in both
urban and rural areas
5. Global hub
Since manufacturing of some products is cheaper in Pakistan than in other South
East Asian countries
28
juices
Nestle
6. Market growth
Juices market expands very fast .A new research proves that in future (2012) every
person use 85.5 liters juices per years.
7. limited options in real fruits juices
Limited options in locally produced real fruit juices.
Threats
1. Government Regulation
They face problem if government employ taxes on them which force them to raise
the price of their product.
2. Increase in competition
There is large competition in juices market
3. Entry barrier
There are no many entry barriers so a large numbers of local juices enter in juices
market
4. Labor coast
Increase labor cost
5. Inflation rate
Increase inflation rate very fast .In 2008 expected inflation rate 23.3%.
Porter five forces model
29
juices
Nestle
Michael Potter's five forces framework can be used to determine whether the
industry is attractive enough to sustain a small or medium size enterprise. The five
forces of Entry, Rivalry, Substitutes, Buyers and Suppliers jointly determine the
intensity of competition and profit potential for a small and medium size firm in a
given industry or market sector. In analyzing each market force, the question is
whether it is sufficiently strong to reduce or eliminate industry profits. The focus at
this stage is at the industry level because industry dynamics and profits of necessity
dictate profits of other firms that enter the industry. Also, in carrying out a five
forces analysis we want to be able to answer this question: If the competitive forces
in the industry are strong, is there some strategy that firms might employ to defend it,
or influence the forces in their own favors?
30
juices
Nestle
Threat of new entry:
The threat of new entrance means when any other company that is not operate in that
product category but operate in the other product market or the company that start it
new venture see a opportunity in this field like juices and they decided to enter in
this market. So the current company that is operating in the market has a great threat
for the new entrance. New entry can raise the threat of competition. In juices market
there is great threat of new entry. Because in last few years many new juices enter in
market. There is no major barrier for local juices to enter in market. So many local
juices enter in market like FRAZ, COUNTRY. There is some barrier for stop the
new entrance
Economies of Scale
Product Differentiation
Capital Requirements
Switching Costs
Access to Distribution Channels
Cost Disadvantages Independent of Scale
Government Policy
If all these things present in the market then no company want to enter in that market
because they know there is no any opportunity for it.
Bargaining power of supplier
The company needs raw material, labors, component and other supplies. These
requirement leads to buyers-suppliers relationships between industry and the
suppliers. Suppliers, if powerful can exert an influence on the producing industry,
such as selling raw materials at high price to capture some of the industry profits.
Suppliers have great bargaining power if the company can not produces its raw
materials or other ingredients. Suppliers have weak bargaining powers, if in the
market many suppliers and demand of raw material is low.
31
juices
Nestle
Buyer Power
Bargaining power of customer is one of the important forces in the porter five forces.
In the field of juices customer has a low bargaining power because they purchase a
single unit and have not in that situation that they can negotiate with seller on price
matter. But the bargaining power of those buyers whose buy in bulk have great and
they want to set the price on their concern.
Here you ask yourself how easy it is for buyers to drive prices down. Again, this is
driven by the number of buyers, the importance of each individual buyer to your
business, the cost to them of switching from your products and services to those of
someone else, and so on. If you deal with few, powerful buyers, they are often able
to dictate terms to you.
Threats of substitutes
Substitute products refer to products in other industries. To the economist, a threat of
substitutes exists when a product demand is affected by the price change of a
substitute product. A products price elasticity is effected by substitute product – as
more substitute become available, demand becomes more elastic since customer
have more alternative . A close substitute products constrains the ability of firms in
an industry to raise prices. While the treat of substitutes typically impact an industry
through price competition. If substitution is easy and substitution is viable, then this
weakens your power. The substitute product has a strong affect if the following
things are occurred
Sales of substitutes are growing rapidly
Producers of substitutes plan to add new capacity
Profits of producers of substitutes are up
In juices market nestle juices has great threat for substitute like Shezan, Haleeb etc.
Competitive Rivalry
The big factor determining the strength of rivalry is how actively and aggressively
are rivals employing the various weapons of competition in jockeying for a stronger
32
juices
Nestle
market position and seeking bigger sales. In the market rival create a great threat.
Many companies introduce juices in market and increase threat. Many local
company enter in market, there is also great threat for establish company. Nestle
juices also face lot of competitor rivalry. Some carbonated company introduces
juices in market, it also create threat for nestle juices. The main competitors of
Nestle juices in the market Shezan, Haleeb.
Analyze buyer behavior
Initiate buying behavior
There are two stimuli that insist the consumer to purchase the product that is
1) Consumer internal stimuli
2) Consumer external stimuli
Customer external stimuli
There are following types of people group include in the internal stimuli
Family
Reference group
So children, Individual and member in a group are the person who may initiate the
buying process. Usually young generation and families initiate the buying process.
Customer internal stimuli
A person also insist itself to drink juices due to its internal desire to drink the juice.
It is called internal stimuli
Sometimes if there is group of same age people like young generation friends group
then any of one or more then two person can insist to drink juices.
Distributors and retailers role in buying process
Product after passing through Distributors and Retailers reach to the final customers.
So they play very imported role in buying process because distributors are those
persons who first buy the juice in complete packing then sell to the retailers so
distributors start their purchasing after deciding the profit margins rate and area to
distribute the juices. Similarly retailers after buying juices from distributors they sell
33
juices
Nestle
to final customer after analyzing the brand loyalty and after the judgment of the
packing and attractive offer for the retailers of any promotion scheme for the retailers
and profit margins.
Source
Asim Bakers
Al Meraje Bakers
China Bakers
Factors stimuli to purchase.
There are the following factors that insist the person to buy the juices. These are
Thirst
Taste & Flavor
Fit for body
Most persons drink the juices due to taste and different fruity flavors. Some people
like co2 water but some people like without co2 juices. So many people like to drink
soft juices like nestle fruit juices due to natural taste and flavor
Similarly now a days people are more health conscious so due to fruity mixture they
desired to full fill their esteem needs and so they drink that juices.
Evaluate the alternative product
Customer evaluates the product by considering the brand company and their
ingredients and packing. They also check the taste, flavor and quality. If the flavor
and ingredients are satisfied for the customer and better then the competitor then
customer can insist itself to buy that juice, otherwise customer may can choose the
competitor’s juices.
Who take final decision
Usually family main members take the final decision to purchase juices. But a single
person also can take that decision according to his or her desire.
They also implement the purchase transaction. In a family if the main family
member implement the purchase transaction and whole family drinks the juices.
Juices are disposable means after drinks mostly packing of the juices are disposed.
34
juices
Nestle
Marketing Segmentation
We are going to segment juice market on the basis of need. There are following need
which we came to know that people like to drink during the following stages:
For Travelling and occasional
Usually People like to drink during travelling. Because they have to carry single or
small packing and juices are the best for that. Juice provide them suitable taste and
flavour.
For domestic use
Nestle distributes that volume of juice for large family use which may be used in any
events and occasions like use with breakfast and dinner etc or serving the guests etc.
Targeting
200ml
For Travelling and occasional
1000ml
For domestic use
Nestle is first company who launch the these two packing in juices who provide the
satisfaction more as compare to competitors but now competitors also move this
segment and according to that we are going to launch segment of food energy drink.
Identifying new segments
In Pakistan our segmentation strategy are so strong and the result all the established
areas have availability of our juices and our target goals achieve easily but according
to the competitors are moving our segmentation we will launch new segment of food
energy drink for the sportsmen and professional working people.
35
juices
Nestle
Positioning
Brand strategy is at the heart of marketing strategy. It is the act of designing the
company offer and image so that it occupies a distinct and valued place in the target
customer mind.
Nestlé brings you a range of juices that will scintillate your taste-buds and add
variety to suit every moment
Oranges are in demand not only for their divine juicy flavor but equally celebrated
for their health benefits. They are naturally low in calories, and an excellent source
of Fiber and Vitamin C.
Squeezed from the finest handpicked oranges, 100% pure NESTLE® Pure Orange
Juice has no added sugar and is a good source of Vitamin C. Having Orange juice
everyday is a great way of strengthening the body resistance against infections and
diseases and maintaining a healthy lifestyle.
Point of parity
Different flavor
Tetra packing
Point of difference
100% pure juice
Enhanced nutrition
This is the point of differentiate that nestle always provide good and pure juices
which is fit for human body
Brand element
Name
Nestle juices is the brand name.
Slogan & logo
36
juices
Nestle
Slogan is the short phrase that communicates descriptive or persuasive information
about the brand. 100% pure is the slogan of Nestle juices. The slogan shows that
nestle pure juices have good quality and taste. Nestle juices slogan wants to create
image of pure juice with good taste and quality in the mind of customer. Logo of
Nestle juices in word marks with text it own name Nestle.
Product strategy
core benefit
Core benefit means the services and benefits the customer is really buying.
Our customer fulfills its need of thrust and refreshment by buying our nestle juice.
Basic product
It’s mean what specifically the actual product is.
Our actual product is juice
Excepted product
A set of attributes and conditions buyers normally expect when they purchase this
product.
Normally customers want to drink a juice with greater taste and flavor so nestle
provide great and pure juices.
Augmented product
A product that include features that go beyond consumer expectations and
differentiate the product from competitors.
Our juice taste and flavor is according to the customer expectations because we
provide 100% pure juice. We have no compromise with quality. We try to provide
maximum quality and satisfaction to the customers. Quality is our guarantee and we
promised to the customers that we stop the product rather to low the quality of
product.
Potential product
All possible augmentation and transformations the product or offering might undergo
in the future.
37
juices
Nestle
In future we will introduce new pulp juices in the market nearer future. We will
launch special juices for sports men and professional working people.
PRODUCT COMPARISON IN MARKET
COMPANY
QUALITY
SERVICES
LOCTION
EXTRA
OF
FACILITY
PRODUCT
Nestlé
Haleeb
Shezan
Better
Normal
Good
Excellent
Normal
Normal
Excellent
Normal
Good
Good
Normal
Average
Communication Strategy
Nestle company use different sources to communicate their target marketing. nestle
company use those sources on that the more customer attract like TV,
NEWSPAPERS, BILLBORD and when they lunch any secame in juices they use
pamphlets to aware their customer. When launch the new juice or new sale
promotion for the juice then they spread the awareness about their brand through
following communication strategy.
Communication objective
Nestle company use different sources to attract their target customer. The objective
of nestle produce awareness in our customer about new products and also produce
awareness to new customer about nestle juices. Nestle also tells their customer that
nestle provide pure juices to their customers. Nestle also give the knowledge of
nestle juices that they give you energy and good taste. Nestle also give message that
nestle juices are good for your health.
Communication strategy of competitor
38
juices
Nestle
Nestle main competitor is shezan juice.shezan also use the same communication
strategy which adopted the nestle juices.
Shezan is also advertising through TV, new papers, billboard.
Adds in TV channel
Nestle juices give ads on different TV channel at different time .nestle management
also keep in mind that their competitors use what channel and what time they give
adds. Nestle management also keep in mind what type of customer they attract and
what time they sit before TV. nestle juices different time on different channel to keep
in mind the target customer TV watching time.nestle juices give ads on PTV
home,GEO,ARY an PTV news.
News papers
Nestle company advetise their juices through news papers.large numbers of custmers
have reading habits of news papers, so nestle use the media of news papers to attract
their customer. nestle management also keep in mind that their competitors use what
type of news paper and what time they give their ads.so after all these analysis nestle
select DAWN and NAWAE-WAQT.nestle give their ads on both news paper at the
time of Sunday.
Billboard
Nestle juices attract their customer through billboard. Nestle company select the
main city in country and those places where large numbers of customer easily attract.
Nestle has a polices to use 500sqr fts in each region
.
39
juices
Nestle
Marketing budget
TV budget
Channel
Ptv home
Geo
ARY
Ptv news
Timing No ads
7.30am 2
2
9.15pm
10 pm 2
8 pm
2
9pm
2
Price/mint Total
100,000(Rs) 232226
132226(Rs)
50000(Rs)
70000(Rs)
40000(Rs)
Total
50000
70000
40000
392226(Rs)
nestle juices give their ads on tv when the juices season on pack. Nestlé give its
juices ads on different tv channel 24days in different timing. total cost on this
advertisement 9413424(rs)
News paper budget
News paper
size
Day
Price
Dawn
27×4
Sunday
430920(Rs)
Nawa-e-Waqt
27×4
Sunday
1,782,000(Rs)
Nestle juices advitise their juices on news paper in top season .the total coat
on advitisement is 17703360(Rs).
40
juices
Nestle
Billboard budget
Nestle has a polices that they cover each region with 500 sqr fts.in small city the use
less billboards. the coast of billboard in different cities has different. there are three
rate 40000,70000,and 125000(Rs).total coast on billboards 2560000(Rs)
Total advertisement budget
Advisements sources
coast
Different TV channel
9413424(Rs)
Different news paper
17703360(Rs).
Billboard
25600000(Rs)
Total coast
52716784(Rs)
Distribution Strategy
Nestle Company establishes the distribution channels in each famous city of Pakistan
like Islamabad, Karachi, Lahore, Gujranwala, Faisalabad etc.
They also acquired the suitable distributors in each city. They hire maximum two or
three distributors in a city due to prevent from their own competition.
The provide the margin to the retailers is equal to the interest of band like 7% to 8%.
They also pay to use the shelf to store the nestle juices to the retailer for sale to the
final consumers.
41
juices
Nestle
Manufacture
Where houses
Distributor
Whole seller
Retailer
Customer
Nestle juices uses different channel to distribute their product. First of all the
finishing goods stored in the ware houses and the next step products sending you the
distributor and distributor distribute throw different channel to whole seller to realtor
and the end to purchasing customer. Nestle distribute their product regularly to
distributions because their customers satisfy nestle services. Nestle company
distribution channel urban areas and rural areas, in rural areas the wholesaler
distributes the Nestle juices to the retailers store, and the rural areas the distributor
have a responsibilities to distributes the product to all the realtors stores. Nestle
company target market in Pakistan all the big and important cities
42
juices
Nestle
Price Strategy
Nestle juice are available six flavored and two size in the market. One is 200ml and
second is 1000ml. The packing of 200ml target of individual customer and 1000ml
packing target the whole family. 100% clear juices, the prices on the base of cost of
ingredients as well as other operational costs like processing, weighing packaging
and logistics.
Pricing objective
Maximum profit margin
Nestle juices is a big price objective that they provided high quality and positing and
we taken premium price to our customer other than our competitors. Nestle juices
contain maximum profit margin other than their competitors.
Quality leadership
Nestle juices is a main objective that its responsibility to provided best quality who
they promised to their customers and they fulfill their promised. In the recent
research nestle juices is market lender in the soft drink market.
Long relationships with customer.
Nestle juices provided superior value to their customer who they promised throwing
advertising. So the customer are loyal the nestle brand.
43
juices
Nestle
Price Structure
(Consumer price)
200ml
20 Rs.
1000 ml
130 Rs.
(Mango and orange mix flavored)
1000ml
145 Rs.
(Pineapple and red grapes)
As they are market followers, they respond to the price strategy of market leader
(Nestle) in following manner:
Hold current
price;
Has competitor
Cut prices
continue to monitor
competitor’s price.
Yes
Will lower price
Negatively affect our
Market share & profits?
Reduce price
Yes
Can/should effective
Action be taken?
Raise perceived
quality
No
Improve quality
And increase price
Launch low-price
“Fighting brand”
44
juices
Nestle
Price Demand curve
Demand have a impact on a company objectives because price are inversely to
demeaned, if price is high so demand is low of the product . Nestle company always
aware of the price sensitivity of the customer so it known about purchasing power of
the customer. Nestle juices demand curve is elastic because lower price and higher
quality produces high revenue.
Elastic demand
Inelastic demand
45
juices
Nestle
Estimating cost
Nestle company do accumulated production because if they produced
mass production so it reduced their labored cost and other cost for
production process. It’s a big advantages of the nestle company who
produce large quantity of units. With the help accumulated production
Nestle Company has a low cost of production and high profit margin.
Going rate pricing
Nestle company selecting a price method of going rate price. Because
their pricing near the competitor pricing. Shazan juices price is same of
our nestle juices. Nestle juices has a market leader in beverage industry.
Final price
Nestle set the final pricing related to their market competitors so nestle
price do not have impact on the company policy, and other marketing
activities.
46
juices
Nestle
Sale forecast
There is 1500,000 litters nestle juices being sold in a month in Pakistan. 30% of 1500,000
litters is being sold in Karachi and 20% of 1500000 is being sold in Lahore, 10% in
Faisalabad, and 5% in Gujranwala and 7% also in Islamabad.
Karachi
Lahore
Faisalabad
Islamabad
Gujranwala
Other
Sale analysis for the 5 years
monthly sale total juices sale of Nestle is
Per litter cost is
Total sale per year 2008
Year
2003
2004
2005
2006
2007
2008
1500000 litters
65 Rs
1,170,00,000/-Rs
Total Sale
807,147,644
858,667,706
913,476,283
971,783,280
1,099,800,000
1,170,00,000
1,200,000,000
1,000,000,000
800,000,000
Nestle
600,000,000
400,000,000
200,000,000
0
2003
2004
2005
47
juices
2006
2007
2008
Nestle
48
juices
Nestle