Federal Urdu University of Arts, Science and Technology
Islamabad
Marketing Project
Group Members: Asfandyar Fida Muhammad Rizwan Muzamil Hussain
Ather RiazSubmitted To: Mr. Imran MirDated: 09 June, 2015
Introduction:This is a semester project regarding a company we
have decided to select Nestle as a company for our project. Nestle
has beenservingthis world foroverone hundredand thirty years. It
has differentiateditself throughits highquality product mix and
positioned itself ashealth and NutritionCompanywhile
targetingthehealth conscious people throughout theworld Henrie
Nestle established Nestle in 1867 in Switzerland. Nestle is worlds
N0 1 food company. 3 Lac 39 thousands people employed all over the
world. Operation in more than 197 countries Over 700 products
renovated or innovated in the past five years.
I. Situation Analysis:
a. External Environment:
i. Political: Nestle is a global company and leading in
nutartion, food beverage industry.Companies polices are afftected
if there is unstable poltical environment . Nestle has full support
of governments to manufacture healthier diets for target market and
they have made significant changes in products according to the
customers needsii. Economic: According to latest report Nestle has
organic growth of 4.4% in 2015. In 2014 sales are 91.6 Billon
dollars and profit generate by company is 14 billon dollars.iii.
Social: Nestle was founded on social responsibilty. Nestle
manufacture products which are legal and healthier for people in
this way target market become satisfiediv. International: Nestle
company improves their operation by expanding their business on a
international scale, Nestle company performing operations in more
than 197 counties.
b. Corporate Review:I. Misson: Good Food, Good Life."The company
aims to provide consumers with tasty, healthy food and drinks for
every meal and snack.Vison: Their vision is to be the leading Food
and Beverage Company in all over the world providing our customers
with high quality products and service at competitive prices in
this way our company will be able to achieve its goal and
objectivesStrategic Intet:Nestle is world leading in nutration,
food and beverage industry.In past years they deliverd best quality
products to their cutomersGood Food Good life indicates company
corporate plan that company proimise to deliver best quality
products which are healthier for life. The company is able to
create value among consumers by introducing new products
continously with also reenginering business processII. Corporate
Plan: Nestles target health concious people as their target market
than they provide best quality, tasty, healthier food and cold
drinks to their coustomers . Company has used reenginering as a
businees plan to achieve goals. It means thay can rethink and
redesign their products according to consumers needs. Marketing
plan of nestle consist of to manufacture best quality products in
afforadable price for typicall market they use best prmotion
sources to intarct with customers.III. Long term Goals: Reducing
direct water withdrawal per tonne of product by 40% compared to
2005, by 2015 Reducing direct greenhouse gas emissions per tonne of
product by 35% compared to 2005, by 2015. Providing healthy and
tasty foods to their customers. Company want to reamain worlds
leading in food & beverage industry.IV. Objectives: Nestl's
corporate objective is to be the world's largest and best branded
food and beverage manufacturer with best quality products. To build
trust and strong business realtionship with consumers, governmental
authorities and business partners. Introduce new products and
teacnologies Monitor perforamce and results and make changes to
achieve required goals.V. Organizational
Chart:CHAIRMANP.Barbeck-letmathe
Corporate governanceD.P FRICKCEOP.BulckeCorporate
communicationsR.RamsauerPharma & cosmetics HRF.Castaner
Finance & controlJ.SinghOperationsJ.LopezSBUs marketing
&salesW.BauerInnovation technology & R&DW.BauerZone
EUR: EUROPEL.FreixeNestle ProfessionalM.Caira
Nestle nutritionR.T.LaubeZone AOA: ASIA/AFRICAF.Van DijkZone
AMS: AmericasL.CantarellNestle watersJ.J.Harris
c. Product Category Review:
I. General Discription: Nestle is worlds largest nutrtion, food
and beverage industry. Nestles manufacture products which are
healthier and deliver best quality products to their customers.
They do not use any harmful ingredients. So their products are for
all people, ages and cultures.II. Sales Trends: Nestles is world
leading in nutration, food and beverage industry. People in now a
days more concious about their diets and health. Nestles introduce
best quality brands which are healthier and tasty.Major shares of
brands according to organic growth are:Nescafe 11%, Milo 13%,
Nestle pure water 11% , Nido 11% & Maggi 10%III. Distribution:
Nestle has its own distribution network with all transporation
facilities. They transport their products to regional sales offices
which are situated all over the world. The distribution process
consist of following steps:Raw material, manufacturer, processing,
product, packaging, , transporation, distributor, retailer,
customers.IV. Pricing: Price depend upon the market of product.
Nestle Company charge fair prices according to the product quality,
competition in the market and they made product according to the
buying power of the customers e.g Nestle Milk Pack 110 RS Per kg in
Pakistan.V. Packaging: Nestles used best material for packaging of
product in order to prevent food waste and avoide to damage
environment , company also avoided the wastage of packaging
material. Nestles design packaging in such a way that it attract
customers to buy the product.
d. Competative Analysis:I. Descriptions of major competitors
strength and weakness: Major comprtitor of Nestle company are Engro
foods, Walmart, Unilever, Habib, , keuring, Unilever NV, Hershey
Foods, Kraft Foods, Cadbury Schweppes, GROUPE DANONE and many other
companies etc These companies manufacture same products like nestle
and used best distribution sources , make changes in price of
products to challenge nestle in the market.
II. Brand Postioning and advertising:
1. Media Spending: In 2011, Nestl spent more than 2.9 billion
U.S. dollars on advertising, in 2013, Nestle spent 3.12 billon U.S
dollars on advertisng worlwide.
II. Sales Promtion:It was one of the best advertsing compigon
used by companies to attract customers. Nestle done the promotion
of the products very smartly. Nestle try to poistioning that their
products are for all ages and healthier for every one in this way
they will attract large market. Now, Nestles is world leading
nutration, food and beverage industry.e. Consumer Analysis:
I. Demographical Factors: If we look on Nestles company
demogrphic segemenation then we will find that their some products
are for every one , people from any area, culture ,age, and any
beliefs etc and some products are for special target market e.g
Children foods like Ceralic for only childrens etc
II. Brand Loyalty: According to latest research Nestles company
ranked NO.5 most loved company all over the world. It is due to the
consumers brand loyalty.It's the world's leading nutrition, health
and wellness company. The mission of "Good Food, Good Life" is to
provide consumers with the best tasting, most nutritious choices in
a wide range of food and beverage categories and eating occasions,
from morning to night.They are providing best quality products to
their customers. In this way customers become loyal they do not
purchase competing products available in market.
III. Purchase Rate: Nestles company manufacture products which
are healtheir and tasty. In this way they attract health concious
people after delivering best quality products their customer become
brand loyal. They purchase Nestles company products ang
givingperference Nestles products among competitors products .
Purchase share of some Nestles product according to annual 2014
report:Powdered and Liquid products 20.3 % Milk and ice cream
products 16.7% . Prepared dishes 13.5% Nutrition products 13.1%
Petcare 11.3% Water 6.9% & confectionery &chocolate
9.8%.
II . SWOT Analysis:Strengths: Companys name Nestle specifies the
quality image high standard and quality product Loyalty from
customers is also the major strength for the company Employees are
also loyal due to the decentralized culture of the company People
trust on products due to proper health and safety measures The
strength of Nestle confectionary is its imported chocolates and
candies, which strengthens its image Being a multinational company
it has the capability to attract more customers than the local
companies Company has the ability to compete in a dynamic
environment Company always adapt the new technology and deliver
best quality products to customers.Weaknesses: There is not much
margins for retailers to prefer its sales. They need to improve the
facilities of transporation of products and promotion of the
product The distribution cost is high as compared to the
competition in the local market.
Opportunities: They have an opportunity to expand or capture the
market by adding its product line. They have the opportunity to
offer snacks & enter in ice cream industry. They can also
capture the market of home appliances. Company can open separate
stores to eliminate retailers. Recently, they have created an
opportunity for themselves by introducing chillers in the market.
Company is trying to open stores in universities. They can provide
incentives to retailers to increase sales volume.
Threats: cost. Existing companies are increasing their product
lines that can prove to be a threat in the coming years. Company
like Cadbury is giving more discounts to retailers as compared to
distributors due to which retailers prefer its products for sale.
As compared to the local competitors, Nestles distributor cost is
very high. As Nestl Products has to maintain and obey the Nestl
standards. Some companies are competing on the basis of cost.
III. Strategic Planning:
a. Marketing Objectives: Nestle business objective is to
manufacture and market its products in a way that creates value
that can be sustained over the long term for shareholders,
employees,consumers, business partners and national economies in
which Nestl operates.The aim of the creating values for the company
include with improve business conditionfor the firm. To obtain more
reliable and high qualify source of raw materials, improved
government functioning and regulatory, employed skill and loyal
workforce and superior quality products which successfully
complete.
b. Marketing Strategies: Nestles define mrketing as: A social
and managerial process where by individual & groups obtain good
food and good lifethrough creating and exchanging products and
values. For this purpose thay used marketing stsrtegy to bulid
strong realtionship with customers. Their marketing staretgy is to
attract new customers by providing superior products in affordable
price to satisfy them. There all products are healthy for life and
for society welfare. So according to their mission and vision they
are following Societal Marketing Concept.
c. Targeting and segmenting:
Target Market: Nestles products are not for all. Some products
are for different target market and other are for different e.g
baby foodies, for babies and Milk pack for teenagers and elders
depending upon people income, life style, purchasing power etc.
they will be targeting only those segments that can provide best
possible returns so in this way they may be able to achieve their
goals effectively and efficiently.
Market Segmentation: Nestle has divided its market into
geographic (Location and area) , demographic ( Age, below 18, above
30, 18-30 and gender), psychographic (Upper class, lower class and
middle class according to their income level) and behavioral
segments. These segments will help to understand the market better
and in implementation of marketing strategies.
d. Competitive Advantages: Leading in food and beverage industry
Best quality products to capture large health concious market The
research and development capabilities allow the Company to lead the
way in innovation among its competitorse. Positioning and Branding:
As Nestle has salgon Good Food Good Life they have trying to
positioing that their products are for everyone and healtheir for
health. They do not use chemicals and harm ful ingredients which
are also harmful for human beings as well as environment. Nestles
company used best promotion sources to poistioning that their
brands are legal and healthier for everyone. In this way they
attract health concious large marke
1V. Marketing Mix: Product: Product stands for goods and
services that the company offers to target market. Nestle
manufacture products which are used every day. Nestle has large
number of products some of the brands are following: Baby Foods,
Breakfast Cereals, Beverages, Bottled Water, Chocolate &
Confectionery, Dairy Products, Food Services, Ice Cream, Prepared
Foods, Petcare & Cosmetics Names of some products are: Cerelac,
cookie crisp, Nestle fruit juices, Coffee Nescafe, Milo. Nido,
Nestle Pure Life Bottled water, Crunch, Kit Kat, Nestle Milk Pack,
Friskies, Maggi, Dog Chow, L Oreal etc Price: The price is
dependent on the market of each individual products. Nestle sets
prices of their products according to the market demand as low as
possible to achieve its goal and provide services to everyone.
Nestle has no effect on prices by their competitors because they
set their own.They charge offardable prices to their customers.
List of prices of some Nestle products in Pakistan: Cerelac baby
food RS 125, 200 grms and different varities have different prices,
Nestle Milk Pack RS. 110 per kg, Maggi Chicken RS.24 , Nestle
Nesfruta RS. 100 Per 1000 ml, KitKat Chunky RS 2350 Per 50 grms
pack, Nestle water 18.9 liter bottle RS .230 etc
Promotion: Nestle has adopted the channels for promotion through
TV, News papers, magazines, Doctors,and hoardings, personal selling
and direct marketing etc For this purpose nestle issues ads about
their products to tv channels to intract with customers and
similarly to the newspapers, they also used hoardings on markets or
roads to communicate with customers. Nestle also used dirct
marketing for products, consumers will register to online ordor
than they will provide products and services with in 24-48 hours.
Nestles company also uses person selling, selling through person to
person communications process. For this purpose company sent their
good observers in the market to intarct with the people, tell them
about products, face to face communication will help the company to
attract large marke.
Placement: Nestls distribute their products on world wide scale.
They are operating or saling their products in more than 197
countries, in these countries thay sale all over regardless big and
small cities. For this purpose Nestle has its own transpoaratin
system, they manufacture the products in factories and transfer
products in regional offices or sales center then provide products
to distributors and retilors. IV. Controling and Evaluation:a.
Forcasting:Forecasting is used by companies to determine how to
allocate their budgets for an upcoming period of time. Nestle, the
world's largest packaged foods maker, forecast sales to rise 5
percent this year, in line with its long-term goals, following a
weaker year in 2014 that was hurt by deflation in Europe and
slowing demand in Asia.b. Budgeting:According to annual Nestles
company report in 2014, thay are operating in 197 countries having
having 3, 39, 000 employees. Nestles company had sales of 91.6
billon dollars and 14.0 billon profit.Total sales in europe 25.9%.
Americans 39.4% and Asia & Africia 26.3%. tjey also used heavy
amount on advertisment.In 2011, Nestles company spent 2.9 billon
dollars on media for advertisment purpose.c. Evaluation: Nestle is
world leading in nutration, food and beverage industry.In past
years they deliverd best quality products to their cutomers.Nestl
Company is an international company which came to the stage it is
today by gaining superior competitive advantage over its rivals.
The focus product differentiation strategy has been very successful
although it may not work for other firms. The company is able to
create and deliver value not only by offering distinguished
products but also gaining effectiveness and efficiency by
reengineering its business..We are sure that Nestl Company will do
better in the future than their competitors and might be the new
trendsetter in some criteria and also gain its above-average
returns to their company.
Federal Urdu University of Arts, Science and Technology
Islamabad