Launching A New Product: Project of Marketing

In The Name of ALLAH The Most Beneficial, The Most Merciful.

Project of Marketing LAUNCHING A NEW PRODUCT

Presented By;

AAMIR RAZA SABEEL FARHAN

Presented To,

AMMARA SAMREEN

Sir Faheem Athar Haqqani

ZAINAB NADEEM

University of Sargodha

Group (A) M.B.A. Regular “A

1

“ACHI SEHAT KA KHAZANA, NESDAIRY KA BUTTER HI KHANA”

DEDICATION

We would like to thank our professor Mr. Faheem Athar Haqqani who was always there to help and guide us when we needed help. His perceptive criticism kept me working to make this project more full proof. We are thankful to him for his encouraging and valuable support. Working under him was an extremely knowledgeable and enriching experience for us. We are very thankful to him for all the value addition and enhancement done to me.

No words can adequately express my overriding debt of gratitude to my parents whose support helps me in all the way. Above all I shall thank my friends who constantly encouraged and blessed me so as to enable me to do this work successfully.

2


ACKNOWLEDGEMENT

“To Him belongs the dimension of the Heavens and the earth, it is He who gives Life and death and He has power over all things.” (Al-Quran)

All acclamation to Allah who has empowered and enabled us to accomplish the task successfully. First of all we would like to thank our Allah Almighty who really helps us in every problem during the project. We would like to express our sincere and humble gratitude to ALLAH almighty who’s Blessings, help and guidance has been a real source of all our achievements in our life. We would like to admit that we completed this project due to parents who pray for our success. We also wish to express our appreciation to our supervisor Mr. Faheem Athar Haqani who help us a lot and introduce us to new dimensions of knowledge. And we would like to acknowledge all our work to our parents and friends who guided to accomplish this never forgetting task. Last but not the least our team efforts, support, cooperation and encouragement showed by each members in the group with each other.

3


TABLE OF CONTENTS  Executive summary

06

 Company o Company Introduction o Mission statement o Vision statement o Background of the company o History of Nestle o History of Nestle Logo`s o Nestle brands in Pakistan

07 08 08 10 11 14 15

 SWOT analysis o Strengths o Weaknesses o Opportunities o Threats

27

 Market research o Introduction of research o Scope of the study o Limitations of the study o Research methodology o Research Conclusion

30 31 32 33 39

 Brand description o Logo o Caption statement o Key to success o Segmentation o Targeting o Positioning

41 41 41 42 43 45 46 4


 Marketing mix o Product o Price o Place o Promotion

48 50 61 65 69

 Conclusion

76

5


EXECUTIVE SUMMARY

T

his project is about new product development by Nestle. Nestle has the distinction of being largest in innovations strategies. We have launched a new brand under corporate brand Nestle..

“As the worlds number one f ood company, our challenge goes beyond provi ding saf e, bygieni c packaged f ood.Our the years f ood product s have evolved f rom mere product s to a statement of lif estyle. Nestle brands aredesi gned to suit your lif est yle and your needs. We have int roduced our product aft er a co mplet e research o f market we find out t hat peoples are willing t o buy our product t hat we have launched in a sophist icat ed packaging wit h reasonable pr ice. Most peoples r espo nds in a much bet t er way about our product . Aft er free sample dist r ibut ion we have gained a co mpet it ive edge. Now we are int roducing a new br and na med ―NESDAIRY‖ . Under t his brand we are launching a new product ―KNI FE & BUTER‖. About which we co mplet ely defined as under, It has many competi tive advan tages tha t wi ll ensure profitability and its a ccepta nce in s ociety.  The mos t impor tan t fea ture o f ou r new pr oduct is tha t it is qualityconsious. which will satisfy the need s o f heal th con sci ous pe ople. 

We recognize that our mo st impor tan t j ob i s to provide o ur customers, feeling them to have an ex cellent bal a nced diet.

“Our main focus is to satisfy our customers”

6


INTRODUCTION OF NESTLE Nestlé is the world's leading food company. Since it was set up by Henri Nestlé to provide an infant food product, it has been associated with providing high quality, customer and consumer focused products. In recent years it has focused on becoming a nutrition, health and wellness company. Wellness is about supporting people to live more healthy lives e.g. through the development of probity yoghurts that help maintain the balance of the digestive system. The company is a world leader in research and development, and Nestlé's scientists work in all areas to create healthier and more nutritious foods.

7


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 need`s and creating solutions, nestle contributes to your well-being and enhances your quality of life”.

VISION AND STRATEGY The Nestlé global vision is to be the leading health, wellness, and Nutrition Company in the world. Nestlé Pakistan subscribes fully to this vision. In particular, they envision to:  Lead a dynamic motivated and professional workforce – proud of its heritage and bullish about the future.  Meet the nutritional needs of consumers of all age groups – from infancy to old age, from nutrition to pleasure, through an innovative portfolio of branded food and beverage products of the highest quality.  Deliver shareholder value through profitable long-term growth, while continuing to play a significant and responsible role in the social, economic and environmental sectors of the country.  Nestlé has profitable and diversified high quality food and beverage product portfolio, delivering 60:40+ advantage to consumers, available across all sales channels.  Nestlé brands are the preferred choice in their categories. Consumer insight drives all aspects of their marketing and communication efforts. 8


 Their communications to the consumer are relevant, cutting-edge, and adhere to the highest standards of responsible communication.  Nestlé Company is seen as the No. 1 career destination for talented, motivated and ambitious professionals.  Their result-oriented organizational structure ensures effective communication and empowered self-management.  Nestlé milk collection and agri services will continue to play the primary role in development of the dairy sector in rural Pakistan.  Their proactive innovation and renovation culture is the key to their success in the marketplace.  Fully integrated systems (Nestlé Pakistan, suppliers, customers) ensure efficient business processes.  Non-strategic activities and products are outsourced or discontinued.

9


BACKGROUND OF THE COMPANY Nestlé Company had started off from a single man's idea, and developed into a giant corporation. In 1866 Henri Nestlé, a pharmacist, developed a milk food formula for infants who were unable to tolerate their mother milk (Nestle.com). His product became a success, and it created a demand throughout Europe. As Nestlé’s popularity grew more businesses wanted to merge and become partners with Henri Nestlé's business. From 1866 to 1947 the Nestlé Company had gone through several name changes. In 1905, Anglo-Swiss Condensed Milk Co. and Farine Lactee Henri Nestlé merged, and the company’s name became Nestlé & Anglo-Swiss Condensed Milk Co. Then in 1929, Peter-Cailler-Kohler Chocolates Suisse’s S.A. merged with the company. The name was then changed to Nestlé & Anglo-Swiss Holding Co. Ltd, on November 27, 1936. In December 1947, Co. acquired all the shares capital of the Alimentana S.A. Company in exchange for fifteen Nestlé shares and fifteen Unilac shares for each of Alimentana S.A. share, so this point the name was at Nestlé Alimentana S.A. And then finally, the last name change that the company would endure was in 1977, where it adopted the name Nestlé SA (Mergent Online). Along the way Nestlé’s company remain successful, which allowed them expand to new region and territories throughout the world, making them the world’s biggest food and beverage company. Nestlé’s headquarters are located in Vevey, Switzerland, but the Nestlé Company has factories or operation in almost ever country in the world. In addition, to the increase in the size of the Nestlé Company.

10


HISTORY OF NESTLÉ 1866-1905 The key factor which drove the early history of the enterprise that would become The Nestlé Company was Henri Nestlé's search for a healthy, economical alternative to breastfeeding for mothers who could not feed their infants at the breast. Nestlé’s first product was called Farine Lactée (―corn flour gruel‖ in French) Henri Nestlé. Nestlé's first customer was a premature infant who could tolerate neither his mother's milk nor any of the conventional substitutes, and had been given up for lost by local physicians. 1905-1918 The Company formed by the 1905 merger was called the Nestlé and Anglo-Swiss Milk Company. By the early 1900s, the Company was operating factories in the United States, Britain, Germany and Spain. Condensed-milk exports increased rapidly as the Company replaced sales agents with local subsidiary companies. In 1907, the Company began full-scale manufacturing in Australia, its second-largest export market. Warehouses were built in Singapore, Hong Kong, and Bombay to supply the rapidly growing Asian markets. 1918-1938 The end of World War I brought with it a crisis for Nestlé. Government contracts dried up following the cessation of hostilities, and civilian consumers who had grown accustomed to condensed and powdered milk during the war switched back to fresh milk when 1938-1944 The effects of the onset of World War II were felt immediately by Nestlé. Profits dropped from $20 million in 1938 to $6 million in 1939. Neutral Switzerland became increasingly

11


isolated in a Europe at war, and the Company transferred many of its executives to offices in Stamford, As in World War I, production and sales rose in the wartime economy: Nestlé's total sales jumped from $100 million in 1938 to $225 million in 1945. As the end of the war approached, Nestlé executives found themselves unexpectedly heading up a worldwide coffee concern, as well a company built upon Nestlé's more traditional businesses. 1944-1975 The close of World War II marked the beginning of the most dynamic phase of Nestlé's history. Throughout this period, Nestlé's growth was based on its policy of diversifying within the food sector to meet the needs of consumers. Dozens of new products were added as growth within the Company accelerated and outside companies were acquired. 1975-1981 After the agreement with L'Oréal in 1974, Nestlé's overall position changed rapidly. For the first time since the 1920s, the Company's economic situation deteriorated as the price of oil rose and growth in the industrialized countries slowed. Nestlé's rapid growth in the developing world partially offset a slowdown in the Company's traditional markets, but it also carried with it the risks associated with unstable political and economic conditions. To maintain a balance, Nestlé made its second venture outside the food industry by acquiring Alcon Laboratories, Inc., a U.S. manufacturer of pharmaceutical and ophthalmic products. 1981-1995 Under a new Chief Executive Officer, Helmut Maucher, Nestlé approached the 1980s with a renewed flexibility and determination to evolve. The Company's strategy for this period was twofold: improve its financial situation through internal adjustments and divestments, and continue its policy of strategic acquisitions. Thus, between 1980 and 1984, the Company divested a number of non-strategic or unprofitable businesses. At the same time, Nestlé managed to put an end to a serious controversy over its 12


marketing of infant formula in the Third World. This debate had led to a boycott of Nestlé products by certain lay and religious organizations. This issue is still alive in some quarters, but there is no longer any significant boycott activity. 1996-2002 The first half of the 1990s proved to be a favorable time for Nestlé: trade barriers crumbled and world economic markets developed into a series of more or less integrated trading areas. The opening of Central and Eastern Europe, as well as China, and a general trend towards liberalization of direct foreign investment was good news for a company with interests as farflung and diverse as Nestlé. While progress since then has not been as encouraging, the overall trends remain positive. In July 2000, Nestlé launched a Group-wide initiative called GLOBE (Global Business Excellence), aimed at harmonizing and simplifying business process architecture; enabling Nestlé to realize the advantages of a global leader while minimizing the drawbacks of size. 2003 and Now The year 2003 started well with the acquisition of Mövenpick Ice Cream, enhancing Nestlé's position as one of the world market leaders in this product category. The years that followed saw consistent business growth through innovation and renovation of the products. Nestlé made three significant acquisitions in 2007. The first was Novartis Medical Nutrition which put Nestlé in a a strong number

two

position

globally

for

healthcare

nutrition.

13


HISTORY OF THE NESTLÉ LOGO The Nestlé logo was launched by Henri Nestlé in 1868 on the basis of the meaning of his name in German, i.e. little nest, and of his family emblem.

Henri obtained

a

15-year

French

patent

for

his

logo in

1868.

After he retired, it was registered in Vevey in 1875 by the new owners of his company.

In 1938, the traditional nest design was combined with the "Nestlé" name to form what is called the combined mark.

In 1966 the design was simplified. In 1988, the worm in the mother bird's beak was removed and the fledglings became two instead of three. It is said that it was meant to better illustrate the activities of the company, no longer active only in nutrition, and to reflect the average modern family of two children.

The logo we know now has just been simplified. The tree is supposed to represent an oak and the bird’s thrushes.

14


Nestlé is a multinational packaged food company founded and headquartered in Vevey, Switzerland. It has also its branches in Pakistan.

NESTLE PRODUCTS Nestlé has a wide range of products across a number of markets including coffee (Nescafe), Water, other Beverages, Ice cream, Infant foods, performance and healthcare nutrition, seasonings, frozen and refrigerated foods, confectionery and pet food.

15


16


17


18


19


NESCAFE® CLASSIC

20


21


22


23


24


25


26


SWOT ANALYSIS Swot analysis shows the strengths and powers of the company. We will analyze the internal and external powers and weaknesses. Mostly some companies have strong internal structure and some have great outdoor power. NESTLE has a great internal structure. And we are launching our new brand under that corporate brand. And we can easily locate our product under that company. Now, we will discuss some points of the swot analysis of nestle. And draw a complete product launching structure on the basis of that summary.

FLOW CHART OF SWOT ANALYSIS:

Now, we are discussing all points of swot analysis under separate heads. 27


STRENGTHS: Nestle is the world's largest food and beverage company in terms of sales. Due do strong brand name our product will gain a wide consumer acceptance from all over the Pakistan. The biggest strength would be the strong brand name the risk in investing would be reasonable very low. We will set a complete transparent manufacturing system for customer satisfaction in terms of hygiene. We will strengthen our product by broad distribution network by increasing the capacity for innovation which will lead to an improvement in sale growth. We will be organizing a team which will inspect and observe the accumulation (stock) on daily bases to prevent any damages occurring and also in order to keep the inventory fresh. We will make sure that we are not having surprise shortage, weather it is winter or summer no matter what circumstances are. Further strength would be. Strengths: Skilled labor. Educated staff. Large number of offerings. Pre purchase virtual display. Arrangement of events. Good background of the company. Easy to approach outlets. Physical evidence Economical Pure butter in quality Strong brand name

Weakness:

28


The main weakness of our product is the lack of an established good standing. Our competitors have been around for decades and therefore have a loyal base. The second biggest weakness would be the lack of capital, establishing such an enormous and gigantic plant there will be a need of acquiring financial support in terms of loans from the bank. Spending millions in a strong brand is no guarantee to wealth. It may the safest way to get into the business, but it is not necessarily the cheapest. Further weakness would be. Weaknesses: Small target market. Lack of awareness among the target market. Dependency on others (govt. & sponsors) for the arrangement of events. Communication is week

Opportunities: The biggest opportunity would be considered geographically. Pakistan is situated in an area where we have summers most of the time. People love as well as enjoy eating ice-cream in this season. Due to strong brand name in the market our product has a great potential of earning profits. To make the product successful we will be utilizing the highest degree of technology in calculating customers’ satisfaction as well as their feed back. Gaining initial success the next step would be opening a par lour where people can enjoy all the flavors under one roof. Further opportunities would be. Opportunities: Increasing interest of people Few and weak competitors Concentrating on these areas can increase sales Increase in product line.

Threats: 29


The biggest threat to are product is the fierce competition in the local market. Walls by (unilever) are one of the biggest names in ice cream which not only distribute their products nation wide but also had a total control on the local market. The second thread that our product will face would be Shezan, Gourmet and many others small bakeries which have their influence on the market. Threats: Major player may enter target market Legal and ethical issues. Market segment growth could attract new entrants. Economic slow down can reduce demand. Missing the targeted customers Allergic reaction Segments are being shared by competitors Uncertain conditions will effect the sales (diseases of animals) Under cutting by competitors. Competitors

INTRODUCTION OF RESEARCH In this research we have introduced a new brand ―NESDAIRY‖ and a product under this brand ―KNIFE & BUTTER‖ which is available in different sizes. During this research I have interacted with peoples of different cities to conduct a survey that which kind of quality and taste they like. We collected suggestions from different peoples of some main cities and rural areas. The reports of surveys are pasted below. After this research I came to know how people perceives these products on the variables like price, quality, advertisement, satisfaction, taste, packaging, brand loyalty etc. I also came to know which particular brand of butter is most preferred by peoples of different age groups. In this research I have surveyed that how frequently and how much butter they consume, whether they buy small, big or family pack. Trend of 30


ongoing changes in their likings has been shown in the report. In this report I have tried to explain the entire research and facts product wise.

CONSUMER PREFERENCE All marketing starts with the consumer. So consumer is a very important person to a marketer. Consumer decides what to purchase, for whom to purchase, why to purchase, from where to purchase, and how much to purchase. In order to become a successful marketer, he must know the liking or disliking of the customers. He must also know the time and the quantity of goods and services, a consumer may purchase, so that he may store the goods or provide the services according to the likings of the consumers. Gone are the days when the concept of market was let the buyer’s beware or when the market was mainly the seller’s market. Now the whole concept of consumer’s sovereignty prevails. The manufacturers produce and the sellers sell whatever the consumer likes. In this sense, “consumer is the supreme in the market”.

The study of the consumer preference not only focuses on how and why consumers make buying decision, but also focuses on how and why consumers make choice of the goods they buy and their evaluation of these goods after use. So for success of any company or product promotion it is very necessary to depart its concentration towards consumer preference.

SCOPE OF THE STUDY As learning is a human activity and is as natural, as breathing. Despite of the fact that learning is all pervasive in our lives, psychologists do not agree on how learning takes place. How individuals learn is a matter of interest to marketers. They want to teach consumers in their roles as their roles as consumers. They want consumers to learn about their products, product attributes, potential consumers benefit, how to use, maintain or even dispose of the product and new ways of behaving that will satisfy not only the consumer’s needs, but the marketer’s objectives. 31


The scope of my study restricts itself to the analysis of consumer preferences, perception and consumption about butter products. There are many other brands of butters available but my study is limited to two major players leaving behind the others. The scope of my study is also restricts itself to Pakistan only.

OBJECTIVES OF THE STUDY

This project is based on the comparative study consumer behavior towards Nesdairy and Knife & Butter. And Objectives of the study are:  The other objective is to know about the customer satisfaction level associated with the product and the customer preference level.  To increase customer satisfaction and recapture the market share by fulfilling the customer needs.  To study the factors affecting the consumption pattern.

LIMITATIONS OF THE STUDY In attempt to make this project authentic and reliable, every possible aspect of the topic was kept in mind. Nevertheless, despite of fact constraints were at play during the formulation of this project. The main limitations are as follows:  Due to limitation of time only few people were selected for the study. So the sample of consumers was not enough to generalize the findings of the study.  The main source of data for the study was primary data with the help of self-administered questionnaires. Hence, the chances of unbiased information are less.  People were hesitant to disclose the true facts.  The chance of biased response can’t be eliminated though all necessary steps were taken to avoid the same. 32


RESEARCH ANALYSIS

Market Condition:  Pakistan is a third world country therefore its market is not a stable one. This survey was done in January 2009 when inflationary conditions in Pakistani market were not that severe, therefore this report should be viewed in context of the market conditions which were prevailing in January 2009.  During the past one decade Pakistani people got rich due to much privatization and foreign investment, coupled with property and stock exchange boom. Now people have money to spend and their affordability has increased dramatically. Therefore we launched a brand NESDAIRY keeping in mind the per capita purchasing power, and set their prices at a premium since people have trust in nestle therefore Nesdairy will earn good profit in Pakistan. “Besides the increase in per capita purchasing power, awareness increased among people of Pakistan regarding to the health issues. People are now health conscious which helped Nesdairy to flourish in Pakistan.”

RESEARCH METHODOLOGY This chapter describes the methodology of the study. This project is based on information collected from primary sources. After the detailed study, an attempt has been made to present comprehensive analysis of consumption of Knife & Butter consumed by the people. The data had been used to cover various aspects like consumption, consumer’s preference and customer’s satisfaction regarding Knife & Butter.

Survey design:

33


The study is a cross sectional study because the data were collected at a single point of time. For the purpose of present study a related sample of population was selected on the basis of convenience.

Sample Size and Design: A sample of 100 people was taken on the basis of convenience. The actual consumers were contacted on the basis of random sampling.

Research Period: Research work is only carried for 2 or 3 weeks.

Research Instrument: This work is carried out through self-administered questionnaires. The questions included were opening ended, dichotomous and offered multiple choices. Data Collection: The data, which is collected for the purpose of study, is divided into 2 bases:  Primary Source: The primary data comprises information survey of ―Comparative study of consumer behavior towards Knife & Butter. The data has been collected directly from respondent with the help of structured questionnaires.  Secondary Source: The secondary data was collected from internet, References from Library.

Data Analysis: The data is analyzed on the basis of suitable tables by using mathematical techniques. The technique that I have used is bar technique.

34


LIKING FOR THE “KNIFE & BUTTER” Table: 1

Liking for the “Nesdairy”

Yes

No

Number of Respondents

95

5

Number of Persons

Liking For the Knife & Butter"

100 80 60 40 20 0

95

Yes No

5 Response

1

35


Chart: 1

From the above analysis of the given sample of 100 respondents it is concluded that out of 100 people 95 people likes to use Knife & Butter while only 5 people don’t prefer to use Butter.

DIFFERENT AGE GROUPS Table: 2 AGE GROUPS

0-10

10-20

20-30

ABOVE 30

NUMBER OF

8%

34%

30%

28%

RESPONDENTS

FACTOR`S GIVING SATISFACTION TO CONSUMERS Table: 3 FACTORS

GRAND TOTAL

AVERAGE

51%

4.81

1

PRICE

10%

3.6

4

QUALITY

6%

3.86

2

PACKAGING

54%

3.56

5

COLOR

25%

3.49

7

FLAVOR/TASTE

RANK

36


BRAND

48%

3.77

3

IMAGE

34%

3.45

8

SHAPE

42%

3.52

6

According to the above analysis it is concluded that on an average people are most satisfied with the flavor/taste of a chocolate followed by quality and brand. It is surprising to know that although people are satisfied with quality but unsatisfied with the quantity.

CONSUMER’S BRAND LOYALTY Table: 23 BRAND LOYALTY ACTIONS

NUMBER OF RESPONDENTS

POSTPONE YOUR PURCHASE

26%

SWITCH OVER TO OTHER BRANDS

24%

GO TO OTHER SHOP FOR SEARCH

45%

OF PREFERED BRAND

Number of consumers

Brand Loyalty 50 40 30 20 10 0

45 Postpone Purchase

26

24

Switch Brand Search in other Shop

1 Action of Consumers in absence of Prefered Brand

37


Chart: 3 According to the above analysis it is concluded that mostly people are loyal to the brand as in the absence of availability of their preferred brand mostly people like to search for it or they are ready to postpone their purchase.

REACTION OF CONSUMERS IF NEW BRAND IS INTRODUCED Table: 24 SHIFT TO NEW BRAND OF THE


PREFERED PRODUCT NO, NOT AT ALL

35

MAY CONSIDER

27

NO, SHALL NOT

4

CAN’T SAY

29

Number of Consumers

Reaction of consumers if new brand is introduced 40 35 30 25 20 15 10 5 0

35 29

27

No, Not at all May Consider Shall Not Can't Say

4 1

Reactions

Chart: 4

38


According to the above analysis it is concluded that mostly people are addicted to the same flavor or taste and they don’t want to change it as out of 95 respondents 35 are not ready to try new brand at any cost.

REASONS FOR NOT SWITCHING OVER TO OTHER BRANDS All the consumers why they continue to buy the old brand gave various important reasons. The most important reasons given by the consumers were: o Taste/Flavor o Brand o Image o Quality o Packaging

SEARCH FINDINGS Consumer research: Consumer research deals with consumer and their problems and solution to the problems. In this I came to know about the consumers need and expectation levels regarding products and ascertainable levels of consumer satisfaction.

Product research: Under product research I came to know about the modification which consumers wants as to the quality, packing, shape, color, and quantity etc of their favorite brand.

Pricing research:

39


This includes ability to consume, to pay for the product, how much a person can spend on his/her favorite product. In this I have tried to find out consumer’s price expectations and reactions.

Advertising research: Under

this

I

have

concluded

that

whether

the

advertisement appeals the consumers or not. This also includes evaluating and selecting the proper media-mix and measuring advertising effectiveness.

RESEARCH CONCLUSION A survey of the people has been conducted to know the liking pattern of Knife & Butter. It is observed that overall people like to use Nesdairy. It is concluded that mostly people preferred our product due to its taste, quality and image and due to its hard form. Some people often like to have Butter with good quality and taste so they are going towards Knife & Butter. It is thus concluded from the facts collected that mostly people refer to buy big pack of their favorite Butter, and sometimes some of them go for small pack.

40


BRAND DESCRIPTION NESDAIRY is our brand which is launched under a corporate brand NESTLE. This is the maximization in product line width of our company.

Brand logo:

Caption statement: Our band slogan is, “GOOD FOOD, GOOD LIFE” “ACHI SEHAT KA KHAZANA, NESDAIRY KA BUTTER HI KHANA”

KEY TO SUCCESS OF NESDAIRY Nesdairy has four pillars of strength these are operating as a key to success. Excellence innovation and renovation product availability communication

41


 Meet the nutritional needs of consumers of all age groups – from infancy to old age, from nutrition to pleasure, through an innovative portfolio of branded food and beverage products of the highest quality.  Their proactive innovation and renovation culture is the key to their success in the marketplace.  Fully integrated systems (Nestlé Pakistan, suppliers, customers) ensure efficient business processes.  Non-strategic activities and products are outsourced or discontinued.  Their communications to the consumer are relevant, cutting-edge, and adhere to the highest standards of responsible communication.  Their result-oriented organizational structure ensures effective communication and empowered self-management. Nestle do cares about its employees that is the reason it has been a successful company to retain brilliant, confident, genius and hardworking employees which is the greatest strength of nestle that is the people who work for it. Management has skills and experience in a variety of areas. Trevor Clayton the managing director of nestle Pakistan 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.‖ And 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.‖ Nestle tries to take the mentality and customs of individual countries into account, but there are some general guidelines that are applied everywhere.

42


SEGMENTATION Market segmentation Dividing a market into smaller groups with distinct needs, characteristics or behaviors who might require separate products or marketing mixes. We have selected some groups from whole market. Now we are going to target these customers. We have divided the customers in different groups according to: 1. Segment size 2. Segment structure attractiveness 3. Company objectives and resources Segment size: All the people living in cities and students either they are living in their homes or in hostels according to our thinking and foresightedness above mentioned people are included in our segment size. These all people are our potential customers Segment structure attractiveness Our segment structure is based on household of cities and students who are living in hostels are our actual target. We are trying to build and retain customers for our new brand which we are going to launch in Pakistan. We have lot of support from our old customers who are using our other products and they will also purchase our knife and butter having brand Nesdairy. This brand will create values for customers and also get value from customers in return. It might be in shape of brand loyalty, goodwill and profit. We are taking into account the requirements of our potential and old customers. We are going to fulfill the requirements of our customers by launching the knife and butter with brand of Nesdairy. Company objectives and resources Our company is serving people through our products in many countries, so our objectives are to create better relationships with customers, to retain the customers, create opportunities for the company to make customers. Along with these objectives the main and sole objective is to earn profit with reasonable margin. Our company has much more resources as compared to our all competitors in the world. We can invest money, launch brands and products and advertise our newly launched products and brands and old brands also. 43


We are introducing new technology as we require for new products (knife and butter). We made the market segments on the following basis: Density Age Gender Income Family size Family life cycle Occupation Education Social classes Life style Personality Benefits

44


TARGETING Target Market A set of buyers sharing common needs or characteristics that the company decides to serve. Targeting market The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter. We will target the following customers: Young boys and girls Households Peoples belongs to middle class Student of colleges and universities Peoples want a new and healthy butter.

45


POSITIONING In marketing, positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. It is the 'relative competitive comparison' their product occupies in a given market as perceived by the target market.

Positioning process Generally, the product positioning process involves: We want to capture the mind of customers. We have collected information from a sample of customers about their perceptions of each product on the relevant attributes We have determine each product's share of mind We have determine each product's current location in the product space We have determine the target market's preferred combination of attributes (referred to as an ideal vector) Examine the fit between: o The position of our product o The position of the ideal vector. The process is similar for positioning your company's services. Services, however, don't have the physical attributes of products - that is, we can't feel them or touch them or show nice product pictures. So you need to ask first your customers and then yourself, what value do clients get from my services? How are they better off from doing business with me? Also ask: is there a characteristic that makes my services different? Write out the value customers derive and the attributes your services offer to create the first draft of your positioning. Test it on people who don't really know what you do or what you sell, watch their facial expressions and listen for their response. When they want to know more because you've piqued their interest and started a conversation, you'll know you're on the right track. Product Position:

The way the product is defined by consumers on important attributes .The place the products occupies in consumers minds relative to competing products. We are going to launch positioning strategy. 46


Through unique attributes Through competitive advantage Less prices Effective promotion Intensive distribution Quality products Customers research Attractive packaging

Knife and Butter Attributes:

Our product is a quality product. It is very delicious that’s why it is its feature. Style of our product is rectangular shaped with cream color’s for as design is concern its ingredient`s are natural. Because we extract it from milk.

Core Benefit:

The purpose of our product is nutrition. We are going to launch our product in three different sizes which can serve our target customers having distinct needs. Knife and butter is packed in a sophisticated packing. Its expiry date is 30 days after manufacturing. We hope that this new brand will also get positive response from our customers. Blue band and Haleeb butter are our competitors in this regard but by adding attractive and different attributes to this product we can achieve our goals. Our price strategy , place strategy and promotion strategies are very effective and will differentiate our product from our competitors. Our logo, caption statement, brand name and color combination are very attractive. We hope that we will be succeeded in this goal.

47


MARKETING MIX

Marketing mix is the combination of elements that you will use to market your product. There are four elements: Product, Place, Price and Promotion its simple! You just need to create a product that a particularly group of people want, put it on sale some place that those same people visit regularly, and price it at a level which matches the value they feel they get out of it; and do all that at a time they want to buy. Then you've got it made! You have gotten a rough idea about the market situation and the possible positioning of your product. Of course, it's far to be sufficient. Now, you must write your detailed planning. It means that brainstorming is ended and that you have to go to the specifics in examining and checking the entire hypothesis you had made in the preceding chapters. You will use the marketing mix. There's a lot of truth in this idea. However, a lot of hard work needs to go into finding out what customers want, and identifying where they do their shopping. Then you need to figure out how to produce the item at a price that represents value to them, and get it all to come together at the critical time.

MARKETING TOOL

48


The marketing mix and the 4 Ps of marketing are often used as synonyms for each other. In fact, they are not necessarily the same thing. "Marketing mix" is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. The 4 Ps is one way - probably the best-known way - of defining the marketing mix, The 4Ps are: Product (or Service) Place Price Promotion

The marketing mix is a good place to start when you are thinking through your plans for a product or service, and it helps you avoid these kinds of mistake.

CREATE A MARKETING MIX

PRODUCT

PRICE

PROMOTION

PLACEMENT

Marketing-mix planning

We have developed a strategy; a company must then decide which tactics will be most effective in achieving strategy goals. Tactical marketing involves creating a marketing mix of four components—product, price, place, promotion—that fulfils the strategy for the targeted set of customer needs.

P`S OF MARKETING MIX There are four p’s of marketing mix. As given below Product Price Place Promotion 49


PRODUCT

Products come in several forms. Consumer products can be categorized as convenience goods, for which consumers are willing to invest very limited shopping efforts. Thus, it is essential to have these products readily available and have the brand name well known. Specialty goods are those that are of interest only to a narrow segment of the population—e.g., drilling machines. Industrial goods can also be broken down into subgroups, depending on their uses. It should also be noted that, within the context of marketing decisions, the term product refers to more than tangible goods—a service can be a product, too.

OUR PRODUCT

Our product is high in providing quality, taste and good health. We are the only one in local market providing Butter as no one ever does in Pakistan where consumers may choose from whole market’. A large variety of modes manufactured by a single brand NESTLE. “Anything that is produced, whether as the result of generation, growth, labor, or thought, or by the operation of involuntary causes; as, the products of the season, or of the farm; the products of manufactures; the products of the brain.”

50


‖The word product qualifies a marketing concept. A product is more than a person, place or thing. Nothing is more important to a marketing strategy than the "product concept‖. Aggressive marketers believe that continuous product development is the most important of all strategic marketing activities.

BRAND NAME Our brand name NESDAIRY has a direct relation with food and beverages as the name comes in mind the person things of nothing but a quality product. The brand name is easy to read and pronounce at the same time stylish and attractive. And the corporate brand of that has a great significance in the market. Features: Initially our features include services like sending our representatives to the door steps of interested consumers (target market), answering their concerns, and telling them what we have for them. And how we can satisfy them in future and remain providing services throughout life. Quality: We will assure our customers about providing quality services and make sure that the inventory we provide are durable, healthy, fresh and long lasting. Our quality of service will help consumers develop trust in us. We believe in quality and that’s our aim we want to achieve. Quality products are required in every where in current conditions. Only quality is that feature that goes throughout and build goodwill in market. Styling: Style and catchy designs are the most important aspects of our product. We will help our consumers feel special and find the product healthful. Our dairy products are of good quality and health fresheners’. Variety:

51


The variety is our aim we want to achieve. And we believe in variety. Another feature of our product is variety and flexibility of products provided. We have the availability of large variety of taste as compared to different brands. Our products are available in different sizes like that. Single size Middle size

ACTUAL PRODUCT We are launching a new product under a new brand name NESDAIRY. Our product name is ―KNIFE & BUTTER‖. Nestle is the corporate brand of that company and have large number of customer based services. That it is providing over a long period of time. This is a new launch of that companies product and we have attain a lot a good views from our market research that we have made in the different areas of the country. Your market research data will be able to look more closely at what your market want and then look at your products to see if they are satisfying your customer's needs. Examine your packaging design, materials used, size and quantity. By analyzing the market and its requirements, you will be able to change the product or develop the product in order to match those requirements of the people you are aiming at. You also need to remember that your customer's needs are likely to change and therefore your products should constantly change to reflect each market change, if you ignore these changes your products will no longer be needed or desired by your target customers. The only way you will be able to do this is to track your products and track how your customers are still receiving your products and services, balancing the subtle changes as they occur.

52


Our products will include: Keeping in mind the taste of individuals. Modifying our products by new innovations every year. Giving best taste at best affordable prices. 53


Selection of appropriate ingredients, We give desired consumers perception.

Key facts Vitamin A helps maintain good vision and healthy skin. Vitamin B1 helps to boost energy in your body Vitamin B2 provides energy from carbohydrates Vitamin B6 helps nerves and forms red blood cells Vitamin D is good for bones and teeth

FEATURES OF “KNIFE & BUTTER”

Attractive Packaging Brand Structure Price Image\positioning Differentiation Competition

QUALITY OF “KNIFE & BUTTER”

A good product makes its marketing by itself because it gives benefits to the customer. We can expect that you have right now a clear idea about the benefits your product can offer.

The designing The packaging The safety The green

The design: 54


It can be a decisive advantage but it changes with fads. For example, a fun board must offer a good and fashionable design adapted to young people. The packaging: Our product is providing a better appearance and a convenient use. In food business, products often differ only by packaging. The safety: According to its packaging it is safe in many ways. It does not concern fun board but it matters very much for products used by kids. The green: Our product provide green environment. A friendly product to environment gets an advantage among some segments.

Branding strategy of Nesdairy: Nesdairy brand name presents a message of caring which make it distinctive and attractive than other companies. Nesdairy brand is ―good food, good life‖. The message of family protection is enough to get the attraction of customer. The Nesdairy brand name is easy to understand & translate. It is easy to pronounce and it is also easy to recognize. Another message in brand name is given to customer to preserve their families from different deceases.

Labeling strategy of Nesdairy: Nesdairy ―KNIFE & BUTTER‖ label gives all information about our product like ingredients which are used in it and all instructions regarding product. People can easily understand what kind of product we are offering. And easily they can afford it.

Product development: The first marketing-mix element is the product, which refers to the offering or group of offerings that will be made available to customers. In the case of a physical product, such as a car, a company will gather information about the features and benefits desired by a target market. Before assembling a product, the marketer's role is to communicate customer desires to the engineers who design the product or service. This is in contrast to past practice, when engineers designed a product based on their own preferences, interests, or expertise and then expected 55


marketers to find as many customers as possible to buy this product. Contemporary thinking calls for products to be designed based on customer input and not solely on engineers' ideas.

Packaging and branding: a means of distinguishing one firm's products or services from another's and of creating and maintaining an image that encourages confidence in the quality and performance of that firm's products or services

PRODUCT LIFE CYCLE If we look Nesdairy ―KNIFE & BUTTER‖ product life cycle than it easy to judge that it is at introduction stage. Because Nestle is the market pioneer and at this stage its profit is negative or low due to low sale and high distribution and promotion expenses. Other major reason to be at introduction stage is unawareness in rural areas. The people are not aware to the pure life water that’s why their sale is low. They can brought change in product life cycle by effective promotion, by formulating new price strategies etc.

Nesdairy KNIFE & BUTTER

(Product)

Introduction growth

maturity

decline

KNIFE & BUTTER (life-cycle) Phases Knife & Butter also go through what is known as a life cycle or phase. When exploring what mix is best suited to your product, you should also consider where in the life-cycle your products lie: 56


Introductory Phase:

If you are releasing a brand new product or service then it will be a baby in the market and will need to be introduced to your market. How you price, promote and place this into the market place will need careful consideration. Growth Phase:

If your product or service has been enjoying being the only one on the market, you may have noticed that others are also joining in and entering a competitive product or service and this will have an affect of the healthy sales you might be enjoying at the moment. How you react to this will have an impact on the survival of your product - Will you drop the price to compete, will you change the way in which you promote it, will you change the distribution method? Maturity Phase:

If your product is one of many competing products, then you can consider that your product is a mature one. If this is the case then you have to take care that interest for your product is not lost. Maturity of a product is a dangerous time and it could get swallowed up by your competitors. As with a product in the growth part of the life-cycle - Will you drop the price to compete, will you change the way in which you promote it, will you change the distribution method? Decline Phase:

Perhaps you have noticed that one of your products is losing its appeal; sales or interest might have dropped. If this is the case, your product may be in decline and if you are not careful it may die. These parts of the cycle need careful consideration. You might decide, enough is enough, and remove it from your shelves or you could re-invent it by changing by packaging or product name. Take a close look at your market research data “Depending which phase you felt your products were at - introductory, growth, maturity or decline, you would be able to make further decisions at to what price to charge, where to sell your product.”

57


The Marketing Mix: Product

New product development:

New product development tends to happen in stages. Although firms often go back and forth between these idealized stages, the following sequence is illustrative of the development of a new product: New product strategy development. Different firms will have different strategies on how to approach new products. Some firms have stockholders who want to minimize risk and avoid investing in too many new innovations. Some firms can only survive if they innovate frequently and have stockholders who are willing to take this risk. For example, Hewlett-Packard has to constantly invent new products since competitors learn to work around its patents and will be able to manufacture the products at a lower cost. Idea generation. Firms solicit ideas as to new products it can make. Ideas might come from customers, employees, consultants, or engineers. Many firms receive a large number of ideas each year and can only invest in some of them. Screening and evaluation: Some products that after some analysis are clearly not feasible or are not consistent with the core competencies of the firm are eliminated. Business analysis. Ideas are now exposed to more rigorous analysis. Profit projections, risks, market size, and competitive response are considered. If promising, market research may be done. Development: The product is designed and manufacturing facilities are planned. 58


Market testing: Frequently, firms will try to ―test‖ a product in one region to see if it will sell in reality before it is released nationally and internationally. There is a lesser risk if the firm only commits money to advertising and other marketing efforts in one region. Retailers will also be more receptive in other parts of the country and world if it has been demonstrated that the product sold well in one region. The firm may also experiment with different prices for the product. Commercialization: Facilities to manufacture the product on a larger scale are now put into operation and the firm starts a national marketing campaign and distribution effort.

DIFFUSION OF INNOVATION: The diffusion of innovation refers to the tendency of new products, practices, or ideas to spread among people.

Usually, when new products or ideas come about, they are initially only adopted by a small group of people. Later, many innovations spread to other people. The bell shaped curve frequently illustrates the rate of adoption of a new product. Cumulative adoptions are reflected by the S-shaped curve.

59


The saturation point is the maximum proportion of consumers likely to adopt a product. In the case of refrigerators in the U.S., the saturation level is nearly one hundred percent of households. The figure will almost certainly be well below that for video games that, even when spread out to a large part of the population, will be of interest to far from everyone. Some cultures tend to adopt new products more quickly than others, based on several factors: Modernity: The extent to which the culture is receptive to new things. In some countries, such as Britain and Saudi Arabia, tradition is greatly valued—thus, new products often don’t fare too well. The United States, in contrast, tends to value progress. Homophily: The more similar to each other that members of a culture are, the more likely an innovation is to spread—people are more likely to imitate similar than different models. The two most rapidly adopting countries in the World are the U.S. and Japan. While the U.S. interestingly scores very low, Japan scores high. Physical distance: The greater the distance between people, the less likely innovation is to spread. Opinion leadership: The more opinion leaders are valued and respected, the more likely an innovation is to spread. The style of opinion leaders moderates this influence, however. In less innovative countries, opinion leaders tend to be more conservative, i.e., to reflect the local norms of resistance. It should be noted that innovation is not always an unqualifiedly good thing. Some innovations, such as infant formula adopted in developing countries, may do more harm than good. Individuals may also become dependent on the innovations. For example, travel agents who get used to booking online may be unable to process manual reservations.

New Product / Service Development Process Life Cycle Management Market response analysis Competitive monitoring & defense Innovation at maturity

Introduction Launch planning Tracking the launch

Testing Advertising & product testing Pretest & pre-launch forecasting Test marketing

Design Customer needs Sales forecast Product positioning Engineering Segmentation Marketing mix

Opportunity Identification Market definition Idea generation

Reposition

60


PRICING As we have explained in the product part of marketing mix that we have launched a new brand ―NESDAIRY‖ under a corporate brand nestle. And our product Nesdairy ―KNIFE & BUTTER‖ Our product is new in the market and we have to set price according to our competitor’s price. We have to allocate our fixed cost and variable cost. And mostly our product should gain customers satisfaction and win their trust. And peoples can afford our product easily. Pricing is one of the most important elements of the marketing mix, as it is the only mix, which generates a turnover for the organization. The remaining 3p’s are the variable cost for the organization. It gives way to and designs a product; it costs to distribute a product and costs to promote it. Price must support these elements of the mix. Pricing is difficult and must reflect supply and demand relationship. Pricing a product too high or too low could mean a loss of sales for the organization. Pricing should take into account the following factors: Fixed and variable costs. Competition Company objectives Proposed positioning strategies. Target group and willingness to pay.

Objectives of price fixation: The main strategy that bases the launch of a product is pricing strategy. Our pricing is done considering  Our marketing objectives.  The economic conditions of our target market  Pricing of our competitors.  The nature of our business.  It can be status oriented. These are following objectives of nestle pure life regarding price fixation: 61


 Profit Earning: Profit earning is the main objective of every company but in case of Nesdairy their profit margin is low. Only a few amount of profit is collected from KNIFE & BUTTER at start.  Customer satisfaction: In Nesdairy price is not fixed by keeping in mind profit motive, only customer satisfaction is kept in mind while fixing the prices.  Strategies for fixing the price: In Nesdairy prices are set on cost basis as given below:

 Price = Cost + Profit Break even or Target price:  Per Unit Price = variable cost + fixed cost / units of sale Pricing Strategies An organization can adopt a number of pricing strategies. The pricing strategies are based much on what objectives the company has set itself to achieve. We have settled a plan to introduce our product with higher price in the market. We are launching our product in two sizes. One is of 100g and other is of 250g and our price complies with the competitor’s price. We have launched our product with a higher price to gain a competitive edge We have used two pricing strategies, Penetration pricing Cost plus pricing Penetration pricing: Penetration pricing involves the setting of lower, rather than higher prices in order to achieve a large, if not dominant market share. Our strategy is to sell more and more quality products. According to our marketing strategy we have settled higher prices in the start but then reduce our prices to gain more and more customers. This strategy is most often used businesses wishing to enter a new market or build on a relatively small market share. COST PLUS PRICING: 62


We have used cost plus pricing to calculate our cost price. That’s why we are able to efficiently calculate our cost. The advantages of using cost plus pricing are: Easy to calculate Price increases can be justified when costs rise Price stability may arise if competitors take the same approach (and if they have similar costs) Pricing decisions can be made at a relatively junior level in a business based on formulas We fix prices according to these factors. Nature of the market – we have first studied the nature of customer by completing survey in the market. That’s why we have successfully marked our price with the needs of our customers. Bulk discounts – a discount will also be given to the customers to fulfill their needs. Pricing strategy – we have initially adopted penetration pricing strategy to launch our product with higher price from our competitors. Stage of the product in its life cycle – after launching we have changed our pricing strategy and transform our product to create higher demand. Products at the earlier stages of the life cycle may need a lower mark-up percentage to help establish demand. NESDAIRY KNIFE & BUTTER PRICING: The total per unit price for the 250mg pack that we will offer is as follows:

o Cost of Knife & Butter

Rs.50

o Electricity

Rs.7

o Factory over head

Rs.6

o Miscellaneous

Rs.4

o Retailer margin

Rs.3

o Profit

Rs.10

Total price

Rs.80

63


In accordance to our strategy we have decided to offer the product to customers at the price of Rs.80. The price is very much compatible and the offer is substantial enough to attract a large percentage of market in a very quick time. SIZE

PRICE

250g

Rs.80

100g

Rs.35

NESDAIRY PRICING STRATEGY Launching Strategy The pricing NESDAIRY adopted at the time of launch in penetrating pricing strategy. According to that strategy we want to create goodwill and better impression in the market. We want to show the strength of our quality and good impression which is supported by our greater promotional campaigns. That was based on good quality and we have satisfied our customers by distributing free samples. Our Customers know about the quality of our product. That’s why we have adopted that strategy. Growth Strategy Then we have changed our strategy from penetrating price to skimming price strategy by Lowering its price to gain more and more customers by lowering the profit of the business. At this scale more and more customers are attracted and profit is minimized. By that process ours cost should also be lowered due to large scale production.

REASONABLE PRICE Table: 5 PRICE OF KNIFE & BUTTER


BELOW 5

6

5-10

23

10-20

51

20-30

18

ABOVE 30

24

64


PLACEMENT Placement refers to how the product gets to the customer; for example, point of sale placement or retailing. This fourth P has also sometimes been called Place, referring to the channel by which a product or services is sold (e.g. online vs. retail), which geographic region or industry, to which segment (young adults, families, business people), etc. also referring to how the environment in which the product is sold in can affect sales. Place simply refers to how you will sell your products to your customers. Depending on what it is you are selling will directly influence how you distribute it, and it affects mainly those businesses that are in production. If for example you own a small retail outlet or offer a service to your local community then you are at the end of the distribution chain so and will be directly supplying a variety of products directly to the customer.

Company network Nestle is now the world's largest food company. It is present on all five continents, has an annual turnover of 74.7 billion Swiss francs, runs 509 factories in 83 countries and employs about 231,000 people the world over. The Company owes its current status to the pioneering spirit inherited from its founders which continues to inspire it, to its concern with quality and to its constant search for new ways of satisfying man's nutritional needs. Wherever possible, it sets up factories locally, employs personnel from the country concerned and relies on indigenous raw materials. Its agricultural services provide assistance to improve the quality and yield of the raw materials it uses. Much attention is devoted to professional training and to the integration of the Company in its economic and social environment Nesdairy network in Pakistan: Our Headquarter is in Lahore, the company operates five production factories. Three of its factories in Sargodha, Seikhupura and Kbirwala are multi product factories. One factory in Islamabad and two in Karachi are working. Through its effective marketing and a vast sales and

65


distribution network thought out the country, it ensures that its products are made available to consumers whenever, wherever and however Nesdairy value delivery network: The Nesdairy Group is in principle not directly involved in primary production of raw materials and other food ingredients. In general nestle use locally available raw materials and purchase them either directly from producers or through existing trade channels. In Pakistan, Nesdairy’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 other countries. Nesdairy’s strong: Cash flow and comfortable debt-equity ratio leave it with ample muscle for takeovers. Recently, Nesdairy acquired dairy food, Their focus will be primarily on expanding sales in the Pakistani market, and in time will look to export Indonesian food products to other countries. Nesdairy has employed a wide-area strategy for Asia that involves producing different products in each country to supply the region with a given product from one country. For example, Nesdairy produces soy milk in Pakistan, all for regional distribution. Milk plant at Kabirwala is the Nesdairy’s world largest milk processing plant. Nesdairy pays the local milkmen for the continuous supply of milk to its plant, since Pakistan is the fifth largest milk producing country.

NESDAIRY CHANNEL OF DISTRIBUTION Nesdairy is making full efforts to supply its product to ultimate consumers. For this purpose the company uses the conventional marketing channels of distribution to supply the product. In this method company supply the product to whole seller who responds it to retailers who supply to ultimate user. It Refers to how an organization will distribute the product or service they are offering to the end user. The organization must distribute the product to the user at the right place at the right time. Efficient and effective distribution is important if the organization is to meet its 66


overall marketing objectives. If organization underestimate demand and customers cannot purchase products because of it profitability will be affected. Nesdairy`s channel of distribution: NESDAIRY uses two types of channel of distribution. Indirect distribution involves distributing your product by the use of an intermediary. Direct distribution involves distributing direct from a manufacturer to the consumer. Clearly direct distribution gives a manufacturer complete control over their product.

Above indirect distribution (left) and direct distribution (right).

NESDAIRY DISTRIBUTION NETWORK 1.

Direct selling

Direct selling involves selling directly to your customer; retailing, door-to-door, mail order and ecommerce all directly sell to customers. The advantage of deciding to directly sell would mean you are in direct contact will your customers and can easily detect the subtle changes which are occurring and adapt to the changes; i.e. demand for price changes or overall demand for your products. You also have complete control over your product range, how it is sold and at what price. However, direct sales can come at a price; you will need storage facilities or retail premises to sell your products directly. Shopping carts on the internet required a degree of Internet knowledge to pull it off and building consumer confidence can prove a tricky business.

67


DIRECT TO CONSUMER: If you don't want the expense of opening and running your own retail outlet to sell to your customers, then you might consider selling to existing retail outlets. This would obviously save your company a lot of money setting up a variety of retails outlets to cover areas regionally or nationally. However, the administration behind running a system like this would be considerable. Firstly you would have to have a sales teams to consult with the retailers on new products, price and promotion. You would also have to have a method of distributing to many small outlets in which ever region of the country you are selling to: this would cost a small business quite a lot of money and effort. The financial side also needs to be considered as you will have to administer a number of small accounts at the same time.

Distribution Strategies: Depending on the type of product being distributed there are three common distribution strategies available: 1. Intensive distribution: We use it to distribute low priced or impulse purchase products eg. chocolates, soft drinks. 2. Exclusive distribution: We involve limiting distribution to a single outlet. The product is usually highly priced, and requires the intermediary to place much detail in its sell. An example of would be the sale of vehicles through exclusive dealers. 68


3. Selective Distribution: A small number of retail outlets are chosen to distribute the product. Selective distribution is common with products such as computers, televisions household appliances, where consumers are willing to shop around and where manufacturers want a large geographical spread.

NESDAIRY FACTORIES: SARGODHA 124, A PAF University road Sargodha, Punjab, Pakistan Phone

(048-3210000)

Sheikhupura 29th Kilometer, Lahore - Sheikhupura Road Sheikhupura, Punjab, Pakistan Phone

(042-6369321-6)

Islamabad AVA® water factory in Islamabad

PROMOTION It is not enough for a business to have good products sold at attractive prices. To generate sales and profits, the benefits of products have to be communicated to customers. In marketing, this is commonly known as "promotion". Promotion is a form of corporate communication that uses various methods to reach a targeted audience with a certain message in order to achieve specific organizational objectives. Nearly all 69


organizations, whether for-profit or not-for-profit, in all types of industries, must engage in some form of promotion. Such efforts may range from multinational firms spending large sums on securing high-profile celebrities to serve as corporate spokespersons to the owner of a oneperson enterprise passing out business cards at a local businessperson’s meeting. The fourth part of the marketing mix refers to process of informing your customers of your company's products. To make your customers aware that your products exist, there are a number of methods you may choose to use, they include: Media Advertising (television, magazines, Internet, radio) Personal selling (involving a sales person) Non-personal communication (persuasion advertising-competitions, free samples) Other promotional types include public relation exercises and free publicity. Promotion needs to be carefully planned, and it is usual to decide on a new promotional plan each year. There should be one main objective to the promotion campaign and that particular emphasis should be projected during a certain time to a certain market segment.

Promotion Mix: Promotion is all about companies communicating with customers. A business' total marketing communications programme is called the "promotional mix" and consists of a blend of advertising, personal selling, sales promotion and public relations tools. In this revision note, we describe the four key elements of the promotional mix in more detail. A business' total marketing communications programme is called the "promotional mix" and consists of a blend of advertising, personal selling, sales promotion and public relations tools. It is helpful to define the four main elements of the promotional mix before considering their strengths and limitations.

Promotional strategies 1. 2. 3. 4. 5. 6.

Advertising Personal selling & sales force Sales promotions Public relations publicity Sample`s distribution 70


7. Communication with consumer 8. Getting connected with consumer 9. Promotional campaigns 10. Consumer services 11. Creating shared value 12. Welfare projects 13. Prioritize 14. Slogans or mottos 15. Nesdairy consumer services

(1) Advertising Advertisement is a tool to introduce the product in the market. To increase sales and build an image in the mind of consumer company advertise their product in different ways, as for as Nesdairy pure life is concerned company use: Any paid form of non-personal communication of ideas or products in the "prime media": i.e. television, newspapers, magazines, billboard posters, radio, cinema etc. Advertising is intended to persuade and to inform. Advertising is any paid form of non-personal mass communication through various media to present and promote product, services and ideas etc. by an identified sponsor The main forms of advertising are: Television Radio Newspapers and magazines Travel trade press Videos Exhibitions and trade fairs Internet Bill boards Nesdairy advertising strategies Nesdairy launched “KNIFE & BUTTER” product with aberrant marketing strategies and tactics. Our product is new concept in our society like with so extensive marketing the products brought this saying into life i.e., vini vici vidi (they came, they saw and they 71


conquered). It conducted puppet shows in schools as well as on roads creating consumer awareness as well as brand preference. Such marketing tactics were unknown (or sparingly seen) before in Pakistan. Nesdairy increasing sales is attributed to innovative strategies and a sound distribution network that has proven to be par excellence. (2) Personal Selling Communicating with the buyers of a product the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to "close the sale". (3) Sales Promotion Providing incentives to customers or to the distribution channel to stimulate demand for a product. Sales promotion is a marketing discipline that utilizes a variety of incentives techniques to structure sales – related programs targeted to customers, trade, and or sales levels that generate a specific, measurable action or response for a product or service. Sales promotions for example includes free samples, discount, rebates, coupons, contents and sweepstakes, premiums, scratch cards, exchange offers, early bird prizes, etc. (4) Public relations Public relations is a broad set of communication activities employed to create and maintain favorable relationship with employees, shareholders, suppliers, media, educators, potential investors, financial institutions, government agencies and officials and society in general. What is good for you is good for us!

Consumer Relationship Marketing lies at the heart of Nesdairy Consumer services. We strive to build a long-term, sustainable relationship of trust and loyalty. (5) Publicity

72


The communication of a product, brand or business by placing information about it in the media without paying for the time or media space directly, otherwise known as "public relations" or PR. (6) Sample distribution We have launched a totally different advertisement technique. We have distributed free samples of “KNIFE & BUTTER” in all the areas of our segmented market. That’s why we are more successful in promoting our product.

(7) Communication with consumers All representation including text, sound, and visual, should accurately represent the product, including taste, size, and content. Nutrient content information, including fortification and nutrition claims, must be made in a way that accurately reflects the nutrition composition of the product, and comply with applicable legislation and regulations. Specific benefit claims/propositions on packaging must reflect local legislation. (8) Getting connected with consumers Direct contact with consumers is at the heart of our vision. For many people around the country, our field staff is the face of Nesdairy. These dedicated field staff invite consumers, mostly homemakers, to Nestlé activities. We invite our guests to learn more about Nesdairy and its philosophy and brief them about our brands. We try to give them vital information about health and wellness, to help their families live a better lifestyle. (9) Promotional campaign Our promotion campaign will start with selling free samples to customers and visiting home to home services. 73


(10) Consumer Service Our consumer services is to locate city peoples and living in rural areas. And satisfy them in every way. Satisfy them about the quality of the product. Satisfy them in more communicative way. In addition to the above principles for all consumers (including children), Nesdairy has developed the following principles for communication specifically aimed at children. (By ―children‖ in general we mean those less than 12 years, but definitions vary from country to country). Nesdairy must at all times be diligent in applying these principles, and use common sense and good judgment to interpret the quality (11) Creating Shared Value We are creating shared values by giving good health and satisfaction to our customers. And they are more benefited at lower prices. (12) Welfare projects Nesdairy Pakistan is involved in a wide range of programmes and projects intended to improve the lives of underprivileged Pakistanis. Our efforts are focused on: Nutrition Programme for Mothers & Children Financial Support Well and Good health Projects Help Centre for Farmers School Rehabilitation and Education Advancement Research & Development Initiatives (13) Priority

74


Our priority is the customer satisfaction and creating greater goodwill among our customers. Good life, good health is our main slogan. And we will work on more and more customer satisfaction. (14) Slogans & Motos We will gain more satisfaction by working on these logos and words and maintaining our brand equity and maintain goodwill among customers. Our slogan is that

“GOOD FOOD, GOOD LIFE” “ACHI SEHAT KA KHAZANA, NESDAIRY KA BUTTER HI KHANA”

(15) Nesdairy consumer services Nesdairy Consumer Services is the main interface between you and the company, and we make every effort to ensure that your voice is heard. After all, it's your satisfaction that really counts. We want to build a long-term relationship of trust and loyalty with you.

75


CONCLUSION We have concluded from our whole work that a complete research make the product launch successfully. Our product launch has made

76


Launching A New Product: Project of Marketing

Recommend Documents