MARKETING MANAGEMENT ASSIGNMENT

MARKETING AUDIT REPORT

ON

NESTLE’s MILO

Made by:

RAHUL TANWAR

24-025

SECTION – A

INTRODUCTION

NESTLE’s relationship with India dates back to 1912, when it began trading as The NESTLÉ

Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished

products in the Indian market.

After India's independence in 1947, the economic policies of the Indian Government

emphasised the need for local production. NESTLÉ responded to India's aspirations by

forming a company in India and set up its first factory in 1961 at Moga, Punjab, where the

Government wanted NESTLÉ to develop the milk economy. Progress in Moga required the

introduction of NESTLÉ's Agricultural Services to educate advice and help the farmer in a

variety of aspects. From increasing the milk yield of their cows through improved dairy

farming methods, to irrigation, scientific crop management practices and helping with the

procurement of bank loans.

NESTLÉ set up milk collection centres that would not only ensure prompt collection and pay

fair prices, but also instil amongst the community, a confidence in the dairy business.

Progress involved the creation of prosperity on an on-going and sustainable basis that has

resulted in not just the transformation of Moga into a prosperous and vibrant milk district

today, but a thriving hub of industrial activity, as well.

NESTLÉ has been a partner in India's growth for over a century now and has built a very

special relationship of trust and commitment with the people of India. The Company's

activities in India have facilitated direct and indirect employment and provides livelihood to

about one million people including farmers, suppliers of packaging materials, services and

other goods.

The Company continuously focuses its efforts to better understand the changing lifestyles of

India and anticipate consumer needs in order to provide Taste, Nutrition, Health and

Wellness through its product offerings. The culture of innovation and renovation within the

Company and access to the NESTLÉ Group's proprietary technology/Brands expertise and

the extensive centralized Research and Development facilities gives it a distinct advantage in

these efforts. It helps the Company to create value that can be sustained over the long term by

offering consumers a wide variety of high quality, safe food products at affordable prices.

NESTLÉ India manufactures products of truly international quality under internationally

famous brand names such as NESCAFÉ, MAGGI, MILKYBAR, KIT KAT, BAR-ONE,

MILKMAID and NESTEA and in recent years the Company has also introduced products of

daily consumption and use such as NESTLÉ Milk, NESTLÉ SLIM Milk, NESTLÉ Dahi and

NESTLÉ Jeera Raita.

NESTLÉ India is a responsible organisation and facilitates initiatives that help to improve the

quality of life in the communities where it operates.

FUCTIONAL AUDIT

PRICE PLANNING:

Global pricing policies:

Apart from global coordination of prices on specific products and firms usually adopt one of

the three alternative pricing policies that cut across their product lines. These are:

Polycentric pricing

Geocentric pricing

Ethnocentric pricing

Nestle use geocentric pricing policy.

Nestle products price planning

Nestle dairy products are priced keeping in view the buying power of middle-income

and high-income social classes.

The cost includes the cost of manufacturing, labour, raw materials etc. The industry

sales growth is largely driven by population growth as well as the amount of

advertising and product innovation taking place in the industry. The company has

resorted to pricing discrimination strategies to maximize the value of consumer

demand.

Being a multinational brand, the pricing objective of Nestle is mainly to increase sales

as it has already penetrated the market. Their prices are not affected by price changes

by competitors, and they don't engage in price wars. Competition is met through

innovation. The prices of Nestle milk change as the product size is changed pf the

Product Life Cycle. And because of the contrast between the seller companies, they

offer same price. So there is no skim based or penetration based pricing by company.

The retail prices are different according to their size and brand. However prices have

been standardized throughout Pakistan and there is no differentiation based on

geographical areas. There is no change in prices according to season. It remains the

same.

They adopt same strategy in international marketing as in local marketing. But the

prices are according to the international currency.

PROMOTION PLANNING:

Promotion planning of Diary products:

The promotions of Nestle Dairy product are no doubt the best of all. Its intense advertising

has really captured the minds of all categories of people besides media advertising; the

company has signed several agreements with different sports in order to promote. For the

Advertising, the company has a policy that the commercial should best communicate its

message toward its target markets. The promotional planning of Nestle milk has taken the

emotions of youngsters quite successfully.

Promotion Objectives:

To project sales of Nestle Dairy Products

To create awareness among the masses about my new product of Nestle

To achieve brand loyalty

Selection of Promotion Media;

Selection of promotion media is done on the basis of whether the company wants:

Immediate sales uplift - Achieve through television and other forms of electronic

media

Gradual sales uplift

Promotion planning depends on marketing push or marketing pull strategy. Nestle milk is not

considered a seasonal product in Pakistan, so they do not need to promote very much.

Sponsoring Major and Rural Sport Region :

Another mode of promotion for nestle is sponsoring major and rural sport events. Milo a

brand from nestle always sponsors sporting events like badminton to bowling to the

Commonwealth Games. These kinds of promotion will always lead to the awareness of our

customers.

PACKAGING:

Since packaging is an integral part of product, nestle propose new packaging in this

marketing plan that is not only attractive and durable, but also functional too. Our innovative

packaging strive to ensure every product packaging guarantees freshness, safety, convenience

and whenever possible environmentally friendly too.

Since packaging is an integral part of our product, we propose new packaging in this

marketing plan that is not only attractive and durable, but also functional too. Our innovative

packaging strive to ensure every product packaging guarantees freshness, safety, convenience

and whenever possible environmentally friendly too.

Beyond homes, Nestle supplies its product to hotels, airlines, vending machines, quick-serve

restaurants, supermarket, and retailers.

DISTRIBUTION PLANNING:

They distribute their products nationally and internationally throughout the world.

Nestle are distributed using an indirect channel, that is, dealers. Nestle milk is sent to

warehouses after manufacture.

They use intensive distribution for marketing coverage. Because its goals are to have

wide market coverage, channel acceptance and high total sales and profits.

Distribution is made nationally and internationally through

Motor carriers

Waterways

Airways

Railroads, throughout the country in every city and village. It includes suppliers and

retailers

Supply chain:

There are various departments

Raw material department

Finished goods department

From the finished goods department the product goes to the warehouses.

Export Expansion Strategy :

There are two types of export expansion strategies

Water fall

Sprinkler

Nestle use waterfall strategy. It moves gradually to different countries.

ENVIRONMENTAL REPORT - Export Entry Mode:

JOINT VENTURES OF NESTLE

Shareholders

Nestlé has about 250 000 shareholders, none of whom individually own more than 3% of the

shares. As of December 31, 2003, Swiss investors held the major part of the stock (42%)

followed by US citizens (22%) and British (10%), French (8%), and German (5%)

shareholders.

Unfortunately, shareholder identities are not made public under Swiss law, but we do know

that Lillian de Bettencourt, heiress to the L’Oreal fortune and the richest woman in France,

has a holding in Nestlé. Nestlé and L’Oreal have a close relationship dating back to a

shareholder pact made in 1974. Nestlé holds a 26.4% stake in the world's largest cosmetics

group and has right of first refusal over the Bettencourt family's 27.5 percents take for 10

years, but with no obligation to buy. Whilst it is unlikely that Nestlé will take over L’Oreal in

the immediate future, it could well do so in a few years. It already has cosmeceutical joint

ventures with L'Oreal through Gal derma and Innéov.

EU clears Coke Nestle deal - Coke-Nestle joint venture

European Union regulators have cleared plans by US firm Coca-Cola and Swiss food giant

Nestle to expand an international joint venture focusing on iced teas and coffee. In a

statement, the European Commission said there were no competition concerns, as the new

operation would still face "strong competition brands" such as Unilever's Lipton. The new

enterprise, Beverage Partners Worldwide, will be based in Zurich, Switzerland. Expanding on

a previous arrangement created in 1991 for the manufacture and distribution of Nestlé’s

Nestea brand, the new venture will increase the number of countries in which it operates to

40, from an initial 24.Coke will add its Tuan Yu Di and Yang Guang teas and Planet Java

coffees to the venture, while Nestle will contribute Belte tea, which is sold in Italy. Analysts

say both companies are looking to capitalise on the growing worldwide appetite for iced teas

and coffees, which have shown better growth than soda in recent years.

Cereal Partners Worldwide

In November 1989, Nestlé S.A. and General Mills, the Minneapolis-based maker of

breakfast cereals, snacks and baking aids, formed a joint venture to produce and market

breakfast cereals worldwide, with the exception of the United States and Canada. Based in

Morges, Switzerland, CPW officially began operations in early 1991. General Mills’

expertise and technology, combined with Nestlé’s worldwide presence and marketing

experience, quickly led to a breakthrough in Europe, which was CPW’s first target market.

NESTLE: MILKPAK

The joint venture between Milkpak Ltd. And Nestle S.A. came about in 1988 and the

company was renamed as Nestle Milkpak Ltd. Prior to that, Milkpak Ltd., produced

UHTmilk, butter, cream, desi ghee and fruit drinks at Sheikhupura factory. 21 branded

product lines were added during 1990 to 1998. Nestle Milkpak operates the largest and an

extremely efficient milk collection system in the country, which enables it to collect the

highest quality milk for production of UHT and powder milks as well as other milk based

products. The company voluntarily provides extension services of farmers in the area of

animal husbandry and livestock breed improvement.

A Competitive Audit of Nestlé’s Milo

I plan to produce a SWOT analysis, PEST analysis and a Competitive Audit on Milo. This is

because I’m going to need to produce a good analysis on the market place, if I intend to

create the best marketing strategy. This is important because there are a range of options

available when creating a marketing strategy. Without these analytical processes I will not be

able to identify which strategy is appropriate.

I am going to produce a SWOT analysis to find out how effective Milo is operating and what

internal factors may influence its success. A SWOT analysis analyses the internal factors that

may influence the success of a business. The initials SWOT stand for:

Strengths

Weaknesses

Opportunities

Threats

Strengths and Weaknesses are internal factors within the control of the organisation.

Opportunities and Threats are outside the control of the organisation. For example, products

offered by competitors, or market forces such as seasonal fluctuations in demand. It enables

an organisation to plan future activities by considering a number of questions such as:

What are our Strengths? How can we build on them to ensure that we offer a better

product than our competitors?

What are our Weaknesses? How can we eliminate them?

What are our Opportunities? How are we going to use them to attract new customers

or increase the number of products that existing customers buy?

What are our Threats? How are we going to minimise them so that they do not affect

sales of our products?

Here are the advantages and disadvantages of using a SWOT analysis:

Advantages

Identified strengths (value for money)

Identified opportunities for marketing

Identified weaknesses (problems to be addressed)

Identified threats

Structure for analysis

Disadvantages

May contain biases (If based whole strategy on SWOT information without

considering validity of using other marketing tools could cause strategy to fail)

Results/Importance/Consequences need to be communicated to everyone in company

to make it successful not just more paperwork

Prone to Human error

Focus could become too diverse and loose main objectives

Here is a SWOT analysis on Milo:

Strengths

Only chocolate energy drink

Unique selling point

Big sales in other countries

Part of Nestle (reputation) funds available for prelaunch

Middle of paper ... ship and adverts in Australia

Advertising on TV, bill boards etc

Sponsorships for large sports events

Last sponsor was the Rugby World Cup

Buy one get on free

25% extra free etc

Boosts performance makes athletes go 25% longer

Advertisements on T.V, internet websites, bill boards, magazines, etc.

CONCLUSION:

To conclude all three process (SWOT, PEST and Competitive Audit) have affected my

strategy and marketing decisions. The SWOT analysis has help me to acknowledge and

comprehend my weaknesses, which will be a benefit because now I know my weaknesses all

I need now is search for a way to eliminate them. The PEST analysis has drawn my

awareness to the external forces that may have an influence on the product (Milo).

Therefore, when making marketing decisions the factors found will be taking into

consideration. The competitive Audit has showed me where Milo’s competitors are (what

level they are on) which is also a benefit because I can see what I’m up against, what I have

to do to get ahead and whether I’m disadvantaged in anyway. This is very important in the

competitive environment because as a competitor, you cannot allow rivals to gain advantages

in any form or way.

Suggestions and recommendations:

As Nestle is the best company all over the world but there is some recommendations

and suggestions;.

Their prices are little bit higher so they should low their prices to increase their

customers.

About 70 % people use their products why the rest don’t use them they should

conduct survey and concentrate on those facts why they are not using their products.

They should also improve their advertising. Their advertising doesn’t pay long-term

effect in the mind of customers.

About 17% people are not satisfied from the taste of Nestle so nestle has to improve

its taste.

Due to a great demand of nestle Milkpak now a days there is a shortage of nestle milk

in shops sometimes they have to consider this aspect too.

REFERENCE:

https://www.nestle.in/aboutus/allaboutnestl%C3%A9