Acknowledgement
Praise is to Allah Almighty, the one testing us all at all times
and
making decisions about what we dont know and cant know.
Writing
this report appeared to be a great experience to us. It added a
lot to
our knowledge while we were working on this report. If we say
that this
report is one of our memorable experiences in student life, then
it
would not be wrong.
We owe profound gratitude toMR.Mohsin Ali Shah for stimulating
our
creative abilities by assigning this report to me. I am
immensely
obliged to all our fellow students who guided me in making this
report,
without whose considerate attention and interest, it would be
difficult
for me to complete this report on time. Whatever we have learnt
from
them and this Assignment report has put indelible impression on
my mind.
It is my conviction that this learning experience will always be
a source
of help in my practical life and professional career.
Executive SummeryWe are analyzing the marketing plan of Nestle
which is an FMCG
company. Our analysis of Nestle will include the current
market
situation and strategic analysis of the company. We will see the
various
strategies that can be used by them for improving their product.
Nestle
has been serving worldwide with its excellence in product
safety,
quality and value. It provides many products which include
dairy
products, beverages, water, and infant dietetic and
confectionary. We
have taken NESTLE WATER for our project report. Their aim is
to
provide customer with pure drinking water on suitable prices
make the
product as convenient as possible. According to their claim that
they
provide the best food through out the world. For Nestle Pure
Life they
adopted the societal and marketing concept. Further we will
explain
the SWOT, SMART, IMC plan competitive analysis and all other
strategies used by them.
Introduction Of NestleNestle is the leading FMCG company of
Switzerland established by
Henri Nestle. Nestle is serving worldwide with its more than
500
factories in 86 countries comprising almost all continents.
Nestls
product portfolio is more than 500 products all over the world
serving
best to their customers.
Henri Nestl endowed his company with the symbol derived from
his
name. His family coat of arms, the nest with a mother bird
protecting
her young, became the Company's logo and a symbol of the
Company's care and attitude to life-long nutrition. The Nestl
nest
represents the nourishment, security and sense of family that
are so
essential to life.
The first product made by Henri Nestl, a food for babies who
were
unable to breastfeed. His first success was a premature infant
who
could not tolerate his mother's milk or any of the usual
substitutes.
People quickly recognized the value of the new product, after
Nestl's
new formula saved the child's life, and soon, Farine Lacte Henri
Nestl
was being sold in much of Europe. Nestl has been serving
Pakistani
consumers since 1988, when the parent company, the
Switzerlandbased
Nestl SA, first acquired a share in Milkpak Ltd.
Nestls Vision:The consumer's voice is the key to Nestl
Pakistan's vision and
working. Whether you live in the remotest village or the
metropolis of
Karachi, Nestle consumer services team stands ready to listen to
your
concerns and provide answers about our products and guidance
on
matters of health and wellness.
Nestls global vision is to be the leading health, wellness,
and
Nutrition Company of the world. Nestle Pakistan subscribes fully
to this
global vision. In addition to that, Nestle Pakistan also
envisions to:
Lead a dynamic motivated and professional workforce that is
proud of its heritage and bullish about the future
Meet the nutritional needs of all age groups through a
diversified
product range that contains an innovative portfolio of
branded
food and beverages of the highest quality
Maintain long-term growth and deliver shareholder value
Establishing responsible communication with the consumer
which in turn can provide us a better look into what changes
need to be made to our products
Strengthen the position as the best career destination for
talented and motivated individuals
Empowering a system of self-management
Mission StatementNestle is dedicated to providing the best foods
to people throughout
their day, throughout their lives, throughout the world. With
our
unique experience of anticipating consumers' needs and creating
solutions, Nestle contributes to your well-being and enhances
your
quality of life.
Nestle Pure Life Water & Current Market Situation
The launch of Nestle Pure Life in December 1998 was a truly
significant
episode in the history of Nestle Pakistan. Nestle Pure Life was
going to
get the entry of Pakistans growing water market. At the same
time
Pakistan became the first country where Nestle launched the
new
brand. Nestle Pure Life is a premium drinking water, produced to
the
highest standards of safety and purity as per the website
suggests. It is
ideally balanced with essential minerals like vitamins, calcium
and
many other useful items. According to nestle, pure water product
is the
stasr of nestle having useful ingredients in every drop of water
which
are essential for being hydrated all the time. Capitalizing on
its strong
brand recognition, aggressive pricing and supported by a
strong
marketing campaign, Nestle Pure Life has made very strong
inroads
into the water market in Pakistan. Nestl PURE LIFE is available
around
the globe today in Canada, USA, Mexico, Brazil, Argentina,
South
Africa, Saudi Arabia, Jordan, Egypt, Lebanon, Turkey,
Russia,
Uzbekistan, Pakistan, China, Thailand, and the PhilippineA
social and managerial process where by individual & groups
obtains
good food Launched on the North American market
in 2003, Nestl PURE LIFE is destined to
become the worlds top and most widely
distributed brand by 2010. Nestle is also
willing and has goal to achieve the $1
Billion enterprise by 2014. Nestle Pure
Life is a premium drinking water, produced to the highest
standard of
safety and purity. The company is seeking to provide customer
with
pure drinking water on suitable prices make the product as
convenient
as possible. According to their claim that they provide the best
food
throughout the world.
Nestle is leading brand in water market and has left behind many
local
brands which were working before the launching of Nestle Pure
Life.
Now it has maximum market share in developed and major cities
of
Pakistan like Lahore, Karachi, Islamabad, Multan, Hyderabad and
many
others. As we have discussed earlier that Nestle is going to
become the
fully market leader of water market in Pakistan, signs are
clearly visible
to achieve the set point of Nestle. Nestle Pure Life is also the
star
product of Nestle Pakistan and most probably all over the world
where
Nestle Pure Life exist.
Information and data pertinent to the markets
current situation.
They keep the information of the other companies what they
are
offering. Try to improve their strategies from others so that
they can
promote their product more. like more companies are now coming
in
the market so there is more completion in the market and they
have to
be up to date from the current situations.
Companys marketing goals and objectivesNestl's business
objective is to manufacture and market the
Company's products in such a way as to create value that can
be
sustained over the long term for shareholders, employees,
consumers,
and business partners.
Nestl recognizes that its consumers have a sincere and
legitimate
interest in the behavior, beliefs, and actions of the Company
behind
brands in which they place their trust and that without its
consumers
the Company would not exist.
Nestl continues to maintain its commitment to follow and respect
all
applicable local laws in each of its markets.
SMART Analysis
SMART is an acronym which tells us that when ever we set any
companies objectives they should be,
S = Specific
M= Measurable
A = Actionable or Achievable
R = Realistic
T = Time Frame
Market ShareNestle is now a days willing to have more and more
market share so
that it could achieve the goals that are set. The goal for
market share
will be discussed below.
Nestle occupied 85% of drinking water market in all over the
Pakistan.
In Lahore
Nestle Pure Life has 69%of total market, Sparklet has 13% and
Cool
have 11% and remaining 7%are kept by other local companies.
In
Karachi 50% of market is kept by Nestle and 25% by AVA and
remaining 25% is kept by other local companies. As for as
Islamabad is
concern Nestle Pure Life has 65%of market Share.They have
certain goals and objectives
which they want to achieve. They want to
create and promote their products to create
value for their product. They have the
resources for increasing their products
quality and compete it with the othercompanies. They conduct
researches for that and try to get their
objective which they have decided. They are promoting their
product
by creating customer awareness.
Nestl believes that, as a general rule, legislation is the most
effective
safeguard of responsible conduct,
although in certain areas, additional
guidance to staff in the form of
voluntary business principles is
beneficial in order to ensure that the
highest standards are met throughout
the organization.
Nestl is conscious of the fact that the
success of a corporation is a reflection of the professionalism,
conduct
and the responsible attitude of its management and
employees.
Therefore recruitment of the right people and ongoing training
and
development are crucial.
The Percentage Use of Nestle
Pure Life and its Competitors in
Islamabad
Hierarchy details of marketing and sales department
Marketing ManagerMarket manager is an employee who is
responsible for planning
and controlling its marketing activities and budgets
.Marketing
manager take cares the promotional strategies of the
products.
Manager try to use innovative ideas for the improvement of
product in
market.Finance manager
The field of finance covers the economics of the
contingent claims. Financial economists study the valuation of
these claims, the markets in which they are traded, and their use
by
individuals, corporations, and the society at large.
Finance manager and marketing manager are related with each
other
to meet their marketing targets. It is important because
alone
marketing manager can not promote any marketing strategy
without
any budget.
Market Segmentation and Targeting Strategy and
Consumer Profile AnalysisMarket SegmentationFor getting the
maximum market share and respect of the product in
the minds of the consumer, as per our observation and market
survey
we have concluded that Nestle Pure Life Waters segmentation is
based
on two points.
Geographic Segmentation
Demographic SegmentationGeographic SegmentationThe company has
divided its geographic segmentation in several
regions. First they have the segmentation of a whole country and
from
each provincial capital, they divided its areas into north,
east, west,
south. So that it could be easy for the company to work
efficiently on
its supply chain management.
Demographic Segmentation:Nestle Pure Life isnt a supreme quality
product that only the high class
uses. The product is for all. Infant to seniors. There is no
age, sex,
income and any other kind of limitation on use of the product.
The
product is for all. Anyone can use the product as per need.
Targeting StrategyAccording to our observation and market
survey, we have concluded
that as such there is not set demographic techniques to set the
specific
target market. Because, water is something that everyone
uses.
Everyone can use any size of bottle that Nestle is offering.
There are
some variations that can be made throw OUR OBSERVATION but
not
from the company.Nestle Pure Life comes in four different sizes.
These four are targeting
different types of people and lifestyles.
This is the smallest size of Nestle Pure Life Water of
0.5L. This size is being heavily used by the consumers
in place of soft drink. University and Colleges are also
included in its target market of this size. But the
product is used by everyone in the society also. It is not
only specified people that have been discussed above.
This is the second size of the Nestle Pure Life Water
which is about 1.5L. This size is being used in mostly
meetings. You can say that any kind of organizational
meeting or any other social meeting, this product is
being used.
This is the third size of the Nestle Pure Life which is
used in mostly houses and offices in the waiting areas
(offices)
This is the fully household product and also using in
executive rooms in offices with the dispensers. This
Nestle Pure Life Water Bottle is also very helpful in
many dispensers available in the market with good
options.
Consumer Profiling AnalysisThe product is being used by many
people of Pakistan and there is no
restriction in use of Nestle Pure Life as the is not that kind
of product
with specific characteristics. Everyone is free to use Nestle
Pure Life.
The above table shows that Nestle Pure Life is for
all. It is not necessary that Nestle Pure Life Water
Cans can only be used by higher income persons.
Because the data is linked with the regular use of
Nestle Pure Life Water Cans. Means income can be
considerable for the people who consume Nestle Pure Life on
daily
basis. If we exclude the factor of daily basis the answer will
be No.
there is not restriction to use Nestle Pure Life for Muslims and
non
Muslims.
Product Strategy and FAB Analysis with Product Line
The product was launched due to certain reasons and problems
faced
by the government and other factors. There are many areas in
Pakistan
where we will not find pure water but the infiltrated water.
That could
harm your body and cause the major problem called Diaria. That
is one of the harmful diseases which can also lead to
death. To overcome this problem, Nestle
decided to launch its water product by
acquiring the water plant of AVA Company.
Now the plant is under control of Nestle
Pakistan Ltd. Nestle launched its product by offering very
useful
ingredients like vitamins, calcium and many other useful things
which
gives the human body more than the water. Nestle is available in
the
market in four good sizes according to the need and as per
targeted
and segmented market. 0.5L, 1.5L, 12L and 19L. These sizes
are
complete sized according to the need of the customers. To
understand the full ingredients of the water, we would like to show
a FAB Analysis.
The above chart shows the ingredients and level of them in
Nestle Pure
Life Water Bottle. The water is also tested on the basis of
above
ingredients in the laboratory of USA, Pakistan, and Thailand
etc
Here is one more table which will clearly define the FAB
Analysis of
Nestle Pure Life Water.
FAB ANALYSIS
This is the complete FAB Analysis of Nestle Pure Life which
should be
known to all the consumers for powerful CRMFeature
The Pricing Strategy:We can easily observe that Nestle itself is
not
taking active part in social welfare. And on the
other hand, we see the lower prices of the
product as compared to the other FMCGs
Companys products like Unilever, Colgate
Palmolive and Procter and Gamble. If we look at the prices, we
can
observe that Nestle is also using its name for the promotional
activities
and pricing strategies also. They have to maintain their level
of
efficiency and always provide the best at best price. Nestle
cares about
the customers. As the time is of inflation, nestle is trying to
overcome
the pricing problems to the extent they can do. Nestls point of
view is
Only by understanding their needs can we serve our consumers
to
the fullest.
Profit earning is the core aim of every company but in case of
nestle
their profit margin is small just for the sake of customers
trust and
happiness. Only a few amount of profit is collected from pure
life water.
Nestle always strive to give superior product at low rates.
Nestle is also
one of the leader of retaining their customers. This is one
reason of
their success. They use the simple formula for the price that is
Cost +
Profit.
Market Distribution and Channels StrategyNestl Pakistan's supply
chain and
distribution makes sure that Nestl
products are accessible, no matter where
consumers are in Pakistan. Nestle aims to
put together processes from the farm to
markets, and make sure products are
distributed to the consumers at the
correct time, the right cost and in the
accurate quantities. In the first quarter of
2006, Nestle proved it by delivering an amazing 136 million kg
of
Nestl products in Pakistan.
The mission of Nestle Supply Chain is to:
1. Optimize and consolidate resources and processes for a
low-cost
but efficient
2. Develop and manage simplified and effective supply network
to
achieve a high level of service
3. Create a continuous improvement culture driven by
performance
measures and reward.
To accomplish their tasks, the company chooses both
marketing
channels method that is conventional and vertical. In
conventional
channel, Nestle Pure Life is distributed among the wholesalers
of
Pakistan and from wholesalers; the products are distributed to
retailers
and from retailers, the products reaches to ultimate consumers.
Nestle
Pure Life is also delivered directly to the consumers throw
vertical
distribution channel. In this channel, the cost can be
minimized.
Market Positioning Strategy, IMC Plan, Perceptual
Mapping and USPThere are certain points on which they occupy
their customers and
those points are very helpful in retaining their customers.
There are
number of water products available in Pakistani market
including
Springley, Sprarklet, Aqua Fina, Kinley, Deja Blue and many
others. But
Nestle Pure Life attracts its customers throw many reasons. The
main reason is Pure Water
which is the name of this product.
Rests of the water products are
using chemicals which can be
harmful for the human body but
Nestle Pure Life is the only water
product which is pure in nature.
That is also the unique selling
point of Nestle Pure Life. This is
the most powerful point that is in
the mind of the customers while
purchasing any water bottle in their routine life. The brand
name is
also very important for the consumers. The slogan of Nestle is
Good
Food Good Life. That is very attractive slogan people can
attract from.
It puts the perception in the minds of people that theyre being
offered
good products for their healthy lifestyle. If you look at the
logo of
Nestle, youll get to know that a bird is feeding the children.
Obviously
a mother cant deceive the children. Nestle pure life is a brand
of
nestle which explains a big symbol of quality to customers.
Nestle Pure Life shows in their ads about the purity of water
and the
water need for your body. In its launching advertisement, the
company
advertises Nestle Pure Life very successfully. In that
advertisement, a
lady is drinking Nestle Pure Life Water and then it goes towards
inside
the body to show the functions of pure water. That was the
awesome
commercial that boosted the sale of Nestle Pure Life. Nestle is
also
advertising on famous websites like you can observe that
whenever
you will login to your facebook account, the ads of Nestle will
be there.
There are number of sign boards and banners you will see in the
cities to aware people about the products of Nestle. Thus, Nestle
is using all
types of media to advertise their products in anyway. When
Nestle Pure
Life was launched, they distributed the free samples of 0.5L
bottles for
market testing and for their advertising purpose. Then a short
walk
was also arranged for the sake of good health and seminars was
also
conducted to make sure about the pure water needed your
body.
To understand the depth of Positioning, we will divide into
three steps.Personal SellingA direct Vendor Selling Activity was
coordinated and carried out during
the summer months of June, July, and August 1999 in Lahore. A
team
of vendors, clad in branded T-shirts, caps and jackets, sold
chilled 0.5
liter bottles to traveling customers on all major intersections.
The
brand got great mileage out of this innovative idea of personal
selling
in terms of brand awareness, paid trial, image as well as real
sales.PublicityPure Life was launched on 14 December, 1998 in
Karachi with a huge
amount of enthusiasm and positive response shown by the locals.
The
successful story of its launch was printed in all the local
newspapers
the next day. This greatly helped in creating awareness of the
brand
and gave its introduction a good start.
Sales PromotionSpecific promotions of Nestle Pure Life were
arranged in some of the
key outlets of Lahore. Elaborate shelf space was acquired for
product
display and specially designed POS material was extensively used
to
promote sales. On a 12-bottle purchase of 1.5 ml, one 1.5 ml
bottle
was offered free to consumers. Similarly on a 6-bottle purchase
of 1.5
ml, one 0.5 ml bottle was offered free. Regarding trade
promotion, the
retailer was also given an additional discount of 4 % during
this sales promotion. Not only did the sales of Nestle Pure Life
grow
tremendously during the promotion, these continued at a higher
pace
even after it was over.
The above map shows the ranking of different products in the
eyes of
customers and retailers as per our survey. In this map, Coca
Colas
Kinley and Pepsis Aqua Fina are the real time competitors of
Nestle
Pure Life. Nestle Pure Life is on the top of the map having
larger
market share. You can see the pie chart of market share in the
diagram
shown here. There are other products available in the market
like Deja Blue, Dew Drops, and Springley etc
The above chart shows the market share of Nestle in three major
cities
of Pakistan. Here are Lahore, Karachi and Islamabad. Lahores
market
share is about 60%, Islamabads have 68% and in Karachi, the
market
share is about 50%. (The data is not considered 100%. It is
just
comparison.)
Competitive PositionCompetitive position of Nestle tells that
how much its competing its
competitor and what it has unique from its competitors. It tells
its
position in the market that where it stands in market. And also
tells us that what its competitive position is in the market. So we
would
analyze its position from two aspects
SWOT Matrix Analysis of the company
Core Competencies & Key Success FactorsSWOT Analysis of the
CompanySWOT analysis would tell us in better way about the
competitive
position of the company. Following is SWOT analysis of the
company.Strength Strong Brand name (NESTLE LOGO & FAMILY
BRAND)
Pure Drinking Water in market
Mineral Product (Free of chemicals)
Only brand in the area maintaining its quality and taste
It has largest market share
Ease of availability of their products all over Pakistan
Immense product range and huge diversification leads to
reduce
risk.
High quality standards
Weakness Communication is weak
Lack of Awareness
Weak Distribution Channels
These distributors, though observing the rapid increase in
customer
demand refuse to hire new, more efficient and innovative staff
that
would take the organizations to rise rather they stuck to their
old staff
members.Opportunities
Concentrating on these areas of weakness can increase sales
It has opportunity to advertise its product in better way.
It has strongest opportunity to increase its product line by
making segments in mineral water. Mineral water should be of
different
taste E.g. like AQUA FINA in USA has introduced mineral water
of
different taste. So it captured the market.
By increasing product line it can also increase its sales.Threat
Segments are being shared by competitors
Under cutting by competitors.
Uncertain conditions will affect the sales
Core Competencies & key success factorsA) Innovative
ProductNestle first of all introduced innovative product in
Pakistan. Some of
core competencies of Nestle are given below
Pure Water
Its free of Germs
It is free of chemical
It includes different vitamins in water which increase its
purity
and make this mineral water unique from others
Health Drinking Water. Because it includes vitamins which
prevent its users from different diseases.
Nestle sponsors different events
Continuous improvement
Social responsibilitySo core competency is basically the skill
that a company has. As Nestle
Mineral Water has this core competency. If Nestle meet these
core
competencies, it can grow it sales and revenue. Then it can
also
differentiate its product from others. So these are key factors
to
achieve success and meet goals.
Competitive AnalysisCompetitive analysis includes the comparison
of one organization with
its competitor. It differentiate product and tells which product
stands at
which position. It tells about the differentiation of
characteristics and
weaknesses of the product with its competitors.
As we know that more important competitor of Nestle is Aqua
Fina.
STRATEGIES FOR COMPETITIVE ADVANTAGESEvery product on the shelf,
every service and every customer contact
helps to shape this image. A Nestl brand name on a product is
a
promise to the customer that it is safe to consume, that it
complies with all regulations and that it meets high standards of
quality.
Customers expect us to keep this promise every time. Under
no
circumstances will we compromise on the safety of a product
and
every effort must be made to avoid hazards to health.
Likewise,
compliance with all relevant laws and regulations is a must and
is not
negotiable. People, equipment and instruments are made available
to
ensure safety and conformity of Nestl products at all times. The
effort
is worth it. Companies with huge quality standards make
fewer
mistakes, waste less time and money and are more productive.
They
also make higher profits. Quality is our most successful
product. It is
the key to our success, today and tomorrow.
Other marketing strategies adopted by the companyIn future two
competitors of Pure Life are going to launch their water in
the market which are Pepsi & Coca Cola. As their competitor
will
advertise their product at very high stage so people will get
awareness
about drinking water and nestle pure life can achieve a great
market
share in future because people can see that our water is getting
rough
day by day and there is a need for pure drinking water to
survive in the
world.
For these opportunities company is going to launch an other
plant for
drinking water next year.
Firstly Nestle pure life was focusing on product and pricing
strategy but
recently its focusing on marketing strategy to create
customer
awareness of the product in those areas which are far away.
Marketing FinancialsIn marketing financials of the Nestl,
advertisement budget is low
because their profit margins for nestle pure life is only
5%.They have
weak advertisement. For increasing their sales they have to
increase
segmentation with more effective strategies. If they will
increase their
product line then their sales would be automatically increased
and
after that profit margin will increase. Then they can promote
more their
product by advertising and tools like this .
GAP AnalysisGAP analysis stands for identification of GAPS in
the market, which a
company can capitalized upon. This means that the difference
of
customer wants, and what company is giving. The remaining
portion is
called GAP Analysis. GAP Analysis for company is given
below.
If we compare Nestle with Aqua. Then we would come to know
that
Aqua Fina is providing mineral water of different tastes in USA.
And
sooner it would introduce mineral water of different tastes in
Pakistan.
But if we see Nestle, its only giving pure water of one taste.
As
customer wants different taste in water. So this is GAP
analysis
between company and customer. Major difference is of
different
segments. So Nestle should introduce different tastes in water
to meet
customer requirements.
Problems according to the companyNestle is very much afraid of
current economic condition of Pakistan as
the company is willing to become the $1 Billion enterprise till
2014. Nestle should contact to the main head quarter situated in
Switzerland
for financial, economic, strategic support so that the goals of
Nestle
Pakistan could be achieved. One more thing that is possible
that
company should made some agreements about their business plans
so
that the company could able to work with stability.
The group is willing to enhance its product line but due to
some
internal and external reasons along with security, the company
is
facing the shortage of producing certain products which have
demand
in the market.SolutionThe company should buy the existing plants
by any mean in Pakistan
to fulfill the demand of market. Because to setup a new plant
can be
costly for the company. It is also possible that company should
work
with other small companies to meet the demand. There should be
very
low probability of loss on the goods as the brand image is so
strong in
Pakistani market about Nestle.
Problems according to the group analysisThe company should make
huge expenses on advertisement in rural
areas of Pakistan to create awareness in the mind of local
area's
people.
The company should held seminars and meeting for the promotion
of
Nestle Pure Life.Strategies recommended for rectifying
problemsThey should increase their product quality as now a day
they are facing
problem of impurity of their products. They have to improve
themarketing strategies. So that they can capture market and
improve
their sales.
Nestle is the world leader in FMCG industry. People trust on
the
products launched by the company even the product is facing
some
problems.
Nestle was doing its good job in past but now it is facing
some
problems of low quality of their products. Nestle is sued by
someone
they claim that they are doing unethical business. They are
mixing
unhygienic things which can cause damage to customers health.
Its
example is that their water is not pure and good for health. You
can see
dust partials in Nestle mineral water when you keep it in
sunlight that
shows its product quality is down. Now they have to do more
making
their strong position in market because when you lose your image
in
customers eye then it is difficult to renew their image.