Beruflich Dokumente
Kultur Dokumente
Nestle has been serving this world for over one hundred and thirty years. It has
differentiated itself through its high quality product mix and positioned itself as health and
Nutrition Company while targeting the health conscious people throughout the world. Nestle
started its operations in Pakistan back in1988, by acquiring a diary company MILKPAK
LTD, when people of Pakistan actually needed it.
Since Pakistan is the fifth worlds largest milk producing country therefore Nestle deals
mainly in dairy products. Moreover it also sells juices, chocolates, prepared food like
noodles, baby food, infant formula milk and breakfast cereals in Pakistan.
Nestle is a low cost leader with its efficient operations hence it provides its customers with
high quality products and sells them at a premium price. Therefore it is earning good profits.
Nestle has set its manufacturing plants at in Karachi, Lahore, Islamabad and Kabirwala. The
milk processing plant at Kabirwala district is the Nestls world largest milk processing plant.
When nestle introduced its products in Pakistan people were neither aware nor accustomed to
them. Therefore nestle ran an extensive marketing campaign to educate people and create a
need for its products.
Pakistan is a land where fresh eatables are readily available. Nestle should sell the same
quality of products in Pakistan as it sells abroad. It should also introduce more brands in
Pakistani market which it offers in other markets of the world since consumers in Pakistan are
becoming more demanding day by
History
In the mid-1860s Nestl, a trained pharmacist named Henri Nestle began experimenting with
various combinations of cow's milk, wheat flour and sugar in an attempt to develop an
alternative source of infant nutrition for mothers who were unable to breast feed. His ultimate
goal was to help combat the problem of infant mortality due to malnutrition. He called the
new product Farine Lacte Henri Nestl.
Nestl's first customer was a premature infant who could not tolerate any of the conventional
substitutes, and had been given up for lost by local physicians. People quickly recognized the
value of the new product, after Nestl's new formula saved the child's life and within a few
years, Farine Lacte Nestl was being marketed in much of Europe.
Henri Nestl also showed early understanding of the power of branding. Nestl means 'little
nest'. Nestle was created in 1867.
Nestl is today the worlds leading food company, with a 140-year history and operations in
virtually every country in the world. Their principal assets are not office buildings, factories,
or even brands. Rather, it is the fact that they are a global organization comprised of many
nationalities, religions, and ethnic backgrounds all working together in one single unifying
corporate culture. Their culture unifies people on all continents, with roughly half their
factories and people located in the developing world.
Nestle started it operations in Pakistan in 1988. A qualified workforce, trained by nestles or
emerging from a strong educational and industrial context, strongly influences the companys
ability to be globally competitive. The fair treatment and development of company staff and
the strengthening of the local workforce are essential long-term investments. They reinforce
the conditions for growth and sustained economic development in the locations where Nestl
operates. Nestls ability to employ thousands of people each year is an important
contribution the company makes towards future generations, providing income to
families who can enhance their chances at better education, healthcare and standard of living
for entire families and communities.
Company Information
Ticker:
NESTL
Country:
PAKISTAN
Major Industry:
Food & Beverages
Sub Industry:
Diversified Food
Employees:
2,345
Currency:
Pakistan Rupee
Market Capital:
61,221,938,400
Share Type:
Ordinary
Mission Statement:
"Nestl is the largest food company in the world. But, more important to them is to be
the world's leading food company.
At Nestl, we believe that research can help us make better food so that people live a better
life.
Good Food is the primary source of Good Health throughout life. We strive to bring
consumers foods that are safe, of high quality and provide optimal nutrition to meet
physiological needs. In addition to Nutrition, Health and Wellness, Nestl products bring
consumers the vital ingredients of taste and pleasure.
Vision statement:
Nestle aim is to meet the various needs of the consumer every day by marketing and selling
food of a consistently high quality. The confidences have in our brands is a result of our
companys many years of knowledge in marketing.
Lead a dynamic, motivated and professional workforce proud of our heritage and
positive about the future.
Meet the nutrition needs of consumers of all ages 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 Pakistan.
Goals of Nestle:
Philosophy of Nestle:
Nestls philosophy is summed up in four words:
Good Ingredients
Three vital ingredients lie at the heart of Nestl and come together in their brands:
Their people, their research and development, and their commitment to quality.
The 250,000 dedicated people who make up the Nestl family are their source of strength and
energy. Realizing this, Nestl offer them constant professional development, and feel their
cultural diversity is one of greatest assets.
Products:
MILKPAK
NESVITA
NIDO
NESLAC
EVERYDAY
NESTLE Dahi
NESTLE Fruit Yogurt
NESTLE Raita
MILKPAK Cream
Beverages:
NESCAFE
NEQUICK
MILO
NESTLE Fruita Vitals
Bottled Water:
Baby Food:
CERELAC
Food:
Corn Flakes
Honey Gold Flakes
KOKO Crunch
KITKAT
KITKAT Chunky
Polo
Milk, dairy and Chilled dairy: wide variety of dairy products is available to cater
almost every segment of customer. Liquid Milk especially Nesvita is produced
especially for the females as it contains high content of iron, beneficial for them.
Beverages: it includes Nescafe, Milo, Nesquik, and Nestle Friuta Vitals. Their main
target market includes people of all ages.
CHAIRMAN
Bottled water: businesses, students, for the people who do not have access to clean
P.Barbeck-letmathe
drinking water.
Baby food: target market of baby food is all the parents
Food: it includes Maggie noodles which mostly caters children and teenagers.
CEO
Breakfast cereals: children, teensP.Bulcke
and adults benefits from it
Corporate governance Corporate communications Pharma &
D.P FRICK
Chocolates and confectionary: people of all ages. R.Ramsauer cosmetics HR
F.Castaner
Sports nutrition: it specifically targets sports persons for a nutritive protein diet.
Operations Finance & control SBUs marketing &sales Innovation technology &
J.Lopez J.Singh W.Bauer R&D
W.Bauer
Organization Chart
Raymond Franke, Head of Finance and Controls, Finance & Control Division
Haseeb Aslam, country business manager water, water division.
Peter Wuetherich, Head of Technical, Technical Division
Salman Nazir, Head of Supply Chain, Supply Chain Division
Uzma Qaiser Butt, Head of Human Resources, Human Resources Division
Zafar Hussain, Head of Sales, Sales Division
Sheikhupura Factory
Kabirwala Factory
Type of Business
Nestl Corporate Business Principles will continue to evolve and adapt to a changing world,
their basic foundation is unchanged from the time of the origins of their Company, and
reflects the basic ideas of fairness, honesty, and a general concern for people. Nestl is
committed to the following Business Principles in all countries, taking into account local
legislation, cultural and religious practices.
Consumers
Nutrition, Health and Wellness
Our core aim is to enhance the quality of consumers lives every day, everywhere by offering
tastier and healthier food and beverage choices and encouraging a healthy lifestyle. We
express this via our corporate proposition Good Food, Good Life.
Everywhere in the world, the Nestl name represents a promise to the consumer that the
product is safe and of high standard.
2. Consumer communication
We fully support the United Nations Global Compacts (UNGC) guiding principles on human
rights and labor and aim to provide an example of good human rights and labor practices
throughout our business activities.
Our People
Our success is based on our people. We treat each other with respect and dignity and expect
everyone to promote a sense of personal responsibility. We recruit competent and motivated
people who respect our values, provide equal opportunities for their development and
advancement protect their privacy and do not tolerate any form of harassment or
discrimination.
6. Safety and health at work
We are committed to preventing accidents, injuries and illness related to work, and to
protect employees, contractors and others involved along the value chain.
We require our suppliers, agents, subcontractors and their employees to demonstrate honesty,
integrity and fairness, and to adhere to our non-negotiable standards. In the same way we are
committed to our own customer
The Environment
3. Environmental sustainability
4. Water
We are committed to the sustainable use of water and continuous improvement in water
management. We recognize that the world faces a growing water challenge and that
responsible management of the worlds resources by all water users is an absolute necessity.
Customers
Every person, of any age group, gender etc is the target customer of Nestle
Nestle target its customers by knowing customer needs & demands. For this purpose it
made customer profile.
SWOT Analysis
STRENGTHS
Parent support
Nestle Pakistan has a strong support from its parent company, which is the worlds largest
processed food and beverage company, with a presence in almost every country. The
company has access to the parents hugely successful global folio of products and brands.
Company Image
Nestle company has a great image in the mind of people. Nestle company has worldwide
reputation which helps them to retain the market even in bad situations & unfavorable
conditions.
Nestle produce a good quality products. Nestle cannot compromise on quality because people are
more quality conscious now a days, with the best quality they can attain customer loyalty. Nestle
being the worldwide renowned brand creates qualitative product to retain that image.
Well-developed strategy
Nestle has recognizes there is a right time and place for their product; therefore, their strategy
makes room for adjustments, Nestle captured a market with great sweep with the developed
strategy.
Market Share
Nestle juices has a highest market share almost in every SBUs line, such as in Milk pack &
Nestle pure life. High market share always depicts the quality of the firm & its strong
management decisions.
Good marketing skills and services
Nestle is now a days working on this concept because they want to increase their market share.
They are providing quality products to the customers that include their service and product.
Brand strength
In Pakistan Nestle has some very strong brands like Nescafe, Maggie, Cereals, Nestle water and
these brands are almost generic to their product categories. So when a brand becomes generic
then it creates the feel of strong brand in the eyes of customers. Such as Google.com etc.
Research and development department keeps Nestle in continuous knowledge about itself and
competitors. It has a competitor advantage because many local companies have no research &
development department.
Product innovation
The Company has been continuously introducing new products, thus expanding its product
offerings. With the extra ordinary technology adoption nestle able to produce innovated products.
HR department
Nestle company has a strong HR department which depicts nestles strong committed
management of the company.
WEAKNESSES
Less Proactive
Nestle being a company is less proactive they create changes but usually unless competitor
doesnt change they doesnt adopt a change.
Limited Distribution Channel
Nestles major & bad factor is the limited distribution channel because they distributes their
products to whole seller in their own factory vehicles. As compare to their major competitor they
have limited distribution channel but they are maintaining to penetrate the market as far.
No outlets in Pakistan
They dont have direct outlets to whole sellers to create less burden on the factory distribution
channels however their competitors give them a major threat by this.
As being less proactive they are more concerned about profits, & their market share the main
objective of every company is to gain profits but as compare to competitors its a drawback.
OPPORTUNITES
Government support foreign investors to invest in Pakistan which eventually is the opportunity
for Nestle.
Nestle should be working on the distribution network to enhance the companys network against
its competitor.
Consumers in urban areas now adopt Western lifestyles, especially the younger generation which
is hugely influenced by the Western media. Younger consumers tend to follow Western life style.
There was an increase in demand for Nestle products over the review period.
Health conscious
Increasing health and hygiene awareness among Pakistanis has greatly increased sales of nestle
products. Both the government and the media have started health awareness campaigns to make
Pakistanis realizes that consumption of Nestles hygienic products is as essential as eating food.
Fruit/ juices & eatable products are doing very well in both urban and rural areas.
Market growth
Nestle market expands very fast. A new research proves that in future (2012) every person use
85.5 liters juices per years & uses more hygienic products because of the low hygienic conditions
of the environment.
THREATS
Government Regulation
They face problem if government employ taxes on them which force them to raise the price of
their product.
Competition among competitors is major threat to Nestle which can be controlled by the help to
retaining more customers & making more loyal ones.
No Entry Barrier
There are no many entry barriers so a large numbers of local companies enter in various Nestles
product market.
Inflation rate
Increase inflation rate very fast .In 2008 expected inflation rate 23.3% so with the increasing
inflation rate the prices will go down which creates the market slump, so inflation is very true
bad factor which can affect Nestle.
Unfavorable Changes in Consumer Demand
With the increase in the competitors there will be a increase in the number of related products
which eventually harm the Nestles market. Due to which the consumers demand pattern
fluctuate.
When the market saturates the loss of the market share of Nestles products is there major threat
to Nestle.
In a conclusion we can say that whether the company is international or local both of the
organizations have strengths & weaknesses which lead them to avail opportunities & remove
threats. So for nestle it important or recommended that they should pay more attention to their
weaknesses & threats in order to compete for a long time & maintain the sustainable competitive
advantage. Nestle is doing so far in a good way they compete with their competitor with full &
strong response. They are proactive but less reactive which is not good for the firms or
organizations that are reactive.
Competitors Analysis
Nestle Pakistan have many competitors in market to cut their market & capture the market they
have. These competitors are;
Haleeb Limited
Engro food Limited
They have to face many hurdles in order to be the best & deliver because they cutthroat
competition with all of the competitors.
Haleeb Limited
Strengths
1. The thickest milk
2. Taste
3. Nutritious
4. Hygienic
5. Packaging
Weaknesses
3. Weak distribution
Strengths
1. PR with farmers
Weaknesses
1 .Packaging
BCG Matrix
Stars
The stars are the high relative market share and high market growth. Nestle beverages i.e. are
somewhat the stars in their business, because with the high quality and new designs which comes
every now and then makes them more popular among the customers, because customer with
upper class wants the quality and nestle offers the best quality food items.
Cash Cows
The cash cows are their baby food items i.e. nestle cerelace and other baby food products.
Company has to take measures to make these products as stars.
Dogs
The pharmaceutical products are nestle Dog, because it has low-share business with low growth
market especially when we talk about Pakistani market. The company has to think on what it can
do by improving the low share and growth market.
Question Mark
The question marks are the breakfast cereals. They have high market growth but low market
share. The company has to decide about which question mark they should try to build into the
stars and which one of these should be phased out.
Nestle is using the product differentiation strategy by providing the superior quality products.
Their main focus is to keep the customers loyal. They bought shelve space in different
departmental stores to attract the customers. They tried to reach each group of people in which
they have succeeded.
Customer Oriented
Customer satisfaction is the focal point for the company. They provide hygienic products to their
customers. Products are also verified by health and safety measures and international quality
standards.
MARKETING MIX
Marketing Mix is defined as a set of controllable tactical marketing tools that firm blends to
produce the response it wants in the target market. The marketing mix consists of every thing the
firm can do to influence the demand for its products. The many possibilities can be collected into
four groups of variables known as the four P's that are as follows:
1. Product
2. Price
3. Place
4. Promotion
1-PRODUCT
Product stands for goods and services that the company offers to target market.
Nestl kit Kat is in four sizes including K.K Chunky, while Polo is in three sizes. The shape and
the color of the Kit Kat and Polo are quite attractive for the customers. The labeling, packaging
of the Kit Kat and Polo includes the Nestl brand and logo. The packaging includes an expiry
date and time along with a manufacture date. Second part of labeling includes the quantity of
product in grams along with ingredients and contents of chocolates and candies.
2- PRICE
The amount of money charged for a product or service, or sums of the values that consumers
exchange for the benefits of having or using the product or services.
The price of Nestl Kit Kat and Polo varies increases with the increase in its size.
3- PLACING
Placing stands for company's activities that make the product available to the target consumer.
Nestl' distribution is using the direct distribution channel to supply confectionary products
weekly to the retailers.
4- PROMOTION
Producing a quality product, pricing it attractively and making it available for the target
consumer is not the only problem companies need to solve. Modern era is the era of
communication with customer, assuring customer satisfaction, demands for personal and non-
personal communication with the target customer to build a relationship with them. In an area-
storming activity, giving out products free, gift hampers, attracts new customers; kites depending
on the season (for existing and potential customers) are given. The basic purpose is to explore the
area that is being unexposed and to bring awareness in the people.
Porter Five Forces:
Threat of New
Entrants
Substitute
Competitive Rivalry
In Pakistan the competition among the multinational companies is very small. Currently 2-3
companies are doing the business of dairy products out which one brand is international and
other two brands are locals, from this it can be concluded that there would be a lot of chances of
other international famous brands of dairy products to start their businesses in Pakistan.
Substitutes:
The major substitutes of Nestle ice cream would be Walls ice cream, Hico ice cream and eat
more ice cream. In the same way the substitute for Nestle Beverages would be Nestle Bottled
water. Hence Nestle provides wide variety of substitute products to meet the needs and wants of
customers.
Bargaining Power of Suppliers:
As Nestle came in Pakistan in 1988 and they are the market leaders in the dairy products. Nestle
Pakistan is already in the business of dairy so the companies bargaining power of supplier would
be moderate.
Bargaining power of customers would be very low because the price of Nestle dairy products
would be fixed and customer has to buy a particular product at standardized fixed price.
Competitive Rivalry:
Although Nestle has major competitors in Pakistan such as Haleeb Foods, Engro Foods and
Shezan, still it is leading market. The strategies applied by Nestle include Cost leadership,
differentiation in products; strong and intimate relationship with suppliers and customers etc.
PROBLEM SECTION FOR NESTLE
According to the analysis we did nestle only have few problem otherwise company is doing their
best in the industry so far. They have attained the highest market share for their brands. The only
problem they can face is from pressure groups & limited Distribution Channel.
Pressure groups or religious groups are the major threats to the Nestles management & their
targets. So to control the threats from the pressure groups good marketing strategy can be adopt
to eliminate the threat. Nestle should work on the distribution channel & expands the distribution
channel to control the market & untapped areas, which eventually give them an edge to increase
the market share of Nestle.
Nestles problem can be eliminated by strategically thinking & implementing some strategies
which can be effective in terms of both profit & growth. Solutions to the problems which have
been discussed before is that ; for eliminating the pressure groups threat they should include a
strong religious person for advertising their products which can easily arose the demand for the
product & people have less question to ask. This will eventually increase the market share &
profit of the company through extensive sales. Taking an example same strategic strategy was
implemented in Pepsi Co. for Lays.
Strategically speaking as nestle falls in aggressive strategy, so they should go joint ventures with
their distributors cut short their own tensions & make others to their job as Pepsi co. have Riaz
bottlers for their distribution which eventually gave them an edge. So if they go forward
integration then they might be able to have more market share & demand for the product can be
increased & more market can be taped.
These distributors, though observing the rapid increase in customer demand refuse to hire new,
more efficient and innovative staff that would take the organizations to rise rather they stuck to
their old staff members
These are two extensive solutions for the problem faced by the management of Nestle, & this
should be taken in to account for the more market share.
Problems according to the company:
Solution:
Nestle should contact to the main head quarter situated in Switzerland for financial, economic,
strategic support so that the goals of Nestle Pakistan could be achieved. One more thing that is
possible that company should made some agreements about their business plans so that the
company could able to work with stability. The group is willing to enhance its product line but
due to some internal and external reasons along with security, the company is facing the shortage
of producing certain products which have demand in the market.
Solution:
The company should buy the existing plants by any mean in Pakistan to fulfill the demand of
market. Because to setup a new plant can be costly for the company. It is also possible that
company should work with other small companies to meet the demand. There should be very low
probability of loss on the goods as the brand image is so strong in Pakistani market about Nestle.
The company should make huge expenses on advertisement in rural areas of Pakistan to create
awareness in the mind of local area's people. The company should held seminars and meeting for
the promotion of Nestle Pure Life.
They should increase their product quality as now a day they are facing problem of impurity of
their products. They have to improve the marketing strategies. So that they can capture market
and improve their sales.
CONCLUSION & RECOMMENDATIONS
Nestle was doing its good job in past but now it is facing some problems of low quality of their
products. Nestle issued by someone they claim that they are doing unethical business. They are
mixing unhygienic things which can cause damage to customers health. Its example is that their
water is not pure and good for health. You can see dust partials in Nestle mineral water when you
keep it in sunlight that shows its product quality is down. Now they have to do more making
their strong position in market because when you lose your image in customers eye then it is
difficult to renew their image.
Recommendations are these, that NPL should diversify its product portfolio & introduce ice
cream & some other products which can cut the competition of the major players in Pakistan.
Dog items should be back up by the cash generated by cash cows & renovate them. Nestle
should increase the distribution Network & diversified their portfolio.