anjalicutek
Anjali Khurana
Nestle S.A. (French pronunciation: [nɛsˈle]) is the largest consumer packaged goods company in the world,[2] founded and headquartered in Vevey, Switzerland. Nestle originated in a 1905 merger of the Anglo-Swiss Milk Company, which was established in 1866 by brothers George Page and Charles Page, and the Farine Lactee Henri Nestle Company, which was founded in 1866 by Henri Nestle. The company grew significantly during the First World War and following the Second World War, eventually expanding its offerings beyond its early condensed milk and infant formula products. Today, the company operates in 86 countries around the world and employs nearly 283,000 people.
Having decided its corporate objectives and strategy, Nestlé can set marketing objectives for each of its product lines and profit centres. The primary objective for Kit Kat is to maintain its position as the UK's number one selling confectionery brand. In order to achieve this, Nestlé has to develop a marketing strategy that will take into account all the elements of the marketing mix. This will involve individual strategies for pricing, product development, promotion and distribution. For an established brand name, these strategies must be flexible and relevant to each new generation of consumers, but at the same time, great care must be taken not to damage the perceptions of the product built up over decades of marketing.
Kit Kat has a particularly broad consumer profile and is popular with all age groups. The Kit Kat marketing strategy can be summarised by the line 'Broad in appeal, young in feel and big in stature.'
Milk Industry of Country (India ):
Strenghths:
· Demand profile:
Absolutely optimistic
Margins:
Quite reasonable, even on packed liquid milk.
· Flexibility of
product mix:
Tremendous with balancing equipment, you can keep on adding to your product line.
· Availability of raw material:
Presently, more than 80 per cent of milk produced is flowing into the unorganized sector, which requires proper channelization.
· Technical manpower:
Professionally-trained, technical human resource pool, built over last 30 years.
Weaknesses:
· Perishability:
Pasteurization has overcome this weakness partially. UHT gives milk long life. Surely, many new processes will follow to improve milk quality and extend its shelf life.
· Lack of control over yield:
Theoretically, there is little control over milk yield. However, increased awareness of developments like embryo transplant, artificial insemination and properly managed animal husbandry practices, coupled with higher income to rural milk producers should automatically lead to improvement in milk yields.
· Logistics of procurement:
Woes of bad roads and inadequate transportation facility make milk procurement problematic. But with the overall economic improvement in India, these problems would also get solved.
· Problematic distribution:
Yes, all is not well with distribution. But then if ice creams can be sold virtually at every nook and corner, why can’t we sell other dairy products too? Moreover, it is only a matter of time before we see the emergence of a cold chain linking the producer to the refrigerator at the consumer’s home!
· Competition:
With so many newcomers entering this industry, competition is becoming tougher day by day. But then competition has to be faced as a ground reality. The market is large enough for many to carve out their niche.
Opportunities:
"Failure is never final, and success never ending”. Dr Kurien bears out this statement perfectly. He entered the industry when there were only threats. He met failure head-on, and now he clearly is an example of ‘never ending successes! If dairy entrepreneurs are looking for opportunities in India, the following areas must be tapped:
· Value addition:
There is a phenomenal scope for innovations in product development, packaging and presentation.
Given below are potential areas of value addition:
o Steps should be taken to introduce value-added products like shrikhand, ice creams, paneer, khoa, flavored milk, dairy sweets, etc. This will lead to a greater presence and flexibility in the market place along with opportunities in the field of brand building.
o Addition of cultured products like yoghurt and cheese lend further strength - both in terms of utilization of resources and presence in the market place.
o A lateral view opens up opportunities in milk proteins through casein, and other dietary proteins, further opening up export opportunities.
o Yet another aspect can be the addition of infant foods, geriatric foods and nutritional.
· Export potential:
Efforts to exploit export potential are already on. Amul is exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new GATT treaty, opportunities will increase tremendously for the export of agri-products in general and dairy products in particular.
Threats:
· Milk vendors, the un-organized sector:
Today milk vendors are occupying the pride of place in the industry. Organized dissemination of information about the harm that they are doing to producers and consumers should see a steady decline in their importance.
The study of this SWOT analysis shows that the ‘strengths’ and ‘opportunities’ far outweigh ‘weaknesses’ and ‘threats’. Strengths and opportunities are fundamental and weaknesses and threats are transitory. Any investment idea can do well only when you have three essential ingredients: entrepreneurship (the ability to take risks), innovative approach (in product lines and marketing) and values (of quality/ethics).
The Indian dairy industry, following its deli censing, has been attracting a large number of entrepreneurs. Their success in dairying depends on factors such as an efficient yet economical procurement network, hygienic and cost-effective processing facilities and innovativeness in the market place.
All that needs to be done is: to innovate, convert products into commercially exploitable ideas. All the time keep reminding yourself: Benjamin Franklin discovered electricity, but it was the man who invented the meter that really made the money.
Market Segmentaion of Nestle Milkpak
· Geographic Segmentation:
Milkpak has segmented the market on the basis of Geographic segmentation and its target market is major populated cities of pakistan
· Demographic Segmentation:
Nestle Milkpak is also segementing the market on the basis of Income level of the people. Three Income level has been defined; Higher, middle and lower income classes.
Targeting
Ø Urabn areas of the country
Ø Upper and Middle income class
Situation Analysis
Awareness:
Top of the mind recall
Due to strong brand positioning and effective advertising, Milkpak has highest awareness level.
The table shows that Milkpak has the highest market share due to its consistent quality.
Market Trends
• The growth of processed milk is increasing by 20% annually
• People are getting more quality and health conscious with the passage of time
• Due to impurities of Gawala milk, people are attracting towards processed milk
Key factors are:
• Changing lifestyle
• Influence of foreign media
Market Potential
• At an average, a Pakistani consumer spends 42 % of income on food
• Consumer often prefer branded food items for both quality and status reasons
• Per capita real GDP has increased at an average of 5.6 % per annum during the last three years
• This increase has led to a rise in average income of people and an increase in consumer spending.
SWOT Analysis (Nestle Milkpak)
Strengths:
· Strong Brand image:
Nestle has been serving the Pakistani consumers since 1988, and it has built a strong brand image due to its quality products.
· Quality product:
Nestle Milkpak is known as the best UHT milk in Pakistan due to consistency in quality.
· Solid Financial position:
Nestle Milkpak’s annual turnover is Rs.30 Billion which provides it a financial edge over its competitors.
· Strong supply chain network:
Nestle collects Milk directly form the farmers instead of relying on the contractors. And it distribution is also very strong. In this way it has a complete control over its supply chain.
· Qualified work force
· Commitment to High Quality Products
· Focus on research and development
Weaknesses:
The target market of Nestle Milkpak is upper middle and high class because lower middle and poor class cannot afford to buy UHT milk due to its premium price. This is the only weakness of Milkpak.
Opportunities:
Estimations of UHT Milk Production and Consumption up to 2008– 09
Year
Annual Production
(million liters)
Annual Consumption
(million liters)
2008-09
648.43
353.71
2009-10
753.89
372.05
The projected values of UHT Milk consumption and production are obtained from the ARIMA model.
• More people are coming towards processed milk because loose milk is dangerous for health due to a lot of contamination.
• Growth of processed milk is increasing with 20% annually so Nestle Milkpak has the opportunity to capture a large share of market.
Threats:
• Two main competitors Haleeb and Olpers are main threat for Milkpak especially the Olpers is growing very fast.
• Inflation is getting higher and higher so the purchasing power of the people is decreasing day by day.
• There is no entry barrier for new entrants as the Olpers has come in the market.
Positioning Strategy
• Functional Positioning
Nestle Milkpak has adopted the functional positioning strategy like:
“Khaalis He Sab Kuch Hai”
“Wohi Qudarti Maza”
“Jaan Banaoo”
Differentiation
Addition of IRON and Vitamin “A & C”
Marketing Mix
Product:
• Quality Product
Nestle Milkpak has the largest market share due to its consistent quality.
• Product Style and logo
Nestle Milkpak is available in different product range and stylish packaging.
• Product Lifecycle
Nestle Milkpak has been in the market for a very ling time and it is at maturity stage.
Price:
• Competition Based Pricing
Milkpak is holding a large share in the market due to its quality at same price as compared to competitors.
Placement:
Distribution Channels:
Milkpak is not sold directly to consumers and the complete distribution process is followed. It uses indirect channels for distribution like:
ManufactureràDistributoràWholesaleràRetaileràConsumer
Promotion:
• Focusing on health conscious people in their advertisement.
Promotion Mix
• Advertisement
• Public relations
Marketing Strategy
Nestle is pursing growth strategy. They have invested $ 70 billion at Kabirwala Plant and they are planning to invest $ 381 billion in the milk business.
Having decided its corporate objectives and strategy, Nestlé can set marketing objectives for each of its product lines and profit centres. The primary objective for Kit Kat is to maintain its position as the UK's number one selling confectionery brand. In order to achieve this, Nestlé has to develop a marketing strategy that will take into account all the elements of the marketing mix. This will involve individual strategies for pricing, product development, promotion and distribution. For an established brand name, these strategies must be flexible and relevant to each new generation of consumers, but at the same time, great care must be taken not to damage the perceptions of the product built up over decades of marketing.
Kit Kat has a particularly broad consumer profile and is popular with all age groups. The Kit Kat marketing strategy can be summarised by the line 'Broad in appeal, young in feel and big in stature.'
Milk Industry of Country (India ):
Strenghths:
· Demand profile:
Absolutely optimistic
Margins:
Quite reasonable, even on packed liquid milk.
· Flexibility of
product mix:
Tremendous with balancing equipment, you can keep on adding to your product line.
· Availability of raw material:
Presently, more than 80 per cent of milk produced is flowing into the unorganized sector, which requires proper channelization.
· Technical manpower:
Professionally-trained, technical human resource pool, built over last 30 years.
Weaknesses:
· Perishability:
Pasteurization has overcome this weakness partially. UHT gives milk long life. Surely, many new processes will follow to improve milk quality and extend its shelf life.
· Lack of control over yield:
Theoretically, there is little control over milk yield. However, increased awareness of developments like embryo transplant, artificial insemination and properly managed animal husbandry practices, coupled with higher income to rural milk producers should automatically lead to improvement in milk yields.
· Logistics of procurement:
Woes of bad roads and inadequate transportation facility make milk procurement problematic. But with the overall economic improvement in India, these problems would also get solved.
· Problematic distribution:
Yes, all is not well with distribution. But then if ice creams can be sold virtually at every nook and corner, why can’t we sell other dairy products too? Moreover, it is only a matter of time before we see the emergence of a cold chain linking the producer to the refrigerator at the consumer’s home!
· Competition:
With so many newcomers entering this industry, competition is becoming tougher day by day. But then competition has to be faced as a ground reality. The market is large enough for many to carve out their niche.
Opportunities:
"Failure is never final, and success never ending”. Dr Kurien bears out this statement perfectly. He entered the industry when there were only threats. He met failure head-on, and now he clearly is an example of ‘never ending successes! If dairy entrepreneurs are looking for opportunities in India, the following areas must be tapped:
· Value addition:
There is a phenomenal scope for innovations in product development, packaging and presentation.
Given below are potential areas of value addition:
o Steps should be taken to introduce value-added products like shrikhand, ice creams, paneer, khoa, flavored milk, dairy sweets, etc. This will lead to a greater presence and flexibility in the market place along with opportunities in the field of brand building.
o Addition of cultured products like yoghurt and cheese lend further strength - both in terms of utilization of resources and presence in the market place.
o A lateral view opens up opportunities in milk proteins through casein, and other dietary proteins, further opening up export opportunities.
o Yet another aspect can be the addition of infant foods, geriatric foods and nutritional.
· Export potential:
Efforts to exploit export potential are already on. Amul is exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new GATT treaty, opportunities will increase tremendously for the export of agri-products in general and dairy products in particular.
Threats:
· Milk vendors, the un-organized sector:
Today milk vendors are occupying the pride of place in the industry. Organized dissemination of information about the harm that they are doing to producers and consumers should see a steady decline in their importance.
The study of this SWOT analysis shows that the ‘strengths’ and ‘opportunities’ far outweigh ‘weaknesses’ and ‘threats’. Strengths and opportunities are fundamental and weaknesses and threats are transitory. Any investment idea can do well only when you have three essential ingredients: entrepreneurship (the ability to take risks), innovative approach (in product lines and marketing) and values (of quality/ethics).
The Indian dairy industry, following its deli censing, has been attracting a large number of entrepreneurs. Their success in dairying depends on factors such as an efficient yet economical procurement network, hygienic and cost-effective processing facilities and innovativeness in the market place.
All that needs to be done is: to innovate, convert products into commercially exploitable ideas. All the time keep reminding yourself: Benjamin Franklin discovered electricity, but it was the man who invented the meter that really made the money.
Market Segmentaion of Nestle Milkpak
· Geographic Segmentation:
Milkpak has segmented the market on the basis of Geographic segmentation and its target market is major populated cities of pakistan
· Demographic Segmentation:
Nestle Milkpak is also segementing the market on the basis of Income level of the people. Three Income level has been defined; Higher, middle and lower income classes.
Targeting
Ø Urabn areas of the country
Ø Upper and Middle income class
Situation Analysis
Awareness:
Top of the mind recall
Due to strong brand positioning and effective advertising, Milkpak has highest awareness level.
The table shows that Milkpak has the highest market share due to its consistent quality.
Market Trends
• The growth of processed milk is increasing by 20% annually
• People are getting more quality and health conscious with the passage of time
• Due to impurities of Gawala milk, people are attracting towards processed milk
Key factors are:
• Changing lifestyle
• Influence of foreign media
Market Potential
• At an average, a Pakistani consumer spends 42 % of income on food
• Consumer often prefer branded food items for both quality and status reasons
• Per capita real GDP has increased at an average of 5.6 % per annum during the last three years
• This increase has led to a rise in average income of people and an increase in consumer spending.
SWOT Analysis (Nestle Milkpak)
Strengths:
· Strong Brand image:
Nestle has been serving the Pakistani consumers since 1988, and it has built a strong brand image due to its quality products.
· Quality product:
Nestle Milkpak is known as the best UHT milk in Pakistan due to consistency in quality.
· Solid Financial position:
Nestle Milkpak’s annual turnover is Rs.30 Billion which provides it a financial edge over its competitors.
· Strong supply chain network:
Nestle collects Milk directly form the farmers instead of relying on the contractors. And it distribution is also very strong. In this way it has a complete control over its supply chain.
· Qualified work force
· Commitment to High Quality Products
· Focus on research and development
Weaknesses:
The target market of Nestle Milkpak is upper middle and high class because lower middle and poor class cannot afford to buy UHT milk due to its premium price. This is the only weakness of Milkpak.
Opportunities:
Estimations of UHT Milk Production and Consumption up to 2008– 09
Year
Annual Production
(million liters)
Annual Consumption
(million liters)
2008-09
648.43
353.71
2009-10
753.89
372.05
The projected values of UHT Milk consumption and production are obtained from the ARIMA model.
• More people are coming towards processed milk because loose milk is dangerous for health due to a lot of contamination.
• Growth of processed milk is increasing with 20% annually so Nestle Milkpak has the opportunity to capture a large share of market.
Threats:
• Two main competitors Haleeb and Olpers are main threat for Milkpak especially the Olpers is growing very fast.
• Inflation is getting higher and higher so the purchasing power of the people is decreasing day by day.
• There is no entry barrier for new entrants as the Olpers has come in the market.
Positioning Strategy
• Functional Positioning
Nestle Milkpak has adopted the functional positioning strategy like:
“Khaalis He Sab Kuch Hai”
“Wohi Qudarti Maza”
“Jaan Banaoo”
Differentiation
Addition of IRON and Vitamin “A & C”
Marketing Mix
Product:
• Quality Product
Nestle Milkpak has the largest market share due to its consistent quality.
• Product Style and logo
Nestle Milkpak is available in different product range and stylish packaging.
• Product Lifecycle
Nestle Milkpak has been in the market for a very ling time and it is at maturity stage.
Price:
• Competition Based Pricing
Milkpak is holding a large share in the market due to its quality at same price as compared to competitors.
Placement:
Distribution Channels:
Milkpak is not sold directly to consumers and the complete distribution process is followed. It uses indirect channels for distribution like:
ManufactureràDistributoràWholesaleràRetaileràConsumer
Promotion:
• Focusing on health conscious people in their advertisement.
Promotion Mix
• Advertisement
• Public relations
Marketing Strategy
Nestle is pursing growth strategy. They have invested $ 70 billion at Kabirwala Plant and they are planning to invest $ 381 billion in the milk business.
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