1 Nestle juices

2 Nestle juices

TABLE OF CONTENTS

No. Particulars Page

1 Executive summary 3

2 History and Introduction 4

3 Mission and vision 10

4 Value chain Analysis 12

5 Pest analysis 19

6 Market analysis 22

7 Competitor analysis 24

8 Swot analysis of nestle juice 27

9 Porter five model 30

10 Analysis of buying behavior 33

11 Hierarchy of goals 35

12 Marketing segmentation 35

13 Positioning 36

14 Product strategy 37

15 Communication strategy 38

16 Budget 40

17 Distribution strategy 41

18 Price strategy 42

19 Sale forecast 47

3 Nestle juices

Executive summary

Nestle foods was established in 1866. Since then it has continued to

provide quality products to its customers with products and packaging

innovations. Nestle juices is Pakistan’s number one and fastest growing

food company. The company is trying their level best to differentiate

themselves from other local companies and trying to win the competition

in juice industry by adopting the modern trends and technologies in both

operational fields as well as in marketing of their products.

In this detailed project we covered all most all the topics related to the

marketing plan. First of all we presented the companies’ history and

introduction which included the year of formation and certain steps the

resulted in the today’s form of Nestle. We describes value chain analysis

PEST analysis about nestle juices and our brand competitor .And the

next step we do experiment about SWOT analysis who its effect on our

brand .so we described MARKET analysis, competitor analysis,

analysis buyer behavior , hierarchy of organization goals and the next

step to STP of nestle company ,so we explain product strategy , price

strategy and distribution strategy ,communication strategy and other

things related to a marketing plan such as marketing budget and last of

our project sale forecast for last 5 year.. Innovative technology, ,

Globalization, Matrices, , Financial Review, Porter’s five model,

Industrial analysis, Five Ws and Future Plans Of Company.

4 Nestle juices

5 Nestle juices

INTRODUCTION AND HISTORY OF COMPANY

History

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

6 Nestle juices

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..

1981 -1996

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 Carn tion.

1996+

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.

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Nestle Today:

Today, after 142 years it was first used, the nest continues to be the corporate

Identity of Nestle as the worlds leading Food Company and remains the symbol of

quality. Nestle, the symbol of quality and commitment in the field of food products.

Nestle is the world No.1 food company. It is the 5th

largest company in the world

according to its turnover. It is present on all five continents, has an annual turn-over

of 70 billion Swiss francs, runs 522 factories in 81 countries, 200 operating

companies, 1 basic re- search center and 20 technological development groups and

more than 231,000 employees 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 de- voted to professional training and to the

integration of the company in its economic and social environment.

History of Nestle juices

A well-known brand, FROST was introduced in 1986 and has the largest share of the

countrywide market. Positioned as a cold drink and alternate to cola drinks, its

strength lies in the convenience attached to its usage.

NESTLE JUICES

Encouraged by the consumer response to NESTLE ORANGE JUICE that was

launched in 1996, the category of NESTLE juices was expanded with the

introduction of Mango-Orange and Mango flavors in the year 2000. This has further

strengthened the position of Nestle as leader in the value added/premium drinks

market. Consumer response to these new flavors has been very upbeat and is

8 Nestle juices

expected to gain further. Now nestle company have launch following juice brand in

Pakistan.

Indulge in the pure pleasures of a healthy life!

Nestlé brings you a range of juices that will scintillate your taste-buds and add

variety to suit every moment.

NESTLÉ Pure Orange Juice

Oranges are in demand not only for their divine juicy flavor but

equally celebrated for their health benefits. They are naturally

low in calories, and an excellent source of Fiber and Vitamin C.

Squeezed from the finest handpicked oranges, 100% pure

NESTLE® Pure Orange Juice has no added sugar and is a good source of Vitamin C.

Having Orange juice everyday is a great way of strengthening the body resistance

against infections and diseases and maintaining a healthy lifestyle.

NESTLÉ Clear Apple Nectar

Apples have no fat and are cholesterol free. NESTLE® Clear

Apple Nectar is made from the finest Apples and is 100% clear.

As irresistible as sin itself – give in to the amber kick of

NESTLE® Clear Apple Nectar.

NESTLÉ Red Grape 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.

Relish the full-bodied, smooth flavor of NESTLÉ® Red Grapes Nectar and let your

taste buds soak in the sensuous richness of Red Grapes.

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NESTLÉ Pineapple Nectar

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.

NESTLÉ Mango Orange

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.

NESTLÉ Chaunsa Nectar

Nestle Chaunsa Nectar is prepared from the finest quality Chaunsa mangoes that are

procured from the best fruit farms. The 100% rich mango nectar is nutritious,

refreshing and wonderfully delicious. It helps to replenish the lost vigor during

workouts and enhances your fitness by providing fortified energy endowed with

dietary fiber, Vitamin A, C & E.

NESTLÉ Guava Nectar A chilled glass of pink Nestle Guava Nectar is not only great tasting but is also

wholesome in antioxidants making it very nutritious.

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Nestle Guava Nectar is rich in Vitamin A, Vitamin B, Vitamin C and Niacin and due

to excessive fiber content it is an effective fat burner.

NESTLÉ Mango

Feel the burst of fruity fun and discover Nestle Mango fruit drink made with the

juiciest, sweetest mangos to sass up your taste buds.

Now that is a sweet deal!

Mission statement

“Good food good life”

Build Branded food business to improve quality of life by offering tasty, affordable

and highly nutritional products to our consumers while maximizing stake holders'

value”

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VISION

Explore all over the worlds-from baker to babies, parents to pet owners

single servings to catering: providing for all their needs always with the

assurance of outstanding quality.

VALU CHAIN ANALYSIS

Consumer

Demand

Continuous

Improvement

Corrective Action

Management

Review Quality

Maintaining &

Measurement

Management

Responsibility

Resources

Documentation

Consumer Satisfaction

Audit

Ensuring SupplyDevelopment &

New Product Introduction

Consumer Services

Sales

&

Product Use

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Our selected brand is nestle orange juice, to analyze the specific activities through

which firms can create a competitive advantage; it is useful to model the firm as a

chain of value creating activities. Michael porter identified a set of interrelated

generic activities common to a wide range of firms. The resulting model is known as

the value chain and is depicted below.

Primary activities

Inbound logistics

Major raw materials of nestle orange juices are different pulps of orange such from

Germany and France. Nestle company is being getting there raw material from local

market in the Pakistan. Nestle juices included their ingredient such as fresh fruit

nectar of mango, apple, pineapple, orange, included their fresh juices.

Nestle imported all machinery and formulas who is the advantage of nestle company.

Operation

PRODUCTION PROCESS

Fruit juice production procedures involved in fruit juice manufacturing depending on

What type of the juice the unit is going to make. For the purpose of this -feasibility,

we propose the 4% token juice drink of Citrus fruit (Orange), Mango and pineapple.

Fruit Juice - Production Process Flow

Production of fruit juices is a standardized process and initial preparatory processes

for all fruits will be similar, as will be the last stages of juice/pasteurization section

and packaging, although differences in handling juice composition arise in certain

cases due to the nature of the fruit and percentage of vitamin involved. Basically,

preparation process of juices involves the following steps:-

Inbound

logistics Operation Outbound

logistics

Marketing

& Sales Service

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Boiling of fruit

Storage in Tank

Ingredients mixing

Syrup Storage in Tank

Juice Preparation

Juice Storage Tank

Filling and Packaging

Cooling and Storage

In the following pages the process flowchart and brief description of the various

Processes involved in fruit juice production are outlined.

Fruit Juice Production Process

Fruits boiler where it is cooked and shifted to the plate heat exchanger. Then stored

in the storage tank. Then supplied to the mixing tank in the desired quantity while in

mixing tanks; any additives to the are made at this stage before it is pumped to syrup

storage tanks. Blended juice is then pumped through pasteurizer; where it is heated

to 90oC to inactivate enzymes and living organism. After pasteurization the juice

passes through final filtration, before loading it into a juice storage tank. Juice from

the tank is ready for packaging

Packing and labeling then storage.

The juice will be then packed in the quantities demanded by the market. Consumer

packs as like 200ml and 1000ml tetra pack and then label the nestle juices. Product

will be in cool dry store.

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Out bound logistic

In Nestle Company the activities that include in outbound logistics are, they establish

their sale and distributive offices in big cities like Karachi, Lahore, Islamabad, Faisal

bad, Gujranwala etc. and also hire suitable distributors on agreed profit margins.

Who bought from nestle office of the city and try to distribute to the each retailers

and shop keeper in the city.

Services

Company established the customer center in each office in a city. And also given toll

free number as a help line number which means that if customers feel any problem

then they can contact through our help line.

Marketing and sale

Nestle company launch their sale promotion scheme after six months and their last

sale promotion was “ ‘’. This was for a retail shop who put the nestle juices

billboard on their shop or sale reception table then they can win attractive prizes. By

this operation they can save all the advertisement expenses which they have to pay to

the retailer or owner of the shop.

Nestle company use advertisement channels when company have to launch new

brand or improvement in previous brand. So company prefer to use Jeo, ARY one

world, PTV home, I vision and news papers. They contract with the advertisement

channels for 1 to 2 months and repeat 2 or 3 time in a day.

They hire suitable distributors in a country at agreed profit margins who bought

juices in bulk form from the distributive channels and then sell to the retailer who

final sale to the end consumers.

Nestle company has efficient market management who’s main objectives for

marketing their product are

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Strong customer relationship

Identify need of customer like new taste new fruit item

Maintain market leadership by maintaining the pure quality

Provide juices which are fit for human body

Stop brand selling don’t reduce quality

Quality is our grantee

Supportive activities

The primary value chain activities described above are facilitated by support

activates. Porter identified four generic categories of support activities, the details of

which are industry specific.

COMPANY STRUCTURE

Nestlé head-office in Pakistan is in Lahore. It also has its registered office in Lahore.

Nestlé has divided the whole Pakistan in to three zones.

Northern Zone

Central Zone

Southern Zone

Nestlé has 8 regional offices in all over the Pakistan. These offices work under their

respective zonal offices.

FACTORIES

Nestlé has two factories in Pakistan for the production of Juices items.

One in Sheikhupura near Lahore.

LOCATION OF FACTORIES

Now we give some information about the company’s factories of the company.

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Technology

They used Tetra Recart restorable carton in juice packing. The easy-open carton was

more convenient and positioned the tetra packing juices as a premium product.

High tech ½ fat juices, France. Technology used to increase flavor and decrease the

fat in juices.

Plant capacity – About 75000 kg per day fruit juice concentrate of orange and

passion fruit.

Plant equipment- Infeed fruit conveyor, fruit washer, fruit mill, screw pre heater,

hydraulic press, press filter, aerator, tubular/ plate sterilized/ pasteurizer, jacketed

storage tank and filling machine.

Plant and Equipment

The main plant and equipment will be for following activities

Fruit handling &

Reception

Inspection/ washing Juice extraction

Juice processing Juice finishing Centrifugation

Homogenization Membrane filtration Pasteurization

De-aeration Concentration Essence recovery

Concentrate post-

treatment

Aseptic or non-

aseptic packaging

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PEST Analysis

Political or legal forces

Taxation Law

If government imposes heavy taxes on the industry then it badly effects the industry

growth. The taxes impose is from government side and it varies from industry to

industry. Juices have no tax except sales tax. But nestle’s some product has like

butter and cream which has more taxes

Labor Laws

Labor is being privileged here having all the laws. Nestle company also follow these

law like government announce minimum salaries of a employ Rs 7000.

Laws on hiring & promotions

Hiring & promotion is followed by law. People with better capabilities are privileged

because they deserve it, for the betterment of the organization. As well as a well

educated & skilled experienced person is a precious asset for the company suit

should be hired on better term & conditions and be promoted on the basis of it

capabilities.

Environmental protection Laws

They do concern for environment and contribute more and more for the betterment

of environment.

Foreign trade Regulations

Foreign trade regulation does not effect the over all policy and the working of the

“Nestle juices” because they operate nationally not internationally.

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Attitudes towards foreign companies

They have no any agreement with any foreign company but if any company will

offer the business to them related / unrelated they would think about it according to

terms and conditions.

Political instability

The government stability also plays a great role for any industry. In Pakistan government

face lot of difficulty from the side of terrorism and also its activity that badly effect

environment of the country which is totally very upset. Recently in Punjab instability of

government creates lot of problem for the industry like shortage of electricity that badly

affects the industry operational process. Nestle juices have not much affect this condition but

in future it may be face some difficulty for operating.

Economic forces

Inflation Rate:

Now in Pakistan inflation rate is almost 22.3% so if increase in inflation rate then

increase in prices of Nestle JUICES but if in Pakistan economy.

Economic growth rate

Economy growth rate accelerate is 7+

Social factor

Health consciousness

Today people are more health conscious so Nestle juices by identifying this need of

the people they are also producing health conscious juices with more vitamins.

Demographic trend

In Pakistan the population growth rate is 1.828% in 2008 and total population is

167,762,040 (July 2008 est)

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Age structure

0-14 years: 40% (male 33,293,428; female 31,434,314)

15-64 years: 56.9% (male 48,214,298; female 46,062,933)

65 years and over 4.1% (male 3,256,065; female 3,542,522)

KKeeyy IInnddiiccaattoorrss

Population: 164,741,942 (July 2007 est.)

Growth rate: 1.828% (2007 est.)

Birth rate: 27.74 births/1,000 population (2007 est.)

Death rate: 8 deaths/1,000 population (2007 est.)

Environmental concerns:

About the environmental concerns of Nestle juices is good health.

Work life quality:

Quality of work life is very safer & environment friendly

Lifestyle changes:

They consider quality life changes and take advantages of accordingly so that

customer can convinced as well as it plays a vital role to attain & retain the customer.

Consumer adopts the trend of changing environment because of modern facility as

well as globalization they are aware about each and every thing happening all around

them.

Technological forces

New Products

Nestle juices focusing concentric and conglomerate diversification because in

present era it is not possible for any organization to exist in market for long run by

providing just one product. So Nestle juices are diversifying according to changing

demand of customers and trends.

Product innovation

Product innovation is becoming more necessary for the organization because of

globalization people are becoming aware about the changes being taken place around

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them so in order tactical the situation nestle juices is focusing on product innovation

by introducing new flavor of juices with the passage of time NESTLE JUICES use

new tetra packing like easy open cork of pack.

Productivity improvement through automation

Automation don’t matter a lot but to some extent it contribute towards productivity

and improvement. Imported pulp is filled in machines for processing after the final

form of juice it is packed in 250 and 1 liter packing.

Total spending on R&D

Spending on R&D is long term investment for any organization. Nestle has R&D

department and head of R&D department is Mr Arshad Bhati. Nestle total spending

on R&D 70 millions.

New communication technology

All the modern as well as traditional ways of communication are being adopted by

Nestle juices including own emails, letters, faxes and monthly visit in different

offices of Nestle juices for better communication among supplier, distributor and

customers.

Nestle juices has also established own web site which can be visited any one for

most recent news innovation and activities being taken in the organization.

Market analysis

Currently in Pakistan, there are 24 fruit juice/pulp processing units and a number of

small units in the informal sector are working. The present installed capacity is

estimated around 400,000 metric tons per annum with a demand for juices growing

at a combined annual growth rate of 27%. The fruit juice industry reported sales of

9.526 billion Rupees in year 2011

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0

50

100

150

200

250

2001 2002 2003 2004 2005 2006 2007 2008

East

Column 2

Column 3

The outlook for the canned food industry - which can exploit rising demand

for convenience and consumer fears over food origin and hygiene - and the

soft drinks and beverages industry - which can capitalize on the asp rational

demands of Pakistan's young population - have both been moderately

accelerated. Forecast canned food sales growth to 2012 now stands at 46.7%,

while soft drinks sales growth to 2012 is forecast to stand at 36.4%. Both

have contributed to a per capita food consumption growth forecast

amendment to 15.4%. It is also expected that the average consumption of the

single person will be 85.5 hundred litters per years in 2012.

2500,000 liters juices approx drink by Pakistani people in a month. And per

day there is 83330 liters approx juices drink by people.

The market of juices is growing because the consumption of juices

increases every year and expected it increase continually due people change

the life style and more health conscious. They prefer juices on other soft

drink.

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The market share of the nestle juices is 60%. Which mean 1500,000 litters

in a month and 50,000 litters in a day.

Nestle is name of pure life so quality is their guarantee. So if they lose their

quality then they lose their sale because these don’t operate on the given

image. And increase in rates of raw materials also influence the level of

demand because due to increase in cost the sale price also increase and due to

price war in a market of Pakistan demand level is effected. Or increase in tax

there will be increased cost price which also effect in decreased in demand.

Increase in inflation rate in Pakistan then this also effect in decrease in

demand level.

The nestle juices are at growing stage of product life cycle.

Competitor’s analysis

Competitor analysis in marketing and strategically management is an assessment of

the strengths and weaknesses of current and potential competitors. This analysis

provides both an offensive and defensive strategic context through which to identify

opportunities and threats. Competitor profiling coalesces all of the relevant sources

of competitor analysis into one framework in the support of efficient and effective

strategy formulation, implementation, monitoring and adjustment

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In order to evaluate the competitive position we have to take a look on the

competitors of “Nestle juices” in JUICE CATEGORY.

Competitors in market

Shezan

Haleeb

Country

Shezan is the main competitor of “Nestle juices” nestle juices compete their

customer on quality basis because In Pakistan their in no big name in pure fruit

juices. nestle provide their customer pure fruit juices.

Shezan

Short introduction of Shezan

The Shezan International Limited was incorporated on May 30, 1964 as a Private

Limited Company. Shezan International Limited was conceived as a joint venture by

the Shahnawaz Group, Pakistan and Alliance Industrial Development Corporation,

U.S.A. in 1964. Shezan is the largest food processing unit having developed and

installed the capacity to meet the country's local as well as export needs. In 1971,

Shahnawaz group purchased all the shares of Alliance Industrial Development

Corporation with the permission of the Government of Pakistan. In 1980-81 a

separate unit was installed in Karachi which now caters for Karachi, Sind and export

demand. A bottle filling plant was set in 1983 in Lahore, Punjab. An independent

Tetra Brik plant was commissioned in 1987.In the year 1990 it was decided to install

a juice factory at the Hattar in North West Frontier Province of Pakistan. Shezan

International's Head Office Located in Lahore, Pakistan. In Canada, Target Foods, is

the authorized distributor for all Shezan Products. They carry all the export quility

Juices, James, Pickles, Chutneys, Sauces, Syrups and Squashes.

The products of the Company include tetra pack juice, mango juice, pickles,

custards, vegetables, jellies and jams. The Company distributes the products under

the Shezan brand name.

Strong local name in the juice and drinks range

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– Launched Shezan Orange

– Launched Twist (nectars) 2003

• Aggressive marketing campaign print, electronic

– Shezan All Pure 2004

– No trial generation activities

• No consumer reward/loyalty CPs

• Available packaging options

– Shezan All Pure 1 Ltr

– Nectars

• Twist

• Shezan nectars 1 Ltr

Swot analysis of shezan juices

Strengths:

1. Shezan has it own fruit forms.

2. Shezan juices operate in market earlier than nestle juices.

3. Better knowing the culture of country.

4. Shezan juices have best distribution channel in all over the Pakistan.

5. Offer good quality products especially nectars juices in market.

6. Shezan juices have good positioning in customer mind.

Weakness

1. Less product awareness in customer mind.

2. Rising manufacture cost

3. Inadequate human resource

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Opportunities

1. Shezan juices have great perception value in minds of customers while as Pakistan

organization.

2. Increase juices market very fast.

3. The concentric diversification in different juices products.

4. Backward integration can use in juice products of Company.

5. Decreasing economy condition.

Threats

1. There is strong competition in juices market.

2. Different strategies adopted by competitors Nestle in juices products

3. New product advancement by different competitors.

4. Increase inflation rate (23.3% 2008)

5. Rising labors coast.

Swot analysis of nestle juices

Strengths

1. Company Image

Nestle company has a great image in the mind of people. Nestle company has

worldwide reputation.

2. Quality Conscious

Nestle produce a good quality products. It can not compromise on quality.

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3. Well-developed strategy

Nestle has recognizes there is a right time and place for their product; therefore, their

strategy makes room for adjustments

4. Market Share

Nestle juices has a highest market share i.e. 60% in juices market.

5. Good marketing skills and services

Nestle is now a days working on this concept because they want to increase their

market share. They are providing quality products to the customers that include their

services and products.

6. Brand strength - In Pakistan Nestle has some very strong brands like Nescafe,

Maggie, Cerelac, nestle water and these brands are almost generic to their product

categories.

7. Research &Development

Research and development department keeps Nestlé in continuous knowledge about

itself and competitors. it has a competitor advantage because many local juices have

no research & development department.

8. Product innovation - The Company has been continuously introducing new

products, thus expanding its product offerings.

9. HR department

Nestle company has a strong HR department.

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Weaknesses

1. Storage ability

Nestle juices not store able for long time.

Opportunities

1. Support foreign investors

Government support foreign investors to invest in Pakistan.

2. Scientifically gas

This is great opportunity for nestle company. Because in coming future nestle take

the benefits of uses the scientifically gas.

3. Changing Social Trend

Consumers in urban areas drink functional drinks on a regular basis as they

increasingly adopt Western lifestyles, especially the younger generation which is

hugely influenced by the Western media. Younger consumers tend to follow Western

eating and drinking habits. There was an increase in demand for functional drinks

over the review period.

4. Health conscious

Increasing health and hygiene awareness among Pakistanis has greatly increased

sales of fruit/vegetable juice products. Both the government and the media have

started health awareness campaigns to make Pakistanis realizes that consumption of

fruit/ juices is as essential as eating food. Fruit/ juices are doing very well in both

urban and rural areas

5. Global hub

Since manufacturing of some products is cheaper in Pakistan than in other South

East Asian countries

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6. Market growth

Juices market expands very fast .A new research proves that in future (2012) every

person use 85.5 liters juices per years.

7. limited options in real fruits juices

Limited options in locally produced real fruit juices.

Threats

1. Government Regulation

They face problem if government employ taxes on them which force them to raise

the price of their product.

2. Increase in competition

There is large competition in juices market

3. Entry barrier

There are no many entry barriers so a large numbers of local juices enter in juices

market

4. Labor coast

Increase labor cost

5. Inflation rate

Increase inflation rate very fast .In 2008 expected inflation rate 23.3%.

Porter five forces model

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Michael Potter's five forces framework can be used to determine whether the

industry is attractive enough to sustain a small or medium size enterprise. The five

forces of Entry, Rivalry, Substitutes, Buyers and Suppliers jointly determine the

intensity of competition and profit potential for a small and medium size firm in a

given industry or market sector. In analyzing each market force, the question is

whether it is sufficiently strong to reduce or eliminate industry profits. The focus at

this stage is at the industry level because industry dynamics and profits of necessity

dictate profits of other firms that enter the industry. Also, in carrying out a five

forces analysis we want to be able to answer this question: If the competitive forces

in the industry are strong, is there some strategy that firms might employ to defend it,

or influence the forces in their own favors?

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Threat of new entry:

The threat of new entrance means when any other company that is not operate in that

product category but operate in the other product market or the company that start it

new venture see a opportunity in this field like juices and they decided to enter in

this market. So the current company that is operating in the market has a great threat

for the new entrance. New entry can raise the threat of competition. In juices market

there is great threat of new entry. Because in last few years many new juices enter in

market. There is no major barrier for local juices to enter in market. So many local

juices enter in market like FRAZ, COUNTRY. There is some barrier for stop the

new entrance

Economies of Scale

Product Differentiation

Capital Requirements

Switching Costs

Access to Distribution Channels

Cost Disadvantages Independent of Scale

Government Policy

If all these things present in the market then no company want to enter in that market

because they know there is no any opportunity for it.

Bargaining power of supplier

The company needs raw material, labors, component and other supplies. These

requirement leads to buyers-suppliers relationships between industry and the

suppliers. Suppliers, if powerful can exert an influence on the producing industry,

such as selling raw materials at high price to capture some of the industry profits.

Suppliers have great bargaining power if the company can not produces its raw

materials or other ingredients. Suppliers have weak bargaining powers, if in the

market many suppliers and demand of raw material is low.

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Buyer Power

Bargaining power of customer is one of the important forces in the porter five forces.

In the field of juices customer has a low bargaining power because they purchase a

single unit and have not in that situation that they can negotiate with seller on price

matter. But the bargaining power of those buyers whose buy in bulk have great and

they want to set the price on their concern.

Here you ask yourself how easy it is for buyers to drive prices down. Again, this is

driven by the number of buyers, the importance of each individual buyer to your

business, the cost to them of switching from your products and services to those of

someone else, and so on. If you deal with few, powerful buyers, they are often able

to dictate terms to you.

Threats of substitutes

Substitute products refer to products in other industries. To the economist, a threat of

substitutes exists when a product demand is affected by the price change of a

substitute product. A products price elasticity is effected by substitute product – as

more substitute become available, demand becomes more elastic since customer

have more alternative . A close substitute products constrains the ability of firms in

an industry to raise prices. While the treat of substitutes typically impact an industry

through price competition. If substitution is easy and substitution is viable, then this

weakens your power. The substitute product has a strong affect if the following

things are occurred

Sales of substitutes are growing rapidly

Producers of substitutes plan to add new capacity

Profits of producers of substitutes are up

In juices market nestle juices has great threat for substitute like Shezan, Haleeb etc.

Competitive Rivalry

The big factor determining the strength of rivalry is how actively and aggressively

are rivals employing the various weapons of competition in jockeying for a stronger

33 Nestle

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market position and seeking bigger sales. In the market rival create a great threat.

Many companies introduce juices in market and increase threat. Many local

company enter in market, there is also great threat for establish company. Nestle

juices also face lot of competitor rivalry. Some carbonated company introduces

juices in market, it also create threat for nestle juices. The main competitors of

Nestle juices in the market Shezan, Haleeb.

Analyze buyer behavior

Initiate buying behavior

There are two stimuli that insist the consumer to purchase the product that is

1) Consumer internal stimuli

2) Consumer external stimuli

Customer external stimuli

There are following types of people group include in the internal stimuli

Family

Reference group

So children, Individual and member in a group are the person who may initiate the

buying process. Usually young generation and families initiate the buying process.

Customer internal stimuli

A person also insist itself to drink juices due to its internal desire to drink the juice.

It is called internal stimuli

Sometimes if there is group of same age people like young generation friends group

then any of one or more then two person can insist to drink juices.

Distributors and retailers role in buying process

Product after passing through Distributors and Retailers reach to the final customers.

So they play very imported role in buying process because distributors are those

persons who first buy the juice in complete packing then sell to the retailers so

distributors start their purchasing after deciding the profit margins rate and area to

distribute the juices. Similarly retailers after buying juices from distributors they sell

34 Nestle

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to final customer after analyzing the brand loyalty and after the judgment of the

packing and attractive offer for the retailers of any promotion scheme for the retailers

and profit margins.

Source Asim Bakers

Al Meraje Bakers

China Bakers

Factors stimuli to purchase.

There are the following factors that insist the person to buy the juices. These are

Thirst

Taste & Flavor

Fit for body

Most persons drink the juices due to taste and different fruity flavors. Some people

like co2 water but some people like without co2 juices. So many people like to drink

soft juices like nestle fruit juices due to natural taste and flavor

Similarly now a days people are more health conscious so due to fruity mixture they

desired to full fill their esteem needs and so they drink that juices.

Evaluate the alternative product

Customer evaluates the product by considering the brand company and their

ingredients and packing. They also check the taste, flavor and quality. If the flavor

and ingredients are satisfied for the customer and better then the competitor then

customer can insist itself to buy that juice, otherwise customer may can choose the

competitor’s juices.

Who take final decision

Usually family main members take the final decision to purchase juices. But a single

person also can take that decision according to his or her desire.

They also implement the purchase transaction. In a family if the main family

member implement the purchase transaction and whole family drinks the juices.

Juices are disposable means after drinks mostly packing of the juices are disposed.

35 Nestle

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Marketing Segmentation

We are going to segment juice market on the basis of need. There are following need

which we came to know that people like to drink during the following stages:

For Travelling and occasional

Usually People like to drink during travelling. Because they have to carry single or

small packing and juices are the best for that. Juice provide them suitable taste and

flavour.

For domestic use

Nestle distributes that volume of juice for large family use which may be used in any

events and occasions like use with breakfast and dinner etc or serving the guests etc.

Targeting

200ml For Travelling and occasional

1000ml For domestic use

Nestle is first company who launch the these two packing in juices who provide the

satisfaction more as compare to competitors but now competitors also move this

segment and according to that we are going to launch segment of food energy drink.

Identifying new segments

In Pakistan our segmentation strategy are so strong and the result all the established

areas have availability of our juices and our target goals achieve easily but according

to the competitors are moving our segmentation we will launch new segment of food

energy drink for the sportsmen and professional working people.

36 Nestle

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Positioning

Brand strategy is at the heart of marketing strategy. It is the act of designing the

company offer and image so that it occupies a distinct and valued place in the target

customer mind.

Nestlé brings you a range of juices that will scintillate your taste-buds and add

variety to suit every moment

Oranges are in demand not only for their divine juicy flavor but equally celebrated

for their health benefits. They are naturally low in calories, and an excellent source

of Fiber and Vitamin C.

Squeezed from the finest handpicked oranges, 100% pure NESTLE® Pure Orange

Juice has no added sugar and is a good source of Vitamin C. Having Orange juice

everyday is a great way of strengthening the body resistance against infections and

diseases and maintaining a healthy lifestyle.

Point of parity

Different flavor

Tetra packing

Point of difference

100% pure juice

Enhanced nutrition

This is the point of differentiate that nestle always provide good and pure juices

which is fit for human body

Brand element

Name

Nestle juices is the brand name.

Slogan & logo

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Slogan is the short phrase that communicates descriptive or persuasive information

about the brand. 100% pure is the slogan of Nestle juices. The slogan shows that

nestle pure juices have good quality and taste. Nestle juices slogan wants to create

image of pure juice with good taste and quality in the mind of customer. Logo of

Nestle juices in word marks with text it own name Nestle.

Product strategy

core benefit

Core benefit means the services and benefits the customer is really buying.

Our customer fulfills its need of thrust and refreshment by buying our nestle juice.

Basic product

It’s mean what specifically the actual product is.

Our actual product is juice

Excepted product

A set of attributes and conditions buyers normally expect when they purchase this

product.

Normally customers want to drink a juice with greater taste and flavor so nestle

provide great and pure juices.

Augmented product

A product that include features that go beyond consumer expectations and

differentiate the product from competitors.

Our juice taste and flavor is according to the customer expectations because we

provide 100% pure juice. We have no compromise with quality. We try to provide

maximum quality and satisfaction to the customers. Quality is our guarantee and we

promised to the customers that we stop the product rather to low the quality of

product.

Potential product

All possible augmentation and transformations the product or offering might undergo

in the future.

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In future we will introduce new pulp juices in the market nearer future. We will

launch special juices for sports men and professional working people.

PRODUCT COMPARISON IN MARKET

COMPANY QUALITY SERVICES LOCTION EXTRA

OF

PRODUCT

FACILITY

Nestlé Better Excellent Excellent Good

Haleeb Normal Normal Normal Normal

Shezan Good Normal Good Average

Communication Strategy

Nestle company use different sources to communicate their target marketing. nestle

company use those sources on that the more customer attract like TV,

NEWSPAPERS, BILLBORD and when they lunch any secame in juices they use

pamphlets to aware their customer. When launch the new juice or new sale

promotion for the juice then they spread the awareness about their brand through

following communication strategy.

Communication objective

Nestle company use different sources to attract their target customer. The objective

of nestle produce awareness in our customer about new products and also produce

awareness to new customer about nestle juices. Nestle also tells their customer that

nestle provide pure juices to their customers. Nestle also give the knowledge of

nestle juices that they give you energy and good taste. Nestle also give message that

nestle juices are good for your health.

Communication strategy of competitor

39 Nestle

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Nestle main competitor is shezan juice.shezan also use the same communication

strategy which adopted the nestle juices.

Shezan is also advertising through TV, new papers, billboard.

Adds in TV channel

Nestle juices give ads on different TV channel at different time .nestle management

also keep in mind that their competitors use what channel and what time they give

adds. Nestle management also keep in mind what type of customer they attract and

what time they sit before TV. nestle juices different time on different channel to keep

in mind the target customer TV watching time.nestle juices give ads on PTV

home,GEO,ARY an PTV news.

News papers

Nestle company advetise their juices through news papers.large numbers of custmers

have reading habits of news papers, so nestle use the media of news papers to attract

their customer. nestle management also keep in mind that their competitors use what

type of news paper and what time they give their ads.so after all these analysis nestle

select DAWN and NAWAE-WAQT.nestle give their ads on both news paper at the

time of Sunday.

Billboard

Nestle juices attract their customer through billboard. Nestle company select the

main city in country and those places where large numbers of customer easily attract.

Nestle has a polices to use 500sqr fts in each region

.

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Marketing budget TV budget

nestle juices give their ads on tv when the juices season on pack. Nestlé give its

juices ads on different tv channel 24days in different timing. total cost on this

advertisement 9413424(rs)

News paper budget

News paper size Day Price

Dawn 27×4 Sunday 430920(Rs)

Nawa-e-Waqt 27×4 Sunday 1,782,000(Rs)

Nestle juices advitise their juices on news paper in top season .the total coat

on advitisement is 17703360(Rs).

Channel Timing No ads Price/mint Total

Ptv home 7.30am

9.15pm

2

2

100,000(Rs)

132226(Rs)

232226

Geo 10 pm 2 50000(Rs) 50000

ARY 8 pm 2 70000(Rs) 70000

Ptv news 9pm 2 40000(Rs) 40000

Total 392226(Rs)

41 Nestle

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Billboard budget

Nestle has a polices that they cover each region with 500 sqr fts.in small city the use

less billboards. the coast of billboard in different cities has different. there are three

rate 40000,70000,and 125000(Rs).total coast on billboards 2560000(Rs)

Total advertisement budget

Advisements sources coast

Different TV channel 9413424(Rs)

Different news paper 17703360(Rs).

Billboard 25600000(Rs)

Total coast 52716784(Rs)

Distribution Strategy

Nestle Company establishes the distribution channels in each famous city of Pakistan

like Islamabad, Karachi, Lahore, Gujranwala, Faisalabad etc.

They also acquired the suitable distributors in each city. They hire maximum two or

three distributors in a city due to prevent from their own competition.

The provide the margin to the retailers is equal to the interest of band like 7% to 8%.

They also pay to use the shelf to store the nestle juices to the retailer for sale to the

final consumers.

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Nestle juices uses different channel to distribute their product. First of all the

finishing goods stored in the ware houses and the next step products sending you the

distributor and distributor distribute throw different channel to whole seller to realtor

and the end to purchasing customer. Nestle distribute their product regularly to

distributions because their customers satisfy nestle services. Nestle company

distribution channel urban areas and rural areas, in rural areas the wholesaler

distributes the Nestle juices to the retailers store, and the rural areas the distributor

have a responsibilities to distributes the product to all the realtors stores. Nestle

company target market in Pakistan all the big and important cities

Manufacture

Where houses

Distributor

Whole seller

Retailer

Customer

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Price Strategy

Nestle juice are available six flavored and two size in the market. One is 200ml and

second is 1000ml. The packing of 200ml target of individual customer and 1000ml

packing target the whole family. 100% clear juices, the prices on the base of cost of

ingredients as well as other operational costs like processing, weighing packaging

and logistics.

Pricing objective

Maximum profit margin

Nestle juices is a big price objective that they provided high quality and positing and

we taken premium price to our customer other than our competitors. Nestle juices

contain maximum profit margin other than their competitors.

Quality leadership

Nestle juices is a main objective that its responsibility to provided best quality who

they promised to their customers and they fulfill their promised. In the recent

research nestle juices is market lender in the soft drink market.

Long relationships with customer.

Nestle juices provided superior value to their customer who they promised throwing

advertising. So the customer are loyal the nestle brand.

44 Nestle

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Price Structure

(Consumer price)

200ml 20 Rs.

1000 ml 130 Rs.

(Mango and orange mix flavored)

1000ml 145 Rs.

(Pineapple and red grapes)

As they are market followers, they respond to the price strategy of market leader

(Nestle) in following manner:

Hold current price;

Has competitor continue to monitor

Cut prices competitor’s price.

Yes

Will lower price

Negatively affect our

Market share & profits?

Reduce price

Yes

Raise perceived

Can/should effective No quality

Action be taken?

Improve quality

And increase price

Launch low-price

“Fighting brand”

45 Nestle

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Price Demand curve Demand have a impact on a company objectives because price are inversely to

demeaned, if price is high so demand is low of the product . Nestle company always

aware of the price sensitivity of the customer so it known about purchasing power of

the customer. Nestle juices demand curve is elastic because lower price and higher

quality produces high revenue.

Elastic demand

Inelastic demand

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Estimating cost

Nestle company do accumulated production because if they produced

mass production so it reduced their labored cost and other cost for

production process. It’s a big advantages of the nestle company who

produce large quantity of units. With the help accumulated production

Nestle Company has a low cost of production and high profit margin.

Going rate pricing

Nestle company selecting a price method of going rate price. Because

their pricing near the competitor pricing. Shazan juices price is same of

our nestle juices. Nestle juices has a market leader in beverage industry.

Final price

Nestle set the final pricing related to their market competitors so nestle

price do not have impact on the company policy, and other marketing

activities.

47 Nestle

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Sale forecast

There is 1500,000 litters nestle juices being sold in a month in Pakistan. 30% of 1500,000

litters is being sold in Karachi and 20% of 1500000 is being sold in Lahore, 10% in

Faisalabad, and 5% in Gujranwala and 7% also in Islamabad.

Karachi

Lahore

Faisalabad

Islamabad

Gujranwala

Other

Sale analysis for the 5 years

monthly sale total juices sale of Nestle is 1500000 litters

Per litter cost is 65 Rs

Total sale per year 2008 1,170,00,000/-Rs

Year Total Sale

2003 807,147,644

2004 858,667,706

2005 913,476,283

2006 971,783,280

2007 1,099,800,000

2008 1,170,00,000

0

200,000,000

400,000,000

600,000,000

800,000,000

1,000,000,000

1,200,000,000

2003 2004 2005 2006 2007 2008

Nestle

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