This document is the presentation of Project work of Principles of Marketing on Nestle

1. Principals of Marketing
GROUP MEMBERS
FARHAN JALIL– B-18532
MUJAHID IQBAL– B-18560

2. Marketing Project on Nestle
ORGANIZATIONAL HISTORY:
NESTLÉ IS A MULTINATIONAL PACKAGED FOOD
COMPANY FOUNDED AND HEADQUARTERED IN
SWITZERLAND.
IT RESULTED FROM A MERGER IN 1905
BETWEEN THE ANGLO-SWISS MILK COMPANY
FOR MILK PRODUCTS ESTABLISHED IN 1866
AND THE FERINE LACTÉE HENRI NESTLÉ
COMPANY SET UP IN 1867.

3. Nestle Company in Pakistan
THE COMPANY, FORMERLY KNOWN AS NESTLE
MILKPAK, LTD., WAS FOUNDED IN 1979 AND IS
BASED IN LAHORE, PAKISTAN. NESTLE PAKISTAN
LIMITED IS A SUBSIDIARY OF NESTLE S.A. IT
OPERATES IN SHEIKHUPURA, KABARIWALA,
ISLAMABAD AND KARACHI.

4. The BCG Growth share Matrix
ANALYZE ITS CURRENT BUSINESS PORTFOLIO AND DECIDE WHICH
BUSINESSES SHOULD RECEIVE MORE OR LESS INVESTMENT,
“AND”
DEVELOP GROWTH STRATEGIES FOR ADDING NEW PRODUCTS
AND BUSINESSES TO THE PORTFOLIO, WHILST AT THE SAME TIME
DECIDING WHEN PRODUCTS AND BUSINESSES SHOULD NO
LONGER BE RETAINED. HOW TO PREPARE THIS MODEL?
THIS CATEGORIZES THE PRODUCTS INTO ONE OF FOUR
DIFFERENT AREAS, BASED ON:
MARKET SHARE – DOES THE PRODUCT BEING SOLD HAVE A LOW
OR HIGH MARKET SHARE?
MARKET GROWTH – ARE THE NUMBERS OF POTENTIAL
CUSTOMERS IN THE MARKET GROWING OR NOT

5. The four categories can be described as follows
 DOGS / SHRINKERS (LOW MARKET SHARE / LOW MARKET GROWTH)
 CASH COWS / BANKERS (HIGH MARKET SHARE / LOW MARKET GROWTH)
 STARS / GROWERS (HIGH MARKET SHARE / HIGH MARKET GROWTH)
 QUESTION MARKS/MAYBES/PROBLEM CHILDREN (LOW MARKET SHARE / HIGH
MARKET GROWTH)

6. Star Category
Nestle Milkpak
Pure life
Nido
Cerelac
Nestle Fruita Vitals (Necter Juices)

7. Question Mark Category
? Everyday
? Milkpak Cream

8. Cash Cow Category
$ Nestle Dahi
$ Maggi
$ KitKat
$ Polo

9. Dog Category
Nestle Koko Crunch
Nestle Cornflakes
Milo
Nestle Raita

10. SWOT Analysis of Nestle, the popular food brand:
Since its formation, Nestle has made a number of corporate acquisitions and
is also listed as the top most profitable corporation in the world. So, keeping
these points and impressive figures in mind, let’s do a SWOT analysis of
Nestle, to get a better perspective of the strengths, weaknesses, opportunities
and threats to this popular food brand.

11. Strengths
 The multinational company is successfully operating in more than 100
countries and has an unmatchable distribution channel around the world.
 To maintain its leading position in the market, Nestle has not only been
forming partnerships with other leading companies, but is also acquiring
several others, resulting in remarkable growth.
 Nestle is a reputable brand and is well-known almost everywhere, as its
products are used by millions of people each day.

12. Weaknesses
The next step to SWOT analysis of Nestle is its weaknesses:
 Perhaps the biggest weakness is their inability to provide consistency in
the quality of their food products, as Nestle often has to call in many
products due to poor supplies or contamination, hurting the image of the
company.
 Nestle has faced a lot of criticism on a variety of issues, such as the
horsemeat scandal and child labor, which it has not been able to avert.

13. Opportunities
 STARTING WITH THE EXTERNALS TO SWOT ANALYSIS OF NESTLE,
LET’S TAKE A LOOK AT THE OPPORTUNITIES THE COMPANY HAS:
 THE INCREASING DEMAND FOR HEALTHY FOOD PRODUCTS HAS
OPENED UP AN IMMENSE MARKET FOR COMPANIES. NESTLE IN
RESPONSE TO THE HEALTH TREND TRIES TO INTRODUCE HEALTHIER
FOOD PRODUCTS.
 NESTLE IS ALREADY ENGAGED IN PARTNERSHIPS WITH A NUMBER OF
MAJOR COMPANIES, SUCH AS COCA-COLA, AND SEVERAL OTHERS,
OPENING DOORS OF OPPORTUNITIES FOR THE COMPANY

14. Threats
 AND FINALLY, THE FINAL PART TO COMPLETING SWOT ANALYSIS OF
NESTLE IS THE THREATS:
 THE BRAND’S IRRESPONSIBILITY TO RUN THOROUGH QUALITY
ASSURANCE ON ITS PRODUCTS RESULTED IN PROVIDING
CONTAMINATED FOOD AND OTHER PRODUCTS ON THE MARKET,
WHICH CAN HURT THE REPUTATION OF THE COMPANY AND LEAD TO
LOSSES.
 NESTLE IS THE LEADING SUPPLIER OF CHOCOLATE AND COCOA
PRODUCTS. THE INCREASING TREND TOWARDS HEALTHY EATING
WILL RESULT IN MAJOR DECLINES IN DEMAND.
 THE DEMAND FOR RAW FOOD IS EXPECTED TO INCREASE AS
POPULATION AND ECONOMY GROWS. AS A RESULT, NESTLE WILL
HAVE TO FACE HIGHER COSTS AND TIGHTER MARGINS.

15. Market Segmentation:
THE MARKETING CONCEPT ASKS FOR
UNDERSTANDING CUSTOMERS’ REQUIREMENTS
AND SATISFYING THEIR REQUIREMENTS AND NEEDS
BETTER THAN THE OTHERS DO. BUT MANY
CUSTOMERS HAVE DIFFERENT REQUIREMENTS AND
IT HARDLY CHANCE TO SATISFY ALL CUSTOMERS
BY TREATING THEM SAME JUST LIKE. MARKET
SEGMENTATION IS THE SEARCHING OF PART OF THE
MARKET THAT ARE NOT SIMILAR FROM OTHER.

16. Users markets can be divided on the basis of these customer
characteristics.
1. Geographic
2. Demographic
3. Psychographic
4. Behavioral

17. Geographic Segmentation:
THE GEOGRAPHICAL VARIABLES HAVE BEEN USED TO SEGMENT
MARKETS IN FOLLOWING WAYS:
 AREA
 CITY
 REGION

18.  In demographic segmentation, the market is divided into
groups on the basis of variables such as age, gender,
income, occupation etc. These demographic variables are so
popular with marketers so that they are often associated
with the consumer’s needs and wants. Segmentation
variables are easily measurable. Here are the demographic
variables have been used to segment markets.

19. Nestle Slim Milk categorizes its target on the
following criteria.
 Age
 Gender
 Occupation
 Income

20. Psychographic Segmentation:
 LIFESTYLE
 PERSONALITY
 OCCASIONS
 BENEFITS:
 USER STATUS:
 USAGE RATE:
 LOYALTY STATUS:
 READINESS STAGE:
 ATTITUDE TOWARD PRODUCT

21. TARGETING
 IN GEOGRAPHIC SEGMENT THEY TARGET CITIES WITH A RAMPANT IT
CULTURE.
 IN DEMOGRAPHIC SEGMENT THEIR MAIN TARGET IS YOUNG WORKING
PROFESSIONALS (20 TO 40 YEARS).
 IN PSYCHOGRAPHIC SEGMENTATION THEY TARGETED A2, B1 AND B2
SOCIO-ECONOMIC CLASSES.
 IN BEHAVIORAL SEGMENTATION IT WAS FOUND THAT THEY WERE
TARGETING THE FIRST TIME USERS AND ALSO THEIR REGULAR USERS.

22. POSITIONING
Point Of Difference Higher price (Rs.80) Lower price (Rs.45)

23. Differentiated
: NESTLE ALSO CHOOSE THE DIFFERENTIATED MARKETING.
IT PROVIDES DIFFERENT PRODUCT FOR MANY SEGMENTS
BASED ON DIFFERENT AGES, OCCUPATION, SEASON AND
CLIMATE .

24. Marketing Mix(4Ps)
The Marketing environment at Nestle focuses on the principle of
satisfying consumer needs. The overall trust of consumers in
Nestlé’s brands and products comes from a quality image that has
been continuously strengthened for over 130 years.
Nestlé strives to increase this trust through its commitment to
environmentally sound business practices. For this purpose Nestle:

25. Bases environmental claims in advertising, promotional
material, labeling and corporate communications on solid
scientific evidence;
• selects materials and printing methods for merchandising
materials such as:
• consumer offers,
• in-store promotions,
• Displaying materials, leaflets and printed materials in light
of environmental considerations.

26. Product
• NESTLE ORANGE JUICE
• FLAGSHIP BRAND (NUMBER 1 BRAND IN JUICES)
• 100% PURE, NO PRESERVATIVES, NO ARTIFICIAL FLAVOR ADDED

27. Price
• 1000 ml Rs. 175
• 200 ml Rs. 25

28. Place
Available at all major cities such as
o Lahore
o Islamabad
o Multan
o Faisalabad
o Gujranwala
o Karachi

29. Promotion:
• In order to promote their products Nestle Juices uses the
following medium.
o Bill boards
o Above The Line
o Below The Line
Target market:
The target market of Nestle juices includes:
• Both male and female between the age group of 19-31
• Health conscious people
• Socio eco class SEC A and B
• Urban areas
• Career oriented and life starters

30. Competitors
• Shezan All Pure
• Haleeb Good Day

31. Sales Growth
Nestle orange juice has been a flagship brand of Nestle juices since years.
However, their sales declined to -1 % as compared to last year.
Last year growth in sales This year growth in sales
20% 19%
• As per the meeting with the Brand manager juices, we got an insight about
customer attitude, competitors, product development etc.
• Total contribution of orange juice is 20% to revenue in the juices category;
however the overall market share of juices is 60%.

32. Customer Attitude
The main concern that the consumers of Nestle Orange juices have
regarding the juice is related to the purity of the juice. The factor and
the feature that they are most concerned with is that is the juice 100%
pure and healthy?

33. The responses of prior studies reveal:
• People actually think that fruit juices are not that great for them because of
the fructose (fruit sugar). They think that when this fructose is processed its pure
sugar gets TERRIBLE for their health. So the solution to them is that if they want
to have a taste of orange they should try having an actual orange because the fiber
in the pulp skin and roughage will slow the absorption of the fructose.