MARKET Markets may be any of a variety of different systems Markets vary in size, range, geographic scale, location, types and variety of human communities Market is any structure that allows buyers and sellers to exchange any type of goods, services andinformation Market facilitates trade and enables the distribution and allocation of resources in a society Markets allow any tradable item to be evaluated and pricedMARKET DEMOGAPHICS Population: 180,000,000 Growth rate: 1.828% Birth rate: 27.74 births/1,000 population Death rate: 8 deaths/1,000 population Net migration rate: -1.24 migrant(s)/1,000 populations 0-14 years: 40% (male 33,293,428; female 31,434,314) 15-64 years: 56.9% (male 48,214,298; female 46,062,933) 65 years and over: 4.1% (male 3,256,065; female 3,542,522)INDUSTRY ANALYSIS POPULATION 180000000 RURAL 116916480 URBAN 63083520 PEOPLE WITHOUT WATER 44%
BOTTLE WATER USAGE 9% PEOPLE WITHOUT BOTTLE WATER 91728000 TOTAL TARGET MARKET 9072000MISSION STATEMENTNestlé is dedicated to providing the best foods to people throughout their day, throughout their lives,throughout the world. With our unique experience of anticipating consumers needs and creatingsolutions, Nestlé contributes to your well-being and enhances your quality of life.VISION STATEMENTWe envision Nestlé to grow in the shortestPossible time into the number one food company inPakistan with the unique ability to meet the needs of consumers of every age group from infancy toold age,For nutrition and pleasure, through development of a largeVariety of food categories of the highest qualityWe envision the company to develop an extremelyMotivated and professionally trained workforce, whichWould drive growth through innovation and renovation
We aspire, as a respected corporate citizen, to continuePlaying our due role in the social and environmentalSectors of the countryORGANIZATION PORTFOLIOESTABLISHMENT:Nestlé was founded in 1866 by Henri Nestlé with headquarters in Vevey, Switzerland. It has employedaround 250,000 people and has factories or operations in almost every country in the world.COMPANY TYPE:It is one of the worlds biggest food and Beverage Companies.BRANDS:Nestle offers a variety of brands of which the most well known are Nescafe, Nestlé Kit Kat, Nestlé juicesand Nestlé bottled waters.Nestlés existing products grow through innovation and renovation while maintaining a balance ingeographic activities and product lines.The Companys priority is to bring the best and most relevant products to people, wherever they are,whatever their needs, throughout their lives.BRAND PORTFOLIOIn 1992, Nestlé was the first company to dare to launch a mineral water, Valvert. Today Nestlé Water isestablished in 130 countries and markets about 70 different brands.In 1998, for the first time in its history, Nestlé associated its name with bottled water "Nestlé Pure Life".The brand was launched in Pakistan and soon appeared in Brazil, followed by Argentina, Thailand, thePhilippines, China, and Mexico in 2000. In 2001, India, Jordan, and Lebanon followed, and in 2002,Egypt, Uzbekistan and the United States.
Today the Nestle Pure Life brand is present in 20 countries around the world, across all continents - Asia,Near East, South and North America and Europe.Wherever it is to be found around the world, Nestle PURE LIFE answers some crucial consumer needs,focused on three core pillars: Trust, Quality and Service.Nestle PURE LIFE offers an ideal balance between a healthy supply of minerals and a pleasant, refreshingtaste, making it suitable for the whole family. It contains essential minerals such as: Calcium: necessary for building strong bones and teeth, Magnesium: necessary for muscle contraction and transmission of pulses.COMPANY FROM FOUNDATION TILL NOW1866 Companys foundation1905 Merger between Nestlé and Anglo-Swiss Condensed Milk Company1929 Merger with Peter-Cailler-Kohler Chocolate Suisses S.A.1947 Merger with Alimentana S.A. (Maggi)1971 Merger with Ursina-Franck (Switzerland)1985 Acquisition of Carnation (USA)1988 Acquisition of Buitoni-Perugina (Italy)
1988 Acquisition of Rowntree (GB)1992 Acquisition of Perrier (France) Nestlé acquires Victor Schmidt & Söhne, Austrias oldest producer of confectionery, including the1995 famous Mozartkugeln. Nestlé, through the Perrier Vittel Group, expands its mineral water activities with the outright1997 acquisition of San Pellegrino. Nestlé acquires Spillers Petfoods of the UK and strengthens position in the petfood business1998 which began in 1985 with the acquisition of the Carnation Friskies brand. Divestiture of Findus brand (except in Switzerland and Italy) and parts of Nestlés frozen food1999 business in Europe. Divestiture of Hills Bros, MJB and Chase & Sanborn roast and ground coffee brands (USA).2000 Acquisition of Power Bar.NESTLES HISTORY AND INNVATIONS:The key factor which drove the early history of the enterprise that would become The Nestlé Companywas Henri Nestlés search for a healthy, economical alternative to breastfeeding for mothers who couldnot feed their infants at the breast.In the mid-1860s Nestlé, a trained pharmacist, began experimenting with various combinations of cowsmilk, wheat flour and sugar in an attempt to develop an alternative source of infant nutrition formothers who were unable to breast feed. His ultimate goal was to help combat the problem of infantmortality due to malnutrition. He called the new product Farine Lactée Henri Nestlé.
Nestlés first customer was a premature infant who could tolerate neither his mothers milk nor any ofthe conventional substitutes, and had been given up for lost by local physicians. People quicklyrecognized the value of the new product, after Nestlés new formula saved the childs life and within afew years, Farine Lactée Nestlé was being marketed in much of Europe.Henri Nestlé also showed early understanding of the power of branding. He had adopted his own coat ofarms as a trademark; in Swiss German, Nestlé means little nest. One of his agents suggested that thenest could be exchanged for the white cross of the Swiss flag. His response was firm: "I regret that Icannot allow you to change 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 by Americans Charles andGeorge Page, broadened its product line in the mid-1870s to include cheese and infant formulas. TheNestlé Company, which had been purchased from Henri Nestlé by Jules Monnerat in 1874, responded bylaunching a condensed milk product of its own. The two companies remained fierce competitors untiltheir merger in 1905.Some other important firsts occurred during those years. In 1875 Vevey resident Daniel Peter figuredout how to combine milk and cocoa powder to create milkchocolate. Peter, a friend and neighbor ofHenri Nestlé, started a company that quickly became the worlds leading maker of chocolate and latermerged with Nestlé.In 1882 Swiss miller Julius Maggi created a food product utilizing legumes that was quick to prepare andeasy to digest. His instant pea and bean soups helped launch Maggi & Company. By the turn of thecentury, his company was producing not only powdered soups, but bouillon cubes, and sauces andflavorings.First came infant and milk nutritionInnovation and an entrepreneurial spirit have been Nestlé characteristics from the start.In 1886, while the Page brothers in Cham were building Europes first condensed milk factory, for theAnglo-Swiss Condensed Milk Co., Henri Nestlé, in Vevey, was developing his infant cereal "Lactous FarinaNestlé "launched in 1867.The two companies merged in 1905 to become the "Nestlé & Anglo-Swiss Condensed Milk Co.". The
former had developed a successful long-life product from fresh milk, a highly perishable raw material,whilst Henri Nestlé had achieved international acclaim due to the remarkable qualities of his invention.Given the highly infant mortality rate, due mainly to the lack of an appropriate breast-milk substitute,his infant cereal respond to a real need.His name and the Nestlé symbol (Nestlé means "little nest" in German) were guarantee of the consistentquality of his product, the result of painstaking scientific research.Then came product diversificationContacts with other leading companies that have innovative ideas led to acquisitions anddiversifications.The company expanded in 1929 through the acquisition of the, Cailler Peter and Kohler chocolate companies,Followed in 1947 by the Maggi group and its culinary productsThus Nestlé became the heir to inventions such as Daniel Peters milk chocolate (1875) and JuliusMaggis vegetable-based soups (1884) and stock cubes (1908).Nestlé accumulated knowledge, as well as the perseverance and competence of scientists like MaxMorenthaler, made possible the huge success of the Nescafe launch in 1938.Subsequent acquisitions opened doors to new areas, such asPreserves (Crosse & Blackwell 1960),
Frozen foods (Findus, 1962),Mineral water (Vittel, 1969)Pet care (Carnation, 1985).Others reinforced the companys position in established areas, for example,Italian cuisine (Buitoni, 1988),Chocolate and confectionery (Rowntree, 1988)Performance foods (PowerBar, 2000).At the same time, reseat at Nestlé resulted in the development of new products such asMilo (1934),Nestea (1944),Nesquick (1948),NAN (1962),Yes (1979),Nespresso (1986),LC (1994) and
Nestlé Pure Life (1998).Existing products such as Nescafe, Maggi culinary products or the various dairy products have beenconstantly improved and adapted to current consumer life-styles.Today and tomorrow a company that cares about consumers al around the globe Today, Nestlé is the worlds leading food company. Its international R&D network supports theproducts made in 479 factories in 81 countries.Being a company dedicated from the start to food, Nestlé remains sensitive to culinary and eatinghabits, and responds to specific nutritional problems, whilst also setting and matching new trends suchas growing out-of-home consumption.CONTRIBUTION TO OTHER SECTORSocialIn the social sector, the company has created over 1200 permanent job opportunities for the skilled,unskilled and professional manpower, apart from hundreds of contractual jobs. It has also played aremarkable role in expansion and vitalization of the dairy and livestock sector.EnvironmentAnother key area where the company is proud to make a contribution in the environment is by makingavailable the processed and packaged dairy.Registered & Corporate Office 308 Upper Mall, Lahore
63 B – D, Chaman Housing Scheme, Opposite Askari Park Quetta, Baluchistan, Pakistan. Quetta Phone : (081) 834887 Fax : (081) 822297 74-W, Yaseen Plaza, 1st Floor, Blue Area, Islamabad, Pakistan Islamabad Phone : (051) 2271874-5, 2824328 Fax : (051) 2821899RATIO ANALYSIS is useful essentially for:InvestorsAssessment of earnings and dividend prospects.Growth in economic value of investments with respect to the risks undertaken.Bankers/Creditors concernAssessment of the ability of the business to service its debt obligations.Debt coverage.Proper utilization of assets financed.Governments concernEvaluation of the economic contributions of the business entity.Determination of the entitys financial strength to carry social and developmental programs.
THE ANALYSISThe financial ratios discussed here are those which are derived simply and directly from financial statements. These ratios are used in analyzing the financialstatements in ordinary course of business activity. The ratio analysis can be divided into three broad categories:The Solvency Ratios.The Efficiency Ratios.The Profitability Ratios.Competitor Analysis• NESTLE• Aquafina• Sufi• Kinley• Other• TOTAL SHARE• 9072000• TOTAL SHARE OF COMPETITORS– NESTLE 2903040
– AQUAFINA 1995849– SUFI 453600– KINLEY 1451520– OTHER 2268000WATERNESTLÉ Pure Life – PET BottlesThe year 2001 saw the successful completion of three years of outstanding business for NESTLÉ Pure Life – PET Bottles of 0.5 and 1.5 liters. The exceptional brandsuccess was the result of expanding national distribution and an increasingly loyal customer base. The brand has revolutionized the Pakistani market by tapping thereal consumer need for pure, healthy, and safe water and has successfully dominated a key strategic businessNESTLÉ Pure Life – Home & Office ServiceIn 2000, NESTLÉ Pure Life established a successful Home and Office (H&O) delivery service in Lahore, which has substantially grown ever since and has come todominate the 5- gallon market. Successful marketing and sales strategies offer greater convenience and better value to the consumers. The brand is poised forstrong growth in future.
AVA & FONTALIATo expand its H&O water delivery business countrywide, Nestlé acquired major share holdings in both these businesses in 2001. While AVA is an important nationalplayer in the branded bottled water category, both in PET and H&O servicesNESTLÉ PURE LIFE & BULK WATERThe launch of Nestlé Pure life in December 1998 was a truly historic event. This marks Nestlé Milkpaks entry into the countrys fastest growing water market. At thesame time Pakistan became the first country where Nestlé launched this new worldwide brand. It has been launched in 11 markets internationally with its lead andbest performing market being in Pakistan. The reporting of Nestlé Pure life is not directly under the Nestlé headquarters at Vevey, Switzerland. Rather all the waterbrands at Nestlé have to report to Perrier Vittel, the pioneer and lead French Brand in the water market. Other than that, all the research concerning the contents iscarried out at the Research Center at Vevey.SEGMENTATION STRATEGY• Psychographic Segmentation• Demographic Segmentation• Geographic Segmentation• Behavioral segmentationTARGET MARKET• Targeting Strategy Of Nestle Pure Life Is Differentiated Marketing• Nestle Pure Life Targets Both Genders• Targets The Upper And Middle Class People Who Are Health Conscious• Tourists Are Also The Target Market Of Nestle Pure Life
POSITIONING• Newly Drinking Water With Safety And Security• Pure Water Pure Relationship• Safe And Healthy Drinking Water• Public Awareness MessageINDUSTRIAL SWOT ANALYSISStrengths– the lifestyle of the people is changing– DEMAND is increasing day by day in the bottle WaterWeaknesses– the lack of awareness and the poverty– the lack of availability in the remote areas is also the strong reasonOpportunities– people are becoming more health consciousThreats– Low Entry Barrier– Economical UncertaintySWOT ANALYSISStrengths:• High Quality Obtained By The Usage Of A Special Production Process.
• Own Industrial Laboratories That Perform Constant Control For Physical-chemical And Bacteriological Parameters.• Daily Sensor Water Analysis for Flavor, Color And Odor.• Great And Neutral Taste Which Suits All The Family• Safety And Purity From The Source To The Consumer• Produced Locally, Close To The Consumer.Weakness:• Nestle Pure Life Is Relatively Expensive Than Other Brands.Opportunities:• Water Is An Essential Part Of Life And Everyone Prefers To Drink Safe And Healthy Water.• Nestle Is A Trusted Brand For Providing Good Quality Products.Threats:• Tough Competition From Aquafina And Kinley.MARKETING MIX1-PRODUCT:Nestlé Pure Life is drinking water that has been treated and rematerialized using a standardized industrial process to ensure purity and quality. Pure and Safe NestlePURE LIFE refills your body with water to maintain a good level of hydration. It provides a balanced mineral formula (on average 150-170 mg per liter), contributingto daily mineral requirements.Structure of water Concentration, Mineral Component not more
General mineralization (mg/l) 220 mg/l Calcium 40 mg/l Magnesium 15 mg/l Potassium 20 mg/l Bicarbonates 60 mg/l Fluorides 0,6 mg/l Hardness Mg-eq/l 3PRODUCT TYPE:It is a consumer product and a convenience good.PRODUCT ATTRIBUTES:Nestle Pure Life is a pure, safe and healthy, colorless and odorless drinking water with a pleasant taste.BRAND NAME:Nestle Pure Life.BRAND POSITIONING:Premium drinking waterBRAND IMAGE:Safe and healthy waterBRAND EXTENSION:Nestle is soon introducing flavored water in lemon, orange, raspberry and strawberry flavors.
PACKAGING:Nestlé PURE LIFE is available in a wide variety of packaging formats to suit all consumer needs and consumption occasions. Packaging is innovative to meet theindividual needs of consumer all over the world.The range of formats extends from the individual bottle for on-the-go consumption (0.33l to 0.5l), to the family size bottle (1.5l) and on to larger formats of 5 gallons(18.9l) for in-home and office usage.Nestle PURE LIFE 18.9-liter bottles have a protective cover, so that the consumer can immediately define, that the product was delivered from the factory. Itsproprietary design equally protects the brand from counterfeiting.Nestlé Pure Lifes originality lay in the use of an all-new plastic, P.E.T. (polyethylene teraphthalate), which is stronger and more elastic than the PVC. Besides, P.E.T.is recyclable.Nestlé PURE LIFE is bottled when possible in the country, or at least in the region where it is sold, combining the benefit of a local production and the strength of aworldwide brand.LABEL:The label provides information like quantity, mineral contents, logo, manufacturing date and best before date. Consumer service number is mentioned and stamp ofPSQCA with license number is also mentioned.2-PROMOTION:Nestle Waters Coolers has been a part of Nestle Waters since 2003 and represents Nestle Pure Life brand. Service quality has always been the main driver of HODbusiness. They are using television and radio advertisements in electronic media. In print media they are using billboards, newspapers, pole signs and posters.In big departmental store they have display corner in which Nestle Pure Life is refrigerated. Moppies are also used for advertisement in these stores.In summers direct marketing is used for promotion by providing cool points of Nestle Pure Life where chilled Nestle Pure Life is available for instant drinking.3-PLACE:Nestle Pure Life is a convenience good and is frequently used therefore it has been placed on all big and small stores to make it available everywhere. The type ofplacement used for nestle pure life is spot exchange.4-PRICE:Nestle pure life is following brand pricing through which it provides functional and psychological satisfaction to its target customer. The pricing strategy of NestlePure Life is market skimming.
Prices of Nestle Pure Life are relatively higher than their competitors. Market prices of individual consumables (0.33l to 0.5l) are Rs.10 and Rs.13. The price of familysize bottle (1.5l) is Rs.24 and of large bottles of 5 gallons (18.9l) is Rs.130 PRICE PRODUCT PROMOTION PLACE MARKETING MIXSTRATEGIES FOR CREATING COMPETITIVE ADVANTAGEDIFFERENTIATION STRATEGY:They have developed a very visible image of their water that it is safe and healthy and is "PURE LIFE" in true sense.OVERALL EXCELLENCE STRATEGY:Nestle is a trusted brand and its products are consider to best and of very high quality world wide. This is a very important competitive advantage of Nestle PureLife. Introduction Growth Maturity DeclineCharacteristics LoyalCustomers Innovators Mass Market Mass Market CustomersCompetition Little if any Increasing Intense Decreasing Low levels, then Slow/no annualSales Rapid Growth Declining rising growth Strong, then atProfits None Declining annually Low/none peakMarketing
Implications Market MarketOverall Strategy Defensive Efficiency Development PenetrationCosts High per unit Declining Stable or increasing LowProduct Strategy Undifferentiated Improved items Differentiated Pruned LinePricing Strategy Most Likely high Lower over time Lowest IncreasingDistribution Strategy Scattered Intensive Intensive SelectivePromotion Strategy Category awareness Brand Preference Brand Loyalty ReinforcementSUGGESTIONS• They should introduce 0.20l water glass of Nestle Pure Life which should be provide on cool points in summer.• They should set the price of their product in accordance with their competitors price.• Nestle Pure Life should communicate the benefits of drinking it.• Now a day, they are not advertising properly therefore they should focus on more advertisement so that they could create strong brand loyalty among customers.• They should introduce 0.20l water glass of Nestle Pure Life which should be provide on cool points in summer.• They should set the price of their product in accordance with their competitors price.• Nestle Pure Life should communicate the benefits of drinking it.• Now a day, they are not advertising properly therefore they should focus on more advertisement so that they could create strong brand loyalty among customers.