Nestle Marketing Plan

Marketing Plan Nestle Pure Life Nestle Pure Life is Nestlé’s famous bottled drinking water and has made its customer market in several countries of world. Health conscious societies consider it as a blessing thinking of it as being purest water available in the market. [Year]  Product: Nestle Pure Life Company: Nestle Contents Product: Nestle Pure Life 1 Company: Nestle 1 INTRODUCTION 4 Nestle - Company Overview 4 Nestle Waters – A subsidiary 5 Nestle Pure Life – The Product 6 SEGMENTATION & TARGETING 7 Segmentation 7 Target Market 7 COMPETITORS 8 Main Competitors – Competitive Analysis 8 SWOT 9 Weaknesses 10 Opportunities 10 Threats 10 CUSTOMERS 11 Main Customers – Customers Analysis 11 Core Competency 12 Apparent Marketing Strategy 13 Recommendations for Strategy Re-vamp 15 Bibliography 17  INTRODUCTION Nestle - Company Overview “Good Food, Good Life” – Nestlé is today world’s leading health, nutrition and wellness company (Nestle, 2012). Nestlé’s mission is to provide the best tasting and nutritious choices in extensive range of beverages and food categories to its consumers all over the world. Today Nestle has 67 brands of bottled water, produced in 36 countries and its distribution is made in 130 countries worldwide (Nestlé Waters, 2011). Nestle traces its origin back in 1866 when Anglo-Swiss Condensed Milk Company opened the first European condensed milk factory in Cham, Switzerland. One year later, a trained pharmacist, Henri Nestle, introduced world’s first prepared cereals for infants in ‘Farine lactee’ in Switzerland. Both of these companies merged in 1905 to be a company known as Nestle with headquarters based in Swiss town of Vevey – where it started in the beginning. (Nestle, 2012). Nestlé’s first customer was a premature infant who was unable to tolerate his mother’s milk as well as any other conventional substitutes. Henri’s effort was to develop an alternative source of infant nutrition for mothers who were unable to breast feed. Thus the cereal was prepared with his experiments on various combinations of cow’s milk, wheat flour and sugar (Nestle, 2012). Today Nestle employs around 328,000 people and are managing different factories and/or operations in almost every country of the World. Nestle sales for the year 2011 came to be almost CHF CHF refers to Swiss Franc 83.7 billion (Nestle, 2012). Nestle SA is a publicly owned company with subsidiaries across the globe. Nestle UK and Ireland, is a subsidiary of Nestle SA (Nestle UK and Ireland, 2012). Nestle has built its competitive advantage on the basis of its unmatched geographic presence worldwide. Sprung from the Swiss cultures, the company grew and managed to establish a presence in almost every country in the world today. Nestle has developed strong relationships with farmers and other suppliers with the development of local management teams, R & D and manufacturing (Nestlé, 2012).  Nestle Waters – A subsidiary Nestle Waters North America Inc. started its functions in 1976 as a company that imported its famous Perrier Sparkling Natural Mineral Water from France. The company tapped in the opportunity when Americans were looking to adopt a healthier lifestyle with better food eating and availability of pure drinking water. The company’s bottled water products became popular among those customers who were seeking a refreshing all-natured beverage that could have been relied to be free of calories, caffeine and additives. People who were indulged in regular exercise related activities started enjoying bottled water after hiking, biking, tennis etc. instead of a cocktail. By the early 80s, domestic waters were added to its product line by the company and thus became a major player in the U. S. bottled water market. Nestle Waters North America has today recognized as largest bottled water company in the United States (Nestlé Waters North America Inc., 2011).  Nestle Pure Life – The Product Nestle Pure Life – a Purified Water is bottled water prepared with a unique and appropriate balance of minerals to deliver the best taste (Nestlé Waters North America Inc., 2011). In 1992, Nestlé was the first company to provide mineral water with the brand name of “Valvert”. Howsoever, Nestlé Water has today grown in 130 countries and markets with 70 different brands. In 1998, Nestlé named its bottled water as “Nestlé Pure Life” (Nestle, 2012). The brand was initially sprung in Pakistan and soon it was launched in Brazil, followed by Argentina, Thailand, the Philippines, China, and Mexico in 2000. India, Jordan, and Lebanon followed in 2001 and then in 2002, Egypt, Uzbekistan and then United States. Now the product (Nestle Pure Life) is present in several countries of all continents i.e. Asia, Near East, South and North America and Europe with different brand names (Nestle, 2012). Nestle PURE LIFE offers an ideal balance between a healthy supply of minerals and a pleasant, refreshing taste, making it suitable for the whole family. It contains essential minerals such as: Calcium: necessary for building strong bones and teeth, Magnesium: necessary for muscle contraction and transmission of pulses.  SEGMENTATION & TARGETING Segmentation Nestle Pure Life have segmented the product on the following basis: Psychographic Segmentation Demographic Segmentation Geographic Segmentation Behavioral segmentation Target Market After the segmentation of the market, Nestle management has to decide the target market for each separate segment of the market. “A position is the way a firm’s product, brand, or organization is viewed relative to the competition by current and prospective customers.” When positioning a product the marketer wants to convey benefits most desired by the target market.  COMPETITORS Main Competitors – Competitive Analysis Nestle Pure Life has two very strong competitors in the market, which are trying to compete with Nestlé’s water brand using innovative strategies and approaches. These are: Aquafina Water is bottled by the Pepsi Co. The other is Dasani which is bottled by Coca Cola Company. Pepsi’s Aquafina’s purification of water involves the processes of charcoal filtration and reverse osmosis. In an effort to have a competitive edge in the market they have extended their brand to include six different varieties of fruit flavored flat water and two varieties of carbonated water that are also fruit flavored. Pepsi’s Aquafina water is also available in different countries with different brand names. Pepsi has been striving hard to penetrate Nestle Pure Life’s market with different strategies (Hanson, 2012). On the other hand, Coca Cola’s Dasani process their water through reverse osmosis process, but once the contaminated or other materials are removed they add special blend minerals to their water which gives its characteristic crisp flavor. They have other flavored brands but the company has limited itself to four different flavors. Coca Cola’s bottle water is present in different countries with different brand names i.e. Kinley water etc. Although Nestle Waters bottles their product in polyethylene terephthalate (PET), this material is 100% recyclable and does not have BPA (Bi-Sphenol A) which is known to be organic compound used to make polycarbonate plastic. This has been declared as toxic. In addition their bottles are an average of 30% lighter. Nestle waters has so many brands that they can accommodate even the most demanding customer. The line of Nestle Pure Life has flat water, flavored water and carbonated water. Nestle Pure Life is quite different from the Aquafina and Dasani, and Nestle has used different brand promotion strategies to promote their product. The quality provided by Nestle Pure Life has built a strong trust and long lasting relationship between company and consumers of its products. SWOT Strengths Nestle is a global food producer with presence in almost all countries. Nestle has been consistently one of the world's largest food producers with sales of almost CHF CHF refers to Swiss Franc 83.7 billion in year 2011. Such a strong company’s brand image has positive influence and impact for Nestle Pure Life (Nestle, 2012). Nestle has been repeatedly recognized as the world's largest company providing bottled water and have set up facilities to work on water resources ethically. For the twelfth consecutive year, Nestle has been recognized as one of "America's Most Admired Food Companies" in Fortune magazine in 2008. Nestlé provides quality brands and products and line extensions that are well-known, top-selling brands including: Lean Cuisine, Yoplait, Maggi, Dryer's/Edy's, Haagen-Dazs, Stouffer's, Boost, Dibs, Hot Pockets, Chocolate and Candy: Kit Kat, Butterfinger, Toll House, Baby Ruth, Crunch Bar etc. Pet Products: Cat Chow, Purina, Alpo, Fancy Feast, Friskies, Tidy Cat. Drinks: Carnation, Perrier, Nesquik, S. Pellegrino, Nescafe, CoffeeMate, Taster's Choice, Juicy Juice. General Mills: subsidiary which makes Betty Crocker, Bisquick, Hamburger Helper, Pillsbury, Old El Paso, cereals, fruit snacks, frozen pizza, canned soups, frozen vegetables, ready-made frozen meals. Gerber: baby formula, prepared baby foods, baby cereals, water, juice, yogurt, foods for infants, toddlers and preschoolers. These brands become a source for the brand recognition of “Nestle Pure Life” and hence the brand is known and associated along with its other well-known brands for different segments of the markets. Weaknesses There is lack of awareness about using bottled water in the developing countries. Water is thought to be basic need of human life readily available anywhere. Hence, bottled water is not seen as a commercial product in the developing countries. In the developed countries, the branding and promotion of Pure Life Mineral water is not extensive, therefore competitors get chance to penetrate in the market by fetching substantial share of the market. Opportunities In today's health conscious societies in the developed and developing countries, pure water can be promoted as basic item for healthy life. Countries where pure drinking water is not easily available can be tapped and pure and clean drinking water can be extensively promoted. Nestle Pure Life can launch new flavors according to the tastes of different regions. These flavors can be categorized on the different segmentation basis i.e. demographic. Threats Nestle Pure Life has threat from the different bottled water companies who have launched their bottled waters in the developed countries. They have major competitors, like Hershey's, Cadbury-Schweppes (owned by Pepsi), Lindt and Ghirardelli, Kellogg's, Post, Starbucks, Beech-Nut, Quaker, Kraft Foods, Dannon, Del-Monte, Iams, Earth's Best, Heinz, Frito-Lay (owned by Pepsi).  CUSTOMERS Main Customers – Customers Analysis Nestle is the biggest water bottling company in the world with famous brand name of “Nestle Pure Life” (Hanson, 2012). This product and its customers can be found in several countries across the globe. Nestle has bottled water brands around the world but in the United States, however, the star of the company is the brand “Nestle Pure Life”. From their numerous brands Nestle Pure life stands apart for its light taste and affordability. This brand is available to the consumers as flat, flavored or carbonated water. In addition to the Pure Life brand Nestle has several natural spring water brands like; Poland Spring, Calistoga, Deer Park, Ice Mountain, Ozarka and Zephyrhills They also sell mountain spring water with their brand Arrow Head. In the process to purify and prepare the water for consumers Nestle Bottlers follows rigorous guidelines as established in each of the countries they sell their products and in most of the cases exceeding them. Nestle Bottlers not only strive for ways to improve the quality and taste of their product, but also to develop more efficient and environmentally safe packaging for their bottled water. Since 1998, when the brand Pure Life entered the market and in accordance with the Nestle policy on Environmental sustainability, this company has reduced the plastic in their bottles making them an average of 30% lighter than the packaging of their competitors. Their bottles are 100% recyclable. Nestle Bottlers have established also several recycling programs to ensure sustainability of their business in earths ecosystem. Nestlé Waters have regular programs to introduce and launch new varieties and formats to meet consumers' changing needs in different markets (Nestlé, 2012). Nestlé Waters constantly seek better environmentally-sound production processes. The research centers based in France are constantly looking for new product packages, designs and other layout developments in order to best meet the consumers’ expectations. Nestle is a global company but strives act locally, meeting each country's needs and expectations. Nestlé is the world's foremost Nutrition, Health and Wellness Company, committed to serving consumers all over the world.  Core Competency Nestle Bottlers do have different brands that come from  municipal resources as well as brands  that come directly from natural springs like their brands Acqua Panna  or Comtrex. However, “Consistency” has helped Nestle Bottled water in the market to be a giant in the water bottling industry. Consistent quality, flavor and overall reliability of Nestle’s Pure Life product have gained Nestle the loyalty of consumers from all over the World. Usually, bottled water has many disparagers and the strongest argument in the favor is that the bottled water is only hyped tap water and nothing else. It is true that most common bottled water producers use municipal resources. It is also matter of the fact that this water is processed through extensive quality control processes to remove microorganisms, minerals and impurities. Below is the global Food market share graph, where Nestle is at the top (Bar et al., 2004) Apparent Marketing Strategy Nestlé is an organization working globally. As the operations of the organization are extended in almost all countries, it is not doubtless at all the competitive focus must be at the heart of the company’s international strategy. Nestlé’s competitive strategies are closely affected with foreign direct investment (FDI) in milk, dairy, beverages and other food businesses. Nestlé has an objective to balance sales obtained from low risk and low growth countries of the developed world with high risk and potentially high growth markets of underdeveloped or developing countries i.e. Africa and Latin America. Nestlé identifies the potential profits from these high-risk countries, but doesn’t take unnecessary risks just for the sake of growth. This strategy and process of circumventing keeps growth steady while maximizing shareholders’ value (Castelar Articles, 2005). In the markets of developed countries, Nestle has made an objective to grow and gain economies of scale with the help of investment in other big companies. For example, just recently, Nestlé has given LC1 brand license to the Müller - a massive scale German dairy producer in Germany and Austria (Castelar Articles, 2005). In the developing markets, Nestlé grows by manipulating ingredients or processing technology for local conditions, and employ the appropriate brand. For example, in many European countries most chilled dairy products contain sometimes two to three times the fat content of American Nestlé products and are released under the Sveltesse brand name. Another strategy that has been successful for Nestlé involves striking strategic partnerships with other large companies. In the early 1990s, Nestlé entered into an alliance with Coca Cola in ready-to-drink teas and coffees in order to benefit from Coca Cola’s worldwide bottling system and expertise in prepared beverages. European and American food markets are seen by Nestlé to be flat and fiercely competitive. Therefore, Nestlé is setting is sights on new markets and new business for growth. In Asia, Nestlé’s strategy has been to acquire local companies in order to form a group of autonomous regional managers who know more about the culture of the local markets than Americans or Europeans. Nestlé’s strong cash flow and comfortable debt-equity ratio leave it with ample muscle for takeovers. Recently, Nestlé acquired Indofood, Indonesia’s largest noodle producer. Their focus will be primarily on expanding sales in the Indonesian market, and in time will look to export Indonesian food products to other countries. Marketing Strategy It is expected by marketing division of a company to design a marketing strategy for each target market of the product or service, which includes the establishment of the marketing mix. The Marketing Mix consists of multiple aspects of the following four elements: a product, its price, where is it placed and how the company is going to promote it? These four elements are intended to satisfy a target market’s needs and on the other hand equally important marketing objectives for an organization. The Company's strategy is guided by several fundamental principles. Nestlé's existing products grow through consistent creativity, innovation and renovation while maintaining a balance in different geographic events and company’s other product lines. Nestle’s Long-term potential is never sacrificed for pleasing short-term performance. Nestlé is committed to the following Business objectives in all countries, taking into account local legislation, cultural and religious practices: Nestlé's business objective is to manufacture and market the Company's products in such a way as to create value that can be sustained over the long term for shareholders, employees, consumers, and business partners. Nestlé does not favor short-term profit at the expense of successful long-term business development. Nestlé recognizes that its consumers have a sincere and legitimate interest in the behavior, beliefs and actions of the Company behind brands in which they place their trust, and that without its consumers the Company would not exist. Nestlé continues to maintain its commitment to follow and respect all applicable local laws in each of its markets Across the four dimensions of People, Products, Science and communication, Nestle’s strategy can be shown as follows (Bar et al., 2004). Recommendations for Strategy Re-vamp Nestlé is one of the largest and most successful food companies in the world. It has successfully introduced many new products into many different segments of the food and beverage industry and still has potential to introduce new products in its line of products. Nestlé possess a product, LC1, which is innovative, fairly new in the North American perspective, provides health benefits for the consumer, while offering a new avenue for profits for Nestlé. Nestlé, with its probiotic cultures found in its LC1 product, has an innovation that is ripe to be introduced into the North American market. Currently LC1 is primarily offered in Japan and Germany in the form of yogurts, with great degrees of success. Unfortunately LC1 yogurts were unsuccessful in a number of European markets, including France and The United Kingdom. Nestle can work on improving the unsuccessful LC1 products in these markets in order to create a good image for the Nestle waters. Nestle waters can have extensive marketing and promotional campaigns in the developing and under-developed countries where focus is less on the health related issues.  Bibliography Bar, D., Pinheiro, S., Rebiero, P. & Turpenien, J., 2004. The Future in the Food Markets: Nestle vs Unilever. Project. UBI. Castelar Articles, 2005. Nestle's Competitve Strategy. [Online] Available at: http://articles.castelarhost.com/nestle_competitive_strategy.htm [Accessed 8 April 2012]. Hanson, M., 2012. Nestle Waters: Water Delivery Service Review, Competitors & Coupon Code. [Online] Available at: http://water-delivery.knoji.com/nestlewaters-review-and-promo-coupon-code/ [Accessed 9 April 2012]. Nestle UK and Ireland, 2012. About us. [Online] Available at: http://www.nestle.co.uk/aboutus/Pages/about-us.aspx [Accessed 8 April 2012]. Nestlé Waters North America Inc., 2011. Nestlé Pure Life. [Online] Nestlé Waters North America Inc. Available at: http://www.nestle-watersna.com/pdf/NPL_BWQR.pdf [Accessed 8 April 2012]. Nestlé Waters, 2011. Nestlé Waters 2011. [Online] Available at: http://www.nestle-waters.com/Content/pdf/2011_yearbook.pdf [Accessed 8 April 2012]. Nestle, 2012. About us. [Online] Available at: http://www.nestle.com/AboutUs/Pages/AboutUs.aspx [Accessed 8 April 2012]. Nestlé, 2012. Global Presence. [Online] Available at: http://www.nestle.com/AboutUs/GlobalPresence/Pages/Global_Presence.aspx [Accessed 8 April 2012]. Nestle, 2012. History. [Online] Available at: http://www.nestle.com/AboutUs/History/Pages/History.aspx [Accessed 8 April 2012]. 1 1