nestle presentation

PRESENTATION ON NESTLE

26th March 2009

IP Management @ Nestlé - 26th March 2009

2 Finance & ControlFinance & Control


3 Finance & Control

MISSION STATEMENT

“Nestle is dedicated to providing the best foods to people throughout their day, throughout their lives, throughout the world. With its unique experience of anticipating consumers needs and creating solutions, Nestle contributes to the well-being and enhances the quality of life.”


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ABOUT NESTLENestle is the world’s foremost nutrition, health

& wellness company.Nestle with headquarters in Vevey, Switzerland

was founded by Henri Nestle.Nestle employ around 2,60,000 people and

have factories or operations in almost every country in the world.

Nestle international R & D network supports the products made in more than 500 factories in 86 countries.


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The Nestle factories are operating in the region of:

AfricaAmericaAsiaEuropeOceania


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OBJECTIVE OF NESTLE “Nestle’s business objective is to

manufacture and market its products in a way that creates value that can be sustained over the long term for shareholders, employees, consumers, business partners and the national economies in which Nestle’ operates.”


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LATEST PRESS RELEASES

March 4, 2009Nestle launches state-of-the-art factory and beverage distribution centre in USA

February 19, 2009Strong performance by Nestle in 2008


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NESTLE CHAIRMAN Nestle chairman Peter Brabeck Letmathe is to receive a Lifetime Achievement Award from business TV channel CNBC for his outstanding contribution to business & leadership of the Nestle group.


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What Nestlé is Doing• Protect our intellectual property

• Work with government organisations

• Enforce our rights

AND SO

• Keep our promise to the consumers


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Nestle Corporate Business Principles• 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.

• 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.



Nestle Line of Products• Soluble Coffee

• Infant Nutrition

• Confectionery

• Dairy

• Chocolate Milk Beverages

• Bottled Water

• Pet Care

• Ice Cream (co-leader with Unilever)



... in various parts of the world ...

Example NESTLE PURE LIFE Pakistan/Afghanistan



Russia



FINANCIAL AND STRATEGIC ANALYSIS

The companies strength and weaknesses and areas of development or decline are analyzed.

The opportunities open to the company are considered and its growth potential assessed. Competitive or technological threats are highlighted.

It provides detailed financial ratios for the past five years as well as interim ratios for the last four quarters.

Financial ratios include profitability, margins and returns, liquidity, financial position and efficiency ratios are also analyzed.



Annual result in brief



Facts and figures

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The World's largest Food and Beverage Company in 2005



HOW NESTLE DEFINE MARKETTING

“A social and managerial process whereby individual and groups obtains good food and good life through creating and exchanging products and values.”



BALANCE SHEET



Balance sheet

(Rs

crore)

Dec ' 07 Dec ' 06 Dec ' 05 Dec ' 04 Dec ' 03

Sources of funds

Owner's fund

Equity share capital 96.42 96.42 96.42 96.42 96.42

Share application money - - - - -

Preference share capital - - - - -

Reserves & surplus 322.01 292.47 257.72 222.99 238.58

Loan funds

Secured loans 2.87 16.27 14.30 7.91 5.10

Unsecured loans - - - - -

Total 421.30 405.16 368.44 327.31 340.10

Uses of funds

Fixed assets

Gross block 1,179.77 1,058.27 942.40 838.16 789.45

Less : revaluation reserve - - - - -

Less : accumulated depreciation 577.96 516.48 468.63 440.94 398.08

Net block 601.81 541.80 473.77 397.22 391.37

Capital work-in-progress 73.70 38.24 22.83 34.09 13.94

Investments 94.40 77.77 104.43 154.86 73.64

Net current assets

Current assets, loans & advances 678.69 583.45 514.59 421.20 412.39

Less : current liabilities & provisions 1,027.31 836.10 747.18 680.05 551.24

Total net current assets -348.61 -252.65 -232.59 -258.86 -138.85

Miscellaneous expenses not written - - - - -

Total 421.30 405.16 368.44 327.31 340.10



MARKET SEGMENTMENTATION FOR NESTLE PURE LIFE

Nestle Pure Life segments its markets on two basis:

Geographic segmentationDemographic segmentation



Geographical segmentationThe company segments its markets

geographically on divisional basis. They divide each division in different zones.

For e.g.; Lahore is divided into five zones like East, West, North, South & South West

Demographical segmentationNestle Pure Life states that the product is

for everyone. People from any area, any culture, any belief and any income will drink water.



PRODUCT MIX OF NESTLEMilk products:• Nestle Milkpak UHT milk• Milkpak Butter• Milkpak Desi Ghee• Nestle everydayCoffee:• Nescafe ClassicFruit Drinks:• Frost• Nestle orange juiceWater:• Nestle Pure Life



MARKET SHARE OF NESTLE PURE LIFE DRINKING WATER

•Nestle occupies 85% of drinking water market in all over Pakistan

• In Lahore Nestle Pure life has 69% of total market

• In Karachi 50% of market is kept by Nestle

• In Islamabad Nestle Pure Life has 66% of market share



Europe38.3%

AOA19.3%

Americas42.4%

Sales by regionPercentage of total F&B sales in 2006



6 worldwide strategiccorporate brands



Strategic and local brands are protected & managed by IPD

365Strategic

Local

Brands

6'000

27'000

Protections

82'000

Managed by 17 Regional IP Advisers (RIPA's) for local Nestlé Operating Companies

Managed by Center IP Department in co-operation with the Strategic Business Units (SBU’s) and the RIPA's



Counterfeiting is a multi-faceted issue ...

•customer safety

•brand protection

•corporate reputation

•profits (loss of revenue & government taxes)



... Infringements are frequent ...

Trademark infringement

+ Unfair competition

Example:



MARKETING MIX OF NESTLE



Marketing Mix

The Marketing mix is generally accepted as the use and specification of the four p's describing the strategic position of a product in the marketplace. A Marketing mix is the division of groups to make a particular product, by pricing, product, branding, place, and quality



4 P’S OF MARKETING



Product - A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units.

Price – The price is the amount a customer pays for the product. It is determined by a number of factors including market share, competition, material costs, product identity and the customer's perceived value of the product.

Place – Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet.

Promotion – Promotion represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements - advertising, public relations, word of mouth and point of sale



NESTLE:PRODUCT MIX

• Milk Products & NutritionFrom shelf-stable solutionto chilled dairy

Nestlé India has a wide portfolio for Milk Products and Nutrition.

Nestlé has a very clear Charter of ethics and responsible behaviour in selling infant nutrition products.



NESTLE MILK PRODUCTS NESTLÉ EVERYDAY Dairy Whitener NESTLÉ EVERYDAY Slim NESTLÉ EVERYDAY Ghee NESTLÉ MilkNESTLÉ Slim Milk NESTLÉ NESVITA PRO-HEART MILK NESTLÉ Fresh 'n' Natural Dahi NESTLÉ Fresh 'n' Natural Slim Dahi NESTLÉ Jeera Raita NESTLÉ NESVITA Dahi NESTLÉ NESVITA Fruit Yoghurt NESTLÉ CEREVITA NESTLÉ MILKMAID NESTLÉ MILKMAID Fruit yoghurt



• Prepared Dishes & Cooking Aids

Preparing well balanced meals is a snap with Nestlé. MAGGI 2-MINUTE Noodles is one of the largest snack food brands in the country and defines the Instant Noodles category in the country. MAGGI 2-MINUTE Noodles has been renovated to provide 20% of the RDA* of Calcium and Protein for the core target group. It is available in 4 flavours: Masala, Chicken, Tomato and Curry.



• BeveragesDrink to an active life with Nestlé Beverages. NESCAFÉ CLASSIC has the unmistakable taste of 100% pure coffee and is made from carefully selected coffee beans picked from the finest plantations, blended and roasted to perfection. 100% coffee…100% pleasure .

EXAMPLES-NESCAFÉ CLASSIC NESCAFÉ SUNRISENESCAFÉ CAPPUCCINO NESTLÉ MILO SMART PLUS Ready-to-drinkNESTLÉ MILO SMART PLUS NESTEA ICED TEA WITH GREEN TEA NESTEA ICED TEA



• Chocolates & ConfectioneryDelighting the senses with a range of tastes and textures. Nestlé proudly adds yet another exciting innovation by launching - POLO XTRA STRONG.

POLO XTRA STRONG with added menthol crystals provides that real longer lasting freshness that many consumers now seek. It comes in a pocket friendly singles’ format priced at 50p. It has clutter breaking & innovative black packaging.

The product is certain to evoke reactions like: Ghanti to Bajegi New POLO XTRA STRONG - a HOLE lot stronger



Promotion mix

Promotion strategy for market expansionThe following are some of the strategies used byNestle for market expansion: Availability of NESCAFE enhanced through an expansion of the vending machine network. New consumption opportunities for chocolates

and confectionery were identified and developed in areas like railway platforms, college canteens and major events.

Nestle set up ‘Café Nescafe’ and ‘Coffee Corners’ across metros and mini-metros.

Finance & Control40


PRICE

NESTLE HAS CONSIDERED THE KEY CURRENCIES NESTLE HAS CONSIDERED THE KEY CURRENCIES SUCH AS EURO, US$ ETCSUCH AS EURO, US$ ETC

AN EXTENSION OR ENTHOCENTRIC PRICING AN EXTENSION OR ENTHOCENTRIC PRICING POLICY.POLICY.

ADAPTATION OR POLYCENTRIC PRICING POLICY.ADAPTATION OR POLYCENTRIC PRICING POLICY.

GEOCENTRIC PRICING APPROACH IN THE GEOCENTRIC PRICING APPROACH IN THE PHARMACEVTICAL PRODUCT.PHARMACEVTICAL PRODUCT.

..



IN 1999 NESTLE OPERATED FROM 509 FACTORIES WORLDWIDE,424 ARE IN FOOD,68 ARE MINERAL WATER BOTTLING PLANTS AND 17 ARE PRODUCTION UNITS FOR PHARMACEUTICAL PRODUCTS.

THE ORGANIZATION REVENUE FIGURE REPRESENTED THAT THE FOOD AND BEVERAGE GAIN MORE RETURN ON INVESTMENT THAN OTHER.IT REPRESENT THAT THE POTENTIAL SUSTAINABLE GROWTH MARKET FOR THE FIRM.



BEVERAGES ACCOUNTED FOR 28% OF 1999 REVENUES,PREPARED DISHES AND COOKING AIDS, 27% MILK PRODUCTS, NUTRITION AND ICE CREAM, 26% CHOCLATE AND CONFETIONARY, 14% AND PHARMACEUTICALS 5%.



PLACE PLACE RELATES TO DECISION ABOUT THE STORING &

TRANSPORTING OF PRODUCTS & ALSO ABOUT SELECTING THE PRODUCTS CHANNEL OF DISTRIBUTION.

THE MAJOR DISTRIBUTION CHANNEL INCLUDE WITH THE GEOGRAPHICALLY CONSIDERATION WITH MANUFACTURING PLACE SITUATED.

NESTLE DISTRIBUTED THEIR PRODUCTS SUCH AS NUTRITION,WATER & OTHER GLOBALLY MANAGED FOOD & BEVERAGE BUSINESS IN GEOGRAPHICALLY LIKE EUROPE,AMERICA,AFRICA ETC.



CONCLUSIONNestlé is not complacent about its position, it still

means to go forward, developing new policies.

Nestlé will also work with national and international bodies to improve sustainability. For example, the 2002 World Summit on Sustainable Development set a target to decrease by half the number of people without access to safe drinking water by 2015: Nestlé will share its knowledge with others to help reach this goal. Nestlé will continue to protect water, increase the efficient and responsible use of water and encourage its partners and stakeholders to use water in a responsible way.



THANK YOUTHANK YOU

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