INTROD

UCTION
Nestlé was founded in 1867 on the shores of Lake Geneva in Vevey, Switzerland and its
first product was “Farine Lactée Nestlé”, an infant cereal specially formulated by Henri Nestlé to
provide and improve infant nutrition. From its first historic merger with the Anglo-Swiss
Condensed Milk Company in 1905, Nestlé has grown to become the world’s largest and most
diversified food Company, and is about twice the size of its nearest competitor in the food and
beverages sector.

Nestlé’s trademark of birds in a nest, derived from Henri Nestlé’s personal coat of arms,
evokes the values upon which he founded his Company. Namely, the values of security, maternity
and affection, nature and nourishment, family and tradition. Today, it is not only the central
element of Nestlé’s corporate identity but serves to define the Company’s products,
responsibilities, business practices, ethics and goals.

In 2004, Nestlé had around 247,000 employees worldwide, operated 500 factories in
approx. 100 countries and offered over 8,000 products to millions of consumers universally. The
Company’s transparent business practices, pioneering environment policy and respect for the
fundamental values of different cultures have earned it an enviable place in the countries it
operates in. Nestlé’s activities contribute to and nurture the sustainable economic development of
people, communities and nations. Above all, Nestlé is dedicated to bringing the joy of ‘Good Food,
Good Life’ to people throughout their lives, throughout the world.

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 As a marketing student, I must make this scenario as my guard lines to make sure my
assessment are always in the right track.

From this scenario, I can detect that Nestlé become popular in food industry especially in
snack chocolate product. To become more shine in their snack chocolate market, Nestlé try to
attract their customer by change the chocolate shape, Aero bar and then Cadbury bought out a
rival bar called Wispa. Cadbury are the competitor to the Nestlé Company. But at the same time,
both of them plan to expand their company to become more aggressive in growing market. Nestlé
try to be the first choice of customer and number one in Malaysia manufactured the chocolate
product.

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 TABL
E OF
CONTENT PAGE
INTRODUCTION 1-3

CONTEN
CONTENTS
CONCLUSION
RECOMMENDATIONS
4-11
12
13
BIBLIOGRAPHY 14
APPENDICES 15

CONT
ENT 3|Page
1. Present two definitions of marketing and compare both definitions.

“Marketing is the process of planning and executing the conception, pricing,

promotion and distribution of ideas, goods and services to create exchange that
satisfy individual and organization objectives.” (by American Marketing Association:
AMA)

This definition is about pricing, promotion, and distribution of idea, goods and services.
The marketer can control the size of exchanges by creating product, setup sensible, agree
and rationalize the prices, build awareness and also prefer and ensure accessibility and
services.

“Marketing is the management process which identifies, anticipates and suppliers

customer requirements efficiently and profitability.” (by Chartered Institute of
Marketing: CIMA)

This definition focus on identifies and anticipates customer requirements. The marketer
will make the decision after researching the market and identifying what the customer
needs and wants.

Both of them have the similarities likes they want to make sure the product
deliverer to customer and fulfill customer needs and wants by used 4P’s. There are
product, price, place, and promotion.

Product means good, service, or idea that is marketed to fill consumers’ needs
and wants. Conceiving and developing new products is a normal challenge for marketers,
who need consider the factor of change such as changing in technology, wants and needs
of users, economic conditions.

Pricing. The pricing of a product is selecting the best price at which to sell it. On
the other hand, price must support a variety of costs, like operating, administrative,
research cost, and marketing costs. The price cannot be too much that users turn to
competitors.

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 After that, for the place or distribution, placing a product in the proper outlet. For
examples, a retail store requires decisions about several activities. All are which
concerned with getting the product from the producer to the users. Distribution decisions
are decisions about warehousing and inventory control.

Last one, about promotion which refers to techniques for communicating

information about products. The most important promotional tools including advertising,
personal selling, sales promotions, publicity, and public relations.

2. Identify the main characteristics of a marketing-oriented organization of Nestlé with an

example provided.

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 Marketing orientation focus on pinpoint what customer needs, organization
resources itself and objectives.

“Marketing orientation is the organization-wide generation of market intelligence

pertaining to current and future customer needs, dissemination of the intelligence
across departments, and organization-wide responsiveness to it.” (by Kohli and
Jaworski, 1990).

Identify customer or consumer needs and wants. Human needs are states of felt
deprivation. They include basic physically needs for food, clothing, warmth, and safety.
But, the social needs for belonging and affection. Individual needs for knowledge and
self-expression. Wants are the form human needs take as shaped by culture and
individual personality. All of this needs not creates by marketers, they are the basic
part of the human being. By make marketing research, Nestlé marketer will know
what the customer needs and wants. They will know what kind of product that
customer perhaps. By care the relationship between customer and Nestlé Company
through Twitter, Facebook or other communication tools. For chocolate product, what
kind of chocolate that they loved, how the taste that they want, the kind of flavor that
they want.

Developing products is to meet customer/ consumer needs and wants. After the
Nestlé marketer find out what their customer loved and automatically can gain more
profit to Nestlé Company. Research and development production (R&D) need to
produce the product that can fulfill their customer preference. Behind every one of
Nestlé’s products is a team of scientists, product developers, designers, nutritionists,
consumer service representatives and regulatory affairs specialists. They will get all
the information from the research result than scientist creates product formulation,
quality and safety, processing and packaging.

After deciding what products a company will offer to customers, the second
major component of the marketing mix is pricing. Pricing means determining what the
customer pays and the seller receives in exchange for a product. Setting prices
involves understanding how they contribute to achieving the firm’s sales objectives.

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Pricing decisions are also influenced by the need to compete in the marketplace, by
social and ethical concerns, and even by corporate image. Sales and marketing
department will setup the pricing process. For the new-product strategies, company
faces the challenge of setting prices for the first time. They can choose between two
broad strategies, market-skimming pricing and market-penetration pricing. Market-
skimming pricing are setting a high price for a new product to skim maximum revenues
layer by layer from the segments willing to pay the high price, the company makes
fewer but more profitable sales. Market-penetration pricing, setting a low price for a
new product in order to attract a large number of buyers and a large market share. So,
before setup the price, Nestlé will analyst the entire price from their competitors
market.

Distribution is the combination of distribution channels by which a firm gets

products to end users. For this activity, to make sure the product delivered to
customer, we used middlemen. Intermediaries help to distribute goods, and provide
the information that stimulates their movement from sellers to customer. They have 4
channels of distribution.

CHANNEL 1
Producer to end users.
Direct distribution

CHANNEL 2 Producer to retailer then end users.

Retail distribution

CHANNEL 3

Wholesale Producer to wholesaler, retailer, then end

distribution users.

CHANNEL 4

Distribution by Producer to agent or broker then end user.

agents or brokers

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But, for Nestlé Company, marketer used channel 2 and 3 to deliver their product to the end
users. Nestlé is the big companies that have variety of product. So, they decide to use this
channel because Nestlé provides food product that customer used in daily routine and this
way give more convenience to consumer to get it. No needs agents or brokers. You can get
chocolate product like KITKAT at the retail shop that are closed with them.

To make sure customer know the new product that exist in the market global,
promoter will take over this process. Promoter will inform customers or consumers of the
existence of the product and persuading them to buy it. Promotion refers to techniques
for communicating information about products and is part of the communication mix. The
total message any company sends to consumers about its product. Promotional
techniques, especially advertising, must communicate the uses, features, and benefits of
products and marketers use an arrangement of tools for this purpose. The objective of any
promotion is to increase sales. In addition, marketer may use promotion to communicate
information, position products, add value, and control sales volume. Basically, in Nestlé
chocolate product, for new product, they will attract customer by give them to taste that
product. It called tester give. Usually, they will have at shopping complex, or any place
that have many users. They can taste it free of charge the KITKAT chocolate. Other than
that, Nestlé Company exist the contest to persuade user to buy the product to get boucher
RM100 that have made to KITKAT chocolate.

3. Explain in great detail of at least (3) elements of the marketing concept and relate your
answer with Nestlé.

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 Marketing concept include 3 element likes target market, customer needs and
profitability.

Marketers have long known that products cannot be all things to all people. The
emergence of the marketing concept and the recognition of consumers’ needs and wants
led marketers to think in term of target market. Target market means group of people that
have similar wants and needs and can be expected to show interest in the same product.
For examples, Nestlé chocolate products like SMARTIES, the feature are colorful, full of
chocolate, and automatically their target market user, the children. Children attract with the
colorful product and sweet taste.

Customer needs, basically each company produce the product base on their
customer needs. Needs, the things that human cannot live without it. Nestlé chocolate
product, are product that good care about the quality product itself. Customer will get the
benefit from the ingredient and also enjoy with that product to decrease their stress at
work place. Likes KITKAT, suitable with the slogan, ”WORK LIKE A MACHINE”. For make
sure our health are always in a good condition, beneficial sources so important. It’s good
for our body that can avoid the disease likes cancer.

Customer and company, both of them want the profitability. User, they want the
good product such as in ingredient, structure of product likes the shape, color, the best
taste, and so on. At the same time, Nestlé product, for make it simple to understand, when
they market the product, of course their target is to gain profit, and to disseminate market
product into global market. Both of them gain a benefit.

4. Provide an indication of the likely costs and benefits to Nestlé in adopting a marketing
approach.

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 A lot of advantages that we have in Nestlé such as in customer satisfaction,
customer care, quality of services and products, and market research.

Customer satisfaction, when customer satisfied with our product, they will make
a repeat purchases and they tell to others about their experiences when they used the
product. For the chocolate Nestlé product, like KITKAT, each customer has their own
taste. Not only child, but also adult will buy it. So, when they satisfied with the taste, of
course they will buy it again and again even the price quite expensive compare with other
cheaper chocolate.

Another benefit likes customer care that can make Nestlé company gain more
profits. Marketer must concern about customer needs and wants. Marketer must always
alert what customer perhaps from the chocolate industry like Nestlé. Basically user wants
other from another. The no limit someone's wishes. They will perhaps the change to more
enjoy when they eat those chocolates likes add more chocolate in KITKAT, add some rice
chocolate inside them, or may be add more biscuit. So, needs and wants of the customer
should be emphasized and giving reaction that should.

Besides that, qualities of services and products always have in good condition.
That is the big impact that can influence to achieve the target market. To make sure our
customer unswerving to other competitor, product performances are always in control.
Qualities of product must always consistent. There is a number of company will use
material that not quality in order to save the production cost.

Market research, the ways that can help company know what they must improve
by none stop collecting information about customer’s needs. They must take good care of
relationship between customer and Nestlé Company to make sure customer does not
choose another product or Nestlé’s competitors.

The disadvantages that have in marketing approach are time management for a
new product to appear in open market and production of Nestlé product.

To produce a new product takes a long time. From this case, it can give a chance
to Nestlé competitors take over Nestlé customers. It will give Nestlé gain low profit to
company and bad perceptions about their brand from customer.

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 The production of Nestlé product, type of chocolate that we have at Malaysia lower
volume compare with abroad. So, customers at Malaysia do not have much choice when
they want to buy it. It also causes income from Nestlé chocolate product sales only a small
value.

CONC
LUSIO
In this assignment, I have learned something about Nestle product. I also know
about history of Nestle clearly. Nestle have potential to be the first company that produce
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N
chocolate product because Nestle get trust from Malaysian people. Base on marketing
oriented, I have learned market research, Research & Development (R&D), pricing,
distribution and promotion. For the marketing concept, I know the customer needs, target
market, and profitability.

The cost of Nestle product, they are time management for a new product to appear
in open market and production of Nestlé product. Then, for the benefit likes customer
satisfaction, customer care, quality of services and products, and market research.

RECO
MME
NDAT
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IONS
 From my analysis about the Nestlé chocolate product, Nestle must came out with
many types of chocolate products, such as Kit-Kat Strawberry, Kurma’s Chocolate, Grapes
chocolate, pineapple chocolate, apple chocolate, and so on. The demand will increase on the
Nestle Company. It also follows current demand in Malaysia. About the prices have to be
reasonable with the chocolate product. Other than that, Nestle have to expand the market rural
and urban area. Nestle also should produce more halal product because the majority of
community are Muslim. Some of old person like to eat chocolate, so Nestle should alert with the
quantity of sugar. So, Nestle have to make I chocolate product less sugar.

BIBLIOG
RAPHY
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 JUN JUHAIZI JUHARI,(2011).NOTES MARKETING (22064Y).PART ONE:
MARKETING CONCEPT AND PROCESS, (p. 1).

 http://www.nestle.in/nestlestory.aspx

 Philip Kotler and Gary Armstrong. (2001). Principle of Marketing. Pearson

Education, Inc., Upper Saddle River, New Jersey, 07458.

 http://www.nestle.com/RandD/ProductDevelopment/Pages/ProductDevelopme
nt.aspx

 Ronald J. Ebert, Ricky W. Griffin, (2000). Business Essentials, Seventh

Edition. Chapter 12: Pricing, Distributing, and Promoting Product, (p.164).

 http://www.nestle.in/chocolatesconf.aspx?OB=4&id=6

APPE
NDIC
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