Download effect of external environment on nestle delicious jam

CONTENTS
EXECUTIVE SUMMARY .............................................................................................................................3
HISTORY .......................................................................................................................................................4
MISSION STATEMENT ............................................................................................................................5
NESTLE BUSINESS OBJECTIVES ......................................................................................................6
NESTLE PRODUCTS ................................................................................................................................6
CUSTOMER ORIENTATION .................................................................................................................10
MARKETING ENVIRONMENT .............................................................................................................10
NESTLÉ’S MICROENVIRONMENT .................................................................................................10
NESTLÉ’S MACRO ENVIRONMENT ..............................................................................................11
MARKETING OFFERING .......................................................................................................................12
EFFECT OF EXTERNAL ENVIRONMENT ON NESTLE DELICIOUS JAM .............................12
MARKETING RESEARCH AND MARKETING INFORMATION...................................................12
OBSERVATION .....................................................................................................................................13
EXPERIMENT .......................................................................................................................................13
SURVEY ..................................................................................................................................................13
MARKETING STRATEGY .......................................................................................................................15
MARKET SEGMENTATION...................................................................................................................15
GEOGRAPHICAL SEGMENTATION ...............................................................................................15
DEMOGRAPHICAL SEGMENTATION ...........................................................................................15
TARGET MARGET ...................................................................................................................................15
VALUE PROPOSITION ...........................................................................................................................16
NESTLE LOGO & FAMILY BRAND ........................................................................................16
COMMUNICABLE.......................................................................................................................16
CONSUMER BEHAVIOUR ................................................................................................................16
CUSTOMER RELATIONSHIP MANAGEMENT ................................................................................16
STRATEGY FOR CAPTURING VALUES ............................................................................................17
PRICE ......................................................................................................................................................19
PRICING OBJECTIVES ......................................................................................................................20
FACTORS AFFECTING THE PRICE OF NESTLE JAMS..........................................................20
PLACE .....................................................................................................................................................20
RETAILING ................................................................................................................................................20
RETAILERS CLASSIFIED BY MARKETING STRATEGIES .....................................................20
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CHANNEL OF DISTRIBUTION ............................................................................................................21
VERTICAL MARKETING SYSTEM ..................................................................................................21
MULTIPLE DISTRIBUTION CHANNELS .......................................................................................21
PROMOTION .........................................................................................................................................21
STRATEGIC PLANNING .........................................................................................................................22
BCG MATRIX FOR CURRENTLY PRODUCING SBU’S ............................................................22
DEVELOPING STRATEGY FOR GROWTH AND DOWNSIZING ............................................24
SWOT ANALYSIS OF NESTLE JAM ...................................................................................................24
STRENGTHS .........................................................................................................................................24
WEAKNESS ...........................................................................................................................................24
OPPORTUNTIES...................................................................................................................................25
THREATS ...............................................................................................................................................25
RETURN ON INVESTMENT (ROI) .......................................................................................................25
MARKET IMPLEMENTATION...............................................................................................................25
CONCLUSION .................................................................................................................................................25
REFERENCES ..................................................................................................................................................26
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EXECUTIVE SUMMARY
Our marketing project is about launching a new product which
is Nestle Delicious Jam, bring happiness in life. Nestle is not producing
jam currently. So we will introduce this product 1st time in market. The
marketing plan for this purpose consists of many strategies that we will
use. We will compete the market because our product will offer a
unique combination of features e.g. different flavors, bottle design,
nutrients etc at a value added price. Its target market will include all
people but specially the children. It will be available in all possible
flavors and reasonable price will be offer for Nestle Delicious Jam. The
product life cycle will start from the maturity stage by providing more
values in beginning. We will use corporate vertical marketing system
for Nestle Delicious Jam.
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HISTORY
1866-1905
In the 1860s Henri Nestlé, a pharmacist developed a food for babies who
were unable to breastfeed. His first success was a premature infant who could
not tolerate his mother's milk or any of the usual substitutes. People quickly
recognized the value of the new product, after Nestlé's new formula saved the
child's life, and soon, Farine Lactée Henri Nestlé was being sold in much of
Europe.
1905-1918
In 1905 Nestlé merged with the Anglo-Swiss Condensed Milk Company. By
the early 1900s, the company was operating factories in the United States, Britain,
Germany and Spain. World War I created new demand for dairy products in the
form of government contracts. By the end of the war, Nestlé's production had
more than doubled.
1918-1938
After the war Government contracts dried up and consumers switched
back to fresh milk. However, Nestlé's management responded quickly,
streamlining operations and reducing debt. The 1920s saw Nestlé's first expansion
into new products, with chocolate the Company's second most important
activity.
1938-1944
Nestlé felt the effects of World War II immediately. Profits dropped from $20
million in 1938 to $6 million in 1939. Factories were established in developing
countries, particularly Latin America. Ironically, the war helped with the
introduction of the Company's newest product, Nescafé, which was a staple
drink of the US military. Nestlé's production and sales rose in the wartime
economy.
1944-1975
The end of World War II was the beginning of a dynamic phase for Nestlé.
Growth accelerated and companies were acquired. In 1947 came the merger
with Maggi seasonings and soups. Crosse & Blackwell followed in 1960, as did
Findus (1963), Libby's (1971) and Stouffer's (1973). Diversification came with a
shareholding in L'Oréal in 1974.
1975-1981
Nestlé's growth in the developing world partially offset a slowdown in the
Company's traditional markets. Nestlé made its second venture outside the food
industry by acquiring Alcon Laboratories Inc.
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1981-1995
Nestlé divested a number of businesses1980 / 1984. In 1984, Nestlé's
improved bottom line allowed the Company to launch a new round of
acquisitions, the most important being American food giant Carnation.
1996-2002
The first half of the 1990s proved to be favorable for Nestlé: trade barriers
crumbled and world markets developed into more or less integrated trading
areas. Since 1996, there have been acquisitions including San Pellegrino (1997),
Spillers Petfoods (1998) and Ralston Purina (2002). There were two major
acquisitions in North America, both in 2002: in July, Nestlé merged its U.S. ice
cream business into Dreyer's, and in August, a USD 2.6bn acquisition was
announced of Chef America, Inc.
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. In 2006, Jenny Craig and Uncle Toby's were added to the Nestlé
portfolio and 2007 saw Novartis Medical Nutrition, Gerber and Henniez join the
Company
MISSION STATEMENT
“Nestle 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, Nestle contributes
to your well-being and enhances your quality of life.”
Nestle is not only Switzerland's largest industrial company, but it is also the
World's Largest Food Company. The mission statement emphasizes on the fact
that Nestle products are available in nearly every country around the world.
Wherever one may live, only Nestle can provide the best and most reliable food
and beverage products to meet his/her needs throughout the day, throughout
the life. Especially, people on the move want to be able to find good food
wherever they are, whatever the time of day. They are often reassured that they
will find well-known brands out of home. This statement also reflects the image of
high quality products that Nestle offers. Nestle has the advantage that it offers
caterers, fast food chains and other restaurants a complete range of high quality
ingredients, base products and meal components, as well as leading consumer
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brands such as Nescafe. Quality is the cornerstone of the success of
the Nestle Company. Everyday, millions of people all over the world
show their trust in the
company by choosing Nestle products. This trust comes from a quality image that
has been built up for over a century. Therefore, the quality of the products
ultimately enhances the quality of the consumer’s life. In addition, the mission
statement declares that Nestle has the ability to anticipate “…consumer’s needs
and create solutions….” Nestle has proven this ability a number of times by
introducing new products that were required by consumers.
NESTLE BUSINESS OBJECTIVES
 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 longterm 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. So the needs & wants of consumers should be considered.
 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.
NESTLE PRODUCTS
Nestle is a well-known company all over the world and Pakistan. The
company basically deals in food products as their logo says “Good Food, Good
Life.” Their major products lines are:
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MILK PRODUCTS
1) NESTLE MILKPAK UHT MILK
This product was launched in 1981. Backed by a very
strong brand name, aggressive marketing and distribution
plan, consistent quality, and availability throughout the year,
it has become quality milk. In September 1999, Milk Pak UHT milk was launched as
Nestle Milk Pak UHT milk. It is available in 1000, 500 and 250 ml sizes.
2) MILKPAK BUTTER
This product was launched in 1985 under the Milk Pak brand name. It has
been recently repackaged in a crisp white laminate, the design of which bears
closed resemblance to that of Milkpak UHT milk. This new package design allows
gaining strength from Nestle Milkpak UHT milk. It is available in 200 and 100 gm
sizes.
3) MILKPAK UHT CREAM
This product was launched in 1986 under Milkpak brand
name. It is available in 200 ml size.
4) MILKPAK DESI GHEE
This product was launched in 1986. It is available in 1000 ml size
and is leading branded desi ghee in the country.
5) NESTLE EVERYDAY
To meet the requirements of the tea-whitening segment, this product was
launched in 1992. On account of aggressive marketing, focused distribution,
excellent consumer acceptance and product quality, this brand has shown
strong growth and holds good promise for the future.
6) NESTLE NIDO
Soon after it was introduced in the early 70`s as an imported
product, Nido full cream milk powder became the market leader.
Local manufacturing of Nido began in 1990, which has reinforced
its position as the dominant player in the full cream milk powder
category.
CHOCOLATE DRINKS
1) MILOPOWDER
This product was launched in 1994. It is available in 14,100
and 200 gm sizes. It is strongly associated with a healthy life style
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and is an ideal drink for growing children who need strength and
energy.
2) MILO RTD
To cater for consumer convenience, Milo RTD (ready to drink) was
launched in 1995 and is now available in an attractive 180 ml slim pack. It is
popular among all age groups especially among the growing segment of
nutrition conscious consumers. It is an excellent substitute for cold drinks.
COFFEE
1) NESCAFE CLASSIC
It is one of the world’s most popular coffee brands.
Nescafe global campaign “open up” was launched in Pakistan
in October, introducing a new brand framework and increased
emphasis behind coffee sales in Pakistan. Nestle Milkpak locally
packs imported coffee and markets it in 225 and 500gm.
FRUIT DRINKS
1) FROST
It is a well-known brand launched in 1986 and has the largest market share.
Positioned as a cold drink and an alternate to cola drinks, its
strength lies in the convenience attached to its usage.
2) NESTLE ORANGE JUICE
The product was launched in July 1996. It is available in 180ml
and1litre sizes. In a market that is becoming increasingly conscious
about nutrition and is displaying preference for healthy drinks,
Nestle Orange Juice has made very good inroads and has a strong potential in
the future.
DIETETIC & INFANT PRODUCTS
1) LACTOGEN
Lactogen 1 and Lactogen 2 are infant and follow-up
formulae launched in 1991 and are available in two sizes both
pack and can. The brands provide both affordability and quality.
2) CEREALS
Launched in 1989, it is the dominant player in the growing infant food
market. It is available in 5 flavors and provides balanced nutrition to infants.
3) NESTLE RICE
An affordable starter weaning cereal and offers the flexibility of
preparation with a variety of meals. This was launched in 1994 and available
in125ml pack size.
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4) NESTLE WHEAT
Nestle wheat is a wheat-based infant cereal without milk. It is available in
125 and 200 gm pack sizes.
5) NESLAC
Neslac is a growing up milk, formulated specially for 1 to 4 years old. This was
launched in 1994. It contains a right balance of proteins, calcium, iron, vitamins
and essential minerals in order to cater nutritional needs of growing children.
CULINARY PRODUCTS
1) MAGGI 2-MINUTE NOODLES
Fast to cook, good to eat – Maggi 2-Minutes Noodles
were launched with local production in 1992, and doing so
Nestle pioneered the category of instant noodles in Pakistan. It
offers flavors like chicken masala, chili and chatkhara.
2) MAGGI COLD SAUCES
Nestle entered the Cold Sauces category early in the year with the launch
of Maggi ketchup, Maggi mirch maza and Maggi khatti meethi – the first Emily
sauces in Pakistan. The innovative taste of Khatti meethi together with the more
traditional tastes of Ketchup and Mirch maza, were received well by the
consumers.
CONFECTIONERY
In view of the impressive potential for
confectionery sales in the country, Nestle
Milkpak established an independent sales and
distribution network for confectionery products.
From three main cities in 1996, it has grown into
a nation-wide network. The initial product
range includes locally produced Polo Mint,
Kitkat, Smarties, Lion Bar, and Fox’s, Allen’s Toffo
and Allen’s Soothers. Both Toffo and Soothers
are produced on a new confectionery linebased on a new state-of-the-art technology
that provides an extremely flexible process for
production of wide range of high and low boiled candies. This will enable the
company to introduce varieties of new sweet
flavors over the next few years.
WATER
The launch of Nestle Pure Life in
December 1998 was a truly historic event. This
marks the Nestle Pure Life’s entry into the
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country’s fast growing water market. At the same time Pakistan
became the first country where Nestle launched the new brand.
Nestle Pure Life is a premium drinking water, produced to the highest standards
of safety and purity. It is ideally balanced with essential minerals. It is available in
two convenient sizes of 0.5 and 1.0 liters. Capitalizing on its strong brand
recognition, aggressive pricing and supported by a strong marketing campaign,
Nestle Pure Life has made very strong inroads into the water market in Pakistan.
Nestlé PURE LIFE is available around the globe today in Canada, USA,
Mexico, Brazil, Argentina, South Africa, Saudi Arabia, Jordan, Egypt, Lebanon,
Turkey, Russia, Uzbekistan, Pakistan, China, Thailand, and the Philippines.
Launched on the North American market in 2003, Nestlé PURE LIFE is destined to
become the world’s leading and most widely distributed brand by 2010.
CUSTOMER ORIENTATION
Nestlé is the customer oriented company from its foundation to till now. In
1866 it introduced the food for babies who were unable to breastfeed, and this
formula saved the lives of many children.
Due to the customer’s realization over the company, Nestlé's production
and sales rose in the wartime economy. The quality of the products ultimately
enhances the quality of the consumer’s life. In addition, Nestlé has the ability to
anticipate “…consumer’s needs and create solutions….” Nestlé has proven this
ability a number of times by introducing new products that were required by
consumers.
Nestlé is one of the few companies to have an information system that commits
the company to respond to information requested.
MARKETING ENVIRONMENT
NESTLÉ’S MICROENVIRONMENT
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1) SUPPLIERS
 Nestlé is a corporate member of the National Minority
Supplier Development Council.
 It has established the relationship with many suppliers. They don’t have
any specific suppliers. Moreover it includes different and a large number
of suppliers for obtaining raw materials.
2) CUSTOMERS
Consumer markets are important for all organizations by marketing
perspective but for Nestle it is too important because
 It is related to food and beverage industry.
 Worldwide consumer markets
 Consumed in the 85 countries of the world
 Not only large but also dynamic
 Completely focusing on changing behavior
 Fictitious product will also have a consumer market
3) COMPETITORS
Every company tries to provide greater value and satisfaction than its
competitor do. Following are the main competitors of the Nestle Company  Mitchell’s
 Shezan
 Rafhan
 National etc
Threats of competition come from external environment. To improve its
Competitive position Nestle has made joint ventures with its competitors.
NESTLÉ’S MACRO ENVIRONMENT
a) SOCIAL & CULTURAL FORCES
 Nestle uses recognized safe raw materials and processes them with
minimal energy input.
 An eco-friendly device is the use of perforations around labels to make
them easy to remove.
 For advertising and sales promotions, it tries to reduce waste in the POP
advertising materials.
 The raw material that nestle use in their products is according to our
society and Islamic culture.
b) TECHNOLOGICAL ENVIRONMENT
 Currently nestle is using high technology and machinery which is one of
the key to success for the Nestle. It gives them the competitive
advantage.
 Nestle uses better technology and machinery, it gives the customers the
healthy and clean environment so the consumers buy their products
more and they gain profit. With technological environment there is no
wastage of time
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c) ECONOMIC ENVIRONMENT
Currently Nestle is at prosperity stage of Business Cycle. The
major economic factor which can affect the sale of Nestle products in Pakistan is
inflation.
d) POLITICAL & LEGAL FORCES
 Nestle supports appropriate voluntary initiatives designed to protect the
environment.
 Nestle promotes balanced environmental laws and regulations &
opposes unjustified prohibitions and other discriminatory measures.
e) DEMOGRAPHIC ENVIRONMENT
 Nestle products are for everyone and for all group of people.
 These products are usable by all categories of people, having different
ages but especially children
MARKETING OFFERING
We are making a marketing plan of Nestle Delicious Jam. The launch of
Nestle Delicious JAM in Pakistan will provide the customer with the best jam full of
nutrients. In Pakistan, the launching of delicious and appetizing JAM with the
brand name of Nestle will generate huge revenue.
EFFECT OF EXTERNAL ENVIRONMENT ON
NESTLE DELICIOUS JAM
 In short, factors of macro environment affect microenvironment. The
major problem that may affect can be economic environment that
includes inflation in Pakistan which is increasing day by day. Due to this,
there is rise in price level. It can have an impact on the customer’s
purchasing decision. The other problems may be poverty,
unemployment, deficit, economic instabilities.
 Government has their specific rules and regulations. E.g. every product
has retail price+ tax. When the new govt. changes its tax policy, the
company also changes their rules.
MARKETING RESEARCH AND MARKETING
INFORMATION
At Nestlé, we believe that research can help us make better food so that
people live a better life. The role of the Nestlé Research Center, is to help fulfill
Nestlé's vision of making good food central to enjoying a good healthy life for
consumers everywhere. Different marketing programs are initiated and planned
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for every product of Nestle. With the Blend of primary data and
secondary data Nestle formulates strategies for every product, and
also for every country of the world. Nestle use three basic methods for obtaining
the primary data.
 Observation
 Experiment
 Survey
OBSERVATION
Nestle observes the attitudes, lifestyles and behaviors of the people
residing in every different country of the world. Nestle also observes the major
changes in the socioculture environment and hit the target through Nestle
products which are needed to be present in the market.
EXPERIMENT
 As Nestle spends huge amount of money on research in Lab
experiments in order to produce and provide better taste products in
the market. Nestle do the experiments in order to clearly determine the
better tastes and other ingredients and nutrition’s of its products. And
emphasis on the Lab experiments
 Nestle keeps on investing in Research and more than 3000 people
around the world work to improve, find, and discover food that is better
for all of consumers so that consumers can live a better life.
 Nestle always keeps an eye on its competitors and basically greatly rely
on competitive intelligence
SURVEY
Nestle also conduct surveys for better understanding of the consumer
behavior, and stay up to mark according to the desires of the consumers which
help in better planning and implementation of marketing mix as per required by
the domestic and international market.
So here for our new fictitious product we used this method for obtaining the
primary data. In this way we came to know about the point of view and
acceptance related to our product in the minds of people. The Survey result is as
follow
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SURVEY RESULTS
1-If nestle launches jam would you
like to eat it?
a) Yes
83.26%
b) No
14.3%
c) not decided
2.44%
2-Nestle would like to give you a jam
in curved bottle to let you hold it
easily; would you like that?
a) Yes
84.87%
b) No
15.13
c) Not decided
3-Nestle is going to provide you a jam
with some new flavors select those
you like.
a) Apple mango
b) Mango orange
c) Strawberry apple
9.09%
52.91%
11.2%
d) Strawberry mango
e) Apple orange
4-Why do you like nestle products?
22.6%
4.2%
a) Because they are pure
b) Because they are easily available
c) Because they are best in taste
d) Because of low price
37.9%
43.6%
14.3%
4.2%
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MARKETING STRATEGY
Nestle uses the societal marketing concept. Nestlé designed and
launched the products according to the society. It meets the responsibilities of
the society. In the Muslim countries it makes sure to write “Hilal” at the packaging
of the products.
In the African countries Nestle build its water purification for free to provide clean
and purify water to the poor nations.
MARKET SEGMENTATION
To occupy a clear distinctive & desirable place related to competing
delicious jam in the minds of the target customers Nestle Jam will segment its
market only on geographic basis.
GEOGRAPHICAL SEGMENTATION
The Company will segment its market geographically on divisional basis.
They will divide each division in different zones and every distributor will be
restricted to sale its products only in his own zone.
E.g. Lahore will be divided into five zones like East, West, South, North, and
South west. Nestle Marketing strategies will focus on urban areas because more
of the revenue comes from that areas.
DEMOGRAPHICAL SEGMENTATION
There will be no demographic segmentation for Nestle Delicious Jam. If we
look Nestle Jam demographic segmentation, then we will find that our product
will be for everyone. People from any area, any culture, any age, any sex, any
belief and any income will purchase our Nestle Jam. It is not any luxury item
which will be used by a specific people.
TARGET MARGET
The target market will be up to 60 years of age and the core target will be
between 10-30 years of age. A specific demographic target market will not be
chosen for Nestle Jam; instead the goal is to develop a product to be used by
consumers of all ages - from babies to seniors. It will be intended as a family
product especially for families who work and have a short time for making meal
or breakfast.
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VALUE PROPOSITION
Nestle will use some competitive advantages or important attributes which
will help in occupying a good position in consumer's mind relative to competing
jams. These competitive advantages are as follow
1) CUSTOMER ORIENTED
Customer satisfaction is the focal point for the company. They will provide
the hygienic products to their customers. Products will be verified by health and
safety measures and international quality standards. Its will provide different
flavor to the customers and different offers which will the Nestle jam a
competitive advantage.
2) NESTLE LOGO & FAMILY BRAND
Jam will use Nestle brand name and the logo of Nestle Delicious Jam
which will show family care to consumer which is enough to attract the customer.
That's why customer will give it preference on other products.
3) COMMUNICABLE
Nestle Delicious Jam will be a brand of Nestle which will show a big sign of
quality to customers. Due to its brand and name it will be very easy to
communicate.
CONSUMER BEHAVIOUR
 Consumer behavior towards the Nestle Jam could be in terms of the
choice among the flavors. Some customers would choose the one fruit
flavor, while some customers would like the flavor of two fruits.
 Consumers could be loyal towards their favorite flavors and could have
preference of one flavor of jam on the other flavor.
 Consumers would buy the Nestle Jam keeping in mind the quality and
cost of the jam relative to those of competing products. The consumer
behavior will be more satisfactory towards the jam if the taste and
quality of the jam matches the consumers’ expectations.
CUSTOMER RELATIONSHIP
MANAGEMENT
Nestle jams will build profitable customer relationship by providing them
best taste best health at very best price. We are going to produce a jam with
number of important vitamins, iron, nutrition and lot and lots of health and taste.
We are going to give best flavors which no one provides. We use good food
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colors so in short we give them value and satisfactions to build a
profitable customer relationship by letting them feel ‘we care’.
STRATEGY FOR CAPTURING
VALUES
Our philosophy and strategy to capture values will be to
 Win consumers' trust.
 Understand consumers' nutritional and emotional preferences.
 Serving our consumers and improving their quality of life.
 Giving them value satisfaction and healthy nutrition.
 Change our product according to need of customer.
 Our strategy starts and ends with the consumer.
Consumer Relationship Marketing lies at the heart of Nestlé Consumer
Services. We will strive to build a long-term, sustainable relationship of trust and
loyalty. We will develop our products based on consumer tastes and
preferences, we will get profit and it will generate our capital.
4P’s OF MARKETING MIX
PRODUCT
PRODUCT LINE
Nestle jam would include in
confectionaries. It is provided in different flavors.
These flavors include mango, orange, plum,
rose, apple, mix fruit, apple orange, and mango
orange.
PACKAGING
Nestle will design and produce the jam bottles and the wrappers by
keeping focus on the following purposes:
 To contain and protect the food products.
 For the attractiveness of the product using packing of the product as a
tool.
 As nestle is relevant to food products which are highly perishable so
packaging focuses on storage and convenience.
 Its packaging will be reusable by the customers.
E.g. nestle bottles obtained from bottled jam.
 Packaging will be made more impressive especially by increasing the
volume of bottles.
LABELING
 Nestle labeling will focus on persuasiveness.
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 Nestle will not give any expressed warranty on its daily usable
Jam as it gives on medical products
 Nestle Delicious Jam's label will give all information about their product like
ingredients which will be used in it and all instructions regarding product.
 Retail price will also be shown on its label
BRAND
Nestle products use the brand name Nestle. The customer who come to
purchase nestle products, the name of this brand affects positively in the mind of
consumer. They prefer Nestle jam to other brands.
1) BRAND MARK
As Nestle is a company purely related to food industry and
it uses the symbol that includes three sparrows in nest.
2) TRADE MARK
No other company will be able to use the name Nestle for himself
because Nestle has been registered as a trade mark.
BRANDING STRATEGY OF NESTLE JAM
Nestle brand name will present a message of caring which make it
distinctive and attractive than other companies. Delicious Jam's brand is good
food for good life. The message of family protection will be enough to get the
attraction of customer. The Nestlé's brand name is easy to understand &
translate. It is easy to pronounce and it is also easy to recognize. We will use the
same brand mark for our new product that is three sparrows in nests
PRODUCT LIFE CYCLE
PRODUCT LIFE CYCLE OF JAMS
If we look at jams in product life cycle then it is easy to judge that they are
at maturity stage. Because jam market has become the pioneer market and at
this stage its profit is positive and sales do not decrease because jams companies
reinvent their products in terms of packaging, labeling, and vitamins and
continue to add values into their products to capture values from customers.
There exists high competition among jams companies so they need high
distribution and promotion expenses.
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PRODUCT LIFE CYCLE OF NESTLE JAM
Nestle jam will start from the introduction stage. Nestle jam will be the
market pioneer and at this stage its profit will be negative or low due to low sale
and high distribution and promotion expenses. Other major reason to be at
introduction stage may be unawareness in rural and urban areas. The people will
not be aware of the nestle jam, that’s why their sale may be low. To increase
their sale they will continue to bring changes in product life cycle by effective
promotion and by formulating new price strategies etc. so it will have a long
maturity period.
PRICE
 In setting the price of product, the company will follow four steps
procedure as given below
 Company will establish its objectives (Survival, max. supposed profit,
revenue, sale growth etc)
 Company will determine the demand schedule which will show the
probable quantity purchased per period at alternative price
 Company will estimate how their costs will vary at different output levels.
 Company will examine the competitor’s price
PRICING STRATEGY
1) MARKETING SKIMMING & PENETRATION PRICING
This strategy is used in any company when it launched a new product.
And it offers a high price for new product to skim maximum earning more profit
and revenue and in this way company makes fewer but more profitable sales.
While other pricing is used by those company which is non branding and need to
increase market share, to capture value from customer, to attract customer
when they launched new product in market.
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In our case we will use penetration pricing strategy to
capture value from customer, to attract them and to increase our
share because there is a lot of brand present in market whose product of jam is
bought by people in large amount like national, Michal n Shezan and they
already have capture market share in large amount
2) BY PRODUCT
We will use by product pricing strategy for nestle with the penetration. We
will offer kitkat to our customers in introduction phase, because we are more
focusing on children and in this way we can easily attract people for our nestle
jam.
PRICING OBJECTIVES
The objectives for pricing nestle jam are as follows:
 To achieve a target return
 To maximize profit
 Stabilize prices to meet competition
 Market share Leadership
 Product Quality Leadership
FACTORS AFFECTING THE PRICE OF NESTLE JAMS
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The following are the some factors that may affect the price of Nestle Jams
Expensive technology
Miserable condition of transportation and roads
The unstable politicians, which can have positive and negative effect on
the price
The labor cost is low in Pakistan as compare to the others
Advertisement cost
Increase in taxes that may affect the price of product
PLACE
As far as the distribution is concerned, NESTLE will make segmentation with
respect demographic and geographic basis. The distribution network needs to
be more extended; NESTLE will hire more potential distributors for the distribution
of NESTLE Delicious Jam in several parts of the country so that their product will
reach to every corner of the country.
RETAILING
Retailers plays a very important role in the sale of nestle products. Nestle
does not directly its products to the end consumers.
Nestle has different retailers at different levels.
RETAILERS CLASSIFIED BY MARKETING
STRATEGIES
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1) DEPARTMENT STORES
Mostly nestle delicious jam will be sold on the department
stores. Because these stores sell the Nestlé’s products in a large quantity.
2) SUPERMARKETS
Nestle will sell its fictitious product on the supermarkets.
3) CONVENIENCE STORES
To facilitate the consumer nestle will selling Delicious jam by the
convenience stores. A very large portion of the sale can be sold on convenience
stores.
CHANNEL OF DISTRIBUTION
DISTRIBUTION CHANNELS
Nestle do not sell the product directly. It sells its products by indirect
distribution channel.
Finished
products
Whole
sellers
Retailers
Consumers
VERTICAL MARKETING SYSTEM
Nestle uses corporate vertical marketing system.
MULTIPLE DISTRIBUTION CHANNELS
Nestle adopts multiple distribution channels due to Size of the buyers.
We would also use the same distribution channels for our fictitious product
that the Nestle company is recently using e.g.; Indirect distribution channel,
Vertical marketing system, Multiple distribution channels.
PROMOTION
Thus company will hire, train and motivate sales people. It will set up
communication and promotion programs consisting of advertising, direct
marketing, sales promotion and public relation as mentioned below.
ADVERTISING
SALES PROMOTION
PUBLIC RELATION
Contests
DIRECT
MARKETING
Catalogs
Print and
broadcast ads
Billboards
Lotteries
Mailings
Annual reports
Seminars
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Posters
Gifts
Telemarketing
Charitable
donations
Brochures
Premium
Electronic
Company magazine
Leaflets
Exhibits
Shopping
Sponsorship
Directories
Sampling
TV shopping
Publication
It means that NESTLE will advertise in print media like newspapers,
magazines e.g. Dawn, Nawa-e-Waqat, Jung and in some journals for
promotional purposes. It will advertise on electronic media & Broad cast media
e.g. TV, Radio which will be more attractive as compare to the advertisement of
competitor product and Nestle will also use billboards and printed ads for
retailers, moreover the company has got a website on which is Nestle will provide
special offers to the distributors.
When they lunched new juice brand, they offer buy one pack and get
one free to distributors. Nestlé can use the same strategy for Nestle Delicious Jam.
They will offer free trial of the newly introducing jam to the general public.
PROMOTION MIX STRATEGY
In consumer products the management of Nestle believes in pull strategy i.e.
creating pull through advertising. So we will use the pull strategy to promote the
sale of Nestle Delicious Jam through media.
STRATEGIC PLANNING
BCG MATRIX FOR CURRENTLY PRODUCING
SBU’S
STARS
The two Sbu’s, Mineral water and Confectioneries fall into this category of
the BCG. These SBU’s have high market share and high industry growth rate.
These Sbu’s are requiring lots of investment to compete in the growing market.
For example, lots of money is being spent and aggressive marketing strategies
have been implemented for the Mineral water to build and maintain market
share.
Nestle Pure Life has captured 50 % of the bottled-water market in Pakistan
since it was introduced in 1998. Its approximate sales for 1999 are RS. 70, 401000.
This sales figure is quite impressive as the sales rose quite high in only one year. It
is predicted that there will be additional growth in the mineral water category in
coming years. The sales of the confectioneries rose to RS. 106,559 000 from RS.
87,758 000.
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The huge increase of RS. 18, 801 000 puts this SBU in the stars
category and shows its increasing market share. There is a growing
market for the products in confectioneries for example Kitkat (eventhough it’s
imported), Polo Smarties etc. This can be proven from the fact that Nestle keeps
introducing new products in this category for example Allen’s Soothers were
launched during the last quarter of 1998.
CASHCOWS
Milk products, Coffee and Dietetic and Infant food have a high market
share and are doing business in mature industries. Since the customers of this
product category are loyal, the marketing costs of these SBU’s is quite low and as
a result a large amount of cash can be generated. Customer Loyalty is a must for
these Cash cows to maintain their market share.
The sales of the Milk products have increased to RS. 108,430000 from RS.
87,758000. This huge increase in sales reflects the high market share of this SBU.
However, its growth rate is low because in general this category is in its maturity
stage – that is – a number of milk products have been launched by Nestle, most
of which are quite old. An innovation has not really been made in this category.
The same conclusion can be made about Coffee. There is an already existing
market for Coffee which is not increasing further by a large amount.
The sales of Coffee were Rs. 46,89 000 in 1999 and Rs. 392,00 000 in 1998.
This huge difference shows that a great amount of cash is being generated from
this SBU. Sales of Dietetic and Infant food rose to Rs. 60,935 000 from Rs. 52,655
000. The infant foods unit of Nestle is operating in a mature industry. Like the milk
products, the infant foods have been around for a long time without barely any
new product line being started in this category.
QUESTION MARKS
Included in this section are the culinary products of the organization. The
products such as Maggi 2-minute Noodles and Maggi cold sauces have a low
market share and a high growth rate. These products especially the cold sauces
are operating in a highly competitive market. The approximate sales were Rs.
79,919 000 in 1999 and Rs. 60,818 000 in 1998. This figure represents a great
potential for growth in future. However, in contrast, the market share of the
products in this category is not very high currently.
A reason for this is that Nestle just recently introduced cold sauces such as
“Emily sauce” etc. However the enthusiasm, with which the customers received
the different flavors of sauces, portrays a very high potential for future growth.
The firm needs to focus on differentiating its products in the competitive market
to gain customers.
DOGS
Chocolate and Fruit drinks fall into this category and they possess a low
market share and a low growth rate. Chocolate drinks had sales of Rs. 19639000
in 1999, which rose from Rs. 19541000 in 1998. This is quite a small increase
considering the rise in the sales of other SBU’s. However, the chocolate drinks are
still profitable so the firm does not have to worry about liquidating or getting rid of
this SBU. The sales of Fruit drinks rose to Rs. 40,620 000 in 1999 from Rs. 38,103 000 in
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1998. There has been a small amount of increase; however it is not
a lot compared to other SBU’s.
Firstly, there is not a huge market for chocolate drinks in Pakistan. People
usually tend to buy light juices like apple or orange juice or Pepsi instead of
chocolate drinks. Secondly, regarding the fruit juices, there are not a lot of
flavors available currently in this category.
Nestle needs to introduce new flavors such as apple, grape etc. to
capture the market that prefer these flavors. This will not only increase the sales
of the SBU, but it will also increase its market share. At the moment, additional
amount of money is not being invested in these SBU’s, as they are not very
profitable. Nestle is currently trying to maximize profits from this category by
minimizing expenditures and by differentiating the product to build market share.
BOSTON CONSULTING GROUP (BCG)
MATRIX FOR DELICIOUS JAM
It will lay in question mark because it may be possible that many people
will not be aware of this newly made product which will show the low sale of this
product in starting. So it may have low growth in beginning period. Different
strategies will be made for the promotion of this product and the firm will focus
on differentiating its products in the competitive market to gain customers.
The introduction of new variety in terms of features, packaging, labeling
and flavor may lead to the high future growth rate. In the start the market share
would be low and after penetration it will increase its share in market.
DEVELOPING STRATEGY FOR GROWTH AND
DOWNSIZING
From the matrix of Market Expansion Grid, for the company growth, the
strategy of diversification will be applied for the Nestle Jam because the
company is starting up with the product outside the company’s current products
and markets.
SWOT ANALYSIS OF NESTLE JAM
STRENGTHS
 The only brand in the area maintaining its quality and taste and having the
same impact on its customer
 Economical
 Delicious jam in market with many flavors
 Strong Brand Name
WEAKNESS
 Communication may be weak
 Lack of Awareness for the new product
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OPPORTUNTIES
 Concentrating on distributing areas will increase sales
 Increase in product line by offering different flavors.
THREATS
 Sharing of segments by the competitors
RETURN ON INVESTMENT (ROI)
 A Nestle Company can assess the return on investment in terms of
standard marketing performance measures, such as brand awareness and
sales or market shares of the Nestle Jam.
 Nestle Jam will use sales and share data to evaluate specific
advertisement campaigns which will depict real-life scenarios of
consumers using different flavored jams.
 Nestle will use customer-centered measures of marketing, such as
customer acquisition, customer retention and customer lifetime value that
will produce returns in the form of more profitable customer relationships.
 Moreover, the marketing investments could result in improved customer
value and satisfaction, which, in turn, will increase customer attraction and
retention. This will increase individual customer lifetime values and the
company’s overall customer equity. Increased customer equity, in relation
to the cost of the marketing investments, will determine the return on
marketing investments.
MARKET IMPLEMENTATION
During the manufacturing of the product we would go for its advertising.
We would distribute broachers to create awareness. Then we would hire some
sign board in different major cities of Pakistan. And at the same time we would
go for TV and radio commercials. In all this process our main focus would be on
TV commercials and sign boards because now a day these are the most popular
things among the consumers.
CONCLUSION
 Nestle is one of the latest and pioneer food producing company in Pakistan
 The company is performing very well for the financial point of view so it will
spend a huge amount on the promotion of Nestle Delicious Jam
 It is leader in food goods in Pakistan. It will provide best quality of food
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 It pays a huge amount annually in the form of taxes to the
government of Pakistan
 Company’s distribution channels are very effective
 It has more variety in food products line as compared to its competitors
 In consumer products the management of Nestle believes in pull strategy
i.e. creating pull through advertising
REFERENCES
1.
2.
3.
4.
5.
www.google.com
www.info.com
www.nestle.com
www.wikipedia.com
www.scribd.com
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