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Nestlé Pakistan Limited, the Groups principal activities are to manufacture process and sell food products and ancillary equipment. The food products include diary, confectionery and culinary products, coffee and beverage and drinking water. The major brands include MILKPAK UHT, NESTLE EVERYDAY, LACTOGEN and NESCAFE. It operates in Sheikhupura, Kabariwala, Islamabad and Karachi. The Milkpak Sheikhupura factory had commenced operations in 1981 as a producer of UHT milk. By 1988, it had expanded its operation and was also producing butter, cream, ghee.
To target the large potential offered by the tea-creaming segment, Nestlé everyday tea-creamer was launched in 1992, supported by integrated marketing, focused distribution with sampling drives and excellent consumer acceptance, the brand has shown strong growth and holds great promise for the future.
Nestlé Pakistan is proud of its commitment to excellence in product and safety and quality and providing value and services to its consumers. On the social front it is very responsible when it comes to environmentally sound business practices and corporate social responsibility. Nestlé Pakistan operates in many ways but people products and brands are the main flag bearers of the company’s image.
Nestlé Milkpak Ltd. is the market leader in food and beverage industry. They are producing high quality well known brands. The core raw material of Nestlé Milkpak is milk. Over the last thirteen years the company prime concern has been to improve the quality and volume of milk for UHT processing and for other milk base products. So the company has twenty-five milk collection centres in Pakistan.
Nestlé Pakistan’s supply chain makes sure that Nestlé products are available, no matter wherever in Pakistan. Nestlé integrate processes from the farm to markets, and ensure products are delivered to consumers at the right time, the right cost and in the right quantities.
At the Village Milk Collection Centre the farmer’s milk is poured into aluminium churns. The agent checks the milk’s freshness and purity, and enters the quantity into the farmer’s logbook. He takes it to one of Nestlé’s 1308 Secondary Reception and Cooling Stations, about 2-4 kilometres away.
Along with correct cooling, pasteurization is one of the most important processes in the treatment of milk. Temperature and pasteurization time are very important factors which must be specified precisely in relation to the quality of the milk and its shelf life requirements. The pasteurization temperature for homogenized, HTST pasteurized, regular-grade milk is usually 72-75 °C for 15-20 seconds.
Nestlé is the world’s largest food and beverage company in terms of sales. Due to strong brand name product will gain a wide consumer acceptance from all over the Pakistan. The biggest strength would be the strong brand name, the risk in investing would be reasonable be very low. Nestlé will set a complete transparent manufacturing system for customer satisfaction in terms of hygiene. Nestlé strengthen their product by broad distribution network by increasing the capacity for innovation which will lead to an improvement in sale growth.
Nestlé will be organising a team which will inspect and observe the accumulation (stock) on daily bases to prevent any damages occurring and also in order to keep the inventory fresh. Nestlé will make sure that they are not having surprise shortage, weather it is winter or summer no matter what circumstances are. Further strength would be skilled labour, educated staff, large number of offerings and pre-purchase virtual display; arrangement of events, good background of the company, easy to approach outlets and physical evidence.
The main weakness of Nestlé product is the lack of an established good standing. The competitors have been around for decades and therefore have a loyal base. The second biggest weakness would be the lack of capital, establishing such an enormous and gigantic plant there will be a need of acquiring financial support in terms of loans from the bank. Spending millions in a strong brand is no guarantee to wealth. It may the safest way to get into the business, but it is not necessarily the cheapest. Further weakness would be small target market, lack of awareness among the target market and dependency on others like governments and sponsors for the arrangement of events.
The biggest opportunity would be considered geographically. Pakistan is situated in an area where have summers most of the time. People love as well as enjoy eating ice-cream in the season. Due to strong brand name in the market, Nestlé product has a great potential of earning profits. To make the product successful, the company will be utilizing the highest degree of technology in calculating customers’ satisfaction as well as their feedback. Gaining initial success the next step would be opening a parlour where people can enjoy all the flavour under one roof. Further opportunities would be increasing interest of people ad few and weak competitors.
Nestlé is facing the threats by worldwide community due to its violation of international marketing standards. Many conferences and campaigns have been held against Nestlé in this regard which can damage the name and trust of its customers. Another threat is due to the increasing popularity of its competitor OLPERS in local and international markets. Further threat would be the major player may enter target market, the legal and ethical issues, market segment growth could attract new entrants and economic slowdown can reduce demand.
Stage 3: Strategy Formulation
Milkpak will position Nestlé product as a high quality product consumer focused. Messages like “They knows your taste better than us”, “Nestle Milkpak now at your door step”; “Add additional flavours’ to your life” will help to portray Nestlé picture clearly and distinctly. Milkpak will position Nestlé product against the competitors and gain competitive advantage through the efficient promotional methods, using innovations, and by reaching closer to the target market through the arrangement of events like Basant, Valentine day and etc. In short consumers will view Nestlé as a product providing highly quality, in terms of taste, customer focused and, at the same time reasonably priced as compared to others.
3.0 Core Competency of Nestlé
To pose Nestlé product against the competitors, the company will be using differentiation strategy which will not only differentiate their own from others but also give an edge over others. Nestlé core products will be very beneficial especially in terms of quality, health, and hygiene and most important consumer satisfaction. Nestlé augmented products will include consumer satisfaction, warranty to retailers in terms of expire, delivery and after sales services.
The companies all over the world get some competitive edge based on some features which other companies don’t have. For example, as the Dell has the competitive edge over other computer manufacturer companies, because they use built-to-order Strategy while no other company in computer industry use this strategy. Similarly in Pakistan nestle has their competitive edge based on the strategies like product differentiation and customer oriented.
Nestlé is using the product differentiation strategy by providing the superior quality products. Their main focus is to keep the customers loyal. They bought shelve space in different departmental stores to attract the customers. They tried to reach each group of people in which they have succeeded. Besides, customer satisfaction is the focal point for the company. They provide hygienic products to their customers. Products are also verified by health and safety measures and international quality standards.
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