Nestle Marketing Report

Marketing Report On Nestle

Submitted By:
Alina Ejaz 30941
Atka Aqeel 30894
Faraz Ahmed 31988
Nabeel Zafar
Zarak Khan 30988
Submitted To:
Sir Waqas Rana
Submitted on:
5/4/2018

1|Page
Nestle Marketing Report

Table of Contents
ACKNOWLEDGEMENT .............................................................................................................3
INDUSRIAL ANALYSIS ..............................................................................................................4
Competitve Rivalry ......................................................................................................................4
Threat of new entrants ..................................................................................................................4
Bargaining power of Buyers ........................................................................................................5
Bargaining Power of Suppliers ....................................................................................................6
Threat of substitues ......................................................................................................................6
COMPANY DESCRIPTION ........................................................................................................8
Mission .........................................................................................................................................8
Vision ...........................................................................................................................................8
Revenue History ...........................................................................................................................8
SWOT ANALYSIS ......................................................................................................................10
Strengths .....................................................................................................................................10
Weaknesses ................................................................................................................................10
Opportunities ..............................................................................................................................11
Threats ........................................................................................................................................12
ANSOFF MATRIX ......................................................................................................................14
Market Penetration .....................................................................................................................14
Product Development .................................................................................................................14
Market Development ..................................................................................................................15
Diversification ............................................................................................................................15
BRAND PORTFOLIO ................................................................................................................16
BCG MATRIX .............................................................................................................................17
Stars ............................................................................................................................................17
Question Marks ..........................................................................................................................17
Cash Cows ..................................................................................................................................17
Dogs ...........................................................................................................................................18
Conclusion ................................................................................................................................... 19

2|Page
Nestle Marketing Report

ACKNOWLEDGEMENT

First of all, we would like to thank all almighty Allah for all the blessing He had provided us

with. The most gracious and merciful, whose blessings and support were always there for us in

making our project a successful one.

Then we would like to thank Sir Muhammad Waqas Rana for teaching us throughout

the semester and helping us whenever we need him. He is a very dedicated teacher who always

motivates his students to perform well. We are thankful for his quality teaching, cooperation,

guidance, and support during this period

3|Page
Nestle Marketing Report

INDUSTRIAL ANALYSIS

Competitive rivalry

Competition is considered to be one of the significant forces in industry environment.

Competitive rivalry against NESTLE Company comprises of these following forces and their

extent:

 Infinite number of companies

 High aggressiveness of firms

 Low exchanging costs

There are a huge number of firms and companies that are running in same industry as NESTLE

i.e. Industry of food products. For example Shezan, Engro etc. and other so many firms are

potential competitors of Nestle. Not only these are high in number but their aggressiveness in

being competitive is not less, for example, lately Aquafina stole the market share of nestle

bottled water. Moreover their switching cost is low which means consumers don’t have to pay

much if they want to switch and its easy for customers to shift from one firm to another.

Threat of New Entrants

Nestle has to compete with not only the recognized firms but also the new entrants. Following

are the factors that create weak/strong force of new entrants as a threat for Nestle

 Low cost of switching

 Required cost of brand development which is quite high

 Economies of scale are high

4|Page
Nestle Marketing Report

Switching cost is low which makes it easy for consumers to switch their brand and try new

products in the market. However it’s not easy to build a strong brand like Nestle and become as

reputable as Nestle. Building a strong brand requires high cost which makes it difficult for new

entrants to compete with Nestle. Moreover, Nestle has advantage of high economies of scale

because its production takes place at a large scale. To enter into the market new entrants are

forced to work on a large scale or accept the company’s drawback. Being a new entrant they

might suffer in manufacturing, advertising, marketing as the existing products have achieved

their image in consumers mind. Overall the threat of new entrants is not a big concern for

Nestle.

Bargaining Power of Customers/Buyers

Any company’s success or failure depends on its customers/buyers as customers are considered

to be the greatest asset. Same is the case with Nestle. Nestlé’s condition relies upon its

customers’ response to its items. Nestlé must consider the following forces/factors that serve as

an indicator about bargaining power of customers:

 Little switching cost

 Availability of high quality information

 Quality of Nestle products

The small cost of switching makes it easy for customers/buyers to shift from Nestlé’s products to

other firm’s products (like people switched from nestle water to Aquafina). It helps customers to

possess a high bargaining power. Moreover, the information about the products is easily

accessible to the customers. It helps them to decide if they want to switch from Nestlé’s products

to some other firm’s products. They can get all the information they want with the help of high

5|Page
Nestle Marketing Report

technology e.g. they can search out the information on internet. One way to get even with

bargaining power of buyers is to understand needs of customers and satisfy them high quality

products. That’s what nestle do. It provides high quality products which makes it difficult for

customers to think about other brands.

Bargaining Power of Suppliers

Suppliers may affect industry environment of Nestle by influencing the supply accessible to

companies. Below are the aspects that affect the bargaining power of suppliers:

 Relation with suppliers

 Supplier’s population

The population of suppliers for food industry is large, which makes the bargaining power of

suppliers strong. However, nestle maintains good relations with suppliers because for products

like dairy, quality is quiet important. Nestle keep good relations with its suppliers in return they

provide high quality inputs for nestle products.

Threat of Substitutes

Substitutes may impact the revenues of companies that operate in consumer goods industries.

They can reduce the strength and revenue of firms like Nestle. In Nestlé’s case, the elements that

contribute to this force of substitutes are as follows:

 Low cost of switching/shifting

 Availability of substitutes

6|Page
Nestle Marketing Report

As mentioned earlier, the cost of switching is low for consumer goods which helps consumer to

switch from Nestlé’s products to other firm’s products. Nestle has many competitors in the

industry which provide substitutes for Nestle products almost at the same rice. Examples include

Aquafina as a substitute for Nestle water, Olpers by Engro as a substitute for Nestle Milkpak and

the list goes on. Hence we can sum-up that the threat of substitutes for Nestle is quite high.

7|Page
Nestle Marketing Report

COMPANY DESCRIPTION

Nestle is operating in Pakistan since 1988. Nestle is considered as one of the leading companies

of food and beverage products in Pakistan, because of its high quality and customer focus

strategies. Nestlé wants to reach to the faraway and distant locations in all over Pakistan to serve

consumers with Nutrition, health and Wellness. Nestle Pakistan has the honor to be the leader in

Nutrition, Wellness and health. Nutrition is their core competency since 1867, when Henri

invented the food for babies, and infants. Now days many of the consumers understand Nestlé’s

emphasize on nutrition because nestle has created awareness among them. They know that their

choices regarding food products affect their health. Nestle Pakistan serves in many ways but

their main focus is people and for people it will keep improving the quality of its products.

Mission

“To positively enhance the quality of life of people of Pakistan by all that we do through our

people, our brands, products and our Creating Shared Value (CSV) initiatives.”

Vision

Nestlé’s vision is to be the globally recognized leading Nutrition, Health and Wellness (NHW)

Company. Nestle Pakistan subscribes fully to this vision and the values that come with it.

Revenue History

Nestle Pakistan is a company which has its origin in Switzerland. It is a company which is

registered in Karachi and Lahore stock exchange and it is operating in Pakistan since 1988 with a

joint venture with Milk Pak ltd. It is the company which is among the top 25 companies of

8|Page
Nestle Marketing Report

Karachi stock exchange since 10 years. Nestle has invested more than Rs 50 billion in Pakistan.

Nestle Pakistan is one of the reason for providing employment and income to more than 190000

farmers in Pakistan. Nestlé is very much committed to Pakistan that despite of some up’s and

down’s the company is still operating here and will continue to do so.

9|Page
Nestle Marketing Report

SWOT ANALYSIS

Strengths

Variety of brands:

Nestle has variety of brands under its name which makes it able to tailor the economics because

many market segments are served by Nestle.

Different Markets:

Nestle operates in a number of different markets and sectors of these markets.

R&D:

Nestle possess strong research and development capabilities.

Relations with retailers:

Nestlé is known to maintain good relationships with its retailers and suppliers.

Market Share:

Nestle has some of the most reputable brands that have high market share in national economies.

Brand Loyalty:

Some of Nestlé’s products are used by generations and are considered trustworthy brands by

households. For example people still use cerelac instead of any other food for infants.

Weaknesses

10 | P a g e
Nestle Marketing Report

Few well recognized Brands:

Most of Nestlé’s sales revenue is gained by few brands which make the brand insecure if there

are sudden changes regarding those brands.

Old Fashioned Products:

Some of Nestlé’s products are considered as old fashioned (both in packaging and advertising)

and are not according to modern lifestyle (e.g. Milkpak)

Less Advertising:

Nestle doesn’t incur much cost for advertisingas compare to competitors due to which

competitors successfully steal the show.

Premium Price:

Prices of Nestle products are little higher than that of competitors due to which consumers

become a little reluctant to buy their product.

Opportunities

Expansion of Product Line:

Nestle can expand its product line for many other food products like Tea.

Elimination of Retailers:

Nestle can open its own outlets which will help eliminate the retailers and dealing with

customers directly.

11 | P a g e
Nestle Marketing Report

International Markets:

Growth of Nestle in international markets.

Social Company:

Nestle can become a social company by taking part in corporate social responsibility.

More Health Based Products:

People these days are becoming more concerned about their diet and health, So nestle has the

opportunity to introduce more nutritious products.

Threats

Price Fluctuations:

There are price fluctuations due to rupee devaluation which is harmful for the company because

raw material is imported.

Seasonality:

There is Effect of seasons on the revenue of Nestle Company. For example consumption of

coffee reduces in summers.

Competitors:

Nestle has so many competitors e.g. Shezan, Engroetc and pose a great threat for Nestle.

Inflation:

12 | P a g e
Nestle Marketing Report

Inflation in Pakistan is increasing due to which people’s purchasing ability is decreasing and

there’s nothing Nestle can do about it.

Taste of consumers:

If nestle wants to introduce new products that would be a little hard because people’s taste has

already developed and they will be hesitant to purchase new products.

13 | P a g e
Nestle Marketing Report

ANSOFF MATRIX

Market Penetration:
Pure Life Product
Kitkat Development:
Cerelac Nescafe 3 in 1
Milkpak Nestle Raita
Nescafe Nesvita

Market Diversification:
Development: Nescafe Dolce Gusto
Nestle Acticol Machine

Market penetration:

Nestle bottled water pure life, Cerelac, Milkpak, Nescafe and kitkat comes under market

penetration. These are the existing products which are offered in existing market because they

help nestle earn a high revenue.

Product development:

After Nescafe classic Nestle modified its coffee and offered 3 in 1 sachet in which you don’t

have to add sugar etc. Same goes with Nestle raita. They first launched yogurt and then came up

with raita. Same is the case with Nesvita. It’s from ambient category but it focuses more on

calcium.

14 | P a g e
Nestle Marketing Report

Market development:

Nestle Launched Acticol to control cholesterol. It launched in Islamabad, Lahore and Karachi

and now its market is expanding in more cities. It’s now available in other cities as well.

Diversification:

For the very first time Nestle introduced something related to electronics. Nescafe Dolce Gusto

Machine is coffee making machine which gives you the taste of coffee shop’s coffee at home.

15 | P a g e
Nestle Marketing Report

BRAND PORTFOLIO
-Nestle Bunyad -Nestle Everyday Tea Creamer
-Nestle MilkPak -Nestle MilkPak Cream
-Nestle Milo -Nesvita
-Nestle Acticol

-Nestle Yougurt -Nestle Riwayati Maza Yogurt

-Nestle Actiplus Yogurt -Nestle Milkpak Yogurt
-Nestle Zeera Raita -Nestle Podina raita

-Nestle Pure Life

-Nescafe -Nescafe dolce Gusto

-Nescafe gold (machine and pods)
-Nescafe 3 in 1

-Nestle fruita Vitals

-Nestle Nesfruita

-Nestle Maggi Noodles

-Nestle Cerelac

-Nestle KOKO crunch

-Nestle Milo Cereal
-Nestle Corn Flakes

-Nestle Kitkat

16 | P a g e
Nestle Marketing Report

BCG MATRIX

Stars:

According to different surveys and researches, Nestlé’s Products, NIDO, PURELIFE (Nestle

bottled water), FRUITA VITALS (Nestle juices), MILKPAK (Nestle milk), and CERELAC are

stars of Nestle company. These are the products which are consumed most by Pakistani

population. Their market share and growth rate both are high.

Questions Mark:

EVERYDAY(Nestle tea creamer), and MILKPAK CREAM are Nestles’ Question marks

because they have low market share but comparatively have high growth rate as more people are

starting to consume these products.

Cash Cows:

NESTLE YOGURT, MAGGI NOODLES and KITKAT are considered cash cows of Nestle,

because they have High market share but low growth rate. It’s because of the reason that these

products are only used by specific people (most probably upper and middle class). That’s why

their market growth is low.

17 | P a g e
Nestle Marketing Report

Dogs:

NESTLE KOKO CRUNCH, NESTLE CORN FLAKES and MILO are Dogs of BCG matrix

because their market growth rate and market share both are low. These products aren’t consumed

much because there are many substitutes of these products which are available at lower price

than nestle. Hence people prefer those substitutes over these products.

• •
Stars:
Question
-Pure Life
-Nestle Milkpak Marks:
-Nido -Everyday
-Cerelac -MilkPak Cream
-Fruita vitals

Dogs:
Cash Cows: -Nestle KOKO
-Nestle Yogurt Crunch
-Maggi -Nestle Corn
-Kitkat Flakes
-Milo

18 | P a g e
Nestle Marketing Report

CONCLUSION

Nestle is one of the most influential and reputable food companies in Pakistan food industry.

Even though it has many competitors like Engro, Shezan, PepsiCo etc. It is maintaining its place

in market with great market share and growth. It never compromised on quality of its products

because they want to provide healthy foods to all the people in Pakistan. Their goal is to reach

most distant locations in Pakistan and provide people there with their healthy products. By

current progress of Nestle, can expect it to grow and achieve its goal.

19 | P a g e