EXECUTIVE SUMMARY

Nestle has been serving this world for over one hundred and thirty years.
It has differentiated itself through its high quality product mix and positioned
itself as health and Nutrition Company while targeting the health conscious
people throughout the world. Nestle started its operations in Pakistan back in
1988, by acquiring a diary company MILKPAK LTD, when people of Pakistan
actually needed it.

Since Pakistan is the fifth world’s largest milk producing country therefore nestle
deals mainly in dairy products. Moreover it also sells juices, chocolates, prepared
food like noodles, baby food, infant formula milk and breakfast cereals in
Pakistan.

Nestle is a low cost leader with its efficient operations hence it provides its
customers with high quality products and sells them at a premium price.
Therefore it is earning good profits.

Nestle has set its manufacturing plants at in Karachi, Lahore, Islamabad and
Kabirwala. The milk processing plant at Kabirwala district is the Nestlé’s world
largest milk processing plant.

When nestle introduced its products in Pakistan people were neither aware nor
accustomed to them. Therefore nestle ran an extensive marketing campaign to
educate people and create a need for its products.

Pakistan is a land where fresh eatables are readily available. Nestle should sell
the same quality of products in Pakistan as it sells abroad. It should also
introduce more brands in Pakistani market which it offers in other markets of the
world since consumers in Pakistan are becoming more demanding day by day.
 INTRODUCTION
Nestlé at a Glance

The story begins in 1867, when Henri Nestlé developed a baby formula that
saved a child's life and marked the beginning of Nestlé's decades-old
commitment to nutrition. In the 140 years since then, they have expanded around
the world and developed a range of products designed to suit every taste, need
and cultural preference. Their distinctive seal is recognized everywhere as a
guarantee of quality and healthfulness.

Nutrition, quality and convenience remain the keystones of their products and
even as they confront the new century's challenges, they feel it is their duty to
adapt to the changing needs of consumers. Their responsibility does not simply
lie in perfecting the products they develop at their R&D centers spanning four
continents, but the role their products play in making lives well - both for their
consumers and for communities in the countries they serve.

Worldwide Presence

Today, Nestlé SA is the world's largest Food and Beverages Company, and a
global leader in health, nutrition and wellness. Consumers around the world, from
village squares in Nigeria to the skyscrapers of New York and Chicago, are
united by the Nestlé promise of quality, taste, nutrition and convenience.

Though headquartered in Vevey, Switzerland, they now have 487 factories

dotted around the globe, employing over 250,000 people in 86 countries. Their
products are available in almost every country.
 Nestlé International History

History of Nestlé

1866-1905

the key factor which drove the early history of the enterprise that would become
The Nestlé Company was Henri Nestlé's search for a healthy, economical
alternative to breastfeeding for mothers who could not feed their infants at the
breast. Nestlé’s first product was called Farine Lactée (“corn flour gruel” in
French) Henri Nestlé. Nestlé's first customer was a premature infant who could
tolerate neither his mother's milk nor any of the conventional substitutes, and had
been given up for lost by local physicians.

People quickly recognized the value of the new product, after Nestlé's new
formula saved the child's life and within a few years, Farine Lactée Nestlé was
being marketed in much of Europe.

The Anglo-Swiss Condensed Milk Company, founded in 1866 by Americans

Charles and George Page, broadened its product line in the mid-1870s to include
cheese and infant formulas. The Nestlé Company, which had been purchased
from Henri Nestlé by Jules Monnerat in 1874, responded by launching a
condensed milk product of its own. The two companies remained fierce
competitors until their merger in 1905.

Some other important firsts occurred during those years. In 1875 Vevey resident
Daniel Peter figured out how to combine milk and cocoa powder to create milk
chocolate. Peter, a friend and neighbor of Henri Nestlé, started a company that
quickly 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 launch Maggi & Company..
 1905-1918

The Company formed by the 1905 merger was called the Nestlé and Anglo-
Swiss Milk Company. By the early 1900s, the Company was operating factories
in the United States, Britain, Germany and Spain. In 1904, Nestlé added
chocolate to its range of food products after reaching an agreement with the
Swiss General Chocolate Company.

Condensed-milk exports increased rapidly as the Company replaced sales

agents with local subsidiary companies. In 1907, the Company began full-scale
manufacturing in Australia, its second-largest export market. Warehouses were
built in 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 I brought severe disruptions. Acquiring raw materials and distributing
products became increasingly difficult. Fresh-milk shortages throughout Europe
forced factories to sell almost all their supplies to meet the needs of local towns.
Nevertheless, the war created tremendous new demand for dairy products,
largely in the form of government contracts. To keep up, Nestlé purchased
several existing factories in the United States. By war's end, the Company had
40 factories, and its world production had more than doubled since 1914.

1918-1938

The end of World War I brought with it a crisis for Nestlé. Government contracts
dried up following the cessation of hostilities, and civilian consumers who had
grown accustomed to condensed and powdered milk during the war switched
back to fresh milk when

it became available again. In 1921, the Company recorded its first loss. Nestlé's
management responded quickly, bringing in Swiss banking expert Louis Dapples
to reorganize the Company.

1938-1944

The effects of the onset of World War II were felt immediately by

Nestlé. Profits dropped from $20 million in 1938 to $6 million in 1939.
 Neutral Switzerland became increasingly isolated in a Europe at war,
and the Company transferred many of its executives to offices in
Stamford,

The first truly global conflict ended forever the traditional Company structure. To
overcome distribution problems in Europe and Asia, factories were established in
developing 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
staple beverage of American servicemen serving in Europe and Asia. Annual
production levels reached one million cases by 1943.

As in World War I, production and sales rose in the wartime economy: Nestlé's
total sales jumped from $100 million in 1938 to $225 million in 1945. As the end
of the war approached, Nestlé executives found themselves unexpectedly
heading up a worldwide coffee concern, as well a company built upon Nestlé's
more traditional businesses.

1944-1975

The close of World War II marked the beginning of the most dynamic phase of
Nestlé's history. Throughout this period, Nestlé's growth was based on its policy
of diversifying within the food sector to meet the needs of consumers. Dozens of
new products were added as growth within the Company accelerated and
outside companies were acquired.

In 1947, Nestlé merged with Alimentana S.A., the manufacturer of Maggi

seasonings and soups, becoming Nestlé Alimentana Company. The acquisition
of Crosse & Blackwell, the British manufacturer of preserves and canned foods,
followed in 1960, as did the purchase of Findus frozen foods (1963), Libby's fruit
juices (1971) and Stouffer's frozen foods (1973).

Meanwhile, Nescafé continued its astonishing rise. From 1950 to 1959, sales of
instant coffee nearly tripled, and from 1960 to 1974, they quadrupled..

1975-1981
After the agreement with L'Oréal in 1974, Nestlé's overall position changed
rapidly. For the first time since the 1920s, the Company's economic situation
deteriorated as the price of oil rose and growth in the industrialized countries
slowed. In addition, foreign exchange rates deteriorated with the French franc,
dollar, pound sterling, and mark all losing value relative to the Swiss franc.
Finally, between 1975 and 1977, the price of coffee beans quadrupled, and the
price of cocoa tripled. As in 1921, the Company was forced to respond quickly to
a radically changed marketplace.

Nestlé's rapid growth in the developing world partially offset a slowdown in the
Company's traditional markets, but it also carried with it the risks associated with
unstable political and economic conditions. To maintain a balance, Nestlé made
its second 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

margins required boldness and vision. Even more than the L'Oréal move, Alcon
represented a leap into unknown waters for Nestlé. But, as Group Chairman
Pierre Liotard-Vogt noted, "Today we find ourselves with a very wide range of
activities, all of which have one thing in common: they all contribute to satisfying
the requirements of the human body in various ways."

1981-1995

Under a new Chief Executive Officer, Helmut Maucher, Nestlé approached the
1980s with a renewed flexibility and determination to evolve. The Company's
strategy for this period was twofold: improve its financial situation through
internal adjustments and divestments, and continue its policy of strategic
acquisitions.

Thus, between 1980 and 1984, the Company divested a number of non-strategic
or unprofitable businesses. At the same time, Nestlé managed to put an end to a
serious controversy over its marketing of infant formula in the Third World. This
debate had led to a boycott of Nestlé products by certain lay and religious
organizations. This issue is still alive in some quarters, but there is no longer any
significant boycott activity.
In 1984, Nestlé's improved bottom line allowed the Company to launch a new
round of acquisitions, including a public offer of $3 billion for the American food

1996-2002

The first half of the 1990s proved to be a favorable time for Nestlé: trade barriers
crumbled and world economic markets developed into a series of more or less
integrated trading areas. The opening of Central and Eastern Europe, as well as
China, and a general trend towards liberalization of direct foreign investment was
good news for a company with interests as far-flung and diverse as Nestlé. While
progress since then has not been as encouraging, the overall trends remain
positive.

In July 2000, Nestlé launched a Group-wide initiative called GLOBE (Global

Business Excellence), aimed at harmonizing and simplifying business process
architecture; enabling Nestlé to realize the advantages of a global leader while
minimizing the drawbacks of size.

There were two major acquisitions in North America 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. , a
leading U.S.-based hand-held frozen food product business.

Also in 2002, the joint venture Dairy Partners Americas was set up with Fonterra;
and Laboratoires innéov was set up, another joint venture, this time with L'Oréal.

2003 +

The year 2003 started well with the acquisition of Mövenpick Ice Cream,
enhancing Nestlé's position as one of the world market leaders in this product
category. The years that followed saw consistent business growth through
innovation and renovation of the products.

In 2006, Jenny Craig, the USA weight management company and Uncle Toby's
were acquired as well as Delta Ice Cream.

Nestlé made three significant acquisitions in 2007. The first was Novartis Medical
Nutrition which put Nestlé in a a strong number two position globally for
healthcare nutrition. Gerber, the iconic US baby food brand was the second
acquisition and the third was the Swiss water company, Sources Minérales
Henniez S.A.

The end of 2007 was marked by a strategic partnership with the Brussels-based
luxury chocolate maker Pierre Marcolini.
History of the Nestlé Logo
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.

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. The tree is
supposed to represent an oak and the bird’s thrushes.

Guiding Principles of Nestlé

Nestlé is committed to the following Business Principles in all countries, taking

into account local legislation, cultural and religious practices:

• Nestlé'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.
 • Nestlé does not favor short-term profit at the expense of successful long-
term business development.

• Nestlé 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.

• Nestlé 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.

• Nestlé 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.

• Nestlé continues to maintain its commitment to follow and respect all

applicable local laws in each of its markets.

Philosophy of Nestlé

Nestlé‘s philosophy is summed up in four words:

Good Food, Good Life.

In their quest to become the world's leading health, nutrition and wellness
company, they do everything they can to help people live more fulfilling lives.

Good Food, Good Life

Henri Nestlé chose his own coat of arms to represent the company's philosophy:
a bird's nest, with a mother feeding her young.

The image represents Nestlé core values: care, family values, nutrition, healthy
growth, safety and comfort. It is a guarantee of quality and a commitment to
responsibilities as a food company and experts in nutrition.

Over the years Nestlé has reaffirmed its commitment to wellness, helping
consumers to live longer, healthier, and more productive lives, no matter their
age, gender or socioeconomic status.

Good Ingredients

Three vital ingredients lie at the heart of Nestlé and come together in their
brands: Their people, their research and development, and their
commitment to quality.

The 250,000 dedicated people who make up the Nestlé family are their source of
strength and energy. Realizing this, Nestlé offer them constant professional
development, and feel their cultural diversity is one of greatest assets.

Nestlé Pakistan History

Nestlé Pakistan

Nestlé has been serving Pakistani consumers since 1988, when their parent
company, the Switzerland-based Nestlé SA, first acquired a share in Milkpak 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 they operate. Nestlé Pakistan ensures that their products
are made available to consumers wherever in the country they might be.
Convenience is at the heart of the Nestlé philosophy, and their aim is to bring
products to people's doorsteps.

A History of Service

In line with the parent company's global philosophy, Nestlé is proud of their
commitment to excellence in product safety, quality, and value. Their products
cater to human needs, and Nestlé is active in the communities they serve.
From spreading awareness about nutrition and wellness to digging wells in the
Thar Desert and succoring earthquake victims, they are committed to serving the
country and its people.

The consumer's voice is key to Nestlé Pakistan's vision and working. Whether
you live in the remotest village or the metropolis of Karachi, their consumer
services team stands ready to listen to your concerns and provide answers about
their products and guidance on matters of health and wellness
Vision and Strategy
The Nestlé global vision is to be the leading health, wellness, and Nutrition
Company in the world. Nestlé Pakistan subscribes fully to this vision. In
particular, they envision to:
➢ Lead a dynamic motivated and 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.

➢ Nestlé has profitable and diversified high quality food and beverage product
portfolio, delivering 60:40+ advantage to consumers, available across all
sales channels.

➢ Nestlé brands are the preferred choice in their categories. Consumer insight
drives all aspects of their marketing and communication efforts.

➢ Their communications to the consumer are relevant, cutting-edge, and

adhere to the highest standards of responsible communication.

➢ Nestlé Company is seen as the No. 1 career destination for talented,

motivated and ambitious professionals.

➢ Their result-oriented organizational structure ensures effective

communication and empowered self-management.

➢ Nestlé milk collection and agri services will continue to play the primary role in
development of the dairy sector in rural Pakistan.

➢ Their proactive innovation and renovation culture is the key to their success in
the marketplace.

➢ Fully integrated systems (Nestlé Pakistan, suppliers, customers) ensure

efficient business processes.
➢ Non-strategic activities and products are outsourced or discontinued.

MARKET CONDITION

Pakistan is a third world country therefore its market is not a stable one. This
report was prepared in July 2008 when inflationary conditions in Pakistani
market were not that severe, therefore this report should be viewed in
context of the market conditions which were prevailing in July 2008.

During the past one decade Pakistani people got rich due to much privatization
and foreign investment, coupled with property and stock exchange boom. Now
people have money to spend and their affordability has increased dramatically.
Therefore nestle also introduced many brands keeping in mind the per capita
purchasing power, and set their prices at a premium since people have trust in
nestle therefore nestle is earning good profits in Pakistan.

Besides the increase in per capita purchasing power, awareness increased

among people of Pakistan regarding to the health issues. People are now health
conscious which helped nestle to flourish in Pakistan.

Swot analysis

Strengths

Nestlé is a global leader and has got many strengths and competitive
advantages. Pakistan Nestle is the largest consumer industry where its annual
sales stand at Rs.22 billion. The Nestle chief executive said the company has
given direct jobs to 10,000 people while one million people are employed through
business in Pakistan. Nestle has four pillars of strength these are operating
excellence, innovation and renovation, product availability, and
communication.

Skilled and committed team:

Nestle do cares about its employees that is the reason it has been a successful
company to retain brilliant, confident, genius and hardworking employees which
is the greatest strength of nestle that is the people who work for it. Management
has skills and experience in a variety of areas. Trevor Clayton the managing
director of nestle Pakistan emphasizes internal growth, meaning he wants to
achieve higher volumes by renovating existing products, and innovating new
products. His explanation of renovation is that “to just keep pace in the industry,
you need to change at least as fast as consumer expectations.” And his
explanation of innovation is “to maintain a leadership position, you also need to
leapfrog, to move faster and go beyond what consumers will tell you.”

Nestle tries to take the mentality and customs of individual countries into
account, but there are some general guidelines that that are applied everywhere.
Those include:

1. A positive attitude toward work

2. A pragmatic, realistic approach to doing business

3. An open-minded approach to the world

4. A minimal number of systems and written guidelines

5. A personal style of management

6. An atmosphere of mutual trust

7. An avoidance of showing off, windy rhetoric and hypocritical remarks

8. An emphasis on practical experience and on the setting of good

examples.

Efficient operations, low costs and high quality:

Another strength that Nestle has is that they are low cost operators. This allows
them to not only beat the competition by producing low cost products, but by also
putting comparatively low prices on high quality products. Its ability to negotiate
on bulk purchases helps to reduce the capital costs. Having been operating for
more than a hundred years nestle has designed the most efficient ways of
production.
To reduce the costs nestle has come up with a unique distribution strategy in
Asian countries, that is to produce in those countries where the raw material is
cheap and abundant and export the finished products to the other Asian
countries. For example corn flakes available in Pakistan are imported from
Philippines. A huge industrial unit producing magi products has been setup in
India and products are exported to the other countries.

R&D:

Nestle has multiple critical resources. They have a great research and
development team. Achieving health and wellness through foods is a challenging
adventure. It extends the boundaries of consumer expectations and satisfaction
beyond the classical sensory experience. Today’s discoveries provide the
knowledge for tomorrow’s innovations.

Nestle is probably unique in the food industry in having an integrated research

and development program that engages in applied and basic research in the
fields of human physiology, health, nutrition and raw materials. Nestle research
and development program enables it to create new types of products that we
cannot even imagine today, especially in the critical area where preventive
medicine and food products overlap. In addition, as concern for the environment
grows, research will play an important role in overcoming environmental
problems. For Nestlé, this is particularly important in packaging. Concern for the
effects of packaging on the environment is forcing us to look for new solutions
and to consider their interaction with our biological product -- food.

BRAND RECOGNITION AND FAVOURABLE CONSUMER PERCEPTION:

Nestle brand recognition is one strength that helps it to be a market leader

whenever it enters a new market or when it introduces a new product. One of
their main goals has been to deliver brands that consumers trust and value and
they have succeeded. Another strength that nestle has is the fact that consumers
simply know that nestle products are healthy. People have trust in nestle
because nestle always listen to its customers and was the first company to
introduce customer service tradition in Pakistan.

LACK OF COMPETITORS:
Nestle is the world largest food company. The products which nestle has
introduced in the Pakistani market had already been successfully test marketed
in the other parts of the world. Having been operating for more than a century
and huge resources this market giant improved the quality of its products and
hence gained a kind of reputation that helped to increase its brand equity.

Product availability and strong distribution networks:

From farm to factory:

Nestle setup its milk plants in the southern Punjab where milk is in abundance,
instead of going into corporate farming nestle went for contracts with local
milkmen for milk supply for its factories, which helped to reduce the costs
efficiently and also helped to solve the problems of the local milkmen because
nestle pays them well.

From factory to market:

One of the key strengths that nestle has is its thorough and efficient research in
different parts of the globe and which helps it to come up with practical and
feasible decisions. After a thorough study of Pakistan’s geographical regions
nestle decided to distribute its products through the distributors on the contract
basis, instead of hiring employees to do this job which would increase its costs
many folds. Through these distributors nestle ensures that its customers should
get its products wherever, whenever and however possible. That’s the reason
consumers in Pakistan has never witnessed shortage of nestle products on the
market shelves. Nestle also offers the free delivery services.

Communication and effective marketing campaigns:

Nestle is a giant in the food industry. It not only knows how to produce goods and
innovate and renovate them, but it also understands the people through out the
globe. Nestle entered into water business at the time when number of diseases
due to dirty water consumption was touching the sky. Pakistan is an agricultural
country where water is in abundance and people living here are accustomed to
drink fresh water from the ground. When nestle launched its water pure life back
in 1998 people could not get the idea behind it therefore nestle ran a huge
campaign to increase the awareness among the people of Pakistan regarding to
the water related diseases, which helped people to accept the idea of safe
bottled water which was new to them.

People in Pakistan are habitual of having heavy breakfast rich in carbohydrates

and fats. When nestle launched the breakfast cereals people did not accept the
idea quickly hence nestle ran an awareness campaign regarding to the healthy
eating habits and how to keep ones body fit, which helped in the product
acceptance.

Investors and nestle:

People trust nestle therefore nestle has got this edge that investors find it a very
attractive organization to invest in on the stock market

Long term views:

Nestlé makes clear a distinction between strategy and tactics. It gives priority to
the long-range view. Long-term thinking defuses many of the conflicts and
contentions among groups – this applies to employment conditions and relations
with employees as well as to the conflicts and opposing interests of the trade and
the industry. Of course, Nestlé’s ability to focus on long-term considerations is
only possible if it is successful in the struggle for short-term survival. This is why
Nestlé strives to maintain a satisfactory level of profits every year.

Decentralization

Switzerland is home to Nestlé’s Swiss subsidiary, its international headquarters

and the registered office of Nestlé’s holding company, but Nestlé does not regard
its Swiss headquarters as the center of the universe. Decentralization is a basic
principle of Nestlé. Its policy is to adapt as much as possible to regional
circumstances, mentalities and situations. By decentralizing operational
responsibility, it create strength and flexibility and are able to make decisions that
are better attuned to specific situations in a given country. Policies and decisions
concerning personnel, marketing and products are largely determined locally.
This policy creates stronger motivation for Nestlé’s executives and employees
and a greater sense of identification with Nestlé’s business. It is not Nestlé’s
policy to generate most of its sales in Switzerland, supplemented by a few
satellite subsidiaries abroad. Nestle strives to be an “insider” in every
country in which it operates, not an “outsider.”

Nutrition as the corporate strategy:

Nestlé describes itself as a food, nutrition, health, and wellness company.

Recently they created Nestlé Nutrition, a global business organization designed
to strengthen the focus on their core nutrition business. They believe
strengthening their leadership in this market is the key element of their corporate
strategy. This market is characterized as one in which the consumer’s primary
motivation for a purchase is the claims made by the product based on nutritional
content.

In order to reinforce their competitive advantage in this area, Nestlé created

Nestlé Nutrition as an autonomous global business unit within the organization,
and charged it with the operational and profit and loss responsibility for the claim-
based business of Infant Nutrition, HealthCare Nutrition, and Performance
Nutrition. This unit aims to deliver superior business performance by offering
consumers trusted, science based nutrition products and services.

Weaknesses

Product related weaknesses:

Breakfast cereals:

The main weakness of nestle in Pakistan is regarding to their breakfast cereals.

Their cereals are not that successful in Pakistan as they are in western countries.
A third world country like Pakistan where there are not enough facilities people
have to depend on their manual strength, therefore in order to get enough energy
to work all day long people rely on heavy breakfast rich in calories while the
nutritional value of breakfast cereals is not compatible with Pakistani lifestyle. A
recent report by the UK Consumers Association claims that 7 out of the 15
breakfast cereals with the highest levels of sugar, fat and salt were Nestlé
products.

Powdered milk:

The Zhejiang Administration for Industry and Commerce (ZAIC) in China

conducted a routine quality test on Nestlé powdered milk products and found that
iodine content in 91.7 percent of the sample exceeded the legal limit set by the
Ministry of Health. When provincial governments called for removal of the
product from store shelves, a Nestlé representative admitted that the company
knew its product was over the local iodine limit, but instead chose to comply with
international standards that set no cap on iodine levels. Nestlé issued a recall of
the milk product ten days after the government warning over iodine content;
however the company refused to reimburse customers for their purchase and
would only allow the exchange of powdered milk for another Nestlé product.

Milk:

According to South Africa-based global anti-poverty group, ActionAid

International, approximately 50,000 Brazilian dairy farmers have been forced out
of business as a result of aggressive takeovers by Nestlé and Parmalat.

In Peru, Nestlé controls 80 percent of the nation's milk production

Though such lawsuit haven’t been witnessed in Pakistan yet but nestle has taken
over much of the milk production in southern Punjab which is the largest milk
production region in Pakistan. All this has led the shortage of milk for the local
poor people who can not afford nestle products at all.

Water:

A 2006 report by the Connecticut-based Container Recycling Institute which is a

nonprofit dedicated to increasing recovery and recycling of beverage containers
and San Francisco-based nonprofit As You Sow which aims to promote
corporate accountability, grades America’s top beverage companies on their
efforts to use recycled content, increase recovery and recycling, and reduce the
 amount of material used in beverage containers. Nestlé Waters earned F’s in
every area surveyed. Nestlé Waters scored an F grade overall, with a GPA of 0.1
(on a 4.0 scale).

Ailments caused by the consumption of products:

A lot of adverse medical conditions have been witnessed in Pakistan among the
continuous consumers of nestle products, which include:

hair fall due to the consumption of nestle PURE LIFE

yellow teeth caused by consuming EVERYDAY tea whitener

stomach problems such as acidity caused by consuming nestle NIDO

Lack of innovation at nestle Pakistan:

The fact that they are the market leader in the Pakistan may be hindering them
from innovation. Since the nestle targeted customers in Pakistan are less in
number as people belonging to middle class in Pakistan can not simply afford
nestle products for daily use customers in Pakistan are neither much demanding
nor there are strong competitors, therefore nestle has been producing same old
products in Pakistan for years without any innovation.

Discriminatory acts:

Lower pays for milkmen in third world countries:

Nestlé pays 15 cents for every liter of milk produced in developing countries,
compared to wages of 48 cents per liter received by dairy farmers in Europe.
However, the origin of milk accounts for little to no difference in its retail price.
The price of milk from developing countries and Europe are virtually the same in
supermarkets everywhere.

Genetically engineered foods:

Nestlé continues to employ a double standard for incorporating genetically

engineered food in its products. Nestlé refrains from using genetically engineered
products wherever they are required to bear identifying labels. However,
genetically engineered foods are used in a variety of Nestlé products in countries
 where no such regulations exist. Concerns have been raised about the safety of
genetically engineered foods, particularly as they could cause health issues such
as antibiotic resistance, allergic reactions and toxin development.

Substandard products for third world countries:

Nestle products available in the first world countries are far better in quality as
compared to the nestle products available in the third world countries like
Pakistan. While nestle is charging same international prices from all the
consumers.

Since nestle is a huge company with its headquarters based in Switzerland,

therefore whenever a new venture has to be started in its any subsidiary a long
procedure is involved for getting permission from the headquarters which is
quite time consuming.

Nestle has positioned itself as health and nutrition company while it is selling the
processed food which contain food additives and preservatives not good for
health. This weakness of nestle leads health conscious people avoid using nestle
products.

Water related issues:

Ruthless water privatization an attack on humanity:

Nestlé, Coke, Danone and Pepsi are the major targets of a Polaris Institute
report exposing the dark side of the water industry. “Inside the Bottle: An Exposé
of the Bottled Water Industry” highlights the abuses of these corporations,
including fraudulent advertising, ruthless water privatization, and the distribution
of unsafe water. These four companies dominate the world’s bottled water
market.

"Drinking Water Crisis in Pakistan and the Issue of Bottled Water: The Case
of Nestlé's 'Pure Life'" (April 2005).

Nestlé has been criticized for its bottled water operations in Pakistan:

The population of Pakistan suffers from water scarcity and limited potable water, with 40
percent of urban residents and as much as 90 percent of rural residents lacking
access to water for their daily needs. Nestlé's water extraction has put the
 company in direct competition with local communities for precious groundwater
resources. In the Lahore district where Nestlé sources its 'Pure Life' brand water,
4.11 million people depend on 316 tube wells to supply their tap water. Nestlé
pumps water from the same groundwater source for its industrial production,
essentially without regulation.

The Sindh High Court in Karachi curtailed Nestlé's plans to build a water bottling plant
projected to extract 306 million liters annually and produce 228 million liters of
bottled water per year. Rather than selling its products in Karachi where potable
water is greatly needed, Nestlé disclosed that the American military base in
Kandahar, Afghanistan was the intended end market.

Nestle water related issues through out the world:

According to Canadian-based Polaris Institute, which fights for democratic social

change, Nestlé has been implicated in the following water-related issues:

Poland Spring brand bottled water issue:

In 2003, Nestlé faced 12 class-action lawsuits regarding the origin of its Poland
Spring brand bottled water. Nestlé markets the product as pure and natural
spring water; however the lawsuits claimed that Poland Springs is in fact drawn
from common groundwater sources and is then treated with multiple filtering
processes. The plaintiffs claimed that Nestlé’s Poland Spring brand "advertised
their water in a false, fraudulent, deceptive, and misleading manner," and also
alleges that contrary to advertisements, the product is not spring water and may
not even be safe to drink. A settlement of $12 million dollars was awarded to
plaintiffs in one case. The other 11 cases have yet to be settled.

Ice Mountain Spring Water Co issue:

In 2001, Michigan Citizens for Water Conservation filed a lawsuit against Nestlé
Waters North America (NWNA) requesting that operations at the Ice Mountain
Spring Water Co. plant be closed. The lawsuit claimed that production would
reduce water levels in lakes and streams in surrounding areas, jeopardizing fresh
water sources for local communities. Convinced of the threat to area lakes and
streams, a judge ordered Nestlé to cease pumping water in 2003; however,
within a few weeks operations resumed

Nestlé’s Zephyr hills bottled water issue:

In Pasco County and throughout Florida, Nestlé has been the focus of concern
regarding water extraction in areas that are drought-prone. Nestlé’s Zephyr hills
bottled water is sourced from the Crystal Springs, which feeds into the river that
serves as the Tampa Bay area’s main source of drinking water. When the region
was plagued by drought in 2000 and 2001, Nestlé pressured Florida to allow for
an increase in its water drawings from 1.14 million to 6.8 million liters per day. An
appeals court eventually denied the request.

Demineralization of water issue:

After Nestlé built a water bottling plant on top of a rare mineral water aquifer in
Sao Lourenco, Brazil, residents began reporting a change in the water’s flavor.
When the famous aquifer ran dry, Franklin Frederick of the Water Citizenship
Movement began investigating Nestlé’s operations and the possible effects it had
on the water source

Ethical misconduct:

Infant formula milk issue:

Every 30 seconds a baby dies from unsafe bottle feeding in the Third World

Nestlé and Wyeth, two of the World's largest producers of powdered baby milk,
are currently breaking a World Health Organization Code on the marketing of
breast milk substitutes.

Nestlé and Wyeth provide free milk to maternity hospitals in the Third World so
that newborn babies are routinely bottle-fed. When newborn babies are given
bottles, they are less able to suckle well. This makes breastfeeding failure likely.
The baby is then dependent on artificial milk. When the mother and baby leave
hospital, the milk is no longer free. At home parents are forced to buy more milk,
which can cost 50% of the family income. Because the milk is so expensive the
child is not fed enough. This leads to malnutrition. The water mixed with the
formula is often contaminated. This leads to diarrhea, malnutrition and often
death. James Grant, Executive Officer of UNICEF, has said: Every day some
3,000 to 4,000 infants die because they are denied access to adequate breast
milk. 1.5 million Babies die every year from unsafe bottle feeding. Breast feeding
is free and safe and protects against infection - but companies know that unless
they get babies on the bottle, they don't do business.

Children trafficking to harvest cocoa beans:

The workers' rights group, International Labor Rights Fund (ILRF) has sued
Nestlé, Archer Daniels Midland, and Cargill in Federal District Court in Los
Angeles for involvement in the trafficking, torture, and forced labor of children
who cultivate and harvest cocoa beans that the companies import from Africa.
The ILRF and plaintiffs in the case filed suit on behalf of a class of Malian
children who were trafficked from Mali into the Ivory Coast and forced to work 12
to 14 hours a day with no pay, little food and sleep, and frequent beatings. The
three children representing the class of plaintiffs are proceeding anonymously,
for fear of retaliation by the cocoa farm owners implicated in the lawsuit.

Substandard contaminated milk issue:

In November 2002, police ordered Nestlé Colombia to decommission 200 tons of

imported powdered milk. The milk had come from Uruguay under the brand
name Conaprole, but the sacks had been repackaged with labels stating they
had come from a local Nestlé factory, and stamped with false production dates of
20th September and 6th October 2002. The real production dates were between
August 2001 and February 2002. A month later another 120 tons with similarly
false country of origin and production dates were discovered, pointing to
systematic fraud. The discoveries caused a stir, with senators insisting the
Attorney General conduct a full inquiry leading to prosecutions.

Coffee farmer pay issue:

Nestlé scored a 43 on Oxfam's rating of the 4 major coffee producers in 2003.

According to Oxfam's report, "On the positive side, it [Nestlé] led the major
roasters in participating in various international forums and supporting the efforts
of the International Coffee Organization, but all this talking has yet to benefit any
of the struggling farmers...Nestlé failed in a key area--paying the farmer a decent
price for their coffee." Companies were graded on the price they paid to farmers
(70 percent), support for policy alternatives (10 percent), financial contributions
(10 percent) and leadership in industry-wide initiatives (10 percent). Other
companies graded are Kraft, Procter & Gamble and Sara Lee. In 2002, farmers’
income from coffee crops could buy merely one-quarter of what it could in 1960.
Adjusted for inflation, the current rate farmers are paid for coffee is perhaps the
lowest rate in a century.

Managerial weakness:

Operational delays:

Since nestle is a huge company with its headquarters based in Switzerland,

therefore whenever a new venture has to be started in its any subsidiary a long
procedure is involved for getting permission from the headquarters which is
quite time consuming.

Union busting activities:

The International Labor Rights Fund (ILRF), which advocates for fair treatment of
workers, sued Nestlé in the U.S. District Court for the Southern District of Florida
for its complicity in the torture and murder of Luciano Enrique Romero Molina.
Romero was a Colombian trade unionist and former Nestlé employee. According
to the lawsuit, Colombia’s paramilitary murdered Romero in response to his
role in exposing Nestlé’s use of expired milk in its Milo brand drink. The suit
claims that Nestlé and two of its subsidiaries “acted in concert with, conspired
with, aided and abetted or otherwise retained as agents the individuals” who
murdered Romero.

Political biasness:

Nestlé USA’s Political Action Committees (PACs) contributed $112,800 USD to

political candidates between 2002 and 2004. The company handed out soft
money donations worth a total of $225,892 from 1998 to 2002, the majority of
which went to Republican Party candidates. Joseph Weller, Nestlé USA
Chairman, raised more than $100,000 for George Bush’s reelection campaign,
and was dubbed a ‘Pioneer’ by the Bush 2004 campaign.

Pollution:

The Institute of Public and Environmental Affairs, a Chinese non-governmental

organization, blacklisted Nestlé as one of 33 multinational corporations
responsible for causing water pollution. Nestlé Shanghai Ltd, Nestlé’s bottled
water manufacturing plant in China, was cited for starting operations before its
wastewater treatment facilities had passed an environmental impact assessment.

Opportunities

International strategy:

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

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

Nestle takes ingredients from the local market:

When operating in a developed market, Nestlé strives to grow and gain

economies of scale through foreign direct investment in big companies. In the
developing markets, Nestlé grows by manipulating ingredients or
processing technology for local conditions, and employ the appropriate
brand. For example, in many European countries most chilled dairy products
contain sometimes two to three times the fat content of American Nestlé products
Another strategy that has been successful for Nestlé involves striking strategic
partnerships with other large companies. In the early 1990s, Nestlé entered into
an alliance with Coca Cola in ready-to-drink teas and coffees in order to benefit
from Coca Cola’s worldwide bottling system and expertise in prepared
beverages.

Nestle strategies in Asia:

European and American food markets are seen by Nestlé to be flat and fiercely
competitive. Therefore, Nestlé is setting is sights on new markets and new
business for growth. In Asia, Nestlé’s strategy has been to acquire local
companies in order to form a group of autonomous regional managers who know
more about the culture of the local markets than Americans or Europeans.
Nestlé’s strong cash flow and comfortable debt-equity ratio leave it with ample
muscle for takeovers. Recently, Nestlé acquired Indofood, Indonesia’s largest
noodle producer. Their focus will be primarily on expanding sales in the
Indonesian market, and in time will look to export Indonesian food products to
other countries. Nestlé has employed a wide-area strategy for Asia that
involves producing different products in each country to supply the region
with a given product from one country. For example, Nestlé produces soy
milk in Indonesia, coffee creamers in Thailand, soybean flour in Singapore,
candy in Malaysia, and cereal in the Philippines, all for regional distribution.

Opportunities in Pakistani market:

One opportunity that Nestle has is that health-based products are becoming
more popular in the world, including in the Pakistan. Consumers are becoming
more health conscious, and realize that living longer isn’t only by luck and
genetics. Nestle also has an opportunity of being even a larger market leader
because no other company in Pakistan has ever positioned itself as so customer
oriented and differentiated themselves as food and nutrition company.

The greatest opportunity that nestle can avail is that, Pakistani market is still not
mature enough and there are huge opportunities to grow. Pakistani market is an
expanding market and it has got a lot of flexibility. People in Pakistan are
becoming more aware about the health issues and they have started to take care
about their bodies.

Lack of competition:

Since no other strong competitor is prevailing in the market nestle has got the
opportunity to attract the customers totally towards its market offerings and can
easily build customers preference for its brands.

Being a world leader in business nestle has got enormous resources, therefore
by utilizing those resources nestle can run massive campaigns to create the
awareness among the people regarding health issues, create a need for their
products and attract customers by educating them.

Since Pakistani market is still an immature one nestle can win the whole market
through its enormous research, development, innovation and experience.

Economic Trends:

During the past ten years economic trends have changed drastically, people
became rich in Pakistan because of excessive privatization and foreign
investment policies of government. In today’s Pakistani economy:

• Consumers have a larger disposable income

• Urban populations are growing and feeding periods shortening

• Research suggests that nestle sales increase if the product is made more
available to the consumer

These findings, coupled with today's more discerning consumer, suggest that
nestle will be able to capitalize on the impulse nature of the food purchasing
decisions of the consumers.

Threats

Missing the targeted customers:

Nestle has positioned itself as health and nutrition company, and targets health
conscious people throughout the world. The biggest threat to nestle Pakistan is
that, the health conscious people, who are the target market of nestle, do not like
to stuff their bodies with preservatives and food additives which are present in
the processed food. Pakistan is a land where fresh eatables are readily available,
and those who can actually afford nestle products can also easily afford fresh
fruits and vegetables. Over the past ten year awareness regarding to the health
issues among the people has increased dramatically and this awareness has
induced a negative attitude towards the processed food. Hence for nestle
Pakistani market is a tough one to deal with when it comes to the processed food
because people do not need it when fresh eatables are available in abundance.
Therefore nestle has to create the need before introducing a new product in
Pakistani market.

Fake nestle products:

One of the threats that nestle faces in the Pakistani market is the availability of
fake nestle products for sale, hence customers are deceived when they consume
the substandard products consequently they loose trust and stop the
consumption of the nestle products.

Discontentment due to the discriminatory acts:

Much discontentment prevails in the Pakistani market due to the fact that nestle
products available in Pakistani market are of inferior quality as compared to
similar nestle products available in the markets of first world countries, while they
are charging the same international prices from the consumers of all countries.

Milk production and human rights:

Since Nestle has opened a milk processing plant in Kabirwala, Punjab in

Pakistan. The plant is reportedly Nestlé’s largest milk reception facility in the
world, and has a processing capacity of 2 million liters per day. This is expected
to rise to more than 3 million liters in the coming years, the company said. This
has led the human rights Ngoc’s working in Pakistan to rally against nestle
regarding to the fact that local people are being deprived of milk because of
Nestlé’s such act.

Competitors:
 A threat prevailing in the Pakistani market is coming from the competitors, local
as well as multinational competitors. Local competitors like Shezan and Haleeb
are producing the similar products and selling them for lower prices. Companies
like coca cola and Pepsi are tough competitors to beat specifically when coke
has got a far better distribution system in the market.

Allergic reactions:

Due to the following allergic reactions caused by the consumption of nestle

products consequently people are becoming more and more dissatisfied and
hence lower level of sales.

Allergic reactions caused by the consumption of nestle products:

A lot of adverse medical conditions have been witnessed in Pakistan among the
continuous consumers of nestle products, which include:

hair fall due to the consumption of nestle PURE LIFE

yellow teeth caused by consuming EVERYDAY tea whitener

Stomach problems such as acidity caused by consuming nestle NIDO.

Nestlé is a multinational packaged food company founded and headquartered in

Vevey, Switzerland. It resulted from a merger in 1905 between the Anglo-Swiss
Milk Company for milk products established in 1866 by the Page Brothers in
Cham, Switzerland and the Farine Lactée Henri Nestlé Company set up in 1867
by Henri Nestlé to provide an infant food product. Several of Nestlé's brands are
globally renowned, which made the company a global market leader in many
product lines, including milk, chocolate, confectionery, bottled water, coffee, ice
cream, food seasoning and pet foods. The company stock is listed on the SWX
Swiss Exchange.

Much of the company's public image has been dominated by the world-wide
media furore that surrounded the manner in which it sold its breastmilk substitute
to developing countries, which led to the Nestlé boycott from 1977. Although the
company has taken serious measures to combat the damage that this caused to
its brand, it is still widely associated with questionable business ethics especially
with regards to the developing world.

NESTLE PRODUCTS

Nestlé has a wide range of products across a number of markets including coffee
(Nescafé), Water, other Beverages, Ice cream, Infant foods, performance and
healthcare nutrition, seasonings, frozen and refrigerated foods, confectionery
and pet food.

DEFINITION OF PRODUCT:
“Anything that is produced, whether as the result of generation, growth, labor, or thought, or by
the operation of involuntary causes; as, the products of the season, or of the farm; the products of
manufactures; the products of the brain.”

”The word product qualifies a marketing concept. A product is more than a

person, place or thing. Nothing is more important to a marketing strategy than
the "product concept”.

Aggressive marketers believe that continuous product development is the most

important of all strategic marketing activities.

WHAT IS PRODUCT MARKETING?

An organization must properly define the function of strategic product marketing

before it can be effective. For example, one common mistake is thinking that
marketing is advertising, another is that marketing is gathering information or
finding new prospects. While these objectives are certainly key parts of
marketing, the successful strategic marketer will seek additional objectives.
The definition of strategic marketing is usually divided into four functional
areas.

Marketing includes having something for people to buy, finding people who will
buy, encouraging people to buy, and providing value. Together, these objectives
form a picture of strategic marketing.

To more easily remember these objectives, marketing is often described as The

Four P's:

• Product

• Place

• Promotion

• Price

NESTLE BRAND EQUITY:

Nestle has been serving this world for over one hundred and thirty years. Over all
these years nestle has successfully gained people’s trust, hence they are even
ready to pay premium price for nestle products, because they know that they are
buying something valuable for their money. Nestle has differentiated itself with
its high quality products, it has positioned itself as health and nutrition company
and targets health conscious people around the globe. Therefore nestle has got
a very strong brand equity.

PRODUCT DEVELOPMENT AT NESTLE:

Nestlé is probably unique in the food industry in having an integrated research

and development program that engages in applied and basic research in the
fields of human physiology, health, nutrition and raw materials. Its research and
development program gives it the capacity to create new types of products that
we cannot even imagine today, especially in the critical area where preventive
medicine and food products overlap. In addition, as concern for the environment
grows, research will play an important role in overcoming environmental
problems. For Nestlé, this is particularly important in packaging. Concern for the
effects of packaging on the environment is forcing it to look for new solutions and
to consider their interaction with our biological product -- food.
The Nestlé research and development centers have two main tasks: to create
new products and manufacturing processes and to improve those that already
exist. These centers play a key role in product safety and quality and also have
their role in conserving resources and protecting the environment. Environmental
concerns are an integral part of any development process to ensure that our
future commercial operations meet the desired criteria.

The Nestlé Research Center provides the scientific support needed to prevent
and solve environmental problems arising in the development groups as well as
manufacturing. In addition, studies are carried out to find new ways of using
industrial residues to create valueadded byproducts. This will reduce total
emissions and effluents.

The Nestlé development centers prepare environmental impact studies for new
products and manufacturing processes. These cover all aspects, from raw
materials, through processing, to the final packed product. These analyses
provide additional elements for use in deciding whether to commercialize a new
product, or to introduce a new or modified process.

NESTLE PRODUCTS LIFE-CYCLES:

Nestle deals in eatables whose lifecycle is as old as the humanity itself, therefore
nestle products enjoy a long life-cycle. Not only this nestle keeps on innovating
new products keeping in view the changing global needs and also renovating the
existing products, for example nestle introduced calcium fortified corn flakes and
fruity yoghurt.

COMPONENTS OF NESTLE PAKISTAN:

NESTLE PRODUCT CLASSIFICATION:

Nestle deals in both type of products:

1) consumer products

2) industrial products

CONSUMER PRODUCTS BY NESTLE:

 The type of consumer products in which nestle deals are basically
convenience products that consumer usually buy frequently, immediately
and with a minimum of comparisin and buying effort. Nestle provide superior
quality products in pakistani market, that is the reason they achieved a bigger
market share of consumer convenience products in a short period of time.
Nestle is a market leader difficult to compete.

INDUSTRIAL PRODUCTS BY NESTLE:

Though nestle deals in eatibles only but its products are also used as industrial
products. Nestle products are used as manufactured materials in restaurants,
for example nestle juices are served at hotels like PC, AVARI and HOLIDAYINN
for breakfast, moreover its products like cream, yoghurt, cornflakes etc are the
part of several recepis served at restaurants. Nestle also provide vending
machines like coffee vending machine and juices vending machines at hotels,
restaurant, colleges and offices, it also provide services regarding to these
machines.

BRAND MANAGERS:

Since nestle is a huge organization therefore there is a brand manager for each
of its divisions and they are:

Imran (juices), Majid Saeed (NPL), Ibrrar Khan (Coffee), Jamal (everyday).

NESTLE PRODUCT MIX:

Nestle product mix includes processed food items and hot and cold bevrages.

NESTLE PRODUCT LINE:

A list of nestle product lines is given below:

MILK,DAIRY & CHILLED DAIRY:

• NESTLE MILKPAK

• NESTLE NESVITA

• NESTLE NIDO

• NESTLE NESLAC
 • NESTLE EVERYDAY

• NESTLE YOGURT

• NESTLE FRUIT YOGURT

• NESTLE RAITA

• NESTLE CREAM

• NESTLE DESI GHEE

BEVERAGES:

• NESCAFE

• NESTLE MILO

• NESTLE JUICES

• NESTLE INSTANT DRINKS

BOTTLED WATER:

• NESTLE PURE LIFE

• AVA

BABY FOOD:

• NESTLE CERELAC

PREAPRED MEALS:

• MAGGI 2-MINUTE NOODLES

BRAKFAST CEREALS:

CHOCOLATE & CONFECTIONARY:

• NESTLE KITKAT AND KITKAT CHUNKY

• POLO

RAW MATERIALS FOR NESTLE PRODUCTS:

 Nestle does not generate raw materials to be used in its products by itself
instead Nestlé grows by manipulating ingredients or processing technology
for local conditions, and employ the appropriate brands. For example instead
of going into corporate farming nestle partners with the local milkmen in
southern Punjab for its continuous supply of milk. Nestle does not own the
fruit farm for its juices instead it purchases orange and mango pulp from
Pakistan, pineapple pulp from Malaysia and Thailand and grapes pulp from
Spain.

Packaging of nestle products:

Nestle products have been a success on the market shelves because of the
following packaging characteristics:

• Functional - effectively contain and protect the contents

• Provide convenience during distribution, sale, opening, use, reuse, etc.

• Environmentally responsible

• Cost effective

• Appropriately designed for target market

• Eye-catching (particularly for retail/consumer sales)

• Communicate attributes and recommended use of the product and

package

• Compliant with retailers' requirements

• Promotes image of enterprise

• Distinguishable from competitors' products

• Meet legal requirements for product and packaging

• Point of difference in service and supply of product.

• For a perfect product, perfect colour.

NESTLE PRODUCTS IN PAKISTAN:

Details of products attributes, brands and packaging of several nestle
products available in pakistani market given below.

Pure, rich and delicious NESTLÉ® MILKPAK® standardized UHT milk benefits
from Nestlé’s expertise in bringing you the very best life has to offer and benefits
from 140 years of consumer trust.

Our extensive milk collection system ensures that the milk you get is of the finest
quality.
Encourage your family to exercise regularly, eat a healthy, well-balanced diet
and drink pure, nutritious milk for good health. Milk is a must-drink for your
children as it is a rich source of Calcium that helps in the growth and
development of strong bones and teeth. It is equally beneficial in keeping grown-
ups bones strong. So live to the fullest and enjoy the pure, wholesome goodness
of milk with

Low Fat Hi-Calcium Milk & Yogurt

Stronger Bones, Smarter You!

Did you know that your body loses a certain amount of Calcium every day that
must be replenished on a daily basis? Since your body cannot produce Calcium,
you must ensure that you get enough of it in your daily diet.
If you are set for an active and healthy lifestyle then you need to get the strength
your bones.

NESTLÉ® NESVITA® Milk is available in two handy sizes: 1000ml

and 200ml. NESTLÉ® NESVITA® Yogurt is available in a 450g tub
packaging.
*Source: Food & Nutrition Board, National Research Council Recommended
Dietary Allowances (Revised 1989)

One glass is 250 ml One serving is of 125 gms

Sehatmand bachay, sehatmand mustakbil!

Healthy kids, healthy future!

Children grow very quickly and so do their developmental needs. That is exactly
why Nestlé has developed NIDO® Nutrition System that understands the
nutritional needs of your children at all stages of growth.
NIDO® Nutrition System

As a part of the NIDO® Nutrition System, NESTLÉ® NIDO® 1+, 3+, 6+ and
NIDO® Fortified comprise a series of Nestlé’s milk powders that address the
developmental needs of children according to their age and nutritional
requirements.
NIDO® 1+ is developed for children NIDO® 3+ with Prebio 3™ is designed
aged 1-3 years. It contains Prebio 1™ to support your child’s mental and
that helps maintain a healthy digestive physical development as well as aid
system and protects from upset healthy digestion.
tummies.

NIDO® 6+ is for your 6 year old’s NIDO® Fortified is for children between
stronger bones and teeth. It is focused 4-12 years of age who are growing up
on children who are in an increasingly competitive
experiencing increased physical environment and require something
activity. It contains Calci-N™, Nestlé’s extra to ensure success on the playing
natural Calcium source from milk which field and in the classroom. It is
has Calcium and Vitamin D that help enriched with iron, 24 vitamins and
lock calcium in their bones. minerals, which are essential for your
child's growth.

Growing-up Milk for 1, 2 & 3 years of age

As a mother you want the best for your child and almost always worry about
his/her health. But are you completely sure if your child is getting sufficient
nutrition for his or her good health and development?
Many of you may not be so sure. Children between 1 to 3 years of age
experience rapid growth and strong height and weight gains making their
nutritional requirements unique.

That's why we have NESTLÉ® NESLAC®, growing-up milk for children 1-3 years
of age. NESTLÉ® NESLAC® provides the right vitamins and minerals in the right
proportions that your little one needs at this particular age.
NESTLÉ® NESLAC® is available in Honey flavour and is enriched with the right
balance of Protein, Iron, Calcium and Multivitamins to help give your child a
strong and healthy foundation for life!

Mazaidar chai har bar

Perfect cup of tea, every time
We love tea; our day doesn’t begin without it!
When it comes to choosing the milk for your favourite cup of tea why should you
settle for any ordinary milk?

NESTLÉ® EVERYDAY® dairy tea whiter, made from pure fresh milk gives you
that perfect rich taste that only specialized milk can, so you can enjoy the same
delicious cup of tea each time!

For your convenience NESTLÉ® EVERYDAY® is available both in powder and

liquid forms:
NESTLÉ® Yogurt is simply nutritious and delicious! It is a popular and preferred
accompaniment to our rich desi cuisines and palate! It contains the dairy
goodness and benefits of milk with live cultures that help the digestive system
function smoothly.

Use NESTLÉ® Yogurt for making chilled lassi, to refresh yourself or help settle
your stomach or just enjoy its creamy taste on its own.

Moreover, use NESTLÉ® Yogurt to make some coleslaw, jazz up the typical
boring green salad with a spoonful or two or enjoy it straight ‘n simple as your
breakfast accompaniment.
NESTLÉ® Yogurt is available in serves of 125g & 450g.
NESTLÉ® Fruit Yogurt, a mouth-watering treat with real fruit chunks in sweet
creamy yogurt, takes the yogurt experience up a few notches!

It is by far the delicious, healthier alternative to any other snacks – loved by kids
and grown-ups alike. It is easily digestible and a good source of Calcium too!

You can have it as a snack, as dessert, or even with your breakfast cereal but
most importantly you need not look for an excuse to enjoy this nutritious and
healthy treat any time you like!

NESTLÉ® Fruit Yogurt is available in 3 indulgent flavors: Mango, Peach and

Strawberry, in ready-to-serve 100g cups.

Pour it on pure ‘n thick for that soft, rich, velvety flavour that is MILKPAK®
Cream.

Its silky creamy texture is ideal with strawberries or mangoes! Some prefer to
give their coffee a swirl for that creamy finishing touch or put
a generous dollop on their naan (round flatbread).
MILKPAK® Cream is ideal for desserts, an assortment of toppings and to put a
rich spin on whatever you fancy!
If you weren’t happy with the raita (local Pakistani cuisine condiment) served last
that was anything but delicious or the one you had with the chicken tikka at a
dinner party had gone sour, take heart.

For reasons of health, convenience and hygiene, life should be simpler when it
can be made simpler: with NESTLÉ® Raita you can now indulge your taste buds
with the flavour that is just right to compliment your meal. Without the preparation
hassle and the worry of quality you can be assured that the raita you are having
is nothing but the very best from Nestlé.

NESTLÉ® Raita helps proper functioning of the digestive system, is easily

digestible and a good source of Calcium too! Life just got better!

Nestlé® Raita is available with cumin and podina (mint) to give you options to
choose from.

Har Ghar Ki Lazeez Rewaiat!

There's nothing like the rich traditional flavour of food cooked in desi ghee.
Whether it's the finest halva, tarqa on the daal or your grandmother's delicious
korma, MILKPAK® Desi Ghee adds the magnificence to your menu.
With MILKPAK® DESI GHEE you can be assured of top quality.
MILKPAK® DESI GHEE is available in 870g packaging.
Jaago!
Come Alive!

Stimulate your mind. Awaken your soul. Arouse your senses. Come alive with
NESCAFÉ®.

Every great tasting cup of NESCAFE® is rich, aromatic and favorable. It is frothy,
intense and indulging; bold and satisfying…

Serve it hot or icy cold; strong black or milky, the NESCAFÉ®

experiences are as diverse and unique as its many blends and
varieties. Ranging from the morning wake-me-up, to getting through
the day, quiet reflective moments to unwinding, parties to simply hanging out with
your pals, the NESCAFE® magic goes beyond just a great tasting cup of coffee;
its eye opening, thought provoking &
stimulating. It stimulates one physically, mentally and emotionally touching the
body, mind and soul. NESCAFÉ® fits the bill A to Z!

NESCAFE® CLASSIC
NESCAFE® Classic kicks start your day and keeps you going and going…

NESCAFE® GOLD
The premium blends of coffee that gives you rich taste with an aroma to soothe
your soul.
NESCAFE® 3in1
Sugar, Creamer & Coffee; all you need is love and a little hot water. Makes every
cup taste great. Easy to make, convenient to store and hassle free usage.

With the new and improved Nestlé MILO®, children have more reasons to be
active as it gives them the energy they need for an active and healthy lifestyle. A
specific balance of Vitamins, Minerals and
Actigen – E help optimize the release of energy from Proteins, Fats
and Carbohydrates.

Loaded with extra cocoa and rich malt, Nestlé MILO® has the
irresistible chocolaty taste that kids love. So treat your children with Nestlé
MILO® and watch them at their active best!

For your convenience Nestlé MILO® is available both in powder and ready to
drink forms:
 Oranges are in demand not only for their divine juicy flavour but equally
celebrated for their health benefits. They are naturally low in calories and an
excellent source of Fiber and Vitamin C. Nestle uses the orange pulp from the
oranges produced in Pakistan. Nestle orange is the only juice that nestle
sells and rest of its fruit beverages are nectar. Juice contains 80 to 90%
fruit and 10% water and flavors. Where as nectar contains 50% fruit and
50% water and flavors.

Apples have no fat and are cholesterol free. NESTLE® Clear Apple Nectar is made
from the finest Apples and is 100% clear. Nestle calls it apple nectar because
nectar contains 50% fruit and 50% water and flavors.

As irresistible as sin itself – give in to the amber kick of NESTLE® Clear Apple
Nectar.

Grapes also called the ‘queen of fruits’ are known for their great internal body
cleansing properties. They are a good source of Vitamin C and Potassium that plays
an important role in proper heart functioning by regulating blood pressure and heart
beat. Nestle imports grapes pulp from Spain to be used in grapes nectar.
Relish the full-bodied, smooth flavor of NESTLÉ® Red Grapes Nectar and let your
taste buds soak in the sensuous richness of Red Grapes.

Pineapples are good source of Vitamin C, an antioxidant that helps fight against free
radicals, one of the main reasons for aging.

Made from premium pineapples, NESTLÉ® Pineapple Nectar brings you the exotic
taste of pineapples with a refreshing tropical flavor and is a good source of Vitamin
C. Nestle imports pineapple pulp from Malaysia and Thailand.

Sink into Fruity Refreshment

Feel the burst of fruity fun and discover the flavors of NESTLÉ® Mango &
NESTLÉ® Mango Orange fruit drink made with the juiciest, sweetest Mangos and
racy, sharp Oranges to sass up your taste buds.

Now that is a sweet deal!

ReVitalize With Pure Vitamin Burst!

You are living life in a constant overdrive and your body needs to equip itself to fight
the daily wear out.

NESTLE® FRUITAVITALS™ mix fruit juice fortified with Vitamin A, B, C & D is a

delightful combination of Orange, Apple and Guava to give you the perfect hit of
flavour and Vitamins to get you revitalized and in top gear. What’s more it has no
added sugar!

NESTLÉ® Limo (Lemon) & NESTLÉ® Malta (Orange) Instant Drinks provide
fruit-filled refreshment that quenches your thirst and energizes your body with an
instant citrus boost!

They are both available in 25g single-serve sachets that are convenient and
affordable. But what really hits the spot is that NESTLÉ® Instant Drinks are
packed with Vitamin C that provides immunity against diseases and helps put the
glow in your skin.
NESTLÉ® Limo (Lemon) gives you 36% RDA of Vitamin C and NESTLÉ® Malta
(Orange) gives you 24% RDA of Vitamin C. So get refreshed and invigorated
with NESTLÉ® Limo and NESTLÉ® Malta!

Now also available in a convenient 500g Jar packaging

Pakistan’s Favorite Water

NESTLÉ® PURE LIFE™, is pure, safe and healthy drinking water for you and
your family.

Every bottle of NESTLÉ® PURE LIFE™ is produced with the Nestlé Safety
System and is carefully sealed with a proprietary seal. Purity of the highest
standards is matched by an optimal balance of essential minerals, enhancing the
health and wellbeing of your family.

No wonder its Pakistan’s favorite water because more people trust it than any
other brand.

For your convenience NESTLÉ® 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).
Be Good to Yourself
Safety, convenience and value are just what you get from AVA ®, your source of
pure, safe and healthy drinking water for you and your family.

AVA ® is packed and sealed in special sterilized bottles and caps to ensure the
highest standard of quality and safety, keeping clean of all suspended and
dissolved contamination.

AVA ® is available in two economical sizes of 12 and 19 Liter bottles. You can
get your 19 Liter bottle delivered free of cost through our home and office
delivery service. The 12 Liter take-home bottle can be conveniently collected
from any leading retail outlet by placing a refundable deposit.

For your convenience, AVA ® also offers different payment options that give you
more value for your money.

*Only available in Karachi

Bharpoor nashvonuma!
Sehatmand mustakbil ka behtrin aghaaz!
Best Start to a Healthier Future!
Whether it’s your first-born or even your third bundle of joy – each
baby is unique and special. You want the best for your baby in every way and
that also means the best nutrition for your baby’s healthy
development, giving him or her the solid foundation for a bright and healthy
future!

From birth to 3 years of age, your baby goes through a period of rapid growth
and development. Choosing the best nutrition for your baby can be difficult and
confusing and you always wonder if it’s just right.

Each stage of your baby’s growth is unique and so are the changing nutritional
requirements. NESTLÉ® CERELAC® infant cereals (6 months onwards) are
easy to digest and grouped in stages according to the changing nutritional needs
of the growing child, with NESTLÉ® CERELAC® providing the right nutrition at
each stage.

NESTLÉ® CERELAC® is available in three sizes: 400g & 200g box packaging
and a 25g sachet packaging for your convenience.

STAGE
1

STAGE
2
 From birth to 3 years, your baby will undergo a period of rapid growth and
development. Nestlé Developmental Nutrition Plan helps your baby grow
through each unique stage so that he/she always gets the right nutrition at
the right moment.

STAGE 1 GENTLE FIRST FOOD

CERELAC® Rice

CERELAC® Wheat

NESTLÉ® Rice

STAGE 2 NEW TASTES

CERELAC® Wheat 3-Fruits

CERELAC® Wheat Banana

 CERELAC® Wheat Honey

STAGE 3 RICHER TASTES & TEXTURES

CERELAC® Wheat 5-Fruits

CERELAC® Chicken Vegetable Rice

JUNIOR STRONG FOUNDATION

NESTLÉ® NESLAC®

New Maggi Atta Noodles - Taste bhi, Health bhi

MAGGI® 2-Minute Noodles™ brand new offering of MAGGI® Atta Noodles

contains the natural goodness of whole wheat. A source of Protein and Fiber -
good for digestion, great for your heart and essential in the re-building of muscles
and cells in your body. Now make sure that the food you eat is tasty as well as
healthy!

One pack of MAGGI® Atta Noodles contains the nutritional benefits of 2 Rote of
Real Atta (1 pera = 400 gms ).

Jub bhook satay MAGGI® ho jayee!!

Open up a pack of MAGGI® 2-Minute Noodles and give your kids a fun, warm
snack they love to eat! Fast to cook and good to eat! Kids love ‘em!

Did you know that MAGGI® 2-Minute Noodles have 307 Kcal and on an average
one serving meets about 35% of your 4-8 year old’s RDA* for Protein
Protein plays an important role in the regulation and growth of muscles, skin,
hair, eyes and other organs.

So whenever your kids are hungry for a yummy snack, choose from the exciting
flavors of MAGGI® 2-Minute Noodles: the widely popular Chicken, Chatkhara
and Chicken Tikka for the more adventurous taste buds.

* RDA (Required Dietary Allowance): Source is DRIs (Dietary Reference Intakes)

for individuals, Macronutrients, Food and Nutrition Board, Institutes of
Medicine, National Academies.

Breakfast has been declared the most important meal of the day – and with good
reason. It’s the first meal after your body has been resting all night and this is the
meal that is going to fuel the body and prep it for the day ahead.

All of us: children, teens and even adults benefit from a good breakfast. A bowl of
cereal is an ideal way to start your day!
Available in three varieties, NESTLÉ® CORNFLAKES (275g and 150g boxes),
kids’ favorite chocolaty NESTLÉ® KOKOKRUNCH® (330g and 170g boxes) and
NESTLÉ® HONEY STARS® (300g and 150g boxes), are delicious cereals made
from wholesome grains and packed with Vitamins, Calcium and other minerals.

Have a break, have a KITKAT

Chocolate is one of the most loved indulgences around the world.
It is one of life's little pleasures, which delights the senses of all ages.

NESTLÉ™ KITKAT® is by far one of the most popular chocolates all around the
world! It’s trademark red and white colors and the distinct NESTLÉ™ KITKAT®
logo makes it one of the most recognized brands ever.

This light hearted treat of wafer fingers coated with delicious smooth chocolate,
can be enjoyed in the signature style of snapping one finger at a time.

NESTLÉ™ KITKAT® Chunky is a single solid finger that is perfect for those who
want a mouthful!

So have a break have a KITKAT!!!

NESTLÉ™ KITKAT® is sold in 11g, 17g and 35g finger bars and
NESTLÉ™ KITKAT® Chunky is available in 46g bar.
Just the right sweetness, fresh and minty. That’s POLO®, the
all-time favourite mint with the hole. It’s popular around the globe
for its just-because moments!

POLO® mints are products for all occasions, especially when you need to
freshen your mouth and breath with its cool, lingering aftertaste.

POLO® mints come in stick-packs of 6, 14 & 20 mints.

PRODUCT AND SUPPORT SERVICES:

“Only by listening to what people say can we understand what they want and
need. Only by understanding their needs can we serve our consumers to the
fullest”. Nestle is the first ever company in Pakistan which introduced the
customer services tradition. Nestle listens to its customers carefully and try to
rectify the product related problems as soon as possible.

Foresight:

At present, the world faces daunting questions about its ability to provide enough
wholesome food for everyone. Malnutrition and poor eating habits are still
serious problems in many developing countries. By 2100, the world's population
will double. Will it be possible to feed a world with so many inhabitants? At
Nestlé, the big picture is all about feeding the world and providing food and
nutrition for an ever-growing population. Our response to this situation is to
intensify research, strive for innovations and improve quality.

Price

Price is the only revenue generating element among the 4’ ps of marketing. Price
can be defined as:

“The amount of money charged for a product or service or the value exchanged
for the benefits of the product or service”

More broadly, Price is the sum of all the values that customers give up in
order to gain the benefits of having or using a product or service. It’s a very
powerful tool at the disposal of an organization to differentiate its offerings.

Pricing strategy:

Nestle pricing is an important strategic issue because it is related to product

positioning. Nestle is basically using psychological pricing strategy as they are
earning huge profits, approximately 30% on their products. People believe in
nestle hence this aspect gives nestle a competitive advantage being a market
leader to set its prices high. The main thing behind the success of nestle is they
keep an eye on their customers and accordingly they change the price. People
have trust in nestle that is the reason they are willing to buy nestle products
again and again. Nestle has always tried to enter the market with the right price
and then justifying it with high quality products and by communicating and
transferring the maximum value to the customers.

“Duniya Main Her Kemti Cheez Mehngi Nahe Hoti”

This slogan by nestle proves its pricing approach.

In addition to this pricing approach nestle focuses on vide range of SKU’s in

order to capture greater market segment keeping in view their buying power.
This way nestle ensures their consumption in the entire segment of market.
Therefore nestle adopt “value base pricing”.

Nestle has been the low cost leader through its extensive research and
efficient operations. The Nestle Group is in principle not directly involved in
primary production of raw materials and other food ingredients. In general nestle
use locally available raw materials and purchase them either directly from
producers or through existing trade channels. Nestle has differentiated itself as
health and nutrition company, therefore it targets health conscious people
throughout the world. In Pakistan nestle has positioned its brands as something
of supreme quality.

Therefore nestle has determined its prices a bit higher than the other local
brands available in Pakistan. It targets the people belonging to the upper middle
class and above who can afford nestle products for daily use.

In Asia, Nestlé’s strategy has been to acquire local companies in order to form a
group of autonomous regional managers who know more about the culture of the
local markets than Americans or Europeans. Nestlé’s strong cash flow and
comfortable debt-equity ratio leave it with ample muscle for takeovers. Recently,
Nestlé acquired Indoo, Indonesia’s largest noodle producer. Their focus will be
primarily on expanding sales in the Indonesian market, and in time will look to
export Indonesian food products to other countries.
Nestlé has employed a wide-area strategy for Asia that involves producing
different products in each country to supply the region with a given product from
one country. For example, Nestlé produces soy milk in Indonesia, coffee
creamers in Thailand, soybean flour in Singapore, candy in Malaysia, and cereal
in the Philippines, all for regional distribution.

All these strategies have helped nestle to keep its costs and consequently its
prices low, with the supreme quality products that it offers to its customers.
Nestle does not want to become either a conglomerate or a portfolio manager.
Nestle wants to operate only those businesses about which it has some special
knowledge and expertise.

Retail and wholesale selling at Nestle:

Nestle brings its customers with its products through distributors. Though nestle
does not involve itself in retail selling but still it provides its customers with the
free home and office delivery facility, but mostly it only go for the wholesale
selling.

DISCOUNTS

Discount is the:

“A straight reduction in price on purchases during a stated period of time”

The discount rate offered to the employees in very high. The main reason behind
the success of nestle is key consider themselves as a family and then change
the price. The discount they offers to their distributors are like 12+1 offer or buy
5000*24bottles and get free dispenser. The discount they give to the customers
is of JUMBO rewards for these brands that they sold directly JUMBO rewards are
basically the points per bottle earned.

Right now it is limited to the jumbo services. When you earn some points then
you can choose different things that are changed after every six months.

“The customers are very much satisfied with our brand and a product, so we
don’t wast time in thinking of discount offers, we focus to expand our brand”
By: brand manager juices

WHAT IS PROMOTION?

It is not enough for a business to have good products sold at attractive prices. To
generate sales and profits, the benefits of products have to be communicated to
customers. In marketing, this is commonly known as "promotion".

Promotion is a form of corporate communication that uses various methods to

reach a targeted audience with a certain message in order to achieve specific
organizational objectives. Nearly all organizations, whether for-profit or not-for-
profit, in all types of industries, must engage in some form of promotion. Such
efforts may range from multinational firms spending large sums on securing high-
profile celebrities to serve as corporate spokespersons to the owner of a one-
person enterprise passing out business cards at a local businessperson’s
meeting.

Promotion Mix:

A business' total marketing communications programme is called the

"promotional mix" and consists of a blend of advertising, personal selling, sales
promotion and public relations tools. It is helpful to define the four main elements
of the promotional mix before considering their strengths and limitations.

(1) Advertising

Any paid form of non-personal communication of ideas or products in the "prime

media": i.e. television, newspapers, magazines, billboard posters, radio, cinema
etc. Advertising is intended to persuade and to inform

(2) Personal Selling

Oral communication with potential buyers of a product with the intention of

making a sale. The personal selling may focus initially on developing a
relationship with the potential buyer, but will always ultimately end with an
attempt to "close the sale".

(3) Sales Promotion

Providing incentives to customers or to the distribution channel to stimulate
demand for a product.

(4) Publicity

The communication of a product, brand or business by placing information about

it in the media without paying for the time or media space directly, otherwise
known as "public relations" or PR.

NESTLE ADVERTISING STRATEGIES:

Nestle launched every product with aberrant marketing strategies and tactics.
Some of it's products were a total new concept in our society like tea whitener,
two minute noodles, UHT milk e.t.c but with so extensive marketing the products
brought this saying into life i.e., vini vici vidi (they came, they saw and they
conquered). It conducted puppet shows in schools as well as on roads creating
consumer awareness as well as brand preference. Such marketing tactics were
unknown (or sparingly seen) before in Pakistan. Recently, launch of Nestle
FROTH`E (coffee) and free sampling at Macdonald's proved to be success.
Nestle increasing sales is attributed to innovative strategies and a sound
distribution network that has proven to be par excellence.
NESTLE’S PHILOSOPHY:

• Win consumers' trust

• Understand consumers' nutritional and emotional preferences

• Serving our consumers and improving their quality of life.

• Our strategy starts and ends with the consumer.

Our lifestyles and approach to life has evolved and changed significantly. With
new technology and information, our lives are easier, but we are also a whole lot
busier. Health and nutrition is more dynamic than ever. Food has evolved from
being a necessity to becoming an expression of how we live and what we want
from life. It is all about making informed choices. And in this progressive and fast-
changing time, your future begins today.

Concepts and products you would have considered eccentric and frivolous
earlier are the order of the day. Food is not just about nourishment anymore; it
has evolved into a source of taste and pleasure along with health and nutrition
benefits.

Consumers will never give up good taste, but more and more, foods that also
make good nutritional sense are finding favor everywhere in the world.

This shift and awareness is a fresh approach to life. It is the development and
nurturing of a life-long relationship. It is the way forward to: Good Food, Good
Life.
Eat well to live well!

There is a lot of hype about two catch phrases: wellness and well-being. They
are not exactly the same, yet have inter-linked meanings. Wellness is the
platform on which well-being rests.

Nutrition

The science of food in its relationship to health. The essential “good for you”
elements that help us grow strong and stay healthy. It refers to how our body
uses nutrient substances contained in food so that it can carry out its functions
properly.

Health

Soundness of body or mind, characterized by a strong constitution, plenty of

energy, a resistance to illness quick recovery, good skin, clear eyes, etc.

Wellness

A condition of enhanced health mainly focused on physicality, an actively sought-

after goal; maintained by good diet, exercise and life habits. Feeling of vitality
and being in good shape.

Well-being

A state of being happy and healthy, prosperity of spirit, contentment, a feeling of

satisfaction and fulfillment in one’s life. Well-being is less focused on physicality,
but rather on all three dimensions of body, mind and soul. Well-being is inclusive
of good health and wellness, encompassing the emotional dimensions of look
good and feel good.

However all the happiness in the world can only be meaningful if one is healthy.
Like it is said, ‘Jaan hai tau jahan hai.’ This means that with good health, you
have the world at your feet. Eat well to live well; after all we are what we eat.
Remember: there are no bad foods, only bad diets so make your choices with
care and know your own nutritional needs.
Nestlé is leading the change in the food industry as it is also the leading food
company in terms of having the largest set up of research and development in
food science and nutrition. We are uniquely positioned to provide products that
help consumers live a good life. Many Nestlé brands have benefited from the
active ingredients developed by Nestlé research and with over 130 years of
expertise, consumers know they are getting the best in quality when they choose
a Nestlé brand.

Happy and healthy consumers are at the heart of what we do. Our company
philosophy is summed up in the phrase “Good Food, Good Life: and we remain
committed to help consumers choose better tasting and healthier products to
help them enjoy happier, healthier lives. We welcome you to a world of health
and wellness!

To live a healthy, fulfilling life, you need to stay on top of your nutritional and
lifestyle requirements. Eating anutritious and balanced diet lies at the foundation
of a life of good health and wellness. However, besides good food, you also need
to stay fit, active and keep stress at bay. Recognize that your body and mind will
change as you grow older – and so will their special needs.

We have collected some great ideas to help you explore how easy it is to bring
wellness into your life, no matter how busy you are. Moreover, you will also find
out how to have fun doing it!

Good Food, Good Life is about making sure your kids live a life of well-being. For
your children to be bright, healthy & active, you need to know for every age what
their nutritional and lifestyle requirements are.

Here we bring together a wealth of ideas that help bring together friends,
parents, sisters and brothers to discover new ways to grow together, participate
in group activities and strengthen relationships with each other. We share little
ideas that help you be a more supportive and nurturing parent.

Go back to the basics that hectic life shoved on the backburner, and rediscover
the joys of parenting! It's the little things that make all the difference in the world,
so unlock all the little ideas for big fun, love and the joy of being a happy family.

NESTLE’ CONSUMER COMMUNICATION PRINCIPLES:

Communication with consumers

_All representation including text, sound, and visual, should accurately represent
the product, including taste, size, and content.

_ Health benefit claims must have a sound scientific basis, comply with
applicable legislation and regulations, and be easily understood by consumers.

Nutrient content information, including fortification and nutrition claims, must be

made in a way that accurately reflects the nutrition composition of the product,
and comply with applicable legislation and regulations. Specific benefit
claims/propositions on packaging must reflect local legislation.

_ Food advertising should depict moderation in food consumption, including

moderate portion sizes

(i.e.: not excessive, but sensible), with portion sizes appropriate to the target
audience and social context.
_ Wherever possible and appropriate, food and drink advertising should depict
an active, rather than a sedentary, life style.
_ Products that form only part of a meal should clearly be depicted as such.
Unless a snack food or beverage has been nutritionally designed as a meal
replacement, it should not be portrayed as such. Snacks and confectionery bars
should be promoted in a manner that does not suggest that they replace a meal.
_ The content of consumer communications must reflect good taste and social
responsibility in accordance with each country’s laws and regulations and
voluntary codes and standards. Although standards will vary from country to
country, it must not display vulgarity, bad manners or offensive behavior and
there must never be an intention to shock or offend.
_ Advertising content must not depict attitudes that are discriminatory or
offensive to religious, ethnic, political, cultural or social groups.
_ Advertising should avoid exploiting media events that could be in bad taste.
_ Advertising should never exploit the misfortunes of others.
_ Consumer communications must show the consumption of products in a safe
way, and not depict persons engaged in dangerous activity.
_ Advertising should not name competitors directly, portray competitive products
inaccurately, nor denigrate them.
It is against Nestlé principles to sponsor or place advertising in television and
radio programmes, or magazines and websites whose strategy for attracting
viewers or readers relies on exploiting violence or sex, or encouraging offensive
behavior to others. When collecting consumer data, including from children,
Nestlé complies with applicable privacy legislation and regulations, and applies
Nestlé standards where specific

Children as consumers

In addition to the above principles for all consumers (including children), Nestlé
has developed the following principles for communication specifically aimed at
children. (By “children” in general we mean those less than 12 years, but
definitions vary from country to country.)

Nestlé must at all times be diligent in applying these principles, and use common
sense and good judgment to interpret them appropriately for each country.

_ Food products advertised to children must be appropriate for the specific age
range portrayed in the advertisement.

_ Advertising should not mislead about potential benefits from the use of the
product. Such potential benefits may include, but are not limited to, status or
popularity with peers, physical growth, strength or proficiency.

_ Our communication must not undermine the authority of parents. Children

shown in our communication should not be seen urging parents or others to buy
products.
_ Advertising directed to children should not create a sense of urgency; imply
exclusivity, or price minimization, for example, by using words like “now” and
“only”.

_ Advertising should not portray or encourage behavior intended to shock or

create anxiety in children, including use of violence, or sexual innuendo.

_ Fantasy, including animation, is appropriate for younger as well as older

children. However, it should not create difficulty in distinguishing between the
real and the imaginary.

_ Products developed from or associated with programmed content primarily

directed to children should not be advertised during or adjacent to that
programmed.

_ Programmed personalities, live or animated, should not be used to sell

products, premiums, or services in or adjacent to programmes primarily directed
to children in which the same personality or character appears. In the same way,
a character or personality associated with the editorial content of a print
publication should not be used to sell products, premiums, or services in the
same publication.

_ Sampling and promotional activities in schools and at events will be done only
with the prior agreement and consent of the school administration and event
organizers. It should comply with applicable legislation or regulations, and should
ideally be accompanied by some kind of educational nutritional messages.

_ In July 2007 Nestlé decided to strengthen its principles on advertising to

children yet further, adding the following two new provisions to existing ones.

The following will be fully implemented in all countries by the end of 2008 at the
latest

1) No advertising or marketing activity may be directed at children under 6;

2) Advertising for children from 6 to 12 to be restricted to products with a

nutritional profile which helps children achieve a healthy balance diet, including
clear limits for such ingredients as sugar, salt and fat.

CONSUMERS, DIET AND PHYSICAL ACTIVITY

Nestlé believes that individual responsibility and freedom of choice are basic
human rights. However we have a responsibility to help build awareness of how
people can exercise control over what they eat and drink – to ensure that they
enjoy a balanced diet.

Nestlé considers that proper nutrition and adequate physical activity are integral
to maintaining good health.

Nestlé develops, produces, and markets a wide range of foods and beverages.
These products satisfy many consumer needs: nutrient content, variety,
pleasure, and convenience. Every food and beverage has a role to play in
contributing to the consumer’s achievement of a balanced, healthy diet and
overall well-being.
PUBLIC RELATIONS

What is good for you is good for us!

Consumer Relationship Marketing lies at the heart of Nestlé Consumer services.

We strive to build a long-term, sustainable relationship of trust and loyalty.

Our customer staff stands ready to help consumers with any queries or
complaints regarding our products, and draws upon Nestlé Pakistan's vast in-
house resources to answer questions.

Recently, we launched an advanced consumer contact management system

called CONSO+. This is a specialized programme specifically designed to help
us deal with contact management and analysis and form closer ties with our
consumers.

GETTING CONNECTED

Direct contact with consumers is at the heart of our vision. For many people
around the country, our field staff is the face of Nestlé.

These dedicated field staff invite consumers, mostly homemakers, to Nestlé

activities.

We invite our guests to learn more about Nestlé and its philosophy and brief
them about our brands. We try to give them vital information about health and
wellness, to help their families live a better lifestyle.

At these sessions homemakers have the opportunity to learn about a company

that produces many of their favorite foods and beverages, globally and locally.

They also have the confidence of knowing that any concerns regarding their
family's nutrition, health and wellness will be capably answered. They know that
they can rely on Nestlé.

SHARING AND DEVELOPING RECIPES

PROMOTIONAL CAMPAIGNS

NIDO –SEHAT KAHANI

Mothers want the very best for their children in every way to provide them with a
happy healthy life.

NIDO® Sehat Kahani has been launched to introduce a platform where child
nutrition and wellness are brought into focus. Supported by Nestlé’s expertise in
nutrition, the NIDO® Sehat Kahani programme endeavors to inform, guide and
educate mothers about child nutrition, health, fitness and wellness.
NIDO® Sehat Kahani communicates on television with the help of endorsements
from educationists, teachers, nutritionists, psychologists and sports coaches to
help mothers nurture their children even better by making informed choices and
taking appropriate measures for their health and wellness.
This programme has been appreciated and met with great success. It is now an
integral part of NESTLÉ® NIDO’s® communication to help mothers take care of
their children even better.

Doodh ki Qudrati Ghizayat

Pure, Nutritious Goodness of Milk

Pure, rich and delicious NESTLÉ® MILKPAK® standardized UHT milk benefits
from Nestlé’s expertise in bringing you the very best life has to offer and benefits
from 140 years of consumer trust.

Nestle MILKPAK is UHT milk, which gets heat treatment at a very high
temperature for a very short time. This kills all micro-organisms in
milk. The ultra heat-treated milk is aseptically packed in tetra
packing. As the entire UHT process is intact until packing, heated at a
high temperature makes it bacteria-free, and hence giving a longer shelf
life to the product at an ambient temperature. No chemical preservative
is used for extending the product's shelf life. Furthermore, the shelf
life of the products is defined after extensive keeping quality studies
and analyses.

New Maggi Atta Noodles - Taste bhi, Health bhi

MAGGI® 2-Minute Noodles™ brand new offering of MAGGI® Atta Noodles

contains the natural goodness of whole wheat. A source of Protein and Fibre -
good for digestion, great for your heart and essential in the re-building of muscles
and cells in your body. Now make sure that the food you eat is tasty as well as
healthy! To communicate healthy tastes of Maggi meal different Nestle teams
visited schools and put up their stalls to communicate their message in children
and parents. Free samples were distributed among children as well.

Mazaidar chai har bar “Perfect cup of tea, every time”

We love tea; our day doesn’t begin without it!
When it comes to choosing the milk for your favorite cup of tea why should you
settle for any ordinary milk?

NESTLÉ® EVERYDAY® dairy tea whiter, made from pure fresh milk gives you
that perfect rich taste that only specialized milk can, so you can enjoy the same
delicious cup of tea each time!.Everyday ads and commercials on TV express
the relationship and emotional bond between loved ones, how to express
emotions…”BANAY HAIN AIK DOSRAY KAY LIYEE”

NESTLÉ® PURE LIFE™ is pure, safe and healthy drinking water for you and
your family .More and more people are realizing that added sugar in beverages
is not too healthy and adds unnecessary calories.

Water is vital to the human body and we can not live without it. It is one of the
key contributors to wellness. Amongst its many functions, water helps regulate
body temperature, transports nutrients and Oxygen to cells, flushes out toxins
and waste, cushions joints and protects organs and tissues.

It is recommended that you drink at least 8-10 glasses of pure, safe water every
day. If you have an active lifestyle, you will need even more: at least 10-12
glasses a day. It is important that you pay attention to the quality of water you
consume for good health and to safeguard against water-borne illnesses!
NESTLE SALES FORCE

Nestle has 485 factories the world over and its one billion items are sold each
day. The Nestle company's global chairman, Peter Brabeck Litmathe said that,
Pakistan Nestle is the largest consumer industry where its annual sales stand at
Rs.22 billion. The Nestle chief executive said the company has given direct jobs
to 10,000 people while one million people are employed through business in
Pakistan.

Nestle Pakistan, established in 1988, is presently running 5 factories - one each

in Sheikhupura and Kabirwala for dairy and other products, two in Karachi and
gone water factory in Islamabad.

NESTLE CONSUMER SERVICES:

Nestlé 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.

We 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, Nestlé 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.

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?
In our 140 years of experience, we have learnt that businesses and the societies
in which they operate are in a symbiotic relationship.

If society flourishes, business is good. If a business does well, it brings wealth

and stability to a society.

From this organic interdependence comes our conception of corporate Social

Responsibility (CSR).

We try to Create Shared Value at every step of our value chain, to ensure that
our actions benefit not only the company, but also society at large. Both are, after
all, interdependent. This consideration affects all our corporate initiatives.

Nestlé Pakistan is involved in a wide range of programmes and projects intended

to improve the lives of underprivileged Pakistanis.

Our efforts are focused on:

• Nutrition Programme for Mothers & Children

• Financial Support

• Well and Hand-Pump Installation Projects

• Help Centre for Farmers

• School Rehabilitation and Education Advancement

• Research & Development Initiatives

Nestlé respects the environment and is committed to environmentally sound
business practices throughout the world, thus taking into account the need to
preserve natural resources and save energy.

Marketing is based on the principle of satisfying consumer needs. This is the

foundation also for the environmental marketing approach of Nestlé.

Environmental product claims in advertising, promotional material and on

packaging are in accordance with legal requirements, based on solid scientific
evidence and used in a serious and reasonable manner.

Our aim is to minimize wastage in communication, publicity and promotional

material, in particular through more precise targeting of marketing activities.

Consumer promotions and merchandising material such as consumer offers, in

store promotions, display material, leaflets, printed matter, etc. take
environmental aspects into account.
In October 2005, the biggest natural calamity in our history struck Pakistan.
Thousands died and millions were left homeless after a massive earthquake hit
our mountainous northern areas.

In step with the rest of the nation, Nestlé Pakistan responded immediately,
putting its infrastructure and resources to work in the affected areas.

PLACEMENT

Placement: refers to how the product gets to the customer; for example,
point of sale placement or retailing. This fourth P has also sometimes been
called Place, referring to the channel by which a product or services is sold (e.g.
online vs. retail), which geographic region or industry, to which segment (young
adults, families, business people), etc. also referring to how the environment in
which the product is sold in can affect sales.

COMPANY NETWORK

Nestle is now the world's largest food company. It is present on all five
continents, has an annual turnover of 74.7 billion Swiss francs, runs 509 factories
in 83 countries and employs about 231,000 people the world over. The Company
owes its current status to the pioneering spirit inherited from its founders which
continues to inspire it, to its concern with quality and to its constant search for
new ways of satisfying man's nutritional needs. Wherever possible, it sets up
factories locally, employs personnel from the country concerned and relies on
indigenous raw materials. Its agricultural services provide assistance to improve
the quality and yield of the raw materials it uses. Much attention is devoted to
professional training and to the integration of the Company in its economic and
social environment

NESTLÉ IN PAKISTAN

Headquarters in Lahore, the company operates five production factories. Two of

its factories in Seikhupura and Kbirwala are multi product factories. One factory
in Islamabad and two in Karachi produce bottled water. Through its effective
marketing and a vast sales and distribution network thought out the country, it
ensures that its products are made available to consumers whenever, wherever
and however

Nestle value delivery network:

The Nestle Group is in principle not directly involved in primary production of raw
materials and other food ingredients. In general nestle use locally available raw
materials and purchase them either directly from producers or through existing
trade channels. In Asia, Nestlé’s strategy has been to acquire local companies in
order to form a group of autonomous regional managers who know more about
the culture of the local markets than Americans or Europeans.

Nestlé’s strong
Cash flow and comfortable debt-equity ratio leave it with ample muscle for
takeovers. Recently, Nestlé acquired Indofood,

Indonesia’s largest noodle producer. Their focus will be primarily on expanding

sales in the Indonesian market, and in time will look to export Indonesian food
products to other countries.

Nestlé has employed a wide-area strategy for Asia that involves producing
different products in each country to supply the region with a given product from
one country. For example, Nestlé produces soy milk in Indonesia, coffee
creamers in Thailand, soybean flour in Singapore, candy in Malaysia, and cereal
in the Philippines, all for regional distribution. Milk plant at Kabirwala is the
Nestlé’s world largest milk processing plant. Nestle pays the local milkmen for
the continuous supply of milk to its plant, since Pakistan is the fifth largest milk
producing country.
FACTORIES

Sheikhupura

29th Kilometer, Lahore - Sheikhupura Road Sheikhupura, Punjab, Pakistan

Phone :(042) 6369321-6 ET 7228300

Fax :(042) 6368710

NESTLE ® MILKPAK® UHT milk, NESTLE® NESVITA® products, NESTLE®

PURE LIFE™ water, NESTLE® CERELAC® and yogurt.

Milkpak UHT milk, produce butter, cream and ghee

NESTLE® NIDO® milk powder

Nestle NESTLE® PURELIFE™

Fruit yogurt, tea whitener, cream and raita, NESTLE® NESVITA®

Kabirwala

Khanewal - Kabirwala Road, Kabirwala District Khanewal, Punjab, Pakistan

Phone (06512) 411433-36

Fax (06512) 411432

Nestle Milkpak

MAGGI® noodles

NESTLE® EVERYDAY® tea whitening powder

Islamabad

AVA® water factory in Islamabad

Provides our consumers with their favorite brands of bottled water in convenient
package sizes.

Auditors A.F. Ferguson & Co. (Chartered Accountants)

Legal Advisors Cheema & lbrahim (Advocates)

Bankers

ABN AMRO Bank

Bank of Tokyo-Mitsubishi Ltd.

Citibank N.A.

Credit Agricole Indosuez

Deutsche Bank A.G

Habib Bank Ltd.

Muslim Commercial Bank Ltd.

Standard Chartered Bank

Standard Chartered Grindlays Bank Ltd.

ORGANIZATIONAL STRUCTURE

Definition:

A deliberate arrangement of people to accomplish some specific purpose is

called “Organization” and the arrangement is called “Organizational
Structure”.

“Nestle’ works according to BUISNESS UNIT STRUCTURE (BUS) and

BUISENESS

UNIT MANAGEMENT (BUM).”

NESTLE’S MANAGERIAL ENVIRONMENT

The nestle is a multi-national organization, it has to maintain the measuring

standard of the worlds biggest profit making organization, Nestle’ is the only
organization that sells itself. The working environment of the Nestle’ is
exceptionally friendly and most cooperative. The decision or we can say the
managerial style of Nestle’ is decentralized, it means that every employee can be
a part of the every decision they take.

SALES STRATEGIES

Real need is required for selling. Nestle products were a real need for the
citizens of Pakistan. The increasing number of diseases because of consumption
of substandard eatables was the time for Nestle to think of its customer’s health.
Government supported the company in launching of Nestle products. It became
easy for Nestle to market its goods.

DISTRIBUTION CHANNELS

Nestle uses indirect distribution channels to bring its products to the

customers Producers→ Distributors→ Retailers→ Consumers. Nestle does
not involve wholesalers in its distribution channel. Nestle products are distributed
to the customers mostly through distributors. They buy the distribution on
contractual bases. Nestle usually do not go for retail selling. Home delivery
service is also provided by Nestle Pure Life. You can buy Nestle Pure Life from
any shop in any area. Nestle uses vertical marketing system. Nestle distributes
its products through the strong supply chain management strategies and efficient
marketing logistics.

Nestle reasons for indirect selling methods:

• Distribution channels already established.

• Nestle uses its capital for further production.

• Too many consumers in a large area; difficult to reach.

• Direct on-selling advantages.

Reasons for bypassing wholesalers:

As stated earlier nestle does not involve wholesalers in its distribution channel,
the reasons are given below:
 • Limited storage facilities in Pakistan, since it’s a third world country
here the wholesalers are not well versed to handle products from such a
huge company.

• Retailers' preferences

• Wholesaler cannot promote products successfully

• Nestle’s desire for closer market contact

• Position of power

• Cost of wholesalers' services

• Price stabilisation

• Need for rapid distribution

• Make more money

Nestle has following distribution objectives:

1. To reach the customer and better availability of the product to the

customer

2. To capture more market shares as compare to the competitors.

3. Satisfying the changing needs of market.

NATURE OF PHYSICAL DISTRIBUTION

DISTRIBUTION CENTRE

A large highly automated ware house is designed to receive goods from plants
and suppliers, take orders, fill them efficiently and deliver goods to customers as
quickly as possible. Nestle has its distribution centers in Sheikhupura, Karachi,
Lahore and Islamabad. The increasing number of customers is forcing Nestle
Pure Life to increase its distribution centers.
.INVENTORY MANAGEMENT

Inventory management plays an important role in the satisfaction of the

customers. Here Nestle should maintain the delicate balance between carrying to
little inventory and carrying too much. Nestle Pure Life is running successfully
and its difficult for it to maintain its inventory.
TRANSPORTATION
Nestle uses all types of transportation. Usually Shehzore is used for
transportation. Home delivery service is also provided with the same
transportation. Tracks are used for long transportation to minimize the cost.
Triwheelers are used to transport precious water to backward areas.
DISTRIBUTION AND TERMS OF CONTRACT
The distribution is mostly done through the distributors and the agreement is on
contractual bases. The terms and conditions changes with the passage of time
and the amount submitted as the security.
Retail and wholesale selling:
Nestle brings its customers with its products through distributors. Though nestle
does not involve itself in retail selling but still it provides its customers with the
free home and office delivery facility as direct marketing channel. Nestle products
are sold at all types of retail stores which are

1) specialty store

2) department store

3) supermarket

4) convenience store

5) Super store.

6) Chain stores.

RECOMMENDATIONS

Though nestle is an industry giant and doing a successful business around the
world, but still certain measures it should take in Pakistani market are
recommended below:

1) It should sell better quality products in Pakistani market also just

like it sells in first world countries because consumer in Pakistan is much
aware today than it was a decade ago. It would help to rectify the feelings
of discontent that prevail among the Pakistani consumers against nestle.

2) Nestle should bring other flavors in breakfast cereals like fruit and
nuts corn flakes to Pakistan since consumers are becoming more
demanding day by day. Moreover Kellogs is offering a wide range of
breakfast cereals with far better quality.

3) Nestle should introduce its other chocolates like lion and butter
finger in Pakistan, moreover it should also introduce libbys ketchup brand
in Pakistan since ketchup brands available in Pakistan are not of good
quality.

4) Nestle should increase the promotional campaigns magnitude since

strong competitors are takingover the industry especially in dairy products.

5) Nestle should introduce its LC-1 probiotic yoghurt in Pakistan since

people are becoming more health conscious.