NESTLE MARKETING PLAN

Acknowledgement

Praise is to Allah Almighty, the one testing us all at all times andmaking decisions about what we don’t know and can’t know. Writingthis report appeared to be a great experience to us. It added a lot toour knowledge while we were working on this report. If we say that thisreport is one of our memorable experiences in student life, then itwould not be wrong.We owe profound gratitude toMR.Mohsin Ali Shah for stimulating ourcreative abilities by assigning this report to me. I am immenselyobliged to all our fellow students who guided me in making this report,without whose considerate attention and interest, it would be difficultfor me to complete this report on time. Whatever we have learnt fromthem 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 Summery

We are analyzing the marketing plan of Nestle which is an FMCGcompany. Our analysis of Nestle will include the current marketsituation and strategic analysis of the company. We will see the variousstrategies that can be used by them for improving their product. Nestlehas been serving worldwide with its excellence in product safety,quality and value. It provides many products which include dairyproducts, beverages, water, and infant dietetic and confectionary. Wehave taken NESTLE WATER for our project report. Their aim is toprovide customer with pure drinking water on suitable prices make theproduct as convenient as possible. According to their claim that they

provide the best food through out the world. For Nestle Pure Life theyadopted the societal and marketing concept. Further we will explainthe SWOT, SMART, IMC plan competitive analysis and all other strategies used by them.

Introduction Of Nestle

Nestle is the leading FMCG company of Switzerland established byHenri Nestle. Nestle is serving worldwide with its more than 500factories in 86 countries comprising almost all continents. Nestlé’sproduct portfolio is more than 500 products all over the world servingbest to their customers.Henri Nestlé endowed his company with the symbol derived from hisname. His family coat of arms, the nest with a mother bird protectingher young, became the Company's logo and a symbol of theCompany's care and attitude to life-long nutrition. The Nestlé nestrepresents the nourishment, security and sense of family that are soessential to life.The first product made by Henri Nestlé, a food for babies who were

unable to breastfeed. His first success was a premature infant whocould not tolerate his mother's milk or any of the usual substitutes.People quickly recognized the value of the new product, after Nestlé'snew formula saved the child's life, and soon, Farine Lactée Henri Nestléwas being sold in much of Europe. Nestlé has been serving Pakistaniconsumers since 1988, when the parent company, the SwitzerlandbasedNestlé SA, first acquired a share in Milkpak Ltd.

Nestlé’s Vision:The consumer's voice is the key to Nestlé Pakistan's vision andworking. Whether you live in the remotest village or the metropolis of

Karachi, Nestle consumer services team stands ready to listen to yourconcerns and provide answers about our products and guidance onmatters of health and wellness.Nestlé’s global vision is to be the leading health, wellness, andNutrition Company of the world. Nestle’ Pakistan subscribes fully to thisglobal vision. In addition to that, Nestle Pakistan also envisions to:Lead a dynamic motivated and professional workforce that isproud of its heritage and bullish about the futureMeet the nutritional needs of all age groups through a diversifiedproduct range that contains an innovative portfolio of brandedfood and beverages of the highest qualityMaintain long-term growth and deliver shareholder valueEstablishing responsible communication with the consumerwhich in turn can provide us a better look into what changesneed to be made to our productsStrengthen the position as the best career destination fortalented and motivated individualsEmpowering a system of self-management

Mission Statement

“Nestle is dedicated to providing the best foods to people throughouttheir day, throughout their lives, throughout the world. With ourunique experience of anticipating consumers' needs and creating solutions, Nestle contributes to your well-being and enhances yourquality of life.”

Nestle Pure Life Water & Current Market SituationThe launch of Nestle Pure Life in December 1998 was a truly significantepisode in the history of Nestle Pakistan. Nestle Pure Life was going toget the entry of Pakistan’s growing water market. At the same timePakistan became the first country where Nestle launched the newbrand. Nestle Pure Life is a premium drinking water, produced to thehighest standards of safety and purity as per the website suggests. It isideally balanced with essential minerals like vitamins, calcium andmany other useful items. According to nestle, pure water product is thestasr of nestle having useful ingredients in every drop of water whichare essential for being hydrated all the time. Capitalizing on its strongbrand recognition, aggressive pricing and supported by a strongmarketing campaign, Nestle Pure Life has made very strong inroadsinto the water market in Pakistan. Nestlé PURE LIFE is available aroundthe globe today in Canada, USA, Mexico, Brazil, Argentina, SouthAfrica, Saudi Arabia, Jordan, Egypt, Lebanon, Turkey, Russia,Uzbekistan, Pakistan, China, Thailand, and the Philippine

“A social and managerial process where by individual & groups obtains

good food

Launched on the North American marketin 2003, Nestlé PURE LIFE is destined to

become the world’s top and most widelydistributed brand by 2010. Nestle is alsowilling and has goal to achieve the $1Billion enterprise by 2014. Nestle PureLife is a premium drinking water, produced to the highest standard ofsafety and purity. The company is seeking to provide customer withpure drinking water on suitable prices make the product as convenientas possible. According to their claim that they provide the best foodthroughout the world.Nestle is leading brand in water market and has left behind many localbrands which were working before the launching of Nestle Pure Life.Now it has maximum market share in developed and major cities ofPakistan like Lahore, Karachi, Islamabad, Multan, Hyderabad and manyothers. As we have discussed earlier that Nestle is going to become thefully market leader of water market in Pakistan, signs are clearly visibleto achieve the set point of Nestle. Nestle Pure Life is also the star

product of Nestle Pakistan and most probably all over the world whereNestle Pure Life exist.

Information and data pertinent to the market’scurrent situation.

They keep the information of the other companies what they areoffering. Try to improve their strategies from others so that they canpromote their product more. like more companies are now coming inthe market so there is more completion in the market and they have tobe up to date from the current situations.

Company’s marketing goals and objectives

Nestlé's business objective is to manufacture and market theCompany's products in such a way as to create value that can besustained over the long term for shareholders, employees, consumers,and business partners.Nestlé recognizes that its consumers have a sincere and legitimateinterest in the behavior, beliefs, and actions of the Company behindbrands in which they place their trust and that without its consumersthe Company would not exist.Nestlé continues to maintain its commitment to follow and respect allapplicable local laws in each of its markets.

SMART Analysis

SMART is an acronym which tells us that when ever we set anycompanies objectives they should be,

S = SpecificM= MeasurableA = Actionable or AchievableR = RealisticT = Time Frame

Market ShareNestle is now a days willing to have more and more market share sothat it could achieve the goals that are set. The goal for market sharewill be discussed below.Nestle occupied 85% of drinking water market in all over the Pakistan.In LahoreNestle Pure Life has 69%of total market, Sparklet has 13% and Coolhave 11% and remaining 7%are kept by other local companies. InKarachi 50% of market is kept by Nestle and 25% by AVA andremaining 25% is kept by other local companies. As for as Islamabad isconcern Nestle Pure Life has 65%of market Share.They have certain goals and objectives

which they want to achieve. They want tocreate and promote their products to createvalue for their product. They have theresources for increasing their product’squality and compete it with the othercompanies. They conduct researches for that and try to get theirobjective which they have decided. They are promoting their productby creating customer awareness.Nestlé believes that, as a general rule, legislation is the most effective

safeguard of responsible conduct,although in certain areas, additionalguidance to staff in the form ofvoluntary business principles isbeneficial in order to ensure that thehighest standards are met throughout

the organization.Nestlé is conscious of the fact that thesuccess of a corporation is a reflection of the professionalism, conductand the responsible attitude of its management and employees.Therefore recruitment of the right people and ongoing training anddevelopment are crucial.

The Percentage Use of NestlePure Life and its Competitors inIslamabad

Hierarchy details of marketing and sales department

Marketing Manager

Market manager is an employee who is responsible for planningand controlling its marketing activities and budgets .Marketingmanager take cares the promotional strategies of the products.Manager try to use innovative ideas for the improvement of product inmarket.

Finance managerThe field of finance covers the economics of thecontingent claims. Financial economists study the valuation of these claims, the markets in which they are traded, and their use byindividuals, corporations, and the society at large.Finance manager and marketing manager are related with each otherto meet their marketing targets. It is important because alonemarketing manager can not promote any marketing strategy withoutany budget.

Market Segmentation and Targeting Strategy andConsumer Profile Analysis

Market SegmentationFor getting the maximum market share and respect of the product inthe minds of the consumer, as per our observation and market surveywe have concluded that Nestle Pure Life Water’s segmentation is basedon two points.Geographic SegmentationDemographic Segmentation

Geographic SegmentationThe company has divided its geographic segmentation in severalregions. First they have the segmentation of a whole country and fromeach provincial capital, they divided it’s areas into north, east, west,south. So that it could be easy for the company to work efficiently onit’s supply chain management.

Demographic Segmentation:

Nestle Pure Life isn’t a supreme quality product that only the high classuses. 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. Theproduct is for all. Anyone can use the product as per need.

Targeting StrategyAccording to our observation and market survey, we have concludedthat as such there is not set demographic techniques to set the specifictarget market. Because, water is something that everyone uses.Everyone can use any size of bottle that Nestle is offering. There aresome variations that can be made throw OUR OBSERVATION but notfrom the company.Nestle Pure Life comes in four different sizes. These four are targetingdifferent 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 alsoincluded in its target market of this size. But theproduct is used by everyone in the society also. It is notonly specified people that have been discussed above.

This is the second size of the Nestle Pure Life Waterwhich is about 1.5L. This size is being used in mostlymeetings. You can say that any kind of organizationalmeeting or any other social meeting, this product isbeing used.

This is the third size of the Nestle Pure Life which isused in mostly houses and offices in the waiting areas

(offices)

This is the fully household product and also using inexecutive rooms in offices with the dispensers. ThisNestle Pure Life Water Bottle is also very helpful inmany dispensers available in the market with goodoptions.

Consumer Profiling AnalysisThe product is being used by many people of Pakistan and there is norestriction in use of Nestle Pure Life as the is not that kind of productwith specific characteristics. Everyone is free to use Nestle Pure Life.

The above table shows that Nestle Pure Life is forall. It is not necessary that Nestle Pure Life WaterCans can only be used by higher income persons.Because the data is linked with the regular use ofNestle Pure Life Water Cans. Means income can beconsiderable 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 nonMuslims.

Product Strategy and FAB Analysis with Product LineThe product was launched due to certain reasons and problems facedby the government and other factors. There are many areas in Pakistan

where we will not find pure water but the infiltrated water. That couldharm your body and cause the major problem called Diaria. That is one of the harmful diseases which can also lead todeath. To overcome this problem, Nestledecided to launch its water product byacquiring the water plant of AVA Company.Now the plant is under control of NestlePakistan Ltd. Nestle launched it’s product by offering very usefulingredients like vitamins, calcium and many other useful things whichgives the human body more than the water. Nestle is available in themarket in four good sizes according to the need and as per targetedand segmented market. 0.5L, 1.5L, 12L and 19L. These sizes arecomplete 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 PureLife Water Bottle. The water is also tested on the basis of aboveingredients in the laboratory of USA, Pakistan, and Thailand etc…Here is one more table which will clearly define the FAB Analysis ofNestle Pure Life Water.

FAB ANALYSIS

This is the complete FAB Analysis of Nestle Pure Life which should beknown to all the consumers for powerful CRMFeature

The Pricing Strategy:

We can easily observe that Nestle itself is nottaking active part in social welfare. And on theother hand, we see the lower prices of theproduct as compared to the other FMCGsCompany’s products like Unilever, Colgate

Palmolive and Procter and Gamble. If we look at the prices, we canobserve that Nestle is also using its name for the promotional activitiesand pricing strategies also. They have to maintain their level ofefficiency and always provide the best at best price. Nestle cares aboutthe customers. As the time is of inflation, nestle is trying to overcomethe pricing problems to the extent they can do. Nestlé’s point of view is“Only by understanding their needs can we serve our consumers tothe fullest”.Profit earning is the core aim of every company but in case of nestletheir 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 alsoone of the leader of retaining their customers. This is one reason oftheir success. They use the simple formula for the price that is Cost +Profit.

Market Distribution and Channels Strategy

Nestlé Pakistan's supply chain anddistribution makes sure that Nestléproducts are accessible, no matter whereconsumers are in Pakistan. Nestle aims toput together processes from the farm tomarkets, and make sure products aredistributed to the consumers at thecorrect 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 ofNestlé products in Pakistan.The mission of Nestle Supply Chain is to:1. Optimize and consolidate resources and processes for a low-cost

but efficient2. Develop and manage simplified and effective supply network toachieve a high level of service3. Create a continuous improvement culture driven by performancemeasures and reward.

To accomplish their tasks, the company chooses both marketingchannels method that is conventional and vertical. In conventionalchannel, Nestle Pure Life is distributed among the wholesalers ofPakistan and from wholesalers; the products are distributed to retailersand from retailers, the products reaches to ultimate consumers. NestlePure Life is also delivered directly to the consumers throw verticaldistribution channel. In this channel, the cost can be minimized.

Market Positioning Strategy, IMC Plan, PerceptualMapping and USP

There are certain points on which they occupy their customers and

those points are very helpful in retaining their customers. There arenumber of water products available in Pakistani market includingSpringley, Sprarklet, Aqua Fina, Kinley, Deja Blue and many others. ButNestle Pure Life attracts its customers throw many reasons. The main reason is Pure Waterwhich is the name of this product.Rests of the water products areusing chemicals which can beharmful for the human body butNestle Pure Life is the only waterproduct which is pure in nature.That is also the unique sellingpoint of Nestle Pure Life. This isthe most powerful point that is inthe mind of the customers whilepurchasing any water bottle in their routine life. The brand name isalso very important for the consumers. The slogan of Nestle is “GoodFood Good Life”. That is very attractive slogan people can attract from.

It puts the perception in the minds of people that they’re being offeredgood products for their healthy lifestyle. If you look at the logo of

Nestle, you’ll get to know that a bird is feeding the children. Obviouslya mother can’t deceive the children. Nestle pure life is a brand ofnestle which explains a big symbol of quality to customers.Nestle Pure Life shows in their ads about the purity of water and thewater need for your body. In its launching advertisement, the companyadvertises Nestle Pure Life very successfully. In that advertisement, alady is drinking Nestle Pure Life Water and then it goes towards insidethe body to show the functions of pure water. That was the awesomecommercial that boosted the sale of Nestle Pure Life. Nestle is alsoadvertising on famous websites like you can observe that wheneveryou 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 alltypes of media to advertise their products in anyway. When Nestle Pure

Life was launched, they distributed the free samples of 0.5L bottles formarket testing and for their advertising purpose. Then a short walkwas also arranged for the sake of good health and seminars was alsoconducted 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 duringthe summer months of June, July, and August 1999 in Lahore. A teamof vendors, clad in branded T-shirts, caps and jackets, sold chilled 0.5liter bottles to traveling customers on all major intersections. Thebrand got great mileage out of this innovative idea of personal sellingin terms of brand awareness, paid trial, image as well as real sales.

PublicityPure Life was launched on 14 December, 1998 in Karachi with a hugeamount of enthusiasm and positive response shown by the locals. Thesuccessful story of its launch was printed in all the local newspapersthe 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 thekey outlets of Lahore. Elaborate shelf space was acquired for productdisplay and specially designed POS material was extensively used topromote sales. On a 12-bottle purchase of 1.5 ml, one 1.5 ml bottlewas offered free to consumers. Similarly on a 6-bottle purchase of 1.5ml, one 0.5 ml bottle was offered free. Regarding trade promotion, theretailer was also given an additional discount of 4 % during this sales promotion. Not only did the sales of Nestle Pure Life growtremendously during the promotion, these continued at a higher paceeven after it was over.

The above map shows the ranking of different products in the eyes ofcustomers and retailers as per our survey. In this map, Coca Cola’sKinley and Pepsi’s Aqua Fina are the real time competitors of NestlePure Life. Nestle Pure Life is on the top of the map having largermarket 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 citiesof Pakistan. Here are Lahore, Karachi and Islamabad. Lahore’s marketshare is about 60%, Islamabad’s have 68% and in Karachi, the marketshare is about 50%.

(The data is not considered 100%. It is justcomparison.)

Competitive PositionCompetitive position of Nestle tells that how much it’s competing itscompetitor and what it has unique from its competitors. It tells itsposition in the market that where it stands in market. And also tells us that what its competitive position is in the market. So we wouldanalyze its position from two aspects• SWOT Matrix Analysis of the company• Core Competencies & Key Success Factors

SWOT Analysis of the CompanySWOT analysis would tell us in better way about the competitiveposition 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 reducerisk.• High quality standards

Weakness• Communication is weak• Lack of Awareness• Weak Distribution ChannelsThese distributors, though observing the rapid increase in customerdemand refuse to hire new, more efficient and innovative staff thatwould take the organizations to rise rather they stuck to their old staffmembers.

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 bymaking segments in mineral water. Mineral water should be of differenttaste E.g. like AQUA FINA in USA has introduced mineral water ofdifferent 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 factors

A) Innovative ProductNestle first of all introduced innovative product in Pakistan. Some ofcore competencies of Nestle are given below• Pure Water• It’s free of Germs• It is free of chemical• It includes different vitamins in water which increase its purityand make this mineral water unique from others• Health Drinking Water. Because it includes vitamins whichprevent its users from different diseases.• Nestle sponsors different events• Continuous improvement• Social responsibilitySo core competency is basically the skill that a company has. As NestleMineral Water has this core competency. If Nestle meet these corecompetencies, it can grow it sales and revenue. Then it can also

differentiate its product from others. So these are key factors toachieve success and meet goals.

Competitive Analysis

Competitive analysis includes the comparison of one organization withits competitor. It differentiate product and tells which product stands atwhich position. It tells about the differentiation of characteristics andweaknesses of the product with its competitors.As we know that more important competitor of Nestle is Aqua Fina.

STRATEGIES FOR COMPETITIVE ADVANTAGES

Every product on the shelf, every service and every customer contacthelps to shape this image. A Nestlé brand name on a product is apromise 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 andevery effort must be made to avoid hazards to health. Likewise,compliance with all relevant laws and regulations is a must and is notnegotiable. People, equipment and instruments are made available toensure safety and conformity of Nestlé products at all times. The effortis worth it. Companies with huge quality standards make fewermistakes, waste less time and money and are more productive. Theyalso make higher profits. Quality is our most successful product. It isthe key to our success, today and tomorrow.

Other marketing strategies adopted by the company

In future two competitors of Pure Life are going to launch their water inthe market which are Pepsi & Coca Cola. As their competitor will

advertise their product at very high stage so people will get awarenessabout drinking water and nestle pure life can achieve a great marketshare in future because people can see that our water is getting roughday by day and there is a need for pure drinking water to survive in theworld.For these opportunities company is going to launch an other plant fordrinking water next year.Firstly Nestle pure life was focusing on product and pricing strategy butrecently it’s focusing on marketing strategy to create customerawareness of the product in those areas which are far away.

Marketing Financials

In marketing financials of the Nestlé, advertisement budget is lowbecause their profit margins for nestle pure life is only 5%.They haveweak advertisement. For increasing their sales they have to increasesegmentation with more effective strategies. If they will increase theirproduct line then their sales would be automatically increased andafter that profit margin will increase. Then they can promote more theirproduct by advertising and tools like this .

GAP Analysis

GAP analysis stands for identification of GAPS in the market, which acompany can capitalized upon. This means that the difference ofcustomer wants, and what company is giving. The remaining portion iscalled GAP Analysis. GAP Analysis for company is given below.If we compare Nestle with Aqua. Then we would come to know thatAqua Fina is providing mineral water of different tastes in USA. Andsooner it would introduce mineral water of different tastes in Pakistan.But if we see Nestle, it’s only giving pure water of one taste. Ascustomer wants different taste in water. So this is GAP analysisbetween company and customer. Major difference is of differentsegments. So Nestle should introduce different tastes in water to meetcustomer requirements.

Problems according to the company

Nestle is very much afraid of current economic condition of Pakistan asthe company is willing to become the $1 Billion enterprise till 2014. Nestle should contact to the main head quarter situated in Switzerlandfor financial, economic, strategic support so that the goals of NestlePakistan could be achieved. One more thing that is possible thatcompany should made some agreements about their business plans sothat the company could able to work with stability.The group is willing to enhance its product line but due to someinternal and external reasons along with security, the company isfacing the shortage of producing certain products which have demandin the market.

SolutionThe company should buy the existing plants by any mean in Pakistanto fulfill the demand of market. Because to setup a new plant can be

costly for the company. It is also possible that company should workwith other small companies to meet the demand. There should be verylow probability of loss on the goods as the brand image is so strong inPakistani market about Nestle.

Problems according to the group analysisThe company should make huge expenses on advertisement in ruralareas of Pakistan to create awareness in the mind of local area'speople.The company should held seminars and meeting for the promotion ofNestle Pure Life.

Strategies recommended for rectifying problems

They should increase their product quality as now a day they are facingproblem of impurity of their products. They have to improve the

marketing strategies. So that they can capture market and improvetheir sales.

Nestle is the world leader in FMCG industry. People trust on theproducts launched by the company even the product is facing someproblems.Nestle was doing its good job in past but now it is facing someproblems of low quality of their products. Nestle is sued by someonethey claim that they are doing unethical business. They are mixingunhygienic things which can cause damage to customer’s health. Its

example is that their water is not pure and good for health. You can seedust partials in Nestle mineral water when you keep it in sunlight thatshows its product quality is down. Now they have to do more makingtheir strong position in market because when you lose your image incustomer’s eye then it is difficult to renew their image.