Академический Документы
Профессиональный Документы
Культура Документы
(ECONOMICS)
Submitted To:
prof. Hina
Submitted By:
TAYYBA JAMEEL
SAJID IMRAN
M. AMIR
M. ADNAN
ZEESHAN ALI
KHURRAM SHAHZAD
Company Selected:
NESTLE FOODS LTD
Product:
MILK PACK
History in Pakistan
1985 - Mr. Khawaja Selah-ud-din established PND (Pak National Distributors)
in Bahawalpur first company of PND Group
_ 1985 - Unilever Retail Distribution in 40% geographies of Multan
_ 1987 - Nestle as handling agent for entire Southern Punjab
_ 1992 - Tariq Glass Industries (OMROC)
_ 2000 - Nestle Pure Life (drinking water) distribution in Lahore
_ 2005 - Retail Franchise of Shell Pakistan Ltd
_ 2006 - Handling Agents of Shan Foods Pvt Ltd & Youngs Pvt Ltd
_ 2007 - retail distribution of 40% Lahore through M/S Wali & Company (PND
Group Company) for English Biscuit Manufacturers (EBM) Pvt Ltd.
_ 2007 - 08 Nestle Pure Life (drinking water) operations in complete Lahore
_ 2008 - Currently 40% Lahore is serviced through National Distributors (PND
Group Company) for Nestle Liquid Products
_ 2009 - Asian Foods Pvt Ltd (Mayfair) as handling agent and retail
distribution
for entire Southern Punjab
_ 2009 - Unilever Retail Distribution in remaining 60% geographies of Multan
_ 2010 - Asian Foods Pvt Ltd (Mayfair) as retail distribution for Bahawalpur
--------------
Introduction
The Swiss flag flies on our Headquarter building. But, inside, around 80
nationalities are
represented by our 1,600people working there
Information
A market has two sides: buyers and sellers. There are markets for goods such as
apples and hiking boots, for services such as haircuts and tennis lessons, for factors
of production such as computer programmers and earthmovers, and for other
manufactured inputs such as memory chips and auto parts. There are also markets
for money such as Japanese yen and for financial securities such as Yahoo! stock.
Only our imagination limits what can be traded in markets. Some markets are
physical places where buyers and sellers meet and where an auctioneer or a broker
Demand
Wants are the unlimited desires or wishes that people have for goods and services.
How many times have you thought that you would like something if only you could
afford it or if it werent so expensive Scarcity guarantees that manyperhaps
mostof our wants will never be satisfied. Demand reflects a decision about which
wants to satisfy
When the price of a good rise other things remaining the same, its relative price
its opportunity costrises. Although each good is unique it has substitutesother
goods that can be used in its place. As the opportunity cost of a good rises the
incentive to economize on its use and switch to a substitute becomes stronger.
Income Effect
When a price rise,other things remaining the same, the price rises relative to
income. Faced with a higher price and an unchanged income people cannot afford
to buy all the things they previous bought. They must decrease the quantities
demanded of at least some goods and services. Normally the good whose price has
increased will beone of the goods that people buy less of.To see the substitution
effect and the income effectat work, think about the effects of a change in the price
of an energy bar. Several different goods aresubstitutes for an energy bar.
You are now about to study one of the two most used curves in economics: the
demand curve. You are also going to encounter one of the most critical distinctions:
the distinction between demand and quantity demanded .The term demand refers to
the entire relationship between the price of a good and the quantity demanded of
that good. Demand is illustrated by the demand curve and the demand schedule.
The term quantity demanded refers to a point on a demand curvethe quantity
demanded at a particular price.
Figure 3.1 shows the demand curve for energy bars. A demand curve shows the
relationship between he quantity demanded of a good and its price when all other
influences on consumers planned purchases remain the same. The table in Fig. 3.1
is the demand schedule for energy bars. A demand schedule lists the quantities
demanded at each price when all the other influences on consumers planned
purchases remain the same For example, if the price of a bar is 50, the quantity
demanded is 22 million a week. If the price is $2.50,the quantity demanded is 5
million a week. The other rows of the table show the quantities demanded at prices
of $1.00, $1.50, and $2.00.We graph the demand schedule as a demand curve with
the quantity demanded on the x-axis and the price on the y-axis. The points on the
demand curve labeled A through E correspond to the rows of the demand schedule.
For example, point A on the graph
shows a quantity demanded of 22 million
demanded schedule
PRICE
0.50
1.00
1.50
2.00
2.50
A
B
C
D
E
DEMAND
22
15
10
7
Demand curve
Price
Demand
Demand function
.nestle has increase the price of 1liter milk pack by Rs 10aaand the price became 110they do no
change price of other product due to this the supply of the product should be reduce by the
suppliers and the shortage of the milk pack
When the supply is reduced the demand is increase people required more milk but the supply is
short
This position of market I always in summer season when the production of liquid milk is reduced
and the demand of the packet milk should be increase
Pakistan has the fifteen largest milk produced country
The annual production of milk is 36 billion litter but the customer is facing the shortage problem
Especially in summer season because the urban people required milk
The liquid milk is not available the people is have no more substitute
Therefore they demand the packet milk
In this demand the nestle is no/1 choice of the people
Descriptives
N
Minimum
Maximum
Mean
Std. Deviation
demand
10
40.00
60.00
49.4000
5.89161
price
10
12.00
19.00
15.3000
2.21359
incom
10
100.00
100.00 1.0000E2
.00000
Valid N
(listwise)
Frequency Table
10
demand
Cumulative
Frequency
Vali 40
d
Percent
Valid Percent
Percent
10.0
10.0
10.0
43
10.0
10.0
20.0
45
10.0
10.0
30.0
47
10.0
10.0
40.0
50
20.0
20.0
60.0
52
20.0
20.0
80.0
55
10.0
10.0
90.0
60
10.0
10.0
100.0
10
100.0
100.0
Total
price
demand
Cumulative
Frequency
Valid
Percent
Valid Percent
price
Percent
12
10.0
10.0
10.0
13
10.0
10.0
20.0
14
20.0
20.0
40.0
15
20.0
20.0
60.0
16
10.0
10.0
70.0
17
10.0
10.0
80.0
18
10.0
10.0
90.0
19
10.0
10.0
100.0
10
100.0
100.0
Total
Cross Correlations
Correlation
Std. Errora
-7
.103
.577
-6
.154
.500
-5
-.023
.447
-4
-.500
.408
-3
.184
.378
-2
.455
.354
-1
.192
.333
-.990
.316
.082
.333
.408
.354
.304
.378
-.505
.408
-.013
.447
.140
.500
.104
.577
a.
b.
t he serhite noise.
Correlations
Partial Correlations
Correlations
Control Variables
incom
demand
price
demand
Correlation
price
1.000
Significance (2-tailed)
df
Correlation
1.000
Significance (2-tailed)
df
Proximities
Case Processing Summary
Cases
Valid
Missing
Percent
10
100.0%
Regression
Total
Percent
0
.0%
Percent
10
100.0%
Model Summary
Model
R
.990a
Adjusted R
Square
Estimate
R Square
.980
.978
.88192
ANOVAb
Model
1
Sum of Squares
Regression
Residual
Total
df
Mean Square
306.178
306.178
6.222
.778
312.400
Sig.
393.657
.000a
Coefficientsa
Standardized
Unstandardized Coefficients
Model
1
Std. Error
(Constant)
89.714
2.051
price
-2.635
.133
Coefficients
Beta
-.990
Sig.
43.743
.000
-19.841
.000
Supply
A supply is more than just having the resources and the technology to produce
something. Resources an technology are the constraints that limit what is ossible
Many useful things can be produced, but they are not produced unless it is
profitable to do so. Supply reflects a decision about which technologically feasible
items to produce
The quantity supplied of a good or service is the amount that producers plan to sell
during a given
time period at a particular price. The quantity suppliedis not necessarily the same
amount as thequantity actually sold. Sometimes the quantity suppliedis greater
than the quantity demanded, so thequantity sold is less than the quantity supplied.
Like the quantity demanded, the quantity suppliedis measured as an amount per
unit of time. For example suppose that GM produces 1,000 cars a day. The quantity
of cars supplied by GM can be expressed as 1,000 a day, 7,000 a week, or 365,000
a year. Without the time dimension, we cannot tell whether aparticular quantity is
large or small.
A 0.50
B 1.00
C 1.50
D 2.00
E 2.50
0
6
10
13
15
Supply curve
Price
Supply curve
Y axis
X axis
supply
In this diagram we can se that when the price increase the supply also increase and when the
price is decrease the supply is also decrease
The supply curve is gone down to up word this show the positive relation with supply and price
Supply is the function of price
price
Supply
Frequency Table
price
supply
Price
Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
12
6.7
6.7
6.7
25
6.7
6.7
13.3
28
6.7
6.7
20.0
30
6.7
6.7
26.7
35
6.7
6.7
33.3
39
6.7
6.7
40.0
40
6.7
6.7
46.7
42
6.7
6.7
53.3
45
6.7
6.7
60.0
49
6.7
6.7
66.7
50
6.7
6.7
73.3
52
6.7
6.7
80.0
53
6.7
6.7
86.7
55
6.7
6.7
93.3
60
6.7
6.7
100.0
15
100.0
100.0
Total
Supply
Cumulative
Frequency
Valid
Percent
Valid Percent
Percent
6.7
6.7
6.7
6.7
6.7
13.3
11
6.7
6.7
20.0
13
6.7
6.7
26.7
15
6.7
6.7
33.3
17
6.7
6.7
40.0
19
6.7
6.7
46.7
23
6.7
6.7
53.3
25
6.7
6.7
60.0
27
6.7
6.7
66.7
30
6.7
6.7
73.3
35
6.7
6.7
80.0
36
6.7
6.7
86.7
40
6.7
6.7
93.3
45
6.7
6.7
100.0
15
100.0
100.0
Total
Descriptive Statistics
N
Minimum
Maximum
Mean
Std. Deviation
price
15
12.00
60.00
41.0000
13.12577
supply
15
5.00
45.00
23.3333
12.05148
Valid N (listwise)
15
Ratio Statistics
Case Processing
Summary
Count
Overall
15
Excluded
Total
0
15
1.121
Coefficient of Dispersion
.212
Coefficient of Variation
price
supply
Median Centered
26.4%
Means
Case Processing Summary
Cases
Included
N
supply * price
Excluded
Percent
15
100.0%
Total
Percent
0
.0%
Percent
15
T-Test
Paired Samples Statistics
Mean
Pair 1
Std. Deviation
price
41.0000
15
13.12577
3.38906
supply
23.3333
15
12.05148
3.11168
100.0%
Correlations
Correlations
price
Price
Pearson Correlation
Supply
1
.959**
Sig. (2-tailed)
.000
N
Supply
Pearson Correlation
Sig. (2-tailed)
15
15
.959**
.000
15
15
Proximities
Case Processing Summary
Cases
Valid
N
Missing
Percent
15
100.0%
Total
Percent
0
.0%
Percent
15
100.0%
Regression
Variables Entered/Removedb
Model
1
Variables
Variables
Entered
Removed
pricea
Method
. Enter
Model Summary
Model
R
.959a
R Square
Adjusted R
Square
Estimate
.919
.913
3.55945
ANOVAb
Model
1
Sum of Squares
Regression
Residual
Total
df
Mean Square
1868.627
1868.627
164.706
13
12.670
2033.333
14
F
147.488
Sig.
.000a
Coefficientsa
Standardized
Unstandardized Coefficients
Model
1
B
(Constant)
price
Std. Error
-12.754
3.110
.880
.072
Coefficients
Beta
.959
Sig.
-4.100
.001
12.144
.000
Milk is a complete diet and an important source of income for our farmers. In
fact it is the top valued commodity in the entire agriculture. With annual milk
production of over 35 million ton Pakistan ranks fourth in the world in milk
production after India, United States and China. The dairy sector of the
country is not fully developed. The herd average herd size is 2-5 animals per
farmer that denies the producer the economies of scale.
Unfortunately over 95 per cent of the dairy sector operates in informal sector
but corporate sector in recent years has started penetrating the dairy
market. Most of the milk produced is consumed without any processing in
the villages or through the milkman (Gawallas) in the cities. Since the milk
production centres are in remote areas it takes at least 6-8 hours for the
milkman to deliver the milk at the door step of the consumers. The problem
in this regard is that the shelf life of milk is only 4 hours. Milk being a very
precious commodity is kept at low temperatures and then processed to
prolong its shelf life. This facility in Pakistan is available to only 3-5 per cent
of the farmers; the rest preserve it through unhygienic and unhealthy
methods details of which are given separately.
There are more than 8 million dairy farmers in the country and the average
herd size is 2-5 animals per farm. Baring a few none of these farming
household are connected with the formal market.
As far as value is concerned dairy sector has a huge annual turnover of over
Rs1400 billion (35 billion litres x Rs40 per litre) which is equivalent to $14
billion. Dairy farmers still adhere to old and traditional dairy farming
practices which is the reason that the productivity of its milking animals is
very low compared with the developed
tarang
haleeb
nestle
2
1
nestle
0
2008
haleeb
2009
2010
tarang
2011
economies.
14
12
10
8
6
4
2
0
growth2
normal
0 level
2009
2010
2011
2012
We must not undermine the efforts of resource less dairy farmers that have
taken the milk production in the country from 5.895 billion liters in 1961 to
35.861 billion liters in2011. However the Chinese have outperformed our
dairy sector during the same period. In 1961 they were producing only 1.529
billion liter of milk that increased by 2001 to 13.281 billion liters. In 2001
Pakistan was still way ahead of the Chinese with 25.646 billion liter of milk
production.
Dairy sector growth increased phenomenally in last decade in China reaching
40.028 billion liters in 2011. The Chinese government adopted most modern
techniques in the dairy sector. It improved the quality of its milking animals
through artificial insemination. Improved the supply chain and processing of
the milk. Indian dairy industry developed at par with Pakistan until the start
of this century. They have developed cool chains for milk and are currently
the largest producer of milk in the world replacing United States.
India
19.840
21.825
33.271
51.713
79.918
114.850
2012
2011
Chang
e
+22.0
%
+1.4%
79,08
8
27.2
%
64,82
4
25.8
%
13.9
%
13.0
%
+0.9%
7.4%
7.2%
+0.2%
5,865
4,668
+25.6
%
129.3
2
102.9
4
+25.6
%
SUBSITUTES
When the shortage of the nestle accure.
And when the price increase a larg number of substitute in the market is prevails
Haleeb
Haleeb is a compitators of the nestle it is the old compitators of the nestle it is use in
the place of the nestle milk pack
Tetra Pack
Tetra pack is a small compitators of the nestle it is also a substitute of the nestle milk
pack
Tarang
Tarang is a newly compitators of the nestle milk pack it is a substitute of the nestle
milk pack
Olpers
Olpers is a big and new commpitators of the nestle it is a substitute of the nestle milk
pack
Tea max
Tea max is a local compitators of the nestle milk pack is a substitute of nestle milk
pack
8
0%
5%
6
5
4
Axis Title 3
pakistan
china
india
2
1
0
2009
2010
2011
2012
Axis Title
%
Nestle expenses
Transportation cost
Nestle has facing the hgh transportation cost the nestle has get mik in the out of the city this the
milk is rech in the factory and there furher process is taken and then is milk pack is send to the
other area in these way a high cost of the transportation is facing by the compony which cause to
increase the cost of the compony and the cost of the single units
Packing cost
Nestle use the packet in which the milk is packed is beautiful and the hard
The packet is made in this shape they protect the milk the packet is mad by three cover sheet that
cover the milk .
The packet is made by three cover that increase cost of the product
And the milk is packed by a new technology that cover the milk
Advertisement cost
Nestle has make a heavy advertisement to increase their sale level the nestle make a
commmercial many outlet to show their product this process increase the sale level and also
increase the cost of the compony it is an impotant part of business that increase the sale all the
compony make the advertisement and increase their sale level
Material cost
The nestle purchase the liquid milk by different dairy and then make them process to convert in
milk pack and save them a number of day to purchase the milk is high cost increase the cost of
nestle milk pack
Because of all these cost the nestle has creat a value in the market and goodwill
Ambient Dairy
Nestl MILKPAK
only strengthen thebrand further but will also aid in the growth of the bottled
water market. It makes Pakistans Favorite Water available in
all major segments across the market.
Home and Office Service was re-launched at the start of
the year with the aim of providing better service to Nestl
Pure Life customers. New customers were also attracted by
highlighting the improved and superior NESTL PURE LIFE
experience.
management REPORT
In order to delight customers, several promotions were offered
throughout the season to provide them more value for money.
Our product and communications strategy of keeping the
Consumer at heart helped us in further strengthening
consumer loyalty and trust that has further improve profitability
in 2010.
.
Quantity
Quantity
Shortage ()
(dollars
demanded
supplied
or surplus (+)
0.50
1.00
1.50
2.00
2.50
22
15
10
7
5
price
0
6
10
13
15
22
9
0
+6
+10
Supply curve
e
p
demand curve
Q demanded
An Example
The demand for milk is
P = 800 - 2QD
The supply of milk is
P = 200 + 1QS.
The price of a milk is expressed in cents, and the
quantities are expressed in milk kg per day.To find the equilibrium price (P*)
andequilibriumquantity (Q*), substitute Q* for QD and QS and P* for
P. That is,
P* = 800 - 2Q*
P* = 200 + 1Q*.
Now solve for Q*:
800 - 2Q* = 200 + 1Q*
600 = 3Q*
Q* = 200.
And
P* = 800 2[200]
= 400.
The equilibrium price is $4 a milk
quantity is 200 milkkg per day.
kg,
surplus
.p3
Equilibrium point
p2
shortage
80
100
120
equilibrium
in this point the demand of the milk pack is equal to the supplyof the milk pack in this point
the buyer is agree to buy the nestle mik pack and seller is agree to sale the nestle milk pack
and the market is equilibrium point no shortage no surplus
shortage
in the above diagrame we can see that when the price fall the demand increase and the
supply reduced and the shortage occure of the milk pack
normally thus is done by in summer season when the production of liquid milk is reduced
and the demand of the milk is high the people use the packet milk and the demand increase
this is short period of time the nestle should not increase their production the cause of
shortage
surplus
in the above diagrame we can see that when the price rise the supply of the milk pack
increase and the demand decrease this is done in the winter season when production is
high and the demand is low
in this situation the surplus production is in the market