Nestle Pure Life

Nestle Pure Life

Nestle Pure Life
Nestle Pure Life

TABLE OF CONTENTS

EXECUTIVE SUMMARY...........................................................................................................4
INTRODUCTION.........................................................................................................................4
1.1. COMPANY PROFILE...................................................................................................5
1.2 Introduction to the product............................................................................................5
1.3 Introduction to the new product process:.....................................................................6
OPPORTUNITY INDENTIFICATION......................................................................................6
2.1 Market Identification& Existing Strategy:...................................................................6
2.2. Market profile Analysis:................................................................................................8
2.3. Basis For Defining Markets:..........................................................................................9
(a). Demographics:.............................................................................................................9
(b). Geographic:.................................................................................................................9
(c). Attitudes:......................................................................................................................9
(d). Price Sensitivity:.........................................................................................................9
2.4. Idea generation:..............................................................................................................9
(a). Identification of Ideas Sources:.................................................................................9
(b). Methods of generating ideas:...................................................................................10
(c). Outcomes:..................................................................................................................10
DESIGN........................................................................................................................................11
3.1 Objectives of Nestle Pure Life:.....................................................................................11
(a). Safety:.........................................................................................................................11
(b) To offer consumers a healthy product:....................................................................11
(c). To offer an affordable mineral water:.....................................................................11
(d) .To make the product as convenient as possible:....................................................12
3.2. Design Process:..............................................................................................................12
a) Designated Name:....................................................................................................12
b) Concept Development:............................................................................................12
c) Developing bottles shapes & cap:...........................................................................12
d) Customer Insight:....................................................................................................12
3.3 Marketing Mix...............................................................................................................13
(a). Product:......................................................................................................................13
(b). Price:..........................................................................................................................13
(c). Placement:..................................................................................................................13
(d). Packaging:.................................................................................................................14
(e). Promotion:.................................................................................................................14
APPENDIX...................................................................................................................................17
Nestle Pure Life

EXECUTIVE SUMMARY

Since its origin in Switzerland, more than 130 years ago, “Nestle” has made a field of human
nutrition its primary concern.

So, while there is no doubt that water is essential for vitality and health, there is considerable
doubt about the quality of drinking water available to us. Because of difficulties is preserving
natural resources and their environment, fresh water supplies are becoming increasingly
threatened by an accelerated population growth and environmental pollution. There is an urgent
need for pure, safe and healthy drinking water.

This aspect was considered by “Nestle” and it came up with the idea of a pure mineral water
with well-balanced minerals. Although there had been a lot of other local brands and a major one
being Ava, yet these companies had no concept of calculating the minerals.

For this, “Nestle” had to undergo a lot of research in order to calculate the feasibility of
introducing a product like water in a poor country like Pakistan. The total research period was
about three years during which they went through the product development processes of ideation,
screening, development and then commercialization.

“Nestle” does not have a very formal method of the development process still they covered
all the basic steps that are required for the success of any product.

In ideation, “Nestle pure life” considered all the water problems faced by the country in
order to achieve a best possible solution. For screening it completely analyzed the market
situation, target market. It carried out effective market tests. In the development phase it created
strict quality control measures for the production process, and imported all the basic raw
materials. The commercialization was also very well handled, with effective sales promotion
techniques and advertising.
Nestle Pure Life

Chapter#1

INTRODUCTION

Throughout the world competition among business is becoming intense day by day. Firms are
always in search of ways to survive in the competition as well as gaining most of the market
share.
One important aspect or method that helps firms in doing so is the new product development
(NPD) and its launch in international market. Initially firms did not recognize it as an important
part of their business, but now the scenario is changing rapidly and businesses have realized the
importance of this process.
But this does not mean that this field is new. Companies did undergo new product
development but they did not realize this, therefore didn’t pay much attention to the steps
undertaken. In short no systematic process was being followed.
Therefore as a part of our course study and to actually understand how the process is
implemented in the real business world we were required to study the new products process of
any existing product. The product chosen by us for our study is “Nestlé’s pure life (mineral
water)”.

1.1. COMPANY PROFILE

Innovation and an entrepreneurial spirit have been “Nestle” characteristics from the start.

In 1866, while the page brothers in Cham were building Europe’s first condensed milk
factory, for the Anglo-Swiss condensed milk Co., Henri Nestle in Vevey, was developing his
infant cereal “Lactose Farina Nestle” launched in 1867. The two companies merged in 1905 to
become the “Nestle and Anglo Swiss condensed milk Co.”. The former had developed a
successful long life product from fresh milk, a highly perishable raw material, whilst Henri
Nestle had achieved international acclaim due to the remarkable qualities of his invention. Given
the high infant morality rate. His infant cereal responded to a real need.

His name and the symbol (Nestle means “little nest” in German) were the guarantee of
quality of his product, the result of painstaking scientific research.
Nestle Pure Life

Today, “Nestle” is the world’s leading food company. Its international R&D network
supports the products made in 479 factories in 81 countries. Being a company dedicated from the
start to food, “Nestle” remains sensitive to culinary and eating habits, and responds to scientific
nutritional problems, whilst also setting and matching new trends such as growing out-of-home
consumption.

1.2 Introduction to the product

Vision:

Extract from The Nestlé Water Policy:

Water is a universal resource that is indispensable for life. “Nestlé”

recognizes that the responsible management of worldwide water resources is an absolute
necessity entering the 21st century. Preserving both the quantity and the quality of water is not
only an environmental challenge, but also one that spans economic, political, social, cultural and
emotional considerations.

As a leading food and beverage company, water is a key priority for Nestlé for
manufacturing “Nestlé's” food products, for their preparation by consumers and for bottled
waters. To help assure a long term, high quality, adequate water supply, “Nestlé” supports the
sustainable use of water, strictly controls its use in the Company's activities and strives for
continuous improvement in the management of water resources

Nestle Pure Life:

The launch of “Nestle Pure Life” in December 1998 was a truly historic event. This
marks the Nestle `s entry into the country’s fast 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. It is ideally
balanced with essential minerals. It is available in two convenient sizes of 0.5 and 1.0 liters.
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.

1.3 Introduction to the new product process and its launch in Pakistan:

Transforming ideas into blockbuster products, not just derivative products offering
incremental revenue gains, is a disruptive process. When done right - with innovation, speed and
market insights - it is a revitalizing process that serves as your engine for long-term, sustainable
growth.
Nestle Pure Life

Today, identifying unknown and unmet market needs and matching them to
multimillion-dollar product possibilities demands a new approach - one that is part art, part
science, part technological pioneering. To succeed, one need an in-depth understanding of the
way people live, learn and work coupled with an unmatched knowledge of how new
technologies can be exploited and applied. And the work does not end there. To truly grow, one
needs to embrace aggressive marketing and management strategies - to surround innovative
products with new business and marketing approaches

At “Nestle” the new products process sits within a much larger set of activities
within the firm that keeps the ongoing operation alive and well. This process does not stand
alone, nor does it dominate the ongoing business. One of the biggest problems in new products
management is that preferred plans must be altered to fit with established activities.
Nestle Pure Life

Chapter#2

OPPORTUNITY INDENTIFICATION

2.1 Market Identification& Existing Strategy:

(a). Growth Potential:

The existing market size was calculated to 33 million liters in 1988,
yet exports predicted an explosion over next few years with increases in this by 30-40%range.

(b). Early Entry:

“Nestle Pure Life” is not one of the first entrant in the “Mineral Water
market” however which seen from the target markets perspective this is the first mineral water
to introduce water i.e Pure mineral water for all segments of society and not just the upper class
that either used to consume mineral water for luxurious purposes, or foreigners and may be
people seriously ill due to some malnutrition’s or usage for the corporate level purposes. This is
why “Nestle Pure life” enjoyed the benefits such as:

(i). Positioning:
“Nestle Pure Life” had its initial targets to position itself as:

“Water for all to have a pure life”

That is why it had 0.5 liters bottle which made it convenient for many segments of the market
to consume this water.

(ii). Entry Barriers:

“ Nestle” being a multinational and its operations spread all around the
world had nothing secret for its preparation of “Nestle Pure life” but the technological
advantage, R&D budget s and economies of scale that it enjoyed. Those features automatically
led to creating barriers of entry for many others.

(iii). Brand Considerations:

The brand name of “Nestle” attracted to pure life was an
authenticity signature for many and removed the doubts that many people carried for other
brands of mineral water in the market.
Nestle Pure Life

(iv). Cognitive Advantage:

The marketers of “Nestlé Pure life” knew that they could capture
the cognitive advantages because of their wide spread distribution networks are over the country
and as they were the first one’s to remove the concept of mineral water being available only at
chemists shops, super stores etc but at all lower level retail outlets i.e even the traditional
“Khokha’s”

(c). Competitive Attractiveness:

Although there was a number of already existing brands,
still the target markets and availability was very limited and this is where “Nestle” saw the
“Gap”.

 Ava, a local company supported by Belgian investment offered treated water in

1.5 liter and 50 cl bottles sold and available at upper class stores and drug shops. This
was later acquired by “Nestle”, as it was the only true national player majorly targeting
corporate sector.
 The other contestant present for the most parts in no more than one or two cities
e.g. “Wah Waters, BSW, Askari & Cool”
 Beyond these suppliers of generally acceptable product are a multitude of small
local concerns that sell treated water in 12 liter containers e.g. “Sparkletts”later on came
into 1and 1.5 liter bottle.
 Other competitors include tap filter manufacturers e.g. “So-Safe” but the overall
unit is expensive and needs replacement of cartridges on a frequent base.
 Another alternative to the bottled water used by approximately 70 % of Pakistan’s
population is “boiling tap water” however, while boiling a great amount of time is
wasted this kills many microbes and minerals needed by the human body and the calcium
required by our bodies settles down in the container.
 Finally imports mainly from the Middle East such as “Gulf” and “Masafi” are
attempting to make inroads in these restricted but potentially lucrative markets.

(d). Investment:
The water plants already operating did not have a requirement of huge
investment but for “Nestle” with wide spread distribution channels, Quality controlled
manufacturing, high promotional costs meant a lot of investments which they were able to cope
with because of their status as a Multinational Corporation however after “Nestle” it is very hard
for others to enter as the “Investment” in itself will be acting as a barrier.

(e). Rewards:
Although, “Nestle” had to put in large investment but it was feasible because of
the high return on investment forecasted. That is why large investment entry costs resulted in
long-term profitability.
Nestle Pure Life

(f). Risks:

2.2. Market profile Analysis:

For “Nestle” there were three markets under considerations that are:
 Pakistan
 India

 Brazil
The reason for selecting Pakistan was mainly because of the more water
condition as well as living standards of the people.

Pakistan having tragic consequences of water borne diseases causing 40%

of deaths of children below the age of five. Previously, people never had an idea of buying water
however they preferred juices and cold drinks. However with increasing awareness of
importance of drinking pure &healthy water led people to adapt to newer preferences. The
awareness was further boosted through Pakistan Government Awareness program’s which was
resulting in more educated people in both urban and rural areas in terms of “Drinking Waters
Purity”.

Pakistani people assign a lot of credibility to doctors that are where

“Nestle” was able to explore its market.

2.3. Basis for Defining Markets:

The basis for the defining markets are:

(a). Demographics:
A Specific demographic market not chosen for “Nestle Pure Life”,
instead the goal was to develop a product to be used by the consumers of all ages from infants to
adults .It was intended as a family product especially for families living in large, polluted urban
agglomerations that experience increasing difficulties finding safe healthy drinking water.
“Nestlé Pure Life’s”0.5 liter bottle is targeting itself to be also an alternative to soft drinks.

(b). Geographic:
Geographically the three major cities----Karachi, Lahore and Islamabad were
initially targeted because these account for close to one –sixth of the population or twenty one
million people.

(c). Attitudes:
Attitude were segmented was for “Nestlé” through this positioning strategies
i.e health conscious people with awareness of health problems, people from the upper class who
have mineral water for status maintenance purposes .The lower class guided by the doctors.
Nestle Pure Life

(d). Price Sensitivity:

Before “Nestle Pure Life” consumption of mineral water was a
practice done only by the upper class of the society, as previously priced water was available.
However the post “Nestle Pure Life” is quite different as this water is easily affordable by every
individual and gives various options to consumers.

2.4. Idea generation:

The idea generation process has three steps areas follows:

(a). Identification of Ideas Sources:

The idea sources for “Nestle” were:

 “Nestle” already had mineral water in its product line in West but with different
names they were “Vittel, Contex, Perrier” etc. So they had prior experience in this
category and they wanted to avail this opportunity because of drastic water problems in
Pakistan.

 Safe sources of drinking water are becoming increasingly rare in emerging

countries. In Pakistan, the tap water system is often in terrible condition. Water mains
laid down for the most part by the British in the early twentieth century, are rusty and
leaky. In Karachi, an alternative distribution system uses tank trucks to fill water
reservoirs in individual buildings. But even here, sanitary conditions are often doubtful,
and some installations are in poor shape. As a result, the idea of water quality sounds
like an oxymoron - and its problem facing every city in the country.

 Another is that the sewerage and water pipes are required to be 6 feet apart from
each other whereas in Pakistan they are only 3 feet apart which further leads to very
unhygienic water. Pure water can only be found 450 feet below the surface of the ground,
which is the reason why tube wells are installed in different parts of the country. But that
too after a survey has been found out that most tube wells have the maximum depth of
only 250 feet.

 The media - with newspapers and television leading the way - report regularly on
water contamination by a variety of pollutants. For consumers, mistrust is a necessary
attitude, and the need for safe water is acute. The Pakistani market was estimated at only
33 million liter's in 1998, yet experts predict an explosion over next few years, with
increases in the 30 - 40 % range. The reasons are firstly, the tap water is often
contaminated as mentioned before. Second, urban consumers are increasingly aware of
the problem and are demanding safe drinking water - including treated bottled water,
which has not been immune to contamination problems. Safety concerns also explain in
part why Pepsi is found virtually everywhere in Pakistan. People prefer Pepsi to water
because they have no idea where the water was bottled or manufactured. In the bottled
Nestle Pure Life

water market, “Nestle Pure Life” is thus the first to offer a clear message and product
that addresses consumer concerns.

(b). Methods of generating ideas:

The methods used by “Nestle” for generating ideas for “Nestle
Pure Life” are:

 Research & development department of “Nestle” prepared feasibilities

and suggested that the Pakistan market was ready for the acceptance of mineral water.
 Technology already present with the “Nestle” was diffused to the
developing countries of the world.
 Market & profitability studies done in 1997.
 A 3 years study at the research center outside Lusanne.

(c). Outcomes:

The 3 years study revealed tributaries of pure water in the Hindu Kush Mountains,
which were considered excellent for healthy water content.
The market and profitability studies in 1997 made sense strategically and thus the
first contact were established to develop packaging and the products image people
were recruited to work on developing the products specific mineral water formula in
collaboration with the “Nestle” research center.
In October 1997 the first bottle prototype, artwork for the logo and label and a
marketing strategy was presented.
The project was code named as “Napoli”.
Once consensus was reached on the product concept the task of bringing it to life
in the real world began.
Nestle Pure Life

Chapter # 03

DESIGN

3.1 Objectives of Nestle Pure Life:

The main objectives for “Nestle Pure Life” was to be
the number one selling bottled mineral water in Pakistan. The objectives was hoped to be the
accomplished by the following further sub-objectives.

(a). Safety:
To provide the consumers with a safe drinking water: Consumers want
reassurance. The “Nestle” name on the product is an assurance of quality for the consumer.
Also related to safety is the fact that the water is captured in a safety environment and
undergoes rigorous treatment to meet universal quality standards. The water is de-
mineralized by distillation. Mineral salts are then added, in accordance with a strict formula
developed. The bottling line is also subject to strict sanitary regulations: an air-controlled
room houses the filing machine, and the bottles and caps are sterilized. Quality is a continual
process and is monitored during each production phase - some 200 controls. Packaging also
receives special attention. Each “Nestle Pure Life” bottle and the 5-litre PET jug have a
special cap and tamper-resistant band. This way, the consumer can tell immediately whether
the bottle has come straight from the plant or if it has been tampered with.

(b) To offer consumers a healthy product:

Remineralization let “Nestle’ offer consumers a balanced, refreshing and
healthy product, the product's second key objective. The formula developed for “Nestle Pure
Life” contains minerals such as calcium, which is essential for bone development; magnesium,
which is recommended for muscles and the central nervous system; bicarbonates, which are
particularly useful for digestion; and sodium, which helps regulate hydration in the human body.
Overall mineralization is light (200 mg per liter) and suitable for the whole family.

(c). To offer an affordable mineral water:

As well as being pure, safe, healthy water, Nestle Pure Life is affordable and
convenient. No matter what the format, “Nestle Pure Life” is sold consistently at popular prices
affordable for a large portion of the population. The 1.5-L bottle is offered for Rs. 22 -- cheaper
than most of the other water brands of the same size. The 0.5 L bottle was initially offered for
Rs. 8 but now is sold for Rs. 12. The increase in price has been caused mainly due to inflation
and competition.

(d) .To make the product as convenient as possible:

This was the product's fourth objective. Due to its well-balanced mineral content,
“Nestle Pure Life” can also be used for cooking and to prepare tea or coffee. The brand is
available in several formats suited to a variety of consumption patterns (50 cl, 1.5 litre, 5 litre).
The idea is clear: to be close to the consumer. In other words, “Nestle Pure Life” must be
available in all sales and restaurants outlets and anywhere else consumer’s young and old are
likely to buy or drink water.
Nestle Pure Life

These objectives can be very well matched with the mission statement of the
organization. Consider the following 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.”
3.2. Design Process:

After long procedure of decision making “Nestle Pure Life” took

following steps:

a) Designated Name:
“Nestle Pure Life” at the time, the choice of the brand name was
definitely set according to a very clear hierarchy. “Nestle” appeared as category brand and
“Pure Life” as product brand. “Nestle” had to be prominent, because the brand has the ideal
image of quality to support the safety concept. “Pure Life” adds complementary values,
fleshing out the product's promise.

b) Concept Development:
The basic idea was to leverage key visual, small figures evoking a happy family.
These figures were embossed on the bottle itself and on the label. Thus, the overall signature for
the project became: “Nestle Pure Life”. The ideal water - From “Nestle with love.” It is a
form of prototype.

c) Developing bottles shapes & cap:

The bottle was designed- on the primary concept given above and the color of
the bottle and cap were chosen in accordance to the colours of water as well as the effect of
coolness associated with blue color.

d) Customer Insight:
Organoleptic and concepts tests were planned to assess consumer’s tastes
and perceptions. In four countries including Pakistan, one hundred consumers at a time were
invited to discuss and comment on the “Nestle Pure Life” against other competitors. These
consumers belonged to different backgrounds. Their useful discussion concluded addition and
subtraction of various features in the marketing mix.

3.3 Marketing Mix

(a). Product:
The mineral water “Pure Life” for “Nestle” internationally was only an
addition to the product line or a line extension as “Nestle” already introduced many water brand
through the world with different name but in Pakistan the nature of the new product i.e “Pure
Life” is of a new category entry as it took the firm into a category new to it and the target market
was also different. As mentioned above, “Nestle” was involved in making the world’s finest
Nestle Pure Life

drinking water, which their target was in the form of “Pure Life”. For this they had to consider
all the necessary minerals required for a healthy human body. “Nestle Pure Life” is ideally
balanced with essential minerals for ones good health and well-being. The distribution of the
minerals was achieved as follows:

 Calcium 50.1
 Magnesium 5.0
 Sodium 10.0
 Sulphate 20.0
 Fluoride 0.5
 Bicarbonate 25.4
 Chloride 89.0

 Total minerals 200.0

(b). Price:
“Nestle pure life” being introduced as pure and safe, healthy and affordable. The
prices, which were, set when the product was introduced was affordable and the objective was to
offer a quality product at a standard price. That price also covered all costs and expenses.
No matter what the format, “Nestle Pure Life” is sold consistently at
popular prices affordable for a large portion of the population. The 1.5-L bottle is offered for Rs.
22 -- cheaper than most of the other water brands of the same size. The 0.5 L bottle was initially
offered for Rs. 8 but now is sold for Rs. 12. The increase in price has been caused mainly due to
inflation and competition. Firstly, the reduced retail prices further increased competition. There,
were other companies offering water products i.e. Sparkletts, Ava, Cool, Askari, Masafi,
Himalaya and others. So “Nestle” had to increase its prices. Secondly, the key facts about
Pakistan’s economy, inflation further increased to 18%. And lastly the demand was inelastic.
That is why the prices further increased.

(c). Placement:
“Nestle” primarily chose the retail outlets and small shops to distribute “Nestle
Pure Life”. Another distribution channel explored was the pharmacy network, where bottled
water is offered alongside drugs, vitamins, and other health products. Finally, the following
major distribution channels were also considered: the food service sector in particular airline
companies, airports, hotel chains, and caterers who supply head offices and international
companies established in Pakistan.

(d). Packaging:
“Nestle Pure Life” will be available in two sizes of bottles and these bottles are
disposable and are made up of plastic. The large bottle contain 1.5 litres of spring water, will the
small one will be of 0.5 litres which is handy and be carried even in small bags. The material use
is not only economical but can be recycled for further use. The color of the bottle is light blue,
which gives the effect of freshness and the pictures is inserted on the bottle, which shows a
whole family. Thus representing that “Nestle Pure Life” is a family drink. Each “Nestle Pure
Life” bottle and the 5-litre PET jug have a special cap and tamper-resistant band. This way, the
Nestle Pure Life

consumer can tell immediately whether the bottle has come straight from the plant or if it has
been tampered with.

(e). Promotion:
“Nestle Pure Life” introduced the product in a convincing and different style. The
basic idea to leverage a key visual i.e. small figures evoking a happy family. These figures were
embossed on the bottle itself and on the label too. From there the advertising message started,
this is how the overall signature became “Nestle Pure Life”. The ideal water. This involved true
visual elements: newspaper advertising, posters, and billboard and T.V commercials, conducting
other events i.e. sponsoring cricket matches, concert of well-known artists. Their logo depicts a
clear picture of the image they want to portray like the figures embossed on the bottle of “Nestle
Pure Life”.

(i). Advertising:
The advertising message was later developed: “Nestle Pure Life” . The ideal water -
From “Nestle with love”. The campaign involved three visual elements: newspaper
advertising, posters and television commercials. To ensure a coherent approach, every
application of the product's visual elements was described in detail - be it a banner, a delivery
van, a display, or a mobile. Through various forms of advertisements, the message of and a
healthy product is promoted.

More specifically, the promotion of the brand in Murree Hills is an excellent

example of advertising the product. An effective outdoor campaign was carried out which
included billboards on the road to Murree, shop signs, shop boards, branded umbrellas, stands,
shop paintings, wall paintings, and cross road signs.

(ii). 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.
Nestle Pure Life

(iii). Publicity:
“Nestle 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.

(iv). 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 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.

Product sampling and sticker sampling activities were carried out in Murree in summer of
1999. “Nestle” marketing team has also undertaken a major education campaign on water use
and its importance in daily life. Mothers of school children were sent an invitation to attend a
Water Show demonstrating the benefits of safe water and were asked to fill out a questionnaire.
The questionnaire refined the team's knowledge of consumer perceptions. At the end of the
show, visitors received a promotional kit offering a chance to sample “Nestle Pure Life” and
opportunity to enter a photo contest on the theme “Nestle Pure Life and You.” The contest
offered 10,000 rupees in prize money. This helped boost the brand's image in the minds of
consumers. Another contest took place in October 2000 by the name of “Cricket Hangama.”
This contest provided a chance to win a thousand of tickets, signature posters, VIP Tickets, and a
chance to dine with the cricket stars.

v) Public Relations:
As far as the public relations are concerned, the organization releases an annual
report, which includes the company's financial statements along with the sales of all product
categories. The annual report is mainly aimed at the stockholders. However, another very
important form of public relations is the newsletters and bi-monthly magazines issued by the
organization. A huge amount of information is found in these regarding the products and their
promotion. In the same way, “Nestle Pure Life” was given quit a bit of importance in the
newsletters issued after its launch, which obviously helped in creation of the awareness of this
brand.

Besides these promotional methods, word of mouth, a major factor in Pakistan

proved to be very effective in the increasing sales of “Nestle Pure Life”. “Nestle Pure Life”
has captured 50 % of the bottled-water market in Pakistan since it was introduced in 1998. Its
approximate sales for 1999 were RS. 70, 401000. This sales figure is quite impressive as the
sales rose quite high in only one year. In 2000 their exports stood at Rs. 231 million.
Nestle Pure Life

Chapter # 4

Perceptual Mapping: Identification of Strategic Benefits

4.1 Perception & the CBP:

Core Benefit Proposition for “Nestle Pure Life” is:

“Piyo aur Jiyo”

meaning the water is so pure and healthy that the more you drink the more life you give to your
self. This proposition was conveyed to consumers not only through television and newspapers
but also through Nestles signage and billboard revealing a complete integrated Marketing
communication (Unified Message). This made perception of the consumers that nothing is as
pure as “Nestle Pure Life”.

4.2 Customers Buy based on perceptions: -

The two dimensions considered to be the primary in terms of consumer perception and
preference are taken as
 Availability / convenience
 Social status/social acceptance.
Nestle Pure Life

Low

4.3 Subjective benefits and features (Lens Model)

Product Features Perception Preference

 Pure Water  High Quality Pure
 Mineral Content High water  Consumer First
 Convenient Packaging  Status Symbol Choice
 Convenience

Sales promotion
Mega Launching Fully aware consumers
Excessive Use of Excellent Availability Nestle Pure Life
Newspaper & Television Affordable for everyone
Billboards & Files
Benefits & Value:-
World of Mouth
Nestle Pure Life

4.4 Benefits are:

 Pure water
 Affordable
 Quality product
 Convenient in handling
 Available every where
 Social Acceptance and status symbol when holding a “Nestle Pure Life” bottle.
Nestle Pure Life

Chapter # 5

Strategic Product Positioning and Customer Preferences

5.1 Customer need arrayed in a hierarchy.

Primary Needs Secondary needs Tertiary need

Availability  Convenience in  Placed in neat clean
handling stands or shelves
 Good value for  Know to everybody
money when asked for it is
quickly given.
 Chilled seing
insumers
 Water doesn’t
dropout when opened.
 Bottle is made of
Status Symbol good material
 Can be reused
 Clean  Colors and logo are
 Visibility of bottle known to everybody.
 Easy to open &
close the bottle.

5.2 Analysis of Customer Importance

For the analysis of customer importance two kind of tests were done:-

5.2.1 Factor analysis:

Where a range of factors were given in a survey to consumers such as

 Availability
 Price
 Taste
 Preference of Mineral Water over tap water
 Preference of mineral water over boiled water
 Quality of water available
Other than these factors customer insight was also taken in terms of

“What features would you like to have in a mineral water”

where according to customers positive important factors came out to be

 Affordability
 Availability
 Purity/Quality.
Nestle Pure Life

5.2.2 Cluster Analysis:

After gathering the initial data from Factor analysis, the key factors were concluded and
their importance according to consumers were rated such as:

Factors Scale of Importance

Size of bottle 0 100%

Shape of bottle
Color
Cap
Seal
Transparency of bottle
Bottle material
Etc.

5.3 Choice between two strategies

“Nestle Pure Life” focused on the “low profit making & High volume” technique
because of the nature of the product.
Nestle Pure Life

Chapter # 6

Advertising & Product Testing

6.1. Ad Testing

Basically, Nestle had three test ads designed for its ad company of “Nestle Pure Life”
they were:-

 An old man and a child were displayed who were playing chess and the
old man when stuck drinks “Nestle Pure Life” and succeeded.
 3 Girls of College level were shown in summer season drinking pure life
and enjoying.
 A “Nestle Pure Life” bottle was shown with happy family figures
dancing all around and enjoying pure water.

The first two ads were taken for transit advertising and below the line advertising.
However the third ad was taken for testing in the initial phase on local media in Karachi because
of the diverse customer base and after and being shown for three days, survey were conducted to
know the awareness level, impact and understanding of the consumers.

6.2 Criteria for evaluating Advertising Copy.

The consumer response hierarchy was designed in this way for “Nestle Pure Life”.

Process Measures
Exposure The audience for local Television in
Karachi
Attention Survey results where people were
asked about
 Seeing the product
 Remembering the product

Comprehension  Ability to recall

 What did they understand
from the ad
Nestle Pure Life

6.3: - Product Quality Testing

6.3.1 (a) Laboratory Tests:

Strict checking standards have been designed for “Nestle Pure Life”. A total of
33 criteria checks is what every bottle goes through to provide pure and quality water. The water
is de-mineralized by distillation. Mineral Salts are then added, in accordance with a strict
formula developed.

It also mentions another system of imprinting the minutes and seconds of the
production time on the bottles and they keep a sample of bottles from each production for the
safety precautions. They keep those bottles in the laboratory and if the water turns bad before its
expiry date, they retrieve and recollect the entire stock from the retail outlets.

6.3.2. (b) Customer Tests:

Product sampling and sticker sampling activities were carried out in Murree in
summer of 1999. Nestle marketing team had undertaken a major education campaign or water
use and its importance in daily life. Mothers of school children were sent an invitation to attend a
“Water Show” and demonstrating the benefit of safe water and were asked to fill out a
questionnaire. The questionnaire refined the teams knowledge of consumer perceptions.

At the end of the show, visitors received a promotional kit offering a chance to
sample “Nestle Pure Life” and opportunity to enter a photo contest on the theme:

“Nestle Pure Life and You”

The contest offered 10,000 rupees in prize money. This helped boost the brands
image in the minds of consumers. Another contest also took place in the meanwhile named:-

“Cricket Hangama”

This contest provided a chance to win a thousand of tickets, signature, posters, VIP tickets and a
chance to dine out with cricket stars.

6.4 Test Marketing

“Nestle Pure Life” test marketed through “Replication National Strategy” where as said
before the product was displayed in various shows supported by the ad campaign on the
local TV and the same segments were targeted as original. As well as the whole
marketing mix and product characteristics were also kept as the same
Nestle Pure Life

Chapter No. 7

Launching the Product

7.1. Launch Planning

The launch planning consists of following three:-

7.1.1. Coordination of marketing and Production:

While the marketing Programme was being ready for the launch (will be discussed). The
production concern that the establishment of “Nestle Pure Life” bottling line at
Sheikhupura was being done, when the decision of producing the pure life water was
made final, the next challenge was to install a production unit that would be immediate
operational to save time. This demanded a watch maker’s precision in setting the
specifications for every component that goes into a bottling line and locating machinery
supplies for each. The building of “Nestle Pure Life” bottling line at the Sheikhupura
plant was taken up. The technical project head, Luc Desbrun visited the plant for the first
time in November 1997, and checked the available building surfaces, plotted the civil
engineering process and planned the installation of the future line. The equipment was
ordered from all around the world. After the installation of the equipment, industrial tests
were initiated; finally, the first bottles came off the line on November 9, 1998. The plant
costs about Rs. 4 million.

7.1.2 Timing of Launch

The launch of “Nestle Pure Life” took place in December 14th 1998 was a truly historic
event. This marks the “Nestle Pure Life” entry into the country’s fast 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. It is ideally balanced with essential minerals. It is available
in two convenient sizes of 0.5 and 1.0 litre. Capitalizing on its strong brand recognition
aggressive pricing and supported by a strong marketing campaign in Pakistan “Nestle
Pure Life” has made very strong inroads into the water market in Pakistan. On this date
in Karachi the declared launch site, “Nestle Pure Life” Sales representatives under the
guidance of the regional sales-head, experienced a moment in history; the launch of
“Nestle Pure Life” in every store in the city. Twenty vans bearing the new brand of
bottled water rolled out the product from Shahra-e-Faisal Street. Within a week, 7500
sales, outlets in the country’s three largest cities were offering the product to just three
months “Nestle Pure Life” had conquered joy of the market in Pakistan three largest
cities within six months “Nestle Pure Life” had become the best selling bottled mineral
water in Pakistan.
Nestle Pure Life

7.2. Actual Launch

(4 P’s)

7.3. Tracking the Launch.

The launch was tracked by following means:

7.3.1. Need to Monitor Control System.

 Product Display was ensured through sales teams.

 Constant feedback from consumers and retailers was being taken.
 Through heavy investments Nestle had already raised barriers for new and
existing entrants.
Nestle Pure Life

Nestle Pure Life and Michael Porter

At “Nestle” the new product as international product launch in Pakistan process sits
within a much larger set of activities within the firm that keeps the ongoing operation alive
and well. This process does not stand alone, nor does it dominate the ongoing business. One
of the biggest problems in international product management is that preferred plans must be
altered to fit with established activities.

1. Factor Conditions:

“Nestle” is not only Switzerland's largest industrial company, but it is also the World's
Largest Food Company. The mission statement emphasizes on the fact that Nestle products are
available in nearly every country around the world. Wherever one may live, only “Nestle” can
provide the best and most reliable food and beverage products to meet his/her needs throughout
the day, throughout the life. Especially, people on the move want to be able to find good food
wherever they are, whatever the time of day. They are often reassured that they will find well-
known brands out of home. Its mission and vision statement is based on the exploring and
availability of manpower, machinery, money and material these all factor of production are well
captured and maintained by the management of the company and these factor of production are
efficiently used by Nestlé in all markets to maximize its sales and to capture market share in
domestic and international market.

2. Demand Condition

Today, identifying unknown and unmet market needs and matching them to multimillion-
dollar product possibilities demands a new approach - one that is part art, part science, part
technological pioneering. To succeed, one need an in-depth understanding of the way people
live, learn and work coupled with an unmatched knowledge of how new technologies can be
exploited and applied. And the work does not end there. To truly grow, one needs to embrace
aggressive marketing and management strategies - to surround innovative products with new
business and marketing approaches. As mentioned in the introduction of the launch of the
product in Pakistan that with increase number of diseases in Pakistan and increased awareness of
water purity demand of mineral and pure water was increased to alarming state as before Nestle
these demand was catered by indirect competitors and people were catering to their needs by use
of water purification filters and by boiling water in their home but the time consuming exercise
made people to switch to use of disposable water bottles so that health and safety standards
should be maintained this demand gap was identified by Nestle as an opportunity and came with
a product of “Nestle Pure life Water”.
Nestle Pure Life

3. Related/Supported Industry:

The third broad determinant of national advantage that was being identified by “Nestle”
is related and supporting industries that are internationally competitive. “Nestle” by offering its
services in domestic and international markets focused on bets supplier and these suppliers
provide all supporting material and services to all the customers. Management of “Nestle”
always focused on provision of best services to its customers and for that best supplier is
identified and then contracted to provide best services in collaboration with all the operational
partners and suppliers of “Nestlé”. “Nestle” has got a competitive edge of being market leader
and with largest infrastructure

4. Firm Strategy, Structure and Rivalry:

In order to retain maximum market share and to get maximum people use to “Nestle Pure
Life” management of “Nestle” use innovative and proactive marketing strategy and structure
that made “Nestle” to become market leader. The most latest and globalize marketing and
corporate strategies are used and incorporated to make people effective and to make them
familiar with operations of Nestle and to get maximum output from all the available means of
“Nestle Pure Life” infrastructure.
Nestle Pure Life

Conclusion and Recommendations

Nestle can perform more efficiently and effectively if following areas are improved:

 Communication skills of employees are to be improved.

 Aggressive marketing strategies should be practiced in the rural areas to capture

neglected areas.

 Proper R&D facilities should be arranged in domestic market or rural areas where new
and innovative marketing strategies can be identified.

 General working conditions aught to be improved and the employees should be given
with more fringe benefits so that the motivation level of employees should be at
maximum level of productivity.

 Cultural barriers to be identified and rectified in the operations through proper training of
employees.

 Innovation should be focused by management from top to bottom so that all the
employees should come up with innovative ideas and make operations of company more
dynamic and effective.

 Operations and mechanism should be more innovative and dynamic so that the
customers should not face any problem in rendering product in late hours.

 Corporate customers need to be identified so that to increase market share and to

maximize the profitability of Nestlé from market of Pakistan.
Nestle Pure Life
Nestle Pure Life

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” is not only Switzerland's largest industrial company, but it is also the World's
Largest Food Company. The mission statement emphasizes on the fact that Nestle products are
available in nearly every country around the world. Wherever one may live, only “Nestle” can
provide the best and most reliable food and beverage products to meet his/her needs throughout
the day, throughout the life. Especially, people on the move want to be able to find good food
wherever they are, whatever the time of day. They are often reassured that they will find well-
known brands out of home.

This statement also reflects the image of high quality products that “Nestle” offers.
“Nestle” has the advantage that it offers caterers, fast food chains and other restaurants a
complete range of high quality ingredients, base products and meal components, as well as
leading consumer brands such as Nescafe. Quality is the cornerstone of the success of the
“Nestle Company”. Every day, millions of people all over the world show their trust in the
company by choosing “Nestle” products. This trust comes from a quality image that has been
built up for over a century. Therefore, the quality of the products ultimately enhance the quality
of the consumer’s life.
In addition, the mission statement declares that “Nestle” has the ability to anticipate “…
consumer’s needs and create solutions….” “Nestle” has proven this ability a number of times
by introducing new products that were required by consumers. Especially, the launch of Nestle
Pure Life in Pakistan proves the accuracy of this fact. In Pakistan, there was a need for safe and
healthy drinking water and “Nestle” responded to this consumer need by introducing “Nestle
Pure Life”.
Nestle Pure Life

Finally, it is quite evident that the organization has actually implemented its mission
statement in the business practices that it carries out. Also, the mission statement has been an
important guideline for any SBU that the firm has started and this is portrayed by the success that
each SBU of Nestle enjoys.

STRATEGIC BUSINESS UNITS (SBU’s) OF NESTLE

“Nestle” is a well-known company all over the world and Pakistan. The company
basically deals in food products as their logo says “Good Food Good Life.” Their major
products lines are:

I- Milk Products: -

(i) Nestle Milkpak UHT Milk: This product was launched in 1981. Backed by a very strong
brand name, aggressive marketing and distribution plan, consistent quality, and availability
throughout the year, it has become quality milk. In September 1999, Milk Pak UHT milk was
launched as Nestle Milk Pak UHT milk. It is available in 1000, 500 and 250 ml sizes.

(ii) Milkpak Butter: This product was launched in 1985 under the Milk Pak brand name. It has
been recently repackaged in a crisp white laminate, the design of which bears closed
resemblance to that of Milkpak UHT milk. This new package design allows to gain strength from
Nestle Milkpak UHT milk. It is available in 200 and 100 gm sizes.

(iii) Milkpak UHT Cream: This product was launched in 1986 under Milkpak brand name. It is
available in 200 ml size.

(iv) Milkpak Desi Ghee: This product was launched in 1986. It is available in 1000 ml size and
is a leading branded desi ghee in the country.

(v) Nestle Everyday: To meet the requirements of the tea-whitening segment, this product was
launched in 1992. On account of aggressive marketing, focused distribution, excellent consumer
acceptance and product quality, this brand has shown strong growth and holds good promise for
the future.

(vi) Nestle Nido: Soon after it was introduced in the early 70`s as an imported product, Nido full
cream milk powder became the market leader. Local manufacturing of Nido began in 1990,
which has reinforced its position as the dominant player in the full cream milk powder category.

II- Chocolate Drinks: -

(i) Milo powder: This product was launched in 1994. It is available in 14,100 and 200 gm sizes.
It is strongly associated with a healthy life style and is an ideal drink for growing children who
need strength and energy.
Nestle Pure Life

(ii) Milo RTD: To cater for consumer convenience, Milo RTD (ready to drink) was launched in
1995 and is now available in an attractive 180 ml slim pack. It is popular among all age groups
especially among the growing segment of nutrition conscious consumers. It is an excellent
substitute for cold drinks.

III- Coffee: -

(i) Nescafe Classic: It is one of the world’s most popular coffee brands. Nescafe global
campaign “open up” was launched in Pakistan in October, introducing a new brand framework
and increased emphasis behind coffee sales in Pakistan. Nestle Milkpak locally packs imported
coffee and markets it in 225 and 500gm.

IV- Fruit Drinks: -

(i) Frost: It is a well-known brand launched in 1986 and has the largest market share. Positioned
as a cold drink and an alternate to cola drinks, its strength lies in the convenience attached to its
usage.

(ii) Nestle Orange Juice: The product was launched in July 1996. It is available in 180ml
and1litre sizes. In a market that is becoming increasingly conscious about nutrition and is
displaying preference for healthy drinks, Nestle Orange Juice has made very good inroads and
has a strong potential in the future.

V- Dietetic & Infant Products: -

(i). Lactogen: Lactogen 1 and Lactogen 2 are infant and follow-up formulae launched in 1991
and are available in two sizes both pack and can. The brands provide both affordability and
quality.

(ii). Cereals: Launched in 1989, it is the dominant player in the growing infant food market. It is
available in 5 flavors and provides balanced nutrition to infants.

(iii) Nestle Rice: An affordable starter weaning cereal and offers the flexibility of preparation
with a variety of meals. This was launched in 1994 and available in125ml pack size.

(iv). Nestle Wheat: Nestle wheat is a wheat-based infant cereal without milk. It is available in
125 and 200 gm pack sizes.

(v) Neslac: Neslac is a growing up milk, formulated specially for 1 to 4 years old. This was
launched in 1994. It contains a right balance of proteins, calcium, iron, vitamins and essential
minerals in order to cater nutritional needs of growing children.
Nestle Pure Life

VI-Culinary Products: -

(i) Maggi 2-minute Noodles: Fast to cook, good to eat – Maggi 2-Minutes Noodles were
launched with local production in 1992, and doing so Nestle pioneered the category of instant
noodles in Pakistan. It offers flavors like chicken masala, chili and chatkhara.

(ii) Maggi Cold Sauces: Nestle entered the Cold Sauces category early in the year with the
launch of Maggi ketchup, Maggi mirch maza and Maggi khatti meethi – the first Emily sauces in
Pakistan. The innovative taste of Khatti meethi together with the more traditional tastes of
Ketchup and Mirch maza, were received well by the consumers.

VII- Confectionery: -

In view of the impressive potential for confectionery sales in the country, Nestle Milkpak
established an independent sales and distribution network for confectionery products. From three
main cities in 1996, it has grown into a nation-wide network. The initial product range includes
locally produced Polo Mint, Kit Kat, Smarties, Lion Bar, and Fox’s, Allen’s Toffo and Allen’s
Soothers. Both Toffo and Soothers are produced on a new confectionery line-based on a new
state-of-the-art technology that provides an extremely flexible process for production of wide
range of high and low boiled candies. This will enable the company to introduce varieties of new
sweet flavors over the next few years.

VIII- Water: -

(i) Nestle Pure Life: The launch of “Nestle Pure Life” in December 1998 was a truly historic
event. This marks the “Nestle Pure Life” entry into the country’s fast 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. It is ideally balanced with essential minerals. It is available in two convenient sizes of 0.5
and 1.0 liters. 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.

Tabular Product Generation Concept:

Opportunity External mandate

Concept: Pure water
Tested concept: The need was confirmed because of the prevailing bad water conditions.
Protocol Includes well balanced minerals required for a healthy living.
Prototype Safety and purity.
Specifications
Pilot 1997
Production November 1998
Market Reached the market in 1998.
Success immediately gained 50% market share.
Nestle Pure Life

B
ACKGROUND
R 
EPORT
 
Pakistan State Oil Company Limited is one of Pakistan’s largest companies which posted an
after tax profit of Rs. 4.2 billion this year.For nearly two decades PSO had held the reigns
of market leadership when itc a m e t o   l u b r i c a n t s .   Y e t i n   1 9 9 4 ,   w h e n   t h e
government announced a new petroleum policy
in which lubricants were deregulated, PSO failed to react and
m a n a g e   t h e challenges of the free market conditions. It did not expand its stagnant product
lines, andt h e g r o w i n g c o n s u m e r n e e d s w e r e m e t i n s t e a d b y i t s c l o s e s t
competitors, Shell
a n d Caltex.I n   2 0 0 0 ,   P S O   u n d e r w e n t   a   c o r p o r a t e   r e s t r u c t u r i n g ,   a n
d   t h u s   b e g a n   i t s transformation process that has seen it restored as market leader in POL
products, and hasregained significant confidence in its lubricants division.  The
following highlight thechanges brought on for lubricants during the transformation process:
1.
The formation of a complete value chain under the new business
u n i t concept.
2.
Extension of product line.
3.
Technical seminars conducted for dealers.
4.
Improved customer
services.P S O ’ s   e x t e n s i v e   p r o g r e s s   i n   s u c h   s h o r t   t i m e   w a r r a n t e d   i t   a   p
r o p o s a l   f o r    privatization in 2003. Yet time passed, and the prospect of
privatization kept beingdelayed. Finally, with the completion of PTCL’s privatization process
this year, PSO isnow scheduled to be next in line with the date set for the end of 2005.
Nestle Pure Life

S
TRATEGIC
M
ARKETING
 
AND
P
LANNING
P
AKISTAN
S
TATE
Nestle Pure Life

O
IL
Automotive Lubricants
2. E
XTERNAL
E
NVIRONMENT
 2.1 Market Structure
Nestle Pure Life

End-Customer BracketsB
RAND
L
OYAL
 
•
Will buy lubricants based on perceivedquality and from preferred vendor 
•
Will buy lubricants from that stationthat has shown best service or quality
C
ONVENIENCE
 
•
Will purchase lubricants from vendor that is most convenient
•
Purchases from station closest tohome/work 
P
RICE
C
ONSCIOUS
 
•
Purchases based on lower price
•
The loudest customer type, will buythat lubricant that fits desired qualityand fits the wallet
I
MPULSE
 
•
Will buy lubricants on impulse
•
While filling petrol at station, willsuddenly realize the need for lubricant
Nestle Pure Life