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Praise is to Allah Almighty, the one testing us all at all times and
making decisions about what we don’t know and can’t know. Writing
this report appeared to be a great experience to us. It added a lot to
our knowledge while we were working on this report. If we say that this
report is one of our memorable experiences in student life, then it
would not be wrong.
We owe profound gratitude to SIR ALY RAZA SYED for stimulating our
creative abilities by assigning this report to us. We are immensely
obliged to all our fellow students who guided us in making this report,
without whose considerate attention and interest, it would be difficult
for us to complete this report on time. Whatever we have learnt from
them and this project report has put indelible impression on our mind.
It is our conviction that this learning experience will always be a source
of help in our practical life and professional career.
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Executive Summery
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Introduction Of Nestle:
Nestlé’s Vision:
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The consumer's voice is the key to Nestlé Pakistan's vision and
working. Whether you live in the remotest village or the metropolis of
Karachi, Nestle consumer services team stands ready to listen to your
concerns and provide answers about our products and guidance on
matters of health and wellness.
Nestlé’s global vision is to be the leading health, wellness, and
Nutrition Company of the world. Nestle’ Pakistan subscribes fully to this
global vision. In addition to that, Nestle Pakistan also envisions to:
• Lead a dynamic motivated and professional workforce that is
proud of its heritage and bullish about the future
Mission Statement:
“Nestle is dedicated to providing the best foods to people throughout
their day, throughout their lives, throughout the world. With our
unique experience of anticipating consumers' needs and creating
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solutions, Nestle contributes to your well-being and enhances your
quality of life.”
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Nestle Pure Life Water & Current Market Situation:
The launch of Nestle Pure Life in December 1998 was a truly significant
episode in the history of Nestle Pakistan. Nestle Pure Life was going to
get the entry of Pakistan’s growing water market. At the same time
Pakistan became the first country where Nestle launched the new
brand. Nestle Pure Life is a premium drinking water, produced to the
highest standards of safety and purity as per the website suggests. It is
ideally balanced with essential minerals like vitamins, calcium and
many other useful items. According to nestle, pure water product is the
stasr of nestle having useful ingredients in every drop of water which
are essential for being hydrated all the time. Capitalizing on its strong
brand recognition, aggressive pricing and supported by a strong
marketing campaign, Nestle Pure Life has made very strong inroads
into the water market in Pakistan. Nestlé PURE LIFE is available around
the globe today in Canada, USA, Mexico, Brazil, Argentina, South
Africa, Saudi Arabia, Jordan, Egypt, Lebanon, Turkey, Russia,
Uzbekistan, Pakistan, China, Thailand, and the Philippines.
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Life is a premium drinking water, produced to the highest standard of
safety and purity. The company is seeking to provide customer with
pure drinking water on suitable prices make the product as convenient
as possible. According to their claim that they provide the best food
throughout the world.
Nestle is leading brand in water market and has left behind many local
brands which were working before the launching of Nestle Pure Life.
Now it has maximum market share in developed and major cities of
Pakistan like Lahore, Karachi, Islamabad, Multan, Hyderabad and many
others. As we have discussed earlier that Nestle is going to become the
fully market leader of water market in Pakistan, signs are clearly visible
to achieve the set point of Nestle. Nestle Pure Life is also the star
product of Nestle Pakistan and most probably all over the world where
Nestle Pure Life exist. Here you can see the market share chart for the
product and after that there is a Boston Consultancy Group Matrix is
shown which would describe the ranking of Nestle Pure Life in product
portfolio of Nestle Pakistan. BCG Matrix shows the company’s market
share over the growth of industry. This BCG matrix is the clear picture
of current market situation of Nestle Pure Life.
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Boston Contingency Matrix
Market Share High Market Share Low
High Industry Stars: Question Mark:
Growth Nestle Pure Life Culinary Products
Dogs:
Low Industry Cash cows:
Chocolate Drinks and
Growth Coffee (Nescafe)
Polo
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SMART Analysis:
SMART is an acronym which tells us that when ever we set any
companies objectives they should be,
S= Specific
M= Measurable
A= Actionable or Achievable
R= Realistic
T= Time Frame
Market Share:
Nestle is now a days willing to have more and more market share so
that it could achieve the goals that are set. The goal for market share
will be discussed below.
Nestle occupied 85% of drinking water market in all over the Pakistan.
In Lahore
Nestle Pure Life has 69%of total market, Sparklet has 13% and Cool
have 11% and remaining 7%are kept by other local companies. In
Karachi 50% of market is kept by Nestle and 25% by AVA and
remaining 25% is kept by other local companies. As for as Islamabad is
concern Nestle Pure Life has 65%of market Share.
They have certain goals and objectives Market Share
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companies. They conduct researches for that and try to get their
objective which they have decided. They are promoting their product
by creating customer awareness.
Nestlé believes that, as a general rule, legislation is the most effective
safeguard of responsible conduct,
The Percentage Use of Nestle
although in certain areas, additional Pure Life and its Competitors in
Islamabad
guidance to staff in the form of Others
20% Sparkle
voluntary business principles is 30%
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Hierarchy details of marketing and sales department
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claims, the markets in which they are traded, and their use by
individuals, corporations, and the society at large.
Finance manager and marketing manager are related with each other
to meet their marketing targets. It is important because alone
marketing manager can not promote any marketing strategy without
any budget.
Market Segmentation:
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 Pure Life Water’s segmentation is based
on two points.
• Geographic Segmentation
• Demographic Segmentation
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Geographic Segmentation:
The company has divided its geographic segmentation in several
regions. First they have the segmentation of a whole country and from
each provincial capital, they divided it’s areas into north, east, west,
south. So that it could be easy for the company to work efficiently on
it’s supply chain management.
Demographic Segmentation:
Nestle Pure Life isn’t a supreme quality product that only the high class
uses. The product is for all. Infant to seniors. There is no age, sex,
income and any other kind of limitation on use of the product. The
product is for all. Anyone can use the product as per need.
Targeting Strategy:
According to our observation and market survey, we have concluded
that as such there is not set demographic techniques to set the specific
target market. Because, water is something that everyone uses.
Everyone can use any size of bottle that Nestle is offering. There are
some variations that can be made throw OUR OBSERVATION but not
from the company.
Nestle Pure Life comes in four different sizes. These four are targeting
different types of people and lifestyles.
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This is the smallest size of Nestle Pure Life Water of
0.5L. This size is being heavily used by the consumers
in place of soft drink. University and Colleges are also
included in its target market of this size. But the
product is used by everyone in the society also. It is not
only specified people that have been discussed above.
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Consumer Profiling Analysis:
The product is being used by many people of Pakistan and there is no
restriction in use of Nestle Pure Life as the is not that kind of product
with specific characteristics. Everyone is free to use Nestle Pure Life.
Requirement
Considerable
Bottle Related To People
Size Age Group Of / Use Sex Income Education
infant - maximum
0.5L age All the people No No No
1.5L 15years - 60years Household No No No
12L 25years - 70years Household & Offices No Can be No
19L 25years - 70years Household & Offices No Can be No
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of the harmful diseases which can also lead to
death. To overcome this problem, Nestle
decided to launch its water product by
acquiring the water plant of AVA Company.
Now the plant is under control of Nestle
Pakistan Ltd. Nestle launched it’s product by offering very useful
ingredients like vitamins, calcium and many other useful things which
gives the human body more than the water. Nestle is available in the
market in four good sizes according to the need and as per targeted
and segmented market. 0.5L, 1.5L, 12L and 19L. These sizes are
complete sized according to the need of the customers. To understand
the full ingredients of the water, we would like to show a FAB Analysis.
The above chart shows the ingredients and level of them in Nestle Pure
Life Water Bottle. The water is also tested on the basis of above
ingredients in the laboratory of USA, Pakistan, and Thailand etc…
Here is one more table which will clearly define the FAB Analysis of
Nestle Pure Life Water.
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FAB ANALYSIS
This is the complete FAB Analysis of Nestle Pure Life which should be
known to all the consumers for powerful CRM.
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Palmolive and Procter and Gamble. If we look at the prices, we can
observe that Nestle is also using its name for the promotional activities
and pricing strategies also. They have to maintain their level of
efficiency and always provide the best at best price. Nestle cares about
the customers. As the time is of inflation, nestle is trying to overcome
the pricing problems to the extent they can do. Nestlé’s point of view is
“Only by understanding their needs can we serve our consumers to
the fullest”.
Profit earning is the core aim of every company but in case of nestle
their profit margin is small just for the sake of customers trust and
happiness. Only a few amount of profit is collected from pure life water.
Nestle always strive to give superior product at low rates. Nestle is also
one of the leader of retaining their customers. This is one reason of
their success. They use the simple formula for the price that is Cost +
Profit.
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2006, Nestle proved it by delivering an amazing 136 million kg of
Nestlé products in Pakistan.
The mission of Nestle Supply Chain is to:
1. Optimize and consolidate resources and processes for a low-cost
but efficient
2. Develop and manage simplified and effective supply network to
achieve a high level of service
3. Create a continuous improvement culture driven by performance
measures and reward
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The main reason is Pure Water
which is the name of this product.
Rests of the water products are
using chemicals which can be
harmful for the human body but
Nestle Pure Life is the only water
product which is pure in nature.
That is also the unique selling
point of Nestle Pure Life. This is
the most powerful point that is in
the mind of the customers while
purchasing any water bottle in their routine life. The brand name is
also very important for the consumers. The slogan of Nestle is “Good
Food Good Life”. That is very attractive slogan people can attract from.
It puts the perception in the minds of people that they’re being offered
good products for their healthy lifestyle. If you look at the logo of
Nestle, you’ll get to know that a bird is feeding the children. Obviously
a mother can’t deceive the children. Nestle pure life is a brand of
nestle which explains a big symbol of quality to customers.
Nestle Pure Life shows in their ads about the purity of water and the
water need for your body. In its launching advertisement, the company
advertises Nestle Pure Life very successfully. In that advertisement, a
lady is drinking Nestle Pure Life Water and then it goes towards inside
the body to show the functions of pure water. That was the awesome
commercial that boosted the sale of Nestle Pure Life. Nestle is also
advertising on famous websites like you can observe that whenever
you will login to your facebook account, the ads of Nestle will be there.
There are number of sign boards and banners you will see in the cities
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to aware people about the products of Nestle. Thus, Nestle is using all
types of media to advertise their products in anyway. When Nestle Pure
Life was launched, they distributed the free samples of 0.5L bottles for
market testing and for their advertising purpose. Then a short walk
was also arranged for the sake of good health and seminars was also
conducted to make sure about the pure water needed your body.
To understand the depth of Positioning, we will divide into three steps.
Personal Selling:
A direct Vendor Selling Activity was coordinated and carried out during
the summer months of June, July, and August 1999 in Lahore. A team
of vendors, clad in branded T-shirts, caps and jackets, sold chilled 0.5
liter bottles to traveling customers on all major intersections. The
brand got great mileage out of this innovative idea of personal selling
in terms of brand awareness, paid trial, image as well as real sales.
Publicity:
Pure Life was launched on 14 December, 1998 in Karachi with a huge
amount of enthusiasm and positive response shown by the locals. The
successful story of its launch was printed in all the local newspapers
the next day. This greatly helped in creating awareness of the brand
and gave its introduction a good start.
Sales Promotion:
Specific promotions of Nestle Pure Life were arranged in some of the
key outlets of Lahore. Elaborate shelf space was acquired for product
display and specially designed POS material was extensively used to
promote sales. On a 12-bottle purchase of 1.5 ml, one 1.5 ml bottle
was offered free to consumers. Similarly on a 6-bottle purchase of 1.5
ml, one 0.5 ml bottle was offered free. Regarding trade promotion, the
retailer was also given an additional discount of 4 % during this sales
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promotion. Not only did the sales of Nestle Pure Life grow
tremendously during the promotion, these continued at a higher pace
even after it was over.
The above map shows the ranking of different products in the eyes of
customers and retailers as per our survey. In this map, Coca Cola’s
Kinley and Pepsi’s Aqua Fina are the real time competitors of Nestle
Pure Life. Nestle Pure Life is on the top of the map having larger
market share. You can see the pie chart of market share in the diagram
shown here. There are other products available in the market like Deja
Blue, Dew Drops, and Springley etc…
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Market Share
Market Share
Islamabad
Lahore
Karachi
The above chart shows the market share of Nestle in three major cities
of Pakistan. Here are Lahore, Karachi and Islamabad. Lahore’s market
share is about 60%, Islamabad’s have 68% and in Karachi, the market
share is about 50%. (The data is not considered 100%. It is just
comparison.)
Competitive Position:
Competitive position of Nestle tells that how much it’s competing its
competitor and what it has unique from its competitors. It tells its
position in the market that where it stands in market. And also tells us
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that what its competitive position is in the market. So we would
analyze its position from two aspects
• SWOT Matrix Analysis of the company
• Core Competencies & Key Success Factors
Strength:
• Strong Brand name (NESTLE LOGO & FAMILY BRAND)
• Pure Drinking Water in market
• Mineral Product (Free of chemicals)
• Only brand in the area maintaining its quality and taste
• It has largest market share
• Ease of availability of their products all over Pakistan
• Immense product range and huge diversification leads to reduce
risk.
• High quality standards
Weakness:
• Communication is weak
• Lack of Awareness
• Weak Distribution Channels
These distributors, though observing the rapid increase in customer
demand refuse to hire new, more efficient and innovative staff that
would take the organizations to rise rather they stuck to their old staff
members.
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Opportunities:
• Concentrating on these areas of weakness can increase sales
• It has opportunity to advertise its product in better way.
• It has strongest opportunity to increase its product line by
making segments in mineral water. Mineral water should be of different
taste E.g. like AQUA FINA in USA has introduced mineral water of
different taste. So it captured the market.
• By increasing product line it can also increase its sales.
Threat:
• Segments are being shared by competitors
• Under cutting by competitors.
• Uncertain conditions will affect the sales
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So core competency is basically the skill that a company has. As Nestle
Mineral Water has this core competency. If Nestle meet these core
competencies, it can grow it sales and revenue. Then it can also
differentiate its product from others. So these are key factors to
achieve success and meet goals.
Competitive Analysis
Competitive analysis includes the comparison of one organization with
its competitor. It differentiate product and tells which product stands at
which position. It tells about the differentiation of characteristics and
weaknesses of the product with its competitors.
As we know that more important competitor of Nestle is Aqua Fina.
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with all regulations and that it meets high standards of quality.
Customers expect us to keep this promise every time. 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 Nestlé products at all times. The effort
is worth it. Companies with huge quality standards make fewer
mistakes, waste less time and money and are more productive. They
also make higher profits. Quality is our most successful product. It is
the key to our success, today and tomorrow.
Marketing Financials:
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In marketing financials of the Nestlé, advertisement budget is low
because their profit margins for nestle pure life is only 5%.They have
weak advertisement. For increasing their sales they have to increase
segmentation with more effective strategies. If they will increase their
product line then their sales would be automatically increased and
after that profit margin will increase. Then they can promote more their
product by advertising and tools like this.
GAP Analysis
GAP analysis stands for identification of GAPS in the market, which a
company can capitalized upon. This means that the difference of
customer wants, and what company is giving. The remaining portion is
called GAP Analysis. GAP Analysis for company is given below.
If we compare Nestle with Aqua. Then we would come to know that
Aqua Fina is providing mineral water of different tastes in USA. And
sooner it would introduce mineral water of different tastes in Pakistan.
But if we see Nestle, it’s only giving pure water of one taste. As
customer wants different taste in water. So this is GAP analysis
between company and customer. Major difference is of different
segments. So Nestle should introduce different tastes in water to meet
customer requirements.
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Nestle should contact to the main head quarter situated in Switzerland
for financial, economic, strategic support so that the goals of Nestle
Pakistan could be achieved. One more thing that is possible that
company should made some agreements about their business plans so
that the company could able to work with stability.
The group is willing to enhance its product line but due to some
internal and external reasons along with security, the company is
facing the shortage of producing certain products which have demand
in the market.
Solution:
The company should buy the existing plants by any mean in Pakistan
to fulfill the demand of market. Because to setup a new plant can be
costly for the company. It is also possible that company should work
with other small companies to meet the demand. There should be very
low probability of loss on the goods as the brand image is so strong in
Pakistani market about Nestle.
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marketing strategies. So that they can capture market and improve
their sales.
Conclusion:
Nestle is the world leader in FMCG industry. People trust on the
products launched by the company even the product is facing some
problems.
Nestle was doing its good job in past but now it is facing some
problems of low quality of their products. Nestle is sued by someone
they claim that they are doing unethical business. They are mixing
unhygienic things which can cause damage to customer’s health. Its
example is that their water is not pure and good for health. You can see
dust partials in Nestle mineral water when you keep it in sunlight that
shows its product quality is down. Now they have to do more making
their strong position in market because when you lose your image in
customer’s eye then it is difficult to renew their image.
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