Executive Summary: The report has been prepared as a mandatory requirement of our course MKT-101(Principle of marketing). It is the summarized outcome of what we have learned till now in the sectors Principle of Marketing. Executive summary presents a clear vision of the report with different titles. After we identify an existing company, which is Nestle, Bangladesh. In our report we mainly deal with the new product line and deigned the packaging and leveling of the fruit juice. This report will help us to determine the in-depth information and stand out position in the market.
We sum this philosophy up in four simple words – Good Food, Good Life – reflecting in everything we do and extending beyond what we make. On our path to being the leading food, nutrition, health and wellness company, we will continue to ensure that we do everything we can to build, nurture and develop family and community wherever we are. Today Nestle is the world’s largest food and Beverage Company with more than 250,000 employees and over 500 factories in 86 countries around the world. Our products have been available in Bangladesh. The Nestle Company has not introduced any fruit juice.
So it has decided to introduce new product line of fruit juice, which will be healthy, nutritious and delicious compare to other fruit juices in our country. To introduce a new fruit juice in the market Nestle decided to do a good product line, high skimming price, attractive packaging and labeling to attract the consumers in a large scale. 2. Current Marketing Situation: The current market situation of nestle is given below: |Sales by Management Responsibilities and Geographic Area | | |Jan. March |Jan. -March |Real internal growth |Organic growth | | |2006 |2005 |Jan. –March 2006 |Jan. –March 2006 | | |in CHF millions |% |% | |Zone Europe | 6 217 | 5 978 |+1. 0 |+2. 8 | |Zone Americas | 7 235 | 5 989 |+3. |+6. 6 | |Zone Asia, Oceania and Africa | 3 642 | 3 149 |+6. 2 |+8. 3 | |Nestle Waters | 2 116 | 1 811 |+11. 9 |+10. 5 | |Nutrition | 1 349 | 1 188 |+1. 8 |+5. 2 | |Other food and beverages* | 627 | 499 |+16. 4 |+20. | |Total food and beverages |21 186 |18 614 |+4. 4 |+6. 4 | |Pharma | 1 609 | 1 357 |+10. 6 |+10. 5 | |Total |22 795 |19 971 |+4. 8 |+6. 7 | All calculations based on non-rounded figures. 2005 figures restated for discontinued business and for separate Nutrition activity. *) Mainly Nespresso and joint ventures managed on a worldwide basis. Nestle’s Other Food and Beverage activities, the various globally managed businesses, Nespresso, Cereal Partners Worldwide and Beverage Partners Worldwide, achieved an outstanding organic growth of 20. 3%. |Sales by Product Group | | |Jan. -March |Jan. -March |Real internal growth |Organic growth | | |2006 |2005 |Jan. March 2006 |Jan. –March 2006 | | |in CHF millions |% |% | |Beverages | 5 874 | 5 080 |+7. 9 |+9. 7 | |Milk/Nutrition/Ice Cream | 5 585 | 4 802 |+3. 0 |+5. 8 | |Prepared Dishes and Cooking Aids | 4 280 | 3 896 |+3. 3 |+5. | |Chocolate/Confectionery | 2 659 | 2 399 |+0. 5 |+1. 9 | |PetCare | 2 788 | 2 437 |+5. 3 |+6. 8 | |Pharma | 1 609 | 1 357 |+10. 6 |+10. 5 | |Total |22 795 |19 971 |+4. 8 |+6. 7 |
All calculations based on non-rounded figures. 2005 figures restated for discontinued business. a. Market Description: Juice Consumption of Nestle By Age 2006 |Age |No. of packs per day | |03 – 10 |4. 2 | |11 – 15 |2. 8 | |15+ |1. 3 | These figures show that although juice is a growing market with continued expansion forecast, the growth is focused in the fresh juice sub sector of specialty beverage, consumed primarily away from the home and primarily by children.
Therefore the children, specialty juice segment will be important for any prospective corporations that are targeted for Nestle strategic alliances. b. Product Review: Nestle is going to introduce new fruit juice. Initially its product line will contain Mango Juice, Lichi Juice, Jackfruit Juice, Guava Juice, Pineapple Juice, Orange Juice and Apple Juice. At first Nestle wants to introduce 250 ml packet, 500 ml and 1000 ml plastic bottle of Juice. 250 ml plastic |Price |500 ml plastic bottle |Price |1000 ml plastic bottle|Price | |bottle | | | | | | |Mango |15 |Mango |30 |Mango |55 | |Lichi |15 |Lichi |30 |Jackfruit |55 | |Guava |15 |Jackfruit |30 |Orange |55 | |Orange |15 |Orange |30 |Apple |55 | | | |Apple |30 | | | c. Competitive Review: Competitive Environmental Analysis: Intensity of Competitor Rivalry |Risk of Potential Entrants | |Targeting an under serviced sector of the market |Largest food company in the world secured as a strategic partner | |Resistance from established competitors |IP protection | |Unique combination of products catering to niche corporate needs | | |Not price competitive in corporate juice segment | | |Low Risk | | | | | | |Low Risk | |Supplier Bargaining Power Power of Buyers | |Extensive industry networks via key board member |Existing relationship with Nestle | |Less critical components are generic and can be outsourced |Large corporate buyers | |Multiple suppliers for each component and part | | |Expertise in-house to construct complex components | | |Low Risk | | | | | | | | | |Medium Risk | | |Threat of Substitute Products | | |No alternatives offering combination of features | | |Early mover | | |Low cost of production | | |Low-Medium Risk | In light of the current market trends favoring fresh juice consumed “out of home”, Nestle find themselves needing to skimming the higher margin market segments and satisfy Bangladeshi consumers’ growing taste for various types of juice. Nestle is currently spending a huge amount of money for spreading their new product. For our new fruit juice, we are considering Pran, Danish, Acme, Sezan and Arong as our main competitor. Some comparison of these companies with the Nestle is given below: Name of the company |Price of 250ml |Price of 500ml |Price of 1000ml | |Nestle |15 |30 |55 | |Pran |12 |- |- | |Danish |14 |28 |54 | |Acme |14 |28 |54 | |Sezan |14 |- |- | |Arong |14 |28 |54 | Market share of different company [pic] d. Distribution Review: Nestle Bd. ltd. is the one of the largest distribution network in Bangladesh. Hundreds of eager energetic and effective sales representatives are working supported by our dedicated sales and marketing division.
We are marketing many products namely Nescafe ,Ice cream ,Infant foods ,Chocolate, confectionery and baked goods, Frozen foods In addition to our vast sales and distribution network of dealers, we have several sales depots located at strategic points. We have mobilized adequate distributors to serve all parts of the regions; we are one of the largest distribution organizations in Bangladesh. This network makes possible the flow of goods from the producer through intermediaries to the buyer. Manufacturer Dealer Retailer or super shop Consumer Highlights of Nestle Distribution network: Network and operations |No. f towns under regular coverage | | |No. of distributors | | |No. of outlets under regular frequency | | |No. of sections [each consist of 50 outlets | | |No. of Sales Area | | |No. of Sales Territory | | 3. Strengths, Weaknesses, Opportunities and Threat Analysis a. Strengths: • Already existing food manufacturer company It has large and strong distribution channel. • It is renowned brand name in food manufacturer industry. • It has good reputation for making good, nutritious and healthy food items. • It has already good market share in Bangladesh. b. Weaknesses: • It has a high price comparing to other fruit juice company. • It does not have any distribution channel in the rural area. c. Opportunities: • It has an opportunity to launch new fruit juice flavor under this product line. • Nestle can introduce new product mix using this brand name. In future Nestle can introduce condensed juice for making cake, pitha etc. d. Threats: • There are a lot of competitors in the business of fruit juices. The investment cost is very high and which is very risky for the company. This is one the barrier for the new enterers in the economics of scale. • Product price fixed at an equilibrium point. 4. Marketing Objectives and Issues: • Establish a strong presence in the Bangladeshi market • Use the Nestle association as a conduit for entry into the Bangladeshi market provide guaranteed demand, nation wide distribution, and an opportunity to gauge market acceptance. • Utilize acquired market knowledge and presence to establish non-Nestle customers both through Nestle affiliations and through the efforts. • Establish significant high-margin sales. a. Sales Forecasts :
Based on the market research undertaken, strategies developed and existing customer relationships, the following sales forecasts are developed (in percentage): |Product Details |Year 1(%) |Year 2(%) |Year 3(%) |Year 4(%) |Year 5(%) | |Nestle | | | | | | |Juice |12 |24 |30 |33 |33 | |Non-Nestle | 88 | | | | | |Juice | |76 |70 |67 |67 | b. Sales Assumptions:
Assumptions underlying the development of the sales forecasts are as follows: Year 1 • 100% production is sold to Nestle in accordance with the amount specified in the contract. This is a cautious market strategy allowing us to gain market acceptance and increase market knowledge. • $120,000 will be spent on developing the relationship with Nestle, acquiring and training a sales force, producing brochures, and seeking out the key decision-makers in food and beverage organizations. Year 2 • Nestle contract continues with increased supply. • 24% units will be sold to new customers some of whom may be reached through Nestle affiliations and some as a result of our extensive marketing effort. $600,000 will be spent creating excitement for Juice, achieved through a strong trade show presence and developing trade show materials, a nation-wide personal selling campaign, and mailings of our direct marketing brochures. Year 3 • Nestle contract continues • $480,000 will be spent continuing the marketing effort commenced in Year 2. Years 4 ; 5 • Nestle contract continues • In Year 5 as the benefits of our technology are recognized in the growing market. • $480,000 will be spent in each year continuing the search for further customers and developing the relationships with current customers. 5. Marketing Strategy: The key to the marketing strategy is to identify individuals in food and catering organizations with decision-making authority to acquire juice appliances.
These individuals can be reached through personal selling, direct mailings, trade shows, and business calls. a. Product Strategy: Nestle’s juice offerings will be positioned as cost-effective, reliable, operational solutions to the current and future needs of the hectic pace of the retail juice industry. Nestle will be the pinnacle in current soluble juice technology, able to rival the most established roast and ground machines through their superior tasting juice and superior convenience, speed, consistent output, and reliability, supported by a committed training and maintenance force. This will enable food chains previously cautious of introducing espresso and cappuccino into their product lines to do so at reduced risk. b. Pricing Strategy: Nestle will high price skimming compare to other companies. • This pricing strategy will be high enough to convince customers that they are purchasing an effective high-quality product. Primary research indicates that the target market is not price sensitive. The sales price will return an estimated 39% gross margin on sales. • The juice price is the result of market research conducted by Nestle, the primary consumer. c. Distribution Strategy: • Product distribution will be facilitated by utilizing the distribution channels of the large corporations with whom we secure strategic alliances. Such corporations will typically have nation wide coverage. This strategy will ensure a presence in the market that increases awareness and builds demand. d. Promotional Strategy: Nestle juice entry into the Bangladeshi market will be supported by a campaign to establish its profile in the juice appliance industry. This will include the following: • Seek out the decision-makers in large juice corporations • Direct mail corporate material to the above • Undertake a campaign of personal selling, targeting decision-makers • Advertise in industry journals, on the Internet, and on our website • Attend/sponsor exhibitions and trade shows • Continual PR: press write-ups; personal interviews; testimonials; product trials e. Position: Position is very vital.
It assumes very high significance in the Identity – Image fit of the consumer since once a position has been taken it cannot be radically altered. The consumer relates all offerings to the position the brand occupies in his mind and that progressively forms the nucleus of the posterior brand belief. Already Nestle has a strong position in Bangladesh. People can trust it. So its juice offer will also easily capture the market. Nestle is a branded company. So it is easy to Nestle make a good position in market. f. Organization Structure Chart: The Organizational Structure charts appearing below show how the organization’s staffing needs change over the five years. |Year 1 Year 5 | |Board |Board | |CEO |CEO | |Admin Staff 3 |Admin Staff 12 | |Marketing Staff 2 |Marketing Staff 4 | |Production Staff 8 |Production Staff 30 | | |Finance Staff 8 | | |Sales Staff 8 | | |R and D Staff 4 | g. Marketing research:
Using research, we are identifying the specific features and benefits that our target market segments value. Feedback from market tests, surveys, focus group will help us develop the best juice. We are also measuring and analyzing customers’ attitudes toward competing brands and products. Brand awareness research will help us determine the effectiveness and efficiency of our message and media. Finally we use customer satisfaction to gauge market satisfaction. 6. Packaging and Labeling: a. Product Name: Nestle Orange Drinks Place of Origin: Bangladesh Specifications: 1) Brix: 65+/-1 2) Clarity: 95% (min. ) 3) pH: 3. 5 – 4. 5 4) T. A. : 6. 0% (min. ) 5) Amino nitrogen: 140mg/100g (min. ) 6) Turbidity: 3 (max. ) Packing:200ml plastic bottle inside b.
Product Name: Nestle Mango Drinks Place of Origin: Bangladesh Specifications: 1) Brix: 65+/-1 2) Clarity: 95% (min. ) 3) pH: 3. 5 – 4. 5 4) T. A. : 6. 0% (min. ) 5) Amino nitrogen: 140mg/100g (min. ) 6) Turbidity: 3 (max. ) Packing: 200ml plastic bottle inside c. Product Name: Nestle Lichi Drinks Place of Origin: Bangladesh Specifications: 1) Brix: 65+/-1 2) Clarity: 95% (min. ) 3) pH: 3. 5 – 4. 5 4) T. A. : 6. 0% (min. ) 5) Amino nitrogen: 140mg/100g (min. ) 6) Turbidity: 3 (max. ) Packing: 200ml plastic bottle inside d. Product Name: Nestle Pineapple Juice Place of Origin: Bangladesh Ingredients: 1) Concentrate Orange Juice 2) Sugar 3) Glucose ) Pectin 5) Citric Acid 6) Permitted Flavor & Preservative Packing:280ml glass inside 7. Action Plan a. January: Nestle will initiate a 150000 taka trade sales promotion campaign to generate excitement for the product launch in February. We will provide samples to the peoples. We will start a public relations strategy. b. February: We will start an integrated print or television campaign targeting consumers. The will show how nutritious is Nestle juice. We will try to prove Nestle juice is good for health. c. March: As the advertising campaign continuous we will also distribute new point of purchase displays to support our retailers. d. April:
We will hold a trade sales contest offering prizes for the sales person and retail organization that sells the most Nestle juice during the three week period. e. May: We will launch new advertising in television. Any renowned model or actors will our brand ambassador. The ads will show these celebrities holding the Nestle juice. f. June: We will analyze our customer satisfaction. In case of necessarily we will modify our juice. If our customer will satisfied we will continue our production strongly. We will be aware for future. 8. Budgets: Specific line budget items appear below: Organizational Expense Details |Qtr 1 |Qtr 2 |Qtr 3 |Qtr 4 |Year 1 |Year 2 |Year 3 |Year 4 |Year 5 | |Administration |17,500 |17,500 |17,500 |17,500 |70,000 |150,000 |250,000 |300,000 |350,000 | |Management |35,000 |35,000 |35,000 |35,000 |140,000 |290,000 |320,000 |350,000 |380,000 | |Training |40,000 |20,000 | | |60,000 |120,000 |120,000 |120,000 |120,000 | |Marketing |30,000 |30,000 |30,000 |30,000 |120,000 |600,000 |480,000 |480,000 |480,000 | | Break -even calculations indicate that the Nestle juice will become profitable after the sells volume exceeds 125000 early in the product’ second year. Our break analysis of Nestle’s first PDA product assumes per unit wholesale revenue of 5 taka per unit, and variable cost of 3 taka per unit, and estimated first year cost of 17,000,000.
Based on these assumptions, the break even calculation is: 17, 000, 00 5-3) taka =850,000 units 9. Controls: Nestle is planning tight control measures to closely monitor quality and customer service satisfaction. This will enable us to react very quickly in solving any problems tat may occur. Nestle will try to minimize cost and maximize profit. Discipline and cleanliness will strictly follow. We believe quality not quantity. 10. Marketing Plan Tools: • Various websites help to make a good marketing plan. These websites give valuable information. These also give real life information that helps to realize current market situation. • Marketing plan pro software is helpful software that helps to make a plan step by step. There are various books, which help us to make a marketing plan. For example- “The Marketing Plan” by Marian Burk Wood is a very helpful book for preparing marketing plan. 11. Conclusion: We may see from this research that Nestle is one of the best quality juices producing company operating in Bangladesh. Because of the affordable price, high quality, variation between products have resulted it self in capturing 30% of the market share. As it is the renowned brand name, it has to stand strong among the competitors in the market by skimming its price, standardizing its production and quality to the highest level. So in the better future the company may go for the international.
For consumers, they provide branded quality products that offer superior value and that improve the quality of life. To Nestle communities they provide a foundation, which encourages and supports industries to develop & prosper. They contribute to charitable community activities. They manage our facilities with the utmost concern for the environment. There mission is to achieve or enhance clear leadership in the existing or new core consumer product categories in which we choose to compete with there brands. It is the passion to excel and extend that makes Nestle exciting. They welcome passionate talents to join on this journey of theirs to add one more smile to the million more of the people across the country.