Preseted to:

Course Title: Organizational Behavior

The Institute of management science

EXECUTIVE SUMMARY

In this research project we are going to study the management strategies of Nestle. Nestle is old entrant in the Pakistan market and is facing a competition from other brands. We are focusing on the management strategies of Nestle regarding Nestle Company.

First we have given the introduction of company and its brands. Then we moved to its management and marketing strategies of nestle in Pakistan. We started from market information system then we discussed Pre marketing mix, and in the last we explained the most important part i.e. marketing mix.

Nestle came into Pakistan in 1988 when they first acquired a share in Milk pack Ltd. Today they are fully integrated in Pakistani life, and are recognized as producers of safe, nutritious and tasty food, and leaders in developing and uplifting the communities in which we operate. We at Nestle Pakistan ensure that our products are made available to consumers wherever in the country they might be. Convenience is at the heart of the Nestle philosophy, and our aim is to bring products to people's doorsteps.

ACKNOWLEDGEMENT

All thanks and praise for Almighty Allah who blessed me and enabled me for the completion of this research project. I feel much pleasure in expressing my deep regard and gratitude for our course instructor Madam -- for her critical suggestions, valuable guidance and also for giving me her time from her teaching and official activities.

I are also profoundly obliged to the valuable co-operation of Mr. Muhammad Hussein from nestle sales department, the brand manager of NPL Mr. Salah-ud-din and distribution manager Mr. Tariq Usman.

Last but not the least I am thankful to my family members, who stood side by side with me as the research work progressed.

TABLE OF CONTENTS

TITLES PAGE #

1. INTRODUCTION OF NESTLE 012. HISTORY 013. MISSION STATEMENT 024. OUR PRODUCT 045. NESTLE IN PAKISTAN 086. MARKETING AND SALES 087. BCG MATRIX 098. NESTLE PURE WATER 109. SWOT ANALYSIS 1110. EXTERNAL & INTERNAL FACTORS 1211. MARKETING INFORMATION SYSTEM 1512. PREMARKETING MIX 1613. MARKETING MIX 1814. FUTURE PLANS 2915. CONCLUSION 30

16. SUGGESTION 31 17. BIBLOGRAPHY 32

NESTLE Nestle with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestle and is today the world's biggest food and beverage company. We employ around 265,000 people and have factories or operations in almost every country in the world.The Company's strategy is guided by several fundamental principles. Nestle'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.

Since Henri Nestle developed the first milk food for infants in 1867, and saved the life of a neighbor’s child, the Nestle Company has aimed to build a business based on sound human values and principles.

While our Nestle Corporate Business Principles will continue to evolve and adapt to a changing world, our basic foundation is unchanged from the time of the origins of our Company, and reflects the basic ideas of fairness, honesty, and a general concern for people.Nestle is today the world’s leading nutrition, health and wellness company. Sales for 2007 were CHF 107.6 bn, with a net profit of CHF 10.6 bn. Nestle employs around 276,050 people and has factories or operations in almost every country in the world.

The Company’s strategy is guided by several fundamental principles. Nestle’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.Nestle Waters, the bottled water division of Nestle SA, accounts for nearly 10% of the Group’s consolidated sales, manages a portfolio of 72 brands bottled at 105 production sites, and employs a workforce of 32,000. Day after day, Nestle Waters satisfies the needs of its customers by offering the widest possible choice of bottled waters distributed through multiple trade channels.

“Short history of Nestle”

In the 1860s Henri Nestle, 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, ater Nestle's new formula saved the child's life, and soon, Farine Lactée Henri Nestle was being sold in much of Europe.

In 1905 Nestle 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, Nestle's production had more than doubled.After the war Government contracts dried up and consumers switched back to fresh milk. However, Nestle's management responded quickly, streamlining operations and reducing debt. The 1920s saw Nestle's first expansion into new products, with chocolate the Company's second most important activity.

Nestle 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. Nestle's production and sales rose in the wartime economy.

The end of World War II was the beginning of a dynamic phase for Nestle. 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.

Nestle's growth in the developing world partially offset a slowdown in the

Company's traditional markets. Nestle made its second venture outside the food industry by acquiring Alcon Laboratories Inc..

Nestle divested a number of businesses1980 / 1984. In 1984, Nestle's improved bottom line allowed the Company to launch a new round of acquisitions, the most important being American food giant Carnation.

The first half of the 1990s proved to be favorable for Nestle: 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, Nestle merged its U.S. ice cream business into Dreyer's, and in August, a USD 2.6bn acquisition was announced of Chef America, Inc.. In 2006, Jenny Craig and Uncle Toby's were added to the portfolio.

“Breif history Of nestle”:Nestlé began in Switzerland in the mid 1860s when founder Henri Nestlé created one of the first baby formulas. Henri realized the need for a healthy and economical product to serve as an alternative for mothers who could not breastfeed their babies. Mothers who were unable to breastfeed often lost their infants to malnutrition. Henri’s product was a carefully formulated mixture of cow’s milk, flour and sugar. Nestlé’s first product was called Farine Lactée (“cornflour gruel” in French) Henri Nestlé. The product was first used on a premature baby who could not tolerate his mother’s milk or other alternative products of that time. Doctors gave up on treating the infant. Miraculously the baby tolerated Henri’s new formula and it provided the nourishment that saved his life. Within a few years the first Nestlé product was marketed in Europe.

In 1874 the Nestlé Company was purchased by Jules Monnerat. Nestlé developed its own condensed milk to contend with its competitor, the Anglo-Swiss Condensed Milk Company. The Anglo-Swiss Condensed Milk Company made products like cheese and instant formulas. The two companies merged in 1905, the year after Nestlé added chocolate to its line of foods. The newly formed Nestlé and Anglo-Swiss Milk Company had factories in the United States, Britain, Spain and Germany. Soon the company was full-scale manufacturing in Australia with warehouses in Singapore, Hong Kong and Bombay. Most production still took place in Europe.

The start of World War I made it difficult for Nestlé to buy raw ingredients and distribute products. Fresh milk was scarce in Europe, and factories had to sell milk for the public need instead of using it as an ingredient in foods. Nestlé purchased several factories in the U.S. to keep up with the increasing demand for condensed milk and dairy products via government contracts. The company’s production doubled by the end of the war. When fresh milk became available again after the war, Nestlé suffered and slipped into debt. The price of ingredients was increasing, the economy has slowed and exchange rates deteriorated because of the war.

An expert banker helped Nestlé find ways to reduce its debt. By the 1920s Nestlé was creating new chocolate and powdered beverage products. Adding to the product line once again, Nestlé developed Nescafé in the 1930s and Nestea followed. Nescafé, a soluble powder, revolutionized coffee drinking and became an instant hit.

With the onset of the Second World War, profits plummeted. Switzerland was neutral in the war and became increasingly isolated in Europe. Many of Nestlé’s executive officers were transferred to offices in the U.S. Because of distribution problems in Europe and Asia, Nestlé opened factories in developing countries in Latin America. Production increased dramatically after America entered the war. Nescafé became a main beverage for the American servicemen in Europe and Asia. Total sales increased by $125 million from 1938 to 1945.

Nestlé continued to prosper, merging with Alimentana S.A., a company that manufactured soups and seasonings, in 1947. In the coming years, Nestlé acquired Crosse & Blackwell, Findus frozen foods, Libby’s fruit juices, and Stouffer’s frozen foods. Nescafé instant coffee sales quadrupled from 1960 to 1974, and the new technology of freeze-drying allowed the company to create a new kind of instant coffee, which they named Taster’s Choice.

Expanding its product line outside of the food market, Nestlé became a major stockholder in L’Oréal cosmetics in 1974. Soon after the company suffered with increasing oil prices and the slowing growth in industrialized countries. Foreign exchange rates decreased, in turn reducing the value of sterling, the pound, dollar and franc. Prices of coffee beans and cocoa rose radically, presenting further problems for Nestlé. The company decided to venture into the pharmaceutical industry by acquiring Alcon Laboratories, Inc. While trying to deal with unstable economic conditions and exploring its new ventures, Nestlé faced the crisis of an international boycott.

Many organized groups began boycotting all of Nestlé’s products because they disapproved of Nestlé marketing its baby formula in developing countries. Problems like illiteracy and poverty caused some mothers to use less formula than recommended. In a watered down formula, vital nutrients are lessoned. Contaminated water presented another problem, since the formulas had to be mixed with water. The organizations argued that the misuse of formula resulted in the malnutrition or death of many infants in developing countries.

According to Nestlé the World Health Organization never made statements tying infant death or malnutrition with baby formulas. The company didn’t deny the superiority of breastfeeding and agreed that substituting breast milk for other substances could be very dangerous. Nestlé explained that breastfeeding and non-breastfeeding mothers in developing countries often gave their babies whole cow’s milk, tea, cornstarch, rice water or a mix of flour and water. These alternatives were very unhealthy and a nutritional baby formula was a better choice. Nestlé says that it has never discouraged breastfeeding when it was possible. Nestlé agreed to follow the International Code in developing countries in 1984, and the boycott was suspended. It resumed several years later when the organizations believed Nestlé was sending free or low cost baby formulas to developing countries. Nestlé said it only sent formula to countries that allow donations for orphans,

multiple births, and babies with no access to breast milk. The company has stopped all public advertising for formula in developing countries for almost 20 years. The boycott continues to some extent to this day without satisfactory resolution.

By the 1980s Nestlé had a new Chief Executive Officer. The company focused on improving its financial situation and continuing to expand. In the one of the largest takeovers at that time, Nestlé bought Carnation for $3 billion and parted with any unprofitable businesses. International trade barriers diminished in the 1990s, opening trade with parts of Europe and China. In the 1990s Nestlé acquired San Pellegrino, and Spillers Petfoods of the UK. With the acquisition of Ralston Purina in 2002, the Nestlé-owned pet care businesses joined to form the industry leader Nestlé Purina PetCare. The leading in the food industry, Nestlé brings in $81 billion in overall sales and has 470 factories around the world. Nestlé will continue to grow, introduce new products and renovate existing ones. The company’s mission is to focus on long-term potential over short-term performance.

Nestle From 1866 To 20021866-1905The key factor which drove the early history of the enterprise that wouldbecome The Nestlé Company was Henri Nestlé's search for a healthy,economical alternative to breastfeeding for mothers who could not feed theirinfants at the breast.In the mid-1860s Nestlé, a trained pharmacist, began experimenting with variouscombinations of cow's milk, wheat flour and sugar in an attempt to develop analternative source of infant nutrition for mothers who were unable to breast feed. Hisultimate goal was to help combat the problem of infant mortality due to malnutrition.He called the new product Farine Lactée Henri Nestlé.Nestlé's first customer was a premature infant who could tolerate neither his mother'smilk nor any of the conventional substitutes, and had been given up for lost by localphysicians. People quickly recognized the value of the new product, after Nestlé'snew formula saved the child's life and within a few years, Farine Lactée Nestlé wasbeing marketed in much of Europe.Henri Nestlé also showed early understanding of the power of branding. He hadadopted his own coat of arms as a trademark; in Swiss German, Nestlé means 'littlenest'. One of his agents suggested that the nest could be exchanged for the whitecross of the Swiss flag. His response was firm: "I regret that I cannot allow you tochange my nest for a Swiss cross .... I cannot have a different trademark in everycountry; anyone can make use of a cross, but no-one else may use my coat of arms."Meanwhile, the Anglo-Swiss Condensed Milk Company, founded in 1866 byAmericans Charles and George Page, broadened its product line in the mid-1870s toinclude cheese and infant formulas. The Nestlé Company, which had beenpurchased from Henri Nestlé by Jules Monnerat in 1875, responded by launching acondensed milk product of its own. The two companies remained fierce competitorsuntil their merger in 1905.Some other important firsts occurred during those years. In 1875 Vevey residentDaniel Peter figured out how to combine milk and cocoa powder to create milkchocolate. Peter, a friend and neighbour of Henri Nestlé, started a company thatquickly became the world's leading maker of chocolate and later merged with Nestlé.In 1882 Swiss miller Julius Maggi created a food product utilizing legumes that was

quick to prepare and easy to digest. His instant pea and bean soups helped launchMaggi & Company. By the turn of the century, his company was producing not onlypowdered soups, but bouillon cubes, and sauces and flavourings.1905-1918The Company formed by the 1905 merger was called the Nestlé and Anglo-Swiss Milk Company. By the early 1900s, the Company was operating factories inthe United States, Britain, Germany and Spain. In 1904, Nestlé added chocolate toits range of food products after reaching an agreement with the Swiss GeneralChocolate Company.Condensed-milk exports increased rapidly as the Company replaced sales agentswith local subsidiary companies. In 1907, the Company began full-scalemanufacturing in Australia, its second-largest export market. Warehouses were builtin Singapore, Hong Kong, and Bombay to supply the rapidly growing Asian markets.Most production facilities remained in Europe, however, and the onset of World War Ibrought severe disruptions. Acquiring raw materials and distributing products becameincreasingly difficult. Fresh-milk shortages throughout Europe forced factories to sellalmost all their supplies to meet the needs of local towns.Nevertheless, the war created tremendous new demand for dairy products, largely inthe form of government contracts. To keep up, Nestlé purchased several existingfactories in the United States. By war's end, the Company had 40 factories, and itsworld production had more than doubled since 1914.1918-1938The end of World War I brought with it a crisis for Nestlé. Government contractsdried up following the cessation of hostilities, and civilian consumers who had grownaccustomed to condensed and powdered milk during the war switched back to freshmilk when it became available again. In 1921, the Company recorded its first loss.Rising prices for raw materials, the worldwide post-war economic slowdown, anddeteriorating exchange rates deepened the gloom.Nestlé's management responded quickly, bringing in Swiss banking expert LouisDapples to reorganize the Company. He streamlined operations to bring productionin line with sales and reduced the Company's outstanding debt.The 1920s also saw Nestlé's first expansion beyond its traditional product line. Themanufacture of chocolate became the Company's second most important activity.New products appeared steadily: malted milk, a powdered beverage called Milo, apowdered buttermilk for infants, and, in 1938, Nescafé.The Brazilian Coffee Institute first approached Louis Dapples in 1930, seeking newproducts to reduce Brazil's large coffee surplus. Eight years of research produced asoluble powder that revolutionized coffee-drinking habits worldwide. Nescafé becamean instant success and was followed in the early 1940s by Nestea.1938-1944The effects of the onset of World War II were felt immediately by Nestlé. Profitsdropped from $20 million in 1938 to $6 million in 1939. Neutral Switzerland becameincreasingly isolated in a Europe at war, and the Company transferred many of itsexecutives to offices in Stamford, Connecticut.The first truly global conflict ended forever the traditional Company structure. Toovercome distribution problems in Europe and Asia, factories were established indeveloping countries, particularly in Latin America.Ironically, World War II helped speed the introduction of the Company's newest

product, Nescafé. After the United States entered the war, Nescafé became a staplebeverage of American servicemen serving in Europe and Asia. Annual productionlevels reached one million cases by 1943.As in World War I, production and sales rose in the wartime economy: Nestlé's totalsales jumped from $100 million in 1938 to $225 million in 1945. As the end of the warapproached, Nestlé executives found themselves unexpectedly heading up aworldwide coffee concern, as well a company built upon Nestlé's more traditionalbusinesses.1944-1975The close of World War II marked the beginning of the most dynamic phase ofNestlé's history. Throughout this period, Nestlé's growth was based on its policy ofdiversifying within the food sector to meet the needs of consumers. Dozens of newproducts were added as growth within the Company accelerated and outsidecompanies were acquired. In 1947, Nestlé merged with Alimentana S.A., themanufacturer of Maggi seasonings and soups, becoming Nestlé AlimentanaCompany. The acquisition of Crosse & Blackwell, the British manufacturer ofpreserves and canned foods, followed in 1950, as did the purchase of Findus frozenfoods (1963), Libby's fruit juices (1971) and Stouffer's frozen foods (1973).Meanwhile, Nescafé continued its astonishing rise. From 1950 to 1959, sales ofinstant coffee nearly tripled, and from 1960 to 1974, they quadrupled. TheCompany's total sales doubled twice in the 15 years after World War II. Thedevelopment of freeze-drying led to the introduction, of Taster's Choice instantcoffee, in 1966.Finally, Nestlé management reached the decision to diversify for the first time outsidethe food industry. In 1974, the Company became a major shareholder in L'Oréal, oneof the world's leading makers of cosmetics.1975-1981After the agreement with L'Oréal in 1974, Nestlé's overall position changedrapidly. For the first time since the 1920s, the Company's economic situationdeteriorated as the price of oil rose and growth in the industrialized countries slowed.In addition, foreign exchange rates deteriorated with the French franc, dollar, poundsterling, and mark all losing value relative to the Swiss franc. Finally, between 1975and 1977, the price of coffee beans quadrupled, and the price of cocoa tripled. As in1921, the Company was forced to respond quickly to a radically changedmarketplace.Nestlé's rapid growth in the developing world partially offset a slowdown in theCompany's traditional markets, but it also carried with it the risks associated withunstable political and economic conditions. To maintain a balance, Nestlé made itssecond venture outside the food industry by acquiring Alcon Laboratories, Inc., a U.S.manufacturer of pharmaceutical and ophthalmic products.Taking such a step in a time of increased competition and shrinking profit marginsrequired boldness and vision. Even more than the L'Oréal move, Alcon represented aleap into unknown waters for Nestlé. But, as Group Chairman Pierre Liotard-Vogtnoted, "Today we find ourselves with a very wide range of activities, all of which haveone thing in common: they all contribute to satisfying the requirements of the humanbody in various ways."1981-1996Under a new Chief Executive Officer, Helmut Maucher, Nestlé approached the

1980s with a renewed flexibility and determination to evolve. The Company'sstrategy for this period was twofold: improve its financial situation through internaladjustments and divestments, and continue its policy of strategic acquisitions.Thus, between 1980 and 1984, the Company divested a number of non-strategic orunprofitable businesses. At the same time, Nestlé managed to put an end to aserious controversy over its marketing of infant formula in the Third World. Thisdebate had led to a boycott of Nestlé products by certain lay and religiousorganizations. This issue is still alive in some quarters, but there is no longer anysignificant boycott activity.In 1984, Nestlé's improved bottom line allowed the Company to launch a new roundof acquisitions, including a public offer of $3 billion for the American food giantCarnation. At the time, the takeover, sealed in 1985, was one of the largest in thehistory of the food industry.1996+The first half of the 1990s proved to be a favourable time for Nestlé: tradebarriers crumbled and world economic markets developed into a series ofmore or less integrated trading areas. The opening of Central and Eastern Europe,as well as China, and a general trend towards liberalization of direct foreigninvestment was good news for a company with interests as far-flung and diverse asNestlé. While progress since then has not been as encouraging, the overall trendsremain positive.Consolidation since 1996 has been demonstrated by the acquisition outright of theItalian mineral water concern San Pellegrino (1997), the acquisition of SpillersPetfoods of the UK (1998), and also with the decision to divest the Findus brand inorder to concentrate on high added-value frozen food products (1999). Since then,Ralston Purina was acquired (2002) and the petcare business is now joint worldleader and known as Nestlé Purina PetCare. In the same year, the former PerrierVittel water business was re-named Nestlé Waters, recognising the fact that thedynamic bottled water business accounts for a growing share of Group sales.Nestlé opened the 20th century by merging with the Anglo-Swiss Condensed MilkCompany to broaden its product range and widen its geographical scope. In the newmillennium, Nestlé is the undisputed leader in the food industry, with more than 470factories around the world and sales of more than CHF 81 billion. In July 2000,Nestlé launched a Group-wide initiative called GLOBE (Global Business Excellence),aimed at harmonizing and simplifying business process architecture; enabling Nestléto realize the advantages of a global leader while minimising the drawbacks of size.There have also been two major acquisitions in North America, both in 2002: in July,Nestlé announced that the U.S. ice cream business was to be merged into Dreyer's,and in August, a USD 2.6bn acquisition was announced of Chef America, Inc. , aleading U.S.-based hand-held frozen food product business.The Company's strategy will continue to be guided by several fundamental principles.Nestlé's existing products will grow through innovation and renovation whilemaintaining a balance in geographic activities and product lines. Long-term potentialwill never be sacrificed for short-term performance. The Company's priority will be tobring the best and most relevant products to people, wherever they are, whatevertheir needs, throughout their lives.

Nestle in Pakistan

Nestle has been serving Pakistani consumers since 1988, when our parent company, the Switzerland-based Nestle SA, first acquired a share in Milk pack Ltd. 

Today we are fully integrated in Pakistani life, and are recognized as producers of safe, nutritious and tasty food, and leaders in developing and uplifting the communities in which we operate. 

We at Nestle Pakistan ensure that our products are made available to consumers wherever in the country they might be. Convenience is at the heart of the Nestle philosophy, and our aim is to bring products to people's doorsteps.

We have 4 factories in Pakistan .one is at Sheikhu pura, one is Islamabad and two factories are in Karachi.History of the logo of Nestle:

The Nestlé logo was launched by Henri Nestlé in 1868 on the basis of the meaning of his name in German, i.e. little nest, and of his family emblem (that you can see here).

Henri obtained a 15-year French patent for his logo in 1868. After he retired, it was registered in Vevey in 1875 by the new owners of his company.

In 1938, the traditional nest design was combined with the "Nestlé" name to form what is called the combined mark.

In 1966 the design was simplified.

In 1988, the worm in the mother bird's beak was removed and the fledglings became two instead of three. It is said that it was meant to better illustrate the activities of the company, no longer active only in nutrition, and to reflect the average modern family of two children.

The logo we know now has just been simplified.

MISSION STATEMENT

Nestle is committed to the following Business Principles in all countries, taking into account local legislation, cultural and religious practices:Nestle's business objective is to manufacture and market the Company's products in such a way as to create value that can be sustained over the long term for shareholders, employees, consumers, and business partners. Nestle does not favor short-term profit at the expense of successful long-term business development.

Nestle recognizes that its consumers have a sincere and legitimate interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust, and that without its consumers the Company would not exist. Nestle believes that, as a general rule, legislation is the most effective safeguard of responsible conduct, although in certain areas, additional guidance to staff in the form of voluntary business principles is beneficial in order to ensure that the highest standards are met throughout the organization.

Nestle is conscious of the fact that the success of a corporation is a reflection of the professionalism, conduct and the responsible attitude of its management and employees. Therefore recruitment of the right people and ongoing training and development are crucial. Nestle continues to maintain its commitment to follow and respect all applicable local laws in each of its markets.

Nestle aim is to create value for consumers that can be sustained over the long term by offering a wide variety of high quality, safe food products at affordable prices. Nestle is a caring organization, not only care about the internal customers of the organization but also the external customers in this regard.

Nestle Products

Most people know us through our brands. Our portfolio covers practically all food and beverage categories. Some brands are only available in certain parts of the world. We would like to introduce you to some of our most important. 

We believe that food plays a key role in achieving a well-balanced person. And so our philosophy is Good Food for a Good Life!

 

BOTTELED WATER:

Today, Nestle is a thriving business with headquarters in Paris. In 2006, it sold its 72 brands of bottled water worldwide. The international brands of Nestle Waters are

familiar on tables throughout the world: Acqua Panna, S. Pellegrino, Perrier, Vittel and Contrex.

 In 1998, for the first time in its history, Nestle associated its name with a bottled

water: Nestle Pure Life. It is drinking water that has been treated and remineralized using a standardized industrial process to ensure purity and quality, and is marketed in emerging countries.A second product with the Nestle name was launched in May 2000, this time in six European countries: Nestle Aquarel. Natural spring water currently from nine different springs in France, Germany, Belgium, Hungary, Italy and Spain, Nestle 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.

BABY FOOD:

The production of infant food goes right back to the origins of the Nestle Company. Henri Nestle's 'Farine Lactée' was the first product to bear the Nestle name.

In 1867 a physician persuaded Henri Nestle 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. Nestle's new food worked, and the boy survived. From the very beginning, Nestle'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 Nestle company

quality and superior nutritional value are still as valid today for the wide range of infant formula, cereals and baby food made by Nestle. 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. Nestle 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. Nestle'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:

Nestle has long been a major player in the dairy industry, originally with well known shelf stable, i.e., dried milk powder brands such as Nido, Nespray, La Lechera

and Carnation.  We have been bringing life to milk since the very beginnings of our company.

We look for continued success through innovation and renovation in the

development of milk based products. We introduce new products constantly: in the USA liquid Coffee Mate in new flavors, and also in a soy variant for those who want to enjoy a creamy taste without milk..

BRREAKFAST CEREALS:

Nestle 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.

NUTRITIONS:

Nutrition has been a central theme for Nestle ever since 1867, when Henri Nestle first invented infant food to help save the life of a neighbour's child. Today, we have progressed beyond these beginnings to become a world leader in key categories of Nutrition, Health and Wellness to offer our consumers the food choices they need to achieve the healthy lifestyles they want.

We are leaders in infant nutrition, medical nutrition, performance nutrition,

weight management, water, powdered beverages, dairy, culinary and cereals. In all these categories we offer products that are preferred over those of our competitors in terms of taste and in addition, offer a clear nutritional advantage. This is our rigorous testing system that combines a taste preference with a scientific nutritional assessment.

BEVERAGES:

In 1937, Nestle scientists perfected a powdered coffee product that was introduced in 1938 under the brand name Nescafe 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 Nescafe plant in the United States (more than 1 million cases) was reserved for

military use only. Since then, Nescafe has become one of the world's best-known brands. In addition, Nestle 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. Nestle's ready-to-drink beverages Nestea and Nescafe are sold in various forms (cans, bottles). These are distributed by Nestle's joint-venture with the Coca-Cola Company, Beverage Partners Worldwide. Nestle is also present in fruit juices (Libby's), as well as espresso coffee in capsules (Nespresso).

PREPAID FOODS:

The Society commissioned Julius Maggi, a miller with a reputation as an inventive and capable businessman, to create a vegetable food product that would be quick to prepare and easy to digest. The results two instant pea soups and an instant bean soup helped launch one of the best known brands in the history of the food industry. By the turn of the century, Maggi & Company was producing not only powdered soups, but bouillon cubes, sauces and flavorings. Maggi merged with Nestle in 1947. Buitoni, the authentic Italian brand, which has been producing pasta and sauces in Italy since 1827, became part of the Nestle Group in 1988.

PETCARE:

Nestle entered the petcare business with the purchase of Carnation in 1985, and we consolidated our position in Europe with the acquisition of the Spillers brand in 1998, and further with the acquisition of Ralston-Purina in 2001, creating Nestle Purina PetCare.

Technologies to develop and add value continually for pets and their owners are engineered into our current product range. These include state-of-the-art nutritional innovations, such as products which help maintain feline urinary tract health, or innovations for the most discriminating of pets and their owners.

Marketing and sales

We want Nestle products to be within reach for every single Pakistani. Yet nutritional value and quality remain the most essential ingredients in all our brands.

  Over the years, food products have evolved from mere commodities to a statement of lifestyle. As consumers get more health and quality conscious, producer are also giving importance towards better quality. We continue to play our part in facilitating this revolution by launching value-added products such as NESTLE CERELAC, NESTLE Raita, NESTLE NESVITA, NESTLE FRUITAVITALS and NESTLE NIDO and many other dairy and non-dairy products. Consumers can avail many of our products with branded active benefits that no competitor product offers. Nestle brands are designed to suit your lifestyle and your needs. You can take advantage of the best nutrition in a way that is suitable for your tastes and lifestyle.

For instance, you can purchase NESTLE Juices in several different sizes depending on your needs: a personal-sized 200 ml for on-the-go consumption, or a litter pack for your fridge.

All our key brands are equipped with the Nutritional Compass that ensures all the nutritional information about the product is accessible thanks to our user-friendly nutritional labeling and guidelines.

We're proud to be among the only companies in Pakistan to venture outside the

commercial mode of communication, offering programs catering to better child nutrition and good parenting.

Nestle Consumer Services is the main interface between you and the company, and we make every effort to ensure that your voice is heard. After all, it's your satisfaction that really counts.

When Henri Nestle prepared his first boxes of infant formula for sale, he put his address on the packages. Today, the Nutritional Compass on our packaging encourages consumers to Talk to Nestle, expressing the same belief in openness and accessibility.

Consumer Services doesn't just provide us with feedback on our company, brands and products. It helps us gain important consumer insights: what are the relevant values you hold dear? What do you look for in our products?

The Nestle global vision is to be the leading health, wellness, and Nutrition Company in the world. Nestle Pakistan subscribes fully to this vision. In particular, we envision leading a dynamic, professional workforce – proud of its heritage and bullish about the future. Meet the nutritional needs of consumers of all age groups – from infancy to old age, from nutrition to pleasure, through an innovative portfolio of branded food and beverage products of the highest quality.

Deliver shareholder value through profitable long-term growth, while continuing to play a significant and responsible role in the social, economic and environmental sectors of the country. We have profitable and diversified high quality food and beverage product portfolio. Our brands are the preferred choice in their categories. Consumer insight drives all aspects of our marketing and communication efforts. Our communications to the consumer are relevant, cutting-edge, and adhere to the highest standards of responsible communication. Our company is seen as the No. 1 career destination for talented, motivated and ambitious professionals. Our result-oriented organizational structure ensures effective communication and empowered self-management.

Our milk collection and agriculture services will continue to play the primary role in development of the dairy sector in rural Pakistan. Our proactive innovation and renovation culture is the key to our success in the marketplace. Fully integrated systems (Nestle Pakistan, suppliers, customers) ensure efficient business processes. Non-strategic activities and products are outsourced or discontinued.

PORTFOLIO ANALYSIS OF NESTLE (BCG MATRIX)

High

Market Growth Rate

STAR

Juices, cereals

?

Noodles, Nescafe

Cash cow

Nestle pure water ,milk

Dog

POLO (local manufactured)

Low

high low Relative Market Share

NESTLE WATER

NESTLE Pure Life is pure, safe and healthy drinking water for you and your family. Every bottle of NESTLE Pure Life is produced with the Nestle Safety System and is carefully sealed with a proprietary seal. An optimal balance of essential minerals, enhancing the health and wellbeing of your family, matches purity of the highest standards. No wonder its Pakistan’s favorite water because more people trust it than any other brand.

For your convenience NESTLE Pure Life is available in non-returnable 330ml, 0.5 liter and 1.5 liter bottles at retail outlets and Bulk bottles for Home & Office Delivery in 19 & 12 liter (12 liter is available at retail outlets).

#2 biggest brand worldwide

21 countries where Nestle PURE LIFE is distributed

400 glasses of Nestle Pure Life were drunk every second around the world in 2005

SWOT Analysis

Marketing strategies are being made after the analysis of external and internal audit. External factors include the market threats and market opportunities, while internal factors include the strength and weakness of product. After analyze all above we formulate strategies and then implement it. SWOT analysis of nestle pure water is as under Strength:

Following are the strength of nestle pure water

Nestle water is no. 1 selling water in Pakistan. Nestle is world famous brand name and people trust them. Nestle is v much careful about their products quality, thus there water

quality is good. They are one of the biggest companies of the world so they have solid

financial position and they can compete with any big competitor. Mostly the people who buy Nestle water are health conscious so they use

Nestle water, as it is hygienic and good for health. The supplies network of Nestle pure water is the biggest in Pakistan.

Weakness:

Price of the Nestle is not very economical and Income level of Pakistan is low and most of the people lies in lower middle class so they cannot afford Nestle pure water. Nestle is a very big company so their decision making process is up to mark.

Opportunities: Now a day’s people are more aware and they are getting health conscious

day by day, they know that tap water is not safe for their health Govt. is taking steps to boosting the purchasing power of the public, the

more the purchasing power more will be the buyers Karachi, which is the biggest city of Pakistan and the biggest consumer of

pure water because the water quality of that area is not good Now a days the trend has been settled in most of the offices, banks,

universities and even in homes people are using dispensers instead to water filters or using the tap water so that open the new opportunities for the pure drinking water

People of the Pakistan is consumption oriented

Threats: Many big competitors like coca cola and Pepsi are now in the market and

they are investing heavily in Pakistan in into pure water industry so it is always difficult to compete with big competitors.

Nowadays government department, WASA is also taking precautionary measures to provide safe and healthy drinking water to every home and they are also installing filtered plants to every locality to easily access by everyone, so by that this would be to a big threat for Nestle drinking water in up coming days.

Strategies on the basis of SWOT analysis

On the basis of SWOT analysis Nestle is focusing on following strategies

Cost leadership strategy:

As they have much resources and they have a very good positioning in the customer’s mind and people trust them so Nestle is now going for mass marketing, Nestle is trying to cover every type of people whether belong to low income class or high income class.

That’s why they are now packing water on 12 litter and 17 litter cans. Their cost is much lower and they are charging less price of it so more and more people buy it.

Product differentiation strategy:

Nestle differentiate their product on these basis:

Their service is very efficient as compared to others. Nestle is now supplying water door to door for their regular customers Nestle water is available now in many packing they are more convenient

as well as economical. For your convenience Nestle water is available in non-returnable 330ml, 0.5 litter

and 1.5 litter bottles at retail outlets and Bulk bottles for Home & Office delivery in 19 & 12 liters (12 liter is available at retail outlets).

Their quality check is much better than others so there is no need to bother about the quality and the taste of water.

External and internal factors

On the basis of external and internal factors we make our policies. Internal factors includes customer, supplier, distributor, competitor and external factors consists of demographic factor, economic factors, physical factors, technological factors, political and legal factors and social, cultural factors and religious factors.

Internal factors

Following are the internal factors affecting our policies

Customer:

As we know the Customer is the king of market so all of our policies revolve around the customers, more the customer more will be the profit so while making any policy we keep in mind the liking and disliking of the customer. We can proudly say that we have the largest number of customer in Pakistan’s water industry. Following table shows the customer of pure water in Pakistan. We have market share of 65% of water industry in Pakistan, this figure depicts that we have captured a largest number of consumer of pure water in Pakistan.

Supplier: Nestle don’t have such suppliers they have their own production of bottles and we use tap water as a raw material.

Distributors:We have developed an intensive distribution strategy that brings our

products to your door, through effective communication, door-to-door sampling, and exciting consumer promotions. Day after day, Nestle Waters satisfies the needs of its customers by offering the widest possible choice of bottled waters distributed through multiple trade channels. We have four distributors of NPL in Lahore and 450 distributors across the country.

We have three channels of distribution: Modern trade Traditional trade Horica (food services)

Modern trade:

Through this channel we supply NPL to supper markets, big stores, supper stores e.g. HKB, AL-FATAH, AKBARI Super Store etc.

Traditional trade:This channel supplies NPL to general stores, utility stores, PAAN shops and other

small shops.

Horica trade:

Via this channel we cover Hospitals, Hotels, restaurants, institutes etc.

Distribution System Nestle has divided distribution system in two ways:

1. Food Service Department --- 35% to 30% of Volume2. Retail Service --- 65 % to 70% of Volume

Competitor:

While comparing Nestle with other competitors in the market, Nestle is not facing any major competitor in the market as for as the competitors of Nestle are concerned, in that list Aquafina and Kinlay are at the top.There are so many national and international companies, which are the competitors of the Nestle. But people likes Nestle’ Pure Life.

MAIN COMPITITORES:AVAAQUAFINAKINLAYASKARINAEMATGREENLAND (PURE WATER)

WATER SURVEY:

As per Retail Audit - Year 2004

Bottled Water Selling Outlets in Franchise: 5372 OUTLETS %AGE

Outlets with Nestle Availability: 4004 74.53 %Outlets with Askari Availability: 480 8.94 %Outlets with Aquasafe Availability: 266 4.95 %Outlets with Others Brands Availability: 1976 36.78 %

External factor:

There are many external factors which affects our marketing strategies.

Following are the external factors that affect our marketing strategies of nestle pure water.

More the education more will be the awareness about brand and quality food.

Further educated people are more health conscious so education can affect our sale.

If the income level of people is high then purchasing power will be high so they will purchase more so there is direct relation between income level of people and our sale.

Consumption behavior of Pakistani people is high so they consume more goods Nestle always respects local cultures so we never launch any product which is

against the cultural values . As Pakistan is Muslim country so we cannot add any ingredient which is

prohibited in Islam or which is not “Halal”. As the education level in Pakistan is not very high and most of the people do not

read news papers and magazines so our main source of promotion is television. In those cities where population density is high there is high consumption so

nestle mainly focusing on those cities in which population density is high.like Karachi,Lahore,Faisalabad.

If the inflation rate is high then there will be decrease in purchasing power .so inflation indirectly affects the company’s sale.

In the areas where climate condition is favorable there will be more demand. Like in multan climate is hot so there is more demand of nestle pure water as compared to Murree.

As nestle water is the branded item so the people who are brand conscious will prefer to use nestle water .so nestle is focusing more on the posh areas.

Distribution of nestle water is easy in those cities where infrastructure is good enough.

Market information system

Survival in a market especially in the presence of large number of competitor is not an easy job. One should always be well aware about the environment. What is their competitor doing what strategies they are following .the is the feedback of customers of our products and what customer wants etc. All above type of information we needed is gathered from the marketing information system.

Market information helps us not only at the time of new product launching and in any but as we discussed earlier we should be well aware about everything in the marketWe want to build a long-term relationship of trust and loyalty with you. This helps ensure that you, our consumers, are happy, satisfied and able to live fulfilling lives.

Accordingly, Nestle representatives are poised to provide prompt service and relevant information whenever needed. We try to talk to you, but more, we listen to you. Only by hearing what you say can we understand what you want and need. Only by understanding your needs can we serve you to the fullest and help you achieve your aspirations. From our information system we come to know about: What are the competitors in the market making water?What price they are charging from customer? What type of packing is attracting the customer?What is purchasing power of people of a particular area?What is the budget of competitors on advertisements? Etc….

Our sources of gathering information are:

o Researcho Team operating in the market

After gather the required information we formulate our marketing strategies and plans.

PRE MARKETING MIX

In pre marketing we segment the market, then target the market, after targeting we try to build the image on our target customers and increase the sale by differentiation. SEGMENTATION

Market is segments on different parameters such as ;

Size of a particular market Income level Consumption pattern Growth of particular segment itself Geographic location

Age group

TARGETING:

Nestle is targeting mainly on those city in which density of population is high such as Lahore, Karachi, Faisalabad etc. Nestle is also focusing on educated class because they know the values of health in life.

The economic condition of general public is quite against the price of the product, so that’s why they are focusing on middle higher group and higher class.

Nestle is also capturing all big and small organization as they like to use quality water for their employees. So on the basis of targeting they are using differentiated strategy.

As our target market is not the lower class and lower middle class so Nestle water should be provided in that place where its demand is high i.e. in big cities and in good areas.

Water should be provided where there is a need of your water ,like in Karachi tap water quality is not good so people need pure water.

POSITIONING:

We position nestle water as a safe & healthy water for the entire family & for all consumption needs. Nestle is famous all over the world due to its quality product. So its image in the mind of people is very good. The positioning of Nestle pure water is very positive in the minds of consumers.

DIFFERENTIATION:

As water does not have any taste, smell or color so its not possible to differentiate it on any tangible benefits so its purely differentiated on perception. But we differentiate it by its packing and our services.

Our service is very efficient as compared to others. Nestle is now supplying water door to door for their regular customers. Nestle water is available now in many packing they are more convenient as well a

s economical. For your convenience Nestle water is available in non-returnable 330ml, 0.5 litter

and -1.5 litter bottles at retail outlets and Bulk bottles for Home & Office delivery in 19 & 12 liters (12 liter is available at retail outlets).

Their quality check is much better than others so there is no need to bother about the quality and the taste of water.

Nestle is also introducing flavored water

MARKETING MIX

After the pre marketing mix, the next stage is marketing mix in which we decide what is the product we are going to introduce in market, what is the price of product, how water is promoted, where should we place our product.

Marketing Mix is defined as a set of controllable tactical marketing tools that firm blends to produce the response it wants in the target market. The marketing mix consists of every thing the firm can do to influence the demand for its products. The many possibilities can be collected into four groups of variables known as the four P's.

1. Product2. Price3. Place4. Promotion

PRODUCT:

A product is anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a want or need; it includes objects, services, persons, places, organizations and ideas.

We can also say that product stands for goods and services combination the company offers to target market.

Nestle Pure Water:

Our selected product of Nestle is Nestle pure water. Nestle water is consumer goods. As consumer goods include:

1. Convenience good2. Shopping good3. Specialty good

Nestle water falls under the convenience goods because it is low priced and widely available.

INDIVIDUAL PRODUCT DECISIONS:

We now look at decisions relating to the development and marketing of Nestle product figure below shows the important decision, we will focus on decisions about product attributes, branding bottling, labeling, and product-support services.

Product: Attributes ->Branding->Packaging->Labeling->Product support

PRODUCT ATTRIBUTES:

Developing a product involves defining the benefits that the product will offer. These benefits are communicated and delivered by product attributes such as:

1. Product quality2. Product features3. Product design

Decisions about these product attributes greatly affect consumer reaction to Nestle product.

PRODUCT QUALITY

Quality is one of the marketer's major positioning tools. Quality has two dimensions level and consistency.

Product quality means the ability of a product to perform its functions. It includes the product's overall durability, reliability, precision and other valued attributes. Nestle has chosen the quality level that matches target market needs and wants.

Beside quality level, Nestle consistently delivers the desired level of quality to consumers. Always strives for high level of quality consistency.

PRODUCT FEATURES:

A product can be offered with varying features. A company can create higher-level models by adding more features.

Features are a competitive tool for differentiating the company's product from competitor's products. Following are the features on which Nestle has competitive advantage.

1. Quality2. Availability3. Convenient prices

BRANDING:

Consumer view a brand name as an important part of the product and branding can add value to the product. A name, term, sign, symbol or design or a combination of these intended to identify the goods and services of one seller or group of seller and to differentiate them from their competitors.Brand:

BRAND DECISION:

The company must first decide whether it should put a brand name on its product.

Branding has become so strong that today hardly anything goes unbranded. Nestle water brand decision is based on the fact that company's name "Nestle " is most popular and is perceived by the consumer as quality product so they have put the their parent name “Nestle” on their pure water.

PACKAGING:

Packaging includes the activities of designing and providing the container or wrapper for a product. Nestle water has secondary package, because its bottles is thrown away immediately after the consumption. the carton in which pure water is available is environment friendly and is disposable.LABELING:

Labeling is also part of packaging and consists of printed information appearing on or with the package.Labeling Decision:

Labels may range from simple tags attached to products to complex graphics that are part of the package. Labels of Nestle have complex graphics and perform several functions which include:Identify:

It identifies the product or brand such as "Nestle pure life " stamped on each of its pure water and other product lines also.

Describe: Nestle's label describe several things about the product - who made it, where it was made, when it was made, its contents, how it is to be used.Promote: Nestle label promote the product through attractive graphics besides all these functions performed by Nestle 's label. It also describes.

Unit Pricing: It states the price per unit of standard measure.Open dating: It also states the expected shelf life of the product.

MAJOR REASON FOR USING THE BOTTLED WATER

It tastes like sweet natural water, 1%

Affordable, 1%Water of international

standards, 2%Doctor advised, 2%

Use for children, 1%Artificially purified

water, 0%Easily available, 5%

Clean, 16%

Free of germs, 49%Well reputed

brand, 6%

Good for health, 11%

Use while traveling, 8%

Free of germsCleanGood for healthUse while travelingWell reputed brandEasily availableDoctor advisedWater of international standardsIt tastes like sweet natural waterAffordableUse for childrenArtificially purified water

Almost half (49%) of the respondents revealed that the main reason of using bottled water is that “it is free of germs”

Brand Awareness:

How do you come to know about the first Brand, which you have mentioned? SOURCE OF AWARENESS:

When respondents were asked how they came to know about the first brand they mentioned, it was revealed that the television is the main source of awareness.

PRICE:

Doctor, 3%Banner, 2%

Ad on Bus, 2% N.Papers, 2%DK, 2%

Board/ Hoarding Board, 3%

Already know , 4%

Poster, 4%

Relatives/Friends 5%

Others, 0%

Television, 51%

Shop/Shopkeeper, 20%

Television

Shop/Shopkeeper

Relatives/Friends

Poster

Already know

Board/ Hoarding Board

Doctor

Banner

Ad on Bus

N.papers

DK

Others

Price:

The amount of money charged for a product or service, or sum of the

values that consumers exchange for the benefits of having or using the product or services. As price gives us the profit so this P is very important for business price of product should be that which gives maximum benefit to the company and which gives maximum satisfaction to the customer.

Nestle water is not lie in necessities so its price should not be very high Price should be set according to the product demand of public. Price should be that which gives us more revenue. Price should not be too low or too high than the price competitor is charging from

their customers otherwise nobody will buy your product. Price should be that by those customers are motivated to buy more. Price must be keeping the view of your target market.

FACTORS TO CONSIDER WHEN SETTING PRICES

A company's pricing decisions are affected both by internal company factors and external environmental factors.

INTERNAL FACTORS AFFECTING PRICING DECISION

The marketing objectives, marketing-mix strategy, costs and organizational etc affecting the price of a product.

Market share leadership:

In the beginning of its establishment and for several years Nestle was consistence with market share leadership. As it wanted to enjoy largest market share with lowest costs and highest long-run profit. Nestle had reached for the price and marketing program that has achieved this goal.

Product-quality leadership:

After getting the market share leadership especially in the pure water market, Nestle has adopted. Product-quality leadership as Nestle wants to provide better quality product as compare to its competitors at convenient prices. this normally calls for charging a high price to cover such quality and the high cost but Nestle has set its price

at competitors lends to stabilize the market and to keep the loyalty and import of customer and resellers.

COST: Cost plays a vital role in the price of a product. So concentration on cost is very important. Nestle is a multinational company, also focus on the cost. As they are also producing the water bottles for their pure water. This is a strategy which helps in cost reduction and as we know if the cost is minimum the price will also become less and it help to generate maximum revenue.

Nestle has gained experience in manufacturing and sales of liquid milk, power milk etc based upon or derived from fresh fruits and vegetable, it has learned how to do it better with higher volume, Nestle has become more efficient and has gained economics of scale. As a result average cost tends to fall with accumulated production experience.

EXTERNAL FACTORS AFFECTING PRICING DECISIONS

External factors hat affect Nestle's pricing decisions include the nature of market and demand, competition and other environmental elements.

The market and demand: whereas costs set the lower limit of prices, the market and demand set the upper limit.

Nestle also has monopolistic competition as a range of prices occurs because sellers can differentiate their offers to buyers. As pure water in market varied in quality, features or style or the occupying services can be varied. Buyers see differences in sellers product and will pay different prices for them. Sellers try to develop differentiated offers for different customer segment and in addition to price freely use branding, advertising and personal selling.

GENERAL PRICING APPROACHES

Nestle set its pricing strategy based on two pricing approaches.

1. Cost-based pricing2. Competition-based pricing

Cost-based pricing:

Cost based pricing: Adding a standard mark up to the cost of the product. Nestle’s cost based pricing is fairer to both buyers and sellers. Price of Nestle water is fixed. They provide retailers facility to add their own profit to price, but to limited extent.

Competition-based pricing:

It means going rate pricing. Nestle sets the prices based largely on the competitors. They use the going sale pricing when demand elasticity is hard to measure, firms feel that the going price represents the collective wisdom of the industry concerning the price that yield a fair return. They also feel that holding to the going price will prevent harmful price wars.

PRODUCT MIX PRICING STRATEGY:

Nestle looks for a set of prices that maximizes profit on the total product mix which are often based on demand and cost and faced different degree of competition.

Product-line Pricing:Nestle has product line pricing because it sets the price steps between various

products in a line based on cost differences between product, customer evaluation of different features and competitors prices. It charges following retail prices for its pure water.

PRICE ADJUSTMENT STRATEGIES

When the marketing situation changes Nestle adjust its prices and adopt price adjustment strategies, to account for various customer differences and changing situation.

Discount and allowances pricing

Discount is a straight reduction in prices on purchases during a stated period of time.

Functional discount: A functional discount is offered by Nestle to trade channel member who perform certain function such as selling and storing.

Seasonal discount: A seasonal discount is price reduction to the reseller to purchase merchandise out

of season by the Nestle e.g. in winter season when the demand reduced and retailers are reluctant to buy merchandise.

Promotional pricing

With promotional pricing Nestle temporarily priced its product below list price. Nestle also use special event pricing on certain occasions to attract more customer.

PLACING:Placing stands for company's activity that makes the product available to the

target consumer. Nestle maintains a large body of retailers that sells company's product.

DISTRIBUTION CHANNELS:

A set of interdependent organizations involved in the process of making a product or services available for use or consumption by the consumer.

Marketing channel decisions are among the most important decisions that management faces at Nestle, as it directly affect every other marketing decision.

THE NATURE OF DISTRIBUTION CHANNELS:

Nestle use intermediaries to bring its products to market. So it try to forge a distribution channel.

There are two types of marketing channels or the way to reach the customer.1. Direct marketing2. Marketing through distributors

Nestle uses both direct marketing and marketing through distributions as its channel level.

DISTRIBUTION CHANNELS FUNCTION:

Nestle distribution channel perform major function to carry research and sale. They not only move product from the company but perform key function for company.Information.

Nestle distribution channels helps in gathering and distribution of marketing research and intelligence about actors and forces in the marketing environment needed for planning and aiding exchange.

PROMOTION:Producing a quality product, pricing it attractively and making it available for the

target consumer is not the only problem companies need to solve. Modern era is the era of communication with customer, assuring customer satisfaction, demands for personal and non personal communication with the target customer to build a relationship with them.

Nestle is using a marketing communication program to promote its pure water bottle. Its promotion mix is a blend of advertising, sales promotion, personal selling and public relation.

FACTORS IN SETTING THE PROMOTION MIX

Consumer Product:

Type of product affect the relative ratio of a promotion tools Nestle water are

consumer product which demands for more advertising, with sales promotion and a relative less ratio of spending a personal selling and public relation. But it’s not the case with Nestle's strategy. They are spending more of their promotional budget on trade promotion and public relation.

Push Strategy:Promotional mix is greatly affected whether a company uses push or pulls

strategy. Nestle has selected push strategy from the very beginning. Company has direct distribution channel and it is making the product intensely available at every retail store in adequate quantity.

Purchase state:

In purchase state the consumer had passed through states of awareness, knowledge, liking and preference. The target audience is aware of the product and its attributes and they purchase Nestle with all of its attributes, quality and price.

PROMOTION MIX

ADVERTISING:

Advertising is any paid form of non personal presentation and promotion of ideas, goals or services by an identified sponsor.

Nestle strategy is to annually plan for advertising. As it allocates budget and hires advertising agency.

Objective of Advertising:

Advertising objective is a specific communication task to be accomplished with a specific target audience during a specific period of time. Nestle produces diverse products. For each product the objective is different according to market share, demand, and quality of product. Pure water advertising has following two objectives.

Reminder Advertising:Nestle set its objective of advertisement to remind its pure water and recognize its

name during the whole year. Nestle maintains higher level of mind awareness among the consumers during the whole year and to remind the consumer the name of company in the market during the consumption season; from April to September season.

Persuasive Advertising:

To face the stiff competition Nestle’s advertisement campaign always gives support to the pure water giving perception of the product. It claims that the quality of pure water is best. It is pure, fresh, and good in taste and smell.Advertising Strategies:

Advertising strategy has two elements creating advertising messages and selecting advertising media.

ADVERTISING MEDIA

Advertising media is selected on the basis of cost of advertising media. That media is preferred which is least costing for the company and reach the consumer market very well.

Profile of major media types selected by Nestle is given as:

Television:

Television is selected on the basis that is most appealing to the human senses but Nestle gives ads on television only before the most consumption season. PTV is the channel that is selected on the basis of its popularity among the masses. As for television advertising is concerned the purpose in only to remind and give awareness to the consumer. The recent advertising campaign in run on PTV, Tenports, Geo, ARY etc during prime time because at that time the target market is more likely to watch television.

Newspapers:

Newspapers are selected on the regional basis. All newspapers that give ads of Nestle.

Magazines:

Magazines are selected on the basis of demographic factors, long life good pass along readership. Among magazines She, Herald, Teenager and all college magazines and digests; printed locally, give Nestle ads.Billboard

Nestle has also adopted billboard media, these are selected due to low cost high repeat exposure and flexibility. This year Nestle has displayed billboard about on every road and remind the consumer that Nestle has taken a further step in improvement of quality.

PUBLIC RELATIONING:

Public relations means building good relations with the company's various publics

by obtaining favorable publicity and building up a good corporate image.

Contact:These channels find and communicate with prospect buyers. They each the

prospect buyers easily than its competitors and overcome their shares as well.

Matching:Nestle shape and fit the offers to the buyers needs including such activities as

manufacturing grading, assembling and packaging.

NegotiationThey negotiate with retailers to reach an agreement on price and other terms of

offer so that ownership and possession can be transferred. Nestle specially negotiate with retailers in low selling season and offer certain price offers to attract the product.

BRAND AWARENESSIt is evident from the results of current study that Nestle remained the most frequently recalled bottled water (77%). The main source of acquiring information about the bottled water is found to be Television (51%) followed by shops (20%) and shopkeepers (20%)

BRAND USAGELittle more than half of the respondents (58%) reported of consuming Nestle

during last three months. It is also reported to be the most often used brand (93%). It is indicated that the main reason of using bottled water is that it is “free of germs / hygienic” (49%).

Future plans

Nestle is planning to enhance its investments in Pakistan and by the year 2014, its total stakes would reach an aggregate of $374 million. The company has chalked out long-term investment plan. Nestle is setting up a most modern and latest milk plant with the cost of $ 70 million which will be operative within next couple of months. Company would invest to the tune of $209 million in five years period ending 2009. Nestle is investing $70 million in milk production by increasing capacity of milk powder by 40,000 tones annually; $44 million would be injected in Sheikhupura factory, $12 has

been allocated for expanding milk collection, and $31 million in bottled water plants.

CONCLUSION

The objective of this research was to study marketing strategies of nestle pure water. From our report it is concluded that nestle has a good reputation as a strong consumer brand. 66% of the consumers use Nestle’s products regularly. 60% of the consumer’s associate quality with Nestle.57.3 % of the consumers prefers Nestle over other brands of pure water that are available in the market .66% consumers bought Nestle water because of its brand image which is of good quality products. This is also proved by the statistical and graphical analysis of the data obtained from consumers that they are quite satisfied from nestle pure water. Nestle formulating a good strategy and they are trying to go for mass-marketing.

SUGGESTIONS

Nestle’s pure water need to expand their customer equity. Though 57.3% people prefer Nestle over other brands 43% prefer others. Nestle should benchmark with other brands to compete in this industry.

Nestle should improve its promotional activities on television regarding nestle pure water.

Nestle’s pure water are expensive so they should decrease their prices as big competitors like Aquafina enter into this industry. Aquafina beat nestle in almost every country except Pakistan .So nestle should defense their position.

58% consumers use this product occasionally, 24%

weekly and 14.7% daily. Nestle should try to increase this usage rate through new users by advertising, more usage by convincing people about the high quality of the juices.

Flavored water should be introduces in Pakistani market. From this they can differentiae their product from others and they can get more market shares.

BIBLOGRAPHY

Principle of marketing by Kotler and Armstrong www.Nestle.comwww.views.pk/www.nestle-purelife.us/www.wikipedia.comMarketing management by Philip kotler