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Table of Contents
1. 2. 3. 4. 1. 2. 3. 4. 5. 1. 2. 3. 4. 5. 6. 6. 1. 2. 3. 7. 8. 1. 2. 3. 9. 10. Vision Statement of Nestlé ...................................................................... 1 Brief Introduction of Nestlé ..................................................................... 2 Introduction to Nestlé Fruit Yogurt ......................................................... 3 Nestlé Fruit Yogurt’s Current Marketing Mix ......................................... 6 Product ....................................................................................................... 6 Promotion ................................................................................................. 13 Place ........................................................................................................ 16 Price ......................................................................................................... 17 Nestlé Fruit Yogurt’s Macroenvironment ............................................. 21 Demographics .......................................................................................... 21 Economics Conditions .............................................................................. 23 Competition .............................................................................................. 24 Social and Cultural Forces ....................................................................... 25 Political and Legal Forces ........................................................................ 26 Technology............................................................................................... 27 Nestlé Fruit Yogurt’s Microenvironment .............................................. 30 Market ...................................................................................................... 30 Suppliers .................................................................................................. 31 Marketing Intermediaries .......................................................................... 31 Segmentation ......................................................................................... 33 Target Market and Strategies ................................................................ 40 Cost Leadership (Undifferentiated or Mass) Strategy .............................. 40 Differentiation Strategy ............................................................................. 41 Segmentation Strategy ............................................................................. 42 Positioning.............................................................................................. 45 Strategic Direction of Nestlé Fruit Yogurt ............................................ 47 Where are we now .......................................................................................... 47 Where do we want to go .................................................................................. 48 11. 1. 2. 3. 4. 12. Proposed Marketing Mix ........................................................................ 50 Product Strategy ...................................................................................... 50 Price Strategy........................................................................................... 53 Promotion Strategy .................................................................................. 56 Place (Distribution) Strategy..................................................................... 65 Teachers Comments .............................................................................. 67

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1. Vision Statement of Nestlé

The strategic priorities of Nestlé are focused 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, Nestlé envisions to grow in the shortest possible time into the number one food company in Pakistan with the 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.

Nestlé envisions the company to develop an extremely motivated and professionally trained work force, which would drive growth through innovation and renovation.

It aspires, as a respected corporate citizen, to continue playing a significant role in the social and environmental sectors of the country.

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Nestlé's production and sales rose in the wartime economy. Nestlé's production had more than doubled. Profits dropped from $20 million in 1938 to $6 million in 1939. . the company was operating factories in the United States. after Nestlé's new formula saved the child's life. the war helped with the introduction of the Company's newest product. . with chocolate the Company's second most important activity Nestlé felt the effects of World War II immediately. They employ around 250. .. a pharmacist. . Switzerland was founded in 1866 by Henri Nestlé and is today the world's biggest food and beverage company. . Farine Lactée Henri Nestlé was being sold in much of Europe. World War I created new demand for dairy products in the form of government contracts. . Brief Introduction of Nestlé In the 1860s Henri Nestlé. . . By the end of the war. . . 2 . . .000 people and have factories or operations in almost every country in the world.136. 2. . 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. Nestlé Pakistan currently has 1958 employees and has a market capitalization of 41. developed a food for babies who were unable to breastfeed.268. Nescafé. and soon. . The 1920s saw Nestlé's first expansion into new products. Ironically. By the early 1900s. Britain. .000. . which was a staple drink of the US military. . Nestlé with headquarters in Vevey. Germany and Spain.

. Keeping this in mind. . yogurt and fruit. . . Nestlé Fruit Yogurt. . Such products need to be refrigerated between temperatures of 0 – 4 degrees from manufacturing till it reaches the consumers because they contain live bacteria. . . . 3. . Introduction to Nestlé Fruit Yogurt Nestlé is committed to offering consumers high-quality food products that are safe. . . Nestlé developed a unique healthy product which is a substitute to sugary junk food like carbonated drinks. . . a value added product. The Nestlé Seal of Guarantee is a symbol of this commitment. . ice-creams and desserts. is categorized as a chilled dairy product which has all the goodness of milk. .. 3 . . tasty and affordable. Nestlé Fruit Yogurt has a shelf life of 28 days. .

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• The price of the product is kept low. . . are provided with specially designed clothing/suits. . . . . Marketing Ethics and Social Responsibilities Keeping in mind Pakistan’s social responsibilities and marketing ethics. • Quality of the product is maintained by foreign quality control supervisors on a random weekly basis.. . 5 . especially those involved in the production process. . Product wastes are properly treated. Workers. . . . . . • • • The product is produced using all Halal foods. . . . Nestlé adopts the following practices in its production of Nestlé Fruit Yogurt. .

term. . Following is a detailed study of the contents of Nestlé Fruit Yogurt’s marketing mix. . . b) Brand Familiarity Brand familiarity refers to how well customers recognize and accept a company’s brand. . Branding Branding is the use of a name. . . Nestlé has earned brand acceptance with high quality products and their regular promotion and its high degree of brand familiarity affects the planning 6 . symbol or design or a combination of these to identify a product. Advantages of Branding a) Identification Branding has helped Nestlé Fruit Yogurt gain a distinctive identification and has presented an ease of gaining customers. . Price and Promotion. . . . Place. . The fruit Yogurt has well known brand name Nestlé which has gain popularity over years and is known for offering healthy nutritious food items. Most people prefer trying fruit yogurt of familiar trusted brand rather than of the brands they haven’t heard of before. Nestlé Fruit Yogurt is a new product in Nestlé’s product line in Pakistan. 1. It has also helped reduce the costs for designing and implementing programs for promoting the product. 4. Nestlé Fruit Yogurt’s Current Marketing Mix The marketing mix comprises of the 4 Ps namely: Product. . The idea of a product as potential customer satisfaction or benefit is very important.. Product Products are need-satisfying products of an organization. . . . . .

. cleaner and less susceptible to losses from spilling and spoilage because of its good quality packaging. 7 . . . Helps persuade the consumers to buy the product: Packaging is attractive and colorful with the illustrations of fruits and creamy delicious yogurt which persuades the customers to taste it. of the remainder of the marketing mix. Manufacturer Brand Nestlé is a manufacturer brand (national brand) i-e it is created by producers and is promoted throughout the Pakistani market in addition to markets of other countries. Nestlé Fruit Yogurt comes in an attractive and convenient to use package and serves the following purposes of packaging: • Protects the contents on their way to consumer: Its package id well designed so as to protect it during shipment and prevents tampering with it in the warehouse or retail stores. • • Packaging acceptable to middlemen: Packaging is acceptable to middlemen because it is suitable for displaying and stacking in stores. c) Brand equity Since brand equity refers to the value of brand’s overall position in market we can safely say that Nestlé has higher brand equity on the basis of its satisfied customers and eagerness of customers to have it in stock. . . • Protects the product after purchase: Nestlé Fruit Yogurt is convenient to use. . . . . Therefore Nestlé Fruit Yogurt is placed in all super markets and general stores of Pakistani market and doesn’t require extensive promotion because of its already built brand familiarity. . .. . . . . . . Packaging Packaging concerns with designing and producing the container or wrapper for a product.

. . It carries information about ingredients. tasty and affordable to cater to the customer satisfaction aspect. Therefore. 8 . . . marketing managers must be constantly concerned with product quality. Keeping this in mind. . . Nestlé developed a unique healthy product which is a substitute to sugary junk food like carbonated drinks. . . . Product quality and customer needs Quality is the ability of a product to satisfy a customer’s needs or requirements. . products weight. . . . and the fruit flavor. . Since consumers mainly require satisfaction. nutritional contents. . . The Nestlé Seal of Guarantee is a symbol of this commitment.. Nestlé is committed to offering consumers high-quality food products that are safe. ice-creams and desserts. Labeling A label is a part of a product which carries information about the product and the seller. . Types of labels include: • • • A brand label A descriptive label A grade label Nestlé Fruit Yogurt employs descriptive labeling which is a part of its package. A label may be a part of the package or a separate tag attached to the product.

intended essentially for similar uses and having similar physical characteristics. Product mix The vast product mix of Nestlé among the dairy products consists of • • • • • • • • • Nestlé Milkpak UHT milk Milkpak Butter Nestlé Plain Yogurt Nestlé Fruit Yogurt Milkpak UHT Cream Milkpak Desi Ghee Nestlé Everyday Nestlé Nido Nestlé Nesvita Product Line A group of products.. Product line under consideration mainly consists of Nestlé Plain Yogurt and Nestlé Fruit Yogurt. . . of product lines carried. . Product breadth is measured by the no. . . Product depth is measured by the variety of sizes. . . constitute a product line. . . . . Breadth(different lines) Fruit Yogurt Depth (assortment within a line) Strawberry flavored Peach flavored Without fruit chunks With real fruit chunks Plain Yogurt 9 . and models offered with each product line. . . . . colors. . . Product Mix Structure The structure of product mix has both breadth and depth.

. . Nestlé Fruit Yogurt is a consumer product categorized as convenience product. . however. . .12. it is a value added product. . . . yogurt and fruit. . Since people are not willing to spend much money and time on such products. . . . Initially Nestlé Fruit Yogurt came without fruit chunks.Therefore. . 10 . . . now it comes with real fruit chunks and is worth same piece i-2 Rs. . . . it is a low priced product and is clearly stated as a chilled dairy product with all the goodness of milk.

Product Life Cycle A product life cycle has four categories • • • • Introduction Growth Maturity Decline Management must be able recognize what stage of life cycle is the product in at any given time. SNF: 8. . . The competitive environment and marketing strategies that should be used ordinarily depend on the particular life-cycle stage. Nutritional information Energy Protein Carbohydrates of which sugars Fats of which saturates Fiber Sodium Calcium (%rda) (26.0g%) 118kcal-499kg 5. .1g 208mg Ingredients Standardized fresh milk (Fat 1.4g 19. . permitted food color.. 11 . . . . . .3 %). .3g 0. . stabilizer. Nestlé Fruit Yogurt is in the introductory stage . Fruit chunks (Strawberry.7%. .0g 1. Peach or Mango).0g 2.1g 0. Sucrose. . .6g 19. . . preservatives. . artificial flavor.

. . . When Nestlé Fruit Yogurt was launched in market it was not entirely new but it was well-known (plain fruit yogurt) with a novel feature (i-e fruit flavored) which in effect created a new product category. . a lot of money is spent not only for the development of this product but also to seek consumer acceptance of the offering. . . . . . . Nestlé Fruit Yogurt enjoys the benefit of brand familiarity and its wellknown product line of plain fruit yogurt and is readily accepted by a sufficient number of customers. The product may be entirely new or may come out with a novel feature in an already available product. . Nestlé Fruit Yogurt: Introductory stage During the introduction stage a product is launched in a full-scale screening program. . . . Like all other products at this stage. 12 . . . ..

2. . beliefs. . Marketers usually use promotion to inform the public of their product and communicate with customers with respect to product offerings. . . and feelings of perspective customers. . .. . . Promotion is also however used to influence the marketers target market usually via: • • • • • • • Advertisements and commercials through interpellation Streamers Outdoor billboards Magazines newspapers and posters Personal selling Sales promotion Public relations etc Promoting their product as better then any other similar products or by changing views. . awareness. Nestlé Fruit Yogurt’s production began in the second quarter of 2005 but due to very limited budget and the product being an entirely new concept to the existing market. Promotional roles Three essential promotional roles are given below: • • • Informing Persuading And reminding target audiences Nestlé Fruit Yogurt is a new product in Nestlé’s product line in Pakistan. . . Promotion Promotion is one of the major tools used in marketing and an essential part of the marketing mix of an organization. . a discrete analysis of all the entities that would affect the new product 13 . . . . The product’s present market constitutes all the citizens that consume yogurt. . .

marketers immediately felt the need of informing the people about it. keeping this into mind. For the promotion of Nestlé Fruit Yogurt analysis of the scenario was conducted. . . advertisement and magazines captivating and attractive enough to play upon the weaknesses of fruit. . symbols etc which have the ability not only to retain but also to attract new customers. streamers. Its human nature to get fed up or become indifferent to things that go beyond limit I-e the flood of advertisements coming up everyday. It revealed that in 2004 there ware 250 brands being advertised on TV. So 14 . . . Nestlé. by the start of 2005 the number had doubled and before the launch of Nestlé Fruit Yogurt it reached to about 500 brands. have made billboards. . If Nestlé’s fruit yogurt had been advertised on T. Previously Nestlé’s message regarding their fruit yogurt was “fruit yogurt with real fruit chunks” which later on changed to “imagine the taste”. . This is done by bombarding the target market with messages. . usage and working. and outdoor billboards as the marketing mediums. To promote fruit yogurt through means other than mass media was a very wise decision on the part of the management of Nestlé. . . .V the less they pay heed to them. . Providing Information is the first and the foremost task of promotion because people need to know about the existence of a product. its benefits. The most useful product will be a failure if no one knows it exists. persuasive promotion becomes essential. Last but not the least is reminding the market of the product’s availability and its potential to satisfy.. . Because of the flooding of television with advertisements. As a result. company decided to promote the product distinctively and differently using: streamers. . As the product was new. Another purpose of promotion is persuading. it would have been forgotten or lost its charm very soon.V. . The common observation is that the more the people get to see various advertisements on T. . posters. Intense competition among firms in market provides people with many alternative products for satisfying even basic physiological needs. dessert lovers and diet conscious people who were since long looking for some healthy and hygienic alternative to junk food. . were taken into consideration. magazines.

. . . . . . . . . .. The message of Nestlé’s fruit yogurt (This message helps reminding the target market of fruit yogurt) The captivating fruit yogurt of Nestlé (Persuades the market to buy this product) 15 . . . . . . we conclude that Nestlé’s current message of “imagines the taste” and delicious cup of fruit yogurt serves both persuasive and reminding roles of promotion. . .

. . . These cities of Pakistan are thickly populated and have relatively high awareness and literacy rate. They willingly compromise on quality for price and some among them. 3. They also correctly judged that less knowledgeable and illiterate people will resist switching from raw to fruit yogurt because they are either less aware or indifferent to the hygienic factor and nutritive values of food. Nestlé decided to start off from the safe side I-e they introduced their fruit yogurt in Islamabad. . .12. . We can safely say that this product is targeting “A” class of our country and became popular among them because of the following characteristics of this class: • • • • • “A” class people are mostly literate. . . Lahore. Karachi and Peshawar. . Place Raw yogurt. . They don’t usually compromise on quality. . delicious. has been into market since long. . have awareness and the resources to try out every new food item that comes into the market. knowledgeable. . which is of RS. which is one of the competitors of fruit yogurt. This amalgamation of flavored yogurt with fruit chunks came as good news for fruit lovers.. as they won’t readily accept it. hygiene and delicacy for price. . . It is not only cheap but also available in quantities of one’s choice (more or less). . hygienic and nutritious. among low-income group and low socio-economic status will not be a wise decision. It became popular among teenagers of this class because it is a healthy alternative junk food etc 16 . without striving to get information. They knew that introduction of fruit yogurt. . Management of Nestlé Fruit Yogurt correctly figured out that the perception of raw yogurt of one particular class of Pakistan is hard to change. Keeping these attitudes and behaviors of different classes in mind. They are much aware of the nutritive values of food and know the advantage or edge of fruit yogurt over the raw one. perceive the Nestlé’s fruit yogurt to be of high price and do not buy it ultimately.

. . . . Price The ultimate aim of any organization is to set a price that satisfies both the consumers and the manufacturers. . Since Nestlé Fruit Yogurt is in introductory stage we discuss the pricing policies of introductory stage as under: 17 . It is now commonly used as a substitute to mashed foods for kids and also to junk sugary foods and as a dessert. . Therefore pricing policies are different in introductory. . . Price Level Policies over Product Life Cycle Price level policies vary according to the life cycle stage product is in at any given time. . . . 4. growth. all because it combines the benefits of taste. . The competitors of Nestlé Fruit Yogurt include: • • • Olpers Prime yogurt & Raw yogurt mainly In order to outweigh the competition of raw yogurt which is very cheap and a preference of price-conscious people. quality and low price and is gaining popularity due to these multiple features. . . Nestlé Fruit Yogurt comes in a small pack which is reasonably priced keeping in consideration its fruit-contents which make it nutritious and tasty. maturity and decline stage. This has been achieved by working on price strategy which starts by reducing the production costs so as to reduce the sales costs. . .. . Low price feature of the product targets the lower and middle classes too. Nestlé Fruit Yogurt comes in a small sized pack of 12 Rupees which is affordable to every socioeconomic status.

. Market-Penetration Pricing This strategy involves introduction of products at low prices. . . . . Nestlé Fruit Yogurt: Market-Penetration Pricing The pricing strategy adopted by Nestlé Fruit Yogurt is market-penetration pricing since it is a consumer product and has entered market with price as low as Rs. . . This strategy is applied in case of products with more elastic demand and particularly for consumer goods. Market-Skimming Pricing Skimming defines the pricing strategy of entering market at a high price with high quality products. . . . 12 and also because it fulfills following conditions of market-penetration pricing. . . .. . . . This strategy is applied in case of less elastic or inelastic demand of products. management decides whether to adopt a skimming or a penetration price strategy. Demand is highly elastic. Introductory stage Pricing strategies used at introductory stage or market entering price strategies are: • • Skimming Penetration In preparing to enter the market with a new product. • • • A large market exists for the product. Economies of scale are possible i-e substantial reductions in the unit cost of the product can be achieved through large-scale operations. 18 . .

. With either of the goals of this objective a firm seeks to avoid price competition. Smaller industries tend to “follow the leader” when setting their prices or simply price the products to meet the prevailing market price. 19 . . . . . . . Following are the common pricing objectives: • Profit-oriented: To achieve a target return To maximize profit • Sales-oriented: To increase sales volume To maintain or increase market share • Status quo-oriented: To stabilize prices To meet competition Nestlé price objective: Status-quo oriented The pricing objective taken up by Nestlé Fruit Yogurt is status quo which is intended simply to maintain the firm’s current situation that is the status quo. . Thus management should decide on its pricing objective before determining the price itself. . Nestlé like a few other firms has consciously established a pricing objective for fruit yogurt. .. . . Price Objective Every marketing activity including pricing should be directed towards a goal. This pricing policy gives management an easy means of avoiding difficult pricing decisions. . . Price stabilization is often the goal in industries where one large firm such as Nestlé acts as a leader in setting prices. . . • Competition for this product already exists in market i-e Raw yogurt which presents a fierce competition. .

. . . . . . . It focuses more on using other marketing mix elements such as product distribution and product rather than price. 20 . Nestlé also adopts this strategy to avoid price competition. . Nestlé Fruit Yogurt is concentrating more on innovation that is introducing new flavors and previously introduction of real fruit chunks rather than changing prices. . . . .. . . . . .

.. . Mothers and wives. . it took the Pakistani market by storm. Previously it was taken with meals only but now it has become an all time favorite dessert as well. 21 . People for a long time were looking for one such yogurt that is energizing. creamy. hygienic and the best alternative junk food. nutritious. This is because it’s delicious. Because of its low fat contents it came as good news for the diet conscious people. b) Sex/gender It has been a common observation that men have never been much into eating yogurts but with the launch of this product scenario changed. enjoy this product as much as they can. . . . . and full of fruits. . Lahore. . Demographics a) Age Briefly. So we can safely say that fruit yogurt is popular among men and women alike. Once this product came. . Nestlé Fruit Yogurt’s Macroenvironment Nestlé’ Fruit Yogurt’s External Macroenvironment includes: 1. . . It has loads of flavors suited to the taste of almost every member of the society. Men who used to be most reluctant to eat yogurt. nutritious and high quality products irrespective of their prices. thick. 5. c) Location of residence Nestlé Fruit Yogurt is not available everywhere right now. . It has been first introduced in Karachi. . who have always been the most considerate for their kids and families. preferred to buy fruit yogurt as it is of high quality and distinct taste. . . we can say that fruit yogurt is popular among every age group. . Islamabad and Peshawar where education and awareness level is relatively high and people willingly go for the hygienic.

fruit yogurts of Nestlé are of high quality. . . .you’d know that they are all Halal according to our religion ‘Islam’. With this introduction low income people switched to fruit yogurt as it provided them with high quality. . . This is because one of the foremost strategies of Nestlé Fruit Yogurt is to take well into consideration the country’s legislatures and religious constraints of the country before the introduction of a product. Islamabad. The reason was that it used to be cheap. and delicacy at a very reasonable price. Only the educated people know the importance of nutritious and hygienic foods and such people never compromise on quality for price. . e) Religion With religion comes the concept of Halal. . . To target such people. Nestlé launched its fruit yogurt initially in Karachi. Haram products primarily. f) Education Education and knowledge bestow a person with awareness which actually effects the buying decisions of individuals. . . 22 . people used to prefer khula yogurt. .. . Keeping this aspect into consideration. . . If you take a look at the above-mentioned ingredients of fruit yogurt . . available in large quantities and worth a compromise on quality for price. . Lahore and Peshawar where the literacy rate is relatively high and people have the urge to know more and beware of their surroundings. d) Socioeconomic status Previously. . Nestlé came up with a 12 rupees economical fruit yogurt which is within the affordability of every income group of Pakistan. nutrition. In addition to this. they are nutritious and hygienic as well. They prefer to buy expensive products but in return expect the highest possible quality n wide variety.

b) Labor Policies Government policies. . During the year 2005-06 the country did experience inflation. Apart from this Nestlé Fruit Yogurt team discourages the use of child labor in its plants. and budget balance. Such analysis traditionally concentrated heavily on 23 . GDP growth. . . and productivity of the labor force that create either high or low costs for businesses. . . a low GDP and unemployment all these factors contributed in a low investment by the investors into this fruit yogurt project Nestlé Fruit Yogurt used the process of strategic planning. Some common restrictions and barriers that prevented the investment of capital in this project included: a) Operations Restrictions Restrictions on procurement. . . . . .. This comes at a cost. as well as the efficiency and honesty of officials with whom business executives must deal and the effectiveness and integrity of the judicial system. 2. Strategic planning involves identifying future trends and analyzing how the corporation can take advantage of those trends. or locating business activities. . The labor expenses for the company raised more than forecasted. . trade union activity. hiring foreign personnel. c) Domestic Economic Problems A country's ranking according to its most recent five-year performance record in per capita GDP. unemployment. . inflation. To deal with problems like these Nestlé Fruit Yogurt’s board of directors lessened the use of the middle-man and did most of the sale by their own department. . . Economics Conditions The economic conditions prevalent in the country did affect the investment in the Nestlé Fruit Yogurt industry. . . capital investment.

3. . . . . Fruit yogurt of high quality and a distinct taste. . 3. Most firms use risk information for many reasons and in several different offices. Another important reason for the low investment of capital in the Nestlé Fruit Yogurt project was the increased interest rates. by its nature. . Fewer investments were made which created a need for capital. planners now incorporate political risk analysis. . is qualitative. economic trends. Many planners have found systematic risk ratings particularly useful because they allow for the cross country comparisons that are an integral part of their analytical approach. Olpers Prime Yogurt Raw Yogurt Competitive strategies of Nestlé In order to counter the present competition. but strategic planners can find it difficult to incorporate political analysis into their traditional economic and business research. . Nestlé’ Fruit Yogurt’s marketing team adopts the following measures: • • • Innovations in their products (yogurts) so that the market never gets fed up. . . but since political decisions and events substantially influence these trends. This affected the company’s marketing strategy and the number of advertisements made was decreased. 2. . dealing with more abrupt and sweeping factors. . . Current planning activities made by Nestlé involve an attempt to assess the impact of political and economic trends. . Low fat contents to target the diet-conscious section of the market.. Competition Nestlé Fruit Yogurt has three main competitors namely: 1. . . . 24 . Political analysis.

Where there is a family. . . beliefs. pickles. . • • • • • • Low price of 12 rupees that is affordable to every socioeconomic status. . Culture is basically the customs. taste.g. . simple yogurt is also used as a raw material for cooking. which is again a part of our tradition. Nestlé provides the families with the dairy products like packed simple yogurt. Besides having it as an accessory of food. Nestlé provides the Pakistani families with all that they require purity. raita.. packed or raw yogurt. there is food. Then we have to know what culture is. . Social and Cultural Forces First of all. . . living in communities. hygiene everything. . Attractive packaging and use of imported seals. hygienic and the best alternative to junk food. Different fruit flavors in the yogurt that specifically attract kids and fruit lovers. Now we have to see how and in what ways the cultural and social forces affect the marketing of our chosen organization. . and social organization of a particular country or group. salad. . we have to define what society is. . 4. our culture. Society is all about people in general. The first aspect that will be brought under consideration is: a) Family In a country like Pakistan. and fruit yogurt. . Advertisement through streamers. . 25 . . Nutritious. way of life. advertisement of this new product (fruit yogurt) on mass media. This is a part of our culture. family plays a pivotal role in the everyday life of an individual. magazines and outdoor billboards. . posters. and where there is food there are accessories e. . “Nestlé” in Pakistan. raita. High budget.

. . . 5. therefore. Political and Legal Forces Political and legal forces also influence every company’s conduct. The behavior of the customers changes at certain points in a year where the demand of this particular product increases e. . . Political and legal forces on marketing would be categorized into: a) Trade policy Taxes (state and local taxes) – delivery services result in higher taxes due to increase in number of vans since Nestlé mostly relies on its self service for transportation so that the chilling capacity and other such requirements can be observed. people prefer having yogurt in the summers. . . the country runs on traditions and culture. Moharram. Quotas and tariffs – when importing seals Nestlé also faces import barriers in the form of quotas and tariffs which also limit the imports. . .. As previously mentioned. . . . . b) Customs and Behaviors The normal custom is that this particular product is usually consumed in the summers. . Eid etc. so how this “edible” product is packaged does not really matter as it has to be consumed anyway. . b) Quality Control 26 . . Here in Pakistan. Increase in vans for transportation is thus an uncontrollable factor and demands tax payments. and it tells us that it gives the body a cool effect.g. . Ramadan. the majority of the people are either illiterate or live below the line of poverty.

. in order to meet the needs and desires of consumers around the world. Nestlé Milk related products have established an Extension Service. . . the world's biggest food Group is also the global leader in the industry with regard to Research and Development (R&D). provision of high yield fodder seed etc so as to come up with highest quality food products. . Technology Nestlé. Year after year. c) Open/close economy: It’s an open economy facilitating foreign investments and allowing free trade.. Nestlé Fruit Yogurt-processing industry has special concerns about the health and safety of the consumers. 6. . . convenience. . conducive climate conditions. Since Nestlé is an ever increasing food company quality control also presents a problem which has to be observed. Nestlé invests some 800 million Swiss francs into R&D as a major driving force of its double strategy: to strengthen the Company’s brands worldwide and to continue to support future long. good animal husbandry practices. for pleasure.term growth and competitiveness through innovation and renovation. This is the reason why abundant and productive agricultural sources. staffed by qualified veterinary doctors. . . . . . health and well being. and modern technologies are all important factors for providing Nestlé Fruit Yogurt-processing industry 27 . No other food company dedicates so many human and financial resources to R&D: an international staff of 3500 engaged in the search for innovative new products and the renovation of existing ones. improved breeding. . who assist farmers in vaccination and treatment of livestock. . . Nestlé Fruit Yogurt’s objective is to consolidate and strengthen its leading position at the cutting edge of innovation in the food area. . At the threshold of this new millennium. .

. insects. . These two lactic organisms produce the required acidity and the delicate yogurt flavor. . Aseptic packaging sterilizes the fruit yogurt and 28 . . . Another important technique used in the packaging of Nestlé Fruit Yogurt is that of Aseptic packaging. moisture or oxygen. Souring and thickening take place in about 3 hours at 44¡ C (111¡ F). Because the milk has been heated and soured. For the most part. .At this stage chunks of fruit are added to give the yogurt the desired taste. . or milk fortified by skim milk powder. Nestlé uses the term "clean technologies" to describe its working environment. bacteria. . and it is probably the safest of all perishable foods. to about 90¡ C (194¡ F) for a few minutes. or material use in comparison to the technologies that they replace. . at which point a controlled culture of Lactobacillus bulgaricus and Streptococcus thermophilus is added. . Nestlé foodprocessing facilities are located close to their agricultural source. . Improved Packaging Nestlé’s fruit yogurt’s main aim is the use of less excessive and more environmentally friendly packaging products. and due of its high acidity. . . It uses special packaging techniques that minimizes and eliminates loss by leakage or evaporation and reduces spoilage and contamination by dirt. . ." Nestlé Fruit Yogurt is Mass-processed by heating concentrated milk. and stop when the mixture is cooled to 5¡ C (40¡ F). pathogens cannot grow in yogurt. then cooling it to about 44¡ C (111¡ F). energy use. Well-made yogurt made by Nestlé industries of any type should last for 14 days if kept at 5¡ C (41¡ F). with ample and high quality raw materials. This term is defined as "manufacturing processes or product technologies that reduce pollution or waste. . mold. . .

aseptically packaged foods have a more natural flavor as well as more nutrients. All this makes Nestlé Fruit Yogurt a flavored product with only a few calories per serving and is popular for low calories diets. The typical aseptic containers include foil-lined cartons. . 29 . . In the aseptic process. . plastic cups. . . Another advantage of aseptic packaging is better flavor. . then packages it in a sterilized container. . . . . . . foods can be heated rapidly outside of the container. These containers cost and weigh less than the metal cans or glass bottles traditionally used in packaging. . .. . and plastic bags. Therefore. . . Above everything to keep up with the quality standards Nestlé used imported seals specially designed for packaging dairy products. Cans or bottles require much longer heating time for sterilization. the more the flavor changes. The longer foods are heated.

In marketing any given good or service. . females and adults who are health conscious people and who want healthy alternative to junk food but with good taste. . . and Their buying behavior Nestlé Fruit Yogurt is an indulger for all males. Peach. . However the main target market of this product is not only kids. . . . . 30 . . Nestlé Fruit Yogurt’s Microenvironment 1.e.. Strawberry. . has the resources to purchase the product. but are also a choice of mothers because they are safe and because of their nutritive values.12 per yogurt. Pineapple etc because of their delicious tastes. . . three specific factors need to be considered: • • • People or organizations with needs. . 6. . and is permitted by the law and other regulations to acquire the product. This product is unvaryingly for all fruit-lovers and fans of desserts. . . the term market refers to the group of consumers or organizations that is interested in the product. Their purchasing power. Market In marketing. who are appealed to a variety of fruit flavored yogurts with real fruit chunks i. Briefly Nestlé Fruit Yogurt has a wide range market including all age groups and income groups with price Rs. .

But now with the merger of this factory with Nestlé Milkpak in April 1997. 3. . Marketing Intermediaries Marketing intermediaries are independent business organizations that directly aid in the flow of goods and services between a marketing organization and its markets. . . the company successfully established its own collection system and expanded its operations over a very large milk shed area in Punjab. . . sub-centers and centers. .. There are two types of intermediaries: 31 . Kabirwala factory is a fully owned unit of Nestlé Milkpak ltd. The core raw materials of Nestlé Fruit Yogurts are milk and fruits. Suppliers The people or firms that supply the goods or services required by a producer to make what it sells and also the firms that provide the merchandise. which are undertaken by a fleet of specially insulated tanks. . Initially Nestlé Milkpak ltd. . 2. . . Acquired services of Kabirwala Dairy ltd. . . . a wholesaler or retailer resells are the suppliers and are a vital part of a firm’s marketing success. At these centers chillers have been installed to lower milk temperature to 4 degree centigrade for preventing bacteria development during long hauls to factories. . Milk is collected through a vast network of village milk centers (VMCs). Driven by its commitment to quality and having realized that only self collection could eliminate its dependence on poor quality milk from outside sources. . . .

These are the facilitating organizations that provide services such as transportation. . . a) Middlemen. . 32 . up gradation of milk loading and transportation system. adherence to the highest acceptance standards at all milk collection points. This was achieved through a comprehensive strategy and sustained efforts to overhaul the milk collection process.. . . . intensive education program for the farmers and the milk collection staff. wholesalers and retailers As for Nestlé Fruit Yogurt wholesalers are given license (i. . and financing that are needed to complete exchanges between buyers and sellers. including the factories. increase in the chilling capacity and above all. . those with best chillers). . . warehousing. . . Milk collected by Nestlé is low on Sodium high on fat and solid-non-fats and has reduced bacteria count. b) Channels of distribution They operate between a company and its markets and between a company and its suppliers. . . .e. .However middlemen are less involved because it mostly done by their self owned departments. .

attitudes. . usage.. . Markets can be segmented or targeted using a variety of factor. responses) Psychographic bases (lifestyle. . . . . . occupation) Geographical bases (states. 7. regions. A key factor to success in today's market place is finding subtle differences to give a business the marketing edge. Businesses that target specialty markets will promote its products and services more effectively than a business aiming at the "average" customer. To be effective in market segmentation keep the following things in mind: • • • Segments or target markets should be accessible to the business Each segmented group must be large enough to provide a solid customer base. . values. It is the process of dividing a market into a distinct group of buyers that require different products or marketing mixes. . . family size. . . countries) Behavior bases (product knowledge. . Each segmented group requires a separate marketing plan. 33 . . . personality) A business must analyze the needs and wants of different market segments before determining their own niche. Opportunities in marketing increase when segmented groups of clients and customers with varying needs and wants are recognized. Segmentation Market segmentation is one of the steps that go into defining and targeting specific markets. . The bases for segmenting consumer markets include: • • • • Demographical bases (age. . life cycle.

. and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment. The overall intent is to identify groups of similar customers and potential customers. . . That is. they are likely to respond similarly to a given marketing strategy.. and promoted in a certain way. The requirements for successful segmentation are: • • • • • Homogeneity within the segment Heterogeneity between segments Segments are measurable and identifiable Segments are accessible and actionable Segment is large enough to be profitable 34 . . to understand their behaviour. . but there are alternative ways for to a small business to segment their markets. The process of segmentation is distinct from targeting (chosing which segments to address) and positioning (designing an appropriate marketing mix for each segment). . . Any time one suspect there are significant. . Market segmentation is the process in marketing of dividing a market into distinct subsets (segments) that behave in the same way or have similar needs. distributed in a certain way. . . This research is often too expensive for small businesses to invest in. . to prioritise the groups to address. . they are likely to have similar feeling and ideas about a marketing mix comprised of a given product or service. Large companies such as Nestlé segment their markets by conducting extensive market research projects. . . . Small segments are often termed niche markets or specialty markets. Because each segment is fairly homogeneous in their needs and attitudes. . measurable differences in the market he/she should consider market segmentation. sold at a given price. . There are many reasons for dividing a marketing into smaller segments.

. . The variables used for segmentation include: • Geographic variables o o o region of the world or country country size climate • Demographic variables o o o o o age gender sexual orientation family size family life cycle 35 . . Today the idea of place is not limited to geographic profiling but also demographics and other categorizing variables. . Price refers to not only the actual price but also price elasticity. Promotion.Actionable: you must have a product for this segment M .Measurable: size and purchasing power can be measured Currently a college student studying the marketing mix is now introduced to the Four Ps of the Marketing Mix. .. These criteria can be summarized by the word SADAM: • • • • • S . . . Place has evidently replaced distribution simply by where or what area the marketing campaign is going to cover. Place.Differential: it must respond differently to a different marketing mix A . Product. . . Price. . . . Promotion simply refers to what medium will deliver the message and what the overall marketing strategy is offering as a benefit.Accessible: it must be possible to reach it efficiently D . This has only occurred over the last ten years with the expansion of internet use and its ability to target specific types of people and not just people in a geographic area.Substantial: the segment has to be large and profitable enough A . . . . . . Product (service) is whatever it may be that is being sold/marketed.

When enough information is combined to create a clear picture of a typical member of a segment. . . .. . . . . The task then becomes determining. The most successful small businesses understand that only a limited number of people will buy their product or service. o o o o o o income occupation education socioeconomic status religion nationality/race • Psychographic variables o o o o personality life style value attitude • Behavioral variables o o o o o o benefit sought product usage rate brand loyalty product end use readiness-to-buy stage decision making unit When numerous variables are combined to give an in-depth understanding of a segment. . . A statistical technique commonly used in determining a profile is cluster analysis. . . . this is referred to as a buyer profile. this is referred to as depth segmentation. . When the profile is limited to demographic variables it is called a demographic profile (typically shortened to "a demographic"). . as 36 . . . .

and expanded their market in a way that other manufacturers could not take advantage of. elderly Gender: male. . young. As a manufacturer of dairy products. To make themselves feel good. Nestlé knew that there were plenty of other companies operating in the local market with their own product lines. college. . teens. One needs to understand that people purchase products or services for three basic reasons: • • • To satisfy basic needs. Zeroing in on the target market is done by using Market Segmentation. . . . closely as possible. and divide it into market segments: • • • Age: children.but it also gave them a ‘niche’ that they could capitalize on. So they decided to offer something different something unique to their customers. middle. . . and be prepared to market it accordingly. they came up with the Nestlé Fruit Yogurt. . The first thing they did was to research the 'demographics' of the community. exactly who those people are. In doing this they eliminated a percentage of the market. You'll need to determine which of those categories your product or service is the solution to. The primary market of Nestlé is local or regional. . female Education: high school. . . . . Your product or service may fit more than one category The next step in creating an effective marketing strategy is to zero in on the target market.. To solve problems. . and 'targeting' the business's marketing efforts and dollars toward them. university 37 . . . .

exciting. they needed to segment the market as much as possible using 'psychographics' as their guide: • • • • • Lifestyle: conservative. If Nestlé filled one or more of these corporate needs. . security conscious. middle.. . . library. high Marital status: single. . hall. . This information was available to them through the local town. shopping. . . married for 10 – 20 years. buy products or services for three reasons only: to increase revenue." 38 . to maintain the status quo. . unlike individuals. . physical fitness. then they might have had found a target market. By now they had a picture emerging of who they thought their 'ideal' customer was … or who they wanted him to be. they wanted to find out how they purchased: seasonally. . who makes the decisions? It is important to note that businesses. . In addition. upper Opinion: easily led or opinionated Activities and interests: sports. Nestlé might even be able to write a description of their customer. "My target customer is a middle-class woman in her 30s or 40s who is married and has children. Next. only in volume. economical Social class: lower. medium. trendy. or to decrease expenses. . married. • • • • Income: low. . . with or without children. locally. . and is environmentally conscious and physically fit. or Chamber of Commerce. divorced Ethnic and/or religious background Family life cycle: newly married. books Attitudes and beliefs: environmentalist. Depending on the nature of their business. . .

. they may even know. . . Lots of times prospective customers don't know about the company Nestlé or their product “the fruit yogurt”. If they go back to the basic reasons why people purchase goods or services. but that still leaves 6000 who are not. . It is the job of people at Nestlé. . . . or who have not yet purchased the product from anyone. . Based on the numbers Nestlé uncovered in their research. . they may be successful in capturing a bigger share of the market! On the other hand. . then Nestlé has nothing to fear. 39 . .. only to discover that there are probably less than 75 people who will buy from them? First of all. and can find ways to target their efforts to that age group. above. for example. . Let's face it – there's a market. or can't tell the difference between Nestlé and others. for everything. using the example above. . But if those 75 are only going to spend Rs. . to 'target' the group that they've identified – even if they have competition. . they may decide. . that Nestlé would like to extend their target market to include women from 50 – 60 years of age. once to know who their best customers are. what if Nestlé 'specialized' the product or service and then researched the target market.600 every decade on your product or service – then Nestlé needs to go 'back to the drawing board' of planning the business and perhaps determining a wider target market – but at least they would be armed with all the information they need to start again. In addition. that there are approximately 9000 of those potential customers in their area! It may well be that 3000 of them are already loyal to a competitor. if those 75 are corporate customers who will spend hundreds on your product or service annually. . or go in a different direction. and a target market.

By producing high volumes of standardized products. The associated distribution strategy is to obtain the most extensive distribution possible. .” Such “niches” specialize in serving market segments that major competitors overlook or ignore. . 8. a company might choose to serve several related segments – perhaps those with different kinds of customers but with the same basic wants. the firm hopes to take advantage of economies of scale and experience curve effects. these selected segments are called target markets. . . A company with limited resources might decide to serve only one or a few special segments or “market niches. Target Marketing involves concentrating your marketing efforts on one or a few key segments. Target marketing involves evaluating each market segment’s attractiveness and selecting one or more segments to enter. . . . Alternatively. . Target Market and Strategies After a company has defined market segments. pricing and distribution of your products and/or services easier and more cost-effective. The beauty of target marketing is that it makes the promotion. .. Maintaining this strategy requires a continuous search for cost reductions in all aspects of the business. Target marketing can be the key to a business’s success. . Nestlé Fruit Yogurt’s marketing team could choose from either of the following strategies: 1. . . . . it can enter one or many segments of a given market. . Promotional 40 . A company should target segments in which it can profitably generate the greatest customer value and sustain it over time. Cost Leadership (Undifferentiated or Mass) Strategy This strategy emphasizes efficiency. . . The product is often a basic no-frills product that is produced at a relatively low cost and made available to a very large customer base.

. . .. To be successful. . Because customers see the product as unrivaled and unequaled. . . this strategy usually requires a considerable market share advantage or preferential access to raw materials. . . and supermarkets such as KwikSave. Differentiation Strategy Differentiation involves creating a product that is perceived as unique. . the price elasticity of demand tends to be reduced and customers tend to be more brand loyal. . Examples include low-cost airlines such as EasyJet and Southwest Airlines. The unique features or benefits should provide superior value for the customer if this strategy is to be successful. or some other important input. . the strategy can easily be mimicked by competitors. . components. Without one or more of these advantages. However there are usually additional costs associated with the differentiating product features and this could require a premium pricing strategy. . This can provide considerable insulation from competition. 2. labour. strategy often involves trying to make a virtue out of low cost product features. . . Successful implementation also benefits from: • • • • • • process engineering skills products designed for ease of manufacture sustained access to inexpensive capital close supervision of labour tight cost control incentives based on quantitative targets. . To maintain this strategy the firm should have: 41 . .

. . . . The following diagram illustrates the use of each target marketing strategy accroding to its market scope and compentency. . • • • • • • • strong research and development skills strong product engineering skills strong creativity skills good cooperation with distribution channels strong marketing skills incentives based largely on subjective measures be able to communicate the importance of the differentiating product characteristics • • stress continuous improvement and innovation attract highly skilled. .. . . . . . you can better meet the needs of that target market. . . creative people 3. 42 . Segmentation Strategy In this strategy the firm concentrates on a select few target markets. It is most suitable for relatively small firms but can be used by any company. . The firm typically looks to gain a competitive advantage through effectiveness rather than efficiency. It is hoped that by focusing your marketing efforts on one or two narrow market segments and tailoring your marketing mix to these specialized markets. .As a focus strategy it may be used to select targets that are less vulnerable to substitutes or where a competition is weakest to earn above-average return on investments. . . It is also called a focus strategy or niche strategy.

. In evaluating segments to target. But before any further decision was made. The team combined market segmentation strategy with product differentiation strategy which was an effective way of matching Nestlé Fruit Yogurt’s product strategy (supply side) to the characteristics of its target market segments (demand side). it would be difficult for consumers to accept a product of price Rs. . . . .12 (although low) and realize the 43 . It was observed that due to Pakistan’s uneven income distribution and education level. . . .. Nestlé’s marketing team observed three factors: • • • Segment size and growth Segment structural attractiveness Company objectives and resources The team collected and analyzed data on current segment sales. . the marketing team evaluated the market segments. . Nestlé Fruit Yogurt’s marketing team chose to combine multiple strategies. . . . . . . . Due to the nature of the product ( uniquely traditional yet contemprary ) and the available market segments. growth rates. and expected profitability for various segments.

Only developed cities such as Karachi. . . Nestlé Fruit Yogurt’s marketing team identified Nestlé Fruit Yogurt’s target market to constitute class ‘A’ citizens of Karachi. . . 44 .. . Islamabad and Lahore – all males. would definitely catch the eye of the youth population. . . . . . This led the marketing team to choose all health conscious males. . Lahore and Karachi were chosen as first target segment. . . females and adults who are health conscious people and who want healthy alternative to junk food but with good taste. . . females and adults to be put up as the second target segment of Nestlé Fruit Yogurt. health benefits and nourishment the product provides. only ‘A’ class citizens of the major developed cities of Pakistan including: Islamabad. Hence a product. A survey also underlined that the changing consumer patterns of young males and females mainly due to diet awareness. that offers combined benefits of a healthy diet in addition to being ready to go. such as Nestlé Fruit Yogurt itself. On the basis of this information. . health consciousness and eating out habits has increased the rate of consumption of ready to go (fast food) food products. Lahore and Islamabad had an even income distribution level and literacy rate that was adequate. . For this reason.

9. One of them is raita. . price does play a pivotal role in helping the target market to decide which product to buy. A good position makes the product unique and is considered a benefit by the target market. . The product has to be beneficial for the target market and we see that Nestlé Fruit Yogurt is very much liked by kids and the fruit lovers. There are many factors that we will be taking into consideration. . And as mentioned previously this product is not subjected to high amounts of heat therefore it retains the original taste. This high quality product is available at a very affordable price or PKR 12. . According to what the studies show there are three main competitors of Nestlé i. 45 . When we are comparing one thing with another we have to look at all the “competitive” factors that make the product conspicuous and prominent among the others. and raw yogurt. . as no competitor before introduced yogurt that was flavored. . . . Now we will talk about how our chosen organization “Nestlé” is positioned in Pakistan. . Prime yogurt. Positioning Positioning can be defined as how your target market defines you in relation to your competitors. Nestlé Fruit Yogurt is available in different flavors with a tinge of originality which boosts up the level of quality. Olpers. Nestlé has been innovative enough to introduce the Nestlé raita in order to stand out in the row of competitors. In a country like Pakistan. The first and foremost factor that we will be considering is the number of competitors. A price that is affordable to almost anyone. When we relate this factor to the Nestlé Fruit Yogurt we see that the product indeed is unique. . the first requirement of good positioning is that the product should be unique. . according to our culture. But being unique is not enough. ..e. accessories of food include lots of things. Besides this. . As stated above. . . . . The next factor is flavor.

The next factor is the high budget advertising activities. knowledgeable. . So its basically the people of the urban areas who are more literate. The packaging is composed of imported seals and a sterilized plastic container. and hygiene conscious. . According to the studies. . . it has been seen that most of the sales are in the major urban areas of Pakistan. . . . . . . . . Packaging is another factor by which Nestlé Fruit Yogurt stands out in the row of competitors. All these positioning factors are then subjected to the perceptual map. whereas the people in the rural areas neither know this stuff nor care about this. . The next factor that we’re going to discuss is quality packaging. . The perceptual map is a two dimensional map used by marketers in order to perceive the comparative importance of each point of every brand available. Rural areas and minor urban areas still use the conventional raw yogurt. Nestlé spends huge amounts in the ATL and BTL activities in order to become the prominent members among the competitors and to have a good image in the eyes of the target market.. . . . 46 .

. . . where do we want to go? Where are we now A detailed approach of assessing where we are now includes SWOT analysis and environmental scanning. WEAKNESSES • They have not entered into many local cities. • Sponsorship can be gained through different means. 47 . THREATS • There is a potential intense competition amongst the top players in the competition. Strategic Direction of Nestlé Fruit Yogurt Setting strategic direction involves answering two questions: Where are we now? And. • Because they are a market leader (42. . • Packaging is not that attractive. they can introduce more health-based products without any doubts.9%). . . . . Each is explained in detail below: SWOT Analysis STRENGTHS • Their brand recognition. such as sporting events. . OPPORTUNITIES • Health-based products are becoming more popular in the world including Pakistan. . • They have a great research and development team. • The employees want to achieve higher volumes by renovating existing products and innovating new products.. . • Along with this comes increased competition to gain market share. • Nestlé is a low cost operator which allows them to beat the competition by producing low cost products and also edging ahead with low operating costs. . . . • Competitors can use aggressive marketing strategies like cutting prices. . . 10. .

. . Where do we want to go Knowing where the organization is at the present time enables managers to set a direction for the firm and start to allocate resources to move towards that direction. . . . . The Portfolio of Business: BCG Matrix 48 . . . . . . . . . . . .. Two techniques to aid in these decisions are: Portfolio and Market Product analysis.

. . . . As Nestlé attempts to increase the sales of its fruit yogurts’ business. . . it must consider all four of the alternative market-product strategies. . 49 . . . . . . . Market Product Analysis Firms can also view growth opportunities in terms of four combinations of current and new markets and current and new products. . . .. .

we feel that the current product line needs change. . . An addition to that is the fact that the targeted literate and health conscious segments of the market aren’t consuming this product as forecasted due to the fact that with the product’s high nutrition value it has relatively high fat content. Nestlé is rightly reputed to offering high-quality. . . Nestlé Fruit Yogurt is a product that was essentially made to target adult males and females but consumer behaviors show that the product is being consumed more by children. 11. This product has all the goodness of milk. The product is expected to gain popularity and momentum in market due to the distinctive features of taste and health combined together along with following features: 50 . . Keeping that in consideration proposed Nestlé Fruit Yogurt has been made on same lines and is a substitute to sugary junk food items. the product has extremely low fat content (99% Fat Free).. . . The components of each marketing mix element are combined to provide a cohesive marketing program which is explained as follows: 1. The new product will overcome the limitations of the current Fruit Yogurts and allow further penetration into the market and increase market share. . we propose that a new product should be introduced in the existing product line. fruit and yogurt and to add to it. . . . tasty and healthy food items. . . Product Strategy Nestlé Fruit Yogurt is a new product of Nestlé’s product line in Pakistan. . . To face these issues. . . Proposed Marketing Mix On the basis of current sales and consumer response to Nestlé Fruit Yogurt.

. . Flavor: Fruit yogurt currently comes in flavors as Strawberry. . Therefore three different sizes will be introduced. . to give vastness to the flavors it offers to fruit lovers the new product introduced is Pineapple flavored. . medium and large. . . This gives novelty to current flavors being offered and more choice to consumers. Peach and Apricot in Pakistani market. . 51 . . ranging from small.. . Nestlé Pineapple Fruit Yogurt Prototype Fat content: The fat content of the product has been reduced to 99 percent which makes it .00 g of the existing product in small size. Following is a hand made large package sample of the proposed product. . . Size and Package: After the popularity of fruit yogurt with kids. . However. .2 g on fats as opposed to 2. the proposed product now comes in a family size package so as to be utilized equally by family as a whole. . . .

52 . . . . . . . . .. . . . Due to its reduced fat-content it is now a best choice for health-conscious people. . . Where the existing fruit yogurt targets only individuals with its small sized pack. . People can now use it readily as a dessert without worrying about its fat content affecting their dietary plans. Target Market: Due to the above mentioned new features Nestlé Fruit Yogurt now targets adults who are health conscious on the same basis as the existing product targets kids as well as adults. it now targets the whole family with its new packaging and attracts a whole lot of new pineapple-lover consumers. . . .

therefore ‘skimming’ the market. . . This strategy is employed only for a limited duration to recover most of investment made to build the product. Price Strategy Setting price of a product is one of the most challenging decisions. a seller must use other pricing tactics such as economy or penetration. . The price is likely to rise later as the product gains a market share. . .. Creaming or skimming Selling a product at a high price. . . Market oriented pricing Setting a price based upon analysis and research compiled from the targeted market. . sacrificing high sales to gain a high profit. . . . Penetration pricing Setting an initial low price at the stage of deployment of the product to attract initial customers. due to the fact that there are fruit yogurts in the market but none with low-fat content. As this product is relatively new in the market. Nestlé could choose from either of the following pricing strategies: 1. . 4. 3. Limit pricing This is a strategy of pricing adopted by firms in a contestable market in order to 'limit' the ability of new entrants to take advantage of economies of scale where by costs are low enough for them to become competitive. . . 2. . 53 . . To gain further market share. 2. .

. For this to be useful. . Psychological pricing Pricing designed to have a positive psychological impact. quarter and year. Contribution Margin-based Pricing Contribution Margin-based Pricing maximizes the profit derived from an individual product. . Nestlé could adopt the following pricing objectives: • • • Profit Orientation Sales Orientation Status quo Orientation For Nestlé Pineapple Fruit Yogurt to be successful the company first needs to capture a large market share and to do so the sales volumes need to be increased. 54 .95 rather than £5. . . selling a product at £4. In order to achieve these objectives Nestlé needs to commit time and money to this marketing program in the form of a budget. . the objective is sales orientation. . This budget is really the “sales” document presented to top management to gain approval for the budgeted resources to implement the marketing program. the pricing objective management selects must be compatible with the overall goals set by the firm and the goals for this marketing program. .. thus. . . 5. . . For example. . . . . The budgeting process starts with a sales forecast based on estimates of units expected to be sold-by month. Estimated expenses for the marketing mix activities comprising the marketing program are estimated and balanced against expected revenues to estimate the programs’ profitability. based on the difference between the product's price and variable costs (the product's Contribution Margin per Unit) 6. a pricing objective needs to be established to achieve required goals. But before we decide on the pricing strategies. .

. . generate substantial sales volume and a large market share. . . . But for this ‘Mesh’ pricing strategy to achieve its goal Nestlé needs to reduce its selling costs by minimizing its production costs which can be achieved through economies of scale (limit pricing). . Now that the pricing objectives are set. The price would be higher than the market-penetrating price level but would still accomplish in penetrating the mass market immediately and.25 for Medium size Rs. . . A large market exists for the product. . a carefully selected price . in doing so. Instead. . the pricing strategy needs to be decided on the following grounds: • • • • • Nestlé Pineapple Fruit Yogurt has low fat content which is a strong desired feature by target customers. but will serve its purpose of profit generation.. Given the conditions neither a complete market-skimming pricing strategy nor a strict market-penetrating pricing strategy would best suit the pricing objectives of Nestlé Pineapple Fruit Yogurt. Substantial reductions in unit costs can be achieved through large scale production (economies of scale). . . its demand is fairly inelastic.10 for Small size 55 . .neither too low nor too high – would allow us to harness all of the product’s market potentials. . As the product is unique in its characteristics. . The product is protected from competition through patents and high plant and equipment costs. .39 for Large size Rs. . We recommend the price to be: Rs. The price will not be too high either so as to only generate lump sums of profit.

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3. Promotion Strategy
It would be safe to say that most companies engage in some form of promotional activity every day of the year. Promotion is one of the four Ps of marketing—price, product, place, and promotion. Promotion is generally thought of as a sequence of activities designed to inform and convince individuals to purchase a product, subscribe to a belief, or support a cause. All of the various tools available to marketing managers for promotional activities constitute what is known as the promotional mix. Launch of a new product into the market is usually accompanied by an aggressive promotional campaign. The objective is to make people aware of the new product, its distinctive features and want satisfying capability. It also aims at outshining the competition and forcing the customers of the existing brands to switch to this new product. After designing our new pineapple yogurt, we set out with the task of promoting its distinctive features. It is an addition to the Nestlé’s fruit yogurt series but is better then the earlier introductions in the following ways: • • • • •

Pineapple flavor (a new one) 99% fat free. Available in the packs of varying sizes (small Rs.10, medium Rs.25, and large Rs.39). An attractive and convenient packaging. Reasonable prices of all yogurt packs.

Promotional mix of pineapple yogurt Marketing managers use different components of the promotional mix as tools for achieving company objectives—advertising, personal selling, public relations, and sales promotion. Each of these elements can be further divided into additional subcomponents or strategies. The majority of a company's promotional resources are usually spent on these four elements for a simple

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reason: Companies perceive these methods as the most effective means to promote their products. In the introductory stage of the life cycle of a product, the promotional campaign should serve the following purposes: • •

Informative Aggressive

To accomplish these goals, we have planned to utilize every possible and available media of promotion because this will help ensure the success of our innovation.

Advertising An identified sponsor often thinks of advertising as the paid, non-personal communication used in the promotion of a cause, idea, product, or service. The various advertising delivery methods include banners at sporting events, billboards, Internet, web sites, logos on clothing, magazines, newspapers, radio spots, and television commercials. Among the common forms of advertising are advocacy, comparative, cooperative, informational, institutional, persuasive, product reminder, point-of-purchase, and specialty. For the selection of an appropriate advertising media for our new product, we will carry out a “media analysis” which is defined as: "An investigation into the relative effectiveness and the relative costs of using the various advertising media in an advertising campaign" We believe that before committing an advertising budget it is necessary to carry out marketing research on: • • • •

Potential customers. Their reading habits, television-watching habits. How many times do we wish the potential customers to see an advertisement? How great a percentage of the market we wish to reach, etc.

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These elements all need to be considered and balanced to plan a campaign that will effectively reach its target audience at a reasonable cost. After the analysis, we will resort to the following two media.

Published media Following are the forms of published media we suggest to be used for advertising the new product. • • • • • • • •

National daily newspapers Sunday newspapers Local and regional newspapers Consumer magazines Specialist magazines Catalogs Trade and professional press Internet

We will make sure that our posters and advertisements have their place in every ordinary or famous magazine and catalog as we are targeting every age group and people belonging to every income-level and socio-economic status. Also, there is no active website of Nestlé Pakistan, we recommend that a website of Nestlé Pakistan should be launched which includes the all product lines of Nestlé available in Pakistan. Following is a poster designed by us for the promotion of our new product – Nestlé Pineapple Fruit Yogurt.

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. contests and sweepstakes. (1) to attract new product users who will hopefully turn into loyal consumers who keep buying the product. and trade shows. 60 . or public relations. . . . . . thereby maintaining their loyalty. Visual and aural media Visual and aural media promotion will include: • • • • • • Television (terrestrial and digital) Radio Cinema Billboards Transport Direct mailing Our message regarding the pineapple yogurt Our logo Sales promotion Sales promotions are marketing practices designed to facilitate the purchase of a product that do not include advertising. personal selling. . Companies use a variety of sales promotion tactics to increase sales. patronage rewards. . . . premiums. . coupons. . . . and (3) to encourage repeat sales from occasional consumers. point-of-purchase displays. price packs/cents-off deals. including advertising specialties. cash refund offers/rebates. .. samples. . (2) to reward existing consumers with a price reduction. Companies use sales promotion for a variety of reasons. .

or door-to-door delivery. we expect that the associated sales will offset the initial cost of the free samples. . . Samples We have decided to distribute free samples of our innovation to the visitors of the extravaganza. On this occasion renowned fast food chains. . . . People in scores will come because of the big names (sponsors) associated with this trade show and will actually get to experience the taste of our pineapple yogurt. . . and distribute promotional materials. national and international airlines. . . make new contacts. We have already bought a stall and now are busy making captivating posters and charts for the presentation of our innovation. . We are hopeful that this mega event will turn out to be an effective promotional platform for us. Considering this means an effective way of promotion. The largest drawback of free samples is their high cost. . renew existing business relationships. Trade shows provide firms that sell to a particular industry an excellent opportunity to promote new products. Advertising specialties We will frequently create and give away everyday items with our printed name and logo such as caps and coffee mugs on the extravaganza and elsewhere. . which include mailing the product. .. and review other issues important to the industry. Premiums A premium is a good offered free or at a low cost to encourage consumers to buy a particular product. consumer goods and service companies will be promoting and selling their products and services. We will also use delivery methods. . However. . . Trade shows Most industries hold conventions and trade shows each year to show off new technology. . assess consumer trends. maintain or build a reputation. we set out to become a part of an extravaganza organized by Bahria University. In order to stimulate the demand of our product on 61 . passing the product out in stores.

We are briefing them about our messages. . . On Eid-ul-Fitr . On Eid-ul-Azha – Pineapple Fruit Yogurt with the pack of Tikka Masala – Rs. government officials. eid-ul-fitr and azha. 25 and 39 respectively. . .Pineapple Fruit Yogurt with the pack of pakora mixes – R.17 only (4 Rupee Discount). personal selling activities can generate long-lasting friendships between consumers and sellers that typically generate many repeat purchases. logos. special occasions such as ramzan.. . .25 only (7 Rupee discount). extreme summers. . 99% fat free feature and ingredients of our yogurt so that they convey this information to customers and interact and cater to their needs in the best possible way. . . a salesperson can listen to and determine a consumer's needs by asking questions and receiving feedback from the consumer. hygienic factor and varying sizes of rupees 10. . 62 . Furthermore. With personal selling.20 only (5 Rupee discount). we will offer products for free with it e-g if we consider the smallest pack of rupees 10 then the offers accordingly will be: • • • In Ramzan . nutritive value. we are also training the sales representatives of the retail stores where we are displaying our product. . employees. telling people about its distinct features such as new flavor. Apart from this. Personal selling We consider personal selling one of the most effective promotional techniques because it facilitates interaction between consumer and seller. including consumers. . . . . Our sales manager has entrusted the sales representatives with the task of selling pineapple yogurt door-to-door.Pineapple Yogurt with the pack of Sawayan – Rs. . low fat contents. Public relations Public relations has been described as building goodwill with a company's various publics. .

We make sure that our consumers believe that they are buying from a caring. and suppliers. . Therefore. for example. employment practices. they may find other work or reduce their productivity because of low morale. A good example of providing superior public relations would be to inform company employees that a small reduction in the work force is required but that a full severance package will be provided for laid-off employees. . . 63 . . . Keeping this fact into consideration. . . . . . we are striving to have good relations with all of the following.. and trustworthy company. the employees are hearing about it first from the company and are also aware that they will be receiving assistance from the company. . honest. We strive to avoid negative media stories about. stockholders. If employees read or see negative reports about the employer without credible public relations explanations. Public relations communications are extremely important in ensuring that employees receive information about the company before outside media receive and report the information. Although this news is not positive. it is essential that they believe in us. Consumers We believe that public relations efforts are extremely important for maintaining a company's consumer base. . exploiting workers or producing substandard products which can do enormous damage to our company in the eyes of consumers and erosion of a company's client base is likely to result in both lost sales and lost market share. The overall goal of any public relations effort is to project a positive company image when dealing with such issues as community and government relations. . Employees The most valuable asset of our company is an employee. . and environmental issues. . . .

. Suppliers are most concerned about being paid for the product they are selling to a company. Suppliers could stop shipping their products or demand that payment is made at the time of delivery. . . . we make our best effort to answer any questions that regulators have regarding negative media stories or consumer complaints. providing even more negative publicity. . In order to avoid such trouble. . . . The opposite is also true: Stories about client complaints or other dishonest practices or potentially illegal actions will draw the government's attention and probably some sort of investigation—something that no company wants. Neither option is appealing to us. . we do our best to maintain our positive position and goodwill in the eyes of public. the public is still likely to be skeptical because the company was investigated. 64 . . Even if the government regulators find no wrongdoing. .. . But any negative news regarding our financial position in the absence of a full and complete explanation from our public relations department may result in a damaged reputation with suppliers. Our well-organized public relations department wards off potential trouble by being honest.g. Government officials Maintaining a positive public image is also important because government agencies and offices (e. An investigation can drag on for months. . Since our suppliers are generally not paid until ten to twenty days after delivery of the raw material or product. even years.. and helpful to government regulators and members of the news media. Federal Trade Commission. . Positive stories in the media obviously help promote a positive image to government regulators. Suppliers Positive public relations are essential for a company's relation with its suppliers. . Federal Communication Commission) monitor the media and have regulatory oversight over company activities. Therefore. positive. . which reduces the chance of being investigated and possibly fined. . and both could cause critical delays in getting our products to market. they don’t make a fuss because of their faith in our ability to pay the bills. friendly.

. . . . . . Nestlé must provide retailers with appropriate sized chillers having effective temperature maintenance. Presently. . Place (Distribution) Strategy Distribution channels can be viewed as a ‘pipeline’ to the market. .. . connection and commitment. . Our choices of marketing outlets have come about largely by trial and error. But there is a problem with the retailers shelving ability. .or they can be filled with impurities. competency. meter readers etc. new products fail because the channel could not do the job. the distribution seems just fine and no proposal needs to be made to alter the distribution channel in any way. . Each of these pipeline blockages is a dimension of your channel capacity which is a function of coverage. this product also has to be kept at a temperature between 0-4 degrees and hence requires good chillers (refrigerators) for storage at retail stores. give them to people walking past restaurants or inside the departmental store because it is proven by an expert that whatever you give away comes back to you manifold. your channels can be too narrow to provide the flow of revenue you need . The easier it is for our customers to get our product the more they will be able to buy. It feels better not to have all our eggs in one basket. In the process of trying out various avenues we have settled at this point that grocery stores works well for us. . resulting in a poor quality product or service to your customer. . We need to be free with samples. Like a physical pipeline. . 4. Nestlé needs to make sure that no one leaves the factory without a sample whether its delivery persons. We have tried to add stability to our operation by selling our products through several different outlets. Sometimes. The net result is lower revenue and higher sales and marketing cost.they can be clogged with conflicting product lines or agendas . . as things can always change 65 .they can be piped to the wrong customer set . Like its previous contemporary Fruit Yogurts. .

. . . . . . . . and each outlet supports the others by increasing our visibility and hence customer familiarity. . . . . unexpectedly. buy back any product that didn’t sell by its due date (called a buy back guarantee). . . . . 66 . . Each week we stock the shelves ourselves. The big advantage of selling through stores is the relatively steady income and the volume of sales possible with comparatively little time expended on our part..

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