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Naveed Ahmed 071191
Rehman Baig 071172 Tariq Waseem 071194 Mazhar Cheema
063171 Hamza Ahmed 083606
Table of Contents
Executive Summary 4
NESTLE 5
HISTORY OF NESTLE 5
COMPANY VISION 5
COMPANY MISSION 5
PRODUCTS 6
NESTLE IN PAKISTAN 6
NESTLE MILKPAK 6
COMPETITORS 7
Competitive Advantage 7
Demographics of Pakistan 8
Pakistan Milk Market/Industrial Analysis 9
MILK Flow Channels in Pakistan 12
Industry SWOT Analysis 13
Strenghts 13
Weaknesses 13
Opportunities13
Threats13
Milk Supply Chain in Pakistan 14
Milk Industry of India (SWOT).....15
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Market Segmentaion of Nestle Milkpak 18
Geographic Segmentation 18
Demographic Segmentation 18
Targeting 18
Situation Analysis 18
Awareness: 18
Top of the mind recall 18
Market Share (%) 19
Market Trends 20
Market Potential 20
SWOT Analysis (Nestle Milkpak) 20
Strengths 20
WEAKNESSES 21
OPPORTUNITIES 21
THREATS 21
Positioning Strategy 22
Differentiation 22
Marketing Mix 22
PRODUCT 22
PRICE 22
PLACEMENT 23
Distribution Channels 23
PROMOTION 23
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Nestle is the world largest food company and nestle MilkPak is Nestls famous UHT milk
brand. Nestle Milkpak has south Asias biggest Plant at Kabirwala. It is targeting upper and
middle class. It is differentiating its brand by adding Iron and Vitamin C.
The Nestle MilkPak is following growth strategy. The immense competition is going in the
market; it is recommended that Nestle Milkpak should invest more in milk business and othervalue added milk products. In this way Nestle Milkpak can fulfill the local demand by locallyprocessed milk and milk products instead of the imported milk products. Nestle has brandrecognition throughout the world and they can export milk powder and other value addedproducts in future.
Nestle
Nestle is the largest food company in the world.
It is present in all five continents, has an annual turnover of 74.7 billionSwiss Frances.
There are 509 factories are running in 83 countries, having 231,000 employs.
History Of Nestle
Ourstory begins in 1867, when Henry Nestle developed a baby formula thatsaved childs life and marked the beginning of Nestle.
It is originally consisted of two companies and two products, Henry Nestleand His baby food in Vevey, and the Anglo Swiss Condensed Milk company andits condensed Milk in Cham, both in Switzerland.
His first factory was located in Vevey.
In 1875, He sold His Company and retired.
In 1880, second factory was built in bercher
In 1883, first time Nestle built a factory abroad, in Edlitz Grimmenstein
In 1890, Vevey factory produced 28 billion cans of Milk food and 2.2 millioncans of condensed Milk.
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In 1912, Nestle begins it long relationship with South Asia when Nestlecondensed Milk company start.
In 1979, Milkpak Ltd. Is founded by Syed Baber Ali. It manufactures UHTMilk, Cream and Butter as well as fruit Juices.
Company Vision
Vision of Nestle Milkpak is to expand business according to the increasingdemand of market.
As per our company vision in 2020 production capacity of all plants workingin Pakistan is being increased.
So extension of Kabirwala Plant is the example of our company vision.
Company Mission
At Nestle, we believe that research can help us to make better food, so thatpeople live a better life.
Good food is the primary source of good health, so we are trying to makegood food.
To provide fresh and pure products to the customers, we introduced (SHE) Safety,
Health and environment policy to protect health of our employs and keep cleanour surrounding environment.
Products
Bottled water
Baby food
Dairy products
Breakfast cereals
Nutrition
Prepared food
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Nestle In Pakistan
Nestle have been serving Pakistani consumers since 1988 when the parentcompany Switzerlandbased on Nestle first acquired share in Milkpak.
Nestle acquires 40% share in Milkpak.
In 1990, Sheikhupura factory started the production of Nido Milk Powdercereals;
1n 1992, Nestle took over the running of company (Kabirwala plant) andbegan to develop its Milk collection network.
In 1996 Milkpak was renamed to Nestle Milkpak Ltd.
In 1997, It becomes a fully owned unit of Nestle Pakistan.
1n 1998, Nestle Milk collection system in Punjab matures and company isable to buy all its Milk from Farmers instead of relying on contractors.
In 2005, Nestle Milkpak Ltd. Is renamed again Nestle Pakistan.
Nestle Milkpak
Dhood ki Qudrati Ghizayat Pure, nutritious goodness of Milk
Pure, rich and delicious Nestle Milkpak standardized (UHT) benefits fromNestles expertise in bringing you the best life has to offer and benefits from 140
years of consumers trust.
Encourage your family to exercise regularly, eat a healthy, well balanced dietand drink pure, nutritious Milk for good health.
Milk is a must drink for your children as it is a rich source of calcium that
helps in the growth and development of strong bones and teeth.
A 250ml Nestle Milkpak Glass consist of followings:
27-30% of calcium, 15-18% of protein, 31-34% of phosphorous,6-9% ofVitamin A and 160-169 k Cal of energy, as recommended dietary allowance bynational Academy of Science (USA).
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The contents of the above said products have the following fruitful benefits for health
improvement of Human body.
Calcium
It is important for the growth of strong bones and teeth.
Protein
It is necessary for cell and tissue growth.
Phosphorous
It is important for healthy bones and teeth.
Vitamin A
It improves vision and keeps skin and hair healthy
Competitors
The main competitors of Nestle Milkpak are:
Haleeb Milk
Olpers milk
Good Milk
Dairy Queen Milk
Competitive Advantage
Nestle Milkpak never compromises on quality.
Nestle Milkpaks extensive milk collection system ensures that the milk youget is of the finest quality.
Nestles products are available in every city and town
Nestle is using the latest technology in its production units.
Nestle makes milk powder of the surplus milk in winter and converts thismilk powder into UHT milk in summer.
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Population of Major Cities of Pakistan
Cities Population
Karachi 15 Million
Lahore 9 Million
Rawalpindi 3 Million
Faisalabad 2.6 Million
Multan 1.6 Million
Gujranwala 1.3 Million
Hyderabad 1.3 Million
Islamabad 1.3 Million
Peshawar 1.0 Million
Pakistan Milk Market/Industrial Analysis
Pakistans economy is predominantly agrarian in nature.
Agriculture accounts for 20.9 percent of the GDP.
43.4 percent of the total work force is from agriculture sector and it is the main source of livelihood for 66 percent of
the countrys population living in rural areas.
Growth in the agriculture sector registered a sharp recovery in 2006-07 and grew by 5%.
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Pakistan is the 5th largest milk producing country in the world.
An estimated 33.25 billion liters of annual milk is produced.
Approximately 50 million animals managed by 8 million farming households.
Contribution of the livestock sector to Pakistans GDP is at 11% while the processed milk sector contributes about 0.43
per cent.
The milk economy represents 27.7%2 of the total value of the
Agriculture sector.
Total Target Market Of Milk180000000
Annual Production Of Milk
(Billion Liters) 33.25
Total market of Gawala (96%) Billion liters 31.92
Total EXISTING market of processed milk (4%) Billion
Liters1.33
Need Analysis (UHT and Loose Milk)
Predicted Supply of Fresh and UHT Milk
Year
Supply of fresh milk
(Million liters)
Supply of UHT milk
(Million liters)
2007-08 33805.10 557.72
2008-09 35495.25 48.43
Projections of Fresh Milk Production and Consumption Up to 2008 09
Years
Annual Production
(million liters)
Annual Consumption
(million liters)
2008-09 35495.25 36361.25
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2009-10 37669.75 38188.92
About 1.02 billion liters milk is imported.
Projections of UHT Milk Production and Consumption up to 200809
Year
Annual Production
(million liters)
Annual Consumption
(million liters)
2008-09 648.43 353.71
2009-10 753.89 372.05
Our projections show increasing deficits in fresh milk production and increasing surpluses in UHT milk market in the run up to 2009-10, which
suggests that the industry should get ready to face challenges.
The analysis shows that Pakistans milk yields are very low, and even simple management of feed (proper timing, proper mix and so on) can
increase yield substantially. This requires intervention at two levels:
a) The farmers need to have better knowledge of feed management. This can be done by involving milk plants and provincial livestock
departments who can provide training and extension services to dairy farmers.
b) The feed industry needs to be developed substantially to provide better quality animal feed at affordable prices. Currently we do not
have sufficient supply of high quality nutrients and additives, especially in rural areas. A specific package needs to be developed with
the help of the government and in partnership with the private sector that would facilitate and encourage the development of a modern
feed industry. Further, the vast potential of using molasses as concentrate in animal feed also need to be taped.
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Milk Flow Channels in Pakistan
Dairy Farmer
Formal sector 4% Share
Informal Sector 96 % Share
Gawala (Milkman)
Retailer
Milk Collector
Distributor/Retailer
Milk Processing Plant
Milk Collection Agency
Customer
Industry SWOT Analysis
Strenghts:
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Pakistan dairy industry is the Worlds fifth largest industry
Pakistan Dairy Industry is Cheaper than Austrai, America and other deveolped countries.
Farmers are engaged in agriculture and dairy at the same time.
By-product of Agriculture is used in Dairy
By-product of dairy is used in agriculture.
Weaknesses:
Poor profitability for farmers.
Lack of contact for farmers to the market mechanism.
Poor dairy infrastructure in rural areas.
Lack of education among the farmers is making it difficult to change farm and dairy management systems.
Lack of knowledge about optimal feed.
Lack of a cold chain to protect milk quality.
Lack of access to well trained support service staff such as
Veterinarians.
Despite the huge volume of milk produced in Pakistan, processors find it hard to procure sufficient milk to meet future
consumer demand.
Increasing demand for imported products.
The product range offered to consumers is not well developed.
Production of milk falls to 55% of peak production at its lowest point in mid-June.
The demand increases 60% during June compared to December when the milk supply is ample.
Opportunities:
There is an opportunity for companies to introduce value-added products like shrikhand, ice creams,paneer, khoya,
flavored milk, dairy sweets, etc.
There is a phenomenal scope for innovations in product development, packaging and presentation.
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Threats:
Very low quality milk is provided by the milkmen to dairy farms which is a very big threat for the entire market.
The shortage of milk providing animals is also a threat for entire milk industry.
Milk Supply Chain in Pakistan
Consumer
Gawala (Milkman)
Halwai (sweet shop)
De-creamer
Milk Collector
Dairy Farmer
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Retailer
Milk Industry of Neighbour Country (India ):
Strenghths:
Demand profile:
Absolutely optimistic
Margins:
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Quite reasonable, even on packed liquid milk.
Flexibility ofproduct mix:
Tremendous with balancing equipment, you can keep on adding to your product line.
Availability of raw material:
Presently, more than 80 per cent of milk produced is flowing into the unorganized sector, which requires proper
channelization.
Technical manpower:
Professionally-trained, technical human resource pool, built over last 30 years.
Weaknesses:
Perishability:
Pasteurization has overcome this weakness partially. UHT gives milk long life. Surely, many new processes will follow to
improve milk quality and extend its shelf life.
Lack of control over yield:
Theoretically, there is little control over milk yield. However, increased awareness of developments like embryo transplant,
artificial inseminationand properly managed animal husbandry practices, coupled with higher income to rural milk
producers should automatically lead to improvement in milk yields.
Logistics of procurement:
Woes of bad roads and inadequate transportation facility make milk procurement problematic. But with the overall
economic improvement in India, these problems would also get solved.
Problematic distribution:
Yes, all is not well with distribution. But then if ice creams can be sold virtually at every nook and corner, why cant we
sell other dairy products too? Moreover, it is only a matter of time before we see the emergence of a cold chain linking the
producer to the refrigerator at the consumers home!
Competition:
With so many newcomers entering this industry, competition is becoming tougher day by day. But then competition has to
be faced as a ground reality. Themarketis large enough for many to carve out their niche.
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Opportunities:
"Failure is never final, and success never ending. Dr Kurien bears out this statement perfectly. He entered the industry
when there were only threats. He met failure head-on, and now he clearly is an example of never ending successes! If
dairy entrepreneurs are looking foropportunitiesin India, the following areas must be tapped:
Value addition:
There is a phenomenal scope for innovations in product development, packaging and presentation.
Given below are potential areas of value addition:
oSteps should be taken to introduce value-added products like shrikhand, ice creams,paneer, khoa,
flavored milk, dairy sweets, etc. This will lead to a greater presence and flexibility in the market
place along with opportunities in the field of brand building.
oAddition of cultured products like yoghurt and cheese lend further strength - both in terms of
utilization of resources and presence in the market place.
oA lateral view opens up opportunities in milk proteins through casein, and other dietary proteins,
further opening upexport opportunities.
oYet another aspect can be the addition of infant foods, geriatric foods and nutritional.
Export potential:
Efforts to exploit export potential are already on. Amul is exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle
East. Following the new GATT treaty, opportunities will increase tremendously for the export of agri-products in general
and dairy products in particular.
Threats:
Milk vendors, the un-organized sector:
Today milk vendors are occupying the pride of place in the industry. Organized dissemination of information about the
harm that they are doing to producers and consumers should see a steady decline in their importance.
The study of this SWOTanalysis shows that the strengths and opportunities far outweigh weaknesses and threats.
Strengths and opportunities are fundamental and weaknesses and threats are transitory. Any investment idea can do well
only when you have three essential ingredients: entrepreneurship (the ability to take risks), innovative approach (in product
lines and marketing) and values (of quality/ethics).
The Indian dairy industry, following its deli censing, has been attracting a large number of entrepreneurs. Their success in
dairying depends on factors such as an efficient yet economical procurement network, hygienic and cost-effective
processing facilities and innovativeness in the market place.
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All that needs to be done is: to innovate, convert products into commercially exploitable ideas. All the time keep reminding
yourself: Benjamin Franklin discovered electricity, but it was the man who invented the meter that really made the money.
Market Segmentaion of Nestle Milkpak
Geographic Segmentation:
Milkpak has segmented the market on the basis of Geographic segmentation and its target market is major populated cities
of pakistan
Demographic Segmentation:
Nestle Milkpak is also segementing the market on the basis of Income level of the people. Three Income level has been
defined; Higher, middle and lower income classes.
Targeting
Urabn areas of the country
Upper and Middle income class
Situation Analysis
Awareness:
Top of the mind recall
Due to strong brand positioning and effective advertising, Milkpak has highest awareness level .
Brand Awareness (%)
Milkpak 43
Haleeb 38
Olpers 9
Dairy Queen 7
Good Milk 2
Nurpur 1
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Market Share (%)
Good Milk 1
Milk Pak 45
Dairy Queen 9
Haleeb 22
Olpers 17
Nur Pur 4
Others 2
The table shows that Milkpak has the highest market share due to its consistent quality.
Market Trends
The growth of processed milk is increasing by 20% annually
People are getting more quality and health conscious with the passage of time
Due to impurities of Gawala milk, people are attracting towards processed milk
Key factors are:
Changing lifestyle
Influence of foreign media
Market Potential
At an average, a Pakistani consumer spends 42 % of income on food
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Consumer often prefer branded food items for both quality and status reasons
Per capita real GDP has increased at an average of 5.6 % per annum during the last three years
This increase has led to a rise in average income of people and an increase in consumer spending.
SWOT Analysis (Nestle Milkpak)
Strengths:
Strong Brand image:
Nestle has been serving the Pakistani consumers since 1988, and it has built a strong brand image due to its quality
products.
Quality product:
Nestle Milkpak is known as the best UHT milk in Pakistan due to consistency in quality.
Solid Financial position:
Nestle Milkpaks annual turnover is Rs.30 Billion which provides it a financial edge over its competitors.
Strong supply chain network:
Nestle collects Milk directly form the farmers instead of relying on the contractors. And it distribution is also very strong.
In this way it has a complete control over its supply chain.
Qualified work force
Commitment to High Quality Products
Focus on research and development
Weaknesses:
The target market of Nestle Milkpak is upper middle and high class because lower middle and poor class cannot afford to
buy UHT milk due to its premium price. This is the only weakness of Milkpak.
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Opportunities:
Estimations of UHT Milk Production and Consumption up to 200809
Year
Annual Production
(million liters)
Annual Consumption
(million liters)
2008-09 648.43 353.71
2009-10 753.89 372.05
The projected values of UHT Milk consumption and production are obtained from the ARIMA model.
More people are coming towards processed milk because loose milk is dangerous for health due to a lot of contamination.
Growth of processed milk is increasing with 20% annually so Nestle Milkpak has the opportunity to capture a large share
of market.
Threats:
Two main competitors Haleeb and Olpers are main threat for Milkpak especially the Olpers is growing very fast.
Inflation is getting higher and higher so the purchasing power of the people is decreasing day by day.
There is no entry barrier for new entrants as the Olpers has come in the market.
Positioning Strategy
Functional Positioning
Nestle Milkpak has adopted the functional positioning strategy like:
Khaalis He Sab Kuch Hai
Wohi Qudarti Maza
Jaan Banaoo
Differentiation
Addition of IRON and Vitamin A & C
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Marketing Mix
Product:
Quality Product
Nestle Milkpak has the largest market share due to its consistent quality.
Product Style and logo
Nestle Milkpak is available in different product range and stylish packaging.
Product Lifecycle
Nestle Milkpak has been in the market for a very ling time and it is at maturity stage.
Price:
Competition Based Pricing
Milkpak is holding a large share in the market due to its quality at same price as compared to competitors.
Placement:
Distribution Channels:
Milkpak is not sold directly to consumers and the complete distribution process is followed. It uses indirect channels for distribution
like:
ManufacturerDistributorWholesalerRetailerConsumer
Promotion:
Focusing on health conscious people in their advertisement.
Promotion Mix
Advertisement
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Public relations
Marketing Strategy
Nestle is pursing growth strategy. They have invested $ 70 billion at Kabirwala Plant and they are planning to invest $ 381 billion in the milk
business.
Recommendations
The immense competition is going in the market so Nestle Milkpak should penetrate more and
more in the market.
Only 4 % milk is being processed and 96% people are using loose milk so Nestle Milkpak has the
opportunity to capture a large share of the market through more creative advertising and other
promotional activities.
Nestle Milkpak should invest more on research and development because customers using loose
milk are getting a lot of contaminations especially in urban areas so Nestle Milkpak can provide
awareness to people in this aspect.
Bibliography
Mr. Imran Rasool: Executive Marketing, Nestle MilkPak.
Mr. Shehzad Anwar: Assistant Area Sales Executive Nestle Milkpak.
Mr. Mustafa Zaidi: Joint Director Research and Development, Lahore Chamber of Commerce.
Dairy reports:
White Revolution by Pakistan Dairy Development Company
Year book 2006-07, By Ministry of Food, Agriculture and Livestock.
Websites:
http://www.google.com
http://www.wikipedia.com
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