Executive Summary
Marketing
is the process of planning and executing the conception, pricing, promotion and
distribution of ideas, goods and services to create exchanges that satisfy
individual and organizational goals. While strategy is the action plan to do
something and hence,
Marketing Strategy is the managerial process of developing and
maintaining a viable fit between the organization’s objectives, skills and
resources and its changing market opportunities. The aim of marketing strategy
is to shape the company’s business and products so that they yield targeted
profit growth.
Nestlé
Pakistan Limited is selected to study that how they have planned their
marketing strategy for Nestlé Pure Life (water). Nestlé is a multinational food
company and offering Fast Moving Consumer Goods (FMCG). The motto of Nestlé 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.
Nestlé Pure Life (NPL) is one of them that was first offered in Pakistan by
Nestlé 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. Nestlé identified this opportunity and lunched
NPL that satisfied the customer needs and Nestlé become market leader in the
water industry.
The
customers of NPL showed interest on NPL because of trust on Quality of Nestlé,
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 Nestlé 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.
Nestlé
Pakistan also has the Customer Service Department with the logo "Talk to
Nestlé" in Lahore to receive the complaints and suggestions from the
customers. In this way Nestlé 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.
2.1 Introduction
Food
is core element in our daily lives. Not only does it enable us to survive, but
approprate amounts and quality also help to ensure a better standard of living
by contributing to our health and wellness. Consumer needs and expectations
associated with a particular food product are not fixed, but change with time
and according to geographic region, culture and the various stages of life.
Ever since its foundation in 1866, Nestlé’s goal has been to keep in step with
this constant process of change. It reacts to new consumer requirements with
innovative and continually renovated products, and implements new scientific
findings in tasty foods.
Mission Statement
Nestlé's business mission is to manufacture and market the
Company's products in such a way as to create value that can be sustained over
the long term for shareholders, employees, consumers, and business partners.
Motto of Nestlé is “Good Food, Good Life”.
Objectives
·
Nestlé does not favor
short-term profit at the expense of successful long-term business development.
·
Nestlé recognizes that
its consumers have a sincere and legitimate interest in the behavior, beliefs
and actions of the Company behind brands in which they place their trust, and
that without its consumers the Company would not exist.
·
Nestlé believes that, as
a general rule, legislation is the most effective safeguard of responsible
conduct, although in certain areas, additional guidance to staff in the form of
voluntary business principles is beneficial in order to ensure that the highest
standards are met throughout the organization.
·
Nestlé is conscious of
the fact that the success of a corporation is a reflection of the
professionalism, conduct and the responsible attitude of its management and
employees. Therefore recruitment of the right people and ongoing training and
development are crucial.
·
Nestlé continues to
maintain its commitment to follow and respect all applicable
local laws in each
of its markets.
2.2 History (The story of Nestlé: From nutrition to wellness)
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. High infant
mortality rates, and the lack of suitable replacement foods for babies with no
access to breast milk, were the motivation behind Henri Nestlé’s invention of
Farine Lactee. He was also able to offer his food – to convalescent and elderly
people, thus laying the foundations of today’s concept of nutrition. He said,
“
The thought that my invention could save the lives of so many
children
counted enormously, the financial gain was not the
prime
motivation“.
(Henri
Nestlé. 1869)
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.
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.
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
Nestlé
felt the effects of World War II immediately. Profits dropped from $20 million
in 1938 to $6 million in 1939. Factories were established in developing
countries, particularly Latin America. Ironically, the war helped with the
introduction of the Company's newest product, Nescafé, which was a staple drink
of the US military. Nestlé's production and sales rose in the wartime economy.
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.
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.
Nestlé
divested a number of businesses 1980 / 1984. In 1984, Nestlé's improved bottom
line allowed the Company to launch a new round of acquisitions, the most
important being American food giant carnation.
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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