Acknowledgement

1
We are grateful to our teacher Mr. SHAHZAD ALAM for assisting us
throughout the course of “Marketing”. We have been able to gain
knowledge of unique Marketing concepts by the advanced teaching
methodologies and versatile knowledge of Mr. SHAHZAD ALAM.

We are also highly obliged to Mr. Muhammad Sarfraz the Sales

Promotional Executive for Lahore, Nestle Pakistan Ltd for his assistance
and guidance to develop and compose this report and broaden our
vision on the complex market of milk.

2
History of Nestle
Pakistan
3
 Nestle have been serving Pakistani consumers since 1988 when
the parent company’ Switzerland based’ on Nestle first acquired
share in MilkPak.

 Nestle acquires 40% share in MilkPak.

 In 1990, Sheikhupura factory started the production of Nido Milk

Powder cereals;

 In 1992, Nestle took over the running of company (Kabirwala

plant) and began to develop its Milk collection network.

 In 1996 MilkPak was renamed to Nestle MilkPak Ltd.

 In 1997, it becomes a fully owned unit of Nestle Pakistan.

 In 1998, Nestle Milk collection system in Punjab matures and

company is able to buy all its Milk from Farmers instead of relying
on contractors.

 In 2005, Nestle MilkPak Ltd. Is renamed again Nestle Pakistan.

VISION STATEMENT
4
 “The Nestlé global vision is to be the leading
Health, wellness and Nutrition Company in the
World”.

MISSION STATEMENT

“Dedicated to providing the best food to the people,

throughout their day, throughout their lives, throughout
the world”

General Information

5
 Head Office in Lahore.

 Registered in both Lahore & Karachi Stock exchanges

 One among top 25 companies of both exchanges.

 Company has more than 37 brands.

 Profit for 2010 3,096 million (PKR)

 Earnings Per Share 68.28 (PKR)

 Leader of consumer market currently

Production Process Of Nestle

Milk Pak

6
Milk Collection Storing Standardization De-Creaming

Spray Drying Evaporation Pasteurization

Cooling

Comparison of Nestle
With Other Brands

7
 Brands Nestle Olpers Haleeb

Brand Image Pure Strong Thick

Promotion TV, News TV, Radio, TV ,News

Billboards, Shows

Taste Natural Good Creamy

Brand History 1981 2006 1986

Sub Brands Nesvita,Nido Olwell Dairy Queen

Differential Edge Purity, Iron, All Purpose Good For Tea

Vitamin C,
UHT

8
Most Popular Nestle Brands

Quality is the essential ingredient in all the Nestle brands and also Nestle
brands maintains the nutritional balance in a fast pace world, that is why
people around the globe choose Nestle Brands. Following are the most
popular Nestles Brand:

9
Nestle MilkPak

10
 Introduction
Of
Nestle MilkPak

Nestle MilkPak is a trusted brand known throughout the country for its

nutritious wholesome, goodness & natural taste. To secure a happier &

healthier future, support of a strong partner like MilkPak is needed.

11
 Competitors Of Nestle
MilkPak

The Main Competitors of Nestle MilkPak are:

 Olpers Milk

 Haleeb Milk

 Gourmet Milk

 White & Gold Milk (Sapphire)

12
 Competitive Advantage

 Nestle MilkPak never compromises on quality.

 Nestle Products are available in every City & Town.

 It is using the latest technology in its production units.

 Nestle makes milk powder of the surplus milk in winter & converts
this milk powder into UHT milk in summer.

13
14
Marketing Mix of Nestle
MilkPak

r
P
o
i
k
r
a
M
P
m
o
l
e
c d
c
e
t
m
M
g
o
i
t
n
e
t
c
u
e x
i
n
15
PRODUCT

16
 1. Product Quality

Nestle MilkPak has the largest market share due to its consistent quality.

1.1 Core Part:

The core parts of Nestle MilkPak are:

 Taste
 Energy
 Growth

1.2 Features:
One glass of Nestle MilkPak contains:

Ingredients Quantity

Calcium 41%

Vitamin C 20%

Phosphorous 31-34%

Vitamin A 18%

Energy 160-165Kcal

Iron 20%

17
 2. Product Packaging

Nestle is committed to reduce the environmental impact of packaging

without jeopardizing the safety, quality & consumer acceptance of its
products

Milk is a perishable item & requires a special packaging. To meet this

objective Nestle MilkPak use Tetra Pack to deliver fresh milk to its
customer without sacrificing in health measures.

3. Brand Name
18
 “Settle Oneself Comfortably”

3.1 Qualities of Nestlé’s Brand Name:

o It is based on company name.

o It is very easy to remember.

o Company brand is directly suggesting its product.

4. Product Life Cycle:

The product life cycle of Nestle Milk Pak is very strong and it is on
maturity stage and it has crossed its initial stages of introduction and
growth.

19
 Price

Pricing is very important regarding every product. We have to consider

consumers buying power, competitor’s price and cost of production as

well.

20
 1.Price Analysis

No of Unit Nestle Price Olpers Price Haleeb Price

1000 Ml 70 70 70
500 Ml 38 38 38
250 Ml 20 20 20

2. Factors Affecting Price Strategies

 Cost of Raw Material

 Government Steps

 Cost Of Raw Material :

21
 The cost of milk which the company gets from the farmers is a very
important factor which affects the prices; because in the months from
October to February the shortage of cow milk occurs in the market
and the suppliers supply the milk on high prices which affects the
prices.

 Government Interference :

The Government interference is the second important factor which

affects the company in the matter of pricing strategy i.e. Increase in
the prices of oil and other energy resources. These factors highly
affect the supplier and they increase the prices which directly affects
the cost.

Placement

MilkPak is not sold directly to consumers. A complete distribution

process is followed. It uses indirect channels for distribution like:

22
 Distributors in Lahore

 Saeed Brothers

 Zakir & Sons

 Deen Distributors

23
  SMR Distributors

Distributor Ware Houses

Saeed Brothers Model Town

Town Ship

Airport
Deen Distributors
Ghazi Road

Zakir & Sons Muslim Town More

SMR Fatah Garh

Promotion

24
The promotional strategies for anything is the most important factor in
marketing, therefore a special attention is required to market the
product. For this we use different tools

Advertisement:
About 60% of promotional budget is spent on advertisement.

Following are the different Advertisement Medias used by Nestle to

promote its product:

25
  Television
 Bill Boards
 Shelf show
 Print Media
 Radio

 Sale Promotion Activities :

 Events:

The company conducts different sports event, fashion shows and school
functions in which they sale their product on discount prices. They also
give their product to participants as a gift or memorandum.

 Free Sampling:

On different events free samples are given to the people to attract the
people towards their products.

 Public Relations :
Nestle remains committed to Pakistan and is deeply engaged in the
recent flood relief activities. By the end of September, 2010 the Company
has so far committed around PKR 24 million to relief efforts in the shape

26
of food to affected people, water tankers supplying clean drinking
waters, veterinary and vaccination support to cattle and other related
relief.

In addition Nestle SA has donated PKR 20 million and Nestle employees

from Pakistan and other Nestle Markets have also donated additional
PKR 7 million, bringing total contribution to PKR 51 million.

Swot Analysis Of Nestle Pakistan

Strengths:

Strong Brand Name:

Nestle has been serving the Pakistani consumers since 1988 & it has
made a strong brand image due to its quality products. It is known for
honesty, integrity, full compliance with all applicable laws, and fair
dealing.

Product Innovation:

The company has been continuously introducing new products to

expand its product offerings.

Research & Development:

27
One of the most important strengths of the Nestle is its strong culture.
Every one give emphasis to its internal growth, have committed to
achieve higher volumes with strong R&D by refurbishing existing brands
and innovating new ones.

Solid Financial Position:

Nestle MilkPak annual turnover is Rs.30 Billion which provides it a

financial edge over its competitors.

Weaknesses

Narrow Target Market:

The target market of Nestle MilkPak is only the upper and middle class.
As poor class cannot afford to buy UHT milk because of its premium
price

Low Advertisement:
There are different companies of milk but the name of Nestle MilkPak
always stand in the last in term of low advertising and marketing.

Selective Investment:

Selective investment due to uncertain economic and political conditions.

Rivals:

Relatively a new company in comparison to its rivals e.g. Lever Brothers

28
 Opportunities

Global Hub:

Since manufacturing of some products is cheaper in ASIA as compared to

other continents, Nestle Pakistan could become the export hub for the
certain product categories.

Health Conscious People:

Now a day’s consumers have become health-conscious. Therefore it is an

important opportunity for nestle to come up with variety of health-
based products.

Huge Market to Be Target:

Thirty percent of the countries are developed and 70% are developing
and have higher GDP. Nestle must have to focus on them.

Threats

Increasing number of Competitors:

29
Three main competitors Haleeb, Olpers & Gourmet are the main threat
for MilkPak especially the Olpers & Gourmet are growing very fast.

Devaluation of Local Currency:

Price fluctuations due to rupee devaluation as raw material are

imported.

Uncertain Economic Conditions:

The uncertainty of economic conditions possesses a great threat, as the

major funds invested in the country come from outside Pakistan

BCG Matrix of Nestle

30
 MARKET SHARE

HIGH LOW

STARS: QUESTION MARK:

HIGH

 Pure Life Water  Maggie 2 Minute Noodles

 Confectioneries

INDUSTRIAL GROWTH

CASH COWS: DOGS:

 Milk Products
 Chocolate Drinks
LOW  Coffee

 Infant Foods

Market Segmentation

31
For getting the maximum market share and respect of the product
in the minds of the consumer, as per our observation and market
survey we have concluded that Nestle MilkPak segmentation is
based on two points.

 Demographic Segmentation
 In-Store Display Segmentation

 Demographic Segmentation:

 Family, Age & Income

Milk Pack has made different sizes of Tetra packs which can match the
needs of buyers, ranging from 0.25 liters to 1.5 liter. Buyers can buy
according to their need between these quantities.

 In-Store Display Segmentation

32
Nestle have also segmented Milk Pack on the bases of In-Store display
segmentation.

In this type of segmentation the company have given different shelves in

big stores and also given the chillers to some of the agent having the Milk
Pack sticker upon them but in Pakistan unfortunately the shop keepers
are not using the shelves properly and they have put other brand
products on those shelves

33
 Conclusions

Nestle is a market leader due to different reasons:

 Its price is high against its competitors but it matches its quality
with its competitors.

 Nestle is today the world’s largest food and beverage company with
its mission to provide healthier lifestyle.

 Nestle is using its brand name and its packaging is good to promote
its products.

 We can easily find Nestle from any retailer shop

References

www.nestle.com.pk
Nestle Annual Report 2010
Nestle Head Office: Mr.Wasim (Sales Deptt.)

34