Marketing Strategy of Nestle Essay

Executive Summary nestle foods was established in 1866. Since then it has continued to pop the question woodland crops to its customers with convergences and packaging innovations. nest juices is world wide number atomic number 53 and fastest growing food bon ton. The follow is trying their level best to class themselves from other local companies and trying to win the com dearieition in juice industry by adopting the modern trends and technologies in about(prenominal) operational fields as well as in grocerying of their harvest-feasts. In this detailed project we covered all(prenominal) most altogether the topics related to the commercializeing plan. First of all we presented the companies history and introduction which included the year of conformationation and certain steps the resulted in the todays form of nestle. We describes value chain analysis gadfly analysis close nestle juices and our unlikeiate competitor .And the next step we do experiment about SWO T analysis who its effect on our brand .so we described MARKET analysis, competitor analysis, analysis grease ones palmser behavior , hierarchy of organization goals and the next step to STP of nestle comp some(prenominal) ,so we explain product strategy , value strategy and distri onlyion strategy ,communication strategyand other things related to a marketing plan such as marketing cipher and last of our project sale forecast for last 5 year.. Innovative technology, , Globalization, Matrices, , Financial look backward, Porters five model, Industrial analysis, Five Ws and Future Plans Of Company.1. foundation garment1.1 Basic Information Regarding come onNestleis the largest food and nourishment company in the world, founded and headquartered in Vevey, Switzerland. Nestl originated in a 1905 merger of Anglo-Swiss Milk Company, established in 1867 by brothers George P season and Charles Page, and FarineL bitee Henri Nestl, founded in 1866 by Henri Nestl. The company grew signif i locoweedtly during the First founding War and following the Second World War, eventually expanding its offerings beyond its archean condensed milk and infant formula products. Today, the company operates in 86 countries well-nigh the world and employs nearly 283,000 hatful.AIMNestle (NESN.VX) is aiming for long- status organic growth of 10 percent in its nutrition unit. The aim of manufacturing Nestls product in global market impart be earning maximum hit at negligible cost and capture the maximum sh atomic number 18 of the market.GoalNestles goal is to manufacture and market the companys product in such a elan as to create value that give the sack be sustained over the long term for sh atomic number 18holders, employees, consumers and business partners. Nestle does not favour short term profit as the expense of successful long term business increasement.Market GrowthIn 2009, consolidated sales were CHF 107.6 billion and net profit was CHF 10.43 billion. Research and deve lopment investment was CHF 2.02 billion. Sales by activity breakdown 27% from drinks, 26% from dairy and food products, 18% from ready-prepared dishes and ready-cooked dishes, 12% fromumber, 11% from pet products, 6% from pharmaceutical products and 2% from baby milks. Sales by geographical area breakdown 32% from Europe, 31% from Americas (26% from US), 16% from Asia, 21% from rest of the world. design and IssuesTaking an objective approach to an issue means having due regard for the realizen valid state (relevant facts, logical implications and viewpoints and human purposes) pertaining to that issue. If relevant valid evidence is denied or falsified, an objective approach is impossible. An objective approach is particularly important in science, and in decision-making processes which affect large numbers of people.Capital issuesNestl S.A. has set up a youthful, wholly-owned subsidiary to manage the free radicals pension fund assets, which amounted to most CHF 25 billion at the end of 2005. From 1 January 2007, Nestl Capital Advisers, the modern Swiss- base company, will have a strategic advisory role and be a one-stop-shop for any services required by Nestl pension funds around the world. Nestl Capital Advisers CEO will be Jean-Pierre Steiner, who will also continue as Nestls corporate pension and risk director. Paul Polman, CFO of Nestl S.A., will serve as Chairman of the Board. In addition, Nestl Capital Advisers has established Nestl Capital Management, an operational asset management arm found in London, plentifuly veritable and regulated by the UK Financial Services Authority. Nestl Capital Management will start operations from 1 January 2007, with 15 investment managers and a compliance officer. This new Nestl asset management company will be able to provide cross-border investment and advisory services to any Nestl pension fund based in Europe or elsewhere. However, each individual Nestl pension fund will continue to be chthonian the respo nsibility of the relevant local trustee board. Nestls new, shared-services approach to Group pension fund management aims to lower costs and boost net asset performance while strengthening Nestl S.A.s overview of Group pension assets.Key of SuccessThe quality, low impairment charging and marketing strategy will be the reason ofworking behind to achieve success of Nestle. Nestle has to focus on the mind of buyer and consumers by which their selling rate. Nestle will be able to achieve maximum profit. Besides taking some extra strategies the company will be able to reduce its cost of the product.1.2 History Of NestleThe company dates to 1867, when two separate Swiss enterprises were founded that would later form the core of Nestl. In the succeeding decades the two competing enterprises aggressively expanded their businesses throughout Europe and the United States. In August 1867 Charles A and George Page, two brothers from Lee County, Illinois, ground forces established the Anglo-Sw iss Condensed Milk Company in Cham. Their first British operation was opened at Chippenham Wiltshire in 1873. In September 1867, in Vevey, Henri Nestl developed a milk-based baby food and soon began marketing it. The following year, 1868, saw Daniel Peter begin seven years of work perfecting his invention, the milk chocolate manufacturing process M. Nestls was the crucial cooperation M. Peter needed to solve the problem of removing all the water from the milk added to his chocolate and thus preventing the product from developing mildew. Henri Nestl retired in 1875, alone the company, under new ownership, retained his name as FarineLacte Henri Nestl. In 1877 Anglo-Swiss added milk-based baby foods to its products, and in the following year the Nestl Company added condensed milk, so that the planetary houses became direct and fierce rivals. In 1905 the companies merged to become the Nestl and Anglo-Swiss Condensed Milk Company, retaining that name until 1947, when the name Nestl Ali mentana SA was taken as a result of the acquisition of Fabrique de Produits Maggi SA (founded 1884) and its holding company, Alimentana SA of Kempttal, Switzerland. Maggi was a major manufacturer of dope up mixes and related foodstuffs. The companys current name was adopted in 1977. By the early 1900s, the company was operating factories in the United States, United Kingdom, Ger umteen and Spain. World War I created new demand for dairy products in the form of governance contracts by the end of the war, Nestls production had more than doubled. After the war, government contracts dried up and consumers switched back to fresh milk. However, Nestls management responded quickly, streamliningoperations and reducing debt. The 1920s saw Nestls first expansion into new products, with chocolate the companys second most important activity. Nestl felt the effects of World War II immediately. Profits dropped from US$20 million in 1938 to US$6 million in 1939. Factories were established in de veloping countries, particularly Latin America. Ironically, the war helped with the introduction of the companys newest product, Nescaf (Nestls java), which was a staple drink of the US military. Nestls production and sales rose in the wartime economy. The end of World War II was the beginning of a dynamic phase for Nestl. Growth accelerated and companies were acquired. In 1947 came the merger with Maggi seasonings and soups. Crosse & Blackwell followed in 1950, as did Findus (1963), Libbys (1971) and Stouffers (1973). Diversification came with a shareholding in LOral in 1974. In 1977, Nestl made its second venture outside the food industry by acquiring Alcon Laboratories Inc.In 1984, Nestls improved scum bag line allowed the company to launch a new round of acquisitions, notably American food giant Carnation and the British confectionery company Rowntree mack in 1988, which brought the Willy Wonka Brand to Nestl. The Brazilian president, Lula da Silva, inaugurates a factory in F eira de Santana (Bahia), in February of 2007. The first half of the 1990s proved to be favorable for Nestl cope barriers crumbled and world markets developed into more or less integrated trading areas. Since 1996 at that place have been acquisitions including San Pellegrino (1997), Spillers Petfoods (1998), and Ralston Purina (2002). in that location were two major acquisitions in North America, both in 2002 in June, Nestl merged its U.S. ice cream business into Dreyers, and in August a US$2.6 billion acquisition was announced of Chef America, the creator of impetuous Pockets. In the aforementioned(prenominal) time frame, Nestl came close to purchasing the iconic American company Hersheys, one of its fiercest confectionery competitors, though the deal fell through. Another recent procure included the Jenny Craig weight loss program for US$600 million. In December 2005, Nestl bought the Greek company Delta Ice Cream for 240 million. In January 2006, it took full ownership of D reyers, thus becoming the worlds biggest ice cream shamr with a 17.5% market share. In November 2006, Nestl purchased the Medical Nutrition division of Novartis pharmaceutical for $2.5B, also acquiring in2007 the milk flavouring product cognize as Ovaltine. In April 2007, returning to its roots, Nestl bought US baby-food manufacturer Gerber for $5.5 billion. In December 2007, Nestl entered in a strategic partnership with a Belgian chocolate maker Pierre Marcolini.8 Nestl agreed to sell its controlling stake in Alcon to Novartis on 4 January 2010. The sale was to form part of a broader US$39.3 billion offer, by Novartis, for full acquisition of the worlds largest eye-care company. On March 1, 2010, Nestl concluded the purchase of Krafts North American frozen pizza business for $3.7 billion.1.3 Situation AnalysisFirst of all nestle company want to know about the market situation. So the company collect information from the market.Market Description All most all of the country consu me the product of nestle. They are very careful about the quality and nutrition. there isalmost 6000 brand with a wide range of products. Like- they have Baby foods (Nestl Cerelac, NAN)Breakfast cereals (Nestl Cereals)Dairy products (Milkpak, NIDO, Nespray, Nestl Yogurts, Everyday) Ice-creams (Movenpick, Dreyers)Chocolate confectionary (Kit Kat, Smarties, Toffo)Beverages (Nescafe, Milo, Nestl juices) fodder service (Nestl Jumbo Bottle)Prepared foods (Maggi, office staffed Soups)Bottled water ( Nestl Pure Life, Nestl Aquarral)Pet care (Pro Plan, Purine, ONE, Fancy feast, Dog Chow, Cat Chow, Felix, Alpo) Pharmaceuticals (Ophthalmic drugs, lens-care solutions & optical surgical Instruments)Competitor ReviewUNILEVERNestles main international competitors include Unilever and Procter &Gamble. They also face competition in local markets or product ranges from companies such as Beiersdorf, ConAgra, Danone, everyday Mills, Henkel, Mars, Inc., Pepsico, Reckitt Benckiser and S. C. Johnson & Son.LANGNESELangnese is the German Heartbrand subsidiary of the Anglo-Dutch company Unilever. They are the number one producer of ice cream products in Germany, and their main competitor is Nestl a reflection of the sex act positions of these two giants in the global market.BRITANNIA INDUSTRIESBritannia Industries Limited is an Indian company based in Kolkata that is famous for its Britannia and Tiger brands of biscuit, which are popular throughout the country. Britannia is has an estimated 38% market share. The Companys principal activity is the manufacture and sale of biscuits, bread, Rusk, cakes and dairy products. Despite this strong competition, Nestle can carve out a clear image and gain recognition among the tar pass watered segments. The products what we are serving to our consumers is the critical point of variousiation for competitive advantage.2. Marketing naval division2.1Geographical SegmentationNestle is the worlds largest food company that did marketing segmentat ion very well. They also base on the geographic segmentation. Here they consider the world region, country region and folksy area.1) World or country region-Nestle understands the geographical different in needs and wants. For example in Viet Nam, Nestle has the Maggi brand with many kinds of Asia sauce, only if Maggi do not exist in England because of the different in the geographical taste. While, Nestle sell pet food in England and some other countries but they do not sell in Viet Nam. So we can easily understand that this company considers geographical segmentation. Maggi Sauce in Viet Nam2) Rural area Segmentation-Nestle also considers the rural area segmentation. For example, in the city supper shopsof Asia keeps Maggi /Nido milk and in rural areas nestle supplies a much less product deal Maggi or Nido milk.2.2Demographical SegmentationNestle segments their customer into the different of age, family size, family life cycle, income etc.1) Age-Nestle never offers the same pro duct for the people whose is 30 and whose age is 13. For example, nestle offers Nescafe coffee for adult people and offering Milo for children. Coffee for adult Milo for children2) Family Size and Life cycle-Nestle offers their same product in different size of containers to fulfill the different type of needs according to the size of the family. For example, Nestle chocolate offers different size of containers. The family with many members can buy the large container to satisfy everyone in the family, where a small family can take the small one to do the same.3) Income-The people with small income can buy nestle product. They produce that product which will save money. Like, Nescafe coffee has a mini pack for instant coffee which saves the money of limited income people.2.3Psychographic SegmentationNestle offers their product considering customers psychographic segment, like, social class, lifestyle and personality.1) Social class-Many products of nestle company are highly affordab le by different the people of different social class.2) Lifestyle and personality-Nestle Breakfast Cereals is the best choice for busy people and Nescafe also help them more alert in working. Besides, there are some people who love to eat can eat every time and everywhere. Confectionery such as Smartest, Aero, Butterfinger, and Orion can be called their best friends.2.4Behavioral SegmentationBehavioral segmentation base on the different in knowledge, attitudes or responses to a product.Benefits-Nestle offers us the best quality, taste and price for baby food, coffee and chocolate. Customers may buy other companies baby food/coffee/chocolate, but no other company can provide the quality and flavor that Nestle provides.Readiness stage-Nestle is one of the most well known company in the world. A very few people can found who dont know about this companies product. Nestle figure out the stage of their customer and make them more aware about their foods and nutrition.Attitude Toward prod uct-Nestle is alship canal concern about the attitude of people toward their product. The considers the feedback of their customers and the other people and make their product more better to get the positive opinion of their customers.User Status-A market has all types of customers. Nestle tries to measure user status to take more customers into their segment, so that all types of customer get opportunity to buy the product of Nestle. All the following criteria are followed by the Nestle Company for their segmentation.3. Market TargetingMarket segmentation reveals the firms market segment opportunities. It now must evaluate the various segments and decide how many and which segment it can serve best. We now look at how the company evaluate and fundament segments.Fig Porters Five Forces3.1.Right size and growth-Nestle company collets information about different type of customer from market segmentation. Then analyze to select a target market. They complete this task considering the size and growth of the target market. Nestle mostly focus on the geographic and demographic segmentation because, their product is made based on this two segments.3.2.Structural Attractiveness-Most of the companies have their similar competitors. Nestle also considers its competitors so that, they can attract their target market. They try to make a better product in a good price then their competitors. But now a days there no close competitor of nestle company. Nestle is also concern about the buyers power and the suppliers power. To achieve the target market Nestle need to satisfy the buyers as well as the suppliers. To avoid the bargaining problem that is created by the buyers, Nestle companies all products are at a wintry price. There is another problem of substitute product. But because of the high quality and affordability Nestle dont need to be worried about that problem.3.a. Selecting target marketAfter evaluating different segments, Nestle Company decides which and how many segment it will target. Buyers have unique need and want. So, nestle divided their products according to the different segments of market. Nestle company wants to use differentiated marketing strategy and the company decides to target several market segments and designs different offers for each segment. It decides to produce different types of products based on age, family life cycle, social class and lifestyle. Nestle tries to know what type of products are needed for which type of people. At first, nestle company produces a product for testing and experimenting for a specific segment and if it is wanted by the target market, it changes the product types.Nestle wants to offer some kind of product that is mainly based on demographic segmentation.No.Different consumerproduct1Age 6 months and onwardsCerelak, Nido, Nan2Coffee loversNescafe, Coffee Mate, 3 in 13Chocolate loversKitkat, Crunch, Galak4Age 8 years and onwardsMaggi, ptit pot5Age teenagersMilo, Aero, TurtlesThese are some o f the different types of products that Nestle Company offers for different types of customers. They offer these different types of product because there are different types of demand in the market.4. PositioningA company must differentiate its offers by building a unique bundle of benefits that appeal to a substantial group indoors the segment. Nestle knows this pretty well. It has many advantages over competitors by offering different types of quality products. To create a profitable relationship with the different types of customers, Nestle stays alert and finds different ways to differentiate itself in the eye of every customer. Marketers often prepare a perpetual positioning part to plan strategies. It shows consumer perceptions of their brands versus competing products onimportant buying dimensions. Nestle company always tries to maintain a better position in consumer minds than others.PriceNestleUnileverBritanniaLengneseBenefit4.1 Positioning MapThe figure below shows a posi tioning map for the worlds leading food brand-Nestle. The position for each circle of the map indicates the brands perceived positioning on two dimensions price and quality.4.2 Choosing Positioning StrategyIts very easy for Nestle to find its positioning strategy. Since its a very well known company, it tries to have the same position in a different segment. Nestle differentiates its offers by building a unique bundle of benefits which is appealing to a substantial group within a segment.Nestle follows three steps for its positioning taska) It identifies a set of possible competitive advantages to build a position.b) Then, it chooses the right competitive advantage.c) And selects an boilersuit positioning strategyAfter these steps, nestle communicates and delivers the chosen position to the market effectively.Identifying possible value difference and competitive advantageNestle understands the importance of mind customer needs better than the competitors and delivering more value. Its very important to build a profitable relationship with the customers. Nestle has positioned itself tothe extent of providing superior value, by this it has gained competitive advantage. But, solid position cant be built by false promises. Nestle delivers the quality and service it promises. Thus nestle has differentiated the company in the market.Nestle thinks through the customers entire experience with the company product to find the point of differentiation. It has successfully found ways to differentiate at every customers point of view.Nestls strategies for differentiation areServiceNestle wants to make sure that their service is better than other competitors. They print the nutritionary values and other health facts related to the product on the packet of the product. They also provide contact number and mailing addresses etc. for queries or any other facts. For example, in the image Nescafe Tasters Choice the arrow indicated area has all the information about this produ ct.Product Nestle provides the best products and they are quite confident about it. They know very well that they have a very few competitors which makes it easy for them to capture the market.Image Nestle knows that a company cannot develop an image in customary mind overnight using only a few advertisements. Nestle has a different image in public eye which it has earned over the years.People Their number of target people is very high because they have much demand for baby food and nutrition products.Positioning strategyFor a new product, firstly they decide to use more for less positioning strategy. Nestle gives more benefit than the other competitors but their price is low, because in this case, they can attract the customers easily.4.1Positioning strategyNestle company generally use more for more strategy. Compare to other company they are charging higher price than other. But on the other hand they not only charging higher price they are also provide benefit to the customer.4 .2 ontogeny a positioning statementIn positioning statement the summarization of company and brand positioning are followed. The concept is TO (Target segment and need) OUR (company) IS( product) THAT ( point of difference). By this way Nestle make positioning statement.PRICEMORE THE SAME LESSSFig Positioning StrategyDeveloping a positioning statementIn positioning statement the summarization of company and brand positioning are followed. The concept is TO ( Target segment and need) OUR (company) IS( product) THAT ( point of difference). By this way Nestle make positioning statement.Developing 4ps5.1ProductAll most all of the country consume the product of nestle. They are very careful about the quality and nutrition. There are almost 6000 brand with a wide range of products. Like 1. Baby food- Cerelak, NatureNes,nestum2. Cereals- Chocapic, Fitness, Cini Minis3. Water- Nestle Pure Life, Perrier, Poland Spring4. Dairy- Cornation, Coffee Mate, Nido5. Coffee- Nescafe 3-1, Nescafe Cla ssic, Nescafe Decaf6. Drinks- Milo, Juicy Juice, Nestea7. Sports nutrition- Power Bar8. Ice cream- Maxibone,Drumstick, Sorbetes9. Diet foods- Jenny Craig10. Healthcare nutrition- Boost, NutrenJunior,Resource11. Frozen foods- Buitoni, Herta, Hot Pocket, Maggi.12. Chocolate-Auro, Crunch, Kitkat, Butterfinger13. Pet care- Purina Alpo, Bakers Complete, Cat Chow5.2Pricepeople never wanted to compromise on quantity. So they adapted value based pricing. Nestle specially want to capture different segment of the market. So its price are based on its effective value of customer selective to their product. However its price is comparatively higher than the price of other product.5.3PlaceNestl began in Switzerland in the mid 1860s when founder Henri Nestl created one of the first baby formulas. Henri realized the need for a healthy and economical product to serve as an alternative for mothers who could not suck their babies. Mothers who were unable to breastfeed often lost their infants to mal nutrition. In 1874 the Nestl Company was purchased by Jules Monnerat. Nestl developed its own condensed milk to contend with its competitor, the Anglo-Swiss Condensed Milk Company.5.4PromotionPromotion is the very important and crucial section of marketing strategy as through it the company establishes its image in the minds of the customers. NPL is promoted by using different ways of promotion. Advertisement of NPL is done through TV, radio, billboards, newspapers and magazines. authorized advertising slogans are that NPL is trust, hope and happiness and Good Food Good life. Nestl also conducts the tradeshows, concerts, events sponsorships, and discounts for sales promotion. Forestablishing public relations, Nestl distributes its newsletters, annual reports, calendars and diaries, lobbying, donation for charitableand civic events. For the victims of 8th October 2005 earthquake, Nestl has donated 90 trucks, which were containing different foods items, and NPL was one of them which is around Rs. 2 Billion. The Nestle organized its teams to distribute products to the affected areas and all employees contributed from top to bottom.Example-Buy-One-Get-One-Free (BOGOF) if a loaf of bread is priced at $1, and cost 10 cents to manufacture, if you sell two for $1, you are still in profit especially if there is a corresponding increase in sales. This is known as a PREMIUM sales promotion tactic. Customer Relationship Management (CRM) -incentives such as bonus points or money off coupons. There are many examples of CRM, from banks to supermarkets. Free gifts- Subway gave away a card with six spaces for stickers with each sandwich purchase. Once the card was full the consumer was given a free sandwich. Free samples- Red Bull (a caffeinated fizzy drink) was given away to potential consumers at supermarkets, in high streets and at petrol stations (by a promotions team).ConclusionNestl is one of the only companies to have developed an information manifestationpolicy. B ut the policy includes no good practice principles. To strengthen their capabilities forensuring consistent public disclosure of information across the company Nestl should identifynarrowly defined conditions for non-disclosure and commit to responding to information requestswithin a defined period of time. In participation, Nestl only make a general lading to engagingwith those outside the company through their Corporate Business Principles. They should go furtherand develop a detailed policy on external stakeholder engagement that identifies the conditions underwhich stakeholder can wait to be engaged in company decision-making and commits toincorporating stakeholder input into decision-making else providing an explanation. Furthermore,Nestl needs to strengthen their complaints and response capabilities the company needs to put inplace a complaint mechanism that covers more than a single product and allows bothinternal andexternal stakeholder to submit complaints for issues of n on-compliance in relation to all the companyspolicies and practices.References1. Allied Stores was originally formed in 1929 to act a the groups purchasing arm.2. http//www.nestle.com/Pages/Nestle.aspx3. http//www.nestleusa.com/4. http//en.wikipedia.org/wiki/Nestl%C3%A95. http//www.verybestbaking.com/6. http//www.purina.com/7. http//www.nestle.pk/8. http//www.nestle-nutrition.com/Public/Default.aspx9. Newspaper10. Www. Google.com11. Friends