Nestle Pakistan Ltd. is a food processing company, which is registered on Karachi and Lahore stock exchanges. It established its first production unit in 1988 in Sheikhupura, Pakistan with the name of Nestle Milkpak Limited but its name has been changed and now it is called Nestle Pakistan Limited. Headquartered in Lahore, the Company operates five production facilities. Two of its factories in Sheihupura and Kabirwala are multi product factories, while another one at Karachi is already for production. One factory in Islamabad and two in Karachi produce bottled water.
Through its effective marketing and a vast sales and distribution network throughout the country, it ensures that its products are made available to consumers whenever, wherever and however. Nestle Pakistan is a subsidiary of Nestle S. A. – a company of Swiss origin headquartered in Vevey, Switzerland. Marketing Mix Of Pakistan Nestle Pakistan Limited is selected to study that how they have planned their marketing strategy for Nestle Pure Life (water). Nestle is a multinational food company and offering Fast Moving Consumer Goods (FMCG).
The motto of Nestle is “Good Food, Good Life”, so delivering the qualitative products to the customer is their main objective. It is offering 75 brands of bottled waters worldwide. Nestle Pure Life (NPL) is one of them that was first offered in Pakistan by Nestle Pakistan Limited in 1998. People felt need of Pure, safe and clean water because of impurities in water especially in the industrialized cities like Karachi, Lahore, Faisalabad etc. Nestle identified this opportunity and lunched NPL that satisfied the customer needs and Nestle become market leader in the water industry.
The customers of NPL showed interest on NPL because of trust on Quality of Nestle, at the heart of which there are qualitative products and its long term commitment to deliver better products to consumers. Being the market leader, the market share of NPL is 78% that is much higher than its competitors. NPL is passing through its Growth stage (of Product Life Cycle) i. e. its sales are increasing tremendously and competitors are entering in the market like Aqua Fina by Pepsi and Askari Waters.
There are different SKU’s of NPL to cover a wide market needs like for Home and office delivery there are 3gallon and 5 gallon bottles (bulk usage) and for day to day usage easily carrying light weight like “1. 5, 0. 5, 0. 2 liters” bottles are available in the market. Still Nestle is working on bringing the changes and innovation in this field. For this it has close relationship with its suppliers and distributors to get their suggestion to improve the quality of NPL. Nestle Pakistan also has the Customer Service Department with the logo “Talk to Nestle” in Lahore to receive the complaints and suggestions from the customers.
In this way Nestle analyze its market and becomes aware of the new market trends. Marketing strategy include 4 P’s strategy i. e. Product, Price, Place and Promotion strategies. Product is something that is offered to the market. NPL product strategy studies show that they are positioning the product with respect to its attributes that NPL is safe, pure, refreshing and healthy water. Nestle also does product line expansion; recently it has offered a 0. 25 liter bottle of NPL in the market. It’s also using the company name with its product name i. e. Nestle Pure Life.
NPL round shape and elegance of the bottle are instantly recognizable. Quality is cornerstone of NPL success. Nestle people say: “Quality is our more successful product and it is key to our success today and tomorrow. ” In Price strategy, Nestle has adopted the strategy of non-price competition. It is offering one price for NPL to all cities of Pakistan. It also keeps the check on distributors to maintain single price of NPL. It offers trade discounts to its distributors. Placement is the distribution of the product to its customers at right time, in right quantity, at right price and at right place.
To ensure this, channel adopted by the Nestle for distribution of NPL is as follows: Producer Wholesaler Retailer Consumer NPL comes under the category of FMCG, so for this the timely supply is very important that’s why Nestle is following intensive distribution strategy. Promotion is the very important and crucial element of marketing strategy as through it the company establishes its image in the minds of the customers. NPL is promoted by using different ways of promotion. Advertisement of NPL is done through TV, radio, billboards, newspapers and magazines.
Current advertising slogans are that NPL is trust, hope and happiness and JIYO! Kay yahi hay Zindagi. Nestle also conducts the tradeshows, concerts, events, sponsorships, and discounts for sales promotion. For establishing public relations, Nestle distributes its newsletters, annual reports, calendars and diaries, lobbying, donation for charitable and civic events. For the victims of 8th October 2005 earthquake, Nestle has donated 90 trucks, which were containing different foods items, and NPL was one of them which is around Rs. 2 Billion.
The Nestle organized its teams to distribute products to the effected areas and all employees contributed from top to bottm (MD himself was involved personally to distribute products physically) Market Market consists of people or organizations with needs to satisfy, money to spend, and willingness to spend it. Markets are made up of current and prospective customers, defined as any person or group with whom a marketer has an existing or potential relationship. Analysis of Market Analyzing the market means getting the information about the current market trends.
The needs and wants of the customers are identified; the availability of the products is monitored as well as information about the competitors is gathered through this analysis. The image of the product in the minds of the customers is also judged and then on the basis There are different ways, which are adopted by Nestle to get the information of the market. Sales Department Sales department is a primary source of getting the information about the market. They actually visit the market and find out that who are the competitors, and what strategies they are adopting.
They also collect the complaints of the customers and make sure the availability of the product in the markets. Customer Service Department For Every product there is customer service department. This is head office based department i. e. every head office has its own department. In this department, customer’s complaints are collected which are gathered through the sales force or directly submitted by the customers. Then batch number is assigned to these complaints and is transferred to the Marketing Department.
If Marketing Department can’t be able to solve the problem then these complaints moved to the Quality Assurance Department, which is working in the Factory. Nestle believe in maintaining regular contact with their consumers. This applies both to how it presents its products and to how it addresses its consumers’ questions and concerns. When Henri Nestle prepared his first boxes of infant formula for sale, he put his address on the packages so people would know where to go if they had questions.
Today, Nestle’s Consumer Relationship Panel with the words “Talk to Nestle” expresses the same commitment. This is why Nestle have a worldwide Nestle Consumer Services network devoted to caring for consumers. The employees have expertise in a wide range of areas such as nutrition, food science, food safety and culinary expertise. They provide the prompt, efficient and high quality service that consumers expect from Nestle. In addition, employees are taught to talk with consumers and above all, to listen. Listening helps to understand what people want.
Nestle uses the insights gained from relationships with consumers to drive product development. Nestle cares for its consumers because its success depends on meeting their needs and expectations. Through listening and understanding, it can make products that they will want to use all through their lives. Market Entry Strategies The price of NPL is maintained constant over the period as the base for this is qualitative product which over the time period has reaped more market by keeping price constant. Discounts and Allowances
Discounts and allowances result in a deduction from the base (or list) price. The deduction may be in the form of reduced price or some other concession, such as free merchandise or advertising allowances. Discounts and allowances are common in business dealings. Nestle (NPL) offers the Trade Discounts to it customers. Trade discounts sometimes called functional discounts are deductions from the list price offered to buyers in payments for marketing functions the buyer will perform. The examples of these functions are: storing, promoting, and selling the product.
One-Price Strategy NPL is using this special price strategy i. e. one-price strategy in which the company charges the same price to all similar customers who buy identical quantities of a product. But for different quantities the company is offering different price. Even prices are set for the NPL products. Resale Price Maintenance Some manufacturers want to control the prices at which middlemen resell their products; this is termed as resale price maintenance. Nestle is also following this strategy.
It is doing so to protect the brand’s image. They say that their control of prices provide middleman with ample profit margins. Place Inn marketing strategy, Place means distribution of the products. It is a very important element of the marketing-mix. Ownership of a product has to be transferred some how from the individual or organization that makes it to the consumer who needs it and buy it. Goods also must be physically transported from where they are produced to where they are needed. For this purpose, middlemen are used.
Middleman is a business firm that renders services related directly to the sale and/or purchase of a product as it flows from producer to consumer. Due to these middlemen, activities such as creating assortments and storing products can be shifted from one party to another in an effort to improve efficiency. They are also able to carry out distribution activities better or more cheaply than either producers or consumers. A distribution channel consists of the set of people and firms involved in the transfer of title to a product as the product moves from producer to ultimate consumer or business user.
Marketing Mix (4 Ps) for Nestle Malaysia Product: Nestle has one of the biggest and finest product range in food and nutrition in Malaysia. The prepared food market has been rising in Malaysia which was correctly and elegantly captured by the Nestle. So I recommend for nestle to continue its dominance in the prepared food market and produce new products in prepared foods area which can be assumed as healthy food such as chicken-salad, tuna-salad and other food with salad Price: Price range offered by the Nestle on its products has a huge variety from being very low to very high.
The packaging of lower to higher priced products helps Nestle to capture all sectors of customers with any age and any buying preferences in bulk of a small price. The market is very intense competitive in pricing and Nestle is never behind in it. so we recommend to use current nestle pricing strategy. Place: as the Nestle is in Malaysia for more than 100 years they have a vast distributed network of distributors, wholesalers, retailers and suppliers. The loyalty and association with the company of the entire channel player is so strong that Nestle never face any problem in distribution network in any part of Malaysia.
As for our new products we need to focus on the healthy perception, so the expire date should be within 5 days so it can be assumed as fresh food and it should be kept in suitable environment. Promotion: Nestle has used a variety of promotional strategies for its long range of products. In chocolate section Nestle has offered promotions strategies under which free bars will be offered in the multi bar family pack. The company has also had tie up with Burger King in recent past in order to win exciting prices such as meal coupons to its customers.
As for the healthy prepared food Nestle promotion team will work with health and fitness centers like fitness first and true fitness to encourage and recommend their customers to eat nestle healthy prepared food. According to Nestle’s CEO, Paul Bulcke, the major strength of the company is its long presence (FLEXNEWS 2008). Nestle Malaysia has an existence that dates back to 1912. It has had a first mover advantage on most of the product lines and hence it cannot at this point sacrifice the chance of being the leader in the market.
And as the healthy consciousness and awareness increased in the recent years people prefer to eat healthy food. Physical Evidence: Nestle has adopted some of the newly and eye catching strategies as done by the Pepsi and Coke to invite people to their factories and check the quality and hygiene of the products produced by the company. Nestle also adopted this strategy and was able to capture people and thus increase their markets by many fold. Also Nestle started getting medical teams associations to get them accredited and better their images in their customers.
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