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Project Report
On
NESTLE MILKPAK
Submitted To:
Submitted By:
Rehman Baig 071172 Tariq Waseem 071194 Mazhar Cheema 063171 Hamza
Ahmed 083606
Table of Contents
Executive Summary 4
NESTLE 5
HISTORY OF NESTLE 5
COMPANY VISION 5
COMPANY MISSION 5
PRODUCTS 6
NESTLE IN PAKISTAN 6
NESTLE MILKPAK 6
COMPETITORS 7
Competitive Advantage 7
Demographics of Pakistan 8
Weaknesses 13
Opportunities………………………………………………………………………13
Threats………………………………………………………………………………13
· Geographic Segmentation 18
· Demographic Segmentation 18
Targeting 18
Situation Analysis 18
Awareness: 18
Market Trends 20
Market Potential 20
Strengths 20
WEAKNESSES 21
OPPORTUNITIES 21
THREATS 21
Positioning Strategy 22
Differentiation 22
Marketing Mix 22
PRODUCT 22
PRICE 22
PLACEMENT 23
Distribution Channels 23
PROMOTION 23
Marketing Strategy 23
Recommendations 23
BIBLIOGRAPHY 24
Executive Summary
Only 4% of the total milk production is processed and used in urban areas of
the country. According to Pakistan Dairy Development Authority
· Only 0.52 Billion liters UHT and 0.5 Billion liters pasteurized milk is available
in the country.
· There is a potential of about 5 billion liters of milk sold in the urban areas.
· In urban areas people are more health and quality conscious, the income
level of urban population is also good so this segment has potential for UHT
and Pasteurized milk.
Nestle is the world largest food company and nestle MilkPak is Nestlé’s
famous UHT milk brand. Nestle Milkpak has south Asia’s biggest Plant at
Kabirwala. It is targeting upper and middle class. It is differentiating its brand
by adding Iron and Vitamin “C”.
Nestle
History Of Nestle
Ø Our story begins in 1867, when Henry Nestle developed a baby formula
that saved child’s life and marked the beginning of Nestle.
Ø In 1890, Vevey factory produced 28 billion cans of Milk food and 2.2 million
cans of condensed Milk.
Ø In 1912, Nestle begins it long relationship with South Asia when Nestle
condensed Milk company start.
Company Vision
Ø As per our company vision in 2020 production capacity of all plants working
in Pakistan is being increased.
Company Mission
Ø At Nestle, we believe that research can help us to make better food, so that
people live a better life.
Ø Good food is the primary source of good health, so we are trying to make
good food.
Products
• Bottled water
• Baby food
• Dairy products
• Breakfast cereals
• Nutrition
• Prepared food
Nestle In Pakistan
Ø Nestle have been serving Pakistani consumers since 1988 when the parent
company’ Switzerland based’ on Nestle first acquired share in Milkpak.
Ø 1n 1992, Nestle took over the running of company (Kabirwala plant) and
began to develop its Milk collection network.
Nestle Milkpak
Ø Pure, rich and delicious Nestle Milkpak standardized (UHT) benefits from
Nestle’s expertise in bringing you the best life has to offer and benefits from
140 years of consumers trust.
Ø Milk is a must drink for your children as it is a rich source of calcium that
helps in the growth and development of strong bones and teeth.
The contents of the above said products have the following fruitful benefits
for health improvement of Human body.
Ø Calcium
Ø Protein
Ø Phosphorous
Competitors
Ø Haleeb Milk
Ø Olpers milk
Ø Good Milk
Competitive Advantage
Ø Nestle Milkpak’s extensive milk collection system ensures that the milk you
get is of the finest quality.
Demographics of Pakistan
Age Structure
· 0-14 years: 40% (male 33,293,428; female 31,434,314)
Literacy:
· Male: 60%
· Female: 40%
Cities
Population
Karachi
15 Million
Lahore
9 Million
Rawalpindi
3 Million
Faisalabad
2.6 Million
Multan
1.6 Million
Gujranwala
1.3 Million
Hyderabad
1.3 Million
Islamabad
1.3 Million
Peshawar
1.0 Million
Ø 43.4 percent of the total work force is from agriculture sector and it is the
main source of livelihood for 66 percent of the country’s population living in
rural areas.
Agriculture sector.
180000000
(Billion Liters)
33.25
Total market of Gawala (96%) Billion liters
31.92
1.33
Year
(Million liters)
(Million liters)
2007-08
33805.10
557.72
2008-09
35495.25
648.43
Years
Annual Production
(million liters)
Annual Consumption
(million liters)
2008-09
35495.25
36361.25
2009-10
37669.75
38188.92
Annual Production
(million liters)
Annual Consumption
(million liters)
2008-09
648.43
353.71
2009-10
753.89
372.05
The analysis shows that Pakistan’s milk yields are very low, and even simple
management of feed (proper timing, proper mix and so on) can increase yield
substantially. This requires intervention at two levels:
a) The farmers need to have better knowledge of feed management. This can
be done by involving milk plants and provincial livestock departments who
can provide training and extension services to dairy farmers.
Dairy Farmer
Gawala (Milkman)
Retailer
Milk Collector
Distributor/Retailer
Customer
Strenghts:
Weaknesses:
Veterinarians.
· Production of milk falls to 55% of peak production at its lowest point in mid-
June.
· The demand increases 60% during June compared to December when the
milk supply is ample.
Opportunities:
Threats:
· Very low quality milk is provided by the milkmen to dairy farms which is a
very big threat for the entire market.
· The shortage of milk providing animals is also a threat for entire milk
industry.
Consumer
Gawala (Milkman)
De-creamer
Milk Collector
Dairy Farmer
Retailer
Strenghths:
· Demand profile:
Absolutely optimistic
Margins:
Quite reasonable, even on packed liquid milk.
· Flexibility of
product mix:
Presently, more than 80 per cent of milk produced is flowing into the
unorganized sector, which requires proper channelization.
· Technical manpower:
Weaknesses:
· Perishability:
Pasteurization has overcome this weakness partially. UHT gives milk long life.
Surely, many new processes will follow to improve milk quality and extend its
shelf life.
· Logistics of procurement:
· Problematic distribution:
Yes, all is not well with distribution. But then if ice creams can be sold
virtually at every nook and corner, why can’t we sell other dairy products
too? Moreover, it is only a matter of time before we see the emergence of a
cold chain linking the producer to the refrigerator at the consumer’s home!
· Competition:
Opportunities:
"Failure is never final, and success never ending”. Dr Kurien bears out this
statement perfectly. He entered the industry when there were only threats.
He met failure head-on, and now he clearly is an example of ‘never ending
successes! If dairy entrepreneurs are looking for opportunities in India, the
following areas must be tapped:
· Value addition:
o Addition of cultured products like yoghurt and cheese lend further strength
- both in terms of utilization of resources and presence in the market place.
o Yet another aspect can be the addition of infant foods, geriatric foods and
nutritional.
· Export potential:
Today milk vendors are occupying the pride of place in the industry.
Organized dissemination of information about the harm that they are doing to
producers and consumers should see a steady decline in their importance.
The study of this SWOT analysis shows that the ‘strengths’ and
‘opportunities’ far outweigh ‘weaknesses’ and ‘threats’. Strengths and
opportunities are fundamental and weaknesses and threats are transitory.
Any investment idea can do well only when you have three essential
ingredients: entrepreneurship (the ability to take risks), innovative approach
(in product lines and marketing) and values (of quality/ethics).
The Indian dairy industry, following its deli censing, has been attracting a
large number of entrepreneurs. Their success in dairying depends on factors
such as an efficient yet economical procurement network, hygienic and cost-
effective processing facilities and innovativeness in the market place.
All that needs to be done is: to innovate, convert products into commercially
exploitable ideas. All the time keep reminding yourself: Benjamin Franklin
discovered electricity, but it was the man who invented the meter that really
made the money.
· Geographic Segmentation:
Milkpak has segmented the market on the basis of Geographic segmentation
and its target market is major populated cities of pakistan
· Demographic Segmentation:
Nestle Milkpak is also segementing the market on the basis of Income level of
the people. Three Income level has been defined; Higher, middle and lower
income classes.
Targeting
Situation Analysis
Awareness:
Brand
Awareness (%)
Milkpak
43
Haleeb
38
Olpers
Dairy Queen
Good Milk
2
Nurpur
Good Milk
Milk Pak
45
Dairy Queen
Haleeb
22
Olpers
17
Nur Pur
Others
The table shows that Milkpak has the highest market share due to its
consistent quality.
Market Trends
• People are getting more quality and health conscious with the passage of
time
• Changing lifestyle
Market Potential
• Consumer often prefer branded food items for both quality and status
reasons
• Per capita real GDP has increased at an average of 5.6 % per annum during
the last three years
• This increase has led to a rise in average income of people and an increase
in consumer spending.
Strengths:
Nestle has been serving the Pakistani consumers since 1988, and it has built
a strong brand image due to its quality products.
· Quality product:
Nestle Milkpak is known as the best UHT milk in Pakistan due to consistency
in quality.
· Strong supply chain network:
Nestle collects Milk directly form the farmers instead of relying on the
contractors. And it distribution is also very strong. In this way it has a
complete control over its supply chain.
Weaknesses:
The target market of Nestle Milkpak is upper middle and high class because
lower middle and poor class cannot afford to buy UHT milk due to its
premium price. This is the only weakness of Milkpak.
Opportunities:
Year
Annual Production
(million liters)
Annual Consumption
(million liters)
2008-09
648.43
353.71
2009-10
753.89
372.05
The projected values of UHT Milk consumption and production are obtained
from the ARIMA model.
• More people are coming towards processed milk because loose milk is
dangerous for health due to a lot of contamination.
Threats:
• Two main competitors Haleeb and Olpers are main threat for Milkpak
especially the Olpers is growing very fast.
• Inflation is getting higher and higher so the purchasing power of the people
is decreasing day by day.
• There is no entry barrier for new entrants as the Olpers has come in the
market.
Positioning Strategy
• Functional Positioning
“Jaan Banaoo”
Differentiation
Marketing Mix
Product:
• Quality Product
Nestle Milkpak has the largest market share due to its consistent quality.
• Product Lifecycle
Nestle Milkpak has been in the market for a very ling time and it is at
maturity stage.
Price:
• Competition Based Pricing
Milkpak is holding a large share in the market due to its quality at same price
as compared to competitors.
Placement:
Distribution Channels:
ManufactureràDistributoràWholesaleràRetaileràConsumer
Promotion:
Promotion Mix
• Advertisement
• Public relations
Marketing Strategy
Nestle is pursing growth strategy. They have invested $ 70 billion at
Kabirwala Plant and they are planning to invest $ 381 billion in the milk
business.
Recommendations
· Only 4 % milk is being processed and 96% people are using loose milk so
Nestle Milkpak has the opportunity to capture a large share of the market
through more creative advertising and other promotional activities.
Bibliography
Mr. Mustafa Zaidi: Joint Director Research and Development, Lahore Chamber
of Commerce.
Dairy reports:
Websites:
http://www.google.com
http://www.wikipedia.com