Nestle Juices Project Final

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MARKETING REPORT ² NESTLE FRUITA VITALS GROUP - G

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Nestle Fruita Vitals

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GROUP MEMBERS:

DaneyalMirza ( Leader ) alhaRiaz  T alhaRiaz hahid  SoniyaS hahid alman S arwar arwar  S alman aseemT ahir ahir  W aseem  Junaid Ashraf 

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Table of Contents G ROUP

...................................... ......................... .......................... .......................... ............. 1 MEMBERS: .......................... ..................................... .......................... .......................... ......................... ................. ..... 5 Execut ive ive summary ........................ IN T T RODUC T T I O N A N ST ORY ................................ ....... 8 D H I ST ORY OF COMPA N Y Y ......................... ..................................... ......................... .......................... .......................... ......................... ................... ....... 8 Hist ory ......................... N es ...................................... .......................... ......................... ......................... ...................... ......... 9 est le le Today: ......................... ...................................... ......................... ......................... .......................10 ..........10 Hist ory o f N es est le le juices ......................... N ST S .......................... ...................................... ......................... .......................... .......................... ..............10 .10 J U E ST LE J U I CE CE S ..................................... .......................... .......................... ......................... ..................15 ......15 Mission st at emen ement ........................ S I O N ......................... ...................................... .......................... .......................... ......................... ......................... .....................15 ........15 V I S T I O N PROCE SS SS ........................ ..................................... .......................... ......................... ..................17 ......17 PRODUC T ...................................... .....................17 ........17 t Juice - Pr od uct ion Pr ocess Fl ow......................... Fr uit Ju ..................................... .......................... ..............18 .18 Packing and labeling t hen hen st orage. ........................ TURE URE ......................... ...................................... ......................... ......................... ...................20 ......20 COMPA N Y Y ST RUC T ..................................... ......................... ......................... .......................... .......................20 ..........20 TOR R I S ........................ FAC T O E S LOCATIO N OF FACTORIES ......................... ...................................... ......................... ................20 ....20 ....................................... ......................... ......................... .......................... .......................21 ..........21 ST Analysis.......................... PE ST ...................................... ......................... ......................... ...................21 ......21 P olit ical ical or legal f orces......................... ...................................... .......................... .......................... ......................... ................22 ....22 Economic f orces ......................... Social fac t or ......................... ...................................... ......................... ......................... .......................... .......................22 ..........22 ..................................... ......................... .......................... .......................23 ..........23 T echn echnol o gical f orces ......................... ..................................... ......................... ......................... .......................... .......................25 ..........25 Market analysis........................ ..................................... ......................... .......................... .........................2 ............27 7 C ompet it or¶s analysis ......................... S wot analysis o f nes t le ..................................... .......................... .......................... ..............28 .28 le juices ........................ ...................................... ......................... .......................... .......................... .......................... ..............28 .28 treng S t r eng t ths h s .......................... ..................................... ......................... ......................... .......................... .........................2 ............29 9 eaknesses ........................ W eaknesses ...................................... .......................... ......................... ......................... .....................29 ........29 tunit ies Oppor tu ies ......................... T hrea ..................................... ......................... .......................... .......................... ......................... ..................31 ......31 hreat s ......................... ....................................... ......................... ......................... .....................32 ........32 P or t ter e r five f orces model .......................... T hrea ....................................... ......................... ......................... .......................33 ..........33 hreat o f new ent ry ry: .......................... ..................................... ......................... .......................33 ..........33 Bargaining p ower o f su pplier ......................... ..................................... .......................... ......................... ......................... .......................34 ..........34 Bu yer P ower ........................ T hrea ....................................... ......................... ......................... .....................34 ........34 hreat s o f subst itut es es .......................... ....................................... ......................... ......................... .......................35 ..........35 C ompet it ive ive Rivalry .......................... Marketing Mix3 Nestle Fruita Vitals

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..................................... ......................... .......................... .......................35 ..........35 Analyze b u yer behavi or ......................... ...................................... ......................... ......................... .....................38 ........38 Market ing ing S egmen egment at ion ......................... ...................................... .......................... .......................... ......................... ......................... .....................39 ........39 Pr od uct ......................... ...................................... .......................... .......................... ......................... ................41 ....41 Pr od uct st ra rat egy egy......................... T COMPAR I S SO N IN N IN MARKE T T ......................... ..................................... ................42 ....42 PRODUC T ..................................... ......................... ......................... .......................... .........................4 ............43 3 PROMOT I O N ........................ ..................................... .......................... ......................... ......................... .......................... .......................46 ..........46 PLACE ........................ ....................................... ......................... ......................... .......................... .......................47 ..........47 Price S t tra r at egy egy .......................... ..................................... .......................... ......................... ......................... .....................47 ........47 Pricing object ive ive ........................

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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 o perational 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 describes value chain analysis PEST analysis about about nestle juices 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 hierarchy of organization goals goals and the next step 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 R eview, eview, Porter¶s five model, Ws and Future Plans Of Company. Industrial analysis, Five Ws

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RODUC TI D INT TI O N A N

H I S T O Y TORY RY OF COMPA N Y

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, FarineLactée 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 S pain. 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. military. Nestlé's production product ion and sales rose in the wartime economy. 1944 -1975

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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 Carntion. 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. S ince 1996 there have been acquisitions including San Pellegrino (1997), S pillers Petfoods (1998) and R alston alston 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.

N estle estle T oday: oday:

corpo rate 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 a nd commitment in the field of food products. Nestle is the world No.1 food company. It is the 5th largest company in the world wo rld according to its turnover. It is present on all five continents, cont inents, has an annual turn-over of 70 billion Swiss francs, runs 522 factories in 81 co untries, 200 operating Marketing Mix9


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companies, 1 basic research 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 N estle estle 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. N TL E ES TL

JU I CES CES

Encouraged by the consumer response to NESTLE ORA NGE 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 expected to gain further. Now nestle company have launch following juice brand in Pakistan.

Indulge in the pure pleasures of a healthy lif e! e! Nestlé brings you a range of o f juices that will scintillate your taste-buds and add variety to suit every moment.

NESTLÉ® Pure Orange Juice

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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 goo d 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 A pples have no fat and are cholesterol free. NESTLE® Clear A pple Nectar is made from the finest A pples and is

100% clear. As irresistible as sin itself ± give in to the amber k ick of

NESTLE® Clear A pple Nectar.

NESTLÉ® R ed ed Grape Nectar Grapes also called the µqueen of o f fruits¶ are known for their great internal body cleansing properties. pro perties. They are a good source of Vitamin C and Potassium that plays an important role in proper heart functionin funct ioning g by regulating regulat ing blood pressure and heart beat. elish the full-bodied, smooth flavor of NESTLÉ® R ed ed R elish Grapes Nectar and let your taste buds soak in the sensuous richness of R ed ed Grapes.

NESTLÉ® Pineapple Nectar Pineapples are good goo d source of Vitamin C, an antioxidant that helps fight against free radicals, one of o f the main reasons for Marketing Mix11


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aging. Made from premium pineapples, NESTLÉ® Pineapple Nectar brings you the exotic exot ic taste of pineapples with a refreshing tropical flavor and is a good source of Vitamin C.

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NESTLÉ® Mango Orange efreshment Sink into Fruity R efreshment 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 mangoes that are procured procu red from the best fruit farms. The 100% rich mango nectar is nutriti nutr itious, ous, 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 Nect ar is not only great tasting A chilled glass of pink Nestle Guava Nectar but is also wholesome in antioxidants making it very nutritious. 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.

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Chaunsa

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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!

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

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ood g oo ood life´ ³Good f oo ood bu siness Build Branded f oo o ffering t as ast y, our

t o

impr ove qualit y o f life by

aff ordable and highly n ut ri rit ional pr od uct s t o

consumers while maximizing s t ake ake holders' val ue´ 

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Mission statement

E ST LÉ t o N ST

be t he he ³Beverage W ellness ellness Champion´ o ffering consumers heal t t hy hy and refreshing pleasures o f life t hr hr ou gh a variet y o f premium juices and nect ars´ ars´

V I S I O N

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PRODUC TI TI O N PROCESS Fruit juice production procedures involved in fruit juice manufacturing depending on What type of the juice the unit is going to make. For Fo r the purpose of this -feasibility, we propose the 4% token juice drink of Citrus fruit ( Orange), Mango and pineapple. p ineapple.

Fruit Juice - Production Process Flow Production of fruit juices is a standardized process pro cess 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 o f vitamin involved. Basically, preparation process of juices involves the following following steps:y

Boiling of fruit

y

Storage in Tank

y

Ingredients mixing

y

Syrup Storage in Tank

y

Juice Preparation

y

Juice Storage Tank

y

Filling and Packaging

y

Cooling and Storage

pro cess flowchart and brief description of the various In the following pages the process Processes involved in fruit juice production product ion are outlined. 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 t ank in the desired quantity while in mixing tanks; any additives to the t he 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 packag ing

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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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COMPA N Y S T U T RUC TURE T RE Nestlé head-office in Pakistan is in Lahore. It also has its registered office in Lahore. Nestlé has divided the whole Pakistan Pak istan in to three zones. y

Northern Zone

y

Central Zone

y

Southern Zone

Nestlé has 8 regional offices in all over the t he Pakistan. These offices work under their respective zonal o ffices. ffices.

TOR R I FAC T O ES Nestlé has two factories in Pakistan for the pro duction duction of o f Juices items. One in Sheikhupura near Lahore. LOCATIO N OF FACTORIES

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

Sheikhupura Factory

abirwala Factory K abirwala

29th K ilometers ilometers on

hanewal R oad, oad, Distt. K hanewal

Lahore Sheikhupura road Sheikhupura.

abirwala. K abirwala. Ph. 0692-53168-69

Ph. 92-42-6369321-26

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T Analysis PES T Taxation Law

Political or legal forces

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 R s 6000.

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 t erm & conditions and be promoted on o n the basis of it capabilities.

Environmental protection Laws They do concern for environment and contribute more and more for the betterment

of environment.

gn trade R egula egulations Forei gn Foreign trade regulation does not effect the over all policy and the working of the ³Nestle juices´ because they operate operat e nationally not internationally. 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. Marketing Mix21


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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. R ecently ecently 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 Inf la lation R ate: 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. econo my.

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 a lso producing health conscious juices with more vitamins.

emographic trend

D

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

167,762,040 (July 2008 est) Age structure y y y

0-14 years: 15-64 years: 65 years and over

40% (male 33,293,428; female 31,434,314) 56.9% (male 48,214,298; female 46,062,933) 4.1% (male 3,256,065; female 3,542,522)

ey Indicators

K

y

Population: Growth rate:

164,741,942 (July 2007 est.) 1.828% (2007 est.)

y

Birth rate:

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

y

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y

Death rate:

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

Environmental concerns: o f Nestle juices is good health. A bout the environmental concerns of

Work rk llif e quality: Quality of work life is very safer & environment friendly

Lif es estyle changes: They consider quality life changes and take advantages of accordingly so that

customer can convinced as well we ll as it plays a vital role to attain & retain the customer. Consumer adopts the trend of o f changing environment because of modern facility facility as

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

echnological T echnological

forces

New Products Nestle juices focusing concentric and conglomerate co nglomerate diversification diversification because in present era it is not possible po ssible 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 them so in order tactical the situation nestle juices is focusing on product innovation by introducing new flavor of o f juices with the passage of time NESTLE JUICES use new tetra packing like easy open cork of pack. Productivity improvement through automation

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co ntribute ute towards to wards productivity productivity Automation don¶t matter a lot but to some extent it contrib 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 &D is long long term investment for any organization. organization. Nestle has R &D &D S pending on R &D department and head of R &D &D department is Mr ArshadBhati. Nestle total spending on R &D &D 70 millions.

New communication technology being adopted by All the modern as well as traditional ways of communication are being 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 w hich can be visited any one o ne for most recent news innovation and act ivities ivities being taken t aken in the organization.

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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 8.526 billion R upees upees in year 2008. 250 200 East

150

Column 2 100

Column 3

50 0 200 001 1

y

2002 20 02 20 2003 03 20 200 04

200 005 5

200 006 6

200 007 7

2008 20 08

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 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 litters per years in 2012. y

2500,000

liters juicesapprox drink by Pakistani people in a month. And per

day there is 83330 liters liters approx juices drink by people. Marketing Mix25


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y

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. y

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

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

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.

lation Increase in inf la

rate inPakistan then this also effect in decrease in

demand level. y

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

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

competitors of ³Nestle juices´ in JUICE CATEGORY. Competitors in market y

Shezan

y

Haleeb

y

Malee

y

Country

y

Fraz

co mpetitor of ³Nestle juices´ nestle juices compete their Shezan is the main competitor customer on quality basis because In Pakistan their in no big name in pure fruit juices. nestle provide their customer pure fruit fruit juices.

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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. Itcan not compromise on quali qua lity. ty. 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 sk ills 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.

R esear esearch &Development

esearch and development department keeps Nestlé in continuous knowledge about R esearch 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

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9. HR department

Nestle company has a strong HR department.

W eaknesses eaknesses 1. Storage ability

Nestle juices not store able for long time. t ime.

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

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S ince manufacturing of some products is cheaper in Pakistan than in other South East Asian countries

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Market growth

Juices market expands very fast .A new research proves that in future (2012) every person use 85.5 liters liters juices per years. 7.

limited options in real f ru ruits juices

Limited options in locally produced real fruitjuices.

T hreats hreats 1. Government R egula egulation They face problem if government employ taxes on them which force them to raise

the price of their product. produ ct. 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.

Inf la lation rate

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

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Porter five forces model 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, R ivalry, ivalry, 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: I f 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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T hreat hreat

of new entry:

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

product category but operate o perate in the other product market or the co mpany 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. entr y. 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

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Product Differentiation

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equirements Capital R equirements

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Switching Costs

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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 t here 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

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materials or other ingredients. Suppliers have weak bargaining powers, if in the market many suppliers and demand of o f raw material is low.

Buyer Power Bargaining power of customer is one of o f the important forces in the porter five forces. In the field of juices customer custo mer has a low bargaining power because they the y 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 o f switching from your products and services to those of someone else, and so on. If you deal with few, powerful power ful buyers, they are often able to dictate terms to you.

T hreats hreats

of substitutes

industries. To the economist, a threat of Substitute products refer to products in other industries. substitutes exists when a product demand is affected by the price change of of a substitute product. A products price elasticity is effected by substitute product ± as more substitute become become available, demand becomes more elastic elastic since customer have more alternative . A close substitute products constrains co nstrains the ability of firms in an industry to raise prices. While the treat of o f substitutes typically impact an industry through price competition.I f 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

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Producers of substitutes plan to add new capacity Profits of producers of substitutes are up t hreat for substitute like Shezan, Haleeb etc. In juices market nestle juices has great threat

Competitive Rivalry o f rivalry is how actively and aggressively The big factor determining the strength of are rivals employing the various weapons o f competition in jockeying for a stronger 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 t here 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 followingtypes of people group include in the internal stimuli

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

buying process. Usually young generation generat ion and families initiate the buying process. Marketing Mix35


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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 o ne or more then two person can insist to drink juices. Di

stributors and retailers role in buying process

Product after passing through Distributors and R etailers etailers 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 to final customer after analyzing the brand loyalty and after the judgment of the packing and attractive offer o ffer for the retailers of any promotion scheme for the t he retailers and profit margins. Source

Asim Bakers Al Meraje Bakers China Bakers

actors stimuli to purchase.

F

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

desired to full fill their esteem needs and so t hey drink that juices. Marketing Mix36


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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 t hat decision according to his or o r 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.

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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 dur ing the following stages: Fo

r 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.

Fo

r 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

Fo

r Travelling and occasional

1000ml

Fo

r 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 pro fessional fessional working wo rking people.

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Product Brand strategy is at the heart of o f marketing strategy. It is the act of designing the t he company offer and image so that it occupies a distinct and valued place in the target customer mind. Nestlé brings you a range of o f 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 goo d 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 diff eren erence

100% pure juice Enhanced nutrition This is the point of differentiate that nestle always pro vide good and pure juices

which is fit for human body Brand element

Name Marketing Mix40


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Nestle juicesis the brand name.

Slogan & logo information Slogan is the short phrase that communicates descriptive or p ersuasive information about the brand. 100% pure is the slogan of Nestle juices. The slogan shows that nestle pure juices have good goo d quality and taste. Nestle Nestle juices slogan wants to create image of pure juice with good goo d taste and quality in the mind of o f customer. Logo of Nestle juices in word marks with text it own o wn name Nestle.

Product strategy core benefit

be nefits ts the t he customer is really buying. Corebenefit means the services and benefi Our customer fulfills its need of thrust and refreshment by buying o ur 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 p ure juices. Augmented product A product that include features that go beyond consumer expectations and

differentiate the product from competitors. accord ing to the customer expectations because we Our juice taste and flavor is according provide 100% pure juice. We have no compromise with quality. We try to provide maximum quality and satisfaction to the customers. Quality Quality is our guarantee and we promised to the customers that we stop the product rather to low the quali qua lity ty of o f Marketing Mix41


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product. Potential product

prod uct or offering might undergo All possible augmentation and transformations the product in the future. pu lp juices in the market nearer future.We will In future we will introduce new pulp launch special juices for sports men and professional working people.

PRODUC T SO N T COMPAR I N IN IN MARKE T T COMPA NY

QUALITY

SER VICES

LOCTIO N

OF

EXTRA

FACILITY

PRODUCT

Nestlé

Better

Excellent

Excellent

Good

Haleeb

Normal

Normal

Normal

Normal Normal

Shezan

Good

Normal

Good

Average

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PROMOTI O N Nestle company use different sources to co mmunicate their target marketing. nestle company use those sources on o n that the more customer attract like like TV,NEWSPAPERS,BILLBOR D and when they lunch any secame in juices they use

pamphlets to aware their customer. When launch the new juice or o r new sale promotion for the juice then they spread the awareness about their brand through following communication strategy. Communication ob jective

Nestle company use different sources to attract their t heir 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

Nestle main competitor is shezanjuice.shezan also use t he 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 d ifferent TV channel at different time .nestle management also keep in mind that their t heir competitors use what channel and what t ime 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 o n PTV home,GEO,ARY an PTV news.

News papers Nestle company advetise their juices through throug h news papers.large numbers of custmers Marketing Mix43


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have reading habits of o f news papers, so nestle use the media of o f 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 t he main city in country and those places where large numbers of customer custo mer easily attract. Nestle has a polices to use 500sqr fts in each region

.

Marketing budget

TV budget

Channel Ptv home

Geo ARY Ptv news

Timing No ads Price/mint 7.30am 9.15pm 10 pm 8 pm 9pm

2 2 2 2 2

100,000(R s) s) 132226(R s) s) 50000(R s) s) 70000(R s) s) 40000(R s) s) Total

Total 232226 50000 70000 40000 392226(R s) s)

nestle juices give their ads on o n tv when the juices season on pack. Nestlé give its juices ads on differenttv differenttv channel 24days in different different timing.total cost on this advertisement 9413424(rs)

News paper budget

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News paper

size

D

ay

Price

Dawn

27×4

Sunday

430920(R s) s)

Nawa-e-Waqt

27×4

Sunday

1,782,000(R s) s)

Nestle juices advitise their juices on news paper in top season .the total coat on advitisement is 17703360(R s). s).

Billboard budget

Nestle has a polices that they t hey cover each region with 500 50 0 sqr fts.in small city the use less billboards.the coast of billboard in different cities has different.there are t hree rate 40000,70000,and 125000(R s).total s).total coast on billboards 2560000(R s) s)

Total advertisement budget Advisements sources

coast

Different TV channel

9413424(R s) s)

Different news paper

17703360(R s). s).

Billboard

25600000(R s) s)

Total coast

52716784(R s) s)

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P L ACE NestleCompanyestablishes the distribution channels in each famous city of Pakistanlike Islamabad, K arachi, arachi, Lahore, Gujranwala, Faisalabad etc. d istributors utors in each city. They hire maximum two or They also acquired the suitable distrib 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 t he retailer for sale to the

final consumers.

Manuf acture

Where houses

stributor

Di

Whole seller

R etailer

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Nestle juices uses different channel to distribute their product. First of all the finishing goods stored in in the ware houses and the next step products sending 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 Pak istan all the big and important cities

Price Strategy Nestle juice are available six flavored and two size in the market. One is 200ml and second is1000ml. The packing of 200ml target of individual customer and 100ml packing target the whole family. 100% clear juices, the prices on the base of cost of ingredients as well as other operational o perational costs like processing, weighing packaging and logistics.

Pricing objective Maximum profit margin

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Nestle juices is a big price objective object ive that they provided high quality and positing po siting and we taken premium price to our o ur customer other than our competitors. Nestle Nestle juices contain maximum profit margin other than their t heir competitors. Quality leadership

Nestle juices is a main objective that t hat its responsibility responsibility to provided best quality who they promised to their customers and they fulfill their promised. 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 t heir customer who they promised throwing advertising. So the customer are loyal the nestle nest le brand.

Price Struct ure

(Consumer price) 200m

l

18 R s.

1000 ml

65

R s.

lavored) (Mango and orange mi x f lav 1000ml

75

R s.

(Pineapple and red grapes)

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

(Nestle) in following manner:

Hold current price; Has competitor Cut prices

continue to monitor competitor¶s price.

Yes

Will lower price Negatively affect our Market share & profits? educe price R educe Yes

aise perceived R aise Can/should effective Action be taken?

No

quality Improve quality And increase price

Launch low-price

³Fighting brand´

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 pro duct . Nestle company always aware of the price sensitivity of the customer cu stomer so it known about purchasing pu rchasing power of the customer. Nestle juices demand curve is elastic because lower price and higher quality produces high revenue.

Going rate pricing Marketing Mix49


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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. Fi

nal price

Nestle set the final final pricing related to to their market competitors competitors so nestle price do not have impact on the company policy ,and other marketing activities

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IX BCG MATR IX

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References As the data for Pakistan beverage market and especially the juice market is skater on

the cyber space so here are some links from which data about the particular market obtained.

www.cia.gov www.nestle.com.pk www.finance.gov.pk www.nestle.com www.brandsynario.com/advertisement www.brandsynario.com/ advertisement rates Mr. R ana anaAsif (GM) M Usman (Gujranwala Distributor)

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Nestle Juices Project Final

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