nestle history

131
EXECUTIVE SUMMARY 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 in 1988, by acquiring a diary company MILKPAK LTD, when people of Pakistan actually needed it. Since Pakistan is the fifth world’s 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 Nestlé’s world largest milk processing plant. When nestle introduced its products in Pakistan people were neither aware nor accustomed to them. Therefore nestle ran

Upload: aamir-raza

Post on 16-Nov-2014

8.217 views

Category:

Documents


1 download

DESCRIPTION

University of Sargodha

TRANSCRIPT

Page 1: Nestle history

EXECUTIVE SUMMARY

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 in

1988, by acquiring a diary company MILKPAK LTD, when people of Pakistan

actually needed it.

Since Pakistan is the fifth world’s 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 Nestlé’s 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 day.

Page 2: Nestle history

INTRODUCTION

Nestlé at a Glance

The story begins in 1867, when Henri Nestlé developed a baby formula that

saved a child's life and marked the beginning of Nestlé's decades-old

commitment to nutrition. In the 140 years since then, they have expanded around

the world and developed a range of products designed to suit every taste, need

and cultural preference. Their distinctive seal is recognized everywhere as a

guarantee of quality and healthfulness.

Nutrition, quality and convenience remain the keystones of their products and

even as they confront the new century's challenges, they feel it is their duty to

adapt to the changing needs of consumers. Their responsibility does not simply

lie in perfecting the products they develop at their R&D centers spanning four

continents, but the role their products play in making lives well - both for their

consumers and for communities in the countries they serve.

Worldwide Presence

Today, Nestlé SA is the world's largest Food and Beverages Company, and a

global leader in health, nutrition and wellness. Consumers around the world, from

village squares in Nigeria to the skyscrapers of New York and Chicago, are

united by the Nestlé promise of quality, taste, nutrition and convenience.

Though headquartered in Vevey, Switzerland, they now have 487 factories

dotted around the globe, employing over 250,000 people in 86 countries. Their

products are available in almost every country.

Page 3: Nestle history

Nestlé International History

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.

People quickly recognized the value of the new product, after Nestlé's new

formula saved the child's life and within a few years, Farine Lactée Nestlé was

being marketed in much of Europe.

The Anglo-Swiss Condensed Milk Company, founded in 1866 by Americans

Charles and George Page, broadened its product line in the mid-1870s to include

cheese and infant formulas. The Nestlé Company, which had been purchased

from Henri Nestlé by Jules Monnerat in 1874, responded by launching a

condensed milk product of its own. The two companies remained fierce

competitors until their merger in 1905.

Some other important firsts occurred during those years. In 1875 Vevey resident

Daniel Peter figured out how to combine milk and cocoa powder to create milk

chocolate. Peter, a friend and neighbor of Henri Nestlé, started a company that

quickly became the world's leading maker of chocolate and later merged with

Page 4: Nestle history

Nestlé. In 1882 Swiss miller Julius Maggi created a food product utilizing

legumes that was quick to prepare and easy to digest.

His instant pea and bean soups helped launch Maggi & Company..

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. In 1904, Nestlé added

chocolate to its range of food products after reaching an agreement with the

Swiss General Chocolate Company.

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.

Most production facilities remained in Europe, however, and the onset of World

War I brought severe disruptions. Acquiring raw materials and distributing

products became increasingly difficult. Fresh-milk shortages throughout Europe

forced factories to sell almost all their supplies to meet the needs of local towns.

Nevertheless, the war created tremendous new demand for dairy products,

largely in the form of government contracts. To keep up, Nestlé purchased

several existing factories in the United States. By war's end, the Company had

40 factories, and its world production had more than doubled since 1914.

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

Page 5: Nestle history

grown accustomed to condensed and powdered milk during the war switched

back to fresh milk when

it became available again. In 1921, the Company recorded its first loss. Nestlé's

management responded quickly, bringing in Swiss banking expert Louis Dapples

to reorganize the Company.

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 isolated in a Europe at war,

and the Company transferred many of its executives to offices in

Stamford,

The first truly global conflict ended forever the traditional Company structure. To

overcome distribution problems in Europe and Asia, factories were established in

developing countries, particularly in Latin America.

Ironically, World War II helped speed the introduction of the Company's newest

product, Nescafé. After the United States entered the war, Nescafé became a

staple beverage of American servicemen serving in Europe and Asia. Annual

production levels reached one million cases by 1943.

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

Page 6: Nestle history

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.

In 1947, Nestlé merged with Alimentana S.A., the manufacturer of Maggi

seasonings and soups, becoming Nestlé Alimentana Company. The acquisition

of Crosse & Blackwell, the British manufacturer of preserves and canned foods,

followed in 1960, as did the purchase of Findus frozen foods (1963), Libby's fruit

juices (1971) and Stouffer's frozen foods (1973).

Meanwhile, Nescafé continued its astonishing rise. From 1950 to 1959, sales of

instant coffee nearly tripled, and from 1960 to 1974, they quadrupled..

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. In addition, foreign exchange rates deteriorated with the French franc,

dollar, pound sterling, and mark all losing value relative to the Swiss franc.

Finally, between 1975 and 1977, the price of coffee beans quadrupled, and the

price of cocoa tripled. As in 1921, the Company was forced to respond quickly to

a radically changed marketplace.

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.

Page 7: Nestle history

Taking such a step in a time of increased competition and shrinking profit

margins required boldness and vision. Even more than the L'Oréal move, Alcon

represented a leap into unknown waters for Nestlé. But, as Group Chairman

Pierre Liotard-Vogt noted, "Today we find ourselves with a very wide range of

activities, all of which have one thing in common: they all contribute to satisfying

the requirements of the human body in various ways."

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 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.

In 1984, Nestlé's improved bottom line allowed the Company to launch a new

round of acquisitions, including a public offer of $3 billion for the American food

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 far-flung and diverse as Nestlé. While

progress since then has not been as encouraging, the overall trends remain

positive.

Page 8: Nestle history

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.

There were two major acquisitions in North America in 2002: in July, Nestlé

announced that the U.S. ice cream business was to be merged into Dreyer's, and

in August, a USD 2.6bn acquisition was announced of Chef America, Inc. , a

leading U.S.-based hand-held frozen food product business.

Also in 2002, the joint venture Dairy Partners Americas was set up with Fonterra;

and Laboratoires innéov was set up, another joint venture, this time with L'Oréal.

2003 +

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.

In 2006, Jenny Craig, the USA weight management company and Uncle Toby's

were acquired as well as Delta Ice Cream.

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. Gerber, the iconic US baby food brand was the second

acquisition and the third was the Swiss water company, Sources Minérales

Henniez S.A.

The end of 2007 was marked by a strategic partnership with the Brussels-based

luxury chocolate maker Pierre Marcolini.

Page 9: Nestle history

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.

Guiding Principles of Nestlé

Nestlé is committed to the following Business Principles in all countries, taking

into account local legislation, cultural and religious practices:

Page 10: Nestle history

Nestlé's business objective is to manufacture and market the Company's

products in such a way as to create value that can be sustained over the

long term for shareholders, employees, consumers, and business

partners.

Nestlé does not favor short-term profit at the expense of successful long-

term business development.

Nestlé recognizes that its consumers have a sincere and legitimate

interest in the behavior, beliefs and actions of the Company behind brands

in which they place their trust, and that without its consumers the

Company would not exist.

Nestlé believes that, as a general rule, legislation is the most effective

safeguard of responsible conduct, although in certain areas, additional

guidance to staff in the form of voluntary business principles is beneficial

in order to ensure that the highest standards are met throughout the

organization.

Nestlé is conscious of the fact that the success of a corporation is a

reflection of the professionalism, conduct and the responsible attitude of

its management and employees. Therefore recruitment of the right people

and ongoing training and development are crucial.

Nestlé continues to maintain its commitment to follow and respect all

applicable local laws in each of its markets.

Philosophy of Nestlé

Nestlé‘s philosophy is summed up in four words:

Good Food, Good Life.

Page 11: Nestle history

In their quest to become the world's leading health, nutrition and wellness

company, they do everything they can to help people live more fulfilling lives.

Good Food, Good Life

Henri Nestlé chose his own coat of arms to represent the

company's philosophy: a bird's nest, with a mother feeding her

young.

The image represents Nestlé core values: care, family values, nutrition, healthy

growth, safety and comfort. It is a guarantee of quality and a commitment to

responsibilities as a food company and experts in nutrition.

Over the years Nestlé has reaffirmed its commitment to wellness, helping

consumers to live longer, healthier, and more productive lives, no matter their

age, gender or socioeconomic status.

Good Ingredients

Three vital ingredients lie at the heart of Nestlé 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 Nestlé family are their source of

strength and energy. Realizing this, Nestlé offer them constant professional

development, and feel their cultural diversity is one of greatest assets.

Nestlé Pakistan History

Nestlé Pakistan

Nestlé has been serving Pakistani consumers since 1988, when their parent

company, the Switzerland-based Nestlé SA, first acquired a share in Milkpak Ltd.

Page 12: Nestle history

Today they are fully integrated in Pakistani life, and are recognized as producers

of safe, nutritious and tasty food, and leaders in developing and uplifting the

communities in which they operate. Nestlé Pakistan ensures that their products

are made available to consumers wherever in the country they might be.

Convenience is at the heart of the Nestlé philosophy, and their aim is to bring

products to people's doorsteps.

A History of Service

In line with the parent company's global philosophy, Nestlé is proud of their

commitment to excellence in product safety, quality, and value. Their products

cater to human needs, and Nestlé is active in the communities they serve.

From spreading awareness about nutrition and wellness to digging wells in the

Thar Desert and succoring earthquake victims, they are committed to serving the

country and its people.

The consumer's voice is key to Nestlé Pakistan's vision and working. Whether

you live in the remotest village or the metropolis of Karachi, their consumer

services team stands ready to listen to your concerns and provide answers about

their products and guidance on matters of health and wellness

Page 13: Nestle history

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.

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.

Page 14: Nestle history

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.

MARKET CONDITION

Pakistan is a third world country therefore its market is not a stable one. This

report was prepared in July 2008 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 July 2008.

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 nestle also introduced many brands keeping in mind the per capita

purchasing power, and set their prices at a premium since people have trust in

nestle therefore nestle is earning good profits 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 nestle to flourish in Pakistan.

Swot analysis

Page 15: Nestle history

Strengths

Nestlé is a global leader and has got many strengths and competitive

advantages. Pakistan Nestle is the largest consumer industry where its annual

sales stand at Rs.22 billion. The Nestle chief executive said the company has

given direct jobs to 10,000 people while one million people are employed through

business in Pakistan. Nestle has four pillars of strength these are operating

excellence, innovation and renovation, product availability, and

communication.

Skilled and committed team:

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 that are applied everywhere.

Those include:

1. A positive attitude toward work

2. A pragmatic, realistic approach to doing business

3. An open-minded approach to the world

4. A minimal number of systems and written guidelines

5. A personal style of management

6. An atmosphere of mutual trust

Page 16: Nestle history

7. An avoidance of showing off, windy rhetoric and hypocritical remarks

8. An emphasis on practical experience and on the setting of good

examples.

Efficient operations, low costs and high quality:

Another strength that Nestle has is that they are low cost operators. This allows

them to not only beat the competition by producing low cost products, but by also

putting comparatively low prices on high quality products. Its ability to negotiate

on bulk purchases helps to reduce the capital costs. Having been operating for

more than a hundred years nestle has designed the most efficient ways of

production.

To reduce the costs nestle has come up with a unique distribution strategy in

Asian countries, that is to produce in those countries where the raw material is

cheap and abundant and export the finished products to the other Asian

countries. For example corn flakes available in Pakistan are imported from

Philippines. A huge industrial unit producing magi products has been setup in

India and products are exported to the other countries.

R&D:

Nestle has multiple critical resources. They have a great research and

development team. Achieving health and wellness through foods is a challenging

adventure. It extends the boundaries of consumer expectations and satisfaction

beyond the classical sensory experience. Today’s discoveries provide the

knowledge for tomorrow’s innovations.

Nestle is probably unique in the food industry in having an integrated research

and development program that engages in applied and basic research in the

fields of human physiology, health, nutrition and raw materials. Nestle research

and development program enables it to create new types of products that we

cannot even imagine today, especially in the critical area where preventive

Page 17: Nestle history

medicine and food products overlap. In addition, as concern for the environment

grows, research will play an important role in overcoming environmental

problems. For Nestlé, this is particularly important in packaging. Concern for the

effects of packaging on the environment is forcing us to look for new solutions

and to consider their interaction with our biological product -- food.

BRAND RECOGNITION AND FAVOURABLE CONSUMER PERCEPTION:

Nestle brand recognition is one strength that helps it to be a market leader

whenever it enters a new market or when it introduces a new product. One of

their main goals has been to deliver brands that consumers trust and value and

they have succeeded. Another strength that nestle has is the fact that consumers

simply know that nestle products are healthy. People have trust in nestle

because nestle always listen to its customers and was the first company to

introduce customer service tradition in Pakistan.

LACK OF COMPETITORS:

Nestle is the world largest food company. The products which nestle has

introduced in the Pakistani market had already been successfully test marketed

in the other parts of the world. Having been operating for more than a century

and huge resources this market giant improved the quality of its products and

hence gained a kind of reputation that helped to increase its brand equity.

Product availability and strong distribution networks:

From farm to factory:

Nestle setup its milk plants in the southern Punjab where milk is in abundance,

instead of going into corporate farming nestle went for contracts with local

milkmen for milk supply for its factories, which helped to reduce the costs

Page 18: Nestle history

efficiently and also helped to solve the problems of the local milkmen because

nestle pays them well.

From factory to market:

One of the key strengths that nestle has is its thorough and efficient research in

different parts of the globe and which helps it to come up with practical and

feasible decisions. After a thorough study of Pakistan’s geographical regions

nestle decided to distribute its products through the distributors on the contract

basis, instead of hiring employees to do this job which would increase its costs

many folds. Through these distributors nestle ensures that its customers should

get its products wherever, whenever and however possible. That’s the reason

consumers in Pakistan has never witnessed shortage of nestle products on the

market shelves. Nestle also offers the free delivery services.

Communication and effective marketing campaigns:

Nestle is a giant in the food industry. It not only knows how to produce goods and

innovate and renovate them, but it also understands the people through out the

globe. Nestle entered into water business at the time when number of diseases

due to dirty water consumption was touching the sky. Pakistan is an agricultural

country where water is in abundance and people living here are accustomed to

drink fresh water from the ground. When nestle launched its water pure life back

in 1998 people could not get the idea behind it therefore nestle ran a huge

campaign to increase the awareness among the people of Pakistan regarding to

the water related diseases, which helped people to accept the idea of safe

bottled water which was new to them.

People in Pakistan are habitual of having heavy breakfast rich in carbohydrates

and fats. When nestle launched the breakfast cereals people did not accept the

idea quickly hence nestle ran an awareness campaign regarding to the healthy

eating habits and how to keep ones body fit, which helped in the product

acceptance.

Page 19: Nestle history

Investors and nestle:

People trust nestle therefore nestle has got this edge that investors find it a very

attractive organization to invest in on the stock market

Long term views:

Nestlé makes clear a distinction between strategy and tactics. It gives priority to

the long-range view. Long-term thinking defuses many of the conflicts and

contentions among groups – this applies to employment conditions and relations

with employees as well as to the conflicts and opposing interests of the trade and

the industry. Of course, Nestlé’s ability to focus on long-term considerations is

only possible if it is successful in the struggle for short-term survival. This is why

Nestlé strives to maintain a satisfactory level of profits every year.

Decentralization

Switzerland is home to Nestlé’s Swiss subsidiary, its international headquarters

and the registered office of Nestlé’s holding company, but Nestlé does not regard

its Swiss headquarters as the center of the universe. Decentralization is a basic

principle of Nestlé. Its policy is to adapt as much as possible to regional

circumstances, mentalities and situations. By decentralizing operational

responsibility, it create strength and flexibility and are able to make decisions that

are better attuned to specific situations in a given country. Policies and decisions

concerning personnel, marketing and products are largely determined locally.

This policy creates stronger motivation for Nestlé’s executives and employees

and a greater sense of identification with Nestlé’s business. It is not Nestlé’s

policy to generate most of its sales in Switzerland, supplemented by a few

satellite subsidiaries abroad. Nestle strives to be an “insider” in every

country in which it operates, not an “outsider.”

Nutrition as the corporate strategy:

Page 20: Nestle history

Nestlé describes itself as a food, nutrition, health, and wellness company.

Recently they created Nestlé Nutrition, a global business organization designed

to strengthen the focus on their core nutrition business. They believe

strengthening their leadership in this market is the key element of their corporate

strategy. This market is characterized as one in which the consumer’s primary

motivation for a purchase is the claims made by the product based on nutritional

content.

In order to reinforce their competitive advantage in this area, Nestlé created

Nestlé Nutrition as an autonomous global business unit within the organization,

and charged it with the operational and profit and loss responsibility for the claim-

based business of Infant Nutrition, HealthCare Nutrition, and Performance

Nutrition. This unit aims to deliver superior business performance by offering

consumers trusted, science based nutrition products and services.

Weaknesses

Product related weaknesses:

Breakfast cereals:

The main weakness of nestle in Pakistan is regarding to their breakfast cereals.

Their cereals are not that successful in Pakistan as they are in western countries.

A third world country like Pakistan where there are not enough facilities people

have to depend on their manual strength, therefore in order to get enough energy

to work all day long people rely on heavy breakfast rich in calories while the

nutritional value of breakfast cereals is not compatible with Pakistani lifestyle. A

recent report by the UK Consumers Association claims that 7 out of the 15

breakfast cereals with the highest levels of sugar, fat and salt were Nestlé

products.

Page 21: Nestle history

Powdered milk:

The Zhejiang Administration for Industry and Commerce (ZAIC) in China

conducted a routine quality test on Nestlé powdered milk products and found that

iodine content in 91.7 percent of the sample exceeded the legal limit set by the

Ministry of Health. When provincial governments called for removal of the

product from store shelves, a Nestlé representative admitted that the company

knew its product was over the local iodine limit, but instead chose to comply with

international standards that set no cap on iodine levels. Nestlé issued a recall of

the milk product ten days after the government warning over iodine content;

however the company refused to reimburse customers for their purchase and

would only allow the exchange of powdered milk for another Nestlé product.

Milk:

According to South Africa-based global anti-poverty group, ActionAid

International, approximately 50,000 Brazilian dairy farmers have been forced out

of business as a result of aggressive takeovers by Nestlé and Parmalat.

In Peru, Nestlé controls 80 percent of the nation's milk production

Though such lawsuit haven’t been witnessed in Pakistan yet but nestle has taken

over much of the milk production in southern Punjab which is the largest milk

production region in Pakistan. All this has led the shortage of milk for the local

poor people who can not afford nestle products at all.

Water:

A 2006 report by the Connecticut-based Container Recycling Institute which is a

nonprofit dedicated to increasing recovery and recycling of beverage containers

Page 22: Nestle history

and San Francisco-based nonprofit As You Sow which aims to promote

corporate accountability, grades America’s top beverage companies on their

efforts to use recycled content, increase recovery and recycling, and reduce the

amount of material used in beverage containers. Nestlé Waters earned F’s in

every area surveyed. Nestlé Waters scored an F grade overall, with a GPA of 0.1

(on a 4.0 scale).

Ailments caused by the consumption of products:

A lot of adverse medical conditions have been witnessed in Pakistan

among the continuous consumers of nestle products, which include:

hair fall due to the consumption of nestle PURE LIFE

yellow teeth caused by consuming EVERYDAY tea whitener

stomach problems such as acidity caused by consuming nestle NIDO

Lack of innovation at nestle Pakistan:

The fact that they are the market leader in the Pakistan may be hindering them

from innovation. Since the nestle targeted customers in Pakistan are less in

number as people belonging to middle class in Pakistan can not simply afford

nestle products for daily use customers in Pakistan are neither much demanding

nor there are strong competitors, therefore nestle has been producing same old

products in Pakistan for years without any innovation.

Discriminatory acts:

Lower pays for milkmen in third world countries:

Nestlé pays 15 cents for every liter of milk produced in developing countries,

compared to wages of 48 cents per liter received by dairy farmers in Europe.

However, the origin of milk accounts for little to no difference in its retail price.

The price of milk from developing countries and Europe are virtually the same in

supermarkets everywhere.

Page 23: Nestle history

Genetically engineered foods:

Nestlé continues to employ a double standard for incorporating genetically

engineered food in its products. Nestlé refrains from using genetically engineered

products wherever they are required to bear identifying labels. However,

genetically engineered foods are used in a variety of Nestlé products in countries

where no such regulations exist. Concerns have been raised about the safety of

genetically engineered foods, particularly as they could cause health issues such

as antibiotic resistance, allergic reactions and toxin development.

Substandard products for third world countries:

Nestle products available in the first world countries are far better in quality as

compared to the nestle products available in the third world countries like

Pakistan. While nestle is charging same international prices from all the

consumers.

Since nestle is a huge company with its headquarters based in Switzerland,

therefore whenever a new venture has to be started in its any subsidiary a long

procedure is involved for getting permission from the headquarters which is quite

time consuming.

Nestle has positioned itself as health and nutrition company while it is selling the

processed food which contain food additives and preservatives not good for

health. This weakness of nestle leads health conscious people avoid using nestle

products.

Water related issues:

Ruthless water privatization an attack on humanity:

Page 24: Nestle history

Nestlé, Coke, Danone and Pepsi are the major targets of a Polaris Institute report

exposing the dark side of the water industry. “Inside the Bottle: An Exposé of the

Bottled Water Industry” highlights the abuses of these corporations, including

fraudulent advertising, ruthless water privatization, and the distribution of unsafe

water. These four companies dominate the world’s bottled water market.

"Drinking Water Crisis in Pakistan and the Issue of Bottled Water: The Case

of Nestlé's 'Pure Life'" (April 2005).

Nestlé has been criticized for its bottled water operations in Pakistan:

The population of Pakistan suffers from water scarcity and limited potable

water, with 40 percent of urban residents and as much as 90 percent of rural

residents lacking access to water for their daily needs. Nestlé's water

extraction has put the company in direct competition with local communities

for precious groundwater resources. In the Lahore district where Nestlé

sources its 'Pure Life' brand water, 4.11 million people depend on 316 tube

wells to supply their tap water. Nestlé pumps water from the same

groundwater source for its industrial production, essentially without regulation.

The Sindh High Court in Karachi curtailed Nestlé's plans to build a water

bottling plant projected to extract 306 million liters annually and produce 228

million liters of bottled water per year. Rather than selling its products in

Karachi where potable water is greatly needed, Nestlé disclosed that the

American military base in Kandahar, Afghanistan was the intended end

market.

Nestle water related issues through out the world:

According to Canadian-based Polaris Institute, which fights for democratic social

change, Nestlé has been implicated in the following water-related issues:

Poland Spring brand bottled water issue:

Page 25: Nestle history

In 2003, Nestlé faced 12 class-action lawsuits regarding the origin of its Poland

Spring brand bottled water. Nestlé markets the product as pure and natural

spring water; however the lawsuits claimed that Poland Springs is in fact drawn

from common groundwater sources and is then treated with multiple filtering

processes. The plaintiffs claimed that Nestlé’s Poland Spring brand "advertised

their water in a false, fraudulent, deceptive, and misleading manner," and also

alleges that contrary to advertisements, the product is not spring water and may

not even be safe to drink. A settlement of $12 million dollars was awarded to

plaintiffs in one case. The other 11 cases have yet to be settled.

Ice Mountain Spring Water Co issue:

In 2001, Michigan Citizens for Water Conservation filed a lawsuit against Nestlé

Waters North America (NWNA) requesting that operations at the Ice Mountain

Spring Water Co. plant be closed. The lawsuit claimed that production would

reduce water levels in lakes and streams in surrounding areas, jeopardizing fresh

water sources for local communities. Convinced of the threat to area lakes and

streams, a judge ordered Nestlé to cease pumping water in 2003; however,

within a few weeks operations resumed

Nestlé’s Zephyr hills bottled water issue:

In Pasco County and throughout Florida, Nestlé has been the focus of concern

regarding water extraction in areas that are drought-prone. Nestlé’s Zephyr hills

bottled water is sourced from the Crystal Springs, which feeds into the river that

serves as the Tampa Bay area’s main source of drinking water. When the region

was plagued by drought in 2000 and 2001, Nestlé pressured Florida to allow for

an increase in its water drawings from 1.14 million to 6.8 million liters per day. An

appeals court eventually denied the request.

Demineralization of water issue:

Page 26: Nestle history

After Nestlé built a water bottling plant on top of a rare mineral water aquifer in

Sao Lourenco, Brazil, residents began reporting a change in the water’s flavor.

When the famous aquifer ran dry, Franklin Frederick of the Water Citizenship

Movement began investigating Nestlé’s operations and the possible effects it had

on the water source

Ethical misconduct:

Infant formula milk issue:

Every 30 seconds a baby dies from unsafe bottle feeding in the Third World

Nestlé and Wyeth, two of the World's largest producers of powdered baby milk,

are currently breaking a World Health Organization Code on the marketing of

breast milk substitutes.

Nestlé and Wyeth provide free milk to maternity hospitals in the Third World so

that newborn babies are routinely bottle-fed. When newborn babies are given

bottles, they are less able to suckle well. This makes breastfeeding failure likely.

The baby is then dependent on artificial milk. When the mother and baby leave

hospital, the milk is no longer free. At home parents are forced to buy more milk,

which can cost 50% of the family income. Because the milk is so expensive the

child is not fed enough. This leads to malnutrition. The water mixed with the

formula is often contaminated. This leads to diarrhea, malnutrition and often

death. James Grant, Executive Officer of UNICEF, has said: Every day some

3,000 to 4,000 infants die because they are denied access to adequate breast

milk. 1.5 million Babies die every year from unsafe bottle feeding. Breast feeding

is free and safe and protects against infection - but companies know that unless

they get babies on the bottle, they don't do business.

Children trafficking to harvest cocoa beans:

Page 27: Nestle history

The workers' rights group, International Labor Rights Fund (ILRF) has sued

Nestlé, Archer Daniels Midland, and Cargill in Federal District Court in Los

Angeles for involvement in the trafficking, torture, and forced labor of children

who cultivate and harvest cocoa beans that the companies import from Africa.

The ILRF and plaintiffs in the case filed suit on behalf of a class of Malian

children who were trafficked from Mali into the Ivory Coast and forced to work 12

to 14 hours a day with no pay, little food and sleep, and frequent beatings. The

three children representing the class of plaintiffs are proceeding anonymously,

for fear of retaliation by the cocoa farm owners implicated in the lawsuit.

Substandard contaminated milk issue:

In November 2002, police ordered Nestlé Colombia to decommission 200 tons of

imported powdered milk. The milk had come from Uruguay under the brand

name Conaprole, but the sacks had been repackaged with labels stating they

had come from a local Nestlé factory, and stamped with false production dates of

20th September and 6th October 2002. The real production dates were between

August 2001 and February 2002. A month later another 120 tons with similarly

false country of origin and production dates were discovered, pointing to

systematic fraud. The discoveries caused a stir, with senators insisting the

Attorney General conduct a full inquiry leading to prosecutions.

Coffee farmer pay issue:

Nestlé scored a 43 on Oxfam's rating of the 4 major coffee producers in 2003.

According to Oxfam's report, "On the positive side, it [Nestlé] led the major

roasters in participating in various international forums and supporting the efforts

of the International Coffee Organization, but all this talking has yet to benefit any

of the struggling farmers...Nestlé failed in a key area--paying the farmer a decent

price for their coffee." Companies were graded on the price they paid to farmers

(70 percent), support for policy alternatives (10 percent), financial contributions

(10 percent) and leadership in industry-wide initiatives (10 percent). Other

Page 28: Nestle history

companies graded are Kraft, Procter & Gamble and Sara Lee. In 2002, farmers’

income from coffee crops could buy merely one-quarter of what it could in 1960.

Adjusted for inflation, the current rate farmers are paid for coffee is perhaps the

lowest rate in a century.

Managerial weakness:

Operational delays:

Since nestle is a huge company with its headquarters based in Switzerland,

therefore whenever a new venture has to be started in its any subsidiary a long

procedure is involved for getting permission from the headquarters which is quite

time consuming.

Union busting activities:

The International Labor Rights Fund (ILRF), which advocates for fair treatment of

workers, sued Nestlé in the U.S. District Court for the Southern District of Florida

for its complicity in the torture and murder of Luciano Enrique Romero Molina.

Romero was a Colombian trade unionist and former Nestlé employee. According

to the lawsuit, Colombia’s paramilitary murdered Romero in response to his

role in exposing Nestlé’s use of expired milk in its Milo brand drink. The suit

claims that Nestlé and two of its subsidiaries “acted in concert with, conspired

with, aided and abetted or otherwise retained as agents the individuals” who

murdered Romero.

Political biasness:

Nestlé USA’s Political Action Committees (PACs) contributed $112,800 USD to

political candidates between 2002 and 2004. The company handed out soft

Page 29: Nestle history

money donations worth a total of $225,892 from 1998 to 2002, the majority of

which went to Republican Party candidates. Joseph Weller, Nestlé USA

Chairman, raised more than $100,000 for George Bush’s reelection campaign,

and was dubbed a ‘Pioneer’ by the Bush 2004 campaign.

Pollution:

The Institute of Public and Environmental Affairs, a Chinese non-governmental

organization, blacklisted Nestlé as one of 33 multinational corporations

responsible for causing water pollution. Nestlé Shanghai Ltd, Nestlé’s bottled

water manufacturing plant in China, was cited for starting operations before its

wastewater treatment facilities had passed an environmental impact assessment.

Opportunities

International strategy:

Nestlé is a global organization. Knowing this, it is not surprising that international

strategy is at the heart of their competitive focus. Nestlé’s competitive strategies

are associated mainly with foreign direct investment in dairy and other food

businesses. Nestlé aims to balance sales between low risk but low growth

countries of the developed world and high risk and potentially high growth

markets of Africa and Latin America and Asia. Nestlé recognizes the profitability

possibilities in these high-risk countries, but pledges not to take unnecessary

risks for the sake of growth. This process of hedging keeps growth steady and

shareholders happy.

Nestle takes ingredients from the local market:

Page 30: Nestle history

When operating in a developed market, Nestlé strives to grow and gain

economies of scale through foreign direct investment in big companies. In the

developing markets, Nestlé grows by manipulating ingredients or

processing technology for local conditions, and employ the appropriate

brand. For example, in many European countries most chilled dairy products

contain sometimes two to three times the fat content of American Nestlé products

Another strategy that has been successful for Nestlé involves striking strategic

partnerships with other large companies. In the early 1990s, Nestlé entered into

an alliance with Coca Cola in ready-to-drink teas and coffees in order to benefit

from Coca Cola’s worldwide bottling system and expertise in prepared

beverages.

Nestle strategies in Asia:

European and American food markets are seen by Nestlé to be flat and fiercely

competitive. Therefore, Nestlé is setting is sights on new markets and new

business for growth. In Asia, Nestlé’s strategy has been to acquire local

companies in order to form a group of autonomous regional managers who know

more about the culture of the local markets than Americans or Europeans.

Nestlé’s strong cash flow and comfortable debt-equity ratio leave it with ample

muscle for takeovers. Recently, Nestlé acquired Indofood, Indonesia’s largest

noodle producer. Their focus will be primarily on expanding sales in the

Indonesian market, and in time will look to export Indonesian food products to

other countries. Nestlé 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, Nestlé produces soy

milk in Indonesia, coffee creamers in Thailand, soybean flour in Singapore,

candy in Malaysia, and cereal in the Philippines, all for regional distribution.

Opportunities in Pakistani market:

Page 31: Nestle history

One opportunity that Nestle has is that health-based products are becoming

more popular in the world, including in the Pakistan. Consumers are becoming

more health conscious, and realize that living longer isn’t only by luck and

genetics. Nestle also has an opportunity of being even a larger market leader

because no other company in Pakistan has ever positioned itself as so customer

oriented and differentiated themselves as food and nutrition company.

The greatest opportunity that nestle can avail is that, Pakistani market is still not

mature enough and there are huge opportunities to grow. Pakistani market is an

expanding market and it has got a lot of flexibility. People in Pakistan are

becoming more aware about the health issues and they have started to take care

about their bodies.

Lack of competition:

Since no other strong competitor is prevailing in the market nestle has got the

opportunity to attract the customers totally towards its market offerings and can

easily build customers preference for its brands.

Being a world leader in business nestle has got enormous resources, therefore

by utilizing those resources nestle can run massive campaigns to create the

awareness among the people regarding health issues, create a need for their

products and attract customers by educating them.

Since Pakistani market is still an immature one nestle can win the whole market

through its enormous research, development, innovation and experience.

Economic Trends:

During the past ten years economic trends have changed drastically, people

became rich in Pakistan because of excessive privatization and foreign

investment policies of government. In today’s Pakistani economy:

Consumers have a larger disposable income

Page 32: Nestle history

Urban populations are growing and feeding periods shortening

Research suggests that nestle sales increase if the product is made more

available to the consumer

These findings, coupled with today's more discerning consumer, suggest that

nestle will be able to capitalize on the impulse nature of the food purchasing

decisions of the consumers.

Threats

Missing the targeted customers:

Nestle has positioned itself as health and nutrition company, and targets health

conscious people throughout the world. The biggest threat to nestle Pakistan is

that, the health conscious people, who are the target market of nestle, do not like

to stuff their bodies with preservatives and food additives which are present in

the processed food. Pakistan is a land where fresh eatables are readily available,

and those who can actually afford nestle products can also easily afford fresh

fruits and vegetables. Over the past ten year awareness regarding to the health

issues among the people has increased dramatically and this awareness has

induced a negative attitude towards the processed food. Hence for nestle

Pakistani market is a tough one to deal with when it comes to the processed food

because people do not need it when fresh eatables are available in abundance.

Therefore nestle has to create the need before introducing a new product in

Pakistani market.

Fake nestle products:

One of the threats that nestle faces in the Pakistani market is the availability of

fake nestle products for sale, hence customers are deceived when they consume

Page 33: Nestle history

the substandard products consequently they loose trust and stop the

consumption of the nestle products.

Discontentment due to the discriminatory acts:

Much discontentment prevails in the Pakistani market due to the fact that nestle

products available in Pakistani market are of inferior quality as compared to

similar nestle products available in the markets of first world countries, while they

are charging the same international prices from the consumers of all countries.

Milk production and human rights:

Since Nestle has opened a milk processing plant in Kabirwala, Punjab in

Pakistan. The plant is reportedly Nestlé’s largest milk reception facility in the

world, and has a processing capacity of 2 million liters per day. This is expected

to rise to more than 3 million liters in the coming years, the company said. This

has led the human rights Ngoc’s working in Pakistan to rally against nestle

regarding to the fact that local people are being deprived of milk because of

Nestlé’s such act.

Competitors:

A threat prevailing in the Pakistani market is coming from the competitors, local

as well as multinational competitors. Local competitors like Shezan and Haleeb

are producing the similar products and selling them for lower prices. Companies

like coca cola and Pepsi are tough competitors to beat specifically when coke

has got a far better distribution system in the market.

Allergic reactions:

Page 34: Nestle history

Due to the following allergic reactions caused by the consumption of nestle

products consequently people are becoming more and more dissatisfied and

hence lower level of sales.

Allergic reactions caused by the consumption of nestle products:

A lot of adverse medical conditions have been witnessed in Pakistan

among the continuous consumers of nestle products, which include:

hair fall due to the consumption of nestle PURE LIFE

yellow teeth caused by consuming EVERYDAY tea whitener

Stomach problems such as acidity caused by consuming nestle NIDO.

Nestlé is a multinational packaged food company founded and headquartered in

Vevey, Switzerland. It resulted from a merger in 1905 between the Anglo-Swiss

Milk Company for milk products established in 1866 by the Page Brothers in

Cham, Switzerland and the Farine Lactée Henri Nestlé Company set up in 1867

by Henri Nestlé to provide an infant food product. Several of Nestlé's brands are

globally renowned, which made the company a global market leader in many

product lines, including milk, chocolate, confectionery, bottled water, coffee, ice

cream, food seasoning and pet foods. The company stock is listed on the SWX

Swiss Exchange.

Much of the company's public image has been dominated by the world-wide

media furore that surrounded the manner in which it sold its breastmilk substitute

to developing countries, which led to the Nestlé boycott from 1977. Although the

Page 35: Nestle history

company has taken serious measures to combat the damage that this caused to

its brand, it is still widely associated with questionable business ethics especially

with regards to the developing world.

NESTLE PRODUCTS

Nestlé has a wide range of products across a number of markets including coffee

(Nescafé), Water, other Beverages, Ice cream, Infant foods, performance and

healthcare nutrition, seasonings, frozen and refrigerated foods, confectionery and

pet food.

DEFINITION OF PRODUCT:

“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.”

”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.

WHAT IS PRODUCT MARKETING?

An organization must properly define the function of strategic product marketing

before it can be effective. For example, one common mistake is thinking that

marketing is advertising, another is that marketing is gathering information or

finding new prospects. While these objectives are certainly key parts of

marketing, the successful strategic marketer will seek additional objectives.

Page 36: Nestle history

The definition of strategic marketing is usually divided into four functional

areas.

Marketing includes having something for people to buy, finding people who will

buy, encouraging people to buy, and providing value. Together, these objectives

form a picture of strategic marketing.

To more easily remember these objectives, marketing is often described as The

Four P's:

Product

Place

Promotion

Price

NESTLE BRAND EQUITY:

Nestle has been serving this world for over one hundred and thirty years. Over all

these years nestle has successfully gained people’s trust, hence they are even

ready to pay premium price for nestle products, because they know that they are

buying something valuable for their money. Nestle has differentiated itself with

its high quality products, it has positioned itself as health and nutrition company

and targets health conscious people around the globe. Therefore nestle has got

a very strong brand equity.

PRODUCT DEVELOPMENT AT NESTLE:

Nestlé is probably unique in the food industry in having an integrated research

and development program that engages in applied and basic research in the

fields of human physiology, health, nutrition and raw materials. Its research and

development program gives it the capacity to create new types of products that

we cannot even imagine today, especially in the critical area where preventive

medicine and food products overlap. In addition, as concern for the environment

Page 37: Nestle history

grows, research will play an important role in overcoming environmental

problems. For Nestlé, this is particularly important in packaging. Concern for the

effects of packaging on the environment is forcing it to look for new solutions and

to consider their interaction with our biological product -- food.

The Nestlé research and development centers have two main tasks: to create

new products and manufacturing processes and to improve those that already

exist. These centers play a key role in product safety and quality and also have

their role in conserving resources and protecting the environment. Environmental

concerns are an integral part of any development process to ensure that our

future commercial operations meet the desired criteria.

The Nestlé Research Center provides the scientific support needed to prevent

and solve environmental problems arising in the development groups as well as

manufacturing. In addition, studies are carried out to find new ways of using

industrial residues to create valueadded byproducts. This will reduce total

emissions and effluents.

The Nestlé development centers prepare environmental impact studies for new

products and manufacturing processes. These cover all aspects, from raw

materials, through processing, to the final packed product. These analyses

provide additional elements for use in deciding whether to commercialize a new

product, or to introduce a new or modified process.

NESTLE PRODUCTS LIFE-CYCLES:

Nestle deals in eatables whose lifecycle is as old as the humanity itself, therefore

nestle products enjoy a long life-cycle. Not only this nestle keeps on innovating

new products keeping in view the changing global needs and also renovating the

existing products, for example nestle introduced calcium fortified corn flakes and

fruity yoghurt.

Page 38: Nestle history

COMPONENTS OF NESTLE PAKISTAN:

NESTLE PRODUCT CLASSIFICATION:

Nestle deals in both type of products:

1) consumer products

2) industrial products

CONSUMER PRODUCTS BY NESTLE:

The type of consumer products in which nestle deals are basically

convenience products that consumer usually buy frequently, immediately

and with a minimum of comparisin and buying effort. Nestle provide superior

quality products in pakistani market, that is the reason they achieved a bigger

market share of consumer convenience products in a short period of time.

Nestle is a market leader difficult to compete.

INDUSTRIAL PRODUCTS BY NESTLE:

Though nestle deals in eatibles only but its products are also used as industrial

products. Nestle products are used as manufactured materials in restaurants,

for example nestle juices are served at hotels like PC, AVARI and HOLIDAYINN

for breakfast, moreover its products like cream, yoghurt, cornflakes etc are the

part of several recepis served at restaurants. Nestle also provide vending

machines like coffee vending machine and juices vending machines at hotels,

restaurant, colleges and offices, it also provide services regarding to these

machines.

BRAND MANAGERS:

Since nestle is a huge organization therefore there is a brand manager for each

of its divisions and they are:

Page 39: Nestle history

Imran (juices), Majid Saeed (NPL), Ibrrar Khan (Coffee), Jamal (everyday).

NESTLE PRODUCT MIX:

Nestle product mix includes processed food items and hot and cold bevrages.

NESTLE PRODUCT LINE:

A list of nestle product lines is given below:

MILK,DAIRY & CHILLED DAIRY:

NESTLE MILKPAK

NESTLE NESVITA

NESTLE NIDO

NESTLE NESLAC

NESTLE EVERYDAY

NESTLE YOGURT

NESTLE FRUIT YOGURT

NESTLE RAITA

NESTLE CREAM

NESTLE DESI GHEE

BEVERAGES:

NESCAFE

NESTLE MILO

Page 40: Nestle history

NESTLE JUICES

NESTLE INSTANT DRINKS

BOTTLED WATER:

NESTLE PURE LIFE

AVA

BABY FOOD:

NESTLE CERELAC

PREAPRED MEALS:

MAGGI 2-MINUTE NOODLES

BRAKFAST CEREALS:

CHOCOLATE & CONFECTIONARY:

NESTLE KITKAT AND KITKAT CHUNKY

POLO

RAW MATERIALS FOR NESTLE PRODUCTS:

Nestle does not generate raw materials to be used in its products by itself

instead Nestlé grows by manipulating ingredients or processing technology

for local conditions, and employ the appropriate brands. For example instead

of going into corporate farming nestle partners with the local milkmen in

Page 41: Nestle history

southern Punjab for its continuous supply of milk. Nestle does not own the

fruit farm for its juices instead it purchases orange and mango pulp from

Pakistan, pineapple pulp from Malaysia and Thailand and grapes pulp from

Spain.

Packaging of nestle products:

Nestle products have been a success on the market shelves because of the

following packaging characteristics:

Functional - effectively contain and protect the contents

Provide convenience during distribution, sale, opening, use, reuse, etc.

Environmentally responsible

Cost effective

Appropriately designed for target market

Eye-catching (particularly for retail/consumer sales)

Communicate attributes and recommended use of the product and

package

Compliant with retailers' requirements

Promotes image of enterprise

Distinguishable from competitors' products

Meet legal requirements for product and packaging

Point of difference in service and supply of product.

For a perfect product, perfect colour.

NESTLE PRODUCTS IN PAKISTAN:

Details of products attributes, brands and packaging of several nestle

products available in pakistani market given below.

Page 42: Nestle history

Pure, rich and delicious NESTLÉ® MILKPAK® standardized UHT milk benefits

from Nestlé’s expertise in bringing you the very best life has to offer and benefits

from 140 years of consumer trust.

Our extensive milk collection system ensures that the milk you get is of the finest

quality.

Encourage your family to exercise regularly, eat a healthy, well-balanced diet and

drink pure, nutritious milk for good health. Milk is a must-drink for your children as

it is a rich source of Calcium that helps in the growth and development of strong

bones and teeth. It is equally beneficial in keeping grown-ups bones strong. So

live to the fullest and enjoy the pure, wholesome goodness of milk with

Low Fat Hi-Calcium Milk & Yogurt

Stronger Bones, Smarter You!

Did you know that your body loses a certain amount of Calcium every day that

must be replenished on a daily basis? Since your body cannot produce Calcium,

you must ensure that you get enough of it in your daily diet.

If you are set for an active and healthy lifestyle then you need to get the strength

your bones.

Page 43: Nestle history

NESTLÉ® NESVITA® Milk is available in two handy sizes: 1000ml

and 200ml. NESTLÉ® NESVITA® Yogurt is available in a 450g tub

packaging.

*Source: Food & Nutrition Board, National Research Council Recommended

Dietary Allowances (Revised 1989)

One glass is 250 ml                One serving is of 125 gms

Sehatmand bachay, sehatmand mustakbil!

Healthy kids, healthy future!

Children grow very quickly and so do their developmental needs. That is exactly

why Nestlé has developed NIDO® Nutrition System that understands the

nutritional needs of your children at all stages of growth.

NIDO® Nutrition System

As a part of the NIDO® Nutrition System, NESTLÉ® NIDO® 1+, 3+, 6+ and

NIDO® Fortified comprise a series of Nestlé’s milk powders that address the

developmental needs of children according to their age and nutritional

requirements.

Page 44: Nestle history

NIDO® 1+ is developed for children

aged 1-3 years. It contains Prebio 1™

that helps maintain a healthy digestive

system and protects from upset

tummies.

NIDO® 3+ with Prebio 3™ is designed

to support your child’s mental and

physical development as well as aid

healthy digestion.

NIDO® 6+ is for your 6 year old’s

stronger bones and teeth. It is focused

on children who are

experiencing increased physical

activity. It contains Calci-N™, Nestlé’s

natural Calcium source from milk which

has Calcium and Vitamin D that help

lock calcium in their bones.

NIDO® Fortified is for children between

4-12 years of age who are growing up

in an increasingly competitive

environment and require something

extra to ensure success on the playing

field and in the classroom. It is

enriched with iron, 24 vitamins and

minerals, which are essential for your

child's growth.

Growing-up Milk for 1, 2 & 3 years of age

Page 45: Nestle history

As a mother you want the best for your child and almost always worry about

his/her health. But are you completely sure if your child is getting sufficient

nutrition for his or her good health and development?

Many of you may not be so sure. Children between 1 to 3 years of age

experience rapid growth and strong height and weight gains making their

nutritional requirements unique.

That's why we have NESTLÉ® NESLAC®, growing-up milk for children 1-3 years

of age. NESTLÉ® NESLAC® provides the right vitamins and minerals in the right

proportions that your little one needs at this particular age.

NESTLÉ® NESLAC® is available in Honey flavour and is enriched with the right

balance of Protein, Iron, Calcium and Multivitamins to help give your child a

strong and healthy foundation for life!

Mazaidar chai har bar

Perfect cup of tea, every time

We love tea; our day doesn’t begin without it!

When it comes to choosing the milk for your favourite cup of tea why should you

settle for any ordinary milk?

NESTLÉ® EVERYDAY® dairy tea whiter, made from pure fresh milk gives you

that perfect rich taste that only specialized milk can, so you can enjoy the same

Page 46: Nestle history

delicious cup of tea each time!

For your convenience NESTLÉ® EVERYDAY® is available both in powder and

liquid forms:

NESTLÉ® Yogurt is simply nutritious and delicious! It is a popular and preferred

accompaniment to our rich desi cuisines and palate! It contains the dairy

goodness and benefits of milk with live cultures that help the digestive system

function smoothly.

Use NESTLÉ® Yogurt for making chilled lassi, to refresh yourself or help settle

your stomach or just enjoy its creamy taste on its own.

Moreover, use NESTLÉ® Yogurt to make some coleslaw, jazz up the typical

boring green salad with a spoonful or two or enjoy it straight ‘n simple as your

breakfast accompaniment.

NESTLÉ® Yogurt is available in serves of 125g & 450g.

Page 47: Nestle history
Page 48: Nestle history

NESTLÉ® Fruit Yogurt, a mouth-watering treat with real fruit chunks in sweet

creamy yogurt, takes the yogurt experience up a few notches!

It is by far the delicious, healthier alternative to any other snacks – loved by kids

and grown-ups alike. It is easily digestible and a good source of Calcium too!

You can have it as a snack, as dessert, or even with your breakfast cereal but

most importantly you need not look for an excuse to enjoy this nutritious and

healthy treat any time you like!

NESTLÉ® Fruit Yogurt is available in 3 indulgent flavors: Mango, Peach and

Strawberry, in ready-to-serve 100g cups.

Pour it on pure ‘n thick for that soft, rich, velvety flavour that is MILKPAK®

Cream.

Its silky creamy texture is ideal with strawberries or mangoes! Some prefer to

give their coffee a swirl for that creamy finishing touch or put

a generous dollop on their naan (round flatbread).

MILKPAK® Cream is ideal for desserts, an assortment of toppings and to put a

rich spin on whatever you fancy!

Page 49: Nestle history

If you weren’t happy with the raita (local Pakistani cuisine condiment) served last

that was anything but delicious or the one you had with the chicken tikka at a

dinner party had gone sour, take heart.

For reasons of health, convenience and hygiene, life should be simpler when it

can be made simpler: with NESTLÉ® Raita you can now indulge your taste buds

with the flavour that is just right to compliment your meal. Without the preparation

hassle and the worry of quality you can be assured that the raita you are having

is nothing but the very best from Nestlé.

NESTLÉ® Raita helps proper functioning of the digestive system, is easily

digestible and a good source of Calcium too! Life just got better!

Nestlé® Raita is available with cumin and podina (mint) to give you options to

choose from.

Page 50: Nestle history

Har Ghar Ki Lazeez Rewaiat!

There's nothing like the rich traditional flavour of food cooked in desi ghee.

Whether it's the finest halva, tarqa on the daal or your grandmother's delicious

korma, MILKPAK® Desi Ghee adds the magnificence to your menu.

With MILKPAK® DESI GHEE you can be assured of top quality.

MILKPAK® DESI GHEE is available in 870g packaging.

Page 51: Nestle history

Jaago!

Come Alive!

Stimulate your mind. Awaken your soul. Arouse your senses. Come alive with

NESCAFÉ®.

Every great tasting cup of NESCAFE® is rich, aromatic and favorable. It is frothy,

intense and indulging; bold and satisfying…

Serve it hot or icy cold; strong black or milky, the NESCAFÉ®

experiences are as diverse and unique as its many blends and

varieties. Ranging from the morning wake-me-up, to getting through

the day, quiet reflective moments to unwinding, parties to simply hanging out with

your pals, the NESCAFE® magic goes beyond just a great tasting cup of coffee;

its eye opening, thought provoking &

stimulating. It stimulates one physically, mentally and emotionally touching the

body, mind and soul. NESCAFÉ® fits the bill A to Z!

NESCAFE® CLASSIC

NESCAFE® Classic kicks start your day and keeps you going and going…

NESCAFE® GOLD

The premium blends of coffee that gives you rich taste with an aroma to soothe

Page 52: Nestle history

your soul.

NESCAFE® 3in1

Sugar, Creamer & Coffee; all you need is love and a little hot water. Makes every

cup taste great. Easy to make, convenient to store and hassle free usage.

With the new and improved Nestlé MILO®, children have more reasons to be

active as it gives them the energy they need for an active and healthy lifestyle. A

specific balance of Vitamins, Minerals and

Actigen – E help optimize the release of energy from Proteins, Fats

and Carbohydrates.

Loaded with extra cocoa and rich malt, Nestlé MILO® has the

irresistible chocolaty taste that kids love. So treat your children with Nestlé

MILO® and watch them at their active best!

For your convenience Nestlé MILO® is available both in powder and ready to

drink forms:

Page 53: Nestle history
Page 54: Nestle history

Oranges are in demand not only for their divine juicy flavour but equally

celebrated for their health benefits. They are naturally low in calories and an

excellent source of Fiber and Vitamin C. Nestle uses the orange pulp from the

oranges produced in Pakistan. Nestle orange is the only juice that nestle

sells and rest of its fruit beverages are nectar. Juice contains 80 to 90%

fruit and 10% water and flavors. Where as nectar contains 50% fruit and

50% water and flavors.

Apples have no fat and are cholesterol free. NESTLE® Clear Apple Nectar is made

from the finest Apples and is 100% clear. Nestle calls it apple nectar because

nectar contains 50% fruit and 50% water and flavors.

As irresistible as sin itself – give in to the amber kick of NESTLE® Clear Apple

Nectar.

Grapes also called the ‘queen of fruits’ are known for their great internal body

cleansing properties. They are a good source of Vitamin C and Potassium that plays

an important role in proper heart functioning by regulating blood pressure and heart

Page 55: Nestle history

beat. Nestle imports grapes pulp from Spain to be used in grapes nectar.

Relish the full-bodied, smooth flavor of NESTLÉ® Red Grapes Nectar and let your

taste buds soak in the sensuous richness of Red Grapes.

Pineapples are good source of Vitamin C, an antioxidant that helps fight against free

radicals, one of the main reasons for aging.

Made from premium pineapples, NESTLÉ® Pineapple Nectar brings you the exotic

taste of pineapples with a refreshing tropical flavor and is a good source of Vitamin

C. Nestle imports pineapple pulp from Malaysia and Thailand.

Sink into Fruity Refreshment

Feel the burst of fruity fun and discover the flavors of NESTLÉ® Mango &

NESTLÉ® Mango Orange fruit drink made with the juiciest, sweetest Mangos and

racy, sharp Oranges to sass up your taste buds.

Now that is a sweet deal!

Page 56: Nestle history

ReVitalize With Pure Vitamin Burst!

You are living life in a constant overdrive and your body needs to equip itself to fight

the daily wear out.

NESTLE® FRUITAVITALS™ mix fruit juice fortified with Vitamin A, B, C & D is a

delightful combination of Orange, Apple and Guava to give you the perfect hit of

flavour and Vitamins to get you revitalized and in top gear. What’s more it has no

added sugar!

Page 57: Nestle history

NESTLÉ® Limo (Lemon) & NESTLÉ® Malta (Orange) Instant Drinks provide

fruit-filled refreshment that quenches your thirst and energizes your body with an

instant citrus boost!

They are both available in 25g single-serve sachets that are convenient and

affordable. But what really hits the spot is that NESTLÉ® Instant Drinks are

packed with Vitamin C that provides immunity against diseases and helps put the

glow in your skin.

NESTLÉ® Limo (Lemon) gives you 36% RDA of Vitamin C and NESTLÉ® Malta

(Orange) gives you 24% RDA of Vitamin C. So get refreshed and invigorated

with NESTLÉ® Limo and NESTLÉ® Malta!

Now also available in a convenient 500g Jar packaging

Page 58: Nestle history

Pakistan’s Favorite Water

NESTLÉ® PURE LIFE™, is pure, safe and healthy drinking water for you and

your family.

Every bottle of NESTLÉ® PURE LIFE™ is produced with the Nestlé Safety

System and is carefully sealed with a proprietary seal. Purity of the highest

standards is matched by an optimal balance of essential minerals, enhancing the

health and wellbeing of your family.

No wonder its Pakistan’s favorite water because more people trust it than any

other brand.

For your convenience NESTLÉ® PURE LIFE™ is available in

non-returnable 330ml, 0.5 liter and 1.5 liter bottles at retail outlets and Bulk

bottles for Home & Office Delivery in 19 & 12 liter (12 liter is available at retail

outlets).

Be Good to Yourself

Page 59: Nestle history

Safety, convenience and value are just what you get from AVA ®, your source of

pure, safe and healthy drinking water for you and your family.

AVA ® is packed and sealed in special sterilized bottles and caps to ensure the

highest standard of quality and safety, keeping clean of all suspended and

dissolved contamination.

AVA ® is available in two economical sizes of 12 and 19 Liter bottles. You can

get your 19 Liter bottle delivered free of cost through our home and office

delivery service. The 12 Liter take-home bottle can be conveniently collected

from any leading retail outlet by placing a refundable deposit.

For your convenience, AVA ® also offers different payment options that give you

more value for your money.

*Only available in Karachi

Bharpoor nashvonuma!

Sehatmand mustakbil ka behtrin aghaaz!

Best Start to a Healthier Future!

Whether it’s your first-born or even your third bundle of joy – each

baby is unique and special. You want the best for your baby in every way and

that also means the best nutrition for your baby’s healthy

Page 60: Nestle history

development, giving him or her the solid foundation for a bright and healthy

future!

From birth to 3 years of age, your baby goes through a period of rapid growth

and development. Choosing the best nutrition for your baby can be difficult and

confusing and you always wonder if it’s just right.

Each stage of your baby’s growth is unique and so are the changing nutritional

requirements. NESTLÉ® CERELAC® infant cereals (6 months onwards) are

easy to digest and grouped in stages according to the changing nutritional needs

of the growing child, with NESTLÉ® CERELAC® providing the right nutrition at

each stage.

NESTLÉ® CERELAC® is available in three sizes: 400g & 200g box packaging

and a 25g sachet packaging for your convenience.

STAGE

1

STAGE

2

Page 61: Nestle history

From birth to 3 years, your baby will undergo a period of rapid growth and

development. Nestlé Developmental Nutrition Plan helps your baby grow

through each unique stage so that he/she always gets the right nutrition at

the right moment.

STAGE 1 GENTLE FIRST FOOD

CERELAC® Rice

Page 62: Nestle history

CERELAC® Wheat

NESTLÉ® Rice

STAGE 2 NEW TASTES

CERELAC® Wheat 3-Fruits

CERELAC® Wheat Banana

CERELAC® Wheat Honey

STAGE 3 RICHER TASTES & TEXTURES

CERELAC® Wheat 5-Fruits

CERELAC® Chicken Vegetable Rice

JUNIOR STRONG FOUNDATION

NESTLÉ® NESLAC®

New Maggi Atta Noodles - Taste bhi, Health bhi

MAGGI® 2-Minute Noodles™ brand new offering of MAGGI® Atta Noodles

contains the natural goodness of whole wheat. A source of Protein and Fiber -

good for digestion, great for your heart and essential in the re-building of muscles

and cells in your body. Now make sure that the food you eat is tasty as well as

healthy!

Page 63: Nestle history

One pack of MAGGI® Atta Noodles contains the nutritional benefits of 2 Rote of

Real Atta (1 pera = 400 gms ).

Jub bhook satay MAGGI® ho jayee!!

Open up a pack of MAGGI® 2-Minute Noodles and give your kids a fun, warm

snack they love to eat! Fast to cook and good to eat! Kids love ‘em!

Did you know that MAGGI® 2-Minute Noodles have 307 Kcal and on an average

one serving meets about 35% of your 4-8 year old’s RDA* for Protein

Protein plays an important role in the regulation and growth of muscles, skin,

hair, eyes and other organs.

So whenever your kids are hungry for a yummy snack, choose from the exciting

flavors of MAGGI® 2-Minute Noodles: the widely popular Chicken, Chatkhara

and Chicken Tikka for the more adventurous taste buds.

* RDA (Required Dietary Allowance): Source is DRIs (Dietary Reference Intakes)

for individuals, Macronutrients, Food and Nutrition Board, Institutes of

Medicine, National Academies.

Page 64: Nestle history

Breakfast has been declared the most important meal of the day – and with good

reason. It’s the first meal after your body has been resting all night and this is the

meal that is going to fuel the body and prep it for the day ahead.

All of us: children, teens and even adults benefit from a good breakfast. A bowl of

cereal is an ideal way to start your day!

Available in three varieties, NESTLÉ® CORNFLAKES (275g and 150g boxes),

kids’ favorite chocolaty NESTLÉ® KOKOKRUNCH® (330g and 170g boxes) and

NESTLÉ® HONEY STARS® (300g and 150g boxes), are delicious cereals made

from wholesome grains and packed with Vitamins, Calcium and other minerals.

Page 65: Nestle history

Have a break, have a KITKAT

Chocolate is one of the most loved indulgences around the world.

It is one of life's little pleasures, which delights the senses of all ages.

NESTLÉ™ KITKAT® is by far one of the most popular chocolates all around the

world! It’s trademark red and white colors and the distinct NESTLÉ™ KITKAT®

logo makes it one of the most recognized brands ever.

This light hearted treat of wafer fingers coated with delicious smooth chocolate,

can be enjoyed in the signature style of snapping one finger at a time.

NESTLÉ™ KITKAT® Chunky is a single solid finger that is perfect for those who

want a mouthful!

So have a break have a KITKAT!!!

NESTLÉ™ KITKAT® is sold in 11g, 17g and 35g finger bars and

NESTLÉ™ KITKAT® Chunky is available in 46g bar.

Just the right sweetness, fresh and minty. That’s POLO®, the

all-time favourite mint with the hole. It’s popular around the globe

for its just-because moments!

Page 66: Nestle history

POLO® mints are products for all occasions, especially when you need to

freshen your mouth and breath with its cool, lingering aftertaste.

POLO® mints come in stick-packs of 6, 14 & 20 mints.

PRODUCT AND SUPPORT SERVICES:

“Only by listening to what people say can we understand what they want and

need. Only by understanding their needs can we serve our consumers to the

fullest”. Nestle is the first ever company in Pakistan which introduced the

Page 67: Nestle history

customer services tradition. Nestle listens to its customers carefully and try to

rectify the product related problems as soon as possible.

Foresight:

At present, the world faces daunting questions about its ability to provide enough

wholesome food for everyone. Malnutrition and poor eating habits are still serious

problems in many developing countries. By 2100, the world's population will

double. Will it be possible to feed a world with so many inhabitants? At Nestlé,

the big picture is all about feeding the world and providing food and nutrition for

an ever-growing population. Our response to this situation is to intensify

research, strive for innovations and improve quality.

Price

Price is the only revenue generating element among the 4’ ps of marketing. Price

can be defined as:

“The amount of money charged for a product or service or the value exchanged

for the benefits of the product or service”

More broadly, Price is the sum of all the values that customers give up in

order to gain the benefits of having or using a product or service. It’s a very

powerful tool at the disposal of an organization to differentiate its offerings.

Pricing strategy:

Page 68: Nestle history

Nestle pricing is an important strategic issue because it is related to product

positioning. Nestle is basically using psychological pricing strategy as they are

earning huge profits, approximately 30% on their products. People believe in

nestle hence this aspect gives nestle a competitive advantage being a market

leader to set its prices high. The main thing behind the success of nestle is they

keep an eye on their customers and accordingly they change the price. People

have trust in nestle that is the reason they are willing to buy nestle products

again and again. Nestle has always tried to enter the market with the right price

and then justifying it with high quality products and by communicating and

transferring the maximum value to the customers.

“Duniya Main Her Kemti Cheez Mehngi Nahe Hoti”

This slogan by nestle proves its pricing approach.

In addition to this pricing approach nestle focuses on vide range of SKU’s in

order to capture greater market segment keeping in view their buying power. This

way nestle ensures their consumption in the entire segment of market. Therefore

nestle adopt “value base pricing”.

Nestle has been the low cost leader through its extensive research and

efficient operations. The Nestle 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. Nestle has differentiated itself as

health and nutrition company, therefore it targets health conscious people

throughout the world. In Pakistan nestle has positioned its brands as something

of supreme quality.

Page 69: Nestle history

Therefore nestle has determined its prices a bit higher than the other local

brands available in Pakistan. It targets the people belonging to the upper middle

class and above who can afford nestle products for daily use.

In Asia, Nestlé’s strategy has been to acquire local companies in order to form a

group of autonomous regional managers who know more about the culture of the

local markets than Americans or Europeans. Nestlé’s strong cash flow and

comfortable debt-equity ratio leave it with ample muscle for takeovers. Recently,

Nestlé acquired Indoo, Indonesia’s largest noodle producer. Their focus will be

primarily on expanding sales in the Indonesian market, and in time will look to

export Indonesian food products to other countries.

Nestlé 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, Nestlé produces soy milk in Indonesia, coffee

creamers in Thailand, soybean flour in Singapore, candy in Malaysia, and cereal

in the Philippines, all for regional distribution.

All these strategies have helped nestle to keep its costs and consequently its

prices low, with the supreme quality products that it offers to its customers.

Nestle does not want to become either a conglomerate or a portfolio manager.

Nestle wants to operate only those businesses about which it has some special

knowledge and expertise.

Retail and wholesale selling at Nestle:

Nestle brings its customers with its products through distributors. Though nestle

does not involve itself in retail selling but still it provides its customers with the

free home and office delivery facility, but mostly it only go for the wholesale

selling.

DISCOUNTS

Page 70: Nestle history

Discount is the:

“A straight reduction in price on purchases during a stated period of time”

The discount rate offered to the employees in very high. The main reason behind

the success of nestle is key consider themselves as a family and then change

the price. The discount they offers to their distributors are like 12+1 offer or buy

5000*24bottles and get free dispenser. The discount they give to the customers

is of JUMBO rewards for these brands that they sold directly JUMBO rewards are

basically the points per bottle earned.

Right now it is limited to the jumbo services. When you earn some points then

you can choose different things that are changed after every six months.

“The customers are very much satisfied with our brand and a product, so we

don’t wast time in thinking of discount offers, we focus to expand our brand”

By: brand manager juices

WHAT IS 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 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-

Page 71: Nestle history

profile celebrities to serve as corporate spokespersons to the owner of a one-

person enterprise passing out business cards at a local businessperson’s

meeting.

Promotion Mix:

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.

(1) Advertising

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

(2) Personal Selling

Oral communication with potential buyers of a product with 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.

(4) Publicity

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.

Page 72: Nestle history

NESTLE ADVERTISING STRATEGIES:

Nestle launched every product with aberrant marketing strategies and tactics.

Some of it's products were a total new concept in our society like tea whitener,

two minute noodles, UHT milk e.t.c but with so extensive marketing the products

brought this saying into life i.e., vini vici vidi (they came, they saw and they

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. Recently, launch of Nestle

FROTH`E (coffee) and free sampling at Macdonald's proved to be success.

Nestle increasing sales is attributed to innovative strategies and a sound

distribution network that has proven to be par excellence.

Page 73: Nestle history

NESTLE’S PHILOSOPHY:

Win consumers' trust

Understand consumers' nutritional and emotional preferences

Serving our consumers and improving their quality of life.

Our strategy starts and ends with the consumer.

Our lifestyles and approach to life has evolved and changed significantly. With

new technology and information, our lives are easier, but we are also a whole lot

busier. Health and nutrition is more dynamic than ever. Food has evolved from

being a necessity to becoming an expression of how we live and what we want

from life. It is all about making informed choices. And in this progressive and fast-

changing time, your future begins today.

Concepts and products you would have considered eccentric and frivolous earlier

are the order of the day. Food is not just about nourishment anymore; it has

evolved into a source of taste and pleasure along with health and nutrition

benefits.

Consumers will never give up good taste, but more and more, foods that also

make good nutritional sense are finding favor everywhere in the world.

Page 74: Nestle history

This shift and awareness is a fresh approach to life. It is the development and

nurturing of a life-long relationship. It is the way forward to: Good Food, Good

Life.

Eat well to live well!

There is a lot of hype about two catch phrases: wellness and well-being. They

are not exactly the same, yet have inter-linked meanings. Wellness is the

platform on which well-being rests.

Nutrition

The science of food in its relationship to health. The essential “good for you”

elements that help us grow strong and stay healthy. It refers to how our body

uses nutrient substances contained in food so that it can carry out its functions

properly.

Health

Soundness of body or mind, characterized by a strong constitution, plenty of

energy, a resistance to illness quick recovery, good skin, clear eyes, etc.

Wellness

A condition of enhanced health mainly focused on physicality, an actively sought-

after goal; maintained by good diet, exercise and life habits. Feeling of vitality

and being in good shape.

Page 75: Nestle history

Well-being

A state of being happy and healthy, prosperity of spirit, contentment, a feeling of

satisfaction and fulfillment in one’s life. Well-being is less focused on physicality,

but rather on all three dimensions of body, mind and soul. Well-being is inclusive

of good health and wellness, encompassing the emotional dimensions of look

good and feel good.

However all the happiness in the world can only be meaningful if one is healthy.

Like it is said, ‘Jaan hai tau jahan hai.’ This means that with good health, you

have the world at your feet. Eat well to live well; after all we are what we eat.

Remember: there are no bad foods, only bad diets so make your choices with

care and know your own nutritional needs.

Nestlé is leading the change in the food industry as it is also the leading food

company in terms of having the largest set up of research and development in

food science and nutrition. We are uniquely positioned to provide products that

help consumers live a good life. Many Nestlé brands have benefited from the

active ingredients developed by Nestlé research and with over 130 years of

expertise, consumers know they are getting the best in quality when they choose

a Nestlé brand.

Happy and healthy consumers are at the heart of what we do. Our company

philosophy is summed up in the phrase “Good Food, Good Life: and we remain

committed to help consumers choose better tasting and healthier products to

help them enjoy happier, healthier lives. We welcome you to a world of health

and wellness!

To live a healthy, fulfilling life, you need to stay on top of your nutritional and

lifestyle requirements. Eating anutritious and balanced diet lies at the foundation

Page 76: Nestle history

of a life of good health and wellness. However, besides good food, you also need

to stay fit, active and keep stress at bay. Recognize that your body and mind will

change as you grow older – and so will their special needs.

We have collected some great ideas to help you explore how easy it is to bring

wellness into your life, no matter how busy you are. Moreover, you will also find

out how to have fun doing it!

Good Food, Good Life is about making sure your kids live a life of well-being. For

your children to be bright, healthy & active, you need to know for every age what

their nutritional and lifestyle requirements are.

Here we bring together a wealth of ideas that help bring together friends, parents,

sisters and brothers to discover new ways to grow together, participate in group

activities and strengthen relationships with each other. We share little ideas that

help you be a more supportive and nurturing parent.

Go back to the basics that hectic life shoved on the backburner, and rediscover

the joys of parenting! It's the little things that make all the difference in the world,

so unlock all the little ideas for big fun, love and the joy of being a happy family.

NESTLE’ CONSUMER COMMUNICATION PRINCIPLES:

Communication with consumers

_All representation including text, sound, and visual, should accurately represent

the product, including taste, size, and content.

_ Health benefit claims must have a sound scientific basis, comply with

applicable legislation and regulations, and be easily understood by consumers.

Page 77: Nestle history

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.

_ Food advertising should depict moderation in food consumption, including

moderate portion sizes

(i.e.: not excessive, but sensible), with portion sizes appropriate to the target

audience and social context.

_ Wherever possible and appropriate, food and drink advertising should depict an

active, rather than a sedentary, life style.

_ Products that form only part of a meal should clearly be depicted as such.

Unless a snack food or beverage has been nutritionally designed as a meal

replacement, it should not be portrayed as such. Snacks and confectionery bars

should be promoted in a manner that does not suggest that they replace a meal.

_ The content of consumer communications must reflect good taste and social

responsibility in accordance with each country’s laws and regulations and

voluntary codes and standards. Although standards will vary from country to

country, it must not display vulgarity, bad manners or offensive behavior and

there must never be an intention to shock or offend.

_ Advertising content must not depict attitudes that are discriminatory or

offensive to religious, ethnic, political, cultural or social groups.

_ Advertising should avoid exploiting media events that could be in bad taste.

_ Advertising should never exploit the misfortunes of others.

_ Consumer communications must show the consumption of products in a safe

way, and not depict persons engaged in dangerous activity.

_ Advertising should not name competitors directly, portray competitive products

inaccurately, nor denigrate them.

It is against Nestlé principles to sponsor or place advertising in television and

radio programmes, or magazines and websites whose strategy for attracting

viewers or readers relies on exploiting violence or sex, or encouraging offensive

Page 78: Nestle history

behavior to others. When collecting consumer data, including from children,

Nestlé complies with applicable privacy legislation and regulations, and applies

Nestlé standards where specific

Children as consumers

In addition to the above principles for all consumers (including children), Nestlé

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.)

Nestlé must at all times be diligent in applying these principles, and use common

sense and good judgment to interpret them appropriately for each country.

_ Food products advertised to children must be appropriate for the specific age

range portrayed in the advertisement.

_ Advertising should not mislead about potential benefits from the use of the

product. Such potential benefits may include, but are not limited to, status or

popularity with peers, physical growth, strength or proficiency.

_ Our communication must not undermine the authority of parents. Children

shown in our communication should not be seen urging parents or others to buy

products.

_ Advertising directed to children should not create a sense of urgency; imply

exclusivity, or price minimization, for example, by using words like “now” and

“only”.

_ Advertising should not portray or encourage behavior intended to shock or

create anxiety in children, including use of violence, or sexual innuendo.

Page 79: Nestle history

_ Fantasy, including animation, is appropriate for younger as well as older

children. However, it should not create difficulty in distinguishing between the real

and the imaginary.

_ Products developed from or associated with programmed content primarily

directed to children should not be advertised during or adjacent to that

programmed.

_ Programmed personalities, live or animated, should not be used to sell

products, premiums, or services in or adjacent to programmes primarily directed

to children in which the same personality or character appears. In the same way,

a character or personality associated with the editorial content of a print

publication should not be used to sell products, premiums, or services in the

same publication.

_ Sampling and promotional activities in schools and at events will be done only

with the prior agreement and consent of the school administration and event

organizers. It should comply with applicable legislation or regulations, and should

ideally be accompanied by some kind of educational nutritional messages.

_ In July 2007 Nestlé decided to strengthen its principles on advertising to

children yet further, adding the following two new provisions to existing ones.

The following will be fully implemented in all countries by the end of 2008 at the

latest

1) No advertising or marketing activity may be directed at children under 6;

2) Advertising for children from 6 to 12 to be restricted to products with a

nutritional profile which helps children achieve a healthy balance diet, including

clear limits for such ingredients as sugar, salt and fat.

CONSUMERS, DIET AND PHYSICAL ACTIVITY

Page 80: Nestle history

Nestlé believes that individual responsibility and freedom of choice are basic

human rights. However we have a responsibility to help build awareness of how

people can exercise control over what they eat and drink – to ensure that they

enjoy a balanced diet.

Nestlé considers that proper nutrition and adequate physical activity are integral

to maintaining good health.

Nestlé develops, produces, and markets a wide range of foods and beverages.

These products satisfy many consumer needs: nutrient content, variety,

pleasure, and convenience. Every food and beverage has a role to play in

contributing to the consumer’s achievement of a balanced, healthy diet and

overall well-being.

Page 81: Nestle history

PUBLIC RELATIONS

What is good for you is good for us!

Consumer Relationship Marketing lies at the heart of Nestlé Consumer services.

We strive to build a long-term, sustainable relationship of trust and loyalty.

Our customer staff stands ready to help consumers with any queries or

complaints regarding our products, and draws upon Nestlé Pakistan's vast in-

house resources to answer questions.

Recently, we launched an advanced consumer contact management system

called CONSO+. This is a specialized programme specifically designed to help

us deal with contact management and analysis and form closer ties with our

consumers.

GETTING CONNECTED

Direct contact with consumers is at the heart of our vision. For many people

around the country, our field staff is the face of Nestlé.

These dedicated field staff invite consumers, mostly homemakers, to Nestlé

activities.

We invite our guests to learn more about Nestlé 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.

At these sessions homemakers have the opportunity to learn about a company

that produces many of their favorite foods and beverages, globally and locally.

Page 82: Nestle history

They also have the confidence of knowing that any concerns regarding their

family's nutrition, health and wellness will be capably answered. They know that

they can rely on Nestlé.

SHARING AND DEVELOPING RECIPES

PROMOTIONAL CAMPAIGNS

NIDO –SEHAT KAHANI

Mothers want the very best for their children in every way to provide them with a

happy healthy life.

NIDO® Sehat Kahani has been launched to introduce a platform where child

nutrition and wellness are brought into focus. Supported by Nestlé’s expertise in

nutrition, the NIDO® Sehat Kahani programme endeavors to inform, guide and

educate mothers about child nutrition, health, fitness and wellness.

NIDO® Sehat Kahani communicates on television with the help of endorsements

from educationists, teachers, nutritionists, psychologists and sports coaches to

help mothers nurture their children even better by making informed choices and

taking appropriate measures for their health and wellness.

This programme has been appreciated and met with great success. It is now an

Page 83: Nestle history

integral part of NESTLÉ® NIDO’s® communication to help mothers take care of

their children even better.

Doodh ki Qudrati Ghizayat

Pure, Nutritious Goodness of Milk

Pure, rich and delicious NESTLÉ® MILKPAK® standardized UHT milk benefits

from Nestlé’s expertise in bringing you the very best life has to offer and benefits

from 140 years of consumer trust.

Nestle MILKPAK is UHT milk, which gets heat treatment at a very high

temperature for a very short time.  This kills all micro-organisms in

milk.  The ultra heat-treated milk is aseptically packed in tetra

packing.  As the entire UHT process is intact until packing, heated at a

high temperature makes it bacteria-free, and hence giving a longer shelf

life to the product at an ambient temperature. No chemical preservative

is used for extending the product's shelf life.  Furthermore, the shelf

life of the products is defined after extensive keeping quality studies

and analyses.

Page 84: Nestle history

New Maggi Atta Noodles - Taste bhi, Health bhi

MAGGI® 2-Minute Noodles™ brand new offering of MAGGI® Atta Noodles

contains the natural goodness of whole wheat. A source of Protein and Fibre -

good for digestion, great for your heart and essential in the re-building of muscles

and cells in your body. Now make sure that the food you eat is tasty as well as

healthy! To communicate healthy tastes of Maggi meal different Nestle teams

visited schools and put up their stalls to communicate their message in children

and parents. Free samples were distributed among children as well.

Mazaidar chai har bar “Perfect cup of tea, every time”

We love tea; our day doesn’t begin without it!

When it comes to choosing the milk for your favorite cup of tea why should you

settle for any ordinary milk?

NESTLÉ® EVERYDAY® dairy tea whiter, made from pure fresh milk gives you

that perfect rich taste that only specialized milk can, so you can enjoy the same

delicious cup of tea each time!.Everyday ads and commercials on TV express

the relationship and emotional bond between loved ones, how to express

emotions…”BANAY HAIN AIK DOSRAY KAY LIYEE”

Page 85: Nestle history

NESTLÉ® PURE LIFE™ is pure, safe and healthy drinking water for you and

your family .More and more people are realizing that added sugar in beverages is

not too healthy and adds unnecessary calories.

Water is vital to the human body and we can not live without it. It is one of the

key contributors to wellness. Amongst its many functions, water helps regulate

body temperature, transports nutrients and Oxygen to cells, flushes out toxins

and waste, cushions joints and protects organs and tissues.

It is recommended that you drink at least 8-10 glasses of pure, safe water every

day. If you have an active lifestyle, you will need even more: at least 10-12

glasses a day. It is important that you pay attention to the quality of water you

consume for good health and to safeguard against water-borne illnesses!

NESTLE SALES FORCE

Nestle has 485 factories the world over and its one billion items are sold each

day. The Nestle company's global chairman, Peter Brabeck Litmathe said that,

Pakistan Nestle is the largest consumer industry where its annual sales stand at

Rs.22 billion. The Nestle chief executive said the company has given direct jobs

to 10,000 people while one million people are employed through business in

Pakistan.

Page 86: Nestle history

Nestle Pakistan, established in 1988, is presently running 5 factories - one each

in Sheikhupura and Kabirwala for dairy and other products, two in Karachi and

gone water factory in Islamabad.

NESTLE CONSUMER SERVICES:

Nestlé 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.

This helps ensure that you, our consumers, are happy, satisfied and able to live

fulfilling lives.

Accordingly, Nestlé representatives are poised to provide prompt service and

relevant information whenever needed.

We try to talk to you, but more, we listen to you. Only by hearing what you say

can we understand what you want and need. Only by understanding your needs

can we serve you to the fullest and help you achieve your aspirations.

Consumer Services doesn't just provide us with feedback on our company,

brands and products. It helps us gain important consumer insights: what are the

relevant values you hold dear? What do you look for in our products?

Page 87: Nestle history

In our 140 years of experience, we have learnt that businesses and the societies

in which they operate are in a symbiotic relationship.

If society flourishes, business is good. If a business does well, it brings wealth

and stability to a society.

From this organic interdependence comes our conception of corporate Social

Responsibility (CSR).

We try to Create Shared Value at every step of our value chain, to ensure that

our actions benefit not only the company, but also society at large. Both are, after

all, interdependent. This consideration affects all our corporate initiatives.

Nestlé 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 Hand-Pump Installation Projects

Help Centre for Farmers

School Rehabilitation and Education Advancement

Research & Development Initiatives

Page 88: Nestle history

Nestlé respects the environment and is committed to environmentally sound

business practices throughout the world, thus taking into account the need to

preserve natural resources and save energy.

Marketing is based on the principle of satisfying consumer needs. This is the

foundation also for the environmental marketing approach of Nestlé.

Environmental product claims in advertising, promotional material and on

packaging are in accordance with legal requirements, based on solid scientific

evidence and used in a serious and reasonable manner.

Our aim is to minimize wastage in communication, publicity and promotional

material, in particular through more precise targeting of marketing activities.

Page 89: Nestle history

Consumer promotions and merchandising material such as consumer offers, in

store promotions, display material, leaflets, printed matter, etc. take

environmental aspects into account.

In October 2005, the biggest natural calamity in our history struck Pakistan.

Thousands died and millions were left homeless after a massive earthquake hit

our mountainous northern areas.

In step with the rest of the nation, Nestlé Pakistan responded immediately,

putting its infrastructure and resources to work in the affected areas.

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.

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

Page 90: Nestle history

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

NESTLÉ IN PAKISTAN

Headquarters in Lahore, the company operates five production factories. Two of

its factories in Seikhupura and Kbirwala are multi product factories. One factory

in Islamabad and two in Karachi produce bottled water. Through its effective

marketing and a vast sales and distribution network thought out the country, it

ensures that its products are made available to consumers whenever, wherever

and however

Nestle value delivery network:

The Nestle 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 Asia, Nestlé’s strategy has been to acquire local companies in

order to form a group of autonomous regional managers who know more about

the culture of the local markets than Americans or Europeans.

Nestlé’s strong

Cash flow and comfortable debt-equity ratio leave it with ample muscle for

takeovers. Recently, Nestlé acquired Indofood,

Page 91: Nestle history

Indonesia’s largest noodle producer. Their focus will be primarily on expanding

sales in the Indonesian market, and in time will look to export Indonesian food

products to other countries.

Nestlé 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, Nestlé produces soy milk in Indonesia, coffee

creamers in Thailand, soybean flour in Singapore, candy in Malaysia, and cereal

in the Philippines, all for regional distribution. Milk plant at Kabirwala is the

Nestlé’s world largest milk processing plant. Nestle pays the local milkmen for

the continuous supply of milk to its plant, since Pakistan is the fifth largest milk

producing country.

Page 92: Nestle history

FACTORIES

Sheikhupura

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

Phone :(042) 6369321-6 ET 7228300

Fax :(042) 6368710

NESTLE ® MILKPAK® UHT milk, NESTLE® NESVITA® products, NESTLE®

PURE LIFE™ water, NESTLE® CERELAC® and yogurt.

Milkpak UHT milk, produce butter, cream and ghee

NESTLE® NIDO® milk powder

Nestle NESTLE® PURELIFE™

Fruit yogurt, tea whitener, cream and raita, NESTLE® NESVITA®

Kabirwala

Khanewal - Kabirwala Road, Kabirwala District Khanewal, Punjab, Pakistan

Phone (06512) 411433-36

Fax (06512) 411432

Page 93: Nestle history

Nestle Milkpak

MAGGI® noodles

NESTLE® EVERYDAY® tea whitening powder

Islamabad

AVA® water factory in Islamabad

Provides our consumers with their favorite brands of bottled water in convenient

package sizes.

Auditors A.F. Ferguson & Co. (Chartered Accountants)

Legal Advisors Cheema & lbrahim (Advocates)

Bankers

ABN AMRO Bank

Bank of Tokyo-Mitsubishi Ltd.

Citibank N.A.

Credit Agricole Indosuez

Deutsche Bank A.G

Habib Bank Ltd.

Muslim Commercial Bank Ltd.

Standard Chartered Bank

Page 94: Nestle history

Standard Chartered Grindlays Bank Ltd.

ORGANIZATIONAL STRUCTURE

Definition:

A deliberate arrangement of people to accomplish some specific purpose is

called “Organization” and the arrangement is called “Organizational

Structure”.

“Nestle’ works according to BUISNESS UNIT STRUCTURE (BUS) and

BUISENESS

UNIT MANAGEMENT (BUM).”

NESTLE’S MANAGERIAL ENVIRONMENT

The nestle is a multi-national organization, it has to maintain the measuring

standard of the worlds biggest profit making organization, Nestle’ is the only

organization that sells itself. The working environment of the Nestle’ is

exceptionally friendly and most cooperative. The decision or we can say the

managerial style of Nestle’ is decentralized, it means that every employee can be

a part of the every decision they take.

SALES STRATEGIES

Real need is required for selling. Nestle products were a real need for the

citizens of Pakistan. The increasing number of diseases because of consumption

of substandard eatables was the time for Nestle to think of its customer’s health.

Government supported the company in launching of Nestle products. It became

easy for Nestle to market its goods.

DISTRIBUTION CHANNELS

Page 95: Nestle history

Nestle uses indirect distribution channels to bring its products to the

customers Producers→ Distributors→ Retailers→ Consumers. Nestle does

not involve wholesalers in its distribution channel. Nestle products are distributed

to the customers mostly through distributors. They buy the distribution on

contractual bases. Nestle usually do not go for retail selling. Home delivery

service is also provided by Nestle Pure Life. You can buy Nestle Pure Life from

any shop in any area. Nestle uses vertical marketing system. Nestle distributes

its products through the strong supply chain management strategies and efficient

marketing logistics.

Nestle reasons for indirect selling methods:

Distribution channels already established.

Nestle uses its capital for further production.

Too many consumers in a large area; difficult to reach.

Direct on-selling advantages.

Reasons for bypassing wholesalers:

As stated earlier nestle does not involve wholesalers in its distribution channel,

the reasons are given below:

Limited storage facilities in Pakistan, since it’s a third world country here

the wholesalers are not well versed to handle products from such a huge

company.

Retailers' preferences

Wholesaler cannot promote products successfully

Nestle’s desire for closer market contact

Position of power

Cost of wholesalers' services

Price stabilisation

Need for rapid distribution

Make more money

Page 96: Nestle history

Nestle has following distribution objectives:

1. To reach the customer and better availability of the product to the

customer

2. To capture more market shares as compare to the competitors.

3. Satisfying the changing needs of market.

NATURE OF PHYSICAL DISTRIBUTION

DISTRIBUTION CENTRE

A large highly automated ware house is designed to receive goods from plants

and suppliers, take orders, fill them efficiently and deliver goods to customers as

quickly as possible. Nestle has its distribution centers in Sheikhupura, Karachi,

Lahore and Islamabad. The increasing number of customers is forcing Nestle

Pure Life to increase its distribution centers.

.INVENTORY MANAGEMENT

Inventory management plays an important role in the satisfaction of the

customers. Here Nestle should maintain the delicate balance between carrying to

little inventory and carrying too much. Nestle Pure Life is running successfully

and its difficult for it to maintain its inventory.

TRANSPORTATION

Nestle uses all types of transportation. Usually Shehzore is used for

transportation. Home delivery service is also provided with the same

transportation. Tracks are used for long transportation to minimize the cost.

Triwheelers are used to transport precious water to backward areas.

DISTRIBUTION AND TERMS OF CONTRACT

The distribution is mostly done through the distributors and the agreement is on

contractual bases. The terms and conditions changes with the passage of time

and the amount submitted as the security.

Retail and wholesale selling:

Page 97: Nestle history

Nestle brings its customers with its products through distributors. Though nestle

does not involve itself in retail selling but still it provides its customers with the

free home and office delivery facility as direct marketing channel. Nestle products

are sold at all types of retail stores which are

1) specialty store

2) department store

3) supermarket

4) convenience store

5) Super store.

6) Chain stores.

RECOMMENDATIONS

Though nestle is an industry giant and doing a successful business around the

world, but still certain measures it should take in Pakistani market are

recommended below:

1) It should sell better quality products in Pakistani market also just like it

sells in first world countries because consumer in Pakistan is much aware today

than it was a decade ago. It would help to rectify the feelings of discontent that

prevail among the Pakistani consumers against nestle.

2) Nestle should bring other flavors in breakfast cereals like fruit and nuts

corn flakes to Pakistan since consumers are becoming more demanding day by

day. Moreover Kellogs is offering a wide range of breakfast cereals with far better

quality.

3) Nestle should introduce its other chocolates like lion and butter finger in

Pakistan, moreover it should also introduce libbys ketchup brand in Pakistan

since ketchup brands available in Pakistan are not of good quality.

4) Nestle should increase the promotional campaigns magnitude since

strong competitors are takingover the industry especially in dairy products.

Page 98: Nestle history

5) Nestle should introduce its LC-1 probiotic yoghurt in Pakistan since people

are becoming more health conscious.