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NESTLE COMPANY
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FFAAWWAADD UURR RRAAHHMMAANN
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EEXXEECCUUTTIIVVEE SSUUMMMMAARRYY::
Nestlé with headquarters in Vevey, Switzerland was founded in
1866 by Henri Nestlé and is today the World’s biggest food and
Beverage Company. Sales at the end of 2007 were 91 billion, with a
net profit of 8 billion. They employee around 250,000 people and
have factories or operations in almost every Country in the world.
BBaacckkggrroouunndd ooff tthhee ccoommppaannyy::
Nestlé Company had started off from a single man's idea, and
developed into a giant corporation. In 1866 Henri Nestlé, a
pharmacist, developed a milk food formula for infants who were
unable to tolerate their mother milk (Nestle.com). His product
became a success, and it created a demand throughout Europe. As
Nestlé’s popularity grew more businesses wanted to merge and
become partners with Henri Nestlé's business. From 1866 to 1947
the Nestlé Company had gone through several name changes. In
1905, Anglo-Swiss Condensed Milk Co. and Farine Lactee Henri
Nestlé merged, and the company’s name became Nestlé & Anglo-
Swiss Condensed Milk Co. Then in 1929, Peter-Cailler-Kohler
Chocolates Suisse’s S.A. merged with the company. The name was
then changed to Nestlé & Anglo-Swiss Holding Co. Ltd, on
November 27, 1936. In December 1947, Co. acquired all the shares
capital of the Alimentana S.A. Company in exchange for fifteen
Nestlé shares and fifteen Unilac shares for each of Alimentana S.A.
share, so this point the name was at Nestlé Alimentana S.A. And
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then finally, the last name change that the company would endure
was in 1977, where it adopted the name Nestlé SA (Mergent Online).
Along the way Nestlé’s company remain successful, which allowed
them expand to new region and territories throughout the world,
making them the world’s biggest food and beverage company.
Nestlé’s headquarters are located in Vevey, Switzerland, but the
Nestlé Company has factories or operation in almost every country
in the world. In addition, to the increase in the size of the Nestlé
Company; Nestlé also has increased the variety in the different
products they offer. In Nestlé’s business strategy they encourage
product growth through innovation and renovation (Nestle.com).
This strategy has allowed Nestlé to develop many different products
in the various fields: baby foods, dairy products, breakfast cereals,
ice creams, chocolates and confectionery, prepared foods,
beverages, food services, bottled water, and pet care.
IInnttrroodduuccttiioonn ooff tthhee CCoommppaannyy::
Nestlé is the world's leading food company. Since it was set up by
Henri Nestlé to provide an infant food product, it has been
associated with providing high quality, customer and consumer
focused products. In recent years it has focused on becoming a
nutrition, health and wellness company. Wellness is about
supporting people to live more healthy lives e.g. through the
development of probity yoghurts that help maintain the balance of
the digestive system. The company is a world leader in research and
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development, and Nestlé's scientists work in all areas to create
healthier and more nutritious foods.
BBrriieeff HHiissttoorryy::
In 1866 Henri Nestlé, a pharmacist, developed a food for babies who
were unable to breastfeed. His first Success was a premature infant
who could not tolerate his mother's milk or any of the usual
substitutes. People quickly recognized the value of the new product,
after Nestlé's new formula saved the child's life, and soon, Farine
Lactée Henri Nestlé was being sold in much of Europe. In 1905
Nestlé merged with the Anglo-Swiss Condensed Milk Company. By
the early 1900s, the Company was operating factories in the United
States, Britain, Germany and Spain. World War I created new
demand for dairy products in the form of government contracts. By
the end of the war, Nestlé's production had more than doubled.
After the war Government contracts dried up and consumers
switched back to fresh milk. However, Nestlé’s management
responded by streamlining operations and reducing debt. The
1920s saw Nestlé's first expansion into new products, with
chocolate the Company's second most important activity. Nestle felt
the effects of World War II immediately. Profits dropped from $20
million in 1938 to $6 million in 1939. Factories were established in
developing countries, particularly Latin America. Ironically, the war
Helped with the introduction of the Company's newest product,
Nescafe, which was a staple drink of the US military. Nestlé's
production and sales rose in the wartime economy. The end of
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World War II was the beginning of a dynamic phase for Nestlé.
Growth accelerated and Companies were acquired.
Nestlé's growth in the developing world partially offset a slowdown
in the Company's traditional markets. Nestlé made its second
venture outside the food industry by acquiring Alcon Laboratories
Inc. Nestlé divested a number of businesses1980 / 1984. In 1984,
Nestlé's improved bottom line allowed the Company to launch a new
round of acquisitions, the most important being American food
giant Carnation. The first half of the 1990s proved to be favorable
for Nestlé: trade barriers crumbled and world markets developed
into more or less integrated trading areas. Since 1996 there have
been acquisitions including San Pellegrino (1997), Spillers Pet foods
(1998) and Ralston Purina (2002). There were two major
Acquisitions in North America, both in 2002: in July, Nestlé merged
its U.S. ice cream business into Dreyer's, and in August, a USD
2.6bn acquisition was announced of Chef America, Inc.
SSiiggnniiffiiccaanntt bbrraanndd::
Nestle ice-cream which means a refreshing treat which every one
loves. Nestle started their ice- cream product in 1991 in United
States. The products gain a wide acceptance with kids as well as
grownups.
The project is about induction of Nestle ice-cream in Pakistan.
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IIddeennttiiffiiccaattiioonn ooff OOppppoorrttuunniittyy::
SSWWOOTT AAnnaallyyssiiss..
STRENGTH
Nestle is the world's largest food and beverage company in terms of
sales. Due do strong brand name our product will gain a wide
consumer acceptance from all over the Pakistan. The biggest
strength would be the strong brand name the risk in investing
would be reasonable very low. And the pledge of getting a viable
business, one that has been “worked” many times before. We will
set a complete transparent manufacturing system for customer
satisfaction in terms of hygiene. We will strengthen our product by
broad distribution network by increasing the capacity for innovation
which will lead to an improvement in sale growth. We will be
organizing a team which will inspect and observe the accumulation
(stock) on daily bases to prevent any damages occurring and also in
order to keep the inventory fresh. We will make sure that we are not
having surprise shortage, weather it is winter or summer no matter
what circumstances are. Further strength would be.
Strengths
Skilled labor.
Educated staff.
Large number of offerings.
Pre purchase virtual display.
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Arrangement of events.
Good background of the company.
Easy to approach outlets.
Physical evidence
WWeeaakknneessss::
The main weakness of our product is the lack of an established
good standing. Our competitors have been around for decades and
therefore have a loyal base. The second biggest weakness would be
the lack of capital, establishing such an enormous and gigantic
plant there will be a need of acquiring financial support in terms of
loans from the bank. Spending millions in a strong brand is no
guarantee to wealth. It may the safest way to get into the business,
but it is not necessarily the cheapest. Further weakness would be.
Weaknesses
Small target market.
Lack of awareness among the target market.
Dependency on others (govt. & sponsors) for the arrangement
of events.
OOppppoorrttuunniittiieess::
The biggest opportunity would be considered geographically.
Pakistan is situated in an area where we have summers most of the
time. People love as well as enjoy eating ice-cream in this season.
Due to strong brand name in the market our product has a great
potential of earning profits. To make the product successful we will
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be utilizing the highest degree of technology in calculating
customers’ satisfaction as well as their feed back. Gaining initial
success the next step would be opening a par lour where people can
enjoy all the flavors under one roof. Further opportunities would be.
Opportunities:
Increasing interest of people
Few and weak competitors
TThhrreeaattss::
The biggest threat to are product is the fierce competition in the
local market. Walls by (Unilever) are one of the biggest names in ice
cream which not only distribute their products nation wide but also
had a total control on the local market. The second thread that our
product will face would be Shezan, Gourmet and many others small
bakeries which have their influence on the market.
Threats
Major player may enter target market
Legal and ethical issues.
Market segment growth could attract new entrants.
Economic slow down can reduce demand.
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BBCCGG MMAATTRRIIXX
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BCG MATRIX:
SSTTAARRSS
The products which have high market share and high anticipated
growth rate would come under this. Nestlé two major products lie
under the star products. Otherwise nestle have hundreds of
products and brands .But we will discuss here only its major
products nestle milk pack and second is nestle water. These two
products will lies in the category of star products.
QQUUEESSTTIIOONN MMAARRKKSS
The product which have high anticipated growth rate but low
market share would be considered as question marks. The product
which we are going to launch first time in Pakistan (NESTLE-ICE-
CREAM) would come under the question marks.
CCAASSHH CCOOWWSS
The products which have low anticipated growth rate and high
market share would be considered as cash cows .The product which
lies under this is nestle Milo
DDOOGGSS
The product which have low anticipated growth rate and low market
share would be considered as dog product of the company’s the
product which comes under this is nestle corn flakes.
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CCoorree DDiissttiinnccttiivvee CCoommppeetteennccyy ooff tthhee CCoommppaannyy::
To pose our product against the competitors we will be using
differentiation strategy which will not only differentiate us from
others but also give an edge over others. Our core products will be
very beneficial especially in terms quality, health, and hygiene and
most important consumer satisfaction. Our augmented products
will include consumer satisfaction as we have discussed, warranty
to retailers in terms of expire, delivery and after sales services.
PPrroodduucctt mmaarrkkeett eexxppaannssiioonn ggrriidd::
We will be following the same strategy for our expansion as does
nestle ice-cream do and they would be,
Low cost operator
Low cost operator in terms of using minimum initial investment - to
not to overload the business with expensive assets.
Assets utilization- ensuring full use of existing assets at a regional
level before acquiring additional ones.
Ingredients optimism – selection of appropriate ingredients, which
gives desired consumer perception at lower cost.
Innovation / Renovation
Using strong innovation system which will able to provide each year
a new product range in a timely manner, while making best use of
existing assets.
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Product availability (“with in arms reach”)
Maximum availability at the right cost at all channels.
Communication
By making nestle ice-cream the most visible brand in the street,
placing a priority on visibility. We will also be ensuring that we
reinforce the availability and attractively of our brand in locations of
high traffic flow.
PPrroodduucctt lliiffee ccyyccllee::
The diagram shows that the industry is on the growth phase while NESTLE is on
introductory phase.
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PPoorrtteerr’’ss FFiivvee FFoorrcceess::
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PORTER FIVE FORCES
TTHHRREEAATTSS OOFF NNEEWW EENNTTRRAANNTTSS::
In Pakistan the competition in the ice cream business is very small.
Currently 2-3 companies are doing the business of ice cream out of
which one brand is international and other two brands are local’s
from this it can be concluded that there would be a lot of chances of
other international famous brands of ice cream start their
businesses in Pakistan.
SSUUBBSSTTIITTUUTTEESS::
The major substitutes of nestle ice cream would be walls ice
cream,Hico ice cream and eat more ice cream.
BBAARRGGAANNIINNGG PPOOWWEERR OOFF SSUUPPPPLLIIEERR::
As nestle came in Pakistan since 1988 and they are the market
leaders in the dairy products. As nestle Pakistan is already in the
business of dairy so our bargaining power of supplier would be very
moderate.
BBAARRGGAAIINNIINNGG PPOOWWEERR OOFF CCUUSSTTOOMMEERR::
Bargaining power of customer would be very low because the price
of our ice-cream would be fixed.
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SSttrraatteeggyy ffoorr llaauunncchhiinngg tthhee pprroodduucctt::
Goals & objectives:
Creating awareness about our product to at least 50% of the
target market within three months of launch.
This objective will be achieved through intense promotional
activities, developed to get to the target market in the best possible
manner.
Capturing 60 % of target market within 1 year.
Our promotional activities will develop interest for people thus
compelling them to approach us. We will make good relations with
our customers so they create good word of mouth for us and
approach us again and refer others.
Launching the product in summers.
We will be launching the product in summers to capture most of
the target consumers and as well as market share.
Opening different outlets.
We will be opening different outlets initially in major two cities and
after gaining primarily success we will be available in all big and
small cities of Pakistan.
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MMaarrkkeettiinngg ssttrraatteeggyy::
Our product will include features that contains the
combination of both health and hygeine keeping in mind the
individuals requirments in terms of taste. However the
marketing will be done considering the concept of mass
personage.
Our product will be tailored to individual needs (desired taste)
but promotion will attract all of them collectively. Further
more we will be following pull strategy and approach our end
users ourselves with the help of various promotional activities.
In our case no intermediary (whole sellers) is involved. Our
distribution channel will be as
follow.
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AACCTTIIOONN PPRROOGGRRAAMMSS::
We will be acting for our operations by the following chart. For the
implementation of the plan we have divided the tasks to the
respective staff that will ensure the implementation
RReessppoonnssiibbiilliittiieess ooff tthhee TTeeaamm::
Marketing Head will be responsible to coordinate all the marketing
activities happening. He gets the sales, finance and process control
activities done through the respective subordinates however he is
directly involved in the designing and implementation of the public
relation and advertisement activities. He also monitors the budget
details given to him by the financial officer and ensures its proper
allocation.
Sales management in this the management is responsible for the
activities related to sales such as discounts and other sale
promotions.
The financial officer’s keeps record of the marketing budget and
the distribution of budget allocated for various areas by the head.
The process control officers make sure that all the process
involved in the service is performed efficiently. He coordinates the
activities of the mechanics and the computer designers.
Further there are staff for various areas who are directly involved
in the accomplishment of the tasks provided to them by their
respective heads
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AAccttiioonn PPllaann TTiimmiinnggss::
All the Task force will work keeping in view the following major
activities.
The service is to be launched on 1st march 2008.
The advertisement through cable and our magazine will be
started one week before the launch.
The first issue of the magazine will be distributed along with the
English news papers on Sunday 24thof February 2008
. MMaarrkkeett sseeggmmeennttaattiioonn::
We have divided our market into geographic, demographic,
psychographic and behavioral segments. These segments will help
us understand our market better.
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Geographic Segmentation:
Enjoying ice-cream is popular mostly all over the Pakistan but
keeping in mind the market conditions and secondly to reduce the
initial (expenses not to over load the business). We will be
launching our product initially at Lahore and Karachi. So
geographically we have divided the market in to Lahore and
Karachi.
Demographic segmentation:
The demographic segments for our product comprises of following
variables:
Age:
Below 18, 18-30, 30 +
Gender:
Male, female
Psychographic Segmentation:
Lower class, Middle class, Upper class.
Behavioral Segmentation:
Firstly this segment includes people who are interested and like
enjoying ice-cream.
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Secondly it includes people who are willing to buy but not
finding any other in the region up to the level they desire with
respect to quality, hygiene and taste.
And lastly there are people who are not interested in the
concept at all.
TTaarrggeett mmaarrkkeett::
Knowing the fact that we can not be every thing for everyone we will
be targeting only those segments that can provide best possible
returns so that we may reach are goals effectively and efficiently.
Our target market collectively consist of males as well as females in
Lahore and Karachi of age group less then 18-30 belonging to
middles class, not finding any other provider in terms of quality,
hygiene and taste.
PPoossiittiioonniinngg::
We will position our product as a high quality product consumer
focused. Messages like
“Who knows your taste better than us”,
“Nestle ice-cream now at your door step”;
“Add additional flavors’ to your life”
will help us portray our picture clearly and distinctly. We will
position our product against the competitors and gain competitive
advantage through our efficient promotional methods, using
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innovations, and by reaching closer to our target market through
the arrangement of events like BASANT, VALENTINE DAY and etc.
In short consumers will view us as a product providing highly
quality, in terms of taste, customer focused and, at the same time
reasonably priced as compared to others.
MMaarrkkeettiinngg mmiixx::
Product.
Price.
Placement.
Promotion.
Product.
Our product is high in providing quality, taste and hygiene. We are
the only one in local market providing flavors as no one ever does in
Pakistan where consumers may choose from a wide range of
flavors’. A large variety of modes manufactured by a single brand
NESTLE.
Our products will include:
A wide range of flavors, keeping in mind the taste of
individuals.
Modifying our products by new innovations every year.
Giving best taste at best affordable prices.
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Selection of appropriate ingredients, which gives desired
consumer perception.
AAccttuuaall PPrroodduucctt::
Our actual product consists of following attributes:
Brand name:
The brand name NESTLE has a direct relation with food and
beverages as the name comes in mind the person things of nothing
but a quality products. The brand name is easy to read and
pronounce at the same time stylish and attractive
Features:
Initially our features include services like sending our
representatives to the door steps of interested consumers (target
market), answering their concerns, and telling them what we have
for them.
Quality:
We will assure and provide quality service and make sure that the
inventory we provide are durable, healthy, fresh and long lasting.
Our quality of service will help consumers develop trust in us.
Styling:
Style and catchy designs are the most important aspects of our
product. We will help our consumers feel special and find the
product healthful.
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Variety:
Another feature of our product is variety and flexibility of products
provided. We have the availability of large variety of flavors as
compared to different brands.
Price:
Our pricing is done considering
Our marketing objectives
The economic conditions of our target market
Pricing of our competitors
The nature of our business.
PPLLAACCEE::
We will be placing our product by different channels to hit the
target consumers. Our coverage will be quit flexible for intended
positioning. Assortments regarding our product will be enthusiastic.
Our locations will be positioned in such a manner which will be
accessible either to consumer as well as retailers. As the map shows
we will be placing the main head office at Gulberg near Hussain
Chowk. We will be having a completely separate department which
will make assure that the inventory remains fresh. Our
transportation will be marked by our brand name .And finally our
logistics and equipment will be installed by the professionals of
Motorola to keep track of every thing.
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PPrroommoottiioonn::
The accomplishment of our objectives to create awareness about
our product and to get desired market share will be possible
through our promotional efforts. Our promotional efforts will not
only help attract the existing market but also create interest in new
groups of people specially youngsters. The promotion tactics have
been designed keeping in view the trends of the target market and
the modes which are best suited to reach them.
PPrroommoottiioonnaall MMiixx::
Following tools will be used in our promotion:
Advertising
Public Relations
Sales Promotion
Direct Marketing
Advertisement:
We will advertise using world call cable, distributing magazine
placed in news papers, and as well as on World Wide Web.
On World Call cable we will advertise 20 times a day on 5 movie
channels for 2 months. After two months the advertisement will be
reduced to 10 times a day. Further the advertisement will also be
displayed on the scroll for first two months. The advertisement will
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contain attractive messages for the youngsters and ice-cream
lovers. The cable advertisements will help create awareness and
capture the attention of large number of youngsters, as movie
channels are mostly watched by youngsters. The distribution of
small magazines (catalog) is a unique method of advertisement
which will readily grasp the attention of people. This method has
been adopted instead of placing advertisement in the paper because
news paper ads are not viewed much by the youngsters. The
magazine will display the details of our products and the
information regarding that.
Messages Delivered Through Advertisements:
Using AIDA model.
Awareness:
NESTLE the biggest in ice-cream industry now here in Pakistan.
Interest:
Enjoy five flavors in just one scoop. What more you can wish for.
Desire:
Flavors you have never tasted before…………it’s only the beginning
let us show you what ice-cream really means.
Action:
Just try us once we promise you it will be like nothing you’ve ever
experienced.
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Advertisement Costs: (source: world call help line)
World call cable charges Rs.250 /min for advertisement on five
movie channels.
For scroll advertisement world call charges 45000 per month
To distribute a magazine of 5-7 pages, each page of dimensions 6”
by 5” costs app Rs.4 per piece.
Public Relations:
Building good relation with our clients is essential to capture large
share in the market. These public relations will be built by
arranging festivals occasionally especially like BASANT.We will be
giving free kites on that the kites will be marked by our (product)
brand name. This will not only help in creating good public
relations but also crate awareness among the public.
Sales Promotion:
Our major sales promotion is by giving special discounts or
coupons to our customers and retailers. For example with every
purchase of 3 liter family pack extra one liter would be absolutely
free. We will arrange these kinds of discount activities’ on timely
basis to keep an edge over our competitors’.
Direct Marketing:
Direct marketing is an important entity in our promotional mix.
Presently there are many groups of youngsters who are really
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interested in trying these kinds of new products. The important fact
is that they not only themselves seek products from the best
possible providers but also refer their fellows. Our sales people will
approach them and build relations with them. Another technique
we will use is sending occasional mails to the registered users on
the web, thus communicating ourselves directly with the most
potential group of our market. These mails will give details of our
new products along with a redirection to our web site
(www.nestleicecream.com.pk)
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DDeettaaiillss ooff PPrroommoottiioonnaall BBuuddggeett::
Note: This is the budget required for promotional activities for
the first 2 months after the launch.
Total Budget: 1,110.000
Allocation
Activity Budget Required
Rs
Details
World Call Cable
Advertisement
450,000
1 minute
advertisement 20
times a day.
World Call cable
Scroll
90,000 First two months
after the launch
Magazines 320000 10,000 copies every
Sunday
Public relation
activities
5 % of total
budget i.e.
250000
Prize money to the
winners, giving
away shirts and key
rings etc
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CCoonncclluussiioonn::
Nestlé is the world's leading food company. Since many decades it
has been associated with providing high quality, customer and
consumer focused products. Our company Nestle (ice-cream) will be
focused on becoming number one in nutritious, health and
Wellness Company. We will take pride by setting consumer
satisfaction our first priority and we will be successful in the
upcoming years.