Preseted to:
Course Title: Organizational Behavior
The Institute of management science
EXECUTIVE SUMMARY
In this research project we are going to study the management strategies of
Nestle. Nestle is old entrant in the Pakistan market and is facing a competition from
other brands. We are focusing on the management strategies of Nestle regarding Nestle
Company.
First we have given the introduction of company and its brands. Then we
moved to its management and marketing strategies of nestle in Pakistan. We started
from market information system then we discussed Pre marketing mix, and in the last
we explained the most important part i.e. marketing mix.
Nestle came into Pakistan in 1988 when they first acquired a share in Milk
pack Ltd. Today they are fully integrated in Pakistani life, and are recognized as
producers of safe, nutritious and tasty food, and leaders in developing and uplifting the
communities in which we operate. We at Nestle Pakistan ensure that our products are
made available to consumers wherever in the country they might be. Convenience is at
the heart of the Nestle philosophy, and our aim is to bring products to people's
doorsteps.
ACKNOWLEDGEMENT
All thanks and praise for Almighty Allah who blessed me and enabled me for
the completion of this research project. I feel much pleasure in expressing my deep
regard and gratitude for our course instructor Madam
-for her critical
suggestions, valuable guidance and also for giving me her time from her teaching and
official activities.
I are also profoundly obliged to the valuable co-operation of Mr. Muhammad
Hussein from nestle sales department, the brand manager of NPL Mr. Salah-ud-din
and distribution manager Mr. Tariq Usman.
Last but not the least I am thankful to my family members, who stood
side by side with me as the research work progressed.
TABLE OF CONTENTS
TITLES
1. INTRODUCTION OF NESTLE
2. HISTORY
3. MISSION STATEMENT
4. OUR PRODUCT
5. NESTLE IN PAKISTAN
6. MARKETING AND SALES
7. BCG MATRIX
8. NESTLE PURE WATER
9. SWOT ANALYSIS
10. EXTERNAL & INTERNAL FACTORS
11. MARKETING INFORMATION SYSTEM
12. PREMARKETING MIX
13. MARKETING MIX
14. FUTURE PLANS
15. CONCLUSION
16. SUGGESTION
17. BIBLOGRAPHY
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NESTLE
Nestle with headquarters in Vevey, Switzerland was founded in 1866 by Henri
Nestle and is today the world's biggest food and beverage company. We employ around
265,000 people and have factories or operations in almost every country in the world.
The Company's strategy is guided by several fundamental principles. Nestle's existing
products grow through innovation and renovation while maintaining a balance in
geographic activities and product lines. Long-term potential is never sacrificed for shortterm performance. The Company's priority is to bring the best and most relevant products
to people, wherever they are, whatever their needs, throughout their lives.
Since Henri Nestle developed the first milk food for infants in 1867, and saved
the life of a neighbor’s child, the Nestle Company has aimed to build a business based on
sound human values and principles.
While our Nestle Corporate Business Principles will continue to evolve and
adapt to a changing world, our basic foundation is unchanged from the time of the origins
of our Company, and reflects the basic ideas of fairness, honesty, and a general concern
for people.
Nestle is today the world’s leading nutrition, health and wellness company. Sales for
2007 were CHF 107.6 bn, with a net profit of CHF 10.6 bn. Nestle employs around
276,050 people and has factories or operations in almost every country in the world.
The Company’s strategy is guided by several fundamental principles. Nestle’s existing
products grow through innovation and renovation while maintaining a balance in
geographic activities and product lines. Long-term potential is never sacrificed for shortterm performance. The Company’s priority is to bring the best and most relevant products
to people, wherever they are, whatever their needs, throughout their lives.Nestle Waters,
the bottled water division of Nestle SA, accounts for nearly 10% of the Group’s
consolidated sales, manages a portfolio of 72 brands bottled at 105 production sites, and
employs a workforce of 32,000. Day after day, Nestle Waters satisfies the needs of its
customers by offering the widest possible choice of bottled waters distributed through
multiple trade channels.
“Short history of Nestle”
In the 1860s Henri Nestle,
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, ater Nestle's
new formula saved the child's life, and soon, Farine Lactée Henri Nestle was being sold
in much of Europe.
In 1905 Nestle 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, Nestle's production had more than doubled.
After the war Government contracts dried up and consumers switched back to fresh milk.
However, Nestle's management responded quickly, streamlining operations and reducing
debt. The 1920s saw Nestle's first expansion into new products, with chocolate the
Company's second most important activity.
Nestle 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 introduction of the
Company's newest product, Nescafé, which was a staple drink of the US military.
Nestle's production and sales rose in the wartime economy.
The end of World War II was the beginning of a dynamic phase for Nestle.
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.
Nestle's growth in the developing world partially offset a slowdown in the
Company's traditional markets. Nestle made its second venture outside the food industry
by acquiring Alcon Laboratories Inc..
Nestle divested a number of businesses1980 / 1984. In 1984, Nestle's improved
bottom line allowed the Company to launch a new round of acquisitions, the most
important being American food giant Carnation.
The first half of the 1990s proved to be favorable for Nestle: trade barriers
crumbled and world markets developed into more or less integrated trading areas. Since
1996 there have been acquisitions including San Pellegrino (1997), Spillers Petfoods
(1998) and Ralston Purina (2002). There were two major acquisitions in North America,
both in 2002: in July, Nestle merged its U.S. ice cream business into Dreyer's, and in
August, a USD 2.6bn acquisition was announced of Chef America, Inc.. In 2006, Jenny
Craig and Uncle Toby's were added to the portfolio.
“Breif history Of nestle”:
Nestlé began in Switzerland in the mid 1860s when founder Henri Nestlé created one of
the first baby formulas. Henri realized the need for a healthy and economical product to
serve as an alternative for mothers who could not breastfeed their babies. Mothers who
were unable to breastfeed often lost their infants to malnutrition. Henri’s product was a
carefully formulated mixture of cow’s milk, flour and sugar. Nestlé’s first product was
called Farine Lactée (“cornflour gruel” in French) Henri Nestlé. The product was first
used on a premature baby who could not tolerate his mother’s milk or other alternative
products of that time. Doctors gave up on treating the infant. Miraculously the baby
tolerated Henri’s new formula and it provided the nourishment that saved his life. Within
a few years the first Nestlé product was marketed in Europe.
In 1874 the Nestlé Company was purchased by Jules Monnerat. Nestlé developed its own
condensed milk to contend with its competitor, the Anglo-Swiss Condensed Milk
Company. The Anglo-Swiss Condensed Milk Company made products like cheese and
instant formulas. The two companies merged in 1905, the year after Nestlé added
chocolate to its line of foods. The newly formed Nestlé and Anglo-Swiss Milk Company
had factories in the United States, Britain, Spain and Germany. Soon the company was
full-scale manufacturing in Australia with warehouses in Singapore, Hong Kong and
Bombay. Most production still took place in Europe.
The start of World War I made it difficult for Nestlé to buy raw ingredients and distribute
products. Fresh milk was scarce in Europe, and factories had to sell milk for the public
need instead of using it as an ingredient in foods. Nestlé purchased several factories in the
U.S. to keep up with the increasing demand for condensed milk and dairy products via
government contracts. The company’s production doubled by the end of the war. When
fresh milk became available again after the war, Nestlé suffered and slipped into debt.
The price of ingredients was increasing, the economy has slowed and exchange rates
deteriorated because of the war.
An expert banker helped Nestlé find ways to reduce its debt. By the 1920s Nestlé was
creating new chocolate and powdered beverage products. Adding to the product line once
again, Nestlé developed Nescafé in the 1930s and Nestea followed. Nescafé, a soluble
powder, revolutionized coffee drinking and became an instant hit.
With the onset of the Second World War, profits plummeted. Switzerland was neutral in
the war and became increasingly isolated in Europe. Many of Nestlé’s executive officers
were transferred to offices in the U.S. Because of distribution problems in Europe and
Asia, Nestlé opened factories in developing countries in Latin America. Production
increased dramatically after America entered the war. Nescafé became a main beverage
for the American servicemen in Europe and Asia. Total sales increased by $125 million
from 1938 to 1945.
Nestlé continued to prosper, merging with Alimentana S.A., a company that
manufactured soups and seasonings, in 1947. In the coming years, Nestlé acquired Crosse
& Blackwell, Findus frozen foods, Libby’s fruit juices, and Stouffer’s frozen foods.
Nescafé instant coffee sales quadrupled from 1960 to 1974, and the new technology of
freeze-drying allowed the company to create a new kind of instant coffee, which they
named Taster’s Choice.
Expanding its product line outside of the food market, Nestlé became a major stockholder
in L’Oréal cosmetics in 1974. Soon after the company suffered with increasing oil prices
and the slowing growth in industrialized countries. Foreign exchange rates decreased, in
turn reducing the value of sterling, the pound, dollar and franc. Prices of coffee beans and
cocoa rose radically, presenting further problems for Nestlé. The company decided to
venture into the pharmaceutical industry by acquiring Alcon Laboratories, Inc. While
trying to deal with unstable economic conditions and exploring its new ventures, Nestlé
faced the crisis of an international boycott.
Many organized groups began boycotting all of Nestlé’s products because they
disapproved of Nestlé marketing its baby formula in developing countries. Problems like
illiteracy and poverty caused some mothers to use less formula than recommended. In a
watered down formula, vital nutrients are lessoned. Contaminated water presented
another problem, since the formulas had to be mixed with water. The organizations
argued that the misuse of formula resulted in the malnutrition or death of many infants in
developing countries.
According to Nestlé the World Health Organization never made statements tying infant
death or malnutrition with baby formulas. The company didn’t deny the superiority of
breastfeeding and agreed that substituting breast milk for other substances could be very
dangerous. Nestlé explained that breastfeeding and non-breastfeeding mothers in
developing countries often gave their babies whole cow’s milk, tea, cornstarch, rice water
or a mix of flour and water. These alternatives were very unhealthy and a nutritional baby
formula was a better choice. Nestlé says that it has never discouraged breastfeeding when
it was possible. Nestlé agreed to follow the International Code in developing countries in
1984, and the boycott was suspended. It resumed several years later when the
organizations believed Nestlé was sending free or low cost baby formulas to developing
countries. Nestlé said it only sent formula to countries that allow donations for orphans,
multiple births, and babies with no access to breast milk. The company has stopped all
public advertising for formula in developing countries for almost 20 years. The boycott
continues to some extent to this day without satisfactory resolution.
By the 1980s Nestlé had a new Chief Executive Officer. The company focused on
improving its financial situation and continuing to expand. In the one of the largest
takeovers at that time, Nestlé bought Carnation for $3 billion and parted with any
unprofitable businesses. International trade barriers diminished in the 1990s, opening
trade with parts of Europe and China. In the 1990s Nestlé acquired San Pellegrino, and
Spillers Petfoods of the UK. With the acquisition of Ralston Purina in 2002, the Nestléowned pet care businesses joined to form the industry leader Nestlé Purina PetCare. The
leading in the food industry, Nestlé brings in $81 billion in overall sales and has 470
factories around the world. Nestlé will continue to grow, introduce new products and
renovate existing ones. The company’s mission is to focus on long-term potential over
short-term
performance.
Nestle From 1866 To 2002
1866-1905
The key factor which drove the early history of the enterprise that would
become The Nestlé Company was Henri Nestlé's search for a healthy,
economical alternative to breastfeeding for mothers who could not feed their
infants at the breast.
In the mid-1860s Nestlé, a trained pharmacist, began experimenting with various
combinations of cow's milk, wheat flour and sugar in an attempt to develop an
alternative source of infant nutrition for mothers who were unable to breast feed. His
ultimate goal was to help combat the problem of infant mortality due to malnutrition.
He called the new product Farine Lactée Henri Nestlé.
Nestlé's first customer was a premature infant who could tolerate neither his mother's
milk nor any of the conventional substitutes, and had been given up for lost by local
physicians. People quickly recognized the value of the new product, after Nestlé's
new formula saved the child's life and within a few years, Farine Lactée Nestlé was
being marketed in much of Europe.
Henri Nestlé also showed early understanding of the power of branding. He had
adopted his own coat of arms as a trademark; in Swiss German, Nestlé means 'little
nest'. One of his agents suggested that the nest could be exchanged for the white
cross of the Swiss flag. His response was firm: "I regret that I cannot allow you to
change my nest for a Swiss cross .... I cannot have a different trademark in every
country; anyone can make use of a cross, but no-one else may use my coat of arms."
Meanwhile, the Anglo-Swiss Condensed Milk Company, founded in 1866 by
Americans Charles and George Page, broadened its product line in the mid-1870s to
include cheese and infant formulas. The Nestlé Company, which had been
purchased from Henri Nestlé by Jules Monnerat in 1875, responded by launching a
condensed milk product of its own. The two companies remained fierce competitors
until their merger in 1905.
Some other important firsts occurred during those years. In 1875 Vevey resident
Daniel Peter figured out how to combine milk and cocoa powder to create milk
chocolate. Peter, a friend and neighbour of Henri Nestlé, started a company that
quickly became the world's leading maker of chocolate and later merged with Nestlé.
In 1882 Swiss miller Julius Maggi created a food product utilizing legumes that was
quick to prepare and easy to digest. His instant pea and bean soups helped launch
Maggi & Company. By the turn of the century, his company was producing not only
powdered soups, but bouillon cubes, and sauces and flavourings.
1905-1918
The Company formed by the 1905 merger was called the Nestlé and AngloSwiss Milk Company. By the early 1900s, the Company was operating factories in
the United States, Britain, Germany and Spain. In 1904, Nestlé added chocolate to
its range of food products after reaching an agreement with the Swiss General
Chocolate Company.
Condensed-milk exports increased rapidly as the Company replaced sales agents
with local subsidiary companies. In 1907, the Company began full-scale
manufacturing in Australia, its second-largest export market. Warehouses were built
in Singapore, Hong Kong, and Bombay to supply the rapidly growing Asian markets.
Most production facilities remained in Europe, however, and the onset of World War I
brought severe disruptions. Acquiring raw materials and distributing products became
increasingly difficult. Fresh-milk shortages throughout Europe forced factories to sell
almost all their supplies to meet the needs of local towns.
Nevertheless, the war created tremendous new demand for dairy products, largely in
the form of government contracts. To keep up, Nestlé purchased several existing
factories in the United States. By war's end, the Company had 40 factories, and its
world production had more than doubled since 1914.
1918-1938
The end of World War I brought with it a crisis for Nestlé. Government contracts
dried up following the cessation of hostilities, and civilian consumers who had grown
accustomed to condensed and powdered milk during the war switched back to fresh
milk when it became available again. In 1921, the Company recorded its first loss.
Rising prices for raw materials, the worldwide post-war economic slowdown, and
deteriorating exchange rates deepened the gloom.
Nestlé's management responded quickly, bringing in Swiss banking expert Louis
Dapples to reorganize the Company. He streamlined operations to bring production
in line with sales and reduced the Company's outstanding debt.
The 1920s also saw Nestlé's first expansion beyond its traditional product line. The
manufacture of chocolate became the Company's second most important activity.
New products appeared steadily: malted milk, a powdered beverage called Milo, a
powdered buttermilk for infants, and, in 1938, Nescafé.
The Brazilian Coffee Institute first approached Louis Dapples in 1930, seeking new
products to reduce Brazil's large coffee surplus. Eight years of research produced a
soluble powder that revolutionized coffee-drinking habits worldwide. Nescafé became
an instant success and was followed in the early 1940s by Nestea.
1938-1944
The effects of the onset of World War II were felt immediately by Nestlé. Profits
dropped from $20 million in 1938 to $6 million in 1939. Neutral Switzerland became
increasingly isolated in a Europe at war, and the Company transferred many of its
executives to offices in Stamford, Connecticut.
The first truly global conflict ended forever the traditional Company structure. To
overcome distribution problems in Europe and Asia, factories were established in
developing countries, particularly in Latin America.
Ironically, World War II helped speed the introduction of the Company's newest
product, Nescafé. After the United States entered the war, Nescafé became a staple
beverage of American servicemen serving in Europe and Asia. Annual production
levels reached one million cases by 1943.
As in World War I, production and sales rose in the wartime economy: Nestlé's total
sales jumped from $100 million in 1938 to $225 million in 1945. As the end of the war
approached, Nestlé executives found themselves unexpectedly heading up a
worldwide coffee concern, as well a company built upon Nestlé's more traditional
businesses.
1944-1975
The close of World War II marked the beginning of the most dynamic phase of
Nestlé's history. Throughout this period, Nestlé's growth was based on its policy of
diversifying within the food sector to meet the needs of consumers. Dozens of new
products were added as growth within the Company accelerated and outside
companies were acquired. In 1947, Nestlé merged with Alimentana S.A., the
manufacturer of Maggi seasonings and soups, becoming Nestlé Alimentana
Company. The acquisition of Crosse & Blackwell, the British manufacturer of
preserves and canned foods, followed in 1950, as did the purchase of Findus frozen
foods (1963), Libby's fruit juices (1971) and Stouffer's frozen foods (1973).
Meanwhile, Nescafé continued its astonishing rise. From 1950 to 1959, sales of
instant coffee nearly tripled, and from 1960 to 1974, they quadrupled. The
Company's total sales doubled twice in the 15 years after World War II. The
development of freeze-drying led to the introduction, of Taster's Choice instant
coffee, in 1966.
Finally, Nestlé management reached the decision to diversify for the first time outside
the food industry. In 1974, the Company became a major shareholder in L'Oréal, one
of the world's leading makers of cosmetics.
1975-1981
After the agreement with L'Oréal in 1974, Nestlé's overall position changed
rapidly. For the first time since the 1920s, the Company's economic situation
deteriorated as the price of oil rose and growth in the industrialized countries slowed.
In addition, foreign exchange rates deteriorated with the French franc, dollar, pound
sterling, and mark all losing value relative to the Swiss franc. Finally, between 1975
and 1977, the price of coffee beans quadrupled, and the price of cocoa tripled. As in
1921, the Company was forced to respond quickly to a radically changed
marketplace.
Nestlé's rapid growth in the developing world partially offset a slowdown in the
Company's traditional markets, but it also carried with it the risks associated with
unstable political and economic conditions. To maintain a balance, Nestlé made its
second venture outside the food industry by acquiring Alcon Laboratories, Inc., a U.S.
manufacturer of pharmaceutical and ophthalmic products.
Taking such a step in a time of increased competition and shrinking profit margins
required boldness and vision. Even more than the L'Oréal move, Alcon represented a
leap into unknown waters for Nestlé. But, as Group Chairman Pierre Liotard-Vogt
noted, "Today we find ourselves with a very wide range of activities, all of which have
one thing in common: they all contribute to satisfying the requirements of the human
body in various ways."
1981-1996
Under a new Chief Executive Officer, Helmut Maucher, Nestlé approached the
1980s with a renewed flexibility and determination to evolve. The Company's
strategy for this period was twofold: improve its financial situation through internal
adjustments and divestments, and continue its policy of strategic acquisitions.
Thus, between 1980 and 1984, the Company divested a number of non-strategic or
unprofitable businesses. At the same time, Nestlé managed to put an end to a
serious controversy over its marketing of infant formula in the Third World. This
debate had led to a boycott of Nestlé products by certain lay and religious
organizations. This issue is still alive in some quarters, but there is no longer any
significant boycott activity.
In 1984, Nestlé's improved bottom line allowed the Company to launch a new round
of acquisitions, including a public offer of $3 billion for the American food giant
Carnation. At the time, the takeover, sealed in 1985, was one of the largest in the
history of the food industry.
1996+
The first half of the 1990s proved to be a favourable time for Nestlé: trade
barriers crumbled and world economic markets developed into a series of
more or less integrated trading areas. The opening of Central and Eastern Europe,
as well as China, and a general trend towards liberalization of direct foreign
investment was good news for a company with interests as far-flung and diverse as
Nestlé. While progress since then has not been as encouraging, the overall trends
remain positive.
Consolidation since 1996 has been demonstrated by the acquisition outright of the
Italian mineral water concern San Pellegrino (1997), the acquisition of Spillers
Petfoods of the UK (1998), and also with the decision to divest the Findus brand in
order to concentrate on high added-value frozen food products (1999). Since then,
Ralston Purina was acquired (2002) and the petcare business is now joint world
leader and known as Nestlé Purina PetCare. In the same year, the former Perrier
Vittel water business was re-named Nestlé Waters, recognising the fact that the
dynamic bottled water business accounts for a growing share of Group sales.
Nestlé opened the 20th century by merging with the Anglo-Swiss Condensed Milk
Company to broaden its product range and widen its geographical scope. In the new
millennium, Nestlé is the undisputed leader in the food industry, with more than 470
factories around the world and sales of more than CHF 81 billion. In July 2000,
Nestlé launched a Group-wide initiative called GLOBE (Global Business Excellence),
aimed at harmonizing and simplifying business process architecture; enabling Nestlé
to realize the advantages of a global leader while minimising the drawbacks of size.
There have also been two major acquisitions in North America, both in 2002: in July,
Nestlé announced that the U.S. ice cream business was to be merged into Dreyer's,
and in August, a USD 2.6bn acquisition was announced of Chef America, Inc. , a
leading U.S.-based hand-held frozen food product business.
The Company's strategy will continue to be guided by several fundamental principles.
Nestlé's existing products will grow through innovation and renovation while
maintaining a balance in geographic activities and product lines. Long-term potential
will never be sacrificed for short-term performance. The Company's priority will be to
bring the best and most relevant products to people, wherever they are, whatever
their needs, throughout their lives.
Nestle in Pakistan
Nestle has been serving Pakistani consumers since 1988, when our parent
company, the Switzerland-based Nestle SA, first acquired a share in Milk pack Ltd.
Today we are fully integrated in Pakistani life, and are recognized as producers of
safe, nutritious and tasty food, and leaders in developing and uplifting the communities in
which we operate.
We at Nestle Pakistan ensure that our products are made available to consumers
wherever in the country they might be. Convenience is at the heart of the Nestle
philosophy, and our aim is to bring products to people's doorsteps.
We have 4 factories in Pakistan .one is at Sheikhu pura, one is Islamabad and two
factories are in Karachi.
History of the logo of Nestle:
The Nestlé logo was launched by Henri Nestlé in 1868 on the basis of the
meaning of his name in German, i.e. little nest, and of his family emblem (that you can see here).
Henri obtained a 15-year French patent for his logo in
After he retired, it was registered in Vevey in 1875 by the new owners of his company.
1868.
In 1938, the traditional nest design was combined with the "Nestlé" name to
form what is called the combined mark.
In 1966 the design was simplified.
In 1988, the worm in the mother bird's beak was removed and the fledglings
became two instead of three. It is said that it was meant to better illustrate the activities of the
company, no longer active only in nutrition, and to reflect the average modern family of two children.
The logo we know now has just been simplified.
MISSION STATEMENT
Nestle is committed to the following Business Principles in all
countries, taking into account local legislation, cultural and religious
practices:
Nestle'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.
Nestle does not favor short-term profit at the expense of successful longterm business development.
Nestle 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.
Nestle 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.
Nestle 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. Nestle continues to
maintain its commitment to follow and respect all applicable local laws in
each of its markets.
Nestle aim is to create value for consumers that can be
sustained over the long term by offering a wide variety of high
quality, safe food products at affordable prices. Nestle is a caring
organization, not only care about the internal customers of the
organization but also the external customers in this regard.
Nestle Products
Most people know us through our brands. Our portfolio covers practically all food
and beverage categories. Some brands are only available in certain parts of the world. We
would like to introduce you to some of our most important.
We believe that food plays a key role in achieving a well-balanced person. And so
our philosophy is Good Food for a Good Life!
BOTTELED WATER:
Today, Nestle is a thriving business with headquarters in Paris. In 2006, it sold its
72 brands of bottled water worldwide. The international brands of Nestle Waters are
familiar on tables throughout the world: Acqua Panna, S. Pellegrino, Perrier, Vittel
and Contrex.
In 1998, for the first time in its history, Nestle associated its name with a bottled
water: Nestle Pure Life. It is drinking water that has been treated and remineralized
using a standardized industrial process to ensure purity and quality, and is marketed in
emerging countries.A second product with the Nestle name was launched in May 2000,
this time in six European countries: Nestle Aquarel. Natural spring water currently from
nine different springs in France, Germany, Belgium, Hungary, Italy and Spain, Nestle
Aquarel also uses the multi-source concept to satisfy new consumer expectations,
especially for water with a low mineral content that the whole family can drink.
BABY FOOD:
The production of infant food goes right back to the origins of the Nestle
Company. Henri Nestle's 'Farine Lactée' was the first product to bear the Nestle name.
In 1867 a physician persuaded Henri Nestle to give his product to an infant who
was very ill he had been born prematurely and was refusing his mother's milk and all
other types of nourishment. Nestle's new food worked, and the boy survived. From the
very beginning, Nestle's product was never intended as a competitor for mother's milk. In
1869, he wrote:
"During the first months, the mother's milk will always be the most
natural nutrient, and every mother able to do so should herself suckle her
children."
The factors that made baby foods success in the early days of the Nestle company
quality and superior nutritional value are still as valid today for the wide range of infant
formula, cereals and baby food made by Nestle. The World Health Organization (WHO)
recognizes that there is a legitimate market for infant formula, when a mother cannot or
chooses not to breast feed her child. Nestle markets infant formula according to the
principles and aims of the WHO International Code of Marketing Breast Milk
Substitutes, and seeks dialogue and cooperation with the international health community
and in particular with the WHO and UNICEF, to identify problems and their solution.
Nestle's expertise as the world's leading infant food manufacturer, gained over more than
125 years, is put at the disposal of health authorities, the medical profession and mothers
and children everywhere.
DAIRY PRODUCTS:
Nestle has long been a major player in the dairy industry, originally with well
known shelf stable, i.e., dried milk powder brands such as Nido, Nespray, La Lechera
and Carnation. We have been bringing life to milk since the very beginnings of our
company.
We look for continued success through innovation and renovation in the
development of milk based products. We introduce new products constantly: in the USA
liquid Coffee Mate in new flavors, and also in a soy variant for those who want to enjoy
a creamy taste without milk..
BRREAKFAST CEREALS:
Nestle has a joint venture with General Mills outside North America, Cereal
Partners Worldwide, which is active in more than 80 countries.
The joint venture began in 1990, and its rapid growth has been characterized by
strong branding and lately the launching of breakfast cereal brands into the fast-growing
cereal bar market.
NUTRITIONS:
Nutrition has been a central theme for Nestle ever since 1867, when Henri Nestle
first invented infant food to help save the life of a neighbour's child. Today, we have
progressed beyond these beginnings to become a world leader in key categories of
Nutrition, Health and Wellness to offer our consumers the food choices they need to
achieve the healthy lifestyles they want.
We are leaders in infant nutrition, medical nutrition, performance nutrition,
weight management, water, powdered beverages, dairy, culinary and cereals. In all these
categories we offer products that are preferred over those of our competitors in terms of
taste and in addition, offer a clear nutritional advantage. This is our rigorous testing
system that combines a taste preference with a scientific nutritional assessment.
BEVERAGES:
In 1937, Nestle scientists perfected a powdered coffee product that was
introduced in 1938 under the brand name Nescafe the world's first commercially
successful soluble coffee.
It became so popular during World War II that for one full year the entire output
of the Nescafe plant in the United States (more than 1 million cases) was reserved for
military use only. Since then, Nescafe has become one of the world's best-known
brands. In addition, Nestle is a major producer of chocolate-based and malted drinks.
Its leading brands, Nesquik, Milo and Nescau are very popular with a growing number
of young people around the world. Nestle's ready-to-drink beverages Nestea and
Nescafe are sold in various forms (cans, bottles). These are distributed by Nestle's jointventure with the Coca-Cola Company, Beverage Partners Worldwide. Nestle is also
present in fruit juices (Libby's), as well as espresso coffee in capsules (Nespresso).
PREPAID FOODS:
The Society commissioned Julius Maggi, a miller with a reputation as an
inventive and capable businessman, to create a vegetable food product that would be
quick to prepare and easy to digest. The results two instant pea soups and an instant bean
soup helped launch one of the best known brands in the history of the food industry. By
the turn of the century, Maggi & Company was producing not only powdered soups, but
bouillon cubes, sauces and flavorings. Maggi merged with Nestle in 1947. Buitoni, the
authentic Italian brand, which has been producing pasta and sauces in Italy since 1827,
became part of the Nestle Group in 1988.
PETCARE:
Nestle entered the petcare business with the purchase of Carnation in 1985, and
we consolidated our position in Europe with the acquisition of the Spillers brand in 1998,
and further with the acquisition of Ralston-Purina in 2001, creating Nestle Purina
PetCare.
Technologies to develop and add value continually for pets and their owners are
engineered into our current product range. These include state-of-the-art nutritional
innovations, such as products which help maintain feline urinary tract health, or
innovations for the most discriminating of pets and their owners.
Marketing and sales
want Nestle products to be within reach for every single Pakistani. Yet
nutritional value and quality remain the most essential ingredients in all our brands.
We
Over the years, food products have evolved from mere commodities to a
statement of lifestyle. As consumers get more health and quality conscious, producer are
also giving importance towards better quality. We continue to play our part in facilitating
this revolution by launching value-added products such as NESTLE CERELAC,
NESTLE Raita, NESTLE NESVITA, NESTLE FRUITAVITALS and NESTLE NIDO
and many other dairy and non-dairy products. Consumers can avail many of our products
with branded active benefits that no competitor product offers. Nestle brands are
designed to suit your lifestyle and your needs. You can take advantage of the best
nutrition in a way that is suitable for your tastes and lifestyle.
For instance, you can purchase NESTLE Juices in several different sizes
depending on your needs: a personal-sized 200 ml for on-the-go consumption, or a litter
pack for your fridge.
All our key brands are equipped with the Nutritional Compass that ensures all the
nutritional information about the product is accessible thanks to our user-friendly
nutritional labeling and guidelines.
We're proud to be among the only companies in Pakistan to venture outside the
commercial mode of communication, offering programs catering to better child nutrition
and good parenting.
Nestle Consumer Services is the main interface between you and the company, and we
make every effort to ensure that your voice is heard. After all, it's your satisfaction that
really counts.
When Henri Nestle prepared his first boxes of infant formula for sale, he put his
address on the packages. Today, the Nutritional Compass on our packaging encourages
consumers to Talk to Nestle, expressing the same belief in openness and accessibility.
Consumer Services doesn't just provide us with feedback on our company, brands
and products. It helps us gain important consumer insights: what are the relevant values
you hold dear? What do you look for in our products?
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, we
envision leading a dynamic, professional workforce – proud of its heritage and bullish
about the future. Meet the nutritional needs of consumers of all age groups – from
infancy to old age, from nutrition to pleasure, through an innovative portfolio of branded
food and beverage products of the highest quality.
Deliver shareholder value through profitable long-term growth, while continuing
to play a significant and responsible role in the social, economic and environmental
sectors of the country. We have profitable and diversified high quality food and beverage
product portfolio. Our brands are the preferred choice in their categories. Consumer
insight drives all aspects of our marketing and communication efforts. Our
communications to the consumer are relevant, cutting-edge, and adhere to the highest
standards of responsible communication. Our company is seen as the No. 1 career
destination for talented, motivated and ambitious professionals. Our result-oriented
organizational structure ensures effective communication and empowered selfmanagement.
Our milk collection and agriculture services will continue to play the primary role
in development of the dairy sector in rural Pakistan. Our proactive innovation and
renovation culture is the key to our success in the marketplace. Fully integrated systems
(Nestle Pakistan, suppliers, customers) ensure efficient business processes. Non-strategic
activities and products are outsourced or discontinued.
PORTFOLIO ANALYSIS OF NESTLE
(BCG MATRIX)
High
Market Growth
Rate
STAR
?
Juices, cereals
Noodles, Nescafe
Cash cow
Low
Nestle pure water ,milk
Dog
POLO (local
manufactured)
high
Relative Market Share
low
NESTLE WATER
NESTLE Pure Life is pure, safe and healthy drinking water for you and your
family. Every bottle of NESTLE Pure Life is produced with the Nestle Safety System and
is carefully sealed with a proprietary seal. An optimal balance of essential minerals,
enhancing the health and wellbeing of your family, matches purity of the highest
standards. No wonder its Pakistan’s favorite water because more people trust it than any
other
brand.
For your convenience NESTLE Pure Life is available in non-returnable 330ml,
0.5 liter and 1.5 liter bottles at retail outlets and Bulk bottles for Home & Office Delivery
in
19
&
12
liter
(12
liter
is
available
at
retail
outlets).
#2
biggest brand worldwide
21
countries where Nestle PURE LIFE is distributed
400
glasses of Nestle Pure Life were drunk every second around the world in
2005
SWOT Analysis
Marketing strategies are being made after the analysis of external and internal audit.
External factors include the market threats and market opportunities, while internal
factors include the strength and weakness of product. After analyze all above we
formulate strategies and then implement it.
SWOT analysis of nestle pure water is as under
Strength:
Following are the strength of nestle pure water
 Nestle water is no. 1 selling water in Pakistan.
 Nestle is world famous brand name and people trust them.
 Nestle is v much careful about their products quality, thus there water
quality is good.
 They are one of the biggest companies of the world so they have solid
financial position and they can compete with any big competitor.
 Mostly the people who buy Nestle water are health conscious so they use
Nestle water, as it is hygienic and good for health.
 The supplies network of Nestle pure water is the biggest in Pakistan.
Weakness:
Price of the Nestle is not very economical and Income level of Pakistan is
low and most of the people lies in lower middle class so they cannot afford Nestle pure
water. Nestle is a very big company so their decision making process is up to mark.
Opportunities:
 Now a day’s people are more aware and they are getting health conscious
day by day, they know that tap water is not safe for their health
 Govt. is taking steps to boosting the purchasing power of the public, the
more the purchasing power more will be the buyers
 Karachi, which is the biggest city of Pakistan and the biggest consumer of
pure water because the water quality of that area is not good
 Now a days the trend has been settled in most of the offices, banks,
universities and even in homes people are using dispensers instead to
water filters or using the tap water so that open the new opportunities for
the pure drinking water
 People of the Pakistan is consumption oriented
Threats:
 Many big competitors like coca cola and Pepsi are now in the market and
they are investing heavily in Pakistan in into pure water industry so it is
always difficult to compete with big competitors.
 Nowadays government department, WASA is also taking precautionary
measures to provide safe and healthy drinking water to every home and
they are also installing filtered plants to every locality to easily access by
everyone, so by that this would be to a big threat for Nestle drinking water
in up coming days.
Strategies on the basis of SWOT analysis
On the basis of SWOT analysis Nestle is focusing on following strategies
Cost leadership strategy:
As they have much resources and they have a very good positioning in the
customer’s mind and people trust them so Nestle is now going for mass marketing, Nestle
is trying to cover every type of people whether belong to low income class or high
income class.
That’s why they are now packing water on 12 litter and 17 litter cans. Their cost
is much lower and they are charging less price of it so more and more people buy it.
Product differentiation strategy:
Nestle differentiate their product on these basis:
 Their service is very efficient as compared to others.
 Nestle is now supplying water door to door for their regular customers
 Nestle water is available now in many packing they are more convenient
as well as economical.
 For your convenience Nestle water is available in non-returnable 330ml, 0.5 litter
and 1.5 litter bottles at retail outlets and Bulk bottles for Home & Office delivery
in 19 & 12 liters (12 liter is available at retail outlets).
 Their quality check is much better than others so there is no need to bother
about the quality and the taste of water.
External and internal factors
On the basis of external and internal factors we make our policies. Internal
factors includes customer, supplier, distributor, competitor and external factors consists
of demographic factor, economic factors, physical factors, technological factors, political
and legal factors and social, cultural factors and religious factors.
Internal factors
Following are the internal factors affecting our policies
Customer:
As we know the Customer is the king of market so all of our policies revolve
around the customers, more the customer more will be the profit so while making any
policy we keep in mind the liking and disliking of the customer.
We can proudly say that we have the largest number of customer in Pakistan’s water
industry. Following table shows the customer of pure water in Pakistan. We have market
share of 65% of water industry in Pakistan, this figure depicts that we have captured a
largest number of consumer of pure water in Pakistan.
Supplier:
Nestle don’t have such suppliers they have their own production of bottles and we
use tap water as a raw material.
Distributors:
We have developed an intensive distribution strategy that brings our
products to your door, through effective communication, door-to-door sampling,
and exciting consumer promotions.
Day after day, Nestle Waters satisfies the needs of its customers by offering the
widest possible choice of bottled waters distributed through multiple trade
channels. We have four distributors of NPL in Lahore and 450 distributors across
the country.
We have three channels of distribution:
 Modern trade
 Traditional trade
 Horica (food services)
 Modern trade:
Through this channel we supply NPL to supper markets, big stores,
supper stores e.g. HKB, AL-FATAH, AKBARI Super Store etc.

Traditional trade:
This channel supplies NPL to general stores, utility stores, PAAN shops and other
small shops.
 Horica trade:
Via this channel we cover Hospitals, Hotels, restaurants, institutes etc.
Distribution System Nestle has divided distribution system in two ways:
1.
2.
Food Service Department --- 35% to 30% of Volume
Retail Service
--65 % to 70% of Volume
Competitor:
While comparing Nestle with other competitors in the market, Nestle is not
facing any major competitor in the market as for as the competitors of Nestl e are
concerned, in that list Aquafina and Kinlay are at the top.
There are so many national and international companies, which are the competitors of the
Nestle. But people likes Nestle’ Pure Life.
MAIN COMPITITORES:
AVA
AQUAFINA
KINLAY
ASKARI
NAEMAT
GREENLAND (PURE WATER )
WATER SURVEY:
As per Retail Audit - Year 2004
Bottled Water Selling Outlets in Franchise:
OUTLETS
%AGE
Outlets with Nestle Availability:
Outlets with Askari Availability:
Outlets with Aquasafe Availability:
Outlets with Others Brands Availability:
4004
480
266
1976
5372
74.53 %
8.94 %
4.95 %
36.78 %
External factor:
There are many external factors which affects our marketing strategies.
Following are the external factors that affect our marketing strategies of nestle pure
water.
 More the education more will be the awareness about brand and quality food.
Further educated people are more health conscious so education can affect our
sale.
 If the income level of people is high then purchasing power will be high so they
will purchase more so there is direct relation between income level of people and
our sale.
 Consumption behavior of Pakistani people is high so they consume more goods
 Nestle always respects local cultures so we never launch any product which is
against the cultural values .
 As Pakistan is Muslim country so we cannot add any ingredient which is
prohibited in Islam or which is not “Halal”.
 As the education level in Pakistan is not very high and most of the people do not
read news papers and magazines so our main source of promotion is television.
 In those cities where population density is high there is high consumption so
nestle mainly focusing on those cities in which population density is high.like
Karachi,Lahore,Faisalabad.
 If the inflation rate is high then there will be decrease in purchasing power .so
inflation indirectly affects the company’s sale.
 In the areas where climate condition is favorable there will be more demand. Like
in multan climate is hot so there is more demand of nestle pure water as compared
to Murree.
 As nestle water is the branded item so the people who are brand conscious will
prefer to use nestle water .so nestle is focusing more on the posh areas.
 Distribution of nestle water is easy in those cities where infrastructure is good
enough.
Market information system
Survival in a market especially in the presence of large number of competitor is
not an easy job. One should always be well aware about the environment. What is their
competitor doing what strategies they are following .the is the feedback of customers of
our products and what customer wants etc.
All above type of information we needed is gathered from the marketing
information system.
Market information helps us not only at the time of new product launching and in
any but as we discussed earlier we should be well aware about everything in the market
We want to build a long-term relationship of trust and loyalty with you. This helps ensure
that you, our consumers, are happy, satisfied and able to live fulfilling lives.
Accordingly, Nestle representatives are poised to provide prompt service and
relevant information whenever needed. We try to talk to you, but more, we listen to you.
Only by hearing what you say can we understand what you want and need. Only by
understanding your needs can we serve you to the fullest and help you achieve your
aspirations. From our information system we come to know about:
What are the competitors in the market making water?
What price they are charging from customer?
What type of packing is attracting the customer?
What is purchasing power of people of a particular area?
What is the budget of competitors on advertisements?
Etc….
Our sources of gathering information are:
o Research
o Team operating in the market
After gather the required information we formulate our marketing strategies and
plans.
PRE MARKETING MIX
In pre marketing we segment the market, then target the market, after targeting we
try to build the image on our target customers and increase the sale by differentiation.
SEGMENTATION
Market is segments on different parameters such as ;






Size of a particular market
Income level
Consumption pattern
Growth of particular segment itself
Geographic location
Age group
TARGETING:
Nestle is targeting mainly on those city in which density of population is high
such as Lahore, Karachi, Faisalabad etc. Nestle is also focusing on educated class
because they know the values of health in life.
The economic condition of general public is quite against the price of the product,
so that’s why they are focusing on middle higher group and higher class.
Nestle is also capturing all big and small organization as they like to use quality
water for their employees. So on the basis of targeting they are using differentiated
strategy.
As our target market is not the lower class and lower middle class so Nestle water
should be provided in that place where its demand is high i.e. in big cities and in good
areas.
Water should be provided where there is a need of your water ,like in Karachi tap
water quality is not good so people need pure water.
POSITIONING:
We position nestle water as a safe & healthy water for the entire family & for all
consumption needs. Nestle is famous all over the world due to its quality product. So its
image in the mind of people is very good. The positioning of Nestle pure water is very
positive in the minds of consumers.
DIFFERENTIATION:
As water does not have any taste, smell or color so its not possible to differentiate
it on any tangible benefits so its purely differentiated on perception. But we differentiate
it by its packing and our services.





Our
service
is
very
efficient
as
compared
to
others.
Nestle is now supplying water door to door for their regular customers.
Nestle water is available now in many packing they are more convenient as well a
s economical.
For your convenience Nestle water is available in non-returnable 330ml, 0.5 litter
and -1.5 litter bottles at retail outlets and Bulk bottles for Home & Office delivery
in 19 & 12 liters (12 liter is available at retail outlets).
Their quality check is much better than others so there is no need to bother about
the quality and the taste of water.
Nestle is also introducing flavored water
MARKETING MIX
After the pre marketing mix, the next stage is marketing mix in which we decide what is
the product we are going to introduce in market, what is the price of product, how water
is promoted, where should we place our product.
Marketing Mix is defined as a set of controllable tactical marketing tools that firm
blends to produce the response it wants in the target market. The marketing mix consists
of every thing the firm can do to influence the demand for its products. The many
possibilities can be collected into four groups of variables known as the four P's.
1.
2.
3.
Product
Price
Place
4.
Promotion
PRODUCT:
A product is anything that can be offered to a market for attention, acquisition,
use or consumption and that might satisfy a want or need; it includes objects, services,
persons, places, organizations and ideas.
We can also say that product stands for goods and services combination the
company offers to target market.
Nestle Pure Water:
Our selected product of Nestle is Nestle pure water. Nestle water is
goods. As consumer goods include:
1.
Convenience good
2.
Shopping good
3.
Specialty good
consumer
Nestle water falls under the convenience goods because it is low priced and
widely available.
INDIVIDUAL PRODUCT DECISIONS:
We now look at decisions relating to the development and marketing of Nestle
product figure below shows the important decision, we will focus on decisions about
product attributes, branding bottling, labeling, and product-support services.
Product:
Attributes ->Branding->Packaging->Labeling->Product support
PRODUCT ATTRIBUTES:
Developing a product involves defining the benefits that the product will offer.
These benefits are communicated and delivered by product attributes such as:
1.
2.
3.
Product quality
Product features
Product design
Decisions about these product attributes greatly affect consumer reaction to Nestle
product.
PRODUCT QUALITY
 Quality is one of the marketer's major positioning tools. Quality has two
dimensions level and consistency.
 Product quality means the ability of a product to perform its functions. It
includes the product's overall durability, reliability, precision and other
valued attributes. Nestle has chosen the quality level that matches target
market needs and wants.
 Beside quality level, Nestle consistently delivers the desired level of
quality to consumers. Always strives for high level of quality consistency.
PRODUCT FEATURES:
A product can be offered with varying features. A company can create
higher-level models by adding more features.
Features are a competitive tool for differentiating the company's product from
competitor's products. Following are the features on which Nestle has competitive
advantage.
1.
2.
3.
Quality
Availability
Convenient prices
BRANDING:
Consumer view a brand name as an important part of the product and branding
can add value to the product. A name, term, sign, symbol or design or a combination of
these intended to identify the goods and services of one seller or group of seller and to
differentiate them from their competitors.
Brand:
BRAND DECISION:
The company must first decide whether it should put a brand name on its product.
Branding has become so strong that today hardly anything goes unbranded. Nestle water
brand decision is based on the fact that company's name "Nestle " is most popular and is
perceived by the consumer as quality product so they have put the their parent name
“Nestle” on their pure water.
PACKAGING:
Packaging includes the activities of designing and providing the container or
wrapper for a product. Nestle water has secondary package, because its bottles is thrown
away immediately after the consumption. the carton in which pure water is available is
environment friendly and is disposable.
LABELING:
Labeling is also part of packaging and consists of printed information appearing
on or with the package.
Labeling Decision:
Labels may range from simple tags attached to products to complex graphics that
are part of the package. Labels of Nestle have complex graphics and perform several
functions which include:
Identify:
It identifies the product or brand such as "Nestle pure life " stamped on each of
its pure water and other product lines also.
Describe: Nestle's label describe several things about the product - who made it,
where it was made, when it was made, its contents, how it is to be used.
Promote: Nestle label promote the product through attractive graphics besides all these
functions performed by Nestle 's label. It also describes.
Unit Pricing: It states the price per unit of standard measure.
Open dating: It also states the expected shelf life of the product.
MAJOR REASON FOR USING THE BOTTLED WATER
Water o f internatio nal
standards, 2%
Do cto r advised, 2%
It tastes like sweet
natural water, 1%
A ffo rdable, 1%
Clean
A rtificially purified
water, 0%
Good for health
Use while traveling
Easily available, 5%
Well reputed
brand, 6%
Use while
traveling, 8%
Free of germs
Use fo r children, 1%
Free o f germs,
49%
Well reputed brand
Easily available
Doctor advised
Water of international standards
It tastes like sweet natural water
Go o d fo r health, 11%
Affordable
Use for children
Clean, 16%
Artificially purified water
Almost half (49%) of the respondents revealed that the main reason of using bottled
water is that “it is free of germs”
Brand Awareness:
How do you come to know about the first Brand, which you have mentioned?
SOURCE OF AWARENESS:
Ad on Bus, 2%
Banner, 2%
Doctor, 3%
Board/ Hoarding
Board, 3%
Already know , 4%
Poster, 4%
N.Papers, 2%
Television
DK, 2%
Others, 0%
Shop/Shopkeeper
Relatives/Friends
Poster
Already know
Board/ Hoarding Board
When respondents were asked how they came to know aboutDoctor
the first brand they
Television, 51%
mentioned, it was revealed that the television is the
main source of awareness.
Banner
Relatives/Friends
5%
Shop/Shopkeeper,
PRICE:
20%
Ad on Bus
N.papers
DK
Others
Price:
The amount of money charged for a product or service, or sum of the
values that consumers exchange for the benefits of having or using the product or
services. As price gives us the profit so this P is very important for business price of
product should be that which gives maximum benefit to the company and which gives
maximum satisfaction to the customer.
Nestle water is not lie in necessities so its price should not be very high
 Price should be set according to the product demand of public.
 Price should be that which gives us more revenue.
 Price should not be too low or too high than the price competitor is charging from
their customers otherwise nobody will buy your product.
 Price should be that by those customers are motivated to buy more.
 Price must be keeping the view of your target market.
FACTORS TO CONSIDER WHEN SETTING PRICES
A company's pricing decisions are affected both by internal company factors and
external environmental factors.
INTERNAL FACTORS AFFECTING PRICING DECISION
The marketing objectives, marketing-mix strategy, costs and organizational etc
affecting the price of a product.
Market share leadership:
In the beginning of its establishment and for several years Nestle was consistence
with market share leadership. As it wanted to enjoy largest market share with lowest
costs and highest long-run profit. Nestle had reached for the price and marketing program
that has achieved this goal.
Product-quality leadership:
After getting the market share leadership especially in the pure water market,
Nestle has adopted. Product-quality leadership as Nestle wants to provide better quality
product as compare to its competitors at convenient prices. this normally calls for
charging a high price to cover such quality and the high cost but Nestle has set its price
at competitors lends to stabilize the market and to keep the loyalty and import of
customer and resellers.
COST:
Cost plays a vital role in the price of a product. So concentration on cost is very
important. Nestle is a multinational company, also focus on the cost. As they are also
producing the water bottles for their pure water. This is a strategy which helps in cost
reduction and as we know if the cost is minimum the price will also become less and it
help to generate maximum revenue.
Nestle has gained experience in manufacturing and sales of liquid milk, power
milk etc based upon or derived from fresh fruits and vegetable, it has learned how to do it
better with higher volume, Nestle has become more efficient and has gained economics
of scale. As a result average cost tends to fall with accumulated production experience.
EXTERNAL FACTORS AFFECTING PRICING DECISIONS
External factors hat affect Nestle's pricing decisions include the nature of market
and demand, competition and other environmental elements.
The market and demand: whereas costs set the lower limit of prices, the market
and demand set the upper limit.
Nestle also has monopolistic competition as a range of prices occurs because
sellers can differentiate their offers to buyers. As pure water in market varied in quality,
features or style or the occupying services can be varied. Buyers see differences in sellers
product and will pay different prices for them. Sellers try to develop differentiated offers
for different customer segment and in addition to price freely use branding, advertising
and personal selling.
GENERAL PRICING APPROACHES
Nestle set its pricing strategy based on two pricing approaches.
1.
2.
Cost-based pricing
Competition-based pricing
Cost-based pricing:
Cost based pricing: Adding a standard mark up to the cost of the product. Nestle’s
cost based pricing is fairer to both buyers and sellers. Price of Nestle water is fixed. They
provide retailers facility to add their own profit to price, but to limited extent.
Competition-based pricing:
It means going rate pricing. Nestle sets the prices based largely on the
competitors. They use the going sale pricing when demand elasticity is hard to measure,
firms feel that the going price represents the collective wisdom of the industry concerning
the price that yield a fair return. They also feel that holding to the going price will prevent
harmful price wars.
PRODUCT MIX PRICING STRATEGY:
Nestle looks for a set of prices that maximizes profit on the total product mix
which are often based on demand and cost and faced different degree of competition.
Product-line Pricing:
Nestle has product line pricing because it sets the price steps between various
products in a line based on cost differences between product, customer evaluation of
different features and competitors prices. It charges following retail prices for its pure
water.
PRICE ADJUSTMENT STRATEGIES
When the marketing situation changes Nestle adjust its prices and adopt price
adjustment strategies, to account for various customer differences and changing situation.
Discount and allowances pricing
Discount is a straight reduction in prices on purchases during a stated period of
time.

Functional discount: A functional discount is offered by Nestle to trade
channel member who perform certain function such as selling and storing.
Seasonal discount:
A seasonal discount is price reduction to the reseller to purchase merchandise out
of season by the Nestle e.g. in winter season when the demand reduced and retailers are
reluctant to buy merchandise.
Promotional pricing
With promotional pricing Nestle temporarily priced its product below list price.
Nestle also use special event pricing on certain occasions to attract more customer.
PLACING:
Placing stands for company's activity that makes the product available to the
target consumer. Nestle maintains a large body of retailers that sells company's product.
DISTRIBUTION CHANNELS:
A set of interdependent organizations involved in the process of making a product
or services available for use or consumption by the consumer.
Marketing channel decisions are among the most important decisions that
management faces at Nestle, as it directly affect every other marketing decision.
THE NATURE OF DISTRIBUTION CHANNELS:
Nestle use intermediaries to bring its products to market. So it try to forge a
distribution channel.
There are two types of marketing channels or the way to reach the customer.
1.
Direct marketing
2.
Marketing through distributors
Nestle uses both direct marketing and marketing through distributions as its
channel level.
DISTRIBUTION CHANNELS FUNCTION:
Nestle distribution channel perform major function to carry research and sale.
They not only move product from the company but perform key function for company.
Information.
Nestle distribution channels helps in gathering and distribution of marketing
research and intelligence about actors and forces in the marketing environment needed
for planning and aiding exchange.
PROMOTION:
Producing a quality product, pricing it attractively and making it available for the
target consumer is not the only problem companies need to solve. Modern era is the era
of communication with customer, assuring customer satisfaction, demands for personal
and non personal communication with the target customer to build a relationship with
them.
Nestle is using a marketing communication program to promote its pure water
bottle. Its promotion mix is a blend of advertising, sales promotion, personal selling and
public relation.
FACTORS IN SETTING THE PROMOTION MIX
Consumer Product:
Type of product affect the relative ratio of a promotion tools Nestle water are
consumer product which demands for more advertising, with sales promotion and a
relative less ratio of spending a personal selling and public relation. But it’s not the case
with Nestle's strategy. They are spending more of their promotional budget on trade
promotion and public relation.
Push Strategy:
Promotional mix is greatly affected whether a company uses push or pulls
strategy. Nestle has selected push strategy from the very beginning. Company has direct
distribution channel and it is making the product intensely available at every retail store
in adequate quantity.
Purchase state:
In purchase state the consumer had passed through states of awareness,
knowledge, liking and preference. The target audience is aware of the product and its
attributes and they purchase Nestle with all of its attributes, quality and price.
PROMOTION MIX
ADVERTISING:
Advertising is any paid form of non personal presentation and promotion of ideas,
goals or services by an identified sponsor.
Nestle strategy is to annually plan for advertising. As it allocates budget and hires
advertising agency.
Objective of Advertising:
Advertising objective is a specific communication task to be accomplished with a
specific target audience during a specific period of time. Nestle produces diverse
products. For each product the objective is different according to market share, demand,
and quality of product. Pure water advertising has following two objectives.
Reminder Advertising:
Nestle set its objective of advertisement to remind its pure water and recognize its
name during the whole year. Nestle maintains higher level of mind awareness among the
consumers during the whole year and to remind the consumer the name of company in
the market during the consumption season; from April to September season.
Persuasive Advertising:
To face the stiff competition Nestle’s advertisement campaign always gives
support to the pure water giving perception of the product. It claims that the quality of
pure water is best. It is pure, fresh, and good in taste and smell.
Advertising Strategies:
Advertising strategy has two elements creating advertising messages and selecting
advertising media.
ADVERTISING MEDIA
Advertising media is selected on the basis of cost of advertising media. That
media is preferred which is least costing for the company and reach the consumer market
very well.
Profile of major media types selected by Nestle is given as:
Television:
Television is selected on the basis that is most appealing to the human senses but
Nestle gives ads on television only before the most consumption season. PTV is the
channel that is selected on the basis of its popularity among the masses. As for television
advertising is concerned the purpose in only to remind and give awareness to the
consumer. The recent advertising campaign in run on PTV, Tenports, Geo, ARY etc
during prime time because at that time the target market is more likely to watch
television.
Newspapers:
Newspapers are selected on the regional basis. All newspapers that give ads of
Nestle.
Magazines:
Magazines are selected on the basis of demographic factors, long life good pass
along readership. Among magazines She, Herald, Teenager and all college magazines
and digests; printed locally, give Nestle ads.
Billboard
Nestle has also adopted billboard media, these are selected due to low cost high
repeat exposure and flexibility. This year Nestle has displayed billboard about on every
road and remind the consumer that Nestle has taken a further step in improvement of
quality.
PUBLIC RELATIONING:
Public relations means building good relations with the company's various publics
by obtaining favorable publicity and building up a good corporate image.
Contact:
These channels find and communicate with prospect buyers. They each the
prospect buyers easily than its competitors and overcome their shares as well.
Matching:
Nestle shape and fit the offers to the buyers needs including such activities as
manufacturing grading, assembling and packaging.
Negotiation
They negotiate with retailers to reach an agreement on price and other terms of
offer so that ownership and possession can be transferred. Nestle specially negotiate with
retailers in low selling season and offer certain price offers to attract the product.
BRAND AWARENESS
It is evident from the results of current study that Nestle remained the most frequently
recalled bottled water (77%). The main source of acquiring information about the bottled
water is found to be Television (51%) followed by shops (20%) and shopkeepers (20%)
BRAND USAGE
Little more than half of the respondents (58%) reported of consuming Nestle
during last three months. It is also reported to be the most often used brand (93%). It is
indicated that the main reason of using bottled water is that it is “free of germs /
hygienic” (49%).
Future plans
Nestle is planning to enhance its investments in
Pakistan and by the year 2014, its total stakes would reach an
aggregate of $374 million. The company has chalked out
long-term investment plan. Nestle is setting up a most modern
and latest milk plant with the cost of $ 70 million which will
be operative within next couple of months. Company would
invest to the tune of $209 million in five years period ending
2009. Nestle is investing $70 million in milk production by
increasing capacity of milk powder by 40,000 tones annually;
$44 million would be injected in Sheikhupura factory, $12 has
been allocated for expanding milk collection, and $31 million
in bottled water plants.
CONCLUSION
The objective of this research was to study
marketing strategies of nestle pure water. From our report
it is concluded that nestle has a good reputation as a
strong consumer brand. 66% of the consumers use
Nestle’s products regularly. 60% of the consumer’s
associate quality with Nestle.57.3 % of the consumers
prefers Nestle over other brands of pure water that are
available in the market .66% consumers bought Nestle
water because of its brand image which is of good quality
products. This is also proved by the statistical and
graphical analysis of the data obtained from consumers
that they are quite satisfied from nestle pure water. Nestle
formulating a good strategy and they are trying to go for
mass-marketing.
SUGGESTIONS
Nestle’s pure water need to expand their customer
equity. Though 57.3% people prefer Nestle over other
brands 43% prefer others. Nestle should benchmark with
other brands to compete in this industry.
Nestle should improve its promotional activities on
television regarding nestle pure water.
Nestle’s pure water are expensive so they should
decrease their prices as big competitors like Aquafina
enter into this industry. Aquafina beat nestle in almost
every country except Pakistan .So nestle should defense
their position.
58% consumers use this product occasionally, 24%
weekly and 14.7% daily. Nestle should try to increase
this usage rate through new users by advertising, more
usage by convincing people about the high quality of the
juices.
Flavored water should be introduces in Pakistani
market. From this they can differentiae their product
from others and they can get more market shares.
BIBLOGRAPHY
Principle of marketing by Kotler and Armstrong
www.Nestle.com
www.views.pk/
www.nestle-purelife.us/
www.wikipedia.com
Marketing management by Philip kotler