Course Title: Principles of Marketing Submitted To: Madam Shehla Sohail Institute of Management Science Lahore Group Members Raheel Khalid 081193 Uzma Tahir 081181 Abida Parveen 081140 Sehrish Qamar 073122 Acknowledgement All thanks and praise for Almighty Allah who blessed us and enabled us for the completion of this research project. We feel much pleasure in expressing our deep regard and gratitude for our course instructor madam Shehla sohail. We are also profoundly obliged to the valuable co-operation of Mr. Muhammad Hussein from nestle sales department. And the brand manager of NPL Mr. Shehzad Qamar and distribution manager Mr. Tariq Usman. EXECUTIVE SUMMARY In this research project we are going to study the marketing strategies of Nestle pure water. Nestle is old entrant in the pure water market and is facing a competition from other brands like Aquafina, Kinlay, Sufi etc.We are focusing on the marketing strategies of Nestle regarding Nestle pure water. 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 they operate. Nestle Pakistan ensure that t there products are made available to consumers wherever in the country they might be. Convenience is at the heart of the Nestle philosophy, and there aim is to bring products to people's doorsteps. Introduction Nestle with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestle and is today the world's biggest food and beverage company Nestle's existing products grow through innovation and renovation while maintaining a balance in geographic activities and product lines. The Company's priority is to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives. History In the 1860s Henri Nestle, a pharmacist, developed a food for babies. People quickly recognized the value of the new product, after Nestle's new formula saved the child's life, and soon, Farine Lactée Henri Nestle was being sold in much of Europe. The end of World War II was the beginning of a dynamic phase for Nestle. Growth accelerated and companies were acquired . 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. Nestlé's Products 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 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, 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. BREAKFAST 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, Nestle has 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. 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 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 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. 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. Marketing and Sales Nestle products are within reach for every single Pakistani. Yet nutritional value and quality remain the most essential ingredients in all our brands. 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. 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 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 PORTFOLIO ANALYSIS OF NESTLE (BCG MATRIX) STAR ? Juices, cereals Noodles, Nescafe Cash cow Dog Nestle pure water ,milk POLO (local manufactured) 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. NESTLE WATER 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. 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 #2biggest brand worldwide 21countries where Nestle PURE LIFE is distributed 400glasses 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 SWOT ANALYSIS Strength Weakness Opportunities Threat Strength Nestle water is no. 1 selling water in Pakistan. Nestle is world famous brand name and people trust them 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 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 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. Strategies on the basis of SWOT analysis Cost leadership strategy Product differentiation strategy External and internal factors Internal factors Following are the internal factors affecting our policies Customer: nestle have the largest number of customer in Pakistan’s water industry.. Nestle 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 three channels of distribution: Modern trade Traditional trade Horica (food services) Competitor: MAIN COMPITITORS AVA AQUAFINA KINLAY ASKARI NAEMAT GREEN LAND (PURE WATER ) WATER SURVEY As per Retail Audit - Year 2007 Bottled Water Selling Outlets in Franchise: 5372 OUTLETS %AGE Outlets with Nestle Availability: 4004 74.53% Outlets with Askari Availability: 480 8.94% Outlets with Aquasafe Availability: 266 4.95% Outlets with Others Brands Availability: 1976 36.78% External factor 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. If the income level of people is high then purchasing power will be high so they will purchase more Consumption behavior of Pakistani people is high so they consume more goods As Pakistan is Muslim country so we cannot add any ingredient which is prohibited in Islam or which is not “Halal”. If the inflation rate is high then there will be decrease in purchasing power .so inflation indirectly affects the company’s sale. 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(MIS) Survival in 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 there competitor doing what strategies they are following that is the feedback of customer of our products and what customer wants. from our information system we came to know about….. What are the competitors 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 source of gathering information are: Research Team operating in the marketing After gather the required information we formulate our marketing strategies and plains. 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 particulars 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. 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 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 MARKETING MIX 1. Product 2. Price 3. Place 4. Promotion Attributes Branding Packaging Labeling Product support PRODUCT Nestle Pure Water Our selected product of Nestle is Nestle pure water. Nestle water is consumer goods. As consumer goods include: 1. Convenience good 2. Shopping good 3. Specialty good PRODUCT ATTRIBUTES 1. Product quality 2. Product features 3. Product design 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 1. Quality 2. Availability 3. Convenient prices MAJOR REASON FOR USING THE BOTTLED WATER It tastes like sweet Affordable, 1% Free of germs natural water, 1% Use for children, 1% Water of international Clean standards, 2% Artificially purified Doctor advised, 2% Good for health water, 0% Easily available, 5% Use while traveling Free of germs, Well reputed brand Well reputed 49% brand, 6% Easily available Use while Doctor advised traveling, 8% Water of international standards It tastes like sweet natural water Good for health, 11% Affordable Use for children Clean, 16% Artificially purified water Brand Awareness Ad on Bus, 2% N.Papers, 2% Television Banner, 2% DK, 2% Shop/Shopkeeper Doctor, 3% Others, 0% Board/ Hoarding Relatives/Friends Board, 3% Poster Already know , 4% Already know Board/ Hoarding Board Poster, 4% Doctor Television, 51% Banner Relatives/Friends Ad on Bus 5% N.papers DK Shop/Shopkeeper, 20% Others PRICE 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 INTERNAL FACTORS AFFECTING PRICING DECISION Market share leadership Product-quality leadership COST EXTERNAL FACTORS AFFECTING PRICING DECISIONS GENERAL PRICING APPROACHES Nestle set its pricing strategy based on two pricing approaches. 1. Cost-based pricing 2. Competition-based pricing PRODUCT MIX PRICING STRATEGY Product-line Pricing Discount and allowances pricing Functional discount Seasonal discount Promotional pricing PLACING DISTRIBUTION CHANNELS 1. Direct marketing 2. Marketing through distributors PROMOTION FACTORS IN SETTING THE PROMOTION MIX Consumer Product Push Strategy Purchase state PROMOTION MIX ADVERTISING MEDIA Television Newspapers Magazines 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.