Project

Principles of Marketing

Submitted by: Zahid Ali

Roll#: 09-056

Toseef Arshad
Roll#: 09-057

BBA (M) 3rd Semester

Submitted to: Sir Asad Abbas Jaffery
 History & Background
• In 1866, Henri Nestle founded the company in Switzerland
• Nestlé is one of the largest food and beverage company in the world with sales of about
CHF 109.9 billion.
• 283,000 employees worldwide
• Operates 479 factories in 82 countries
Nestlé is about twice the size of its nearest competitor in the food and beverage sector.
Nestle is the largest food company in the world. It is present in all five continents, has an annual
turnover of 74.7 billion Swiss Frances. There are 509 factories are running in 83 countries,
having 231,000 employs.
 Our story begins in 1867, when Henry Nestle developed a baby formula that saved child’s life
and marked the beginning of Nestle.

 It is originally consisted of two companies and two products, Henry Nestle and His baby
food in Vevey, and the Anglo Swiss Condensed Milk company and its condensed Milk in
Cham, both in Switzerland.
 His first factory was located in Vevey.
 In 1875, He sold His Company and retired.
 In 1880 second factory was built in bercher.
 In 1883, first time Nestle built a factory abroad, in Edlitz Grimmenstein.
 In 1890, Vevey factory produced 28 billion cans of Milk food and 2.2 million cans of
condensed Milk.
 In 1912, Nestle begins it long relationship with South Asia when Nestle condensed Milk
company start.
 In 1979, Milkpak Ltd. Is founded by Syed Baber Ali. It manufactures UHT Milk, Cream
and Butter as well as fruit Juices.

Company Mission

  At Nestle, we believe that research can help us to make better food, so that people live a better
life.
Good food is the primary source of good health, so we are trying to make good food.
To provide fresh and pure products to the customers, we introduced (SHE) Safety, Health and
environment policy to protect health of our employs and keep clean our surrounding
environment
Company Vision
 Vision of Nestle Milkpak Company is to expand business according to the increasing
demand of market.
 As per our company vision in 2020 production capacity of all plants working in Pakistan
is being increased.
 So extension of Kabirwala Plant is the example of our company vision. 

 MARKETTING AND SALES:

Bringing the consumer and shopper at the heart of all decision making is the vision of the
Generating Demand team at Nestlé Pakistan. Continuous efforts have been initiated to better
understand our consumers and shoppers with the intent to not only make deep local
consumer understanding the base of all Marketing and Communication Strategy but to also
make it the foundation of all innovation and renovation efforts. O ne of the successes coming
out of this was the launch of NIDO Bunyad with Iron fortification, addressing a major
nutritional deficiency in Pakistani children. Generating Demand continued to play its role in
bringing to life Nestlé Pakistan’s vision of being the leading Nutrition, Health and Wellness
Company in Pakistan by truly helping consumers to have “Good Food, Good Life”. T his was
clearly visible in the portfolio of Ambient Dairy brands. Nestlé MILKPAK continued to address
Iron deficiency in Pakistan and helped homemakers to strengthen their homes. With the
relaunch of Nestlé EVERYDAY, it continued to provide great tea moments to consumers in all
kinds of tea preparation. NE SVITA Women of Strength provided inner strength to the young
women of Pakistan so they could lock a better future for themselves and their families.
Additionally to help consumers make healthier food and life style choices all our brands carry
the “Nutritional Compass” on their packaging. These are some of the reasons why despite a
tough business environment in 2009, Nestlé Pakistan Limit
Financial Performance:
2009 was indeed another year of instability in social, economic, energy, and security terms.
However, despite these issues, for Nestlé Pakistan it marked a solid recovery from the much
deeper challenges of 2008. Local inflation in key commodities still had an impact in 2009 –
particularly in fresh milk where supply constraints continued and
lead to cost increases of +16%. T he Company continued to expand its dairy development
initiatives aimed at accelerating production of good quality milk in the country. I believe the key
elements to our performance in 2009 were
effective cost management, more investment behind our brands, and diversification of our
product portfolio based on deeper consumer insights. T he major new product launches this
year included: NE SQUI K milk enhancer, NI DO BUN YAD, LACTOGEN GO LD, and CERE LAC fruit
cereals. Sales for the year surpassed P KR 41 billion, and the growth of 20% was split relatively
even between Real Internal Growth and pricing movements. Export sales rose dramatically by
+48% to PKR 3.3 billion as we continue to leverage our brand strength in other markets.

 PKR Million 2009 2008 Change;

 Sales 41,156 34,184 +20%
 Gross Profit margin 28.9% 26.2% +270 bps
 Operating Profit margin 13.5% 12.0% +150 bps
 Net Profit margin 7.3% 4.5% +280 bps
 Net Profit 3,005 1,553 +94%
 Earnings per share 66.27 34.24 “
 5

Product Line
Beverages

Chocolate, Confectionery & Biscuits

Prepared dishes and cooking aids

Water
Milk Products

Nutrition

Miscellaneous
Most Popular brands
New Product Development:
Nestle wants to use their surplus capital for a new market offering. For this purpose Nestle
has followed the New Product Development steps. A New Product is lifeblood for an
organization. When the old product become weak organization have to introduce New
Products.

Idea Generation:
 Flavored Cheese
 Cakes
 Broast Ready-to-Eat
 Yogurt Flavored
 Boiled Eggs
  Biscuit

Idea Screening:
R-W-W---------Real-Win-Worth
is it real?
From the above Idea the most realist product, according to our Financial, Human and
Technical resource, are, Cheese Flavored, Cake, Biscuit.
real need and desire for the Product?
Customers may enjoy Cheese Flavored, Cake, and Biscuit.
Boiled eggs, Surf are not a real concern of the customer.
really satisfies the customer needs:
Cheese Flavored and Cake could satisfy the customer needs and want but Surf’s Market
is already saturated.
Our competitors already have launched Cheese Flavored, Biscuit and Cake, can we give
more satisfaction to the customer? The Answer is YES because of brand images and
quality product is better than our competitors.
Do we have resources?
Yes; our Co. has the ability to be success.

is it worth doing?
Cake and Flavored of our Co. can do something that greatly worth our Co.
Does the product set the Company’s overall growth strategy?
Our Co. has capital that is unused and also human and technical Resources also available
capture the market immediately and earned Profit. Management has decided that Cheese
Flavored will be our final product to be produced.

Concept Development and Testing:

What the consumer wants?
Something that our Co. can give their more satisfaction.
Which satisfy their wants and desires;
-health
By which they can enjoy their lifestyle

How the product shall be successful and profitable:

Due to goodwill and good image of our products in the mind of the customers, we can
capture the market by satisfying their needs and desires.
Concept Testing:
To test our product “Cheese Flavored”, we have decided to make sample products
and give freely at different markets and public places and then takes comments
from them about our product.
MARKETING MIX
Product positioning
 favor the rules of free competition
 under a clear legal framework
 Create and respond to demand for its product.
 Nespresso is a brilliant example
Place
decisions depend on:
 storing and transporting of products
 channel of distribution
Price
 ethnocentric pricing policy (per unit price of an item to be the
same, no matter where in the world the buyer is situated)
 geocentric pricing policy approach in the pharmaceutical product.
Advertising, Promotion & Packaging
Advertising
• through newspapers, magazines, television, radio, billboard or the internet
• Unique, Use creative slogan
• Example- Nesquik Rabbit
Packaging
mainly in plastics, but also to a lesser extent across metals and paper and broad
Promotion
• Professional Athletes, Famous individuals
• Example: U.S. Nestle Crunch Commercials staring Shaq

Market Strategy Development:

1st part:

1-Target Market:
 children
 young boys and girls
 elders men & women

2-Planned Value Proposition:

 more vitamins and calcium

3-Sales, Market shares and Profit goals for the first few years:
 First the company will sold 2,500,000 packs of Cheese Flavored at no profit no loss
basis.
 In 2nd year Company will sold 4,000,000 packs at 2.5 million profit.

2nd part:

Pricing:
Competition Base;
Price of our product, Cheese Flavored, will be always Rs.2 less then our competitors, most
prominent competitor, i-e Uniliver.
Distribution;
Product will be distributed to the customers by the distribution Channel we already have.

Marketing Budget;
Rs.1.5 million budgets for marketing purpose for first year.

3rd part:

Long run Analysis;

Long run sales;
In near future Sales must be reached up to 1 million. For which our resources shall be utilized
effectively to achieve this goal.
Long run Profit;
Profit shall not be less than 45 million.

Business Analysis:
Sales should not be less then 4,500,000, because our cost is about 2,000,000 and to recover our overall
Operating Expenses, Marketing Expense and Administrative Expense we have to make sales of
4,500,000.

Product Development:
Research & Development has developed samples of Cheese Flavored to check, is the in market
offering is matched with the product concept in real sense? Successfully the product concept is
turn into physical product, and now it is [Flavored milk] is ready to be market for initial test.

Test Marketing:
The sample Cheese Flavored made to test the market is now ready to offer in market for Testing.
Standard Test Marketing;
The Cheese Flavored is distributed in different cities, Lahore, Karachi, Faisalabad, Multan,
Peshawar, Quetta, Gilgit, Mumbai, Calcutta, Goa, Washington, California, Georgia, etc
Controlled Test Market;
Also to test the market Nestle has engaged same advertising firms, Karakorum Advertising
Company.

Simulated Test Markets:

Many samples of Cheese Flavored have given to different retailer shops to test the customers’
reaction about our product. For this purpose Nestle has tested at different market at different
cities.
Commercialization:
To launch the Product in market, a proper time and place should be decided, the management
and marketing manager has decided to launch the product at the time of NEW YEAR and at
every retailer shop where our former products are available.

Macro analysis
 Health & wellness
 Growing and developing populations
Micro analysis
 Quality and safety assurance
 Commercial behavior
 Environmental practices of suppliers
 Health & safety
 Energy & climate change