Marketing Rep

8/2/2019 Marketing Rep

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ASSIGNMENT

ON

MARKETING PLAN

Prepared by:


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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 liters in the

country; But the Processed milk is only 4% of the total production.

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 milkproduction 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.

According to Pakistan Dairy 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.

Nestle is the world largest food company and nestle Pure milk is Nestls famous UHT milk

brand. Nestle Pure milk has south Asias biggest Plant at Kabirwala. It is targeting upper and

middle class. It is differentiating its brand by adding Iron and Vitamin C.


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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.

History Of Nestle

Ourstory 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 Nestleand 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.


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Company Vision

Vision of Nestle Pure Milk 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.

Company 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.

Products

Bottled water

Baby food

Dairy products

Breakfast cereals

Nutrition

Prepared food


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NestlePure milk

Dhood ki Qudrati Ghizayat Pure, nutritious goodness of Milk

Pure, rich and delicious Nestle Pure milk standardized (UHT) benefits from

Nestles expertise in bringing you the best life has to offer and benefits from 140

years of consumers trust.

Encourage your family to exercise regularly, eat a healthy, well balanced diet

and drink pure, nutritious Milk for good health.

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.

A 250ml Nestle Pure milk Glass consist of followings:

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).

The contents of the above said products have the following fruitful benefits for health

improvement 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


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Competitors

The main competitors of Nestle pure Milk are:

Haleeb Milk

Olpers milk

Good Milk

Dairy Queen Milk

Demographics of Pakistan

Pakistan is a small country with limited resources. But the population of Pakistanis 180,000,000. Pakistan has 6

th number in population in the world.

Population and Growth

,000 population (2007 EST.)

-1.24 migrant(s)/1,000 populations (2007 est.)

Age Structure

-14 years: 40% (male 33,293,428; female 31,434,314)

-64 years: 56.9% (male 48,214,298; female 46,062,933)

-64 years: 1.05 male(s)/female


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ale(s)/female (2007 EST.)

Literacy:

Definition: Over the age of 15 and can read and write.

Population of Major Cities of Pakistan

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

Pakistan Milk Market/Industrial Analysis


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of livelihood for 66 percent of the countrys population living in rural areas.

Growth in the agriculture sector registered a sharp recovery in 2006-07 and grew by5%.

Pakistan is the 5th largest milk producing country in the world.An estimated 33.25 billion liters of annual milk is produced.Approximately 50 million animals managed by 8 million farming households.Contribution of the livestock sector to Pakistans GDP is at 11% while the processedmilk sector contributes about 0.43 per cent.

The milk economy represents 27.7%2 of the total value of the agriculture sector.

Total Target Market Of Milk 180000000

Annual Production Of Milk

(Billion Liters) 33.25

Total market of Gawala (96%) Billion

liters 31.92Total EXISTING market of processed

milk (4%) Billion Liters 1.33

Need Analysis (UHT and Loose Milk)

Predicted Supply of Fresh and UHT Milk

Year

Supply of fresh milk

(Million liters)

Supply of UHTmilk

(Million liters)

2007-08 33805.10 557.72

2008-09 35495.25 648.43


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Projections of Fresh Milk Production and Consumption Up to 200809

YearsAnnual Production

(million liters)

Annual

Consumption

(million liters)

2008-09 35495.25 36361.25

2009-10 37669.75 38188.92

About 1.02 billion liters milk is imported.

Projections of UHT Milk Production and Consumption up to 200809

Year

Annual Production

(million liters)

Annual Consumption

(million liters)

2008-09 648.43 353.71

2009-10 753.89 372.05

Industry SWOT Analysis

Strenghts:

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.


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Weaknesses:

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 farmand 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 asVeterinarians.

Despite the huge volume of milk produced in Pakistan, processors find ithard 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 inmid-June.

The demand increases 60% during June compared to December when themilk supply is ample.

Opportunities:

There is an opportunity for companies to introduce value-added productslikeshrikhand, ice creams,paneer, khoya, flavored milk, dairy sweets, etc.

There is a phenomenal scope for innovations in product development,packaging and presentation.

Threats:

Very low quality milk is provided by the milkmen to dairy farms which is avery big threat for the entire market.

The shortage of milk providing animals is also a threat for entire milkindustry.

The study of this SWOT analysis shows that the strengths and opportunities faroutweigh 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).


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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, convertproducts 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.

Market Segmentaion of Nestle Pure Milk

Geographic Segmentation:

Pure milk has segmented the market on the basis of Geographic segmentation and its

target market is major populated cities of Pakistan

Demographic Segmentation:

Nestle Pure milk 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

Urabn areas of the countryUpper and Middle income class

Situation Analysis

Awareness:

Due to strong brand positioning and effective advertising,Pure milk has highest awareness

level.

Brand Awareness (%)

Pure milk 43Haleeb 38

Olpers 9

Dairy Queen 7

Good Milk 2

Nurpur 1


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Market Share (%)

Good Milk 1

Pure milk 45

Dairy Queen 9

Haleeb 22

Olpers 17

Nur Pur 4

Others 2

The table shows thatPure milk has the highest market share due to its consistent quality.

Market Trends

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

Market Potential

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.


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SWOT Analysis (NestlePure milk )

Strengths:

Strong Brand image: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 Pure milk is known as the best UHT milk in Pakistan due to consistency in quality.

Solid Financial position:NestlePure milk annual turnover is Rs.30 Billion which provides it a financial edge overits competitors.

Strong supply chain network:

Nestle collects Milk directly form the farmers instead of relying on the contractors. And itdistribution is also very strong. In this way it has a complete control over its supply chain.

Qualified work force

Commitment to High Quality Products

Focus on research and development

Weaknesses:

The target market of Nestle Pure milk 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 Pure milk.

Opportunities:

Estimations of UHT Milk Production and Consumption up to 200809

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.


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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 Pure milk has the

opportunity to capture a large share of market.

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.

Marketing Mix

Product:

Quality Product

Nestle Pure milk has the largest market share due to its consistent quality. Product Style and logo

Nestle Pure milk is available in different product range and stylish packaging.

Product Lifecycle

Nestle Pure milk has been in the market for a very ling time and it is at maturity stage.

Price:

Competition Based Pricing

Pure milk is holding a large share in the market due to its quality at same price as

compared to competitors.


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Placement:

Distribution Channels:

Pure milk is not sold directly to consumers and the complete distribution process is

followed. It uses indirect channels for distribution like:

ManufacturerDistributorWholesalerRetailerConsumer

Promotion:

Focusing on health conscious people in their advertisement.

Marketing Rep

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