final_report opf nestle by usmanjee123

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                             COMPANY’S PROFILE

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


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

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

     Nestlé's business objective is to manufacture and market the Company's products
          in such a way as to create value that can be sustained over the long term for
                  shareholders, employees, consumers, and business partners.
       Nestlé does not favor short-term profit at the expense of successful long-term
                                      business development.


     Nestlé recognizes that its consumers have a sincere and legitimate interest in the
         behavior, beliefs and actions of the Company behind brands in which they place
             their trust and that without its consumers the Company would not exist.
     Nestlé believes that, as a general rule, legislation is the most effective safeguard
         of responsible conduct, although in certain areas, additional guidance to staff in
         the form of voluntary business principles is beneficial in order to ensure that the
                     highest standards are met throughout the organization.
     Nestlé is conscious of the fact that the success of a corporation is a reflection of
         the professionalism, conduct and the responsible attitude of its management and
         employees. Therefore recruitment of the right people and ongoing training and
                                     development are crucial.


                                PRODUCT LINE

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

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



                                KEY OBJECTIVES

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

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

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

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

But now a days people are much more conscious about there health and hygiene so
regarding the need of milk a want has come into being in shape of packed, pasteurized
and ultra heat treated healthy milk.

            Enterprise
            Empowerment
            Accountability
            Team work


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

                               Competitive Analysis

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

Theme:                MILK FOR EVERY ONE
Push VS Pull:         At some stores there is push strategy for the product where as at
                      some stores its pull.
Promise & Support: BEST MILK FOR DRINKING & TEA.
Value Preposition:     Best value for money.
Marketing Strategy Used:-
Penetration strategy supported by product differentiation


                            MICRO ENVOIRMENT
Company in Nestlé the owner have no concern with the company operation all the
decisions are taken by the board of directors and pass on to the subordinates.

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

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

As this one is a public company but not listed in the stock exchange yet Company is
using both the printed and electronic media Company having keen interest in general
public because they are the actual customer of the organization and try to design the
product according to their expectations.


                              Differential Strategy
   Provide hygienic and nutritional products to the nation in an affordable price

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

Segmentation & Target Market

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


                                 MARKET SHARE

                                 Market Share
                        7%             6%



         Nestle        Haleeb          Nurpur        Engro Foods         Empty

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

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

Daily sales: 400,000 liters
Monthly sales value: Rs. 30 crore
Annual sales value: Rs. 4.8 billion
Sales Growth rate        25%

This is changed 12% w.r.t last year.
22.62% as per share.
Total Turnover:-
13.5 Billion Rupees.

                                            - 10 -

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

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

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

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

achievement of this object.

                               Nestlé Sales Turn Over

                                      Sales Turnover of Nestle'

                              15                             12.9    13.5
                                              9.8    10.7


                                   2001- 2002- 2003- 2004-          2005
                                    02    03    04    05            -06

                                     year Amount in (Billion Rs.)

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

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

keeps on increasing continuously in the next three years 2003-04, 2004-05 and 2005-06

which is 10.7, 12.9, 13.5 billions respectively.

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

clearly representing the struggle of the management of Nestlé.

                                            - 11 -

                            Nestlé’ With Competitors


                   (Rs.)                        2.7
                              5                       1.2         0.3


                     Nestle       Haleeb    Nurpur    Engro Foods       Others

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

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

compete the overall sales revenue of Nestlé.

                                           - 12 -

                               S.W.O.T ANALYSIS

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

        HACCP (in process safety controls)                          ISO 9001-2000
         (better quality)
        ISO 14000 (environment friendly operations)
        Tubular indirect heat treatment system from Holland.

        Unattractive and low media advertising

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

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

                                           - 13 -

                                 The BCG Matrix-

                                               Market Share
                                 High                                       Low
                               Star Nestlé
                               •High growth & share    •Question Marks
                                                       •High growth, low share
                               • Profit potential   • Build into Stars or phase out
                               • May need heavy         • Require cash to hold
                               • investment to grow        • market share
                                  Cash Cows                      Dog
                             •Low growth, high share      •Low growth & share
                             • Established, successful    • Low profit potential
                       Lo         •Produce cash

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

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

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

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

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

                                           - 14 -

the company required cash to hold market share. And finally as far as DOG (low growth

& share) in BGC matrix of Nestlé are concerned if the company will not perform well

their higher potential profits can be changed into dog.


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


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

                                           - 15 -

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