Introduction: -

Nestlé was founded in 1866 by Henri Nestlé and is today the

world's biggest food and beverage company. Sales at the end of
2005 were CHF 91 bn, with a net profit of CHF 8 bn. Nestlé
employ around 250,000 people from more than 70 countries and
have factories or operations in almost every country in the world.

The history of Nestlé began in Switzerland in 1867 when Henri Nestlé, the pharmacist,
launched his product Farine Lactée Nestlé, a nutritious gruel for children. Henri used his
surname, which means ’little nest’, in both the company name and the logotype. The nest,
which symbolizes security, family and nourishment, still plays a central role in Nestlé’s
profile.
Since it began over 130 years ago, Nestlé’s success with product innovations and
business acquisitions has turned it into the largest Food Company in the world. As the
years have passed, the Nestlé family has grown to include chocolates, soups, coffee,
cereals, frozen products, yoghurts, mineral water and other food products. Beginning in
the 70s, Nestlé has continued to expand its product portfolio to include pet foods,
pharmaceutical products and cosmetics too.
Today, Nestlé markets a great number of products, all with one thing in common: the
high quality for which Nestlé has become renowned throughout the world
The Company's strategy is guided by several fundamental principles. Nestlé'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.
Taste of Nestlé in each of the countries where Nestlé sell products. Nestlé is based on the
principle of decentralization, which means each country is responsible for the efficient
running of its business - including the recruitment of its staff.

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That's not to say that every operating company can do as it wishes. Headquarters in
Vevey sets the overall strategy and ensures that it is carried out. It's an approach that is
best summed up as: 'centralize what you must, decentralize what you can'.
Nestlé is a company which is present in all over the world but It has difference and
unique motto to deal in all over the world. Nestlé believes that they should think about
their organizations globally but they deal with people by interacting with them locally.

“Thinking globally - acting locally”

Evolution of Nestlé: -

1867 Henri Nestlé founded the company in Vevey, Switzerland.

1898 Nestlé purchases its first factory outside of Switzerland - Viking Milk factory in
Norway.

1905 Nestlé merges with Anglo-Swiss Condensed Milk Company.

1929 Nestlé merges with Peter-Cailler-Kohler Chocolates Suisses S.A.

1938 Nestlé launches Nescafé - the world’s first instant coffee.

1947 Nestlé merges with Alimentana S.A. with the brand Maggi.

1962 Nestlé purchases Findus.

1974 Nestlé becomes a significant shareholder in the Cosmetics Company L’Oréal.

1977 Nestlé purchases Alcon, manufacturer of eye care products and kits.

1985 Nestlé purchases the Food Company Carnation.

1988 Nestlé purchases the confectionary company Rowntree Mackintosh and the pasta
company Buitoni-Perugina.

1992 Nestlé purchases the mineral water Company Perrier.

1998 Nestlé purchases Spillers pet foods business.

2000 Nestlé sells the Findus brand in all countries except for Switzerland.

2001 Nestlé merges with Ralston Purina, the premier petfood company in North America,
and with unique expertise in the dry dog food area.

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Vision of Nestlé

Nestlé's vision of making good food central to enjoying a good healthy life for consumers
everywhere. This implies gaining a deeper understanding in many areas of nutrition and
food research and transforming the scientific advances into applications for the company.

Having a broad vision the company is doing its best for their consumers to show the great
sense of responsibility.

Nestlé’s aim is to meet the various needs of the consumer every day by marketing
and selling food of a consistently high quality.

The confidences that consumers have in our brands is a result of our company’s many
years of knowledge in marketing, research and development, as well as continuity -
consumers relate to this and feel they can trust our products.

High quality and collaboration

Our objectives are to deliver the very best quality in everything we do, from primary
produce, choice of suppliers and transport, to recipes and packaging materials. Our
operations and collaboration in the Nordic countries gives us greater opportunities to be
efficient and strategic and to function well as an organization, both when it comes to the
distribution chain and to concentrating on joint product launches and campaigns.

Focus on e-business and websites

Increased investments in the sphere of e-business give us swifter business and direct
contact with trade. Our website is a forum for consumers, students, future employees and
the media. We hope that through a sincere approach and by conducting dialogues, we will
be able to improve, change and satisfy the demands and wishes of the people of today

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History of Nestlé: -

Nestlé started its work as a multinational company in 1866. From that time they provided
their best to their customers and the history of the Nestlé is given below:

History of Nestle

1866-1918 1918-1944 1944-1975 1975-1981 1981-1996 1996-Now

Food
Chocolate,
Products
Coffee
for babies Fast Food Fast Food Yogurt Ice
and Fresh
& Powder Maggi Products and Butter Creams
Milk
Milk

1866 -1918

In the 1860s Henri Nestlé, 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. People quickly recognized the value of the new
product, after Nestlé's new formula saved the child's life, and soon, Farine Lactée Henri
Nestlé was being sold in much of Europe.
In 1905 Nestlé 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, Nestlé's production had more than doubled.

1918 -1944

After the war Government contracts dried up and consumers switched back to fresh milk.
However, Nestlé's management responded quickly, streamlining operations and reducing
debt. The 1920s saw Nestlé's first expansion into new products, with chocolate the
Company's second most important activity

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Nestlé 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, Nescafé, which was a staple drink of the US military.
Nestlé'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 Nestlé. 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'Oréal
in 1974.

1975 -1981

Nestlé's growth in the developing world partially offset a slowdown in the Company's
traditional markets. Nestlé made its second venture outside the food industry by acquiring
Alcon Laboratories Inc.

1981 -1996
Nestlé divested a number of businesses1980 / 1984. In 1984, Nestlé's improved bottom
line allowed the Company to launch a new round of acquisitions, the most important
being American food giant Carnation. Nestlé introduce yogurt and butter in this time
period.
1996 Onwards
The first half of the 1990s proved to be favorable for Nestlé: 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, Nestlé merged its U.S. ice cream business into Dreyer's, and in August, a
USD 2.6bn acquisition was announced of Chef America, Inc.

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Main Brands of Nestlé are as under:

Today Nestlé is present in different markets with the following main brands:

Nestlé’s Brands in All Over the World

Coffee

Water

Beverages

Shelf Stable

Children Foods

Ice Creams

Infant Nutrition

Performance
Nutrition
Health Care
Nutrition

Soups & Pasts

Frozen Foods

Refrigerated
Products
Chocolates &
Biscuits

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Detail of Nestlé’s Products in All over the World

Coffee Nescafé, Taster’s Choice, Ricoré, Ricoffy, Nespresso,

Bonka, Zoégas, Loumidis

Water Nestlé Pure Life, Nestlé Aquarel, Perrier, Vittel, Contrex,

S.Pellegrino, Acqua Panna, Levissima, Arrowhead, Poland
Spring, Deer Park, Ozarka, Hépar, Ice Mountain,
Zephyrhills

Other beverages Nestea, Nesquik, Nescau, Milo, Carnation, Libby’s, Caro,

Nestomalt, Nestlé

Shelf stable Nestlé, Nido, Nespray, Ninho, Carnation, Milkmaid, La

Lechera, Moça, Klim, Gloria, Svelty, Molico, Nestlé Omega
Plus, Bear Brand, Coffee-Mate,milk pak,yougart

Chilled Nestlé, Sveltesse, La Laitière, La Lechera, Ski, Yoco,

Svelty, Molico, LC1, Chiquitin

Ice cream Nestlé, Antica Gelateria del Corso, Dreyer's/Edy's,

Drumstick/Extrême, Maxibon/Tandem, Mega, Mövenpick,
Sin Parar/Sem Parar/Non Stop

Infant nutrition Nestlé, Nan, Lactogen, Beba, Nestogen, Cerelac, Neslac,

Nestum, Guigoz, Good Start

Performance nutrition PowerBar, Pria, Musashi

HealthCare nutrition Nutren, Clinutren, Peptamen, Modulen

Bouillons, soups, seasonings, pasta, Maggi, Buitoni, Thomy, Winiary,Torchin

sauces

Frozen foods Stouffer’s, Lean Cuisine, Hot Pockets, Buitoni, Maggi

Refrigerated products Nestlé, Buitoni, Herta, Toll House

Chocolate and biscuits Nestlé, Crunch, Cailler, Galak/Milkybar, Kit Kat, Smarties,
Butterfinger, Aero, Polo
Cosmetics Biotherm, Body Shop , Cosmence, Garnier, Helena
Rubenstein, Innéov , La Roche-Posay, Lancôme
,L'Oreal ,Matrix , Maybe line ,Metamorphosis ,Plenitude ,
Red ken

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 Pet food Arthur's, Bakers, BETA, Bonio, Felix ,Friskies
Go-Cat ,Go-dog, Pro Plan, Purina ,Spiller's
Winalot.

Cereals Cheerios & Honey Nut Cheerios, Cinnamon and Golden

Grahams ,Clusters, Cookie Crisp
Shreddies , Fibre 1,Fitnesse ,Force Flakes
Fruitful ,Golden Nuggets ,Nesquik cereal
Shredded Wheat including: Bite size, Fruitful, Honey Nut
,Shred dies: Coco and frosted

Nestlé’s Brands Detail

Baby Foods: -

In 1867 a physician persuaded Henri Nestlé to give his product to an infant who was very
ill — he had been born prematurely and was refusing his mother's milk and all other
types of nourishment. Nestlé's new food worked, and the boy survived. From the very
beginning, Nestlé's product was never intended as a competitor for mother's milk. In
1869, he wrote: "During the first months, the mother's milk will always be the most
natural nutrient, and every mother able to do so should herself suckle her children."

The factors that made baby foods success in the early days of the Nestlé company —
quality and superior nutritional value — are still as valid today for the wide range of
infant formula, cereals and baby food made by Nestlé. The World Health Organization
(WHO) recognizes that there is a legitimate market for infant formula, when a mother
cannot or chooses not to breast feed her child. Nestlé markets infant formula according to
the principles and aims of the WHO International Code of Marketing Breast Milk
Substitutes, and seeks dialogue and cooperation with the international health community
and in particular with the WHO and UNICEF, to identify problems and their solution.
Nestlé's expertise as the world's leading infant food manufacturer, gained over more than
125 years, is put at the disposal of health authorities, the medical profession and mothers
and children everywhere.

Dairy Products: -

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Nestlé has long been a major player in the dairy industry, originally with well known
shelf stable brands such as Nido, Nespray, La Lechera and Carnation, then building a
strong international presence in Chilled dairy and Ice cream under the Nestlé brand.

Innovation and renovation play a major role in the development of milk based products as
well as of breakfast cereals, managed as a joint venture with General Mills.
The area of Nutrition, with its benefits to health and wellbeing, is having a significant
impact on the development of our business. A wide range of proven, science based
solutions such as starter and follow-up formulas, growing-up milks, cereals, enteral diets,
oral supplements and performance foods are actively developed and successfully brought
to market under the Nestlé brand.

Breakfast Cereals: -

Although cereals have been with mankind in one form or another for millennia, it was not
until the mid 19th century that scientific research, technological innovation, and the
influence of a group of American health reformers, gave rise to the crunchy foodstuff we
know today as breakfast cereal.
Nestlé has a joint venture with General Mills outside North America, Cereal Partners
Worldwide, which is active in more than 80 countries.
The joint venture began in 1990, and its rapid growth has been characterized by strong
branding and lately the launching of breakfast cereal brands into the fast-growing cereal
bar market.

Ice Cream: -

Ice Cream is also one of the major products of Nestlé.

Chocolate & Confectionery: -

Chocolates and confectionery are also present in the list of Nestlé’s products. Nestlé has
Kit Kat, polo, Toffo, Butter scotch, Fruit drops and Soothers in this section of
products.

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Prepared Foods: -

In this section of production Nestlé has Maggi and Buitoni. Maggi merged with Nestlé in
1947. Buitoni, the authentic Italian brand, which has been producing pasta and sauces in
Italy since 1827, became part of the Nestlé Group in 1988
Beverages: -

In 1937, Nestlé scientists perfected a powdered coffee product that was introduced in
1938 under the brand name Nescafé – the world's first commercially successful soluble
coffee.
It became so popular during World War II that for one full year the entire output of the
Nescafé plant in the United States (more than 1 million cases) was reserved for military
use only. Since then, Nescafé has become one of the world's best-known brands. In
addition, Nestlé is a major producer of chocolate-based and malted drinks.
Its leading brands, Nesquik, Milo and Nescau are very popular with a growing number of
young people around the world. Nestlé's ready-to-drink beverages Nestea and Nescafé are
sold in various forms (cans, bottles). These are distributed by Nestlé's joint-venture with
the Coca-Cola Company, Beverage Partners Worldwide. Nestlé is also present in fruit
juices (Libby's), as well as espresso coffee in capsules (Nespresso).

Bottled Water:-

Nestlé began its entry into the water business in 1969 with a 30% stake in the owners of
the Société Générale des Eaux Minérales de Vittel. It acquired a controlling interest in
SGEMV in January 1992, and went on in May of the same year to buy out the entire
Perrier Group.
In 1992, Nestlé was the first company to dare to launch a mineral water, Valvert, in five
different countries at once. Its originality lay in the use of an all-new plastic, P.E.T.
(polyethylene teraphthalate), which is stronger and more elastic than the PVC used since
1968. Besides, P.E.T. is recyclable.

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By the end of 1997, the Group was present on every continent, and the purchase of San
Pellegrino gave it the leadership in the Italian market. In 1998, for the first time in its
history, Nestlé associated its name with a bottled water: Nestlé 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.
Nestlé Pure Life is drinking water that has been treated and rematerialized using a
standardized industrial process to ensure purity and quality and is marketed in emerging
countries.
A second product with the Nestlé name was launched in May 2000, this time in six
European countries: Nestlé Aquarel. Natural spring water currently from nine different
springs in France, Germany, Belgium, Hungary, Italy and Spain, Nestlé Aquarel also uses
the multi-source concept to satisfy new consumer expectations, especially for water with
a low mineral content that the whole family can drink.
In April 2002, the Group changed its name to Nestlé Waters, a token of Nestlé's decisive
commitment to the bottled water market, which now represents 9% of its sales. Today,
Nestlé Waters are established in 130 countries and markets about 70 different brands. The
Group is able to offer top quality brands and innovative packaging to meet the individual
needs of the water consumer all over the world, whenever, wherever and however thanks
to the wide variety of its offer in terms of distribution and product mix.
L'Oreal (France):
L'Oreal is the global #1 in cosmetics with a portfolio that contains many of the world's
biggest hair and beauty products, including such brands as Garnier, Maybelline and
Lancome. It also markets fragrances and cosmetics under license for other companies
such as Giorgio Armani and Ralph Lauren. More than 80% of group sales are generated
outside France, with operations in every major territory. Since the 1980s the group has
made North America a particular focus of attention, wrong-footing domestic rivals with
dynamic marketing and a series of smart launches and clever acquisitions. The most
recent of these is the 2006 deal to acquire ethical beauty products retailer Body
Shop. Advertising Age estimated global measured advertising expenditure of $2.8bn in
2005, making L'Oreal the world's #5 advertiser

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 Images of Nestlé’s Brands

Baby Foods:-

Cerelac Nestle junior Baby cao

Cereal Milk Drinks

Dairy Products: -

Nido Nespray La Lechera

Carnation

Every Day

Ice Cream: -

Ice Cream

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Chocolate & Confectionery: -

Soothers Kit Kat

Prepared Foods: -

Maggi Buitoni

Beverages: -

Fruit Juices Nescafé Milo Nesquik

Nestea

Bottled Water:-

Nestlé Pure Life Nestlé Aquarel

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Members of the Board of Directors
Here are the Names, Year of Birth, Nationality and Education of the Members of the
Board of Directors.

Name Year Of Birth Nationality Education

Swiss Matura Diploma and
Rainer E. Gut
1932 Swiss professional
(Chairman)
Peter Brabeck-
Degree in Economics
Letmathe 1944 Australia
(VCM & ECO)
Degree in Mechanical
Andreas Koopmann Engineering and
1951 Swiss
Business Administration

Edward George
British Degree in Economics
(Lord George) 1938

Degree in Law
Rolf Hanggi 1943 Swiss

Degree in Economics
Jean-Pierre Meyers 1948 French

Swiss Attorney-at-law
Peter Bockli 1936

Degree in Political Science

Nobuyuki Idei Japanese
1937 and Economics

Degree in Physics
Andre Kudelski 1960 Swiss

Degree in Mechanical
Kaspar Villiger 1941 Swiss Engineering

Degree in Physics and in

Daniel Borel
1950 Swiss Computer Science

Carolina Muller- Degree in Political Science

1968 Swiss
Mohl

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COMPETITIVE PRIORITIES

 Quality

Everyday, millions of people all over the world shows their confidence in
nestle by choosing Nestlé products. This confidence is based on their quality
image and a reputation for high standards that has been built up over many
years.

High performing design Quality policy and principles, the mandatory

standards and the recommended tools for implementation are laid down in the
Nestlé Quality System, which is applicable throughout the group. Further
directions are given through instructions, norms and guidelines, often specific
to a product.
Nestle business products; such as raw material producers, packaging
suppliers, contract manufacturers and distributors are expected to share nestle
concern for Quality.

Consistent quality A Nestlé 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.

 Cost

Nestle provides high quality products to its customers at lower prices; prices
that are affordable by people in order to get nutritious healthy products.

 Time

Through its effective marketing and vast sales and distribution network
throughout the company, Nestle ensures that its products are available to
consumers whenever, wherever and however. They believe that getting the
new product to market first gives the firm an edge on the competition that is
difficult to overcome in a rapidly changing business environment
(Development speed)
speed)

 Volume Flexibility

Nestle has the ability to accelerate and decelerate the rate of production
quickly to handle large fluctuations in demand. For Nestle volume flexibility
is an important operating capability that supports the achievement of their
other competitive priorities.

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  Corporate wellness unit of Nestle Corporation

The Corporate Wellness Unit was designed to integrate nutritional value-

added in their food and beverage businesses. This unit will drive the nutrition,
health and wellness organization across all their food and beverage
businesses. It encompasses a major communication effort, both internally and
externally, and strives to closely align Nestlé’s scientific and R&D expertise
with consumer benefits. This unit is responsible for coordinating horizontal,
cross-business projects that address current customer concerns as well as
anticipating future consumer trends.

 International strategy

1. Focus on Foreign Direct Investment

 Nestlé is a global organization. Knowing this, it is not surprising that international

strategy is at the heart of their competitive focus. Nestlé’s competitive strategies
are associated mainly with foreign direct investment in dairy and other food
businesses.
 Nestlé aims to balance sales between low risk but low growth countries of the
developed world and high risk and potentially high growth markets of Africa and
Latin America. Nestlé recognizes the profitability possibilities in these high-risk
countries, but pledges not to take unnecessary risks for the sake of growth. This
process of hedging keeps growth steady and shareholders happy.

2. Partnership with other large companies

Another strategy that has been successful for Nestlé involves striking strategic
partnerships with other large companies. In the early 1990s, Nestlé entered into an
alliance with Coca Cola in ready-to-drink teas and coffees in order to benefit from
Coca Cola’s worldwide bottling system and expertise in prepared beverages.

3. Acquire local companies

In Asia, Nestlé’s strategy has been to acquire local companies in order to form a
group of autonomous regional managers who know more about the culture of the
local markets than Americans or Europeans. Nestlé’s strong cash flow and
comfortable debt-equity ratio leave it with ample muscle for takeovers. Recently,
Nestlé acquired Indofood, Indonesia’s largest noodle producer. Their focus will
be primarily on expanding sales in the Indonesian market, and in time will look
to export Indonesian food products to other countries.

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SWOT ANALYSIS OF NESTLE:

Strengths:

Nestlé’s has much strength.

1. Their first is that they have a great CEO, Peter Brabeck. Brabeck
emphasizes internal growth, meaning he wants to achieve higher
volumes by renovating existing products, and innovating new
products. His explanation of renovation is that “to just keep pace in the
industry, you need to change at least as fast as consumer
expectations.”(Hitt, 2005)
2. His explanation of innovation is “to maintain a leadership position,
you also need to leapfrog, to move faster and go beyond what
consumers will tell you.” Brabeck has led Nestle into a position to
better achieve the internal growth targets with his.
3. Another strength that Nestle has is that they are low cost operators.
This allows them to not only beat the competition by producing low
cost products, but by also edging ahead with low operating costs.

Weakness:

1. The main weakness of Nestle is that they were not as successful as

they thought they would be in France. The launch in France was in
1994, but since the late 1980s, Danone had already entered the market
with a health-based yogurt.
2. The second weakness is that LC-1 was positioned as too scientific, and
consumers didn’t quite understand that LC-1 was a food and not a
drug.
3. Nestle also has multiple critical resources. They have a great research
and development team. James Gallagher and Andrea Pfeifer were the
masterminds behind the research on the La-1 cultures in the LC-1
yogurt. They were also the two that decided on selling LC-1 as a
functional food. This enabled Nestle to position the product in a way
that differentiated it among the other products in the market. They also
have four pillars that Brabeck, Nestle’s CEO has identified he believes
will help their internal growth worldwide. These are operating
excellence, innovation and renovation, product availability, and
communication.

17
 Opportunities:

1. One opportunity that Nestle has is that health-based products are

becoming more popular in the world, including in the United States.
Consumers are
2. Becoming more health conscious, and realize that living longer isn’t
only by luck and genetics. LC1 has not been introduced in the United
States yet.
3. Nestle also has an opportunity of being even a larger market leader in
Germany with LC-1. Within two years of launching the product in
Germany, they had captured 60% of the market. This was due to the
fact that they differentiated the product, and Germans simply preferred
the taste.
4. Another opportunity of LC1 is that, because they are a market leader,
they can introduce more health-based products in Germany.
5. As nestle has more then 9000 brands all over the world .they are
increasing their products day by day. With very new changes. like now
they are introducing Nestle LEMU Malta

Threats:

1. A threat to Nestle is the fact that some markets they are entering are
already mature. Danone had an established leadership position in the
yogurt market in France. Since Danone was the first to arrive in the
market, they have always been the market leader there.
2. Also consumers in France liked the taste of LC-1, but researchers
believe they did not repurchase the yogurt because they preferred the
taste of Danone products better.
3. Another threat to Nestle is that there is intense competition in the
United States yogurt market. General Mills’ Yoplait division is the
leader in the yogurt market in the United States. Yoplait has been the
leader for years and is constantly innovating new health products.
4. The main threat of Nestle these days is the campaign led by the
International Nestlé Boycott Committee primarily targets Nescafe, the
corporation's flagship product. To boycott Nestlé products until the
company stops promoting its baby milk.
5. Another threat now a days is in nestle pure life. as it’s the leading
brand and people prefer Nestle pure life but their may be a threat from
aqua fena which is introduced by Pepsi
6. Threat of Olper Milk and Haleeb Milk

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Competitors Of Nestle Globally

Nestlé towers over its competitors as the world's largest food company, proudly
proclaiming "good food, good life." Not so good is Nestlé's reputation for corporate
abuse throughout its operations, ranging from the marketing of infant formula to the
production of its chocolate and bottled water. Nestlé has been the target of strong
international criticism for its aggressive marketing of infant formula in countries with
scarce potable water, leading to a reduction in breastfeeding and increased risk for
infants. Nestlé is one of the top four water bottling companies in the world,
contributing to the problem of plastic waste as well as the usurping of water that
should remain a shared resource.
Competitors
- Cadbury Schweppes -Campbell Soup
- Chiquita Brands - Coca-Cola
- ConAgra Foods - Danone
- Dean Foods - Dole
- General Mills -H.J. Heinz Company
- Hershey - Kellogg
- Kraft Foods -McDonald's
- PepsiCo - Procter & Gamble
- Sara Lee -Smithfield Foods
- Starbucks -Tyson Foods
- Unilever -Vivendi Universal S.A.
- Wendy's

Selection of one product:

I choose the dairy products for my report .and my main focus is on Nestle milk PAK
because its In Pakistan it is used every where.

Products Marketed in Pakistan—Business Areas

Locally Produced Products

A broad range of products is produced locally. These are grouped under the six broad
categories listed below:

Dairy Products:
• MILKPAK UHT Milk
MILKPAK pioneered the UHT market in 1981. A major re-launch in 1997
repositioned the brands the perfectly pure and natural milk. This enhanced its
brand image, and simultaneously strengthened its leadership in the market. It is
currently available in three different sizes: 250 ml, 500 ml, and 1000 ml.

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• MILKPAK UHT Butter

MILKPAK butter was launched in 1985. It has an established consumer base, and
a significant market share. It is available in two different sizes: l00g, and 200g.

• MILKPAK UHT Cream

•
MILKPAK UHT cream was launched in 1986. It is the market leader in the cream
segment, and has a high degree of brand loyalty. It is available in the 200ml slim
pack.

• MILKPAK Desi Ghee

MILKPAK Desi Ghee was launched in 1986. It has gained a dominant market
share due to its aroma, taste, and quality, and also by capitalizing on the
MILKPAK brand name. It is available in a 1000ml tetra pack.

• EVERYDAY Dairy Whitener

•
EVERYDAY, a spray dried instant dairy whitener was launched in 1992 to tap
the potential offered by the large tea drinking consumer segment, and also to
expand the overall powder milk market. EVERYDAY dairy whitener, backed by
an aggressive marketing strategy, has shown tremendous growth and holds great
promise for the future. EVERYDAY is available in three different sizes: 200g,
500g, and l000g.

• NESTLE EVERYDAY UHT:

Nestle Everyday UHT was launched in October 2001 .it is a special milk for tea
that enhances the tea taste like no other milk can! It is available in 375ml, 200ml,
125ml pack sizes.

• NIDO
Prior to local production commencing in 1990, NIDO had been imported for
roughly two decades. NIDO had established itself as the market leader in the
instant powdered, full cream 'vitaminized' milk (as it is enriched with vitamins A
and D) category before 1990. Presently, major efforts are directed towards
expanding the powder milk market that holds the potential to grow rapidly. NIDO
is available in 200g (soft pack), 500g (soft pack), and l000g (pouch) sizes that are
locally produced, whilst an 1800g tin is imported.

• GLORIA
•
Gloria full cream milk powder was launched in 1991, and is sold in bulk (25kg
packs) to industrial consumers, and to end consumers per se. In 1997, GLORIA
skimmed milk powder was also introduced under the GLORIA brand.

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 • NESTLE NESVETA

Nestle Nesvita Hi- calcium low fat milk was launched in sep 2003 .it is available
in sizes 500ml and 1000ml TBA slim.the main compitators and pioneer in the
market is SKIMZ.it available in both powder and liquid form .it is a low fat milk
less than 1% fat with no extra benefits and has an esitimated 45% share of the
market.
It is best suited for weight conscious people as well as those trying to maintain
low cholesterol.

Nestle Milkpak Ltd. (A brief history

The joint venture between Milkpak Ltd. And Nestle S.A. came about in 1988 and the
company was renamed as Nestle Milkpak Ltd. Prior to that, Milkpak Ltd., produced UHT
milk, butter, cream, desi ghee and fruit drinks at Sheikhupura factory. 21 branded product
lines were added during 1990 to 1998. Nestle Milkpak operates the largest and an
extremely efficient milk collection system in the country, which enables it to collect the
highest quality milk for production of UHT and powder milks as well as other milk based
products. The company voluntarily provides extension services of farmers in the area of
animal husbandry and livestock breed improvement.

UHT means Ultra Heat Treatment. In this process the milk passes through 140oC in 3
seconds and then immediately cooled to 20oC in the next 5 seconds, which in turn kills
all the bacteria. This is the most sophisticated and advanced process in the world. At Milk
Pak we use the indirect method of UHT meaning that milk is heated by steam passing
through stainless steel pipes outside milk. All other brands in Pakistan use the direct
method of heating that is by injecting steam in the milk, this adds water content in the
milk, where as indirect heating in fact evaporates water from the milk. This is what
makes Milk Pak the "Thickest Milk".

FEATURES:

Consumers everywhere know that only Milk Pak is the thickest, pure and hygienic milk.
Milk Pak is pasteurized, homogenized, and standardized pure UHT milk of the highest
standard .the result have been very heartening as 59% respondents preferred NESTLE
MILK over HALEEB .It’s a premier brand, and the choice of quality-conscious
consumers who only want the best.Pack in easy to open, 6-layered Tetra Pak Brick
Aseptic packaging.

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Regional Sales Offices
Nestle Milkpak Ltd. has sales offices throughout Pakistan. The ten
(including the federal Capital) cities in which the sales offices are
located are:

• Karachi (Sindh)
• Hyderabad (Sindh)
• Quetta (Balauchistan)
• Peshawar (NWFP)
• Gujranwala (Punjab)
• Faisalabad (Punjab)
• Multan (Punjab)
• Lahore (Punjab)
• Islamabad (Federal Capital
• North Outstation

Target Market Of Nestle Dairy Products:

The customers of Nestle Dairy products in Pakistan are the local people with at least a
little higher level of income for its milk products. By offering different confectionary and
instant food products etc the company has tried to capture the market of children.
Milk:
Milk is used in every home and all age group people drink milk so nestle target
market of milk is for all age group people who have at least higher level of income.

Nestle Nesvita:
Those persons who are diet conscious and want low fat milk preffer Nestle nevita
they are mostly youngsters
Every Day:
Every day is used for tea .and it target market is mostly those people who love tea and
it is used in offices, restaurants, colleges, homes.
Nido:
Nido is famous in up growing children’s. So Nido target market is children’s.

22
 Competitors of Nestle dairy products:
As nestle provide quality products .so it’s the leading company all over the world in
all its products. It has also some competitors of its dairy products in Pakistan.

Nestle dairy products Competitor

Milk pak Haleeb,Nur pur, Olper
Nido No competitor
Every day No competitor
Nestle butter Blue Band Butter, Haleeb Butter
Nestle Pure life Aqua phena
Yogurt Prime, Haleeb
Kit Kat Mars, sneaker, Cadbury
Cereals No competitor

Haleeb& Olper:

Haleeb and Olper are the main competitors of Nestle milk. But mostly people prefer
Nestle milk pak because of its good taste and good packaging. It is also UHT treated.
Nestle price is also reasonable. And quality is out class.

Prime:
Prime is the competitor of nestle yogurt. But mostly people prefer nestle yogurt
because of its good taste and packing.

23
 PRICE PLANNING:

Global pricing policies:

Apart from global coordination of prices on specific products and firms usually adopt
one of the three alternative pricing policies that cut across their product lines. these
are
1. Polycentric pricing
2. Geocentric pricing
3. Ethnocentric pricing
Nestle use geocentric pricing policy.

Nestle Products price planning

 Nestle dairy products are priced keeping in view the buying power of middle-
income and high-income social classes.
 The cost includes the cost of manufacturing, labor, raw materials etc. The
industry sales growth is largely driven by population growth as well as the
amount of advertising and product innovation taking place in the industry. The
company has resorted to pricing discrimination strategies to maximize the value
of consumer demand
 Being a multinational brand, the pricing objective of Nestle is mainly to increase
sales as it has already penetrated the market. Their prices are not affected by price
changes by competitors, and they don’t engage in price wars. Competition is met
through innovation. The prices of Nestle milk change as the product size is
changed of the Product Life Cycle. And Because of the contract between the
seller companies, they offer same price. So there is no skim based or penetration
based pricing by company.
 The retail prices are different according to there size and brand. However prices
have been standardized throughout Pakistan and there is no differentiation based
on geographical areas. There is no change in prices according to season. It
remains the same.
 They adopt same strategy in international marketing as in local marketing. But the
prices are according to the international currency.

PROMOTION PLANNING

Promotion Planning of Dairy Products:

24
The promotion of Nestle Dairy product are no doubt the best of all. Its intense advertising
has really captured the minds of all categories of people besides media advertising; the
company has signed several agreements with different sports in order to promote. For the
Advertising, the company has a policy that the commercial should best communicate its
message toward its target markets. The promotional planning of Nestle milk has taken the
emotions of youngsters quite successfully.
Promotion is handled by the marketing department but campaigns are launched through
an agency. Promotion is done through the electronic media, billboards and print media
(press).
Promotion Objectives

• To project sales of Nestle Dairy Products

• To create awareness among the masses about any new product of Nestle
• To achieve brand loyalty

Selection of Promotion Media

Selection of promotion media is done on the basis of whether the company wants:
• Immediate sales uplift
- Achieved through television and other forms of electronic media
Or
• Gradual sales uplift
Promotion planning depends on marketing push or marketing pull strategy. Nestle milk is
not considered a seasonal product in Pakistan, so they do not need to promote very much.

Sales Throug
Advertisement And M

News papers.
Internet
Television
Radio
25
 Nestle Advertisements on TV:

Chocolate:
“ Have a Break! Have a KIT KAT”

The world primer chocolate brand creates waves in the winter season s Nestle milk pak
Pakistan started aggressive marketing on KITKAT during the winter season. International
TVs on several cable TV channels,heavy outdoor and attractive POS drew attention on
the brand. Sale responded in very positive manner as the brand managed to penetrate into
all income segments.

Dairy products:

Every Day:

“Adhora Hai Jeevan Teray Binaa” -New Thematic Campaign

Adhora hai Jeevan tray bina –Life is incomplete without you, was the new advertising
campaign for NESTLE EVERY DAY launched in August 2003, it is the first joint
campaign for both formats i.e. Liquid and powder of the brand NESTLE EVERY
DAY.

“Mazay Dar Chaiay Ho Gaiay”

Nestle Milk Pak

“ Pakka Aitebar” Campaign

The highlight of 2003 has been the “MILK PAK Pak Aitebar” Campaing ,launched in
may as an integrated campaign through TV, outdoor , Print and POS,thecampaing was
instrumental in increasing the sale and market share of NESTLE MILK PAK.

“Khalis Hee Sab Khuch Hai”

26
Nestle Nutrition Plan

“Nestle Introduces...Your baby’s health planner”

The Ad of Developmental nutrition plans for kids are really impressive for mothers.

NIDO:

There are also so impressive ads of Nestle Nido which give your child complete
nourishment in his growing years.

See Him Grow

Healthy and strong

With Nido

Nestle pure Life:

Nestle Pure Life. Pakistan’s Favorite Water.

Nestle pure life is Pakistan favorite water because it is pure, safe and healthy .its
advertisement is on several cable TV channels,heavy outdoor and attractive POS .

27
 Sponsoring Major and Rural Sport Region

Another mode of promotion for nestle is sponsoring major and rural sport events.
Milo a brand from nestle always sponsors sporting events like badminton to
bowling to the Commonwealth Games. This kind of promotion will always lead
to the awareness of our customers.

Packaging

Since packaging is an integral part of product, nestle propose new packaging in

this marketing plan that is not only attractive and durable, but also functional too.
Our innovative packaging strive to ensure every product packaging guarantees
freshness, safety, convenience and whenever possible environmentally friendly

too. Since packaging is an integral part of our product, we propose new packaging
in this marketing plan that is not only attractive and durable, but also functional
too. Our innovative packaging strive to ensure every product packaging
guarantees freshness, safety, convenience and whenever possible environmentally
friendly too.

Beyond homes, Nestle supplies its product to hotels, airlines, vending machines,
quick-serve restaurants, supermarket, and retailers.

Distribution Planning
They distribute there products nationally and internationally through out the world.

Nestle are distributed using an indirect channel, that is, dealers. Nestle milk is sent to
warehouses after manufacture.

Nestle

Dealer

Retailer

28
 Final Consumers

They use intensive distribution for marketing coverage. Because its goals are to have
wide market coverage, channel acceptance and high total sales and profits.
Distribution is made nationally and internationally through
Motor carriers
Waterways
Airways
Railroads
Through out the country in every city and village.

It includes suppliers and retailers

Supply chain:
There are various departments
 Raw material department
 Finished goods department
From the finished goods department the product goes to the warehouses.

Export Expansion Strategy:

There are two types of export expansion strategies

1. Water fall
2. Sprinkler

Nestle use waterfall strategy. It moves gradually to different countries.

Export Entry Mode:

JOINT VENTURES OF NESTLE

Shareholders

Nestlé has about 250 000 shareholders, none of whom individually own more than 3% of
the shares. As of December 31, 2003, Swiss investors held the major part of the stock
(42%) followed by US citizens (22%) and British (10%), French (8%), and German (5%)
shareholders.

29
Unfortunately, shareholder identities are not made public under Swiss law, but we do
know that Liliane de Bettencourt, heiress to the L'Oréal fortune and the richest woman in
France, has a holding in Nestlé. Nestlé and L'Oréal have a close relationship dating back
to a shareholder pact made in 1974. Nestlé holds a 26.4% stake in the world's largest
cosmetics group and has right of first refusal over the Bettencourt family's 27.5 percent
stake for 10 years, but with no obligation to buy. Whilst it is unlikely that Nestlé will take
over L'Oréal in the immediate future, it could well do so in a few years. It already has
cosmeceutical joint ventures with L'Oreal through Galderma and Innéov.

EU clears Coke Nestle deal - Coke-Nestle joint venture

European Union regulators have cleared plans by US firm Coca-Cola and Swiss food
giant Nestle to expand an international joint venture focusing on iced teas and coffee.
In a statement, the European Commission said there were no competition concerns, as the
new operation would still face "strong competition brands" such as Unilever's Lipton.

The new enterprise, Beverage Partners Worldwide, will be based in Zurich, Switzerland.
Expanding on a previous arrangement created in 1991 for the manufacture and
distribution of Nestle's Nestea brand, the new venture will increase the number of
countries in which it operates to 40, from and initial 24.
Coke will add its Tuan Yu Di and Yang Guang teas and Planet Java coffees to the
venture, while Nestle will contribute Belte tea, which is sold in Italy.
Analysts say both companies are looking to capitalise on the growing worldwide appetite
for iced teas and coffees, which have shown better growth than soda in recent years.

Cereal Partners Worldwide

In November 1989, Nestlé S.A. and General Mills, the Minneapolis-based maker of
breakfast cereals, snacks and baking aids, formed a joint venture to produce and market
breakfast cereals worldwide, with the exception of the United States and Canada.
Based in Morges, Switzerland, CPW officially began operations in early 1991. General
Mills’ expertise and technology, combined with Nestlé’s worldwide presence and
marketing experience, quickly led to a breakthrough in Europe, which was CPW’s first
target market.

NESTLE: MILKPAK

The joint venture between Milkpak Ltd. And Nestle S.A. came about in 1988 and the
company was renamed as Nestle Milkpak Ltd. Prior to that, Milkpak Ltd., produced UHT
milk, butter, cream, desi ghee and fruit drinks at Sheikhupura factory. 21 branded product
lines were added during 1990 to 1998. Nestle Milkpak operates the largest and an
extremely efficient milk collection system in the country, which enables it to collect the
highest quality milk for production of UHT and powder milks as well as other milk based
products. The company voluntarily provides extension services of farmers in the area of

30
animal husbandry and livestock breed improvement.

Suggestions and recommendations:

As Nestle is the best company allover the world but there is some recommendations and
suggestions.
1. Their prices are little bit higher so they should low their prices to increase their
customers.
2. About 70 % people use their products why the rest don’t use them they should
conduct survey and concentrate on those facts why they are not using their
products.
3. They should also improve their advertising. Their advertising doesn’t pay long-
term effect in the mind of customers.
4. About 17% people are not satisfied from the taste of Nestle so nestle has to
improve its taste.
5. Due to a great demand of nestle Milk pak now a days there is a shortage of nestle
milk in shops sometimes they have to consider this aspect too.

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Nestlé – Good Food, Good Life