Federal Urdu University of Arts, Science and Technology Islamabad

Marketing Project

Group Members: Asfandyar Fida Muhammad Rizwan Muzamil Hussain Ather RiazSubmitted To: Mr. Imran MirDated: 09 June, 2015

Introduction:This is a semester project regarding a company we have decided to select Nestle as a company for our project. Nestle has beenservingthis world foroverone hundredand thirty years. It has differentiateditself throughits highquality product mix and positioned itself ashealth and NutritionCompanywhile targetingthehealth conscious people throughout theworld Henrie Nestle established Nestle in 1867 in Switzerland. Nestle is worlds N0 1 food company. 3 Lac 39 thousands people employed all over the world. Operation in more than 197 countries Over 700 products renovated or innovated in the past five years.

I. Situation Analysis:

a. External Environment:

i. Political: Nestle is a global company and leading in nutartion, food beverage industry.Companies polices are afftected if there is unstable poltical environment . Nestle has full support of governments to manufacture healthier diets for target market and they have made significant changes in products according to the customers needsii. Economic: According to latest report Nestle has organic growth of 4.4% in 2015. In 2014 sales are 91.6 Billon dollars and profit generate by company is 14 billon dollars.iii. Social: Nestle was founded on social responsibilty. Nestle manufacture products which are legal and healthier for people in this way target market become satisfiediv. International: Nestle company improves their operation by expanding their business on a international scale, Nestle company performing operations in more than 197 counties.

b. Corporate Review:I. Misson: Good Food, Good Life."The company aims to provide consumers with tasty, healthy food and drinks for every meal and snack.Vison: Their vision is to be the leading Food and Beverage Company in all over the world providing our customers with high quality products and service at competitive prices in this way our company will be able to achieve its goal and objectivesStrategic Intet:Nestle is world leading in nutration, food and beverage industry.In past years they deliverd best quality products to their cutomersGood Food Good life indicates company corporate plan that company proimise to deliver best quality products which are healthier for life. The company is able to create value among consumers by introducing new products continously with also reenginering business processII. Corporate Plan: Nestles target health concious people as their target market than they provide best quality, tasty, healthier food and cold drinks to their coustomers . Company has used reenginering as a businees plan to achieve goals. It means thay can rethink and redesign their products according to consumers needs. Marketing plan of nestle consist of to manufacture best quality products in afforadable price for typicall market they use best prmotion sources to intarct with customers.III. Long term Goals: Reducing direct water withdrawal per tonne of product by 40% compared to 2005, by 2015 Reducing direct greenhouse gas emissions per tonne of product by 35% compared to 2005, by 2015. Providing healthy and tasty foods to their customers. Company want to reamain worlds leading in food & beverage industry.IV. Objectives: Nestl's corporate objective is to be the world's largest and best branded food and beverage manufacturer with best quality products. To build trust and strong business realtionship with consumers, governmental authorities and business partners. Introduce new products and teacnologies Monitor perforamce and results and make changes to achieve required goals.V. Organizational Chart:CHAIRMANP.Barbeck-letmathe

Corporate governanceD.P FRICKCEOP.BulckeCorporate communicationsR.RamsauerPharma & cosmetics HRF.Castaner

Finance & controlJ.SinghOperationsJ.LopezSBUs marketing &salesW.BauerInnovation technology & R&DW.BauerZone EUR: EUROPEL.FreixeNestle ProfessionalM.Caira

Nestle nutritionR.T.LaubeZone AOA: ASIA/AFRICAF.Van DijkZone AMS: AmericasL.CantarellNestle watersJ.J.Harris

c. Product Category Review:

I. General Discription: Nestle is worlds largest nutrtion, food and beverage industry. Nestles manufacture products which are healthier and deliver best quality products to their customers. They do not use any harmful ingredients. So their products are for all people, ages and cultures.II. Sales Trends: Nestles is world leading in nutration, food and beverage industry. People in now a days more concious about their diets and health. Nestles introduce best quality brands which are healthier and tasty.Major shares of brands according to organic growth are:Nescafe 11%, Milo 13%, Nestle pure water 11% , Nido 11% & Maggi 10%III. Distribution: Nestle has its own distribution network with all transporation facilities. They transport their products to regional sales offices which are situated all over the world. The distribution process consist of following steps:Raw material, manufacturer, processing, product, packaging, , transporation, distributor, retailer, customers.IV. Pricing: Price depend upon the market of product. Nestle Company charge fair prices according to the product quality, competition in the market and they made product according to the buying power of the customers e.g Nestle Milk Pack 110 RS Per kg in Pakistan.V. Packaging: Nestles used best material for packaging of product in order to prevent food waste and avoide to damage environment , company also avoided the wastage of packaging material. Nestles design packaging in such a way that it attract customers to buy the product.

d. Competative Analysis:I. Descriptions of major competitors strength and weakness: Major comprtitor of Nestle company are Engro foods, Walmart, Unilever, Habib, , keuring, Unilever NV, Hershey Foods, Kraft Foods, Cadbury Schweppes, GROUPE DANONE and many other companies etc These companies manufacture same products like nestle and used best distribution sources , make changes in price of products to challenge nestle in the market.

II. Brand Postioning and advertising:

1. Media Spending: In 2011, Nestl spent more than 2.9 billion U.S. dollars on advertising, in 2013, Nestle spent 3.12 billon U.S dollars on advertisng worlwide.

II. Sales Promtion:It was one of the best advertsing compigon used by companies to attract customers. Nestle done the promotion of the products very smartly. Nestle try to poistioning that their products are for all ages and healthier for every one in this way they will attract large market. Now, Nestles is world leading nutration, food and beverage industry.e. Consumer Analysis:

I. Demographical Factors: If we look on Nestles company demogrphic segemenation then we will find that their some products are for every one , people from any area, culture ,age, and any beliefs etc and some products are for special target market e.g Children foods like Ceralic for only childrens etc

II. Brand Loyalty: According to latest research Nestles company ranked NO.5 most loved company all over the world. It is due to the consumers brand loyalty.It's the world's leading nutrition, health and wellness company. The mission of "Good Food, Good Life" is to provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night.They are providing best quality products to their customers. In this way customers become loyal they do not purchase competing products available in market.

III. Purchase Rate: Nestles company manufacture products which are healtheir and tasty. In this way they attract health concious people after delivering best quality products their customer become brand loyal. They purchase Nestles company products ang givingperference Nestles products among competitors products . Purchase share of some Nestles product according to annual 2014 report:Powdered and Liquid products 20.3 % Milk and ice cream products 16.7% . Prepared dishes 13.5% Nutrition products 13.1% Petcare 11.3% Water 6.9% & confectionery &chocolate 9.8%.

II . SWOT Analysis:Strengths: Companys name Nestle specifies the quality image high standard and quality product Loyalty from customers is also the major strength for the company Employees are also loyal due to the decentralized culture of the company People trust on products due to proper health and safety measures The strength of Nestle confectionary is its imported chocolates and candies, which strengthens its image Being a multinational company it has the capability to attract more customers than the local companies Company has the ability to compete in a dynamic environment Company always adapt the new technology and deliver best quality products to customers.Weaknesses: There is not much margins for retailers to prefer its sales. They need to improve the facilities of transporation of products and promotion of the product The distribution cost is high as compared to the competition in the local market.

Opportunities: They have an opportunity to expand or capture the market by adding its product line. They have the opportunity to offer snacks & enter in ice cream industry. They can also capture the market of home appliances. Company can open separate stores to eliminate retailers. Recently, they have created an opportunity for themselves by introducing chillers in the market. Company is trying to open stores in universities. They can provide incentives to retailers to increase sales volume.

Threats: cost. Existing companies are increasing their product lines that can prove to be a threat in the coming years. Company like Cadbury is giving more discounts to retailers as compared to distributors due to which retailers prefer its products for sale. As compared to the local competitors, Nestles distributor cost is very high. As Nestl Products has to maintain and obey the Nestl standards. Some companies are competing on the basis of cost.

III. Strategic Planning:

a. Marketing Objectives: Nestle 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 national economies in which Nestl operates.The aim of the creating values for the company include with improve business conditionfor the firm. To obtain more reliable and high qualify source of raw materials, improved government functioning and regulatory, employed skill and loyal workforce and superior quality products which successfully complete.

b. Marketing Strategies: Nestles define mrketing as: A social and managerial process where by individual & groups obtain good food and good lifethrough creating and exchanging products and values. For this purpose thay used marketing stsrtegy to bulid strong realtionship with customers. Their marketing staretgy is to attract new customers by providing superior products in affordable price to satisfy them. There all products are healthy for life and for society welfare. So according to their mission and vision they are following Societal Marketing Concept.

c. Targeting and segmenting:

Target Market: Nestles products are not for all. Some products are for different target market and other are for different e.g baby foodies, for babies and Milk pack for teenagers and elders depending upon people income, life style, purchasing power etc. they will be targeting only those segments that can provide best possible returns so in this way they may be able to achieve their goals effectively and efficiently.

Market Segmentation: Nestle has divided its market into geographic (Location and area) , demographic ( Age, below 18, above 30, 18-30 and gender), psychographic (Upper class, lower class and middle class according to their income level) and behavioral segments. These segments will help to understand the market better and in implementation of marketing strategies.

d. Competitive Advantages: Leading in food and beverage industry Best quality products to capture large health concious market The research and development capabilities allow the Company to lead the way in innovation among its competitorse. Positioning and Branding: As Nestle has salgon Good Food Good Life they have trying to positioing that their products are for everyone and healtheir for health. They do not use chemicals and harm ful ingredients which are also harmful for human beings as well as environment. Nestles company used best promotion sources to poistioning that their brands are legal and healthier for everyone. In this way they attract health concious large marke

1V. Marketing Mix: Product: Product stands for goods and services that the company offers to target market. Nestle manufacture products which are used every day. Nestle has large number of products some of the brands are following: Baby Foods, Breakfast Cereals, Beverages, Bottled Water, Chocolate & Confectionery, Dairy Products, Food Services, Ice Cream, Prepared Foods, Petcare & Cosmetics Names of some products are: Cerelac, cookie crisp, Nestle fruit juices, Coffee Nescafe, Milo. Nido, Nestle Pure Life Bottled water, Crunch, Kit Kat, Nestle Milk Pack, Friskies, Maggi, Dog Chow, L Oreal etc Price: The price is dependent on the market of each individual products. Nestle sets prices of their products according to the market demand as low as possible to achieve its goal and provide services to everyone. Nestle has no effect on prices by their competitors because they set their own.They charge offardable prices to their customers. List of prices of some Nestle products in Pakistan: Cerelac baby food RS 125, 200 grms and different varities have different prices, Nestle Milk Pack RS. 110 per kg, Maggi Chicken RS.24 , Nestle Nesfruta RS. 100 Per 1000 ml, KitKat Chunky RS 2350 Per 50 grms pack, Nestle water 18.9 liter bottle RS .230 etc

Promotion: Nestle has adopted the channels for promotion through TV, News papers, magazines, Doctors,and hoardings, personal selling and direct marketing etc For this purpose nestle issues ads about their products to tv channels to intract with customers and similarly to the newspapers, they also used hoardings on markets or roads to communicate with customers. Nestle also used dirct marketing for products, consumers will register to online ordor than they will provide products and services with in 24-48 hours. Nestles company also uses person selling, selling through person to person communications process. For this purpose company sent their good observers in the market to intarct with the people, tell them about products, face to face communication will help the company to attract large marke.

Placement: Nestls distribute their products on world wide scale. They are operating or saling their products in more than 197 countries, in these countries thay sale all over regardless big and small cities. For this purpose Nestle has its own transpoaratin system, they manufacture the products in factories and transfer products in regional offices or sales center then provide products to distributors and retilors. IV. Controling and Evaluation:a. Forcasting:Forecasting is used by companies to determine how to allocate their budgets for an upcoming period of time. Nestle, the world's largest packaged foods maker, forecast sales to rise 5 percent this year, in line with its long-term goals, following a weaker year in 2014 that was hurt by deflation in Europe and slowing demand in Asia.b. Budgeting:According to annual Nestles company report in 2014, thay are operating in 197 countries having having 3, 39, 000 employees. Nestles company had sales of 91.6 billon dollars and 14.0 billon profit.Total sales in europe 25.9%. Americans 39.4% and Asia & Africia 26.3%. tjey also used heavy amount on advertisment.In 2011, Nestles company spent 2.9 billon dollars on media for advertisment purpose.c. Evaluation: Nestle is world leading in nutration, food and beverage industry.In past years they deliverd best quality products to their cutomers.Nestl Company is an international company which came to the stage it is today by gaining superior competitive advantage over its rivals. The focus product differentiation strategy has been very successful although it may not work for other firms. The company is able to create and deliver value not only by offering distinguished products but also gaining effectiveness and efficiency by reengineering its business..We are sure that Nestl Company will do better in the future than their competitors and might be the new trendsetter in some criteria and also gain its above-average returns to their company.

Federal Urdu University of Arts, Science and Technology Islamabad