NESTLE MARKETING PLAN

Acknowledgement Praise is to Allah Almighty, the one testing us all at all times and making decisions about what we don’t know and can’t 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 to MR.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 Summery We 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 Nestle Nestle 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. Nestlé’s product portfolio is more than 500 products all over the world serving best to their customers. Henri Nestlé 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 Nestlé nest represents the nourishment, security and sense of family that are so essential 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 who could not tolerate his mother's milk or any of the usual substitutes.

People quickly recognized the value of the new product, after Nestlé's new formula saved the child's life, and soon, Farine Lactée Henri Nestlé was being sold in much of Europe. Nestlé has been serving Pakistani consumers since 1988, when the parent company, the Switzerlandbased Nestlé SA, first acquired a share in Milkpak Ltd.

Nestlé’s Vision: The consumer's voice is the key to Nestlé 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. Nestlé’s 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 Statement

“Nestle 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 Pakistan’s 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. Nestlé 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 Philippine “A social and managerial process where by individual & groups obtains

good food

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

become the world’s 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 market’s 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.

Company’s marketing goals and objectives Nestlé'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. Nestlé 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. Nestlé 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 Share Nestle 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 product’s quality and compete it with the other companies. They conduct researches for that and try to get their objective which they have decided. They are promoting their product by creating customer awareness. Nestlé 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. Nestlé 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 Manager Market 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 Analysis Market Segmentation For 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 Water’s segmentation is based on two points. • Geographic Segmentation • Demographic Segmentation

Geographic Segmentation The 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 it’s areas into north, east, west, south. So that it could be easy for the company to work efficiently on it’s supply chain management.

Demographic Segmentation:

Nestle Pure Life isn’t 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 Strategy According 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 Analysis The 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 it’s 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 CRM Feature

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 Company’s 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. Nestlé’s 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 Strategy Nestlé Pakistan's supply chain and distribution makes sure that Nestlé 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 Nestlé 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 USP There 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 they’re being offered good 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. Obviously a mother can’t 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 Selling A 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.

Publicity Pure 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 Promotion Specific 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 Cola’s Kinley and Pepsi’s 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. Lahore’s market share is about 60%, Islamabad’s have 68% and in Karachi, the market share is about 50%. (The data is not considered 100%. It is just comparison.)

Competitive Position Competitive position of Nestle tells that how much it’s 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 Factors

SWOT Analysis of the Company

SWOT 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 factors A) Innovative Product Nestle first of all introduced innovative product in Pakistan. Some of core 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 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 responsibility So 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 Analysis Competitive 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 ADVANTAGES Every product on the shelf, every service and every customer contact helps to shape this image. A Nestlé 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 Nestlé 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 company In 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 it’s focusing on marketing strategy to create customer awareness of the product in those areas which are far away.

Marketing Financials

In marketing financials of the Nestlé, 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 Analysis GAP 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, it’s 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 company Nestle 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.

Solution The 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 analysis

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

marketing 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 customer’s 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 customer’s eye then it is difficult to renew their image.