Nestle final project

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2. 2. MANAGEMENT PRACTICES FINAL REPORT Online Projects, Reports, Presentations.. :)
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3. 3. PHASE 1 3|Page Online Projects, Reports, Presentations.. :)
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4. 4. Executive summary: Nestle has been serving this world for over one hundred and thirty
years. It has differentiated itself through its high quality product mix and positioned itself as
health and Nutrition Company while targeting the health conscious people throughout the
world. Nestle started its operations in Pakistan back in1988, by acquiring a diary company
MILKPAK LTD, when people of Pakistan actually needed it. Since Pakistan is the fifth worlds
largest milk producing country therefore Nestle deals mainly in dairy products. Moreover it
also sells juices, chocolates, prepared food like noodles, baby food, infant formula milk and
breakfast cereals in Pakistan. Nestle is a low cost leader with its efficient operations hence it
provides its customers with high quality products and sells them at a premium price.
Therefore it is earning good profits. Nestle has set its manufacturing plants at in Karachi,
Lahore, Islamabad and Kabirwala. The milk processing plant at Kabirwala district is the
Nestls world largest milk processing plant. When nestle introduced its products in Pakistan
people were neither aware nor accustomed to them. Therefore nestle ran an extensive
marketing campaign to educate people and create a need for its products. Pakistan is a land
where fresh eatables are readily available. Nestle should sell the same quality of products in
Pakistan as it sells abroad. It should also introduce more brands in Pakistani market which it
offers in other markets of the world since consumers in Pakistan are becoming more
demanding day by day. 4|Page Online Projects, Reports, Presentations.. :)
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5. 5. History: In the mid-1860s Nestl, a trained pharmacist named Henri Nestle began
experimenting with various combinations of cow's milk, wheat flour and sugar in an attempt
to develop an alternative source of infant nutrition for mothers who were unable to breast
feed. His ultimate goal was to help combat the problem of infant mortality due to malnutrition.
He called the new product Farine Lacte Henri Nestl. Nestl's first customer was a
premature infant who could not tolerate any of the conventional substitutes, and had been
given up for lost by local physicians. People quickly recognized the value of the new product,
after Nestl's new formula saved the child's life and within a few years, Farine Lacte Nestl
was being marketed in much of Europe. Henri Nestl also showed early understanding of the
power of branding. Nestl means 'little nest'. Nestle was created in 1867. Nestl is today the
worlds leading food company, with a 140-year history and operations in virtually every
country in the world. Their principal assets are not office buildings, factories, or even brands.
Rather, it is the fact that they are a global organization comprised of many nationalities,
religions, and ethnic backgrounds all working together in one single unifying corporate

culture. Their culture unifies people on all continents, with roughly half their factories and
people located in the developing world. Nestle started it operations in Pakistan in 1988. A
qualified workforce, trained by nestles or emerging from a strong educational and industrial
context, strongly influences the companys ability to be globally competitive. The fair
treatment and development of company staff and the strengthening of the local workforce are
essential long-term investments. They reinforce the conditions for growth and sustained
economic development in the locations where Nestl operates. Nestls ability to employ
thousands of people each year is an important contribution the company makes towards
future generations, providing income to 5|Page Online Projects, Reports, Presentations.. :)
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6. 6. families who can enhance their chances at better education, healthcare and standard of
living for entire families and communities. Company Information Ticker: NESTL Country:
PAKISTAN Major Industry: Food & Beverages Sub Industry: Diversified Food Employees:
2,345 (Pakistan as of January 2008) Currency: Pakistan Rupee Market Capital:
61,221,938,400 Share Type: Ordinary 6|Page Online Projects, Reports, Presentations.. :)
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7. 7. Mission Statement: "Nestl is the largest food company in the world. But, more important
to them is to be the world's leading food company. At Nestl, we believe that research can
help us make better food so that people live a better life. Good Food is the primary source of
Good Health throughout life. We strive to bring consumers foods that are safe, of high quality
and provide optimal nutrition to meet physiological needs. In addition to Nutrition, Health and
Wellness, Nestl products bring consumers the vital ingredients of taste and pleasure. Vision
statement: Nestl aim is to meet the various needs of the consumer every day by marketing
and selling food of a consistently high quality. The confidences that consumers have in our
brands is a result of our companys many years of knowledge in marketing, research and
development, as well as continuity consumers relate to this and feel they can trust our
products. In particular, we envision to; Lead a dynamic, motivated and professional
workforce proud of our heritage and positive about the future. 7|Page Online Projects,
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8. 8. Meet the nutrition needs of consumers of all ages from infancy to old age, from
nutrition to pleasure, through an innovative portfolio of branded food and beverage products
of the highest quality. Deliver shareholder value through profitable long term growth, while
continuing to play a significant and responsible role in the social, economic, and
environmental sectors of Pakistan. Goals of Nestle: The main goals as described by Nestle
are as follows: Good Food, Good Life, the key to health, nutrition and wellness. With over
140 years of experience and expertise, we take great pride in bringing you the best products
because happy, healthy consumers are important to us. We develop our products keeping
your preferences, tastes and needs in mind. We understand that you, along with millions of
other consumers, know that you can trust our products to deliver purity, quality, convenience
and nutrition. Our products are carefully aligned to Pakistani tastes and needs. We're always
trying hard to develop new products and improve existing ones, and serve our consumers
better. That's why through constant renovation and innovation we're always testing or
launching value added products and making them available in sizes that will suit every

requirement. So explore the world of health with Nestl products, and find out what suits your
family's needs Objectives of Nestle: Marketing objectives are compatible with the overall
corporate objectives of nestle. Companys objective is to be the worlds largest and best
branded food manufacturer while insuring that nestle name is synonymous with the products
of the highest quality. Philosophy of Nestle: Nestls philosophy is summed up in four words:
Good Food, Good Life. In their quest to become the world's leading health, nutrition and
wellness company, they do everything they can to help people live more fulfilling lives. 8|
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9. 9. Good Food, Good Life Henri Nestl chose his own coat of arms to represent the
company's philosophy: a bird's nest, with a mother feeding her young. The image represents
Nestl core values: care, family values, nutrition, healthy growth, safety and comfort. It is a
guarantee of quality and a commitment to responsibilities as a food company and experts in
nutrition. Over the years Nestl has reaffirmed its commitment to wellness, helping
consumers to live longer, healthier, and more productive lives, no matter their age, gender or
socioeconomic status. Good Ingredients Three vital ingredients lie at the heart of Nestl and
come together in their brands: Their people, their research and development, and their
commitment to quality. The 250,000 dedicated people who make up the Nestl family are
their source of strength and energy. Realizing this, Nestl offer them constant professional
development, and feel their cultural diversity is one of greatest assets. Products: Business
Lines in Pakistan: Milked dairy and chilled dairy: MILKPAK NESVITA NIDO NESLAC
EVERYDAY NESTLE Dahi NESTLE Fruit Yogurt 9|Page Online Projects, Reports,
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10. 10. NESTLE Raita MILKPAK Cream Beverages: NESCAFE NEQUICK MILO NESTLE Fruita
Vitals Bottled Water: NESTLE Pure Life Baby Food: CERELAC Food: MAGGI-2 Minute
Noodles Break Fast Cereals: Corn Flakes Honey Gold Flakes KOKO Crunch Chocolate &
Confectionary: KITKAT KITKAT Chunky Polo 10 | P a g e Online Projects, Reports,
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11. 11. Target market of Nestle: Milk, dairy and Chilled dairy: wide variety of dairy products is
available to cater almost every segment of customer. Liquid Milk especially Nesvita is
produced especially for the females as it contains high content of iron, beneficial for them.
Beverages: it includes Nescafe, Milo, Nesquik, and Nestle Friuta Vitals. Their main target
market includes people of all ages. Bottled water: businesses, students, for the people who
do not have access to clean drinking water. Baby food: target market of baby food is all the
parents Food: it includes Maggie noodles which mostly caters children and teenagers.
Breakfast cereals: children, teens and adults benefits from it Chocolates and confectionary:
people of all ages. Sports nutrition: it specifically targets sports persons for a nutritive
protein diet. Size of the organization: 2010: Nestls first quarter revenues in 2010, increased
by 6.5% compared to the previous year. The company's food and drinks segment revenues
increased by 5.1% in Europe and more than 10% in emerging markets. In the first half of
2010, Nestls revenues increased 6.1% compared to the first half of 2009; net profits
increased 7.5% 2009: Nestle is the world's largest food and beverage company, with 2009
sales of over 107 billion CHF ($101 billion USD). 2008: With sales of CHF 109.9 billion
(Swiss currency) in 2008, Nestl is the world's leading nutrition, health and wellness

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company. The company employs more than 280,000 people and has 456 factories in 84
countries. Nestl products are sold in almost every country in the world. Only about 1.5
percent of its sales are generated in its home country, and all but 12 of its factories are
situated abroad. Nestl is a truly public company with over 250,000 shareholders of which
around one third are Swiss. No single shareholder owns more than 3% of the stock. US
investors, who, together, hold over 30% of the capital. 11 | P a g e Online Projects, Reports,
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12. Competitors: Engro Foods Pakistan Major product lines: Olpers milk, Olwell, Olper
Cream, Tarang Tea whitener, Tarkka Ghee Haleeb Foods Major product lines: Bread,
snacks, desserts and meals. Shezan Foods Pakistan Major product lines: Food Products,
Jams Jellies & Marmalades, Tomato Ketchup, Sauces & Pickles, Fruit Juices Syrups &
Squashes 12 | P a g e Online Projects, Reports, Presentations.. :)
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13. Organization Chart CHAIRMAN P.Barbeck-letmathe CEO Corporate governance
P.Bulcke D.P FRICK Corporate communications R.Ramsauer Operations Finance & control
SBUs marketing &sales J.Lopez J.Singh Pharma & cosmetics HR F.Castaner W.Bauer
Innovation technology & R&D W.Bauer Nestle nutrition Nestle waters Nestle Professional
R.T.Laube J.J.Harris M.Caira Zone EUR: EUROPE Zone AOA: ASIA/AFRICA Zone AMS:
Americas L.Freixe F.Van Dijk L.Cantarell 13 | P a g e Online Projects, Reports,
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14. Pakistan - key positions occupied by: Trevor Clayton, Managing Director, MD Office
(Country Head of Operations) Syed Yawar Ali, Chairman Raymond Franke, Head of
Finance and Controls, Finance & Control Division Haseeb Aslam, country business
manager water, water division. Peter Wuetherich, Head of Technical, Technical Division
Salman Nazir, Head of Supply Chain, Supply Chain Division Uzma Qaiser Butt, Head of
Human Resources, Human Resources Division Zafar Hussain, Head of Sales, Sales
Division Registered and Corporate Offices in Pakistan 308 Upper Mall, Lahore +92 042
111.637.853 +92 042 578 9303 +92 042 578 9304 Corporate Office Annex 14 | P a g e
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15. 304 Upper Mall, Lahore +92 042 111.637.853 Park Lane Tower 72-Tufail Road, Lahore
Cantt Lahore +92 042 609 9300 Sheikhupura Factory 29thK.M.Lahore-Sheikhupura Road,
Sheikhupura +92 056 340 6615-25 +92 042 636 8710 Kabirwala Factory KabirwalaKabirwala Road, Kabirwala, District Khanewal +92 065 111.637.853 +92 065 241 1432
Islamabad Factory (Water) Plot no. 32, Street 3; Sector 1 10/3, Islamabad +92 051 444
5991-3 +92 051 444 5997 15 | P a g e Online Projects, Reports, Presentations.. :)
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16. Karachi Factory (Water) 23-A, North Western Industrial State, Port Qasim Authority,
Karachi +92 021 472 0151-3 +92 021 472 0154 Type of Business: Nestl Corporate
Business Principles will continue to evolve and adapt to a changing world, their basic
foundation is unchanged from the time of the origins of their Company, and reflects the basic
ideas of fairness, honesty, and a general concern for people. Nestl is committed to the
following Business Principles in all countries, taking into account local legislation, cultural
and religious practices. Consumers 1. Nutrition, Health and Wellness Our core aim is to

enhance the quality of consumers lives every day, everywhere by offering tastier and
healthier food and beverage choices and encouraging a healthy lifestyle. We express this via
our corporate proposition Good Food, Good Life. 2. Quality assurance and product safety
Everywhere in the world, the Nestl name represents a promise to the consumer that the
product is safe and of high standard. 16 | P a g e Online Projects, Reports, Presentations.. :)
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17. 17. 3. Consumer communication We are committed to responsible, reliable consumer
communication that empowers consumers to exercise their right to informed choice and
promotes healthier diets. We respect consumer privacy. Human Rights and Labor Practices
4. Human rights in our Business activities We fully support the United Nations Global
Compacts (UNGC) guiding principles on human rights and labor and aim to provide an
example of good human rights and labor practices throughout our business activities. Our
People 5. Leadership and personal responsibility Our success is based on our people. We
treat each other with respect and dignity and expect everyone to promote a sense of
personal responsibility. We recruit competent and motivated people who respect our values,
provide equal opportunities for their development and advancement protect their privacy and
do not tolerate any form of harassment or discrimination. 6. Safety and health at work We are
committed to preventing accidents, injuries and illness related to work, and to protect
employees, contractors and others involved along the value chain. Suppliers and customers
7. Supplier and customer relations 17 | P a g e Online Projects, Reports, Presentations.. :)
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18. 18. We require our suppliers, agents, subcontractors and their employees to demonstrate
honesty, integrity and fairness, and to adhere to our non-negotiable standards. In the same
way, we are committed to our own customers. 8. Agriculture and rural development We
contribute to improvements in agricultural production, the social and economic status of
farmers, rural communities and in production systems to make them more environmentally
sustainable. The Environment 9. Environmental sustainability We commit ourselves to
environmentally sustainable business practices. At all stages of the product life cycle we
strive to use natural resources efficiently, favor the use of sustainablymanaged renewable
resources, and target zero waste. 10. Water We are committed to the sustainable use of
water and continuous improvement in water management. We recognize that the world faces
a growing water challenge and that responsible management of the worlds resources by all
water users is an absolute necessity. Customers Every person, of any age group, gender
etc is the target customer of Nestle Nestle target its customers by knowing customer needs
& demands. For this purpose it made customer profile. Customer profile based on two
criteria: Qualitative research:18 | P a g e Online Projects, Reports, Presentations.. :)
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19. 19. This involves setting up small focus groups of consumers who express their ideas and
opinions about their needs and views on different products. At one level, this might involve
asking groups of athletes to talk about their lifestyles, dietary habits and training regimes. At
another level, it could involve a consumer focus group discussing the quality of the nutritional
labeling on a yogurt drink. Quantitative research: This involves only relatively few people like
professional market researchers may interview thousands of people through postal or

telephone interviewing. Nestl regularly uses both forms of research to gain a clear idea of
consumer opinions and trends. Using these customer profile techniques, Nestle developed
its different product strategies to target the customers. 19 | P a g e Online Projects, Reports,
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20. 20. SWOT Analysis Strengths: Companys name Nestle specifies the quality image high
standard and quality product Loyalty from customers is also the major strength for the
company Employees are also loyal due to the decentralized culture of the company
People trust on products due to proper health and safety measures The strength of Nestle
confectionary is its imported chocolates and candies, which strengthens its image Being a
multinational company it has the capability to attract more customers than the local
companies Company has the ability to compete in a dynamic environment Company
always adapt the new technology Weaknesses: There is not much margins for retailers to
prefer its sales. They need to improve the facilities like chillers. The distribution cost is
high as compared to the competition in the local market. Company mostly advertises its
milk products, advertisement of confectionary products is not so better. Opportunities: They
have an opportunity to expand or capture the market by adding its product line.
21. 21. They have the opportunity to offer snacks. They can also capture the market of home
appliances. Company can open separate stores to eliminate retailers. Recently, they have
created an opportunity for themselves by introducing chillers in the market. Company is
trying to open stores in universities. They can provide incentives to retailers to increase
sales volume. Company can enter in ice cream products Threats: Existing companies are
increasing their product lines that can prove to be a threat in the coming years. Company
like Cadbury is giving more discounts to retailers as compared to distributors due to which
retailers prefer its products for sale. As compared to the local competitors, our distributor cost
is very high. As Nestl confectionary Products has to maintain and obey the Nestl
standards. Some companies are competing on the basis of cost. Environment: In line with
Nestl's global commitment, Nestl Pakistan is dedicated to playing its role in helping to
protect the environment. We comply with the Environmental Act (1997), and try to ensure
that at every stage of our operations, the environmental impact is minimal. Learn more about
our Responsibility to the Environment projects: Our Environmental Commitment in Action:
Our environmental commitment extends to every part of our value chain.
22. 22. Thus, at the raw materials stage, we support sustainable agricultural and dairy farming
practices, including environmental protection. When it comes to production, all our factories
try to maximize eco-efficiency, i.e. increase production while minimizing resource
consumption, waste and emissions. Our factories are equipped with complete testing and
monitoring facilities for waste and air emissions. To eliminate air pollution, we have stopped
using heavy fuel oil in our factories, which are now run on clean natural gas. This has
reduced our emissions into the atmosphere to well below the legal limits. Our Sheikhupura &
Kabirwala factories have elaborate water treatment systems to prevent wastewater from
polluting the environment. In 2005, we upgraded our wastewater treatment plants in both
factories. That's not all; we are continually reducing our consumption of raw water per ton of
production. Irresponsible packaging can have a heavy impact on the environment. To reduce
the amount of material used without jeopardizing the safety and quality of our products, we

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are always working on new packaging solutions that have minimal weight and volume and
can be easily recycled. We even operate a collection system for used packaging. Solid waste
is collected at source and then reused, recycled or disposed in an environmentally friendly
way. Natural gas incinerators at our Sheikhupura & Kabirwala factories are used to safely
dispose of material that cannot be recycled & dumped. Our factories have environment
committees to manage routine environment issues and review performance. Environmental
impact assessment is done in advance for every new project and measures are adopted to
minimize adverse impacts on the environment. Our employees regularly undergo training to
inculcate awareness about environment-friendly practices. Managerial Implications: The
problems faced by Nestle in todays world are the claims faced by it as being charged with
the responsibility of violating the International Marketing Codes. Nestle claims that I is doing
nothing wrong and unethical in the way it markets is baby foods around the world. Baby milk
action has raised the case of Syed Aamar Raza who has publicizes evidence of
23. Nestle malpractice in Pakistan as well. It has been claimed that company marketing is
causing unnecessary deaths and suffering of babies, largely among poor because they do
not use the proper amount of powder in order to save some volume for future use which
causes great danger to baby life. Recommendations: Nestle must state in writing that it
accepts the international code and the subsequent relevant World Health Assembly
Resolutions are minimum requirements for every country. Nestle must state in writing that it
will require changes to bring its Baby Food Marketing policy and practice into line with
International Code and Resolutions.
24. PHASE II
25. Corporate Social Responsibility Nestle believes that every single company, no matter
where in the world it operates, ought to be fully integrated into the local social, cultural &
economic life. Company must be good corporate citizens, and give back to the societies to
which it belongs. There are two ways of fulfilling the responsibility and practicing corporate
Social Responsibility: 1- Through social investments: giving to charities, leading and
supporting cultural or welfare initiatives. 2- Through the realization that businesses create
social and environmental impacts, both positive & negative, through the daily operations of
their value chain. The operations of Nestle throughout the world are committed to making full
use of the above tools. Thus Nestl people everywhere are involved in the many programs
and projects we have designed to strengthen local communities and nations. Nestle is
heavily involved in projects relating to its areas of expertise, such as nutrition, education &
research, health projects, and agricultural assistance. In times of crisis Nestle is amongst the
first on the scene to help with humanitarian relief aid and food donations. To help culture &
society flourish, Nestle does its best to encourage a host of other activities: they support
charities, education and training initiatives, art and cultural events, sport events and
HIV/AIDS prevention. Following are the major contributions of Nestle in being social
responsible:
26. Education Nestl Pakistan is involved in a wide range of programs and projects intended
to improve the lives of underprivileged Pakistanis. Our efforts are focused on: 1- Social
Rehabilitation and education advancement: To help improve education in rural areas, they
undertook the rehabilitation of several primary and middle schools, focusing especially on

schools for girls. In 2004, in partnership with an NGO, they adopted a school in Pindi
Dhallon, Sheikhupura, and achieved such an improvement of educational facilities, including
teaching aids and teacher training, that school attendance doubled. Three schools were
rehabilitated in 2004-05, and also donated over 100 computers to schools in poor rural and
urban community. (1) 2- Research and Development Initiatives: In the 21st century, no
country can hope to progress without a strong commitment to scientific training and
research. Demonstrating our investment in Pakistan's long-term future, they have committed
to help set up a School of Science and Engineering at the world-renowned Lahore University
of Management Sciences (LUMS). Earthquake Relief: 1- The Shocks:
27. 27. In October 2005, the biggest natural calamity in our history struck Pakistan. Thousands
died and millions were left homeless after a massive earthquake hit mountainous northern
areas. In step with the rest of the nation, Nestl Pakistan responded immediately, putting its
infrastructure and resources to work in the affected areas. A) First Responses: When the
earthquake struck, Nestl Pakistan responded instantly, even before the magnitude of the
disaster had dawned upon the nation. They immediately donated food and beverage items.
Within two days, they had established a crisis committee under the supervision of Managing
Director. The same day, the management team left to visit the affected areas, and by 11
October, the first six Nestl trucks left factories, bearing bottled water, powdered and UHT
milk and ready-to-cook MAGGI noodles. (2) Instead of burdening the government and relief
agencies, they aggressively reactivated their own shattered distribution channels to bring
supplies to the people who needed them most and established six camps to distribute relief
goods. Despite blocked roads, grave logistical challenges & an atmosphere of fear and
suffering, nestle teams, consisting of about forty Nestl employees and distributors, went out
and distributed Nestl products to the affectees.
28. 28. Within two days Nestle teams reached the worst-hit areas around Muzaffarabad, Bagh
and Mansehra. They worked in collaboration with the Pakistan Air Force and arranged for
supplies to be airdropped to the most inaccessible areas. Other teams of Nestl volunteers
supported relief work undertaken by other agencies around the affected areas. They also
distributed 80 trucks of goods, worth Rs 20 million. Two 10-ton trucks of drinking water were
dispatched to Muzaffarabad Hospital, and volunteer teams ensured that goods were
distributed fairly and efficiently to those who needed them most. B) Aftermaths: After the
crisis came a time for rebuilding shattered lives. Among the reconstruction efforts some are
the following initiatives: They have allocated an amount of Rs 20 million, raised through
employee contributions, matching grants and contributions from other Nestl markets. This
amount is to be used to adopt and reconstruct a model village in Azad Kashmir. They also
intend to build an orphanage in the affected areas for the hundreds of children who lost their
parents in this disaster. Nestle is initiating a livestock health improvement program to help
the locals rebuild their shattered lives.
29. 29. The parent company, Nestl SA has donated an additional Rs 16 million for
reconstruction and rehabilitation work. C) Pitching: Nestl employees worked tirelessly to
bring aid to earthquake victims. Nestl employees donated Rs 3.3 million from their own
salaries. Nestl employees in other countries also stepped forward and donated to the
Nestl relief fund. Five teams of staff volunteers worked day and night in the affected areas

to ensure that relief goods got where they were needed. A medical detailing team worked
with the students of King Edward Medical University, Lahore, to collect medicines worth Rs
175,000. Society: Taking the Nestl concept of corporate Social Responsibility to heart, they
are deeply involved in social investment and humanitarian aid. They are committed to
Pakistan's long-term betterment, and strictly follow the code of corporate governance. They
deal fairly with stakeholders.
30. 30. They serve their consumers through safe, high quality products & communicate with
them responsibly. They benefit consumers by spreading awareness about healthy nutrition
and lifestyles as well as constantly developing or improving existing products for health,
nutrition and wellness. Nestle is actively involved in several social action programs (SAPs) to
improve the lives of our country's under-privileged people. Nestle offer generous financial
support to hospitals and organizations that are dedicated to providing services to the poor.
Only recently, they donated a mobile dispensary to APWA for its medical outreach program
in a remote community near Hub, Sindh. They have always responded generously with
assistance to victims of natural disasters, such as floods, earthquakes and droughts.
Partnership for success: In efforts to provide pure, high quality milk to consumers in distant
towns, Nestl entered into an unprecedented partnership with local farmers. A complex
network of collection centers ensures that no farmer has to go far to deliver his daily produce.
His payment is prompt and transparent. Advanced chilling systems are in place so as milk
travels to factories in Sheikhupura and Kabirwala, its quality is not degraded. To improve the
quality of milk and the lives of suppliers, Nestle have established a unique technical
assistance team that trains farmers in modern techniques. The milk collection system has an
economic and social impact far beyond the farmers themselves. Through this Nestle has
created hundreds of jobs, instituted a communications and transport network. More than
900,000 farmers and their dependants have been directly affected by milk purchases. Today,
14 years after Nestl first entered the milk district in force, the hard work and determination
of Nestls milk collection & technical assistance teams and their dedication to Corporate
Social Responsibility have raised the bar for dairy concerns in Pakistan
31. 31. Quality Assurance: Nestle takes the motto of Good Food, Good Life very seriously. At
every step, from collecting raw materials from rural farmers to distributing finished goods in
city supermarkets, employees are trained and retrained to understand their role in ensuring
that consumers enjoy food and beverage items of the highest quality. The Nestl name on a
product is a promise to consumers that: It is safe to consume It complies with all relevant
laws and regulations and meets high standards of quality. In addition, they constantly try to
improve and tighten existing regulations. They ensure the highest possible benefits and
protection for the consumers. For this reason, Nestle actively participate in the revision of
food standards with the government. Quality is to win consumer trust and preference Nestle
is committed in offering products and services to its customers that meet their needs and/or
preference and provide sound nutrition. Quality is everybodys commitment All Nestl
functions across the Value Chain are fully responsible to follow mandatory norms and
instructions for maintaining agreed quality standards. Nestle follows the international
standards of the World Health Organizations Codex Aliment Arius on food production. All
factory laboratories operate according to Good Laboratory Practices guidelines.

Sheikhupura and Kabirwala laboratories have long enjoyed an 'Excellent' rating in the
worldwide proficiency tests conducted by Nestl SA (Switzerland), and attest to the
worldclass quality of factories.
32. 32. Quality is to strive for zero defects and no waste Nestle focuses on facts and results
and strive for zero defect and excellence in everything they do. They constantly look for
competitiveness and opportunities for Continuous Improvement of the quality standards
delivered to their consumers. Safety, Health and Environment Policy: Nestl Pakistan Ltd. is
one of the leading Food and Beverage Companies and aims to provide consumers with the
best quality food products by incorporating safe and environmentally sound practices into its
daily business activities. Their commitment to sustainable development will be accomplished
by integrating occupational safety, health and risk management programs at all workplaces
to provide a healthy and safe work environment for employees, contractors and Corporate
Internal audit: Visitors, Exercising this commitment and reflecting its benefit to the community
remains central to business strategy for today and tomorrow. In the process of transforming
raw material into finished products, Nestle aims to make the best possible use of them by
minimizing wastage, adopting safe working methods, efficient use of natural resources and
minimizing the impact on the environment. Nestl Pakistan Ltd. is also committed to
communicate Safety, Health and Environmental Performance to its stakeholders. (6)
33. 33. Legal Responsibility Corporate Governance Principles: We are dedicated to following the
best practices laid down by our parent company, Nestl SA. We have implemented the
Corporate Governance Principles established by Nestl SA, covering four core areas:
Rights and responsibilities of shareholders Equitable treatment of shareholders Duties
and responsibilities of the board of directors Disclosure and transparency Recognizing the
need to maintain transparency and verify the application of corporate standards, Nestl
Pakistan has established an internal audit department that monitors administrative and
operational functions throughout the company. Thanks to its operations, we can be assured
that adequate internal controls are in place, management information is reliable, resources
are used effectively, and company assets are safeguarded. Real life Stories Story of a small
farmer: Asif Ikram is a typical small farmer. He owns two hectares of land and lives in a mud
house in a village of 1800 people. He has electricity but no running water. Asif and his family
work their land themselves. The only equipment they own are hand tools, though Asif hires a
tractor when needed. He recently bought himself a bicycle and a television. Asif owns three
buffaloes, of which two are in lactation. With Nestl's help he plans to apply for a loan to build
a cowshed, but for now, the animals live in his courtyard. Asif's buffalos produce ten
34. 34. liters of milk a day. He takes six liters on his new bicycle to a Village Milk Collection
Centre a kilometer away. Every Tuesday, he receives payment at published rates. 60% of the
family income derives from Nestl's milk pay. "I thank God that now, for the first time in my
life, I sleep in peace. I no longer fear for my family's future, he says. The above excerpt is an
extract from 'Nestl in Pakistan 1988-2004: The Development of a Milk District', by Rmy
Montavon. A Quiet revolution: In 2005 Nestle restructured agricultural services so that they
now consist of over thirty fulltime agronomists, vets and agricultural engineers to help the
farmers of the Punjab with their milk production. Yet there is another crucial stakeholder in
every milk-producing farm: the farmer's wife. Nestle has created seven teams of three

women each, all trained vets, sociologists and specialists in animal husbandry. Their task is
to meet farmers' wives and empower then through training in milk production, animal
husbandry, and hygiene, and to give them an understanding of Nestl's milk collection
system. In effect, there's a quiet revolution going on in Pakistan's milk district. (9) Helping the
farmer Improving Feed: Even before calling Nestl in, Milkpak Ltd. had tried to ensure that
milk cows were given fresh fodder during the summer. Nestle teams are always prepared to
offer practical advice. They have planted a variety of fodder crops, which they demonstrated
to farmers on field days. Nestle gives stress on the importance of giving cattle enough water,
and train farmers in hygiene and milking.
35. 35. Better Equipment: Agricultural services staff have drawn up technical plans for cowsheds,
which are provided free of charge. Nestle mechanics have also developed prototypes of
machines to cut fodder quickly and inexpensively. Starting 2004, Nestle went a step further
and proposed a system of small loans for farmers who wanted to make improvements to their
farms, such as building cowsheds. They drew up the sample specifications for a model farm
to be presented to the banks disbursing the loans. The Service even helps farmers fill out
applications for loans. HUMAN RESOURCE HR is dedicated to their employees, and
ensures that they have all the right people with the right skills, in the right places at the right
time. Understanding that their people are the bedrock of all their business strategies, it is
their mandate to enhance their skills with cutting edge training and provide them with worldstandard facilities. They select flexible, innovative people who are ready to confront new
challenges and make a difference. Their groundbreaking Management Trainee Programmed
aims to develop talented young men and women and help them achieve their potential in a
dynamic and enabling environment. Over a hundred people travel out of the country every
year to take advantage of their international training and development events. WHAT THEY
BELIEVE IN: They are a people company. Their people are their greatest strength, and
nothing can be achieved without their commitment and energy. At Nestl Pakistan their
opinion counts. Here you'll fit into a corporate culture that's based on a set of fundamental
principles and values. These are: High commitment to quality products and brands
Respect of other cultures and traditions Commitment to strong work ethic
36. 36. Personal relations based on trust and mutual respect Proactive cooperation Being
pragmatic rather than dogmatic Favoring decentralization and networking Being
committed to work and quality Preferring the long-term perspective to short-term thinking
They're proud of their traditions and heritage, and as times change, these core values keep
evolving. RECRUITMENT WHAT THEY LOOK FOR: It takes a special sort of person to
come and work at Nestl Pakistan. That's why, when selecting candidates, they look for a set
of interrelated characteristics encompassing three key areas: knowledge, personality and
motivation. Professional Knowledge: They look for good academic results at university or
equivalent qualifications. However, the class of the degree you have obtained, though very
important, is not the only criterion for selection. Other experiences during their studies,
previous jobs, assignments, language theses and any other significant extracurricular
activities and achievements, are also given the right. They look for candidates who can
identify a problem, analyze it, look at different options, and come to reasoned conclusions.
They want people with drive and tenacity, energy and enthusiasm, who can initiate a project

and follow through to the end. All these skills are vital during a career at Nestl Pakistan.
Personality: To succeed at Nestl Pakistan, you need more than professional knowledge.
You need a flair
37. 37. for the field of activity of their choice, an open mind, and a willingness to dig in and learn
new skills and ideas. They're looking for applicants who are dynamic and communicative.
People, who can listen, understand and integrate the opinion of others, people who can
express their ideas clearly, both verbally and on paper. They want people who like to
negotiate, even with very different partners, and to solve problems in complex situations
.They like candidates who show leadership, inspire others, and are self-confident, yet
realistic. People who have a positive attitude to work and willing to work hard, even under
pressure. They seek people who can be objective in their assessment of themselves and of
others. Motivation: While they expect loyalty to their company, they expect their people to be
critical and suggest improvements wherever necessary. They like people who are motivated
themselves & can motivate others. A Nestl employee is characterized by creativity and
dynamism. They don't only look for specialists, but people who have knowledge and skills in
more than one field, with broad interests. To sum up, they want people with purpose and
ambition, though not at the expense of others. They want people who take responsibility for
their actions, who consider Nestl their own business, and who show an entrepreneurial
spirit. Recruiting process: Applying for a current job / graduate program / internship Please
look through the vacancies and choose which you are interested in. Create your CV by filling
out the online form. Once the application is complete, you will receive a confirmation
message telling you that it has been received and is being processed.
38. 38. Receiving CVs: They will review and select CVs that best match open jobs. Please note
that only completed CVs will be taken into account. Register for our talent pool: If there is no
job opening suitable for you, you can still register your details in our database. You will then
be considered as a potential candidate for new up coming positions. The Interview Process:
Graduate Program Applicants: Regular group interview sessions are held throughout the
year for most of the Graduate Programs. This is a one-day sessions that consists of
discussions about potential jobs and career developments, individual interviews with HR and
line managers, group and/or individual case studies. If you are successful at the group stage,
you will be invited for an individual interview day with HR and line managers. Professional
applicants: You should expect a series of individual interviews with HR and line managers.
These will generally focus on your background and motivation as theyll as how you likely fit
Nestl's culture and values. Internships applicants: You will be interviewed by HR as theyll
as a line manager. These interviews will generally focus on your background and motivation
as theyll as how you likely fit Nestl's culture and values.
39. 39. TRAINING Management Trainee Programmed: If you're young, bright and hard working,
the Management Trainee Program may be the place for you. They hire fresh graduates as
potential managers to develop new competencies and skills through on-the-job development.
You'll be hired in one of various departments at inductee level on a 12-month training
program. Once you've completed the program, you will be assigned independent
responsibilities supporting the company's business needs. They begin sourcing Management
Trainees in January. Preliminary interviews and screening is organized according to the

graduation schedules of Pakistani and foreign universities, and are followed by interviews
with senior management. Employee Nutrition Training: Building a continuous nutrition
learning culture within Nestl is a key element in our journey to become a nutrition, health
and wellness company, to provide profitable growth in the future. To support this objective,
they have developed the NQ (Nutritional Quotient) training program for employees, based on
the principle that nutrition is everybodys business at Nestl, irrespective of the area in which
employees work. Nestls expert nutrition knowledge is long-established, centered on the
activities of Nestl Nutrition and our R&D network. The NQ program is designed to widen
and increase the knowledge base among employees in other job functions, giving everyone
the confidence to apply this knowledge in their work. The program combines nutritional
knowledge with commercial application. For example, when communicating with consumers
about balanced diets, the knowledge gained by Nestl employees through the NQ program
will help make nutrition and wellness tangible to consumers, ensuring that Nestl is regarded
as a knowledgeable partner in nutrition matters. Not only this - a major aim of the program is
also to help employees make informed and healthy nutrition choices for themselves and their
own families.
40. 40. A modular program: NQ training comprises engaging modules suitable for all employees,
from the Executive Board to plant operators, and leverages the nutrition expertise of Nestl
scientists and health marketing specialists. Implementation began in 2007, with Nestl
nutrition experts and marketing specialists taking part in "train the trainer" sessions across
our zones to support the cascade of knowledge to all employees. Key to the success of the
NQ training are interactive, customized modules designed to encourage people to participate
and put knowledge into action. These are tailored to specific needs: Foundation module: a
stand-alone program of learning and development for Nestl employees whose jobs are
principally non consumer or customer facing. Advanced module: core learning for staff who
are engaged with external bodies and consumers/customers. Specialist modules: place
particular emphasis on understanding the consumer and application of the Nestl nutrition
and wellness strategy in specific product categories. A complete toolkit: The NQ program
toolkit comprises a suite of materials for trainers, including training manuals and slide sets.
For trainees themselves, learning takes place in an engaging way using a variety of media
and formats, including interactive games, motivational video content and an on-line quiz. This
is used to measure collective progress and to allow each trainee to evaluate, in an entirely
confidential way, his or her personal lifestyle choices. The toolkit also comprises awarenessraising and motivational material that can be used and adapted to meet local needs,
including posters, questionnaires and certificates. Ongoing development:
41. 41. As nutrition and our insights into nutrition evolve, so too will our NQ Nutrition training,
helping Nestl employees to keep abreast of new developments and maintain a high level of
credibility through the breadth and depth of our nutrition expertise. Internships: Internships
are a great way to apply the knowledge and skills you are developing at university and get
experience in a leading corporation. They offer project-based internship positions in various
departments at Nestl Pakistan. You may be hired as an intern at various points during their
academic career: during undergraduate study or graduate school. Most internship
assignments are offered during the summer months and generally run for 6 to 8 weeks. At

the end of the internship you will be required to submit a project or program report to the
company on the topic assigned to you at the beginning of the internship program. If you
impress us with their talent & hard work, you may be considered for employment
opportunities after you have completed their studies. The Nestl Human Resource Policy
This policy encompasses those guidelines which constitute a sound basis for efficient and
effective HR Management in the Nestl Group around the world. They are in essence flexible
and dynamic and may require adjustment to a variety of Circumstances. Therefore its
implementation will be inspired by sound judgment, compliance with local market laws and
common sense, taking into accounts the specific context. Its spirit should be respected under
all circumstances. As Nestl is operating on a worldwide basis, it is essential that local
legislation and practices be respected everywhere. Also to be considered is the degree of
development of each market and its capacity to advance in the management of their human
resource. Should any HR
42. 42. policy conflict with local? Legislation, local legislation will prevail. These policies are
addressed to all those who have a responsibility in managing? People as they will as to HR
professionals?? The Nestl Management and Leadership Principles include the guidelines
inspiring all the Nestl employees in their action and in their dealings with others. The
Corporate Business Principles refer to all the basic principles which Nestl endorses and
subscribes to on a worldwide basis. Both these documents are the pillars on which the
present policy has been built. A SHARED RESPONSIBILITY: HR managers and their staff
are there to provide professional support in handling people matters but should not substitute
themselves to the responsible manager. Their prime responsibility is to contribute actively to
the quality of HR management throughout the organization by proposing adequate policies,
ensuring their consistent application and coherent implementation with fairness. Acting as
business partners, the HR manager advises and offers solutions which results in positive
impact on the organizations effectiveness. Furthermore, she/he proposes best practices and
provides state-of-the-art support and counseling to her/his colleagues. Together they act as
co-responsible partners for all HR matters. This partnership is the key for efficiency in people
management. The communication skills of the HR staff must be appropriate to deal with all
delicate matters as they occur frequently in human relations issues. They gain their credibility
not only from their professional contribution but also through the care and the excellence of
their communication skills. MOTIVATIONAL STRATEGIES Adoption Assistance: Family is an
important part of who we are, which is why Tetra pack offers a valuable support for the
families through various programs. Employee Discounts:
43. 43. Tetra Pak offers discounts on a broad range of products to their employees also provide
travel and quarters, electronics, gifts, financial services, clothing and more. Voluntary
Benefits: Tetra Pak makes a number of voluntary benefits available to you through an outside
service provider, including auto and home insurance, prepaid legal services and pet
insurance. Scholarship Program: The Nestl Scholarship Foundation is proud to sponsor a
scholarship program that provides financial assistance. Scholarship recipients are selected
based on academic record, demonstrated leadership skills, and participation in school and
community activities. Long-Term Care: Long-Term Care insurance is available to protect
employees and eligible family members from the potential cost of nursing homes or other

long-term care. Employee Assistance Program (EAP): Nestl provides EAP services at no
cost to employees and their eligible family members for confidential access to professional
counselors trained to help with a variety of personal and family issues. Pick and Drop
Facilities: Nestle provide their employee pick and drop facility, the timing of employee come
into the workplace is also not disturb. All employees are relatively on the time in their
workplace. Good Working Environment: Working environment is very suitable for employees.
Nestle is multi national company so they provide their employees effective working
environment that encourage employee to done their work continues effectively. Games:
According to the employee fitness, Nestle held gaming programs for their employees.
44. 44. Human Resources Management Law SAFETY AT WORK: Nestl is committed to being a
leader in workplace safety and health. The Nestl Occupational Health and Safety
Management System (NSMS) was revised in line with the 2007 edition of the international
standard OHSAS 18001 and reissued to all Nestl operations, reinforcing our commitment
that Safety is non-negotiable. They are also working towards external certification of our
factories against OHSAS 18001. This will provide a common language around our health and
safety management systems, and make it easier to demonstrate implementation of these
standards to our stakeholders. The number of workplace injuries has been reduced. For
example, in 2008 the number of injuries leading to one or more days away from work in
Nestl decreased to almost one quarter of that seen in 2001. Major focus on preventing
accidents: Over the years, Nestl has developed a strong network of local Safety, Health and
Environment functions that develops and shares best practices in accident prevention across
the world. Involving employees: Employees at all levels are employed to assume ownership
of workplace safety. Behavior based safety programs are being implemented in all
operational sites (including factories and distribution centers). Safety observations made by
those most concerned are gathered and analyzed and measures to eliminate or manage
risks are implemented. Tools to manage safety performance: Custom-made tools have been
put in place to track workplace safety key performance indicators. Safety practitioners and
managers have access to reports about their local performance and those of other sites,
enabling easy internal benchmarking and identification of best practices.
45. 45. Safety at Work Award: In order to reinforce a culture of safety in the company Nestl has
created a 'Nestl Safety at Work Award' 2008. Nestl country or market organizations
worldwide presented applications to the jury. Each country or market organized an internal
safety award competition and designates one champion team to participate in the Nestl
Safety Award. Local winners are recognized with Gold, Silver and Bronze awards and the
global winners will be announced at the end of March. The winners are presented with their
trophies at the Nestl Market Conference. Nestl Policy on Health and Safety at Work: Nestl
regards its people as its most valuable asset and places the highest priority on protecting
them. The Nestle Policy on Health and Safety at Work is based on the Nestl Corporate
Business Principles, which are binding for the whole Nestl Group. Prevention of workrelated injury and illness Nestl believes that work-related injuries and illnesses can be
prevented. They integrate health and safety into management of the business by establishing
local safety organizations that proactively advance a strong safety culture. Further, they
implement worldwide our mandatory Nestl. Operational Safety, Health and Risk

Management Strategy, which meets or surpasses the requirements of the health and safety
laws applicable in the countries in which they operate conduct risk assessments and take
appropriate corrective action to minimize threats to human health and safety. Furthermore,
they establish emergency and contingency plans to deal with residual risks. This approach
also minimizes threats to the business, protecting our shareholders interests; continuously
improve our performance by adapting processes, work practices and systems as a result of
monitoring safety performance and analyzing accidents or occupational health problems.
46. 46. Nestl regards its people as its most valuable asset and places the highest priority on
protecting them. In every country where we operate, our company emphasizes the need for
safe working environments, which must meet our strict global corporate standards. We are
determined to provide a safe working environment for all our employees, contractors and
visitors and we are vigilant in continuing to implement Health and Safety practices and
programs at all our sites. Valuing our people by providing a safe place to work. Identifying,
assessing and reducing risk and preventing injury or illness to our employees, contractors
and visitors. Operating our business to meet health, safety, legislative and other
requirements applicable to Nestl. Continually monitoring, reviewing and establishing new
objectives aimed at eliminating or minimizing work related injury or illness. Developing and
implementing effective and efficient injury management systems which enable a safe and
sustainable return to work for affected employees. Providing information, training and
supervision to employees and contractors to ensure they understand their roles and
responsibilities in eliminating or minimizing the risk of workplace injury or illness.
Encouraging a similar Health and Safety commitment from our suppliers and contractors.
Consulting with employees and other stakeholders on Health and Safety Matters. S.W.O.T.
ANALYSIS OF NESTLE STRENGHTS
47. 47. The strengths of Nestl confectionary products including Kit Kat, Polo & Fox are as
follows: Companys name Nestl signifies the quality image high standard and quality
product. Loyalty from customers is also the major strength for the company. Employees
are also loyal due to the decentralized culture of company. People trust on products due to
the proper health and safety measures. The strength of Nestl confectionary is its imported
chocolates and candies, which strengthens its image. Being a multinational company it has
the capability to attract more customer than the local companies. Company has the ability
to compete in a dynamic environment. Company always adapts the new technology.
WEAKNESSES The weaknesses are as follows: There is not much margins for retailers to
prefer its sales. They need to improve the facilities like chillers. The distribution cost is
high as compared to the competition in the local market. Company mostly advertises its
milk products, advertisement of confectionary products is not so better. OPPORTUNITIES:
They have an opportunity to expand or capture the market by adding its product line. They
have the opportunity to offer snacks.
48. 48. They can also capture the market of home appliances. Company can open separate
stores to eliminate retailers. Recently, they have created an opportunity for themselves by
introducing chillers in the market. Company is trying to open stores in universities. They
can provide incentives to retailers to increase sales volume. Company can enter in ice

49.

50.

51.

52.

cream products/ THREATS Existing companies are increasing their product lines that can
prove to be a threat in the coming years. Company like Cadbury is giving more discounts
to retailers as compared to distributors due to which retailers prefer its products for sale.
As compared to the local competitors, our distributor cost is very high. As Nestl
confectionary Products has to maintain and obey the Nestl standards. Some companies
are competing on the basis of cost. BCG Matrix
49. Stars The stars are the high relative market share and high market growth. Nestle
beverages i.e. are somewhat the stars in their business, because with the high quality and
new designs which comes every now and then makes them more popular among the
customers, because customer with upper class wants the quality and nestle offers the best
quality food items. Cash Cows The cash cows are their baby food items i.e. nestle cerelace
and other baby food products. Company has to take measures to make these products as
stars.
50. Dogs The pharmaceutical products are nestle Dog, because it has low-share business
with low growth market especially when we talk about Pakistani market. The company has to
think on what it can do by improving the low share and growth market. Question Marks The
question marks are the breakfast cereals. They have high market growth but low market
share. The company has to decide about which question mark they should try to build into
the stars and which one of these should be phased out. Competitive Strategy What makes
competitive The hallmark of the nestle is the quality of the products which the company
offers. Competitive Edge of nestle The companies all over the world get some competitive
edge based on some features which other companies dont have. For example, as the Dell
has the competitive edge over other computer manufacturer companies, because they use
Built-to-order Strategy while no other company in computer industry use this strategy.
Similarly in Pakistan nestle has their Competitive edge based on these Strategies: Product
Differentiation
51. Customer Oriented Product differentiation Strategy Nestle is using the product
differentiation strategy by providing the superior quality products. Their main focus is to keep
the customers loyal. They bought shelve space in different departmental stores to attract the
customers. They tried to reach each group of people in which they have succeeded.
Customer Oriented Customer satisfaction is the focal point for the company. They provide
hygienic products to their customers. Products are also verified by health and safety
measures and international quality standards. MARKETING MIX Marketing Mix is defined as
a set of controllable tactical marketing tools that firm blends to produce the response it wants
in the target market. The marketing mix consists of every thing the firm can do to influence
the demand for its products. The many possibilities can be collected into four groups of
variables known as the four P's that are as follows: 1. Product 2. Price 3. Place 4. Promotion
1-PRODUCT
52. Product stands for goods and services that the company offers to target market. Nestl
kit Kat is in four sizes including K.K Chunky, while Polo is in three sizes. The shape and the
color of the Kit Kat and Polo are quite attractive for the customers. The labeling, packaging of
the Kit Kat and Polo includes the Nestl brand and logo. The packaging includes an expiry
date and time along with a manufacture date. Second part of labeling includes the quantity of

product in grams along with ingredients and contents of chocolates and candies. 2- PRICE
The amount of money charged for a product or service, or sums of the values that
consumers exchange for the benefits of having or using the product or services. The price of
Nestl Kit Kat and Polo varies increases with the increase in its size. 3- PLACING Placing
stands for company's activities that make the product available to the target consumer.
Nestl' distribution is using the direct distribution channel to supply confectionary products
weekly to the retailers. 4- PROMOTION Producing a quality product, pricing it attractively and
making it available for the target consumer is not the only problem companies need to solve.
Modern era is the era of communication with customer, assuring customer satisfaction,
demands for personal and nonpersonal communication with the target customer to build a
relationship with them. In an area-storming activity, giving out products free, gift hampers,
attracts new customers; kites depending on the season (for existing and potential customers)
are given. The basic purpose is to explore the area that is being unexposed and to bring
awareness in the people.
53. 53. Porter Five Forces: Threat of New Entrants Substitute Bargaining Power of Supplier
Bargaining Power of Customer Competitive Rivalry Threat of New Entrants: In Pakistan the
competition among the multinational companies is very small. Currently 2-3 companies are
doing the business of dairy products out which one brand is international and other two
brands are locals, from this it can be concluded that there would be a lot of chances of other
international famous brands of dairy products to start their businesses in Pakistan. Example:
Business of Ice cream Substitutes: The major substitutes of Nestle ice cream would be Walls
ice cream, Hico ice cream and eat more ice cream. In the same way the substitute for Nestle
Beverages would be Nestle Bottled water. Hence Nestle provides wide variety of substitute
products to meet the needs and wants of customers.
54. 54. Bargaining Power of Suppliers: As Nestle came in Pakistan in 1988 and they are the
market leaders in the dairy products. Nestle Pakistan is already in the business of dairy so
the companies bargaining power of supplier would be moderate. Bargaining Power of
Customer: Bargaining power of customers would be very low because the price of Nestle
dairy products would be fixed and customer has to buy a particular product at standardized
fixed price. Competitive Rivalry: Although Nestle has major competitors in Pakistan such as
Haleeb Foods, Engro Foods and Shezan, still it is leading market. The strategies applied by
Nestle include Cost leadership, differentiation in products; strong and intimate relationship
with suppliers and customers etc. Strategy for Launching the Product: Goals & Objectives:
Creating awareness about the Nestls products to at least 50% of the target market within
three months of launch. The objectives are achieved through intense promotional activities,
developed to get to the target market in the best possible manner. Creating 60% of target
market within one year. The promotional activities of company will develop interest for the
people thus compelling them to approach it and in return good relations with customers will
be created, so they create good word of mouth for Nestle and strive to approach it again and
refer others. Launching the product in summers Nestl will be launching the product in
summers to capture most of the target customers and as well as market share. Opening
different outlets

55. 55. Nestle will be opening different outlets initially in major two cities and after gaining
primarily success it will be available in all big and small cites of Pakistan. Marketing Strategy:
The products include features that contain the combination of both health and hygiene
keeping in mind the individuals requirements in terms of taste. However the marketing will be
done considering the concept of mass percentage. Products will be tailored to individual
needs (desired taste) but promotion will attract all of them collectively. Furthermore Nestl
will be following pull strategy and approach its end users itself with the help of various
promotional activities. For the distribution of products, no intermediary (whole sellers) is
involved. The distribution channel is direct. Nestle Direct Channel Retailors Target Market:
Knowing the fact that Nestle cannot be everything for everyone, it will be targeting only those
segments that can provide best possible returns so that it may reach its goals effectively and
efficiently. The target market collectively consists of males and females in Lahore and
Karachi of age group less than 18-30 belonging to middle class, not finding any other
provider on terms of quality, hygiene and taste. Market Segmentation:Nestle has divided its
market into geographic, demographic, psychographic and behavioral segments. These
segments will help to understand the market better and in implementation of marketing
strategies.
56. 56. Geographic Segmentation: The geographic segmentation is based on the weather
conditions as enjoying ice cream is popular mostly all over the Pakistan but keeping in mind
the market conditions and secondly to reduce the initial expenses (not to over load the
business). Demographic Segmentation: Nestl has demographic segmentation for its
products that comprises of following variables: Age: Below 18. 18-30, 30+ Gender: Male,
female Psychographic Segmentation: The psychographic segmentation of Nestle is based
on the classes such as lower class, middle class and upper class. Behavioral
Segmentation: Firstly, the segment includes people who are interested and like enjoying
Nestl products. Secondly, it includes people who are willing to buy but not finding any
other in the region up to the level they desire with respect to quality, hygiene and taste.
Thirdly, there are people who are not interested in the concept at all. Core Distinctive
Competency of the company: To pose our product against the competitors Nestl will be
using differentiation strategy which will not only differentiate it from others but also given an
edge over others. Companys core products will be very beneficial especially in terms of
quality, health and hygiene and most important consumer satisfaction. The segmented
products of Nestl will
57. 57. include consumers satisfaction as warranty to retailers in terms of expire, delivery and
after sales services. Product Market Expansion Grid: Nestl will be following the same
strategy for its expansion: Low Cost operator: Nestl will be low cost operator in terms of
using minimum initial investment to not to overload the business with expensive assets.
Assets will be utilized in such a way that ensure full use of existing assets at a regional level
before acquiring additional ones. Selection of ingredients is done which will give desired
consumer perception at lower cost Innovation/ Renovation: Using strong innovation system
which will able to provide each year a new product range in a timely manner, while making
best use of existing assets. Product availability (with in arms reach): Nestl strives to
provide maximum availability at the right cost at all channels. Communication: By making

Nestls products the most visible brands in the street, placing a priority on visibility and will
also be ensuring that the company has reinforce the availability and attractiveness of its
brand in locations of high traffic flow. STRATEGIC MANGEMENT AT NESTL PAKISTAN
LIMITED There are sets of policies which are uniform for everyone and strictly enforced. The
procedure for policy formulation is transparent; where everyone is given a chance to express
58. 58. one's opinion. The ultimate approval is given by the Chief Executive. Policies are
formulated in the various meetings as outlined below. POLICY FORMULATION Regular
meetings are organized at each level of the organization to keep the company moving in a
systematic manner. The main objective behind these meetings is to bring forth the
employees at a forum, where they can discuss their problems, give suggestions for
improvement and development. Also they can share their experiences with each other. Some
meetings are held at periodic basis which are necessary to keep a check on the progress of
the company. These are: Senior Management Meetings Cycle Meetings Department Wise
Scheduled Meetings SENIOR MANAGEMENT MEETINGS Every month, the Divisional
heads and the Senior Managers hold a meeting to discuss major policy issues facing the
management. The Human Resources Manager plays the role of a guardian for establishment
and development of the policies. At the Senior Management meetings, the suggested
policies are presented before the Divisional Heads and Senior Management. The Senior
Management discusses the feasibility of these policies. The recommended policy is the one
that has the approval of all members. Only after, the whole of this exercise has been done, it
is presented before the Chief Executive. He takes the ultimate decision which is always in the
best interest of the company and its employees. CYCLE MEETINGS Sales personnel of
Nestl Milkpak Ltd. from all over Pakistan hold a meeting or a bi-monthly
59. 59. sales review. The major force behind a giant food company like Nestl is its sales.
Therefore it is extremely necessary to keep a check upon the progress of the various brands
and their sales profitability. Information regarding the sales is required at each division of the
company. Marketing Managers need it to design methods for stabilizing and building the
sales of prosperous brands. The Finance and Control Division needs it to judge the viability
of the investments being made and the budget allocation, also for managing the supply
against the demand of various brands. Similarly, Technical Purchase Division too needs
requisite information for purchasing equipment for product innovations which is based mainly
on the sales. At this meeting the Zonal and Regional Sales Managers make presentations
and provide figures necessary to make interpretations. DEPARTMENT WISE SCHEDULED
MEETINGS In addition to the high level meetings and sales preview; every department holds
several scheduled and non-scheduled meetings. Scheduled meetings are organized to keep
all members of the department up to date about the complete workings of the department.
Members discuss their problems; give suggestions for improvements, generate ideas for
development of their department and share experiences with each other as well the
respective bosses. This helps develop communication through all levels of the hierarchy. And
management remains aware of the work being done by the sub-ordinates. Non-scheduled
meetings can be called anytime to discuss urgent issues. These do not have any prescribed
date/day/time as compared to the scheduled meetings. MANAGERIAL STYLE One of the
most difficult responsibilities that any manager assumes is that of managing people even if

he is responsible for managing a homogeneous group. The difficulty of this task is magnified
with the size of the organization and as diversity is introduced to the group (cultural diversity,
gender, age, beliefs, disabilities etc.). Nestl Milkpak Limited is an example of such an
organization which is large in size and diverse in culture. The original culture of Milkpak
Limited still prevails and the key managers face a tough task of managing the people and
making them adapt to the culture the Nestl team wants to incorporate in the company. No
formal data could be obtained on the managerial style for managers at Nestl Milkpak, the
following detail rests on my personal observation.
60. 60. The relation observed by me, of the managers at different levels with their sub ordinates
was that of an "open-door policy". The key to success in managing a diverse work group is
encouraging open, two way communications. The employees of a particular department and
the organization as a whole knew that not only are they valued, but their opinion is also
welcome. The more they feel that their input is valued, the greater the sense of ownership
they'll have in their department's mission. This was exactly the case observed at NML.
Therefore, it can be said that a "democratic style" of leadership was observed at the
organization. This style describes a leader who tends to involve sub ordinates in decision
making, delegates authority, encourages participation in deciding work methods and goals,
and uses feedback as an opportunity for coaching. The use of feedback was a very
important element observed by me during my training. Being an internee, I was also asked
by one of my department heads to give a feedback stating the good and bad points of the
employees I was working with including the Incharge himself. Such elements go a long way
in the success of a large scale and diverse organization like Nestl Milkpak Limited and the
appropriate management style is mandatory in the achievement of targets for the company.
MANAGERIAL POLICY Managerial policy guidelines are made in consultation with the
senior executives of the company. "A Policy and Procedure Forum" is held for the line
managers who are responsible to implement the policies approved in their respective
departments. If any changes are made regarding the policies or procedures, it is the
responsibility of the Human Resources Manager to convey the change to the line managers.
Apart from the policies, the managerial styles vary from person to person