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Naveed Ahmed 071191 Rehman Baig 071172 Tariq Waseem 071194 Mazhar Cheema 063171 Hamza Ahmed 083606 Table of Contents
ummary 4
OF NESTLE 5
Y VISION 5
Y MISSION 5
S6
N PAKISTAN 6
ILKPAK 6
TORS 7
e Advantage 7
ics of Pakistan 8
WOT Analysis 13
nghts 13
knesses 13
es13
13
y Chain in Pakistan 14
ry of India (SWOT).....15
eographic Segmentation 18
emographic Segmentation 18
nalysis 18 18
mind recall 18
re (%) 19
ket Trends 20
ket Potential 20
ngths 20
AKNESSES 21
ORTUNITIES 21
REATS 21
Strategy 22
ion 22
Mix 22
ODUCT 22
CE 22
ACEMENT 23
ribution Channels 23
OMOTION 23
Strategy 23
dations 23
APHY 24
Executive Summary
an agricultural country. According to Ministry of Food, Agriculture and livestock, accounts for 20.9 percent of the GDP. Dairy industry contributes 49% to the agriculture 1% to the GDP. Annual production of milk is 35.25 Billion liters in the country; But the milk is only 4% of the total production.
ountries Dairy is not a dedicated profession of the people, farmers is associated with dairy ure at the same time, Profitability for the farmers is very less. Infrastructure is not cooling tanks and other facilities are not available, and the large part of milk production is re is a multi-hierarchal distribution system of the milk; the farmers are not getting reward k. All these factors are making this industry unattractive for the farmers and the industry is ng up to the mark.
the total milk production is processed and used in urban areas of the country. According to iry Development Authority Only 0.52 Billion liters UHT and 0.5 Billion liters pasteurized milk is available in the country. In urban areas 4.7 Billion liters milk is provide by Gawalas. 1.27 Billion liters processed milk is sold by the milk shops.
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.
e world largest food company and nestle MilkPak is Nestls famous UHT milk brand. pak has south Asias biggest Plant at Kabirwala. It is targeting upper and middle class. It is ng its brand by adding Iron and Vitamin C.
MilkPak is following growth strategy. The immense competition is going in the market; it nded that Nestle Milkpak should invest more in milk business and other value added milk this way Nestle Milkpak can fulfill the local demand by locally processed milk and milk tead of the imported milk products. Nestle has brand recognition throughout the world and port milk powder and other value added products in future.
Nestle
Nestle is the largest food company in the world. It is present in all five continents, has an annual turnover of 74.7 billion Swiss Frances. There are 509 factories are running in 83 countries, having 231,000 employs.
f Nestle
Our story begins in 1867, when Henry Nestle developed a baby formula that saved childs life and marked the beginning of Nestle. It is originally consisted of two companies and two products, Henry Nestle and His baby food in Vevey, and the Anglo Swiss Condensed Milk company and its condensed Milk in Cham, both in Switzerland. His first factory was located in Vevey. In 1875, He sold His Company and retired. In 1880, second factory was built in bercher
In 1883, first time Nestle built a factory abroad, in Edlitz Grimmenstein In 1890, Vevey factory produced 28 billion cans of Milk food and 2.2 million cans of condensed Milk. In 1912, Nestle begins it long relationship with South Asia when Nestle condensed Milk company start. In 1979, Milkpak Ltd. Is founded by Syed Baber Ali. It manufactures UHT Milk, Cream and Butter as well as fruit Juices.
Vision
Vision of Nestle Milkpak is to expand business according to the increasing demand of market. As per our company vision in 2020 production capacity of all plants working in Pakistan is being increased. So extension of Kabirwala Plant is the example of our company vision.
Mission
At Nestle, we believe that research can help us to make better food, so that people live a better life. Good food is the primary source of good health, so we are trying to make good food. To provide fresh and pure products to the customers, we introduced (SHE) Safety, Health and environment policy to protect health of our employs and keep clean our surrounding environment.
Pakistan
Nestle have been serving Pakistani consumers since 1988 when the parent company Switzerland based on Nestle first acquired share in Milkpak. Nestle acquires 40% share in Milkpak. In 1990, Sheikhupura factory started the production of Nido Milk Powder cereals; 1n 1992, Nestle took over the running of company (Kabirwala plant) and began to develop its Milk collection network. In 1996 Milkpak was renamed to Nestle Milkpak Ltd. In 1997, It becomes a fully owned unit of Nestle Pakistan. 1n 1998, Nestle Milk collection system in Punjab matures and company is able to buy all its Milk from Farmers instead of relying on contractors. In 2005, Nestle Milkpak Ltd. Is renamed again Nestle Pakistan.
27-30% of calcium, 15-18% of protein, 31-34% of phosphorous,6-9% of Vitamin A and 160-169 k Cal of energy, as recommended dietary allowance by national Academy of Science (USA).
ts of the above said products have the following fruitful benefits for health nt of Human body. Calcium It is important for the growth of strong bones and teeth. Protein It is necessary for cell and tissue growth. Phosphorous It is important for healthy bones and teeth. Vitamin A It improves vision and keeps skin and hair healthy
ors
ompetitors of Nestle Milkpak are: Haleeb Milk Olpers milk Good Milk Dairy Queen Milk
ve Advantage
Nestle Milkpak never compromises on quality. Nestle Milkpaks extensive milk collection system ensures that the milk you get is of the finest quality. Nestles products are available in every city and town Nestle is using the latest technology in its production units.
Nestle makes milk powder of the surplus milk in winter and converts this milk powder into UHT milk in summer.
phics of Pakistan
Pakistan is a small country with limited resources. But the population of Pakistan is 180,000,000. Pakistan has 6th number in population in the world.
d Growth
Population:
Growth
Birth
Death
Net
0-14
15-64
65
Sex
under
15-64
65
Total
Total
Male:
60%
Female:
40%
Population 15 Million 9 Million 3 Million 2.6 Million 1.6 Million 1.3 Million 1.3 Million 1.3 Million
Peshawar
1.0 Million
Market/Industrial Analysis
Pakistans economy is predominantly agrarian in nature.
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
Growth in the agriculture sector registered a sharp recovery in 2006-07 and grew by 5%.
Contribution of the livestock sector to Pakistans GDP is at 11% while the processed milk sector contributes about 0.43 per cent.
lture sector.
180000000
(Billion Liters)
33.25 31.92
Need Analysis (UHT and Loose Milk) Predicted Supply of Fresh and UHT Milk
08
09
Annual Consumption
(million liters)
2008-09
35495.25
36361.25
2009-10
37669.75
38188.92
Annual Consumption
(million liters)
2008-09
648.43
353.71
2009-10
753.89
372.05
how increasing deficits in fresh milk production and increasing surpluses in UHT milk market in the run up to 2009-10, which suggests
ws that Pakistans milk yields are very low, and even simple management of feed (proper timing, proper mix and so on) can increase
farmers need to have better knowledge of feed management. This can be done by involving milk plants and provincial livestock
ments who can provide training and extension services to dairy farmers.
feed industry needs to be developed substantially to provide better quality animal feed at affordable prices. Currently we do not have
ent supply of high quality nutrients and additives, especially in rural areas. A specific package needs to be developed with the help of the
ment and in partnership with the private sector that would facilitate and encourage the development of a modern feed industry. Further,
Channels in Pakistan
Dairy Farmer
% Share
96 % Share
Gawala (Milkman)
Retailer
Milk Collector
Distributor/Retailer
n Agency
Customer
T Analysis
Pakistan dairy industry is the Worlds fifth largest industry Pakistan Dairy Industry is Cheaper than Austrai, America and other deveolped countries. Farmers are engaged in agriculture and dairy at the same time. By-product of Agriculture is used in Dairy By-product of dairy is used in agriculture.
Poor profitability for farmers. Lack of contact for farmers to the market mechanism. Poor dairy infrastructure in rural areas. Lack of education among the farmers is making it difficult to change farm and dairy management systems. Lack of knowledge about optimal feed. Lack of a cold chain to protect milk quality. Lack of access to well trained support service staff such as
Veterinarians. Despite the huge volume of milk produced in Pakistan, processors find it hard to procure sufficient milk to meet future consumer demand. Increasing demand for imported products. The product range offered to consumers is not well developed. 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.
There is an opportunity for companies to introduce value-added products like shrikhand, ice creams, paneer, khoya, flavored milk, dairy sweets, etc. There is a phenomenal scope for innovations in product development, packaging and presentation.
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.
hain in Pakistan
Consumer
Gawala (Milkman)
De-creamer
Milk Collector Dairy Farmer
Retailer
Demand
profile:
Absolutely optimistic
Margins:
Flexibility
of product mix:
Tremendous with balancing equipment, you can keep on adding to your product line.
Availability
of raw material:
Presently, more than 80 per cent of milk produced is flowing into the unorganized sector, which requires proper channelization.
Technical
manpower:
nesses: 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.
Lack of
Theoretically, there is little control over milk yield. However, increased awareness of developments like embryo transplant, artificial insemination and properly managed animal husbandry practices, coupled with higher income to rural milk producers should automatically lead to improvement in milk yields.
Logistics of
procurement:
Woes of bad roads and inadequate transportation facility make milk procurement problematic. But with the overall economic improvement in India, these problems would also get solved.
Problematic
distribution:
Yes, all is not well with distribution. But then if ice creams can be sold virtually at every nook and corner, why cant 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 consumers home!
Competition:
With so many newcomers entering this industry, competition is becoming tougher day by day. But then competition has to be faced as a ground reality. The market is large enough for many to carve out their niche.
tunities: "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:
There is a phenomenal scope for innovations in product development, packaging and presentation.
Steps should be taken to introduce value-added products like shrikhand, ice creams, paneer, khoa, flavored
milk, dairy sweets, etc. This will lead to a greater presence and flexibility in the market place along with opportunities in the field of brand building.
Addition of cultured products like yoghurt and cheese lend further strength - both in terms of utilization of
A lateral view opens up opportunities in milk proteins through casein, and other dietary proteins, further
Yet another aspect can be the addition of infant foods, geriatric foods and nutritional.
Export
potential:
Efforts to exploit export potential are already on. Amul is exporting to Bangladesh, Sri Lanka, Nigeria, and the Middle East. Following the new GATT treaty, opportunities will increase tremendously for the export of agri-products in general and dairy products in particular.
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.
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.
eting
Urabn areas of the country
ysis
ecall
Due to strong brand positioning and effective advertising, Milkpak has highest awareness level.
Awareness (%) 43 38
ak
s Queen
9 7 2 1
Milk
ur
(%)
Good Milk Milk Pak Dairy Queen Haleeb Olpers Nur Pur Others
1 45 9 22 17 4 2
ble shows that Milkpak has the highest market share due to its consistent quality.
s
The growth of processed milk is increasing by 20% annually
People are getting more quality and health conscious with the passage of time
Due to impurities of Gawala milk, people are attracting towards processed milk
Changing lifestyle
ial
At an average, a Pakistani consumer spends 42 % of income on food
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.
s (Nestle Milkpak)
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. Solid Financial position: Nestle Milkpaks annual turnover is Rs.30 Billion which provides it a financial edge over its competitors.
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.
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.
Annual Consumption
(million liters)
2008-09
648.43
353.71
2009-10
753.89
372.05
lues 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.
Growth of processed milk is increasing with 20% annually so Nestle Milkpak has the opportunity to capture a large share of
market.
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.
ategy
Functional Positioning
aza
Quality Product
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.
Milkpak is holding a large share in the market due to its quality at same price as compared to competitors.
nnels:
ak is not sold directly to consumers and the complete distribution process is followed. It uses indirect channels for distribution like:
stributorWholesalerRetailerConsumer
Advertisement
Public relations
ategy
growth strategy. They have invested $ 70 billion at Kabirwala Plant and they are planning to invest $ 381 billion in the milk business.
ons
The immense competition is going in the market so Nestle Milkpak should penetrate more and more in the market. 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. Nestle Milkpak should invest more on research and development because customers using loose milk are getting a lot of contaminations especially in urban areas so Nestle Milkpak can provide awareness to people in this aspect.
Bibliography
e.com
edia.com
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