Strategic Marketing- Assignment

Student Names:

Saif Ullah: 01-322222-027

Saad Fayyaz: 01-322222-041
Muzammil Abbas: 01-322222-021
Atif Shahzad: 01-322222-043

Submitted to:
Dr. Kasheer

MBA 2 YEARS (WEEKEND)

MBA -3W
BUSINESS SCHOOL
Bahria University, Islamabad.
 Table of Contents

1. Introduction of the Organization and Mission, Vision, and Values..........................................................2

Mission:.....................................................................................................................................................2
Vision:........................................................................................................................................................2
Values:.......................................................................................................................................................2
 Respect:..........................................................................................................................................2
 Long-term Focus:...........................................................................................................................2
 Quality and Safety:........................................................................................................................2
2. Overview of Products/Services Offered by the Organization....................................................................2
1. Dairy Products:......................................................................................................................................2
2. Beverages:..............................................................................................................................................2
3. Infant Nutrition:.....................................................................................................................................3
4. Cereals:..................................................................................................................................................3
5. Health Science:......................................................................................................................................3
6. Confectionery and Snacks:....................................................................................................................3
7. Culinary Products:.................................................................................................................................3
3. Analysis of the Competitors of Nestle Pakistan........................................................................................4
Key Competitors:.......................................................................................................................................4
Strengths of Nestle Pakistan:.....................................................................................................................4
Weaknesses of Nestle Pakistan:.................................................................................................................4
4. A Detailed Account of Nestle Pakistan's Existing Distribution Channels.................................................5
1. Direct Distribution:................................................................................................................................5
2. Indirect Distribution:..............................................................................................................................5
3. Retail Channels:.....................................................................................................................................6
4. Institutional Sales:..................................................................................................................................6
5. Alternative and Emerging Channels:.....................................................................................................6
Key Characteristics of Nestle Pakistan's Distribution Network:...............................................................6
Challenges and Opportunities:...................................................................................................................6
5. Suggestion for a New Product/Service for Nestle Pakistan.......................................................................7
Product Concept:........................................................................................................................................7
Implementation Considerations:................................................................................................................7
Potential Challenges:.................................................................................................................................8
1. Introduction of the Organization and Mission, Vision, and Values

Nestle Pakistan is part of the larger Nestle group, the world's largest food and beverage company. Nestle
has a presence in numerous countries across the globe, including Pakistan, where it has established itself
as a leading player in the food and beverage industry.

Mission: Nestle's mission is deeply rooted in its commitment to enhancing the quality of life and
contributing to a healthier future. In Pakistan, this translates to providing consumers with products that
are not only enjoyable but also nutritious, focusing on improving the health and well-being of its
consumers.

Vision: Nestle's vision is to be recognized as the foremost Nutrition, Health, and Wellness company. In
Pakistan, this vision guides the company's strategy and product development, aiming to address local
nutritional needs and preferences while maintaining global quality standards.

Values: Nestle's values are integral to its global and local operations. These include:
 Respect: This encompasses respect for different cultures, traditions, and the environment. In
Pakistan, this means adapting products and practices to align with local customs and
sustainability goals.
 Long-term Focus: Nestle emphasizes long-term sustainability and profitability, rather than short-
term gains. This approach impacts how they invest in local communities and infrastructure in
Pakistan.
 Quality and Safety: The company is committed to maintaining high standards of quality and
safety in its products, ensuring that consumers receive reliable and safe products.

2. Overview of Products/Services Offered by the Organization

Nestle Pakistan's product portfolio is diverse, catering to various consumer needs:

1. Dairy Products:

 Milk Powders: Products like NIDO provide essential nutrients and are popular among different
age groups.
 Liquid Milk: MILKPAK and other liquid milk products are staples in many households.
 Yogurt: Nestle offers a range of yogurts, catering to both taste and health preferences.

2. Beverages:

 Coffee: Nescafé is a flagship product, offering a variety of coffee experiences.

 Tea: Nestle offers tea products tailored to local tastes.
  Bottled Water: Nestle Pure Life is a major player in the bottled water market, emphasizing
purity and safety.

3. Infant Nutrition:

 Infant Formula: Products are designed to meet the nutritional needs of infants.
 Cereals: Brands like Cerelac provide essential nutrients for infants and toddlers.

4. Cereals:

 Breakfast Cereals: These include options like Corn Flakes and KOKO KRUNCH, focusing on
taste and nutrition.

5. Health Science:

 Specialized Nutrition: These products cater to specific dietary needs and health conditions,
offering tailored nutrition solutions.

6. Confectionery and Snacks:

 Chocolates and Candies: KitKat, Milo, and other snacks cater to the confectionery market.
 Healthy Snacks: Options that focus on health and nutrition are also available.

7. Culinary Products:

 Cooking Milks, Sauces, and

Instant Noodles: Maggi
noodles and other culinary
products are popular for their
convenience and taste.
3. Analysis of the Competitors of Nestle Pakistan

Nestle Pakistan operates in a competitive market with several local and international players. The
competition varies across different product categories. Here's an analysis of key competitors and a
comparison of Nestle Pakistan's strengths and weaknesses:

Key Competitors:

1. Unilever Pakistan: A major competitor in various categories like tea, ice cream, and culinary
products. Brands like Lipton and Knorr are direct competitors to Nestle's beverage and culinary
product lines.
2. Engro Foods (now part of FrieslandCampina): A significant player in the dairy sector,
competing with Nestle in milk, yogurt, and infant nutrition products. Olper's is a well-known
brand in this segment.
3. Mondelez International: Competes in the confectionery segment with popular brands like
Cadbury, directly challenging Nestle's chocolate and snack products.
4. Murree Brewery: In the beverage sector, particularly in juices and non-alcoholic drinks, Murree
Brewery's products can be seen as alternatives to Nestle's beverage offerings.
5. Local and Regional Brands: Various local and regional brands offer competitive products in
dairy, snacks, and culinary products, often competing on price and local preferences.

Strengths of Nestle Pakistan:

1. Brand Recognition and Trust: Nestle is a globally recognized brand, and its reputation for
quality is a significant strength in Pakistan.
2. Diverse Product Portfolio: Nestle Pakistan offers a wide range of products, catering to various
segments, which helps in risk diversification.
3. Quality and Safety Standards: Adherence to international quality and safety standards is a key
strength, especially in categories like infant nutrition and dairy products.
4. Strong Distribution Network: Nestle has a well-established distribution network, ensuring wide
availability of its products across Pakistan.
5. Research and Development: Nestle’s global R&D capabilities enable it to innovate and tailor
products to local tastes and nutritional needs.

Weaknesses of Nestle Pakistan:

1. Price Sensitivity: Some of Nestle's products are priced higher than local competitors, which can
be a disadvantage in a price-sensitive market.
2. Dependence on Global Brand Image: Local issues or global controversies can impact Nestle
Pakistan’s image, given its strong association with the global brand.
 3. Challenges in Rural Market Penetration: While Nestle has a strong urban presence,
penetrating deeper into rural areas can be challenging due to logistical issues and lower brand
awareness.
4. Environmental and Sustainability Concerns: Like many large corporations, Nestle faces
scrutiny regarding its environmental impact and sustainability practices.
5. Consumer Health Trends: Increasing awareness of health and wellness can be a double-edged
sword, as consumers might opt for local or organic products over packaged goods.
Nestle Pakistan’s strengths lie in its brand reputation, diverse product range, and strong distribution
network. However, it faces challenges in terms of price sensitivity, dependence on the global brand
image, and adapting to rapidly changing consumer preferences and environmental concerns. Its
competitors, ranging from large multinational corporations to local brands, offer stiff competition in
various product categories, necessitating continuous innovation and adaptation to the local market.

4. A Detailed Account of Nestle Pakistan's Existing Distribution Channels

Nestle Pakistan, like its global counterpart, employs a sophisticated and extensive distribution network to
ensure its products are widely available across the country. This network is crucial for maintaining the
company's market presence and competitive edge. Here's a detailed look at the various components of
Nestle Pakistan's distribution channels:

1. Direct Distribution:

 Central Warehouses: Nestle Pakistan operates central warehouses from where products are
distributed across the country. These warehouses are strategically located to optimize logistics
and supply chain efficiency.
 Distribution Centers: Smaller distribution centers or depots are spread throughout the country.
These centers act as hubs from which products are further distributed to various retail outlets.
 Sales Force: A dedicated sales force is responsible for managing relationships with retailers and
ensuring product availability. This team plays a crucial role in understanding market dynamics
and consumer preferences.

2. Indirect Distribution:

 Distributors and Wholesalers: Nestle Pakistan works with a network of distributors and
wholesalers who purchase products in bulk and distribute them to smaller retail outlets. These
intermediaries are crucial for reaching areas that are not directly serviced by Nestle.
 E-Commerce Platforms: With the rise of online shopping, Nestle Pakistan has also tapped into
e-commerce platforms. This includes both partnerships with existing e-commerce retailers and
possibly its own online sales channels.
3. Retail Channels:

 Supermarkets and Hypermarkets: These large retail outlets are key channels, especially in
urban areas. Nestle Pakistan ensures prominent shelf placement and visibility in these stores.
 Convenience Stores and Kirana Shops: Smaller retail outlets, including local convenience
stores, are critical for penetrating deeper into both urban and rural markets.
 Specialty Stores: For certain product lines, such as Nestle Health Science products, specialty
stores like pharmacies are important distribution points.

4. Institutional Sales:

 B2B Channels: Nestle Pakistan also engages in business-to-business sales, supplying products
directly to institutions like hotels, restaurants, and cafeterias.

5. Alternative and Emerging Channels:

 Direct-to-Consumer Initiatives: There may be initiatives to reach consumers directly, especially

for niche products or in specific marketing campaigns.
 Mobile and Temporary Outlets: In some cases, mobile sales units or temporary outlets at
events and high-footfall areas are used to promote and sell products.

Key Characteristics of Nestle Pakistan's Distribution Network:

 Extensive and Diverse: The network is designed to cover a vast geographical area, reaching a
diverse consumer base across urban and rural settings.
 Efficient and Responsive: The supply chain is optimized for efficiency, ensuring timely delivery
and responsiveness to market changes.
 Technology-Driven: Nestle Pakistan likely employs advanced technology for inventory
management, order processing, and logistics optimization.
 Adaptive and Scalable: The distribution network is adaptable to changes in market demand,
consumer preferences, and external factors like economic shifts or regulatory changes.

Challenges and Opportunities:

 Rural Penetration: Expanding reach in rural areas remains a challenge due to logistical
complexities and lower brand awareness.
 Digital Transformation: Embracing digital channels and e-commerce is an ongoing opportunity,
especially in a rapidly digitizing market like Pakistan.
 Sustainability Practices: Integrating sustainable practices in the distribution network, like
reducing carbon footprint and optimizing packaging, is increasingly important for corporate
responsibility and consumer perception.
5. Suggestion for a New Product/Service for Nestle Pakistan

Considering Nestle Pakistan's strengths, competitive landscape, and market dynamics, a strategic addition
to its product portfolio could be beneficial. Based on current trends and gaps in the market, here's a
suggestion for a new product/service:
Product Suggestion: Plant-Based Dairy Alternatives

Product Concept: A line of plant-based dairy alternatives, including milk, yogurt, and possibly cheese,
made from sources like almonds, oats, soy, or coconut. This line could be marketed under a new sub-
brand or as part of Nestle's existing dairy range.
Rationale for the Suggestion:
1. Growing Health Consciousness: There's a global trend towards healthier eating habits,
including in Pakistan. Plant-based dairy alternatives cater to consumers looking for lactose-free,
lower-calorie, or cholesterol-free options.
2. Dietary Restrictions and Preferences: This product line would appeal to vegans, vegetarians,
and those with lactose intolerance or dairy allergies, a market segment that is currently
underserved in Pakistan.
3. Sustainability Appeal: Plant-based products are often perceived as more environmentally
friendly, aligning with global and local concerns about sustainability and ethical consumption.
4. Innovation and Market Leadership: By introducing such a product line, Nestle Pakistan can
reinforce its image as an innovative and forward-thinking company, potentially capturing a new
market segment before its competitors.

Implementation Considerations:

1. Product Development: Leverage Nestle’s global R&D capabilities to develop products that suit
local tastes and preferences, ensuring they are nutritionally comparable to dairy products.
2. Supply Chain Adaptation: Establish a supply chain for sourcing high-quality plant-based
ingredients. This might involve local sourcing to reduce costs and carbon footprint.
3. Marketing Strategy: Educate consumers about the benefits of plant-based dairy alternatives.
Marketing campaigns should focus on health benefits, taste, and versatility of the products.
4. Distribution: Initially, these products could be targeted at urban areas and large retail chains,
where there is likely to be more openness to trying new products. E-commerce platforms can also
be a key channel for reaching health-conscious consumers.
5. Pricing Strategy: While these products might need to be priced higher than traditional dairy
products due to production costs, competitive pricing will be key to encouraging trial and
adoption.
6. Regulatory Compliance: Ensure that all products meet local food safety and labeling
regulations, particularly around nutritional content and health claims.
Potential Challenges:

 Consumer Acceptance: Convincing traditional dairy consumers to try plant-based alternatives

could be challenging.
 Price Sensitivity: Higher price points might limit the initial market to more affluent consumers.
 Competition: As the market for plant-based products grows, Nestle Pakistan might face
competition from both local and international brands.
Introducing a line of plant-based dairy alternatives could be a strategic move for Nestle Pakistan, tapping
into emerging consumer trends and reinforcing its position as a leader in innovation and health-oriented
products. This initiative would leverage Nestle's strengths in product development, brand trust, and
distribution while addressing a growing market segment concerned with health, dietary needs, and
sustainability.