Master in Business Administration Developing and Implementing Promotional Strategies

SUBMITTED BY: Name Student Roll No Subject Assignment # Date : : : : : Qazi Abdul Haseeb AH523138 Marketing Theory &Practice 02 30 October 2010

ACKNOWLEDGEMENT

I would like to thank to Almighty Allah who gave me knowledge and capability to make me able to complete and submit my Second Assignment successfully.

We shall also like to wish to acknowledge and show our deep gratitude to our respected teacher Sir Nouman Sattar , for his consistence, advice and support given during the writing up of this assignment. I personally visited to Nestle Pure Water Islamabad Plot # 395-396 Industrial Area Islamabad. We also thankful to Sales Manager who supported us well and provided us information about our topic.

ABSTRACT
Nestle is dedicated to providing the best foods to people throughout their day, throughout their lives, throughout the world. With our unique experience of anticipating consumers' needs and Creating solutions, Nestle contributes to your well-being and enhances your quality of life.

Referring to the first part of the mission statement, Nestle did provide the consumers with the best bottled-mineral water, as it is number one in the bottled-water market in Pakistan. According to their claim that they provide the best food throughout the world, Nestl Pure Life is available throughout Pakistan in a number of outlets because of the intensive distribution strategy of the firm. Secondly, Nestle was very successful in identifying the need for safe and pure drinking water, and thus came with the wonderful solution of providing the Nestle Pure Life water. Referring to Nestl Pure Life, it has all the essential minerals, which a human body needs, as well as, it is pure and safe. Thus it improves one aspect of our lives. By drinking healthy water, people can escape different fatal diseases like Hepatitis B and C (one of the causes of which being the contaminated water). Ultimately, the quality of life is enhanced as portrayed by the mission statement.

TABLE OF CONTENTS
Serial 1 2 3 4 5 6 7 8 9 Description ACKNOWLEDGEMENT ABSTRACT INTRODUCTION REVIEW OF LITERATURE DATA COLLECTION METHODS SWOT ANALYSIS CONCLUSIONS RECOMMENDATIONS REFERENCES Page No 2 3 4 5 6-10 11-27 28 29 29 30

INTRODUCTION
PROMOTION:
Promotion is one of the four elements of marketing mix (product, price, promotion, distribution). It is the communication link between sellers and buyers for the purpose of influencing, informing, or persuading a potential buyer's purchasing decision. The following are two types of Promotion:

Above the line promotion: Promotion in the media (e.g. TV, radio, newspapers, Internet, Mobile Phones, and, historically, illustrated songs) in which the advertiser pays an advertising agency to place the ad Below the line promotion: All other promotion. Much of this is intended to be subtle enough for the consumer to be unaware that promotion is taking place. E.g. sponsorship, product placement, endorsements, sales promotion, merchandising, direct mail, personal selling, public relations, trade shows

The specification of five elements creates a promotional mix or promotional plan. These elements are personal selling, advertising, sales promotion, direct marketing, and publicity. A promotional mix specifies how much attention to pay to each of the five subcategories, and how much money to budget for each. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image. Fundamentally, however there are three basic objectives of promotion. These are; 1. To present information to consumers as well as others 2. To increase demand 3. To differentiate a product There are different ways to promote a product in different areas of media. Promoters use internet advertisement, special events, endorsements, and newspapers to advertise their product. Many times with the purchase of a product there is an incentive like discounts, free items, or a contest. This is to increase the sales of a given product. The term "promotion" is usually an "in" expression used internally by the marketing company, but not normally to the public or the market - phrases like "special offer" are more common.

Promotional Mix:
There are seven main aspects of a promotional mix. These are:

Advertising - Any paid presentation and promotion of ideas, goods, or services by an identified sponsor. Examples: Print ads, radio, television, billboard, direct mail, brochures and catalogs, signs, in-store displays, posters, motion pictures, Web pages, banner ads, and emails. Personal Selling - A process of helping and persuading one or more prospects to purchase a good or service or to act on any idea through the use of an oral presentation. Examples: Sales presentations, sales meetings, sales training and incentive programs for intermediary salespeople, samples, and telemarketing. Can be face-to-face or via telephone. Sales promotion - Media and non-media marketing communication are employed for a pre-determined, limited time to increase consumer demand, stimulate market demand or improve product availability. Examples: Coupons, sweepstakes, contests, product samples, rebates, tie-ins, self-liquidating premiums, trade shows, trade-ins, and exhibitions. Public relations - Paid intimate stimulation of supply for a product, service, or business unit by planting significant news about it or a favorable presentation of it in the media. Examples: Newspaper and magazine articles/reports, TVs and radio presentations, charitable contributions, speeches, issue advertising, and seminars. Corporate image - The Image of an organization is a crucial point in marketing. If the reputation of a company is bad, consumers are less willing to buy a product from this company as they would have been, if the company had a good image. Direct Marketing is often listed as a the fifth part of the marketing mix Exhibitions - are try-outs. You make your product, and let potential buyers try the product, this way, you know directly what people see in your product. The downside, your competitor can see exactly what you are doing.

Advertising

Personal Selling

Promotion Strategies Sales Promotion Public Relations

Direct Marketing

REVIEW OF LITERATURE
Sales promotion:
An activity designed to boost the sales of a product or service. It may include an advertising campaign, increased PR activity, a free-sample campaign, offering free gifts or trading stamps, arranging demonstrations or exhibitions, setting up competitions with attractive prizes, temporary price reductions, door-to-door calling, telemarketing, and personal letters on other methods. More than any other element of the promotional mix, sales promotion is about action. It is about stimulating customers to buy a product. It is not designed to be informative a role which advertising is much better suited to. Sales promotion can be directed at: The ultimate consumer (a pull strategy encouraging purchase) The distribution channel (a push strategy encouraging the channels to stock the product). This is usually known as selling into the trade Price promotions Price promotions are also commonly known as price discounting These offer either (1) A discount to the normal selling price of a product, or (2) More of the product at the normal price. Increased sales gained from price promotions are at the expense of a loss in profit so these promotions must be used with care. A producer must also guard against the possible negative effect of discounting on a brands reputation.

Promotion- push and pull strategies:

Marketing theory distinguishes between two main kinds of promotional strategy - "push" and "pull". Push: A push promotional strategy makes use of a company's sales force and trade promotion activities to create consumer demand for a product. The producer promotes the product to wholesalers, the wholesalers promote it to retailers, and the retailers promote it to consumers. A good example of "push" selling is mobile phones, where the major handset manufacturers such as Nokia promote their products via retailers such as Carphone Warehouse. Personal selling and trade promotions are often the most effective promotional tools for companies such as Nokia for example offering subsidies on the handsets to encourage retailers to sell higher volumes.

Producer

Retailers and whole sellers

Consumer

Producers marketing Push Strategies

Retailers marketing Activities

A "push" strategy tries to sell directly to the consumer, bypassing other distribution channels (e.g. selling insurance or holidays directly). With this type of strategy, consumer promotions and advertising are the most likely promotional tools. Pull: If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers. A good example of a pull is the heavy advertising and promotion of children's toys mainly on television. Consider the recent BBC promotional campaign for its new pre-school programs the Fimbles. Aimed at two to four-year-olds, 130 episodes of Fimbles have been made and are featured everyday on digital.

Demand
Producer Retailer and Whole seller Consumer

Pull Strategies

Sales Promotion Methods:

Consumer Sales Promotion Techniques It encourage/stimulate customers to patronize a specific retail store or to try a specific product.

Coupons: Usually reduce the purchase price or offered as cash. Need to state the offer clearly and make it easy to recognize.

Demonstrations: Excellent attention getters. Labor costs are usually high.

Point of Purchase Display: Outside signs, window displays, counter pieces, display racks. 90% of retailers believe that point of purchase materials sell products. Essential for product introductions. Also with
2/3 of purchasing decisions made in the store, they are important.

Free Samples: Stimulate trial of product. Increase sales volume at the early stage of the product life cycle and obtain desirable distribution.

BRANDING STRATEGY OF NESTLE PURE LIFE: Nestle brand name present a message of caring which make it distinctive and attractive than other companies. Pure Life's brand is good food for good life. The message of family protection is enough to get the attraction of customer. The Nestl's brand name is easy to understand &

10

translate. It is easy to pronounce and it is also easy to recognize. Another message in brand name is given to customer to preserve their families from different deceases. LABELING STRATEGY OF NESTLE PURE LIFE: Nestl's pure life's label gives all information about their product like ingredients which are used in it and all instructions regarding product. CHANEL OF DISTRIBUTION: Nestle pure life is making full efforts to supply its product to ultimate consumers. For this purpose the company uses the conventional marketing channels of distribution to supply the product. In this method company supply the product to whole seller who respond it to retailers who supply to ultimate user. In this method Nestle feel little consumption of time because retailers cannot directly approach up to the company. The company also uses the vertical marketing system in which retailers also take supply from directly company resources without contact with whole sellers. In this way the margin of company decrease and going into the interest of the ultimate consumer.

Vertical Marketing System

Pure Life Water

Conventional Marketing System

Pure Life Water

Whole Seller Whole Seller

Retailers Retailers

.
Consumers

Consumers

11

COMMUNICATION & ADVERTISING STRATEGY: Advertisement is a tool to introduce the product in the market. To increase sales and build an image in the mind of consumer company advertise their product in different ways, as for as Nestle pure life is concerned company use: Television Radio News Paper Bill Board Hoarding etc. Some time company also makes free sampling, held stalls at different programs like Health Mela. Pure Life's communication strategy is weak as they follow emotional black mailing. In advertising they show emotional feelings to their customers. MESSAGE TO AUDIENCE: In every advertisement of pure life water the company tries to convey their message like: They provide health food and health drinking water for caring their customers. We work for society welfare. FUTURE FORECASTING OF NESTLE PURE LIFE WATER: In future two competitors of Pure Life are going to launch their water in the market which is Pepsi & Coca Cola. As their competitor will advertise their product at very high stage so people will get awareness about drinking water and nestle pure life can achieve a great market share in future because people can see that our water is getting rough day by day and there is a need for pure drinking water to survive in the world. For these opportunities company is going to launch an other plant for drinking water next year NESTLE ROLE FOR SOCIAL WELFARE: Nestle is not playing any acting role for the welfare of society because their margin ratio is very less. Nestle pure life profit margin is 5% on the other hand the profit margin of Pepsi is 60%, Mobilink 55% and Coca Cola has 50%. So they can afford these huge expenses but Nestle can't afford it.

12

DATA COLLECTION
INTRODUCTION TO NESTLE: Today, Nestle is the world leading Food Company. Nestle headquarters is in Switzerland. Its international R&D network supports the products made in more than 500 factories in 86 countries. The Nestle factories are operating in the region of: 1. 2. 3. 4. 5. Africa America Asia Europe Oceania

Being a company dedicated to food from the beginning, Nestle remains sensitive to culinary and eating habits, and responds to specific nutritional problems, whilst also setting and matching new trends such as growing out-of-home consumption and caring about the well being of its consumers.

MEANING OF NESTLE: Henri Nestl endowed his company with the symbol derived from his name. His family coat of arms, the nest with a mother bird protecting her young, became the Company's logo and a symbol of the Company's care and attitude to life-long nutrition. The Nestl nest represents the nourishment, security and sense of family that are so essential to life. BRIEF HISTORY OF NESTLE: 1866 -1905 In the 1860s Henri Nestl, a pharmacist, developed a food for babies who were unable to breastfeed. His first success was a premature infant who could not tolerate his mother's milk or
13

any of the usual substitutes. People quickly recognized the value of the new product, after Nestl's new formula saved the child's life, and soon, Farine Lacte Henri Nestl was being sold in much of Europe. 1905-1918 In 1905 Nestl merged with the Anglo-Swiss Condensed Milk Company. By the early 1900s, the company was operating factories in the United States, Britain, Germany and Spain. World War I created new demand for dairy products in the form of government contracts. By the end of the war, Nestl's production had more than doubled. 1918 -1938 After the war Government contracts dried up and consumers switched back to fresh milk. However, Nestl's management responded quickly, streamlining operations and reducing debt. The 1920s saw Nestl's first expansion into new products, with chocolate the Company's second most important activity 1938 -1944 Nestl felt the effects of World War II immediately. Profits dropped from $20 million in 1938 to $6 million in 1939. Factories were established in developing countries, particularly Latin America. Ironically, the war helped with the introduction of the Company's newest product, Nescafe, which was a staple drink of the US military. Nestl's production and sales rose in the wartime economy. 1944 -1975 The end of World War II was the beginning of a dynamic phase for Nestl. Growth accelerated and companies were acquired. In 1947 came the merger with Magi seasonings and soups. Crosse & Blackwell followed in 1950, as did Findus (1963), Libby's (1971) and Stouffer's (1973). Diversification came with a shareholding in L'Oral in 1974. 1975 -1981 Nestl's growth in the developing world partially offset a slowdown in the Company's traditional markets. Nestl made its second venture outside the food industry by acquiring Alcon Laboratories Inc..

14

1981 -1996 Nestl divested a number of businesses1980 / 1984. In 1984, Nestl's improved bottom line allowed the Company to launch a new round of acquisitions, the most important being American food giant Carnation. 1996+ The first half of the 1990s proved to be favorable for Nestl: trade barriers crumbled and world markets developed into more or less integrated trading areas. Since 1996 there have been acquisitions including San Pellegrino (1997), Spillers Pet foods (1998) and Ralston Purina (2002). There were two major acquisitions in North America, both in 2002: in July, Nestl merged its U.S. ice cream business into Dreyer's, and in August, a USD 2.6bn acquisition was announced of Chef America, Inc. Nestle is not only Switzerland's largest industrial company, but it is also the World's Largest Food Company. The mission statement emphasizes on the fact that Nestle products are available in nearly every country around the world. Wherever one may live, only Nestle can provide the best and most reliable food and beverage products to meet his/her needs throughout the day, throughout the life. Especially, people on the move want to be able to find good food wherever they are, whatever the time of day. They are often reassured that they will find well-known brands out of home. This statement also reflects the image of high quality products that Nestle offers. Nestle has the advantage that it offers caterers, fast food chains and other restaurants a complete range of high quality ingredients, base products and meal components, as well as leading consumer brands such as Nescafe. Quality is the cornerstone of the success of the Nestle Company. Every day, millions of people all over the world show their trust in the company by choosing Nestle products. This trust comes from a quality image that has been built up for over a century. Therefore, the quality of the products ultimately enhances the quality of the consumers life. In addition, the mission statement declares that Nestle has the ability to anticipate consumers needs and create solutions. Nestle has proven this ability a number of times by introducing new products that were required by consumers. Especially, the launch of Nestle Pure Life in Pakistan proves the accuracy of this fact. In Pakistan, there was a need for safe and healthy drinking water and Nestle responded to this consumer need by introducing Nestle Pure Life. Finally, it is quite evident that the organization has actually implemented its mission statement in the business practices that it carries out. Also, the mission statement has been an important guideline for any SBU that the firm has started and this is portrayed by the success that each SBU of Nestle enjoys.

15

HOW NESTLE DEFINE MARKETING: Building customer relationship based on customer value and satisfaction is at the very heart of modern marketing. The two fold goals of Nestle marketing is to attract new customers by providing superior value and to keep and grow the current customers by delivering satisfaction. Nestle defines marketing as: A social and managerial process where by individual & groups obtains good food and good life through creating and exchanging products and values.

NESTLE BUSINESS PRINCIPALS:

Nestl's business objective is to manufacture and market the Company's products in such a way as to create value that can be sustained over the long term for shareholders, employees, consumers, and business partners. Nestl does not favor short-term profit at the expense of successful long-term business development. Nestl recognizes that its consumers have a sincere and legitimate interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust and that without its consumers the Company would not exist. Nestl believes that, as a general rule, legislation is the most effective safeguard of responsible conduct, although in certain areas, additional guidance to staff in the form of voluntary business principles is beneficial in order to ensure that the highest standards are met throughout the organization. Nestl is conscious of the fact that the success of a corporation is a reflection of the professionalism, conduct and the responsible attitude of its management and employees. Therefore recruitment of the right people and ongoing training and development are crucial. Nestl continues to maintain its commitment to follow and respect all applicable local laws in each of its markets.

MARKETING PHILOSPHY NESTLE ADOPTED:

Nestle vision is to be the leading food & beverage company in the world providing customers with healthy food at affordable prices. Their logo is Good Food for GOOD LIFE; there all products are for society welfare. So according to their logo and mission statement it is very fair to say that they are following the Societal Marketing Concept.

16

PRODUCTS OF NESTLE:
Nestle is a well-known company all over the world and Pakistan. The company basically deals in food products as their logo says Good Food, Good Life. Their major products lines are: Nestle Milkpak:

This product was launched in 1981. Backed by a very strong brand name, aggressive marketing and distribution plan, consistent quality, and availability throughout the year, it has become quality milk. In September 1999, Milk Pak UHT milk was launched as Nestle Milk Pak UHT milk. It is available in 1000, 500 and 250 ml sizes. Milkpak Butter: This product was launched in 1985 under the Milk Pak brand name. It has been recently repackaged in a crisp white laminate, the design of which bears closed resemblance to that of Milkpak UHT milk. This new package design allows to gain strength from Nestle Milkpak UHT milk. It is available in 200 and 100 gm sizes. Milkpak UHT Cream: This product was launched in 1986 under Milkpak brand name. It is available in 200 ml size. Milkpak Desi Ghee: This product was launched in 1986. It is available in 1000 ml size and is a leading branded desi ghee in the country. Nestle Everyday: To meet the requirements of the tea-whitening segment, this product was launched in 1992. On account of aggressive marketing, focused distribution, excellent consumer acceptance and product quality, this brand has shown strong growth and holds good promise for the future.

17

Nestle Nido: Soon after it was introduced in the early 70`s as an imported product, Nido full cream milk powder became the market leader. Local manufacturing of Nido began in 1990, which has reinforced its position as the dominant player in the full cream milk powder category.

Nestle yogurt: Nestl Fruit Yogurt is a mouth-watering treat with real fruits chunks in sweet creamy yogurt. A healthy option for you to serve your kids, making yogurt fun! Nestl Fruit Yogurt goes great with breakfast and dessert, or can be had as it is to satiate cravings for a delicious snack anytime you like Nescafe Classic: It is one of the worlds most popular coffee brands. Nescafe global campaign open up was launched in Pakistan in October, introducing a new brand framework and increased emphasis behind coffee sales in Pakistan. Nestle Milkpak locally packs imported coffee and markets it in 225 and 500gm.

18

Nestle Cerelac: Whether its your first-boron evens your third bundle of joy each baby is unique and special. You want the best for your baby in every way and that also means the best nutrition for your babys healthy development, giving him or her solid foundation for a bright and healthy future.

Maggi 2-minute Noodles: Fast to cook, good to eat Maggi 2-Minutes Noodles were launched with local production in 1992, and doing so Nestle pioneered the category of instant noodles in Pakistan. It offers flavors like chicken masala, chili and chatkhara. Nestle entered the Cold Sauces category early in the year with the launch of Maggi ketchup, Maggi mirch maza and Maggi khatti meethi the first Emily sauces in Pakistan. The innovative taste of Khatti meethi together with the more traditional tastes of Ketchup and Mirch maza, were received well by the consumers.

Kit Kat: Nestle Kit Kat is available in different packs of 35g, 17g, and 11g. And Kit Kat
chunky Chocolate is available in 46g pack.

19

BREAKFAST CEREALS:

Breakfast has been declared the most important meal of the day and with good reason. Its the first meal after your body has been resting all night and this is the meal that is going to fuel the body and prepare it for the day ahead. All of us: children, teens and even adults benefit from a good breakfast. A bowl of cereal is an ideal way to start your day!

Nestle Pure Life: Water:

The launch of Nestle Pure Life in December 1998 was a truly historic event. This marks the Nestle Pure Lifes entry into the countrys fast growing water market. At the same time Pakistan became the first country where Nestle launched the new brand. Nestle Pure Life is a premium drinking water, produced to the highest standards of safety and purity. It is ideally balanced with essential minerals. It is available in two convenient sizes of 0.5 and 1.0 liters. Capitalizing on its strong brand recognition, aggressive pricing and supported by a strong marketing campaign, Nestle Pure Life has made very strong inroads into the water market in Pakistan. Nestl PURE LIFE is available around the globe today in Canada, USA, Mexico, Brazil, Argentina, South
20

Africa, Saudi Arabia, Jordan, Egypt, Lebanon, Turkey, Russia, Uzbekistan, Pakistan, China, Thailand and the Philippines. Launched on the North American. Nestle PURE LIFE is destined to become the worlds leading and most widely distributed brand in 2010.

As our topic is on nestle pure water that is why we mainly focus on Nestle Water.

MARKETING PHILOSPHY FOR NESTLE PURE LIFE WATER:

Nestle Pure Life is a premium drinking water, produced to the highest standard of safety and purity. Their aim is to provide customer with pure drinking water on suitable prices make the product as convenient as possible. According to their claim that they provide the best food through out the world. For Nestle Pure Life they adopted the societal and marketing concept Objectives of Nestle Pure Life: The main objective for the SBU was to be number one selling bottled-mineral water in Pakistan. This objective was hoped to be accomplished by setting the following further sub-objectives. i) Safety: To provide the consumers with a safe drinking water: Consumers want reassurance. The Nestle name on the product is an assurance of quality for the consumer. Also related to safety is the fact that the water is captured in a safety environment and undergoes rigorous treatment to meet universal quality standards. The water is de-mineralized by distillation. Mineral salts are then added, in accordance with a strict formula developed. The bottling line is also subject to strict sanitary regulations: an air-controlled room houses the filing machine, and
21

the bottles and caps are sterilized. Quality is a continual process and is monitored during each production phase - some 200 controls. Packaging also receives special attention. Each Nestle Pure Life bottle and the 5-litre PET jug have a special cap and tamper-resistant band. This way, the consumer can tell immediately whether the bottle has come straight from the plant or if it has been tampered with. ii) To offer consumers a healthy product: Demineralization let Nestle offer consumers a balanced, refreshing and healthy product, the product's second key objective. The formula developed for Nestle Pure Life contains minerals such as calcium, which is essential for bone development; magnesium, which is recommended for muscles and the central nervous system; bicarbonates, which are particularly useful for digestion; and sodium, which helps regulate hydration in the human body. Overall mineralization is light (200 mg per liter) and suitable for the whole family. iii) To offer an affordable mineral water: As well as being pure, safe, healthy water, Nestle Pure Life is affordable and convenient. No matter what the format, Nestle Pure Life is sold consistently at popular prices affordable for a large portion of the population. The 1.5-L bottle is offered for Rs. 22 -- cheaper than most of the other water brands of the same size. The 0.5 L bottle was initially offered for Rs. 8 but now is sold for Rs. 12. The increase in price has been caused mainly due to inflation and competition. iv) To make the product as convenient as possible: This was the product's fourth objective. Due to its well-balanced mineral content, Nestle Pure Life can also be used for cooking and to prepare tea or coffee. The brand is available in several formats suited to a variety of consumption patterns (250 ml, 1.5 liter, 5 liter). The idea is clear: to be close to the consumer. In other words, Nestle Pure Life must be available in all sales and restaurants outlets and anywhere else consumers young and old are likely to buy or drink water. These objectives can be very well matched with the mission statement of the organization. Consider the following mission statement: Nestle is dedicated to providing the best foods to people throughout their day, throughout their lives, throughout the world. With our unique experience of anticipating consumers' needs and Creating solutions, Nestle contributes to your well-being and enhances your quality of life. Referring to the first part of the mission statement, Nestle did provide the consumers with the best bottled-mineral water, as it is number one in the bottled-water market in Pakistan. According to their claim that they provide the best food throughout the world, Nestl Pure Life is available throughout Pakistan in a number of outlets because of the intensive distribution strategy of the firm. Secondly, Nestle was very successful in identifying the need for safe and pure drinking water, and thus came with the wonderful solution of providing the Nestle Pure Life water. Referring to Nestl Pure Life, it has all the essential minerals, which a human body needs, as well as, it is pure and safe. Thus it improves one aspect of our lives. By drinking healthy water, people can escape different fatal diseases like Hepatitis B and C (one of the causes
22

of which being the contaminated water). Ultimately, the quality of life is enhanced as portrayed by the mission statement.

NESTLE PURE LIFE & ITS COMPETITORS: There are not too much competitors of nestle pure life in the market because Nestle was the only company who gives the idea o bottled water. Up to some extent Sparklet and AVA are the competitors of Pure Life Water. But in future Pepsi and Coca Cola will be their competitors because they are also launched their drinking water Aquafina.

MARKET SHARE OF PURE LIFE WATER:

The Percentage Use of Nestle Pure Life and its Competitors in Islamabad Others 20% Sparkle 30%

Nestle Pure Life 60%

Nestle occupied 85% of drinking water market in all over the Pakistan. In Lahore Nestle Pure Life has 69%of total market, Sparklet has 13% and Cool have 11% and reaming 7%are kept by other local companies. In Karachi 50% of market is kept by Nestle and 25% by AVA and remaining 25% is kept by other local companies. As for as Islamabad is concern Nestle Pure Life has 65%of market Share.

23

M ark e t Share of Ne s tle Pure Life in Karachi

1 2 3

STRATEGIES FOR COMPETIOTIVE ADVANTAGES: Every product on the shelf, every service and every customer contact helps to shape this image. A Nestl brand name on a product is a promise to the customer that it is safe to consume, that it complies with all regulations and that it meets high standards of quality. Customers expect us to keep this promise every time. Under no circumstances will we compromise on the safety of a product and every effort must be made to avoid hazards to health. Likewise, compliance with all relevant laws and regulations is a must and is not negotiable. People, equipment and instruments are made available to ensure safety and conformity of Nestl products at all times. The effort is worth it. Companies with huge quality standards make fewer mistakes, waste less time and money and are more productive. They also make higher profits. Quality is our most successful product. It is the key to our success, today and tomorrow. The customer comes first We want to win and keep customers: distributors, supermarkets, hotels, shopkeepers and the final consumers. They have very different requirements. Trade customers expect excellent service, correct information and timely delivery. Consumers consider taste, appearance and price when they make their choice. Our task is to understand what customers want and respond to their expectations rapidly and effectively. We serve various groups of consumers and there is demand for products at different levels of perceived quality and price. All customers, however, expect value for their money good quality at a reasonable price. When offering quality to customers we also mean environmental quality. Nestl shares societys concern for the environment and is committed to environmentally sound business practices throughout the world. Customers are central to our business and we must always respect their needs and preferences.

24

Quality is a competitive advantage We live in a competitive world and must never forget that our customers have a choice. If they are not satisfied with a Nestl product, they will switch to another brand. Our goal, therefore, is to provide superior value in every product category and market sector in which we compete. The pursuit of highest quality at any price is no guarantee for success, nor is a single-minded costcutting approach. Lasting competitive advantage is gained from a balanced search for optimal value to customers, by simultaneous improvement of quality and reduction cost. Success can never be taken for granted. We must watch and learn from our competitors. If they do something better, we must improve our own performance. We can achieve competitive advantage through Quality. Quality is a joint effort Operating companies are fully responsible for maintaining agreed quality standards. Not only Production units, but also Marketing, Purchasing, Distribution and Sales have a vital role to play in providing quality to customers. This implies a thorough knowledge of the products and services we offer Quality units at different levels of the organization provide specific support, promote quality awareness, assume guardianship and audit the system. Quality departments monitor operations against agreed standards and must intervene in case of non-conformity. Quality policy and principles, the mandatory standards and the recommended tools for implementation are laid down in the Nestl Quality System that is applicable throughout the group. Further directions are given through instructions, norms and guidelines, often specific to a product. Our business products, such as raw material producers, packaging suppliers, contract manufacturers and distributors are expected to share our concern for Quality. They too must set up an adequate quality system, so as to meet our requirements consistently.

Every function and department in the company as well as our business partners must share the quality efforts. Quality is made by people Adequate equipment, procedures and systems are needed to make Quality; so are involved and dedicated people. Each and every Nestl employee must do his best to provide quality products and services. Training and teamwork are crucial to the successful implementation of high quality standards. Continuous training ensures that everyone understands his tasks and has the necessary skills to
25

carry them out. Teamwork allows us to achieve results that are greater than the sum of individual efforts.We motivate employees by demonstrating management commitment to Quality, by setting challenging goals and by giving them responsibility and recognition. It is through employee involvement that goals and targets can be achieved in the shortest time. Quality must be a way of life for everyone in the company. Quality is action Quality is the result of deliberate action. It is the responsibility of senior managers to communicate the quality objectives and to provide the resources necessary for their implementation. It is then up to all employees to make Quality happen throughout the company. Progress is followed by listening to our customers and by measuring our performance. Shortcomings and mistakes must be analyzed and corrected. Problems must be anticipated and prevented before they occur. We also must identify and take advantage of opportunities. To stand still is to fall behind. So we must strive for continuous improvement in every area. It is through many small improvements as well as through major breakthroughs that we will achieve excellence.

SALES STRATEGY OF NESTLE PURE LIFE WATER:

The sales strategy which Nestle adopted for Pure Life water is Availability & Visibility. To increase sales and gain profit the company has to provide proper supply of product in the market.
26

All the time company remains busy to make the availability of their product in the market. In departmental stores and shops the Pure Life Water is so placed that it is visible for the customers

SALES PROMOTION STRATEGY:

Personal Selling: A direct Vendor Selling Activity was coordinated and carried out during the summer months of June, July, and August 1999 in Lahore. A team of vendors, clad in branded T-shirts, caps and jackets, sold chilled 0.5 liter bottles to travelling customers on all major intersections. The brand got great mileage out of this innovative idea of personal selling in terms of brand awareness, paid trial, image as well as real sales. Publicity: Nestle Pure Life was launched on 14 December, 1998 in Karachi with a huge amount of enthusiasm and positive response shown by the locals. The successful story of its launch was printed in all the local newspapers the next day. This greatly helped in creating awareness of the brand and gave its introduction a good start. Sales Promotion: Specific promotions of Nestle Pure Life were arranged in some of the key outlets of Islamabad. Elaborate shelf space was acquired for product display and specially designed POS material was extensively used to promote sales. On a 12-bottle purchase of 1.5 ml, one 1.5 ml bottle was offered free to consumers. Similarly on a 6bottle purchase of 1.5 ml, one 0.5 ml bottle was offered free. Regarding trade promotion, the retailer was also given an additional discount of 4 % during this sales promotion. Not only did the sales of Nestle Pure Life grow tremendously during the promotion, these continued at a higher pace even after it was over. Public Relations: As far as the public relations are concerned, the organization releases an annual report which includes the company's financial statements along with the sales of all product categories. The annual report is mainly aimed at the stockholders. However, another very important form of public relations is the newsletters and bi-monthly magazines issued by the organization. A huge amount of information is found in these regarding the products and their promotion. In the same
27

way, Nestle Pure Life was given quit a bit of importance in the newsletters issued after its launch, which obviously helped in creation of the awareness of this brand. Besides these promotional methods, word of mouth, a major factor in Pakistan proved to be very effective in the increasing sales of Nestle Pure Life.

MARKET SEGMENTATION:
To occupy a clear distinctive & desirable place related to competing mineral water in the minds of the target customers Nestle Pure Life segments its market on two bases: Geographic segmentation Demographic segmentation GEOGRAPHICAL SEGMENTATION: The Company segments its market geographically on divisional basis. They divide each division in different zones and every distributor is restricted to sale its products only in his own zone. For example Islamabad is divided into five zones like East, West, South, North, and South west. DEMOGRAPHICAL FACTOR: If we look nestle pure life's demographic segmentation than we will find that our product is for every one. People from any area, any culture, any age, any sex, any belief and any income will drink water. It is not any luxury item which is used by a specific people.

TARGET MARKET OF PURE LIFE WATER: A specific demographic target market was not chosen for Nestle Pure Life; instead the goal was to develop a product to be used by consumers of all ages - from infants to seniors. It was intended as a family product especially for families living in large, polluted urban

Agglomerations that experience increasing difficulties finding safe, healthy drinking water. In fact, Nestle Pure Life's 0.5 L bottle is targeting to be also an alternative to soft drinks. Basically the target market of nestle water is those areas where the consumers having more awareness about pure life. As the people in villages having less information about Nestle Pure Life. So targeting marketing depends on the awareness of the consumers

28

SELETING TARGET MARKET Target Market Strategies Undifferentiated mass market.

Differentiated Segmented Marketing.

Concentrate Marketing.

Micro marketing or Individual Marketing.

POSITIONING STRATEGY:
There are some competitive advantages or important attributes of Nestle Pure Life drinking water, occupying in consumer's mind relative to competing mineral waters are as follows: PURE DRINKING WATER:

29

Nestle Pure Life is only drinking water product in the market. Their competitors are selling mineral water which contain extra chemicals which are harm full for human body, but as for as pure life is concerned it is made by keeping in mind the chemicals which human body requires. NESTLE LOGO & FAMILY BRAND: Pure life use Nestle brand name and the logo of nestle pure life is also showing family care to consumer which is enough to attract the customer. That's why customer gives it preference on other products. COMMUNICABLE: Nestle pure life is a brand of nestle which shows a big sign of quality to customer. Due to its brand name it is very easy to communicate.

DATA ANALYSIS
SWOT ANALYSIS OF NESTLE PURE LIFE:
STRENGTHS:

30

The only brand in the area maintaining its quality and taste and having the same impact on its customer Economical Pure Drinking Water in market (Free of chemicals) Strong Brand Name

WEAKNESS: Communication is weak Lack of Awareness

OPPORTUNTIES THREATS Segments are being shared by competitors Uncertain conditions will effect the sales (diseases of animals) Under cutting by competitors Concentrating on these areas can increase sales Increase in product line

CONCLUSION
Finally it is concluded that Nestle is providing quality water to the people of the country. Nestle is a fast-growing mineral water and food processing company providing quality food items all over the country. Nestle Pure Life is only drinking water product in the market. Their
31

competitors are selling mineral water which contain extra chemicals which are harm full for human body, but as for as pure life is concerned it is made by keeping in mind the chemicals which human body requires. A Nestl brand name on a product is a promise to the customer that it is safe to consume, that it complies with all regulations and that it meets high standards of quality. Customers expect us to keep this promise every time. Under no circumstances will we compromise on the safety of a product and every effort must be made to avoid hazards to health. Likewise, compliance with all relevant laws and regulations is a must and is not negotiable. Specific demographic target market was not chosen for Nestle Pure Life, instead the goal was to develop a product to be used by consumers of all ages - from infants to seniors. It was intended as a family product especially for families living in large, polluted urban agglomerations that experience increasing difficulties finding safe, healthy drinking water. People, equipment and instruments are made available to ensure safety and conformity of Nestl products at all times. The effort is worth it. Companies with huge quality standards make fewer mistakes, waste less time and money and are more productive. They also make higher profits. Quality is our most successful product. It is the key to our success, today and tomorrow.

RECOMMENDATION

We the the group members after working on the nestle pure life water would like to suggest the following recommendations to Nestle Pure life Water;

32

 The company should make huge expenses on advertisement in rural areas of Pakistan to create awareness in the mind of local area's people. The company should held seminars and meeting for the promotion of Nestle Pure Life. Nestl should be held accountable for its commitments with regard to human rights and sustainability. On the one hand, there should be efficient law enforcement With regard to quality standards. The lack of funds and the weak regulatory position of Institutions like PCRWR and PSQCA have to be addressed within governmental authorities, as well as through civil society institutions. Quality control programmes, with a rate imposed on each bottle might be one Opportunity to provide proper funding. To solve the water crisis and lack of drinking water the Government of Pakistan, International agencies and NGOs must play an active role. First, of all the Government of Pakistan should acknowledge a water crisis and start to collect Sufficient data. Lastly, If Nestl fails to comply with Pakistans law, it has to bear consequences, instead of using its access to top leadership. Any political deal will create a loophole in the rule of law and lead to a lack of accountability. Nestls failed compliance with its Corporate Business Principles should also be addressed by its shareholders and cause a public debate in its host country Switzerland.

33