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MARKETING PROCESS

MARKETING

There are many definitions of marketing. The better definitions are focused upon customer orientation and satisfaction of customer needs. Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others KOTL ER Marketing is defined by the American Marketing

Association as the activity, set of institutions, and

processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Marketing is a Systematic process which starts from Customer and ends on Consumer along with profitability. Marketing is successful if customer becomes a repeated consumer after getting full satisfaction. AS-HAM.
NESTLE CORPORATION

MUHAMMAD ARSLAN)

(AMBREEN, MARKETING PROCESS

SAMREEN, HAMAD, AMINA,

MARKETING PROCESS
It is a process which consists of four steps enabling the marketers to perform their strategies according to their plans. These steps are: ANALYZING MARKET SITUATION It is based on information and research including SWOT and PEST analysis of market DEVELOPING MARKETING MIX It includes development of 4Ps namely Product Price Place Promotion MARKETING IMPLEMENTATION It involves turning plans into actions. MARKETING CONTROL Being the last step it identifies the gap between planned and actual goals

Marketing process
MARKETING CONTRO DEVELOPING MARKETING ANALYZING IMPLEMENTATION MARKETING MIX MAEKETING SITUATION

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MARKETING PROCESS

MILK PAK

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Milk Pack was the first tetra pack introduced in Pakistan in

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1981 with green and white packaging that is associated with Pakistans flag. It was a brand that promised natural and healthy milk. It further gained strength when it was backed by Nestle Switzerland a that well established in to it and and and reputable international brand bought its It expanded activities. scope has

recently

highlighted the use of iron that has been added to the milk and communicated this in its advertising and packaging. The tag line also reads as making a stronger household.

Milk Collection The core raw material of Nestle MilkPak is milk. Over the last Twenty Eight years, the company's prime concern has been to improve the quality and volume of milk for UHT processing and for other milk based products. the company successfully established its own collection system and expanded its operations over a very large milk shed area in Punjab. Owing to this tremendous growth in the volume of an extremely high quality raw milk, Nestle MilkPak now produces a superior quality and better tasting UHT milk, with longer shelf life.

Today, Nestle MilkPak can boast of the largest milk collection network in the country, unmatched in size, productivity and efficiency. Milk is collected through a NESTLE CORPORATION

5 vast network of village milk centers (VMCs), sub-centers and centers. At these MARKETING PROCESS centers, chillers have been installed to lower milk temperature to 4C for preventing bacteria development during long hauls to the factories, which are undertaken by a large fleet of specially insulated tankers. Nestle gathers High Quality milk through a comprehensive strategy, intensive education program for the farmers and the milk collection staff, up gradation of milk loading and transportation system, increase in the chilling capacity and above all, adherence to the highest acceptance standards at all milk collection points, including the factories.

MARKETING PROCESS
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ANALYZING MARKETING SITUATION MARKETING PROCESS

SWOT analysis A SWOT Analysis is conducted by the company position itself to in take the opportunities so that it is able to advantage of particular

environment and to avoid or minimize environmental threats. In doing so, the organization attempts to emphasize its strengths and moderate the impact of weaknesses. The analysis is also useful for uncovering strengths that have not been fully utilized and in identifying weaknesses that can be corrected. Matching information about the environment with the organization's capabilities enables management to formulate realistic strategies for attaining its goals. A SWOT Analysis of Nestl MilkPak is as follows:

Internal analysis Strengths

Socially Responsible Company. NMLs products enjoy strong brand image and market pull. Innovative and constantly growing product line. NML launched 17 new products, including variants of existing products in recent past.

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SalesMARKETING PROCESSresource strength in terms of physical resources force is the major of the company. Marketing strategies established by the company are innovative and lure customers. Financial, marketing and sales strategies are formulated by gauging the customer demands. Periodic research carried out to judge market trends. It is a large scale organization, with abundant funds and has the capability of acquiring weaker firms by throwing them out of competition. The recent acquisition of the water brands Aqua and Fontalia provide an example for this strength of the company. Multinational. Growing Sales and profits. Major shareholder in the food industry of Pakistan. Aggressive Marketing. Efficient Distribution networks through out the country. Quality Products. Environment Friendly. Skilled labor. Educated staff. Large number of offerings. Pre purchase virtual display. Arrangement of events. Good background of the company. Easy to approach outlets. Physical evidence Strong Brand image Quality product
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Solid MARKETING PROCESS Financial position Strong supply chain network Qualified work force Commitment to High Quality Products Focus on research and development Estimations of UHT Milk Production and Consumption up to 2008 09 Year Annual Production (million liters) Annual Consumption (million liters) 2008-09 2009-10 => 648.43 353.71 => 753.89 372.05

Weaknesses
Selective investment due to uncertain economic and political conditions. Feasibility of new products needs to be analyzed, e.g. Nestea was launched some years back but it failed because no customer demand for it existed. Relatively a new company in comparison to its rivals e.g. Lever Brothers. Low levels of inventory maintained can be dangerous. No credit sales. Low sales margins due to highly value added products. They cannot launch many of its expensive international brands due to the lower income groups. Physically impossibility to have target market. There is weak marketing of MilkPak as there is no advertisement of MilkPak on official website. Lack of awareness among the target market. It Dependency on others (govt. & sponsors) for the arrangement of
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events. The target market of Nestle MilkPak is upper middle and high MARKETING PROCESS class because lower middle and poor class cannot afford to buy UHT milk due to its premium price. It is a main weakness of MilkPak that there are different companies of milk but the name of nestle MilkPak is always stand in the last because of low advertising and marketing.

External analysis
Opportunities Pakistan is the seventh largest producer of milk in the world with annual output of over 22 billion liters. There are substantial growth opportunities considering the average yield of Pakistani animals at only 1,100 liters/annum as compared to 6,000 liters/annum for animals in Europe and USA. There are nearly 20 million milk producing animals in the country, mostly in Punjab (80%). The overall milk market in Pakistan is 20 billion liters, out of which processed milk contributes only 3 million liters. Nestl MilkPak along with other processed milk businesses contribute only 2% to this large market. Nestl MilkPak has expanded its product range by entering the cold dairy market recently by launching Nestl plain yogurt and now fruit yogurt is also added to it. To expand the cold dairy products range, Nestl fruit yogurt is the latest addition to this group. The cold dairy market offers many opportunities for the company which can capitalize these products by banking on its superior quality milk. The coffee brand also offers many opportunities for the company to expand by tuning the taste of the masses towards coffee. Credit policy can be adopted to increase sales.
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Threats MARKETING PROCESS

Price fluctuations due to rupee devaluation as raw material are imported. The uncertainty of economic conditions poses a great threat as the major funds invested in the country come from outside Pakistan. The present economic crisis in the world, led to the withdrawal of foreign management from the company and the investment has come to a halt. Competition with Nestls owns smuggled brands. Effect of Seasonalitys upon sales. Imported raw material, in some of the companys products. Major player may enter target market Legal and ethical issues. Market segment growth could attract new entrants. Economic slow down can reduce demand. 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. Taste of consumer has already developed which is hard to change. Current market situation Today, Nestl MilkPak produces in over 81 countries and achieves 98% of its turnover outside Europe. Nestl MilkPak is the worlds largest milk company, which does 98% of its business. It has an annual turnover of 70 billion Swiss francs, 522 new factories in 81 countries, 200 operating companies, 1 basic research outer and 20 technological development groups, has more than 231,000 employees and more than 8000 products around the globe. There
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are three companies co-ordinate the activities of some 200 operating MARKETING PROCESS companies around the globe. Their functions and details are as follows: The first, Nestl MilkPak, holds the financial shares in the allied companies. It also checks the profitability of these companies and to ensure the profitability of the group as whole. The second, Nestl MilkPak, has two areas of activities that are as follows: Research and technological development, Technical assistance Beside this, it provides know-how in engineering, marketing, production, organization, management and personnel training on a continuous basis. The third company is Nestl World Trade Corporation that oversees the import and export of merchandise worldwide.

MARKET ANALYSIS
In 1986, Haleeb entered the market with its distinctive blue packaging and positioned itself as the thickest natural milk. The two brands were the main players in a market that is the worlds fourth largest milk producing country. Then in 2006, Engro Foods launched Olpers milk in a market dominated by two highly entrenched strong brands.

Customer Profiling (Customer Data):

Transaction Details

Frequency, amount and timing of purchases, items bought, prices paid, Use of cash or credit.
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Acquisitions Details
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Marketing channel, MARKETING PROCESS Promotion type, and Address/city.

Appended Database Data

Life Style

Profession/occupation, vehicle ownership, Internet use, Travel, Pets, and Hobbies.

Financial Investments, credit card usage and type, living expenses, and credit worthiness.

Demographic Age, income, education, gender, marital status, and Number of kids.

Almost all type of peoples are the consumers of the milk. Geographic
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Own/rent, MARKETING PROCESS urban/rural, size of city, region, and size of dwelling.

Market Research Data

Behavioral

Purchase patterns, why they bought, what they use the product for, Responsiveness to different marketing channels.

Attitudinal Product preferences, willingness to try other brands, price sensitivity, shop for convenience, Opinion of the company and the competition.

DEVELOPING THE MARKETING MIX

The most interesting part of commerce is the marketing; this is the latter addition of the business tools. It starts with conceiving idea of presenting a product, traditionally producers were interested in producing those goods only which has existing pull, whereas now because of marketing tools they are producing with the intention of pushing the product into consumers
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hand. Marketers use numerous tools to elicit desired response from their MARKETING PROCESS target markets. These tools constitute a marketing mix. Marketing Mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. McCarthy classified these tools into four broad groups that he called the four P's of marketing: Product Price Place Promotion

Product
Defining the characteristics of your product or service to meet the customers' needs.

Price
Deciding on a pricing strategy. Even if you decide not to charge for a service, it is useful to realize that this is still a pricing strategy. Identifying the total cost to the user (which is likely to be higher than the charge you make) is a part of the price element.

Place or distribution
Looking at location (e.g. of a library) and where a service is delivered (e.g. are search results delivered to the user's desktop, office, and pigeonhole or do they have to collect them).

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MARKETING PROCESS

Promotion
This includes advertising, personal selling (e.g. attending exhibitions), sales promotions (e.g. special offers), and atmospherics (creating the right impression through the working environment). Public Relations are included within promotion by many marketing people.

Product
Nestl is a famous group of companies. It is well known for its rendered services in food sector. Nestl has more than 70 consumer products in Pakistan. everyone. Nestl has recognized the special nutritional requirements which start from infants and covers the range to all age groups. They add specific nutrients to milk and encourage children to consume nutritious products with different flavors, colors and shapes. For small children, and families Nestl offers smaller sizes and portion able packs. Teens like lots of affordable enjoyment, with big portions and a succession of tastes and textures, particularly when they are buying the products themselves. They also favor ready-to-drink beverages, and here they can offer them a choice of refreshing teas or milk-based drinks NESTLE CORPORATION Good nutrition is

essential from the very beginning. That's why Nestl strives to provide the best for

16 Good tasting lighter meals and healthier milks formulated specifically for adults are MARKETING PROCESS examples of how Nestl caters to these needs. Nestl Clinical Nutrition has a range of good tasting products to help them do it. Nestl milk and dairy products are recognized throughout the world.

Pricing
Nestl has its own set of techniques for setting the prices of the product. It does not primarily focus on the competitors pricing strategies. It emphasizes on the market demand of the product. Nowadays market is going through tough recession, so they set their prices keeping in view the purchasing power of the customers. Moreover the prices of the products are also subjected to the type of consumer product. If the product is a daily use then it can have a minimum price to attract the customer towards your product. Thus the company cannot influence much on the prices. Price Structure General: The prices of Nestls products are and they are within the customers buying power. Nestl also give discounts to their regular customers. Nestl has set prices in such a way that it offers the most quality products with acceptable prices. Its prices are very much comparable with its competitors. It also considers the fact that Pakistani market is not as much economically viable as the other foreign markets. So it keeps in mind all the below line factors while setting the prices of the products.

Place
Selection of place is also a very pivotal step in the success of the organization. The place must be right where the customer wants to be, it must be easy assessable and approachable to the customer. Nestl makes it sure that its product is available at every corner of the country regardless of rural or urban areas. Nestls NESTLE CORPORATION

17 main focus is to make the product within the access of every consumer so that the MARKETING PROCESS consumer should have no difficulty in getting the product. It also helps Nestl to compete with the competitors more effectively as by this it can make the product available to maximums number of target customers. Nestle is catering the market of Gujrat in very effective manner by providing its products in each and every corner which starts from the city and covers the rural areas specially its product, MilkPak. Middlemen and distribution channels

In Nestl the distributions role within its marketing mix is to take the product to its target market. Today executives have come to realize their customers' satisfaction - or dissatisfaction - was linked to the performance of their supply chain. Bernard Teiling, assistant vice president of business process integration for Nestl S.A., which is based in Vevey, Switzerland, says supply chain management (SCM) is "both a source of competitive advantage and a lever for profit margin." Even though the complexity and the cost of SCM have continually increased over the last two decades, companies must be proficient in this process. "If you are not good at SCM, someone else will be," says Teiling. Nestl defines SCM as the two-way management of the flow of goods, services and information from suppliers to manufacturers, wholesalers, distributors, stores -- to the end user. SCM is especially critical for the food industry because of the ease of spoilage. Teiling feels a consumer products company remains profitable only if it has the right product at the right price in the right place at the right time. However, getting these stars to line up only happens when "the entire supply chain works as one."
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Seen that way, SCM becomes a branding issue. When Nestl places its logo MARKETING PROCESS on a product, the logo represents "a seal of quality." Protecting that quality makes Nestl responsible for its entire supply chain. Teiling says consumers don't care if a supplier or distributor had a problem. "If something goes wrong in the supply chain, it ruins things for the consumer," says the Nestl executive. Even though Nestl feels responsible for every link in the supply chain, it outsources many of those activities. "No one company can claim to do everything from A to Z in the food industry. Today that's impossible," says Teiling. For example, Nestl does no farming. And the world's largest food company sells almost nothing directly to consumers. With the arrival of the Internet, companies today want to manage their supply chains through "an efficient interface with an eMarketplace." Many different exchanges are developing. Teiling describes them "as a tremendous opportunity for Nestl to work effectively to create new levels of performance."
Nestl is using all the three levels of channel to ensure that its product should readily available to all its users throughout the country. Like it is using a zero level channel for distributing its product to its customers. It uses mostly the 3-level channel. For example in case of milk products, it uses 3-level channel to penetrate into the as there is enough competition. On other hand, in case of mineral water such as Ava is uses zero level channel as it supplies the jumbo bottles of Ava directly to hotels.

Promotion
Nestl sets its promotional budget on annually basis. Nestl is well aware of the importance of the effectiveness of the promotional program. It designs its promotional program using all the available promotional tools. NESTLE CORPORATION

19 Advertisements MARKETING PROCESS Advertisement plays very important role in promoting the image and name of the company. Because you can give your massage and persuade the person (person may be Customer, client etc) to buy your product, therefore effective advertisement plays important role in the success of product. They give full-page coverage in newspaper and also made advertisement in the television. Also providing advertisements on online facility through creating Web Page of their Nestl, giving all required information about the products. They also advertise in weekly newspapers and magazines The budgets for various consumer products vary depending on the sale and demand of the product. Like on milk Nestl has 75% of sales out of the total sales. So similarly it spends more on promotional activities of milk. Promotional themes Nowadays a lot of companies are using certain promotional themes to promote their product better than their competitors. For example, in case of milk is uses the theme of Khalis creating a view that its milk is closest to pureness. Similarly is uses the promotional theme for Nestl Pure life for mineral water It also uses other below line activities to promote its product like by using the following techniques: Free sampling Door to selling Prizes Market positioning Present image in the mind of customers is given below: COMPANY QUALITY OF PRODUCT Nestl NESTLE Better Excellent CORPORATION Excellent Good SERVICES LOCTION EXTRA FACILITY

20 Haleeb Normal MARKETING PROCESS Halla Good Normal Normal Normal Good Normal Average

In last two decades Nestl Pakistan Ltd. has re-positioned itself by improving the elevations by its products and allocating better customer services; because of it has the best position in the mind of the customers among three companies. It also proves from the increasing market size of Nestl.

IMPLEMENTATION OF MARKETING STRATEGIES

Market segmentation and target strategy
It is really a big market and it is always difficult to segment the big market. There are many uses for segmentation. Nestls strategies about their marketing are in the form of marketing segmentation. They have implemented their strategies by doing segmentation. Secondly they have made their distribution plans, network and methods very strong. Marketing channels and strategies about pricing and positioning are also in main focus.

Needs Based Segmentation

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

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MARKETING PROCESS

P rod uct Segmentation

Manufacturers diversify products within each needs base to appeal to buyers with different tastes and wealth.

Customer Segmentation
Customers are segmented based on their needs and product preferences. Segments grow or shrink over time as a product improve, become outdated or tastes changes.

Global Segmentation
Insurance firms and medical and legal practices also use product segmentation, and sometimes attempt to cover all the product space.

In-store Display Segmentation

Nestle have also segmented Milk Pack on the bases of In- Store display segmentation. In this type of segmentation the company have given different shelves in bib stores and also given the chillers to some of the agent having the Milk Pack sticker upon them but in Pakistan unfortunately the shop keepers are not using the shelves properly and they have put other brand products on those shelves. Drug stores, grocery stores, book stores, and other retail outlets use NESTLE CORPORATION

22 segmentation in order to keep like products close to each other within the store, MARKETING PROCESS making shopping convenient and cross selling more profitable.

Market Positioning: They will position our product as a high quality product consumer focused. Messages like They knows your taste better than us, Nestle MilkPak now at your door step; Add additional flavors to your life will help us portray our picture clearly and distinctly. MilkPak will position our product against the competitors and gain competitive advantage through our efficient promotional methods, using innovations, and by reaching closer to our target market through the arrangement of events like BASANT, VALENTINE DAY and etc. In short consumers will view us as a product providing highly quality, in terms of taste, customer focused and, at the same time reasonably priced as compared to others.

Pricing strategies of MilkPak

MilkPak was first launched in 1988 in Pakistan. Actually this is the Pakistani product and purchased by the Nestle Company. Price of the MilkPak set after the market survey. In this market survey the survey team want to search that how much value consumer actually wants to give this product. They provided the milk to the different people without telling them the name of the company and ask them what should be the price of this one glass milk. In this way company know the willingness of the people that how much money customer actually want to spend on that product. After this they checkout their cost on that product and after analysis they set the price of the MilkPak. After launching it in the market they again check the consumer behaviour regarding price of the MilkPak, and if consumer is satisfy with the
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product MARKETINGask question to judge the behavior of consumer that if the then they PROCESS price of the MilkPak increased by the company then what will they do. If consumer still satisfied then they increase the price of the MilkPak. CDL have adopted value pricing, in which they charge fairly low price for a high offering. Value pricing says that the price should represent a high-value offer to consumers. Value pricing is not a matter of simply setting lower prices on ones products compared to competitors. A matter of reengineering the companys operations to become a low- cost producer without sacrificing quality, and lowering prices significantly to attract a large number of value-conscious customers. Setting price by looking the competitors The competitors of MilkPak are Haleeb milk, olphars and good milk but the biggest competitor is open milk. Total requirement of milk in Pakistan is 31 billion litres in which only 3 billion litres are provided by packed milk. 28 billion litres are provided by milkmaid. So if the nestle want to set price according to their competitors then they have to set price according to the price of open milk which is not possible.

Marketing Channels
These are the sets of the interdependent organizations involved in the process of making a product or service available for the use of consumption. Channel Function and Flows A marketing channel performs the work of moving goods from producer to consumers. It overcomes the time, place and possession gaps that separate
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goods and services PROCESS MARKETING from those that need or want them. It perform number of functions:

They gathering information about potential and current customer, competitors, and other actors and forces in the marketing environment.

They develop and disseminate persuasive communication to stimulate purchasing They place an order to the company They provide for the successive storage and movement of the physical products.

Channel Level

Manufacturer
It is a two-level channel, MilkPak has its own distributors which are suppose to deliver the MilkPak to the wholesaler as well as the retailer,.

Consumer Wholesaler & Retailer Distributor

Distribution Situation: Company is using 2 channels for distribution of MilkPak

Retail outlets (indirect channel) Sales promotion officers (direct channel)

Retail Outlets (indirect channel): There are many retail outlets in all over Pakistan, which provide every day consumable items to the
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consumers.. 80 percent of the milks sales would be through indirect MARKETING PROCESS channels. Direct Sales Promotion Channel: MilkPak is being distributed to institutions like government institutes, offices, teashops, caters, schools, colleges and marriage halls. This channel will constitute 10 percent of the total milks sales. Distribution Outlets: to increase the distribution of MilkPak in all over Pakistan these outlets are open.. Distribution There are many authorized distributors of MilkPak. Company has its own network of vans, which deliver the milk to all the retail outlets early morning. The number of vans operational in different cities and rather then this 135 local vans are also used to supply the milk in pakistan. Intermediaries: MilkPak identifies the types of intermediaries available to carry on its channel works: 1. Company Sales Forces MilkPak expand its direct sales force, assigning the sales representative to territories to contact all prospects in pakistan 2. Stalls in BAZAAR The company also introducing stalls in Sunday Bazaar, Tuesday Bazaar and Friday Bazaar at different location of pakistan and especially to those areas where the sales volume of the MilkPak would be low in order to encourage the consumer. Integrated marketing communication: Company have a complete imc plan in which they that how can the company will inform their consumer about the new, upcoming product and value added services to the existing product. The sources which can use by
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the company to inform their consumers are print, electronic as well as MARKETING PROCESS through their websites. Unique selling proposition: MilkPak is a trend setter in market. They first introduce the packed milk in market. The usp of MilkPak is khalis he sub kuch hai. They provided their consumer pure milk and this the usp of nestle MilkPak.

MARKETING CONTROL
Problems Faced By Nestle
Nestle is facing the problem that is regarding the quality of milk . it is being perceive that infant or child belonging to poor family who use low quantity of milk then required in daily use are getting effected. It is hard to agree the customer to swich to pack milk because of taste which is huredel for further expansion

Recommendations
Nestle must state in writing that it accepts that the international code and the subsequent relevant World Health Assembly Resolutions are minimum requirements for every country. Nestle must state in writing that it will make required changes to bring its Baby Food Marketing policy and practice into line with International Code and Resolutions.

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MARKETING PROCESS

SUGGESTIONS
Nestle Milk Pack should concentrate on all age groups (by showing its benefits) instead of concentrating just on child growth. They should try to create strong brand loyalty among customers. They should keep in mind the competing environment while designing their strategies. They should concentrate on customer retention. They should improve their customer services. They should try to exploit the loopholes of their competitors products. Should try to cater the mind of the customer by creating some attractive jingle like Haleeb: Chai banaye khoob haleeb..
REFERENCES
www.nestle.com

Economy survey of Pakistan 2008 www.Google.com

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MARKETING PROCESS

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