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Marketing Strategy of Nestl (Nestl Pure life)


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Executive Summary

Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals. While strategy is the action plan to do something and hence, Marketing Strategy is the managerial process of developing and maintaining a viable fit between the organizations objectives, skills and resources and its changing market

opportunities. The aim of marketing strategy is to shape the companys business and products so that they yield targeted profit growth. Nestl Pakistan Limited is selected to study that how they have planned their marketing strategy for Nestl Pure Life (water). Nestl is a multinational food company and offering Fast Moving Consumer Goods (FMCG). The motto of Nestl is Good Food, Good Life, so delivering the qualitative products to the customer is their main objective. It is offering 75 brands of bottled waters worldwide. Nestl Pure Life (NPL) is one of them that was first offered in Pakistan by Nestl Pakistan Limited in 1998. People felt need of Pure, safe and clean water because of impurities in water especially in the industrialized cities like Karachi, Lahore, Faisalabad etc. Nestl identified this opportunity and lunched NPL that satisfied the customer needs and Nestl become market leader in the water industry. The customers of NPL showed interest on NPL because of trust on Quality of Nestl, at the heart of which there are qualitative products and its long term commitment to deliver better products to consumers. Being the market leader, the market share of NPL is 78% that is much higher than its competitors. NPL is passing through its Growth stage (of Product Life Cycle) i.e. its sales are increasing tremendously

and competitors are entering in the market like Aqua Fina by Pepsi and Askari Waters. There are different SKUs of NPL to cover a wide market needs like for Home and office delivery there are 3gallon and 5 gallon bottles (bulk usage) and for day to day usage easily carrying light weight like 1.5, 0.5, 0.2 liters bottles are available in the market. Still Nestl is working on bringing the changes and innovation in this field. For this it has close relationship with its suppliers and distributors to get their suggestion to improve the quality of NPL. Nestl Pakistan also has the Customer Service Department with the logo "Talk to Nestl" in Lahore to receive the complaints and suggestions from the customers. In this way Nestl analyze its market and becomes aware of the new market trends. Marketing strategy include 4 Ps strategy i.e. Product, Price, Place and Promotion strategies. Product is something that is offered to the market. NPL product strategy studies show that they are positioning the product with respect to its attributes that NPL is safe, pure, refreshing and healthy water. Nestl also does product line expansion; recently it has offered a 0.25 liter bottle of NPL in the market. Its also using the company name with its product name i.e. Nestl Pure Life. NPL round shape and elegance of

the bottle are instantly recognizable. Quality is cornerstone of NPL success. Nestle people say: Quality is our more successful product and it is key to our success today and tomorrow. In Price strategy, Nestle has adopted the strategy of nonprice competition. It is offering one price for NPL to all cities of Pakistan. It also keeps the check on distributors to maintain single price of NPL. It offers trade discounts to its distributors. Placement is the distribution of the product to its customers at right time, in right quantity, at right price and at right place. To ensure this, channel adopted by the Nestl for distribution of NPL is as follows: Producer Wholesaler Retailer Consumer NPL comes under the category of FMCG, so for this the timely supply is very important thats why Nestl is following intensive distribution strategy. Promotion is the very important and crucial element of marketing strategy as through it the company establishes its image in the minds of the customers. NPL is promoted by using different ways of promotion. Advertisement of NPL is done through TV, radio, billboards, newspapers and magazines. Current advertising slogans are that NPL is trust, hope and happiness and JIYO! Kay yahi hay Zindagi. Nestl also conducts the tradeshows, concerts, events,

sponsorships, and discounts for sales promotion. For establishing public relations, Nestl distributes its newsletters, annual reports, calendars and diaries, lobbying, donation for charitable and civic events. For the victims of 8th October 2005 earthquake, Nestl has donated 90 trucks, which were containing different foods items, and NPL was one of them which is around Rs. 2 Billion. The Nestle organized its teams to distribute products to the effected areas and all employees contributed from top to bottm (MD himself was involved personally to distribute products physically)
2.1 Introduction

Food is core element in our daily lives. Not only does it enable us to survive, but approprate amounts and quality also help to ensure a better standard of living by contributing to our health and wellness. Consumer needs and expectations associated with a particular food product are not fixed, but change with time and according to geographic region, culture and the various stages of life. Ever since its foundation in 1866, Nestls goal has been to keep in step with this constant process of change. It reacts to new consumer requirements with innovative and continually renovated products, and implements new scientific findings in tasty foods.
Mission Statement

Nestl's business mission 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.
Motto of Nestl is Good Food, Good Life. Objectives

Nestl does not favor short-term profit at the expense of successful long-term business development.

Nestl 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.

Nestl 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. Nestl 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.

Nestl continues to maintain its commitment to follow and respect all applicable local laws in each of its markets.
2.2 History (The story of Nestl: From nutrition to wellness)

1866 -1905 In the 1860s Henri Nestl, 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. High infant mortality rates, and the lack of suitable replacement foods for babies with no access to breast milk, were the motivation behind Henri Nestls invention of Farine Lactee. He was also able to offer his food to convalescent and elderly people, thus laying the foundations of todays concept of nutrition. He said, The thought that my invention could save the lives of so many children counted enormously, the financial gain was not the prime motivation. (Henri Nestl. 1869) People quickly recognized the value of the new product, after Nestl's new formula saved the child's life, and soon, Farine Lacte Henri Nestl was being sold in much of Europe. 1905-1918

In 1905 Nestl 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, Nestl's production had more than doubled. 1918 -1938 After the war Government contracts dried up and consumers switched back to fresh milk. However, Nestl's management responded quickly, streamlining operations and reducing debt. The 1920s saw Nestl's first expansion into new products, with chocolate the Company's second most important activity 1938 -1944 Nestl 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, Nescaf, which was a staple drink of the US military. Nestl's production and sales rose in the wartime economy. 1944 -1975 The end of World War II was the beginning of a dynamic phase for Nestl. Growth accelerated and companies were acquired. In 1947 came the merger with Maggi seasonings

and soups. Crosse & Blackwell followed in 1960, as did Findus (1963), Libby's (1971) and Stouffer's (1973). Diversification came with a shareholding in L'Oral in 1974. 1975 -1981 Nestl's growth in the developing world partially offset a slowdown in the Company's traditional markets. Nestl made its second venture outside the food industry by acquiring Alcon Laboratories Inc. 1981 -1996 Nestl divested a number of businesses1980 / 1984. In 1984, Nestl's improved bottom line allowed the Company to launch a new round of acquisitions, the most important being American food giant carnation. 1996+ The first half of the 1990s proved to be favorable for Nestl: 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 Petfoods (1998) and Ralston Purina (2002). There were two major acquisitions in North America, both in 2002: in July, Nestl merged its U.S. ice cream business into Dreyer's, and in August, a USD 2.6bn acquisition was announced of Chef America, Inc.
Nestl Pakistan Limited

Nestl Pakistan Ltd. is a food processing company, which is registered on Karachi and Lahore stock exchanges. It established its first production unit in 1988 in Sheikhupura, Pakistan with the name of Nestl Milkpak Limited but its name has been changed and now it is called Nestl Pakistan Limited. Headquartered in Lahore, the Company operates five production facilities. Two of its factories in Sheihupura and Kabirwala are multi product factories, while another one at Karachi is already for production. One factory in Islamabad and two in Karachi produce bottled water. Through its effective marketing and a vast sales and distribution network throughout the country, it ensures that its products are made available to consumers whenever, wherever and however. Nestle Pakistan is a subsidiary of Nestle S.A.- a company of Swiss origin headquartered in Vevey, Switzerland.
Sheikhupura Factory

The production facility, under the name of Milkpak Ltd. at Sheikhupura commenced operations in 1981 as a producer of UHT milk. By 1988 it had expanded its operations to producer butter, cream, desighee all under the brand name MILKPAK and fruit drinks under the brand name FROST. After Nestl S.A., Switzerland, took a major participation in Pakistan Ltd. In 1988, the Pakistan factory at Sheikhupura

became a part of the joint venture under the name of Nestl Milkpak Ltd. Soon afterwards in 1990 the milk powder plant was established to produce powder milk (NIDO). This was followed in subsequent years by the installation of production lines of infant formulae (LACTOGENs), tea whitener (EVERYDAY), chocolate drink-powder (MILO) growing up milk (NESLAC), ready to drink chocolate drink (MILORTD), sugar confectionery (POLOMint), fruit drinks (FROST), juices (ORANGE, APPLE, PINE APPLE, MANGO), coffee (NESCAFE), flexible confectionery line (TOFFO and SOOTHERS), bottled water (NESTLE PURE LIFE), plain and fruit yogurt, specialized infant formulae(NAN 1 & 2). During these years a variety of variants of different products were also introduced as a part of expansion of products portfolio. To meet the needs of safe storage for the ever expanding product range and their increasing volumes, a National Distribution Center (NDC) was constructed in 2000. Spread over 6614 sq uare meters, it can store up to 8300 pallets, approximately 8000 tons.
Kabirwala Factory

Nestl Pakistan acquired the factory in 1990 as a subsidiary and subsequent to its meger with Nestl Pakistan in April 1997 it became a fully owned unit of Nestl Pakistan Ltd. A MAGGI NOODLES plant was installed in 1992, followed by a mil powder plant for NIDO and GLORIA whose capacity was subsequently increased several times. Then came a new butter line for producing bulk and cultured butter. A dry milk line was installed for tea whitener powder (EVERYDAY) and the milk powder plant was modified to produce NIDO enriched with vitamins and minerals. The desi ghee plant was relocated form Sheikhupura Factory and its capacity was doubled. A National Distributions Center and an Occupational Health Center were established and a new incinerator was commissioned with a scrap yard for proper water disposal.
2.3 Organizational Structure

Organizational structure is the formal framework by which jobs tasks are divided, grouped, and coordinated. Nestl is a function-based organization. The tasks are divided into separate jobs and then these jobs are grouped together under different departments i.e. fuctional departmentalization is found in organization. Each major area is kept under the manager who is specialist in that concerned field and is responsible for all activities, which that department performs.
Organizational structure of Nestl is hierarchical.

There is a chain of command that extends from upper organization levels to the lowest levels and clarifies who reports to whom. The orders move from upward to downward and suggestions move downward to upward direction. The continuous improvement section is made for this purpose. It encourages employees to give their suggestions and share the new ideas. The jobs are formalized; there are explicit job descriptions, numerous organizational rules, and clearly defined procedures covering work procedures. But in spite of

formal rules and regulations, Nestl keeps on changing to keep a pace with the changing environment. So, it is strict but not rigid organization. In effort to be more flexible and responsive, there has been distinct trend in this organization toward decentralizing decision-making.
2.4 Product Lines

Quality and nutritional value are the essential ingredients in all brands of Nestl. Millions of people prefer Nestl products every day, happy with the addition to their wellness that they bring. Nestl is giving its products in 10 different categories of food with 75 brands. These food categories with product lines are: Baby food (Cerelac), Beverages (Necscafe liquid, MILO, Buddy, Orange juice, Nestea), Breakfast cereals, Chocolate and confectionery (KitKat), Dairy Products (Milkpak, NIDO, EveryDay,), Prepared food (Maggi noodles), Bottled Water (Nestl Pure Life) Nestl is offering following Product lines in Pakistan:
Products with Years of Launch:

1981 Nestl Milkpak 1983 Nestl Butter 1986 Pakistan UHT Cream, Pakistan Desighee, Frost 1990 NIDO, CERELAC

1991 Nestl Rice, LACTOGEN 1, LACTOGEN 2 1992 Nestle EveryDay, Gloria, Maggi noodles 1994 MILO powder, NESLAC 1995 MILO RTD 1996 Nestl juices, POLO Mint, NESCAFE Classic 1997 Nestl KitKat 1998 Nestl TOFFO, Nestl Soothers, Nestl Pure Life 2000 Nestl Plain Yogurt 2001 Nestl Fruit Yogurt, Nestl NAN 1, NAN 2 2002 EveryDay liquid, 2003 BUDDY juices, Nestl Hi-Calcium Low Fat Yogurt, Nestl Hi-Calcium Low Fat MILK 2004 Nestl Raita, NESCAFE (3 in 1) Q. Which Product I have selected? I have selected Nestl Pure Life (NPL) to study its marketing strategy, which is adopted by Nestl Pakistan Limited. Water is essential for life. It represents about 60% of an adult's body weight. While at first sight, there would seem to be enough water on our blue planet, in fact, barely 1% of the world's water is available for human and environmental needs. As the worlds leading food and Beverage Company, and the world leader in bottled waters, Nestl has a

responsibility towards the sustainable use of water resources. This responsibility is embedded in Corporate Business Principles and in strategy for sustainability. Nestl began its entry into the water business in 1969. In 1998, for the first time in its history, Nestl associated its name with bottled water: Nestl Pure Life. The brand was launched in Pakistan and soon appeared in Brazil, followed by Argentina, Thailand, the Philippines, China, and Mexico in 2000. In 2001, India, Jordan, and Lebanon followed, and in 2002, Egypt, Uzbekistan and the United States. NPL bottled water is available in markets in several different sizes i.e. SKUs (Stock Keeping Units). These SKUs are of 5 gallon (18.9 liters), 3 gallon for direct home and office delivery and .2 liter, .5 liter, and 1.5 liter bottles. In Pakistan, Nestl water is strengthening Nestl Pure Lifes base of operations to meet the need of countys emerging need for clean, good-tasting water inconvenient sizes and packages to satisfy a familys requirements. NPL is today number one water brand in Pakistan. Annual bottled water consumption per person varies widely throughout Asia, from 2 liters in Pakistan to 73 liters in Thailand, giving Asia strong growth potential for years to come. Nestl with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestl and is today the world's biggest food

and beverage company. Sales at the end of 2005were CHF 91 bn, with a net profit of CHF 8 bn. Nestle employs around 250,000 people and have factories or operations in almost every country in the world. 3.1 Market
Market consists of people or organizations with needs to satisfy, money to spend, and willingness to spend it.

Markets are made up of current and prospective customers, defined as any person or group with whom a marketer has an existing or potential relationship.
3.2 Analysis of Market

Analyzing the market means getting the information about the current market trends. The needs and wants of the customers are identified; the availability of the products is monitored as well as information about the competitors is gathered through this analysis. The image of the product in the minds of the customers is also judged and then on the basis There are different ways, which are adopted by Nestl to get the information of the market.
3.2.1 Sales Department

Sales department is a primary source of getting the information about the market. They actually visit the market and find out that who are the competitors, and what strategies

they are adopting. They also collect the complaints of the customers and make sure the availability of the product in the markets.
3.2.2 Customer Service Department

For Every product there is customer service department. This is head office based department i.e. every head office has its own department. In this department, customers complaints are collected which are gathered through the sales force or directly submitted by the customers. Then batch number is assigned to these complaints and is transferred to the Marketing Department. If Marketing Department cant be able to solve the problem then these complaints moved to the Quality Assurance Department, which is working in the Factory. Nestl believe in maintaining regular contact with their consumers. This applies both to how it presents its products and to how it addresses its consumers' questions and concerns. When Henri Nestl prepared his first boxes of infant formula for sale, he put his address on the packages so people would know where to go if they had questions. Today, Nestls Consumer Relationship Panel with the words "Talk to Nestl" expresses the same commitment. This is why Nestl have a worldwide Nestl Consumer Services network devoted to caring for consumers. The

employees have expertise in a wide range of areas such as nutrition, food science, food safety and culinary expertise. They provide the prompt, efficient and high quality service that consumers expect from Nestl. In addition, employees are taught to talk with consumers and above all, to listen. Listening helps to understand what people want. Nestl uses the insights gained from relationships with consumers to drive product development. Nestl cares for its consumers because its success depends on meeting their needs and expectations. Through listening and understanding, it can make products that they will want to use all through their lives. 3.2.3 Research and Development Department In Nestl, R&D departments are localized. Its head office is in Switzerland. Nestl has divided the whole world into 3 zones each has its own R&D. 1. America 2. Europe 3. A.O.A. (Asia Oceania Africa) The R&D in America Zone is in America itself, in Europe Zone, it is in France and in A.O.A. Zone it is in Australia.

The customer complaints are forward to the R&D where research is conducted. The results of the research and decisions are then transferred form R&D to localized offices.
3.2.4 Suppliers and distributors

To know about the market Nestl Pakistan limited has established the close relationship with their suppliers who provide the raw material and the distributes who distribute the product in the market. As these both have an up-to-date knowledge about the market as they have a close interaction with the customers and also with the competitors.
3.3 STP (Segment, Target and Position) 3.3.1 Market Segmentation

Market segment consists of a large identifiable group within a market with similar wants, purchasing power, geographical location, buying attitudes, or buying habits. In a total market, there is always some diversity among the buyers. Within same general market there are group of customers, market segments, with different wants, buying preferences, product use behavior. In some markets these differences are relatively minor, and a single marketing mix can satisfy benefits sought by the consumer. The market segment is based on need based and its targeted for every one who cares for his/her life and wants to maintain good health.

3.3.2 Target Market

After the company has segmented a market, management must next select one or more segments as its target markets. The company can select any one of the tree strategies i.e. Market Aggregation, single segment concentration, or multiple segment targeting. The target market consists of upper lower class to upper upper class due to their purchasing power and company is following multiple targeting strategy which includes mainly two focus groups i.e. home & office consumption especially for bulk water.
3.3.3 Positioning

After identifying the segments and then selecting oneor mor to target, the marketers must next decide what position to pursue. A position is the way a firms product, brand, or organization is viewed relative to the competition by current and prospective customers. When positioning a product the marketer wants to convey benefits most desired by the target market.
How Nestl is positioning NPL?

Nestl is a food company and its logo is Good Food, Good Life. The basic concept, which it is giving to its customers, is the quality food that if food would be good then life would also become good i.e. a good health.

The name of mineral bottled water is Nestl Pure Life. This name itself conveys the message of the Purity to its customers. Nestl is has ever been trying to establish an image of purity and safety about its products. Through advertising campaign same message is being tried to communicate to the target customers who are health conscious and want to lead a healthy and happy life. The current slogan of NPL is JIYO! Kay Yehi Hay Zindagi. The message, which is conveyed to the customers, is that NPL is Hope, Happiness and Trust. The purpose of all these slogans and messages is to establish the image of pure and quality water in the minds of the customers on which they can trust and can get the happiness and make their life hopeful. Backed up by the best possible product quality and food safety standards, Nestl promotes consumer health and well being while at the same time adhering to regional traditions with regard to taste and pleasure. With the objective of ensuring optimal nutrition, Nestle takes into account the consumers increasing expectations with regard to food, but it also makes a contribution to good health and illness prevention that extends above and beyond the traditional concerns of sustenance, pleasure and convenience.

In line with Nestls global philosophy, Nestl Pakistan is proud of its commitment to excellence in product safety and quality and to providing value and services to its consumers. Nestl Pakistan operates in many ways but people, products and brands are the main flag bearers of the Companys image. Nestl motivates the people to drink NPL by telling their customers about the importance of water, which is pure and safe (clean). Like; Hydration, Support and Performance Until the 1970s, athletes were advised not to drink liquids during sports activities. We now know that this can impede performance and can sometimes even be harmful to health. The Nestl Water Institute has developed a computer program designed specifically to maintain optimal levels of hydration during exercise and strives to raise athletes awareness of the essential role of good hydration before and after exertion to maintain certain water level in body. You are what you drink! Drink a glass of water20 minutes before your meals and you will not eat as much. Or, when you feel tired, or have a craving for sweets, a glass of water will do the trick. This is a simple, healthy and effective way to lose those extra pounds! Drink to Health

Pure, safe water is essential to good health. Water helps maintain your energy, vitality and prevents fatigue. Make sure your children drink plenty of pure, safe water every day.
Best Thirst Quencher!

Make sure you drink plenty of water before, during and after physical activity. Drink before you feel thirsty and drink cool water as it helps lower body temperature. Always carry a bottle full of pure, safe water with you. Cool Down! Remember, only pure, safe water refreshes you best. Caffeinated and sweetened drinks are not the answer to thirst. These beverages act as diuretics, causing the body to lose water and contributes to dehydration.
Develop a Hydration Habit!

Soft drinks, sweetened or caffeinated beverages dont count as your daily water intake. Always keep a bottle full of pure, safe water with you as you go about your daily activities. Drink water when you wake up, with every meal and bedtime. Radiant and Clear! Water is the ultimate beauty tool for radiant and clear complexion. It helps flush away impurities that cause skin problems. Your skin needs water for elasticity. Drink 6-8

glasses of water to prevent your skin for becoming dry and prone to wrinkles.
The customer comes first

Nestl wants to win and keep customers: distributors, supermarkets, hotels, and shopkeepers and the final consumers. They have very different requirements. Trade customers expect excellent service, correct information and timely delivery. Consumers consider taste, appearance and price when they make their choice. Nestl task is to understand what customers want and respond to their expectations rapidly and effectively. It serves various groups of consumers and there is demand for NPL at different levels of perceived quality and price. All customers, however, expect value for their money good quality at a reasonable price. Nestl is offering quality to customers. It also means environmental quality. Nestl shares societys concern for the environment and is committed to environmentally sound business practices throughout the world. Customers are central focus of Nestl and it must always respect their needs and preferences.
Quality is a competitive advantage

This is competitive world and must never forget that customers have a choice. If they are not satisfied with a Nestl Pure Life, they will switch to another brand. Its goal,

therefore, is to provide superior value in every product category and market sector in which they compete.
Quality is a joint effort

Operating companies are fully responsible for maintaining agreed quality standards. Not only Production units, but also Marketing, Purchasing, Distribution and Sales have a vital role to play in providing quality to customers. This implies a thorough knowledge of the products and services we offer. Quality policy and principles, the mandatory standards and the recommended tools for implementation are laid down in the Nestl Quality System, which is applicable throughout the group. Further directions are given through instructions, norms and guidelines, often specific to a product. Our business products, such as raw material producers, packaging suppliers, contract manufacturers and distributors are expected to share our concern for Quality. They too must set up an adequate quality system, so as to meet requirements. Every function and department in the company as well as Nestl business partners must share the quality efforts. Nestle people says,
At Nestl, Quality is our first priority. Let us practice it every day.

3.4 Major Competitors

Competition typically is defined as among forms within an industry producing products that are substitutes for one another. Therefore, the identification and evaluation of marketplace competitors is a key element of strategic marketing and a vital element of the corporate survival. Nestl is the market leader in the water industry. It is the first company which launched bottled water for first time in Pakistan and thats why it has maximum market share than others because of being pioneer in this industry. It is also leading the other firms in new product introductions, distribution coverage, and promotional intensity. For different product categories there are different competitors of Nestl. Nestle pure life (NPL) major competitors at this time who are also offering their water product in market are following: Pepsi is offering Aqua Fina Askari water There are also other small competitors as well e.g. Classic, Nova etc which have very low market segements. According to market view, competition is defined as: The competition between the firms, which are satisfying the same customer, needs.

So according to concept the competitors of NPL are all those companies, which are satisfying the need of thrust of the customers. Beverages companies like unilever, Tapal danedar, Pepsi, Coca cola etc. also come in this kind of the competition.
3.5 Market Share

NPL share is 78%. Pepsi Aqua Fina share is 15% Askari Water has share of 2.9%. Remaining 4.1 % is for all other competitors.

4.1 Marketing Strategy

For each target market, management must design a Marketing strategy, which includes the designing of the

marketing mix. The Marketing Mix is the combination of multiple aspects of the following four elements: a product, how it is distributed and promoted, and its price. These four elements are intended to please the target market(s) and, equally important organization marketing objectives. The Company's strategy is guided by several fundamental principles. Nestl's existing products grow through innovation and renovation while maintaining a balance in geographic activities and product lines. Long-term potential is never sacrificed for short-term performance. The Company's priority is to bring the best and most relevant products to people, wherever they are, whatever their needs, throughout their lives. Nestl is committed to the following Business objectives in all countries, taking into account local legislation, cultural and religious practices:

Nestl'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.

Nestl does not favor short-term profit at the expense of successful long-term business development.

Nestl 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.

Nestl continues to maintain its commitment to follow and respect all applicable local laws in each of its markets. To achieve these objectives the product, price, place and promotion strategies for Nestl Pure Life are as following:
4.2 Product Strategy

Anything offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want.
Product is set of tangible and intangible attributes, including packaging, color, price, manufacturing, prestige, retailing, services, etc. which the buyer may accept as offering want is satisfied. Nestl is offering the products, which comes under the category of fast moving consumer goods (FMCG). Nestl is committed to offering consumers high-quality food products that are safe, tasty and affordable. The Nestl Seal of Guarantee is a symbol of this commitment.

To be successful in marketing, producers must need carefully planned strategies for their products. Now the question is that how Nestl has planned the product strategies for NPL.
4.2.1 Positioning the Product In relation to the attribute

Nestl is positioning its water as pure and safe water, which is essential to good health. They say that Trust Nestl Pure Life and also Nestl pure life is Happiness, Hope and Trust, this is the message which they are giving in their advertising campaign. Nestle also claims that NPL is Pakistans favorite water and currently their slogan is JIYO! kay yehi hay zindagi. On basis of these, it is said that Nestl is positioning in relation to the attribute and quality of the product. Its basic foundation is unchanged from the time of the origins of Company, and reflects the basic ideas of fairness, honesty, and a general concern for people.
4.2.2 Product Line Expansion

Product line expansion is accomplished by increasing the depth (variety of sizes, colors, models) within the product line. Nestl is offering variety of sizes in NPL product line, which are as follows: Retail line: 1.5 liters

0.5 liters 0.2 liters (Recently launched) Home and Office Line: It is also comes under Nestl Bulk category. 3 Gallon 5 Gallon The year 2005 saw the successful completion of yet another year of outstanding business for NESTL PURE LIFE both in retail with 0.5 and 1.5liter bottles with the introduction of a new product i.e. 0.2 liter bottle and direct home and office delivery with 19 liter bottles. The exceptional performance of the brand is the result of expanding national distribution and an increasingly loyal customer bases. The brand has revolutionized the Pakistani market by tapping the real consumer need for pure, safe and healthy water and has successfully dominated a key strategic business in Pakistan. 4.2.3 Product Life Cycle Product life cycle consists of the aggregate demand over an extended period of time for all brands comprising a generic product category. Product life cycle is divided in four stages. Introduction:

During introduction stage, sometimes called the pioneering stage, a product is launched into the market in a full-scale marketing program. Growth: In the growth stage, or market-acceptance stage, sales and profits rise, frequently at a rapid rate. Competitors enter the market, often in large numbers if the profit outlook is particularly attractive. Maturity: During first part of the maturity stage, sales continue to increase, but at a decreasing rate. When sales level off, profits of both producers and middlemen decline. The prime reason is intense competition. Decline: In this stage sales volume decreases and losses become grater than the profits. Small competitors normally quit from the market at this stage and only large and strong remain moderately successful in decline stage. NPL is at the growth stage of the product life cycle. Large and small both kinds of competitors are entering in the market. Sales volume and market share is increasing rapidly. Last year, the sales of water were 8000 tons and now this figure is raised up to 14000 tons.

4.2.4 Branding

A brand is a name and/or mark intended to identify the product of one seller or group of sellers and differentiate the product from competing products. Branding reduces the price competition. Nestl is using following branding strategies: The company name combined with a product name: A Nestl brand name on a product is a promise to the customer that it is safe to consume, that it complies with all regulations and that it meets high standards of quality. Branding for Market Saturation: NPL is categorized as NPL Home and Office (HOD) in bulk (in gallons) and NPL for retailers i.e. easily carrying bottles of small sizes. These multiple brands are necessary to penetrate separate target markets. 4.2.5 Packaging, Design, Color Packaging consists of all the activities of designing and producing the container or wrapper for a product. Packaging is intended to serve vital purposes: Packaging connotes pleasure and attraction. By adding value to the product, the shape of the bottle contributes to building brand identity. NPL round bottle and the classic elegance of bottle are instantly recognizable. Constant research into

materials and styles generates innovative packaging in ever more attractive shapes, textures and colors. Renovation in design, graphic identity and labels helps set new standards and energize brands by anticipating trends in consumer tastes. By adopting a new dynamic design, a renovated and modernized square bottle is lunched by Nestl. Packaging practicality is a key factor for success. Beyond the basic requirements strength, water tightness, etc. ease of daily use is a subject of regular research. Innovation in this area can focus on transportation convenience, making the pack more comfortable to carry the bottle. Packaging is an essential protection. It guarantees product safety and quality from manufacturing through warehousing and distribution up until the end consumer. It is particularly crucial in preserving waters original purity over time. Several of Nestl Waters research programs aim to optimize material performance, while a battery of tests and ever more innovative capping techniques guarantee consumer safety on a daily basis. In addition to this primary role, packaging fulfils several complementary functions, including product identification and enhancement, practicality, consumer information, functionality to suit changing lifestyles, and so on. Given greater diversity

in packaging types and quality, along with the emergence of new consumption patterns, packaging must also meet new ecological challenges. In this context, Nestl Waters continue its efforts to develop more environmentally friendly bottles. This responsible corporate policy relies on a dual approach: reducing both packaging weight and energy requirements during the manufacturing process while considerably increasing the quantity of material recycled. 4.2.6 Labeling A grade label is used in case of NPL. Grade label identifies the products judged quality with a letter, number, or word. Nestl is using different phrases words to show the quality of the product. Like Trust, Happiness, Pure, Pakistans favorite water, safe, healthy and Premium drinking water. 4.2.7 Quality Theres no agreement on a definition of product quality, even though it is universally recognized as significant. Quality is a relative term and it varies from person to person due to the personal interests; what one likes, another may dislike. But one thing is common that when an organization fulfills the expectations of the customers through its products then the image that organization is established as a quality-delivering organization. The same case is with NPL it is satisfying the

needs and expectations of the customers through its standardized products. Everyday, millions of people all over the world show their confidence on Nestl by choosing Nestl Pure Life. This confidence is based on quality image of Nestl and a reputation for high standards that has been built up over many years. Nestl commitment to product quality remains the corner stone of its business philosophy. In Pakistan too the Company has all along been committed to achieving the highest quality of its products. As a part of this effort, in 1993, the Company embarked upon the farm to table quality concept the guarantee about the quality of Nestl products up to the time of consumption by the consumer. Nestl expect this concept to result in its product becoming the product of choice for its consumers.
Quality is the cornerstone of NPL success: Every product on the shelf, every service and every customer contact helps to shape this image. A Nestl brand name on a product is a promise to the customer that it is safe to consume, that it complies Quality is the cornerstone of success.

Every product on the shelf, every service and every customer contact helps to shape this image. A Nestl brand name on a product is a promise to the customer that it is safe to consume, that it complies with all regulations and that it meets

high standards of quality. Under no circumstances will we compromise on the safety of a product and every effort must be made to avoid hazards to health. Likewise, compliance with all relevant laws and regulations is a must and is not negotiable. People, equipment and instruments are made available to ensure safety and conformity of Nestl NPL at all times. Nestl people says: Quality is our most successful product. It is the key to our success, today and tomorrow. Natural or treated, all of Nestl Waters bottled waters undergo the same strict quality controls and adhere to different local and international regulations linked to their specificities. Based at the Product Technology Centre (PTC) in Vittel in France, the Central Laboratory carries out over 200,000 chemical and microbiological analyses every year. Linking two regional laboratories, the Central Laboratory is not only a quality guarantee of the resource and the final product, but also a centre of expertise for the hundred Nestl Waters production sites.
4.3 Price

Price is the amount of money and/or other items with utility needed to acquire a product. and utility is an attribute with potential to satisfy the wants. A product price influences wages, rent, interests, and profits. Some prospective customers are interested in low prices, where as another segment is more concerned with other factors, such as service, quality, value, and brand image. Consumers perception of quality may be influenced not just by price but also by such factors as store reputation and advertising. Pricing objectives may be: Profit- oriented: To achieve a target return To maximize profit Sales-oriented To stabilize prices To maintain or increase market share Status quo-oriented: To stabilize the prices To meet competition In developing a marketing program, management has to decide whether to compete primarily on the basis of price or the non-price elements of the marketing mix. Nestl has adopted following for setting the pricing of NPL:

4.3.1 Non-price Competition Nestl is trying to maintain stable prices of NPL and attempt to improve its market positions by emphasizing other aspects of their marketing programs. Of course, competitors prices still must be taken into considerations, and price changes will occur over time. Nevertheless, the emphasis of Nestl is on something other than price. To maintain this non-price competition Nestl is developing distinctive, hopefully unique, products and to create a novel, appealing promotional program. In addition, it emphasizes the variety and quality of the NPL, which they are offering to customers. Market Entry Strategies The price of NPL is maintained constant over the period as the base for this is qualitative product which over the time period has reaped more market by keeping price constant. 4.3.2 Discounts and Allowances Discounts and allowances result in a deduction from the base (or list) price. The deduction may be in the form of reduced price or some other concession, such as free merchandise or advertising allowances. Discounts and allowances are common in business dealings. Nestl (NPL) offers the Trade Discounts to it customers. Trade discounts sometimes called functional discounts are

deductions from the list price offered to buyers in payments for marketing functions the buyer will perform. The examples of these functions are: storing, promoting, and selling the product.
4.3.3 One-Price Strategy

NPL is using this special price strategy i.e. one-price strategy in which the company charges the same price to all similar customers who buy identical quantities of a product. But for different quantities the company is offering different price. Even prices are set for the NPL products. 4.3.4 Resale Price Maintenance Some manufacturers want to control the prices at which middlemen resell their products; this is termed as resale price maintenance. Nestl is also following this strategy. It is doing so to protect the brands image. They say that their control of prices provide middleman with ample profit margins. 4.4 Place Inn marketing strategy, Place means distribution of the products. It is a very important element of the marketing-mix. Ownership of a product has to be transferred some how from the individual or organization that makes it to the consumer who needs it and buy it. Goods also must be physically transported from where they are produced to where they are needed. For this purpose, middlemen are used. Middleman is

a business firm that renders services related directly to the sale and/or purchase of a product as it flows from producer to consumer. Due to these middlemen, activities such as creating assortments and storing products can be shifted from one party to another in an effort to improve efficiency. They are also able to carry out distribution activities better or more cheaply than either producers or consumers. A distribution channel consists of the set of people and firms involved in the transfer of title to a product as the product moves from producer to ultimate consumer or business user. 4.4.1 Type of Distribution channel: Diverse distribution channels exist today. The distribution channel used for distribution of NPL by Nestl is: Producer Wholesaler Retailer Consumer This is an economically feasible choice. Nestl Pakistan Limited has a strong network of distribution and has a separate supply chain department. This comes under the term:
4.4.2 Vertical Marketing System (VMS)

VMS is tightly coordinated distribution channel designed specifically to improve operating efficiency and marketing effectiveness. This is done by the Nestl. They have

established an ownership relationship with the successive levels of the middlemen. 4.4.3 Supply chain management (SCM) It represents a total system perspective of distribution, combining distribution channels and physical distribution. The core of supply chain management is coordinated logistics. Under supply chain management NPL is distributed through two main channels ie. 1. Consumer Retail Channel 2. Bulk Consumer a. Home b. Office 1. Consumer Retail Channel Company Consumer 2. Bulk Consumer Company Wholesaler Consumer Wholesaler Retailer

4.4.4 Considerations in selecting the channels Nestle is adopting foolowing considerations while selecting the distribution channel. Market consideration

It is necessary to know about the current marketing trends and also about the competitors. Product consideration It is necessary to give the good quality of NPL. Middleman Consideration Water is necessity of life so in time availability of NPL to the customer is very necessary. Company consideration Nestle also has to take care of its objectives while selecting the channel i.e. quality service and at reasonable distribution cost to get maximum profit.
4.4.5 Intensity of Distribution

There are many degrees of intensity__ ranging from intensive to selective to exclusive. The Nestl (NPL) uses Intensive Distribution. The company is trying to sell its products through every available outlet in a market, where a consumer might reasonably look for it. As water is a product of daily usage so its availability at right time and at right place is very important. Ultimate consumers demand immediate satisfaction from convenience goods and will not defer to purchase a particular brand. Thats why Nestl is using this intensive distribution. By using this timely

distribution many benefits the Nestl (NPL) is receiving, such as: Improve customer service, which directly affects the demand. Effective physical distribution management opens many revenues for company. The strong and effective distribution channels has added value to product by both time utility and place utility. The Nestl brands are another strategic asset for Nestl Waters. They originated in the global need for a safe family drinking water with a pleasant taste, affordable price and tailored to local preferences. This need gave rise to a new multi-site production process for bottled water based on a simple idea: a single brand of water produced at a variety of sites, thus reducing costly logistical, warehousing and transport constraints which are particularly high in the bottled water sector enabling consumers to enjoy the product at a more attractive price under a strong brand identity. Careful Management of distribution channels has resulted in helping for Nestl to keep the stable prices of the Nestl Pure Life. 4.5 Promotion

It consists of a diverse collection of incentive tools, mostly short term, designed to stimulate quicker or greater purchase of particular products or services by consumers or the trade. From marketing point of view, Promotion informs, persuades, and reminds prospective and current customers and other selected audiences about a company and its products. The most useful brand is failure if no one knows it is available. 4.5.1 Promotional Mix A promotional mix is an organizations combination of personal selling, advertising, sales promotion, and public relations. An effective promotional mix is a critical part of all marketing strategies. Promotion, in whatever form it takes, is an attempt to influence. Nestl is using following methods for promotion of NPL: 4.5.1.1 Advertising It is non-personal communication paid for by a clearly identified sponsor promoting ideas, organizations, or products. The most familiar outlets for ads used for the advertisement of the NPL by Nestl are the broadcast (TV and Radio) and print media (news papers and magazines). The Nestl also uses other advertising vehicles like billboards, T-shirts and, more recently the Internet. Nestl has its own

website which is giving the information about the different brand of the company. Nestl is doing the selective demand advertising that is intended to stimulate demand for individual brands. In the advertisement the message is given that, There is one water, which gives you, hope, happiness and trust and that water is Nestl Pure Life. It is pure, safe, and healthy water. And in recent advertising campaign, their slogan is, JIYO! Kay yehi hay zindagi. On billboards the pictures of NPL advertisement seems so attractive, especially in summer season across the roads that it motivates the customer to purchase it immediately.
Nestl has the internal advertising department as well as hire the services of the external

Media manager assisted by its assistant to devise all campaigns


4.5.1.2 Sales Promotion

It is demand-stimulating activity designed to supplement advertising. It is paid for by the sponsor and frequently involved a temporary incentive to encourage a sale or purchase. Many sales promotions are directed at consumer. Nestl has designed it in away to encourage the companys

sales force or other members of the distribution channel to sell products more aggressively. Nestl Pakistan limited arranges concerts, trade shows, event sponsorship, in-store displays, and discounts. In Nestl, a separate sales department is working. The function of this department is to taking the sales orders, visiting the market, collecting the customers complaints and transferring to the concerned department. They also make sure the availability of the NPL to the consumer at right time and at right place. 4.5.1.3 Public relations It encompasses a wide variety of communication efforts to contribute to generally favorable attitudes and opinions toward an organization and its products. Unlike most advertising and personal selling, it does not include specific sales message. The targets may be customers, stockholders, a government agency, or a special-interest group. Public relations can take many forms, including newsletters, annual reports, lobbying, and support of charitable and civic events. Nestl is following all above mentioned public relations forms: The company assists through donations such hospitals and organizations that provide services to the poor and responds to distress calls by the government and NGOs for assistance to victims of flood, earthquake, drought and other natural calamities.

The company arrange mil program for undernourished and sick children and mothers through several NGOs and charitable organizations. The company has initiated a tube well and hand pump installation scheme in selected rural areas. It donates computers to schools for disadvantaged children run by NGOs and charitable organizations. To support the spread of education in rural areas, it undertakes Refurbishment Program of Govt. operated primary and middle schools. The Company regularly sponsors sports and cultural events, such as the International Polo Tournament and SAF Games in the recent past. The company gives the extra gifts, calendars and diaries to the employees and customers for public relations. 4.5.1.4 Publicity Publicity is also a promotional method used by the Nestl. Publicity is specific form of public relations that involves news stories about organization or its products. Like advertising, it consists of an impersonal message that reaches a mass audience through the media. But several features distinguish publicity from advertising. The company does not pay for it and it has little or no control over this and it appears as news and therefore has grater credibility than advertising. The

company seeks for good publicity and frequently provides the material for it in the form of news releases, press conferences, and photographs. When a picture of a companys CEO appears on the cover of business publication and it accompanied by a flattering article in the magazine, it is often attributable to the efforts of the firms public relations department. 4.5.2 Integrated Marketing communication Nestl is using the integrated marketing communication system. In this, company is trying to coordinate all promotional efforts make an effective impact on the customer mind and to deliver a consist message. The Nestl has incorporated several different promotional campaigns. Depending upon the objectives and available funds, it undertakes simultaneous local, regional, national, and international programs. Findings and Recommendations This is competitive world and must never forget that customers have a choice. If they are not satisfied with a Nestl Pure Life, they will switch to another brand. The pursuit of highest quality at any price is no guarantee for success, nor is a single-minded cost-cutting approach. Lasting competitive advantage is gained from a balanced search for optimal value

to customers, by simultaneous improvement of quality and reduction cost. Success can never be taken for granted. Nestl must watch and learn from its competitors. If they do something better, Nestle must improve its own performance. Nestle can achieve competitive advantage through Quality. Progress is followed by listening to Nestle customers and by measuring its works performance. Shortcomings and mistakes must be analyzed and corrected. Problems must be anticipated and prevented before they occur. Nestle also must identify and take advantage of opportunities. To stand still is to fall behind. So Nestle must strive for continuous improvement in every area. It is through many small improvements as well as through major breakthroughs that Nestle will achieve excellence. We have observed from our extensive hard-work to compile these pages and after visiting the organization that the company is eager to serve consumers at its every possible level, consumer services department is the evidence of such a pursuit from the organization point of view. Presently the company is market leader in its category but it shouldnt take it as a complacent attitude rather capitalize on its good brand equity and to improve its quality of product to reap not only more profits for the shareholder but also serve the humanity

by providing them healthful water which in other way a noble & sacred job. The company can fulfill this job by having such a spirit following it religiously by incorporating it all the marketing strategies. Bibliography Michael J. Etzel, Bruce J. Walker and William J. Stanton: Marketing 12th edition Philip Kotler: Marketing Management 12th edition Stephen P. Robbins, Mary Coulter: Management 7th edition
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2 comments:

Anonymous said...
awesome project

20 October 2011 23:29

Anonymous said...
research was good ..but i will not agree with the Compitator part this u r missing a very big n major name who was the second in PAKISTAN. THE BRAND NAME IS CULLIGAN WATER .....

17 January 2012 14:42

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