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“Henry Nestle”

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Nestle

 Nestle is the largest food company in the world.

 It is present in all five continents, has an annual turnover of 74.7

billion Swiss Frances.

 There are 509 factories are running in 135 countries.

 There are 10,000 brand in the world wide.

History Of Nestle

 Our story begins in 1867, when Henry Nestle developed a baby

formula that saved child’s life and marked the beginning of Nestle.
 It is originally consisted of two companies and two products,
Henry Nestle and His baby food in Vevey, and the Anglo Swiss
Condensed Milk company and its condensed Milk in Cham, both
in Switzerland.
 His first factory was located in Vevey.
 In 1875, He sold His Company and retired.
 In 1880 second factory was built in bercher.
 In 1883, first time Nestle built a factory abroad, in Edlitz
Grimmenstein.
 In 1890, Vevey factory produced 28 billion cans of Milk food and
2.2 million cans of condensed Milk.
 In 1912, Nestle begins it long relationship with South Asia when
Nestle condensed Milk company start.
 In 1979, Milkpak Ltd. Is founded by Syed Baber Ali. It
manufactures UHT Milk, Cream and Butter as well as fruit Juices.

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Nestle In Pakistan
 Nestle have been serving  Pakistani consumers since 1988, when our
parent company Switzerland based on Nestle first acquired share in
Milkpak.
 Nestle acquires 40% share in Milkpak.
 In 1990, sheikhupura factory starts the production of Nido Milk
Powder cereals; a plant is acquired at Kabirwala.
 1n 1992, Nestle takes over the running of company and begins to
develop its Milk collection network.
 In 1996 Milkpak is renamed to Nestle Milkpak Ltd.
 In 1997, the Kabirwala plant becomes a fully owned unit of Nestle
Pakistan.
 1n 1998, Nestle Milk collection system in Punjab matures and
company is able to buy all its Milk from Formers instead of relying on
contractors.
 In 2005, Nestle Milkpak Ltd. Is renamed again Nestle Pakistan

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Welcome to Nestlé Pakistan Ltd.’s Good Food, Good Life

website. As a subsidiary to Nestlé S.A., whose headquarters
are based in Vevey, Switzerland, we are committed to
providing you, our consumer, with quality food products that
are essential to good living.

It is very clear that eating a nutritious and balanced diet lies at

the foundation of a happy and healthy life. This website is
aimed at assisting you by providing you with information that
will make it easier for you to make healthier choices. We,
therefore, invite you to look at our special features where you
will be sure to find advice aimed at improving the quality of
life for both you and for your family.

Since 1867 when Henri Nestlé developed a food that helped

save a life, the Nestlé Company has aimed at building a
business based on sound human values and principles. In
Pakistan, we have continued with this spirit and are directly
involved with local communities and key stakeholders in order
to help improve conditions for those in less fortunate positions.
You can find details about our efforts in this area via the
‘Community’ link above.

We hope that you enjoy going through our website and we

invite you to share with us your suggestions and any feedback.

Trevor Clayton
Managing Director

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Vision of Nestle Milkpak is to expand business according to the

increasing demand of market.

As per our company vision in 2020 production capacity of all

plants working in Pakistan is being increased.

So extension of Kabirwala Plant is the example of our company

vision.

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At Nestle, we believe that research can help us to make better

food, so that people live a better life.

Good food is the primary source of good health, so we are trying

to make good food.

To provide fresh and pure products to the customers, we

introduced (SHE) Safety, Health and environment policy to protect
health of our employs and keep clean our surrounding environment.

Marketing objectives are compatible with the overall corporate objectives of

nestle. Company’s objective is to be the world’s largest and best branded food

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manufacturer while insuring that nestle name is synonymous with the products of
the highest quality.

Its chief objectives are:

 To achieve compatibility with international voluntary standards on

environmental management systems.

 To build mutual trust with consumers, governmental authorities and business

partners.

 To ensure continuous improvement of nestles environmental performance.

 Conservation of natural resources and minimization of waste.

 Total compliance with the laws.

 To establish the benchmark for good business practice.

 Employing new technologies and processing.

 By committing to resources, both human and financial.

 Measuring the cost and benefits to business of its activities.

 Monitor progress.

 Audit results.

 Review targets.

MARKETING MIX

PRODUCT

BRANDS OF NESTLE

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 Kit Kat
 Nescafe
 Nestle Milo
 Maggi
 Nestle water
 Nido
 Nestle milk pack
 Nestle cerelac
 Friskies
 Nestle yogurt
 Nestle pudina raita
 Nestle zeera raita
 Nestle flavors cream
 Nestle rice
 Nestle frost
 Polo
 Breakfast cereals
 Lactogen
 Milkpack desi ghee
 MilkpackUHT cream

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QUALITY:

A Nestle brand name on product is a promise to the customers that:

 It is safe to consume.
 It complies with all relevant laws and regulation.
 Quality is to win consumers trust and preference.

Product Characteristics expressed as…

Feature Advantage
Benefit

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This feature… and how it helps the client. What it does…

Calcium essential for strong strong bones and
bones and teethes teethes
strong
Vitamin A Improve vision and Better eyesight and
keeps skin and hair healthy skin and hair
healthy
Phosphorous Important for healthy strong bones and
bones and teeth teethes
Protein Necessary for cell and Proper growth of cell
tissue growth and tissues
Iron Stronger the bones It full fill the daily
nutrition requirement
Vitamin C It is good for bones. Stronger bones

PRICE

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We set prices of our own because Nestle is the trend setter in the market due to its
better quality as compare to competitors.

Discounts are not to the final consumers but it can be considered for the he
organizational consumers like Nestle has given discounts to PIA, MC-DONALDS

and PEARL CONTINENTAL.

Nestle never return the paid money back. If the claim is valid then Nestle can replace
the products.

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Pricing strategies of Nestle

Nestle is following value based pricing strategy.
Nestle was first launched in 1988 in Pakistan. Actually this is the Pakistani
product and purchased by the Nestle Company. Price of the nestle set after the
market survey. In this market survey the survey team want to search that how much
value consumer actually wants to give this product. They provided the milk to the
different people without telling them the name of the company and ask them what
should be the price of this one glass milk. In this way company know the willingness
of the people that how much money customer actually want to spend on that product.
After this they checkout their cost on that product and after analysis they set the price
of nestle. After launching it in the market they again check the consumer behaviour
regarding price of nestle, and if consumer is satisfy with the product then they ask
question to judge the behaviour of consumer that if the price of nestle increased by
the company then what will they do. If consumer still satisfied then they increase the
price of nestle. CDL have adopted value pricing, in which they charge fairly low
price for a high offering. Value pricing says that the price should represent a high-
value offer to consumers.
Value pricing is not a matter of simply setting lower prices on one’s products
compared to competitors. A matter of reengineering the company’s operations to
become a low- cost producer without sacrificing quality, and lowering prices
significantly to attract a large number of value-conscious customers.

SETTING PRICE BY LOOKING THE COMPETITORS

INTERNALCOMPETITORS

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 Haleeb Milk
 Olpers milk
 Good Milk
 Dairy Queen Milk

EXTERNAL COMPETITORS

 DANONE
 MILUPA

The competitors of nestle are Haleeb milk, olphars and good milk but the biggest
competitor is open milk. Total requirement of milk in Pakistan is 31 billion litres in
which only 3 billion litres are provided by packed milk. 28 billion litres are provided
by milkmaid. So if the nestle want to set price according to their competitors then
they have to set price according to the price of open milk which is not possible.

PLACEMENT

Zones of Nestle

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NESTLE FACTORIES

Our products are manufactured in five facilities scattered around the country, from
Islamabad in the north, to Karachi in the south.

Two state-of-the-art multipurpose factories are located in the agricultural heartland of

the Punjab, and the remaining three are dedicated to producing our trusted brands of
bottled water.

As citizens of Pakistan, we consider it our duty to make sure that our manufacturing
processes are clean, hygienic and safe.

We are constantly working to reduce emissions at our factories, reducing and treating
wastewater, and making our packaging environmentally friendly. Regular audits have
confirmed that our factories' environmental management meets the Nestlé
international standard.

As is the Nestlé policy around the world, we care for our people. We uphold the
principles of the UN Global Compact and encourage women to participate.

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Sheikupura Factory

At the very heart of the Punjab's major milk district stands our Sheikhupura factory, a
vast state-of-the-art operation that produces many of our most popular products, such
as Milkpak UHT milk, low-fat high-calcium Nesvita products, Nestle pure life water,
Cerelac and yogurt.

The factory commenced operations as part of Milkpak Ltd in 1981. At the time it
produced only UHT milk, but by 1988 had expanded to produce butter, cream and
ghee, as well as fruit drinks.

In 1988, it became part of the joint Milkpak venture, and, soon after, Nido milk
powder started being produced here.

As the needs of Pakistani consumers grew, we added the capacity to manufacture

new products. In 1998 we started supplying dairy mixes to McDonald's. A plant to
produce the popular Nestlé pure life bottled water was also commissioned.

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In recent years, the plant's capacity has been enhanced to produce fruit yoghurt, tea
whitener, cream and raita, as well as low-fat, high-calcium dairy products, sold under
the Nesvita brand.

Kabirwala

In 1990, Milkpak acquired the Kabirwala factory, located in Khanewal district of the
Punjab, as a subsidiary. By 1997 it was a fully owned unit of Nestlé Pakistan Ltd.

Soon after it was acquired, we began upgrading its capacity. In 1992 we added a
Maggi noodles plant was added and 1996 saw an additional of a milk powder.

Over the years, the Kabirwala factory was constantly enhanced. Eeveryday tea
whitening powder was introduced in 2002 and revolutionised tea and coffee drinking
in homes and offices around the country.

In 2005, the factory continued to make notable achievements.

2006 has seen the commencement of Kabirwala Extension Project that would be
completed in April 2007 at a cost of about Rs. 4.0 billion.

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The project has seen expansion of milk processing capacity to triple its current size,
both for powder and liquid.

Islamabad

In 2001 we acquired the AVA water factory in Islamabad. It became a fully owned
unit in 2003, and we immediately instituted a programme of major improvement to
bring the facility on par with international standards.
Over the years, better and more efficient machinery has been introduced. This has
helped us speed up production, and provide our consumers with their favourite
brands of bottled water in convenient package sizes.

We are proud that the Islamabad factory has made efforts to bring Pakistani women
into the workforce, by providing a comfortable and enabling work environment.

Indeed, we were amongst the first to employ female operators working alongside
men in our production department.

Supply Chain

Supply chain was established as a separate department in 2001. Since then, we've
achieved a number of milestones, including a cold-chain in 2002, centralised demand
and supply planning in 2003, and implementation of Globe in 2005.

Marketing Channels  
These are the sets of the interdependent organizations involved in the process of
making a product or service available for the use of consumption. 

Channel Function and Flows

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A marketing channel performs the work of moving goods from producer to

consumers. It overcomes the time, place and possession gaps that separate goods and
services from those that need or want them. It perform number of functions:
 They gathering information about potential and current customer,
competitors, and other actors and forces in the marketing environment.
 They develop and disseminate persuasive communication to stimulate
purchasing
 They place an order to the company
 They provide for the successive storage and movement of the physical
products.

Channel Level 

Company is using 2 channels for distribution of Milkpak

 Retail outlets (indirect channel)

 Sales promotion officers (direct channel)

Retail Outlets (indirect channel)

There are many retail outlets in all over Pakistan, which provide every day
consumable items to the consumers.. 80 percent of the milk’s sales would be through
indirect channels. 

Manufacturer Distributor Wholesaler

Consumer Retailer

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Direct Sales Promotion Channel 

Milkpak is being distributed to institutions like government institutes, offices,

teashops, caters, schools, colleges and marriage halls. This channel will constitute 10
percent of the total milk’s sales. 

Distribution Outlets

To increase the distribution of Milkpak in all over Pakistan these outlets are open.

Distribution

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There are many authorized distributors of Milkpak. Company has its own network of
vans, which deliver the milk to all the retail outlets early morning. The number of
vans operational in different cities and rather then these 135 local vans are also used
to supply the milk in Pakistan.

Nestle has its own warehouses for the storage of products as well as it has also hired
some warehouses. These warehouses are established on the regional basis. Nestle
mode of transportation is roads.

Due to the distribution problems that a number of online firms face Nestle until now
has no plans for E – distribution.

PROMOTION

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For promotions nestle is doing advertisement through TV, News papers, magazines,
billboards and doctors. There is no brand ambassador of nestle.
Advertisement budget is preplanned by the start of financial year. It is kept secret by
the company. Online promotion is not taken into action in Pakistan.
Marketing is done aggressively and the share of promotion is 40% of the product.
Company also has introduced a scheme on nestle mineral water of winning lcd
monitors through luck draw.

1. Company Sales Forces

Nestle expand its direct sales force, assigning the sales representative to territories to
contact all prospects in Pakistan 

2. Stalls in Bazaar

The company also introducing stalls in Sunday Bazaar, Tuesday Bazaar and Friday
Bazaar at different location of pakistan and especially to those areas where the sales
volume of the milkpak would be low in order to encourage the consumer. 

Integrated marketing communication

Company has a complete IMC plan in which they will inform their consumer about
the new, upcoming product and value added services to the existing product. The
sources which can use by the company to inform their consumers are print, electronic
as well as through their websites.

Unique selling proposition

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Milkpak is a trend setter in market. They first introduce the packed milk in market.
Company uses different value creating propositions for their products like,

“Piyo aur jiyo”

“Good food, good life”

“Real fitness for real results”

“Jaan hai tau jahan hai”

Marketing Strategy

Nestle have monopoly in most of its product. Nestle is focusing on public

relationship, pursing growth strategy and diversification strategy. They have invested
$ 70 billion plant and they are planning to invest $381 in milk business

BCG Matrix
It contains products listing according to the market share & market growth. We
gathered some information on it which is shown in this matrix.

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Profit of Nestle in Graphical Form

SWOT ANALYSIS OF NESTLE

Strengths

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· Skilled labor.

· Educated staff.

· Large number of offerings.

· Pre purchase virtual display.

· Arrangement of events.
· Good background of the company.

· Easy to approach outlets.

· Physical evidence Strong Brand image

· Quality product

· Solid Financial position

· Strong supply chain network

· Qualified work force

·  Commitment to High Quality Products

· Focus on research and development Estimations of UHT Milk Production and
Consumption up to 2008– 09

· Year Annual Production
(million liters) Annual Consumption
(million liters)
2008-09   => 648.43 353.71
2009-10 =>  753.89 372.05

· Weaknesses

· Physically impossibility to have target market.

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· There is weak marketing of Milkpak as there is no advertisement of Milkpak

on official website.

· Lack of awareness among the target market.

· It Dependency on others (govt. & sponsors) for the arrangement of events.

The target market of Nestle Milkpak is upper middle and high class because
lower middle and poor class cannot afford to buy UHT milk due to its premium
price.

· It is a main weakness of milkpak that there are different companies of milk

but the name of nestle milkpak is always stand in the last because of low
advertising and marketing.

Opportunities
 Increasing interest of people
 31billion customers are there in Pakistan for milk. Upton now only 4 billion
customers are being facilitated.27 billion customer markets is still available to
be penetrated.
 Few and weak competitors
 Estimations of UHT Milk Production and Consumption up to 2008– 09

Year Annual Production
2008-09  => 648.43 353.71
2009-10  => 753.89 372.05

 The projected values of UHT Milk consumption and production are obtained
from the ARIMA model.

 More people are coming towards processed milk because loose milk is
dangerous for health due to a lot of contamination.

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 Growth of processed milk is increasing with 20% annually so Nestle Milkpak

has the opportunity to capture a large share of market.

Threats
 Major player may enter target market
 Legal and ethical issues.
 Market segment growth could attract new entrants.
 Economic slow down can reduce demand. Two main competitors Haleeb and
Olpers are main threat for Milkpak especially the Olpers is growing very fast.
 Inflation is getting higher and higher so the purchasing power of the people is
decreasing day by day.
 There is no entry barrier for new entrants as the Olpers has come in the
market.
 Taste of consumer has already developed which is hard to change

Share Price

Share price on nestle in Pakistan is more than Rs. 1600.

Welfare works

For welfare purposes Nestle is taking much bold steps they are establishing SOG
homes in different areas. Nestle also has established town in kiberwala. In 2007 at the
time when Pakistan suffered from nature disaster of earthquake nestle contributed a
lot for stablising the life there in northeren ares & nestle also provided free
commodities.

Recommendations

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Nestle must state in writing that it accepts that the international code and the
subsequent relevant World Health Assembly Resolutions are minimum requirements
for every country.

Nestle must state in writing that it will make required changes to bring its Baby Food
Marketing policy and practice into line with International Code and Resolutions.

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BIBLIOGRAPHY

Mr.Muhammad Mudassar Sales Admin Executive

Mr.Roy Niaz Ahmed Territory Incharge

Mr. Munawar Accounts Executive

Mr.Talib Hussain Account Officer

http://www.scribd.com

http://www.imageshock.com

http://www.nestle.com.pk

http://www.govtoffinance.com

http://www.wikipedia.com

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