Executive Summary

Pakistan is an agricultural country. According to Ministry of Food, Agriculture and livestock, agriculture accounts for 20.9 percent of the GDP. Dairy industry contributes 49% to the agriculture value and 11% to the GDP. Annual production of milk is 35.25 Billion litters in the country.

Like other countries Dairy is not a dedicated profession of the people, farmers is associated with dairy and agriculture at the same time, Profitability for the farmers is very less. Infrastructure is not developed, cooling tanks and other facilities are not available, and the large part of milk production is wasted. There is a multi-hierarchal distribution system of the milk; the farmers are not getting reward of their work. All these factors are making this industry unattractive for the farmers and the industry is no developing up to the mark. Only 4% of the total milk production is processed and used in urban areas of the country. Nestle Milkpak have a great share in the different multinational companies. It is statistically calculated that Nestle Milkpak have 50% share in the Nestle company and now Nestle become the leader of all multinational companies in food products and beverages. Nestle is operating in all big cities in Pakistan and try best to provide its Products to other small cities and towns.

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NESTLE MILK PACK

INTRODUCTION 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; In 1992, Nestle took over the running of company (Kabirwala plant) and began to develop its Milk collection network. In 1997, it becomes a fully owned unit of Nestle Pakistan. In 1998, Nestle Milk collection system in Punjab matures and company is able to buy all its Milk from Farmers instead of relying on contractors.

VISION STATEMENT

The Nestl global vision is to be the leading Health, wellness and Nutrition Company in the World.

MISSION STATEMENT Dedicated to providing the best food to the people, throughout their day, throughout their lives, throughout the world PAGE 2

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PRODUCT HIERARCHY
In this step, you define product hierarchies which you can use for statistical analysis or pricing, for example, or you can change their structure. The product hierarchy groups materials by combining different characteristics. Each characteristic is represented by a specific product hierarchy

CLASSIFICATION NEED FAMILY PRODUCT FAMILY PRODUCT CLASS PRODUCT LINE PRODUCT TYPE ITEM

DETAILS **Good Food Good Life** Beverages, Dairy, Water, Sweets, Babyfood Wide Range Of World Class Products For Example: Dairy Product (Milkpak) (1) MILKPAK SMA LL 250 ML (2) NESVITA MEDIU LAR M GE 200ML 1LIT RE

MEDIU LAR SMA M GE LL 500ML 1Litr N.A e

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PRODUCT HIERARCHY

NESTLE

BOTTLED WATER

BEVERAG ES

BABY FOOD

MILK & DAIRY

CHOCOLATE & CONFECTION ARY

NESTLE PURE LIFE

NESCAFE MILO NESTLE FRUITA VITALS

BOTTLED WATER

MILKPAK NESVITA NIDO EVERYDAY NESTLE DAHI NESTLE FRUIT YOUGURT MILKPAK CREAM MILKPAK DESI GHEE

.KITKAT . POLO

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ENVIRONMENTAL ANALYSIS
PEST ANALYSIS

In analyzing the macro-environment, it is significant to discover the factors that might in turn affect a number of imperative variables that are likely to influence the organizations supply and demand levels and its costs (Kotter and Schlesinger, 1991; Johnson and Scholes, 1993). A number of checklists have been developed as ways of sorting the vast number of possible issues that might affect an industry. A PEST analysis is one of them that is merely a framework that categorizes environmental influences as political, economic, social and technological forces. The analysis examines the impact of each of these factors (and their interplay with each other) on the business. The results can then be used to take gain of opportunities and to make contingency plans for threats when preparing business and strategic plans. Kotler (1998) claims that PEST analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. PEST also ensures that companys performance is aligned positively with the powerful forces of change that are affecting business environment (Porter, 1985).PEST is useful when a company decides to enter its

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business operations into new markets and new countries. PEST analysis of Nestl MilkPak Pakistan has following points:

POLITICAL FACTORS:
The company policies are affected and its budget is also affected .Nestl paid 15% sales tax and 18% excise duty when they directly imported chiller from the other country but mostly they purchase chillers inside the country. Increased prices of electricity and petrol cause transportation and other cost heavily which results in the increased prices of processed milk. On the other hand, these days Government provides chillers to the Nestl MilkPak at interest free installment through UNDP and PDDP projects. This process reduces the pressure on milk industry and increase the productivity.

ECONOMICAL FACTORS:
Pakistan is blessed with good potential for dairy development, buffalo being the principal source of milk. But due to problems such as poor nutrition, mismanagement, failure to control disease, unavailability of veterinary and poor animal husbandry, only 5% milk is used for processing. Nestl MilkPak is playing an important role in the economic growth of Pakistan. They earn a lot of profit and also trust its profit in social welfare by making schools or helping with funds during earthquake in Azad Kashmir. Nestl Pakistan also helps educating the farmers how to get maximum quantity of milk from the animals by providing them sufficient food. Now a days, our economy is on recession due to this the prices of processing milk has been increased day by day.

SOCIAL FACTORS:

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People in Pakistan mostly prefer fresh and open milk & rely less on processed milk because they understand processing milk companies add chemicals and preservatives in milk during process. But Nestl MilkPak try to change this trend through heavy advertisement and awareness programs. Processing milk is mostly used in large cities or towns. Companies try to win large number of customers by providing them quality and value.

TECHNOLOGICAL FACTORS:
Nestl uses latest technology and high quality machinery in the production of milk or other products, it also fulfill the customers requirement. For example, Nestl recently opened Asias largest factory in Kabirwala. Nestl MilkPak now uses machinery that produced 1800 to 2000 tones milk daily.

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COMPETITIVE ANALYSIS
Competitive analysis of Nestle With Other Brands

The Main Competitors of Nestle MilkPak are

1.Olpers Milk 2.Haleeb Milk 3.Good Milk

SIZE IN M.LITERS

HALEEB

OLPERS

GOODMILK

NESTLE

1.0 0.5 0.25

68 36 18

70 38 20

68 38 20

70 38 20

COMPETITORS ADVANTAGES

We never compromise on quality and quantity Our extensive milk collection system ensures that the Milk you get is of the finest quality. Our products are available in every city and town

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Swot Analysis Of Nestle Pakistan

Strengths Strong brand image. Quality Product Solid financial position. Conduct more training programs. Try to collect fresh and clean milk. Make shops for farmers. Strong supply chain networks. Qualified workforce. Commitment to high quality

Focus on research and development Nestle has been serving the Pakistani consumers since 1988 & it has made a strong brand image due to its quality products. It is known for honesty, integrity, full compliance with all applicable laws, and fair dealing.One of the most important strengths of the Nestle is its strong culture. Every one give emphasis to its internal growth, have committed to achieve higher volumes with strong R&D by refurbishing existing

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brands and innovating new ones. Nestle MilkPak annual turnover is Rs.30 Billion which provides it a financial edge over its competitors. Weaknesses Does not give milk on credit. Spend less on advertising. High price. The target market of Nestle MilkPak is only the upper and middle class. As poor class cannot afford to buy UHT milk because of its premium price There are different companies of milk but the name of Nestle MilkPak always stand in the last in term of low advertising and marketing. Selective Investment: Selective investment due to uncertain economic and political conditions. Rivals: Relatively a new company in comparison to its rivals e.g. Lever Brothers Opportunities

Worlds 3th largest industry.

Introduce value- added products. Innovations in product development, packaging and presentation. Opportunities for investors to invest in Pakistan. Increasing employment for the people. Since manufacturing of some products is cheaper in ASIA as compared to other continents, Nestle Pakistan could become the export hub for the certain product categories. Now a days consumers have become health-conscious. Therefore it is an important opportunity for nestle to come up with variety of health-based products.
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Thirty percent of the countries are developed and 70% are developing and have higher GDP. Nestle must have to focus on them. Threats Low quality milk Poor profitability for farmers. Lack of contacts for farmers to market mechanism. Lack of education among the farmers. Difficult to meet future consumer demand.

Load shedding.

Three main competitors Haleeb, Olpers & Gourmet are the main threat for MilkPak especially the Olpers & Gourmet are growing very fast. Price fluctuations due to rupee devaluation as raw material are imported The uncertainty of economic conditions possesses a great threat, as the major funds invested in the country come from outside Pakistan.

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TARGET MARKET
TARGET MARKETING OF NESTLE: It is really a big market and it is always difficult to segment the big market. There are many uses for segmentation. Needs Based Segmentation Milk Pack has made different sizes of tetra packs which can match the needs of buyers, ranging from 0.25 liters to 1.5 liter. Buyers can buy according to there need between these quantities.

Product Segmentation

Manufacturers diversify products within each needs base to appeal to buyers with different tastes and wealth. Customer Segmentation Customers are segmented based on their needs and product preferences. Segments grow or shrink over time as a product improve, become outdated or tastes changes.

In-store Display Segmentation Nestle have also segmented Milk Pack on the bases of In- Store display segmentation. In this type of segmentation the company have given different PAGE 12

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shelves in bib stores and also given the chillers to some of the agent having the Milk Pack sticker upon them but in Pakistan unfortunately the shop keepers are not using the shelves properly and they have put other brand products on those shelves. Drug stores, grocery stores, book stores, and other retail outlets use segmentation in order to keep like products close to each other within the store, making shopping convenient and cross selling more profitable.

DISTRIBUTION STRATEGY

DISTRIBUTION CHANNELS Milkpak is not sold directly to consumers and the complete distribution process is followed.

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Distribution There are many authorized distributors of MilkPak. Company has its own network of vans, which deliver the milk to all the retail outlets early morning. The number of vans operational in different cities and rather then this 135 local vans are also used to supply the milk in pakistan. Intermediaries: MilkPak identifies the types of intermediaries available to carry on its channel works: Company are using 2 channels for distribution of MilkPak

Retail outlets (indirect channel) Sales promotion officers (direct channel)

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Retail Outlets (indirect channel) : There are many retail outlets in all over pakistan, which provide every day consumable items to the consumers.. 80 percent of the milks sales would be through indirect channels. Direct Sales Promotion Channel MilkPak is being distributed to institutions like government institutes, offices, teashops, caters, schools , colleges and marriage halls. This channel will constitute 10 percent of the total milks sales.

References:
As the data for Pakistan NESTLE market especially the MilkPak is skater on the cyber space so here are some web links from which data about the particular market we obtained.

www.nestle.com.pk www.wikipedia.com

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