MARKETING MANAGEMENT

ASSIGNMENT ON BRAND
“Nestle”

Submitted by – Nitin Dungdung

Roll No. 12
Nestle is a Swiss multinational food and drink processing conglomerate
corporation. Headquarters in Vevey, Vand, Switzerland. It is the largest
food company in the world, measured by revenue and other metrics. It
was founded in 1886 and was known for its Swiss condensed Milk
company. Its founder is Henri Nestle. Its specialized in baby food ,
coffee, dairy products, breakfast cereals, confectionery ,bottled water,
ice creams etc.

Revenue ↑ CHF 91.43 BLN

Operating Income ↑ CHF 13.75 BLN
Net Income ↑CHF 10.46 BLN
Total assets ↑CHF 137.01 BLN
Total Equity ↑CHF 58.40 BLN
Marketing Strategy:
Segmentation, targeting positioning in the market . The world’s leading
FMCG company is using different strategies in different markets. It uses
demographic, geographic and behavioural segmentation strategies to
cater to changing needs of the most competitive industry.
It was a mix of value based and product passed positioning strategies
depending upon the kind of product they are branding and the market
in which it is and selling the product.

Marketing Mix Of Nestle

It discusses the 4p’s of one of the strongest FMCG companies of the
world .It has a strong product line which boosts its marketing mix.
Different strategic business units to manage various food products.

1) Beverages-
One of the most known coffee brands NESCAFFE , belongs to nestle
and is one of the cash cows for nestle ,however it’s not the biggest cash
cow .Nestle has a worldwide distribution and has many different
variants .For India it launched Nestle.

2) Milk products –
Nestle, Everyday, nestle slim and nestle milk maid are the same of the
milk and milk based products from the house of Nestle.

3) Prepared dishes-
Third category of product comes into prepared dishes and cooking aids.
The major cash cows of nestle lies in this segment , which is Maggie
Noodles .probably one of the most widely sold ready to cook noodle
brands is taste and quality . Thus , Nestle expanded the Maggie brand
to create umbrella of different product like Maggie pasta, Maggie sauce
etc.

4) Chocolate-
Its popular chocolate being nestle Kitkat, munch, Milkybar, éclairs and
polo .The newly launched Alpino is targeting the gifting segment and is
response to various chocolate like dairy Milk and Bournville by Cadbury.
The chocolate segment of nestle is a star, where the completion is high
and the expenses is high but at the same time the market size is huge
as well.

As we can see two major brands of nestle are a very high contribution
to its brand equity – Nescafe an Maggie. These are two brands sold
across India in small as well as big shops or in super markets .There
have been many completions for this product like Bru for Nescafe and
Top ramen and Sunfeast Yippie against Maggie.

Price the Marketing mix:

The price is dependent on the market of each individual products for

example Nescafe and Maggie being the clear leader priced with higher
margins for the company as compound to competition . This is because
the product quality is good enough and a bit of skimming price won’t
cause the customer to switch brands .
The strength of pricing for nestle comes from it packaging or
consumption based pricing. Nestle offer a lot of size and package
option. In a supermarket you can find a sixteen packet Maggie .Where
as is small retail shops, 5Rs Maggie.
Place of marketing mix:

The company follows the FMCG strategy of distribution

Which involves breaking the bulk .Nestle channel is known to be strong
with a good Marketing and sales network for channel distribution. On
top of it, nestle regularly introduces trade discount and various tactic to
keep the channel motivated.

Promotion in the marketing mix:

One of the most widely known tunes is the Nescafe tune. It was one of
the best advertising campaigns and was launched at least 2 decades
back.
However, the campaign brought Nescafe strongly in the market.
On the other hand, nestle brand pushed by the excellent product
quality of Maggie and the witty and innovative campaigns of Maggie.
Promotion o other products too done smartly, kitkat focuses on “take a
break” and has done same good marketing for the same.
Besides this ,nestle regularly uses TVC’s and ATL
marketing .Overall ,nestle is a good brand which has strong products as
well as strong marketing and hencs the brand has very high recall
value .

SWOT analysis of nestle –

Strength :

1) World Renowned brand:

It is fortune 500 companies and is world largest food company
measured by revenue .It does individual branding of their different food
brands which help them in creating awareness about their various food
brands because Maggie does not affect coffee.

2) Extensive distribution system:

With its diversified products portfolio nestle has been successful in
penetrating urban as well as rural markets .It adopts the local
distribution system and supply chain.

3) Broad product portfolio:

Nestle has no more than 8000 brands products under its name which
ranges from beverages like coffee and minerals waters ,
breakfast ,cereals , soups and sauces etc. Under each product nestle
has worked a lot to promote it.
4) Large work force:
Nestle have engaged 3,40,000 add global warfare who are continuously
working to make its products available in every book and corner of the
world.

5) Rand D:
Nestle has over 5000 people involved in research and development of
the product , as well as corporate venture funds and research
partnerships with business partners and other companies .

Weakness:

1 Maggie controversy:
In India Maggie was recently banned because it was found to contain
additives which were harmful .This affected the brand name of nestle
as well as Maggie big time. However it has been re-launched recently
and trying to convince people to which they are getting positive
response .

2) Brand structure:
It has many brand under same umbrella managing such large group
may give rise to conflicts internally or may be externally.

3) Legal and consumes issue:

Although nestle is controversies over the year like nestle baby formula
boycott. Child labour by supplies chocolate price fixing etc. That results
in negative word of mouth

Opportunities:

1: Healthy breakfast:
Maggie oats or other such healthy breakfast alternatives have a big
time scope in future as people are getting more health conscious .But it
needs to do market penetration regards to it cereals.

2) Expanding market:
By entering into other markets and penetrating more and more in the
rural markets through its robust supply chain transition of sports of
unrecognized business to organized one.

3) Increasing income level:

Due to improved literacy rate, information technology, controlled,
inflation disposal income of the people is increasing resulting into
upsurge in demand and changing their lifestyle.

Threats:

Competition in the market:

There are heavy competition in the market for nestle. As people are
getting aware of the products, companies are also getting the
awareness of the market trends, hence they are producing competitive
products at low cost to survive in the market.

BCG Matrix in the marketing strategy of Nestle:

-Its dairy product, powdered and liquid beverages bakeries and cookie
and confectionary business vertical are star due to nestle having a
strong hold in these business with product length Eg; mineral water and
coffee.
- Its pet care, water business vertical is a question mark in the BCG
matrix due to the presence of a large number of local and national
players in the segment.

- Cash cows have high market share in a market and high market
growth rate , undoubtedly cash cows for nestle is Maggie
noodles .With market share 80-85%. It holds a very strange position

-Dogs are those products that were perceived to have the potential to
grow but however failed to create magic due to the slow market
growth. Nestle Milo was launched as chocolate and malt power for milk
and water , however , the products failed to create any significance
impact on the business and is placed in the dog Quadrant of BCG matrix

Mission:

Nestle is the world’s leading nutrition , health , and wellness

company .Its mission o “good Food ,good life “ , is to provide
consumers with the best tasting , most nutritious choice in a wide range
of food and beverages categories and eating occasions , day long .
Its vision and values:

Is to be leading competitive nutrition , health and wellness company

delivering improved shareholder value by being a preferred corporate
citizen , preferred supplier selling preferred product .Promotion of
product and brand Nestle regularly introduce trade discount and
various tactics to keep the channel motivate .

CORE COMPETENCIES:

To pose Nestlé product against the competitors, the company will

be using differentiation strategy which will not only differentiate
their own from others but also give an edge over others. Nestlé
core products will be very beneficial especially in terms of quality,
health, and hygiene and most important consumer satisfaction.
Nestlé augmented products will include consumer satisfaction,
warranty to retailers in terms of expire, delivery and after sales
services.

The companies all over the world get some competitive edge
based on some features which other companies don’t have. For
example, as the Dell has the competitive edge over other
computer manufacturer companies, because they use built-to-
order Strategy while no other company in computer industry use
this strategy. Similarly in Pakistan nestle has their competitive
edge based on the strategies like product differentiation and
customer oriented.

Nestlé is using the product differentiation strategy by providing

the superior quality products. Their main focus is to keep the
customers loyal. They bought shelve space in different
departmental stores to attract the customers. They tried to reach
each group of people in which they have succeeded. Besides,
customer satisfaction is the focal point for the company. They
provide hygienic products to their customers. Products are also
verified by health and safety measures and international quality
standards.

PORTER’S FIVE FORCE:

 Threat of New Entrants:

There is big number of food companies in the world; meanwhile

the competitive between food companies are happened. Some
companies have carved out role in which they support to dairy
supply. These food companies are fearful of being squeezed out
by the big players. Another threat for many food companies is
other food services companies entering the market.15 Competing
in a new industry requires resources to invest. Production of
packed products requires huge investment of financial, human,
technical, and marketing resources.

Bargaining Power of Suppliers:

The suppliers of food might not pose a big threat, because of the
number of suppliers. Raw milk is standard commodity and is
available in the open market from a large number of milkmen. If
anyone refuses to sell its product then company can buy it from
others who are already willing to sell to company. On the other
hand, the importance of volume to supplier also considered as a
threat. Suppliers also have less leverage to bargain over price
because the company is purchasing the large volume of their milk
and suppliers don’t have much option to sell milk to others.

Bargaining Power of Buyers:

The buyers will not post much of a threat to the food industry.
Large clients have their own bargaining power with food
companies. Large corporate clients like airlines and retailers pay
millions of dollars a year. There are large numbers of distributors,
who are buying and distributing the product, so their bargaining
power is low and company have leverage to dictate implement its
terms and conditions to distributors.

Availability of Substitute:

There are few of substitutes in the food industry. Most of the food
companies have similar suites of services. Companies focusing on
their role usually have a competitive advantage, but this
advantage depends on whether there are any barriers that
preventing other firms from entering.15

Competitive Rivalry:

The food industry is highly competitive in nowadays. As a result,

food industry has become more like a commodity, an area in
which the food company with the low cost structure, greater
efficiency and better customer service will beat out competitors.
In long run, larger companies prefer to take over or merge with
other companies rather than spend the money to market and
advertise to people.15
MARKET INNOVATION:

We invest around 1.7 billion Swiss francs (1.7 billion US dollars) every

year in research and development, more than any of our competitors
worldwide
To strengthen our capabilities, we collaborate with academic
institutions, non-government organizations, start-ups and innovation
partners across the world.

Increasing our speed:

Having great ideas is important, but the real opportunity lies in how
fast you can get them to consumers. To launch new products quickly,
we are using fast prototyping and leveraging our size and scale for quick
in-market testing. In the past 12 months alone, we have introduced
around 1500 new products around the world.

In coffee for example, our teams launched the new Nescafé Azera

Nitro in less than 15 months. Similarly, our success in launching
the kitkat Ruby in just 6 months speaks to our speed and

Addressing consumer trends :

When it comes to understanding our consumers, we remain at the

forefront of the industry. By identifying consumer trends early, we are
able to adjust our portfolio accordingly.

For example, we have capitalized on vegan and vegetarian trends

through leveraging our classic brands that consumers know and trust.
We have everything from non-dairy creamers and ice cream in the US,
to plant-based drinks in Brazil.

Points of Parity and Points of Difference:

MARKET OPPORTUNITY ANALYSIS:

Opportunities: They have an opportunity to expand or capture the

market by adding its product line.  They have the opportunity to offer
snacks. They can also capture the market of home appliances.
Company can open separate stores to eliminate retailers. Recently,
they have created an opportunity for themselves by introducing chillers
in the market. Company is trying to open stores in universities. They
can provide incentives to retailers to increase sales volume. Company
can enter in ice cream products.

BUSINESS ENVIRONMENT:

Economic Environment:
The rise in emerging market economies portends surplus buying power,
as well as economies of scale which proffer added economic advantage
(Vandewaetere, 2012).
The leverage of huge resource capital and R&D capability into continual
introduction and redesign of products enables Nestlé to strengthen its
competitive advantage. Through the localization of operations in over
100 countries across the globe, the company manages to address the
impact of foreign currency fluctuations on import and export aspects of
trade (Jones, 2012).

Social Environment:

There is an increasing trend towards healthy eating which is increasing

demand for healthier food product as a producer of finished consumer
goods Nestlé is hugely dependent upon customer satisfaction and
desirability of its product range to achieve success (Jones, 2012). The
company, thus, chooses to embark on huge spending in its competitive
sectors to maintain its brand image and to enhance product desirability
etc. The company has taken specific steps such as the acquisition of
specialized start-ups, and successful partnerships to meet the needs of
health conscious consumers and thereby to take advantage of
emerging market trends and opportunities.

Technological Environment:

The fast pace of technological development and associated capabilities

portend significant challenge for competitiveness in modern industry.
Nestlé has endeavoured to keep up through enormous investments in
research and development to enhance its capability, as well as process
efficiency which have enabled its successful differentiation and
enhanced competitiveness (Nestlé, 2013). Nestlé is involved in
numerous programs aimed at making the company more eco-friendly
which are inherent in its CSR initiatives. 

The four basic market segmentation-strategies are based on:

1. Behavioral

2. Demographic

3. Geographical and

4. Psychographic difference

Geographic:

Nature
-Nestlé Singapore segmented its market for Nescafe Ice depends on
the geographic weather: warm hot and cold.
Nescafe Ice: A coffee which may be consume with ice. During warm
season consumers making this coffee with normal, chilled or cold water
mixing ice cube to bring freshness in their body.
Demographic
Age
-Nestlé segmented market area for its main products based on the
generation. For the products Cerelac, Lactogen, Koko Krunch, Nido,
Nestle divided the market area segment for new born baby
and children of different ages.

Nido
-It is nutritious milk specially makes for children 2 years onwards. It
includes 25 minerals and vitamin D which helps child’s growth.

Cerelac
- Nestle also provide cerelac for new aged baby. It contains milk and
rice mixture for less than one year’s baby. It fulfills baby’s proper
nutrition in foods.
Nesquick, Koko Krunch

- above are chocolate milk for babies. Nesquick and Koko krunch

contain child’s required growth. It’s very sweet and delicious and also
includes vitamin protein, mineral.

- Nestle Singapore brings full cream milk powder in the country. It gives
baby required nutrition. Lactogen one is for children whose age not
more than 6months and lactogen 3 is for babies whose age is below 1
year.

Income
- Nestle segmented their market based on customer’s earnings in an
effective way.

Occupation
- Nestle segmented the market based on their user’s occupation.

Nescafe classic
- This product is for that type of persons those who work busy and hard
and required more freshness. Both the male and female who need
more caffeine and this type of needs Nescafe classic is for them.

Psychographic:

-Life style and personality: Nestle provides KIT KAT these people who
really want to enjoy chocolate. Nescafe 3 in 1 is for exclusively those
customers who are really busy and do not have enough time. They can
save their time by taking Nescafe 3 in 1.All the things sugar, milk, and
coffee remain mixed.
Behavioral
Benefits

-Based on benefits Nestle segmented their market in an efficient way.

So they make available Cerelac for those customers who want
more profit from the product. Cerelac includes a high nutrition for
baby’s whose age is less than 1 year. Two very important things rice
and milk remain added in cerelac. On the other part, cerelac includes
vitamin, more mineral and all major useful nutritious elements for
babies.
Positioning Strategy:
By creating product, service, channel, people and image differentiation 
Nestle arrives the consumer touch point more easily, effectively &
efficiently in comparing with other competitors in the highly
competitive food processing market.

Product Differentiation:
Nestle brings a many of product for target customers.
 They make available 25 types of minerals in Nido for children.
It also arranged Cereals’ and Lactogen
1 &3 for newly born baby exclusively.
 Now the doctors says these products for child’s to their parents for
great & maximum
nutrition Nescafe is a product which contains 4 types of categories. The
y offer  Nescafe ice for hot and warm weather,
They provide Maggi including Maggi instant; Maggi 2 minutes which
Includes and contain various minerals, vitamins and nutrition’s.

Channel Differentiation:
 Nestle reach their products to the customersthrough their experienced 
market salesman and transportation. So that their products.
Are much easy to their customers.

Image differentiation:
Nestlé’s logo is totally different from others competitors that are
greatly choices by its users.
For that way customer easily choose them in the market which is
another effective benifits for Nestle products.

People differentiation:
The company has a large number of manpower’s that are highly
educated and trained. In Singapore, 400 employees are employed in
market Company chairman; They are running this business successfully
for a long time.

Service differentiation:
Another advantage for this company is better service for its respective
users from its competitors. They provide
24×7 hot line service. High quality checking is providing for its
customers. Its marketing department and public relation department
Are working for finding out customer’s new needs and response toward
their nestle products.
Positioning Statement Baby Products
To babies who are deprived of proper nutrition,Nido,Cerelac,Lactogen
are the very nutritious milk Product that provide you more use full
nutrition different from any other brand because these includes
different types of vitamin, mineral etc.
COMPETITOR ANALYSIS:

Hindustan Unilever Ltd (HUL)

Hindustan Unilever Ltd. Is an Indian consumer goods company
dealing in beverages, foods, personal care products, to name a
few. Two out of three Indians use HUL products according to
Nielsen market research data. HUL’s distribution covers over 2
million retail outlets in India directly and its products are available
in over 6.4 million outlets across the country.

BRAND MANTRA:
 Brands that offer balanced nutrition, good hygiene and the confidence
that comes from having clean clothes, clean hair and good skin.
 Products which are sustainably sourced and used in a way which
protects the earth’s natural resources.
 Respect for the rights of the people and communities we work with
throughout the world.
Reference:
https://www.slideshare.net/ShannonCavanaghEdwar/nestle-brand-
management
https://money.cnn.com/magazines/fortune/fortune_archive/
1994/09/19/79744/index.htm
https://en.wikipedia.org/wiki/Nestl%C3%A9
Sources: Google.