Introduction to Management Project

1. Nestle Company Profile:

Nestlé was founded in 1866 by Henri Nestlé with

headquarters in Vevey, Switzerland. It has
employed around 250,000 people and has
factories or operations in almost every country in the world.

Nestle is the world's leading nutrition, health and wellness company today. Being the world's
leading bottled water company is based on a solid economic model: strong brands, global
presence, innovation capacity, environmental stewardship and passionate people.

2. Mission Statement:

Nestlé is dedicated to providing the best foods to people throughout their day, throughout their
lives, throughout the world. With our unique experience of anticipating consumers’ needs and
creating solutions, Nestlé contributes to your well-being and enhances your quality of life.

3. Top Management and Organization Structure

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Nestle in Pakistan

Nestlé has been serving Pakistani consumers since 1988, when the parent company, the
Switzerland-based Nestlé SA, first acquired a share in Milkpak Ltd. Today Nestle is fully
integrated in Pakistani life, and are recognised as producers of safe, nutritious and tasty food,
and leaders in developing and uplifting the communities in which it operates. Nestlé Pakistan
ensure that its products are made available to consumers wherever in the country they might
be. Convenience is at the heart of the Nestlé philosophy, and its aim is to bring products to
people's doorsteps.

Nestle Purelife:

In regard to the dynamic prospects of Pakistan’s bottled water market, Nestlé wanted to take
shares of it. In its mission statement, Nestlé concludes that its brand ‘Pure Life’ is “base of
operations to meet the need of the continent's emerging nations for clean, good-tasting water
in convenient sizes and packages to satisfy a family's daily requirements”. The development of
Nestlé’s market share, in the bottled water market in Asia, is closely linked to its leading world-
brand ‘Pure Life’. Now available in 17 countries and highly successful in Uzbekistan, Turkey,
Jordan, Thailand and the Philippines and Argentina. In 1998, Nestle Purelife was launched in
Pakistan.

a. Key Product Categories:

At Nestlé, the products are developed keeping our consumers, their preferences and health in
mind. Millions of consumers the world over trust Nestlé products for good reason: when they
choose a Nestlé product they have the satisfaction of choosing quality, taste, variety,
convenience and the good nutrition.

With over 140 years of experience and expertise, Nestle takes great pride in bringing us a
portfolio of health and wellness because happy, healthy consumers are important to them.

Key Product Brands in Each Product Categories

Categories
MILK, DAIRY AND Milkpak / Nesvita / Nido / Everyday / Nestle Dahi / Nestle Fruit
CHILLED DAIRY Yogurt / Nestle Raita / Milkpak Cream / Milkpak Desi Ghee
BEVERAGES Nescafe / Milo / Nestle Fruita Vitals /
BOTTLED WATER Nestle Pure Life
BABY FOOD Cerelac
FOOD Maggi 2 – Minute Noodles
BREAKFAST CEREALS Nestle Cornflakes, Nestle Kokocrunch
CHOCOLATE & Kitkat / Kitkat Chunky
CONFECTIONARY

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Bottled Water Industry Analysis

b. Industry Standing:
Bottled Water is in its growth stage and there is a lot more potential in
the market as there is a major part of the target market which is still
untapped.
c. Competition Intensity:
Major players of the market are Aquafina, Kinley, Sufi and Gourme
(Lahore only) etc.
d. Regulatory Authorities
Pakistan Standards & Quality Control Authority (PSQCA)
As the national member body of the ISO, IEC and OIML, the
PSQCA is monitoring and implementing the ISO guidelines
and other national quality benchmarks
Pakistan Council of Research in Water Resources (PCRWR)
Pakistan Council for Research in Water Resources

4. Nestle Purelife
a. Introduction:
In 1992, Nestlé was the first company to dare to launch a mineral water, Valvert. Today
Nestlé Water is established in 130 countries and markets about 70 different brands.
In 1998, for the first time in its history, Nestlé associated its name with bottled water
“Nestlé Pure Life”.
Today the Nestle Pure Life brand is present in 20 countries around the world, across all
continents - Asia, Near East, South and North America and Europe.
b. Manufacturing Facility (Production & Operations)

Nestle’ is currently operating five factories in Pakistan which are:

1. Sheikhupura Factory (Multiline products, biggest unit)
2. Kabirwala Factory (Multiline products but smaller than Sheikhupura Factory)
3. Islamabad Factory (Water Company)
4. Two factories in Karachi (Water Companies)

All of the above mentioned factories have water plants except Kabirwala factory.

a. Marketing:
i. Target Market
 Targeting Strategy Of Nestle Pure Life Is Differentiated Marketing
 Nestle Pure Life Targets Both Genders
 Targets the Upper And Middle Class People Who Are Health Conscious
 Tourists Are Also the Target Market Of Nestle Pure Life
ii. Marketing Strategy

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Nestle Purelife is following Differentiation Strategy as they have
developed a very visible image of their water that it is safe and healthy
and is “PURE LIFE” in true sense.

iii. Marketing Mix (4Ps)

a. Product:
Nestle is providing wide range of food products, dairy products,
beverages products. Nestle is playing with Nestle Purelife brand in
Bottled Waters.
b. Price
Prices of Nestle Pure Life are relatively higher than their competitors.
Market prices of individual consumables 0.5l are Rs.13. The price of
family size bottle (1.5l) is Rs.25 and of large bottles of 5 gallons (18.9l) is
Rs 130.

c. Place (Coverage & Distribution Channels)

Nestle has got widespread distribution network and is enjoying
availability in Point of Sales from Super Stores and Hyper Stores to small
retailers.
In 2000, NESTLÉ Pure Life established a successful Home and Office
(H&O) delivery service in Lahore, which has substantially grown ever
since and has come to dominate the 5- gallon market.
d. Promotion
Nestle Pure-Life is using television and radio advertisements in
electronic media. In print media they are using billboards, newspapers,
pole signs, streamers and posters.
In big departmental stores they have display corner in which Nestle
Pure Life is refrigerated. Moppies are also used for advertisement in
these stores.
In summers direct marketing is used for promotion by providing cool
points of Nestle Pure Life where chilled Nestle Pure Life is available for
instant drinking.

iv. Current Positioning & Brand Image:

Nestle Purelife today is synonymous to quality, safety and trust in the eyes of its
customers. The company has got its own quality management system namely
NQMS (Nestle Quality Management System). Nestle Purelife is reknowned by its
customers as a socially responsible and consistent quality provider.

Sales

Nestle is a sales driven company for which company’s major emphasis has always been on its sales. The
company has been generating huge revenue with a tremendous growth in each successive year. As you

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can see from the below mentioned sales statistics, the company enjoyed roughly 7% growth in sales
volume from 2007 to 2008.

Particulars Dec’ 08 Dec’ 07

Volume in Liters (000) 300,022 280,445

Sales Strategy:

The prime focus for Nestle Purelife Sales Strategy has been on strong distribution network nation-wide
for its Pet Bottle Product Line ranging from 0.5l to 1.5l. The brand is right now focusing on increased
consumer penetration introducing the first of its kind Home Delivery System in Pakistan.

Nestle Purelife Jumbo Service, the pioneers of door-to-door drinking water delivery system has enabled
every household to enjoy the benefits of having safe drinking water at their doorsteps. The brand has
made its presence in all major metropolitan cities of Pakistan, efficiently providing door to door delivery
service with a dedicated helpline, ordering system.

b. SWOT Analysis

Strengths: Weaknesses

 Pioneering Brand  Lack of awareness and the

 Brand Image poverty
 Heavy Advertisement: Top of Mind  Lack of availability in the
 Quality Perception: Taste remote areas is also the strong
 Logistics & Distribution reason
 Customer Services: Helpline  High Price
 the lifestyle of the people is changing
 DEMAND is increasing day by day in the bottle
Water
 High Quality Obtained By The Usage Of A Special
Production Process.
 Own Industrial Laboratories That Perform Constant
Control For Physical-chemical And Bacteriological
Parameters.
 Daily Sensor Water Analysis for Flavor, Color And
Odor.
 Great And Neutral Taste Which Suits All The Family
 Safety And Purity From The Source To The Consumer
 Produced Locally, Close To The Consumer.

Opportunities Threats
 Anticipated Growth (Availability of Safe drinking  Emerging Local Brands and
water) competitive price issue
 People are becoming more health conscious  Low Entry Barrier
 Water Is An Essential Part Of Life And Everyone  Economical Uncertainty

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Prefers To Drink Safe And Healthy Water.
 Nestle Is A Trusted Brand For Providing Good Quality
Products.

5. Nestle Pure Life: A Success Story

a. Consistent Quality Providers:
Nestle Pure Life has been a consistent quality provider since more than a decade of the
inception of their operations in Pakistan, setting a benchmark for all current and new
aspiring players to enter this competitive and attractive market
b. Educating Customers:
Nestle Pure Life is promoting better family health standards in Pakistan by educating
people and highlighting the importance of drinking sufficient amount of clean water
resulting in better hydration nourishment for the whole family.

6. Conclusion
a. Current Issues and Emerging Trends.
Economic Instability, Growing Inflation, Health awareness and consciousness among
masses and young generation
b. Local Players (Gourmet and Sufi), International players (Aquafina and Kinley) and the
impact on Nestle Purelife Sales volume

7. Recommendation
a. They should introduce 0.20L water glass of Nestle Pure Life which should be provided on
cool points in summer.
b. They should set the price of their product in accordance with their competitor’s price.
c. Nestle Pure Life should further communicate and prevail the benefits of drinking safe
water.
d. Now a days, they are not advertising properly therefore they should focus on more
advertisement so that they could create strong brand loyalty among customers.