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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.................................................................................................. 24
Consume Questionnaire.....................................................................................25
Consumer Data Analysis....................................................................................30
SWOT analysis....................................................................................................53
Opportunities/Threats:...........................................................................................55

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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

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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?

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)

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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:

• 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

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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 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

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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)

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

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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:

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 - Class A shops purchased on average 40 pieces of Nesquik (Including
both 400g and 200g) and on average 9 pieces are sold each week.

- 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.

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 • 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 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.

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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 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

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• 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?

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 • Yes

• No

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

• Yes

• No

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

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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?

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

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 • 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

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

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 • 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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35
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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43
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

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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 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

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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.

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

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 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 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

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 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.

• 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

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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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