Introduction: Nestlé was founded in 1866 by Henri Nestlé and is today the world's biggest food and beverage company. Sales at the end of 2005 were CHF 91 bn, with a net profit of CHF 8 bn. Nestlé employ around 250,000 people from more than 70 countries and have factories or operations in almost every country in the world.
The history of Nestlé began in Switzerland in 1867 when Henri Nestlé, the pharmacist, launched his product Farine Lactée Nestlé, a nutritious gruel for children. Henri used his surname, which means ’little nest’, in both the company name and the logotype. The nest, which symbolizes security, family and nourishment, still plays a central role in Nestlé’s profile. Since it began over 130 years ago, Nestlé’s success with product innovations and business acquisitions has turned it into the largest Food Company in the world. As the years have passed, the Nestlé family has grown to include chocolates, soups, coffee, cereals, frozen products, yoghurts, mineral water and other food products. Beginning in the 70s, Nestlé has continued to expand its product portfolio to include pet foods, pharmaceutical products and cosmetics too. Today, Nestlé markets a great number of o f products, all with one thing in common: the high quality for which Nestlé has become renowned throughout the world The Company's strategy is guided by several fundamental principles. Nestlé'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 shortterm performance. The Company's priority is to bring the best an d most relevant products to people, wherever they are, whatever their needs, throughout their lives. Taste of Nestlé in each of o f the countries where Nestlé sell products. Nestlé is based on the principle of decentralization, which means each eac h country is responsible for the efficient running of its business - including the recruitment of its staff.
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That's not to say that every operating company can do as it wishes. Headquarters in Vevey sets the overall strategy and ensures that it is carried out. It's an approach that is best summed up as: 'centralize what you must, decentralize what you can'. Nestlé is a company which is present in all over the world but It has difference d ifference and unique motto to deal in all over the world. Nestlé believes that they should shou ld think about their organizations globally but they deal with people by interacting with them locally.
“Thinking globally - acting locally” Evolution of Nestlé: 1867 Henri Nestlé founded the company in Vevey, Switzerland. 1898 Nestlé purchases its first factory outside of Switzerland - Viking Milk factory in
Norway. 1905 Nestlé merges with Anglo-Swiss Condensed Milk Company. 1929 Nestlé merges with Peter-Cailler-Kohler Chocolates Suisses S.A. 1938 Nestlé launches Nescafé - the world’s first instant coffee. 1947 Nestlé merges with Alimentana S.A. with the brand Maggi. 1962 Nestlé purchases Findus. 1974 Nestlé becomes a significant shareholder in the Cosmetics Company L’Oréal. 1977 Nestlé purchases Alcon, manufacturer of eye care products and kits. 1985 Nestlé purchases the Food Company Carnation. 1988 Nestlé purchases the confectionary company Rowntree Mackintosh and the pasta
company Buitoni-Perugina. 1992 Nestlé purchases the mineral water Company Perrier. 1998 Nestlé purchases Spillers pet foods business. 2000 Nestlé sells the Findus brand in all countries except for Switzerland. 2001 Nestlé merges with Ralston Purina, the premier petfood company in North America,
and with unique expertise in the dry dog food area.
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Vision of Nestlé Nestlé's vision of making good food central c entral to enjoying a good healthy life for consumers c onsumers everywhere. This implies gaining a deeper understanding u nderstanding in many areas of nutrition and food research and transforming the scientific advances into applications for the company. Having a broad vision the company is doing its best for their consumers to show the great sense of responsibility.
Nestlé’s aim is to meet the various needs of the consumer every day by marketing and selling food of a consistently high quality.
The confidences that consumers have in our brands is a result of our company’s many years of knowledge in marketing, research and development, as well as continuity consumers relate to this and feel they can trust our products.
High quality and collaboration Our objectives are to deliver the very best quality in everything we do, from primary produc produce, e, choice choice of suppli suppliers ers and transp transport ort,, to recipe recipess and packag packaging ing materi materials als.. Our operations and collaboration in the Nordic countries gives us greater opportunities to be efficient and strategic and to function well as an organization, both when it comes to the distribution chain and to concentrating on joint product launches and campaigns.
Focus on e-business and websites Increased investments in the sphere of e-business give us swifter business and direct contact with trade. Our website is a forum for consumers, students, future employees and the media. We hope that through a sincere approach and by conducting dialogues, we will be able to improve, change and satisfy the demands and wishes of the people of today
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History of Nestlé: Nestlé started its work as a multinational company in 1866. From that time they provided their best to their customers and the history of the Nestlé is given below:
History of Nestle
1866-1918
1918-1944
Food Products for babies & Powder Milk
Chocolate, Coffee and Fresh Milk
1944-1975
1975-1981
1981-1996
1996-Now
Fast Food Maggi
Fast Food Products
Yogurt and Butter
Ice Creams
1866 -1918
In the 1860s Henri Nestlé, a pharmacist, developed 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. In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. By the early 1900s, the company was operating factories in the United States, Britain, Germany and Spain. World War I created new demand for dairy products in the form of government contracts. By the end of the war, Nestlé's production had more than doubled. 1918 -1944
After the war Government contracts dried up and consumers switched back to fresh milk. However, Nestlé's management responded quickly, streamlining operations and reducing debt. The 1920s saw Nestlé's first expansion into new products, with chocolate the Company's second most important activity
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Nestlé felt the effects of World War II immediately. Profits dropped from $20 million in 1938 to $6 million in 1939. Factories were established in developing countries, particularly Latin America. Ironically, the war helped with the introduction of the Company's newest product, Nescafé, which was a staple drink of the US military. Nestlé's production and sales rose in the wartime economy. 1944 -1975
The end of World War II was the beginning of a dynamic phase for Nestlé. Growth accelerated and companies were acquired. In 1947 came the merger with Maggi seasonings and soups. Crosse & Blackwell followed in 1960, as did Findus (1963), Libby's (1971) and Stouffer's (1973). Diversification came with a shareholding in L'Oréal in 1974. 1975 -1981
Nestlé's growth in the developing world partially offset a slowdown in the Company's traditional markets. Nestlé made its second venture outside the food industry by acquiring Alcon Laboratories Inc. 1981 -1996
Nestlé divested a number of businesses1980 / 1984. In 1984, Nestlé's improved bottom line allowed the Company to launch a new round of acquisitions, the most important being American food giant Carnation. Nestlé introduce yogurt and butter in this time period. 1996 Onwards
The first half of the 1990s proved to be favorable for Nestlé: trade barriers crumbled and world markets developed into more or less integrated trading areas. Since 1996 there have been acquisitions including San Pellegrino (1997), Spillers Petfoods (1998) and Ralston Purina (2002). There were two major acquisitions in North America, both in 2002: in July, Nestlé merged its U.S. ice cream business into Dreyer's, and in August, a USD 2.6bn acquisition was announced of Chef America, Inc.
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Main Brands of Nestlé are as under: Today Nestlé is present in different markets with the following main brands: Nestlé’s Brands in All Over the World
Coffee Water Beverages Shelf Stable Children Foods Ice Creams Infant Nutrition Performance Nutrition Health Care Nutrition Soups & Pasts Frozen Foods Refrigerated Products Chocolates & Biscuits
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Detail of Nestlé’s Products in All over the World Coffee
Nescafé, Taster’s Choice, Ricoré, Ricoffy, Nespresso, Bonka, Zoégas, Loumidis
Water
Nestlé Pure Life, Nestlé Aquarel, Perrier, Vittel, Contrex, S.Pellegrino, Acqua Panna, Levissima, Arrowhead, Poland Spring, Deer Park, Ozarka, Hépar, Ice Mountain, Zephyrhills
Other beverages
Nestea, Nesquik, Nescau, Milo, Carnation, Libby’s, Caro, Nestomalt, Nestlé
Shelf stable
Nestlé, Nido, Nespray, Ninho, Carnation, Milkmaid, La Lechera, Moça, Klim, Gloria, Svelty, Molico, Nestlé Omega Plus, Bear Brand, Coffee-Mate,milk pak,yougart
Chilled
Nestlé, Sveltesse, La Laitière, La Lechera, Ski, Yoco, Svelty, Molico, LC1, Chiquitin
Ice cream
Nestlé, Antica Gelateria del Corso, Dreyer's/Edy's, Drumstick/Extrême, Maxibon/Tandem, Mega, Mövenpick, Sin Parar/Sem Parar/Non Stop
Infant nutrition
Nestlé, Nan, Lactogen, Beba, Nestogen, Cerelac, Neslac, Nestum, Guigoz, Good Start
Performance nutrition
PowerBar, Pria, Musashi
HealthCare nutrition
Nutren, Clinutren, Peptamen, Modulen
Bouillons, soups, seasonings, pasta, Maggi, Buitoni, Thomy, Winiary,Torchin sauces Frozen foods
Stouffer’s, Lean Cuisine, Hot Pockets, Buitoni, Maggi
Refrigerated products
Nestlé, Buitoni, Herta, Toll House
Chocolate and biscuits
Nestlé, Crunch, Cailler, Galak/Milkybar, Kit Kat, Smarties, Butterfinger, Aero, Polo Biotherm, Body Shop , Cosmence, Garnier, Helena Rubenstein, Innéov , La Roche-Posay, Lancôme ,L'Oreal ,Matrix , Maybe line ,Metamorphosis ,Plenitude , Red ken
Cosmetics
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Pet food
Arthur's, Bakers, BETA, Bonio, Felix ,Friskies Go-Cat ,Go-dog, Pro Plan, Purina ,Spiller's Winalot.
Cereals
Cheerios & Honey Nut Cheerios, Cinnamon and Golden Grahams ,Clusters, Cookie Crisp Shreddies , Fibre 1,Fitnesse ,Force Flakes Fruitful ,Golden Nuggets ,Nesquik cereal Shredded Wheat including: Bite size, Fruitful, Honey Nut ,Shred dies: Coco and frosted
Nestlé’s Brands Detail Baby Foods: In 1867 a physician persuaded Henri Nestlé to give his product to an infant who was very ill — he had been born prematurely and was refusing his mother's milk and all other types of nourishment. Nestlé's new food worked, and the boy survived. From the very beginning, Nestlé's product was never intended as a competitor for mother's milk. In 1869, he wrote: "During the first months, the mother's milk will always be the most natural nutrient, and every mother able to do so should herself suckle her children."
The factors that made baby foods success in the early days of the Nestlé company — quality and superior nutritional value — are still as valid today for the wide range of infant formula, cereals and baby food made by Nestlé. The World Health Organization (WHO) recognizes that there is a legitimate market for infant formula, when a mother cannot or chooses not to breast feed her child. Nestlé markets infant formula according to the principles and aims of the WHO International Code of Marketing Breast Milk Substitutes, and seeks dialogue and cooperation with the international health community and in particular with the WHO and UNICEF, to identify problems and their solution. Nestlé's expertise as the world's leading infant food manufacturer, gained over more than 125 years, is put at the disposal of health authorities, the medical profession and mothers and children everywhere.
Dairy Products: 8
Nestlé has long been a major player in the dairy industry, originally with well known shelf stable brands such as Nido, Nespray, La Lechera and Carnation, then building a strong international presence in Chilled dairy and Ice cream under the Nestlé brand.
Innovation and renovation play a major role in the development of milk based products as well as of breakfast cereals, managed as a joint venture with General Mills. The area of Nutrition, with its benefits to health and wellbeing, is having a significant impact on the development of our business. A wide range of proven, science based solutions such as starter and follow-up formulas, growing-up milks, cereals, enteral diets, oral supplements and performance foods are actively developed and successfully brought to market under the Nestlé brand.
Breakfast Cereals: Although cereals have been with mankind in one form or another for millennia, it was not until the mid 19th century that scientific research, technological innovation, and the influence of a group of American health reformers, gave rise to the crunchy foodstuff we know today as breakfast cereal. Nestlé has a joint venture with General Mills outside North America, Cereal Partners Worldwide, which is active in more than 80 countries. The joint venture began in 1990, and its rapid growth has been characterized by strong branding and lately the launching of breakfast cereal brands into the fast-growing cereal bar market.
Ice Cream: Ice Cream is also one of the major products of Nestlé.
Chocolate & Confectionery: Chocolates and confectionery are also present in the list of Nestlé’s products. Nestlé has Kit Kat, polo, Toffo, Butter scotch, Fruit drops and Soothers in this section of
products.
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Prepared Foods: In this section of production Nestlé has Maggi and Buitoni. Maggi merged with Nestlé in 1947. Buitoni, the authentic Italian brand, which has been producing pasta and sauces in Italy since 1827, became part of the Nestlé Group in 1988
Beverages: In 1937, Nestlé scientists perfected a powdered coffee product that was introduced in 1938 under the brand name Nescafé – the world's first commercially successful soluble coffee. It became so popular during World War II that for one full year the entire output of the Nescafé plant in the United States (more than 1 million cases) was reserved for military use only. Since then, Nescafé has become one of the world's best-known brands. In addition, Nestlé is a major producer of chocolate-based and malted drinks. Its leading brands, Nesquik , Milo and Nescau are very popular with a growing number of young people around the world. Nestlé's ready-to-drink beverages Nestea and Nescafé are sold in various forms (cans, bottles). These are distributed by Nestlé's joint-venture with the Coca-Cola Company, Beverage Partners Worldwide. Nestlé is also present in fruit juices (Libby's), as well as espresso coffee in capsules (Nespresso ).
Bottled Water: Nestlé began its entry into the water business in 1969 with a 30% stake in the owners of the Société Générale des Eaux Minérales de Vittel. It acquired a controlling interest in SGEMV in January 1992, and went on in May of the same year to buy out the entire Perrier Group. In 1992, Nestlé was the first company to dare to launch a mineral water, Valvert, in five different countries at once. Its originality lay in the use of an all-new plastic, P.E.T. (polyethylene teraphthalate), which is stronger and more elastic than the PVC used since 1968. Besides, P.E.T. is recyclable.
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By the end of 1997, the Group was present on every continent, and the purchase of San Pellegrino gave it the leadership in the Italian market. In 1998, for the first time in its history, Nestlé associated its name with a bottled water: Nestlé Pure Life. The brand was launched in Pakistan and soon appeared in Brazil, followed by Argentina, Thailand, the Philippines, China, and Mexico in 2000. In 2001, India, Jordan, and Lebanon followed, and in 2002, Egypt, Uzbekistan and the United States. Nestlé Pure Life is drinking water that has been treated and rematerialized using a standardized industrial process to ensure purity and quality and is marketed in emerging countries. A second product with the Nestlé name was launched in May 2000, this time in six European countries: Nestlé Aquarel. Natural spring water currently from nine different springs in France, Germany, Belgium, Hungary, Italy and Spain, Nestlé Aquarel also uses the multi-source concept to satisfy new consumer expectations, especially for water with a low mineral content that the whole family can drink. In April 2002, the Group changed its name to Nestlé Waters, a token of Nestlé's decisive commitment to the bottled water market, which now represents 9% of its sales. Today, Nestlé Waters are established in 130 countries and markets about 70 different brands. The Group is able to offer top quality brands and innovative packaging to meet the individual needs of the water consumer all over the world, whenever, wherever and however thanks to the wide variety of its offer in terms of distribution and product mix.
L'Oreal (France): L'Oreal is the global #1 in cosmetics with a portfolio that contains many of the world's
biggest hair and beauty products, including such brands as Garnier, Maybelline and Lancome. It also markets fragrances and cosmetics under license for other companies such as Giorgio Armani and Ralph Lauren. More than 80% of group sales are generated outside France, with operations in every major territory. Since the 1980s the group has made North America a particular focus of attention, wrong-footing domestic rivals with dynamic marketing and a series of smart launches and clever acquisitions. The most recent of these is the 2006 deal to acquire ethical beauty products retailer Body Shop. Advertising Age estimated global measured advertising expenditure of $2.8bn in 2005, making L'Oreal the world's #5 advertiser
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Images of Nestlé’s Brands
Baby Foods:-
Cerelac
Nestle junior
Baby cao
Cereal Milk Drinks
Dairy Products: -
Nido
Nespray
La Lechera
Carnation
Every Day
Ice Cream: -
Ice Cream
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Chocolate & Confectionery: -
Soothers
Kit Kat
Prepared Foods: -
Maggi
Buitoni
Beverages: -
Fruit Juices
Nescafé
Milo
Nesquik
Nestea
Bottled Water:-
Nestlé Pure Life
Nestlé Aquarel
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Members of the Board of Directors Here are the Names, Year of Birth, Nationality and Education of the Members of the Board of Directors.
Name
Year Of Birth
Nationality
Rainer E. Gut (Chairman)
1932
Swiss
Peter BrabeckLetmathe (VCM & ECO)
1944
Australia
Andreas Koopmann
1951
Swiss
Edward George (Lord George)
1938
Rolf Hanggi
1943
Swiss
Jean-Pierre Meyers
1948
French
Peter Bockli
1936
Nobuyuki Idei
Andre Kudelski
Kaspar Villiger Daniel Borel
Carolina MullerMohl
1937
1960
British
Education Swiss Matura Diploma and professional Degree in Economics Degree in Mechanical Engineering and Business Administration Degree in Economics
Degree in Law
Degree in Economics
Swiss
Attorney-at-law
Japanese
Degree in Political Science and Economics
Swiss
Degree in Physics
Swiss
Degree in Mechanical Engineering
1950
Swiss
Degree in Physics and in Computer Science
1968
Swiss
1941
Degree in Political Science
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COMPETITIVE PRIORITIES
Quality
Everyday, millions of people all over the world shows their confidence in nestle by choosing Nestlé products. This confidence is based on their quality image and a reputation for high standards that has been built up over many years. High performing design Quality policy and principles, the mandatory
standards and the recommended tools for implementation are laid down in the Nestlé Quality System, which is applicable throughout the group. Further directions are given through instructions, norms and guidelines, often specific to a product. Nestle business products; such as raw material producers, packaging suppliers, contract manufacturers and distributors are expected to share nestle concern for Quality. Consistent quality 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. Cost
Nestle provides high quality products to its customers at lower prices; prices that are affordable by people in order to get nutritious healthy products. Time
Through its effective marketing and vast sales and distribution network throughout the company, Nestle ensures that its products are available to consumers whenever, wherever and however. They believe that getting the new product to market first gives the firm an edge on the competition that is difficult to overcome in a rapidly changing business environment (Development speed ) Volume Flexibility
Nestle has the ability to accelerate and decelerate the rate of production quickly to handle large fluctuations in demand. For Nestle volume flexibility is an important operating capability that supports the achievement of their other competitive priorities.
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Corporate wellness unit of Nestle Corporation
The Corporate Wellness Unit was designed to integrate nutritional valueadded in their food and beverage businesses. This unit will drive the nutrition, health and wellness organization across all their food and beverage businesses. It encompasses a major communication effort, both internally and externally, and strives to closely align Nestlé’s scientific and R&D expertise with consumer benefits. This unit is responsible for coordinating horizontal, cross-business projects that address current customer concerns as well as anticipating future consumer trends. International strategy 1. Focus on Foreign Direct Investment
Nestlé is a global organization. Knowing this, it is not surprising that international strategy is at the heart of their competitive focus. Nestlé’s competitive strategies are associated mainly with foreign direct investment in dairy and other food businesses. Nestlé aims to balance sales between low risk but low growth countries of the developed world and high risk and potentially high growth markets of Africa and Latin America. Nestlé recognizes the profitability possibilities in these high-risk countries, but pledges not to take unnecessary risks for the sake of growth. This process of hedging keeps growth steady and shareholders happy. 2.
Partnership with other large companies
Another strategy that has been successful for Nestlé involves striking strategic partnerships with other large companies. In the early 1990s, Nestlé entered into an alliance with Coca Cola in ready-to-drink teas and coffees in order to benefit from Coca Cola’s worldwide bottling system and expertise in prepared beverages. 3.
Acquire local companies
In Asia, Nestlé’s strategy has been to acquire local companies in order to form a group of autonomous regional managers who know more about the culture of the local markets than Americans or Europeans. Nestlé’s strong cash flow and comfortable debt-equity ratio leave it with ample muscle for takeovers. Recently, Nestlé acquired Indofood, Indonesia’s largest noodle producer. Their focus will be primarily on expanding sales in the Indonesian market, and in time will look to export Indonesian food products to other countries.
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SWOT ANALYSIS OF NESTLE:
Strengths: Nestlé’s has much strength. 1. Their first is that they have a great CEO, Peter Brabeck. Brabeck emphasizes internal growth, meaning he wants to achieve higher volumes by renovating existing products, and innovating new products. His explanation of renovation is that “to just keep pace in the industry, you need to change at least as fast as consumer expectations.”(Hitt, 2005) 2. His explanation of innovation is “to maintain a leadership position, you also need to leapfrog, to move faster and go beyond what consumers will tell you.” Brabeck has led Nestle into a position to better achieve the internal growth targets with his. 3. Another strength that Nestle has is that they are low cost operators. This allows them to not only beat the competition by producing low cost products, but by also edging ahead with low operating costs.
Weakness: 1. The main weakness of Nestle is that they were not as successful as they thought they would be in France. The launch in France was in 1994, but since the late 1980s, Danone had already entered the market with a health-based yogurt. 2. The second weakness is that LC-1 was positioned as too scientific, and consumers didn’t quite understand that LC-1 was a food and not a drug. 3. Nestle also has multiple critical resources. They have a great research and development team. James Gallagher and Andrea Pfeifer were the masterminds behind the research on the La-1 cultures in the LC-1 yogurt. They were also the two that decided on selling LC-1 as a functional food. This enabled Nestle to position the product in a way that differentiated it among the other products in the market. They also have four pillars that Brabeck, Nestle’s CEO has identified he believes will help their internal growth worldwide. These are operating excellence, innovation and renovation, product availability, and communication.
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Opportunities: 1. One opportunity that Nestle has is that health-based products are becoming more popular in the world, including in the United States. Consumers are 2. Becoming more health conscious, and realize that living longer isn’t only by luck and genetics. LC1 has not been introduced in the United States yet. 3. Nestle also has an opportunity of being even a larger market leader in Germany with LC-1. Within two years of launching the product in Germany, they had captured 60% of the market. This was due to the fact that they differentiated the product, and Germans simply preferred the taste. 4. Another opportunity of LC1 is that, because they are a market leader, they can introduce more health-based products in Germany. 5. As nestle has more then 9000 brands all over the world .they are increasing their products day by day. With very new changes. like now they are introducing Nestle LEMU Malta
Threats: 1. A threat to Nestle is the fact that some markets they are entering are already mature. Danone had an established leadership position in the yogurt market in France. Since Danone was the first to arrive in the market, they have always been the market leader there. 2. Also consumers in France liked the taste of LC-1, but researchers believe they did not repurchase the yogurt because they preferred the taste of Danone products better. 3. Another threat to Nestle is that there is intense competition in the United States yogurt market. General Mills’ Yoplait division is the leader in the yogurt market in the United States. Yoplait has been the leader for years and is constantly innovating new health products. 4. The main threat of Nestle these days is the campaign led by the International Nestlé Boycott Committee primarily targets Nescafe, the corporation's flagship product. To boycott Nestlé products until the company stops promoting its baby milk . 5. Another threat now a days is in nestle pure life. as it’s the leading brand and people prefer Nestle pure life but their may be a threat from aqua fena which is introduced by Pepsi 6. Threat of Olper Milk and Haleeb Milk
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Competitors Of Nestle Globally Nestlé towers over its competitors as the world's largest food company, proudly proclaiming "good food, good life." Not so good is Nestlé's reputation for corporate abuse throughout its operations, ranging from the marketing of infant formula to the production of its chocolate and bottled water. Nestlé has been the target of strong international criticism for its aggressive marketing of infant formula in countries with scarce potable water, leading to a reduction in breastfeeding and increased risk for infants. Nestlé is one of the top four water bottling companies in the world, contributing to the problem of plastic waste as well as the usurping of water that should remain a shared resource.
Competitors -
Cadbury Schweppes Chiquita Brands ConAgra Foods Dean Foods General Mills Hershey Kraft Foods PepsiCo Sara Lee Starbucks Unilever Wendy's
-Campbell Soup - Coca-Cola - Danone - Dole -H.J. Heinz Company - Kellogg -McDonald's - Procter & Gamble -Smithfield Foods -Tyson Foods -Vivendi Universal S.A.
Selection of one product: I choose the dairy products for my report .and my main focus is on Nestle milk PAK because its In Pakistan it is used every where.
Products Marketed in Pakistan—Business Areas Locally Produced Products
A broad range of products is produced locally. These are grouped under the six broad categories listed below:
Dairy Products: •
MILKPAK UHT Milk MILKPAK pioneered the UHT market in 1981. A major re-launch in 1997 repositioned the brands the perfectly pure and natural milk. This enhanced its brand image, and simultaneously strengthened its leadership in the market. It is currently available in three different sizes: 250 ml, 500 ml, and 1000 ml.
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•
MILKPAK UHT Butter
MILKPAK butter was launched in 1985. It has an established consumer base, and a significant market share. It is available in two different sizes: l00g, and 200g. •
MILKPAK UHT Cream
•
MILKPAK UHT cream was launched in 1986. It is the market leader in the cream segment, and has a high degree of brand loyalty. It is available in the 200ml slim pack. •
MILKPAK Desi Ghee MILKPAK Desi Ghee was launched in 1986. It has gained a dominant market share due to its aroma, taste, and quality, and also by capitalizing on the MILKPAK brand name. It is available in a 1000ml tetra pack.
•
EVERYDAY Dairy Whitener
•
EVERYDAY, a spray dried instant dairy whitener was launched in 1992 to tap the potential offered by the large tea drinking consumer segment, and also to expand the overall powder milk market. EVERYDAY dairy whitener, backed by an aggressive marketing strategy, has shown tremendous growth and holds great promise for the future. EVERYDAY is available in three different sizes: 200g, 500g, and l000g. •
NESTLE EVERYDAY UHT:
Nestle Everyday UHT was launched in October 2001 .it is a special milk for tea that enhances the tea taste like no other milk can! It is available in 375ml, 200ml, 125ml pack sizes. •
NIDO Prior to local production commencing in 1990, NIDO had been imported for roughly two decades. NIDO had established itself as the market leader in the instant powdered, full cream 'vitaminized' milk (as it is enriched with vitamins A and D) category before 1990. Presently, major efforts are directed towards expanding the powder milk market that holds the potential to grow rapidly. NIDO is available in 200g (soft pack), 500g (soft pack), and l000g (pouch) sizes that are locally produced, whilst an 1800g tin is imported.
•
GLORIA
•
Gloria full cream milk powder was launched in 1991, and is sold in bulk (25kg packs) to industrial consumers, and to end consumers per se. In 1997, GLORIA skimmed milk powder was also introduced under the GLORIA brand. 20
•
NESTLE NESVETA
Nestle Nesvita Hi- calcium low fat milk was launched in sep 2003 .it is available in sizes 500ml and 1000ml TBA slim.the main compitators and pioneer in the market is SKIMZ.it available in both powder and liquid form .it is a low fat milk less than 1% fat with no extra benefits and has an esitimated 45% share of the market. It is best suited for weight conscious people as well as those trying to maintain low cholesterol.
Nestle Milkpak Ltd. (A brief history The joint venture between Milkpak Ltd. And Nestle S.A. came about in 1988 and the company was renamed as Nestle Milkpak Ltd. Prior to that, Milkpak Ltd., produced UHT milk, butter, cream, desi ghee and fruit drinks at Sheikhupura factory. 21 branded product lines were added during 1990 to 1998. Nestle Milkpak operates the largest and an extremely efficient milk collection system in the country, which enables it to collect the highest quality milk for production of UHT and powder milks as well as other milk based products. The company voluntarily provides extension services of farmers in the area of animal husbandry and livestock breed improvement. UHT means Ultra Heat Treatment. In this process the milk passes through 140oC in 3 seconds and then immediately cooled to 20oC in the next 5 seconds, which in turn kills all the bacteria. This is the most sophisticated and advanced process in the world. At Milk Pak we use the indirect method of UHT meaning that milk is heated by steam passing through stainless steel pipes outside milk. All other brands in Pakistan use the direct method of heating that is by injecting steam in the milk, this adds water content in the milk, where as indirect heating in fact evaporates water from the milk. This is what makes Milk Pak the "Thickest Milk". FEATURES:
Consumers everywhere know that only Milk Pak is the thickest, pure and hygienic milk. Milk Pak is pasteurized, homogenized, and standardized pure UHT milk of the highest standard .the result have been very heartening as 59% respondents preferred NESTLE MILK over HALEEB .It’s a premier brand, and the choice of quality-conscious consumers who only want the best.Pack in easy to open, 6-layered Tetra Pak Brick Aseptic packaging.
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Regional Sales Offices Nestle Milkpak Ltd. has sales offices throughout Pakistan. The ten (including the federal Capital) cities in which the sales offices are located are: • • • • • • • • • •
Karachi (Sindh) Hyderabad (Sindh) Quetta (Balauchistan) Peshawar (NWFP) Gujranwala (Punjab) Faisalabad (Punjab) Multan (Punjab) Lahore (Punjab) Islamabad (Federal Capital North Outstation
Target Market Of Nestle Dairy Products: The customers of Nestle Dairy products in Pakistan are the local people with at least a little higher level of income for its milk products. By o ffering different confectionary and instant food products etc the company has tried to capture the market of children.
Milk: Milk is used in every home and all age group people drink milk so nestle target market of milk is for all age group people who have at least higher level of income.
Nestle Nesvita: Those persons who are diet conscious and want low fat milk preffer Nestle nevita they are mostly youngsters Every Day: Every day is used for tea .and it target market is mostly those people who love tea and it is used in offices, restaurants, colleges, homes.
Nido: Nido is famous in up growing children’s. So Nido target market is children’s.
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Competitors of Nestle dairy products: As nestle provide quality products .so it’s the leading company all over the world in all its products. It has also some competitors of its dairy products in Pakistan. Nestle dairy products Milk pak Nido Every day Nestle butter Nestle Pure life Yogurt Kit Kat Cereals
Competitor Haleeb,Nur pur, Olper No competitor No competitor Blue Band Butter, Haleeb Butter Aqua phena Prime, Haleeb Mars, sneaker, Cadbury No competitor
Haleeb& Olper: Haleeb and Olper are the main competitors of Nestle milk. But mostly people prefer Nestle milk pak because of its good taste and good packaging. It is also UHT treated. Nestle price is also reasonable. And quality is out c lass.
Prime: Prime is the competitor of nestle yogurt. But mostly people prefer nestle yogurt because of its good taste and packing.
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PRICE PLANNING: Global pricing policies: Apart from global coordination of prices on specific products and firms usually adopt one of the three alternative pricing policies that cut across their product lines. these are 1. Polycentric pricing 2. Geocentric pricing 3. Ethnocentric pricing Nestle use geocentric pricing policy.
Nestle Products price planning
Nestle dairy products are priced keeping in view the buying power of middleincome and high-income social classes. The cost includes the cost of manufacturing, labor, raw materials etc. The industry sales growth is largely driven by population growth as well as the amount of advertising and product innovation taking place in the industry. The company has resorted to pricing discrimination strategies to maximize the value of consumer demand Being a multinational brand, the pricing objective of Nestle is mainly to increase sales as it has already penetrated the market. Their prices are not affected by price changes by competitors, and they don’t engage in price wars. Competition is met through innovation. The prices of Nestle milk change as the product size is changed of the Product Life Cycle. And Because of the contract between the seller companies, they offer same price. So there is no skim based or penetration based pricing by company. The retail prices are different according to there size and brand. However prices have been standardized throughout Pakistan and there is no differentiation based on geographical areas. There is no change in prices according to season. It remains the same. They adopt same strategy in international marketing as in local marketing. But the prices are according to the international currency.
PROMOTION PLANNING Promotion Planning of Dairy Products:
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The promotion of Nestle Dairy product are no doubt the best of all. Its intense advertising has really captured the minds of all categories of people besides media advertising; the company has signed several agreements with different sports in order to promote. For the Advertising, the company has a policy that the commercial should best communicate its message toward its target markets. The promotional planning of Nestle milk has taken the emotions of youngsters quite successfully. Promotion is handled by the marketing department but campaigns are launched through an agency. Promotion is done through the electronic media, billboards and print media (press).
Promotion Objectives • • •
To project sales of Nestle Dairy Products To create awareness among the masses about any new product of Nestle To achieve brand loyalty
Selection of Promotion Media Selection of promotion media is done on the basis of whether the company wants: Immediate sales uplift - Achieved through television and other forms of electronic media Or Gradual sales uplift Promotion planning depends on marketing push or marketing pull strategy. Nestle milk is not considered a seasonal product in Pakistan, so they do not need to promote very much. •
•
Ad
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Nestle Advertisements on TV: Chocolate: “ Have a Break!
Have a KIT KAT”
The world primer chocolate brand creates waves in the winter season s Nestle milk pak Pakistan started aggressive marketing on KITKAT during the winter season. International TVs on several cable TV channels,heavy outdoor and attractive POS drew attention on the brand. Sale responded in very positive manner as the brand managed to penetrate into all income segments.
Dairy products: Every Day:
“Adhora Hai Jeevan Teray Binaa” -New Thematic Campaign Adhora hai Jeevan tray bina –Life is incomplete without you, was the new advertising campaign for NESTLE EVERY DAY launched in August 2003, it is the first joint campaign for both formats i.e. Liquid and powder of the brand NESTLE EVERY DAY. “Mazay Dar Chaiay Ho Gaiay” Nestle Milk Pak “ Pakka Aitebar”
Campaign
The highlight of 2003 has been the “MILK PAK Pak Aitebar” Campaing ,launched in may as an integrated campaign through TV, outdoor , Print and POS,thecampaing was instrumental in increasing the sale and market share of NESTLE MILK PAK.
“Khalis Hee Sab Khuch Hai”
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Nestle Nutrition Plan
“Nestle Introduces...Your baby’s health planner”
The Ad of Developmental nutrition plans for kids are really impressive for mothers. NIDO:
There are also so impressive ads of Nestle Nido which give your child complete nourishment in his growing years. See Him Grow
Healthy and
strong
With Nido
Nestle pure Life:
Nestle Pure Life . Pakistan’s Favorite Water.
Nestle pure life is Pakistan favorite water because it is pure, safe and healthy .its advertisement is on several cable TV channels,heavy outdoor and attractive POS .
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Sponsoring Major and Rural Sport Region
Another mode of promotion for nestle is sponsoring major and rural sport events. Milo a brand from nestle always sponsors sporting events like badminton to bowling to the Commonwealth Games. This kind of promotion will always lead to the awareness of our customers. Packaging
Since packaging is an integral part of product, nestle propose new packaging in this marketing plan that is not only attractive and durable, but also functional too. Our innovative packaging strive to ensure every product packaging guarantees freshness, safety, convenience and whenever possible environmentally friendly too. Since packaging is an integral part of our product, we propose new packaging in this marketing plan that is not only attractive and durable, but also functional too. Our innovative packaging strive to ensure every product packaging guarantees freshness, safety, convenience and whenever possible environmentally friendly too. Beyond homes, Nestle supplies its product to hotels, airlines, vending machines, quick-serve restaurants, supermarket, and retailers.
Distribution Planning They distribute there products nationally and internationally through out the world. Nestle are distributed using an indirect channel, that is, dealers. Nestle milk is sent to warehouses after manufacture. Nestle
Dealer
Retailer 28
Final Consumers
They use intensive distribution for marketing coverage. Becau se its goals are to have wide market coverage, channel acceptance and high total sales and profits. Distribution is made nationally and internationally through Motor carriers Waterways Airways Railroads Through out the country in every city and village. It includes suppliers and retailers Supply chain: There are various departments Raw material department Finished goods department From the finished goods department the product goes to the warehouses.
Export Expansion Strategy: There are two types of export expansion strategies 1. Water fall 2. Sprinkler Nestle use waterfall strategy. It moves gradually to different countries.
Export Entry Mode: JOINT VENTURES OF NESTLE Shareholders
Nestlé has about 250 000 shareholders, none of whom individually own more than 3% of the shares. As of December 31, 2003, Swiss investors held the major part of the stock (42%) followed by US citizens (22%) and British (10%), French (8%), and German (5%) shareholders.
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Unfortunately, shareholder identities are not made public under Swiss law, but we do know that Liliane de Bettencourt, heiress to the L'Oréal fortune and the richest woman in France, has a holding in Nestlé. Nestlé and L'Oréal have a close relationship dating back to a shareholder pact made in 1974. Nestlé holds a 26.4% stake in the world's largest cosmetics group and has right of first refusal over the Bettencourt family's 27.5 percent stake for 10 years, but with no obligation to buy. Whilst it is unlikely that Nestlé will take over L'Oréal in the immediate future, it could well do so in a few years. It already has cosmeceutical joint ventures with L'Oreal through Galderma and Innéov.
EU
clears
Coke
Nestle
deal
-
Coke-Nestle
joint
venture
European Union regulators have cleared plans by US firm Coca-Cola and Swiss food giant Nestle to expand an international joint venture focusing on iced teas and coffee. In a statement, the European Commission said there were no competition concerns, as the new operation would still face "strong competition brands" such as Unilever's Lipton. The new enterprise, Beverage Partners Worldwide, will be based in Zurich, Switzerland. Expanding on a previous arrangement created in 1991 for the manufacture and distribution of Nestle's Nestea brand, the new venture will increase the number of countries in which it operates to 40, from and initial 24. Coke will add its Tuan Yu Di and Yang Guang teas and Planet Java coffees to the venture, while Nestle will contribute Belte tea, which is sold in Italy. Analysts say both companies are looking to capitalise on the growing worldwide appetite for iced teas and coffees, which have shown better growth than soda in recent years.
Cereal Partners Worldwide In November 1989, Nestlé S.A. and General Mills, the Minneapolis-based maker of breakfast cereals, snacks and baking aids, formed a joint venture to produce and market breakfast cereals worldwide, with the exception of the United States and Canada. Based in Morges, Switzerland, CPW officially began operations in early 1991. General Mills’ expertise and technology, combined with Nestlé’s worldwide presence and marketing experience, quickly led to a breakthrough in Europe, which was CPW’s first target market.
NESTLE: MILKPAK The joint venture between Milkpak Ltd. And Nestle S.A. came about in 1988 and the company was renamed as Nestle Milkpak Ltd. Prior to that, Milkpak Ltd., produced UHT milk, butter, cream, desi ghee and fruit drinks at Sheikhupura factory. 21 branded product lines were added during 1990 to 1998. Nestle Milkpak operates the largest and an extremely efficient milk collection system in the country, which enables it to collect the highest quality milk for production of UHT and powder milks as well as other milk based products. The company voluntarily provides extension services of farmers in the area of 30
animal husbandry and livestock breed improvement.
Suggestions and recommendations: As Nestle is the best company allover the world but there is some recommendations and suggestions. 1. Their prices are little bit higher so they should low their prices to increase their customers. 2. About 70 % people use their products why the rest don’t use them they should conduct survey and concentrate on those facts why they are not using their products. 3. They should also improve their advertising. Their advertising doesn’t pay longterm effect in the mind of customers. 4. About 17% people are not satisfied from the taste of Nestle so nestle has to improve its taste. 5. Due to a great demand of nestle Milk pak now a days there is a shortage of nestle milk in shops sometimes they have to consider this aspect too.
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