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Contents

Nestle’s Nesquik Milk Powder.....................................................................................................................3

RESEARCH METHODOLOGY.....................................................................................................................4

INTRODUCTION AND RELEVANT DETAILS:...........................................................................................4

Retailer Report........................................................................................................................................5

Retailers’ Data Analysis........................................................................................................................5

Consumer Report..................................................................................................................................23

Consume Questionnaire....................................................................................................................24

Consumer Data Analysis....................................................................................................................28

SWOT analysis...................................................................................................................................50

Opportunities/Threats:..........................................................................................................................52

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Nestle’s Nesquik Milk Powder

Nesquik is a milk flavoring mix that was developed in the U.S.in 1948, and introduced there as Nestlé

Quik. In the 1950s, it was launched in Europe as Nesquik. In countries using the "Quik" term (including

the U.S., Canada, Mexico and Australia, where it was originally marketed under the name Nestlé's Quik),

the name was changed to the worldwide brand "Nesquik" in 1999.Now in 2009 it was launched in

Pakistan.

Nesquik powder along with the Nesquik Bunny provides kids and families with a fun way to turn milk

into an irresistibly delicious, extra nutritious drink. Nesquik masks the smell of milk which kids dislike

and changes the taste with children’s preferred flavours of chocolate and strawberry. Nesquik also

changes the colour of milk so as to further its resemblance away from milk again.

It has been seen that children sometimes don’t get enough Vitamins and minerals from their daily diet.

Nesquik helps meet the requirements of essential nutrients in children; it’s beneficial supplement for

them to aid not only their growth, but also enhance attention and concentration. Nesquik is fortified

with iron; Vitamin A &C for kids, to give Mom’s the comfort of having provided their kids proper

nourishment for growing up.

To help mother’s ensure milk consumption Nesquik delivers on the key characteristics of a successful

modifier in PAKISTAN.

Taste

Cold Milk Solubility

Nutrition

Fun Communication

Variety Of Flavors

RESEARCH METHODOLOGY

INTRODUCTION AND RELEVANT DETAILS:

After the launching of Nesquik milk powder in Pakistan, we conducted a survey to check If Nesquik is

launched successfully and if the Product (Nesquik milk powder) strong enough to replace Milo milk

powder?

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To check this we prepared separate Questionnaire for both retailers and consumers.

SAMPLE SIZE:

FOR RETAILERS = TOTAL 250 SHOPS FROM SIX DIFFERENT DISTRIBUTIONS. ALMOST 42 SHOPS WERE

TAKEN FROM EACH DISTRIBUTION.

FOR CONSUMERS= 165 (90 FROM ISLAMABAD AND 75 FROM RAWALPINDI)

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Retailer Report

In case of retailers, we personally interviewed them and asked them fixed pattern of questions required

for the completion of the survey. The average interview time was about 3-5 minutes in which we use to

ask the retailer to give their views about the product awareness, its sale, future expectations and its

performance against competitive brands. Following is the data analysis of the retailers’ survey:

Retailers’ Data Analysis

The result indicate that it is a 62/38 scenario where majority of the retailer were informed about

Nesquik being a replacement of Milo and the superiority of Nesquik over Milo i.e.

- Being cold milk soluble

- Introduce in two flavors ( Strawberry and Chocolate)

However in this majority we observed that the awareness level of the replacement was higher in Class A

shops where about 83% of the retailers were aware of the replacement strategy basically due to

following reason, which we could think of:

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Educated Managers:

Frequent visit of order-takers

Imported Nesquik already in the shop

On the other hand, the awareness of the replacement strategy in Class B and Class C shops were almost

the same 64% and 58% respectively. With Class D shops being the least informed with 42% awareness

level, which is not a surprise.

The perception one gets from Nesquik is that it is a Class A and B retail product; sales would be limited in

Class C and D products. However, the awareness of Class B retailers comes as an surprise as the it is

more or less the same as Class C retailers. The trend of Class B retailers was different geographically as

well with majority of Islamabad markets being aware while Rawalpindi markets were deprived of the

information. The awareness level in Class C retailers is acceptable but Class D awareness level is not

impressive at all considering the fact that Nesquik has been launched in 12 grams sachet as well, so why

is there an information gap in the Market?

The main reason for this gap is due to the negligence on the part of order-taker, whom either is not well

aware of the product or does not feel necessary of transfer the knowledge to B,C and D class retailers.

They should not forget the fact that B,C and D class retailers have a say in Consumer’s Buying Decision

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because they personally hand-over the product but in most class A shops consumer on its own has to

decide which product to choose from the shelve and place it in the trolley. Apart from decision making a

lot of variety is offered on Class A and B shops so our product could be ignored if not properly placed

and marketed.

The shops did not had any of the Milo stock left which showed a really planned exit strategy for Milo on

the part of Nestle. However void time between exit and launch gave grey market products to capture

the market as the need had to be satisfied by someone. For a class A shop it is obvious to have variety

but during this period class B and Class C shops also purchased imported stuff. 58% of the class B shops

already had imported Nesquik with a good running while 100% had imported Milo/Ovaltine. While on

the class C shops 12.5% has Nesquik and 81.25% had imported Milo/Ovaltine with one of the shops

keeping only Milo and 18.75 per selling NESQUIK. The scenario of Class D shops was similar to that of

Class C shops with 62% having Chocolate additive either Milo or Ovaltine but no imported Nesquik was

found.(Observe the table below)

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The above graph also suggests the availability of Nesquik in the market with availability as following:

Class A Shops 100.0%

Class B Shops 92.5%

Class C Shops 84.5%

Class D Shops 41.0%

The above stats clearly state that the Nesquik has gotten a reasonable size of coverage in the Market in

all Classes of store. The kind of response and placement in Class C shops is really surprising probably

indicating a Consumer trend in the Market. However, we feel that selling in Class A store is more difficult

than other shops due to the intense competition and apart from that in Class B and C retailers have an

influence in Consumers Behavior as he is involved in the purchase process which gives a chance for

persuasion on the other hand in Class A shops consumer is on their own to decide which product to

place in the trolley. . However one cannot ignore the power of these large stores due to the turn-over

they are getting and the placement that have been done. The retail Strategy of Nesquik is evident that it

is targeting A and B class which is right or wrong would be clear further in the report in the consumer

survey.

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The next question was about the familiarity that the sample had with Nesquik as stated above most of

the retailers had stocks of imported Nesquik so they were aware of the Brand. Every class of the retailer

thought that the name of the product was appropriate. However if we classify geographically:

Safa Traders and Asfar Agencies Class A and B shops followed the same pattern, but Class C and

D Shops majority thought of Nesquik as an Energy Drink.

The above result states that masses (Rawalpindi being more populated than Islamabad) thought of

Nesquik as an Energy drink, however educated community find the name to be appropriate for the

product. The main reason we could think for this result is the Mass appeal that Milo/Ovaltine have and

the power of it as a brand. The perception that an Chocolate Additive would be either Milo or Ovaltine.

The success of Nesquik remains to be seen but if it is for the masses why not Milo was continued? If it is

not for the Masses than why 3 SKU’s were launched i.e. 12g sachet pack? These questions remain to be

seen and would be discussed later in the report.

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The above data states the uniformity for the launch of Nesquik in the market. It clearly states that

placement of the stock was more over on the same day in A, B and C class shop, But according to our

surprise 64% Class A stores received the stock few weeks after the launch and Class B shops almost had

the same amount of delay in placement, 65% to be exact. Than class C shops which also got 61%

placement, however it raises questions about the distribution of product. How one can leave the target

can shops on the launch of the product i.e. Class A and Class B shops. The main reason for this delay in

our opinion is:

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- Confusion between imported and local Nesquik, retailers thought of it as the same product and

hesitation to try the new product instantly considering imported Nesquik already has a good

running.

- Waiting for Imported Nesquik stock to be finished, this is true especially in the case of Class B

shops where they delayed the purchased to make some shelf space and cash problems as no

incentive of discount was being offered.

Initial placement of Class C and Class D shops is impressive considering that it is not the Seasonal period

in which they usually plan to keep Milk Additive Powder but convincing them and placing Nesquik in the

shops on launch is Impressive and deserve all the accolades.

The above question shows the risk that retailers were willing to take for placement of Nesquik. The

result states that majority of the retailers are risk averse and purchased stocks less than Milo. Class B

and Class C products almost follow the same pattern, while Class A has been specifically targeted by

Nestle for placement and promotional campaign such as sampling being carried out in Class A stores.

The quantitative data about the stock purchased first time showed the following results:

- Class A shops purchased on average 40 pieces of Nesquik (Including both 400g and 200g) and

on average 9 pieces are sold each week.

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- Class B shops purchased 9(actual average figure 9.2) pieces of Nesquik (including both 400g

and 200g) and on average 7 pieces are sold in about 3 weeks (2.3 pieces per week).

- Class C shops purchased on average 8(actual average figure 8.3) pieces of Nesquik (Including

both 400g and 200g) and on average 4 pieces are sold in 3 weeks (1.3 pieces per week).

(Disclaimer: The above figures are based on the estimated/memory figure given to us by the retailers and not all

retailers provided us with the information. The data of Class C shops is the most uniform so it appears more accurate

as compared to Class B and A shops where it lacked uniformity)

The above data, shows that Class B shops has the Lowest stock turnover of 28 days, Class A having a

stock turnover of 31 days and Class C having a stock turnover of 42. Class B and Class A shops are the

one where Nesquik is really selling. The above data does not include the sale of Sachet in which Class C

and Class D shops are outperforming Class B stores.

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The above data clearly stats that to get credit from Nesquik one needs to be really credible and only

Class Shops are the one credible the Eyes of the Nestle. As stated above Class B shops have the highest

stock turn-over so Credit could be given to them if the company shows some flexibility while Class C

shops have the Highest risk as Quantity of average first stock of Class C and B retailers has negligible

difference so the firm could have shared the Risk. However being a multi-national firm it has a fixed set

of rules and limited flexibility, but for a product launch company needs to give an incentive thus our next

question would focus on it and its effectiveness?

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Well if not credit, what incentive was given to the retailers by Nestle for Nesquik to get the market

placement of about 90% in such short time. Here we observe that only 36% of the retailers were given

any sort of incentive for the placement, well this figure is not a surprise for us as we all are aware of the

Brand Equity, Goodwill and market position Nestle is in Pakistan. The company has such a strong hold

that it dictates the market and place any of their product in the market without any major hassle.

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Classification of the incentives that took place among different classes of retailers:

Class A: 52% of the shops were offered incentive out of which major below the line activity that

took place was placement shelf dedicated for Nesquik only. Apart from special display, few

retailers even availed discount due to bulk purchasing, as we could have judged from the

average figure of first time purchase of Class A stores (see above.) Other BTL activities include:

o Banner: Nesquik bunny banners place mostly on the entrance of the shops

o Sampling: Free sachets were being offered for the consumers

o Direction Board provided by Nesquik

However, sampling was limited to Islamabad only especially F-sector, porch area of Rawalpindi like

Chaklala Scheme 3, Bahria town, Westridge was ignored. An outlet of Scheme 3 especially mentioned

the need for sampling the area as imported users are not ready to try local Nesquik.

Class B: 22.5% shops were offered incentive/activity with a major chunk receiving Nesquik Gift

Tray which contains 400g and 200g packs, a sachet and information book.

o The basic purpose of the gift was to give display to the product at the reception of the

retailer’s shop apart for a sample for retail owner. However we observed that this idea

failed miserably with most of the retailer taking the sample home and not using the tray

for display. From all the shops who received the Gifts only 2 were using it the proper

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way other had probably given it to Raadi Waala’s as we witnessed one of the shops in 1-

8 doing so.

o POP:Few shops received, posters of “Bachpan Zindabad” which were at display in the

shops.

Class C: 26% of the shops were offered incentive which were same as the ones offered to Class B

shops.

Class D: 15% of the shops were offered Gift trays for placement no other technique used.

The point to be noted here is that few distributions were in progress of distributing the gifts and POP to

retailers especially in Rawalpindi zone. The figures would probably go up with them distributing gifts in

their zone. However, this portray lack of uniformity on the part of Nestle and delay in implantation

which is not a good sign for such a company.

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Class A:

The sale expectations of Class A shops are really positive basically due to concentration of Nestle of

heavy placement of Nesquik in their outlet supported but strong below the line activities. The attitude of

Nestle had increased their confidence in the product that is the reason why we saw that Class A retailers

had the maximum percentage of retailers who purchased more stock of Nesquik as they previously use

to do for Milo

Class B:

Sales expectations are uncertain for Class B outlet with 42 % favoring Nesquik and 38% favoring Milo,

lack of incentives offered by Nesquik is the main reason for this uncertainty. Earlier we observed that

Class B shops had taken the lowest of the risk and those who are favoring Nesquik are the one who had

got a reasonable response of the product i.e retailers selling 7 or more packs in 3 weeks. The retailer’s

location off course plays a role in the sales but the positive trend is dominant in Islamabad’s retails.

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Class C:

Sales expectation of Nesquik against Milo is for Class C shops is same as Class B ones but the negative

expectations are slightly higher. As discussed earlier Class C shops took the maximum risk thus the

uncertainty is higher as compared to Class B shops which is why retailer who are getting reasonable

sales also feel that Nesquik would be weaker than Milo.

Class D:

The majority of the Class D outlets have a negative outlook for Nesquik against Milo which could be

judged by their low purchases and availability of Nesquik is the outlet. The uncertainty increased when

they came to know about the product and they were never informed by the order-taker about

it( Dhook-Hassu, Barakahu.) Sachet of Nesquik has been launched basically for this class of retailers but

placement remains an issue and display as well.

The above graph shows the strength of the product Nesquik that has been launched by Nestle as 60% of

the total market suggesting that Nesquik would have a bright future in the market given that it is led in

the right direction. Majority of the retailers had a positive outlook mainly because of the price

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advantage that the cousumer would get by using the product with minimal compromise in the quality.

Many class B and C when asked whether now they would purchase imported Nesquik answered

negatively. Apart from that the manager of 7th Avenue told us that sale of imported Nesquik has been

reduced considerably. However summer season would be the real test for Nesquik were Ovaltine the

consumer choice would unleash in the market.

The overall market is very much satisfied with the Distributor’s services with about 92% of the shops

claiming either to be very satisfied and satisfied. However despite being satisfied many shops still had

issues and suggestion s which would be listed below, but first we would discuss the retailers who are

dis-satisfied.

Class A: There was only one shop in Barakahu that was dissatisfied with the distributor service claiming

order-taker never informed them about the product launch and they had to purchase it from

Wholesaler due to demand. Well leaving a Class A store for Nesquik is clear negligence on the part of

the order-taker and distributor.

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The other reasons for dissatisfaction were:

Order-taker is not visiting regularly (Barakahu): Shops had above average sale of Nesquik but

they purchased stock from wholesalers and were charging a higher price due to its cost.

Stocks unavailability especially Cream: Apart from cream as one can observe previously that

around about 10% B and C class Shops did not had Nesquik for some unknown reason for

example:

o Shaheen Chemist f-11

o Ayan Bakers Lalazaar

o Bake Man Westridge(purchases from wholesaler every Nestle Product): The guy told us

about his shop being banned by the distributor for placement of Stock due to a fight

that they had on the launch of Nesquik. I do not know much details but being a resident

of Westridge I know how much potential that shop has.

Replacement issues: This was a major reason for dissatisfaction, retailers were complaining

about order-taker not checking the expiry of the old stock and placing new ones and once the

stock expires, it results in loss of time and money both.

Rude attitude of the order-taker

Credit

Low Margins

Placement Money: Even the satisfied retailer requested for some placement compensation as

they said 50% of their shop has Nestle products and they deserve some share for such

placement

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Consumer Report

We conducted a consumer survey from almost all the areas of Islamabad and Rawalpindi that we visited.

In total 165 consumers of different gender and age segments were interviewed, 90 from Islamabad and

75 from Rawalpindi. We met different people in the market and asked them different questions required

for the completion of a consumer’s questionnaire about the product awareness, availability , visibility,

trial , repurchase, price , taste and their expectations about Nesquik milk powder. Open ended

Questions were also asked from them to offer additional comments they might desire to make. Most of

the people who used Nesquik or were aware of the brand were interviewed at the busiest markets of

Islamabad/Rawalpindi. In Islamabad such consumers were found almost everywhere. But in Rawalpindi,

such consumers were hard to find. The awareness level in Islamabad is better than that in Rawalpindi as

most of the Islamabad citizens have been using or are aware of the imported Nesquik for some time. So

we have transformed all the consumer qualitative and quantitative data into graphs and have extracted

the relevant information from them. Following is the data analysis of the consumer survey.

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Consume Questionnaire

1. Do you use milk flavors/additives at home?

Yes

No

If ‘Yes’, which brand do you use?

Ovaltine

Milo

Nesquik

Complan

Horlicks

Others (Please specify if any): ______________________________

2. Do you know about Nesquik?

Yes

No

If ‘Yes’, how did you come to know about Nesquik?

TV/Radio advertisement

Newspaper/Magazine

Internet

Social circle

Point of purchase

Are you aware of the nutritious benefits of Nesquik?

Yes

No

Do you know that Nesquik is the soluble in cold milk as well as in hot milk?

Yes

No

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What is the first impression you get from Nesquik’s packaging?

3. Have you or someone from your family ever tried Nesquik?

Yes

No

If ‘Yes’, how do you rate the taste of Nesquik?

Excellent

Good

Average

Below Average

Bad

Would you repurchase Nesquik?

Yes, off course I would

May be, depends upon the choices

No, would purchase some other brand

4. When did you purchase Nesquik for the first time?

2 months ago

6 weeks ago

4 weeks ago

A few days ago

5. How would you differentiate Nesquik from other brands?

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6. What price you are willing to pay for a medium size pack (200 g) of powdered flavored milk

beverage?

50-60

60-70

70-80

80-90

90-100

Any other (please mention): _______________________________

7. Do you want more flavors in Nesquik?

Yes

No

If ‘Yes’, which other flavors you want?

Banana

Mango

Vanilla

Grape

Coffee

8. Rate the following brands according to your perception

Ovaltine

Milo

Nesquik

Horlicks

Complan

9. Do you find Nesquik readily in most of the shops that you visit?

Yes

No

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10. Do you prefer powdered flavored milk beverages over ready-to-drink flavored milk beverages?

Yes

No

If ‘No’, which brand would you prefer?

Milo

Owsum

Oolala

Pakola

11. Would you like to have Nesquik in ready-to-drink form as well?

Yes

No

Consumer Profile:

Age:

Sex:

Occupation:

Marital Status:

Salary/Pocket money:

End users age:

Residential sector/area:

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Consumer Data Analysis

As the above graph demonstrates, there is a strong trend of using milk flavors/additives in

Islamabad/Rawalpindi. People use it for different reasons e.g. some parents use them for their kids who

do not like the taste or smell of their kids, some people use them just as a healthy additive for their

children’s growth and health etc. So because of this trend the market is quite big now and quite

competitive as well having so many big brands like Ovaltine, Milo (imported), Horlicks, Complan and

Nesquik. People who do not use milk additives mostly claim that these additives are unhealthy, they are

fatty, or they simply prefer the purity of milk.

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As the above chart shows, most of the people use Ovaltine mainly because of its healthy image. Ovaltine

is famous in the above 30 age segment, people who are more conscious about health. Milo is the most

famous brand of the youth (age10-20). Of the age segment 20-30 Milo and Ovaltine are found to be

equally famous. As far as Nesquik is concerned it is also getting famous in kids and teenagers and is

more popular than Ovaltine in the age bracket of 10-20. It is also found to be having good amount of

fame in the other age segments of the population.

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In Islamabad, as mentioned before, the awareness level of Nesquik is quite good. As we can see from

the graph 66% of the people are aware of the brand Nesquik and we found such consumers in almost all

the areas of Islamabad. Many of the consumers were already using the imported Nesquik for a long time

and many came to know about the brand through different sources like media, social circle etc.

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Rawalpindi has a relatively low awareness level about Nesquik. This is because of the remote area

citizens. Such people are low class and low salaried so they do not take interest in such luxury products.

Many shops in the remote areas of the Rawalpindi city do not keep Nesquik and most of the retailers do

not even know about the brand. In some remote areas like Katarian and its surroundings we found out

that Nesquik’s sachet are selling because many children are buying them.

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As the chart illustrates, most of the consumers came to know about Nesquik through television, a large

number of others came to know about Nesquik virally i.e. through their social circle, with a large number

of consumer getting aware of the brand from point of purchase display. Most of the consumers who

have seen the T.V advertisement of Nesquik say that the advertisement is not that catchy and is a little

boring.

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These questions were to test the promotional campaign of Nesquik, mainly the T.V advertisement. As

we can see most of the consumers are not aware of the nutritious benefits of Nesquik, which are

mentioned in the advertisement. So this shows a weakness in the advertisements of the brand. As it is

clear from the second chart that most of the consumers are not aware about the cold milk solubility of

Nesquik which is a characteristic/strength that most of the competitors do not possess. Many

consumers say that the advertisement needs to have more energy in it to catch the eyes, especially of

the kids and parents as well. They say that the advertisement is so boring that they do not watch the

whole advertisement. So these two core characteristics are needed to be emphasized more upon and

there needs to be a lot of more energy in the advertisements to make it successful.

Most of the people answered that they are not aware of the nutritional benefits of Nesquik. Graph

showing that almost that percentage of people who came to know about Nesquik through TV

Advertisement are aware of the nutritional benefits of Nesquik. As other than TV advertisement there is

no such promotional campaign for Nesquik which will tell people about the Nesquik Brand in detail.

Recently we have seen some advertisements of Nesquik in kids and other magazines. But they are not

that elaborative.

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This was an open ended question and the answers fall in the categories of Kid’s brand, milk powder,

coffee brand and chocolate powder. From the packaging most of the consumers perceive Nesquik as

kids’ brand. Many of them had the first impression from its packaging as chocolate powder. Some of the

consumers of imported Nesquik that we interviewed said that they had the family image of the product

from the imported product packaging. There were a few consumers having the impression of a Milk

flavor and Coffee brand.

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Again we can see that most of the consumers have not tried Nesquik, mainly due to lack of pursuassive

element in the advertisement campaign. Many consumers say that they do not find Nesquik that

appealing as compared to Milo or other brands. Some say that the advertisement did not do enough and

some say that the packaging is not very attractive. And those consumers who were using imported

Nesquik, most of them are still using the same imported Nesquik instead of this local Nesquik that was

launched in Pakistan.

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Consumers who have tried Nesquik, generally like the taste, as we can see that the majority has voted it

to be good in taste with quite a large number of the users rating its taste as excellent. No one has rated

its taste as bad though. Some consumers also answered that they found its taste almost similar to that

of Milo.

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The graph shows that because of Nestle company’s own image the brand has been accepted quite early

in the market and many people have started buying it in the early days of its launch in Pakistan. So the

brand has the tendency to grow a lot in the market.

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Many of the people who have tried Nesquik like it and they would buy it again. According to many

retailers of the B and C class, people who have tried Nesquik sachets buy it again regularly and there are

also many loyal consumers of the brand as well.

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Most of the young consumers (10-20) consider Nesquik quite tasty and that is how they differentiate it

from other brands. Some of them take it as an energetic and healthy product as well. As we move above

the age segment, people differentiate it on the basis of quality and health more, as Nestle Company has

a strong image of quality and purity and Nesquik itself has been able to develop it’s healthier and quality

image in the consumers’ minds which is quite an achievement. The advertisement did not mention that

Nesquik has lower fats than any other powdered milk flavors. They need to express these features as

well because generally the older aged people (25+) of the family have the authority to shop such luxury

food items in Pakistan.

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The above graph is the data from the consumers who use milk beverages at home. These consumers are

aware of the market rates of different powdered milk flavors; hence they can judge the price well. Most

of the consumers believe that Nesquik price is quite reasonable and affordable as majority of them has

voted for the price range of 70-80 and 80-90, with a large number having the opinion that a 200g pack of

powdered flavored milk beverage should cost around 90-100 to the consumers.

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Those who do not use milk flavors/additives at home would not be aware of the prices of different

brands so they went for the least option. Most of them chose 50-60 as their ideal price for a medium

size pack of milk while a large number choosing 60-70 price range as their ideal. On the whole, we can

conclude that Nesquik’s price is quite affordable and reasonable and is lower than the other brands.

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Consumers when asked replied that they would like to have more flavors in Nesquik apart from

strawberry and chocolate which could tempt them more to use it. The most voted flavors are shown as

follows:

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A large population of the consumers told that they would like to have coffee flavor in Nesquik, with a

large number wanting banana, mango and vanilla flavors as well. With these choices in flavors Nesquik

will be able to pull more consumers as a lot of consumers do not like strawberry and chocolate flavors

that much. It is an attribute that can give Nesquik and edge over its competitors because no famous

brand is offering a variety of flavors.

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As per consumer preference, we found out that Milo is most famous in the kids, teenagers and young

professionals. Nesquik also has created its market in these types of consumers, mainly in the age

bracket of 10-20. For consumers of age 20-30 Milo is still the most preferable brand with Ovaltine and

Horlicks chasing it. For the age segment of above 30 Ovaltine in the most popular due to its healthy

image.

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There area certain placement issues. Consumers that are aware of Nesquik find it somewhere in most of

the shops but for a large number of consumers Nesquik is not readily available or it is not placed

properly. As it is the start of Nesquik in the market, there need to be special displays, placement shelves

etc to promote the brand and get it into the consumer minds. In many B and C class shops we found it

really hard to locate Nequik.

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Consumers of the age bracket 10-20 find it a hassle to make flavored milk at home so most of them

prefer ready-to-drink flavored milk beverages. Consumers from the age bracket 20-30 have mixed

opinions. Those professionals who do not get a lot of spare time prefer ready-to-drink form but some

health conscious consumer prefer powdered form. 30+ consumers are generally more health conscious

so they mostly prefer powdered form because they feel more satisfied when they prepare the flavored

milk themselves. These health conscious people also say that due to preservatives and other chemicals

they believe it is not that healthy to drink the liquid form.

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Those consumers who prefer ready-to-drink form chose Milo as their preference. Only a few of them

use other brands with Pakola and Owsum amongst the famous ones.

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A very large number of the consumers suggested that they would like to have Nesquik in ready-to-drink

form as well.

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Recommendations

SWOT analysis

Based on the information from whole research that we have conducted, we have figured out strengths,

weaknesses, opportunities and threats for the brand Nesquik. Following this model we have devised the

additional/new strategies for Nesquik.

Strengths

Nesquik is a very innovative brand. The company has targeted the need of having an instant cold milk

soluble flavor/additive that is rarely found in Pakistan that could be used in summer season as well

because most of the consumers use milk flavors/additives in winters. Another positive thing about

Nesquik is that it is being marketed differently so it has a different image than Milo and hence it does

not directly compete with it. So Nesquik needs to capitalize on this characteristic of being cold milk

soluble. In their advertisements and on its packaging this feature needs to be emphasized more upon.

It has another characteristic of having a rich chocolate taste and low calories which could also be a very

effective trait in customer acquisition because in our research a large number of health conscious

consumers mentioned that they do not use milk flavors/additives because they find them unhealthy or

fatty. Some people have a perception that Nesquik is an energy milk additive while many of them take it

as a kids’ product.

Another aspect that the company needs to work on is the flavors. As we the interview results show that

many people would be motivated to buy Nesquik because of the variety of flavors that the imported (UK

assembled) Nesquik offers. Surprisingly, most of the people want coffee flavor, while a large number of

them want banana and mango flavors apart from strawberry and chocolate.

Another strength for Nesquik is that its price is quite reasonable and affordable as stated by those

people who use milk flavors/additives at home as they know the market prices of different brands. In

fact Nesquik has the lowest price per gram age among all the other competitive brands in the market. So

that may influence middle and lower class to buy it as well. Nesquik’s sachet packs are selling quite a lot

according to some B and C class retailers of some remote areas. They say that children buy sachets

everyday and once a person buys a sachet he comes again to buy another or the other SKUs of Nesquik.

Our survey shows that Nestle company has a strong image of quality amongst the consumers and they

really trust Nestle. It has also successfully built an image of purity and health in the FMCG market. So

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many consumers would not hesitate in trying a new product of Nestle and would trust any added

healthy features marketed in the advertisements of the product.

The company has a strong distribution channel and dominance in the retail market. The retailers need to

keep Nestle products no matter how much the margin they get on the products because if they get short

of even a single product they might lose a bunch of consumers and those consumers may be acquired by

other retailers in the market. So the area managers or the order-takers and delivery men can force the

retailers to keep Nesquik and keep it in a good display shelf. Hence they can improve its placement

which has not been very effective so far.

Weaknesses

As stated above that the product is very innovative. In the market the UK assembled Nesquik, which is

perceived as the imported Nesquik, has a big market share that comes from the gray market. It is still

being sold more than the local one. Some retailers have given the imported Nesquik a special display.

The consumer in Pakistan have a perception that imported goods are better in quality and as the

imported Nesquik has already acquired so many upper and middle class consumers, their loyalty is

turning out to be a big hurdle in the buildup of the local Nesquik. Many of the consumers and retailers

that we interviewed suggested that Nesquik’s packaging needs to be improved. Many consumers and

retailers had the opinion that the packaging color of Nesquik is quite similar to that of Cerelac. So that is

a weakness and a threat to the brand’s identity. The packaging needs to be changed and it should be

made similar to the UK assembled Nesquik. That would help in grabbing the market share of the

imported Nesquik as well as it would distinguish it from Cerelac which is a baby product. Many people

perceive it as chocolate powder as well. That is again hiding a big trait of the brand that is the diversity

in flavors.

In our survey we found out that in many B and C class shops the display was not that effective. It was

very hard to locate the local Nesquik in many B and C class stores. Moreover, the point of purchase

advertisement is generally not as efficient as it should be. As the brand is still in the developing phase, its

placement and promotion needs to be given special attention. Retailers should be given bonuses on

achieving the targets of Nesquik sales which would motivate them to promote the product to the

consumers of other competitive brands which would generate the awareness about the brand in the

consumer market. Many retailers told that they are not given the promised bonuses by the company’s

salesmen or the order takers which is creating a really bad image of distrust in the retail market. So the

salesmen and the order takers should be held accountable for such acts.

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Many of the B and C retailers were unaware of the cold milk solubility and other attributes of Nesquik.

They told us that the order taker and the salesman did not educate them about the product and they do

not even know the difference between Nesquik and Milo. When customer asks what is Nesquik, many of

the retailers are completely blank. Most of the B and C class retailers say that the order takers and the

salesmen are very rude and they simply take the order and deliver it on their own will. A large number

of retailers who did not keep Nesquik said they heard the name from us for the first time. So the order

takers and salesmen should be held accountable for not marketing and educating the retailers about the

Nestle products because it could and may be affecting the company negatively. In many areas Nesquik

has not been introduced yet. Most of them are from A, B, C and D shops of SMS-II and C and D shops of

Bilal Traders.

Opportunities/Threats:

The market is in growing stage and we say this by the percentage to consumer who currently

said they use some brand of milk-additive. As stated above our sample represented all ages and

classes which states that market is growing as milk-additive becomes a common product rather

than a luxury one. This probably is the right time to launch and hold the market with a strong

product like Nesquik. Previously only chocolate flavor was the one that people use to relate to

Milk-additive even now in our research when questioned about the first impression of Nesquik

from consumers they said Chocolate Drink rather than our option of Milk-additive. However

introducing flavor like chocolate would create a niche in the market and chances for future

growth as majority of the consumer voted that they wanted more flavours. Launching Vanila

and coffee flavor(if possible) next year around would not be an bad idea for Nesquik as that part

of market is still vacant. This opportunity is a threat at the same time as other companies can

also identify this market and launch their own brand. During our research we heard rumours of

Engro Foods planning to launch their milk additive brand these winter’s. If this turns out to be

true Nesquik would face tough competition like in other products like Milk as we all know “How

Olper’s made a market for its self in such a short time.” A good tactic to counter any new

completion would be to launch a new flavor in the market offering more variety and value to

customers.

There is a saying “With great power comes a great responsibility,” we do not know the writer’s

name but it is from the movie “Spider-man.” This is the case Nestle today in the market it is one

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of the most powerful brand in the market however we feel it should act more responsible.

Although our result states that majority of retailers are satisfied with distributor’s service but

deep down inside the we felt that there is a negative grudge against the company. Other firms in

the market like Engro Foods are occupying the best displays in the retail for their products

especially B and C class shops by offering handsome money to the retailers, Nestle’s Milk-pak

lost ground basically due to this particular reason. The suggestions that retailer gave to us this

was the on the top of the list that some placement money should be offered, thus Nestle should

learn from its mistake, reconsider its policy and act more responsible.

It has been discussed above about the trend of milk-additive becoming a common product

rather than luxury and in our opinion Nestle is under-estimating the Class C and Class D shops,

which can produce handsome sales for the product given that 12g sachet has been launched for

that particular reason.The lack of sachet sale in Class C and D shops is basically due to lack of

proper display in the outlet and the display tray turning out to be ineffective. One of the shops

in Irfanabad was selling the sachet in candy trays and it was besides the candy areas, that shop

was one of the tops seller of sachet in our sample. In our opinion special hanging tray should be

designed with space for 2 200g packs and 6 sachets lariyaans and to be fixed by the order-taker

in the selected outlets considering the turnover they are getting or potential in the area. Below

is the example of what we have in over mind. As far as Class A shops are concerned, the strategy

of Nesquik is fine.

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The second most frequent suggestion that retailer were given to us was about the packaging of

Nesquik, few said make it green like Milo , few said that it looks like Cerelac and few suggested us to

make it like the imported one. Well if retailers feel that packing is a problem so we considered it as a

threat. Now to solve this threat, when we brainstormed we observed the fact that 200g pack is one

that is making most of the sales so no point making a change while changing the packing of the

sachet would be wasting time. However we along with retailers also feel that packing should be

changed but of 400g pack only. Packing should be changed to the of that of U.K ‘s Nesquik which

previously had a reasonable loyalty . Changing the 400g packs packing would give the product the

image that Nestle had planned to give Nesquik prior to launch and apart from that few people

might confuse it with imported one and start purchasing the local one. Changing the packing would

ofcource add to the price and we have no idea of its incremental cost given that we feel that if the

incremental cost is between Rs 5 to 10, changing the packing would pay off and the sales on Nesquik

in Class A shops can increase significantly. Another reason for the change we are suggesting this is

the fact that it would give one of the Stock-keeping Unit of Nesquik a mature look(resembles

Cerelac) which would in return benefit as mature men/women(Preference Ovaltine) might give it a

try, like the product and who knows develop loyalty.

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