• EXECUTIVE SUMMARY

Nestle is a well known company all over the world. It fulfills the needs

of every age group. The famous products of Nestle are Chocolates, Cosmetics,

Milk Powder etc. Nestle make joint venture with Milkpak and serves the

consumers under the brand name of Milkpak Nestle. The head office of

Nestle is at Switzerland. Nestle is the market share leader in almost all of

their products.

Nido is the market leader in Pakistan. The main competitors in the

international market of Nido are Millac and Dano. There is no local market

competitor of Nido. Nido has the excellent brand image in the minds of the

people. Nido is in the growth stage of their product life cycle. The price of the

Nido is according to its perceived quality. Nido have superb promotion mix

system. This report helps the readers to understand the marketing strategies

of Nido.

PAGE # 1
 • ACKNOWLEDGEMENT
As the requirement of our course “Strategic Management of Marketing” we

have conducted this research to study the marketing strategies of NIDO.

We are greatly indebted to our resource person “Mr. Shahzad Alam” whose help

and guidance enabled us to muster our courage and findings in a presentable

manner. His comprehensive teaching style also enabled us to understand the subject

of Marketing. Topics discuss with him would always remain in our minds.

We profoundly acknowledge the assistance, help and patience of Product

Manager of MILKPAK NESTLE. As he with his vast knowledge and experience

helped us to come up with a better understanding of assignment. We also thankful

to him for giving us extra time.

PAGE # 2
 • INTRODUCTION OF THE

COMPANY NESTLE

NESTLE INTERNATIONAL
Nestle is the name which is very respectable among international and

multinational firm. NESTLE was born in the green plains and blue streams

of SWITZERLAND and has its head office in VEVY. SWITZERLAND and

its first product was Chocolate. The company has a 126 years old history and

had dominated in almost all segments of market included food, nutrition’s,

milk, sweets, chocolates, cosmetics and many other products. In simple words

they have a product for every one.

BRANCHES

It has its factories in more than 70 countries and market .Its

product in more than 125 countries and the sales of the Nestle is among

the top ten companies of the world.

NESTLE IN PAKISTAN

Nestle international also wanted to expand its business in South

East Asia. For this motive in mind the first signed a venture with Indian

Company and than turned its attention towards Pakistan.

VENTURE WITH MILKPAK

PAGE # 3
 Milkpak is a company of Wazir Ali Group and is known for producing

finest quality products like Milkpak Dairy products e.g. Milkpak Milk,

Butter, Desi ghee, Cream etc. and also a market share leader in juices e.g.

Frost. Seeing the

reputation of Milkpak in Pakistan, Nestle signed a venture in 1987 and from

than the company is serving consumers with the name Milkpak Nestle.

BOARD O F DIRECTORS
Syed Yawar Ali (Chairman)

Mr. Josef M. Muelier (Managing Director)

M. Hanif Rajput COMPANY SECRETARY

A UDITOR S

A. F. Ferguson & Co.

(Chartered Accountant)

• COMPETITORS

PAGE # 4
 • LOCAL MARKET COMPETITORS
NIDO has no local market competitors as there is no good powdered milk

locally produced available in the market and NESTLE MILKPAK is the only

firm producing good quality powdered milk. Secondly NESTLE is the only

firm producing powdered milk and is market share leader in all respects.

INTERNATIONAL COMPETITORS
At the time when NESTLE introduced NIDO in the Pakistan market it was

facing a intense competition with the following brands:

 MILLAC

 RED COW

 SAFETY

 DANO

 KLIM

Major competitors among these were Millac and Dano at that time but span

of time NIDO with its quality overcomes them and become a market share

leader.

SOME PRODUCTS OF NESTLE

PAGE # 5
1)Creamy milk chocolate. 2 )Milk Sugar Free

3)Flavour Packets 4)Coffee Mate

5)Nutren Renal(250ml can) 6)Pure life water

7)Cerelac 8)Tiger Milk bar

PAGE # 6
 • INTRODUCTION OF THE PRODUCT

DEFINITION
Product is a set of tangible and intangible attributes including

packaging , color , price, manufacturer’s prestige , retailer’s prestige and

manufacturer’s and retailer’s services.

INTRODUCTION
Nido is not a new product in Pakistan. It was available in imported tin

packs from 1974, than the demand for Nido increased day by day and in 1989

the plant with the collaboration of Milkpak started working and the locally

prepared product is introduced in the market.

DESCRIPTION OF THE PRODUCT

It is full cream powdered milk having 23% fats content in powder form

and 3.5% in liquid form which qualifies it as a full cream milk powder. It is

enriched with vitamin A & B.

PAGE # 7
 INGRIDIENTS

NUTRITION INFORMATION
AVERAGE COMPOSITION PER 100 Gms PER SERVING

Energy 2115 kJ 164 kcal

Protein 25.7 gms 8.3 gms

Lactose 37.4 gms 12.2 gms

Butter Fat 28 gms 9.1 gms

Lecithin 0.2 gms 0.06 gms

Minerals 5.7 gms 1.8 gms

Water (max) 3 gms --------

MAJOR VITAMIN AND MINERALS

AVERAGE COMPOSITION PER 100 Gms PER SERVING

Vitamin A 1500 I.U 488 I.U

Vitamin D3 322 I.U 105 I.U

Vitamin B2 1.4 Mqs 0.5 Mqs

Vitamin B12 1.8 Mcq 0.6 Mcq

PAGE # 8
Calcium 930 Mq 302 Mq

Phosphorus 750 Mq 244 Mq

OLD SIZE
When Nido was introduced in Pakistan the following sizes were

available in the market:

200 gms _________________________________ Rs. 26.00

400 gms _________________________________ Rs. 49.00

1600 gms _________________________________ Rs. 210.00

DEMAND FOR NEW SIZES

Due to the increased demand and consumption of Nido,

consumers are requesting for bigger packs of Nido. Milkpak Nestle fulfilling

their needs and introduced the following new sizes.

SIZE R.PRICE

T.PRICE.

20 gms Rs.16.00 Rs.14.56

400 gms Rs.115.00 Rs.104.65

1 Kg Rs.250.00 Rs.227.50

PAGE # 9
FUNCTIONS OF THE PRODUCT
Nido being full cream powder milk is a best substitute

for the fresh milk and can perform all the functions of the fresh milk. As the

fresh milk cannot be preserved for long and spilt milk is useless so the trend

is switching towards milk powder which is hygienic and can be preserved for

a long period.

Its functions are as follows:

1. It can be used for making yogurt

2. It can be used for making desserts e.g. Kheer, Raberri, Firney, Rasmalai,

Khoia etc.

3. It can be used as milk in tea and coffee.

4. It is instant milk.

BRANDING
A brand is a name, term, symbol and / or special design that is

intended to identify the goods or services of one seller or a group of sellers. A

brand differentiates one seller’s products from those of competitors.

The brand name of the product is Nido. It itself does not mean

anything. The product has also its own grand mark. Its brand name and

brand mark are legally protected. The product is marketing under the

manufacture brand name.

The brand name Nido is easy to spell, pronounce and

remember and thus has positive effect upon the marketing of the product.

PAGE # 10
PACKAGING
It can be defined as all the activities of designing and producing the

container or wrapper for a product. Packaging of Nido is attractive and good

to look. At the same time, there are three reasons for packaging:

 Packaging serves several safety and utilitarian purposes.

 Packaging helps identify and differentiate it from other

product. At the time of purchase the package can serve as silent

sales persons.

 Packaging may increase profit and sales volume.

• PRICE
They all are full cream milk powdered and with the arrival of NIDO

they start facing out and NIDO took there place and became market share

leader although NIDO has higher price then all other milk powders.

NIDO meets the market competition through following means:

1. People have well known loyalty and confidence in MILKPAK and

NESTLE. Therefore, NIDO enjoys this market benefit as being a subsidiary

of Wazir Ali Group.

2. It competes on the consumer limited buying power.

3. Being a quality product consumers buy it instead of other powdered

milk.4.The company has better distribution system so it is available easily in

the market.

PAGE # 11
 5. NIDO is offered in three different sizes to meet local competitive

trends.NIDO also competes for the convenience of the consumers. NIDO is

available in threesizes,20 gms, 400 gms and 1 kg.

(Nido Milk)

• PRICING

• MEANING OF PRICING
Price is the value placed on goods and services. Price is the

amount of money and /or goods needed to acquire some combination of

an other and its accompanying services.

IMPORTANCE OF PRICING
Price is considered to be the key activities within the free enter price

system. A products price influences wages, rent, interest and profit. That is

the price of the product influence the price paid for the factors of production.

Nido’s price is a major determinant of its market demand. Its price

represents the firms competitive position and its market share. Its price has a

considerable bearing on the Nestlé’s revenue and net profit because it is only

through price that money comes into an organization.

PAGE # 12
RELATIONSHIP TO PRODUCT QUALITY
Consumers rely heavily on price as indicators of a products quality

especially when they must make purchase decision. The higher price of Nido

is a perception for it to be the better quality.

PRICING OBJECTIVES
The objectives of Nestle for pricing Nido are as follows:

1. Maximum Profit Oriented

• To achieve a target return.

• To maximize profit.

2. Status quo-oriented:

• To stabilize prices.

• To meet competition.

3. Market share Leadership

4. Product Quality Leadership

TO ACHIEVE A TARGET RETURN

Target return pricing is typically used by industry leaders because

they can set their pricing goals more independently of competition that can

other firms in the industry. Nestle has priced Nido to achieve a certain

PAGE # 13
percentage return on its sales. Nestle has settled the price of Nido so that it

can earns a net profit of 15% on its net sales.

TO MAXIMIZE PROFIT
According to the economic theory or business practices there is

nothing wrong with profit maximization because a profit maximization goal

for Nestle is far more beneficial to it and also to the public if it is practiced

over the long run. To do this Nestle sometimes had to accept short run losses.

STATUS QUO-GOALS
The primary intention of Nestle is to adopt these goals to avoid any

form of price competition. Major reason for seeking the price stability is to

avoid price wars. This pricing policy gives the Nestle management an easy

means of avoiding difficult pricing decisions

DEMAND SCHEDULE
Different prices for Nido will produce different level of demand. The

relation between the price and resulting demand is captured in a demand

schedule. Nido has a normal demand schedule in which price varies as

inversely to demand.

PAGE # 14
SELECTING A PRICING METHOD
Nestle has adopted a cost plus pricing method for Nido. In which a

certain markup is added to the cost of the product. Nestle follow the popular

markup pricing on cost. Nestle charge a 15 % profit on the total cost of Nido.

Markup = Total Cost * Desired Rate

Total Cost = Cost price + Packaging price + Transportation Cost +

Proportional Funds + Government Taxes + All Middlemen’s Profit

Desired Rate for Nido = 15 %

Selling Price = Total Cost + Markup

Company has cut down the total cost of Nido by cutting down the

packing cost of Nido as in imported Nido tin is used which is expensive but in

locally manufactured Nido soft packing i.e. packing Nido into a sachet

packing and then into soft pack.

FINAL PRICE
This is the price of Nido which is in agreement with different people

such as government, customers, distributors, dealers and Nestlé’s sales

department.

The final price for Nido is Rs. 130 per 1000 gms. This price satisfies the

quality and standards of Nido.

PAGE # 15
 PRICE ADJUSTEMENT STRATEGIES

GEOGRAPHICAL PRICING
Nido has a vast geographical market. In order to cover the long distances

and transportation it has to adjust its price. Therefore, it adjusts its price

through uniform delivered pricing strategy. In this strategy average

transportation costs are measured and a uniform cost is charged from all the

customers to cover the average transportation cost. So in this strategy all the

customers of Nido will pay the same cost irrespective of their location.

• PLACING
NIDO has no individual distribution system. It is pushed

with other company’s product line. Company has appointed its distribution

offices in all major cities of Pakistan.

REGIONAL SALES OFFICES

 KARACHI

1. Lackson square building No. 1 5th floor , Block - C , R.A. Lines.

2. Sarwar Shaheed Road Karachi Cantt. Pakistan.

Phone: 5689815, 5689217.

Fax : (021) 522775

 MULTAN

PAGE # 16
 Near Al-Shifa Poly Clinic, Chungi No. 1 Multan, Pakistan.

Phone: 515061

 LAHORE

40 - A Zafar Ali Road, Gulberg V, Lahore II.

Phone : 5870887

 ISLAMABAD

74 - W Yasin Plaza 1st Floor Blue Area, Islamabad, Pakistan.

Phone: 211874 - 75, 819686 – 87, Fax : (051) 855608.

 PESHAWAR

2nd Floor State Life Building, the Mall Peshawar Cantt.

Phone: 276274, 274954

Fax : (0521) 276274

In case of NIDO the company is using indirect distribution channel

e.g. Wholesalers are agents of the company and they take commission to sell

NIDO to retailers and then retailers sell it to ultimate consumers.

Company has appointed sales officer to monitor the performance of the

agents. Every sales officer visits an average of 50 shops a day. In a territory

assigned by company he checks that product is available at every shop,

Improve the displays and check the stock position. The Sales officer prepare a

daily sales report and also at the end of the month and submit it to the Head

office in Lahore. These Sales officers are guided by a Regional Sales Manager

who is a manager of Regional Sales Office. List of regional sales offices is

PAGE # 17
given above. There are four distributors in Lahore and four Sales Officers

are assigned to each distribution to monitor the performance of the

distributor.

INDIRECT DISTRIBUTION CHANNEL

Manufacturer _______ Wholesaler ______ Retailer _____ Consumer

• FUNCTIONS OF DISTRIBUTION

CHANNELS
The company’s distribution channel provides the following functions

1. Time Utility

2. Place Utility

3. Gathers and Provides information about the changes, development in the

marketing environment.

4. Tries to find and communicate with the prospective buyers.

5. Distribution helps in promotion.

6. Helps in negotiation.

7. Helps in transporting and storing goods.

INTENSITY OF DISTRIBUTION

PAGE # 18
 They are of three types:

1. Intensive distribution

2. Selective distribution

3. Exclusive distribution

MILKPAK NESTLE is using all three types of distribution to market

NIDO. In the big cities where emphasis is on intensive distribution, selective

in sub-urban areas and exclusive distribution in rural areas.

MILKPAK NESTLE is using all three types of distribution to market NIDO.

In the big cities where emphasis is on intensive distribution, selective in sub-

urban areas and exclusive distribution in rural areas.

• PROMOTION

PAGE # 19
 Promotion is the element in an organization marketing mix that

serves to inform persuade and remind the market of the organizations and /

or its products.

Promotion is the most important factor in the marketing mix.

PROMOTIONAL MIX
The promotional mix is the combination of the personal selling,

advertising, sales promotion, publicity and public relations that helps an

organization to achieve its marketing objectives.

1. ADVERTISEMENT
Advertisement is an essential part of moderate ad so much that it

is not possible for an entrepreneur to even imagine a world without

advertising. The advertisement page of a news papers, magazines etc. is like a

modern novel which gives a “slice from life”.

For this purpose NESTLE is going heavy advertisement on TV, Newspapers,

Magazines, Posters, and advertisements boards.

2. SALES PROMOTION
It is designed to supplement advertising and coordinate personal

selling, Short term incentives are given to encourage quick sales e.g.

Discounts, Rebates, Samples, Coupons, gift schemes etc. Promotion is a

critical ingredient of many marketing strategies. Peoples have general

PAGE # 20
appreciation about milk powder so that’s why MILKPAK NESTLE is doing

sampling of its products.

However, when company finds some break in sales, advertisement is

started and some ads are placed on TV but this is not done on permanent

basis. Company is satisfied from its promotional programs because it is

getting results to its wishes, but now in the near future company has many

ambition plans about the promotion of NIDO.

PROMOTIONAL BUDGET
Promotional budget is totally based on the budget available for

promotion of the products. MILKPAK NESTLE spends 20 % of the budget

to promote NIDO.

WORDS BY FINACE MANAGER

By the grace of ALLAH, the profitability of the product has shown a

healthy increase. The market share has improved because of the efficient staff

of MILKPAK.

WORDS BY JOSEF M.MUELLER (Managing Director)

1993 was of to a good start and we are confident that our company
will continue to progress in all vital areas of our activities.

EVALUATION OF THE PRODUCT

PAGE # 21
 NESTLE is an innovative firm it keeps on bringing changes in NIDO

according to the changing trends. When NIDO was introduced it was a milk

powder which could be dissolved only in hot water, now NIDO is an instant

milk powder which can be easily dissolved in Luke warm water.

Locally manufactured NIDO has a different taste from the imported

NIDO, as locally manufactured is prepared by buffaloes milk while the

imported one is prepared by cows milk, so local NIDO is less expensive and

has a great demand than the imported one.

NIDO
NIDO is full cream powdered milk and is first instant milk in Pakistan

due to its taste and quality people are switching towards it. It has 28 % fats

and 3.5 % in liquid form.

BRAND
The brand name NIDO is easy to spell, pronounce and remember and

thus has positive effect upon the marketing of the product.

PACKAGIN

PAGE # 22
 NIDO has a beautiful packaging in the contrast of yellow, red and

green. Thus packaging is good for selective attention of consumers and it

really works as a silent sales person and has helped in increasing sales of

NIDO.

DISTRIBUTION
MILKPAK NESTLE has a good distribution plan for NIDO. It is

pushed with other product line of MILKPAK NESTLE. There is an

Intensive distribution in the cities, selective in the sub-urban areas and

exclusive in rural areas.

PROMOTION
The company is really trying to increase its promotional programs

regarding NIDO. As they target NIDO on children so they promote NIDO

among children by giving gift schemes, e.g. story books, geometry box, color

pencils etc.

PAGE # 23
 • CONCLUSION
MILKPAK NESTLE has started well and look forward to

a future of testing challenges and rewards. NIDO is going well and will

do on increasing its sales and will add to the reputation of the company.

The potential for growth of NIDO is bright but not immediate. The

companies profitability in the near future is really dependent on NIDO.

The company has good hopes with NIDO and it is coming up to its

expectations.

REFRENCE:

OMER NAZIR (Area Sales Manager)

29-B, Main Gulberg Lahore-Pakistan.

(Nestle Pakistan Ltd)

Phone # 0300-4349374,0425117033.

PAGE # 24