This action might not be possible to undo. Are you sure you want to continue?
Executive Summary Pakistan is an agricultural country. According to Ministry of Food, Agriculture and livestock, agriculture accounts for 20.9 percent of the GDP. Dairy industry contributes 49% to the agriculture value and 11% to the GDP. Annual production of milk is 35.25 Billion liters in the country; But the Processed milk is only 4% of the total production. Like other countries Dairy is not a dedicated profession of the people, farmers is associated with dairy and agriculture at the same time, Profitability for the farmers is very less. Infrastructure is not developed, cooling tanks and other facilities are not available, and the large part of milk production is wasted. There is a multi-hierarchal distribution system of the milk; the farmers are not getting reward of their work. All these factors are making this industry unattractive for the farmers and the industry is no developing up to the mark. Only 4% of the total milk production is processed and used in urban areas of the country. According to Pakistan Dairy Development Authority • Only 0.52 Billion liters UHT and 0.5 Billion liters pasteurized milk is available in the country. • In urban areas 4.7 Billion liters milk is provide by Gawalas. • 1.27 Billion liters processed milk is sold by the milk shops. • There is a potential of about 5 billion liters of milk sold in the urban areas. • In urban areas people are more health and quality conscious, the income level of urban population is also good so this segment has potential for UHT and Pasteurized milk. Nestle is the world largest food company and nestle MilkPak is Nestlé’s famous UHT milk brand. Nestle Milkpak has south Asia’s biggest Plant at Kabirwala. It is targeting upper and middle class. It is differentiating its brand by adding Iron and Vitamin “C”. The Nestle MilkPak is following growth strategy. The immense competition is going in the market; it is recommended that Nestle Milkpak should invest more in milk business and other value added milk products. In this way Nestle Milkpak can fulfill the local demand by locally processed milk and milk products instead of the imported milk products. Nestle has brand recognition throughout the world and they can export milk powder and other value added products in future. 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 83 countries, having 231,000 employs.¬ 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.¬
Vevey factory produced 28 billion cans of Milk food and 2.¬ 1n¬ 1998.In 1880. we believe that research can help us to make better food.¬ As per our company vision in 2020 production capacity of all plants working in Pakistan is being increased. Nestle Milkpak Ltd. It becomes a fully owned unit of Nestle Pakistan. first time Nestle built a factory abroad. nutritious goodness of Milk”¬ .¬ In 1979. Is founded by Syed Baber Ali.¬ In 1912.¬ In 1990. Cream and Butter as well as fruit Juices. It manufactures UHT Milk. Sheikhupura factory started the production of Nido Milk Powder cereals.¬ Company Vision Vision of Nestle Milkpak is to expand business according to the increasing demand of market. Nestle begins it long relationship with South Asia when Nestle condensed Milk company start. Nestle took over the running of company (Kabirwala plant) and began to develop its Milk collection network.¬ In 1996 Milkpak was renamed to Nestle Milkpak Ltd. Health and environment policy to protect health of our employs and keep clean our surrounding environment. Is renamed again Nestle Pakistan. ¬ Company Mission At Nestle. Products • Bottled water • Baby food • Dairy products • Breakfast cereals • Nutrition • Prepared food Nestle In Pakistan Nestle¬ have been serving Pakistani consumers since 1988 when the parent company’ Switzerland based’ on Nestle first acquired share in Milkpak.¬ In 1997. Nestle acquires 40% share in Milkpak. Milkpak Ltd. so we are trying to make good food.¬ Good food is the primary source of good health.¬ So extension of Kabirwala Plant is the example of our company vision.¬ Nestle Milkpak “ Dhood ki Qudrati Ghizayat Pure.¬ 1n 1992. in Edlitz Grimmenstein¬ In 1890.2 million cans of condensed Milk. second factory was built in bercher¬ In 1883. In 2005.¬ To¬ provide fresh and pure products to the customers. so that people live a better life. Nestle Milk collection system in Punjab matures and company is able to buy all its Milk from Farmers instead of relying on contractors. we introduced (SHE) Safety.
¬ Nestle’s products are available in every city and town¬ Nestle is using the latest technology in its production units. Calcium¬ It is important for the growth of strong bones and teeth.¬ Nestle makes milk powder of the surplus milk in winter and converts this milk powder into UHT milk in summer.¬ Nestle Milkpak’s extensive milk collection system ensures that the milk you get is of the finest quality.000. well balanced diet and drink pure.¬ rich and delicious Nestle Milkpak standardized (UHT) benefits from Nestle’s expertise in bringing you the best life has to offer and benefits from 140 years of consumers trust. Vitamin A ¬ It improves vision and keeps skin and hair healthy Competitors The main competitors of Nestle Milkpak are: Haleeb Milk¬ Olpers milk¬ Good Milk¬ Dairy Queen Milk¬ Competitive Advantage Nestle Milkpak never compromises on quality. Milk is a must drink¬ for your children as it is a rich source of calcium that helps in the growth and development of strong bones and teeth.¬ Demographics of Pakistan Pakistan is a small country with limited resources. 15-18% of protein. Phosphorous¬ It is important for healthy bones and teeth. Pakistan has 6th number in population in the world.Pure. Protein¬ It is necessary for cell and tissue growth. nutritious Milk for good health. as recommended dietary allowance by national Academy of Science (USA).6-9% of Vitamin A and 160169 k Cal of energy. The contents of the above said products have the following fruitful benefits for health improvement of Human body. Encourage your¬ family to exercise regularly. Population and Growth . A 250ml Nestle Milkpak Glass consist of followings: 27-30%¬ of calcium. But the population of Pakistan is 180. 31-34% of phosphorous.000. eat a healthy.
0 Million Pakistan Milk Market/Industrial Analysis Pakistan’s economy is predominantly agrarian in nature.000 population (2007 EST. female 3.293.3 Million Islamabad 1.05 male(s)/female • under 15 years: 1.000 populations (2007 est.3 Million Hyderabad 1.9 percent of the GDP.05 male(s)/female • 65 years and over: 0.933) • 65 years and over: 4.6 Million Multan 1.000 population (2007 EST.6 Million Gujranwala 1.1% (male 3.000.428.) • Birth rate: 27.05 male(s)/female (2007 EST.434. .06 male(s)/female • 15-64 years: 1.74 births/1.) • Growth rate: 1.522) (2007est.314) • 15-64 years: 56.065.062.3 Million Peshawar 1.) • Death rate: 8 deaths/1.9% (male 48.828% (2007 EST.¬ 43.) Literacy: Definition: Over the age of 15 and can read and write.) • Male: 60% • Female: 40% Population of Major Cities of Pakistan Cities Population Karachi 15 Million Lahore 9 Million Rawalpindi 3 Million Faisalabad 2.298.4¬ percent of the total work force is from agriculture sector and it is the main source of livelihood for 66 percent of the country’s population living in rural areas. • Total population: 54% (2004 EST.) • Sex ratio at birth: 1.92 male(s)/female • Total population: 1.214. female 31.) • Net migration rate: -1.• Population: 180.256. female 46.542.) Age Structure • 0-14 years: 40% (male 33.000 (2008 EST.24 migrant(s)/1.¬ Agriculture accounts for 20.
¬ Contribution¬ of the livestock sector to Pakistan’s GDP is at 11% while the processed milk sector contributes about 0.7%2 of the total value of the¬ Agriculture sector. which suggests that the industry should get ready to .75 38188.¬ Approximately 50 million animals managed by 8 million farming households.¬ An estimated 33. Total Target Market Of Milk 180000000 Annual Production Of Milk (Billion Liters) 33.43 per cent. Projections of UHT Milk Production and Consumption up to 2008– 09 Year Annual Production (million liters) Annual Consumption (million liters) 2008-09 648.¬ Pakistan is the 5th largest milk producing country in the world.92 About 1.25 36361.25 billion liters of annual milk is produced.25 Total market of Gawala (96%) Billion liters 31.05 Our projections show increasing deficits in fresh milk production and increasing surpluses in UHT milk market in the run up to 2009-10.89 372.10 557.43 353.92 Total EXISTING market of processed milk (4%) Billion Liters 1.43 Projections of Fresh Milk Production and Consumption Up to 2008 – 09 Years Annual Production (million liters) Annual Consumption (million liters) 2008-09 35495.25 2009-10 37669.02 billion liters milk is imported. The milk economy represents 27.Growth in the agriculture sector registered a sharp recovery in 2006-07 and grew by 5%.33 Need Analysis (UHT and Loose Milk) Predicted Supply of Fresh and UHT Milk Year Supply of fresh milk (Million liters) Supply of UHT milk (Million liters) 2007-08 33805.71 2009-10 753.25 648.72 2008-09 35495.
Further. The analysis shows that Pakistan’s milk yields are very low. b) The feed industry needs to be developed substantially to provide better quality animal feed at affordable prices.face challenges. and even simple management of feed (proper timing. Milk Flow Channels in Pakistan . proper mix and so on) can increase yield substantially. especially in rural areas. the vast potential of using molasses as concentrate in animal feed also need to be taped. A specific package needs to be developed with the help of the government and in partnership with the private sector that would facilitate and encourage the development of a modern feed industry. Currently we do not have sufficient supply of high quality nutrients and additives. This requires intervention at two levels: a) The farmers need to have better knowledge of feed management. This can be done by involving milk plants and provincial livestock departments who can provide training and extension services to dairy farmers.
processors find it hard to procure sufficient milk to meet future consumer demand. • Lack of knowledge about optimal feed. . • Poor dairy infrastructure in rural areas. • By-product of Agriculture is used in Dairy • By-product of dairy is used in agriculture. America and other deveolped countries. • Lack of a cold chain to protect milk quality. • Lack of education among the farmers is making it difficult to change farm and dairy management systems. • Increasing demand for imported products. • Production of milk falls to 55% of peak production at its lowest point in mid-June. • The product range offered to consumers is not well developed. • Lack of contact for farmers to the market mechanism. • Despite the huge volume of milk produced in Pakistan. • Lack of access to well trained support service staff such as Veterinarians. • Farmers are engaged in agriculture and dairy at the same time. Weaknesses: • Poor profitability for farmers.Industry SWOT Analysis Strenghts: • Pakistan dairy industry is the World’s fifth largest industry • Pakistan Dairy Industry is Cheaper than Austrai.
• The shortage of milk providing animals is also a threat for entire milk industry. • There is a phenomenal scope for innovations in product development. Milk Supply Chain in Pakistan Milk Industry of Neighbour Country (India ): . paneer. Threats: • Very low quality milk is provided by the milkmen to dairy farms which is a very big threat for the entire market. flavored milk.• The demand increases 60% during June compared to December when the milk supply is ample. ice creams. Opportunities: • There is an opportunity for companies to introduce value-added products like shrikhand. dairy sweets. packaging and presentation. khoya. etc.
He entered the industry when there were only threats. But then if ice creams can be sold virtually at every nook and corner. technical human resource pool. you can keep on adding to your product line. artificial insemination and properly managed animal husbandry practices. increased awareness of developments like embryo transplant. • Availability of raw material: Presently. However. all is not well with distribution. these problems would also get solved. • Flexibility of product mix: Tremendous with balancing equipment. which requires proper channelization. it is only a matter of time before we see the emergence of a cold chain linking the producer to the refrigerator at the consumer’s home! • Competition: With so many newcomers entering this industry. why can’t we sell other dairy products too? Moreover. and now he clearly is an example of ‘never ending successes! If dairy entrepreneurs are looking for opportunities in India. He met failure head-on. competition is becoming tougher day by day. But with the overall economic improvement in India. there is little control over milk yield. many new processes will follow to improve milk quality and extend its shelf life. • Logistics of procurement: Woes of bad roads and inadequate transportation facility make milk procurement problematic. Opportunities: "Failure is never final. But then competition has to be faced as a ground reality. UHT gives milk long life. built over last 30 years.Strenghths: • Demand profile: Absolutely optimistic Margins: Quite reasonable. Surely. and success never ending”. Weaknesses: • Perishability: Pasteurization has overcome this weakness partially. coupled with higher income to rural milk producers should automatically lead to improvement in milk yields. • Problematic distribution: Yes. more than 80 per cent of milk produced is flowing into the unorganized sector. the following areas must be tapped: • Value addition: . • Technical manpower: Professionally-trained. Dr Kurien bears out this statement perfectly. The market is large enough for many to carve out their niche. • Lack of control over yield: Theoretically. even on packed liquid milk.
• Export potential: Efforts to exploit export potential are already on. has been attracting a large number of entrepreneurs. The study of this SWOT analysis shows that the ‘strengths’ and ‘opportunities’ far outweigh ‘weaknesses’ and ‘threats’. convert products into commercially exploitable ideas. Three Income level has been defined. Threats: • Milk vendors. middle and lower income classes. but it was the man who invented the meter that really made the money. Their success in dairying depends on factors such as an efficient yet economical procurement network. and the Middle East. ice creams. . Following the new GATT treaty. Given below are potential areas of value addition: o Steps should be taken to introduce value-added products like shrikhand. o Yet another aspect can be the addition of infant foods. etc. dairy sweets. opportunities will increase tremendously for the export of agri-products in general and dairy products in particular. The Indian dairy industry. Any investment idea can do well only when you have three essential ingredients: entrepreneurship (the ability to take risks). paneer. following its deli censing. Nigeria. All the time keep reminding yourself: Benjamin Franklin discovered electricity. Higher. o Addition of cultured products like yoghurt and cheese lend further strength . packaging and presentation. Organized dissemination of information about the harm that they are doing to producers and consumers should see a steady decline in their importance. o A lateral view opens up opportunities in milk proteins through casein. innovative approach (in product lines and marketing) and values (of quality/ethics). hygienic and cost-effective processing facilities and innovativeness in the market place.There is a phenomenal scope for innovations in product development. Market Segmentaion of Nestle Milkpak • Geographic Segmentation: Milkpak has segmented the market on the basis of Geographic segmentation and its target market is major populated cities of pakistan • Demographic Segmentation: Nestle Milkpak is also segementing the market on the basis of Income level of the people. further opening up export opportunities. flavored milk.both in terms of utilization of resources and presence in the market place. the un-organized sector: Today milk vendors are occupying the pride of place in the industry. khoa. geriatric foods and nutritional. and other dietary proteins. All that needs to be done is: to innovate. Sri Lanka. Strengths and opportunities are fundamental and weaknesses and threats are transitory. Amul is exporting to Bangladesh. This will lead to a greater presence and flexibility in the market place along with opportunities in the field of brand building.
Targeting Urabn areas of the country¬ Upper and Middle income class¬ Situation Analysis Awareness: Top of the mind recall Due to strong brand positioning and effective advertising. Brand Awareness (%) Milkpak 43 Haleeb 38 Olpers 9 Dairy Queen 7 Good Milk 2 Nurpur 1 Market Share (%) Good Milk 1 Milk Pak 45 Dairy Queen 9 Haleeb 22 Olpers 17 Nur Pur 4 Others 2 The table shows that Milkpak has the highest market share due to its consistent quality. Milkpak has highest awareness level. Market Trends • The growth of processed milk is increasing by 20% annually .
and it has built a strong brand image due to its quality products. people are attracting towards processed milk Key factors are: • Changing lifestyle • Influence of foreign media Market Potential • At an average. And it distribution is also very strong. a Pakistani consumer spends 42 % of income on food • Consumer often prefer branded food items for both quality and status reasons • Per capita real GDP has increased at an average of 5. • Strong supply chain network: Nestle collects Milk directly form the farmers instead of relying on the contractors. In this way it has a complete control over its supply chain. • Solid Financial position: Nestle Milkpak’s annual turnover is Rs. SWOT Analysis (Nestle Milkpak) Strengths: • Strong Brand image: Nestle has been serving the Pakistani consumers since 1988.6 % per annum during the last three years • This increase has led to a rise in average income of people and an increase in consumer spending.• People are getting more quality and health conscious with the passage of time • Due to impurities of Gawala milk.30 Billion which provides it a financial edge over its competitors. • Quality product: Nestle Milkpak is known as the best UHT milk in Pakistan due to consistency in quality. • Qualified work force • Commitment to High Quality Products • Focus on research and development Weaknesses: .
• There is no entry barrier for new entrants as the Olpers has come in the market. • Growth of processed milk is increasing with 20% annually so Nestle Milkpak has the opportunity to capture a large share of market.43 353.71 2009-10 753.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. Positioning Strategy • Functional Positioning Nestle Milkpak has adopted the functional positioning strategy like: “Khaalis He Sab Kuch Hai” “Wohi Qudarti Maza” “Jaan Banaoo” Differentiation Addition of IRON and Vitamin “A & C” Marketing Mix .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. This is the only weakness of Milkpak. • Inflation is getting higher and higher so the purchasing power of the people is decreasing day by day. Opportunities: Estimations of UHT Milk Production and Consumption up to 2008– 09 Year Annual Production (million liters) Annual Consumption (million liters) 2008-09 648. Threats: • Two main competitors Haleeb and Olpers are main threat for Milkpak especially the Olpers is growing very fast.
Product: • Quality Product Nestle Milkpak has the largest market share due to its consistent quality. process is followed. Price: • Competition Based Pricing Milkpak is holding a large share in the market due to its quality at same price as compared to competitors. Promotion Mix • Advertisement • Public relations Marketing Strategy Nestle is pursing growth strategy. • Product Style and logo Nestle Milkpak is available in different product range and stylish packaging. • Product Lifecycle Nestle Milkpak has been in the market for a very ling time and it is at maturity stage. Placement: Distribution Channels: Milkpak is not sold directly to consumers and the complete distribution uses indirect channels for distribution like: ManufactureràDistributoràWholesaleràRetaileràConsumer Promotion: • Focusing on health conscious people in their advertisement. They have invested $ 70 billion at Kabirwala Plant and they are planning to invest $ 381 billion in the milk business. It .
Dairy reports: White Revolution by Pakistan Dairy Development Company Year book 2006-07. Websites: http://www.amcy5. .com http://www. Imran Rasool: Executive Marketing. Lahore Chamber of Commerce.google. Mr. Agriculture and Livestock.wikipedia.com About The Author: This project is prepared by the students of Pak Aims. Nestle MilkPak. Mr. Submitted By: Naveed Ahmed 071191 Rehman Baig 071172 Tariq Waseem 071194 Mazhar Cheema 063171 Hamza Ahmed 083606 This project is only to publish at www. By Ministry of Food.Recommendations • The immense competition is going in the market so Nestle Milkpak should penetrate more and more in the market. Bibliography Mr. Shehzad Anwar: Assistant Area Sales Executive Nestle Milkpak. • Only 4 % milk is being processed and 96% people are using loose milk so Nestle Milkpak has the opportunity to capture a large share of the market through more creative advertising and other promotional activities. Mustafa Zaidi: Joint Director Research and Development.com and it is prohibited to publish this project at any other site. • Nestle Milkpak should invest more on research and development because customers using loose milk are getting a lot of contaminations especially in urban areas so Nestle Milkpak can provide awareness to people in this aspect.