AFFILIATED WITH UNIVERSITY OF SINDH, JAMSHORO

MARKETING PLAN OF NESTLE

MARKETING MANAGEMENT

Submitted To: Sir Sohail Isani Submitted By: Huneza Shah & Mona Mughal Subject: marketing management Class: MBA-II (4th SEMESTER) Date: - 08-2011

ACKNOWLEDGEMENT
I am deeply grateful to Almighty Allah for enabling me to accomplish this assignment. Our sincere thanks to our teacher Mr. Sohail Isani who guided us in every phase and step of our plan. Without his guidance and support the compilation of this project report would not have been possible.

Last but not the least; we are very grateful to our family and friends who cooperated a lot throughout the period of making Plan.

Regards

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 & 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. Nestls product portfolio is more than 500 products all over the world serving best to their customers. Henri Nestl endowed his company with the symbol derived from his name. His family coat of arms, the nest with a mother bird protecting her young, became the Company's logo and a symbol of the Company's care and attitude to life-long nutrition. The Nestl nest represents the nourishment, security and sense of family that are so essential to life. The first product made by Henri Nestl, a food for babies who were unable to breastfeed. His first success was a premature infant who could not tolerate his mother's milk or any of the usual substitutes. People quickly recognized the value of the new product, after Nestl's new formula saved the child's life, and soon, Farine Lacte Henri Nestl was being sold in much of Europe. Nestl has been serving Pakistani consumers since 1988, when the parent company, the Switzerland based Nestl SA first acquired a share in Milkpak Ltd.

Nestls Vision:
The consumer's voice is the key to Nestl Pakistan's vision and working. Whether you live in the remotest village or the metropolis of Karachi, Nestle consumer services team stands ready to listen to your concerns and provide answers about our products and guidance on matters of health and wellness. Nestls global vision is to be the leading health, wellness, and Nutrition Company of the world. Nestle Pakistan subscribes fully to this global vision. In addition to that, Nestle Pakistan also envisions to:  Lead a dynamic motivated and professional workforce that is proud of its heritage and bullish about the future.  Meet the nutritional needs of all age groups through a diversified product range that contains an innovative portfolio of branded food and beverages of the highest quality  Maintain long-term growth and deliver shareholder value.

 Establishing responsible communication with the consumer which in turn can provide us a better look into what changes need to be made to our products  Strengthen the position as the best career destination for talented and motivated individuals  Empowering a system of self-management

Mission 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 Pakistans growing water market. At the same time Pakistan became the first country where Nestle launched the new brand. Nestle Pure Life is a premium drinking water, produced to the highest standards of safety and purity as per the website suggests. It is ideally balanced with essential minerals like vitamins, calcium and many other useful items. According to nestle, pure water product is the stars of nestle having useful ingredients in every drop of water which are essential for being hydrated all the time. Capitalizing on its strong brand recognition, aggressive pricing and supported by a strong marketing campaign, Nestle Pure Life has made very strong inroads into the water market in Pakistan. Nestl PURE LIFE is available around the globe today in Canada, USA, Mexico, Brazil, Argentina, South Africa, Saudi Arabia, Jordan, Egypt, Lebanon, Turkey, Russia, Uzbekistan, Pakistan, China, Thailand, and the Philippines.

Launched on the North American market in 2003, Nestl PURE LIFE is destined to become the worlds top and most widely distributed brand by 2010. Nestle is also willing and has goal to achieve the $1Billion 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. Here you can see the market share chart for the product and after that there is a Boston Consultancy Group Matrix is shown which would describe the ranking of Nestle Pure Life in product portfolio of Nestle Pakistan. BCG Matrix shows the companys market share over the growth of industry. This BCG matrix is the clear picture of current market situation of Nestle Pure Life.

Boston Contingency Matrix

High High Industry Growth Low Industry Growth Market Share High Stars: Nestle Pure Life Cash cows: Coffee (Nescafe) Market Share low Question Mark: Culinary Products Dogs: Chocolate Drinks and Polo

Objectives of Nestle Pure Life: The main objective for the SBU was to be number one selling bottled-mineral water in Pakistan. This objective was hoped to be accomplished by setting the following further sub-objectives. i) 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. ii)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. mineralization is light (200 mg per liter) and suitable for the whole family.

Overall

iii) 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.25 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. 18. The increase in price has been caused mainly due to inflation and competition. iv) 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 (0.5 litre, 1.5 litre, 12litre, 19 litres). 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 consumers young and old are likely to buy or drink water. 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. Referring to the first part of the mission statement, Nestle did provide the consumers with the best bottled-mineral water, as it is number one in the bottled-water market in Pakistan. According to their claim that they provide the best food throughout the world, Nestl Pure Life is available throughout Pakistan in a number of outlets because of the intensive distribution strategy of the firm. Secondly, Nestle was very successful in identifying the need for safe and pure drinking water, and thus came with the wonderful solution of providing the Nestle Pure Life water. Referring to Nestl Pure Life, it has all the essential minerals, which a human body needs, as well as, it is pure and safe. Thus it improves one aspect of our lives. By drinking healthy water, people can escape different fatal diseases.

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 Uncertain conditions will affect the sales

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 Nestl brand name on a product is a promise to the customer that it is safe to consume, that it complies with all regulations and that it meets high standards of quality. Customers expect us to keep this promise every time. Under no circumstances will we compromise on the safety of a product and every effort must be made to avoid hazards to health. Like wise, compliance with all relevant laws and regulations is a must and is not negotiable. People, equipment and instruments are made available to ensure safety and conformity of Nestl products at all times. The effort is worth it. Companies with huge quality standards make few e r 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.

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 78% of drinking water market in all over the Pakistan. Pepsi Aqua Fina has 15% and Askari water has 2.9% and remaining 4.1%are kept by other local companies Nestle pure life (NPL) share is 78%. Pepsi Aqua Fina share is 15% Askari Water has share of 2.9%. Remaining 4.1 % is for all other competitors

Marketing Strategy
For each target market, management must design a Marketing strategy, which includes the designing of the marketing mix. The Marketing Mix is the combination of multiple aspects of the following four elements: a product, how it is distributed and promoted, and its price. These four elements are intended to please the target market(s) and, equally important organization marketing objectives.

The Company's strategy is guided by several fundamental principles. Nestl's existing products grow through innovation and renovation while maintaining a balance in geographic activities and product lines. Long-term potential is never sacrificed for short-term performance. The Company's priority is to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives. Nestl is committed to the following Business objectives in all countries, taking into account local legislation, cultural and religious practices: Nestl's business objective is to manufacture and market the Company's products in such a way as to create value that can be sustained over the long term for shareholders, employees, consumers, and business partners. Nestl does not favor short-term profit at the expense of successful long-term business development. Nestl recognizes that its consumers have a sincere and legitimate interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust, and that without its consumers the Company would not exist. Nestl continues to maintain its commitment to follow and respect all applicable local laws in each of its markets. To achieve these objectives the product, price, place and promotion strategies for Nestl Pure Life are as following:

Product Strategy
Anything offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want. Product is set of tangible and intangible attributes, including packaging, color, price, manufacturing, prestige, retailing, services, etc. which the buyer may accept as offering want is satisfied. Nestl is offering the products, which comes under the category of fast moving consumer goods (FMCG). Nestl is committed to offering consumers high-quality food products that are safe, tasty and affordable. The Nestl Seal of Guarantee is a symbol of this commitment. To be successful in marketing, producers must need carefully planned strategies for their products. Now the question is that how Nestl has planned the product strategies for NPL.

Positioning the Product In relation to the attribute

Nestl is positioning its water as pure and safe water, which is essential to good health. They say that Trust Nestl Pure Life and also Nestl pure life is Happiness, Hope and Trust; this is the message which they are giving in their advertising campaign. Nestle also claims that NPL is Pakistans favorite water and currently their slogan is JIYO! kay yehi hay zindagi. On basis of these, it is said that Nestl is positioning in relation to the attribute and quality of the product. Its basic foundation is unchanged from the time of the origins of Company, and reflects the basic ideas of fairness, honesty, and a general concern for people.

Product Line Expansion

Product line expansion is accomplished by increasing the depth (variety of sizes, colors, models) within the product line. Nestl is offering variety of sizes in NPL product line, which are as follows: Retail line: 1.5 liters 0.5 liters Home and Office Line: It is also comes under Nestl Bulk category. 3 Gallon 5 Gallon The year 2005 saw the successful completion of yet another year of outstanding business for NESTL PURE LIFE both in retail with 0.5 and 1.5liter bottles with the introduction of a new product i.e. 0.2 liter bottle and direct home and office delivery with 19 liter bottles. The exceptional performance of the brand is the result of expanding national distribution and an increasingly loyal customer bases. The brand has revolutionized the Pakistani market by tapping the real consumer need for pure, safe and healthy water and has successfully dominated a key strategic business in Pakistan

Price
Price is the amount of money and/or other items with utility needed to acquire a product and utility is an attribute with potential to satisfy the wants. A product price influences wages, rent, interests, and profits. Some prospective customers are interested in low prices, where as another segment is more concerned with other factors, such as service, quality, value, and brand image. Consumers perception of quality may be influenced not just by price but also by such factors as store reputation and advertising. Pricing objectives may be: Profit- oriented: To achieve a target return To maximize profit Sales-oriented To stabilize prices To maintain or increase market share Status quo-oriented: To stabilize the prices To meet competition In developing a marketing program, management has to decide whether to compete primarily on the basis of price or the non-price elements of the marketing mix. Nestl has adopted following for setting the pricing of NPL: Non-price Competition Nestl is trying to maintain stable prices of NPL and attempt to improve its market positions by emphasizing other aspects of their marketing programs. Of course, competitors prices still must be taken into considerations, and price changes will occur over time. Nevertheless, the emphasis of Nestl is on something other than price. To maintain this non-price competition Nestl is developing distinctive, hopefully unique, products and to create a novel, appealing promotional program. In addition, it emphasizes the variety and quality of the NPL, which they are offering to customers.

One-Price Strategy NPL is using this special price strategy i.e. one-price strategy in which the company charges the same price to all similar customers who buy identical quantities of a product. But for different quantities the company is offering different price. Even prices are set for the NPL products.

Place
Inn marketing strategy, Place means distribution of the products. It is a very important element of the marketing-mix. Ownership of a product has to be transferred some how from the individual or organization that makes it to the consumer who needs it and buy it. Goods also must be physically transported from where they are produced to where they are needed. For this purpose, middlemen are used. Middleman is a business firm that renders services related directly to the sale and/or purchase of a product as it flows from producer to consumer. Due to these middlemen, activities such as creating assortments and storing products can be shifted from one party to another in an effort to improve efficiency. They are also able to carry out distribution activities better or more cheaply than either producers or consumers. A distribution channel consists of the set of people and firms involved in the transfer of title to a product as the product moves from producer to ultimate consumer or business user. Type of Distribution channel: Diverse distribution channels exist today. The distribution channel used for distribution of NPL by Nestl is: Producer Wholesaler Retailer Consumer

This is an economically feasible choice. Nestl Pakistan Limited has a strong network of distribution and has a separate supply chain department.

Promotion
It consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade. From marketing point of view, Promotion informs, persuades, and reminds prospective and current customers and other selected audiences about a company and its products. The most useful brand is failure if no one knows it is available. Promotional Mix A promotional mix is an organizations combination of personal selling, advertising, sales promotion, and public relations. An effective promotional mix is a critical part of all marketing strategies.

Promotion, in whatever form it takes, is an attempt to influence. Nestl is using following methods for promotion of NPL: Advertising It is non-personal communication paid for by a clearly identified sponsor promoting ideas, organizations, or products. The most familiar outlets for ads used for the advertisement of the NPL by Nestl are the broadcast (TV and Radio) and print media (news papers and magazines). The Nestl also uses other advertising vehicles like billboards, T-shirts and, more recently the Internet. Nestl has its own website which is giving the information about the different brand of the company. Nestl is doing the selective demand advertising that is intended to stimulate demand for individual brands. In the advertisement the message is given that, There is one water which gives you, hope, happiness and trust and that water is Nestl Pure Life. It is pure, safe, and healthy water. On billboards the pictures of NPL advertisement seems so attractive, especially in summer season across the roads that it motivates the customer to purchase it immediately.

Integrated Marketing communication

Nestl is using the integrated marketing communication system. In this, company is trying to coordinate all promotional efforts make an effective impact on the customer mind and to deliver a consist message. The Nestl has incorporated several different promotional campaigns. Depending upon the objectives and available funds, it undertakes simultaneous local, regional, national, and international programs.